LOUISVILLE, Ky.--(BUSINESS WIRE)--Kindred Healthcare, Inc. (“Kindred” or the “Company”) (NYSE:KND) today announced its operating results for the fourth quarter and year ended December 31, 2013. The Company continues to benefit from its repositioning strategy through the planned exit from a nursing center and a transitional care (“TC”) hospital and the closure of another nursing center during the fourth quarter of 2013. The Company has reclassified the operations of these three facilities as discontinued for all periods presented. 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.
Highlights:
- Volume softness in the hospital and nursing center divisions drove a 1% decline in fourth quarter consolidated revenues which were mitigated by cost controls throughout the Company
- The closure or planned disposition of three additional non-strategic assets bolstered continuing operations diluted EPS by $0.05 in the quarter and $0.13 for the full year
-
Free cash flows for the full year were strong
- Excluding certain items and dividend payments, fiscal 2013 free cash flows of $130 million were up 23% from last year
- GAAP operating cash flows totaled $199 million compared to $263 million a year ago
-
Kindred continued to execute on its Integrated Care Market and
redeployment strategy in the fourth quarter
- Senior Home Care purchase added $143 million of annualized home health revenues to Kindred at Home and the Care Management Division
- The real estate of seven previously leased nursing centers were acquired for $61 million reducing annual rents by approximately $7 million
-
Kindred is well positioned operationally and financially to grow
moving into 2014
- Available borrowing capacity under the Company’s revolving credit facility approximated $396 million at year-end
- Board of Directors declared regular quarterly cash dividend of $0.12 per share payable on March 27, 2014
Fourth Quarter Results
Continuing Operations
Consolidated revenues for the fourth quarter ended December 31, 2013 declined 1% to $1.22 billion compared to $1.24 billion in the same period in 2012. The Company reported a loss from continuing operations for the fourth quarter of 2013 of $54.1 million or $1.04 per share compared to a loss of $84.0 million or $1.62 per share in the fourth quarter of 2012. Fourth quarter 2013 operating results included pretax charges of $87.7 million related to (1) an asset impairment charge, (2) changes in estimates related to pending litigation, (3) severance and retirement costs, (4) costs associated with the closing of a TC hospital, (5) transaction-related costs and (6) an increase in the estimated tax benefit associated with pending litigation, which in aggregate reduced income from continuing operations by $62.4 million or $1.19 per share. Operating results for the fourth quarter of 2012 included an asset impairment charge and severance, restructuring, lease termination and transaction-related costs that reduced income from continuing operations by $104.8 million or $2.03 per share.
During the fourth quarter of 2013, the Company recorded a $76 million goodwill impairment charge to reflect circumstances in which the carrying value of its home health reporting unit exceeded its fair value. The impairment charge resulted primarily from the expected decline in operating results in the Company’s home health business related to the Medicare reimbursement rate reductions for each of the next four years beginning January 1, 2014 announced by the Centers for Medicare and Medicaid Services (“CMS”) on November 22, 2013.
Fiscal Year Results
Continuing Operations
Consolidated revenues for the year ended December 31, 2013 declined 1% to $4.90 billion compared to $4.93 billion in the previous year. The Company reported a loss from continuing operations of $48.5 million or $0.93 per share in 2013 compared to a loss of $48.0 million or $0.93 per share in 2012.
In addition to the charges discussed in the fourth quarter results above, operating results in 2013 included (1) a one-time bonus to employees who do not participate in the Company’s incentive plans distributed in the first quarter of 2013, (2) changes in estimates related to pending litigation, (3) severance and retirement costs, (4) costs associated with the closure of a TC hospital and home health location and (5) charges associated with the modification of certain of the Company’s senior debt, which in aggregate reduced income from continuing operations by $99.1 million or $1.90 per share. Operating results in 2012 included certain items that reduced income from continuing operations by $112.8 million or $2.18 per share, most of which were related to asset impairment charges, litigation and severance and restructuring costs.
Discontinued Operations
In connection with the Company’s long-range plans to reposition its businesses and enhance its Integrated Care Market strategy, the Company has completed various transactions and entered into certain agreements to significantly change its business mix, operating profile and future business prospects. During 2013, the Company exited, sold or agreed to exit, 139 facilities (15 TC hospitals, one inpatient rehabilitation hospital (“IRF”) and 123 nursing centers) with annualized revenues approximating $1.3 billion. These transactions generated approximately $250 million in cash proceeds from asset sales and will reduce annual rents by approximately $125 million. For accounting purposes, the historical operating results and losses on the disposal of these businesses have been classified as discontinued operations in the Company’s consolidated statement of operations for all historical periods.
Management Commentary
Paul J. Diaz, Chief Executive Officer of the Company, remarked, “Our fourth quarter results were in line with our expectations and reflected a continuation of the difficult volume and utilization trends experienced by many healthcare providers in the second half of 2013. We also continued to advance our repositioning strategy with the closure or planned disposition of three additional non-strategic assets. We were successful in managing costs in response to volume weakness in our hospitals and nursing centers, and we are seeing some volume momentum in January and February that we expect will help us get the year off to a strong start.”
Mr. Diaz further noted, “For the full year, we are pleased to report that we exceeded our core earnings objectives that were announced in our third quarter earnings release as we continued to mitigate the negative impact of approximately $40 million of Medicare sequestration cuts across our enterprise. This accomplishment reflects the commitment of our caregivers, and a relentless focus on cost management across the enterprise, all while working to maintain a culture of quality service and patient satisfaction under very difficult circumstances. Despite volume challenges during the last half of the year, and Medicare sequestration cuts, our hospital division results were solid. Our RehabCare division made great progress in the midst of Medicare reimbursement reductions and continues to perform well. For our nursing center division, 2013 was a significant year of transition as we worked through several divestitures. We expect 2014 to reflect more stabilized nursing center operations with better financial performance. Our Care Management Division experienced significant growth in 2013 and now has annualized revenues of over $350 million. We expect operating improvements in our home health and hospice operations in 2014 as we assimilate numerous acquisitions and execute on a more standardized operating model.”
Commenting on the Company’s strategic initiatives, Mr. Diaz noted, “In 2013, we continued advancing a strategy to reposition our business mix with the goal of improving our long-term growth, profitability and financial position and enhancing our Integrated Care Market capabilities, particularly in home health and hospice services. Specifically, we exited, sold or agreed to exit 139 facilities with annualized revenues of $1.3 billion, completed several home health and hospice acquisitions that added approximately $150 million of annualized revenues and we acquired the real estate of nine previously leased facilities for approximately $96 million that will benefit our balance sheet leverage over time. Having substantially completed the divestiture phase of our repositioning strategy, we are evaluating various opportunities to redeploy our management capabilities, industry leading infrastructure and financial resources as we move forward with the growth phase of our strategic plan.”
Mr. Diaz stated, “Our free cash flows, adjusted for certain items, were up 23% compared to last year before paying $13 million in quarterly dividends and absorbing significant reimbursement headwinds. Our significant free cash flows as well as our $396 million of available credit going into 2014, provide the financial strength to further reposition the Company’s business mix and advance our Continue the Care strategy in our Integrated Care Markets.”
Finally, Mr. Diaz added, “The new long-term acute care (“LTAC”) patient criteria enacted in 2013 provides significant clarity to our business and affirms the role of LTAC hospitals in the healthcare continuum. The new criteria will not be fully phased in for most of our hospitals until the summer of 2018, which provides us with significant time to develop clinical programs and services that better align with the clinical needs of this patient population and this new payment system. We believe that the new criteria will afford us the opportunity to grow organically our patient volumes and leverage our existing capacity of TC hospitals.”
Earnings Guidance – Continuing Operations
The Company maintained its previous earnings guidance for 2014. The Company expects consolidated revenues for 2014 to approximate $5.2 billion. Operating income, or earnings before interest, income taxes, depreciation, amortization and rent, is expected to range from $725 million to $742 million. Rent expense is expected to approximate $338 million, while depreciation and amortization should approximate $165 million. Net interest expense is expected to approximate $106 million. The Company expects to report income from continuing operations for 2014 between $58 million and $68 million or $1.05 to $1.25 per diluted share (based upon diluted shares of 53.2 million).
The Company’s 2014 earnings per share guidance includes $0.05 to $0.10 for the estimated impact of new acquisitions that the Company expects to complete in 2014.
The Company updated its operating cash flow guidance for 2014 at a range between $245 million and $275 million. Estimated routine capital expenditures for 2014 are expected to range from $100 million to $105 million and estimated costs to develop new or replacement TC hospitals, transitional care nursing centers, and IRFs will approximate $20 million to $25 million in 2014. Operating cash flows in excess of the Company’s routine and development capital spending programs are expected to approximate $125 million to $145 million for 2014 and will be available to pay dividends, repay debt and fund acquisitions. Estimated dividend payments for 2014 are expected to approximate $26 million.
Benjamin A. Breier, President and Chief Operating Officer of the Company, commented, “As we head into 2014, our confidence in our earnings guidance range has increased as we are beginning to see traction in our sales and marketing efforts to drive patient admissions as well as greater awareness among managed care payors of our value proposition, particularly for our TC hospitals. We also expect additional cost savings by continuing to push for ongoing performance improvement with our efficiency initiatives inside the Company.”
The Company’s earnings and cash flow guidance for 2014 excludes the effect of reimbursement changes, severance and retirement costs, litigation costs, transaction-related costs, any further acquisitions or divestitures (except as otherwise noted), any impairment charges, 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 to its shareholders of $0.12 per common share to be paid on March 27, 2014 to shareholders of record as of the close of business on March 6, 2014. Future declarations of quarterly dividends will be subject to the approval of Kindred’s Board of Directors.
Conference Call
As previously announced, investors and the general public may access a live webcast of the fourth quarter 2013 conference call through a link on the Company’s website at http://investors.kindredhealthcare.com. The conference call will be held on February 21 at 10:00 a.m. (Eastern Time).
A telephone replay of the conference call will become available at approximately 1:00 p.m. on February 21 by dialing (719) 457-0820, access code: 1522310. The replay will be available through March 2.
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,” “should,” “will,” “intend,” “may” 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 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 or performance to differ materially from any future results or performance 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.
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 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 impact of the final rules issued by CMS on August 1, 2012 which, among other things, will reduce Medicare reimbursement to the Company’s TC hospitals in 2013 and beyond by imposing a budget neutrality adjustment and modifying the short-stay outlier rules, (c) 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, (d) 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, (e) the Company’s ability to adjust to the new patient criteria for 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, (f) 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 the Company’s Medicare revenues by $25 million to $30 million on an annual basis, (g) 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, IRFs and home health and hospice operations, and the expiration of the Medicare Part B therapy cap exception process, (h) 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, (i) the ability of the Company’s hospitals and nursing centers to adjust to medical necessity reviews, (j) the costs of defending and insuring against alleged professional liability and other claims (including those related to pending 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, including the impact of differences in actuarial assumptions and estimates compared to eventual outcomes, (k) the impact of the Company’s significant level of indebtedness on the Company’s 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 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 and regional 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.
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 release to compute certain non-GAAP measurements for the three months and years ended December 31, 2013 and 2012 before certain charges or on a core basis. A reconciliation of the non-GAAP measurements to the GAAP measurements is included in this press release.
As noted above, the Company discusses 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 includes a financial measure referred to as operating income, or earnings before interest, income taxes, depreciation, amortization and rent. The Company’s management uses operating income as a meaningful measure of operational performance in addition to other measures. The Company uses operating income to assess the relative performance of its operating divisions as well as the employees that operate these businesses. In addition, the Company believes this measurement is important because securities analysts and investors use this measurement 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. Operating income 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 operating income to income (loss) from continuing operations provided in the Condensed Business Segment Data is included in this press release.
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 approximately $5 billion and approximately 63,000 employees in 47 states. At December 31, 2013, Kindred through its subsidiaries provided healthcare services in 2,280 locations, including 101 transitional care hospitals, five inpatient rehabilitation hospitals, 100 nursing centers, 22 sub-acute units, 159 Kindred at Home hospice, home health and non-medical home care locations, 104 inpatient rehabilitation units (hospital-based) and a contract rehabilitation services business, RehabCare, which served 1,789 non-affiliated facilities. Ranked as one of Fortune magazine’s Most Admired Healthcare Companies for five 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.
| KINDRED HEALTHCARE, INC. | ||||||||||||||||||||||
| Financial Summary | ||||||||||||||||||||||
| (In thousands, except per share amounts) | ||||||||||||||||||||||
| Three months ended | Year ended | |||||||||||||||||||||
| December 31, | December 31, | |||||||||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||||||||
| Revenues | $ | 1,224,374 | $ | 1,237,392 | $ | 4,900,510 | $ | 4,928,509 | ||||||||||||||
| Loss from continuing operations | $ | (51,737 | ) | $ | (83,209 | ) | $ | (44,812 | ) | $ | (46,927 | ) | ||||||||||
| Discontinued operations, net of income taxes: | ||||||||||||||||||||||
| Income (loss) from operations | (6,160 | ) | 3,312 | (36,136 | ) | 12,348 | ||||||||||||||||
| Loss on divestiture of operations | (5,994 | ) | (939 | ) | (83,887 | ) | (4,745 | ) | ||||||||||||||
| Income (loss) from discontinued operations | (12,154 | ) | 2,373 | (120,023 | ) | 7,603 | ||||||||||||||||
| Net loss | (63,891 | ) | (80,836 | ) | (164,835 | ) | (39,324 | ) | ||||||||||||||
| Earnings attributable to noncontrolling interests | (2,405 | ) | (790 | ) | (3,657 | ) | (1,043 | ) | ||||||||||||||
| Loss attributable to Kindred | $ | (66,296 | ) | $ | (81,626 | ) | $ | (168,492 | ) | $ | (40,367 | ) | ||||||||||
| Amounts attributable to Kindred stockholders: | ||||||||||||||||||||||
| Loss from continuing operations | $ | (54,142 | ) | $ | (83,999 | ) | $ | (48,469 | ) | $ | (47,970 | ) | ||||||||||
| Income (loss) from discontinued operations | (12,154 | ) | 2,373 | (120,023 | ) | 7,603 | ||||||||||||||||
| Net loss | $ | (66,296 | ) | $ | (81,626 | ) | $ | (168,492 | ) | $ | (40,367 | ) | ||||||||||
| Loss per common share: | ||||||||||||||||||||||
| Basic: | ||||||||||||||||||||||
| Loss from continuing operations | $ | (1.04 | ) | $ | (1.62 | ) | $ | (0.93 | ) | $ | (0.93 | ) | ||||||||||
| Discontinued operations: | ||||||||||||||||||||||
| Income (loss) from operations | (0.12 | ) | 0.06 | (0.69 | ) | 0.24 | ||||||||||||||||
| Loss on divestiture of operations | (0.11 | ) | (0.02 | ) | (1.61 | ) | (0.09 | ) | ||||||||||||||
| Income (loss) from discontinued operations | (0.23 | ) | 0.04 | (2.30 | ) | 0.15 | ||||||||||||||||
| Net loss | $ | (1.27 | ) | $ | (1.58 | ) | $ | (3.23 | ) | $ | (0.78 | ) | ||||||||||
| Diluted: | ||||||||||||||||||||||
| Loss from continuing operations | $ | (1.04 | ) | $ | (1.62 | ) | $ | (0.93 | ) | $ | (0.93 | ) | ||||||||||
| Discontinued operations: | ||||||||||||||||||||||
| Income (loss) from operations | (0.12 | ) | 0.06 | (0.69 | ) | 0.24 | ||||||||||||||||
| Loss on divestiture of operations | (0.11 | ) | (0.02 | ) | (1.61 | ) | (0.09 | ) | ||||||||||||||
| Income (loss) from discontinued operations | (0.23 | ) | 0.04 | (2.30 | ) | 0.15 | ||||||||||||||||
| Net loss | $ | (1.27 | ) | $ | (1.58 | ) | $ | (3.23 | ) | $ | (0.78 | ) | ||||||||||
| Shares used in computing loss per common share: | ||||||||||||||||||||||
| Basic | 52,344 | 51,692 | 52,249 | 51,659 | ||||||||||||||||||
| Diluted | 52,344 | 51,692 | 52,249 | 51,659 | ||||||||||||||||||
| KINDRED HEALTHCARE, INC. | |||||||||||||||||||||||||
| Condensed Consolidated Statement of Operations | |||||||||||||||||||||||||
| (In thousands, except per share amounts) | |||||||||||||||||||||||||
| Three months ended | Year ended | ||||||||||||||||||||||||
| December 31, | December 31, | ||||||||||||||||||||||||
| 2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||||
| Revenues | $ | 1,224,374 | $ | 1,237,392 | $ | 4,900,510 | $ | 4,928,509 | |||||||||||||||||
| Salaries, wages and benefits | 746,399 | 754,530 | 2,988,487 | 3,012,321 | |||||||||||||||||||||
| Supplies | 80,167 | 84,613 | 328,999 | 343,102 | |||||||||||||||||||||
| Rent | 82,563 | 78,222 | 318,077 | 310,178 | |||||||||||||||||||||
| Other operating expenses | 250,137 | 224,543 | 985,883 | 914,272 | |||||||||||||||||||||
| Other (income) expense | (457 | ) | (3,181 | ) | (1,440 | ) | (12,660 | ) | |||||||||||||||||
| Impairment charges | 76,127 | 108,113 | 77,193 | 108,953 | |||||||||||||||||||||
| Depreciation and amortization | 38,437 | 42,296 | 157,329 | 162,685 | |||||||||||||||||||||
| Interest expense | 25,161 | 27,929 | 108,049 | 107,875 | |||||||||||||||||||||
| Investment income | (1,255 | ) | (246 | ) | (4,051 | ) | (997 | ) | |||||||||||||||||
| 1,297,279 | 1,316,819 | 4,958,526 | 4,945,729 | ||||||||||||||||||||||
| Loss from continuing operations before income taxes | (72,905 | ) | (79,427 | ) | (58,016 | ) | (17,220 | ) | |||||||||||||||||
| Provision (benefit) for income taxes | (21,168 | ) | 3,782 | (13,204 | ) | 29,707 | |||||||||||||||||||
| Loss from continuing operations | (51,737 | ) | (83,209 | ) | (44,812 | ) | (46,927 | ) | |||||||||||||||||
| Discontinued operations, net of income taxes: | |||||||||||||||||||||||||
| Income (loss) from operations | (6,160 | ) | 3,312 | (36,136 | ) | 12,348 | |||||||||||||||||||
| Loss on divestiture of operations | (5,994 | ) | (939 | ) | (83,887 | ) | (4,745 | ) | |||||||||||||||||
| Income (loss) from discontinued operations | (12,154 | ) | 2,373 | (120,023 | ) | 7,603 | |||||||||||||||||||
| Net loss | (63,891 | ) | (80,836 | ) | (164,835 | ) | (39,324 | ) | |||||||||||||||||
| Earnings attributable to noncontrolling interests | (2,405 | ) | (790 | ) | (3,657 | ) | (1,043 | ) | |||||||||||||||||
| Loss attributable to Kindred | $ | (66,296 | ) | $ | (81,626 | ) | $ | (168,492 | ) | $ | (40,367 | ) | |||||||||||||
| Amounts attributable to Kindred stockholders: | |||||||||||||||||||||||||
| Loss from continuing operations | $ | (54,142 | ) | $ | (83,999 | ) | $ | (48,469 | ) | $ | (47,970 | ) | |||||||||||||
| Income (loss) from discontinued operations | (12,154 | ) | 2,373 | (120,023 | ) | 7,603 | |||||||||||||||||||
| Net loss | $ | (66,296 | ) | $ | (81,626 | ) | $ | (168,492 | ) | $ | (40,367 | ) | |||||||||||||
| Loss per common share: | |||||||||||||||||||||||||
| Basic: | |||||||||||||||||||||||||
| Loss from continuing operations | $ | (1.04 | ) | $ | (1.62 | ) | $ | (0.93 | ) | $ | (0.93 | ) | |||||||||||||
| Discontinued operations: | |||||||||||||||||||||||||
| Income (loss) from operations | (0.12 | ) | 0.06 | (0.69 | ) | 0.24 | |||||||||||||||||||
| Loss on divestiture of operations | (0.11 | ) | (0.02 | ) | (1.61 | ) | (0.09 | ) | |||||||||||||||||
| Income (loss) from discontinued operations | (0.23 | ) | 0.04 | (2.30 | ) | 0.15 | |||||||||||||||||||
| Net loss | $ | (1.27 | ) | $ | (1.58 | ) | $ | (3.23 | ) | $ | (0.78 | ) | |||||||||||||
| Diluted: | |||||||||||||||||||||||||
| Loss from continuing operations | $ | (1.04 | ) | $ | (1.62 | ) | $ | (0.93 | ) | $ | (0.93 | ) | |||||||||||||
| Discontinued operations: | |||||||||||||||||||||||||
| Income (loss) from operations | (0.12 | ) | 0.06 | (0.69 | ) | 0.24 | |||||||||||||||||||
| Loss on divestiture of operations | (0.11 | ) | (0.02 | ) | (1.61 | ) | (0.09 | ) | |||||||||||||||||
| Income (loss) from discontinued operations | (0.23 | ) | 0.04 | (2.30 | ) | 0.15 | |||||||||||||||||||
| Net loss | $ | (1.27 | ) | $ | (1.58 | ) | $ | (3.23 | ) | $ | (0.78 | ) | |||||||||||||
| Shares used in computing loss per common share: | |||||||||||||||||||||||||
| Basic | 52,344 | 51,692 | 52,249 | 51,659 | |||||||||||||||||||||
| Diluted | 52,344 | 51,692 | 52,249 | 51,659 | |||||||||||||||||||||
| KINDRED HEALTHCARE, INC. | ||||||||||||||
| Condensed Consolidated Balance Sheet | ||||||||||||||
| (In thousands, except per share amounts) | ||||||||||||||
| December 31, | December 31, | |||||||||||||
| 2013 | 2012 | |||||||||||||
| ASSETS | ||||||||||||||
| Current assets: | ||||||||||||||
| Cash and cash equivalents | $ | 35,972 | $ | 50,007 | ||||||||||
| Cash - restricted | 3,713 | 5,197 | ||||||||||||
| Insurance subsidiary investments | 96,295 | 86,168 | ||||||||||||
| Accounts receivable less allowance for loss | 916,529 | 1,038,605 | ||||||||||||
| Inventories | 25,780 | 32,021 | ||||||||||||
| Deferred tax assets | 37,920 | 12,663 | ||||||||||||
| Income taxes | 36,846 | 13,573 | ||||||||||||
| Other | 43,673 | 35,532 | ||||||||||||
| 1,196,728 | 1,273,766 | |||||||||||||
| Property and equipment | 1,906,366 | 2,226,903 | ||||||||||||
| Accumulated depreciation | (979,791 | ) | (1,083,777 | ) | ||||||||||
| 926,575 | 1,143,126 | |||||||||||||
| Goodwill | 992,102 | 1,041,266 | ||||||||||||
| Intangible assets less accumulated amortization | 423,303 | 439,767 | ||||||||||||
| Assets held for sale | 20,978 | 4,131 | ||||||||||||
| Insurance subsidiary investments | 149,094 | 116,424 | ||||||||||||
| Deferred tax assets | 17,043 | - | ||||||||||||
| Other | 220,046 | 219,466 | ||||||||||||
| Total assets | $ | 3,945,869 | $ | 4,237,946 | ||||||||||
| LIABILITIES AND EQUITY | ||||||||||||||
| Current liabilities: | ||||||||||||||
| Accounts payable | $ | 181,772 | $ | 210,668 | ||||||||||
| Salaries, wages and other compensation | 361,192 | 389,009 | ||||||||||||
| Due to third party payors | 33,747 | 35,420 | ||||||||||||
| Professional liability risks | 60,993 | 54,088 | ||||||||||||
| Other accrued liabilities | 146,495 | 137,204 | ||||||||||||
| Long-term debt due within one year | 8,222 | 8,942 | ||||||||||||
| 792,421 | 835,331 | |||||||||||||
| Long-term debt | 1,579,391 | 1,648,706 | ||||||||||||
| Professional liability risks | 246,230 | 236,630 | ||||||||||||
| Deferred tax liabilities | - | 9,764 | ||||||||||||
| Deferred credits and other liabilities | 206,611 | 214,671 | ||||||||||||
| Equity: | ||||||||||||||
| Stockholders' equity: | ||||||||||||||
|
Common stock, $0.25 par value; authorized 175,000 shares; issued 54,165 shares - December 31, 2013 and 53,280 shares - December 31, 2012 |
13,541 | 13,320 | ||||||||||||
| Capital in excess of par value | 1,146,193 | 1,145,922 | ||||||||||||
| Accumulated other comprehensive loss | (252 | ) | (1,882 | ) | ||||||||||
| Retained earnings (deficit) | (76,825 | ) | 98,799 | |||||||||||
| 1,082,657 | 1,256,159 | |||||||||||||
| Noncontrolling interests | 38,559 | 36,685 | ||||||||||||
| Total equity | 1,121,216 | 1,292,844 | ||||||||||||
| Total liabilities and equity | $ | 3,945,869 | $ | 4,237,946 | ||||||||||
| KINDRED HEALTHCARE, INC. | ||||||||||||||||||||||||
| Condensed Consolidated Statement of Cash Flows | ||||||||||||||||||||||||
| (In thousands) | ||||||||||||||||||||||||
| Three months ended | Year ended | |||||||||||||||||||||||
| December 31, | December 31, | |||||||||||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||||||||||
| Cash flows from operating activities: | ||||||||||||||||||||||||
| Net loss | $ | (63,891 | ) | $ | (80,836 | ) | $ | (164,835 | ) | $ | (39,324 | ) | ||||||||||||
|
Adjustments to reconcile net loss to net cash provided by operating activities: |
||||||||||||||||||||||||
| Depreciation and amortization | 39,644 | 52,392 | 182,389 | 201,484 | ||||||||||||||||||||
| Amortization of stock-based compensation costs | 3,542 | 2,841 | 11,183 | 10,852 | ||||||||||||||||||||
| Amortization of deferred financing costs | 2,376 | 2,592 | 11,905 | 9,683 | ||||||||||||||||||||
| Payment of lender fees related to senior debt modifications | - | (2,940 | ) |
(6,189 |
) | (2,940 | ) | |||||||||||||||||
| Provision for doubtful accounts | 10,151 | 1,038 | 44,640 | 23,692 | ||||||||||||||||||||
| Deferred income taxes | (13,665 | ) | 6,616 | (36,650 | ) | (11,524 | ) | |||||||||||||||||
| Impairment charges | 77,748 | 108,952 | 87,825 | 110,856 | ||||||||||||||||||||
| Loss on divestiture of discontinued operations | 5,994 | 939 | 83,887 | 4,745 | ||||||||||||||||||||
| Other | (1,151 | ) | (981 | ) | 4,301 | 1,772 | ||||||||||||||||||
| Change in operating assets and liabilities: | ||||||||||||||||||||||||
| Accounts receivable | 25,526 | 9,208 | 52,271 | (58,705 | ) | |||||||||||||||||||
| Inventories and other assets | 4,195 | (8,485 | ) | 4,262 | (29,382 | ) | ||||||||||||||||||
| Accounts payable | 9,884 | 737 | (22,095 | ) | (6,515 | ) | ||||||||||||||||||
| Income taxes | (11,763 | ) | (9,294 | ) | (17,032 | ) | 29,991 | |||||||||||||||||
| Due to third party payors | (18,387 | ) | (4,411 | ) | (1,671 | ) | (2,723 | ) | ||||||||||||||||
| Other accrued liabilities | (60,008 | ) | (6,893 | ) | (34,779 | ) | 20,600 | |||||||||||||||||
| Net cash provided by operating activities | 10,195 | 71,475 | 199,412 | 262,562 | ||||||||||||||||||||
| Cash flows from investing activities: | ||||||||||||||||||||||||
| Routine capital expenditures | (37,956 | ) | (38,371 | ) | (100,908 | ) | (115,175 | ) | ||||||||||||||||
| Development capital expenditures | (1,115 | ) | (12,147 | ) | (11,824 | ) | (50,322 | ) | ||||||||||||||||
| Acquisitions, net of cash acquired | (185,213 | ) | (38,904 | ) | (224,319 | ) | (178,212 | ) | ||||||||||||||||
| Acquisition deposit | 14,675 | - | - | - | ||||||||||||||||||||
| Sale of assets | 1,906 | 150 | 250,606 | 1,260 | ||||||||||||||||||||
| Purchase of insurance subsidiary investments | (15,767 | ) | (7,151 | ) | (46,127 | ) | (38,041 | ) | ||||||||||||||||
| Sale of insurance subsidiary investments | 14,527 | 8,290 | 49,954 | 38,363 | ||||||||||||||||||||
| Net change in insurance subsidiary cash and cash equivalents | 217 | (6,114 | ) | (44,077 | ) | (21,285 | ) | |||||||||||||||||
| Change in other investments | (96 | ) | 11 | 122 | 1,465 | |||||||||||||||||||
| Other | 518 | 490 | 376 | (539 | ) | |||||||||||||||||||
| Net cash used in investing activities | (208,304 | ) | (93,746 | ) | (126,197 | ) | (362,486 | ) | ||||||||||||||||
| Cash flows from financing activities: | ||||||||||||||||||||||||
| Proceeds from borrowings under revolving credit | 575,500 | 455,000 | 1,675,800 | 1,784,300 | ||||||||||||||||||||
| Repayment of borrowings under revolving credit | (376,800 | ) | (512,200 | ) | (1,740,400 | ) | (1,757,100 | ) | ||||||||||||||||
| Proceeds from issuance of term loan, net of discount | - | 97,500 | - | 97,500 | ||||||||||||||||||||
| Repayment of other long-term debt | (2,058 | ) | (2,688 | ) | (6,876 | ) | (10,664 | ) | ||||||||||||||||
| Payment of deferred financing costs | (326 | ) | (864 | ) | (1,666 | ) | (1,465 | ) | ||||||||||||||||
| Contribution made by noncontrolling interests | - | - | - | 200 | ||||||||||||||||||||
| Distribution made to noncontrolling interests | (423 | ) | (308 | ) | (2,051 | ) | (3,829 | ) | ||||||||||||||||
| Purchase of noncontrolling interests | - | (4 | ) | - | (719 | ) | ||||||||||||||||||
| Issuance of common stock | 32 | 147 | 461 | 147 | ||||||||||||||||||||
| Dividends paid | (6,502 | ) | - | (13,001 | ) | - | ||||||||||||||||||
| Other | 79 | - | 483 | - | ||||||||||||||||||||
| Net cash provided by (used in) financing activities | 189,502 | 36,583 | (87,250 | ) | 108,370 | |||||||||||||||||||
| Change in cash and cash equivalents | (8,607 | ) | 14,312 | (14,035 | ) | 8,446 | ||||||||||||||||||
| Cash and cash equivalents at beginning of period | 44,579 | 35,695 | 50,007 | 41,561 | ||||||||||||||||||||
| Cash and cash equivalents at end of period | $ | 35,972 | $ | 50,007 | $ | 35,972 | $ | 50,007 | ||||||||||||||||
| KINDRED HEALTHCARE, INC. | |||||||||||||||||||||||||||||||||||||||||||||||
| Condensed Consolidated Statement of Operations | |||||||||||||||||||||||||||||||||||||||||||||||
| (In thousands, except per share amounts) | |||||||||||||||||||||||||||||||||||||||||||||||
| 2012 Quarters | 2013 Quarters | ||||||||||||||||||||||||||||||||||||||||||||||
| First | Second | Third | Fourth | Year | First | Second | Third | Fourth | Year | ||||||||||||||||||||||||||||||||||||||
| Revenues | $ | 1,257,132 | $ | 1,218,336 | $ | 1,215,649 | $ | 1,237,392 | $ | 4,928,509 | $ | 1,278,327 | $ | 1,207,979 | $ | 1,189,830 | $ | 1,224,374 | $ | 4,900,510 | |||||||||||||||||||||||||||
| Salaries, wages and benefits | 770,602 | 740,041 | 747,148 | 754,530 | 3,012,321 | 791,728 | 724,067 | 726,293 | 746,399 | 2,988,487 | |||||||||||||||||||||||||||||||||||||
| Supplies | 88,620 | 85,662 | 84,207 | 84,613 | 343,102 | 85,900 | 82,040 | 80,892 | 80,167 | 328,999 | |||||||||||||||||||||||||||||||||||||
| Rent | 76,092 | 77,379 | 78,485 | 78,222 | 310,178 | 78,134 | 78,970 | 78,410 | 82,563 | 318,077 | |||||||||||||||||||||||||||||||||||||
| Other operating expenses | 229,754 | 233,145 | 226,830 | 224,543 | 914,272 | 235,892 | 232,910 | 266,944 | 250,137 | 985,883 | |||||||||||||||||||||||||||||||||||||
| Other (income) expense | (3,136 | ) | (3,165 | ) | (3,178 | ) | (3,181 | ) | (12,660 | ) | (1,009 | ) | (26 | ) | 52 | (457 | ) | (1,440 | ) | ||||||||||||||||||||||||||||
| Impairment charges | 356 | 108 | 376 | 108,113 | 108,953 | 187 | 438 | 441 | 76,127 | 77,193 | |||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 39,098 | 40,318 | 40,973 | 42,296 | 162,685 | 42,322 | 39,303 | 37,267 | 38,437 | 157,329 | |||||||||||||||||||||||||||||||||||||
| Interest expense | 26,570 | 26,713 | 26,663 | 27,929 | 107,875 | 28,171 | 29,084 | 25,633 | 25,161 | 108,049 | |||||||||||||||||||||||||||||||||||||
| Investment income | (282 | ) | (258 | ) | (211 | ) | (246 | ) | (997 | ) | (87 | ) | (1,475 | ) | (1,234 | ) | (1,255 | ) | (4,051 | ) | |||||||||||||||||||||||||||
| 1,227,674 | 1,199,943 | 1,201,293 | 1,316,819 | 4,945,729 | 1,261,238 | 1,185,311 | 1,214,698 | 1,297,279 | 4,958,526 | ||||||||||||||||||||||||||||||||||||||
|
Income (loss) from continuing operations before income taxes |
29,458 | 18,393 | 14,356 | (79,427 | ) | (17,220 | ) | 17,089 | 22,668 | (24,868 | ) | (72,905 | ) | (58,016 | ) | ||||||||||||||||||||||||||||||||
| Provision (benefit) for income taxes | 12,083 | 7,820 | 6,022 | 3,782 | 29,707 | 6,391 | 9,103 | (7,530 | ) | (21,168 | ) | (13,204 | ) | ||||||||||||||||||||||||||||||||||
| Income (loss) from continuing operations | 17,375 | 10,573 | 8,334 | (83,209 | ) | (46,927 | ) | 10,698 | 13,565 | (17,338 | ) | (51,737 | ) | (44,812 | ) | ||||||||||||||||||||||||||||||||
| Discontinued operations, net of income taxes: | |||||||||||||||||||||||||||||||||||||||||||||||
| Income (loss) from operations | 2,437 | 5,046 | 1,553 | 3,312 | 12,348 | (5,200 | ) | (886 | ) | (23,890 | ) | (6,160 | ) | (36,136 | ) | ||||||||||||||||||||||||||||||||
| Loss on divestiture of operations | (1,170 | ) | (356 | ) | (2,280 | ) | (939 | ) | (4,745 | ) | (2,025 | ) | (10,852 | ) | (65,016 | ) | (5,994 | ) | (83,887 | ) | |||||||||||||||||||||||||||
| Income (loss) from discontinued operations | 1,267 | 4,690 | (727 | ) | 2,373 | 7,603 | (7,225 | ) | (11,738 | ) | (88,906 | ) | (12,154 | ) | (120,023 | ) | |||||||||||||||||||||||||||||||
| Net income (loss) | 18,642 | 15,263 | 7,607 | (80,836 | ) | (39,324 | ) | 3,473 | 1,827 | (106,244 | ) | (63,891 | ) | (164,835 | ) | ||||||||||||||||||||||||||||||||
| (Earnings) loss attributable to noncontrolling interests | (451 | ) | 239 | (41 | ) | (790 | ) | (1,043 | ) | (416 | ) | (82 | ) | (754 | ) | (2,405 | ) | (3,657 | ) | ||||||||||||||||||||||||||||
| Income (loss) attributable to Kindred | $ | 18,191 | $ | 15,502 | $ | 7,566 | $ | (81,626 | ) | $ | (40,367 | ) | $ | 3,057 | $ | 1,745 | $ | (106,998 | ) | $ | (66,296 | ) | $ | (168,492 | ) | ||||||||||||||||||||||
| Amounts attributable to Kindred stockholders: | |||||||||||||||||||||||||||||||||||||||||||||||
| Income (loss) from continuing operations | $ | 16,924 | $ | 10,812 | $ | 8,293 | $ | (83,999 | ) | $ | (47,970 | ) | $ | 10,282 | $ | 13,483 | $ | (18,092 | ) | $ | (54,142 | ) | $ | (48,469 | ) | ||||||||||||||||||||||
| Income (loss) from discontinued operations | 1,267 | 4,690 | (727 | ) | 2,373 | 7,603 | (7,225 | ) | (11,738 | ) | (88,906 | ) | (12,154 | ) | (120,023 | ) | |||||||||||||||||||||||||||||||
| Net income (loss) | $ | 18,191 | $ | 15,502 | $ | 7,566 | $ | (81,626 | ) | $ | (40,367 | ) | $ | 3,057 | $ | 1,745 | $ | (106,998 | ) | $ | (66,296 | ) | $ | (168,492 | ) | ||||||||||||||||||||||
| Earnings (loss) per common share: | |||||||||||||||||||||||||||||||||||||||||||||||
| Basic: | |||||||||||||||||||||||||||||||||||||||||||||||
| Income (loss) from continuing operations | $ | 0.32 | $ | 0.20 | $ | 0.16 | $ | (1.62 | ) | $ | (0.93 | ) | $ | 0.19 | $ | 0.25 | $ | (0.34 | ) | $ | (1.04 | ) | $ | (0.93 | ) | ||||||||||||||||||||||
| Discontinued operations: | |||||||||||||||||||||||||||||||||||||||||||||||
| Income (loss) from operations | 0.05 | 0.10 | 0.02 | 0.06 | 0.24 | (0.09 | ) | (0.02 | ) | (0.46 | ) | (0.12 | ) | (0.69 | ) | ||||||||||||||||||||||||||||||||
| Loss on divestiture of operations | (0.02 | ) | (0.01 | ) | (0.04 | ) | (0.02 | ) | (0.09 | ) | (0.04 | ) | (0.20 | ) | (1.24 | ) | (0.11 | ) | (1.61 | ) | |||||||||||||||||||||||||||
| Income (loss) from discontinued operations | 0.03 | 0.09 | (0.02 | ) | 0.04 | 0.15 | (0.13 | ) | (0.22 | ) | (1.70 | ) | (0.23 | ) | (2.30 | ) | |||||||||||||||||||||||||||||||
| Net income (loss) | $ | 0.35 | $ | 0.29 | $ | 0.14 | $ | (1.58 | ) | $ | (0.78 | ) | $ | 0.06 | $ | 0.03 | $ | (2.04 | ) | $ | (1.27 | ) | $ | (3.23 | ) | ||||||||||||||||||||||
| Diluted: | |||||||||||||||||||||||||||||||||||||||||||||||
| Income (loss) from continuing operations | $ | 0.32 | $ | 0.20 | $ | 0.16 | $ | (1.62 | ) | $ | (0.93 | ) | $ | 0.19 | $ | 0.25 | $ | (0.34 | ) | $ | (1.04 | ) | $ | (0.93 | ) | ||||||||||||||||||||||
| Discontinued operations: | |||||||||||||||||||||||||||||||||||||||||||||||
| Income (loss) from operations | 0.05 | 0.10 | 0.02 | 0.06 | 0.24 | (0.09 | ) | (0.02 | ) | (0.46 | ) | (0.12 | ) | (0.69 | ) | ||||||||||||||||||||||||||||||||
| Loss on divestiture of operations | (0.02 | ) | (0.01 | ) | (0.04 | ) | (0.02 | ) | (0.09 | ) | (0.04 | ) | (0.20 | ) | (1.24 | ) | (0.11 | ) | (1.61 | ) | |||||||||||||||||||||||||||
| Income (loss) from discontinued operations | 0.03 | 0.09 | (0.02 | ) | 0.04 | 0.15 | (0.13 | ) | (0.22 | ) | (1.70 | ) | (0.23 | ) | (2.30 | ) | |||||||||||||||||||||||||||||||
| Net income (loss) | $ | 0.35 | $ | 0.29 | $ | 0.14 | $ | (1.58 | ) | $ | (0.78 | ) | $ | 0.06 | $ | 0.03 | $ | (2.04 | ) | $ | (1.27 | ) | $ | (3.23 | ) | ||||||||||||||||||||||
|
Shares used in computing earnings (loss) per common share: |
|||||||||||||||||||||||||||||||||||||||||||||||
| Basic | 51,603 | 51,664 | 51,676 | 51,692 | 51,659 | 52,062 | 52,265 | 52,323 | 52,344 | 52,249 | |||||||||||||||||||||||||||||||||||||
| Diluted | 51,638 | 51,675 | 51,709 | 51,692 | 51,659 | 52,083 | 52,284 | 52,323 | 52,344 | 52,249 | |||||||||||||||||||||||||||||||||||||
| KINDRED HEALTHCARE, INC. | |||||||||||||||||||||||||||||||||||||||||||||||||
| Condensed Business Segment Data | |||||||||||||||||||||||||||||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||
| 2012 Quarters | 2013 Quarters | ||||||||||||||||||||||||||||||||||||||||||||||||
| First | Second | Third | Fourth | Year | First | Second | Third | Fourth | Year | ||||||||||||||||||||||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||||||||||||||||||||||||||||
| Hospital division | $ | 679,813 | $ | 645,714 | $ | 633,972 | $ | 645,426 | $ | 2,604,925 | $ | 674,363 | $ | 621,454 | $ | 606,488 | $ | 619,344 | $ | 2,521,649 | |||||||||||||||||||||||||||||
| Nursing center division | 274,358 | 269,986 | 273,265 | 274,807 | 1,092,416 | 275,141 | 269,501 | 270,210 | 274,908 | 1,089,760 | |||||||||||||||||||||||||||||||||||||||
| Rehabilitation division: | |||||||||||||||||||||||||||||||||||||||||||||||||
| Skilled nursing rehabilitation services | 253,370 | 253,013 | 252,134 | 244,485 | 1,003,002 | 257,557 | 248,321 | 243,974 | 241,938 | 991,790 | |||||||||||||||||||||||||||||||||||||||
| Hospital rehabilitation services | 74,369 | 73,402 | 71,899 | 73,910 | 293,580 | 74,523 | 69,777 | 68,296 | 74,017 | 286,613 | |||||||||||||||||||||||||||||||||||||||
| 327,739 | 326,415 | 324,033 | 318,395 | 1,296,582 | 332,080 | 318,098 | 312,270 | 315,955 | 1,278,403 | ||||||||||||||||||||||||||||||||||||||||
| Care management division | 28,432 | 28,872 | 35,943 | 50,093 | 143,340 | 51,621 | 53,039 | 53,801 | 66,466 | 224,927 | |||||||||||||||||||||||||||||||||||||||
| 1,310,342 | 1,270,987 | 1,267,213 | 1,288,721 | 5,137,263 | 1,333,205 | 1,262,092 | 1,242,769 | 1,276,673 | 5,114,739 | ||||||||||||||||||||||||||||||||||||||||
| Eliminations: | |||||||||||||||||||||||||||||||||||||||||||||||||
| Skilled nursing rehabilitation services | (27,888 | ) | (27,551 | ) | (27,037 | ) | (26,123 | ) | (108,599 | ) | (29,303 | ) | (29,257 | ) | (28,698 | ) | (28,728 | ) | (115,986 | ) | |||||||||||||||||||||||||||||
| Hospital rehabilitation services | (24,686 | ) | (24,225 | ) | (23,666 | ) | (24,200 | ) | (96,777 | ) | (24,362 | ) | (23,855 | ) | (23,080 | ) | (22,696 | ) | (93,993 | ) | |||||||||||||||||||||||||||||
| Nursing centers | (636 | ) | (875 | ) | (861 | ) | (1,006 | ) | (3,378 | ) | (1,213 | ) | (1,001 | ) | (1,161 | ) | (875 | ) | (4,250 | ) | |||||||||||||||||||||||||||||
| (53,210 | ) | (52,651 | ) | (51,564 | ) | (51,329 | ) | (208,754 | ) | (54,878 | ) | (54,113 | ) | (52,939 | ) | (52,299 | ) | (214,229 | ) | ||||||||||||||||||||||||||||||
| $ | 1,257,132 | $ | 1,218,336 | $ | 1,215,649 | $ | 1,237,392 | $ | 4,928,509 | $ | 1,278,327 | $ | 1,207,979 | $ | 1,189,830 | $ | 1,224,374 | $ | 4,900,510 | ||||||||||||||||||||||||||||||
| Income (loss) from continuing operations: | |||||||||||||||||||||||||||||||||||||||||||||||||
| Operating income (loss): | |||||||||||||||||||||||||||||||||||||||||||||||||
| Hospital division | $ | 151,784 | $ | 132,358 | $ | 131,041 | $ | 147,041 | $ | 562,224 | $ | 150,043 | $ | 132,170 | $ | 113,014 | $ | 127,929 | (a) | $ | 523,156 | ||||||||||||||||||||||||||||
| Nursing center division | 34,067 | 36,215 | 38,960 | 32,016 | 141,258 | 29,844 | 36,678 | 32,146 | 36,694 | 135,362 | |||||||||||||||||||||||||||||||||||||||
| Rehabilitation division: | |||||||||||||||||||||||||||||||||||||||||||||||||
| Skilled nursing rehabilitation services | 10,679 | 19,351 | 16,929 | 21,001 | 67,960 | 12,046 | 20,297 | (8,565 | ) | 12,918 | (b) | 36,696 | |||||||||||||||||||||||||||||||||||||
| Hospital rehabilitation services | 16,116 | 17,860 | 16,977 | 18,792 | 69,745 | 18,132 | 19,573 | 18,215 | 18,005 | (c) | 73,925 | ||||||||||||||||||||||||||||||||||||||
| 26,795 | 37,211 | 33,906 | 39,793 | 137,705 | 30,178 | 39,870 | 9,650 | 30,923 | 110,621 | ||||||||||||||||||||||||||||||||||||||||
| Care management division | 2,341 | 2,789 | 3,645 | 4,933 | 13,708 | 2,786 | 3,961 | 1,085 | 2,131 | (d) | 9,963 | ||||||||||||||||||||||||||||||||||||||
| Corporate: | |||||||||||||||||||||||||||||||||||||||||||||||||
| Overhead | (42,728 | ) | (44,723 | ) | (45,883 | ) | (45,729 | ) | (179,063 | ) | (45,582 | ) | (43,199 | ) | (39,151 | ) | (48,563 | ) | (e) | (176,495 | ) | ||||||||||||||||||||||||||||
| Insurance subsidiary | (482 | ) | (600 | ) | (545 | ) | (500 | ) | (2,127 | ) | (509 | ) | (384 | ) | (482 | ) | (539 | ) | (1,914 | ) | |||||||||||||||||||||||||||||
| (43,210 | ) | (45,323 | ) | (46,428 | ) | (46,229 | ) | (181,190 | ) | (46,091 | ) | (43,583 | ) | (39,633 | ) | (49,102 | ) | (178,409 | ) | ||||||||||||||||||||||||||||||
| Impairment charges | (356 | ) | (108 | ) | (376 | ) | (108,113 | ) | (108,953 | ) | (187 | ) | (438 | ) | (441 | ) | (76,127 | ) | (77,193 | ) | |||||||||||||||||||||||||||||
| Transaction costs | (485 | ) | (597 | ) | (482 | ) | (667 | ) | (2,231 | ) | (944 | ) | (108 | ) | (613 | ) | (447 | ) | (2,112 | ) | |||||||||||||||||||||||||||||
| Operating income | 170,936 | 162,545 | 160,266 | 68,774 | 562,521 | 165,629 | 168,550 | 115,208 | 72,001 | 521,388 | |||||||||||||||||||||||||||||||||||||||
| Rent | (76,092 | ) | (77,379 | ) | (78,485 | ) | (78,222 | ) | (310,178 | ) | (78,134 | ) | (78,970 | ) | (78,410 | ) | (82,563 | ) | (318,077 | ) | |||||||||||||||||||||||||||||
| Depreciation and amortization | (39,098 | ) | (40,318 | ) | (40,973 | ) | (42,296 | ) | (162,685 | ) | (42,322 | ) | (39,303 | ) | (37,267 | ) | (38,437 | ) | (157,329 | ) | |||||||||||||||||||||||||||||
| Interest, net | (26,288 | ) | (26,455 | ) | (26,452 | ) | (27,683 | ) | (106,878 | ) | (28,084 | ) | (27,609 | ) | (24,399 | ) | (23,906 | ) | (103,998 | ) | |||||||||||||||||||||||||||||
|
Income (loss) from continuing operations before income taxes |
29,458 | 18,393 | 14,356 | (79,427 | ) | (17,220 | ) | 17,089 | 22,668 | (24,868 | ) | (72,905 | ) | (58,016 | ) | ||||||||||||||||||||||||||||||||||
| Provision (benefit) for income taxes | 12,083 | 7,820 | 6,022 | 3,782 | 29,707 | 6,391 | 9,103 | (7,530 | ) | (21,168 | ) | (13,204 | ) | ||||||||||||||||||||||||||||||||||||
| $ | 17,375 | $ | 10,573 | $ | 8,334 | $ | (83,209 | ) | $ | (46,927 | ) | $ | 10,698 | $ | 13,565 | $ | (17,338 | ) | $ | (51,737 | ) | $ | (44,812 | ) | |||||||||||||||||||||||||
| (a) | Includes costs of $0.5 million in connection with the closing of a TC hospital and a litigation charge of $7.0 million. | ||||||||||||||||||||||||||||||||||||||||||||||||
| (b) | Includes $0.1 million of severance and retirement costs. | ||||||||||||||||||||||||||||||||||||||||||||||||
| (c) | Includes $1.1 million of severance and retirement costs. | ||||||||||||||||||||||||||||||||||||||||||||||||
| (d) | Includes $0.1 million of severance and retirement costs. | ||||||||||||||||||||||||||||||||||||||||||||||||
| (e) | Includes $2.4 million of severance and retirement costs. | ||||||||||||||||||||||||||||||||||||||||||||||||
| KINDRED HEALTHCARE, INC. | ||||||||||||||||||||||||||||||||||||||||||||
| Condensed Consolidating Statement of Operations | ||||||||||||||||||||||||||||||||||||||||||||
| (In thousands) | ||||||||||||||||||||||||||||||||||||||||||||
| Three months ended December 31, 2013 | ||||||||||||||||||||||||||||||||||||||||||||
| Nursing | Rehabilitation division | Care | Transaction- | |||||||||||||||||||||||||||||||||||||||||
| Hospital | center | Skilled nursing | Hospital | management | related | |||||||||||||||||||||||||||||||||||||||
| division (a) | division | services (b) | services (b) | Total | division (b) | Corporate (b) | costs | Eliminations | Consolidated | |||||||||||||||||||||||||||||||||||
| Revenues | $ | 619,344 | $ | 274,908 | $ | 241,938 | $ | 74,017 | $ | 315,955 | $ | 66,466 | $ | - | $ | - | $ | (52,299 | ) | $ | 1,224,374 | |||||||||||||||||||||||
| Salaries, wages and benefits | 268,475 | 127,261 | 219,484 | 51,773 | 271,257 | 52,353 | 27,181 | - | (128 | ) | 746,399 | |||||||||||||||||||||||||||||||||
| Supplies | 64,278 | 12,102 | 733 | 36 | 769 | 2,791 | 227 | - | - | 80,167 | ||||||||||||||||||||||||||||||||||
| Rent | 53,849 | 25,461 | 1,171 | 51 | 1,222 | 1,567 | 464 | - | - | 82,563 | ||||||||||||||||||||||||||||||||||
| Other operating expenses | 158,572 | 99,393 | 8,801 | 4,197 | 12,998 | 9,204 | 21,694 | 447 | (52,171 | ) | 250,137 | |||||||||||||||||||||||||||||||||
| Other (income) expense | 90 | (542 | ) | 2 | 6 | 8 | (13 | ) | - | - | - | (457 | ) | |||||||||||||||||||||||||||||||
| Impairment charges | - | 45 | - | - | - | 76,082 | - | - | - | 76,127 | ||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 17,092 | 7,213 | 2,559 | 2,498 | 5,057 | 1,829 | 7,246 | - | - | 38,437 | ||||||||||||||||||||||||||||||||||
| Interest expense | 199 | 12 | 60 | - | 60 | 9 | 24,881 | - | - | 25,161 | ||||||||||||||||||||||||||||||||||
| Investment income | 1 | (10 | ) | (31 | ) | - | (31 | ) | (1 | ) | (1,214 | ) | - | - | (1,255 | ) | ||||||||||||||||||||||||||||
| 562,556 | 270,935 | 232,779 | 58,561 | 291,340 | 143,821 | 80,479 | 447 | (52,299 | ) | 1,297,279 | ||||||||||||||||||||||||||||||||||
|
Income (loss) from continuing operations before income taxes |
$ | 56,788 | $ | 3,973 | $ | 9,159 | $ | 15,456 | $ | 24,615 | $ | (77,355 | ) | $ | (80,479 | ) | $ | (447 | ) | $ | - | (72,905 | ) | |||||||||||||||||||||
| Income tax benefit |
|
(21,168 | ) | |||||||||||||||||||||||||||||||||||||||||
| Loss from continuing operations | $ | (51,737 | ) | |||||||||||||||||||||||||||||||||||||||||
|
Capital expenditures, excluding acquisitions (including discontinued operations): |
||||||||||||||||||||||||||||||||||||||||||||
| Routine | $ | 6,286 | $ | 7,361 | $ | 679 | $ | 165 | $ | 844 | $ | 467 | $ | 22,998 | $ | - | $ | - | $ | 37,956 | ||||||||||||||||||||||||
| Development | 1,115 | - | - | - | - | - | - | - | - | 1,115 | ||||||||||||||||||||||||||||||||||
| $ | 7,401 | $ | 7,361 | $ | 679 | $ | 165 | $ | 844 | $ | 467 | $ | 22,998 | $ | - | $ | - | $ | 39,071 | |||||||||||||||||||||||||
| Three months ended December 31, 2012 | ||||||||||||||||||||||||||||||||||||||||||||
| Nursing | Rehabilitation division | Care | Transaction- | |||||||||||||||||||||||||||||||||||||||||
| Hospital | center | Skilled nursing | Hospital | management | related | |||||||||||||||||||||||||||||||||||||||
| division (c,d) | division (c) | services (c) | services (c) | Total | division (c) | Corporate (c) | costs | Eliminations | Consolidated | |||||||||||||||||||||||||||||||||||
| Revenues | $ | 645,426 | $ | 274,807 | $ | 244,485 | $ | 73,910 | $ | 318,395 | $ | 50,093 | $ | - | $ | - | $ | (51,329 | ) | $ | 1,237,392 | |||||||||||||||||||||||
| Salaries, wages and benefits | 280,682 | 136,868 | 220,331 | 51,210 | 271,541 | 36,474 | 29,065 | (100 | ) | - | 754,530 | |||||||||||||||||||||||||||||||||
| Supplies | 66,391 | 14,959 | 876 | 36 | 912 | 2,127 | 224 | - | - | 84,613 | ||||||||||||||||||||||||||||||||||
| Rent | 51,611 | 23,628 | 1,238 | 21 | 1,259 | 1,111 | 613 | - | - | 78,222 | ||||||||||||||||||||||||||||||||||
| Other operating expenses | 151,289 | 91,601 | 2,277 | 3,847 | 6,124 | 6,559 | 19,532 | 767 | (51,329 | ) | 224,543 | |||||||||||||||||||||||||||||||||
| Other (income) expense | 23 | (637 | ) | - | 25 | 25 | - | (2,592 | ) | - | - | (3,181 | ) | |||||||||||||||||||||||||||||||
| Impairment charges | 118 | 96 | 107,899 | - | 107,899 | - | - | - | - | 108,113 | ||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 20,161 | 7,343 | 2,945 | 2,334 | 5,279 | 1,482 | 8,031 | - | - | 42,296 | ||||||||||||||||||||||||||||||||||
| Interest expense | 206 | 15 | 120 | - | 120 | (4 | ) | 27,592 | - | - | 27,929 | |||||||||||||||||||||||||||||||||
| Investment income | (18 | ) | (19 | ) | (1 | ) | - | (1 | ) | - | (208 | ) | - | - | (246 | ) | ||||||||||||||||||||||||||||
| 570,463 | 273,854 | 335,685 | 57,473 | 393,158 | 47,749 | 82,257 | 667 | (51,329 | ) | 1,316,819 | ||||||||||||||||||||||||||||||||||
|
Income (loss) from continuing operations before income taxes |
$ | 74,963 | $ | 953 | $ | (91,200 | ) | $ | 16,437 | $ | (74,763 | ) | $ | 2,344 | $ | (82,257 | ) | $ | (667 | ) | $ | - | (79,427 | ) | ||||||||||||||||||||
| Provision for income taxes | 3,782 | |||||||||||||||||||||||||||||||||||||||||||
| Loss from continuing operations | $ | (83,209 | ) | |||||||||||||||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||||||||||
|
Capital expenditures, excluding acquisitions (including discontinued operations): |
||||||||||||||||||||||||||||||||||||||||||||
| Routine | $ | 9,817 | $ | 8,153 | $ | 672 | $ | 117 | $ | 789 | $ | 1,187 | $ | 18,425 | $ | - | $ | - | $ | 38,371 | ||||||||||||||||||||||||
| Development | 6,693 | 5,454 | - | - | - | - | - | - | - | 12,147 | ||||||||||||||||||||||||||||||||||
| $ | 16,510 | $ | 13,607 | $ | 672 | $ | 117 | $ | 789 | $ | 1,187 | $ | 18,425 | $ | - | $ | - | $ | 50,518 | |||||||||||||||||||||||||
| (a) | Includes costs of $0.5 million in connection with the closing of a TC hospital and a litigation charge of $7.0 million. | |||||||||||||||||||||||||||||||||||||||||||
| (b) |
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). |
|||||||||||||||||||||||||||||||||||||||||||
| (c) |
Includes severance costs of $3.4 million (hospital division - $0.7 million, nursing center division - $1.9 million, rehabilitation division - $0.4 million (skilled nursing rehabilitation services - $0.3 million and hospital rehabilitation services - $0.1 million), care management division - $0.2 million and corporate - $0.2 million) and contract cancellation costs of $0.9 million (corporate) incurred in connection with restructuring activities. |
|||||||||||||||||||||||||||||||||||||||||||
| (d) | Includes a lease cancellation charge of $0.1 million incurred in connection with restructuring activities. | |||||||||||||||||||||||||||||||||||||||||||
| KINDRED HEALTHCARE, INC. | ||||||||||||||||||||||||||||||||||||||||||||
| Condensed Consolidating Statement of Operations | ||||||||||||||||||||||||||||||||||||||||||||
| (In thousands) | ||||||||||||||||||||||||||||||||||||||||||||
| Year ended December 31, 2013 | ||||||||||||||||||||||||||||||||||||||||||||
| Nursing | Rehabilitation division | Care | Transaction- | |||||||||||||||||||||||||||||||||||||||||
| Hospital | center | Skilled nursing | Hospital | management | Corporate | related | ||||||||||||||||||||||||||||||||||||||
| division (a,b) | division (a) | services (a,c,d) | services (a,c) | Total | division (a,c,e) |
|
(a,c,f) | costs | Eliminations | Consolidated | ||||||||||||||||||||||||||||||||||
| Revenues | $ | 2,521,649 | $ | 1,089,760 | $ | 991,790 | $ | 286,613 | $ | 1,278,403 | $ |
224,927 |
$ | - | $ | - | $ | (214,229 | ) | $ | 4,900,510 | |||||||||||||||||||||||
| Salaries, wages and benefits | 1,101,705 | 517,845 | 894,470 | 196,301 | 1,090,771 | 175,581 | 103,124 | - | (539 | ) | 2,988,487 | |||||||||||||||||||||||||||||||||
| Supplies | 264,884 | 50,413 | 3,079 | 126 | 3,205 | 9,631 | 866 | - | - | 328,999 | ||||||||||||||||||||||||||||||||||
| Rent | 207,068 | 98,806 | 4,726 | 106 | 4,832 | 5,101 | 2,270 | - | - | 318,077 | ||||||||||||||||||||||||||||||||||
| Other operating expenses | 631,737 | 387,518 | 57,324 | 16,196 | 73,520 | 29,747 | 74,939 | 2,112 | (213,690 | ) | 985,883 | |||||||||||||||||||||||||||||||||
| Other (income) expense | 167 | (1,378 | ) | 221 | 65 | 286 | 5 | (520 | ) | - | - | (1,440 | ) | |||||||||||||||||||||||||||||||
| Impairment charges | 1,002 | 109 | - | - | - | 76,082 | - | - | - | 77,193 | ||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 72,665 | 28,504 | 11,010 | 9,429 | 20,439 | 6,608 | 29,113 | - | - | 157,329 | ||||||||||||||||||||||||||||||||||
| Interest expense | 763 | 53 | 292 | - | 292 | 15 | 106,926 | - | - | 108,049 | ||||||||||||||||||||||||||||||||||
| Investment income | (16 | ) | (49 | ) | (183 | ) | - | (183 | ) | (1 | ) | (3,802 | ) | - | - | (4,051 | ) | |||||||||||||||||||||||||||
| 2,279,975 | 1,081,821 | 970,939 | 222,223 | 1,193,162 | 302,769 | 312,916 | 2,112 | (214,229 | ) | 4,958,526 | ||||||||||||||||||||||||||||||||||
|
Income (loss) from continuing operations before income taxes |
$ | 241,674 | $ | 7,939 | $ | 20,851 | $ | 64,390 | $ | 85,241 | $ | (77,842 | ) | $ | (312,916 | ) | $ | (2,112 | ) | $ | - | (58,016 | ) | |||||||||||||||||||||
| Income tax benefit | (13,204 | ) | ||||||||||||||||||||||||||||||||||||||||||
| Loss from continuing operations | $ | (44,812 | ) | |||||||||||||||||||||||||||||||||||||||||
|
Capital expenditures, excluding acquisitions (including discontinued operations): |
||||||||||||||||||||||||||||||||||||||||||||
| Routine | $ | 28,571 | $ | 23,023 | $ | 2,608 | $ | 273 | $ | 2,881 | $ | 1,523 | $ | 44,910 | $ | - | $ | - | $ | 100,908 | ||||||||||||||||||||||||
| Development | 11,817 | 7 | - | - | - | - | - | - | - | 11,824 | ||||||||||||||||||||||||||||||||||
| $ | 40,388 | $ | 23,030 | $ | 2,608 | $ | 273 | $ | 2,881 | $ | 1,523 | $ | 44,910 | $ | - | $ | - | $ | 112,732 | |||||||||||||||||||||||||
| Year ended December 31, 2012 | ||||||||||||||||||||||||||||||||||||||||||||
| Nursing | Rehabilitation division | Care | Transaction- | |||||||||||||||||||||||||||||||||||||||||
| Hospital | center | Skilled nursing | Hospital | management | related | |||||||||||||||||||||||||||||||||||||||
| division (g,h) | division (g,i) | services (g) | services (g) | Total | division (g) | Corporate (g) | costs | Eliminations | Consolidated | |||||||||||||||||||||||||||||||||||
| Revenues | $ | 2,604,925 | $ | 1,092,416 | $ | 1,003,002 | $ | 293,580 | $ | 1,296,582 | $ | 143,340 | $ | - | $ | - | $ | (208,754 | ) | $ | 4,928,509 | |||||||||||||||||||||||
| Salaries, wages and benefits | 1,140,647 | 535,157 | 903,271 | 206,614 | 1,109,885 | 105,303 | 121,848 | (450 | ) | (69 | ) | 3,012,321 | ||||||||||||||||||||||||||||||||
| Supplies | 275,409 | 57,647 | 3,127 | 163 | 3,290 | 5,953 | 803 | - | - | 343,102 | ||||||||||||||||||||||||||||||||||
| Rent | 205,325 | 93,702 | 5,442 | 140 | 5,582 | 3,140 | 2,429 | - | - | 310,178 | ||||||||||||||||||||||||||||||||||
| Other operating expenses | 626,969 | 359,969 | 28,642 | 17,010 | 45,652 | 18,376 | 69,310 | 2,681 | (208,685 | ) | 914,272 | |||||||||||||||||||||||||||||||||
| Other (income) expense | (324 | ) | (1,615 | ) | 2 | 48 | 50 | - | (10,771 | ) | - | - | (12,660 | ) | ||||||||||||||||||||||||||||||
| Impairment charges | 753 | 301 | 107,899 | - | 107,899 | - | - | - | - | 108,953 | ||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 78,716 | 28,118 | 11,168 | 9,309 | 20,477 | 4,442 | 30,932 | - | - | 162,685 | ||||||||||||||||||||||||||||||||||
| Interest expense | 1,016 | 67 | 156 | - | 156 | - | 106,636 | - | - | 107,875 | ||||||||||||||||||||||||||||||||||
| Investment income | (64 | ) | (56 | ) | (2 | ) | - | (2 | ) | - | (875 | ) | - | - | (997 | ) | ||||||||||||||||||||||||||||
| 2,328,447 | 1,073,290 | 1,059,705 | 233,284 | 1,292,989 | 137,214 | 320,312 | 2,231 | (208,754 | ) | 4,945,729 | ||||||||||||||||||||||||||||||||||
|
Income (loss) from continuing before income taxes |
$ | 276,478 | $ | 19,126 | $ | (56,703 | ) | $ | 60,296 | $ | 3,593 | $ | 6,126 | $ | (320,312 | ) | $ | (2,231 | ) | $ | - | (17,220 | ) | |||||||||||||||||||||
| Provision for income taxes | 29,707 | |||||||||||||||||||||||||||||||||||||||||||
| Loss from continuing operations | $ | (46,927 | ) | |||||||||||||||||||||||||||||||||||||||||
|
Capital expenditures, excluding acquisitions (including discontinued operations): |
||||||||||||||||||||||||||||||||||||||||||||
| Routine | $ | 38,272 | $ | 20,764 | $ | 2,274 | $ | 348 | $ | 2,622 | $ | 1,616 | $ | 51,901 | $ | - | $ | - | $ | 115,175 | ||||||||||||||||||||||||
| Development | 42,265 | 8,057 | - | - | - | - | - | - | - | 50,322 | ||||||||||||||||||||||||||||||||||
| $ | 80,537 | $ | 28,821 | $ | 2,274 | $ | 348 | $ | 2,622 | $ | 1,616 | $ | 51,901 | $ | - | $ | - | $ | 165,497 | |||||||||||||||||||||||||
| (a) |
Includes one-time bonus costs of $20.1 million (hospital division - $8.0 million, nursing center division - $4.7 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 costs of $6.0 million in connection with the closing of a TC hospital and litigation charges of $7.7 million. | |||||||||||||||||||||||||||||||||||||||||||
| (c) |
Includes severance and retirement costs of $5.6 million (rehabilitation division - $1.5 million (skilled nursing rehabilitation services - $0.1 million and hospital rehabilitation services - $1.4 million), care management division - $0.7 million and corporate - $3.4 million). |
|||||||||||||||||||||||||||||||||||||||||||
| (d) | Includes $23.1 million of litigation charges. | |||||||||||||||||||||||||||||||||||||||||||
| (e) | Includes $0.5 million of costs associated with closing a home health location. | |||||||||||||||||||||||||||||||||||||||||||
| (f) | Includes $2.0 million of fees and charges associated with the modification of certain of the Company’s senior debt. | |||||||||||||||||||||||||||||||||||||||||||
| (g) |
Includes severance costs of $3.4 million (hospital division - $0.7 million, nursing center division - $1.9 million, rehabilitation division - $0.4 million (skilled nursing rehabilitation services - $0.3 million and hospital rehabilitation services - $0.1 million), care management division - $0.2 million and corporate - $0.2 million) and contract cancellation costs of $0.9 million (corporate) incurred in connection with restructuring activities. |
|||||||||||||||||||||||||||||||||||||||||||
| (h) |
Includes severance costs ($2.5 million), restructuring costs ($1.1 million) and lease cancellation charges ($1.6 million) incurred in connection with the closing of a regional office and two TC hospitals, and $5.0 million for employment-related lawsuits. |
|||||||||||||||||||||||||||||||||||||||||||
| (i) | Includes $0.9 million incurred in connection with the cancellation of a sub-acute unit project. | |||||||||||||||||||||||||||||||||||||||||||
| KINDRED HEALTHCARE, INC. | ||||||||||||||||||||||||||||||||||
| Condensed Business Segment Data | ||||||||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||||||||
| 2012 Quarters | 2013 Quarters | |||||||||||||||||||||||||||||||||
| First | Second | Third | Fourth | Year | First | Second | Third | Fourth | Year | |||||||||||||||||||||||||
| Hospital division data: | ||||||||||||||||||||||||||||||||||
| End of period data: | ||||||||||||||||||||||||||||||||||
| Number of hospitals: | ||||||||||||||||||||||||||||||||||
| Transitional care | 103 | 102 | 101 | 101 | 101 | 101 | 101 | 101 | ||||||||||||||||||||||||||
| Inpatient rehabilitation | 5 | 5 | 5 | 5 | 5 | 5 | 5 | 5 | ||||||||||||||||||||||||||
| 108 | 107 | 106 | 106 | 106 | 106 | 106 | 106 | |||||||||||||||||||||||||||
| Number of licensed beds: | ||||||||||||||||||||||||||||||||||
| Transitional care | 7,358 | 7,308 | 7,269 | 7,269 | 7,269 | 7,269 | 7,283 | 7,315 | ||||||||||||||||||||||||||
| Inpatient rehabilitation | 185 | 215 | 215 | 215 | 215 | 215 | 215 | 215 | ||||||||||||||||||||||||||
| 7,543 | 7,523 | 7,484 | 7,484 | 7,484 | 7,484 | 7,498 | 7,530 | |||||||||||||||||||||||||||
| Revenue mix %: | ||||||||||||||||||||||||||||||||||
| Medicare | 63 | 62 | 61 | 63 | 62 | 63 | 61 | 59 | 59 | 61 | ||||||||||||||||||||||||
| Medicaid | 6 | 6 | 6 | 6 | 6 | 5 | 6 | 7 | 6 | 6 | ||||||||||||||||||||||||
| Medicare Advantage | 10 | 11 | 11 | 10 | 10 | 10 | 11 | 11 | 12 | 11 | ||||||||||||||||||||||||
| Commercial insurance and other | 21 | 21 | 22 | 21 | 22 | 22 | 22 | 23 | 23 | 22 | ||||||||||||||||||||||||
| Admissions: | ||||||||||||||||||||||||||||||||||
| Medicare | 10,726 | 9,951 | 9,786 | 9,894 | 40,357 | 10,606 | 9,722 | 9,247 | 9,516 | 39,091 | ||||||||||||||||||||||||
| Medicaid | 924 | 919 | 915 | 838 | 3,596 | 685 | 744 | 788 | 712 | 2,929 | ||||||||||||||||||||||||
| Medicare Advantage | 1,508 | 1,630 | 1,483 | 1,438 | 6,059 | 1,552 | 1,518 | 1,448 | 1,478 | 5,996 | ||||||||||||||||||||||||
| Commercial insurance and other | 2,534 | 2,335 | 2,348 | 2,233 | 9,450 | 2,210 | 2,117 | 2,139 | 2,120 | 8,586 | ||||||||||||||||||||||||
| 15,692 | 14,835 | 14,532 | 14,403 | 59,462 | 15,053 | 14,101 | 13,622 | 13,826 | 56,602 | |||||||||||||||||||||||||
| Admissions mix %: | ||||||||||||||||||||||||||||||||||
| Medicare | 68 | 67 | 68 | 69 | 68 | 70 | 69 | 68 | 69 | 69 | ||||||||||||||||||||||||
| Medicaid | 6 | 6 | 6 | 6 | 6 | 5 | 5 | 6 | 5 | 5 | ||||||||||||||||||||||||
| Medicare Advantage | 10 | 11 | 10 | 10 | 10 | 10 | 11 | 10 | 11 | 11 | ||||||||||||||||||||||||
| Commercial insurance and other | 16 | 16 | 16 | 15 | 16 | 15 | 15 | 16 | 15 | 15 | ||||||||||||||||||||||||
| Patient days: | ||||||||||||||||||||||||||||||||||
| Medicare | 263,839 | 249,315 | 243,315 | 247,535 | 1,004,004 | 260,417 | 241,003 | 229,963 | 232,606 | 963,989 | ||||||||||||||||||||||||
| Medicaid | 32,834 | 30,564 | 33,671 | 31,686 | 128,755 | 28,776 | 30,447 | 31,569 | 29,799 | 120,591 | ||||||||||||||||||||||||
| Medicare Advantage | 42,638 | 45,451 | 43,679 | 42,067 | 173,835 | 44,136 | 44,021 | 42,745 | 44,565 | 175,467 | ||||||||||||||||||||||||
| Commercial insurance and other | 74,906 | 73,128 | 72,243 | 69,237 | 289,514 | 73,066 | 66,575 | 68,514 | 66,449 | 274,604 | ||||||||||||||||||||||||
| 414,217 | 398,458 | 392,908 | 390,525 | 1,596,108 | 406,395 | 382,046 | 372,791 | 373,419 | 1,534,651 | |||||||||||||||||||||||||
| Average length of stay: | ||||||||||||||||||||||||||||||||||
| Medicare | 24.6 | 25.1 | 24.9 | 25.0 | 24.9 | 24.6 | 24.8 | 24.9 | 24.4 | 24.7 | ||||||||||||||||||||||||
| Medicaid | 35.5 | 33.3 | 36.8 | 37.8 | 35.8 | 42.0 | 40.9 | 40.1 | 41.9 | 41.2 | ||||||||||||||||||||||||
| Medicare Advantage | 28.3 | 27.9 | 29.5 | 29.3 | 28.7 | 28.4 | 29.0 | 29.5 | 30.2 | 29.3 | ||||||||||||||||||||||||
| Commercial insurance and other | 29.6 | 31.3 | 30.8 | 31.0 | 30.6 | 33.1 | 31.4 | 32.0 | 31.3 | 32.0 | ||||||||||||||||||||||||
| Weighted average | 26.4 | 26.9 | 27.0 | 27.1 | 26.8 | 27.0 | 27.1 | 27.4 | 27.0 | 27.1 | ||||||||||||||||||||||||
| KINDRED HEALTHCARE, INC. | ||||||||||||||||||||||||||||||||||||||||||||
| Condensed Business Segment Data (Continued) | ||||||||||||||||||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
| 2012 Quarters | 2013 Quarters | |||||||||||||||||||||||||||||||||||||||||||
| First | Second | Third | Fourth | Year | First | Second | Third | Fourth | Year | |||||||||||||||||||||||||||||||||||
| Hospital division data (continued): | ||||||||||||||||||||||||||||||||||||||||||||
| Revenues per admission: | ||||||||||||||||||||||||||||||||||||||||||||
| Medicare | $ | 39,819 | $ | 40,084 | $ | 39,479 | $ | 41,016 | $ | 40,096 | $ | 39,995 | $ | 38,919 | $ | 39,063 | $ | 38,723 | $ | 39,197 | ||||||||||||||||||||||||
| Medicaid | 42,962 | 42,150 | 41,591 | 43,539 | 42,540 | 51,441 | 48,142 | 51,890 | 52,599 | 51,005 | ||||||||||||||||||||||||||||||||||
| Medicare Advantage | 44,259 | 42,577 | 46,352 | 45,832 | 44,692 | 44,698 | 45,269 | 46,604 | 48,917 | 46,343 | ||||||||||||||||||||||||||||||||||
| Commercial insurance and other | 57,723 | 59,402 | 59,980 | 61,451 | 59,579 | 65,866 | 65,444 | 64,002 | 66,561 | 65,469 | ||||||||||||||||||||||||||||||||||
| Weighted average | 43,322 | 43,526 | 43,626 | 44,812 | 43,808 | 44,799 | 44,072 | 44,523 | 44,796 | 44,551 | ||||||||||||||||||||||||||||||||||
| Revenues per patient day: | ||||||||||||||||||||||||||||||||||||||||||||
| Medicare | $ | 1,619 | $ | 1,600 | $ | 1,588 | $ | 1,639 | $ | 1,612 | $ | 1,629 | $ | 1,570 | $ | 1,571 | $ | 1,584 | $ | 1,590 | ||||||||||||||||||||||||
| Medicaid | 1,209 | 1,267 | 1,130 | 1,151 | 1,188 | 1,225 | 1,176 | 1,295 | 1,257 | 1,239 | ||||||||||||||||||||||||||||||||||
| Medicare Advantage | 1,565 | 1,527 | 1,574 | 1,567 | 1,558 | 1,572 | 1,561 | 1,579 | 1,622 | 1,584 | ||||||||||||||||||||||||||||||||||
| Commercial insurance and other | 1,953 | 1,897 | 1,949 | 1,982 | 1,945 | 1,992 | 2,081 | 1,998 | 2,124 | 2,047 | ||||||||||||||||||||||||||||||||||
| Weighted average | 1,641 | 1,620 | 1,614 | 1,653 | 1,632 | 1,659 | 1,627 | 1,627 | 1,659 | 1,643 | ||||||||||||||||||||||||||||||||||
| Medicare case mix index (discharged patients only) | 1.18 | 1.18 | 1.16 | 1.15 | 1.17 | 1.18 | 1.18 | 1.16 | 1.15 | 1.17 | ||||||||||||||||||||||||||||||||||
| Average daily census | 4,552 | 4,379 | 4,271 | 4,245 | 4,361 | 4,516 | 4,198 | 4,052 | 4,059 | 4,205 | ||||||||||||||||||||||||||||||||||
| Occupancy % | 68.5 | 65.4 | 64.4 | 64.0 | 65.6 | 67.9 | 62.9 | 60.4 | 60.8 | 63.0 | ||||||||||||||||||||||||||||||||||
| Annualized employee turnover % | 21.9 | 21.4 | 20.1 | 19.7 | 22.0 | 21.5 | 21.1 | 20.8 | ||||||||||||||||||||||||||||||||||||
| Nursing center division data: | ||||||||||||||||||||||||||||||||||||||||||||
| End of period data: | ||||||||||||||||||||||||||||||||||||||||||||
| Number of facilities: | ||||||||||||||||||||||||||||||||||||||||||||
| Nursing centers: | ||||||||||||||||||||||||||||||||||||||||||||
| Owned or leased | 97 | 97 | 97 | 96 | 96 | 96 | 96 | 96 | ||||||||||||||||||||||||||||||||||||
| Managed | 4 | 4 | 4 | 4 | 4 | 4 | 4 | 4 | ||||||||||||||||||||||||||||||||||||
| Assisted living facilities | 6 | 6 | 6 | 6 | 6 | 6 | 6 | 6 | ||||||||||||||||||||||||||||||||||||
| 107 | 107 | 107 | 106 | 106 | 106 | 106 | 106 | |||||||||||||||||||||||||||||||||||||
| Number of licensed beds: | ||||||||||||||||||||||||||||||||||||||||||||
| Nursing centers: | ||||||||||||||||||||||||||||||||||||||||||||
| Owned or leased | 12,159 | 12,207 | 12,207 | 12,153 | 12,153 | 12,153 | 12,153 | 12,153 | ||||||||||||||||||||||||||||||||||||
| Managed | 485 | 485 | 485 | 485 | 485 | 485 | 485 | 485 | ||||||||||||||||||||||||||||||||||||
| Assisted living facilities | 413 | 341 | 341 | 341 | 341 | 341 | 341 | 341 | ||||||||||||||||||||||||||||||||||||
| 13,057 | 13,033 | 13,033 | 12,979 | 12,979 | 12,979 | 12,979 | 12,979 | |||||||||||||||||||||||||||||||||||||
| Revenue mix %: | ||||||||||||||||||||||||||||||||||||||||||||
| Medicare | 36 | 35 | 35 | 35 | 35 | 35 | 34 | 33 | 32 | 34 | ||||||||||||||||||||||||||||||||||
| Medicaid | 36 | 37 | 37 | 37 | 36 | 36 | 37 | 39 | 40 | 37 | ||||||||||||||||||||||||||||||||||
| Medicare Advantage | 8 | 8 | 7 | 7 | 8 | 8 | 8 | 7 | 8 | 8 | ||||||||||||||||||||||||||||||||||
| Private and other | 20 | 20 | 21 | 21 | 21 | 21 | 21 | 21 | 20 | 21 | ||||||||||||||||||||||||||||||||||
| KINDRED HEALTHCARE, INC. | ||||||||||||||||||||||||||||||||||||||||||||
| Condensed Business Segment Data (Continued) | ||||||||||||||||||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
| 2012 Quarters | 2013 Quarters | |||||||||||||||||||||||||||||||||||||||||||
| First | Second | Third | Fourth | Year | First | Second | Third | Fourth | Year | |||||||||||||||||||||||||||||||||||
| Nursing center division data (continued): | ||||||||||||||||||||||||||||||||||||||||||||
| Patient days (a): | ||||||||||||||||||||||||||||||||||||||||||||
| Medicare | 179,394 | 174,134 | 169,121 | 166,307 | 688,956 | 171,881 | 162,488 | 158,458 | 152,185 | 645,012 | ||||||||||||||||||||||||||||||||||
| Medicaid | 528,701 | 530,816 | 535,784 | 530,503 | 2,125,804 | 515,970 | 516,103 | 525,625 | 532,378 | 2,090,076 | ||||||||||||||||||||||||||||||||||
| Medicare Advantage | 52,860 | 48,778 | 48,483 | 47,105 | 197,226 | 52,460 | 52,064 | 45,865 | 49,319 | 199,708 | ||||||||||||||||||||||||||||||||||
| Private and other | 224,611 | 221,177 | 227,274 | 229,273 | 902,335 | 218,175 | 217,914 | 218,845 | 214,946 | 869,880 | ||||||||||||||||||||||||||||||||||
| 985,566 | 974,905 | 980,662 | 973,188 | 3,914,321 | 958,486 | 948,569 | 948,793 | 948,828 | 3,804,676 | |||||||||||||||||||||||||||||||||||
| Patient day mix % (a): | ||||||||||||||||||||||||||||||||||||||||||||
| Medicare | 18 | 18 | 17 | 17 | 18 | 18 | 17 | 17 | 16 | 17 | ||||||||||||||||||||||||||||||||||
| Medicaid | 54 | 54 | 55 | 54 | 54 | 54 | 54 | 55 | 56 | 55 | ||||||||||||||||||||||||||||||||||
| Medicare Advantage | 5 | 5 | 5 | 5 | 5 | 5 | 6 | 5 | 5 | 5 | ||||||||||||||||||||||||||||||||||
| Private and other | 23 | 23 | 23 | 24 | 23 | 23 | 23 | 23 | 23 | 23 | ||||||||||||||||||||||||||||||||||
| Revenues per patient day (a): | ||||||||||||||||||||||||||||||||||||||||||||
| Medicare Part A | $ | 504 | $ | 506 | $ | 516 | $ | 538 | $ | 516 | $ | 527 | $ | 526 | $ | 526 | $ | 540 | $ | 530 | ||||||||||||||||||||||||
| Total Medicare (including Part B) | 545 | 550 | 562 | 576 | 558 | 564 | 566 | 568 | 584 | 570 | ||||||||||||||||||||||||||||||||||
| Medicaid | 185 | 187 | 188 | 190 | 188 | 190 | 190 | 199 | 205 | 196 | ||||||||||||||||||||||||||||||||||
| Medicaid (net of provider taxes) (b) | 163 | 165 | 166 | 167 | 165 | 167 | 167 | 177 | 183 | 174 | ||||||||||||||||||||||||||||||||||
| Medicare Advantage | 427 | 421 | 423 | 430 | 425 | 427 | 430 | 427 | 437 | 431 | ||||||||||||||||||||||||||||||||||
| Private and other | 249 | 246 | 250 | 254 | 250 | 264 | 262 | 256 | 258 | 260 | ||||||||||||||||||||||||||||||||||
| Weighted average | 278 | 277 | 279 | 282 | 279 | 287 | 284 | 285 | 290 | 287 | ||||||||||||||||||||||||||||||||||
| Average daily census (a) | 10,830 | 10,713 | 10,659 | 10,578 | 10,695 | 10,650 | 10,424 | 10,313 | 10,313 | 10,424 | ||||||||||||||||||||||||||||||||||
| Admissions (a) | 11,092 | 10,298 | 10,128 | 10,399 | 41,917 | 11,044 | 10,305 | 10,045 | 10,048 | 41,442 | ||||||||||||||||||||||||||||||||||
| Occupancy % (a) | 84.2 | 83.6 | 83.0 | 82.6 | 83.3 | 83.3 | 81.5 | 80.5 | 80.3 | 81.4 | ||||||||||||||||||||||||||||||||||
| Medicare average length of stay (a) | 30.4 | 31.3 | 31.9 | 30.6 | 31.0 | 30.2 | 30.9 | 31.6 | 31.4 | 31.0 | ||||||||||||||||||||||||||||||||||
| Annualized employee turnover % | 38.4 | 40.3 | 39.7 | 39.6 | 41.8 | 44.7 | 44.8 | 42.8 | ||||||||||||||||||||||||||||||||||||
| Rehabilitation division data: | ||||||||||||||||||||||||||||||||||||||||||||
| Skilled nursing rehabilitation services: | ||||||||||||||||||||||||||||||||||||||||||||
| Revenue mix %: | ||||||||||||||||||||||||||||||||||||||||||||
| Company-operated | 11 | 11 | 11 | 11 | 11 | 11 | 12 | 12 | 12 | 12 | ||||||||||||||||||||||||||||||||||
| Non-affiliated | 89 | 89 | 89 | 89 | 89 | 89 | 88 | 88 | 88 | 88 | ||||||||||||||||||||||||||||||||||
| Sites of service (at end of period) | 1,722 | 1,730 | 1,735 | 1,726 | 1,729 | 1,713 | 1,768 | 1,806 | ||||||||||||||||||||||||||||||||||||
| Revenue per site | $ | 147,137 | $ | 146,250 | $ | 145,322 | $ | 141,648 | $ | 580,357 | $ | 148,963 | $ | 144,962 | $ | 137,995 | $ | 133,963 | $ | 565,883 | ||||||||||||||||||||||||
| Therapist productivity % | 80.3 | 80.4 | 80.5 | 80.5 | 80.4 | 81.1 | 80.4 | 79.8 | 79.5 | 80.2 | ||||||||||||||||||||||||||||||||||
| Hospital rehabilitation services: | ||||||||||||||||||||||||||||||||||||||||||||
| Revenue mix %: | ||||||||||||||||||||||||||||||||||||||||||||
| Company-operated | 33 | 33 | 33 | 33 | 33 | 33 | 34 | 34 | 31 | 33 | ||||||||||||||||||||||||||||||||||
| Non-affiliated | 67 | 67 | 67 | 67 | 67 | 67 | 66 | 66 | 69 | 67 | ||||||||||||||||||||||||||||||||||
| Sites of service (at end of period): | ||||||||||||||||||||||||||||||||||||||||||||
| Inpatient rehabilitation units | 100 | 102 | 104 | 105 | 103 | 103 | 99 | 104 | ||||||||||||||||||||||||||||||||||||
| LTAC hospitals | 125 | 125 | 123 | 123 | 123 | 123 | 122 | 121 | ||||||||||||||||||||||||||||||||||||
| Sub-acute units | 19 | 20 | 20 | 21 | 8 | 8 | 7 | 10 | ||||||||||||||||||||||||||||||||||||
| Outpatient units | 111 | 115 | 117 | 119 | 98 | 104 | 104 | 144 | ||||||||||||||||||||||||||||||||||||
| Other | 5 | 5 | 5 | 5 | - | - | - | - | ||||||||||||||||||||||||||||||||||||
| 360 | 367 | 369 | 373 | 332 | 338 | 332 | 379 | |||||||||||||||||||||||||||||||||||||
| Revenue per site | $ | 206,580 | $ | 200,006 | $ | 194,849 | $ | 198,150 | $ | 799,585 | $ | 224,466 | $ | 206,441 | $ | 205,711 | $ | 195,296 | $ | 831,914 | ||||||||||||||||||||||||
| Annualized employee turnover % | 19.6 | 16.9 | 17.3 | 16.9 | 10.4 | 13.2 | 14.0 | 13.7 | ||||||||||||||||||||||||||||||||||||
| (a) | Excludes managed facilities. | |||||||||||||||||||||||||||||||||||||||||||
| (b) | Provider taxes are recorded in other operating expenses for all periods presented. | |||||||||||||||||||||||||||||||||||||||||||
| KINDRED HEALTHCARE, INC. | |||||||||||||||||||||||||||||||||||||||||||||
| Loss Per Common Share Reconciliation (a) | |||||||||||||||||||||||||||||||||||||||||||||
| (In thousands, except per share amounts) | |||||||||||||||||||||||||||||||||||||||||||||
| Three months ended December 31, | Year ended December 31, | ||||||||||||||||||||||||||||||||||||||||||||
| 2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||||||||||||||||||||||||
| Basic | Diluted | Basic | Diluted | Basic | Diluted | Basic | Diluted | ||||||||||||||||||||||||||||||||||||||
| Loss: | |||||||||||||||||||||||||||||||||||||||||||||
| Amounts attributable to Kindred stockholders: | |||||||||||||||||||||||||||||||||||||||||||||
| Loss from continuing operations: | |||||||||||||||||||||||||||||||||||||||||||||
| As reported in Statement of Operations | $ | (54,142 | ) | $ | (54,142 | ) | $ | (83,999 | ) | $ | (83,999 | ) | $ | (48,469 | ) | $ | (48,469 | ) | $ | (47,970 | ) | $ | (47,970 | ) | |||||||||||||||||||||
|
Allocation to participating unvested restricted stockholders |
- | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||
| Available to common stockholders | $ | (54,142 | ) | $ | (54,142 | ) | $ | (83,999 | ) | $ | (83,999 | ) | $ | (48,469 | ) | $ | (48,469 | ) | $ | (47,970 | ) | $ | (47,970 | ) | |||||||||||||||||||||
| Discontinued operations, net of income taxes: | |||||||||||||||||||||||||||||||||||||||||||||
| Income (loss) from operations: | |||||||||||||||||||||||||||||||||||||||||||||
| As reported in Statement of Operations | $ | (6,160 | ) | $ | (6,160 | ) | $ | 3,312 | $ | 3,312 | $ | (36,136 | ) | $ | (36,136 | ) | $ | 12,348 | $ | 12,348 | |||||||||||||||||||||||||
|
Allocation to participating unvested restricted stockholders |
- | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||
| Available to common stockholders | $ | (6,160 | ) | $ | (6,160 | ) | $ | 3,312 | $ | 3,312 | $ | (36,136 | ) | $ | (36,136 | ) | $ | 12,348 | $ | 12,348 | |||||||||||||||||||||||||
| Loss on divestiture of operations: | |||||||||||||||||||||||||||||||||||||||||||||
| As reported in Statement of Operations | $ | (5,994 | ) | $ | (5,994 | ) | $ | (939 | ) | $ | (939 | ) | $ | (83,887 | ) | $ | (83,887 | ) | $ | (4,745 | ) | $ | (4,745 | ) | |||||||||||||||||||||
|
Allocation to participating unvested restricted stockholders |
- | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||
| Available to common stockholders | $ | (5,994 | ) | $ | (5,994 | ) | $ | (939 | ) | $ | (939 | ) | $ | (83,887 | ) | $ | (83,887 | ) | $ | (4,745 | ) | $ | (4,745 | ) | |||||||||||||||||||||
| Income (loss) from discontinued operations: | |||||||||||||||||||||||||||||||||||||||||||||
| As reported in Statement of Operations | $ | (12,154 | ) | $ | (12,154 | ) | $ | 2,373 | $ | 2,373 | $ | (120,023 | ) | $ | (120,023 | ) | $ | 7,603 | $ | 7,603 | |||||||||||||||||||||||||
|
Allocation to participating unvested restricted stockholders |
- | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||
| Available to common stockholders | $ | (12,154 | ) | $ | (12,154 | ) | $ | 2,373 | $ | 2,373 | $ | (120,023 | ) | $ | (120,023 | ) | $ | 7,603 | $ | 7,603 | |||||||||||||||||||||||||
| Net loss: | |||||||||||||||||||||||||||||||||||||||||||||
| As reported in Statement of Operations | $ | (66,296 | ) | $ | (66,296 | ) | $ | (81,626 | ) | $ | (81,626 | ) | $ | (168,492 | ) | $ | (168,492 | ) | $ | (40,367 | ) | $ | (40,367 | ) | |||||||||||||||||||||
|
Allocation to participating unvested restricted stockholders |
- | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||
| Available to common stockholders | $ | (66,296 | ) | $ | (66,296 | ) | $ | (81,626 | ) | $ | (81,626 | ) | $ | (168,492 | ) | $ | (168,492 | ) | $ | (40,367 | ) | $ | (40,367 | ) | |||||||||||||||||||||
| Shares used in the computation: | |||||||||||||||||||||||||||||||||||||||||||||
|
Weighted average shares outstanding - basic computation |
52,344 | 52,344 | 51,692 | 51,692 | 52,249 | 52,249 | 51,659 | 51,659 | |||||||||||||||||||||||||||||||||||||
| Dilutive effect of employee stock options | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||
| Dilutive effect of performance-based restricted shares | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||||||||||||||||||
|
Adjusted weighted average shares outstanding - diluted computation |
52,344 | 51,692 | 52,249 | 51,659 | |||||||||||||||||||||||||||||||||||||||||
| Loss per common share: | |||||||||||||||||||||||||||||||||||||||||||||
| Loss from continuing operations | $ | (1.04 | ) | $ | (1.04 | ) | $ | (1.62 | ) | $ | (1.62 | ) | $ | (0.93 | ) | $ | (0.93 | ) | $ | (0.93 | ) | $ | (0.93 | ) | |||||||||||||||||||||
| Discontinued operations: | |||||||||||||||||||||||||||||||||||||||||||||
| Income (loss) from operations | (0.12 | ) | (0.12 | ) | 0.06 | 0.06 | (0.69 | ) | (0.69 | ) | 0.24 | 0.24 | |||||||||||||||||||||||||||||||||
| Loss on divestiture of operations | (0.11 | ) | (0.11 | ) | (0.02 | ) | (0.02 | ) | (1.61 | ) | (1.61 | ) | (0.09 | ) | (0.09 | ) | |||||||||||||||||||||||||||||
| Income (loss) from discontinued operations | (0.23 | ) | (0.23 | ) | 0.04 | 0.04 | (2.30 | ) | (2.30 | ) | 0.15 | 0.15 | |||||||||||||||||||||||||||||||||
| Net loss | $ | (1.27 | ) | $ | (1.27 | ) | $ | (1.58 | ) | $ | (1.58 | ) | $ | (3.23 | ) | $ | (3.23 | ) | $ | (0.78 | ) | $ | (0.78 | ) | |||||||||||||||||||||
| (a) | Loss per common share is based upon the weighted average number of common shares outstanding during the respective periods. 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. However, because the Company reported a loss from continuing operations, there was no allocation to participating unvested restricted stockholders for all periods presented. | ||||||||||||||||||||||||||||||||||||||||||||
| 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 year ended December 31, 2013 and 2012 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 28.8% and 7.2% for the three months ended December 31, 2013 and 2012, respectively, and 30.8% and 10.2% for the year ended December 31, 2013 and 2012, respectively. The change in the effective income tax rates between periods is attributable to the variation between periods 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 year ended December 31, 2013 and 2012 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 | Year ended | |||||||||||||||||||||||
| December 31, | December 31, | |||||||||||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||||||||||
| Detail of charges: | ||||||||||||||||||||||||
| One-time bonus costs | $ | - | $ | - | ($20,158 | ) | $ | - | ||||||||||||||||
| Severance, retirement and other costs | (3,663 | ) | (4,203 | ) | (6,016 | ) | (8,730 | ) | ||||||||||||||||
| Costs associated with the closing of a TC hospital and a home health location | (499 | ) | - | (6,542 | ) | - | ||||||||||||||||||
| Litigation | (7,000 | ) | - | (30,850 | ) | (5,000 | ) | |||||||||||||||||
| Transaction costs | (447 | ) | (667 | ) | (2,112 | ) | (2,231 | ) | ||||||||||||||||
| Impairment charges | (76,082 | ) | (107,899 | ) | (76,082 | ) | (107,899 | ) | ||||||||||||||||
| Lease cancellation charges (rent expense) | - | (176 | ) | - | (1,691 | ) | ||||||||||||||||||
| Senior debt modification charges (interest expense) | - | - | (1,461 | ) | - | |||||||||||||||||||
| (87,691 | ) | (112,945 | ) | (143,221 | ) | (125,551 | ) | |||||||||||||||||
| Income tax benefit | 25,232 | 8,173 | 44,074 | 12,795 | ||||||||||||||||||||
| Charges net of income taxes | (62,459 | ) | (104,772 | ) | (99,147 | ) | (112,756 | ) | ||||||||||||||||
| Allocation to participating unvested restricted stockholders | - | - | - | - | ||||||||||||||||||||
| Available to common stockholders | ($62,459 | ) | ($104,772 | ) | ($99,147 | ) | ($112,756 | ) | ||||||||||||||||
| Weighted average diluted shares outstanding | 52,344 | 51,692 | 52,249 | 51,659 | ||||||||||||||||||||
| Diluted loss per common share related to charges | ($1.19 | ) | ($2.03 | ) | ($1.90 | ) | ($2.18 | ) | ||||||||||||||||
| Reconciliation of operating income before charges: | ||||||||||||||||||||||||
| Operating income before charges | $ | 159,692 | $ | 181,543 | $ | 663,148 | $ | 686,381 | ||||||||||||||||
| Detail of charges excluded from core operating results: | ||||||||||||||||||||||||
| One-time bonus costs | - | - | (20,158 | ) | - | |||||||||||||||||||
| Severance, retirement and other costs | (3,663 | ) | (4,203 | ) | (6,016 | ) | (8,730 | ) | ||||||||||||||||
| Costs associated with the closing of a TC hospital and a home health location | (499 | ) | - | (6,542 | ) | - | ||||||||||||||||||
| Litigation | (7,000 | ) | - | (30,850 | ) | (5,000 | ) | |||||||||||||||||
| Transaction costs | (447 | ) | (667 | ) | (2,112 | ) | (2,231 | ) | ||||||||||||||||
| Impairment charges | (76,082 | ) | (107,899 | ) | (76,082 | ) | (107,899 | ) | ||||||||||||||||
| (87,691 | ) | (112,769 | ) | (141,760 | ) | (123,860 | ) | |||||||||||||||||
| Reported operating income | $ | 72,001 | $ | 68,774 | $ | 521,388 | $ | 562,521 | ||||||||||||||||
| Reconciliation of income from continuing operations before charges: | ||||||||||||||||||||||||
| Amounts attributable to Kindred stockholders: | ||||||||||||||||||||||||
| Income from continuing operations before charges | $ | 8,317 | $ | 20,773 | $ | 50,678 | $ | 64,786 | ||||||||||||||||
| Charges net of income taxes | (62,459 | ) | (104,772 | ) | (99,147 | ) | (112,756 | ) | ||||||||||||||||
| Reported loss from continuing operations | ($54,142 | ) | ($83,999 | ) | ($48,469 | ) | ($47,970 | ) | ||||||||||||||||
|
Reconciliation of diluted income per common share from continuing operations before charges: |
||||||||||||||||||||||||
| Diluted income per common share before charges (a) | $ | 0.15 | $ | 0.39 | $ | 0.94 | $ | 1.22 | ||||||||||||||||
| Charges net of income taxes | (1.19 | ) | (2.03 | ) | (1.90 | ) | (2.18 | ) | ||||||||||||||||
| Other | - | 0.02 | 0.03 | 0.03 | ||||||||||||||||||||
| Reported diluted loss per common share from continuing operations | ($1.04 | ) | ($1.62 | ) | ($0.93 | ) | ($0.93 | ) | ||||||||||||||||
|
|
||||||||||||||||||||||||
|
Weighted average diluted shares used to compute diluted income per common share from continuing operations before charges |
52,461 | 51,984 | 52,315 | 51,815 | ||||||||||||||||||||
| Reconciliation of effective income tax rate before charges: | ||||||||||||||||||||||||
| Effective income tax rate before charges | 27.5 | % | 35.7 | % | 36.2 | % | 39.2 | % | ||||||||||||||||
| Impact of charges on effective income tax rate | 1.5 | % | -30.9 | % | -13.4 | % | 133.3 | % | ||||||||||||||||
| Reported effective income tax rate | 29.0 | % | 4.8 | % | 22.8 | % | 172.5 | % | ||||||||||||||||
| (a) | For purposes of computing diluted earnings per common share before charges, income from continuing operations before charges was reduced by $0.3 million and $0.6 million for the three months ended December 31, 2013 and 2012, respectively, and $1.6 million and $1.5 million for the year ended December 31, 2013 and 2012, respectively, for the allocation of income to participating unvested restricted stockholders. | |||||||||||||||||||||||
| KINDRED HEALTHCARE, INC. | ||||||||||||||||||||||||||||||||||||||||||||||
| Reconciliation of Non-GAAP Measurements to GAAP Results (Continued) | ||||||||||||||||||||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||||||||||||||||||||
| (In thousands) | ||||||||||||||||||||||||||||||||||||||||||||||
| Three months ended December 31, 2013 | ||||||||||||||||||||||||||||||||||||||||||||||
| Charges | ||||||||||||||||||||||||||||||||||||||||||||||
| Severance | Facility | |||||||||||||||||||||||||||||||||||||||||||||
| Before | and retirement | closing | Impairment | Transaction | As | |||||||||||||||||||||||||||||||||||||||||
| charges | costs | costs | Litigation | charges | costs | Total | reported | |||||||||||||||||||||||||||||||||||||||
| Income (loss) from continuing operations: | ||||||||||||||||||||||||||||||||||||||||||||||
| Operating income (loss): | ||||||||||||||||||||||||||||||||||||||||||||||
| Hospital division | $ | 135,428 | $ | - | $ | (499 | ) | $ | (7,000 | ) | $ | - | $ | - | $ | (7,499 | ) | $ | 127,929 | |||||||||||||||||||||||||||
| Nursing center division | 36,694 | - | - | - | - | - | - | 36,694 | ||||||||||||||||||||||||||||||||||||||
| Rehabilitation division: | ||||||||||||||||||||||||||||||||||||||||||||||
| Skilled nursing rehabilitation services | 13,057 | (139 | ) | - | - | - | - | (139 | ) | 12,918 | ||||||||||||||||||||||||||||||||||||
| Hospital rehabilitation services | 19,093 | (1,088 | ) | - | - | - | - | (1,088 | ) | 18,005 | ||||||||||||||||||||||||||||||||||||
| 32,150 | (1,227 | ) | - | - | - | - | (1,227 | ) | 30,923 | |||||||||||||||||||||||||||||||||||||
| Care management division | 2,206 | (75 | ) | - | - | - | - | (75 | ) | 2,131 | ||||||||||||||||||||||||||||||||||||
| Corporate: | ||||||||||||||||||||||||||||||||||||||||||||||
| Overhead | (46,202 | ) | (2,361 | ) | - | - | - | - | (2,361 | ) | (48,563 | ) | ||||||||||||||||||||||||||||||||||
| Insurance subsidiary | (539 | ) | - | - | - | - | - | - | (539 | ) | ||||||||||||||||||||||||||||||||||||
| (46,741 | ) | (2,361 | ) | - | - | - | - | (2,361 | ) | (49,102 | ) | |||||||||||||||||||||||||||||||||||
| Impairment charges | (45 | ) | - | - | - | (76,082 | ) | - | (76,082 | ) | (76,127 | ) | ||||||||||||||||||||||||||||||||||
| Transaction costs | - | - | - | - | - | (447 | ) | (447 | ) | (447 | ) | |||||||||||||||||||||||||||||||||||
| Operating income | 159,692 | (3,663 | ) | (499 | ) | (7,000 | ) | (76,082 | ) | (447 | ) | (87,691 | ) | 72,001 | ||||||||||||||||||||||||||||||||
| Rent | (82,563 | ) | - | - | - | - | - | - | (82,563 | ) | ||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | (38,437 | ) | - | - | - | - | - | - | (38,437 | ) | ||||||||||||||||||||||||||||||||||||
| Interest, net | (23,906 | ) | - | - | - | - | - | - | (23,906 | ) | ||||||||||||||||||||||||||||||||||||
|
Income (loss) from continuing operations before income taxes |
14,786 | (3,663 | ) | (499 | ) | (7,000 | ) | (76,082 | ) | (447 | ) | (87,691 | ) | (72,905 | ) | |||||||||||||||||||||||||||||||
| Provision (benefit) for income taxes | 4,064 | (1,443 | ) | (202 | ) | (5,455 | ) | (17,803 | ) | (329 | ) | (25,232 | ) | (21,168 | ) | |||||||||||||||||||||||||||||||
| $ | 10,722 | $ | (2,220 | ) | $ | (297 | ) | $ | (1,545 | ) | $ | (58,279 | ) | $ | (118 | ) | $ | (62,459 | ) | $ | (51,737 | ) | ||||||||||||||||||||||||
| Three months ended December 31, 2012 | ||||||||||||||||||||||||||||||||||||||||||||||
| Charges | ||||||||||||||||||||||||||||||||||||||||||||||
| Lease | ||||||||||||||||||||||||||||||||||||||||||||||
| Before | Severance | Impairment | Transaction | cancellation | As | |||||||||||||||||||||||||||||||||||||||||
| charges | and other | charges | costs | charges | Total | reported | ||||||||||||||||||||||||||||||||||||||||
| Income (loss) from continuing operations: | ||||||||||||||||||||||||||||||||||||||||||||||
| Operating income (loss): | ||||||||||||||||||||||||||||||||||||||||||||||
| Hospital division | $ | 147,730 | $ | (689 | ) | $ | - | $ | - | $ | - | $ | (689 | ) | $ | 147,041 | ||||||||||||||||||||||||||||||
| Nursing center division | 33,917 | (1,901 | ) | - | - | - | (1,901 | ) | 32,016 | |||||||||||||||||||||||||||||||||||||
| Rehabilitation division: | ||||||||||||||||||||||||||||||||||||||||||||||
| Skilled nursing rehabilitation services | 21,318 | (317 | ) | - | - | - | (317 | ) | 21,001 | |||||||||||||||||||||||||||||||||||||
| Hospital rehabilitation services | 18,889 | (97 | ) | - | - | - | (97 | ) | 18,792 | |||||||||||||||||||||||||||||||||||||
| 40,207 | (414 | ) | - | - | - | (414 | ) | 39,793 | ||||||||||||||||||||||||||||||||||||||
| Care management division | 5,083 | (150 | ) | - | - | - | (150 | ) | 4,933 | |||||||||||||||||||||||||||||||||||||
| Corporate: | ||||||||||||||||||||||||||||||||||||||||||||||
| Overhead | (44,680 | ) | (1,049 | ) | - | - | - | (1,049 | ) | (45,729 | ) | |||||||||||||||||||||||||||||||||||
| Insurance subsidiary | (500 | ) | - | - | - | - | - | (500 | ) | |||||||||||||||||||||||||||||||||||||
| (45,180 | ) | (1,049 | ) | - | - | - | (1,049 | ) | (46,229 | ) | ||||||||||||||||||||||||||||||||||||
| Impairment charges | (214 | ) | - | (107,899 | ) | - | - | (107,899 | ) | (108,113 | ) | |||||||||||||||||||||||||||||||||||
| Transaction costs | - | - | - | (667 | ) | - | (667 | ) | (667 | ) | ||||||||||||||||||||||||||||||||||||
| Operating income | 181,543 | (4,203 | ) | (107,899 | ) | (667 | ) | - | (112,769 | ) | 68,774 | |||||||||||||||||||||||||||||||||||
| Rent | (78,046 | ) | - | - | - | (176 | ) | (176 | ) | (78,222 | ) | |||||||||||||||||||||||||||||||||||
| Depreciation and amortization | (42,296 | ) | - | - | - | - | - | (42,296 | ) | |||||||||||||||||||||||||||||||||||||
| Interest, net | (27,683 | ) | - | - | - | - | - | (27,683 | ) | |||||||||||||||||||||||||||||||||||||
|
Income (loss) from continuing operations before income taxes |
33,518 | (4,203 | ) | (107,899 | ) | (667 | ) | (176 | ) | (112,945 | ) | (79,427 | ) | |||||||||||||||||||||||||||||||||
| Provision for income taxes | 11,955 | (1,673 | ) | (6,150 | ) | (273 | ) | (77 | ) | (8,173 | ) | 3,782 | ||||||||||||||||||||||||||||||||||
| $ | 21,563 | $ | (2,530 | ) | $ | (101,749 | ) | $ | (394 | ) | $ | (99 | ) | $ | (104,772 | ) | $ | (83,209 | ) | |||||||||||||||||||||||||||
| KINDRED HEALTHCARE, INC. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Reconciliation of Non-GAAP Measurements to GAAP Results (Continued) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (In thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Year ended December 31, 2013 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Charges | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Severance | Facility | Senior debt | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Before | One-time | and retirement | closing | Impairment | Transaction | modification | As | |||||||||||||||||||||||||||||||||||||||||||||||||
| charges | bonus | costs | costs | Litigation | charges | costs | charges | Total | reported | |||||||||||||||||||||||||||||||||||||||||||||||
| Income (loss) from continuing operations: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating income (loss): | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Hospital division | $ | 544,879 | $ | (7,997 | ) | $ | - | $ | (6,026 | ) | $ | (7,700 | ) | $ | - | $ | - | $ | - | $ | (21,723 | ) | $ | 523,156 | ||||||||||||||||||||||||||||||||
| Nursing center division | 140,132 | (4,706 | ) | - | (64 | ) | - | - | - | - | (4,770 | ) | 135,362 | |||||||||||||||||||||||||||||||||||||||||||
| Rehabilitation division: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Skilled nursing rehabilitation services | 65,037 | (5,052 | ) | (139 | ) | - | (23,150 | ) | - | - | - | (28,341 | ) | 36,696 | ||||||||||||||||||||||||||||||||||||||||||
| Hospital rehabilitation services | 76,556 | (1,255 | ) | (1,376 | ) | - | - | - | - | - | (2,631 | ) | 73,925 | |||||||||||||||||||||||||||||||||||||||||||
| 141,593 | (6,307 | ) | (1,515 | ) | - | (23,150 | ) | - | - | - | (30,972 | ) | 110,621 | |||||||||||||||||||||||||||||||||||||||||||
| Care management division | 11,924 | (833 | ) | (676 | ) | (452 | ) | - | - | - | - | (1,961 | ) | 9,963 | ||||||||||||||||||||||||||||||||||||||||||
| Corporate: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Overhead | (172,355 | ) | (315 | ) | (3,366 | ) | - | - | - | - | (459 | ) | (4,140 | ) | (176,495 | ) | ||||||||||||||||||||||||||||||||||||||||
| Insurance subsidiary | (1,914 | ) | - | - | - | - | - | - | - | - | (1,914 | ) | ||||||||||||||||||||||||||||||||||||||||||||
| (174,269 | ) | (315 | ) | (3,366 | ) | - | - | - | - | (459 | ) | (4,140 | ) | (178,409 | ) | |||||||||||||||||||||||||||||||||||||||||
| Impairment charges | (1,111 | ) | - | - | - | - | (76,082 | ) | - | - | (76,082 | ) | (77,193 | ) | ||||||||||||||||||||||||||||||||||||||||||
| Transaction costs | - | - | - | - | - | - | (2,112 | ) | - | (2,112 | ) | (2,112 | ) | |||||||||||||||||||||||||||||||||||||||||||
| Operating income | 663,148 | (20,158 | ) | (5,557 | ) | (6,542 | ) | (30,850 | ) | (76,082 | ) | (2,112 | ) | (459 | ) | (141,760 | ) | 521,388 | ||||||||||||||||||||||||||||||||||||||
| Rent | (318,077 | ) | - | - | - | - | - | - | - | - | (318,077 | ) | ||||||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | (157,329 | ) | - | - | - | - | - | - | - | - | (157,329 | ) | ||||||||||||||||||||||||||||||||||||||||||||
| Interest, net | (102,537 | ) | - | - | - | - | - | - | (1,461 | ) | (1,461 | ) | (103,998 | ) | ||||||||||||||||||||||||||||||||||||||||||
|
Income (loss) from continuing operations before income taxes |
85,205 | (20,158 | ) | (5,557 | ) | (6,542 | ) | (30,850 | ) | (76,082 | ) | (2,112 | ) | (1,920 | ) | (143,221 | ) | (58,016 | ) | |||||||||||||||||||||||||||||||||||||
| Provision (benefit) for income taxes | 30,870 | (7,932 | ) | (2,186 | ) | (2,312 | ) | (12,139 | ) | (17,803 | ) | (947 | ) | (755 | ) | (44,074 | ) | (13,204 | ) | |||||||||||||||||||||||||||||||||||||
| $ | 54,335 | $ | (12,226 | ) | $ | (3,371 | ) | $ | (4,230 | ) | $ | (18,711 | ) | $ | (58,279 | ) | $ | (1,165 | ) | $ | (1,165 | ) | $ | (99,147 | ) | $ | (44,812 | ) | ||||||||||||||||||||||||||||
| Year ended December 31, 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Charges | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lease | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Before | Severance | Impairment | Transaction | cancellation | As | |||||||||||||||||||||||||||||||||||||||||||||||||||
| charges | and other | Litigation | charges | costs | charges | Total | reported | |||||||||||||||||||||||||||||||||||||||||||||||||
| Income (loss) from continuing operations: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating income (loss): | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Hospital division | $ | 571,448 | $ | (4,224 | ) | $ | (5,000 | ) | $ | - | $ | - | $ | - | $ | (9,224 | ) | $ | 562,224 | |||||||||||||||||||||||||||||||||||||
| Nursing center division | 144,069 | (2,811 | ) | - | - | - | - | (2,811 | ) | 141,258 | ||||||||||||||||||||||||||||||||||||||||||||||
| Rehabilitation division: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Skilled nursing rehabilitation services | 68,313 | (353 | ) | - | - | - | - | (353 | ) | 67,960 | ||||||||||||||||||||||||||||||||||||||||||||||
| Hospital rehabilitation services | 69,853 | (108 | ) | - | - | - | - | (108 | ) | 69,745 | ||||||||||||||||||||||||||||||||||||||||||||||
| 138,166 | (461 | ) | - | - | - | - | (461 | ) | 137,705 | |||||||||||||||||||||||||||||||||||||||||||||||
| Care management division | 13,858 | (150 | ) | - | - | - | - | (150 | ) | 13,708 | ||||||||||||||||||||||||||||||||||||||||||||||
| Corporate: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Overhead | (177,979 | ) | (1,084 | ) | - | - | - | - | (1,084 | ) | (179,063 | ) | ||||||||||||||||||||||||||||||||||||||||||||
| Insurance subsidiary | (2,127 | ) | - | - | - | - | - | - | (2,127 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
| (180,106 | ) | (1,084 | ) | - | - | - | - | (1,084 | ) | (181,190 | ) | |||||||||||||||||||||||||||||||||||||||||||||
| Impairment charges | (1,054 | ) | - | - | (107,899 | ) | - | - | (107,899 | ) | (108,953 | ) | ||||||||||||||||||||||||||||||||||||||||||||
| Transaction costs | - | - | - | - | (2,231 | ) | - | (2,231 | ) | (2,231 | ) | |||||||||||||||||||||||||||||||||||||||||||||
| Operating income | 686,381 | (8,730 | ) | (5,000 | ) | (107,899 | ) | (2,231 | ) | - | (123,860 | ) | 562,521 | |||||||||||||||||||||||||||||||||||||||||||
| Rent | (308,487 | ) | - | - | (1,691 | ) | (1,691 | ) | (310,178 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | (162,685 | ) | - | - | - | - | - | - | (162,685 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
| Interest, net | (106,878 | ) | - | - | - | - | - | - | (106,878 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
|
Income (loss) from continuing operations before income taxes |
108,331 | (8,730 | ) | (5,000 | ) | (107,899 | ) | (2,231 | ) | (1,691 | ) | (125,551 | ) | (17,220 | ) | |||||||||||||||||||||||||||||||||||||||||
| Provision for income taxes | 42,502 | (3,427 | ) | (1,962 | ) | (6,150 | ) | (592 | ) | (664 | ) | (12,795 | ) | 29,707 | ||||||||||||||||||||||||||||||||||||||||||
| $ | 65,829 | $ | (5,303 | ) | $ | (3,038 | ) | $ | (101,749 | ) | $ | (1,639 | ) | $ | (1,027 | ) | $ | (112,756 | ) | $ | (46,927 | ) | ||||||||||||||||||||||||||||||||||
| 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 40.1% and 16.0% for the three months ended December 31, 2013 and 2012, respectively, and 36.1% and 27.6% for the year ended December 31, 2013 and 2012, respectively. The change in the effective income tax rates between periods is attributable to the variation between periods of payments that are non-deductible in each respective period for income tax purposes. | ||||||||||||||||
| Three months ended | Year ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
|
Reconciliation of net cash flows provided by operating activities to free cash flows: |
||||||||||||||||
| Net cash flows provided by operating activities | $ | 10,195 | $ | 71,475 | $ | 199,412 | $ | 262,562 | ||||||||
| Less: | ||||||||||||||||
| Routine capital expenditures | (37,956 | ) | (38,371 | ) | (100,908 | ) | (115,175 | ) | ||||||||
| Development capital expenditures | (1,115 | ) | (12,147 | ) | (11,824 | ) | (50,322 | ) | ||||||||
| (39,071 | ) | (50,518 | ) | (112,732 | ) | (165,497 | ) | |||||||||
| Free cash flows including certain items | (28,876 | ) | 20,957 | 86,680 | 97,065 | |||||||||||
|
|
||||||||||||||||
|
Adjustments to remove certain payments (including payments made for discontinued operations) included in net cash flows provided by operating activities: |
||||||||||||||||
| One-time employee bonus | - | - | 26,345 | - | ||||||||||||
| Ventas lease termination fee | 20,000 | - | 20,000 | - | ||||||||||||
| Transaction costs | 1,877 | 932 | 10,427 | 3,404 | ||||||||||||
| Severance and retention | 617 | 1,715 | 5,406 | 3,719 | ||||||||||||
| Lease cancellation | - | 176 | - | 1,691 | ||||||||||||
| Financing costs capitalized as deferred financing | - | 2,940 | 6,189 | 2,940 | ||||||||||||
|
Benefit of reduced income tax payments resulting from certain payments |
(9,018 | ) | (922 | ) | (24,667 | ) | (3,244 | ) | ||||||||
| 13,476 | 4,841 | 43,700 | 8,510 | |||||||||||||
| Free cash flows excluding certain items | ($15,400 | ) | $ | 25,798 | $ | 130,380 | $ | 105,575 | ||||||||
| KINDRED HEALTHCARE, INC. | ||||||||||||||||||||||
| Reconciliation of Earnings Guidance for 2014 - Continuing Operations (a) | ||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||
| (In millions, except per share amounts) | ||||||||||||||||||||||
| As of February 20, 2014 | As of November 5, 2013 | |||||||||||||||||||||
| Low | High | Low | High | |||||||||||||||||||
| Operating income | $ | 725 | $ | 742 | $ | 726 | $ | 744 | ||||||||||||||
| Rent | 338 | 338 | 339 | 339 | ||||||||||||||||||
| Depreciation and amortization | 165 | 165 | 165 | 165 | ||||||||||||||||||
| Interest, net | 106 | 106 | 106 | 106 | ||||||||||||||||||
| Income from continuing operations before income taxes | 116 | 133 | 116 | 134 | ||||||||||||||||||
| Provision for income taxes | 45 | 52 | 46 | 53 | ||||||||||||||||||
| Income from continuing operations | 71 | 81 | 70 | 81 | ||||||||||||||||||
| Earnings attributable to noncontrolling interests | (13 | ) | (13 | ) | (12 | ) | (12 | ) | ||||||||||||||
| Income from continuing operations attributable to the Company | 58 | 68 | 58 | 69 | ||||||||||||||||||
| Allocation to participating unvested restricted stockholders | (2 | ) | (2 | ) | (2 | ) | (2 | ) | ||||||||||||||
| Available to common stockholders | $ | 56 | $ | 66 | $ | 56 | $ | 67 | ||||||||||||||
| Earnings per diluted share | $ | 1.05 | $ | 1.25 | $ | 1.05 | $ | 1.25 | ||||||||||||||
| Shares used in computing earnings per diluted share | 53.2 | 53.2 | 53.2 | 53.2 | ||||||||||||||||||
| (a) |
The earnings guidance excludes the effect of reimbursement changes, severance and retirement costs, litigation costs, transaction-related costs, any further acquisitions or divestitures (except as otherwise noted), any impairment charges, and any repurchases of common stock. |
|||||||||||||||||||||
