Kindred Healthcare, Inc. (“Kindred” or the “Company”) (NYSE:KND) today announced its operating results for the fourth quarter and year ended December 31, 2014.
All financial and statistical information included in this press release reflects the continuing operations of the Company’s businesses for all periods presented unless otherwise indicated.
Fourth Quarter Highlights:
- Consolidated revenues increased 6% and core operating income increased 9% from the same period last year primarily resulting from improved volumes and solid cost controls across the organization and growth from acquisitions
- Hospital division reported strong results with 3% same-store admissions growth and flat core operating costs per patient day
- RehabCare division continues to deliver strong results including core operating income growth of 7% and core operating margin improvement to 10.9% from 10.5% compared to the fourth quarter last year
- Care Management division (Kindred at Home) delivered 31% revenue growth compared to the same period last year and core operating margins increased to 9.1% from 3.3% in the fourth quarter of 2013
- Nursing Center division core operating income increased 15% primarily due to growth in revenues and its core operating margins improved to 14.3% due to improved rates and ongoing repositioning initiatives
- Core operating cash flows were $93 million compared to $24 million a year ago; core free cash flows were $67 million compared to a core free cash flow deficit of $15 million in the fourth quarter of 2013
- On February 2, 2015, Kindred completed its acquisition of Gentiva Health Services, Inc. (“Gentiva”) and on January 1, 2015 Kindred completed its acquisition of Centerre Healthcare Corporation (“Centerre”)
- Board of Directors declared regular quarterly cash dividend of $0.12 per share on its common stock payable on April 1, 2015
(1) See reconciliation of core and adjusted results to generally accepted accounting principles (“GAAP”) results for Kindred beginning on page 16 and for Gentiva on page 21.
Kindred Fourth Quarter Results
Consolidated revenues for the fourth quarter ended December 31, 2014 increased 6% to $1.26 billion compared to $1.19 billion during the same period of 2013, primarily due to improved hospital volumes, strong performance in the Care Management division’s operations and growth from acquisitions. Kindred reported a loss from continuing operations for the fourth quarter of 2014 of $9.9 million or $0.15 per diluted share compared to a loss of $52.8 million or $1.01 per diluted share in the fourth quarter of 2013. Fourth quarter 2014 operating results included pretax charges of $40.1 million ($26.8 million net of income taxes) or $0.41 per diluted share related to pre-closing financing for the Gentiva acquisition, transaction, consulting, and severance and retirement costs. The fourth quarter of 2013 included an asset impairment charge, changes in estimate related to pending litigation, severance and retirement costs, costs associated with the closing of a transitional care hospital, transaction costs and an increase in the estimated income tax benefit associated with pending litigation, which the pretax charges totaled $87.7 million ($62.5 million net of income taxes) or $1.19 per diluted share.
During the fourth quarter of 2014, the Company announced that it entered into an agreement with Ventas, Inc. (“Ventas”) (NYSE:VTR) to transfer the operations under the leases for nine non-strategic nursing centers. Kindred has reclassified the operations of these nine nursing centers to discontinued operations for all periods presented.
Kindred Fiscal Year Results
Consolidated revenues for the year ended December 31, 2014 increased 5% to $5.03 billion compared to $4.78 billion in the previous year. The Company reported a loss from continuing operations of $14.0 million or $0.24 per share in 2014 compared to a loss of $44.5 million or $0.85 per share in 2013. In addition to the charges discussed in the fourth quarter results above, operating results for the year ended December 31, 2014 included pretax charges related to restructuring, litigation, debt refinancing and a customer bankruptcy that in aggregate reduced operating results by $119.4 million ($77.2 million net of income taxes) or $1.32 per diluted share. Operating results for the year ended December 31, 2013 included pretax charges of $142.6 million ($98.9 million net of income taxes) or $1.89 per diluted share.
Gentiva Fourth Quarter and Fiscal Year Results
Gentiva consolidated revenues for the fourth quarter of 2014 increased 5% to $509 million compared to $486 million during the same period in 2013. Earnings before interest, income taxes, depreciation, amortization and certain charges (“Adjusted EBITDA”) for the fourth quarter of 2014 increased to $52 million from $22 million a year ago. Gentiva consolidated revenues for the year ended December 31, 2014 increased 15% to $1.99 billion compared to $1.73 billion during the same period in 2013. Adjusted EBITDA for the year ended December 31, 2014 increased to $194 million from $135 million a year ago. The annual audit of Gentiva’s 2014 results is currently in process. See page 21 for a reconciliation of Adjusted EBITDA results for Gentiva to GAAP results.
Management Commentary
Paul J. Diaz, Chief Executive Officer of the Company, commented, “After spending the past several years repositioning the Company through a difficult reimbursement environment, I am incredibly pleased with the strides we made in 2014 to strengthen our business and solidify Kindred’s position as a national leader in post-acute care. Looking forward, Kindred is well positioned to help shape the future of American healthcare and actively participate in the important shift to value-based payment systems and coordinated care. We began 2015 with the successful completion of the Gentiva and Centerre acquisitions, and advanced our Mission of making recovery and a return to home possible for more than a million patients per year. These acquisitions significantly improved the growth, margin and cash flow profile of the Company, and significantly expanded our capitalization and the liquidity of our stock.”
Mr. Diaz continued, “We are also very pleased with Gentiva’s strong results in the fourth quarter and for the full year of 2014, which reaffirms our confidence in the combination. We are entering the year with significant momentum and believe that Kindred is poised for continued long-term success as the nation’s largest operator of long-term acute care hospitals, inpatient rehabilitation facilities, contract rehabilitation, home health and hospice services and one of the leading sub-acute and skilled nursing providers. Today, we are pleased to announce our preliminary financial estimates for 2015 for the combined Company, which underscores our commitment to continued growth and enhanced profitability.”
Benjamin A. Breier, President of the Company, said, “Our patient-centered approach to care and the successful steps we have taken to expand each of our divisions are driving significant growth and value creation for our Company. Kindred’s momentum is further supported by our unique ability to place patients appropriately, transfer patients effectively, and deliver on our promise of quality and value. We are executing on our strategy as we grow the core business, further develop our Integrated Care Markets and care management capabilities, and strengthen our balance sheet.”
Stephen D. Farber, Executive Vice President, Chief Financial Officer, commented, “We are very excited that Kindred, Gentiva and Centerre each completed 2014 with momentum, and that our integration of these acquisitions is ahead of schedule. We remain highly confident that we will meet our synergy goal to realize $35 million of contribution to 2015 performance, and that our improved cash flow and growth profile will support a strong balance sheet and allow us to simultaneously deleverage while continuing to invest in our business and provide meaningful dividends to shareholders.”
2015 Preliminary Financial Estimates
Kindred today announced preliminary financial estimates for 2015 that includes Gentiva for eleven months and Centerre for the full year. These estimates are prior to completion of transaction accounting for the acquisitions of Gentiva and Centerre and are subject to adjustment when, as previously announced, the Company provides 2015 guidance in conjunction with first quarter 2015 results.
Kindred preliminarily estimates 2015 annual revenues of approximately $7.2 billion to $7.3 billion, core operating income (or earnings before interest, income taxes, depreciation, amortization and rent, “EBITDAR”) of approximately $1.00 billion to $1.05 billion (including $35 million of contribution from Gentiva synergies assumed to be realized in the year), and core earnings of $1.20 to $1.40 per diluted share. The earnings per share estimate is based upon an estimated weighted average annual diluted share count for 2015 of roughly 86 million to 87 million shares. Please note that, given the mid-quarter timing of the Gentiva transaction, the estimated weighted average share count for the first quarter of 2015 approximates 84 million diluted shares.
Beginning with 2015, in addition to GAAP earnings per diluted share and core earnings per diluted share, Kindred will report adjusted core earnings per diluted share, which is calculated by excluding non-cash expenses related to amortization of intangible assets, stock-based compensation and deferred financing costs, net of income tax benefit, from core income from continuing operations. We believe this additional performance measure may be useful for investors and analysts, especially for comparability purposes as more public companies adopt similar measures. For 2014, these non-cash expenses, on a core basis, totaled $44.4 million ($26.9 million net of income taxes) or $0.45 per diluted share, resulting in $1.51 of adjusted core earnings per diluted share. The 2015 preliminary financial estimates provided above include an estimated $73 million of such non-cash expenses ($44 million net of income taxes), or roughly $0.50 per diluted share, and on such basis Kindred preliminarily estimates $1.70 to $1.90 of adjusted core earnings per diluted share for 2015.
These preliminary financial estimates exclude transaction costs, pre-closing financing and integration costs associated with the acquisitions of Gentiva and Centerre, the effect of reimbursement changes, debt refinancing costs, severance, retirement, retention and restructuring costs, litigation costs, other transaction costs, any further acquisitions or divestitures, any impairment charges, any further issuances of common stock or any repurchases of common stock.
Quarterly Cash Dividend
The Company announced that its Board of Directors has approved the payment of the regular quarterly cash dividend of $0.12 per share of common stock to be paid on April 1, 2015 to shareholders of record as of the close of business on March 11, 2015.
Conference Call
As previously announced, investors and the general public may access a live webcast of the fourth quarter 2014 conference call through a link on the Company’s website at http://investors.kindredhealthcare.com. The conference call will be held on February 27 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 27 by dialing (719) 457-0820, access code: 5860683. The replay will be available through March 10.
Forward-Looking Statements
This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements include, but are not limited to, statements regarding the Company’s acquisitions of Gentiva and Centerre (including the benefits, results and effects of such acquisitions), all statements regarding the Company’s expected future financial position, results of operations, cash flows, dividends, financing plans, business strategy, budgets, capital expenditures, competitive positions, growth opportunities, plans and objectives of management, and statements containing the words such as “anticipate,” “approximate,” “believe,” “plan,” “estimate,” “expect,” “project,” “could,” “would,” “should,” “will,” “intend,” “may,” “potential,” “upside,” and other similar expressions, are forward-looking statements. Statements in this press release concerning the Company’s business outlook or future economic performance, anticipated profitability, revenues, expenses, dividends or other financial items, and product or services line growth, together with other statements that are not historical facts, are forward-looking statements that are estimates reflecting the best judgment of the Company based upon currently available information.
Such forward-looking statements are inherently uncertain, and stockholders and other potential investors must recognize that actual results may differ materially from the Company’s expectations as a result of a variety of factors, including, without limitation, those discussed below. Such forward-looking statements are based upon management’s current expectations and include known and unknown risks, uncertainties and other factors, many of which the Company is unable to predict or control, that may cause the Company’s actual results, performance or plans to differ materially from any future results, performance or plans expressed or implied by such forward-looking statements. These statements involve risks, uncertainties and other factors discussed below and detailed from time to time in the Company’s filings with the Securities and Exchange Commission.
Risks and uncertainties related to the Company’s acquisitions of Gentiva and Centerre include, but are not limited to, uncertainties as to whether the acquisitions will have the accretive effect on the Company’s earnings or cash flows that it expects, the inability to obtain, or delays in obtaining, cost savings and synergies from the acquisitions, costs and difficulties related to the integration of Gentiva’s and Centerre’s businesses and operations with the Company’s businesses and operations, unexpected costs, liabilities, charges or expenses resulting from the acquisitions, adverse effects on the Company’s stock price resulting from the acquisitions, the inability to retain key personnel, and potential adverse reactions, changes to business relationships or competitive responses resulting from the acquisitions.
In addition to the factors set forth above, other factors that may affect the Company’s plans, results or stock price are set forth in the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
Many of these factors are beyond the Company’s control. The Company cautions investors that any forward-looking statements made by the Company are not guarantees of future performance. The Company disclaims any obligation to update any such factors or to announce publicly the results of any revisions to any of the forward-looking statements to reflect future events or developments.
In addition to the results provided in accordance with GAAP, the Company has provided information in this release to compute certain non-GAAP measurements for the three months and year ended December 31, 2014 and 2013 before certain charges or on a core and adjusted core basis. The use of these non-GAAP measures 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 that are not representative of its ongoing operations due to the materiality and nature of the charges. The Company believes the presentation of adjusted core operating results, which excludes non-cash expenses related to amortization of intangible assets, stock-based compensation and deferred financing costs from core operating results, is a useful performance measure used by some investors, equity analysts and others to make informed investment decisions and for comparability to other companies that use similar measures. The Company’s earnings release also includes financial measures referred to as operating income, or EBITDAR, and earnings before interest, income taxes, depreciation and amortization (“EBITDA”). The Company’s management uses EBITDAR or EBITDA as meaningful measures of operational performance in addition to other measures. The Company uses EBITDAR or EBITDA to assess the relative performance of its operating divisions as well as the employees that operate these businesses. In addition, the Company believes these measurements are important because securities analysts and investors use these measurements to compare the Company’s performance to other companies in the healthcare industry. The Company believes that income (loss) from continuing operations is the most comparable GAAP measure. Readers of the Company’s financial information should consider income (loss) from continuing operations as an important measure of the Company’s financial performance because it provides the most complete measure of its performance. Operating results presented on a core and adjusted core basis and EBITDAR or EBITDA should be considered in addition to, not as a substitute for, or superior to, financial measures based upon GAAP as an indicator of operating performance. Reconciliations of the non-GAAP measurements to the GAAP measurements are included in this press release.
The results for Gentiva for the three months and year ended December 31, 2014 and 2013 enclosed in this release include the non-GAAP measurement Adjusted EBITDA. Adjusted EBITDA is defined as income before interest expense and other (net of interest income), income taxes, depreciation and amortization and excluding charges relating to (i) cost savings initiatives and acquisition and integration activities, (ii) impact of closed and consolidated locations, (iii) goodwill, intangibles and other long-lived asset impairments and (iv) impact of merger related expenses. Gentiva used Adjusted EBITDA to evaluate overall performance and compare current operating results with other companies in the healthcare industry. Adjusted EBITDA should not be considered in isolation or as a substitute for income from continuing operations, net income, operating income or cash flow statement data determined in accordance with GAAP. Because Adjusted EBITDA is not a measurement of financial performance under GAAP and is susceptible to varying calculations, it may not be comparable to similarly titled measures of other companies.
Also in this press release, the Company provides the financial measures of operating cash flows and free cash flows excluding certain items. The Company recognizes that operating cash flows and free cash flows excluding certain items are non-GAAP measurements and are not intended to replace the presentation of the Company’s cash flows in accordance with GAAP. The Company believes that these non-GAAP measurements provide 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 operating cash flows and 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. Operating cash flows and 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. Reconciliations of net cash flows provided by operating activities to operating cash flows and free cash flows excluding certain items are included in this press release.
About Kindred Healthcare
Kindred Healthcare, Inc., a top-85 private employer in the United States, is a FORTUNE 500 healthcare services company based in Louisville, Kentucky with annual revenues of approximately $7.2 billion2. At December 31, 2014, on a pro forma basis to include Gentiva and Centerre, Kindred through its subsidiaries had approximately 103,000 employees providing healthcare services in 2,872 locations in 47 states, including 97 transitional care hospitals, 16 inpatient rehabilitation hospitals, 90 nursing centers, 22 sub-acute units, 634 Kindred at Home hospice, home health and non-medical home care locations, 100 inpatient rehabilitation units (hospital-based) and a contract rehabilitation services business, RehabCare, which served 1,913 non-affiliated facilities. Ranked as one of Fortune magazine’s Most Admired Healthcare Companies for six years, 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.
2 Revenues were computed by combining the twelve months ended December 31, 2014 data for Kindred, Gentiva and Centerre.
KINDRED HEALTHCARE, INC. | ||||||||||||||||||||
Condensed Consolidated Statement of Operations | ||||||||||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||||||
Three months ended | Year ended | |||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||||||
Revenues | $ | 1,264,674 | $ | 1,194,890 | $ | 5,027,599 | $ | 4,775,235 | ||||||||||||
Salaries, wages and benefits | 616,277 | 594,340 | 2,442,879 | 2,364,138 | ||||||||||||||||
Supplies | 73,774 | 70,041 | 289,043 | 286,266 | ||||||||||||||||
Rent | 79,167 | 78,398 | 313,039 | 302,192 | ||||||||||||||||
Other operating expenses | 168,206 | 160,630 | 679,992 | 633,906 | ||||||||||||||||
General and administrative expenses | 259,702 | 225,210 | 977,823 | 906,620 | ||||||||||||||||
Other income | (278 | ) | (487 | ) | (872 | ) | (861 | ) | ||||||||||||
Impairment charges | - | 76,127 | - | 77,193 | ||||||||||||||||
Depreciation and amortization | 38,558 | 37,318 | 155,570 | 152,945 | ||||||||||||||||
Interest expense | 39,919 | 25,151 | 168,763 | 108,008 | ||||||||||||||||
Investment income | (1,021 | ) | (1,253 | ) | (3,996 | ) | (4,046 | ) | ||||||||||||
1,274,304 | 1,265,475 | 5,022,241 | 4,826,361 | |||||||||||||||||
Income (loss) from continuing operations before income taxes | (9,630 | ) | (70,585 | ) | 5,358 | (51,126 | ) | |||||||||||||
Provision (benefit) for income taxes | (4,827 | ) | (20,251 | ) | 462 | (10,493 | ) | |||||||||||||
Income (loss) from continuing operations | (4,803 | ) | (50,334 | ) | 4,896 | (40,633 | ) | |||||||||||||
Discontinued operations, net of income taxes: | ||||||||||||||||||||
Loss from operations | (28,743 | ) | (7,563 | ) | (53,630 | ) | (40,315 | ) | ||||||||||||
Loss on divestiture of operations | (9,061 | ) | (5,994 | ) | (12,698 | ) | (83,887 | ) | ||||||||||||
Loss from discontinued operations | (37,804 | ) | (13,557 | ) | (66,328 | ) | (124,202 | ) | ||||||||||||
Net loss | (42,607 | ) | (63,891 | ) | (61,432 | ) | (164,835 | ) | ||||||||||||
(Earnings) loss attributable to noncontrolling interests: | ||||||||||||||||||||
Continuing operations | (5,143 | ) | (2,466 | ) | (18,872 | ) | (3,890 | ) | ||||||||||||
Discontinued operations | 66 | 61 | 467 | 233 | ||||||||||||||||
(5,077 | ) | (2,405 | ) | (18,405 | ) | (3,657 | ) | |||||||||||||
Loss attributable to Kindred | $ | (47,684 | ) | $ | (66,296 | ) | $ | (79,837 | ) | $ | (168,492 | ) | ||||||||
Amounts attributable to Kindred stockholders: | ||||||||||||||||||||
Loss from continuing operations | $ | (9,946 | ) | $ | (52,800 | ) | $ | (13,976 | ) | $ | (44,523 | ) | ||||||||
Loss from discontinued operations | (37,738 | ) | (13,496 | ) | (65,861 | ) | (123,969 | ) | ||||||||||||
Net loss | $ | (47,684 | ) | $ | (66,296 | ) | $ | (79,837 | ) | $ | (168,492 | ) | ||||||||
Loss per common share: | ||||||||||||||||||||
Basic: | ||||||||||||||||||||
Loss from continuing operations | $ | (0.15 | ) | $ | (1.01 | ) | $ | (0.24 | ) | $ | (0.85 | ) | ||||||||
Discontinued operations: | ||||||||||||||||||||
Loss from operations | (0.44 | ) | (0.15 | ) | (0.91 | ) | (0.77 | ) | ||||||||||||
Loss on divestiture of operations | (0.14 | ) | (0.11 | ) | (0.21 | ) | (1.61 | ) | ||||||||||||
Loss from discontinued operations | (0.58 | ) | (0.26 | ) | (1.12 | ) | (2.38 | ) | ||||||||||||
Net loss | $ | (0.73 | ) | $ | (1.27 | ) | $ | (1.36 | ) | $ | (3.23 | ) | ||||||||
Diluted: | ||||||||||||||||||||
Loss from continuing operations | $ | (0.15 | ) | $ | (1.01 | ) | $ | (0.24 | ) | $ | (0.85 | ) | ||||||||
Discontinued operations: | ||||||||||||||||||||
Loss from operations | (0.44 | ) | (0.15 | ) | (0.91 | ) | (0.77 | ) | ||||||||||||
Loss on divestiture of operations | (0.14 | ) | (0.11 | ) | (0.21 | ) | (1.61 | ) | ||||||||||||
Loss from discontinued operations | (0.58 | ) | (0.26 | ) | (1.12 | ) | (2.38 | ) | ||||||||||||
Net loss | $ | (0.73 | ) | $ | (1.27 | ) | $ | (1.36 | ) | $ | (3.23 | ) | ||||||||
Shares used in computing loss per common share: | ||||||||||||||||||||
Basic | 65,135 | 52,344 | 58,634 | 52,249 | ||||||||||||||||
Diluted | 65,135 | 52,344 | 58,634 | 52,249 | ||||||||||||||||
Cash dividends declared and paid per common share | $ | 0.12 | $ | 0.12 | $ | 0.48 | $ | 0.24 | ||||||||||||
KINDRED HEALTHCARE, INC. | ||||||||||
Condensed Consolidated Balance Sheet | ||||||||||
(In thousands, except per share amounts) | ||||||||||
December 31, | December 31, | |||||||||
2014 | 2013 | |||||||||
ASSETS | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | $ | 164,188 | $ | 35,972 | ||||||
Cash - restricted | 2,293 | 3,713 | ||||||||
Insurance subsidiary investments | 99,951 | 96,295 | ||||||||
Accounts receivable less allowance for loss | 944,219 | 916,529 | ||||||||
Inventories | 25,702 | 25,780 | ||||||||
Deferred tax assets | 82,391 | 37,920 | ||||||||
Income taxes | 8,575 | 36,846 | ||||||||
Interest deposit on senior unsecured notes due 2020 and 2023 held in escrow | 23,438 | - | ||||||||
Other | 39,305 | 43,673 | ||||||||
1,390,062 | 1,196,728 | |||||||||
Property and equipment | 1,978,153 | 1,906,366 | ||||||||
Accumulated depreciation | (1,076,049 | ) | (979,791 | ) | ||||||
902,104 | 926,575 | |||||||||
Goodwill | 997,597 | 992,102 | ||||||||
Intangible assets less accumulated amortization | 400,700 | 423,303 | ||||||||
Assets held for sale | 3,475 | 20,978 | ||||||||
Insurance subsidiary investments | 166,045 | 149,094 | ||||||||
Deferred tax assets | 11,174 | 17,043 | ||||||||
Proceeds from senior unsecured notes due 2020 and 2023 held in escrow | 1,350,000 | - | ||||||||
Acquisition deposit | 195,000 | - | ||||||||
Other | 236,807 | 220,046 | ||||||||
Total assets | $ | 5,652,964 | $ | 3,945,869 | ||||||
LIABILITIES AND EQUITY | ||||||||||
Current liabilities: | ||||||||||
Accounts payable | $ | 175,725 | $ | 181,772 | ||||||
Salaries, wages and other compensation | 358,857 | 361,192 | ||||||||
Due to third party payors | 43,957 | 33,747 | ||||||||
Professional liability risks | 64,137 | 60,993 | ||||||||
Other accrued liabilities | 189,980 | 146,495 | ||||||||
Long-term debt due within one year | 24,607 | 8,222 | ||||||||
857,263 | 792,421 | |||||||||
Long-term debt - senior unsecured notes due 2020 and 2023 | 1,350,000 | - | ||||||||
Long-term debt - other | 1,502,531 | 1,579,391 | ||||||||
Professional liability risks | 243,614 | 246,230 | ||||||||
Deferred credits and other liabilities | 213,584 | 206,611 | ||||||||
Equity: | ||||||||||
Stockholders’ equity: | ||||||||||
Common stock, $0.25 par value; authorized 175,000 shares; issued 69,977 shares - December 31, 2014 and 54,165 shares - December 31, 2013 | 17,494 | 13,541 | ||||||||
Capital in excess of par value | 1,586,692 | 1,146,193 | ||||||||
Accumulated other comprehensive loss | (2,551 | ) | (252 | ) | ||||||
Accumulated deficit | (159,768 | ) | (76,825 | ) | ||||||
1,441,867 | 1,082,657 | |||||||||
Noncontrolling interests | 44,105 | 38,559 | ||||||||
Total equity | 1,485,972 | 1,121,216 | ||||||||
Total liabilities and equity | $ | 5,652,964 | $ | 3,945,869 | ||||||
KINDRED HEALTHCARE, INC. | ||||||||||||||||||||
Condensed Consolidated Statement of Cash Flows | ||||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Three months ended | Year ended | |||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||
Net loss | $ | (42,607 | ) | $ | (63,891 | ) | $ | (61,432 | ) | $ | (164,835 | ) | ||||||||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||||||||||||||
Depreciation and amortization | 39,145 | 39,644 | 160,950 | 182,389 | ||||||||||||||||
Amortization of stock-based compensation costs | 6,986 | 3,542 | 16,643 | 11,183 | ||||||||||||||||
Amortization of deferred financing costs | 2,077 | 2,376 | 23,288 | 11,905 | ||||||||||||||||
Payment of capitalized lender fees related to debt issuance | (3,527 | ) | - | (22,652 | ) | (6,189 | ) | |||||||||||||
Provision for doubtful accounts | 6,215 | 10,151 | 41,803 | 44,640 | ||||||||||||||||
Deferred income taxes | (24,341 | ) | (13,665 | ) | (35,615 | ) | (36,650 | ) | ||||||||||||
Impairment charges | - | 77,748 | 673 | 87,825 | ||||||||||||||||
Loss on divestiture of discontinued operations | 9,061 | 5,994 | 12,698 | 83,887 | ||||||||||||||||
Other | 47 | (1,151 | ) | 2,336 | 4,301 | |||||||||||||||
Change in operating assets and liabilities: | ||||||||||||||||||||
Accounts receivable | 28,125 | 25,526 | (74,378 | ) | 52,271 | |||||||||||||||
Inventories and other assets | (13,074 | ) | 4,195 | (25,960 | ) | 4,262 | ||||||||||||||
Accounts payable | 13,070 | 9,884 | (9,399 | ) | (22,095 | ) | ||||||||||||||
Income taxes | 12,959 | (11,763 | ) | 31,728 | (17,032 | ) | ||||||||||||||
Due to third party payors | (3,363 | ) | (18,387 | ) | 11,177 | (1,671 | ) | |||||||||||||
Other accrued liabilities | 50,376 | (60,008 | ) | 33,611 | (34,779 | ) | ||||||||||||||
Net cash provided by operating activities | 81,149 | 10,195 | 105,471 | 199,412 | ||||||||||||||||
Cash flows from investing activities: | ||||||||||||||||||||
Routine capital expenditures | (23,656 | ) | (37,956 | ) | (91,081 | ) | (100,908 | ) | ||||||||||||
Development capital expenditures | (2,564 | ) | (1,115 | ) | (5,257 | ) | (11,824 | ) | ||||||||||||
Acquisitions, net of cash acquired | - | (185,213 | ) | (24,136 | ) | (224,319 | ) | |||||||||||||
Acquisition deposit | (195,000 | ) | 14,675 | (195,000 | ) | - | ||||||||||||||
Sale of assets | 952 | 1,906 | 23,861 | 250,606 | ||||||||||||||||
Proceeds from senior unsecured notes offering held in escrow | (1,350,000 | ) | - | (1,350,000 | ) | - | ||||||||||||||
Interest in escrow for senior unsecured notes due 2020 and 2023 | (23,438 | ) | - | (23,438 | ) | - | ||||||||||||||
Purchase of insurance subsidiary investments | (7,930 | ) | (15,767 | ) | (105,324 | ) | (46,127 | ) | ||||||||||||
Sale of insurance subsidiary investments | 16,749 | 14,527 | 51,716 | 49,954 | ||||||||||||||||
Net change in insurance subsidiary cash and cash equivalents | (20,689 | ) | 217 | 33,683 | (44,077 | ) | ||||||||||||||
Change in other investments | 379 | (96 | ) | 1,406 | 122 | |||||||||||||||
Other | 1,216 | 518 | 679 | 376 | ||||||||||||||||
Net cash used in investing activities | (1,603,981 | ) | (208,304 | ) | (1,682,891 | ) | (126,197 | ) | ||||||||||||
Cash flows from financing activities: | ||||||||||||||||||||
Proceeds from borrowings under revolving credit | 83,000 | 575,500 | 1,551,515 | 1,675,800 | ||||||||||||||||
Repayment of borrowings under revolving credit | (83,000 | ) | (376,800 | ) | (1,807,615 | ) | (1,740,400 | ) | ||||||||||||
Proceeds from issuance of senior unsecured notes due 2022 | - | - | 500,000 | - | ||||||||||||||||
Proceeds from issuance of senior unsecured notes due 2020 and 2023 | 1,350,000 | - | 1,350,000 | - | ||||||||||||||||
Proceeds from issuance of term loan, net of discount | - | - | 997,500 | - | ||||||||||||||||
Proceeds from issuance of debt component of tangible equity units | 34,773 | - | 34,773 | - | ||||||||||||||||
Repayment of senior unsecured notes | - | - | (550,000 | ) | - | |||||||||||||||
Repayment of term loan | (2,500 | ) | (1,968 | ) | (788,563 | ) | (5,937 | ) | ||||||||||||
Repayment of other long-term debt | (58 | ) | (90 | ) | (273 | ) | (939 | ) | ||||||||||||
Payment of deferred financing costs | (279 | ) | (326 | ) | (3,431 | ) | (1,666 | ) | ||||||||||||
Equity offering, net of offering costs | 101,615 | - | 321,968 | - | ||||||||||||||||
Issuance of equity component of tangible equity units, net of issuance costs | 133,336 | - | 133,336 | - | ||||||||||||||||
Issuance of common stock in connection with employee benefit plans | 26 | 32 | 6,243 | 461 | ||||||||||||||||
Dividends paid | (7,754 | ) | (6,502 | ) | (28,594 | ) | (13,001 | ) | ||||||||||||
Distributions to noncontrolling interests | (4,088 | ) | (423 | ) | (13,692 | ) | (2,051 | ) | ||||||||||||
Other | 165 | 79 | 2,469 | 483 | ||||||||||||||||
Net cash provided by (used in) financing activities | 1,605,236 | 189,502 | 1,705,636 | (87,250 | ) | |||||||||||||||
Change in cash and cash equivalents | 82,404 | (8,607 | ) | 128,216 | (14,035 | ) | ||||||||||||||
Cash and cash equivalents at beginning of period | 81,784 | 44,579 | 35,972 | 50,007 | ||||||||||||||||
Cash and cash equivalents at end of period | $ | 164,188 | $ | 35,972 | $ | 164,188 | $ | 35,972 | ||||||||||||
KINDRED HEALTHCARE, INC. | ||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Consolidated Statement of Operations | ||||||||||||||||||||||||||||||||||||||||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||||||||||||||||||||||||||||||||||||
2013 Quarters | 2014 Quarters | |||||||||||||||||||||||||||||||||||||||||||||||||
First | Second | Third | Fourth | Year | First | Second | Third | Fourth | Year | |||||||||||||||||||||||||||||||||||||||||
Revenues | $ | 1,243,740 | $ | 1,175,915 | $ | 1,160,690 | $ | 1,194,890 | $ | 4,775,235 | $ | 1,272,610 | $ | 1,261,397 | $ | 1,228,918 | $ | 1,264,674 | $ | 5,027,599 | ||||||||||||||||||||||||||||||
Salaries, wages and benefits | 618,091 | 575,368 | 576,339 | 594,340 | 2,364,138 | 618,694 | 606,095 | 601,813 | 616,277 | 2,442,879 | ||||||||||||||||||||||||||||||||||||||||
Supplies | 74,277 | 71,441 | 70,507 | 70,041 | 286,266 | 72,965 | 71,585 | 70,719 | 73,774 | 289,043 | ||||||||||||||||||||||||||||||||||||||||
Rent | 74,259 | 75,040 | 74,495 | 78,398 | 302,192 | 78,530 | 77,699 | 77,643 | 79,167 | 313,039 | ||||||||||||||||||||||||||||||||||||||||
Other operating expenses | 157,309 | 158,416 | 157,551 | 160,630 | 633,906 | 169,530 | 172,674 | 169,582 | 168,206 | 679,992 | ||||||||||||||||||||||||||||||||||||||||
General and administrative expenses | 232,928 | 206,306 | 242,176 | 225,210 | 906,620 | 231,272 | 249,346 | 237,503 | 259,702 | 977,823 | ||||||||||||||||||||||||||||||||||||||||
Other (income) expense | (355 | ) | (120 | ) | 101 | (487 | ) | (861 | ) | (212 | ) | (122 | ) | (260 | ) | (278 | ) | (872 | ) | |||||||||||||||||||||||||||||||
Impairment charges | 187 | 438 | 441 | 76,127 | 77,193 | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||
Depreciation and amortization | 41,089 | 38,241 | 36,297 | 37,318 | 152,945 | 39,092 | 39,172 | 38,748 | 38,558 | 155,570 | ||||||||||||||||||||||||||||||||||||||||
Interest expense | 28,159 | 29,074 | 25,624 | 25,151 | 108,008 | 25,799 | 80,530 | 22,515 | 39,919 | 168,763 | ||||||||||||||||||||||||||||||||||||||||
Investment income | (85 | ) | (1,473 | ) | (1,235 | ) | (1,253 | ) | (4,046 | ) | (182 | ) | (2,449 | ) | (344 | ) | (1,021 | ) | (3,996 | ) | ||||||||||||||||||||||||||||||
1,225,859 | 1,152,731 | 1,182,296 | 1,265,475 | 4,826,361 | 1,235,488 | 1,294,530 | 1,217,919 | 1,274,304 | 5,022,241 | |||||||||||||||||||||||||||||||||||||||||
Income (loss) from continuing operations before income taxes | 17,881 | 23,184 | (21,606 | ) | (70,585 | ) | (51,126 | ) | 37,122 | (33,133 | ) | 10,999 | (9,630 | ) | 5,358 | |||||||||||||||||||||||||||||||||||
Provision (benefit) for income taxes | 6,702 | 9,305 | (6,249 | ) | (20,251 | ) | (10,493 | ) | 14,195 | (12,683 | ) | 3,777 | (4,827 | ) | 462 | |||||||||||||||||||||||||||||||||||
Income (loss) from continuing operations | 11,179 | 13,879 | (15,357 | ) | (50,334 | ) | (40,633 | ) | 22,927 | (20,450 | ) | 7,222 | (4,803 | ) | 4,896 | |||||||||||||||||||||||||||||||||||
Discontinued operations, net of income taxes: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Loss from operations | (5,681 | ) | (1,200 | ) | (25,871 | ) | (7,563 | ) | (40,315 | ) | (7,442 | ) | (8,768 | ) | (8,677 | ) | (28,743 | ) | (53,630 | ) | ||||||||||||||||||||||||||||||
Gain (loss) on divestiture of operations | (2,025 | ) | (10,852 | ) | (65,016 | ) | (5,994 | ) | (83,887 | ) | (3,006 | ) | (2,018 | ) | 1,387 | (9,061 | ) | (12,698 | ) | |||||||||||||||||||||||||||||||
Loss from discontinued operations | (7,706 | ) | (12,052 | ) | (90,887 | ) | (13,557 | ) | (124,202 | ) | (10,448 | ) | (10,786 | ) | (7,290 | ) | (37,804 | ) | (66,328 | ) | ||||||||||||||||||||||||||||||
Net income (loss) | 3,473 | 1,827 | (106,244 | ) | (63,891 | ) | (164,835 | ) | 12,479 | (31,236 | ) | (68 | ) | (42,607 | ) | (61,432 | ) | |||||||||||||||||||||||||||||||||
(Earnings) loss attributable to noncontrolling interests: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Continuing operations | (467 | ) | (116 | ) | (841 | ) | (2,466 | ) | (3,890 | ) | (4,529 | ) | (4,828 | ) | (4,372 | ) | (5,143 | ) | (18,872 | ) | ||||||||||||||||||||||||||||||
Discontinued operations | 51 | 34 | 87 | 61 | 233 | 70 | 253 | 78 | 66 | 467 | ||||||||||||||||||||||||||||||||||||||||
(416 | ) | (82 | ) | (754 | ) | (2,405 | ) | (3,657 | ) | (4,459 | ) | (4,575 | ) | (4,294 | ) | (5,077 | ) | (18,405 | ) | |||||||||||||||||||||||||||||||
Income (loss) attributable to Kindred | $ | 3,057 | $ | 1,745 | $ | (106,998 | ) | $ | (66,296 | ) | $ | (168,492 | ) | $ | 8,020 | $ | (35,811 | ) | $ | (4,362 | ) | $ | (47,684 | ) | $ | (79,837 | ) | |||||||||||||||||||||||
Amounts attributable to Kindred stockholders: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Income (loss) from continuing operations | $ | 10,712 | $ | 13,763 | $ | (16,198 | ) | $ | (52,800 | ) | $ | (44,523 | ) | $ | 18,398 | $ | (25,278 | ) | $ | 2,850 | $ | (9,946 | ) | $ | (13,976 | ) | ||||||||||||||||||||||||
Loss from discontinued operations | (7,655 | ) | (12,018 | ) | (90,800 | ) | (13,496 | ) | (123,969 | ) | (10,378 | ) | (10,533 | ) | (7,212 | ) | (37,738 | ) | (65,861 | ) | ||||||||||||||||||||||||||||||
Net income (loss) | $ | 3,057 | $ | 1,745 | $ | (106,998 | ) | $ | (66,296 | ) | $ | (168,492 | ) | $ | 8,020 | $ | (35,811 | ) | $ | (4,362 | ) | $ | (47,684 | ) | $ | (79,837 | ) | |||||||||||||||||||||||
Earnings (loss) per common share: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Basic: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Income (loss) from continuing operations | $ | 0.20 | $ | 0.25 | $ | (0.31 | ) | $ | (1.01 | ) | $ | (0.85 | ) | $ | 0.34 | $ | (0.47 | ) | $ | 0.04 | $ | (0.15 | ) | $ | (0.24 | ) | ||||||||||||||||||||||||
Discontinued operations: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Loss from operations | (0.10 | ) | (0.02 | ) | (0.49 | ) | (0.15 | ) | (0.77 | ) | (0.13 | ) | (0.16 | ) | (0.13 | ) | (0.44 | ) | (0.91 | ) | ||||||||||||||||||||||||||||||
Gain (loss) on divestiture of operations | (0.04 | ) | (0.20 | ) | (1.24 | ) | (0.11 | ) | (1.61 | ) | (0.06 | ) | (0.04 | ) | 0.02 | (0.14 | ) | (0.21 | ) | |||||||||||||||||||||||||||||||
Loss from discontinued operations | (0.14 | ) | (0.22 | ) | (1.73 | ) | (0.26 | ) | (2.38 | ) | (0.19 | ) | (0.20 | ) | (0.11 | ) | (0.58 | ) | (1.12 | ) | ||||||||||||||||||||||||||||||
Net income (loss) | $ | 0.06 | $ | 0.03 | $ | (2.04 | ) | $ | (1.27 | ) | $ | (3.23 | ) | $ | 0.15 | $ | (0.67 | ) | $ | (0.07 | ) | $ | (0.73 | ) | $ | (1.36 | ) | |||||||||||||||||||||||
Diluted: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Income (loss) from continuing operations | $ | 0.20 | $ | 0.25 | $ | (0.31 | ) | $ | (1.01 | ) | $ | (0.85 | ) | $ | 0.34 | $ | (0.47 | ) | $ | 0.04 | $ | (0.15 | ) | $ | (0.24 | ) | ||||||||||||||||||||||||
Discontinued operations: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Loss from operations | (0.10 | ) | (0.02 | ) | (0.49 | ) | (0.15 | ) | (0.77 | ) | (0.13 | ) | (0.16 | ) | (0.13 | ) | (0.44 | ) | (0.91 | ) | ||||||||||||||||||||||||||||||
Gain (loss) on divestiture of operations | (0.04 | ) | (0.20 | ) | (1.24 | ) | (0.11 | ) | (1.61 | ) | (0.06 | ) | (0.04 | ) | 0.02 | (0.14 | ) | (0.21 | ) | |||||||||||||||||||||||||||||||
Loss from discontinued operations | (0.14 | ) | (0.22 | ) | (1.73 | ) | (0.26 | ) | (2.38 | ) | (0.19 | ) | (0.20 | ) | (0.11 | ) | (0.58 | ) | (1.12 | ) | ||||||||||||||||||||||||||||||
Net income (loss) | $ | 0.06 | $ | 0.03 | $ | (2.04 | ) | $ | (1.27 | ) | $ | (3.23 | ) | $ | 0.15 | $ | (0.67 | ) | $ | (0.07 | ) | $ | (0.73 | ) | $ | (1.36 | ) | |||||||||||||||||||||||
Shares used in computing earnings (loss) per common share: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Basic | 52,062 | 52,265 | 52,323 | 52,344 | 52,249 | 52,641 | 53,714 | 62,863 | 65,135 | 58,634 | ||||||||||||||||||||||||||||||||||||||||
Diluted | 52,083 | 52,284 | 52,323 | 52,344 | 52,249 | 52,711 | 53,714 | 62,902 | 65,135 | 58,634 | ||||||||||||||||||||||||||||||||||||||||
KINDRED HEALTHCARE, INC. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Business Segment Data | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2013 Quarters | 2014 Quarters | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
First | Second | Third | Fourth | Year | First | Second | Third | Fourth | Year | ||||||||||||||||||||||||||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Hospital division | $ | 657,814 | $ | 606,604 | $ | 594,154 | $ | 606,988 | $ | 2,465,560 | $ | 646,458 | $ | 632,156 | $ | 609,452 | $ | 637,008 | $ | 2,525,074 | |||||||||||||||||||||||||||||||||||||
Nursing center division | 253,209 | 248,444 | 249,702 | 254,028 | 1,005,383 | 262,590 | 264,437 | 263,897 | 271,625 | 1,062,549 | |||||||||||||||||||||||||||||||||||||||||||||||
Rehabilitation division: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Skilled nursing rehabilitation services | 258,460 | 249,372 | 245,046 | 243,029 | 995,907 | 253,943 | 253,694 | 246,732 | 252,667 | 1,007,036 | |||||||||||||||||||||||||||||||||||||||||||||||
Hospital rehabilitation services | 74,523 | 69,777 | 68,296 | 74,017 | 286,613 | 73,964 | 75,324 | 74,808 | 75,099 | 299,195 | |||||||||||||||||||||||||||||||||||||||||||||||
332,983 | 319,149 | 313,342 | 317,046 | 1,282,520 | 327,907 | 329,018 | 321,540 | 327,766 | 1,306,231 | ||||||||||||||||||||||||||||||||||||||||||||||||
Care management division | 51,621 | 53,039 | 53,801 | 66,466 | 224,927 | 87,704 | 87,986 | 86,186 | 87,126 | 349,002 | |||||||||||||||||||||||||||||||||||||||||||||||
1,295,627 | 1,227,236 | 1,210,999 | 1,244,528 | 4,978,390 | 1,324,659 | 1,313,597 | 1,281,075 | 1,323,525 | 5,242,856 | ||||||||||||||||||||||||||||||||||||||||||||||||
Eliminations: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Skilled nursing rehabilitation services | (27,065 | ) | (27,097 | ) | (26,628 | ) | (26,640 | ) | (107,430 | ) | (28,154 | ) | (28,485 | ) | (29,209 | ) | (34,960 | ) | (120,808 | ) | |||||||||||||||||||||||||||||||||||||
Hospital rehabilitation services | (23,609 | ) | (23,223 | ) | (22,520 | ) | (22,123 | ) | (91,475 | ) | (23,233 | ) | (22,855 | ) | (22,172 | ) | (22,972 | ) | (91,232 | ) | |||||||||||||||||||||||||||||||||||||
Nursing centers | (1,213 | ) | (1,001 | ) | (1,161 | ) | (875 | ) | (4,250 | ) | (662 | ) | (860 | ) | (776 | ) | (919 | ) | (3,217 | ) | |||||||||||||||||||||||||||||||||||||
(51,887 | ) | (51,321 | ) | (50,309 | ) | (49,638 | ) | (203,155 | ) | (52,049 | ) | (52,200 | ) | (52,157 | ) | (58,851 | ) | (215,257 | ) | ||||||||||||||||||||||||||||||||||||||
$ | 1,243,740 | $ | 1,175,915 | $ | 1,160,690 | $ | 1,194,890 | $ | 4,775,235 | $ | 1,272,610 | $ | 1,261,397 | $ | 1,228,918 | $ | 1,264,674 | $ | 5,027,599 | ||||||||||||||||||||||||||||||||||||||
Income (loss) from continuing operations: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating income (loss): | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Hospital division | $ | 147,493 | (a) | $ | 129,366 | $ | 112,483 | (c) | $ | 126,788 | (i) | $ | 516,130 | $ | 145,395 | $ | 132,878 | (k) | $ | 121,744 | (o) | $ | 138,823 | (q) | $ | 538,840 | |||||||||||||||||||||||||||||||
Nursing center division | 27,168 | (a) | 33,944 | 29,978 | 33,766 | 124,856 | 37,572 | 35,409 | (l) | 35,437 | (o) | 38,310 | (q) | 146,728 | |||||||||||||||||||||||||||||||||||||||||||
Rehabilitation division: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Skilled nursing rehabilitation services | 12,949 | (a) | 21,348 | (7,493 | ) | (d) | 14,009 | (j) | 40,813 | 18,016 | 19,687 | (l) | 17,242 | (o) | 16,029 | 70,974 | |||||||||||||||||||||||||||||||||||||||||
Hospital rehabilitation services | 18,132 | (a) | 19,573 | 18,215 | (e) | 18,005 | (j) | 73,925 | 19,820 | 20,084 | (l) | 18,273 | (p) | 19,534 | 77,711 | ||||||||||||||||||||||||||||||||||||||||||
31,081 | 40,921 | 10,722 | 32,014 | 114,738 | 37,836 | 39,771 | 35,515 | 35,563 | 148,685 | ||||||||||||||||||||||||||||||||||||||||||||||||
Care management division | 2,786 | (a) | 3,961 | 1,085 | (f) | 2,131 | (j) | 9,963 | 4,697 | 7,065 | (l) | 6,789 | (o) | 6,988 | (q,r) | 25,539 | |||||||||||||||||||||||||||||||||||||||||
Corporate: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Overhead | (45,585 | ) | (a) | (43,196 | ) | (39,157 | ) | (g) | (48,557 | ) | (j) | (176,495 | ) | (44,050 | ) | (48,365 | ) | (l) | (45,173 | ) | (o) | (63,642 | ) | (q,s) | (201,230 | ) | |||||||||||||||||||||||||||||||
Insurance subsidiary | (509 | ) | (384 | ) | (482 | ) | (539 | ) | (1,914 | ) | (406 | ) | (443 | ) | (637 | ) | (359 | ) | (1,845 | ) | |||||||||||||||||||||||||||||||||||||
(46,094 | ) | (43,580 | ) | (39,639 | ) | (49,096 | ) | (178,409 | ) | (44,456 | ) | (48,808 | ) | (45,810 | ) | (64,001 | ) | (203,075 | ) | ||||||||||||||||||||||||||||||||||||||
Impairment charges | (187 | ) | (438 | ) | (441 | ) | (76,127 | ) | (77,193 | ) | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||
Transaction costs | (944 | ) | (108 | ) | (613 | ) | (447 | ) | (2,112 | ) | (683 | ) | (4,496 | ) | (4,114 | ) | (8,690 | ) | (17,983 | ) | |||||||||||||||||||||||||||||||||||||
Operating income (EBITDAR) | 161,303 | 164,066 | 113,575 | 69,029 | 507,973 | 180,361 | 161,819 | 149,561 | 146,993 | 638,734 | |||||||||||||||||||||||||||||||||||||||||||||||
Rent | (74,259 | ) | (75,040 | ) | (74,495 | ) | (78,398 | ) | (302,192 | ) | (78,530 | ) | (77,699 | ) | (m) | (77,643 | ) | (79,167 | ) | (313,039 | ) | ||||||||||||||||||||||||||||||||||||
EBITDA | 87,044 | 89,026 | 39,080 | (9,369 | ) | 205,781 | 101,831 | 84,120 | 71,918 | 67,826 | 325,695 | ||||||||||||||||||||||||||||||||||||||||||||||
Depreciation and amortization | (41,089 | ) | (38,241 | ) | (36,297 | ) | (37,318 | ) | (152,945 | ) | (39,092 | ) | (39,172 | ) | (38,748 | ) | (38,558 | ) | (155,570 | ) | |||||||||||||||||||||||||||||||||||||
Interest, net | (28,074 | ) | (27,601 | ) | (b) | (24,389 | ) | (h) | (23,898 | ) | (103,962 | ) | (25,617 | ) | (78,081 | ) | (n) | (22,171 | ) | (38,898 | ) | (t) | (164,767 | ) | |||||||||||||||||||||||||||||||||
Income (loss) from continuing operations before income taxes | 17,881 | 23,184 | (21,606 | ) | (70,585 | ) | (51,126 | ) | 37,122 | (33,133 | ) | 10,999 | (9,630 | ) | 5,358 | ||||||||||||||||||||||||||||||||||||||||||
Provision (benefit) for income taxes | 6,702 | 9,305 | (6,249 | ) | (20,251 | ) | (10,493 | ) | 14,195 | (12,683 | ) | 3,777 | (4,827 | ) | 462 | ||||||||||||||||||||||||||||||||||||||||||
$ | 11,179 | $ | 13,879 | $ | (15,357 | ) | $ | (50,334 | ) | $ | (40,633 | ) | $ | 22,927 | $ | (20,450 | ) | $ | 7,222 | $ | (4,803 | ) | $ | 4,896 |
__________ | ||
(a) | Includes one-time bonus costs of $19.6 million (hospital division - $7.8 million, nursing center division - $4.4 million, rehabilitation division - $6.3 million (skilled nursing rehabilitation services - $5.0 million and hospital rehabilitation services - $1.3 million), care management division - $0.8 million and corporate - $0.3 million). | |
(b) | Includes $1.4 million of charges associated with the modification of certain of the Company’s senior debt. | |
(c) | Includes costs of $5.5 million in connection with the closing of a transitional care (“TC”) hospital and a litigation charge of $0.7 million. | |
(d) | Includes $23.1 million of litigation charges. | |
(e) | Includes $0.3 million of severance and retirement costs. | |
(f) | Includes $0.6 million of severance and retirement costs and $0.5 million of costs associated with closing a home health location. | |
(g) | Includes $1.0 million of severance and retirement costs and $0.5 million of fees associated with the modification of certain of the Company’s senior debt. | |
(h) | Includes $0.1 million of charges associated with the modification of certain of the Company’s senior debt. | |
(i) | Includes costs of $0.5 million in connection with the closing of a TC hospital and a litigation charge of $7.0 million. | |
(j) | Includes severance and retirement costs of $3.7 million (rehabilitation division - $1.2 million (skilled nursing rehabilitation services - $0.1 million and hospital rehabilitation | |
services - $1.1 million), care management division - $0.1 million and corporate - $2.4 million). | ||
(k) | Includes litigation costs of $4.6 million. | |
(l) | Includes severance and other costs related to restructuring activities of $4.9 million (nursing center division - $3.2 million, rehabilitation division - $0.3 million (skilled nursing rehabilitation services - $0.2 million and hospital rehabilitation services - $0.1 million), care management division - $0.8 million and corporate - $0.6 million). | |
(m) | Includes lease cancellation charges of $0.3 million incurred in connection with restructuring activities. | |
(n) | Includes $56.6 million of charges associated with debt refinancing. | |
(o) | Includes severance costs of $1.8 million and other operating (income) expenses of ($0.1) million related to restructuring activities (hospital division - $0.6 million, nursing center division - $0.5 million, skilled nursing rehabilitation services - ($0.2) million, care management division - $0.4 million and corporate - $0.4 million). | |
(p) | Includes $1.9 million allowance for doubtful account related to a customer bankruptcy. | |
(q) | Includes severance and retirement costs of $11.7 million (hospital division - $0.3 million, nursing center division - $0.5 million, care management division - $0.7 million and corporate - $10.2 million). | |
(r) | Includes $0.2 million of costs associated with closing a home health location. | |
(s) | Includes $2.5 million of consulting fees related to new long-term acute care (“LTAC”) criteria rule. | |
(t) | Includes $17.0 million of Gentiva pre-closing financing charges. | |
KINDRED HEALTHCARE, INC. | ||||||||||||||||||||||||||||||
Condensed Business Segment Data | ||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||
2013 Quarters | 2014 Quarters | |||||||||||||||||||||||||||||
First | Second | Third | Fourth | Year | First | Second | Third | Fourth | Year | |||||||||||||||||||||
Hospital division data: | ||||||||||||||||||||||||||||||
End of period data: | ||||||||||||||||||||||||||||||
Number of hospitals: | ||||||||||||||||||||||||||||||
Transitional care | 97 | 97 | 97 | 97 | 97 | 97 | 97 | 97 | ||||||||||||||||||||||
Inpatient rehabilitation | 5 | 5 | 5 | 5 | 5 | 5 | 5 | 5 | ||||||||||||||||||||||
102 | 102 | 102 | 102 | 102 | 102 | 102 | 102 | |||||||||||||||||||||||
Number of licensed beds: | ||||||||||||||||||||||||||||||
Transitional care | 7,059 | 7,059 | 7,073 | 7,105 | 7,145 | 7,145 | 7,145 | 7,147 | ||||||||||||||||||||||
Inpatient rehabilitation | 215 | 215 | 215 | 215 | 215 | 215 | 215 | 215 | ||||||||||||||||||||||
7,274 | 7,274 | 7,288 | 7,320 | 7,360 | 7,360 | 7,360 | 7,362 | |||||||||||||||||||||||
Revenue mix %: | ||||||||||||||||||||||||||||||
Medicare | 62.5 | 60.7 | 59.1 | 59.3 | 60.5 | 60.2 | 58.9 | 57.6 | 57.5 | 58.6 | ||||||||||||||||||||
Medicaid | 5.4 | 5.9 | 6.9 | 6.2 | 6.1 | 6.5 | 6.6 | 6.7 | 5.9 | 6.4 | ||||||||||||||||||||
Medicare Advantage | 10.2 | 11.1 | 11.1 | 11.7 | 11.0 | 11.2 | 11.0 | 10.4 | 10.4 | 10.8 | ||||||||||||||||||||
Medicaid Managed | 1.9 | 1.9 | 2.0 | 1.9 | 1.9 | 2.3 | 2.9 | 3.7 | 4.4 | 3.3 | ||||||||||||||||||||
Commercial insurance and other | 20.0 | 20.4 | 20.9 | 20.9 | 20.5 | 19.8 | 20.6 | 21.6 | 21.8 | 20.9 | ||||||||||||||||||||
Admissions: | ||||||||||||||||||||||||||||||
Medicare | 10,274 | 9,432 | 9,010 | 9,255 | 37,971 | 9,858 | 9,410 | 9,221 | 9,268 | 37,757 | ||||||||||||||||||||
Medicaid | 685 | 744 | 788 | 712 | 2,929 | 835 | 914 | 831 | 762 | 3,342 | ||||||||||||||||||||
Medicare Advantage | 1,519 | 1,474 | 1,422 | 1,450 | 5,865 | 1,515 | 1,449 | 1,305 | 1,430 | 5,699 | ||||||||||||||||||||
Medicaid Managed | 209 | 208 | 225 | 252 | 894 | 317 | 381 | 511 | 573 | 1,782 | ||||||||||||||||||||
Commercial insurance and other | 1,951 | 1,869 | 1,874 | 1,818 | 7,512 | 2,107 | 2,055 | 1,873 | 1,893 | 7,928 | ||||||||||||||||||||
14,638 | 13,727 | 13,319 | 13,487 | 55,171 | 14,632 | 14,209 | 13,741 | 13,926 | 56,508 | |||||||||||||||||||||
Admissions mix %: | ||||||||||||||||||||||||||||||
Medicare | 70.2 | 68.7 | 67.6 | 68.6 | 68.8 | 67.4 | 66.2 | 67.1 | 66.5 | 66.8 | ||||||||||||||||||||
Medicaid | 4.7 | 5.4 | 5.9 | 5.3 | 5.3 | 5.7 | 6.4 | 6.1 | 5.5 | 5.9 | ||||||||||||||||||||
Medicare Advantage | 10.4 | 10.8 | 10.7 | 10.7 | 10.7 | 10.3 | 10.2 | 9.5 | 10.3 | 10.1 | ||||||||||||||||||||
Medicaid Managed | 1.4 | 1.5 | 1.7 | 1.9 | 1.6 | 2.2 | 2.7 | 3.7 | 4.1 | 3.2 | ||||||||||||||||||||
Commercial insurance and other | 13.3 | 13.6 | 14.1 | 13.5 | 13.6 | 14.4 | 14.5 | 13.6 | 13.6 | 14.0 | ||||||||||||||||||||
Patient days: | ||||||||||||||||||||||||||||||
Medicare | 252,195 | 234,490 | 223,639 | 226,662 | 936,986 | 239,759 | 230,122 | 222,704 | 229,475 | 922,060 | ||||||||||||||||||||
Medicaid | 28,765 | 30,425 | 31,569 | 29,799 | 120,558 | 32,909 | 32,821 | 30,786 | 30,669 | 127,185 | ||||||||||||||||||||
Medicare Advantage | 43,016 | 43,040 | 41,842 | 43,784 | 171,682 | 44,979 | 44,094 | 40,901 | 42,253 | 172,227 | ||||||||||||||||||||
Medicaid Managed | 8,808 | 8,342 | 8,264 | 8,238 | 33,652 | 10,733 | 13,247 | 16,595 | 20,023 | 60,598 | ||||||||||||||||||||
Commercial insurance and other | 63,227 | 57,091 | 59,575 | 57,334 | 237,227 | 62,858 | 61,892 | 60,187 | 62,899 | 247,836 | ||||||||||||||||||||
396,011 | 373,388 | 364,889 | 365,817 | 1,500,105 | 391,238 | 382,176 | 371,173 | 385,319 | 1,529,906 | |||||||||||||||||||||
Average length of stay: | ||||||||||||||||||||||||||||||
Medicare | 24.5 | 24.9 | 24.8 | 24.5 | 24.7 | 24.3 | 24.5 | 24.2 | 24.8 | 24.4 | ||||||||||||||||||||
Medicaid | 42.0 | 40.9 | 40.1 | 41.9 | 41.2 | 39.4 | 35.9 | 37.0 | 40.2 | 38.1 | ||||||||||||||||||||
Medicare Advantage | 28.3 | 29.2 | 29.4 | 30.2 | 29.3 | 29.7 | 30.4 | 31.3 | 29.5 | 30.2 | ||||||||||||||||||||
Medicaid Managed | 42.1 | 40.1 | 36.7 | 32.7 | 37.6 | 33.9 | 34.8 | 32.5 | 34.9 | 34.0 | ||||||||||||||||||||
Commercial insurance and other | 32.4 | 30.5 | 31.8 | 31.5 | 31.6 | 29.8 | 30.1 | 32.1 | 33.2 | 31.3 | ||||||||||||||||||||
Weighted average | 27.1 | 27.2 | 27.4 | 27.1 | 27.2 | 26.7 | 26.9 | 27.0 | 27.7 | 27.1 | ||||||||||||||||||||
KINDRED HEALTHCARE, INC. | ||||||||||||||||||||||||||||||||||||||||
Condensed Business Segment Data (Continued) | ||||||||||||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||||||||||||
2013 Quarters | 2014 Quarters | |||||||||||||||||||||||||||||||||||||||
First | Second | Third | Fourth | Year | First | Second | Third | Fourth | Year | |||||||||||||||||||||||||||||||
Hospital division data (continued): | ||||||||||||||||||||||||||||||||||||||||
Revenues per admission: | ||||||||||||||||||||||||||||||||||||||||
Medicare | $ | 40,051 | $ | 39,004 | $ | 38,993 | $ | 38,869 | $ | 39,252 | $ | 39,482 | $ | 39,559 | $ | 38,088 | $ | 39,517 | $ | 39,170 | ||||||||||||||||||||
Medicaid | 51,450 | 48,221 | 51,934 | 52,635 | 51,048 | 50,201 | 45,392 | 49,204 | 49,218 | 48,413 | ||||||||||||||||||||||||||||||
Medicare Advantage | 44,326 | 45,709 | 46,429 | 49,051 | 46,352 | 47,739 | 48,067 | 48,586 | 46,235 | 47,639 | ||||||||||||||||||||||||||||||
Medicaid Managed | 58,770 | 55,496 | 52,771 | 46,112 | 52,930 | 47,781 | 48,953 | 44,406 | 48,647 | 47,342 | ||||||||||||||||||||||||||||||
Commercial insurance and other | 67,389 | 66,306 | 66,170 | 69,876 | 67,417 | 60,679 | 63,315 | 70,078 | 73,570 | 66,661 | ||||||||||||||||||||||||||||||
Weighted average | 44,939 | 44,190 | 44,609 | 45,006 | 44,689 | 44,181 | 44,490 | 44,353 | 45,742 | 44,685 | ||||||||||||||||||||||||||||||
Revenues per patient day: | ||||||||||||||||||||||||||||||||||||||||
Medicare | $ | 1,632 | $ | 1,569 | $ | 1,571 | $ | 1,587 | $ | 1,591 | $ | 1,623 | $ | 1,618 | $ | 1,577 | $ | 1,596 | $ | 1,604 | ||||||||||||||||||||
Medicaid | 1,225 | 1,179 | 1,296 | 1,258 | 1,240 | 1,274 | 1,264 | 1,328 | 1,223 | 1,272 | ||||||||||||||||||||||||||||||
Medicare Advantage | 1,565 | 1,565 | 1,578 | 1,624 | 1,583 | 1,608 | 1,580 | 1,550 | 1,565 | 1,576 | ||||||||||||||||||||||||||||||
Medicaid Managed | 1,395 | 1,384 | 1,437 | 1,411 | 1,406 | 1,411 | 1,408 | 1,367 | 1,392 | 1,392 | ||||||||||||||||||||||||||||||
Commercial insurance and other | 2,079 | 2,171 | 2,081 | 2,216 | 2,135 | 2,034 | 2,102 | 2,181 | 2,214 | 2,132 | ||||||||||||||||||||||||||||||
Weighted average | 1,661 | 1,625 | 1,628 | 1,659 | 1,644 | 1,652 | 1,654 | 1,642 | 1,653 | 1,650 | ||||||||||||||||||||||||||||||
Medicare case mix index (discharged patients only) | 1.18 | 1.18 | 1.16 | 1.16 | 1.17 | 1.17 | 1.18 | 1.16 | 1.14 | 1.16 | ||||||||||||||||||||||||||||||
Average daily census | 4,400 | 4,103 | 3,966 | 3,976 | 4,110 | 4,347 | 4,200 | 4,034 | 4,188 | 4,192 | ||||||||||||||||||||||||||||||
Occupancy % | 68.3 | 63.5 | 61.1 | 61.4 | 63.5 | 67.4 | 64.9 | 62.3 | 64.7 | 64.8 | ||||||||||||||||||||||||||||||
Annualized employee turnover % | 22.1 | 21.7 | 21.4 | 21.3 | 20.7 | 20.8 | 21.5 | 21.6 | ||||||||||||||||||||||||||||||||
Nursing center division data: | ||||||||||||||||||||||||||||||||||||||||
End of period data: | ||||||||||||||||||||||||||||||||||||||||
Number of facilities: | ||||||||||||||||||||||||||||||||||||||||
Nursing centers: | ||||||||||||||||||||||||||||||||||||||||
Owned or leased | 85 | 85 | 85 | 85 | 85 | 85 | 86 | 86 | ||||||||||||||||||||||||||||||||
Managed | 4 | 4 | 4 | 4 | 4 | 4 | 4 | 4 | ||||||||||||||||||||||||||||||||
Assisted living facilities | 6 | 6 | 6 | 6 | 6 | 6 | 6 | 7 | ||||||||||||||||||||||||||||||||
95 | 95 | 95 | 95 | 95 | 95 | 96 | 97 | |||||||||||||||||||||||||||||||||
Number of licensed beds: | ||||||||||||||||||||||||||||||||||||||||
Nursing centers: | ||||||||||||||||||||||||||||||||||||||||
Owned or leased | 11,018 | 11,018 | 11,018 | 11,018 | 11,018 | 11,006 | 11,090 | 11,050 | ||||||||||||||||||||||||||||||||
Managed | 485 | 485 | 485 | 485 | 485 | 485 | 485 | 485 | ||||||||||||||||||||||||||||||||
Assisted living facilities | 341 | 341 | 341 | 341 | 341 | 341 | 341 | 375 | ||||||||||||||||||||||||||||||||
11,844 | 11,844 | 11,844 | 11,844 | 11,844 | 11,832 | 11,916 | 11,910 | |||||||||||||||||||||||||||||||||
Revenue mix %: | ||||||||||||||||||||||||||||||||||||||||
Medicare | 35.5 | 34.5 | 33.7 | 32.5 | 34.1 | 32.6 | 32.2 | 31.4 | 32.0 | 32.0 | ||||||||||||||||||||||||||||||
Medicaid | 35.1 | 35.7 | 38.1 | 39.3 | 37.0 | 39.9 | 39.4 | 39.7 | 39.7 | 39.6 | ||||||||||||||||||||||||||||||
Medicare Advantage | 8.3 | 8.4 | 7.3 | 7.9 | 8.0 | 8.7 | 8.1 | 8.7 | 7.9 | 8.4 | ||||||||||||||||||||||||||||||
Medicaid Managed | 3.5 | 3.6 | 3.7 | 3.6 | 3.6 | 3.2 | 3.7 | 4.7 | 4.7 | 4.1 | ||||||||||||||||||||||||||||||
Private and other | 17.6 | 17.8 | 17.2 | 16.7 | 17.3 | 15.6 | 16.6 | 15.5 | 15.7 | 15.9 | ||||||||||||||||||||||||||||||
KINDRED HEALTHCARE, INC. | ||||||||||||||||||||||||||||||||||||||||
Condensed Business Segment Data (Continued) | ||||||||||||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||||||||||||
2013 Quarters | 2014 Quarters | |||||||||||||||||||||||||||||||||||||||
First | Second | Third | Fourth | Year | First | Second | Third | Fourth | Year | |||||||||||||||||||||||||||||||
Nursing center division data (continued): | ||||||||||||||||||||||||||||||||||||||||
Patient days (a): | ||||||||||||||||||||||||||||||||||||||||
Medicare | 158,941 | 151,538 | 147,864 | 141,116 | 599,459 | 143,228 | 142,670 | 138,158 | 144,357 | 568,413 | ||||||||||||||||||||||||||||||
Medicaid | 466,432 | 466,044 | 474,196 | 481,742 | 1,888,414 | 477,823 | 469,800 | 468,832 | 467,796 | 1,884,251 | ||||||||||||||||||||||||||||||
Medicare Advantage | 48,919 | 48,512 | 42,531 | 46,155 | 186,117 | 51,407 | 48,248 | 52,411 | 48,366 | 200,432 | ||||||||||||||||||||||||||||||
Medicaid Managed | 50,692 | 51,038 | 52,420 | 51,893 | 206,043 | 48,422 | 54,396 | 69,156 | 69,243 | 241,217 | ||||||||||||||||||||||||||||||
Private and other | 150,499 | 150,228 | 150,454 | 146,719 | 597,900 | 140,460 | 143,658 | 136,858 | 142,214 | 563,190 | ||||||||||||||||||||||||||||||
875,483 | 867,360 | 867,465 | 867,625 | 3,477,933 | 861,340 | 858,772 | 865,415 | 871,976 | 3,457,503 | |||||||||||||||||||||||||||||||
Patient day mix % (a): | ||||||||||||||||||||||||||||||||||||||||
Medicare | 18.1 | 17.5 | 17.1 | 16.3 | 17.2 | 16.6 | 16.6 | 16.0 | 16.6 | 16.4 | ||||||||||||||||||||||||||||||
Medicaid | 53.3 | 53.7 | 54.7 | 55.5 | 54.3 | 55.5 | 54.7 | 54.2 | 53.7 | 54.5 | ||||||||||||||||||||||||||||||
Medicare Advantage | 5.6 | 5.6 | 4.9 | 5.3 | 5.4 | 6.0 | 5.6 | 6.0 | 5.5 | 5.8 | ||||||||||||||||||||||||||||||
Medicaid Managed | 5.8 | 5.9 | 6.0 | 6.0 | 5.9 | 5.6 | 6.4 | 8.0 | 7.9 | 7.0 | ||||||||||||||||||||||||||||||
Private and other | 17.2 | 17.3 | 17.3 | 16.9 | 17.2 | 16.3 | 16.7 | 15.8 | 16.3 | 16.3 | ||||||||||||||||||||||||||||||
Revenues per patient day (a): | ||||||||||||||||||||||||||||||||||||||||
Medicare Part A | $ | 530 | $ | 528 | $ | 528 | $ | 543 | $ | 532 | $ | 554 | $ | 553 | $ | 553 | $ | 560 | $ | 555 | ||||||||||||||||||||
Total Medicare (including Part B) | 566 | 566 | 569 | 586 | 571 | 597 | 598 | 599 | 602 | 599 | ||||||||||||||||||||||||||||||
Medicaid | 190 | 190 | 201 | 207 | 197 | 219 | 222 | 223 | 230 | 224 | ||||||||||||||||||||||||||||||
Medicaid (net of provider taxes) (b) | 168 | 168 | 179 | 185 | 175 | 197 | 200 | 205 | 211 | 203 | ||||||||||||||||||||||||||||||
Medicare Advantage | 430 | 433 | 431 | 437 | 433 | 445 | 444 | 440 | 445 | 443 | ||||||||||||||||||||||||||||||
Medicaid Managed | 174 | 174 | 174 | 177 | 175 | 176 | 179 | 179 | 184 | 180 | ||||||||||||||||||||||||||||||
Private and other | 296 | 294 | 286 | 288 | 291 | 292 | 306 | 299 | 300 | 299 | ||||||||||||||||||||||||||||||
Weighted average | 289 | 286 | 288 | 293 | 289 | 305 | 308 | 305 | 312 | 307 | ||||||||||||||||||||||||||||||
Average daily census (a) | 9,728 | 9,531 | 9,429 | 9,431 | 9,529 | 9,570 | 9,437 | 9,407 | 9,478 | 9,473 | ||||||||||||||||||||||||||||||
Admissions (a) | 10,202 | 9,579 | 9,273 | 9,352 | 38,406 | 9,789 | 9,621 | 9,746 | 9,616 | 38,772 | ||||||||||||||||||||||||||||||
Occupancy % (a) | 83.5 | 81.7 | 80.7 | 80.5 | 81.6 | 81.7 | 80.7 | 80.1 | 80.5 | 80.7 | ||||||||||||||||||||||||||||||
Medicare average length of stay (a) | 30.3 | 30.9 | 31.7 | 31.5 | 31.1 | 29.6 | 29.8 | 29.9 | 29.0 | 29.6 | ||||||||||||||||||||||||||||||
Annualized employee turnover % | 41.4 | 44.2 | 44.1 | 42.5 | 39.0 | 42.1 | 42.9 | 42.4 | ||||||||||||||||||||||||||||||||
Rehabilitation division data: | ||||||||||||||||||||||||||||||||||||||||
Skilled nursing rehabilitation services: | ||||||||||||||||||||||||||||||||||||||||
Revenue mix %: | ||||||||||||||||||||||||||||||||||||||||
Company-operated | 10 | 11 | 11 | 11 | 11 | 11 | 11 | 12 | 14 | 12 | ||||||||||||||||||||||||||||||
Non-affiliated | 90 | 89 | 89 | 89 | 89 | 89 | 89 | 88 | 86 | 88 | ||||||||||||||||||||||||||||||
Sites of service (at end of period) | 1,729 | 1,713 | 1,768 | 1,806 | 1,851 | 1,863 | 1,896 | 1,935 | ||||||||||||||||||||||||||||||||
Revenue per site | $ | 149,486 | $ | 145,576 | $ | 138,601 | $ | 134,568 | $ | 568,231 | $ | 137,193 | $ | 136,175 | $ | 130,133 | $ | 130,576 | $ | 534,077 | ||||||||||||||||||||
Therapist productivity % | 81.1 | 80.4 | 79.8 | 79.5 | 80.2 | 80.0 | 79.8 | 79.6 | 79.0 | 79.6 | ||||||||||||||||||||||||||||||
Hospital rehabilitation services: | ||||||||||||||||||||||||||||||||||||||||
Revenue mix %: | ||||||||||||||||||||||||||||||||||||||||
Company-operated | 32 | 33 | 33 | 30 | 32 | 31 | 30 | 30 | 31 | 30 | ||||||||||||||||||||||||||||||
Non-affiliated | 68 | 67 | 67 | 70 | 68 | 69 | 70 | 70 | 69 | 70 | ||||||||||||||||||||||||||||||
Sites of service (at end of period): | ||||||||||||||||||||||||||||||||||||||||
Inpatient rehabilitation units | 103 | 103 | 99 | 104 | 105 | 104 | 102 | 100 | ||||||||||||||||||||||||||||||||
LTAC hospitals | 123 | 123 | 122 | 121 | 121 | 118 | 117 | 117 | ||||||||||||||||||||||||||||||||
Sub-acute units | 8 | 8 | 7 | 10 | 10 | 9 | 10 | 10 | ||||||||||||||||||||||||||||||||
Outpatient units | 98 | 104 | 104 | 144 | 143 | 143 | 139 | 138 | ||||||||||||||||||||||||||||||||
332 | 338 | 332 | 379 | 379 | 374 | 368 | 365 | |||||||||||||||||||||||||||||||||
Revenue per site | $ | 224,466 | $ | 206,441 | $ | 205,711 | $ | 195,296 | $ | 831,914 | $ | 195,157 | $ | 201,400 | $ | 203,284 | $ | 205,749 | $ | 805,590 | ||||||||||||||||||||
Annualized employee turnover % | 10.4 | 13.2 | 14.0 | 13.7 | 12.5 | 14.7 | 15.7 | 15.7 | ||||||||||||||||||||||||||||||||
__________ | ||||||||||||||||||||||||||||||||||||||||
(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, | |||||||||||||||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||||||||||||||||||
Basic | Diluted | Basic | Diluted | Basic | Diluted | Basic | Diluted | |||||||||||||||||||||||||||||||||
Loss: | ||||||||||||||||||||||||||||||||||||||||
Amounts attributable to Kindred stockholders: | ||||||||||||||||||||||||||||||||||||||||
Loss from continuing operations: | ||||||||||||||||||||||||||||||||||||||||
As reported in Statement of Operations | $ | (9,946 | ) | $ | (9,946 | ) | $ | (52,800 | ) | $ | (52,800 | ) | $ | (13,976 | ) | $ | (13,976 | ) | $ | (44,523 | ) | $ | (44,523 | ) | ||||||||||||||||
Allocation to participating unvested restricted stockholders | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||
Available to common stockholders | $ | (9,946 | ) | $ | (9,946 | ) | $ | (52,800 | ) | $ | (52,800 | ) | $ | (13,976 | ) | $ | (13,976 | ) | $ | (44,523 | ) | $ | (44,523 | ) | ||||||||||||||||
Discontinued operations, net of income taxes: | ||||||||||||||||||||||||||||||||||||||||
Loss from operations: | ||||||||||||||||||||||||||||||||||||||||
As reported in Statement of Operations | $ | (28,677 | ) | $ | (28,677 | ) | $ | (7,502 | ) | $ | (7,502 | ) | $ | (53,163 | ) | $ | (53,163 | ) | $ | (40,082 | ) | $ | (40,082 | ) | ||||||||||||||||
Allocation to participating unvested restricted stockholders | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||
Available to common stockholders | $ | (28,677 | ) | $ | (28,677 | ) | $ | (7,502 | ) | $ | (7,502 | ) | $ | (53,163 | ) | $ | (53,163 | ) | $ | (40,082 | ) | $ | (40,082 | ) | ||||||||||||||||
Loss on divestiture of operations: | ||||||||||||||||||||||||||||||||||||||||
As reported in Statement of Operations | $ | (9,061 | ) | $ | (9,061 | ) | $ | (5,994 | ) | $ | (5,994 | ) | $ | (12,698 | ) | $ | (12,698 | ) | $ | (83,887 | ) | $ | (83,887 | ) | ||||||||||||||||
Allocation to participating unvested restricted stockholders | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||
Available to common stockholders | $ | (9,061 | ) | $ | (9,061 | ) | $ | (5,994 | ) | $ | (5,994 | ) | $ | (12,698 | ) | $ | (12,698 | ) | $ | (83,887 | ) | $ | (83,887 | ) | ||||||||||||||||
Loss from discontinued operations: | ||||||||||||||||||||||||||||||||||||||||
As reported in Statement of Operations | $ | (37,738 | ) | $ | (37,738 | ) | $ | (13,496 | ) | $ | (13,496 | ) | $ | (65,861 | ) | $ | (65,861 | ) | $ | (123,969 | ) | $ | (123,969 | ) | ||||||||||||||||
Allocation to participating unvested restricted stockholders | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||
Available to common stockholders | $ | (37,738 | ) | $ | (37,738 | ) | $ | (13,496 | ) | $ | (13,496 | ) | $ | (65,861 | ) | $ | (65,861 | ) | $ | (123,969 | ) | $ | (123,969 | ) | ||||||||||||||||
Net loss: | ||||||||||||||||||||||||||||||||||||||||
As reported in Statement of Operations | $ | (47,684 | ) | $ | (47,684 | ) | $ | (66,296 | ) | $ | (66,296 | ) | $ | (79,837 | ) | $ | (79,837 | ) | $ | (168,492 | ) | $ | (168,492 | ) | ||||||||||||||||
Allocation to participating unvested restricted stockholders | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||
Available to common stockholders | $ | (47,684 | ) | $ | (47,684 | ) | $ | (66,296 | ) | $ | (66,296 | ) | $ | (79,837 | ) | $ | (79,837 | ) | $ | (168,492 | ) | $ | (168,492 | ) | ||||||||||||||||
Shares used in the computation: | ||||||||||||||||||||||||||||||||||||||||
Weighted average shares outstanding - basic computation | 65,135 | 65,135 | 52,344 | 52,344 | 58,634 | 58,634 | 52,249 | 52,249 | ||||||||||||||||||||||||||||||||
Dilutive effect of employee stock options | - | - | - | - | ||||||||||||||||||||||||||||||||||||
Dilutive effect of performance-based restricted shares | - | - | - | - | ||||||||||||||||||||||||||||||||||||
Dilutive effect of tangible equity units | - | - | - | - | ||||||||||||||||||||||||||||||||||||
Adjusted weighted average shares outstanding - diluted computation | 65,135 | 52,344 | 58,634 | 52,249 | ||||||||||||||||||||||||||||||||||||
Loss per common share: | ||||||||||||||||||||||||||||||||||||||||
Loss from continuing operations | $ | (0.15 | ) | $ | (0.15 | ) | $ | (1.01 | ) | $ | (1.01 | ) | $ | (0.24 | ) | $ | (0.24 | ) | $ | (0.85 | ) | $ | (0.85 | ) | ||||||||||||||||
Discontinued operations: | ||||||||||||||||||||||||||||||||||||||||
Loss from operations | (0.44 | ) | (0.44 | ) | (0.15 | ) | (0.15 | ) | (0.91 | ) | (0.91 | ) | (0.77 | ) | (0.77 | ) | ||||||||||||||||||||||||
Loss on divestiture of operations | (0.14 | ) | (0.14 | ) | (0.11 | ) | (0.11 | ) | (0.21 | ) | (0.21 | ) | (1.61 | ) | (1.61 | ) | ||||||||||||||||||||||||
Loss from discontinued operations | (0.58 | ) | (0.58 | ) | (0.26 | ) | (0.26 | ) | (1.12 | ) | (1.12 | ) | (2.38 | ) | (2.38 | ) | ||||||||||||||||||||||||
Net loss | $ | (0.73 | ) | $ | (0.73 | ) | $ | (1.27 | ) | $ | (1.27 | ) | $ | (1.36 | ) | $ | (1.36 | ) | $ | (3.23 | ) | $ | (3.23 | ) |
__________ | ||
(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 Kindred 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, 2014 and 2013 before certain charges or on a core basis. The charges that were excluded from core operating results are denoted in the tables below. The diluted shares exclude the effect of the Gentiva financing. | ||||||||||||||||||||
The income tax benefit associated with the excluded charges was calculated using an effective income tax rate of 33.1% and 28.7% for the three months ended December 31, 2014 and 2013, respectively, and 35.4% and 30.7% for the year ended December 31, 2014 and 2013, respectively. The difference in the effective income tax rate for the three months and year ended December 31, 2014 compared to the same prior year periods is attributable to the composition of charges that are non-deductible for income tax purposes. | ||||||||||||||||||||
The use of these non-GAAP measures 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, 2014 and 2013 that are not representative of its ongoing operations due to the materiality. The Company’s core operating results also represent a key performance measure for the purpose of evaluating performance internally. The Company believes the presentation of adjusted core operating results, which excludes non-cash expenses related to amortization of intangible assets, stock-based compensation and deferred financing costs from core operating results, is a performance measure used by some investors, equity analysts and others to make informed investment decisions and for comparability to other companies that use similar measures. | ||||||||||||||||||||
Three months ended | Year ended | |||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||
Detail of charges: | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||
One-time bonus costs | $ | - | $ | - | $ | - | ($19,585 | ) | ||||||||||||
Severance, retirement and other restructuring costs | (11,745 | ) | (3,663 | ) | (18,381 | ) | (5,557 | ) | ||||||||||||
Customer bankruptcy | - | - | (1,857 | ) | - | |||||||||||||||
Facility closing costs | (200 | ) | (499 | ) | (200 | ) | (6,542 | ) | ||||||||||||
Litigation costs | - | (7,000 | ) | (4,600 | ) | (30,850 | ) | |||||||||||||
Debt refinancing charges (other operating expenses) | - | - | - | (459 | ) | |||||||||||||||
Consulting fees related to new LTAC criteria rule | (2,460 | ) | - | (2,460 | ) | - | ||||||||||||||
Impairment charges | - | (76,082 | ) | - | (76,082 | ) | ||||||||||||||
Transaction costs | (8,690 | ) | (447 | ) | (17,983 | ) | (2,112 | ) | ||||||||||||
Lease cancellation charges (rent expense) | - | - | (247 | ) | - | |||||||||||||||
Gentiva pre-closing financing charges (interest expense) | (17,041 | ) | - | (17,041 | ) | - | ||||||||||||||
Debt refinancing charges (interest expense) | - | - | (56,643 | ) | (1,461 | ) | ||||||||||||||
(40,136 | ) | (87,691 | ) | (119,412 | ) | (142,648 | ) | |||||||||||||
Income tax benefit | 13,298 | 25,165 | 42,234 | 43,792 | ||||||||||||||||
Charges net of income taxes | (26,838 | ) | (62,526 | ) | (77,178 | ) | (98,856 | ) | ||||||||||||
Allocation to participating unvested restricted stockholders | - | - | - | - | ||||||||||||||||
Available to common stockholders | ($26,838 | ) | ($62,526 | ) | ($77,178 | ) | ($98,856 | ) | ||||||||||||
Weighted average diluted shares outstanding | 65,135 | 52,344 | 58,634 | 52,249 | ||||||||||||||||
Diluted loss per common share related to charges | ($0.41 | ) | ($1.19 | ) | ($1.32 | ) | ($1.89 | ) | ||||||||||||
Reconciliation of operating income (EBITDAR) before charges: | ||||||||||||||||||||
Operating income (EBITDAR) before charges | $ | 170,088 | $ | 156,720 | $ | 684,215 | $ | 649,160 | ||||||||||||
Detail of charges excluded from core operating results: | ||||||||||||||||||||
One-time bonus costs | - | - | - | (19,585 | ) | |||||||||||||||
Severance, retirement and other restructuring costs | (11,745 | ) | (3,663 | ) | (18,381 | ) | (5,557 | ) | ||||||||||||
Customer bankruptcy | - | - | (1,857 | ) | - | |||||||||||||||
Facility closing costs | (200 | ) | (499 | ) | (200 | ) | (6,542 | ) | ||||||||||||
Litigation costs | - | (7,000 | ) | (4,600 | ) | (30,850 | ) | |||||||||||||
Debt refinancing charges (other operating expenses) | - | - | - | (459 | ) | |||||||||||||||
Consulting fees related to LTAC criteria | (2,460 | ) | - | (2,460 | ) | - | ||||||||||||||
Impairment charges | - | (76,082 | ) | - | (76,082 | ) | ||||||||||||||
Transaction costs | (8,690 | ) | (447 | ) | (17,983 | ) | (2,112 | ) | ||||||||||||
(23,095 | ) | (87,691 | ) | (45,481 | ) | (141,187 | ) | |||||||||||||
Reported operating income (EBITDAR) | $ | 146,993 | $ | 69,029 | $ | 638,734 | $ | 507,973 | ||||||||||||
Reconciliation of income from continuing operations before charges: | ||||||||||||||||||||
Amounts attributable to Kindred stockholders: | ||||||||||||||||||||
Income from continuing operations before charges | $ | 16,892 | $ | 9,726 | $ | 63,202 | $ | 54,333 | ||||||||||||
Charges net of income taxes | (26,838 | ) | (62,526 | ) | (77,178 | ) | (98,856 | ) | ||||||||||||
Reported loss from continuing operations | ($9,946 | ) | ($52,800 | ) | ($13,976 | ) | ($44,523 | ) | ||||||||||||
Reconciliation of diluted earnings per common share from continuing operations before charges: | ||||||||||||||||||||
Diluted earnings per common share before charges (a) | $ | 0.26 | $ | 0.18 | $ | 1.06 | $ | 1.00 | ||||||||||||
Charges net of income taxes | (0.41 | ) | (1.19 | ) | (1.32 | ) | (1.89 | ) | ||||||||||||
Other | - | - | 0.02 | 0.04 | ||||||||||||||||
Reported diluted loss per common share from continuing operations | ($0.15 | ) | ($1.01 | ) | ($0.24 | ) | ($0.85 | ) | ||||||||||||
Weighted average diluted shares used to compute earnings per common share from continuing operations before charges (b) | 63,163 | 52,461 | 58,210 | 52,315 | ||||||||||||||||
Reconciliation of effective income tax rate before charges: | ||||||||||||||||||||
Effective income tax rate before charges | 27.8 | % | 28.7 | % | 34.2 | % | 36.4 | % | ||||||||||||
Impact of charges on effective income tax rate | 22.3 | % | 0.0 | % | -25.6 | % | -15.9 | % | ||||||||||||
Reported effective income tax rate | 50.1 | % | 28.7 | % | 8.6 | % | 20.5 | % |
__________ | ||
(a) | For purposes of computing diluted earnings per common share before charges, income from continuing operations before charges was reduced by $0.4 million and $0.3 million for the three months ended December 31, 2014 and 2013, respectively, and $1.7 million for each of the years ended December 31, 2014 and 2013 for the allocation of income to participating unvested restricted stockholders. | |
(b) | Excludes share dilution from the fourth quarter 2014 common equity and tangible equity units offerings, both pre-closing financing activities of the Gentiva acquisition. | |
KINDRED HEALTHCARE, INC. | ||||
Reconciliation of Kindred Non-GAAP Measurements to GAAP Results (Continued) | ||||
(Unaudited) | ||||
(In thousands, except per share amounts and statistics) | ||||
A reconciliation of adjusted core earnings follows. | ||||
Year ended | ||||
December 31, | ||||
2014 | ||||
Reconciliation of adjusted core earnings: | ||||
Income from continuing operations before charges (as calculated and reconciled to GAAP measurement on previous page) | $ | 63,202 | ||
Add back non-cash expenses: | ||||
Amortization of intangible assets | 21,666 | |||
Amortization of stock-based compensation costs | 14,330 | |||
Amortization of deferred financing costs | 8,373 | |||
44,369 | ||||
Income tax benefit related to non-cash expenses | 17,459 | |||
Non-cash expenses, net of income taxes | 26,910 | |||
Adjusted core earnings | $ | 90,112 | ||
Reconciliation of diluted adjusted core earnings from continuing operations: | ||||
Diluted income per common share before charges (as calculated on previous page) | $ | 1.06 | ||
Non-cash expenses, net of income taxes | 0.45 | |||
Diluted adjusted core earnings per common share from continuing operations | $ | 1.51 | ||
Weighted average diluted shares used to compute adjusted core earnings per common share | 58,210 | |||
KINDRED HEALTHCARE, INC. | ||||||||||||||||||||||||||||||||||||||||
Reconciliation of Kindred Non-GAAP Measurements to GAAP Results (Continued) | ||||||||||||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||||||||||
Three months ended December 31, 2014 | ||||||||||||||||||||||||||||||||||||||||
Charges | ||||||||||||||||||||||||||||||||||||||||
Severance | LTAC | Gentiva | ||||||||||||||||||||||||||||||||||||||
Before | and other | criteria | pre-closing | Transaction | As | |||||||||||||||||||||||||||||||||||
charges | restructuring | consulting | financing | costs | Total | reported | ||||||||||||||||||||||||||||||||||
Income (loss) from continuing operations: | ||||||||||||||||||||||||||||||||||||||||
Operating income (loss): | ||||||||||||||||||||||||||||||||||||||||
Hospital division | $ | 139,141 | $ | (318 | ) | $ | - | $ | - | $ | - | $ | (318 | ) | $ | 138,823 | ||||||||||||||||||||||||
Nursing center division | 38,810 | (500 | ) | - | - | - | (500 | ) | 38,310 | |||||||||||||||||||||||||||||||
Rehabilitation division: | ||||||||||||||||||||||||||||||||||||||||
Skilled nursing rehabilitation services | 16,029 | - | - | - | - | - | 16,029 | |||||||||||||||||||||||||||||||||
Hospital rehabilitation services | 19,534 | - | - | - | - | - | 19,534 | |||||||||||||||||||||||||||||||||
35,563 | - | - | - | - | - | 35,563 | ||||||||||||||||||||||||||||||||||
Care management division | 7,922 | (934 | ) | - | - | - | (934 | ) | 6,988 | |||||||||||||||||||||||||||||||
Corporate: | ||||||||||||||||||||||||||||||||||||||||
Overhead | (50,989 | ) | (10,193 | ) | (2,460 | ) | - | - | (12,653 | ) | (63,642 | ) | ||||||||||||||||||||||||||||
Insurance subsidiary | (359 | ) | - | - | - | - | - | (359 | ) | |||||||||||||||||||||||||||||||
(51,348 | ) | (10,193 | ) | (2,460 | ) | - | - | (12,653 | ) | (64,001 | ) | |||||||||||||||||||||||||||||
Transaction costs | - | - | - | - | (8,690 | ) | (8,690 | ) | (8,690 | ) | ||||||||||||||||||||||||||||||
Operating income (EBITDAR) | 170,088 | (11,945 | ) | (2,460 | ) | - | (8,690 | ) | (23,095 | ) | 146,993 | |||||||||||||||||||||||||||||
Rent | (79,167 | ) | - | - | - | - | - | (79,167 | ) | |||||||||||||||||||||||||||||||
EBITDA | 90,921 | (11,945 | ) | (2,460 | ) | - | (8,690 | ) | (23,095 | ) | 67,826 | |||||||||||||||||||||||||||||
Depreciation and amortization | (38,558 | ) | - | - | - | - | - | (38,558 | ) | |||||||||||||||||||||||||||||||
Interest, net | (21,857 | ) | - | - | (17,041 | ) | - | (17,041 | ) | (38,898 | ) | |||||||||||||||||||||||||||||
Income (loss) from continuing operations before income taxes | 30,506 | (11,945 | ) | (2,460 | ) | (17,041 | ) | (8,690 | ) | (40,136 | ) | (9,630 | ) | |||||||||||||||||||||||||||
Provision (benefit) for income taxes | 8,471 | (4,251 | ) | (875 | ) | (5,975 | ) | (2,197 | ) | (13,298 | ) | (4,827 | ) | |||||||||||||||||||||||||||
$ | 22,035 | $ | (7,694 | ) | $ | (1,585 | ) | $ | (11,066 | ) | $ | (6,493 | ) | $ | (26,838 | ) | $ | (4,803 | ) | |||||||||||||||||||||
Three months ended December 31, 2013 | ||||||||||||||||||||||||||||||||||||||||
Charges | ||||||||||||||||||||||||||||||||||||||||
Severance | ||||||||||||||||||||||||||||||||||||||||
Before | and | Facility | Impairment | Transaction | As | |||||||||||||||||||||||||||||||||||
charges | retirement | closing | Litigation | charges | costs | Total | reported | |||||||||||||||||||||||||||||||||
Income (loss) from continuing operations: | ||||||||||||||||||||||||||||||||||||||||
Operating income (loss): | ||||||||||||||||||||||||||||||||||||||||
Hospital division | $ | 134,287 | $ | - | $ | (499 | ) | $ | (7,000 | ) | $ | - | $ | - | $ | (7,499 | ) | $ | 126,788 | |||||||||||||||||||||
Nursing center division | 33,766 | - | - | - | - | - | - | 33,766 | ||||||||||||||||||||||||||||||||
Rehabilitation division: | ||||||||||||||||||||||||||||||||||||||||
Skilled nursing rehabilitation services | 14,148 | (139 | ) | - | - | - | - | (139 | ) | 14,009 | ||||||||||||||||||||||||||||||
Hospital rehabilitation services | 19,093 | (1,088 | ) | - | - | - | - | (1,088 | ) | 18,005 | ||||||||||||||||||||||||||||||
33,241 | (1,227 | ) | - | - | - | - | (1,227 | ) | 32,014 | |||||||||||||||||||||||||||||||
Care management division | 2,206 | (75 | ) | - | - | - | - | (75 | ) | 2,131 | ||||||||||||||||||||||||||||||
Corporate: | ||||||||||||||||||||||||||||||||||||||||
Overhead | (46,196 | ) | (2,361 | ) | - | - | - | - | (2,361 | ) | (48,557 | ) | ||||||||||||||||||||||||||||
Insurance subsidiary | (539 | ) | - | - | - | - | - | - | (539 | ) | ||||||||||||||||||||||||||||||
(46,735 | ) | (2,361 | ) | - | - | - | - | (2,361 | ) | (49,096 | ) | |||||||||||||||||||||||||||||
Impairment charges | (45 | ) | - | - | - | (76,082 | ) | - | (76,082 | ) | (76,127 | ) | ||||||||||||||||||||||||||||
Transaction costs | - | - | - | - | - | (447 | ) | (447 | ) | (447 | ) | |||||||||||||||||||||||||||||
Operating income (EBITDAR) | 156,720 | (3,663 | ) | (499 | ) | (7,000 | ) | (76,082 | ) | (447 | ) | (87,691 | ) | 69,029 | ||||||||||||||||||||||||||
Rent | (78,398 | ) | - | - | - | - | - | - | (78,398 | ) | ||||||||||||||||||||||||||||||
EBITDA | 78,322 | (3,663 | ) | (499 | ) | (7,000 | ) | (76,082 | ) | (447 | ) | (87,691 | ) | (9,369 | ) | |||||||||||||||||||||||||
Depreciation and amortization | (37,318 | ) | - | - | - | - | - | - | (37,318 | ) | ||||||||||||||||||||||||||||||
Interest, net | (23,898 | ) | - | - | - | - | - | - | (23,898 | ) | ||||||||||||||||||||||||||||||
Income (loss) from continuing operations before income taxes | 17,106 | (3,663 | ) | (499 | ) | (7,000 | ) | (76,082 | ) | (447 | ) | (87,691 | ) | (70,585 | ) | |||||||||||||||||||||||||
Provision (benefit) for income taxes | 4,914 | (1,147 | ) | (156 | ) | (9,438 | ) | (14,163 | ) | (261 | ) | (25,165 | ) | (20,251 | ) | |||||||||||||||||||||||||
$ | 12,192 | $ | (2,516 | ) | $ | (343 | ) | $ | 2,438 | $ | (61,919 | ) | $ | (186 | ) | $ | (62,526 | ) | $ | (50,334 | ) | |||||||||||||||||||
KINDRED HEALTHCARE, INC. | ||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Kindred Non-GAAP Measurements to GAAP Results (Continued) | ||||||||||||||||||||||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended December 31, 2014 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Charges | ||||||||||||||||||||||||||||||||||||||||||||||||||
Severance | LTAC | Gentiva | ||||||||||||||||||||||||||||||||||||||||||||||||
Before | and other | Customer | criteria | pre-closing | Debt | Transaction | As | |||||||||||||||||||||||||||||||||||||||||||
charges | restructuring | bankruptcy | Litigation | consulting | financing | refinancing | costs | Total | reported | |||||||||||||||||||||||||||||||||||||||||
Income from continuing operations: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Operating income (loss): | ||||||||||||||||||||||||||||||||||||||||||||||||||
Hospital division | $ | 544,375 | $ | (935 | ) | $ | - | $ | (4,600 | ) | $ | - | $ | - | $ | - | $ | - | $ | (5,535 | ) | $ | 538,840 | |||||||||||||||||||||||||||
Nursing center division | 150,916 | (4,188 | ) | - | - | - | - | - | - | (4,188 | ) | 146,728 | ||||||||||||||||||||||||||||||||||||||
Rehabilitation division: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Skilled nursing rehabilitation services | 70,988 | (14 | ) | - | - | - | - | - | - | (14 | ) | 70,974 | ||||||||||||||||||||||||||||||||||||||
Hospital rehabilitation services | 79,738 | (170 | ) | (1,857 | ) | - | - | - | - | - | (2,027 | ) | 77,711 | |||||||||||||||||||||||||||||||||||||
150,726 | (184 | ) | (1,857 | ) | - | - | - | - | - | (2,041 | ) | 148,685 | ||||||||||||||||||||||||||||||||||||||
Care management division | 27,637 | (2,098 | ) | - | - | - | - | - | - | (2,098 | ) | 25,539 | ||||||||||||||||||||||||||||||||||||||
Corporate: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Overhead | (187,594 | ) | (11,176 | ) | - | - | (2,460 | ) | - | - | - | (13,636 | ) | (201,230 | ) | |||||||||||||||||||||||||||||||||||
Insurance subsidiary | (1,845 | ) | - | - | - | - | - | - | - | - | (1,845 | ) | ||||||||||||||||||||||||||||||||||||||
(189,439 | ) | (11,176 | ) | - | - | (2,460 | ) | - | - | - | (13,636 | ) | (203,075 | ) | ||||||||||||||||||||||||||||||||||||
Transaction costs | - | - | - | - | - | - | - | (17,983 | ) | (17,983 | ) | (17,983 | ) | |||||||||||||||||||||||||||||||||||||
Operating income (EBITDAR) | 684,215 | (18,581 | ) | (1,857 | ) | (4,600 | ) | (2,460 | ) | - | - | (17,983 | ) | (45,481 | ) | 638,734 | ||||||||||||||||||||||||||||||||||
Rent | (312,792 | ) | (247 | ) | - | - | - | - | - | - | (247 | ) | (313,039 | ) | ||||||||||||||||||||||||||||||||||||
EBITDA | 371,423 | (18,828 | ) | (1,857 | ) | (4,600 | ) | (2,460 | ) | - | - | (17,983 | ) | (45,728 | ) | 325,695 | ||||||||||||||||||||||||||||||||||
Depreciation and amortization | (155,570 | ) | - | - | - | - | - | - | - | - | (155,570 | ) | ||||||||||||||||||||||||||||||||||||||
Interest, net | (91,083 | ) | - | - | - | - | (17,041 | ) | (56,643 | ) | - | (73,684 | ) | (164,767 | ) | |||||||||||||||||||||||||||||||||||
Income from continuing operations before income taxes | 124,770 | (18,828 | ) | (1,857 | ) | (4,600 | ) | (2,460 | ) | (17,041 | ) | (56,643 | ) | (17,983 | ) | (119,412 | ) | 5,358 | ||||||||||||||||||||||||||||||||
Provision for income taxes | 42,696 | (7,156 | ) | (706 | ) | (1,748 | ) | (935 | ) | (6,381 | ) | (21,528 | ) | (3,780 | ) | (42,234 | ) | 462 | ||||||||||||||||||||||||||||||||
$ | 82,074 | $ | (11,672 | ) | $ | (1,151 | ) | $ | (2,852 | ) | $ | (1,525 | ) | $ | (10,660 | ) | $ | (35,115 | ) | $ | (14,203 | ) | $ | (77,178 | ) | $ | 4,896 | |||||||||||||||||||||||
Year ended December 31, 2013 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Charges | ||||||||||||||||||||||||||||||||||||||||||||||||||
Severance | ||||||||||||||||||||||||||||||||||||||||||||||||||
Before | One-time | and | Facility | Debt | Impairment | Transaction | As | |||||||||||||||||||||||||||||||||||||||||||
charges | bonus | retirement | closing | Litigation | refinancing | charges | costs | Total | reported | |||||||||||||||||||||||||||||||||||||||||
Income (loss) from continuing operations: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Operating income (loss): | ||||||||||||||||||||||||||||||||||||||||||||||||||
Hospital division | $ | 537,619 | $ | (7,763 | ) | $ | - | $ | (6,026 | ) | $ | (7,700 | ) | $ | - | $ | - | $ | - | $ | (21,489 | ) | $ | 516,130 | ||||||||||||||||||||||||||
Nursing center division | 129,287 | (4,367 | ) | - | (64 | ) | - | - | - | - | (4,431 | ) | 124,856 | |||||||||||||||||||||||||||||||||||||
Rehabilitation division: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Skilled nursing rehabilitation services | 69,154 | (5,052 | ) | (139 | ) | - | (23,150 | ) | - | - | - | (28,341 | ) | 40,813 | ||||||||||||||||||||||||||||||||||||
Hospital rehabilitation services | 76,556 | (1,255 | ) | (1,376 | ) | - | - | - | - | - | (2,631 | ) | 73,925 | |||||||||||||||||||||||||||||||||||||
145,710 | (6,307 | ) | (1,515 | ) | - | (23,150 | ) | - | - | - | (30,972 | ) | 114,738 | |||||||||||||||||||||||||||||||||||||
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 (EBITDAR) | 649,160 | (19,585 | ) | (5,557 | ) | (6,542 | ) | (30,850 | ) | (459 | ) | (76,082 | ) | (2,112 | ) | (141,187 | ) | 507,973 | ||||||||||||||||||||||||||||||||
Rent | (302,192 | ) | - | - | - | - | - | - | - | (302,192 | ) | |||||||||||||||||||||||||||||||||||||||
EBITDA | 346,968 | (19,585 | ) | (5,557 | ) | (6,542 | ) | (30,850 | ) | (459 | ) | (76,082 | ) | (2,112 | ) | (141,187 | ) | 205,781 | ||||||||||||||||||||||||||||||||
Depreciation and amortization | (152,945 | ) | - | - | - | - | - | - | - | - | (152,945 | ) | ||||||||||||||||||||||||||||||||||||||
Interest, net | (102,501 | ) | - | - | - | - | (1,461 | ) | - | - | (1,461 | ) | (103,962 | ) | ||||||||||||||||||||||||||||||||||||
Income (loss) from continuing operations before income taxes | 91,522 | (19,585 | ) | (5,557 | ) | (6,542 | ) | (30,850 | ) | (1,920 | ) | (76,082 | ) | (2,112 | ) | (142,648 | ) | (51,126 | ) | |||||||||||||||||||||||||||||||
Provision (benefit) for income taxes | 33,299 | (7,696 | ) | (2,184 | ) | (2,310 | ) | (12,123 | ) | (754 | ) | (17,779 | ) | (946 | ) | (43,792 | ) | (10,493 | ) | |||||||||||||||||||||||||||||||
$ | 58,223 | $ | (11,889 | ) | $ | (3,373 | ) | $ | (4,232 | ) | $ | (18,727 | ) | $ | (1,166 | ) | $ | (58,303 | ) | $ | (1,166 | ) | $ | (98,856 | ) | $ | (40,633 | ) | ||||||||||||||||||||||
KINDRED HEALTHCARE, INC. | ||||||||||||||||||||
Reconciliation of Kindred Non-GAAP Measurements to GAAP Results (Continued) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
(In thousands) | ||||||||||||||||||||
The Company recognizes that operating cash flows and free cash flows excluding certain items are non-GAAP measurements and are not intended to replace the presentation of the Company’s cash flows in accordance with GAAP. The Company believes that these non-GAAP measurements provide 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 operating cash flows and 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 26.8% and 40.1% for the three months ended December 31, 2014 and 2013, respectively, and 29.8% and 36.1% for the year ended December 31, 2014 and 2013, respectively. The difference in the effective income tax rate for the three months and year ended December 31, 2014 compared to the same prior year periods is attributable to the composition of excludable payments that are non-deductible for income tax purposes. | ||||||||||||||||||||
Three months ended | Year ended | |||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||||||
Reconciliation of net cash flows provided by operating activities to free cash flows: | ||||||||||||||||||||
Net cash flows provided by operating activities | $ | 81,149 | $ | 10,195 | $ | 105,471 | $ | 199,412 | ||||||||||||
Adjustments to remove certain payments (including payments made for discontinued operations) included in net cash flows provided by operating activities: | ||||||||||||||||||||
Litigation | - | - | 25,850 | - | ||||||||||||||||
One-time employee bonus | - | - | - | 26,345 | ||||||||||||||||
Ventas lease maintenance payment | 2,500 | - | 2,500 | - | ||||||||||||||||
Ventas lease cancellation fee | - | 20,000 | - | 20,000 | ||||||||||||||||
Capitalized lender fees related to debt refinancing | 3,527 | - | 22,652 | 6,189 | ||||||||||||||||
Other debt refinancing costs (expensed) | - | - | 40,373 | - | ||||||||||||||||
Severance, retirement and retention | 1,217 | 617 | 7,866 | 5,406 | ||||||||||||||||
Transaction costs | 9,299 | 1,877 | 18,040 | 10,427 | ||||||||||||||||
16,543 | 22,494 | 117,281 | 68,367 | |||||||||||||||||
Benefit of reduced income tax payments resulting from certain payments | (4,435 | ) | (9,018 | ) | (34,912 | ) | (24,667 | ) | ||||||||||||
12,108 | 13,476 | 82,369 | 43,700 | |||||||||||||||||
Net cash flows provided by operating activities excluding certain items (core operating cash flows) | 93,257 | 23,671 | 187,840 | 243,112 | ||||||||||||||||
Less: | ||||||||||||||||||||
Routine capital expenditures | (23,656 | ) | (37,956 | ) | (91,081 | ) | (100,908 | ) | ||||||||||||
Development capital expenditures | (2,564 | ) | (1,115 | ) | (5,257 | ) | (11,824 | ) | ||||||||||||
(26,220 | ) | (39,071 | ) | (96,338 | ) | (112,732 | ) | |||||||||||||
Free cash flows excluding certain items (core free cash flows) | $ | 67,037 | ($15,400 | ) | $ | 91,502 | $ | 130,380 | ||||||||||||
KINDRED HEALTHCARE, INC. | ||||||||||||||||||||
Reconciliation of Gentiva Non-GAAP Measurements to GAAP Results | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
(In thousands) | ||||||||||||||||||||
The results for Gentiva for the three months and year ended December 31, 2014 and 2013 include the non-GAAP measurement Adjusted EBITDA. Gentiva used Adjusted EBITDA to evaluate overall performance and compare current operating results with other companies in the healthcare industry. Adjusted EBITDA should not be considered in isolation or as a substitute for income from continuing operations, net income, operating income or cash flow statement data determined in accordance with GAAP. Because Adjusted EBITDA is not a measurement of financial performance under GAAP and is susceptible to varying calculations, it may not be comparable to similarly titled measures of other companies. | ||||||||||||||||||||
A reconciliation of Adjusted EBITDA to Net income (loss) attributable to Gentiva follows: | ||||||||||||||||||||
Three months ended | Year ended | |||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||
2014 | 2013 (Restated) | 2014 | 2013 (Restated) | |||||||||||||||||
Adjusted EBITDA | $ | 52,269 | $ | 21,571 | $ | 194,045 | $ | 134,962 | ||||||||||||
Cost savings initiatives and acquisition and integration activities | (1,112 | ) | (24,955 | ) | (11,591 | ) | (27,539 | ) | ||||||||||||
Impact of closed and consolidated locations | (354 | ) | (4,565 | ) | (3,389 | ) | (4,565 | ) | ||||||||||||
Goodwill, intangibles and other long-lived asset impairments | - | (401,708 | ) | - | (612,380 | ) | ||||||||||||||
Impact of merger related expenses | (9,393 | ) | - | (11,696 | ) | - | ||||||||||||||
EBITDA | 41,410 | (409,657 | ) | 167,369 | (509,522 | ) | ||||||||||||||
Depreciation and amortization | (6,277 | ) | (10,080 | ) | (27,484 | ) | (24,621 | ) | ||||||||||||
Interest expense and other, net | (24,637 | ) | (43,601 | ) | (98,543 | ) | (110,384 | ) | ||||||||||||
Income (loss) before income taxes and equity in net loss of CareCentrix | 10,496 | (463,338 | ) | 41,342 | (644,527 | ) | ||||||||||||||
Income tax (expense) benefit | (4,795 | ) | 42,780 | (17,294 | ) | 39,953 | ||||||||||||||
Equity in net loss of CareCentrix | - | - | (490 | ) | - | |||||||||||||||
Net income (loss) | 5,701 | (420,558 | ) | 23,558 | (604,574 | ) | ||||||||||||||
Less: Net income attributable to noncontrolling interests | (66 | ) | (62 | ) | (236 | ) | (487 | ) | ||||||||||||
Net income (loss) attributable to Gentiva | $ | 5,635 | ($420,620 | ) | $ | 23,322 | ($605,061 | ) | ||||||||||||
Contacts:
Stephen Farber, 502-596-2525
Executive
Vice President, Chief Financial Officer