UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant
to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 5, 2014
KINDRED HEALTHCARE, INC.
(Exact name of registrant as specified in its charter)
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| Delaware |
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001-14057 |
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61-1323993 |
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incorporation or organization) |
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(Commission
File Number) |
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(IRS Employer
Identification No.) |
680 South Fourth Street
Louisville, Kentucky
(Address of principal executive offices)
40202-2412
(Zip Code)
Registrant’s telephone number, including area code: (502) 596-7300
Not Applicable
(Former
name or former address, if changed since last report)
Check the appropriate box below
if the Form 8-K filing is intended to simultaneously satisfy the filing obligation to the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 2.02. |
Results of Operations and Financial Condition. |
On November 5, 2014, Kindred
Healthcare, Inc. (the “Company”) issued a press release announcing its financial results for the third quarter ended September 30, 2014. The press release, dated November 5, 2014, is attached as Exhibit 99.1 to this Form 8-K. On
November 5, 2014, the Company also made the press release available on its website at www.kindredhealthcare.com.
The
information contained herein is being furnished pursuant to Item 2.02 of Form 8-K, “Results of Operations and Financial Condition.” This information shall not be deemed “filed” for purposes of Section 18 of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in
such a filing.
| Item 7.01. |
Regulation FD Disclosure. |
Incorporated by reference is Exhibit 99.1 attached hereto, a
press release issued by the Company on November 5, 2014 announcing its financial results for the third quarter ended September 30, 2014. Also incorporated by reference is Exhibit 99.3 attached hereto, additional presentation materials
being made available on November 6, 2014 in connection with the Company’s announcement of its financial results for the third quarter ended September 30, 2014. This information is being furnished under Item 7.01 and shall not be
deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of such section.
On November 5, 2014, the Company issued an additional press release
announcing that its Board of Directors approved the payment of a quarterly cash dividend to its shareholders. A cash dividend of $0.12 per common share will be paid on December 9, 2014 to all shareholders of record as of the close of business
on November 18, 2014. Future declarations of quarterly dividends will be subject to the approval of the Company’s Board of Directors. A copy of the press release is attached hereto as Exhibit 99.2 and incorporated herein by reference.
| Item 9.01. |
Financial Statements and Exhibits. |
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| Exhibit 99.1 |
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Press release (earnings) dated November 5, 2014. |
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| Exhibit 99.2 |
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Press release (dividend) dated November 5, 2014. |
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| Exhibit 99.3 |
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Additional presentation materials dated November 6, 2014. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereto duly authorized.
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KINDRED HEALTHCARE, INC. |
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| Date: November 6, 2014 |
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By: |
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/s/ Joseph L. Landenwich |
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Joseph L. Landenwich |
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Co-General Counsel and Corporate Secretary |
EXHIBIT 99.1
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Stephen Farber |
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Executive Vice President, Chief Financial Officer |
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(502) 596-2525 |
KINDRED HEALTHCARE ANNOUNCES THIRD QUARTER 2014 RESULTS
Core Diluted EPS from Continuing Operations of $0.11(1) Including Impact of New
Share Count
Solid Year Continues with 6% Growth in Consolidated Revenues and 7% Growth in Core Operating Income
GAAP EPS from Continuing Operations Totaled $0.03 After Charges of $0.08 per Diluted Share Related
Primarily to Transaction, Customer Bankruptcy, Severance and Restructuring Costs
Reaffirms and Narrows 2014 Earnings Guidance; Reaffirms Free Cash Flows Guidance
LOUISVILLE, Ky. (November 5, 2014) – Kindred Healthcare, Inc. (“Kindred” or the “Company”) (NYSE:KND) today announced its
operating results for the third quarter ended September 30, 2014.
All financial and statistical information included in this press
release reflects the continuing operations of the Company’s businesses for all periods presented unless otherwise indicated.
Third Quarter
Highlights:
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Consolidated revenues increased 6% and core operating income increased 7% from the same period last year primarily resulting from improved hospital volumes, strong performance in the Care Management division’s
Kindred at Home operations, growth from acquisitions and solid cost controls throughout the Company |
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Hospital division reported strong results with 3% same-facility admissions growth and less than 1% growth in core operating costs per patient day |
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RehabCare division continues to deliver strong results including core operating income growth of 9% and margin improvement to 11.7% from 11.0% compared to the same period a year ago |
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Care Management division, including Kindred at Home, delivered 60% revenue growth and core operating income tripled compared to the same period last year |
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Nursing Center division core operating income increased 16.1% primarily due to growth in revenues and its operating margins were significantly improved due to ongoing repositioning and cost control initiatives
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Strong sequential cash flows with core operating cash flows of $95 million and core free cash flows of $72 million |
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Board of Directors declared regular quarterly cash dividend of $0.12 per share payable on December 9, 2014 |
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See reconciliation of core results to GAAP results on page 20. |
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680 South Fourth Street Louisville, Kentucky 40202
502.596.7300
www.kindredhealthcare.com
Kindred Healthcare Announces Third Quarter Results
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November 5, 2014
Third Quarter Results
Continuing Operations
Consolidated
revenues for the third quarter ended September 30, 2014 increased 6% to $1.24 billion compared to $1.18 billion during the same period of 2013, primarily due to improved hospital volumes, strong performance in the Care Management
division’s operations, growth from acquisitions and solid cost controls throughout the Company. Kindred reported income from continuing operations for the third quarter of 2014 of $1.7 million or $0.03 per diluted share compared to a loss from
continuing operations of $16.6 million or $0.31 per diluted share in the third quarter of 2013. Third quarter 2014 operating results included pretax charges of $7.7 million ($5.3 million net of income taxes) or $0.08 per diluted share
related to transaction, customer bankruptcy, severance and restructuring costs. Operating results for the third quarter of 2013 included pretax charges of $32.9 million ($23.2 million net of income taxes) or $0.44 per diluted share related to
litigation costs, costs associated with the closure of a hospital and a home health location, costs associated with certain severance and retirement benefits, charges associated with the modification of certain of the Company’s senior debt, and
transaction costs.
Management Commentary
Paul J. Diaz, Chief Executive Officer of the Company, commented, “We are very pleased with our operating and financial results for the
third quarter of 2014, which were in line with our expectations and reflect further progress in delivering on our promise to provide hope, healing and recovery to the patients we serve. We continued to see improvement in employee engagement and
reduced turnover, while improving quality measures, clinical outcomes and patient satisfaction in all of our business segments. We are also pleased to reaffirm and narrow our earnings guidance and reaffirm our free cash flows guidance for the year,
which reflects the change in share count in our earnings guidance from our mid-year equity offering, as we achieved revenue and core operating income growth of 6% and 7% year-over-year, respectively.”
Mr. Diaz continued, “We also made progress on a number of internal and external growth initiatives during the quarter that will
enhance our Integrated Care Market capabilities, particularly in home health and hospice services. In addition, we continue to evaluate a robust pipeline of external opportunities to deploy our financial resources, industry leading infrastructure
and management capabilities. Overall, we remain committed to further improving our patients’ experiences and to the long-term growth, profitability and strengthened financial position of the Company.”
Benjamin A. Breier, President and Chief Operating Officer of the Company, said, “Our hospital division had another strong quarter.
Same-facility hospital admissions increased 3% in the third quarter compared to the same period last year. RehabCare continues to make great progress, as evidenced by our 9% increase in operating income and margin improvement to 11.7% from 11.0%
compared to the same period a year ago. In addition, we have added 90 net new skilled nursing rehabilitation contracts during 2014. Our efforts to reshape our nursing center division continue to pay off as we achieved a significant improvement in
our core operating margins in the third quarter to 13.1% from 11.9%.”
Mr. Breier added, “Lastly, the positive results in
our home health and hospice operations reflect continued execution improvement by our Care Management division, including Kindred at Home, which has been enabled through better processes, technology and team. We believe that the merger with Gentiva
Health Services, Inc. (“Gentiva”) (NASDAQ:GTIV) will further accelerate these capabilities and our Continue the Care strategy, creating significant value for patients, employees and shareholders.”
Stephen D. Farber, Executive Vice President, Chief Financial Officer, commented, “Our balance sheet at September 30, 2014 is in
great shape with no outstanding borrowings under our revolving credit facility, a cash balance of $82 million and borrowing capacity under our revolving credit facility of approximately $650 million. Our core operating cash flows for the third
quarter were $95 million and core free cash flows were $72 million, a significant improvement over the first half of 2014. We expect that cash flow improvements will continue over the next several
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Kindred Healthcare Announces Third Quarter Results
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November 5, 2014
quarters through performance enhancements in our hospital division central business offices. Our core diluted earnings per share from continuing operations of $0.11 per share for the third
quarter of 2014 compares to core diluted earnings per share from continuing operations of $0.12 per share for the third quarter of 2013 (or $0.10 per share on a pro forma basis assuming the incremental 9.7 million shares issued in the
Company’s equity offering completed in June 2014).”
Acquisition of Gentiva
Kindred announced on October 9, 2014 that a definitive agreement was signed to acquire Gentiva:
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Transaction value is approximately $1.8 billion |
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Combined company is expected to have pro forma annual revenues of approximately $7.1 billion and operating income or earnings before interest, income taxes, depreciation, amortization and rent (“EBITDAR”) of
approximately $1.0 billion |
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Transaction expected to be significantly accretive to Company earnings and cash flows, exclusive of transaction costs, with more than $70 million of expected synergies within two years of closing |
Mr. Diaz commented, “The merger with Gentiva will create one of the nation’s premier healthcare service providers with diverse
business and revenue mix. We are encouraged by Gentiva’s strong results in the third quarter, which were consistent with our expectations and underscore our confidence in the merits of the combination. We are impressed with the talented team at
Gentiva and look forward to working closely together to complete our combination, which will advance our strategy, mission and shared values.”
“We are pleased by the news that after the close of the transaction with Gentiva, David Causby will join our team as President of the
combined Kindred at Home business,” stated Mr. Breier. “David is a strong leader with a deep understanding of Gentiva’s operations, people and systems, which will be invaluable to ensuring a smooth transition. David’s
appointment will allow for continued focus on our patients and operations, and ensure a successful integration and a higher level of certainty on achieving our cost and revenue synergy goals.”
Earnings Guidance – Continuing Operations
The Company today reaffirmed and narrowed its guidance for income from continuing operations for 2014 of between $59 million and $65
million. Using Kindred’s annual diluted share count of 58.3 million outstanding shares following the mid-year equity offering, income from continuing operations for 2014 equates to $0.98 to $1.08 per diluted share (previously $0.96 to
$1.14 per diluted share). As denoted on page 24, based upon the completion of three quarters in 2014, the Company has conformed various line items underlying its earnings guidance, which in aggregate are fully offsetting and had no net impact on its
expectations for income from continuing operations attributable to the Company.
The Company also reaffirmed its operating cash flows in
excess of routine and development capital spending programs and before dividends (“free cash flows”) guidance range of $85 million to $105 million. Estimated dividend payments for 2014 are expected to approximate $29 million.
Please note the Company’s earnings and free cash flows guidance for 2014 excludes the effect of reimbursement changes, debt refinancing
costs, severance, retirement, retention and restructuring costs, customer bankruptcy costs, litigation costs, transaction costs, any further acquisitions or divestitures, any impairment charges, any further issuances of common stock, debt or
mandatory convertible equity securities in conjunction with the Gentiva transaction and any repurchases of common stock.
Quarterly Cash Dividend
The Company also announced that its Board of Directors has approved the payment of the regular quarterly cash dividend of $0.12
per common share to be paid on December 9, 2014 to shareholders of record as of the close of business on November 18, 2014. Future declarations of quarterly dividends will be subject to the approval of Kindred’s Board of Directors.
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Kindred Healthcare Announces Third Quarter Results
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November 5, 2014
Conference Call
As previously announced, investors and the general public may access a live webcast of the third quarter 2014 conference call through a link on
the Company’s website at http://investors.kindredhealthcare.com. The conference call will be held on November 6 at 10:00 a.m. (Eastern Time). The conference call webcast will feature accompanying slides, which will be posted prior
to the conference call, and will be accessible through the Investor Relations section of the Company’s website.
A telephone replay
of the conference call will become available at approximately 5:30 p.m. on November 6 by dialing (719) 457-0820, access code: 2187635. The replay will be available through November 16.
Forward-Looking Statements
This
press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements include,
but are not limited to, statements regarding the Company’s proposed business combination transaction with Gentiva (including financing of the proposed transaction and the benefits, results, effects and timing of a transaction), all statements
regarding the Company’s (and the Company’s and Gentiva’s combined) expected future financial position, results of operations, cash flows, dividends, financing plans, business strategy, budgets, capital expenditures, competitive
positions, growth opportunities, plans and objectives of management, and statements containing the words such as “anticipate,” “approximate,” “believe,” “plan,” “estimate,” “expect,”
“project,” “could,” “would,” “should,” “will,” “intend,” “may,” “potential,” “upside,” and other similar expressions. Statements in this press release
concerning the business outlook or future economic performance, anticipated profitability, revenues, expenses, dividends or other financial items, and product or services line growth of the Company (and the combined businesses of the Company and
Gentiva), together with other statements that are not historical facts, are forward-looking statements that are estimates reflecting the best judgment of the Company based upon currently available information.
Such forward-looking statements are inherently uncertain, and stockholders and other potential investors must recognize that actual results
may differ materially from the Company’s expectations as a result of a variety of factors, including, without limitation, those discussed below. Such forward-looking statements are based upon management’s current expectations and include
known and unknown risks, uncertainties and other factors, many of which the Company is unable to predict or control, that may cause the Company’s actual results, performance or plans with respect to Gentiva to differ materially from any future
results, performance or plans expressed or implied by such forward-looking statements. These statements involve risks, uncertainties and other factors discussed below and detailed from time to time in the Company’s filings with the Securities
and Exchange Commission (the “SEC”).
Risks and uncertainties related to the proposed merger include, but are not limited to,
the risk that Gentiva’s stockholders do not approve the merger, potential adverse reactions or changes to business relationships resulting from the announcement or completion of the merger, uncertainties as to the timing of the merger, adverse
effects on the Company’s stock price resulting from the announcement or completion of the merger, competitive responses to the announcement or completion of the merger, the risk that healthcare regulatory, licensure or other approvals and
financing required for the consummation of the merger are not obtained or are obtained subject to terms and conditions that are not anticipated, costs and difficulties related to the integration of Gentiva’s businesses and operations with the
Company’s businesses and operations, the inability to obtain, or delays in obtaining, cost savings and synergies from the merger, uncertainties as to whether the completion of the merger or any transaction will have the accretive effect on the
Company’s earnings or cash flows that it expects, unexpected costs, liabilities, charges or expenses resulting from the merger, litigation relating to the merger, the inability to retain key personnel, and any changes in general economic and/or
industry-specific conditions.
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Kindred Healthcare Announces Third Quarter Results
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November 5, 2014
In addition to the factors set forth above, other factors that may affect the Company’s
plans, results or stock price include, without limitation, (a) the impact of healthcare reform, which will initiate significant changes to the United States healthcare system, including potential material changes to the delivery of healthcare
services and the reimbursement paid for such services by the government or other third party payors, including reforms resulting from the Patient Protection and Affordable Care Act and the Healthcare Education and Reconciliation Act (collectively,
the “ACA”) or future deficit reduction measures adopted at the federal or state level. Healthcare reform is affecting each of the Company’s businesses in some manner. Potential future efforts in the U.S. Congress to repeal, amend,
modify or retract funding for various aspects of the ACA create additional uncertainty about the ultimate impact of the ACA on the Company and the healthcare industry. Due to the substantial regulatory changes that will need to be implemented by the
Centers for Medicare and Medicaid Services (“CMS”) and others, and the numerous processes required to implement these reforms, the Company cannot predict which healthcare initiatives will be implemented at the federal or state level, the
timing of any such reforms, or the effect such reforms or any other future legislation or regulation will have on the Company’s business, financial position, results of operations and liquidity, (b) the Company’s ability to adjust to
the new patient criteria for long-term acute care (“LTAC”) hospitals under the Pathway for SGR Reform Act of 2013, which will reduce the population of patients eligible for the Company’s hospital services and change the basis upon
which the Company is paid, (c) the impact of the final rules issued by CMS on August 1, 2012 which, among other things, reduced Medicare reimbursement to the Company’s transitional care (“TC”) hospitals in 2013 and beyond by
imposing a budget neutrality adjustment and modifying the short-stay outlier rules, (d) the impact of the final rules issued by CMS on July 29, 2011 which significantly reduced Medicare reimbursement to the Company’s nursing centers
and changed payments for the provision of group therapy services effective October 1, 2011, (e) the impact of the Budget Control Act of 2011 (as amended by the American Taxpayer Relief Act of 2012 (the “Taxpayer Relief Act”))
which instituted an automatic 2% reduction on each claim submitted to Medicare beginning April 1, 2013, (f) the costs of defending and insuring against alleged professional liability and other claims and investigations (including those
related to pending investigations and whistleblower and wage and hour class action lawsuits against the Company) and the Company’s ability to predict the estimated costs and reserves related to such claims and investigations, including the
impact of differences in actuarial assumptions and estimates compared to eventual outcomes, (g) the impact of the Taxpayer Relief Act which, among other things, reduces Medicare payments by an additional 25% for subsequent procedures when
multiple therapy services are provided on the same day. At this time, the Company believes that the rules related to multiple therapy services will reduce its Medicare revenues by $25 million to $30 million on an annual basis, (h) changes
in the reimbursement rates or the methods or timing of payment from third party payors, including commercial payors and the Medicare and Medicaid programs, changes arising from and related to the Medicare prospective payment system for LTAC
hospitals, including potential changes in the Medicare payment rules, the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, and changes in Medicare and Medicaid reimbursement for the Company’s TC hospitals, nursing
centers, inpatient rehabilitation hospitals and home health and hospice operations, and the expiration of the Medicare Part B therapy cap exception process, (i) the effects of additional legislative changes and government regulations,
interpretation of regulations and changes in the nature and enforcement of regulations governing the healthcare industry, (j) the ability of the Company’s hospitals and nursing centers to adjust to medical necessity reviews, (k) the
impact of the Company’s significant level of indebtedness on its funding costs, operating flexibility and ability to fund ongoing operations, development capital expenditures or other strategic acquisitions with additional borrowings,
(l) the Company’s ability to successfully redeploy its capital and proceeds of asset sales in pursuit of its business strategy and pursue its development activities, including through acquisitions, and successfully integrate new
operations, including the realization of anticipated revenues, economies of scale, cost savings and productivity gains associated with such operations, as and when planned, including the potential impact of unanticipated issues, expenses and
liabilities associated with those activities, (m) the Company’s ability to pay a dividend as, when and if declared by the Board of Directors, in compliance with applicable laws and the Company’s debt and other contractual
arrangements, (n) the failure of the Company’s facilities to meet applicable licensure and certification requirements, (o) the further consolidation and cost containment efforts of managed care organizations and other third party
payors, (p) the Company’s ability to meet its rental and debt service obligations, (q) the Company’s ability to operate pursuant to the terms of its debt obligations, and comply with its covenants thereunder, and the
Company’s ability to operate pursuant to its master lease agreements with Ventas, Inc. (NYSE:VTR), (r) the condition of the financial markets, including volatility and weakness in the equity, capital and credit markets, which could limit
the availability and terms of debt
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Kindred Healthcare Announces Third Quarter Results
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November 5, 2014
and equity financing sources to fund the requirements of the Company’s businesses, or which could negatively impact the Company’s investment portfolio, (s) the Company’s
ability to control costs, particularly labor and employee benefit costs, (t) the Company’s ability to successfully reduce (by divestiture of operations or otherwise) its exposure to professional liability and other claims, (u) the
Company’s obligations under various laws to self-report suspected violations of law by the Company to various government agencies, including any associated obligation to refund overpayments to government payors, fines and other sanctions,
(v) national, regional and industry-specific economic, financial, business and political conditions, including their effect on the availability and cost of labor, credit, materials and other services, (w) increased operating costs due to
shortages in qualified nurses, therapists and other healthcare personnel, (x) the Company’s ability to attract and retain key executives and other healthcare personnel, (y) the Company’s ability to successfully dispose of
unprofitable facilities, (z) events or circumstances which could result in the impairment of an asset or other charges, such as the impact of the Medicare reimbursement regulations that resulted in the Company recording significant impairment
charges in the last three fiscal years, (aa) changes in generally accepted accounting principles (“GAAP”) or practices, and changes in tax accounting or tax laws (or authoritative interpretations relating to any of these matters), and (bb)
the Company’s ability to maintain an effective system of internal control over financial reporting.
In addition to the factors set
forth above, other factors that may affect the Company’s plans, results or stock price are set forth in the Company’s Annual Report on Form 10-K and in its reports on Forms 10-Q and 8-K.
Many of these factors are beyond the Company’s control. The Company cautions investors that any forward-looking statements made by the
Company are not guarantees of future performance. The Company disclaims any obligation to update any such factors or to announce publicly the results of any revisions to any of the forward-looking statements to reflect future events or developments.
In addition to the results provided in accordance with GAAP, the Company has provided information in this press release to compute
certain non-GAAP measurements for the three months and nine months ended September 30, 2014 and 2013 before certain charges or on a core basis and on a pro forma basis. A reconciliation of the non-GAAP measurements to the GAAP measurements
is included in this press release.
Also in this release, the Company provides the financial measure of free cash flows excluding certain
items. The Company recognizes that free cash flows excluding certain items is a non-GAAP measurement and is not intended to replace the presentation of the Company’s cash flows in accordance with GAAP. The Company believes that this non-GAAP
measurement provides important information to investors related to the amount of discretionary cash flows that are available for other investing and financing activities. In addition, management uses free cash flows excluding certain items in making
decisions related to acquisitions, development capital expenditures, dividends, long-term debt repayments and other uses. The Company believes net cash flows provided by operating activities is the most comparable GAAP measure. Readers of the
Company’s financial information should consider net cash flows provided by operating activities as an important measure of the Company’s financial performance because it provides the most complete measure of its performance. Free cash
flows excluding certain items should be considered in addition to, not as a substitute for, or superior to, financial measures based upon GAAP as an indicator of operating performance. A reconciliation of net cash flows provided by operating
activities to free cash flows excluding certain items is included in this press release.
The Company’s earnings release also
includes financial measures referred to as operating income, or EBITDAR, and earnings before interest, income taxes, depreciation and amortization (“EBITDA”). The Company’s management uses EBITDAR or EBITDA as meaningful measures of
operational performance in addition to other measures. The Company uses EBITDAR or EBITDA to assess the relative performance of its operating divisions as well as the employees that operate these businesses. In addition, the Company believes these
measurements are important because securities analysts and investors use these measurements to compare the Company’s performance to other companies in the healthcare industry. The Company believes that income (loss) from continuing operations
is the most comparable GAAP measure. Readers of the Company’s financial information should consider income (loss) from continuing operations as an important measure of the Company’s financial performance because it provides the most
complete measure of its performance. EBITDAR or EBITDA should be considered in addition to, not as a substitute
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November 5, 2014
for, or superior to, financial measures based upon GAAP as an indicator of operating performance. A reconciliation of EBITDAR or EBITDA to income (loss) from continuing operations provided in the
Condensed Business Segment Data is included in this press release. The pro forma EBITDAR total of $1.0 billion included in this press release was computed by combining the mid-point of the Company’s 2014 earnings guidance and 2014 EBITDAR
estimate of $232 million for Gentiva, which is based upon Gentiva’s 2014 current average analyst consensus estimates. In addition, pro forma EBITDAR includes full run rate expected cost synergies of $70 million from the transaction.
Additional Information
This press
release does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. This communication may be deemed to be solicitation material in respect of the proposed merger between the
Company and Gentiva. In connection with the proposed merger, Gentiva and the Company intend to file a registration statement on Form S-4, containing a proxy statement/prospectus, with the SEC. SHAREHOLDERS OF GENTIVA ARE URGED TO READ ALL RELEVANT
DOCUMENTS FILED WITH THE SEC, INCLUDING THE PROXY STATEMENT/PROSPECTUS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER. Investors and security holders will be able to obtain copies of the proxy statement/prospectus as well
as other filings containing information about the Company and Gentiva, without charge, at the SEC’s website, www.sec.gov. Those documents, when filed, as well as the Company’s other public filings with the SEC, may be obtained
without charge at the Company’s website at www.kindredhealthcare.com.
Participants in Solicitation
The Company and its directors and executive officers, and Gentiva and its directors and executive officers, may be deemed to be participants in
the solicitation of proxies from the holders of Gentiva common stock in respect of the proposed merger. Information about the directors and executive officers of the Company is set forth in the proxy statement for the Company’s 2014 Annual
Meeting of Shareholders, which was filed with the SEC on April 3, 2014. Information about the directors and executive officers of Gentiva is set forth in the proxy statement for Gentiva’s 2014 Annual Meeting of Shareholders, which was
filed with the SEC on March 25, 2014. Investors may obtain additional information regarding the interest of such participants by reading the proxy statement/prospectus regarding the proposed merger when it becomes available.
About Kindred Healthcare
Kindred
Healthcare, Inc., a top-150 private employer in the United States, is a FORTUNE 500 healthcare services company based in Louisville, Kentucky with annual revenues of $5 billion and approximately 62,600 employees in 47 states. At September 30,
2014, Kindred through its subsidiaries provided healthcare services in 2,376 locations, including 97 transitional care hospitals, five inpatient rehabilitation hospitals, 99 nursing centers, 22 sub-acute units, 152 Kindred at Home hospice, home
health and non-medical home care locations, 102 inpatient rehabilitation units (hospital-based) and a contract rehabilitation services business, RehabCare, which served 1,899 non-affiliated facilities. Ranked as one of Fortune magazine’s Most
Admired Healthcare Companies for six years in a row, Kindred’s mission is to promote healing, provide hope, preserve dignity and produce value for each patient, resident, family member, customer, employee and shareholder we serve. For more
information, go to www.kindredhealthcare.com. You can also follow us on Twitter and Facebook.
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Kindred Healthcare Announces Third Quarter 2014 Results
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November 5, 2014
KINDRED HEALTHCARE, INC.
Financial Summary
(Unaudited)
(In thousands,
except per share amounts)
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Three months ended
September 30, |
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Nine months ended
September 30, |
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2014 |
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2013 |
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2014 |
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2013 |
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| Revenues |
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$ |
1,243,313 |
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$ |
1,175,445 |
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$ |
3,806,019 |
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$ |
3,625,909 |
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|
| Income (loss) from continuing operations |
|
$ |
6,146 |
|
|
$ |
(15,762 |
) |
|
$ |
7,067 |
|
|
$ |
8,841 |
|
| Discontinued operations, net of income taxes: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss from operations |
|
|
(7,601 |
) |
|
|
(25,466 |
) |
|
|
(22,255 |
) |
|
|
(31,892 |
) |
| Gain (loss) on divestiture of operations |
|
|
1,387 |
|
|
|
(65,016 |
) |
|
|
(3,637 |
) |
|
|
(77,893 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss from discontinued operations |
|
|
(6,214 |
) |
|
|
(90,482 |
) |
|
|
(25,892 |
) |
|
|
(109,785 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net loss |
|
|
(68 |
) |
|
|
(106,244 |
) |
|
|
(18,825 |
) |
|
|
(100,944 |
) |
| (Earnings) loss attributable to noncontrolling interests: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Continuing operations |
|
|
(4,372 |
) |
|
|
(841 |
) |
|
|
(13,729 |
) |
|
|
(1,424 |
) |
| Discontinued operations |
|
|
78 |
|
|
|
87 |
|
|
|
401 |
|
|
|
172 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4,294 |
) |
|
|
(754 |
) |
|
|
(13,328 |
) |
|
|
(1,252 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss attributable to Kindred |
|
$ |
(4,362 |
) |
|
$ |
(106,998 |
) |
|
$ |
(32,153 |
) |
|
$ |
(102,196 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Amounts attributable to Kindred stockholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income (loss) from continuing operations |
|
$ |
1,774 |
|
|
$ |
(16,603 |
) |
|
$ |
(6,662 |
) |
|
$ |
7,417 |
|
| Loss from discontinued operations |
|
|
(6,136 |
) |
|
|
(90,395 |
) |
|
|
(25,491 |
) |
|
|
(109,613 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net loss |
|
$ |
(4,362 |
) |
|
$ |
(106,998 |
) |
|
$ |
(32,153 |
) |
|
$ |
(102,196 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income (loss) from continuing operations |
|
$ |
0.03 |
|
|
$ |
(0.31 |
) |
|
$ |
(0.12 |
) |
|
$ |
0.14 |
|
| Discontinued operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss from operations |
|
|
(0.12 |
) |
|
|
(0.49 |
) |
|
|
(0.39 |
) |
|
|
(0.59 |
) |
| Gain (loss) on divestiture of operations |
|
|
0.02 |
|
|
|
(1.24 |
) |
|
|
(0.06 |
) |
|
|
(1.44 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss from discontinued operations |
|
|
(0.10 |
) |
|
|
(1.73 |
) |
|
|
(0.45 |
) |
|
|
(2.03 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net loss |
|
$ |
(0.07 |
) |
|
$ |
(2.04 |
) |
|
$ |
(0.57 |
) |
|
$ |
(1.89 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Diluted: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income (loss) from continuing operations |
|
$ |
0.03 |
|
|
$ |
(0.31 |
) |
|
$ |
(0.12 |
) |
|
$ |
0.14 |
|
| Discontinued operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss from operations |
|
|
(0.12 |
) |
|
|
(0.49 |
) |
|
|
(0.39 |
) |
|
|
(0.59 |
) |
| Gain (loss) on divestiture of operations |
|
|
0.02 |
|
|
|
(1.24 |
) |
|
|
(0.06 |
) |
|
|
(1.44 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss from discontinued operations |
|
|
(0.10 |
) |
|
|
(1.73 |
) |
|
|
(0.45 |
) |
|
|
(2.03 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net loss |
|
$ |
(0.07 |
) |
|
$ |
(2.04 |
) |
|
$ |
(0.57 |
) |
|
$ |
(1.89 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares used in computing loss per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic |
|
|
62,863 |
|
|
|
52,323 |
|
|
|
56,443 |
|
|
|
52,218 |
|
| Diluted |
|
|
62,902 |
|
|
|
52,323 |
|
|
|
56,443 |
|
|
|
52,234 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cash dividends declared and paid per common share |
|
$ |
0.12 |
|
|
$ |
0.12 |
|
|
$ |
0.36 |
|
|
$ |
0.12 |
|
- MORE -
Kindred Healthcare Announces Third Quarter 2014 Results
Page
9
November 5, 2014
KINDRED HEALTHCARE, INC.
Condensed Consolidated Statement of Operations
(Unaudited)
(In thousands,
except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three months ended
September 30, |
|
|
Nine months ended
September 30, |
|
|
|
|
| |
|
2014 |
|
|
2013 |
|
|
2014 |
|
|
2013 |
|
| Revenues |
|
$ |
1,243,313 |
|
|
$ |
1,175,445 |
|
|
$ |
3,806,019 |
|
|
$ |
3,625,909 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Salaries, wages and benefits |
|
|
756,434 |
|
|
|
718,227 |
|
|
|
2,300,567 |
|
|
|
2,215,711 |
|
| Supplies |
|
|
79,394 |
|
|
|
79,498 |
|
|
|
242,176 |
|
|
|
244,247 |
|
| Rent |
|
|
80,192 |
|
|
|
76,762 |
|
|
|
241,449 |
|
|
|
230,605 |
|
| Other operating expenses |
|
|
257,225 |
|
|
|
261,842 |
|
|
|
768,247 |
|
|
|
720,498 |
|
| Other (income) expense |
|
|
(353 |
) |
|
|
51 |
|
|
|
(741 |
) |
|
|
(984 |
) |
| Impairment charges |
|
|
— |
|
|
|
441 |
|
|
|
— |
|
|
|
1,066 |
|
| Depreciation and amortization |
|
|
39,023 |
|
|
|
36,507 |
|
|
|
117,802 |
|
|
|
116,659 |
|
| Interest expense |
|
|
22,516 |
|
|
|
25,624 |
|
|
|
128,845 |
|
|
|
82,857 |
|
| Investment income |
|
|
(343 |
) |
|
|
(1,235 |
) |
|
|
(2,975 |
) |
|
|
(2,794 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,234,088 |
|
|
|
1,197,717 |
|
|
|
3,795,370 |
|
|
|
3,607,865 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income (loss) from continuing operations before income taxes |
|
|
9,225 |
|
|
|
(22,272 |
) |
|
|
10,649 |
|
|
|
18,044 |
|
| Provision (benefit) for income taxes |
|
|
3,079 |
|
|
|
(6,510 |
) |
|
|
3,582 |
|
|
|
9,203 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income (loss) from continuing operations |
|
|
6,146 |
|
|
|
(15,762 |
) |
|
|
7,067 |
|
|
|
8,841 |
|
| Discontinued operations, net of income taxes: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss from operations |
|
|
(7,601 |
) |
|
|
(25,466 |
) |
|
|
(22,255 |
) |
|
|
(31,892 |
) |
| Gain (loss) on divestiture of operations |
|
|
1,387 |
|
|
|
(65,016 |
) |
|
|
(3,637 |
) |
|
|
(77,893 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss from discontinued operations |
|
|
(6,214 |
) |
|
|
(90,482 |
) |
|
|
(25,892 |
) |
|
|
(109,785 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net loss |
|
|
(68 |
) |
|
|
(106,244 |
) |
|
|
(18,825 |
) |
|
|
(100,944 |
) |
| (Earnings) loss attributable to noncontrolling interests: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Continuing operations |
|
|
(4,372 |
) |
|
|
(841 |
) |
|
|
(13,729 |
) |
|
|
(1,424 |
) |
| Discontinued operations |
|
|
78 |
|
|
|
87 |
|
|
|
401 |
|
|
|
172 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4,294 |
) |
|
|
(754 |
) |
|
|
(13,328 |
) |
|
|
(1,252 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss attributable to Kindred |
|
$ |
(4,362 |
) |
|
$ |
(106,998 |
) |
|
$ |
(32,153 |
) |
|
$ |
(102,196 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Amounts attributable to Kindred stockholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income (loss) from continuing operations |
|
$ |
1,774 |
|
|
$ |
(16,603 |
) |
|
$ |
(6,662 |
) |
|
$ |
7,417 |
|
| Loss from discontinued operations |
|
|
(6,136 |
) |
|
|
(90,395 |
) |
|
|
(25,491 |
) |
|
|
(109,613 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net loss |
|
$ |
(4,362 |
) |
|
$ |
(106,998 |
) |
|
$ |
(32,153 |
) |
|
$ |
(102,196 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income (loss) from continuing operations |
|
$ |
0.03 |
|
|
$ |
(0.31 |
) |
|
$ |
(0.12 |
) |
|
$ |
0.14 |
|
| Discontinued operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss from operations |
|
|
(0.12 |
) |
|
|
(0.49 |
) |
|
|
(0.39 |
) |
|
|
(0.59 |
) |
| Gain (loss) on divestiture of operations |
|
|
0.02 |
|
|
|
(1.24 |
) |
|
|
(0.06 |
) |
|
|
(1.44 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss from discontinued operations |
|
|
(0.10 |
) |
|
|
(1.73 |
) |
|
|
(0.45 |
) |
|
|
(2.03 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net loss |
|
$ |
(0.07 |
) |
|
$ |
(2.04 |
) |
|
$ |
(0.57 |
) |
|
$ |
(1.89 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Diluted: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income (loss) from continuing operations |
|
$ |
0.03 |
|
|
$ |
(0.31 |
) |
|
$ |
(0.12 |
) |
|
$ |
0.14 |
|
| Discontinued operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss from operations |
|
|
(0.12 |
) |
|
|
(0.49 |
) |
|
|
(0.39 |
) |
|
|
(0.59 |
) |
| Gain (loss) on divestiture of operations |
|
|
0.02 |
|
|
|
(1.24 |
) |
|
|
(0.06 |
) |
|
|
(1.44 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss from discontinued operations |
|
|
(0.10 |
) |
|
|
(1.73 |
) |
|
|
(0.45 |
) |
|
|
(2.03 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net loss |
|
$ |
(0.07 |
) |
|
$ |
(2.04 |
) |
|
$ |
(0.57 |
) |
|
$ |
(1.89 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares used in computing loss per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic |
|
|
62,863 |
|
|
|
52,323 |
|
|
|
56,443 |
|
|
|
52,218 |
|
| Diluted |
|
|
62,902 |
|
|
|
52,323 |
|
|
|
56,443 |
|
|
|
52,234 |
|
| Cash dividends declared and paid per common share |
|
$ |
0.12 |
|
|
$ |
0.12 |
|
|
$ |
0.36 |
|
|
$ |
0.12 |
|
- MORE -
Kindred Healthcare Announces Third Quarter 2014 Results
Page
10
November 5, 2014
KINDRED HEALTHCARE, INC.
Condensed Consolidated Balance Sheet
(Unaudited)
(In thousands,
except per share amounts)
|
|
|
|
|
|
|
|
|
| |
|
September 30,
2014 |
|
|
December 31,
2013 |
|
| ASSETS |
|
|
|
|
|
|
|
|
| Current assets: |
|
|
|
|
|
|
|
|
| Cash and cash equivalents |
|
$ |
81,784 |
|
|
$ |
35,972 |
|
| Cash—restricted |
|
|
2,390 |
|
|
|
3,713 |
|
| Insurance subsidiary investments |
|
|
95,425 |
|
|
|
96,295 |
|
| Accounts receivable less allowance for loss |
|
|
980,723 |
|
|
|
916,529 |
|
| Inventories |
|
|
25,952 |
|
|
|
25,780 |
|
| Deferred tax assets |
|
|
57,577 |
|
|
|
37,920 |
|
| Income taxes |
|
|
35,779 |
|
|
|
36,846 |
|
| Other |
|
|
42,727 |
|
|
|
43,673 |
|
|
|
|
|
|
|
|
|
|
|
|
|
1,322,357 |
|
|
|
1,196,728 |
|
| Property and equipment |
|
|
1,962,492 |
|
|
|
1,906,366 |
|
| Accumulated depreciation |
|
|
(1,056,524 |
) |
|
|
(979,791 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
905,968 |
|
|
|
926,575 |
|
| Goodwill |
|
|
995,240 |
|
|
|
992,102 |
|
| Intangible assets less accumulated amortization |
|
|
405,900 |
|
|
|
423,303 |
|
| Assets held for sale |
|
|
2,222 |
|
|
|
20,978 |
|
| Insurance subsidiary investments |
|
|
158,394 |
|
|
|
149,094 |
|
| Deferred tax assets |
|
|
— |
|
|
|
17,043 |
|
| Other |
|
|
234,707 |
|
|
|
220,046 |
|
|
|
|
|
|
|
|
|
|
| Total assets |
|
$ |
4,024,788 |
|
|
$ |
3,945,869 |
|
|
|
|
|
|
|
|
|
|
| LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
| Current liabilities: |
|
|
|
|
|
|
|
|
| Accounts payable |
|
$ |
158,397 |
|
|
$ |
181,772 |
|
| Salaries, wages and other compensation |
|
|
346,957 |
|
|
|
361,192 |
|
| Due to third party payors |
|
|
47,320 |
|
|
|
33,747 |
|
| Professional liability risks |
|
|
66,974 |
|
|
|
60,993 |
|
| Other accrued liabilities |
|
|
138,620 |
|
|
|
146,495 |
|
| Long-term debt due within one year |
|
|
10,233 |
|
|
|
8,222 |
|
|
|
|
|
|
|
|
|
|
|
|
|
768,501 |
|
|
|
792,421 |
|
| Long-term debt |
|
|
1,484,436 |
|
|
|
1,579,391 |
|
| Professional liability risks |
|
|
243,496 |
|
|
|
246,230 |
|
| Deferred tax liabilities |
|
|
7,683 |
|
|
|
— |
|
| Deferred credits and other liabilities |
|
|
217,218 |
|
|
|
206,611 |
|
| Equity: |
|
|
|
|
|
|
|
|
| Stockholders’ equity: |
|
|
|
|
|
|
|
|
| Common stock, $0.25 par value; authorized 175,000 shares; issued
64,612 shares—September 30, 2014 and 54,165
shares—December 31, 2013 |
|
|
16,153 |
|
|
|
13,541 |
|
| Capital in excess of par value |
|
|
1,357,134 |
|
|
|
1,146,193 |
|
| Accumulated other comprehensive loss |
|
|
(905 |
) |
|
|
(252 |
) |
| Accumulated deficit |
|
|
(112,044 |
) |
|
|
(76,825 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
1,260,338 |
|
|
|
1,082,657 |
|
| Noncontrolling interests |
|
|
43,116 |
|
|
|
38,559 |
|
|
|
|
|
|
|
|
|
|
| Total equity |
|
|
1,303,454 |
|
|
|
1,121,216 |
|
|
|
|
|
|
|
|
|
|
| Total liabilities and equity |
|
$ |
4,024,788 |
|
|
$ |
3,945,869 |
|
|
|
|
|
|
|
|
|
|
- MORE -
Kindred Healthcare Announces Third Quarter 2014 Results
Page
11
November 5, 2014
KINDRED HEALTHCARE, INC.
Condensed Consolidated Statement of Cash Flows
(Unaudited)
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three months ended
September 30, |
|
|
Nine months ended
September 30, |
|
| |
|
2014 |
|
|
2013 |
|
|
2014 |
|
|
2013 |
|
| Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net loss |
|
$ |
(68 |
) |
|
$ |
(106,244 |
) |
|
$ |
(18,825 |
) |
|
$ |
(100,944 |
) |
| Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Depreciation and amortization |
|
|
39,579 |
|
|
|
42,831 |
|
|
|
121,805 |
|
|
|
142,745 |
|
| Amortization of stock-based compensation costs |
|
|
694 |
|
|
|
1,553 |
|
|
|
9,657 |
|
|
|
7,641 |
|
| Amortization of deferred financing costs |
|
|
1,982 |
|
|
|
2,509 |
|
|
|
21,211 |
|
|
|
9,529 |
|
| Payment of capitalized lender fees related to debt issuance |
|
|
— |
|
|
|
(4,589 |
) |
|
|
(19,125 |
) |
|
|
(6,189 |
) |
| Provision for doubtful accounts |
|
|
14,695 |
|
|
|
13,152 |
|
|
|
35,588 |
|
|
|
34,489 |
|
| Deferred income taxes |
|
|
(32,777 |
) |
|
|
2,336 |
|
|
|
(11,274 |
) |
|
|
(22,985 |
) |
| Impairment charges |
|
|
9 |
|
|
|
8,995 |
|
|
|
673 |
|
|
|
10,077 |
|
| (Gain) loss on divestiture of discontinued operations |
|
|
(1,387 |
) |
|
|
65,016 |
|
|
|
3,637 |
|
|
|
77,893 |
|
| Other |
|
|
175 |
|
|
|
6,316 |
|
|
|
2,289 |
|
|
|
5,452 |
|
| Change in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Accounts receivable |
|
|
10,392 |
|
|
|
45,862 |
|
|
|
(102,503 |
) |
|
|
26,745 |
|
| Inventories and other assets |
|
|
(2,899 |
) |
|
|
3,467 |
|
|
|
(12,886 |
) |
|
|
67 |
|
| Accounts payable |
|
|
(3,592 |
) |
|
|
(12,901 |
) |
|
|
(22,469 |
) |
|
|
(31,979 |
) |
| Income taxes |
|
|
29,832 |
|
|
|
(27,969 |
) |
|
|
18,769 |
|
|
|
(5,269 |
) |
| Due to third party payors |
|
|
28,907 |
|
|
|
25,931 |
|
|
|
14,540 |
|
|
|
16,716 |
|
| Other accrued liabilities |
|
|
4,497 |
|
|
|
44,485 |
|
|
|
(16,765 |
) |
|
|
25,229 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net cash provided by operating activities |
|
|
90,039 |
|
|
|
110,750 |
|
|
|
24,322 |
|
|
|
189,217 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Routine capital expenditures |
|
|
(21,263 |
) |
|
|
(23,152 |
) |
|
|
(67,425 |
) |
|
|
(62,952 |
) |
| Development capital expenditures |
|
|
(1,570 |
) |
|
|
(3,235 |
) |
|
|
(2,693 |
) |
|
|
(10,709 |
) |
| Acquisitions, net of cash acquired |
|
|
(38 |
) |
|
|
(12,173 |
) |
|
|
(24,136 |
) |
|
|
(39,106 |
) |
| Acquisition deposit |
|
|
— |
|
|
|
(14,675 |
) |
|
|
— |
|
|
|
(14,675 |
) |
| Sale of assets |
|
|
8,948 |
|
|
|
236,397 |
|
|
|
22,909 |
|
|
|
248,700 |
|
| Purchase of insurance subsidiary investments |
|
|
(74,101 |
) |
|
|
(7,765 |
) |
|
|
(97,394 |
) |
|
|
(30,360 |
) |
| Sale of insurance subsidiary investments |
|
|
8,447 |
|
|
|
9,899 |
|
|
|
34,967 |
|
|
|
35,427 |
|
| Net change in insurance subsidiary cash and cash equivalents |
|
|
65,928 |
|
|
|
(1,416 |
) |
|
|
54,372 |
|
|
|
(44,294 |
) |
| Change in other investments |
|
|
317 |
|
|
|
(140 |
) |
|
|
1,027 |
|
|
|
218 |
|
| Other |
|
|
(3 |
) |
|
|
79 |
|
|
|
(537 |
) |
|
|
(142 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net cash provided by (used in) investing activities |
|
|
(13,335 |
) |
|
|
183,819 |
|
|
|
(78,910 |
) |
|
|
82,107 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Proceeds from borrowings under revolving credit |
|
|
311,500 |
|
|
|
238,900 |
|
|
|
1,468,515 |
|
|
|
1,100,300 |
|
| Repayment of borrowings under revolving credit |
|
|
(355,100 |
) |
|
|
(519,200 |
) |
|
|
(1,724,615 |
) |
|
|
(1,363,600 |
) |
| Proceeds from issuance of senior unsecured notes |
|
|
— |
|
|
|
— |
|
|
|
500,000 |
|
|
|
— |
|
| Proceeds from issuance of term loan, net of discount |
|
|
— |
|
|
|
— |
|
|
|
997,500 |
|
|
|
— |
|
| Repayment of senior unsecured notes |
|
|
— |
|
|
|
— |
|
|
|
(550,000 |
) |
|
|
— |
|
| Repayment of term loan |
|
|
(2,500 |
) |
|
|
— |
|
|
|
(786,063 |
) |
|
|
(3,969 |
) |
| Repayment of other long-term debt |
|
|
(58 |
) |
|
|
(92 |
) |
|
|
(215 |
) |
|
|
(849 |
) |
| Payment of deferred financing costs |
|
|
(504 |
) |
|
|
(683 |
) |
|
|
(3,152 |
) |
|
|
(1,340 |
) |
| Equity offering, net of offering costs |
|
|
16,376 |
|
|
|
— |
|
|
|
220,353 |
|
|
|
— |
|
| Issuance of common stock in connection with employee benefit plans |
|
|
1,530 |
|
|
|
222 |
|
|
|
6,217 |
|
|
|
429 |
|
| Dividends paid |
|
|
(7,754 |
) |
|
|
(6,499 |
) |
|
|
(20,840 |
) |
|
|
(6,499 |
) |
| Distributions to noncontrolling interests |
|
|
(4,009 |
) |
|
|
(118 |
) |
|
|
(9,604 |
) |
|
|
(1,628 |
) |
| Other |
|
|
183 |
|
|
|
53 |
|
|
|
2,304 |
|
|
|
404 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net cash provided by (used in) financing activities |
|
|
(40,336 |
) |
|
|
(287,417 |
) |
|
|
100,400 |
|
|
|
(276,752 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Change in cash and cash equivalents |
|
|
36,368 |
|
|
|
7,152 |
|
|
|
45,812 |
|
|
|
(5,428 |
) |
| Cash and cash equivalents at beginning of period |
|
|
45,416 |
|
|
|
37,427 |
|
|
|
35,972 |
|
|
|
50,007 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cash and cash equivalents at end of period |
|
$ |
81,784 |
|
|
$ |
44,579 |
|
|
$ |
81,784 |
|
|
$ |
44,579 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- MORE -
Kindred Healthcare Announces Third Quarter 2014 Results
Page
12
November 5, 2014
KINDRED HEALTHCARE, INC.
Condensed Consolidated Statement of Operations
(Unaudited)
(In thousands,
except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
2013 Quarters |
|
|
2014 Quarters |
|
| |
|
First |
|
|
Second |
|
|
Third |
|
|
Fourth |
|
|
First |
|
|
Second |
|
|
Third |
|
| Revenues |
|
$ |
1,259,434 |
|
|
$ |
1,191,030 |
|
|
$ |
1,175,445 |
|
|
$ |
1,209,676 |
|
|
$ |
1,286,742 |
|
|
$ |
1,275,964 |
|
|
$ |
1,243,313 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Salaries, wages and benefits |
|
|
781,865 |
|
|
|
715,619 |
|
|
|
718,227 |
|
|
|
738,952 |
|
|
|
773,812 |
|
|
|
770,321 |
|
|
|
756,434 |
|
| Supplies |
|
|
84,146 |
|
|
|
80,603 |
|
|
|
79,498 |
|
|
|
78,694 |
|
|
|
81,988 |
|
|
|
80,794 |
|
|
|
79,394 |
|
| Rent |
|
|
76,519 |
|
|
|
77,324 |
|
|
|
76,762 |
|
|
|
80,921 |
|
|
|
81,048 |
|
|
|
80,209 |
|
|
|
80,192 |
|
| Other operating expenses |
|
|
230,675 |
|
|
|
227,981 |
|
|
|
261,842 |
|
|
|
245,262 |
|
|
|
249,604 |
|
|
|
261,418 |
|
|
|
257,225 |
|
| Other (income) expense |
|
|
(1,009 |
) |
|
|
(26 |
) |
|
|
51 |
|
|
|
(458 |
) |
|
|
(234 |
) |
|
|
(154 |
) |
|
|
(353 |
) |
| Impairment charges |
|
|
187 |
|
|
|
438 |
|
|
|
441 |
|
|
|
76,127 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
| Depreciation and amortization |
|
|
41,598 |
|
|
|
38,554 |
|
|
|
36,507 |
|
|
|
37,547 |
|
|
|
39,337 |
|
|
|
39,442 |
|
|
|
39,023 |
|
| Interest expense |
|
|
28,159 |
|
|
|
29,074 |
|
|
|
25,624 |
|
|
|
25,152 |
|
|
|
25,799 |
|
|
|
80,530 |
|
|
|
22,516 |
|
| Investment income |
|
|
(85 |
) |
|
|
(1,474 |
) |
|
|
(1,235 |
) |
|
|
(1,252 |
) |
|
|
(183 |
) |
|
|
(2,449 |
) |
|
|
(343 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,242,055 |
|
|
|
1,168,093 |
|
|
|
1,197,717 |
|
|
|
1,280,945 |
|
|
|
1,251,171 |
|
|
|
1,310,111 |
|
|
|
1,234,088 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income (loss) from continuing operations before income taxes |
|
|
17,379 |
|
|
|
22,937 |
|
|
|
(22,272 |
) |
|
|
(71,269 |
) |
|
|
35,571 |
|
|
|
(34,147 |
) |
|
|
9,225 |
|
| Provision (benefit) for income taxes |
|
|
6,505 |
|
|
|
9,208 |
|
|
|
(6,510 |
) |
|
|
(20,522 |
) |
|
|
13,585 |
|
|
|
(13,082 |
) |
|
|
3,079 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income (loss) from continuing operations |
|
|
10,874 |
|
|
|
13,729 |
|
|
|
(15,762 |
) |
|
|
(50,747 |
) |
|
|
21,986 |
|
|
|
(21,065 |
) |
|
|
6,146 |
|
| Discontinued operations, net of income taxes: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss from operations |
|
|
(5,376 |
) |
|
|
(1,050 |
) |
|
|
(25,466 |
) |
|
|
(7,150 |
) |
|
|
(6,501 |
) |
|
|
(8,153 |
) |
|
|
(7,601 |
) |
| Gain (loss) on divestiture of operations |
|
|
(2,025 |
) |
|
|
(10,852 |
) |
|
|
(65,016 |
) |
|
|
(5,994 |
) |
|
|
(3,006 |
) |
|
|
(2,018 |
) |
|
|
1,387 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss from discontinued operations |
|
|
(7,401 |
) |
|
|
(11,902 |
) |
|
|
(90,482 |
) |
|
|
(13,144 |
) |
|
|
(9,507 |
) |
|
|
(10,171 |
) |
|
|
(6,214 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income (loss) |
|
|
3,473 |
|
|
|
1,827 |
|
|
|
(106,244 |
) |
|
|
(63,891 |
) |
|
|
12,479 |
|
|
|
(31,236 |
) |
|
|
(68 |
) |
| (Earnings) loss attributable to noncontrolling interests: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Continuing operations |
|
|
(467 |
) |
|
|
(116 |
) |
|
|
(841 |
) |
|
|
(2,466 |
) |
|
|
(4,529 |
) |
|
|
(4,828 |
) |
|
|
(4,372 |
) |
| Discontinued operations |
|
|
51 |
|
|
|
34 |
|
|
|
87 |
|
|
|
61 |
|
|
|
70 |
|
|
|
253 |
|
|
|
78 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(416 |
) |
|
|
(82 |
) |
|
|
(754 |
) |
|
|
(2,405 |
) |
|
|
(4,459 |
) |
|
|
(4,575 |
) |
|
|
(4,294 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income (loss) attributable to Kindred |
|
$ |
3,057 |
|
|
$ |
1,745 |
|
|
$ |
(106,998 |
) |
|
$ |
(66,296 |
) |
|
$ |
8,020 |
|
|
$ |
(35,811 |
) |
|
$ |
(4,362 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Amounts attributable to Kindred stockholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income (loss) from continuing operations |
|
$ |
10,407 |
|
|
$ |
13,613 |
|
|
$ |
(16,603 |
) |
|
$ |
(53,213 |
) |
|
$ |
17,457 |
|
|
$ |
(25,893 |
) |
|
$ |
1,774 |
|
| Loss from discontinued operations |
|
|
(7,350 |
) |
|
|
(11,868 |
) |
|
|
(90,395 |
) |
|
|
(13,083 |
) |
|
|
(9,437 |
) |
|
|
(9,918 |
) |
|
|
(6,136 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income (loss) |
|
$ |
3,057 |
|
|
$ |
1,745 |
|
|
$ |
(106,998 |
) |
|
$ |
(66,296 |
) |
|
$ |
8,020 |
|
|
$ |
(35,811 |
) |
|
$ |
(4,362 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Earnings (loss) per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income (loss) from continuing operations |
|
$ |
0.20 |
|
|
$ |
0.25 |
|
|
$ |
(0.31 |
) |
|
$ |
(1.02 |
) |
|
$ |
0.32 |
|
|
$ |
(0.48 |
) |
|
$ |
0.03 |
|
| Discontinued operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss from operations |
|
|
(0.10 |
) |
|
|
(0.02 |
) |
|
|
(0.49 |
) |
|
|
(0.14 |
) |
|
|
(0.11 |
) |
|
|
(0.15 |
) |
|
|
(0.12 |
) |
| Gain (loss) on divestiture of operations |
|
|
(0.04 |
) |
|
|
(0.20 |
) |
|
|
(1.24 |
) |
|
|
(0.11 |
) |
|
|
(0.06 |
) |
|
|
(0.04 |
) |
|
|
0.02 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss from discontinued operations |
|
|
(0.14 |
) |
|
|
(0.22 |
) |
|
|
(1.73 |
) |
|
|
(0.25 |
) |
|
|
(0.17 |
) |
|
|
(0.19 |
) |
|
|
(0.10 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income (loss) |
|
$ |
0.06 |
|
|
$ |
0.03 |
|
|
$ |
(2.04 |
) |
|
$ |
(1.27 |
) |
|
$ |
0.15 |
|
|
$ |
(0.67 |
) |
|
$ |
(0.07 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Diluted: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income (loss) from continuing operations |
|
$ |
0.20 |
|
|
$ |
0.25 |
|
|
$ |
(0.31 |
) |
|
$ |
(1.02 |
) |
|
$ |
0.32 |
|
|
$ |
(0.48 |
) |
|
$ |
0.03 |
|
| Discontinued operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss from operations |
|
|
(0.10 |
) |
|
|
(0.02 |
) |
|
|
(0.49 |
) |
|
|
(0.14 |
) |
|
|
(0.11 |
) |
|
|
(0.15 |
) |
|
|
(0.12 |
) |
| Gain (loss) on divestiture of operations |
|
|
(0.04 |
) |
|
|
(0.20 |
) |
|
|
(1.24 |
) |
|
|
(0.11 |
) |
|
|
(0.06 |
) |
|
|
(0.04 |
) |
|
|
0.02 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss from discontinued operations |
|
|
(0.14 |
) |
|
|
(0.22 |
) |
|
|
(1.73 |
) |
|
|
(0.25 |
) |
|
|
(0.17 |
) |
|
|
(0.19 |
) |
|
|
(0.10 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income (loss) |
|
$ |
0.06 |
|
|
$ |
0.03 |
|
|
$ |
(2.04 |
) |
|
$ |
(1.27 |
) |
|
$ |
0.15 |
|
|
$ |
(0.67 |
) |
|
$ |
(0.07 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares used in computing earnings (loss) per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic |
|
|
52,062 |
|
|
|
52,265 |
|
|
|
52,323 |
|
|
|
52,344 |
|
|
|
52,641 |
|
|
|
53,714 |
|
|
|
62,863 |
|
| Diluted |
|
|
52,083 |
|
|
|
52,284 |
|
|
|
52,323 |
|
|
|
52,344 |
|
|
|
52,711 |
|
|
|
53,714 |
|
|
|
62,902 |
|
- MORE -
Kindred Healthcare Announces Third Quarter 2014 Results
Page
13
November 5, 2014
KINDRED HEALTHCARE, INC.
Condensed Business Segment Data
(Unaudited)
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
2013 Quarters |
|
|
2014 Quarters |
|
| |
|
First |
|
|
Second |
|
|
Third |
|
|
Fourth |
|
|
First |
|
|
Second |
|
|
Third |
|
| Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Hospital division |
|
$ |
657,814 |
|
|
$ |
606,604 |
|
|
$ |
594,154 |
|
|
$ |
606,988 |
|
|
$ |
646,458 |
|
|
$ |
632,156 |
|
|
$ |
609,452 |
|
| Nursing center division |
|
|
270,205 |
|
|
|
264,847 |
|
|
|
265,696 |
|
|
|
270,080 |
|
|
|
277,902 |
|
|
|
280,255 |
|
|
|
279,561 |
|
| Rehabilitation division: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Skilled nursing rehabilitation services |
|
|
258,750 |
|
|
|
249,647 |
|
|
|
245,330 |
|
|
|
243,280 |
|
|
|
254,255 |
|
|
|
253,989 |
|
|
|
247,042 |
|
| Hospital rehabilitation services |
|
|
74,523 |
|
|
|
69,777 |
|
|
|
68,296 |
|
|
|
74,017 |
|
|
|
73,964 |
|
|
|
75,324 |
|
|
|
74,808 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
333,273 |
|
|
|
319,424 |
|
|
|
313,626 |
|
|
|
317,297 |
|
|
|
328,219 |
|
|
|
329,313 |
|
|
|
321,850 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Care management division |
|
|
51,621 |
|
|
|
53,039 |
|
|
|
53,801 |
|
|
|
66,466 |
|
|
|
87,704 |
|
|
|
87,986 |
|
|
|
86,186 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,312,913 |
|
|
|
1,243,914 |
|
|
|
1,227,277 |
|
|
|
1,260,831 |
|
|
|
1,340,283 |
|
|
|
1,329,710 |
|
|
|
1,297,049 |
|
| Eliminations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Skilled nursing rehabilitation services |
|
|
(28,657 |
) |
|
|
(28,660 |
) |
|
|
(28,151 |
) |
|
|
(28,157 |
) |
|
|
(29,646 |
) |
|
|
(30,031 |
) |
|
|
(30,788 |
) |
| Hospital rehabilitation services |
|
|
(23,609 |
) |
|
|
(23,223 |
) |
|
|
(22,520 |
) |
|
|
(22,123 |
) |
|
|
(23,233 |
) |
|
|
(22,855 |
) |
|
|
(22,172 |
) |
| Nursing centers |
|
|
(1,213 |
) |
|
|
(1,001 |
) |
|
|
(1,161 |
) |
|
|
(875 |
) |
|
|
(662 |
) |
|
|
(860 |
) |
|
|
(776 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(53,479 |
) |
|
|
(52,884 |
) |
|
|
(51,832 |
) |
|
|
(51,155 |
) |
|
|
(53,541 |
) |
|
|
(53,746 |
) |
|
|
(53,736 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,259,434 |
|
|
$ |
1,191,030 |
|
|
$ |
1,175,445 |
|
|
$ |
1,209,676 |
|
|
$ |
1,286,742 |
|
|
$ |
1,275,964 |
|
|
$ |
1,243,313 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income (loss) from continuing operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Hospital division |
|
$ |
147,493 |
(a) |
|
$ |
129,366 |
|
|
$ |
112,483 |
(c) |
|
$ |
126,788 |
(i) |
|
$ |
145,395 |
|
|
$ |
132,878 |
(k) |
|
$ |
121,744 |
(o) |
| Nursing center division |
|
|
29,145 |
(a) |
|
|
36,018 |
|
|
|
31,505 |
|
|
|
35,585 |
|
|
|
38,471 |
|
|
|
36,880 |
(l) |
|
|
36,179 |
(o) |
| Rehabilitation division: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Skilled nursing rehabilitation services |
|
|
13,239 |
(a) |
|
|
21,623 |
|
|
|
(7,209 |
)(d) |
|
|
14,260 |
(j) |
|
|
18,328 |
|
|
|
19,982 |
(l) |
|
|
17,552 |
(o) |
| Hospital rehabilitation services |
|
|
18,132 |
(a) |
|
|
19,573 |
|
|
|
18,215 |
(e) |
|
|
18,005 |
(j) |
|
|
19,820 |
|
|
|
20,084 |
(l) |
|
|
18,273 |
(p) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31,371 |
|
|
|
41,196 |
|
|
|
11,006 |
|
|
|
32,265 |
|
|
|
38,148 |
|
|
|
40,066 |
|
|
|
35,825 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Care management division |
|
|
2,786 |
(a) |
|
|
3,961 |
|
|
|
1,085 |
(f) |
|
|
2,131 |
(j) |
|
|
4,697 |
|
|
|
7,065 |
(l) |
|
|
6,789 |
(o) |
| Corporate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Overhead |
|
|
(45,585 |
)(a) |
|
|
(43,196 |
) |
|
|
(39,157 |
)(g) |
|
|
(48,557 |
)(j) |
|
|
(44,050 |
) |
|
|
(48,365 |
)(l) |
|
|
(45,173 |
)(o) |
| Insurance subsidiary |
|
|
(509 |
) |
|
|
(384 |
) |
|
|
(482 |
) |
|
|
(539 |
) |
|
|
(406 |
) |
|
|
(443 |
) |
|
|
(637 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(46,094 |
) |
|
|
(43,580 |
) |
|
|
(39,639 |
) |
|
|
(49,096 |
) |
|
|
(44,456 |
) |
|
|
(48,808 |
) |
|
|
(45,810 |
) |
| Impairment charges |
|
|
(187 |
) |
|
|
(438 |
) |
|
|
(441 |
) |
|
|
(76,127 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
| Transaction costs |
|
|
(944 |
) |
|
|
(108 |
) |
|
|
(613 |
) |
|
|
(447 |
) |
|
|
(683 |
) |
|
|
(4,496 |
) |
|
|
(4,114 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating income (EBITDAR) |
|
|
163,570 |
|
|
|
166,415 |
|
|
|
115,386 |
|
|
|
71,099 |
|
|
|
181,572 |
|
|
|
163,585 |
|
|
|
150,613 |
|
| Rent |
|
|
(76,519 |
) |
|
|
(77,324 |
) |
|
|
(76,762 |
) |
|
|
(80,921 |
) |
|
|
(81,048 |
) |
|
|
(80,209 |
)(m) |
|
|
(80,192 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| EBITDA |
|
|
87,051 |
|
|
|
89,091 |
|
|
|
38,624 |
|
|
|
(9,822 |
) |
|
|
100,524 |
|
|
|
83,376 |
|
|
|
70,421 |
|
| Depreciation and amortization |
|
|
(41,598 |
) |
|
|
(38,554 |
) |
|
|
(36,507 |
) |
|
|
(37,547 |
) |
|
|
(39,337 |
) |
|
|
(39,442 |
) |
|
|
(39,023 |
) |
| Interest, net |
|
|
(28,074 |
) |
|
|
(27,600 |
)(b) |
|
|
(24,389 |
)(h) |
|
|
(23,900 |
) |
|
|
(25,616 |
) |
|
|
(78,081 |
)(n) |
|
|
(22,173 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income (loss) from continuing operations before income taxes |
|
|
17,379 |
|
|
|
22,937 |
|
|
|
(22,272 |
) |
|
|
(71,269 |
) |
|
|
35,571 |
|
|
|
(34,147 |
) |
|
|
9,225 |
|
| Provision (benefit) for income taxes |
|
|
6,505 |
|
|
|
9,208 |
|
|
|
(6,510 |
) |
|
|
(20,522 |
) |
|
|
13,585 |
|
|
|
(13,082 |
) |
|
|
3,079 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
10,874 |
|
|
$ |
13,729 |
|
|
$ |
(15,762 |
) |
|
$ |
(50,747 |
) |
|
$ |
21,986 |
|
|
$ |
(21,065 |
) |
|
$ |
6,146 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (a) |
Includes one-time bonus costs of $19.8 million (hospital division—$7.8 million, nursing center division—$4.6 million, rehabilitation division—$6.3 million (skilled nursing rehabilitation
services—$5.0 million and hospital rehabilitation services—$1.3 million), care management division—$0.8 million and corporate—$0.3 million). |
| (b) |
Includes $1.4 million of charges associated with the modification of certain of the Company’s senior debt. |
| (c) |
Includes costs of $5.5 million in connection with the closing of a TC hospital and a litigation charge of $0.7 million. |
| (d) |
Includes $23.1 million of litigation charges. |
| (e) |
Includes $0.3 million of severance and retirement costs. |
| (f) |
Includes $0.6 million of severance and retirement costs and $0.5 million of costs associated with closing a home health location. |
| (g) |
Includes $1.0 million of severance and retirement costs and $0.5 million of fees associated with the modification of certain of the Company’s senior debt. |
| (h) |
Includes $0.1 million of charges associated with the modification of certain of the Company’s senior debt. |
| (i) |
Includes costs of $0.5 million in connection with the closing of a TC hospital and a litigation charge of $7.0 million. |
| (j) |
Includes severance and retirement costs of $3.7 million (rehabilitation division—$1.2 million (skilled nursing rehabilitation services—$0.1 million and hospital rehabilitation services—$1.1 million), care
management division—$0.1 million and corporate—$2.4 million). |
| (k) |
Includes litigation costs of $4.6 million. |
| (l) |
Includes severance and other costs related to restructuring activities of $4.9 million (nursing center division—$3.2 million, rehabilitation division—$0.3 million (skilled nursing rehabilitation
services—$0.2 million and hospital rehabilitation services—$0.1 million), care management division—$0.8 million and corporate—$0.6 million). |
| (m) |
Includes lease cancellation charges of $0.3 million incurred in connection with restructuring activities. |
| (n) |
Includes $56.6 million of charges associated with debt refinancing. |
| (o) |
Includes severance costs of $1.8 million and other operating (income) expenses of ($0.1) million related to restructuring activities (hospital division—$0.6 million, nursing center division—$0.5 million,
skilling nursing rehabilitation services—($0.2) million, care management division—$0.4 million and corporate—$0.4 million). |
| (p) |
Includes $1.9 million allowance for doubtful account related to a customer bankruptcy. |
- MORE -
Kindred Healthcare Announces Third Quarter 2014 Results
Page
14
November 5, 2014
KINDRED HEALTHCARE, INC.
Condensed Consolidating Statement of Operations
(Unaudited)
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three months ended September 30, 2014 |
|
| |
|
Hospital
division
(a) |
|
|
Nursing
center
division
(a) |
|
|
Rehabilitation division |
|
|
Care
management
division (a) |
|
|
Corporate
(a) |
|
|
Transaction
costs |
|
|
Eliminations |
|
|
Consolidated |
|
| |
|
|
Skilled
nursing
services
(a) |
|
|
Hospital
services
(b) |
|
|
Total |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| Revenues |
|
$ |
609,452 |
|
|
$ |
279,561 |
|
|
$ |
247,042 |
|
|
$ |
74,808 |
|
|
$ |
321,850 |
|
|
$ |
86,186 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(53,736 |
) |
|
$ |
1,243,313 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Salaries, wages and benefits |
|
|
269,119 |
|
|
|
127,954 |
|
|
|
220,913 |
|
|
|
50,097 |
|
|
|
271,010 |
|
|
|
64,883 |
|
|
|
24,705 |
|
|
|
— |
|
|
|
(1,237 |
) |
|
|
756,434 |
|
| Supplies |
|
|
64,618 |
|
|
|
10,855 |
|
|
|
680 |
|
|
|
24 |
|
|
|
704 |
|
|
|
3,034 |
|
|
|
183 |
|
|
|
— |
|
|
|
— |
|
|
|
79,394 |
|
| Rent |
|
|
52,509 |
|
|
|
23,865 |
|
|
|
1,041 |
|
|
|
22 |
|
|
|
1,063 |
|
|
|
2,155 |
|
|
|
600 |
|
|
|
— |
|
|
|
— |
|
|
|
80,192 |
|
| Other operating expenses |
|
|
153,909 |
|
|
|
104,846 |
|
|
|
8,046 |
|
|
|
6,408 |
|
|
|
14,454 |
|
|
|
11,479 |
|
|
|
20,922 |
|
|
|
4,114 |
|
|
|
(52,499 |
) |
|
|
257,225 |
|
| Other (income) expense |
|
|
62 |
|
|
|
(273 |
) |
|
|
(149 |
) |
|
|
6 |
|
|
|
(143 |
) |
|
|
1 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(353 |
) |
| Depreciation and amortization |
|
|
16,851 |
|
|
|
7,881 |
|
|
|
2,866 |
|
|
|
2,364 |
|
|
|
5,230 |
|
|
|
2,105 |
|
|
|
6,956 |
|
|
|
— |
|
|
|
— |
|
|
|
39,023 |
|
| Interest expense |
|
|
189 |
|
|
|
13 |
|
|
|
49 |
|
|
|
— |
|
|
|
49 |
|
|
|
12 |
|
|
|
22,253 |
|
|
|
— |
|
|
|
— |
|
|
|
22,516 |
|
| Investment income |
|
|
(63 |
) |
|
|
(6 |
) |
|
|
(91 |
) |
|
|
— |
|
|
|
(91 |
) |
|
|
— |
|
|
|
(183 |
) |
|
|
— |
|
|
|
— |
|
|
|
(343 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
557,194 |
|
|
|
275,135 |
|
|
|
233,355 |
|
|
|
58,921 |
|
|
|
292,276 |
|
|
|
83,669 |
|
|
|
75,436 |
|
|
|
4,114 |
|
|
|
(53,736 |
) |
|
|
1,234,088 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income from continuing operations before income taxes |
|
$ |
52,258 |
|
|
$ |
4,426 |
|
|
$ |
13,687 |
|
|
$ |
15,887 |
|
|
$ |
29,574 |
|
|
$ |
2,517 |
|
|
$ |
(75,436 |
) |
|
$ |
(4,114 |
) |
|
$ |
— |
|
|
|
9,225 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Provision for income taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,079 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income from continuing operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
6,146 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Capital expenditures, excluding acquisitions (including discontinued operations): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Routine |
|
$ |
6,470 |
|
|
$ |
5,024 |
|
|
$ |
489 |
|
|
$ |
62 |
|
|
$ |
551 |
|
|
$ |
228 |
|
|
$ |
8,990 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
21,263 |
|
| Development |
|
|
— |
|
|
|
1,570 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,570 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
6,470 |
|
|
$ |
6,594 |
|
|
$ |
489 |
|
|
$ |
62 |
|
|
$ |
551 |
|
|
$ |
228 |
|
|
$ |
8,990 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
22,833 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three months ended September 30, 2013 |
|
| |
|
Hospital
division
(c) |
|
|
Nursing
center
division |
|
|
Rehabilitation division |
|
|
Care
management
division (f) |
|
|
Corporate
(g) |
|
|
Transaction
costs |
|
|
Eliminations |
|
|
Consolidated |
|
| |
|
|
Skilled
nursing
services
(d) |
|
|
Hospital
services
(e) |
|
|
Total |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| Revenues |
|
$ |
594,154 |
|
|
$ |
265,696 |
|
|
$ |
245,330 |
|
|
$ |
68,296 |
|
|
$ |
313,626 |
|
|
$ |
53,801 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(51,832 |
) |
|
$ |
1,175,445 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Salaries, wages and benefits |
|
|
261,743 |
|
|
|
126,245 |
|
|
|
220,267 |
|
|
|
45,872 |
|
|
|
266,139 |
|
|
|
43,184 |
|
|
|
21,019 |
|
|
|
— |
|
|
|
(103 |
) |
|
|
718,227 |
|
| Supplies |
|
|
63,877 |
|
|
|
12,343 |
|
|
|
750 |
|
|
|
28 |
|
|
|
778 |
|
|
|
2,277 |
|
|
|
223 |
|
|
|
— |
|
|
|
— |
|
|
|
79,498 |
|
| Rent |
|
|
49,761 |
|
|
|
24,111 |
|
|
|
1,123 |
|
|
|
19 |
|
|
|
1,142 |
|
|
|
1,193 |
|
|
|
555 |
|
|
|
— |
|
|
|
— |
|
|
|
76,762 |
|
| Other operating expenses |
|
|
156,049 |
|
|
|
95,784 |
|
|
|
31,342 |
|
|
|
4,150 |
|
|
|
35,492 |
|
|
|
7,237 |
|
|
|
18,396 |
|
|
|
613 |
|
|
|
(51,729 |
) |
|
|
261,842 |
|
| Other (income) expense |
|
|
2 |
|
|
|
(181 |
) |
|
|
180 |
|
|
|
31 |
|
|
|
211 |
|
|
|
18 |
|
|
|
1 |
|
|
|
— |
|
|
|
— |
|
|
|
51 |
|
| Impairment charges |
|
|
418 |
|
|
|
23 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
441 |
|
| Depreciation and amortization |
|
|
16,750 |
|
|
|
6,479 |
|
|
|
2,461 |
|
|
|
2,281 |
|
|
|
4,742 |
|
|
|
1,638 |
|
|
|
6,898 |
|
|
|
— |
|
|
|
— |
|
|
|
36,507 |
|
| Interest expense |
|
|
203 |
|
|
|
4 |
|
|
|
63 |
|
|
|
— |
|
|
|
63 |
|
|
|
6 |
|
|
|
25,348 |
|
|
|
— |
|
|
|
— |
|
|
|
25,624 |
|
| Investment income |
|
|
(8 |
) |
|
|
(19 |
) |
|
|
(50 |
) |
|
|
— |
|
|
|
(50 |
) |
|
|
— |
|
|
|
(1,158 |
) |
|
|
— |
|
|
|
— |
|
|
|
(1,235 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
548,795 |
|
|
|
264,789 |
|
|
|
256,136 |
|
|
|
52,381 |
|
|
|
308,517 |
|
|
|
55,553 |
|
|
|
71,282 |
|
|
|
613 |
|
|
|
(51,832 |
) |
|
|
1,197,717 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income (loss) from continuing operations before income taxes |
|
$ |
45,359 |
|
|
$ |
907 |
|
|
$ |
(10,806 |
) |
|
$ |
15,915 |
|
|
$ |
5,109 |
|
|
$ |
(1,752 |
) |
|
$ |
(71,282 |
) |
|
$ |
(613 |
) |
|
$ |
— |
|
|
|
(22,272 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income tax benefit |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6,510 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss from continuing operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
(15,762 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Capital expenditures, excluding acquisitions (including discontinued operations): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Routine |
|
$ |
6,421 |
|
|
$ |
5,584 |
|
|
$ |
860 |
|
|
$ |
31 |
|
|
$ |
891 |
|
|
$ |
522 |
|
|
$ |
9,734 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
23,152 |
|
| Development |
|
|
3,235 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3,235 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
9,656 |
|
|
$ |
5,584 |
|
|
$ |
860 |
|
|
$ |
31 |
|
|
$ |
891 |
|
|
$ |
522 |
|
|
$ |
9,734 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
26,387 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (a) |
Includes severance costs (included in salaries, wages and benefits) of $1.8 million, other operating expenses of $0.1 million and other income of $0.2 million related to restructuring activities (hospital
division—$0.6 million, nursing center division—$0.5 million, skilled nursing rehabilitation services—$0.2 million income, care management division—$0.4 million and corporate—$0.4 million). |
| (b) |
Includes $1.9 million allowance for doubtful account (included in other operating expenses) related to a customer bankruptcy. |
| (c) |
Includes costs of $5.5 million ($0.2 million included in salaries, wages and benefits and $5.3 million included in other operating expenses) in connection with the closing of a TC hospital and a litigation charge
(included in other operating expenses) of $0.7 million. |
| (d) |
Includes $23.1 million of litigation charges (included in other operating expenses). |
| (e) |
Includes $0.3 million of severance and retirement costs (included in salaries, wages and benefits). |
| (f) |
Includes $0.6 million of severance and retirement costs (included in salaries, wages and benefits) and $0.5 million of costs (included in other operating expenses) associated with closing a home health location .
|
| (g) |
Includes $1.0 million of severance and retirement costs (included in salaries, wages and benefits) and $0.6 million of fees and charges ($0.5 million included in other operating expenses and $0.1 million included in
interest expense) associated with refinancing certain of the Company’s senior debt. |
- MORE -
Kindred Healthcare Announces Third Quarter 2014 Results
Page
15
November 5, 2014
KINDRED HEALTHCARE, INC.
Condensed Consolidating Statement of Operations
(Unaudited)
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Nine months ended September 30, 2014 |
|
| |
|
Hospital
division
(a,b) |
|
|
Nursing
center
division (b,c) |
|
|
Rehabilitation division |
|
|
Care
management
division (b) |
|
|
Corporate
(b,e) |
|
|
Transaction
costs |
|
|
Eliminations |
|
|
Consolidated |
|
| |
|
|
Skilled
nursing
services
(b) |
|
|
Hospital
services
(b,d) |
|
|
Total |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| Revenues |
|
$ |
1,888,066 |
|
|
$ |
837,718 |
|
|
$ |
755,286 |
|
|
$ |
224,096 |
|
|
$ |
979,382 |
|
|
$ |
261,876 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(161,023 |
) |
|
$ |
3,806,019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Salaries, wages and benefits |
|
|
815,047 |
|
|
|
384,349 |
|
|
|
669,427 |
|
|
|
150,399 |
|
|
|
819,826 |
|
|
|
200,376 |
|
|
|
82,356 |
|
|
|
339 |
|
|
|
(1,726 |
) |
|
|
2,300,567 |
|
| Supplies |
|
|
198,295 |
|
|
|
32,183 |
|
|
|
2,096 |
|
|
|
91 |
|
|
|
2,187 |
|
|
|
8,966 |
|
|
|
545 |
|
|
|
— |
|
|
|
— |
|
|
|
242,176 |
|
| Rent |
|
|
158,170 |
|
|
|
71,673 |
|
|
|
3,197 |
|
|
|
95 |
|
|
|
3,292 |
|
|
|
6,588 |
|
|
|
1,726 |
|
|
|
— |
|
|
|
— |
|
|
|
241,449 |
|
| Other operating expenses |
|
|
474,723 |
|
|
|
310,272 |
|
|
|
28,041 |
|
|
|
15,412 |
|
|
|
43,453 |
|
|
|
33,979 |
|
|
|
56,163 |
|
|
|
8,954 |
|
|
|
(159,297 |
) |
|
|
768,247 |
|
| Other (income) expense |
|
|
(16 |
) |
|
|
(616 |
) |
|
|
(140 |
) |
|
|
17 |
|
|
|
(123 |
) |
|
|
4 |
|
|
|
10 |
|
|
|
— |
|
|
|
— |
|
|
|
(741 |
) |
| Depreciation and amortization |
|
|
50,844 |
|
|
|
23,109 |
|
|
|
8,446 |
|
|
|
7,416 |
|
|
|
15,862 |
|
|
|
6,369 |
|
|
|
21,618 |
|
|
|
— |
|
|
|
— |
|
|
|
117,802 |
|
| Interest expense |
|
|
561 |
|
|
|
25 |
|
|
|
158 |
|
|
|
— |
|
|
|
158 |
|
|
|
34 |
|
|
|
128,067 |
|
|
|
— |
|
|
|
— |
|
|
|
128,845 |
|
| Investment income |
|
|
(81 |
) |
|
|
(27 |
) |
|
|
(375 |
) |
|
|
— |
|
|
|
(375 |
) |
|
|
(1 |
) |
|
|
(2,491 |
) |
|
|
— |
|
|
|
— |
|
|
|
(2,975 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,697,543 |
|
|
|
820,968 |
|
|
|
710,850 |
|
|
|
173,430 |
|
|
|
884,280 |
|
|
|
256,315 |
|
|
|
287,994 |
|
|
|
9,293 |
|
|
|
(161,023 |
) |
|
|
3,795,370 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income from continuing operations before income taxes |
|
$ |
190,523 |
|
|
$ |
16,750 |
|
|
$ |
44,436 |
|
|
$ |
50,666 |
|
|
$ |
95,102 |
|
|
$ |
5,561 |
|
|
$ |
(287,994 |
) |
|
$ |
(9,293 |
) |
|
$ |
— |
|
|
|
10,649 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Provision for income taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,582 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income from continuing operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
7,067 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Capital expenditures, excluding acquisitions (including discontinued operations): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Routine |
|
$ |
23,097 |
|
|
$ |
15,242 |
|
|
$ |
1,931 |
|
|
$ |
162 |
|
|
$ |
2,093 |
|
|
$ |
704 |
|
|
$ |
26,289 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
67,425 |
|
| Development |
|
|
562 |
|
|
|
2,131 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,693 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
23,659 |
|
|
$ |
17,373 |
|
|
$ |
1,931 |
|
|
$ |
162 |
|
|
$ |
2,093 |
|
|
$ |
704 |
|
|
$ |
26,289 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
70,118 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Nine months ended September 30, 2013 |
|
| |
|
Hospital
division
(f,g) |
|
|
Nursing
center
division (f) |
|
|
Rehabilitation division |
|
|
Care
management
division (f,j) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
Skilled
nursing
services
(f,h) |
|
|
Hospital
services
(f,i) |
|
|
Total |
|
|
|
Corporate
(f,k) |
|
|
Transaction
costs |
|
|
Eliminations |
|
|
Consolidated |
|
| |
|
|
|
|
|
|
|
|
|
| Revenues |
|
$ |
1,858,572 |
|
|
$ |
800,748 |
|
|
$ |
753,727 |
|
|
$ |
212,596 |
|
|
$ |
966,323 |
|
|
$ |
158,461 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(158,195 |
) |
|
$ |
3,625,909 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Salaries, wages and benefits |
|
|
812,762 |
|
|
|
384,670 |
|
|
|
674,985 |
|
|
|
144,528 |
|
|
|
819,513 |
|
|
|
123,228 |
|
|
|
75,949 |
|
|
|
— |
|
|
|
(411 |
) |
|
|
2,215,711 |
|
| Supplies |
|
|
196,760 |
|
|
|
37,625 |
|
|
|
2,346 |
|
|
|
90 |
|
|
|
2,436 |
|
|
|
6,840 |
|
|
|
586 |
|
|
|
— |
|
|
|
— |
|
|
|
244,247 |
|
| Rent |
|
|
149,564 |
|
|
|
72,091 |
|
|
|
3,555 |
|
|
|
55 |
|
|
|
3,610 |
|
|
|
3,534 |
|
|
|
1,806 |
|
|
|
— |
|
|
|
— |
|
|
|
230,605 |
|
| Other operating expenses |
|
|
459,631 |
|
|
|
282,622 |
|
|
|
48,524 |
|
|
|
11,999 |
|
|
|
60,523 |
|
|
|
20,543 |
|
|
|
53,298 |
|
|
|
1,665 |
|
|
|
(157,784 |
) |
|
|
720,498 |
|
| Other (income) expense |
|
|
77 |
|
|
|
(837 |
) |
|
|
219 |
|
|
|
59 |
|
|
|
278 |
|
|
|
18 |
|
|
|
(520 |
) |
|
|
— |
|
|
|
— |
|
|
|
(984 |
) |
| Impairment charges |
|
|
1,002 |
|
|
|
64 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,066 |
|
| Depreciation and amortization |
|
|
53,997 |
|
|
|
20,634 |
|
|
|
8,451 |
|
|
|
6,931 |
|
|
|
15,382 |
|
|
|
4,779 |
|
|
|
21,867 |
|
|
|
— |
|
|
|
— |
|
|
|
116,659 |
|
| Interest expense |
|
|
564 |
|
|
|
10 |
|
|
|
232 |
|
|
|
— |
|
|
|
232 |
|
|
|
6 |
|
|
|
82,045 |
|
|
|
— |
|
|
|
— |
|
|
|
82,857 |
|
| Investment income |
|
|
(14 |
) |
|
|
(40 |
) |
|
|
(152 |
) |
|
|
— |
|
|
|
(152 |
) |
|
|
— |
|
|
|
(2,588 |
) |
|
|
— |
|
|
|
— |
|
|
|
(2,794 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,674,343 |
|
|
|
796,839 |
|
|
|
738,160 |
|
|
|
163,662 |
|
|
|
901,822 |
|
|
|
158,948 |
|
|
|
232,443 |
|
|
|
1,665 |
|
|
|
(158,195 |
) |
|
|
3,607,865 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income (loss) from continuing operations before income taxes |
|
$ |
184,229 |
|
|
$ |
3,909 |
|
|
$ |
15,567 |
|
|
$ |
48,934 |
|
|
$ |
64,501 |
|
|
$ |
(487 |
) |
|
$ |
(232,443 |
) |
|
$ |
(1,665 |
) |
|
$ |
— |
|
|
|
18,044 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Provision for income taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,203 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income from continuing operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
8,841 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Capital expenditures, excluding acquisitions (including discontinued operations): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Routine |
|
$ |
22,285 |
|
|
$ |
15,662 |
|
|
$ |
1,929 |
|
|
$ |
108 |
|
|
$ |
2,037 |
|
|
$ |
1,056 |
|
|
$ |
21,912 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
62,952 |
|
| Development |
|
|
10,702 |
|
|
|
7 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
10,709 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
32,987 |
|
|
$ |
15,669 |
|
|
$ |
1,929 |
|
|
$ |
108 |
|
|
$ |
2,037 |
|
|
$ |
1,056 |
|
|
$ |
21,912 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
73,661 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (a) |
Includes litigation costs (included in other operating expenses) of $4.6 million. |
| (b) |
Includes severance costs (included in salaries, wages and benefits) of $6.6 million, other operating expenses of $0.2 million and other income of $0.2 million related to restructuring activities (hospital
division—$0.6 million, nursing center division—$3.7 million, rehabilitation division—$0.1 million (skilled nursing rehabilitation services—$0.2 million expense as well as $0.2 million income and hospital rehabilitation
services—$0.1 million), care management division—$1.2 million and corporate—$1.0 million). |
| (c) |
Includes lease cancellation charges (included in rent) of $0.3 million incurred in connection with restructuring activities. |
| (d) |
Includes $1.9 million allowance for doubtful account (included in other operating expenses) related to a customer bankruptcy. |
| (e) |
Includes $56.6 million of charges (included in interest expense) associated with debt refinancing. |
| (f) |
Includes one-time bonus costs (included in salaries, wages and benefits) of $19.8 million (hospital division—$7.8 million, nursing center division—$4.6 million, rehabilitation division—$6.3 million
(skilled nursing rehabilitation services—$5.0 million and hospital rehabilitation services—$1.3 million), care management division—$0.8 million and corporate—$0.3 million). |
| (g) |
Includes costs of $5.5 million ($0.2 million included in salaries, wages and benefits and $5.3 million included in other operating expenses) in connection with the closing of a TC hospital and a litigation charge
(included in other operating expenses) of $0.7 million. |
| (h) |
Includes $23.1 million of litigation charges (included in other operating expenses). |
| (i) |
Includes $0.3 million of severance and retirement costs (included in salaries, wages and benefits). |
| (j) |
Includes $0.6 million of severance and retirement costs (included in salaries, wages and benefits) and $0.5 million of costs (included in other operating expenses) associated with closing a home health location.
|
| (k) |
Includes $1.0 million of severance and retirement costs (included in salaries, wages and benefits) and $2.0 million of fees and charges ($0.5 million included in other operating expenses and $1.5 million included in
interest expense) associated with refinancing certain of the Company’s senior debt. |
- MORE -
Kindred Healthcare Announces Third Quarter 2014 Results
Page
16
November 5, 2014
KINDRED HEALTHCARE, INC.
Condensed Business Segment Data
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
2013 Quarters |
|
|
2014 Quarters |
|
| |
|
First |
|
|
Second |
|
|
Third |
|
|
Fourth |
|
|
First |
|
|
Second |
|
|
Third |
|
| Hospital division data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| End of period data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Number of hospitals: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Transitional care |
|
|
97 |
|
|
|
97 |
|
|
|
97 |
|
|
|
97 |
|
|
|
97 |
|
|
|
97 |
|
|
|
97 |
|
| Inpatient rehabilitation |
|
|
5 |
|
|
|
5 |
|
|
|
5 |
|
|
|
5 |
|
|
|
5 |
|
|
|
5 |
|
|
|
5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
102 |
|
|
|
102 |
|
|
|
102 |
|
|
|
102 |
|
|
|
102 |
|
|
|
102 |
|
|
|
102 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Number of licensed beds: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Transitional care |
|
|
7,059 |
|
|
|
7,059 |
|
|
|
7,073 |
|
|
|
7,105 |
|
|
|
7,145 |
|
|
|
7,145 |
|
|
|
7,145 |
|
| Inpatient rehabilitation |
|
|
215 |
|
|
|
215 |
|
|
|
215 |
|
|
|
215 |
|
|
|
215 |
|
|
|
215 |
|
|
|
215 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,274 |
|
|
|
7,274 |
|
|
|
7,288 |
|
|
|
7,320 |
|
|
|
7,360 |
|
|
|
7,360 |
|
|
|
7,360 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenue mix %: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Medicare |
|
|
62.5 |
|
|
|
60.7 |
|
|
|
59.1 |
|
|
|
59.3 |
|
|
|
60.2 |
|
|
|
58.9 |
|
|
|
57.6 |
|
| Medicaid |
|
|
5.4 |
|
|
|
5.9 |
|
|
|
6.9 |
|
|
|
6.2 |
|
|
|
6.5 |
|
|
|
6.6 |
|
|
|
6.7 |
|
| Medicare Advantage |
|
|
10.2 |
|
|
|
11.1 |
|
|
|
11.1 |
|
|
|
11.7 |
|
|
|
11.2 |
|
|
|
11.0 |
|
|
|
10.4 |
|
| Medicaid Managed |
|
|
1.9 |
|
|
|
1.9 |
|
|
|
2.0 |
|
|
|
1.9 |
|
|
|
2.3 |
|
|
|
2.9 |
|
|
|
3.7 |
|
| Commercial insurance and other |
|
|
20.0 |
|
|
|
20.4 |
|
|
|
20.9 |
|
|
|
20.9 |
|
|
|
19.8 |
|
|
|
20.6 |
|
|
|
21.6 |
|
| Admissions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Medicare |
|
|
10,274 |
|
|
|
9,432 |
|
|
|
9,010 |
|
|
|
9,255 |
|
|
|
9,858 |
|
|
|
9,410 |
|
|
|
9,221 |
|
| Medicaid |
|
|
685 |
|
|
|
744 |
|
|
|
788 |
|
|
|
712 |
|
|
|
835 |
|
|
|
914 |
|
|
|
831 |
|
| Medicare Advantage |
|
|
1,519 |
|
|
|
1,474 |
|
|
|
1,422 |
|
|
|
1,450 |
|
|
|
1,515 |
|
|
|
1,449 |
|
|
|
1,305 |
|
| Medicaid Managed |
|
|
209 |
|
|
|
208 |
|
|
|
225 |
|
|
|
252 |
|
|
|
317 |
|
|
|
381 |
|
|
|
511 |
|
| Commercial insurance and other |
|
|
1,951 |
|
|
|
1,869 |
|
|
|
1,874 |
|
|
|
1,818 |
|
|
|
2,107 |
|
|
|
2,055 |
|
|
|
1,873 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,638 |
|
|
|
13,727 |
|
|
|
13,319 |
|
|
|
13,487 |
|
|
|
14,632 |
|
|
|
14,209 |
|
|
|
13,741 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Admissions mix %: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Medicare |
|
|
70.2 |
|
|
|
68.7 |
|
|
|
67.6 |
|
|
|
68.6 |
|
|
|
67.4 |
|
|
|
66.2 |
|
|
|
67.1 |
|
| Medicaid |
|
|
4.7 |
|
|
|
5.4 |
|
|
|
5.9 |
|
|
|
5.3 |
|
|
|
5.7 |
|
|
|
6.4 |
|
|
|
6.1 |
|
| Medicare Advantage |
|
|
10.4 |
|
|
|
10.8 |
|
|
|
10.7 |
|
|
|
10.7 |
|
|
|
10.3 |
|
|
|
10.2 |
|
|
|
9.5 |
|
| Medicaid Managed |
|
|
1.4 |
|
|
|
1.5 |
|
|
|
1.7 |
|
|
|
1.9 |
|
|
|
2.2 |
|
|
|
2.7 |
|
|
|
3.7 |
|
| Commercial insurance and other |
|
|
13.3 |
|
|
|
13.6 |
|
|
|
14.1 |
|
|
|
13.5 |
|
|
|
14.4 |
|
|
|
14.5 |
|
|
|
13.6 |
|
| Patient days: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Medicare |
|
|
252,195 |
|
|
|
234,490 |
|
|
|
223,639 |
|
|
|
226,662 |
|
|
|
239,759 |
|
|
|
230,122 |
|
|
|
222,704 |
|
| Medicaid |
|
|
28,765 |
|
|
|
30,425 |
|
|
|
31,569 |
|
|
|
29,799 |
|
|
|
32,909 |
|
|
|
32,821 |
|
|
|
30,786 |
|
| Medicare Advantage |
|
|
43,016 |
|
|
|
43,040 |
|
|
|
41,842 |
|
|
|
43,784 |
|
|
|
44,979 |
|
|
|
44,094 |
|
|
|
40,901 |
|
| Medicaid Managed |
|
|
8,808 |
|
|
|
8,342 |
|
|
|
8,264 |
|
|
|
8,238 |
|
|
|
10,733 |
|
|
|
13,247 |
|
|
|
16,595 |
|
| Commercial insurance and other |
|
|
63,227 |
|
|
|
57,091 |
|
|
|
59,575 |
|
|
|
57,334 |
|
|
|
62,858 |
|
|
|
61,892 |
|
|
|
60,187 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
396,011 |
|
|
|
373,388 |
|
|
|
364,889 |
|
|
|
365,817 |
|
|
|
391,238 |
|
|
|
382,176 |
|
|
|
371,173 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Average length of stay: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Medicare |
|
|
24.5 |
|
|
|
24.9 |
|
|
|
24.8 |
|
|
|
24.5 |
|
|
|
24.3 |
|
|
|
24.5 |
|
|
|
24.2 |
|
| Medicaid |
|
|
42.0 |
|
|
|
40.9 |
|
|
|
40.1 |
|
|
|
41.9 |
|
|
|
39.4 |
|
|
|
35.9 |
|
|
|
37.0 |
|
| Medicare Advantage |
|
|
28.3 |
|
|
|
29.2 |
|
|
|
29.4 |
|
|
|
30.2 |
|
|
|
29.7 |
|
|
|
30.4 |
|
|
|
31.3 |
|
| Medicaid Managed |
|
|
42.1 |
|
|
|
40.1 |
|
|
|
36.7 |
|
|
|
32.7 |
|
|
|
33.9 |
|
|
|
34.8 |
|
|
|
32.5 |
|
| Commercial insurance and other |
|
|
32.4 |
|
|
|
30.5 |
|
|
|
31.8 |
|
|
|
31.5 |
|
|
|
29.8 |
|
|
|
30.1 |
|
|
|
32.1 |
|
| Weighted average |
|
|
27.1 |
|
|
|
27.2 |
|
|
|
27.4 |
|
|
|
27.1 |
|
|
|
26.7 |
|
|
|
26.9 |
|
|
|
27.0 |
|
- MORE -
Kindred Healthcare Announces Third Quarter 2014 Results
Page
17
November 5, 2014
KINDRED HEALTHCARE, INC.
Condensed Business Segment Data (Continued)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
2013 Quarters |
|
|
2014 Quarters |
|
| |
|
First |
|
|
Second |
|
|
Third |
|
|
Fourth |
|
|
First |
|
|
Second |
|
|
Third |
|
| Hospital division data (continued): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenues per admission: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Medicare |
|
$ |
40,051 |
|
|
$ |
39,004 |
|
|
$ |
38,993 |
|
|
$ |
38,869 |
|
|
$ |
39,482 |
|
|
$ |
39,559 |
|
|
$ |
38,088 |
|
| Medicaid |
|
|
51,450 |
|
|
|
48,221 |
|
|
|
51,934 |
|
|
|
52,635 |
|
|
|
50,201 |
|
|
|
45,392 |
|
|
|
49,204 |
|
| Medicare Advantage |
|
|
44,326 |
|
|
|
45,709 |
|
|
|
46,429 |
|
|
|
49,051 |
|
|
|
47,739 |
|
|
|
48,067 |
|
|
|
48,586 |
|
| Medicaid Managed |
|
|
58,770 |
|
|
|
55,496 |
|
|
|
52,771 |
|
|
|
46,112 |
|
|
|
47,781 |
|
|
|
48,953 |
|
|
|
44,406 |
|
| Commercial insurance and other |
|
|
67,389 |
|
|
|
66,306 |
|
|
|
66,170 |
|
|
|
69,876 |
|
|
|
60,679 |
|
|
|
63,315 |
|
|
|
70,078 |
|
| Weighted average |
|
|
44,939 |
|
|
|
44,190 |
|
|
|
44,609 |
|
|
|
45,006 |
|
|
|
44,181 |
|
|
|
44,490 |
|
|
|
44,353 |
|
| Revenues per patient day: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Medicare |
|
$ |
1,632 |
|
|
$ |
1,569 |
|
|
$ |
1,571 |
|
|
$ |
1,587 |
|
|
$ |
1,623 |
|
|
$ |
1,618 |
|
|
$ |
1,577 |
|
| Medicaid |
|
|
1,225 |
|
|
|
1,179 |
|
|
|
1,296 |
|
|
|
1,258 |
|
|
|
1,274 |
|
|
|
1,264 |
|
|
|
1,328 |
|
| Medicare Advantage |
|
|
1,565 |
|
|
|
1,565 |
|
|
|
1,578 |
|
|
|
1,624 |
|
|
|
1,608 |
|
|
|
1,580 |
|
|
|
1,550 |
|
| Medicaid Managed |
|
|
1,395 |
|
|
|
1,384 |
|
|
|
1,437 |
|
|
|
1,411 |
|
|
|
1,411 |
|
|
|
1,408 |
|
|
|
1,367 |
|
| Commercial insurance and other |
|
|
2,079 |
|
|
|
2,171 |
|
|
|
2,081 |
|
|
|
2,216 |
|
|
|
2,034 |
|
|
|
2,102 |
|
|
|
2,181 |
|
| Weighted average |
|
|
1,661 |
|
|
|
1,625 |
|
|
|
1,628 |
|
|
|
1,659 |
|
|
|
1,652 |
|
|
|
1,654 |
|
|
|
1,642 |
|
| Medicare case mix index (discharged patients only) |
|
|
1.18 |
|
|
|
1.18 |
|
|
|
1.16 |
|
|
|
1.16 |
|
|
|
1.17 |
|
|
|
1.18 |
|
|
|
1.16 |
|
|
|
|
|
|
|
|
|
| Average daily census |
|
|
4,400 |
|
|
|
4,103 |
|
|
|
3,966 |
|
|
|
3,976 |
|
|
|
4,347 |
|
|
|
4,200 |
|
|
|
4,034 |
|
| Occupancy % |
|
|
68.3 |
|
|
|
63.5 |
|
|
|
61.1 |
|
|
|
61.4 |
|
|
|
67.4 |
|
|
|
64.9 |
|
|
|
62.3 |
|
|
|
|
|
|
|
|
|
| Annualized employee turnover % |
|
|
22.1 |
|
|
|
21.7 |
|
|
|
21.4 |
|
|
|
21.3 |
|
|
|
20.7 |
|
|
|
20.8 |
|
|
|
21.5 |
|
| Nursing center division data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| End of period data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Number of facilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Nursing centers: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Owned or leased |
|
|
94 |
|
|
|
94 |
|
|
|
94 |
|
|
|
94 |
|
|
|
94 |
|
|
|
94 |
|
|
|
95 |
|
| Managed |
|
|
4 |
|
|
|
4 |
|
|
|
4 |
|
|
|
4 |
|
|
|
4 |
|
|
|
4 |
|
|
|
4 |
|
| Assisted living facilities |
|
|
6 |
|
|
|
6 |
|
|
|
6 |
|
|
|
6 |
|
|
|
6 |
|
|
|
6 |
|
|
|
6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
104 |
|
|
|
104 |
|
|
|
104 |
|
|
|
104 |
|
|
|
104 |
|
|
|
104 |
|
|
|
105 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Number of licensed beds: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Nursing centers: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Owned or leased |
|
|
11,921 |
|
|
|
11,921 |
|
|
|
11,921 |
|
|
|
11,921 |
|
|
|
11,921 |
|
|
|
11,909 |
|
|
|
11,993 |
|
| Managed |
|
|
485 |
|
|
|
485 |
|
|
|
485 |
|
|
|
485 |
|
|
|
485 |
|
|
|
485 |
|
|
|
485 |
|
| Assisted living facilities |
|
|
341 |
|
|
|
341 |
|
|
|
341 |
|
|
|
341 |
|
|
|
341 |
|
|
|
341 |
|
|
|
341 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,747 |
|
|
|
12,747 |
|
|
|
12,747 |
|
|
|
12,747 |
|
|
|
12,747 |
|
|
|
12,735 |
|
|
|
12,819 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenue mix %: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Medicare |
|
|
35.0 |
|
|
|
34.0 |
|
|
|
33.1 |
|
|
|
32.1 |
|
|
|
32.0 |
|
|
|
31.8 |
|
|
|
31.1 |
|
| Medicaid |
|
|
35.7 |
|
|
|
36.4 |
|
|
|
38.8 |
|
|
|
39.8 |
|
|
|
40.4 |
|
|
|
39.7 |
|
|
|
40.2 |
|
| Medicare Advantage |
|
|
8.2 |
|
|
|
8.3 |
|
|
|
7.3 |
|
|
|
7.8 |
|
|
|
8.6 |
|
|
|
8.1 |
|
|
|
8.6 |
|
| Medicaid Managed |
|
|
3.4 |
|
|
|
3.5 |
|
|
|
3.5 |
|
|
|
3.5 |
|
|
|
3.2 |
|
|
|
3.6 |
|
|
|
4.5 |
|
| Private and other |
|
|
17.7 |
|
|
|
17.8 |
|
|
|
17.3 |
|
|
|
16.8 |
|
|
|
15.8 |
|
|
|
16.8 |
|
|
|
15.6 |
|
- MORE -
Kindred Healthcare Announces Third Quarter 2014 Results
Page
18
November 5, 2014
KINDRED HEALTHCARE, INC.
Condensed Business Segment Data (Continued)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
2013 Quarters |
|
|
2014 Quarters |
|
| |
|
First |
|
|
Second |
|
|
Third |
|
|
Fourth |
|
|
First |
|
|
Second |
|
|
Third |
|
| Nursing center division data (continued): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Patient days (a): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Medicare |
|
|
167,391 |
|
|
|
158,780 |
|
|
|
154,562 |
|
|
|
148,179 |
|
|
|
148,957 |
|
|
|
149,385 |
|
|
|
144,903 |
|
| Medicaid |
|
|
505,962 |
|
|
|
506,025 |
|
|
|
515,789 |
|
|
|
522,071 |
|
|
|
516,487 |
|
|
|
506,917 |
|
|
|
508,368 |
|
| Medicare Advantage |
|
|
51,695 |
|
|
|
51,337 |
|
|
|
45,338 |
|
|
|
48,537 |
|
|
|
54,404 |
|
|
|
51,355 |
|
|
|
55,188 |
|
| Medicaid Managed |
|
|
52,500 |
|
|
|
52,532 |
|
|
|
53,740 |
|
|
|
53,100 |
|
|
|
49,857 |
|
|
|
55,997 |
|
|
|
70,634 |
|
| Private and other |
|
|
163,641 |
|
|
|
163,167 |
|
|
|
162,506 |
|
|
|
159,518 |
|
|
|
152,807 |
|
|
|
155,530 |
|
|
|
147,326 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
941,189 |
|
|
|
931,841 |
|
|
|
931,935 |
|
|
|
931,405 |
|
|
|
922,512 |
|
|
|
919,184 |
|
|
|
926,419 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Patient day mix % (a): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Medicare |
|
|
17.8 |
|
|
|
17.0 |
|
|
|
16.6 |
|
|
|
15.9 |
|
|
|
16.1 |
|
|
|
16.3 |
|
|
|
15.6 |
|
| Medicaid |
|
|
53.7 |
|
|
|
54.3 |
|
|
|
55.3 |
|
|
|
56.1 |
|
|
|
56.0 |
|
|
|
55.1 |
|
|
|
54.9 |
|
| Medicare Advantage |
|
|
5.5 |
|
|
|
5.5 |
|
|
|
4.9 |
|
|
|
5.2 |
|
|
|
5.9 |
|
|
|
5.6 |
|
|
|
6.0 |
|
| Medicaid Managed |
|
|
5.6 |
|
|
|
5.7 |
|
|
|
5.8 |
|
|
|
5.7 |
|
|
|
5.4 |
|
|
|
6.1 |
|
|
|
7.6 |
|
| Private and other |
|
|
17.4 |
|
|
|
17.5 |
|
|
|
17.4 |
|
|
|
17.1 |
|
|
|
16.6 |
|
|
|
16.9 |
|
|
|
15.9 |
|
| Revenues per patient day (a): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Medicare Part A |
|
$ |
528 |
|
|
$ |
527 |
|
|
$ |
527 |
|
|
$ |
542 |
|
|
$ |
552 |
|
|
$ |
551 |
|
|
$ |
551 |
|
| Total Medicare (including Part B) |
|
|
565 |
|
|
|
567 |
|
|
|
569 |
|
|
|
586 |
|
|
|
597 |
|
|
|
597 |
|
|
|
599 |
|
| Medicaid |
|
|
191 |
|
|
|
190 |
|
|
|
200 |
|
|
|
206 |
|
|
|
217 |
|
|
|
220 |
|
|
|
221 |
|
| Medicaid (net of provider taxes) (b) |
|
|
168 |
|
|
|
168 |
|
|
|
178 |
|
|
|
184 |
|
|
|
195 |
|
|
|
197 |
|
|
|
202 |
|
| Medicare Advantage |
|
|
427 |
|
|
|
430 |
|
|
|
428 |
|
|
|
435 |
|
|
|
441 |
|
|
|
442 |
|
|
|
436 |
|
| Medicaid Managed |
|
|
177 |
|
|
|
177 |
|
|
|
175 |
|
|
|
177 |
|
|
|
178 |
|
|
|
180 |
|
|
|
180 |
|
| Private and other |
|
|
292 |
|
|
|
289 |
|
|
|
283 |
|
|
|
284 |
|
|
|
288 |
|
|
|
302 |
|
|
|
296 |
|
| Weighted average |
|
|
287 |
|
|
|
284 |
|
|
|
285 |
|
|
|
290 |
|
|
|
301 |
|
|
|
305 |
|
|
|
302 |
|
|
|
|
|
|
|
|
|
| Average daily census (a) |
|
|
10,458 |
|
|
|
10,240 |
|
|
|
10,130 |
|
|
|
10,124 |
|
|
|
10,250 |
|
|
|
10,101 |
|
|
|
10,070 |
|
| Admissions (a) |
|
|
10,806 |
|
|
|
10,066 |
|
|
|
9,824 |
|
|
|
9,842 |
|
|
|
10,252 |
|
|
|
10,170 |
|
|
|
10,221 |
|
| Occupancy % (a) |
|
|
83.3 |
|
|
|
81.5 |
|
|
|
80.5 |
|
|
|
80.2 |
|
|
|
81.2 |
|
|
|
80.2 |
|
|
|
79.6 |
|
| Medicare average length of stay (a) |
|
|
30.4 |
|
|
|
31.1 |
|
|
|
31.8 |
|
|
|
31.5 |
|
|
|
29.8 |
|
|
|
29.7 |
|
|
|
30.2 |
|
|
|
|
|
|
|
|
|
| Annualized employee turnover % |
|
|
41.3 |
|
|
|
44.0 |
|
|
|
44.3 |
|
|
|
42.8 |
|
|
|
39.4 |
|
|
|
40.7 |
|
|
|
42.9 |
|
|
|
|
|
|
|
|
|
| Rehabilitation division data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Skilled nursing rehabilitation services: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenue mix %: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Company-operated |
|
|
11 |
|
|
|
11 |
|
|
|
11 |
|
|
|
12 |
|
|
|
12 |
|
|
|
12 |
|
|
|
12 |
|
| Non-affiliated |
|
|
89 |
|
|
|
89 |
|
|
|
89 |
|
|
|
88 |
|
|
|
88 |
|
|
|
88 |
|
|
|
88 |
|
| Sites of service (at end of period) |
|
|
1,729 |
|
|
|
1,713 |
|
|
|
1,768 |
|
|
|
1,806 |
|
|
|
1,851 |
|
|
|
1,863 |
|
|
|
1,896 |
|
| Revenue per site |
|
$ |
149,653 |
|
|
$ |
145,736 |
|
|
$ |
138,762 |
|
|
$ |
134,707 |
|
|
$ |
137,361 |
|
|
$ |
136,333 |
|
|
$ |
130,296 |
|
| Therapist productivity % |
|
|
81.1 |
|
|
|
80.4 |
|
|
|
79.8 |
|
|
|
79.5 |
|
|
|
80.0 |
|
|
|
79.8 |
|
|
|
79.6 |
|
| Hospital rehabilitation services: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenue mix %: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Company-operated |
|
|
32 |
|
|
|
33 |
|
|
|
33 |
|
|
|
30 |
|
|
|
31 |
|
|
|
30 |
|
|
|
30 |
|
| Non-affiliated |
|
|
68 |
|
|
|
67 |
|
|
|
67 |
|
|
|
70 |
|
|
|
69 |
|
|
|
70 |
|
|
|
70 |
|
| Sites of service (at end of period): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Inpatient rehabilitation units |
|
|
103 |
|
|
|
103 |
|
|
|
99 |
|
|
|
104 |
|
|
|
105 |
|
|
|
104 |
|
|
|
102 |
|
| LTAC hospitals |
|
|
123 |
|
|
|
123 |
|
|
|
122 |
|
|
|
121 |
|
|
|
121 |
|
|
|
118 |
|
|
|
117 |
|
| Sub-acute units |
|
|
8 |
|
|
|
8 |
|
|
|
7 |
|
|
|
10 |
|
|
|
10 |
|
|
|
9 |
|
|
|
10 |
|
| Outpatient units |
|
|
98 |
|
|
|
104 |
|
|
|
104 |
|
|
|
144 |
|
|
|
143 |
|
|
|
143 |
|
|
|
139 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
332 |
|
|
|
338 |
|
|
|
332 |
|
|
|
379 |
|
|
|
379 |
|
|
|
374 |
|
|
|
368 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenue per site |
|
$ |
224,466 |
|
|
$ |
206,441 |
|
|
$ |
205,711 |
|
|
$ |
195,296 |
|
|
$ |
195,157 |
|
|
$ |
201,400 |
|
|
$ |
203,284 |
|
| Annualized employee turnover % |
|
|
10.4 |
|
|
|
13.2 |
|
|
|
14.0 |
|
|
|
13.7 |
|
|
|
12.5 |
|
|
|
14.7 |
|
|
|
15.7 |
|
| (a) |
Excludes managed facilities. |
| (b) |
Provider taxes are recorded in other operating expenses for all periods presented. |
- MORE -
Kindred Healthcare Announces Third Quarter 2014 Results
Page
19
November 5, 2014
KINDRED HEALTHCARE, INC.
Earnings (Loss) Per Common Share Reconciliation (a)
(Unaudited)
(In thousands,
except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three months ended September 30, |
|
|
Nine months ended September 30, |
|
| |
|
2014 |
|
|
2013 |
|
|
2014 |
|
|
2013 |
|
| |
|
Basic |
|
|
Diluted |
|
|
Basic |
|
|
Diluted |
|
|
Basic |
|
|
Diluted |
|
|
Basic |
|
|
Diluted |
|
| Earnings (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Amounts attributable to Kindred stockholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income (loss) from continuing operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| As reported in Statement of Operations |
|
$ |
1,774 |
|
|
$ |
1,774 |
|
|
$ |
(16,603 |
) |
|
$ |
(16,603 |
) |
|
$ |
(6,662 |
) |
|
$ |
(6,662 |
) |
|
$ |
7,417 |
|
|
$ |
7,417 |
|
| Allocation to participating unvested restricted stockholders |
|
|
(45 |
) |
|
|
(45 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(234 |
) |
|
|
(234 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Available to common stockholders |
|
$ |
1,729 |
|
|
$ |
1,729 |
|
|
$ |
(16,603 |
) |
|
$ |
(16,603 |
) |
|
$ |
(6,662 |
) |
|
$ |
(6,662 |
) |
|
$ |
7,183 |
|
|
$ |
7,183 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Discontinued operations, net of income taxes: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss from operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| As reported in Statement of Operations |
|
$ |
(7,523 |
) |
|
$ |
(7,523 |
) |
|
$ |
(25,379 |
) |
|
$ |
(25,379 |
) |
|
$ |
(21,854 |
) |
|
$ |
(21,854 |
) |
|
$ |
(31,720 |
) |
|
$ |
(31,720 |
) |
| Allocation to participating unvested restricted stockholders |
|
|
191 |
|
|
|
191 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,000 |
|
|
|
1,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Available to common stockholders |
|
$ |
(7,332 |
) |
|
$ |
(7,332 |
) |
|
$ |
(25,379 |
) |
|
$ |
(25,379 |
) |
|
$ |
(21,854 |
) |
|
$ |
(21,854 |
) |
|
$ |
(30,720 |
) |
|
$ |
(30,720 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Gain (loss) on divestiture of operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| As reported in Statement of Operations |
|
$ |
1,387 |
|
|
$ |
1,387 |
|
|
$ |
(65,016 |
) |
|
$ |
(65,016 |
) |
|
$ |
(3,637 |
) |
|
$ |
(3,637 |
) |
|
$ |
(77,893 |
) |
|
$ |
(77,893 |
) |
| Allocation to participating unvested restricted stockholders |
|
|
(35 |
) |
|
|
(35 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,456 |
|
|
|
2,455 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Available to common stockholders |
|
$ |
1,352 |
|
|
$ |
1,352 |
|
|
$ |
(65,016 |
) |
|
$ |
(65,016 |
) |
|
$ |
(3,637 |
) |
|
$ |
(3,637 |
) |
|
$ |
(75,437 |
) |
|
$ |
(75,438 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss from discontinued operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| As reported in Statement of Operations |
|
$ |
(6,136 |
) |
|
$ |
(6,136 |
) |
|
$ |
(90,395 |
) |
|
$ |
(90,395 |
) |
|
$ |
(25,491 |
) |
|
$ |
(25,491 |
) |
|
$ |
(109,613 |
) |
|
$ |
(109,613 |
) |
| Allocation to participating unvested restricted stockholders |
|
|
156 |
|
|
|
156 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3,456 |
|
|
|
3,455 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Available to common stockholders |
|
$ |
(5,980 |
) |
|
$ |
(5,980 |
) |
|
$ |
(90,395 |
) |
|
$ |
(90,395 |
) |
|
$ |
(25,491 |
) |
|
$ |
(25,491 |
) |
|
$ |
(106,157 |
) |
|
$ |
(106,158 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net loss: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| As reported in Statement of Operations |
|
$ |
(4,362 |
) |
|
$ |
(4,362 |
) |
|
$ |
(106,998 |
) |
|
$ |
(106,998 |
) |
|
$ |
(32,153 |
) |
|
$ |
(32,153 |
) |
|
$ |
(102,196 |
) |
|
$ |
(102,196 |
) |
| Allocation to participating unvested restricted stockholders |
|
|
111 |
|
|
|
111 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3,222 |
|
|
|
3,221 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Available to common stockholders |
|
$ |
(4,251 |
) |
|
$ |
(4,251 |
) |
|
$ |
(106,998 |
) |
|
$ |
(106,998 |
) |
|
$ |
(32,153 |
) |
|
$ |
(32,153 |
) |
|
$ |
(98,974 |
) |
|
$ |
(98,975 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares used in the computation: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Weighted average shares outstanding -basic computation |
|
|
62,863 |
|
|
|
62,863 |
|
|
|
52,323 |
|
|
|
52,323 |
|
|
|
56,443 |
|
|
|
56,443 |
|
|
|
52,218 |
|
|
|
52,218 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Dilutive effect of employee stock options |
|
|
|
|
|
|
39 |
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Adjusted weighted average shares outstanding -diluted computation |
|
|
|
|
|
|
62,902 |
|
|
|
|
|
|
|
52,323 |
|
|
|
|
|
|
|
56,443 |
|
|
|
|
|
|
|
52,234 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Earnings (loss) per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income (loss) from continuing operations |
|
$ |
0.03 |
|
|
$ |
0.03 |
|
|
$ |
(0.31 |
) |
|
$ |
(0.31 |
) |
|
$ |
(0.12 |
) |
|
$ |
(0.12 |
) |
|
$ |
0.14 |
|
|
$ |
0.14 |
|
| Discontinued operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss from operations |
|
|
(0.12 |
) |
|
|
(0.12 |
) |
|
|
(0.49 |
) |
|
|
(0.49 |
) |
|
|
(0.39 |
) |
|
|
(0.39 |
) |
|
|
(0.59 |
) |
|
|
(0.59 |
) |
| Gain (loss) on divestiture of operations |
|
|
0.02 |
|
|
|
0.02 |
|
|
|
(1.24 |
) |
|
|
(1.24 |
) |
|
|
(0.06 |
) |
|
|
(0.06 |
) |
|
|
(1.44 |
) |
|
|
(1.44 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss from discontinued operations |
|
|
(0.10 |
) |
|
|
(0.10 |
) |
|
|
(1.73 |
) |
|
|
(1.73 |
) |
|
|
(0.45 |
) |
|
|
(0.45 |
) |
|
|
(2.03 |
) |
|
|
(2.03 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net loss |
|
$ |
(0.07 |
) |
|
$ |
(0.07 |
) |
|
$ |
(2.04 |
) |
|
$ |
(2.04 |
) |
|
$ |
(0.57 |
) |
|
$ |
(0.57 |
) |
|
$ |
(1.89 |
) |
|
$ |
(1.89 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (a) |
Earnings (loss) per common share are based upon the weighted average number of common shares outstanding during the respective periods. The diluted calculation of earnings per common share includes the dilutive effect
of stock options. The Company follows the provisions of the authoritative guidance for determining whether instruments granted in share-based payment transactions are participating securities, which requires that certain unvested restricted stock be
included as a participating security in the basic and diluted earnings per common share calculation pursuant to the two-class method. |
- MORE -
Kindred Healthcare Announces Third Quarter 2014 Results
Page
20
November 5, 2014
KINDRED HEALTHCARE, INC.
Reconciliation of Non-GAAP Measurements to GAAP Results
(Unaudited)
(In thousands,
except per share amounts and statistics)
In addition to the results provided in accordance with GAAP, the Company has provided
information in this release to compute certain non-GAAP measurements for the three months and nine months ended September 30, 2014 and 2013 before certain charges or on a core basis. The charges that were excluded from core operating results
are denoted in the tables below.
The income tax benefit associated with the excluded charges was calculated using an effective income tax
rate of 31.2% and 29.6% for the three months ended September 30, 2014 and 2013, respectively, and 36.5% and 33.9% for the nine months ended September 30, 2014 and 2013, respectively. The difference in the effective income tax rate for the
three months and nine months ended September 30, 2014 compared to the same prior year periods is attributable to the composition of charges that are non-deductible for income tax purposes.
The use of these non-GAAP measurements are not intended to replace the presentation of the Company’s financial results in accordance with
GAAP. The Company believes that the presentation of core operating results provides additional information to investors to facilitate the comparison between periods by excluding certain charges for the three months and nine months ended
September 30, 2014 and 2013 that the Company believes are not representative of its ongoing operations due to the materiality and nature of the charges. The Company’s core operating results also represent a key performance measure for the
purpose of evaluating performance internally.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three months ended
September 30, |
|
|
Nine months ended
September 30, |
|
| |
|
2014 |
|
|
2013 |
|
|
2014 |
|
|
2013 |
|
| Detail of charges: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| One-time bonus costs |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
($ |
19,842 |
) |
| Severance, retirement and other restructuring costs |
|
|
(1,686 |
) |
|
|
(1,894 |
) |
|
|
(6,636 |
) |
|
|
(1,894 |
) |
| Customer bankruptcy |
|
|
(1,857 |
) |
|
|
— |
|
|
|
(1,857 |
) |
|
|
— |
|
| Facility closing costs |
|
|
— |
|
|
|
(6,043 |
) |
|
|
— |
|
|
|
(6,043 |
) |
| Litigation costs |
|
|
— |
|
|
|
(23,850 |
) |
|
|
(4,600 |
) |
|
|
(23,850 |
) |
| Debt refinancing charges (other operating expenses) |
|
|
— |
|
|
|
(459 |
) |
|
|
— |
|
|
|
(459 |
) |
| Transaction costs |
|
|
(4,114 |
) |
|
|
(613 |
) |
|
|
(9,293 |
) |
|
|
(1,665 |
) |
| Lease cancellation charges (rent expense) |
|
|
— |
|
|
|
— |
|
|
|
(247 |
) |
|
|
— |
|
| Debt refinancing charges (interest expense) |
|
|
— |
|
|
|
(96 |
) |
|
|
(56,643 |
) |
|
|
(1,461 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(7,657 |
) |
|
|
(32,955 |
) |
|
|
(79,276 |
) |
|
|
(55,214 |
) |
| Income tax benefit |
|
|
2,391 |
|
|
|
9,767 |
|
|
|
28,936 |
|
|
|
18,728 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Charges net of income taxes |
|
|
(5,266 |
) |
|
|
(23,188 |
) |
|
|
(50,340 |
) |
|
|
(36,486 |
) |
| Allocation to participating unvested restricted stockholders |
|
|
133 |
|
|
|
— |
|
|
|
— |
|
|
|
1,150 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Available to common stockholders |
|
($ |
5,133 |
) |
|
($ |
23,188 |
) |
|
($ |
50,340 |
) |
|
($ |
35,336 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Weighted average diluted shares outstanding |
|
|
62,902 |
|
|
|
52,323 |
|
|
|
56,443 |
|
|
|
52,234 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Diluted loss per common share related to charges |
|
($ |
0.08 |
) |
|
($ |
0.44 |
) |
|
($ |
0.89 |
) |
|
($ |
0.67 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Reconciliation of operating income (EBITDAR) before charges: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating income (EBITDAR) before charges |
|
$ |
158,270 |
|
|
$ |
148,245 |
|
|
$ |
518,156 |
|
|
$ |
499,124 |
|
| Detail of charges excluded from core operating results: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| One-time bonus costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(19,842 |
) |
| Severance, retirement and other restructuring costs |
|
|
(1,686 |
) |
|
|
(1,894 |
) |
|
|
(6,636 |
) |
|
|
(1,894 |
) |
| Customer bankruptcy |
|
|
(1,857 |
) |
|
|
— |
|
|
|
(1,857 |
) |
|
|
— |
|
| Facility closing costs |
|
|
— |
|
|
|
(6,043 |
) |
|
|
— |
|
|
|
(6,043 |
) |
| Litigation costs |
|
|
— |
|
|
|
(23,850 |
) |
|
|
(4,600 |
) |
|
|
(23,850 |
) |
| Debt refinancing charges (other operating expenses) |
|
|
— |
|
|
|
(459 |
) |
|
|
— |
|
|
|
(459 |
) |
| Transaction costs |
|
|
(4,114 |
) |
|
|
(613 |
) |
|
|
(9,293 |
) |
|
|
(1,665 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(7,657 |
) |
|
|
(32,859 |
) |
|
|
(22,386 |
) |
|
|
(53,753 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Reported operating income (EBITDAR) |
|
$ |
150,613 |
|
|
$ |
115,386 |
|
|
$ |
495,770 |
|
|
$ |
445,371 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Reconciliation of income from continuing operations before charges: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Amounts attributable to Kindred stockholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income from continuing operations before charges |
|
$ |
7,040 |
|
|
$ |
6,585 |
|
|
$ |
43,678 |
|
|
$ |
43,903 |
|
| Charges net of income taxes |
|
|
(5,266 |
) |
|
|
(23,188 |
) |
|
|
(50,340 |
) |
|
|
(36,486 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Reported income (loss) from continuing operations |
|
$ |
1,774 |
|
|
($ |
16,603 |
) |
|
($ |
6,662 |
) |
|
$ |
7,417 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Reconciliation of diluted income per common share from continuing operations before charges: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Diluted income per common share before charges (a) |
|
$ |
0.11 |
|
|
$ |
0.12 |
|
|
$ |
0.75 |
|
|
$ |
0.81 |
|
| Charges net of income taxes |
|
|
(0.08 |
) |
|
|
(0.44 |
) |
|
|
(0.89 |
) |
|
|
(0.67 |
) |
| Other |
|
|
— |
|
|
|
0.01 |
|
|
|
0.02 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Reported diluted income (loss) per common share from continuing operations |
|
$ |
0.03 |
|
|
($ |
0.31 |
) |
|
($ |
0.12 |
) |
|
$ |
0.14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Weighted average diluted shares used to compute income per common share from continuing operations before charges |
|
|
62,902 |
|
|
|
52,333 |
|
|
|
56,506 |
|
|
|
52,234 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Pro forma diluted income per common share before charges |
|
|
|
|
|
$ |
0.10 |
|
|
|
|
|
|
$ |
0.77 |
|
| Weighted average diluted shares used to compute pro forma income per common share from continuing operations before charges
(b) |
|
|
|
|
|
|
61,954 |
|
|
|
|
|
|
|
55,674 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Reconciliation of effective income tax rate before charges: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Effective income tax rate before charges |
|
|
32.4 |
% |
|
|
30.5 |
% |
|
|
36.2 |
% |
|
|
38.1 |
% |
| Impact of charges on effective income tax rate |
|
|
1.0 |
% |
|
|
-1.3 |
% |
|
|
-2.6 |
% |
|
|
12.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Reported effective income tax rate |
|
|
33.4 |
% |
|
|
29.2 |
% |
|
|
33.6 |
% |
|
|
51.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (a) |
For purposes of computing diluted earnings per common share before charges, income from continuing operations before charges was reduced by $0.2 million for both the three months ended September 30, 2014 and 2013,
and $1.2 million and $1.4 million for the nine months ended September 30, 2014 and 2013, respectively, for the allocation of income to participating unvested restricted stockholders. |
| (b) |
Includes the incremental 9.7 million shares, on a weighted average basis, issued in connection with the Company’s equity offering completed in June 2014. |
- MORE -
Kindred Healthcare Announces Third Quarter 2014 Results
Page
21
November 5, 2014
KINDRED HEALTHCARE, INC.
Reconciliation of Non-GAAP Measurements to GAAP Results (Continued)
(Unaudited)
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three months ended September 30, 2014 |
|
| |
|
|
|
|
Charges |
|
|
|
|
| |
|
|
|
|
Severance |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Before |
|
|
and other |
|
|
Customer |
|
|
Transaction |
|
|
|
|
|
As |
|
| |
|
charges |
|
|
restructuring |
|
|
bankruptcy |
|
|
costs |
|
|
Total |
|
|
reported |
|
| Income from continuing operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Hospital division |
|
$ |
122,361 |
|
|
$ |
(617 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(617 |
) |
|
$ |
121,744 |
|
| Nursing center division |
|
|
36,662 |
|
|
|
(483 |
) |
|
|
— |
|
|
|
— |
|
|
|
(483 |
) |
|
|
36,179 |
|
| Rehabilitation division: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Skilled nursing rehabilitation services |
|
|
17,390 |
|
|
|
162 |
|
|
|
— |
|
|
|
— |
|
|
|
162 |
|
|
|
17,552 |
|
| Hospital rehabilitation services |
|
|
20,130 |
|
|
|
— |
|
|
|
(1,857 |
) |
|
|
— |
|
|
|
(1,857 |
) |
|
|
18,273 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
37,520 |
|
|
|
162 |
|
|
|
(1,857 |
) |
|
|
— |
|
|
|
(1,695 |
) |
|
|
35,825 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Care management division |
|
|
7,110 |
|
|
|
(321 |
) |
|
|
— |
|
|
|
— |
|
|
|
(321 |
) |
|
|
6,789 |
|
| Corporate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Overhead |
|
|
(44,746 |
) |
|
|
(427 |
) |
|
|
— |
|
|
|
— |
|
|
|
(427 |
) |
|
|
(45,173 |
) |
| Insurance subsidiary |
|
|
(637 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(637 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(45,383 |
) |
|
|
(427 |
) |
|
|
— |
|
|
|
— |
|
|
|
(427 |
) |
|
|
(45,810 |
) |
| Transaction costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(4,114 |
) |
|
|
(4,114 |
) |
|
|
(4,114 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating income (EBITDAR) |
|
|
158,270 |
|
|
|
(1,686 |
) |
|
|
(1,857 |
) |
|
|
(4,114 |
) |
|
|
(7,657 |
) |
|
|
150,613 |
|
| Rent |
|
|
(80,192 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(80,192 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| EBITDA |
|
|
78,078 |
|
|
|
(1,686 |
) |
|
|
(1,857 |
) |
|
|
(4,114 |
) |
|
|
(7,657 |
) |
|
|
70,421 |
|
| Depreciation and amortization |
|
|
(39,023 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(39,023 |
) |
| Interest, net |
|
|
(22,173 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(22,173 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income from continuing operations before income taxes |
|
|
16,882 |
|
|
|
(1,686 |
) |
|
|
(1,857 |
) |
|
|
(4,114 |
) |
|
|
(7,657 |
) |
|
|
9,225 |
|
| Provision for income taxes |
|
|
5,470 |
|
|
|
(923 |
) |
|
|
(1,017 |
) |
|
|
(451 |
) |
|
|
(2,391 |
) |
|
|
3,079 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
11,412 |
|
|
$ |
(763 |
) |
|
$ |
(840 |
) |
|
$ |
(3,663 |
) |
|
$ |
(5,266 |
) |
|
$ |
6,146 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three months ended September 30, 2013 |
|
| |
|
|
|
|
Charges |
|
|
|
|
| |
|
|
|
|
Severance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Before |
|
|
and |
|
|
Facility |
|
|
|
|
|
Debt |
|
|
Transaction |
|
|
|
|
|
As |
|
| |
|
charges |
|
|
retirement |
|
|
closing |
|
|
Litigation |
|
|
refinancing |
|
|
costs |
|
|
Total |
|
|
reported |
|
| Income (loss) from continuing operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Hospital division |
|
$ |
118,710 |
|
|
$ |
— |
|
|
$ |
(5,527 |
) |
|
$ |
(700 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(6,227 |
) |
|
$ |
112,483 |
|
| Nursing center division |
|
|
31,569 |
|
|
|
— |
|
|
|
(64 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(64 |
) |
|
|
31,505 |
|
| Rehabilitation division: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Skilled nursing rehabilitation services |
|
|
15,941 |
|
|
|
— |
|
|
|
— |
|
|
|
(23,150 |
) |
|
|
— |
|
|
|
— |
|
|
|
(23,150 |
) |
|
|
(7,209 |
) |
| Hospital rehabilitation services |
|
|
18,503 |
|
|
|
(288 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(288 |
) |
|
|
18,215 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34,444 |
|
|
|
(288 |
) |
|
|
— |
|
|
|
(23,150 |
) |
|
|
— |
|
|
|
— |
|
|
|
(23,438 |
) |
|
|
11,006 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Care management division |
|
|
2,138 |
|
|
|
(601 |
) |
|
|
(452 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,053 |
) |
|
|
1,085 |
|
| Corporate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Overhead |
|
|
(37,693 |
) |
|
|
(1,005 |
) |
|
|
— |
|
|
|
— |
|
|
|
(459 |
) |
|
|
— |
|
|
|
(1,464 |
) |
|
|
(39,157 |
) |
| Insurance subsidiary |
|
|
(482 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(482 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(38,175 |
) |
|
|
(1,005 |
) |
|
|
— |
|
|
|
— |
|
|
|
(459 |
) |
|
|
— |
|
|
|
(1,464 |
) |
|
|
(39,639 |
) |
| Impairment charges |
|
|
(441 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(441 |
) |
| Transaction costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(613 |
) |
|
|
(613 |
) |
|
|
(613 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating income (EBITDAR) |
|
|
148,245 |
|
|
|
(1,894 |
) |
|
|
(6,043 |
) |
|
|
(23,850 |
) |
|
|
(459 |
) |
|
|
(613 |
) |
|
|
(32,859 |
) |
|
|
115,386 |
|
| Rent |
|
|
(76,762 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(76,762 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| EBITDA |
|
|
71,483 |
|
|
|
(1,894 |
) |
|
|
(6,043 |
) |
|
|
(23,850 |
) |
|
|
(459 |
) |
|
|
(613 |
) |
|
|
(32,859 |
) |
|
|
38,624 |
|
| Depreciation and amortization |
|
|
(36,507 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(36,507 |
) |
| Interest, net |
|
|
(24,293 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(96 |
) |
|
|
— |
|
|
|
(96 |
) |
|
|
(24,389 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income (loss) from continuing operations before income taxes |
|
|
10,683 |
|
|
|
(1,894 |
) |
|
|
(6,043 |
) |
|
|
(23,850 |
) |
|
|
(555 |
) |
|
|
(613 |
) |
|
|
(32,955 |
) |
|
|
(22,272 |
) |
| Provision (benefit) for income taxes |
|
|
3,257 |
|
|
|
(2,044 |
) |
|
|
(5,805 |
) |
|
|
(756 |
) |
|
|
(599 |
) |
|
|
(563 |
) |
|
|
(9,767 |
) |
|
|
(6,510 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
7,426 |
|
|
$ |
150 |
|
|
$ |
(238 |
) |
|
$ |
(23,094 |
) |
|
$ |
44 |
|
|
$ |
(50 |
) |
|
$ |
(23,188 |
) |
|
$ |
(15,762 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- MORE -
Kindred Healthcare Announces Third Quarter 2014 Results
Page
22
November 5, 2014
KINDRED HEALTHCARE, INC.
Reconciliation of Non-GAAP Measurements to GAAP Results (Continued)
(Unaudited)
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Nine months ended September 30, 2014 |
|
| |
|
|
|
|
Charges |
|
|
|
|
| |
|
|
|
|
Severance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Before |
|
|
and other |
|
|
Customer |
|
|
|
|
|
Debt |
|
|
Transaction |
|
|
|
|
|
As |
|
| |
|
charges |
|
|
restructuring |
|
|
bankruptcy |
|
|
Litigation |
|
|
refinancing |
|
|
costs |
|
|
Total |
|
|
reported |
|
| Income from continuing operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Hospital division |
|
$ |
405,234 |
|
|
$ |
(617 |
) |
|
$ |
— |
|
|
$ |
(4,600 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(5,217 |
) |
|
$ |
400,017 |
|
| Nursing center division |
|
|
115,218 |
|
|
|
(3,688 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(3,688 |
) |
|
|
111,530 |
|
| Rehabilitation division: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Skilled nursing rehabilitation services |
|
|
55,876 |
|
|
|
(14 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(14 |
) |
|
|
55,862 |
|
| Hospital rehabilitation services |
|
|
60,204 |
|
|
|
(170 |
) |
|
|
(1,857 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(2,027 |
) |
|
|
58,177 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
116,080 |
|
|
|
(184 |
) |
|
|
(1,857 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(2,041 |
) |
|
|
114,039 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Care management division |
|
|
19,715 |
|
|
|
(1,164 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,164 |
) |
|
|
18,551 |
|
| Corporate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Overhead |
|
|
(136,605 |
) |
|
|
(983 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(983 |
) |
|
|
(137,588 |
) |
| Insurance subsidiary |
|
|
(1,486 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,486 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(138,091 |
) |
|
|
(983 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(983 |
) |
|
|
(139,074 |
) |
| Transaction costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(9,293 |
) |
|
|
(9,293 |
) |
|
|
(9,293 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating income (EBITDAR) |
|
|
518,156 |
|
|
|
(6,636 |
) |
|
|
(1,857 |
) |
|
|
(4,600 |
) |
|
|
— |
|
|
|
(9,293 |
) |
|
|
(22,386 |
) |
|
|
495,770 |
|
| Rent |
|
|
(241,202 |
) |
|
|
(247 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(247 |
) |
|
|
(241,449 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| EBITDA |
|
|
276,954 |
|
|
|
(6,883 |
) |
|
|
(1,857 |
) |
|
|
(4,600 |
) |
|
|
— |
|
|
|
(9,293 |
) |
|
|
(22,633 |
) |
|
|
254,321 |
|
| Depreciation and amortization |
|
|
(117,802 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(117,802 |
) |
| Interest, net |
|
|
(69,227 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(56,643 |
) |
|
|
— |
|
|
|
(56,643 |
) |
|
|
(125,870 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income from continuing operations before income taxes |
|
|
89,925 |
|
|
|
(6,883 |
) |
|
|
(1,857 |
) |
|
|
(4,600 |
) |
|
|
(56,643 |
) |
|
|
(9,293 |
) |
|
|
(79,276 |
) |
|
|
10,649 |
|
| Provision for income taxes |
|
|
32,518 |
|
|
|
(2,700 |
) |
|
|
(729 |
) |
|
|
(1,805 |
) |
|
|
(22,222 |
) |
|
|
(1,480 |
) |
|
|
(28,936 |
) |
|
|
3,582 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
57,407 |
|
|
$ |
(4,183 |
) |
|
$ |
(1,128 |
) |
|
$ |
(2,795 |
) |
|
$ |
(34,421 |
) |
|
$ |
(7,813 |
) |
|
$ |
(50,340 |
) |
|
$ |
7,067 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Nine months ended September 30, 2013 |
|
| |
|
|
|
|
Charges |
|
|
|
|
| |
|
|
|
|
|
|
|
Severance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Before |
|
|
One-time |
|
|
and |
|
|
Facility |
|
|
|
|
|
Debt |
|
|
Transaction |
|
|
|
|
|
As |
|
| |
|
charges |
|
|
bonus |
|
|
retirement |
|
|
closing |
|
|
Litigation |
|
|
refinancing |
|
|
costs |
|
|
Total |
|
|
reported |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income from continuing operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Hospital division |
|
$ |
403,332 |
|
|
$ |
(7,763 |
) |
|
$ |
— |
|
|
$ |
(5,527 |
) |
|
$ |
(700 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(13,990 |
) |
|
$ |
389,342 |
|
| Nursing center division |
|
|
101,356 |
|
|
|
(4,624 |
) |
|
|
— |
|
|
|
(64 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(4,688 |
) |
|
|
96,668 |
|
| Rehabilitation division: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Skilled nursing rehabilitation services |
|
|
55,855 |
|
|
|
(5,052 |
) |
|
|
— |
|
|
|
— |
|
|
|
(23,150 |
) |
|
|
— |
|
|
|
— |
|
|
|
(28,202 |
) |
|
|
27,653 |
|
| Hospital rehabilitation services |
|
|
57,463 |
|
|
|
(1,255 |
) |
|
|
(288 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,543 |
) |
|
|
55,920 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
113,318 |
|
|
|
(6,307 |
) |
|
|
(288 |
) |
|
|
— |
|
|
|
(23,150 |
) |
|
|
— |
|
|
|
— |
|
|
|
(29,745 |
) |
|
|
83,573 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Care management division |
|
|
9,718 |
|
|
|
(833 |
) |
|
|
(601 |
) |
|
|
(452 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,886 |
) |
|
|
7,832 |
|
| Corporate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Overhead |
|
|
(126,159 |
) |
|
|
(315 |
) |
|
|
(1,005 |
) |
|
|
— |
|
|
|
— |
|
|
|
(459 |
) |
|
|
— |
|
|
|
(1,779 |
) |
|
|
(127,938 |
) |
| Insurance subsidiary |
|
|
(1,375 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,375 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(127,534 |
) |
|
|
(315 |
) |
|
|
(1,005 |
) |
|
|
— |
|
|
|
— |
|
|
|
(459 |
) |
|
|
— |
|
|
|
(1,779 |
) |
|
|
(129,313 |
) |
| Impairment charges |
|
|
(1,066 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,066 |
) |
| Transaction costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,665 |
) |
|
|
(1,665 |
) |
|
|
(1,665 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating income (EBITDAR) |
|
|
499,124 |
|
|
|
(19,842 |
) |
|
|
(1,894 |
) |
|
|
(6,043 |
) |
|
|
(23,850 |
) |
|
|
(459 |
) |
|
|
(1,665 |
) |
|
|
(53,753 |
) |
|
|
445,371 |
|
| Rent |
|
|
(230,605 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
— |
|
|
|
(230,605 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| EBITDA |
|
|
268,519 |
|
|
|
(19,842 |
) |
|
|
(1,894 |
) |
|
|
(6,043 |
) |
|
|
(23,850 |
) |
|
|
(459 |
) |
|
|
(1,665 |
) |
|
|
(53,753 |
) |
|
|
214,766 |
|
| Depreciation and amortization |
|
|
(116,659 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(116,659 |
) |
| Interest, net |
|
|
(78,602 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,461 |
) |
|
|
— |
|
|
|
(1,461 |
) |
|
|
(80,063 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income from continuing operations before income taxes |
|
|
73,258 |
|
|
|
(19,842 |
) |
|
|
(1,894 |
) |
|
|
(6,043 |
) |
|
|
(23,850 |
) |
|
|
(1,920 |
) |
|
|
(1,665 |
) |
|
|
(55,214 |
) |
|
|
18,044 |
|
| Provision for income taxes |
|
|
27,931 |
|
|
|
(11,869 |
) |
|
|
(1,133 |
) |
|
|
(3,218 |
) |
|
|
(419 |
) |
|
|
(1,148 |
) |
|
|
(941 |
) |
|
|
(18,728 |
) |
|
|
9,203 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
45,327 |
|
|
$ |
(7,973 |
) |
|
$ |
(761 |
) |
|
$ |
(2,825 |
) |
|
$ |
(23,431 |
) |
|
$ |
(772 |
) |
|
$ |
(724 |
) |
|
$ |
(36,486 |
) |
|
$ |
8,841 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- MORE -
Kindred Healthcare Announces Third Quarter 2014 Results
Page
23
November 5, 2014
KINDRED HEALTHCARE, INC.
Reconciliation of Non-GAAP Measurements to GAAP Results (Continued)
(Unaudited)
(In thousands)
The Company recognizes that free cash flows excluding certain items is a non-GAAP measurement and is not intended to replace the
presentation of the Company’s cash flows in accordance with GAAP. The Company believes that this non-GAAP measurement provides important information to investors related to the amount of discretionary cash flows that are available for other
investing and financing activities. In addition, management uses free cash flows excluding certain items in making decisions related to acquisitions, development capital expenditures, dividends, long-term debt repayments and other uses.
The income tax benefit associated with the excluded payments was calculated using an effective income tax rate of 21.7% and 24.8% for the
three months ended September 30, 2014 and 2013, respectively, and 30.3% and 34.1% for the nine months ended September 30, 2014 and 2013, respectively. The difference in the effective income tax rate for the three months and nine months
ended September 30, 2014 compared to the same prior periods is attributable to the composition of excludable payments that are non-deductible for income tax purposes.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three months ended
September 30, |
|
|
Nine months ended
September 30, |
|
| |
|
2014 |
|
|
2013 |
|
|
2014 |
|
|
2013 |
|
| Reconciliation of net cash flows provided by operating activities to free cash flows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net cash flows provided by operating activities |
|
$ |
90,039 |
|
|
$ |
110,750 |
|
|
$ |
24,322 |
|
|
$ |
189,217 |
|
| Adjustments to remove certain payments (including payments made for discontinued operations) included in net cash flows provided by
operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Litigation |
|
|
— |
|
|
|
— |
|
|
|
25,850 |
|
|
|
— |
|
| One-time employee bonus |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
26,345 |
|
| Capitalized lender fees related to debt refinancing |
|
|
— |
|
|
|
4,589 |
|
|
|
19,125 |
|
|
|
6,189 |
|
| Other debt refinancing costs (expensed) |
|
|
— |
|
|
|
— |
|
|
|
40,373 |
|
|
|
— |
|
| Severance, retirement and retention |
|
|
1,271 |
|
|
|
1,181 |
|
|
|
6,649 |
|
|
|
4,789 |
|
| Transaction costs |
|
|
4,565 |
|
|
|
6,362 |
|
|
|
8,741 |
|
|
|
8,550 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,836 |
|
|
|
12,132 |
|
|
|
100,738 |
|
|
|
45,873 |
|
| Benefit of reduced income tax payments resulting from certain payments |
|
|
(1,269 |
) |
|
|
(3,013 |
) |
|
|
(30,477 |
) |
|
|
(15,649 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,567 |
|
|
|
9,119 |
|
|
|
70,261 |
|
|
|
30,224 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net cash flows provided by operating activities excluding certain items |
|
|
94,606 |
|
|
|
119,869 |
|
|
|
94,583 |
|
|
|
219,441 |
|
| Less: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Routine capital expenditures |
|
|
(21,263 |
) |
|
|
(23,152 |
) |
|
|
(67,425 |
) |
|
|
(62,952 |
) |
| Development capital expenditures |
|
|
(1,570 |
) |
|
|
(3,235 |
) |
|
|
(2,693 |
) |
|
|
(10,709 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(22,833 |
) |
|
|
(26,387 |
) |
|
|
(70,118 |
) |
|
|
(73,661 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Free cash flows excluding certain items |
|
$ |
71,773 |
|
|
$ |
93,482 |
|
|
$ |
24,465 |
|
|
$ |
145,780 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- MORE -
Kindred Healthcare Announces Third Quarter 2014 Results
Page
24
November 5, 2014
KINDRED HEALTHCARE, INC.
Reconciliation of Earnings Guidance for 2014—Continuing Operations (a)
(Unaudited)
(In millions,
except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
As of November 5, 2014 |
|
|
As of August 6, 2014 |
|
| |
|
Low |
|
|
High |
|
|
Low |
|
|
High |
|
| Revenues |
|
$ |
5,100 |
|
|
$ |
5,100 |
|
|
$ |
5,100 |
|
|
$ |
5,100 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating income (EBITDAR) |
|
$ |
692 |
|
|
$ |
702 |
|
|
$ |
707 |
|
|
$ |
724 |
|
| Rent |
|
|
322 |
|
|
|
322 |
|
|
|
330 |
|
|
|
330 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| EBITDA |
|
|
370 |
|
|
|
380 |
|
|
|
377 |
|
|
|
394 |
|
| Depreciation and amortization |
|
|
157 |
|
|
|
157 |
|
|
|
161 |
|
|
|
161 |
|
| Interest, net |
|
|
92 |
|
|
|
92 |
|
|
|
98 |
|
|
|
98 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income from continuing operations before income taxes |
|
|
121 |
|
|
|
131 |
|
|
|
118 |
|
|
|
135 |
|
| Provision for income taxes |
|
|
44 |
|
|
|
48 |
|
|
|
45 |
|
|
|
52 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income from continuing operations |
|
|
77 |
|
|
|
83 |
|
|
|
73 |
|
|
|
83 |
|
| Earnings attributable to noncontrolling interests |
|
|
(18 |
) |
|
|
(18 |
) |
|
|
(15 |
) |
|
|
(15 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income from continuing operations attributable to the Company |
|
|
59 |
|
|
|
65 |
|
|
|
58 |
|
|
|
68 |
|
| Allocation to participating unvested restricted stockholders |
|
|
(2 |
) |
|
|
(2 |
) |
|
|
(2 |
) |
|
|
(2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Available to common stockholders |
|
$ |
57 |
|
|
$ |
63 |
|
|
$ |
56 |
|
|
$ |
66 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Earnings per diluted share |
|
$ |
0.98 |
|
|
$ |
1.08 |
|
|
$ |
0.96 |
|
|
$ |
1.14 |
|
| Shares used in computing earnings per diluted share |
|
|
58.3 |
|
|
|
58.3 |
|
|
|
58.3 |
|
|
|
58.3 |
|
|
|
|
|
|
|
|
|
|
| |
|
As of November 5, 2014 |
|
| |
|
Low |
|
|
High |
|
| Various non-cash expenses included in earnings guidance above: |
|
|
|
|
|
|
|
|
| Amortization of stock-based compensation |
|
$ |
13 |
|
|
$ |
13 |
|
| Amortization of deferred financing fees |
|
|
8 |
|
|
|
8 |
|
| Straight-line rent expense |
|
|
9 |
|
|
|
9 |
|
| (a) |
The earnings guidance excludes the effect of reimbursement changes, debt refinancing costs, severance, retirement, retention and restructuring costs, customer bankruptcy costs, litigation costs, transaction costs, any
further acquisitions or divestitures, any impairment charges, any further issuances of common stock, debt or mandatory convertible equity securities in conjunction with the Gentiva transaction and any repurchases of common stock. |
- END -
EXHIBIT 99.2
|
|
|
|
|
| Contact: |
|
Stephen Farber |
|
|
|
|
Executive Vice President, Chief Financial Officer |
|
|
|
|
(502) 596-2525 |
|
|
KINDRED HEALTHCARE BOARD OF DIRECTORS DECLARES QUARTERLY
CASH DIVIDEND OF $0.12 PER SHARE
LOUISVILLE, Ky. (November 5, 2014) – Kindred Healthcare, Inc. (“Kindred” or the “Company”) (NYSE:KND) today announced that its
Board of Directors approved the payment of the regular quarterly cash dividend to its shareholders. The quarterly cash dividend of $0.12 per common share will be paid on December 9, 2014 to shareholders of record as of the close of business on
November 18, 2014. Future declarations of quarterly dividends will be subject to the approval of Kindred’s Board of Directors.
Forward-Looking Statements
This
press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements regarding the Company’s
expected future financial position, results of operations, cash flows, financing plans, business strategy, budgets, capital expenditures, competitive positions, growth opportunities, plans and objectives of management and statements containing the
words such as “anticipate,” “approximate,” “believe,” “plan,” “estimate,” “expect,” “project,” “could,” “would,” “should,” “will,”
“intend,” “may,” “potential,” “upside,” and other similar expressions, are forward-looking statements. Statements in this press release concerning the Company’s business outlook or future economic
performance, anticipated profitability, revenues, expenses, dividends or other financial items, and product or services line growth, together with other statements that are not historical facts, are forward-looking statements that are estimates
reflecting the best judgment of the Company based upon currently available information.
Such forward-looking statements are inherently
uncertain, and stockholders and other potential investors must recognize that actual results may differ materially from the Company’s expectations as a result of a variety of factors, including, without limitation, those discussed below. Such
forward-looking statements are based upon management’s current expectations and include known and unknown risks, uncertainties and other factors, many of which the Company is unable to predict or control, that may cause the Company’s
actual results, performance or plans to differ materially from any future results, performance or plans expressed or implied by such forward-looking statements. These statements involve risks, uncertainties and other factors discussed below and
detailed from time to time in the Company’s filings with the Securities and Exchange Commission.
Risks and uncertainties related to
the Company’s recently announced proposed merger with Gentiva Health Services, Inc. (“Gentiva”) (NASDAQ: GTIV) include, but are not limited to, the risk that Gentiva’s stockholders do not approve the merger, potential adverse
reactions or changes to business relationships resulting from the announcement or completion of the merger, uncertainties as to the timing of the merger, adverse effects on the Company’s stock price resulting from the announcement or completion
of
-MORE-
680 South Fourth Street Louisville, Kentucky 40202
502.596.7300
www.kindredhealthcare.com
the merger, competitive responses to the announcement or completion of the merger, the risk that healthcare regulatory, licensure or other approvals and financing required for the consummation of
the merger are not obtained or are obtained subject to terms and conditions that are not anticipated, costs and difficulties related to the integration of Gentiva’s businesses and operations with the Company’s businesses and operations,
the inability to obtain, or delays in obtaining, cost savings and synergies from the merger, uncertainties as to whether the completion of the merger or any transaction will have the accretive effect on the Company’s earnings or cash flows that
it expects, unexpected costs, liabilities, charges or expenses resulting from the merger, litigation relating to the merger, the inability to retain key personnel, and any changes in general economic and/or industry-specific conditions.
In addition to the factors set forth above, other factors that may affect the Company’s plans, results or stock price are set forth in
the Company’s Annual Report on Form 10-K and in its reports on Forms 10-Q and 8-K.
Many of these factors are beyond the
Company’s control. The Company cautions investors that any forward-looking statements made by the Company are not guarantees of future performance. The Company disclaims any obligation to update any such factors or to announce publicly the
results of any revisions to any of the forward-looking statements to reflect future events or developments.
About Kindred Healthcare
Kindred Healthcare, Inc., a top-150 private employer in the United States, is a FORTUNE 500 healthcare services company based in Louisville,
Kentucky with annual revenues of $5 billion and approximately 62,600 employees in 47 states. At September 30, 2014, Kindred through its subsidiaries provided healthcare services in 2,376 locations, including 97 transitional care hospitals, five
inpatient rehabilitation hospitals, 99 nursing centers, 22 sub-acute units, 152 Kindred at Home hospice, home health and non-medical home care locations, 102 inpatient rehabilitation units (hospital-based) and a contract rehabilitation services
business, RehabCare, which served 1,899 non-affiliated facilities. Ranked as one of Fortune magazine’s Most Admired Healthcare Companies for six years in a row, Kindred’s mission is to promote healing, provide hope, preserve dignity and
produce value for each patient, resident, family member, customer, employee and shareholder we serve. For more information, go to www.kindredhealthcare.com. You can also follow us on Twitter and Facebook.
- END -
|
|
| Kindred
Healthcare Third Quarter Investor Update
November 6, 2014
Exhibit 99.3 |
|
|
|
Forward-Looking Statements
2
This presentation includes forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
These forward-looking statements include, but are not limited to, statements regarding the
proposed business combination transaction between Kindred Healthcare, Inc. (“Kindred” or the “Company”)
and Gentiva Health Services, Inc. (“Gentiva”) (NASDAQ:GTIV) (including financing of
the proposed transaction and the benefits, results, effects and timing of a transaction), all statements regarding
Kindred’s (and Kindred’s and Gentiva’s combined) expected future financial
position, results of operations, cash flows, dividends, financing plans, business strategy, budgets, capital expenditures,
competitive positions, growth opportunities, plans and objectives of management, and
statements containing the words such as “anticipate,” “approximate,” “believe,” “plan,” “estimate,” “expect,”
“project,” “could,” “would,” “should,”
“will,” “intend,” “may,” “potential,” “upside,” and other similar expressions. Statements in this presentation concerning the business outlook or future economic
performance, anticipated profitability, revenues, expenses, dividends or other financial
items, and product or services line growth of Kindred (and the combined businesses of Kindred and Gentiva),
together with other statements that are not historical facts, are forward-looking
statements that are estimates reflecting the best judgment of Kindred based upon currently available information.
Such forward-looking statements are inherently uncertain, and stockholders and other
potential investors must recognize that actual results may differ materially from Kindred’s expectations as a result
of a variety of factors, including, without limitation, those discussed below. Such
forward-looking statements are based upon management’s current expectations and include known and unknown risks,
uncertainties and other factors, many of which Kindred is unable to predict or control, that
may cause Kindred’s actual results, performance or plans with respect to Gentiva to differ materially from any
future results, performance or plans expressed or implied by such forward-looking
statements. These statements involve risks, uncertainties and other factors discussed below and detailed from time to
time in Kindred’s filings with the Securities and Exchange Commission (the
“SEC”).
Risks and uncertainties related to the proposed merger include, but are not limited to, the
risk that Gentiva’s stockholders do not approve the merger, potential adverse reactions or changes to business
relationships resulting from the announcement or completion of the merger, uncertainties as to
the timing of the merger, adverse effects on Kindred’s stock price resulting from the announcement or
completion of the merger, competitive responses to the announcement or completion of the
merger, the risk that healthcare regulatory, licensure or other approvals and financing required for the
consummation of the merger are not obtained or are obtained subject to terms and conditions
that are not anticipated, costs and difficulties related to the integration of Gentiva’s businesses and
operations with Kindred’s businesses and operations, the inability to obtain, or delays
in obtaining, cost savings and synergies from the merger, uncertainties as to whether the completion of the merger
or any transaction will have the accretive effect on Kindred’s earnings or cash flows
that it expects, unexpected costs, liabilities, charges or expenses resulting from the merger, litigation relating to the
merger, the inability to retain key personnel, and any changes in general economic and/or
industry-specific conditions.
In addition to the factors set forth above, other factors that may affect Kindred’s
plans, results or stock price are set forth in Kindred’s Annual Report on Form 10-K and in its reports on Forms 10-Q
and 8-K.
Many of these factors are beyond Kindred’s control. Kindred cautions investors that any
forward-looking statements made by Kindred are not guarantees of future performance. Kindred disclaims any
obligation to update any such factors or to announce publicly the results of any revisions to
any of the forward-looking statements to reflect future events or developments.
Kindred has
provided information in this presentation to compute certain non-GAAP measurements for specified periods. A reconciliation of the non-GAAP measurements to the GAAP measurements is
included in this presentation and on Kindred’s website at
www.kindredhealthcare.com under the heading “investors.”
Additional
Information
This presentation does not constitute an offer to sell or the solicitation of an offer to buy
any securities or a solicitation of any vote or approval. This communication may be deemed to be solicitation
material in respect of the proposed merger between Kindred and Gentiva. In connection
with the proposed merger, Kindred intends to file a registration statement on Form S-4, containing a proxy
statement/prospectus, with the SEC. SHAREHOLDERS OF GENTIVA ARE URGED TO READ ALL
RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE PROXY STATEMENT/PROSPECTUS, BECAUSE
THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER. Investors and
security holders will be able to obtain copies of the proxy statement/prospectus as well as other filings
containing information about Kindred and Gentiva, without charge, at the SEC’s website, www.sec.gov. Those documents, when filed, as well as Kindred’s other public filings with the SEC, may be
obtained without charge at Kindred’s website at
www.kindredhealthcare.com.
Participants in Solicitation
Kindred and its directors and executive officers, and Gentiva and its directors and executive
officers, may be deemed to be participants in the solicitation of proxies from the holders of Gentiva common
stock in respect of the proposed merger. Information about the directors and executive
officers of Kindred is set forth in the proxy statement for Kindred’s 2014 Annual Meeting of Shareholders, which
was filed with the SEC on April 3, 2014. Information about the directors and executive
officers of Gentiva is set forth in the proxy statement for Gentiva’s 2014 Annual Meeting of Shareholders, which was
filed with the SEC on March 25, 2014. Investors may obtain additional information regarding
the interest of such participants by reading the proxy statement/prospectus regarding the proposed merger
when it becomes available. |
|
|
| Kindred
Healthcare’s Third Quarter – Achievements and Opportunities
Continued Progress on Employee Engagement, Quality Assurance, Clinical
Outcomes and Patient Satisfaction Measures Across the Enterprise
Strong Third Quarter Results and Reaffirming Confidence in 2014 EPS Guidance
Continued Progress Advancing Integrated Care Market Strategy and
Development of Care Management Capabilities
Commencement of Growth Phase of Strategic Plan
(Repositioning and Recapitalization Complete)
Announced Definitive Agreement to acquire Gentiva, solidifying Kindred’s Position
as the Premier Post-Acute Healthcare Services Provider in the U.S.
3 |
|
|
| Third
Quarter
–
Continuing
Operations
(1)
($ millions, except statistics)
•
Key Q3 operating metrics:
Strong revenue and operating income growth, up 6% and 7%, respectively, compared to prior
year Improved operating income and operating margins across all divisions, lower
interest costs and solid cost controls across the organization driving
year-over-year results Hospital same-store volumes up 3% over prior year,
cost Per Patient Day (“PPD”) up less than 1% over prior year
Strong sequential cash flows with core operating cash flows of $95 million and core free cash
flows were $72 million
4
(1)
Before certain disclosed items reconciled in the appendix.
(2)
Prior year EPS of $0.10 is pro forma to include incremental 9.7 million shares issued in the
June 2014 equity offering. Actual core EPS for Q3 ‘13 is $0.12.
Actual
Prior Year
% change
Revenues
$1,243
$1,175
+6%
Operating expenses
1,085
1,027
Core operating income (EBITDAR)
158
148
+7
Margin
12.7%
12.6%
Net income -
core
7
7
+7
Diluted EPS -
core
$0.11
$0.10
(2)
+10
Diluted EPS -
reported
$0.03
($0.31) |
|
|
| Core Operating
Margins (1)
Margin Expansion Across Enterprise Reflects Full Recovery from Reimbursement Cuts
5
(1)
Before certain disclosed items reconciled in the Appendix.
3Q13
3Q13
3Q13
3Q13
3Q14
3Q14
3Q14
3Q14
20.0%
11.9%
11.0%
4.0%
20.1%
13.1%
11.7%
8.2%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
Hospitals
Nursing Centers
RehabCare
Kindred at Home |
|
|
|
$595
$609
$1,628
$1,642
$1,250
$1,350
$1,450
$1,550
$1,650
$1,750
$450
$500
$550
$600
$650
Q3 '13
Q3 '14
Q3 '13
Q3 '14
Hospital Division
$2.5 billion Revenues
(1)
$527 million Operating Income
(2)
Transitional Care Hospitals (certified as LTAC hospitals)
•
97
Transitional
Care
Hospitals
(3)
•
7,145
licensed
beds
(3)
Inpatient Rehabilitation Hospitals (IRFs)
•
5 IRFs
(3)
•
215 licensed beds
(3)
(1)
Revenues for the twelve months ended September 30, 2014 (divisional revenues before
intercompany eliminations). (2)
Operating income for the twelve months ended September 30, 2014.
(3)
As of September 30, 2014.
(4)
Before certain disclosed items reconciled in the Appendix.
•
Continued clinical success with low rates of
rehospitalizations, reduced employee
turnover and a strong online reputation
•
Strong results with same-store admissions
increase of 3% and less than 1% growth in
core operating costs per patient day
•
Strong operating income margin of 20.1%
(4)
6
Q3 Revenue
Revenue
($ millions)
Per Patient Day Revenues
Q3 Operating Income
(4)
($ millions)
$119
$122
$100
$110
$120
$130
Q3 '13
Q3 '14 |
|
|
|
•
2,264 sites of service served through
20,338 therapists
(3)
•
Including 102 hospital-based acute
rehabilitation units
(3)
•
RehabCare continues to deliver outstanding clinical
results and improved patient functional
improvement across sites of service
•
Year-over-year core operating income and margin
improvements
•
Added 90 net new skilled nursing rehabilitation
sites YTD through Q3 2014
$1.3 billion Revenues
(1)
$146 million Operating Income
(2)
(1)
Revenues for the twelve months ended September 30, 2014 (divisional revenues before
intercompany eliminations). (2)
Operating income for the twelve months ended September 30, 2014.
(3)
As of September 30, 2014.
7
Total Sites of Service
Productivity
2,139
2,264
0
600
1,200
1,800
2,400
2011
Q3 2014
80.4%
79.6%
0.0%
30.0%
60.0%
90.0%
2011
Q3 2014 |
|
|
| Nursing Center
Division •
48 Transitional Care
Centers
(Sub-Acute
facilities
licensed
as
SNFs)
(3)
•
13 Nursing and Rehabilitation Centers
(with
Transitional
Care
Units)
(3)
•
12 Hospital-Based Sub-Acute Units
(3)
•
38
Skilled
Nursing
Centers
(Traditional
SNFs)
(3)
•
Strong operations with low nursing turnover
and improved performance on CMS 5-Star
Program
•
Nursing center division core operating
income increased 16%
(4)
primarily due to
growth in revenues
•
Operating margins significantly improved due
to increased reimbursement rates, ongoing
repositioning and cost control initiatives
•
Admissions up 4% compared to prior year
•
Declines in average length of stay (ALOS)
continue to weigh on average daily census
(ADC)
$1.1 billion Revenues
(1)
$147 million Operating Income
(2)
(1)
Revenues for the twelve months ended September 30, 2014 (divisional revenues before
intercompany eliminations). (2)
Operating income for the twelve months ended September 30, 2014.
(3)
As of September 30, 2014.
(4)
Before certain disclosed items reconciled in the Appendix.
8
Nursing
Center
Operating
Income
Margin
(4)
11.9%
13.2%
13.8%
14.3%
13.1%
10.0%
12.0%
14.0%
16.0%
Q3 2013
Q4 2013
Q1 2014
Q2 2014
Q3 2014 |
|
|
| •
High rates of patient satisfaction for Home Health and
Hospice with nearly 50% of all home health locations
named to HomeCare Elite as top 25% of the nation’s
home health agencies
•
Kindred at Home division delivered 60% revenue growth
in the third quarter of 2014 and more than tripled core
operating income compared to prior year quarter
•
Focus on integration efforts has improved margin from
4.0%
(3)
in
Q3
2013
to
8.2%
(3)
in
Q3
2014
•
Combination with Gentiva creates largest home health
and hospice system in the U.S.
9
•
201
sites
of
service
in
13
states
(2)
•
4,900
caregivers
serving
17,300
patients
on
a daily basis
(2)
(1)
Annualized based upon revenues (before intercompany eliminations) and operating income for the
three months ended September 30, 2014. (2)
As of September 30, 2014.
(3)
Before certain disclosed items reconciled in the Appendix.
(4)
Operating income for the twelve months ended December 31, 2013.
Revenue
($ millions)
Operating Income
($ millions)
$345 million Revenues
(1)
$27 million Operating Income
(1)
(1)
(1)
(4)
$225
$345
$0
$100
$200
$300
$400
2013
2014
$10
$27
$0
$10
$20
$30
2013
2014 |
|
|
| Kindred and
Gentiva A Compelling Opportunity for
American Healthcare and Shareholders
10 |
|
|
| Combination
Creates One of the Nation’s Premier Healthcare Services Providers
11
Leadership Among Premium Healthcare Service Providers
2014 Wall Street
Consensus Revenue
($ in billions)
Pro Forma
Post-Acute Providers
Alternate Site Providers
(4)
$7.1
$5.5
$3.8
$3.1
$2.4
$6.4
$12.7
$4.4
IPCM
DVA
EVHC
AMSG
SCAI
The acquisition of Gentiva further strengthens Kindred’s ability to serve
patients across the full continuum of care
($ in millions)
Kindred
Gentiva
Pro Forma
States
(1)
47
40
47
Locations
(1)
2,376
493
2,869
Employees
(1)
62,600
46,600
109,200
Revenue Guidance/Consensus
$5.1 billion
(2)
$2.0 billion
(2)
$7.1 billion
Patients Per Year
(3)
535,000
550,000
1,085,000
$1.2
$2.7
$1.6
(1)
As of September 30, 2014.
(2)
Per Kindred 2014 guidance as provided on November 5, 2014 and 2014 current average analyst
consensus estimates for Gentiva. (3)
Internal company data.
(4)
Twelve months ended (LTM) as of June 30, 2014 and pro forma for Skilled Healthcare
merger. (2) |
|
|
| Revenues
(1)
$345 MM
Total States
(3)
13
Average Daily Census
(4)
17,300
Total Sites of Service
(3)
201
Home Health
141
Hospice
38
Personal Care
22
Total Caregivers
(3)
4,900
Revenues
(2)
$2.0 B
Total States
(3)
40
Average
Daily
Census
(4)
110,000
Total Sites of Service
(3)
493
Home Health
294
Hospice
165
Community Care
34
Total Caregivers
(3)
40,500
Revenues
(1) (2)
$2.3 B
Total States
41
Average Daily Census
127,300
Total Sites of Service
694
Home Health
435
Hospice
203
Community Care
56
Total Caregivers
45,400
Kindred at Home
Pro Forma Company
Combination creates
largest home health and
hospice system in the
United States
Gentiva
Kindred at Home
12
(1)
Annualized based upon revenues for the three months ended September 30, 2014 (divisional
revenues before intercompany eliminations). (2)
Current average analyst consensus estimate for 2014.
(3)
As of September 30, 2014.
(4)
Internal company data for Kindred and investor presentation for Gentiva.
Gentiva |
|
|
| Gentiva
Integration Management Office Integration Operating Principles
Integration Operating Principles
Prevent disruption to patient care
Prevent harm to target revenue
streams
Retain key talent
Meet all reporting obligations
Ensure Day 1 Readiness
Achieve synergies
INPUTS
IMO steering committee
feedback
Future state objectives
Integration red flags /
anticipated
complexities
(1)
Lessons learned from previous
Kindred IMO
(1) As identified during due diligence.
13 |
|
|
|
Defining Day 1 Readiness
Day one readiness focuses on the details necessary to bring business functions
and processes into alignment at closing.
Focus Areas for Day 1 Readiness / Controls:
-
Payroll Continuity
-
Stability of revenue cycle functions:
-
Accounts receivable
-
Accounts payable
-
Financial Reporting (i.e. financial suite & systems)
-
Synergy Capture
-
Validated synergy
-
Identified initiatives for realizations
-
Developed execution plans for realization
To be completed
Assessment of
controls
Assessment of
systems
Consolidation
plan complete
Ready for Day 1
execution
Gentiva Integration Management Office
Defining Day One Readiness
14 |
|
|
| Synergy
Initiative Development
Chris Consalus
Day 1 Readiness
and Transitional
Operating Models
Employee Retention
Functional integration workstreams
IT
People Services
Finance &
Procurement
Compliance &
Legal
Operations
Sales
Applications
Networks
Hosting
Charlie Wardrip /
Russ McDonough
Payroll
Organization
Structure
Benefits & Comp
Selection
Process
Jeff Jasnoff /
Ed Reisz
Accounting
Tax & Treasury
Financial
Reporting
Internal Audit
Purchasing
Mark Laemmle /
Todd Flowers /
Eric Slusser
Legal & Regulatory
Risk Mgt &
Compliance
External Affairs
Records Retention
Kelly Priegnitz /
Joe Landenwich
/ Suzanne
Riedman / John
Camperlengo
Care Mgt
Home Health
Reimbursement
Care Mgt
Hospice
Managed Care
Facilities
Jon Rousseau /
Todd Higgins /
Susan Sender /
David Causby
Identify Overlaps
Plan Organization
Structure
Plan sales force
rationalization
David Mikula /
Dean Johnson
Plans for Revenue
Synergies
Cross-functional
integration
workstreams
Integration team structure
Executive Sponsorship
Steve Cunanan, Scott Blanchette
IMO
Mark
Douglas
Gentiva
IMO
(support):
Janet
Nicoll
KPMG
Kindred / GTIV Advisory Team:
Operations –
Jon Rousseau / David
Causby Corporate Development
–
Doug Curnutte
Finance
–
Todd Higgins / Eric
Slusser Benefits & Compensation
–
Andrea Romisher
IS/IT
–
Vance Collins
Communications
–
Susan Moss / Paula
Shoemaker We
Have
Assembled
Functional
Teams,
as
Well
as
Teams
That
Will
Help
Us
Work
On
Key
Cross-Functional
Integration
Priorities
Communication &
Change
Management
Gentiva’s functional
IMO leader indicated
in orange font
Gentiva Integration Management Office
Integration Team Structure
15
IMO Lead: |
|
|
| Transaction
Summary Purchase Price
•
$19.50 / share comprising $14.50 in cash and 0.257 shares of Kindred common stock
•
$1.8 billion total consideration, including assumption of net debt
Financial Profile
•
Pro Forma combined company revenues of approximately $7.1 billion and Operating Income or
EBITDAR
(1)
of $1.0 billion
•
Combination will enhance Kindred’s Revenue and Margin Growth Profile
Accretion
•
Immediately and significantly accretive to Kindred’s Earnings and Operating Cash Flows
(exclusive of transaction and integration costs)
Synergies
•
$70 million in expected cost synergies within two years with approximately $35 million
expected in first full year following the closing
(2)
•
Revenue synergies of more than $60 million expected over time
(approximately $20 –
$30 million expected in the first full year following the closing)
Financing
•
Fully committed financing from Citi and J.P. Morgan
•
Expect to use a combination of debt, equity and mandatory convertibles to maintain pro forma
Adjusted Debt to EBITDAR leverage
(3)
of approximately 5.5x at closing, assuming half of $70 million
run rate expected cost synergies
Expected Closing
•
Q1 2015
–
Already received Hart-Scott-Rodino clearance
16
Kindred to acquire Gentiva for $1.8 billion in a combination of cash and stock
(1)
EBITDAR, or operating income, is defined as earnings before interest, income taxes,
depreciation, amortization and rent. EBITDAR was computed by combining the mid point of
2014 guidance for Kindred as provided on November 5, 2014 (see enclosed reconciliation)
and 2014 current average analyst consensus estimates for Gentiva. In addition, pro forma EBITDAR includes full
run rate expected cost synergies of $70 million, and estimated annualized rent expense for
Gentiva of $41 million.
(2)
Excludes one-time integration costs. (3)
Pro forma Adjusted Debt to EBITDAR leverage was computed by dividing a numerator
comprised of estimated long-term debt at closing plus pro forma annual rent expense
multiplied by six, less unrestricted cash, by a denominator comprised of pro forma
EBITDAR.
|
|
|
|
17
Continued Confidence in 2014
Gentiva Performance
(1)
Per Gentiva November 5, 2014 earnings release, see reconciliation in
appendix. (2)
Based upon 2014 current average analyst consensus estimates.
Sustained Improvement in Financial and Operating Performance
Further Validates Our Acquisition Thesis
Q3 Reported
(1)
Confirmed 2014
Guidance
(1)
Consensus Estimates
(mean)
(2)
Revenue
$498.0 million
$1.96 -
2.00 billion
$1.99 billion
Adjusted EBITDA
$48.5 million
$183-195 million
$191 million |
|
|
| Combined Company
Overview Confirmed Confidence in Gentiva Performance
Mid Point of 2014 Guidance/Consensus
($ in millions)
Kindred
(1)
Gentiva
(2)
Expected
Synergies
(3)
Pro Forma
Revenue
$5,100
$1,986
$7,086
EBITDAR
697
232
$70
999
EBITDAR Margin
13.7%
11.7%
14.1%
Rent
322
41
363
% of revenue
6.3%
2.1%
5.1%
EBITDA
375
191
70
636
EBITDA Margin
7.4%
9.6%
9.0%
(1)
Based upon the midpoint of earnings guidance for Kindred as of November 5, 2014.
(2)
Based upon 2014 current average analyst consensus estimates. Assumes annualized rent of $41
million. (3)
Estimated full run rate of cost synergies expected to be achieved within two years of
close. Excludes one-time transaction and integration costs. 18
Gentiva’s
announcement of
Q3 results and
confirmed EBITDA
guidance of
$183-195 million
further validates
our acquisition thesis
and diligence. |
|
|
| Significant and
Immediate Accretion to Earnings and Cash Flows
19
Acquisition is significantly accretive at the contemplated transaction value and
financing structure on both an EPS and cash flow basis
(exclusive of transaction and integration costs)
(1)
Assumes pro forma share count of 85 million shares reflecting fully diluted shares at end of Q3
2014, share consideration as part of Gentiva transaction and the anticipated equity offering to finance the
transaction. Kindred expects the acquisition to be approximately
$0.40 to $0.60 accretive to pro forma earnings, on a run rate basis, once Gentiva is fully
integrated and expected synergies are fully realized in the second full year following
the closing. (2)
Based upon 2014 net income guidance for Kindred as provided on November 5, 2014 and 2014
current average analyst consensus estimates for Gentiva and adding back depreciation and amortization per
Kindred’s 2014 guidance and adding back depreciation and amortization based upon 2014
current average analyst consensus for Gentiva and annualized stock-based compensation and deferred financing cost
amortization for both Kindred and Gentiva. In addition, expected
full run rate estimated cost synergies, net of income taxes, of
$42 million ($70 million full run rate annual costs and operating synergies less
income taxes of $28 million) are included.
EPS Accretion
(1)
$0.40 –
$0.60
+
Acceleration of cost synergies
+
Increased revenue through clinical
integration
+
Incremental development activity fueled
by combined company cash flows
+
Enhanced managed care and ACO
opportunities from expanded integrated
national platform
Drivers for Potential Upside
Pro Forma Cash Flows ($ millions)
Operating Cash Flows
before dividends, changes
in working capital and
capital expenditures
(2)
$350 –
400
Less: Routine CapEx
$120 –
130
As adjusted
$230 –
270
Fully Integrated Run Rate |
|
|
| Key
Highlights •
Expected to issue in aggregate ~$620 –
$720 million of equity to maintain
reasonable leverage
•
Expect to have shares outstanding of
~85 million at close
Financing Plan
20
Sources
($ millions)
New debt financing
$1,300 –
$1,400
New equity and mandatory
convertible securities issued
$200 –
$300
Equity issued to Gentiva
shareholders
~$200
Existing bank revolver draw
~$200
$2,000
Uses
($ millions)
Purchase Gentiva equity
$767
Retire Gentiva debt
~$1,050
Transaction fees & expenses
~$183
$2,000
Aggregate equity financing approximates
purchase price of Gentiva equity
–
Proactively raised $220 million in net
proceeds from June 2014 equity offering
–
Will issue Gentiva shareholders ~$200
million in Kindred stock as part of
purchase consideration
–
Plan to raise ~$200 – $300 million in
equity and / or mandatory convertible
securities between announcement and
close
|
|
|
| 15%
Hospital
35%
Nursing
Rehab
18%
(1)
Kindred
revenues
before
intercompany
eliminations
as
reported
in
the
respective
Form
10-K.
(2)
Per Kindred 2014 guidance as provided on November 5, 2014 and 2014 current average analyst
consensus estimates for Gentiva. Kindred has Significantly Diversified its
Service Offerings & Transformed its Business Mix
•
Combination with Gentiva uniquely positions Kindred as one of the leading healthcare providers
in the U.S. across a broad spectrum of critical services
–
Fundamentally different company today that is at the forefront of a changing healthcare
delivery system –
Results in a suite of services better positioned to help patients and drive shareholder
value Yesterday
Today
Tomorrow
•
A focused operator of nursing facilities
and hospitals
–
Diversified post-acute service
offerings through acquisition of
RehabCare
•
Right-sized operational footprint, yielding
a focused approach across key integrated
care markets
–
Negotiation with Ventas to exit
certain assets and sold others
•
Acquisition of Gentiva results in a well-
balanced portfolio of integrated service
offerings
–
Addition of Gentiva accelerates
capabilities to provide population
health and take risk
2010
2012
Kindred at Home 0%
Kindred at Home 2%
LTM 9/30/2014
Kindred at Home 6%
Pro Forma Kindred
(2)
22
Kindred
at Home
32%
Nursing
21%
Hospital
48%
Rehab
25%
Nursing
45%
Hospital
33%
Rehab
20%
Nursing
47%
Hospital
42%
Rehab
11% |
|
|
| (1)
Based upon current average analyst Consensus estimates for 2014 and 2015 for both Kindred and
Gentiva, including $60 million of annual run rate revenue synergies. (2)
Before certain disclosed items as reconciled in the appendix.
(3)
Based
upon
mid
point
of
2014
earnings
guidance
for
Kindred
as
of
November
5,
2014.
(4)
Based
upon
mid
point
of
2014
earnings
guidance
for
Kindred
as
of
November
5,
2014
and
based
upon
current
average
analyst
Consensus
estimates
for
Gentiva
(includes EBITDA impact of full run rate of $70 million of expected cost synergies).
Kindred has Successfully Shifted its Business to Faster
Growing Businesses, Improving Margins,
Profitability and Operating Cash Flows
Improves Margin and Profitability
Enhances Growth Profile
2014 –
2015 Revenue Growth
(1)
23
EBITDA Margin
(4)
(2)
(3)
3.9%
4.5%
0.0%
2.0%
4.0%
6.0%
Kindred
Kindred + Gentiva
6.1%
7.4%
9.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
Kindred 2011
Kindred 2014
Kindred + Gentiva
PF 2014 |
|
|
| (1)
Based
upon
mid
point
of
2014
earnings
guidance
for
Kindred
as
of
November
5,
2014.
(2)
Based upon mid point of 2014 current average analyst consensus estimates for Gentiva. Assumes
annualized rent of $41 million. (3)
Leases capitalized using 6x rent, equity represents market cap and funded debt calculated as of
December 31 for 2010 and 2012. (4)
Rent expense for the twelve months ended September 30, 2014 capitalized at 6x, funded debt and
closing share price at September 30, 2014, respectively. (5)
Pro forma values shown as of 12/31/2014 and include $1.6bn of additional debt and $363mm of
annual rent expense based upon mid point of 2014 earnings guidance for
Kindred
as
of
November
5,
2014
and
an
estimate
of
annualized
rent
expense
of
$41
million
for
Gentiva.
Pro
forma
value
based
on
fully
diluted
Kindred
shares
outstanding plus newly issued shares as part of the transaction at Kindred share price of
$21.24 on October 30, 2014. Kindred has Developed a Balanced
and Flexible Capital Structure
•
Increasing traditional debt while deleveraging lease exposure will continue to drive
long-term strategic flexibility and create shareholder value
–
Rent as a percent of revenue declines from 6.3%
(1)
for Kindred today to 5.2%
(1)(2)
Yesterday
(3)
Today
(4)
Tomorrow
(5)
•
RehabCare transaction materially
shifted Kindred’s capital structure,
financed by the issuance of traditional
financial debt
•
Recent negotiations with Ventas further
reduced capitalized leases by greater
than $600 million
•
Q1 refinancing added capacity,
improved terms and Financial Flexibility
•
Gentiva transaction continues to shift
Kindred’s capital structure towards
more traditional debt/equity mix
•
Strong deleveraging profile
Equity
22%
Debt
11%
Cap.
Leases
67%
Equity
12%
Debt
34%
Cap.
Leases
54%
~5.5x net adj leverage at close with goal
to delever below 5.0x over the next
two years
24
2010
2012
As of September 30, 2014
Pro Forma Kindred
Equity
27%
Debt
32%
Cap.
Leases
41%
Equity
25%
Debt
44%
Cap.
Leases
31% |
|
|
| Kindred Has
Delivered Attractive Financial Performances
25
Operating Margin
(1)
:
12.7%
14.0%
13.6%
13.7%
Share Price & Dividends
($ millions)
Closing Share Price
Cumulative Dividends
Despite sequential years of significant
reimbursement cuts and a wholesale
restructuring of the Company’s business and
capital structure, the Company has delivered on
its promise to its patients, customers,
teammates and shareholders!
$4.2
$4.9
$4.8
$5.1
$7.1
2011
2012
2013
2014
2014 PF
Revenue
($ billions)
Operating Income
(1)
($ millions)
$11.77
$10.82
$19.74
$21.24
$0.24
$0.60
12/31/2011
12/31/2012
12/31/2013
10/30/2014
14.1%
(1)Before certain disclosed items as reconciled in the Appendix.
(2)Reimbursement cuts totaled $70 million.
(3)Reflects midpoint of Company’s November 5, 2014 earnings guidance.
(4)Assumes Gentiva was acquired on January 1, 2014, and amount for Gentiva is based upon
current analyst consensus estimates.
In
addition,
pro
forma
EBITDAR
includes
full
run
rate
expected
cost
synergies
of
$70
million,
and
estimated
annualized rent expense for Gentiva of $41 million.
(2)
(3)
(3)
(4)
(4)
Kindred and
Gentiva
Kindred and
Gentiva
$529
$679
$658
$697
$999
2011
2012
2013
2014
2014 PF |
|
|
| Kindred Is
Helping to Shape the Future of American Healthcare
•
As the U.S. population ages, demand for patient-centered healthcare is growing
rapidly –
and Kindred is pioneering an integrated approach to address this
demand –
implementing a better model to improve clinical outcomes and patient
safety, smooth care transitions and lower costs
•
Kindred’s “Continue
The
Care”
strategy delivers the services that patients need
across the full spectrum of care, from transitional inpatient hospitalization,
to post-acute rehab and skilled nursing services, to home health and hospice care
•
Kindred is growing to implement this strategy and fostering innovation to provide
more patients, in more communities, with high quality, integrated, patient-
centered care in the lowest-cost setting
26
The merger of Kindred and Gentiva accelerates the development of
this integrated approach to
patient care, creating significant value for both companies’
patients,
employees and shareholders |
|
|
|
Appendix
28
*
*
*
*
*
*
*
*
*
*
* |
|
|
| Explanation of
Non-GAAP Measures In addition to the results provided in accordance with GAAP,
Kindred Healthcare, Inc. (the "Company") has provided information in this presentation to
compute certain non-GAAP measurements for the three months ended September 30, 2014 and
2013, the twelve months ended September 30, 2014, December 31, 2013, 2012 and 2011
before certain charges or on a core basis and on a pro forma basis. A reconciliation of the non-GAAP measurements to
the GAAP measurements is included in this presentation.
The Company's earnings presentation also includes financial measures referred to as operating
income, or EBITDAR, and earnings before interest, income taxes, depreciation and
amortization ("EBITDA"). The Company's management uses EBITDAR or EBITDA as meaningful measures of operational performance
in addition to other measures. The Company uses EBITDAR or EBITDA to assess the relative
performance of its operating divisions as well as the employees that
operate
these
businesses.
In
addition,
the
Company
believes
these
measurements
are
important
because
securities
analysts
and
investors
use
these
measurements to compare the Company's performance to other companies in the healthcare
industry. The Company believes that income (loss) from continuing
operations
is
the
most
comparable
GAAP
measure.
Readers
of
the
Company's
financial
information
should
consider
income
(loss)
from
continuing operations as an important measure of the Company's financial performance because
it provides the most complete measure of its performance. EBITDAR or EBITDA should be
considered in addition to, not as a substitute for, or superior to, financial measures based upon GAAP as an
indicator of operating performance. A reconciliation of EBITDAR or EBITDA to income (loss)
from continuing operations provided is included in this presentation.
The
pro
forma
EBITDAR
total
of
$1.0
billion
included
in
this
presentation
includes
a
2014
EBITDAR
estimate
of
$232
million
for
Gentiva,
which
is based upon Gentiva's 2014 current average analyst consensus estimates. In addition, pro
forma EBITDAR includes full run rate expected cost synergies of $70 million from the
transaction. Also in this presentation, the Company provides the financial measure of
free cash flows excluding certain items. The Company recognizes that free cash
flows
excluding
certain
items
is
a
non-GAAP
measurement
and
is
not
intended
to
replace
the
presentation
of
the
Company’s
cash
flows
in
accordance
with
GAAP. The Company believes that this non-GAAP measurement provides important information
to investors related to the amount of discretionary cash flows that are available for
other investing and financing activities. In addition, management uses free cash flows excluding certain items in making
decisions related to acquisitions, development capital expenditures, dividends, long-term
debt repayments and other uses. The Company believes net cash flows provided by
operating activities is the most comparable GAAP measure. Readers of the Company’s financial information should consider net cash
flows provided by operating activities as an important measure of the Company’s financial
performance because it provides the most complete measure of its performance.
Free cash flows excluding certain items should be considered in addition to, not as a
substitute for, or superior to, financial measures based
upon
GAAP
as
an
indicator
of
operating
performance.
A
reconciliation
of
net
cash
flows
provided
by
operating
activities
to
free
cash
flows
excluding
certain items is included in this presentation.
29 |
|
|
| Reconciliation
of Earnings Guidance (a)
Continuing Operations
($ Millions, except per chare amounts)
30
As of November 5, 2014
Low
High
Revenues
5,100
$
5,100
$
Operating income (EBITDAR)
692
$
702
$
Rent
322
322
EBITDA
370
380
Depreciation and amortization
157
157
Interest, net
92
92
Income from continuing operations before income taxes
121
131
Provision for income taxes
44
48
Income from continuing operations
77
83
Earnings attributable to noncontrolling interests
(18)
(18)
Income from continuing operations attributable to the Company
59
65
Allocation to participating unvested restricted stockholders
(2)
(2)
Available to common stockholders
57
$
63
$
Earnings per diluted share
0.98
$
1.08
$
Shares used in computing earnings per diluted share
58.3
58.3
As of November 5, 2014
Various non-cash expenses included in earnings guidance above:
Low
High
Amortization of stock-based compensation
13
$
13
$
Amortization of deferred financing fees
8
8
Straight-line rent expense
9
9
(a)
The earnings guidance excludes the effect of reimbursement changes, debt refinancing costs,
severance, retirement, retention and restructuring costs, customer bankruptcy costs,
litigation costs, transaction costs, any further acquisitions or divestitures, any
impairment charges, any further issuances of common stock, debt or mandatory
convertible equity securities in conjunction with the Gentiva transaction and any
repurchases of common stock. |
|
|
| Reconciliation
of Non-GAAP Measures 31
($ Thousands)
Three months ended
September 30,
2014
2013
Detail of charges:
Severance, retirement and other restructuring costs
($1,686)
($1,894)
Customer bankruptcy
(1,857)
-
Facility closing costs
-
(6,043)
Litigation costs
-
(23,850)
Debt refinancing charges (other operating expenses)
-
(459)
Transaction costs
(4,114)
(613)
Debt refinancing charges (interest expense)
-
(96)
(7,657)
(32,955)
Income tax benefit
2,391
9,767
Charges net of income taxes
(5,266)
(23,188)
Allocation to participating unvested restricted stockholders
133
-
Available to common stockholders
($5,133)
($23,188)
Weighted average diluted shares outstanding
62,902
52,323
Diluted loss per common share related to charges
($0.08)
($0.44)
Reconciliation of operating income (EBITDAR) before charges:
Operating income (EBITDAR) before charges
$158,270
$148,245
Detail of charges excluded from core operating results:
Severance, retirement and other restructuring costs
(1,686)
(1,894)
Customer bankruptcy
(1,857)
-
Facility closing costs
-
(6,043)
Litigation costs
-
(23,850)
Debt refinancing charges (other operating expenses)
-
(459)
Transaction costs
(4,114)
(613)
(7,657)
(32,859)
Reported operating income (EBITDAR)
$150,613
$115,386
Reconciliation of income from continuing operations before charges:
Amounts attributable to Kindred stockholders:
Income from continuing operations before charges
$7,040
$6,585
Charges net of income taxes
(5,266)
(23,188)
Reported income (loss) from continuing operations
$1,774
($16,603)
Reconciliation of diluted income per common share from continuing operations
before charges:
Diluted income per common share before charges (a)
$0.11
$0.12
Charges net of income taxes
(0.08)
(0.44)
Other
-
0.01
Reported diluted income (loss) per common share from continuing operations
$0.03
($0.31)
Weighted average diluted shares used to compute income per common share
from continuing operations before charges
62,902
52,333
Pro forma diluted income per common share before charges
$0.10
Weighted average diluted shares used to compute pro forma income per
common share from continuing operations before charges (b)
61,954
Reconciliation of effective income tax rate before charges:
Effective income tax rate before charges
32.4%
30.5%
Impact of charges on effective income tax rate
1.0%
-1.3%
Reported effective income tax rate
33.4%
29.2%
(a)
(b)
For purposes of computing diluted earnings per common share before charges, income from
continuing operations before charges was reduced by $0.2 million for both the three
months ended September 30, 2014 and 2013, and $1.2 million and $1.4 million for the
nine months ended September 30, 2014 and 2013, respectively, for the allocation of
income to participating unvested restricted stockholders. Includes the incremental 9.7
million shares, on a weighted average basis, issued in connection with the Company's
equity offering completed in June 2014. |
|
|
| Reconciliation
of Non-GAAP Measures (continued) 32
($ Thousands)
Twelve
2013 Quarters
2014 Quarters
Months ended
First
Second
Third
Fourth
First
Second
Third
Sept. 30, 2014
Revenues:
Hospital division
657,814
$
606,604
$
594,154
$
606,988
$
646,458
$
632,156
$
609,452
$
2,495,054
$
Nursing center division
270,205
264,847
265,696
270,080
277,902
280,255
279,561
1,107,798
Rehabilitation division:
Skilled nursing rehabilitation services
258,750
249,647
245,330
243,280
254,255
253,989
247,042
998,566
Hospital rehabilitation services
74,523
69,777
68,296
74,017
73,964
75,324
74,808
298,113
333,273
319,424
313,626
317,297
328,219
329,313
321,850
1,296,679
Care management division
51,621
53,039
53,801
66,466
87,704
87,986
86,186
328,342
1,312,913
1,243,914
1,227,277
1,260,831
1,340,283
1,329,710
1,297,049
5,227,873
Eliminations:
Skilled nursing rehabilitation services
(28,657)
(28,660)
(28,151)
(28,157)
(29,646)
(30,031)
(30,788)
(118,622)
Hospital rehabilitation services
(23,609)
(23,223)
(22,520)
(22,123)
(23,233)
(22,855)
(22,172)
(90,383)
Nursing centers
(1,213)
(1,001)
(1,161)
(875)
(662)
(860)
(776)
(3,173)
(53,479)
(52,884)
(51,832)
(51,155)
(53,541)
(53,746)
(53,736)
(212,178)
1,259,434
$
1,191,030
$
1,175,445
$
1,209,676
$
1,286,742
$
1,275,964
$
1,243,313
$
5,015,695
$
Income (loss) from continuing operations:
Operating income (loss):
Hospital division
147,493
$
129,366
$
112,483
$
126,788
$
145,395
$
132,878
$
121,744
$
526,805
$
Nursing center division
29,145
36,018
31,505
35,585
38,471
36,880
36,179
147,115
Rehabilitation division:
Skilled nursing rehabilitation services
13,239
21,623
(7,209)
14,260
18,328
19,982
17,552
70,122
Hospital rehabilitation services
18,132
19,573
18,215
18,005
19,820
20,084
18,273
76,182
31,371
41,196
11,006
32,265
38,148
40,066
35,825
146,304
-
Care
management division 2,786
3,961
1,085
2,131
4,697
7,065
6,789
20,682
Corporate:
Overhead
(45,585)
(43,196)
(39,157)
(48,557)
(44,050)
(48,365)
(45,173)
(186,145)
Insurance subsidiary
(509)
(384)
(482)
(539)
(406)
(443)
(637)
(2,025)
(46,094)
(43,580)
(39,639)
(49,096)
(44,456)
(48,808)
(45,810)
(188,170)
Impairment charges
(187)
(438)
(441)
(76,127)
-
-
-
(76,127)
Transaction costs
(944)
(108)
(613)
(447)
(683)
(4,496)
(4,114)
(9,740)
Operating income (EBITDAR)
163,570
166,415
115,386
71,099
181,572
163,585
150,613
566,869
Rent
(76,519)
(77,324)
(76,762)
(80,921)
(81,048)
(80,209)
(80,192)
(322,370)
EBITDA
87,051
89,091
38,624
(9,822)
100,524
83,376
70,421
244,499
Depreciation and amortization
(41,598)
(38,554)
(36,507)
(37,547)
(39,337)
(39,442)
(39,023)
(155,349)
Interest, net
(28,074)
(27,600)
(24,389)
(23,900)
(25,616)
(78,081)
(22,173)
(149,770)
Income (loss) from continuing operations
before income taxes
17,379
22,937
(22,272)
(71,269)
35,571
(34,147)
9,225
(60,620)
Provision (benefit) for income taxes
6,505
9,208
(6,510)
(20,522)
13,585
(13,082)
3,079
(16,940)
10,874
$
13,729
$
(15,762)
$
(50,747)
$
21,986
$
(21,065)
$
6,146
$
(43,680)
$ |
|
|
|
33
($ Thousands)
Reconciliation of Non-GAAP Measures
(continued)
Three months ended September 30, 2014
Charges
Severance
Before
and other
Customer
Transaction
As
charges
restructuring
bankruptcy
costs
Total
reported
Income from continuing operations:
Operating income (loss):
Hospital division
122,361
$
(617)
$
-
$
-
$
(617)
$
121,744
$
Nursing center division
36,662
(483)
-
-
(483)
36,179
Rehabilitation division:
Skilled nursing rehabilitation services
17,390
162
-
-
162
17,552
Hospital rehabilitation services
20,130
-
(1,857)
-
(1,857)
18,273
37,520
162
(1,857)
-
(1,695)
35,825
Care management division
7,110
(321)
-
-
(321)
6,789
Corporate:
Overhead
(44,746)
(427)
-
-
(427)
(45,173)
Insurance subsidiary
(637)
-
-
-
-
(637)
(45,383)
(427)
-
-
(427)
(45,810)
Transaction costs
-
-
-
(4,114)
(4,114)
(4,114)
Operating income (EBITDAR)
158,270
(1,686)
(1,857)
(4,114)
(7,657)
150,613
Rent
(80,192)
-
-
-
-
(80,192)
EBITDA
78,078
(1,686)
(1,857)
(4,114)
(7,657)
70,421
Depreciation and amortization
(39,023)
-
-
-
-
(39,023)
Interest, net
(22,173)
-
-
-
-
(22,173)
Income from continuing operations
before income taxes
16,882
(1,686)
(1,857)
(4,114)
(7,657)
9,225
Provision for income taxes
5,470
(923)
(1,017)
(451)
(2,391)
3,079
11,412
$
(763)
$
(840)
$
(3,663)
$
(5,266)
$
6,146
$
|
|
|
|
34
Reconciliation of Non-GAAP Measures
(continued)
($ Thousands)
Three months ended September 30, 2013
Charges
Severance
Before
and
Facility
Debt
Transaction
As
charges
retirement
closing
Litigation
refinancing
costs
Total
reported
Income (loss) from continuing operations:
Operating income (loss):
Hospital division
118,710
$
-
$
(5,527)
$
(700)
$
-
$
-
$
(6,227)
$
112,483
$
Nursing center division
31,569
-
(64)
-
-
-
(64)
31,505
Rehabilitation division:
Skilled nursing rehabilitation services
15,941
-
-
(23,150)
-
-
(23,150)
(7,209)
Hospital rehabilitation services
18,503
(288)
-
-
-
-
(288)
18,215
34,444
(288)
-
(23,150)
-
-
(23,438)
11,006
Care management division
2,138
(601)
(452)
-
-
-
(1,053)
1,085
Corporate:
Overhead
(37,693)
(1,005)
-
-
(459)
-
(1,464)
(39,157)
Insurance subsidiary
(482)
-
-
-
-
-
-
(482)
(38,175)
(1,005)
-
-
(459)
-
(1,464)
(39,639)
Impairment charges
(441)
-
-
-
-
-
-
(441)
Transaction costs
-
-
-
-
-
(613)
(613)
(613)
Operating income (EBITDAR)
148,245
(1,894)
(6,043)
(23,850)
(459)
(613)
(32,859)
115,386
Rent
(76,762)
-
-
-
-
-
-
(76,762)
EBITDA
71,483
(1,894)
(6,043)
(23,850)
(459)
(613)
(32,859)
38,624
Depreciation and amortization
(36,507)
-
-
-
-
-
-
(36,507)
Interest, net
(24,293)
-
-
-
(96)
-
(96)
(24,389)
Income (loss) from continuing operations
before income taxes
10,683
(1,894)
(6,043)
(23,850)
(555)
(613)
(32,955)
(22,272)
Provision (benefit) for income taxes
3,257
(2,044)
(5,805)
(756)
(599)
(563)
(9,767)
(6,510)
7,426
$
150
$
(238)
$
(23,094)
$
44
$
(50)
$
(23,188)
$
(15,762)
$ |
|
|
| Reconciliation
of Non-GAAP Measures (continued)
($ Thousands)
35
2013
2012
2011
Detail of charges:
One-time bonus
(19,842)
$
$ -
$ -
Severance, retirement and other restructuring costs
(12,558)
(8,730)
(18,259)
Litigation costs
(30,850)
(5,000)
-
Impairment charges
(76,082)
(107,899)
(73,554)
Transaction costs
(2,112)
(2,231)
(33,937)
Lease cancellation charges (rent expense)
-
(1,691)
(1,819)
Debt refinancing charges (interest expense)
(1,461)
-
(13,802)
(142,905)
(125,551)
(141,371)
Income tax benefit
43,893
12,795
34,427
Charges net of income taxes
(99,012)
(112,756)
(106,944)
Allocation to participating unvested restricted stockholders
-
-
-
Available to common stockholders
($99,012)
($112,756)
($106,944)
Reconciliation of EBITDAR before charges:
Operating income (EBITDAR) before charges
$657,914
$679,488
$528,902
Rent
311,526
303,564
276,540
EBITDA
346,388
375,924
252,362
Detail of charges excluded from core operating results:
One-time bonus
(19,842)
-
-
Severance, retirement and other restructuring costs
(12,558)
(8,730)
(18,259)
Litigation costs
(30,850)
(5,000)
-
Impairment charges
(76,082)
(107,899)
(73,554)
Transaction costs
(2,112)
(2,231)
(33,937)
(141,444)
(123,860)
(125,750)
Reported operating income (EBITDAR)
$516,470
$555,628
$403,152
Reconciliation of income from continuing operations before charges:
Amounts attributable to Kindred stockholders:
Income from continuing operations before charges
$53,216
$65,891
$40,482
Charges net of income taxes
(99,012)
(112,756)
(106,944)
Reported loss from continuing operations
($45,796)
($46,865)
($66,462) |
|
|
| Three months
ended September 30,
2014
2013
Reconciliation of net cash flows provided by operating
activities to free cash flows:
Net cash flows provided by operating activities
$90,039
$110,750
Adjustments to remove certain payments (including payments
made for discontinued operations) included in net cash flows
provided by operating activities:
Capitalized lender fees related to debt refinancing
-
4,589
Severance, retirement and retention
1,271
1,181
Transaction costs
4,565
6,362
5,836
12,132
Benefit of reduced income tax payments resulting from
certain payments
(1,269)
(3,013)
4,567
9,119
Net cash flows provided by operating activities excluding certain items
94,606
119,869
Less:
Routine capital expenditures
(21,263)
(23,152)
Development capital expenditures
(1,570)
(3,235)
(22,833)
(26,387)
Free cash flows excluding certain items
$71,773
$93,482
Reconciliation of Non-GAAP Measures
(continued)
($ Thousands)
36 |
|
|
| Gentiva
Non-GAAP Disclosure (1)
37
Third quarter
2014
Adjusted EBITDA
$48.5
Cost savings initiatives and acquisition and integration activities
(0.5)
Impact of closed locations
(0.3)
Impact of merger related expenses
(1.6)
EBITDA
46.1
Depreciation and Amortization
(7.3)
Interest Expense and Other, net
(24.7)
(Loss)/Income Before Income Taxes
14.1
Income Tax Benefit / (Expense)
(5.6)
Equity in net loss of CareCentrix
(0.5)
Net (Loss)/Income
8.0
Less: Net Income Attributable to Noncontrolling
Interests -
Net (Loss) / Income Attributable to Gentiva Shareholders
$8.0
A reconciliation of Adjusted EBITDA and adjusted net income attributable to Gentiva
shareholders to net income, the most directly comparable GAAP measure, is not accessible
on a forward-looking basis without unreasonable effort due to inherent
difficulities in predicting the charges for cost savings initiatives and acquisition
and integration activities, the results of discontinued operations and the impact of
any future acquisitions or divestitures, which can fluctuate significantly and may
have a significant impact on net income.
(1) Per Gentiva November 5, 2014 earnings release.
($ Millions)
(1) |
|
|
| Kindred
Healthcare Third Quarter Investor Update
November 6, 2014 |
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