Kindred Healthcare, Inc. (“Kindred” or the “Company”) (NYSE:KND) today announced its operating results for the fourth quarter ended December 31, 2016.
Benjamin A. Breier, President and Chief Executive Officer of the Company, commented, “We are pleased to report fourth quarter and full year 2016 operating results in line with our expectations. We made significant progress growing our home health, hospice and inpatient rehabilitation businesses, and stabilized our nursing center and RehabCare volumes. We are further encouraged by the performance of our Hospital Division in its first full quarter under long-term acute care (“LTAC”) patient criteria. Our solid volume and cash flow performance, coupled with enterprise-wide cost realignment initiatives, position us to continue building on our success as the post-acute provider of choice among patients, families, healthcare systems and payors.”
Mr. Breier continued, “We continue to advance our strategic initiative to divest our skilled nursing center business, and are pleased with the level of interest in the portfolio. We hope to complete this accretive transaction by year end, and use the anticipated net cash proceeds of $100 million to $300 million to repay debt. Similar to our strategic move into the home health, hospice and community care space, our exit from the nursing center business will contribute to the ongoing transformation of Kindred’s growth, cash flow and earnings profile.”
Mr. Breier added, “We were especially pleased with the volume growth and stable revenue in our Hospital Division in its first full quarter under LTAC patient criteria, both of which were better than we expected. Despite the roughly $30 million revenue impact in the quarter from LTAC patient criteria, we maintained revenues essentially flat year-over-year and grew volumes 2.5% on a same-hospital basis. This solid performance on the topline did not translate directly into EBITDAR growth due in part to increases in labor costs. Nevertheless, our early performance gives us confidence in our multi-pronged LTAC criteria mitigation strategy, and our ability to mitigate at least half of the run-rate impact of criteria by the end of 2017.”
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(1) | Results reflect after-tax costs of $27 million or $0.31 per diluted share related primarily to restructuring costs, a deferred tax valuation allowance and impairment charges. |
(2) | Results reflect pre-tax costs of $26 million related primarily to restructuring costs and impairment charges. |
(3) | See reconciliation of generally accepted accounting principles (“GAAP”) results to non-GAAP results beginning on page 15. As used herein, “EBITDAR” means earnings before interest, income taxes, depreciation, amortization and rent. |
Mr. Breier continued, “Since September 1, 2016, all of the Company’s ongoing LTAC hospitals are under the new patient criteria model. With one full quarter under this new model now completed, we remain confident that we are successfully managing this transition. For the fourth quarter of 2016, approximately 89% of Kindred’s ongoing Hospital Division revenues came from compliant patients, which includes all patients except Medicare site-neutral patients, up from approximately 87% in the month of September. The remaining approximately 11% of revenues were from Medicare site-neutral patients.”
Mr. Breier said, “We are proud of our success to-date in implementing our strategic vision to create innovative post-acute solutions and deliver effective care coordination across the entire patient episode within a value-based healthcare system. Our strategy to pursue innovative solutions was recently confirmed when Kindred was named to Fortune magazine’s list of the World’s Most Admired Companies for the eighth time. Kindred ranked third among Health Care: Medical Facilities companies for innovation, recognizing Kindred’s network management and post-acute benefits management capabilities.”
Mr. Breier concluded, “We believe that a full complement of interrelated solutions is the best way to deliver a positive patient experience. In response to the evolving environment, one of Kindred’s solutions includes building strong relationships with other healthcare partners and providers to align patient care across care settings. For example, Kindred recently announced a clinical collaboration with Genesis HealthCare (NYSE:GEN) to complement our existing platform of post-acute services with unaffiliated nursing centers. We are setting the foundation for a stronger Kindred as we drive effective patient-centered solutions and proactively adapt to the changing healthcare marketplace.”
All financial and statistical information included in this earnings release reflects the continuing operations of the Company’s businesses for all periods presented unless otherwise indicated.
Fourth Quarter and Year Consolidated Results(1):
Fourth Quarter
- Consolidated revenues were $1.75 billion, a 2.0% year-over-year decrease, while the GAAP loss from continuing operations was $6.4 million compared to income of $56.0 million in the same period in 2015. The decrease in consolidated revenues was primarily attributable to both the impact of the first full quarter of LTAC patient criteria and the sale or closure of 15 LTAC hospitals on or before October 1, 2016. The decrease in GAAP income from continuing operations was due to an increase in income taxes attributable to a non-cash deferred tax valuation allowance of $22 million in the fourth quarter of 2016 and a reduction in income tax benefits of $47 million associated with the settlement of a significant litigation contingency in the fourth quarter of 2015, LTAC patient criteria, skilled nursing Medicare census declines and an increase in labor costs. Core EBITDAR declined 13.1% to $215.3 million compared to $247.8 million in the same period in 2015, primarily due to LTAC patient criteria, skilled nursing Medicare census declines and an increase in labor costs.
- GAAP operating cash flows were $146.9 million compared to $70.2 million for the same period a year ago. Core operating cash flows were $142.4 million compared to $53.9 million for the same period a year ago. Core free cash flows were $104.4 million compared to $2.0 million in the same period a year ago. The increase in GAAP operating cash flows, core operating cash flows and core free cash flows in the fourth quarter of 2016 was primarily attributable to reductions in net working capital and, for core free cash flows, lower routine capital expenditures.
- GAAP diluted loss per share from continuing operations was $0.23 as compared to GAAP diluted earnings per share (“EPS”) from continuing operations of $0.50 a year ago. The decrease in GAAP diluted EPS from continuing operations was primarily attributable to an increase in certain charges in the fourth quarter of 2016, including a non-cash deferred tax valuation allowance, a reduction in income tax benefits associated with the settlement of a significant litigation contingency in the fourth quarter of 2015, LTAC patient criteria and an increase in labor costs. Core diluted EPS from continuing operations was $0.08 as compared to $0.33 a year ago. The decline in core diluted EPS was primarily attributable to LTAC patient criteria, declines in skilled nursing Medicare census and an increase in labor costs.
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(1) | See reconciliation of GAAP results to non-GAAP results beginning on page 15. |
Year
- Consolidated revenues were $7.22 billion, a 2.3% year-over-year increase, while the GAAP loss from continuing operations was $617.5 million compared to a loss of $51.9 million in the same period in 2015. The increase in consolidated revenues was primarily attributable to the acquisition of Gentiva Health Services, Inc. (“Gentiva”) on February 2, 2015 and an increase in same-store volumes in both the Kindred at Home and Kindred Hospital Rehabilitation Services business segments. The increase in GAAP loss from continuing operations was primarily attributable to certain charges, net of income taxes, of $740.7 million related to impairments, deferred tax valuation allowance, restructuring, litigation, transaction, debt amendment, business interruption settlements, and research and development costs. GAAP loss from continuing operations for 2015 included certain charges, net of income taxes, of $206.4 million related to impairments, restructuring, litigation, transaction and severance costs. Core EBITDAR declined 3.1% to $950.1 million compared to $980.3 million in the same period in 2015, primarily due to LTAC patient criteria, a decline in skilled nursing Medicare census and an increase in labor costs.
- GAAP operating cash flows were $185.0 million for 2016 compared to $163.3 million for the same period a year ago. The increase in GAAP operating cash flows was attributable to a decline in certain transaction and refinancing payments in 2016. Core operating cash flows were $298.8 million for 2016 compared to $318.1 million for the same period a year ago. Core free cash flows for 2016 were $156.8 million compared to $153.7 million in the same period a year ago. The decrease in core operating cash flows in 2016 was primarily attributable to an increase in net working capital and lower earnings. The increase in core free cash flows for 2016 was attributable to lower routine capital expenditures.
- GAAP diluted loss per share from continuing operations was $7.73 for 2016 as compared to $1.12 a year ago. The increase in GAAP diluted loss per share was primarily attributable to an increase in certain charges in 2016, as noted above. Core diluted EPS from continuing operations was $0.76 as compared to $1.28 a year ago. The decline in core diluted EPS was primarily attributable to LTAC patient criteria, declines in skilled nursing Medicare census, increase in labor costs and a 4.4% increase in aggregate rent, depreciation, amortization, and net interest expense.
Fourth Quarter Segment Results(1)(2):
Our Kindred at Home Division, which comprises the Company’s home health, hospice, community care and home-based primary care businesses, recorded fourth quarter revenues that increased 4.3% over the prior year period to $630.2 million with home health episodes growing 2.6% and hospice average daily census growing 5.1% compared to the same period last year. Segment EBITDAR decreased 8.8% to $90.3 million as compared to $99.0 million and core EBITDAR decreased 10.3% to $88.9 million compared to $99.0 million, compared to the prior year period, both primarily due to an increase in labor costs and lower revenue rates. On a same-store basis, home health episodes grew 3.9% and hospice admissions grew 4.4% over the prior year period.
Kindred’s Hospital Division fourth quarter revenues declined to $530.7 million from the prior year period due to its full entrance into LTAC patient criteria and the impact of the sale or closure of 15 LTAC hospitals since the comparable period. These declines were offset partially by a 2.5% increase in same-hospital admissions and a 4.3% increase in same-hospital commercial revenue rates. Segment EBITDAR in the Hospital Division for the fourth quarter declined to $91.9 million from $116.5 million a year ago, and core EBITDAR for the fourth quarter declined to $91.3 million from $117.7 million a year ago, both due primarily to LTAC patient criteria, divestitures and an increase in labor costs. For the fourth quarter 2016, segment EBITDAR and core EBITDAR also reflect an unbudgeted EBITDAR decline compared to expectations of $2.9 million related to the operations of the LTAC hospitals acquired in a facility swap transaction in the second quarter of 2016. For the year, segment EBITDAR and core EBITDAR reflect unbudgeted declines of $5.9 million related to the LTAC hospitals acquired in the facility swap transaction and $3.9 million related to costs associated with the three closed LTAC hospitals in the third quarter of 2016.
Kindred Rehabilitation Services (“KRS”) Division, which comprises the Company’s hospital-based rehabilitation segment, recorded fourth quarter revenues that declined 0.2% from the prior year period to $361.5 million. Segment EBITDAR for KRS increased 25.4% to $54.9 million as compared to $43.8 million in the prior year period and core EBITDAR decreased 3.6% to $54.9 million compared to $57.0 million a year ago. Segment EBITDAR in the prior period was negatively impacted by $12.9 million of customer contract litigation in the fourth quarter of 2015. Strong performance in the fourth quarter from Kindred Hospital Rehabilitation Services (“KHRS”) inpatient rehabilitation facilities (“IRFs”) was offset by the continuing impact of customer census declines and fewer sites of service operated in RehabCare. The KHRS segment achieved strong revenue growth of 9.3% to $170.0 million, and segment EBITDAR and core EBITDAR grew to $49.3 million each, an increase of 9.9% and 9.3%, respectively, compared to the same period a year ago, as a result of the development of new IRFs and a 4.6% increase in same-IRF discharges. For the year, segment EBITDAR and core EBITDAR results for KHRS included start-up losses of $2.8 million related to the development of new IRFs. RehabCare revenues declined 7.3% to $191.5 million compared to the fourth quarter last year. RehabCare fourth quarter segment EBITDAR increased to $5.6 million as compared to a loss of $1.1 million in the prior year period due to the previously mentioned customer contract litigation in the fourth quarter of 2015 and core EBITDAR decreased to $5.6 million compared to $11.9 million, in the prior year period primarily as a result of year-end training and implementation costs related to RehabCare’s corporate integrity agreement and customer census declines.
Kindred’s Nursing Center Division fourth quarter revenues declined 0.1% to $273.1 million compared to the same period last year. Segment EBITDAR and core EBITDAR in the fourth quarter each declined 8.0% to $33.7 million from $36.6 million a year ago, as a result of declining Medicare census, patient mix deterioration and higher labor costs.
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(1) | See reconciliation of GAAP results to non-GAAP results beginning on page 15. |
(2) | See same-hospital and full segment data on pages 10 through 14. |
2017 Outlook(3)
All forward-looking non-GAAP financial measures used to provide “2017 Outlook” and “2018 Outlook” (collectively “Outlook”) are provided only on a non-GAAP basis. This is due to the inherent difficulty of forecasting the timing or amount of items that would be included in the most directly comparable forward-looking GAAP financial measures. As a result, reconciliation of the forward-looking non-GAAP financial measures to GAAP financial measures is not available without unreasonable effort and the Company is unable to assess the probable significance of the unavailable information.
The Company’s Outlook excludes costs related to significant transactions, material litigation, the effect of any reimbursement changes, debt refinancing or amendment costs, restructuring costs, any further acquisitions or divestitures, any impairment charges, deferred tax asset valuation allowances, and any further issuances or repurchases of common stock.
For the 2017 Outlook, Kindred expects:
- Annual revenues of $7.2 billion, with a range of $7.1 billion to $7.3 billion.
- Core EBITDAR of $930 million, with a range of $910 million to $950 million.
- Core diluted EPS from continuing operations of $0.55, with a range of $0.40 to $0.70 per share(4).
As previously discussed, the Company is in the process of divesting its skilled nursing facility business. For purposes of consistency with our year-end reporting, the 2017 Outlook assumes the Company’s skilled nursing facility business is operated for the entire year. For accounting purposes, this business may qualify as a discontinued operation prior to the completion of the divestiture. At the time the skilled nursing facility business qualifies as a discontinued operation, the Company will be required to recast its historical operating results from continuing operations to exclude the business for all periods presented. We also will update our 2017 Outlook in our quarterly reporting during the quarter in which the recasting occurs.
The Company is not providing a quarterly outlook for 2017 due to uncertainty related to the timing of both the divestiture of its skilled nursing facility business and when this business may qualify as a discontinued operation. However, the Company does expect the first quarter of 2017 to generate substantially similar results as the fourth quarter of 2016, with improving results as the range of initiatives discussed above gain traction over the course of the year.
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(3) | See Forward-Looking Statements beginning on page 15. |
(4) | The EPS estimate is based upon an estimated weighted average annual diluted share count for 2017 of 88.5 million shares. |
2018 Outlook(1)
Kindred’s planned divestiture of its skilled nursing facilities will significantly impact the Company’s reported results, reducing revenues and expenses, and is expected to increase profitability. To assist investors, Kindred is providing the following outlook for 2018:
- Annual revenues of approximately $6.3 billion.
- Core EBITDAR of approximately $840 million.
- Core diluted EPS from continuing operations of approximately $0.80(2).
Please note that all of these items represent midpoint estimates that the Company expects to update over time, and these estimates assume that Kindred completes its skilled nursing facilities exit prior to the start of 2018.
Fourth Quarter Dividend and Change in Dividend Policy
The Kindred Board of Directors declared a cash dividend of $0.12 per share on the Company’s common stock payable on March 31, 2017 to shareholders of record as of the close of business on March 13, 2017. The Kindred Board of Directors has determined that trading levels of the Company’s common stock do not sufficiently reflect the value of the Company’s quarterly cash dividend. Following the payment of the quarterly cash dividend mentioned above, the Kindred Board of Directors has determined to discontinue the Company’s quarterly cash dividend on its common stock and redirect the funds to repay debt and invest in growth.
Cash Flow
Stephen D. Farber, Executive Vice President and Chief Financial Officer of Kindred, noted, “We remain focused on cash flows and were very pleased with our strong cash flow in 2016, and liquidity position at end of year, with only $62.5 million drawn on the Company’s $900 million revolving line of credit. Our fourth quarter GAAP operating cash flows, core operating cash flows and core free cash flows were each up considerably over the third quarter and over the same quarter last year. We were pleased that many of the transient working capital items identified in the third quarter were remedied this quarter, contributing to the fourth quarter’s strong cash flow results. For 2017, we expect modestly muted cash flow performance compared to 2016, based on our 2017 Outlook and adjusted for costs related to our skilled nursing facilities exit and our cost realignment initiatives. For the 2018 Outlook, we expect Kindred’s cash flow results to return to historical levels of roughly $300 million per year in core operating cash flows and approximately half of that amount in core free cash flows with potential upside from this expectation, as capital expenditures and NCI will be reduced meaningfully following our exit from our skilled nursing facility business.”
Mr. Farber continued, “In addition to our operating and free cash flows, we expect additional cash flow for the next several years from harvesting the Company’s net operating loss carryforwards (“NOLs”) to offset federal tax liability, and expect our cash taxes to be less than 10% of our federal book taxes. We ended 2016 with $464 million of federal NOLs, and expect additional NOLs to be generated by our skilled nursing facilities exit. In addition, please note that 2017 is the last year of dividend payments of $12 million per year on the mandatory redeemable preferred stock the Company issued in 2014 as part of the acquisition of Gentiva.”
Mr. Farber concluded, “We expect the combination of significant operational and free cash flows, nominal cash taxes, $100 million to $300 million of expected net cash proceeds from the skilled nursing facility exit, approximately $90 million of associated reduction of annual rent expense, $30 million of associated reduction of annual capital expenditures, $18 million of associated reduction of cash noncontrolling interest disbursements, and the elimination of $54 million of annual common stock and mandatory redeemable preferred stock dividends to drive significant deleveraging and growth for Kindred.”
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(1) | See Forward-Looking Statements beginning on page 15. |
(2) | The EPS estimate is based upon an estimated weighted average annual diluted share count for 2018 of 90.0 million shares. |
Conference Call
As previously announced, investors and the general public may access a live webcast of the fourth quarter 2016 conference call through a link on the Company’s website at http://investors.kindredhealthcare.com. The conference call will be held on February 28 at 9:00 a.m. (Eastern Time).
A telephone replay of the conference call will become available at approximately 12:00 p.m. on February 28 by dialing (719) 457-0820, access code: 9155505. The replay will be available through March 10.
Forward-Looking Statements and Non-GAAP Reconciliations
See page 15 for important disclosures regarding the Company’s forward-looking statements and the non-GAAP financial reconciliations that follow.
About Kindred Healthcare
Kindred Healthcare, Inc., a top-90 private employer in the United States, is a FORTUNE 500 healthcare services company based in Louisville, Kentucky with annual revenues of approximately $7.2 billion. At December 31, 2016, Kindred through its subsidiaries had approximately 100,100 employees providing healthcare services in 2,654 locations in 46 states, including 82 LTAC hospitals, 19 inpatient rehabilitation hospitals, 91 nursing centers, 17 sub-acute units, 635 Kindred at Home home health, hospice and non-medical home care sites of service, 102 inpatient rehabilitation units (hospital-based) and contract rehabilitation service businesses which served 1,708 non-affiliated sites of service. Ranked as one of Fortune magazine’s Most Admired Healthcare Companies for eight 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.
KINDRED HEALTHCARE, INC. | |||||||||||||||||||||||||
Condensed Consolidated Statement of Operations | |||||||||||||||||||||||||
(In thousands, except per share amounts) | |||||||||||||||||||||||||
Three months ended | Year ended | ||||||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||||||||||
Revenues | $ | 1,745,951 | $ | 1,780,949 | $ | 7,219,519 | $ | 7,054,907 | |||||||||||||||||
Salaries, wages and benefits | 945,611 | 909,171 | 3,758,423 | 3,614,091 | |||||||||||||||||||||
Supplies | 89,772 | 96,295 | 384,098 | 384,354 | |||||||||||||||||||||
Rent | 94,509 | 96,934 | 390,534 | 379,889 | |||||||||||||||||||||
Other operating expenses | 195,765 | 208,315 | 845,680 | 825,996 | |||||||||||||||||||||
General and administrative expenses | 304,869 | 341,052 | 1,303,428 | 1,385,038 | |||||||||||||||||||||
Other income | (991 | ) | (1,317 | ) | (2,900 | ) | (3,016 | ) | |||||||||||||||||
Litigation contingency expense | - | 8,261 | 2,840 | 138,648 | |||||||||||||||||||||
Impairment charges | 4,351 | 18,031 | 342,559 | 24,757 | |||||||||||||||||||||
Restructuring charges | 18,952 | 4,177 | 107,175 | 12,970 | |||||||||||||||||||||
Depreciation and amortization | 38,082 | 40,362 | 159,402 | 157,251 | |||||||||||||||||||||
Interest expense | 59,230 | 56,267 | 234,647 | 232,395 | |||||||||||||||||||||
Investment income | (601 | ) | (603 | ) | (3,162 | ) | (2,806 | ) | |||||||||||||||||
1,749,549 | 1,776,945 | 7,522,724 | 7,149,567 | ||||||||||||||||||||||
Income (loss) from continuing operations before income taxes | (3,598 | ) | 4,004 | (303,205 | ) | (94,660 | ) | ||||||||||||||||||
Provision (benefit) for income taxes | 2,860 | (51,980 | ) | 314,330 | (42,797 | ) | |||||||||||||||||||
Income (loss) from continuing operations | (6,458 | ) | 55,984 | (617,535 | ) | (51,863 | ) | ||||||||||||||||||
Discontinued operations, net of income taxes: | |||||||||||||||||||||||||
Income (loss) from operations | 4,194 | 1,509 | 6,616 | (235 | ) | ||||||||||||||||||||
Gain on divestiture of operations | 116 | 261 | 295 | 1,244 | |||||||||||||||||||||
Income from discontinued operations | 4,310 | 1,770 | 6,911 | 1,009 | |||||||||||||||||||||
Net income (loss) | (2,148 | ) | 57,754 | (610,624 | ) | (50,854 | ) | ||||||||||||||||||
(Earnings) loss attributable to noncontrolling interests: | |||||||||||||||||||||||||
Continuing operations | (13,261 | ) | (12,082 | ) | (53,602 | ) | (42,564 | ) | |||||||||||||||||
Discontinued operations | 2 | 2 | (4 | ) | 34 | ||||||||||||||||||||
(13,259 | ) | (12,080 | ) | (53,606 | ) | (42,530 | ) | ||||||||||||||||||
Income (loss) attributable to Kindred | $ | (15,407 | ) | $ | 45,674 | $ | (664,230 | ) | $ | (93,384 | ) | ||||||||||||||
Amounts attributable to Kindred stockholders: | |||||||||||||||||||||||||
Income (loss) from continuing operations | $ | (19,719 | ) | $ | 43,902 | $ | (671,137 | ) | $ | (94,427 | ) | ||||||||||||||
Income from discontinued operations | 4,312 | 1,772 | 6,907 | 1,043 | |||||||||||||||||||||
Net income (loss) | $ | (15,407 | ) | $ | 45,674 | $ | (664,230 | ) | $ | (93,384 | ) | ||||||||||||||
Earnings (loss) per common share: | |||||||||||||||||||||||||
Basic: | |||||||||||||||||||||||||
Income (loss) from continuing operations | $ | (0.23 | ) | $ | 0.50 | $ | (7.73 | ) | $ | (1.12 | ) | ||||||||||||||
Discontinued operations: | |||||||||||||||||||||||||
Income (loss) from operations | 0.05 | 0.02 | 0.08 | - | |||||||||||||||||||||
Gain on divestiture of operations | - | - | - | 0.01 | |||||||||||||||||||||
Income from discontinued operations | 0.05 | 0.02 | 0.08 | 0.01 | |||||||||||||||||||||
Net income (loss) | $ | (0.18 | ) | $ | 0.52 | $ | (7.65 | ) | $ | (1.11 | ) | ||||||||||||||
Diluted: | |||||||||||||||||||||||||
Income (loss) from continuing operations | $ | (0.23 | ) | $ | 0.50 | $ | (7.73 | ) | $ | (1.12 | ) | ||||||||||||||
Discontinued operations: | |||||||||||||||||||||||||
Income (loss) from operations | 0.05 | 0.02 | 0.08 | - | |||||||||||||||||||||
Gain on divestiture of operations | - | - | - | 0.01 | |||||||||||||||||||||
Income from discontinued operations | 0.05 | 0.02 | 0.08 | 0.01 | |||||||||||||||||||||
Net income (loss) | $ | (0.18 | ) | $ | 0.52 | $ | (7.65 | ) | $ | (1.11 | ) | ||||||||||||||
Shares used in computing earnings (loss) per common share: | |||||||||||||||||||||||||
Basic | 86,904 | 86,336 | 86,800 | 84,558 | |||||||||||||||||||||
Diluted | 86,904 | 87,232 | 86,800 | 84,558 | |||||||||||||||||||||
Cash dividends declared and paid per common share | $ | 0.12 | $ | 0.12 | $ | 0.48 | $ | 0.48 | |||||||||||||||||
KINDRED HEALTHCARE, INC. | ||||||||||||||
Condensed Consolidated Balance Sheet | ||||||||||||||
(In thousands, except per share amounts) | ||||||||||||||
December 31, | December 31, | |||||||||||||
2016 | 2015 | |||||||||||||
ASSETS | ||||||||||||||
Current assets: | ||||||||||||||
Cash and cash equivalents | $ | 137,061 | $ | 98,758 | ||||||||||
Insurance subsidiary investments | 108,966 | 106,638 | ||||||||||||
Accounts receivable less allowance for loss | 1,172,078 | 1,194,868 | ||||||||||||
Inventories | 24,673 | 27,791 | ||||||||||||
Income taxes | 10,067 | 11,790 | ||||||||||||
Other | 63,693 | 61,054 | ||||||||||||
1,516,538 | 1,500,899 | |||||||||||||
Property and equipment | 2,026,430 | 2,162,398 | ||||||||||||
Accumulated depreciation | (1,147,844 | ) | (1,190,402 | ) | ||||||||||
878,586 | 971,996 | |||||||||||||
Goodwill | 2,427,074 | 2,669,810 | ||||||||||||
Intangible assets less accumulated amortization | 790,235 | 755,655 | ||||||||||||
Insurance subsidiary investments | 204,929 | 204,498 | ||||||||||||
Deferred tax assets | - | 104,130 | ||||||||||||
Acquisition deposit | - | 18,489 | ||||||||||||
Other | 295,362 | 242,782 | ||||||||||||
Total assets | $ | 6,112,724 | $ | 6,468,259 | ||||||||||
LIABILITIES AND EQUITY | ||||||||||||||
Current liabilities: | ||||||||||||||
Accounts payable | $ | 203,925 | $ | 187,061 | ||||||||||
Salaries, wages and other compensation | 397,486 | 404,925 | ||||||||||||
Due to third party payors | 41,320 | 36,251 | ||||||||||||
Professional liability risks | 65,284 | 64,099 | ||||||||||||
Other accrued liabilities | 269,736 | 394,246 | ||||||||||||
Long-term debt due within one year | 27,977 | 24,630 | ||||||||||||
1,005,728 | 1,111,212 | |||||||||||||
Long-term debt | 3,215,062 | 3,086,348 | ||||||||||||
Professional liability risks | 295,311 | 263,273 | ||||||||||||
Deferred tax liabilities | 201,808 | - | ||||||||||||
Deferred credits and other liabilities | 353,294 | 301,379 | ||||||||||||
Equity: | ||||||||||||||
Stockholders' equity: | ||||||||||||||
Common stock, $0.25 par value; authorized 175,000 shares; issued 85,166 shares - December 31, 2016 and 83,792 shares - December 31, 2015 | 21,291 | 20,948 | ||||||||||||
Capital in excess of par value | 1,710,231 | 1,737,747 | ||||||||||||
Accumulated other comprehensive income (loss) | 1,573 | (2,632 | ) | |||||||||||
Accumulated deficit | (920,544 | ) | (256,209 | ) | ||||||||||
812,551 | 1,499,854 | |||||||||||||
Noncontrolling interests | 228,970 | 206,193 | ||||||||||||
Total equity | 1,041,521 | 1,706,047 | ||||||||||||
Total liabilities and equity | $ | 6,112,724 | $ | 6,468,259 | ||||||||||
KINDRED HEALTHCARE, INC. | ||||||||||||||||||||||||
Condensed Consolidated Statement of Cash Flows | ||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Three months ended | Year ended | |||||||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||||||
Net income (loss) | $ | (2,148 | ) | $ | 57,754 | $ | (610,624 | ) | $ | (50,854 | ) | |||||||||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||||||||||||||||||
Depreciation expense | 32,660 | 33,208 | 135,966 | 128,533 | ||||||||||||||||||||
Amortization of intangible assets | 5,422 | 7,645 | 23,673 | 29,841 | ||||||||||||||||||||
Amortization of stock-based compensation costs | 3,367 | 4,872 | 16,425 | 20,636 | ||||||||||||||||||||
Amortization of deferred financing costs | 4,005 | 3,566 | 15,267 | 13,721 | ||||||||||||||||||||
Payment of capitalized lender fees related to debt issuance | - | - | (7,375 | ) | (28,012 | ) | ||||||||||||||||||
Provision for doubtful accounts | 9,849 | 22,643 | 40,804 | 52,460 | ||||||||||||||||||||
Deferred income taxes | 1,868 | (45,738 | ) | 310,338 | (46,632 | ) | ||||||||||||||||||
Impairment charges | 4,351 | 18,031 | 342,559 | 24,757 | ||||||||||||||||||||
Gain on divestiture of discontinued operations | (116 | ) | (261 | ) | (295 | ) | (1,244 | ) | ||||||||||||||||
Other | 5,152 | 3,080 | 12,414 | 13,537 | ||||||||||||||||||||
Change in operating assets and liabilities: | ||||||||||||||||||||||||
Accounts receivable | 84,922 | 4,822 | (59,031 | ) | (8,577 | ) | ||||||||||||||||||
Inventories and other assets | (20,704 | ) | 10,312 | (24,226 | ) | 54,493 | ||||||||||||||||||
Accounts payable | 1,764 | 2,408 | 26,215 | (10,380 | ) | |||||||||||||||||||
Income taxes | 1,882 | (6,254 | ) | 4,242 | 27,392 | |||||||||||||||||||
Due to third party payors | (16,625 | ) | (26,917 | ) | 3,692 | (30,882 | ) | |||||||||||||||||
Other accrued liabilities | 31,265 | (18,976 | ) | (45,082 | ) | (25,527 | ) | |||||||||||||||||
Net cash provided by operating activities | 146,914 | 70,195 | 184,962 | 163,262 | ||||||||||||||||||||
Cash flows from investing activities: | ||||||||||||||||||||||||
Routine capital expenditures | (27,349 | ) | (41,240 | ) | (96,052 | ) | (121,931 | ) | ||||||||||||||||
Development capital expenditures | (7,713 | ) | (7,865 | ) | (34,825 | ) | (19,931 | ) | ||||||||||||||||
Acquisitions, net of cash acquired | (1,800 | ) | - | (78,840 | ) | (673,547 | ) | |||||||||||||||||
Acquisition deposits | - | (18,489 | ) | 18,489 | 176,511 | |||||||||||||||||||
Sale of assets | 21,025 | 1,674 | 25,987 | 8,735 | ||||||||||||||||||||
Proceeds from senior unsecured notes offering held in escrow | - | - | - | 1,350,000 | ||||||||||||||||||||
Interest in escrow for senior unsecured notes | - | - | - | 23,438 | ||||||||||||||||||||
Purchase of insurance subsidiary investments | (22,318 | ) | (26,036 | ) | (97,740 | ) | (85,222 | ) | ||||||||||||||||
Sale of insurance subsidiary investments | 17,010 | 24,295 | 95,488 | 75,075 | ||||||||||||||||||||
Net change in insurance subsidiary cash and cash equivalents | (7,602 | ) | (3,875 | ) | 877 | (12,271 | ) | |||||||||||||||||
Proceeds from note receivable | - | - | - | 25,000 | ||||||||||||||||||||
Net change in other investments | 577 | (4,995 | ) | (32,770 | ) | (4,620 | ) | |||||||||||||||||
Other | 1,022 | 592 | (255 | ) | 10,972 | |||||||||||||||||||
Net cash provided by (used in) investing activities | (27,148 | ) | (75,939 | ) | (199,641 | ) | 752,209 | |||||||||||||||||
Cash flows from financing activities: | ||||||||||||||||||||||||
Proceeds from borrowings under revolving credit | 376,100 | 325,600 | 1,643,300 | 1,740,450 | ||||||||||||||||||||
Repayment of borrowings under revolving credit | (473,600 | ) | (312,000 | ) | (1,689,400 | ) | (1,631,850 | ) | ||||||||||||||||
Proceeds from issuance of term loan, net of discount | - | - | 198,100 | 199,000 | ||||||||||||||||||||
Proceeds from other long-term debt | - | - | 750 | - | ||||||||||||||||||||
Repayment of Gentiva debt | - | - | - | (1,177,363 | ) | |||||||||||||||||||
Repayment of term loan | (3,508 | ) | (3,002 | ) | (13,527 | ) | (12,010 | ) | ||||||||||||||||
Repayment of other long-term debt | (278 | ) | (5,352 | ) | (1,104 | ) | (6,752 | ) | ||||||||||||||||
Payment of deferred financing costs | (180 | ) | (162 | ) | (522 | ) | (3,446 | ) | ||||||||||||||||
Issuance of common stock in connection with employee benefit plans | - | - | - | 534 | ||||||||||||||||||||
Payment of costs associated with issuance of common stock and tangible equity units | - | - | - | (915 | ) | |||||||||||||||||||
Payment of dividend for mandatory redeemable preferred stock | (2,956 | ) | (2,752 | ) | (11,514 | ) | (10,887 | ) | ||||||||||||||||
Dividends paid | (10,221 | ) | (10,052 | ) | (40,738 | ) | (40,119 | ) | ||||||||||||||||
Contributions made by noncontrolling interests | 3,253 | 660 | 14,514 | 2,152 | ||||||||||||||||||||
Distributions to noncontrolling interests | (10,745 | ) | (10,635 | ) | (45,985 | ) | (42,458 | ) | ||||||||||||||||
Purchase of noncontrolling interests | - | - | (1,000 | ) | - | |||||||||||||||||||
Other | - | 1,306 | 108 | 2,763 | ||||||||||||||||||||
Net cash provided by (used in) financing activities | (122,135 | ) | (16,389 | ) | 52,982 | (980,901 | ) | |||||||||||||||||
Change in cash and cash equivalents | (2,369 | ) | (22,133 | ) | 38,303 | (65,430 | ) | |||||||||||||||||
Cash and cash equivalents at beginning of period | 139,430 | 120,891 | 98,758 | 164,188 | ||||||||||||||||||||
Cash and cash equivalents at end of period | $ | 137,061 | $ | 98,758 | $ | 137,061 | $ | 98,758 | ||||||||||||||||
KINDRED HEALTHCARE, INC. | ||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Consolidated and Business Segment Data | ||||||||||||||||||||||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||||||||||||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Fourth quarter | ||||||||||||||||||||||||||||||||||||||||||||||||||
2015 Quarters | 2016 Quarters | % change v. | ||||||||||||||||||||||||||||||||||||||||||||||||
First | Second | Third | Fourth | Year | First | Second | Third | Fourth | Year | prior year | ||||||||||||||||||||||||||||||||||||||||
Condensed consolidated income statement data: | ||||||||||||||||||||||||||||||||||||||||||||||||||
GAAP presentation: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues | $ | 1,675,967 | $ | 1,833,475 | $ | 1,764,516 | $ | 1,780,949 | $ | 7,054,907 | $ | 1,837,971 | $ | 1,842,070 | $ | 1,793,527 | $ | 1,745,951 | $ | 7,219,519 | (2.0 | ) | ||||||||||||||||||||||||||||
Operating expenses | 1,645,791 | 1,584,873 | 1,568,189 | 1,583,985 | 6,382,838 | 1,604,855 | 1,591,898 | 1,986,221 | 1,558,329 | 6,741,303 | (1.6 | ) | ||||||||||||||||||||||||||||||||||||||
Rent | 91,788 | 95,731 | 95,436 | 96,934 | 379,889 | 97,517 | 100,093 | 98,415 | 94,509 | 390,534 | (2.5 | ) | ||||||||||||||||||||||||||||||||||||||
Depreciation and amortization | 38,935 | 38,625 | 39,329 | 40,362 | 157,251 | 40,681 | 40,257 | 40,382 | 38,082 | 159,402 | (5.6 | ) | ||||||||||||||||||||||||||||||||||||||
Interest, net | 61,777 | 56,140 | 56,008 | 55,664 | 229,589 | 57,245 | 57,559 | 58,052 | 58,629 | 231,485 | 5.3 | |||||||||||||||||||||||||||||||||||||||
Income (loss) from continuing operations before income taxes | (162,324 | ) | 58,106 | 5,554 | 4,004 | (94,660 | ) | 37,673 | 52,263 | (389,543 | ) | (3,598 | ) | (303,205 | ) | (189.9 | ) | |||||||||||||||||||||||||||||||||
Provision (benefit) for income taxes | (27,736 | ) | 24,396 | 12,523 | (51,980 | ) | (42,797 | ) | 11,836 | 17,882 | 281,752 | 2,860 | 314,330 | (105.5 | ) | |||||||||||||||||||||||||||||||||||
Income (loss) from continuing operations | (134,588 | ) | 33,710 | (6,969 | ) | 55,984 | (51,863 | ) | 25,837 | 34,381 | (671,295 | ) | (6,458 | ) | (617,535 | ) | (111.5 | ) | ||||||||||||||||||||||||||||||||
Noncontrolling interests | (8,847 | ) | (11,735 | ) | (9,900 | ) | (12,082 | ) | (42,564 | ) | (12,514 | ) | (13,522 | ) | (14,305 | ) | (13,261 | ) | (53,602 | ) | 9.8 | |||||||||||||||||||||||||||||
Net income (loss) attributable to Kindred | $ | (143,435 | ) | $ | 21,975 | $ | (16,869 | ) | $ | 43,902 | $ | (94,427 | ) | $ | 13,323 | $ | 20,859 | $ | (685,600 | ) | $ | (19,719 | ) | $ | (671,137 | ) | (144.9 | ) | ||||||||||||||||||||||
Diluted EPS | $ | (1.80 | ) | $ | 0.25 | $ | (0.20 | ) | $ | 0.50 | $ | (1.12 | ) | $ | 0.15 | $ | 0.23 | $ | (7.89 | ) | $ | (0.23 | ) | $ | (7.73 | ) | (146.0 | ) | ||||||||||||||||||||||
Diluted shares | 79,575 | 86,402 | 86,184 | 87,232 | 84,558 | 87,249 | 87,500 | 86,869 | 86,904 | 86,800 | (0.4 | ) | ||||||||||||||||||||||||||||||||||||||
Core presentation (a): | ||||||||||||||||||||||||||||||||||||||||||||||||||
EBITDAR | $ | 234,211 | $ | 261,800 | $ | 236,477 | $ | 247,839 | $ | 980,327 | $ | 246,834 | $ | 267,895 | $ | 220,075 | $ | 215,315 | $ | 950,119 | (13.1 | ) | ||||||||||||||||||||||||||||
Rent | 91,199 | 95,528 | 95,436 | 96,934 | 379,097 | 97,517 | 100,093 | 98,069 | 94,509 | 390,188 | (2.5 | ) | ||||||||||||||||||||||||||||||||||||||
Interest, net | 44,346 | 56,140 | 56,008 | 55,664 | 212,158 | 57,245 | 57,559 | 58,052 | 58,629 | 231,485 | 5.3 | |||||||||||||||||||||||||||||||||||||||
Provision for income taxes | 22,466 | 25,721 | 15,298 | 13,758 | 77,243 | 16,546 | 21,417 | 4,639 | 3,243 | 45,845 | (76.4 | ) | ||||||||||||||||||||||||||||||||||||||
Net income attributable to Kindred | 28,418 | 34,051 | 20,506 | 29,039 | 112,014 | 22,331 | 34,031 | 4,340 | 7,591 | 68,293 | (73.9 | ) | ||||||||||||||||||||||||||||||||||||||
Core diluted EPS | $ | 0.34 | $ | 0.39 | $ | 0.23 | $ | 0.33 | $ | 1.28 | $ | 0.25 | $ | 0.38 | $ | 0.05 | $ | 0.08 | $ | 0.76 | (75.8 | ) | ||||||||||||||||||||||||||||
Diluted shares | 82,422 | 86,402 | 86,892 | 87,232 | 86,098 | 87,249 | 87,500 | 87,529 | 87,641 | 87,491 | 0.5 | |||||||||||||||||||||||||||||||||||||||
Revenues by segment: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Kindred at Home: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Home health | $ | 300,867 | $ | 427,820 | $ | 424,054 | $ | 425,759 | $ | 1,578,500 | $ | 430,035 | $ | 438,556 | $ | 449,958 | $ | 444,073 | $ | 1,762,622 | 4.3 | |||||||||||||||||||||||||||||
Hospice | 119,057 | 178,005 | 181,140 | 178,325 | 656,527 | 176,426 | 185,641 | 188,575 | 186,161 | 736,803 | 4.4 | |||||||||||||||||||||||||||||||||||||||
419,924 | 605,825 | 605,194 | 604,084 | 2,235,027 | 606,461 | 624,197 | 638,533 | 630,234 | 2,499,425 | 4.3 | ||||||||||||||||||||||||||||||||||||||||
Hospital division | 640,483 | 627,206 | 579,497 | 593,593 | 2,440,779 | 643,299 | 633,695 | 575,323 | 530,746 | 2,383,063 | (10.6 | ) | ||||||||||||||||||||||||||||||||||||||
Kindred Rehabilitation Services: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Kindred Hospital Rehabilitation Services | 151,564 | 152,544 | 149,435 | 155,579 | 609,122 | 165,774 | 169,815 | 169,018 | 170,041 | 674,648 | 9.3 | |||||||||||||||||||||||||||||||||||||||
RehabCare | 252,595 | 236,791 | 219,518 | 206,582 | 915,486 | 204,248 | 196,075 | 192,480 | 191,489 | 784,292 | (7.3 | ) | ||||||||||||||||||||||||||||||||||||||
404,159 | 389,335 | 368,953 | 362,161 | 1,524,608 | 370,022 | 365,890 | 361,498 | 361,530 | 1,458,940 | (0.2 | ) | |||||||||||||||||||||||||||||||||||||||
Nursing center division | 274,308 | 273,870 | 270,510 | 273,387 | 1,092,075 | 272,227 | 272,395 | 270,259 | 273,055 | 1,087,936 | (0.1 | ) | ||||||||||||||||||||||||||||||||||||||
1,738,874 | 1,896,236 | 1,824,154 | 1,833,225 | 7,292,489 | 1,892,009 | 1,896,177 | 1,845,613 | 1,795,565 | 7,429,364 | (2.1 | ) | |||||||||||||||||||||||||||||||||||||||
Eliminations | (62,907 | ) | (62,761 | ) | (59,638 | ) | (52,276 | ) | (237,582 | ) | (54,038 | ) | (54,107 | ) | (52,086 | ) | (49,614 | ) | (209,845 | ) | (5.1 | ) | ||||||||||||||||||||||||||||
$ | 1,675,967 | $ | 1,833,475 | $ | 1,764,516 | $ | 1,780,949 | $ | 7,054,907 | $ | 1,837,971 | $ | 1,842,070 | $ | 1,793,527 | $ | 1,745,951 | $ | 7,219,519 | (2.0 | ) | |||||||||||||||||||||||||||||
__________ | ||||||||||||||||||||||||||||||||||||||||||||||||||
(a) | See reconciliation of GAAP results to non-GAAP results beginning on page 15. | |||||||||||||||||||||||||||||||||||||||||||||||||
KINDRED HEALTHCARE, INC. | ||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Consolidated and Business Segment Data (Continued) | ||||||||||||||||||||||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||||||||||||||||||||||
(In thousands, except statistics) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Fourth quarter | ||||||||||||||||||||||||||||||||||||||||||||||||||
2015 Quarters | 2016 Quarters | % change v. | ||||||||||||||||||||||||||||||||||||||||||||||||
First | Second | Third | Fourth | Year | First | Second | Third | Fourth | Year | prior year | ||||||||||||||||||||||||||||||||||||||||
Segment EBITDAR: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Kindred at Home: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Home health | $ | 46,798 | $ | 72,917 | $ | 67,682 | $ | 68,776 | $ | 256,173 | $ | 66,941 | $ | 76,030 | $ | 75,073 | $ | 61,487 | $ | 279,531 | (10.6 | ) | ||||||||||||||||||||||||||||
Hospice | 16,996 | 27,887 | 34,025 | 30,212 | 109,120 | 24,866 | 31,329 | 31,326 | 28,805 | 116,326 | (4.7 | ) | ||||||||||||||||||||||||||||||||||||||
63,794 | 100,804 | 101,707 | 98,988 | 365,293 | 91,807 | 107,359 | 106,399 | 90,292 | 395,857 | (8.8 | ) | |||||||||||||||||||||||||||||||||||||||
Hospital division | 134,111 | 131,532 | 96,108 | 116,454 | 478,205 | 135,495 | 125,932 | 82,752 | 91,892 | 436,071 | (21.1 | ) | ||||||||||||||||||||||||||||||||||||||
Kindred Rehabilitation Services: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Kindred Hospital Rehabilitation Services | 44,564 | 44,531 | 42,141 | 44,891 | 176,127 | 47,870 | 50,469 | 49,470 | 49,314 | 197,123 | 9.9 | |||||||||||||||||||||||||||||||||||||||
RehabCare | 15,708 | 14,681 | 14,544 | (1,118 | ) | 43,815 | 11,987 | 13,269 | 9,248 | 5,578 | 40,082 | 598.9 | ||||||||||||||||||||||||||||||||||||||
60,272 | 59,212 | 56,685 | 43,773 | 219,942 | 59,857 | 63,738 | 58,718 | 54,892 | 237,205 | 25.4 | ||||||||||||||||||||||||||||||||||||||||
Nursing center division | 36,963 | 39,877 | 35,923 | 36,601 | 149,364 | 30,100 | 33,662 | 29,922 | 33,658 | 127,342 | (8.0 | ) | ||||||||||||||||||||||||||||||||||||||
Core EBITDAR by segment (a): | ||||||||||||||||||||||||||||||||||||||||||||||||||
Kindred at Home: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Home health | $ | 46,798 | $ | 72,917 | $ | 68,155 | $ | 68,826 | $ | 256,696 | $ | 65,803 | $ | 75,859 | $ | 75,073 | $ | 61,185 | $ | 277,920 | (11.1 | ) | ||||||||||||||||||||||||||||
Hospice | 16,996 | 27,887 | 34,025 | 30,212 | 109,120 | 24,866 | 31,329 | 31,326 | 27,668 | 115,189 | (8.4 | ) | ||||||||||||||||||||||||||||||||||||||
63,794 | 100,804 | 102,180 | 99,038 | 365,816 | 90,669 | 107,188 | 106,399 | 88,853 | 393,109 | (10.3 | ) | |||||||||||||||||||||||||||||||||||||||
Hospital division | 134,786 | 131,532 | 97,128 | 117,675 | 481,121 | 135,495 | 125,932 | 82,752 | 91,262 | 435,441 | (22.4 | ) | ||||||||||||||||||||||||||||||||||||||
Kindred Rehabilitation Services: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Kindred Hospital Rehabilitation Services | 44,564 | 44,531 | 42,141 | 45,098 | 176,334 | 47,870 | 50,469 | 50,217 | 49,314 | 197,870 | 9.3 | |||||||||||||||||||||||||||||||||||||||
RehabCare | 16,493 | 14,681 | 14,544 | 11,858 | 57,576 | 11,987 | 13,269 | 9,248 | 5,578 | 40,082 | (53.0 | ) | ||||||||||||||||||||||||||||||||||||||
61,057 | 59,212 | 56,685 | 56,956 | 233,910 | 59,857 | 63,738 | 59,465 | 54,892 | 237,952 | (3.6 | ) | |||||||||||||||||||||||||||||||||||||||
Nursing center division | 36,963 | 40,461 | 35,923 | 36,601 | 149,948 | 30,100 | 33,662 | 29,922 | 33,658 | 127,342 | (8.0 | ) | ||||||||||||||||||||||||||||||||||||||
Support center | (62,389 | ) | (70,209 | ) | (55,439 | ) | (62,431 | ) | (b) | (250,468 | ) | (69,287 | ) | (62,625 | ) | (58,463 | ) | (53,350 | ) | (b) | (243,725 | ) | (14.5 | ) | ||||||||||||||||||||||||||
$ | 234,211 | $ | 261,800 | $ | 236,477 | $ | 247,839 | $ | 980,327 | $ | 246,834 | $ | 267,895 | $ | 220,075 | $ | 215,315 | $ | 950,119 | (13.1 | ) | |||||||||||||||||||||||||||||
EBITDAR margin by segment: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Kindred at Home: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Home health | 15.6 | 17.0 | 16.0 | 16.2 | 16.2 | 15.6 | 17.3 | 16.7 | 13.8 | 15.9 | (2.4 | ) | ||||||||||||||||||||||||||||||||||||||
Hospice | 14.3 | 15.7 | 18.8 | 16.9 | 16.6 | 14.1 | 16.9 | 16.6 | 15.5 | 15.8 | (1.4 | ) | ||||||||||||||||||||||||||||||||||||||
Kindred at Home | 15.2 | 16.6 | 16.8 | 16.4 | 16.3 | 15.1 | 17.2 | 16.7 | 14.3 | 15.8 | (2.1 | ) | ||||||||||||||||||||||||||||||||||||||
Hospital division | 20.9 | 21.0 | 16.6 | 19.6 | 19.6 | 21.1 | 19.9 | 14.4 | 17.3 | 18.3 | (2.3 | ) | ||||||||||||||||||||||||||||||||||||||
Kindred Rehabilitation Services: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Kindred Hospital Rehabilitation Services | 29.4 | 29.2 | 28.2 | 28.9 | 28.9 | 28.9 | 29.7 | 29.3 | 29.0 | 29.2 | 0.1 | |||||||||||||||||||||||||||||||||||||||
RehabCare | 6.2 | 6.2 | 6.6 | (0.5 | ) | 4.8 | 5.9 | 6.8 | 4.8 | 2.9 | 5.1 | 3.4 | ||||||||||||||||||||||||||||||||||||||
Kindred Rehabilitation Services | 14.9 | 15.2 | 15.4 | 12.1 | 14.4 | 16.2 | 17.4 | 16.2 | 15.2 | 16.3 | 3.1 | |||||||||||||||||||||||||||||||||||||||
Nursing center division | 13.5 | 14.6 | 13.3 | 13.4 | 13.7 | 11.1 | 12.4 | 11.1 | 12.3 | 11.7 | (1.1 | ) | ||||||||||||||||||||||||||||||||||||||
Core EBITDAR margin by segment: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Kindred at Home: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Home health | 15.6 | 17.0 | 16.1 | 16.2 | 16.3 | 15.3 | 17.3 | 16.7 | 13.8 | 15.8 | (2.4 | ) | ||||||||||||||||||||||||||||||||||||||
Hospice | 14.3 | 15.7 | 18.8 | 16.9 | 16.6 | 14.1 | 16.9 | 16.6 | 14.9 | 15.6 | (2.0 | ) | ||||||||||||||||||||||||||||||||||||||
Kindred at Home | 15.2 | 16.6 | 16.9 | 16.4 | 16.4 | 15.0 | 17.2 | 16.7 | 14.1 | 15.7 | (2.3 | ) | ||||||||||||||||||||||||||||||||||||||
Hospital division | 21.0 | 21.0 | 16.8 | 19.8 | 19.7 | 21.1 | 19.9 | 14.4 | 17.2 | 18.3 | (2.6 | ) | ||||||||||||||||||||||||||||||||||||||
Kindred Rehabilitation Services: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Kindred Hospital Rehabilitation Services | 29.4 | 29.2 | 28.2 | 29.0 | 28.9 | 28.9 | 29.7 | 29.7 | 29.0 | 29.3 | - | |||||||||||||||||||||||||||||||||||||||
RehabCare | 6.5 | 6.2 | 6.6 | 5.7 | 6.3 | 5.9 | 6.8 | 4.8 | 2.9 | 5.1 | (2.8 | ) | ||||||||||||||||||||||||||||||||||||||
Kindred Rehabilitation Services | 15.1 | 15.2 | 15.4 | 15.7 | 15.3 | 16.2 | 17.4 | 16.4 | 15.2 | 16.3 | (0.5 | ) | ||||||||||||||||||||||||||||||||||||||
Nursing center division | 13.5 | 14.8 | 13.3 | 13.4 | 13.7 | 11.1 | 12.4 | 11.1 | 12.3 | 11.7 | (1.1 | ) | ||||||||||||||||||||||||||||||||||||||
Consolidated | 14.0 | 14.3 | 13.4 | 13.9 | 13.9 | 13.4 | 14.5 | 12.3 | 12.3 | 13.2 | (1.6 | ) | ||||||||||||||||||||||||||||||||||||||
__________ | ||||||||||||||||||||||||||||||||||||||||||||||||||
(a) | See reconciliation of GAAP results to non-GAAP results beginning on page 15. | |||||||||||||||||||||||||||||||||||||||||||||||||
(b) | Includes changes in estimate of $8 million and $10 million for the fourth quarters of 2015 and 2016, respectively, to lower incentive compensation costs recorded in prior periods. |
KINDRED HEALTHCARE, INC. | |||||||||||||||||||||||||||||||||||||
Condensed Business Segment Data | |||||||||||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||||||||||
Fourth quarter | |||||||||||||||||||||||||||||||||||||
2015 Quarters | 2016 Quarters | % change v. | |||||||||||||||||||||||||||||||||||
First | Second | Third | Fourth | Year | First | Second | Third | Fourth | Year | prior year | |||||||||||||||||||||||||||
Kindred at Home (data combined to include | |||||||||||||||||||||||||||||||||||||
Kindred and Gentiva for each historical period): | |||||||||||||||||||||||||||||||||||||
Home Health: | |||||||||||||||||||||||||||||||||||||
Sites of service (at end of period) | 415 | 411 | 388 | 373 | 384 | 384 | 395 | 390 | |||||||||||||||||||||||||||||
Revenue mix %: | |||||||||||||||||||||||||||||||||||||
Medicare | 80.9 | 80.4 | 80.0 | 80.0 | 80.3 | 79.8 | 79.3 | 78.1 | 77.9 | 78.8 | |||||||||||||||||||||||||||
Medicaid | 2.1 | 2.1 | 2.1 | 2.1 | 2.1 | 2.1 | 2.1 | 2.5 | 1.9 | 2.1 | |||||||||||||||||||||||||||
Commercial and other | 7.3 | 7.9 | 8.2 | 8.5 | 8.1 | 8.4 | 8.2 | 8.6 | 10.6 | 8.9 | |||||||||||||||||||||||||||
Commercial paid at episodic rates | 9.7 | 9.6 | 9.7 | 9.4 | 9.5 | 9.7 | 10.4 | 10.8 | 9.6 | 10.2 | |||||||||||||||||||||||||||
Episodic revenues ($ 000s) | $ | 308,317 | $ | 324,027 | $ | 319,820 | $ | 320,698 | $ | 1,272,862 | $ | 325,821 | $ | 332,193 | $ | 332,562 | $ | 323,398 | $ | 1,313,974 | 0.8 | ||||||||||||||||
Total episodic admissions | 69,936 | 67,808 | 66,753 | 66,157 | 270,654 | 71,426 | 70,212 | 69,219 | 67,501 | 278,358 | 2.0 | ||||||||||||||||||||||||||
Medicare episodic admissions | 61,186 | 59,394 | 58,479 | 57,804 | 236,863 | 62,011 | 60,730 | 59,823 | 59,540 | 242,104 | 3.0 | ||||||||||||||||||||||||||
Total episodes | 110,980 | 109,599 | 108,519 | 108,300 | 437,398 | 113,887 | 113,278 | 113,256 | 111,164 | 451,585 | 2.6 | ||||||||||||||||||||||||||
Episodes per admission | 1.59 | 1.62 | 1.63 | 1.64 | 1.62 | 1.59 | 1.61 | 1.64 | 1.65 | 1.62 | 0.6 | ||||||||||||||||||||||||||
Revenue per episode | $ | 2,778 | $ | 2,956 | $ | 2,947 | $ | 2,961 | $ | 2,910 | $ | 2,861 | $ | 2,933 | $ | 2,936 | $ | 2,909 | $ | 2,910 | (1.8 | ) | |||||||||||||||
Hospice: | |||||||||||||||||||||||||||||||||||||
Sites of service (at end of period) | 190 | 185 | 181 | 175 | 177 | 177 | 185 | 183 | |||||||||||||||||||||||||||||
Admissions | 13,164 | 12,574 | 12,091 | 12,129 | 49,958 | 13,234 | 13,149 | 12,916 | 12,660 | 51,959 | 4.4 | ||||||||||||||||||||||||||
Average length of stay | 95 | 93 | 101 | 100 | 97 | 92 | 91 | 98 | 100 | 95 | - | ||||||||||||||||||||||||||
Patient days | 1,150,841 | 1,190,604 | 1,211,291 | 1,185,330 | 4,738,066 | 1,183,908 | 1,238,584 | 1,277,125 | 1,246,152 | 4,945,769 | 5.1 | ||||||||||||||||||||||||||
Average daily census | 12,787 | 13,084 | 13,166 | 12,884 | 12,981 | 13,010 | 13,611 | 13,882 | 13,545 | 13,513 | 5.1 | ||||||||||||||||||||||||||
Revenue per patient day | $ | 151 | $ | 150 | $ | 150 | $ | 150 | $ | 150 | $ | 149 | $ | 150 | $ | 148 | $ | 149 | $ | 149 | (0.7 | ) | |||||||||||||||
Community Care and other revenues (included in Home Health business segment) ($ 000s) | $ | 65,530 | $ | 67,647 | $ | 67,338 | $ | 67,684 | $ | 268,199 | $ | 66,305 | $ | 68,229 | $ | 75,978 | $ | 74,875 | $ | 285,387 | 10.6 | ||||||||||||||||
Hospital division: | |||||||||||||||||||||||||||||||||||||
End of period data: | |||||||||||||||||||||||||||||||||||||
Number of transitional care hospitals | 97 | 96 | 95 | 95 | 95 | 97 | 94 | 82 | |||||||||||||||||||||||||||||
Number of licensed beds | 7,147 | 7,124 | 7,094 | 7,094 | 7,089 | 7,067 | 6,890 | 6,107 | |||||||||||||||||||||||||||||
Revenue mix %: | |||||||||||||||||||||||||||||||||||||
Medicare | 56.8 | 55.2 | 57.1 | 57.3 | 56.6 | 57.8 | 55.5 | 54.6 | 53.5 | 55.5 | |||||||||||||||||||||||||||
Medicaid | 5.5 | 5.3 | 5.3 | 5.1 | 5.3 | 4.2 | 4.2 | 4.0 | 4.5 | 4.2 | |||||||||||||||||||||||||||
Medicare Advantage | 11.9 | 11.6 | 10.8 | 11.1 | 11.4 | 11.5 | 12.0 | 12.1 | 11.0 | 11.7 | |||||||||||||||||||||||||||
Medicaid Managed | 4.7 | 5.6 | 6.1 | 6.2 | 5.6 | 5.6 | 6.3 | 7.3 | 8.0 | 6.7 | |||||||||||||||||||||||||||
Commercial insurance and other | 21.1 | 22.3 | 20.7 | 20.3 | 21.1 | 20.9 | 22.0 | 22.0 | 23.0 | 21.9 | |||||||||||||||||||||||||||
Admissions: | |||||||||||||||||||||||||||||||||||||
Medicare | 8,775 | 8,267 | 7,976 | 8,169 | 33,187 | 8,919 | 8,253 | 7,861 | 7,351 | 32,384 | (10.0 | ) | |||||||||||||||||||||||||
Medicaid | 610 | 610 | 556 | 520 | 2,296 | 463 | 386 | 375 | 336 | 1,560 | (35.4 | ) | |||||||||||||||||||||||||
Medicare Advantage | 1,555 | 1,352 | 1,212 | 1,304 | 5,423 | 1,453 | 1,382 | 1,327 | 1,210 | 5,372 | (7.2 | ) | |||||||||||||||||||||||||
Medicaid Managed | 643 | 675 | 646 | 612 | 2,576 | 733 | 768 | 861 | 787 | 3,149 | 28.6 | ||||||||||||||||||||||||||
Commercial insurance and other | 1,868 | 1,815 | 1,763 | 1,701 | 7,147 | 1,871 | 1,807 | 1,727 | 1,488 | 6,893 | (12.5 | ) | |||||||||||||||||||||||||
13,451 | 12,719 | 12,153 | 12,306 | 50,629 | 13,439 | 12,596 | 12,151 | 11,172 | 49,358 | (9.2 | ) | ||||||||||||||||||||||||||
Patient days: | |||||||||||||||||||||||||||||||||||||
Medicare | 228,483 | 218,577 | 210,870 | 210,409 | 868,339 | 229,004 | 219,013 | 202,482 | 186,290 | 836,789 | (11.5 | ) | |||||||||||||||||||||||||
Medicaid | 28,663 | 25,213 | 23,167 | 21,795 | 98,838 | 21,134 | 19,409 | 16,781 | 12,181 | 69,505 | (44.1 | ) | |||||||||||||||||||||||||
Medicare Advantage | 48,448 | 44,740 | 39,585 | 41,079 | 173,852 | 45,760 | 47,697 | 43,241 | 37,526 | 174,224 | (8.6 | ) | |||||||||||||||||||||||||
Medicaid Managed | 22,013 | 24,833 | 24,412 | 24,802 | 96,060 | 25,341 | 27,267 | 28,534 | 29,275 | 110,417 | 18.0 | ||||||||||||||||||||||||||
Commercial insurance and other | 62,241 | 62,922 | 58,631 | 57,321 | 241,115 | 62,769 | 63,009 | 59,856 | 54,148 | 239,782 | (5.5 | ) | |||||||||||||||||||||||||
389,848 | 376,285 | 356,665 | 355,406 | 1,478,204 | 384,008 | 376,395 | 350,894 | 319,420 | 1,430,717 | (10.1 | ) | ||||||||||||||||||||||||||
Average length of stay: | |||||||||||||||||||||||||||||||||||||
Medicare | 26.0 | 26.4 | 26.4 | 25.8 | 26.2 | 25.7 | 26.5 | 25.8 | 25.3 | 25.8 | (1.9 | ) | |||||||||||||||||||||||||
Medicaid | 47.0 | 41.3 | 41.7 | 41.9 | 43.0 | 45.6 | 50.3 | 44.7 | 36.3 | 44.6 | (13.4 | ) | |||||||||||||||||||||||||
Medicare Advantage | 31.2 | 33.1 | 32.7 | 31.5 | 32.1 | 31.5 | 34.5 | 32.6 | 31.0 | 32.4 | (1.6 | ) | |||||||||||||||||||||||||
Medicaid Managed | 34.2 | 36.8 | 37.8 | 40.5 | 37.3 | 34.6 | 35.5 | 33.1 | 37.2 | 35.1 | (8.1 | ) | |||||||||||||||||||||||||
Commercial insurance and other | 33.3 | 34.7 | 33.3 | 33.7 | 33.7 | 33.5 | 34.9 | 34.7 | 36.4 | 34.8 | 8.0 | ||||||||||||||||||||||||||
Weighted average | 29.0 | 29.6 | 29.3 | 28.9 | 29.2 | 28.6 | 29.9 | 28.9 | 28.6 | 29.0 | (1.0 | ) | |||||||||||||||||||||||||
Revenues per admission: | |||||||||||||||||||||||||||||||||||||
Medicare | $ | 41,483 | $ | 41,892 | $ | 41,451 | $ | 41,656 | $ | 41,620 | $ | 41,717 | $ | 42,579 | $ | 39,945 | $ | 38,602 | $ | 40,800 | (7.3 | ) | |||||||||||||||
Medicaid | 57,594 | 54,795 | 55,415 | 57,724 | 56,352 | 57,928 | 69,797 | 61,338 | 70,333 | 64,356 | 21.8 | ||||||||||||||||||||||||||
Medicare Advantage | 48,908 | 53,578 | 51,495 | 50,680 | 51,077 | 51,080 | 55,105 | 52,363 | 48,387 | 51,826 | (4.5 | ) | |||||||||||||||||||||||||
Medicaid Managed | 46,740 | 51,950 | 54,976 | 60,263 | 53,383 | 49,287 | 51,696 | 48,631 | 54,238 | 50,932 | (10.0 | ) | |||||||||||||||||||||||||
Commercial insurance and other | 72,395 | 77,110 | 68,151 | 70,735 | 72,150 | 71,651 | 77,193 | 73,515 | 82,066 | 75,819 | 16.0 | ||||||||||||||||||||||||||
Weighted average | 47,616 | 49,312 | 47,683 | 48,236 | 48,209 | 47,868 | 50,309 | 47,348 | 47,507 | 48,281 | (1.5 | ) | |||||||||||||||||||||||||
Revenues per patient day: | |||||||||||||||||||||||||||||||||||||
Medicare | $ | 1,593 | $ | 1,584 | $ | 1,568 | $ | 1,617 | $ | 1,591 | $ | 1,625 | $ | 1,605 | $ | 1,551 | $ | 1,523 | $ | 1,579 | (5.8 | ) | |||||||||||||||
Medicaid | 1,226 | 1,326 | 1,330 | 1,377 | 1,309 | 1,269 | 1,388 | 1,371 | 1,940 | 1,444 | 40.9 | ||||||||||||||||||||||||||
Medicare Advantage | 1,570 | 1,619 | 1,577 | 1,609 | 1,593 | 1,622 | 1,597 | 1,607 | 1,560 | 1,598 | (3.0 | ) | |||||||||||||||||||||||||
Medicaid Managed | 1,365 | 1,412 | 1,455 | 1,487 | 1,432 | 1,426 | 1,456 | 1,467 | 1,458 | 1,453 | (2.0 | ) | |||||||||||||||||||||||||
Commercial insurance and other | 2,173 | 2,224 | 2,049 | 2,099 | 2,139 | 2,136 | 2,214 | 2,121 | 2,255 | 2,180 | 7.4 | ||||||||||||||||||||||||||
Weighted average | 1,643 | 1,667 | 1,625 | 1,670 | 1,651 | 1,675 | 1,684 | 1,640 | 1,662 | 1,666 | (0.5 | ) | |||||||||||||||||||||||||
Medicare case mix index (discharged patients only) | 1.166 | 1.163 | 1.150 | 1.164 | 1.162 | 1.163 | 1.179 | 1.172 | 1.153 | 1.169 | (0.9 | ) | |||||||||||||||||||||||||
Average daily census | 4,332 | 4,135 | 3,877 | 3,863 | 4,050 | 4,220 | 4,136 | 3,814 | 3,472 | 3,909 | (10.1 | ) | |||||||||||||||||||||||||
Occupancy % | 69.2 | 66.1 | 62.2 | 62.2 | 64.9 | 68.0 | 67.5 | 61.6 | 64.1 | 65.1 | 3.1 | ||||||||||||||||||||||||||
KINDRED HEALTHCARE, INC. | ||||||||||||||||||||||||||||||||||||||
Condensed Business Segment Data (Continued) | ||||||||||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||||||||||
Fourth quarter | ||||||||||||||||||||||||||||||||||||||
2015 Quarters | 2016 Quarters | % change v. | ||||||||||||||||||||||||||||||||||||
First | Second | Third | Fourth | Year | First | Second | Third | Fourth | Year | prior year | ||||||||||||||||||||||||||||
Same-hospital data (a): | ||||||||||||||||||||||||||||||||||||||
End of period data: | ||||||||||||||||||||||||||||||||||||||
Number of transitional care hospitals | 78 | 78 | 78 | 78 | 78 | 78 | 78 | 78 | ||||||||||||||||||||||||||||||
Number of licensed beds | 5,965 | 5,965 | 5,965 | 5,965 | 5,960 | 5,960 | 5,960 | 5,960 | ||||||||||||||||||||||||||||||
Revenues | $ | 555,986 | $ | 546,476 | $ | 506,887 | $ | 520,087 | $ | 2,129,436 | $ | 563,201 | $ | 557,989 | $ | 508,608 | $ | 521,244 | $ | 2,151,042 | 0.2 | |||||||||||||||||
Revenue mix %: | ||||||||||||||||||||||||||||||||||||||
Medicare | 57.2 | 55.4 | 57.6 | 57.8 | 57.0 | 58.0 | 55.4 | 54.1 | 53.0 | 55.2 | ||||||||||||||||||||||||||||
Medicaid | 5.0 | 4.7 | 4.8 | 4.5 | 4.8 | 3.7 | 3.9 | 3.7 | 4.5 | 3.9 | ||||||||||||||||||||||||||||
Medicare Advantage | 11.5 | 11.2 | 10.2 | 10.7 | 10.9 | 11.3 | 11.7 | 12.3 | 11.0 | 11.6 | ||||||||||||||||||||||||||||
Medicaid Managed | 4.9 | 5.8 | 6.3 | 6.4 | 5.8 | 5.8 | 6.6 | 7.8 | 8.2 | 7.1 | ||||||||||||||||||||||||||||
Commercial insurance and other | 21.4 | 22.9 | 21.1 | 20.6 | 21.5 | 21.2 | 22.4 | 22.1 | 23.3 | 22.2 | ||||||||||||||||||||||||||||
Admissions: | ||||||||||||||||||||||||||||||||||||||
Medicare | 7,594 | 7,155 | 7,008 | 7,161 | 28,918 | 7,802 | 7,209 | 6,882 | 7,132 | 29,025 | (0.4 | ) | ||||||||||||||||||||||||||
Medicaid | 520 | 527 | 485 | 430 | 1,962 | 395 | 342 | 343 | 336 | 1,416 | (21.9 | ) | ||||||||||||||||||||||||||
Medicare Advantage | 1,284 | 1,099 | 1,020 | 1,082 | 4,485 | 1,219 | 1,148 | 1,165 | 1,187 | 4,719 | 9.7 | |||||||||||||||||||||||||||
Medicaid Managed | 562 | 609 | 572 | 547 | 2,290 | 632 | 702 | 792 | 787 | 2,913 | 43.9 | |||||||||||||||||||||||||||
Commercial insurance and other | 1,548 | 1,514 | 1,457 | 1,410 | 5,929 | 1,567 | 1,528 | 1,462 | 1,456 | 6,013 | 3.3 | |||||||||||||||||||||||||||
11,508 | 10,904 | 10,542 | 10,630 | 43,584 | 11,615 | 10,929 | 10,644 | 10,898 | 44,086 | 2.5 | ||||||||||||||||||||||||||||
Patient days: | ||||||||||||||||||||||||||||||||||||||
Medicare | 198,834 | 189,440 | 184,829 | 185,149 | 758,252 | 200,004 | 190,955 | 177,079 | 180,794 | 748,832 | (2.4 | ) | ||||||||||||||||||||||||||
Medicaid | 21,074 | 18,041 | 16,596 | 14,788 | 70,499 | 14,670 | 13,547 | 12,085 | 12,175 | 52,477 | (17.7 | ) | ||||||||||||||||||||||||||
Medicare Advantage | 40,387 | 37,070 | 32,588 | 34,630 | 144,675 | 38,617 | 40,835 | 38,462 | 36,900 | 154,814 | 6.6 | |||||||||||||||||||||||||||
Medicaid Managed | 19,537 | 22,351 | 21,700 | 22,063 | 85,651 | 22,421 | 24,893 | 26,698 | 29,284 | 103,296 | 32.7 | |||||||||||||||||||||||||||
Commercial insurance and other | 52,945 | 53,110 | 49,896 | 49,141 | 205,092 | 53,613 | 53,821 | 51,772 | 53,391 | 212,597 | 8.6 | |||||||||||||||||||||||||||
332,777 | 320,012 | 305,609 | 305,771 | 1,264,169 | 329,325 | 324,051 | 306,096 | 312,544 | 1,272,016 | 2.2 | ||||||||||||||||||||||||||||
Average length of stay: | ||||||||||||||||||||||||||||||||||||||
Medicare | 26.2 | 26.5 | 26.4 | 25.9 | 26.2 | 25.6 | 26.5 | 25.7 | 25.3 | 25.8 | (2.3 | ) | ||||||||||||||||||||||||||
Medicaid | 40.5 | 34.2 | 34.2 | 34.4 | 35.9 | 37.1 | 39.6 | 35.2 | 36.2 | 37.1 | 5.2 | |||||||||||||||||||||||||||
Medicare Advantage | 31.5 | 33.7 | 31.9 | 32.0 | 32.3 | 31.7 | 35.6 | 33.0 | 31.1 | 32.8 | (2.8 | ) | ||||||||||||||||||||||||||
Medicaid Managed | 34.8 | 36.7 | 37.9 | 40.3 | 37.4 | 35.5 | 35.5 | 33.7 | 37.2 | 35.5 | (7.7 | ) | ||||||||||||||||||||||||||
Commercial insurance and other | 34.2 | 35.1 | 34.2 | 34.9 | 34.6 | 34.2 | 35.2 | 35.4 | 36.7 | 35.4 | 5.2 | |||||||||||||||||||||||||||
Weighted average | 28.9 | 29.3 | 29.0 | 28.8 | 29.0 | 28.4 | 29.7 | 28.8 | 28.7 | 28.9 | (0.3 | ) | ||||||||||||||||||||||||||
Revenues per admission: | ||||||||||||||||||||||||||||||||||||||
Medicare | $ | 41,914 | $ | 42,350 | $ | 41,669 | $ | 41,954 | $ | 41,973 | $ | 41,876 | $ | 42,883 | $ | 39,959 | $ | 38,720 | $ | 40,896 | (7.7 | ) | ||||||||||||||||
Medicaid | 53,340 | 48,832 | 50,400 | 54,199 | 51,591 | 53,232 | 62,945 | 54,765 | 70,288 | 59,996 | 29.7 | |||||||||||||||||||||||||||
Medicare Advantage | 49,842 | 55,649 | 50,807 | 51,604 | 51,909 | 51,955 | 57,112 | 53,701 | 48,440 | 52,757 | (6.1 | ) | ||||||||||||||||||||||||||
Medicaid Managed | 48,002 | 52,017 | 55,653 | 61,296 | 54,156 | 51,511 | 52,419 | 50,027 | 54,286 | 52,076 | (11.4 | ) | ||||||||||||||||||||||||||
Commercial insurance and other | 76,859 | 82,490 | 73,279 | 75,877 | 77,184 | 76,305 | 81,779 | 77,047 | 83,278 | 79,565 | 9.8 | |||||||||||||||||||||||||||
Weighted average | 48,313 | 50,117 | 48,083 | 48,926 | 48,858 | 48,489 | 51,056 | 47,784 | 47,829 | 48,792 | (2.2 | ) | ||||||||||||||||||||||||||
Revenues per patient day: | ||||||||||||||||||||||||||||||||||||||
Medicare | $ | 1,601 | $ | 1,600 | $ | 1,580 | $ | 1,623 | $ | 1,601 | $ | 1,634 | $ | 1,619 | $ | 1,553 | $ | 1,527 | $ | 1,585 | (5.9 | ) | ||||||||||||||||
Medicaid | 1,316 | 1,426 | 1,473 | 1,576 | 1,436 | 1,433 | 1,589 | 1,554 | 1,940 | 1,619 | 23.1 | |||||||||||||||||||||||||||
Medicare Advantage | 1,585 | 1,650 | 1,590 | 1,612 | 1,609 | 1,640 | 1,606 | 1,627 | 1,558 | 1,608 | (3.3 | ) | ||||||||||||||||||||||||||
Medicaid Managed | 1,381 | 1,417 | 1,467 | 1,520 | 1,448 | 1,452 | 1,478 | 1,484 | 1,459 | 1,469 | (4.0 | ) | ||||||||||||||||||||||||||
Commercial insurance and other | 2,247 | 2,352 | 2,140 | 2,177 | 2,231 | 2,230 | 2,322 | 2,176 | 2,271 | 2,250 | 4.3 | |||||||||||||||||||||||||||
Weighted average | 1,671 | 1,708 | 1,659 | 1,701 | 1,684 | 1,710 | 1,722 | 1,662 | 1,668 | 1,691 | (1.9 | ) | ||||||||||||||||||||||||||
Average daily census | 3,698 | 3,517 | 3,322 | 3,324 | 3,463 | 3,619 | 3,561 | 3,327 | 3,397 | 3,475 | 2.2 | |||||||||||||||||||||||||||
__________ | ||||||||||||||||||||||||||||||||||||||
(a) | All historical statistics have been adjusted to present the ongoing hospital division portfolio excluding four hospitals acquired during the second quarter of 2016. See reconciliation of same-hospital revenues to reported revenues for the Hospital Division on page 18. |
KINDRED HEALTHCARE, INC. | ||||||||||||||||||||||||||||||||||||||
Condensed Business Segment Data (Continued) | ||||||||||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||||||||||
Fourth quarter | ||||||||||||||||||||||||||||||||||||||
2015 Quarters | 2016 Quarters | % change v. | ||||||||||||||||||||||||||||||||||||
First | Second | Third | Fourth | Year | First | Second | Third | Fourth | Year | prior year | ||||||||||||||||||||||||||||
Kindred Rehabilitation Services: | ||||||||||||||||||||||||||||||||||||||
Kindred Hospital Rehabilitation Services: | ||||||||||||||||||||||||||||||||||||||
Freestanding IRFs: | ||||||||||||||||||||||||||||||||||||||
End of period data: | ||||||||||||||||||||||||||||||||||||||
Number of IRFs | 16 | 16 | 18 | 18 | 19 | 19 | 19 | 19 | ||||||||||||||||||||||||||||||
Number of licensed beds | 829 | 829 | 919 | 919 | 969 | 969 | 969 | 995 | ||||||||||||||||||||||||||||||
Discharges (a) | 3,806 | 3,927 | 3,941 | 4,317 | 15,991 | 4,448 | 4,646 | 4,644 | 4,671 | 18,409 | 8.2 | |||||||||||||||||||||||||||
Same-hospital discharges (a) | 3,806 | 3,927 | 3,842 | 4,173 | 15,748 | 4,016 | 4,089 | 4,069 | 4,366 | 16,540 | 4.6 | |||||||||||||||||||||||||||
Occupancy % (a) | 73.2 | 71.5 | 68.7 | 68.0 | 70.2 | 70.6 | 70.6 | 68.8 | 66.5 | 69.1 | (2.2 | ) | ||||||||||||||||||||||||||
Average length of stay (a) | 13.7 | 13.1 | 13.2 | 12.7 | 13.2 | 13.2 | 12.9 | 12.7 | 12.6 | 12.8 | (0.8 | ) | ||||||||||||||||||||||||||
Revenue per discharge (a) | $ | 19,517 | $ | 19,325 | $ | 18,992 | $ | 18,640 | $ | 19,104 | $ | 19,731 | $ | 19,318 | $ | 19,599 | $ | 19,486 | $ | 19,531 | 4.5 | |||||||||||||||||
Contract services: | ||||||||||||||||||||||||||||||||||||||
Sites of service (at end of period): | ||||||||||||||||||||||||||||||||||||||
Inpatient rehabilitation units | 100 | 99 | 101 | 100 | 104 | 105 | 104 | 102 | ||||||||||||||||||||||||||||||
LTAC hospitals | 120 | 120 | 119 | 119 | 119 | 121 | 120 | 119 | ||||||||||||||||||||||||||||||
Sub-acute units | 8 | 8 | 7 | 7 | 7 | 7 | 7 | 5 | ||||||||||||||||||||||||||||||
Outpatient units | 138 | 139 | 135 | 130 | 139 | 138 | 139 | 132 | ||||||||||||||||||||||||||||||
366 | 366 | 362 | 356 | 369 | 371 | 370 | 358 | |||||||||||||||||||||||||||||||
Revenue per site | $ | 211,151 | $ | 209,436 | $ | 206,041 | $ | 210,978 | $ | 837,606 | $ | 211,417 | $ | 215,798 | $ | 210,810 | $ | 220,733 | $ | 858,758 | 4.6 | |||||||||||||||||
RehabCare: | ||||||||||||||||||||||||||||||||||||||
Sites of service (at end of period) | 1,829 | 1,789 | 1,821 | 1,798 | 1,767 | 1,759 | 1,754 | 1,718 | ||||||||||||||||||||||||||||||
Revenue per site | $ | 138,106 | $ | 132,359 | $ | 120,548 | $ | 114,896 | $ | 505,909 | $ | 115,590 | $ | 111,470 | $ | 109,738 | $ | 111,460 | $ | 448,258 | (3.0 | ) | ||||||||||||||||
Nursing center division: | ||||||||||||||||||||||||||||||||||||||
End of period data: | ||||||||||||||||||||||||||||||||||||||
Number of nursing centers | 90 | 90 | 90 | 90 | 92 | 92 | 91 | 91 | ||||||||||||||||||||||||||||||
Number of licensed beds | 11,535 | 11,535 | 11,535 | 11,535 | 11,815 | 11,815 | 11,568 | 11,568 | ||||||||||||||||||||||||||||||
Admissions (b) | 10,376 | 9,831 | 9,558 | 9,237 | 39,002 | 9,815 | 9,480 | 9,698 | 9,409 | 38,402 | 1.9 | |||||||||||||||||||||||||||
Medicare average length of stay (b) | 28.9 | 28.9 | 28.5 | 28.4 | 28.7 | 28.2 | 28.4 | 27.4 | 26.7 | 27.7 | (6.0 | ) | ||||||||||||||||||||||||||
Patient days (b) | 861,278 | 852,691 | 851,332 | 845,924 | 3,411,225 | 846,578 | 842,681 | 845,037 | 846,361 | 3,380,657 | 0.1 | |||||||||||||||||||||||||||
Revenues per patient day (b) | $ | 319 | $ | 321 | $ | 318 | $ | 323 | $ | 320 | $ | 322 | $ | 323 | $ | 320 | $ | 323 | $ | 322 | - | |||||||||||||||||
Average daily census (b) | 9,570 | 9,370 | 9,254 | 9,195 | 9,346 | 9,303 | 9,260 | 9,185 | 9,200 | 9,237 | 0.1 | |||||||||||||||||||||||||||
Occupancy % (b) | 81.3 | 79.6 | 78.6 | 78.1 | 79.4 | 77.3 | 76.7 | 77.5 | 77.9 | 77.4 | (0.3 | ) | ||||||||||||||||||||||||||
__________ | ||||||||||||||||||||||||||||||||||||||
(a) | Excludes non-consolidating IRF. | |||||||||||||||||||||||||||||||||||||
(b) | Excludes managed facilities. |
Forward-Looking Statements |
This earnings 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, all statements regarding the Company's ability to exit the skilled nursing facility business and the expected timing of such exit, as well as the Company's ability to realize the anticipated benefits, sale proceeds, cost savings and strategic gains from this initiative, 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, government investigations, regulatory matters, and statements containing words such as “anticipate,” “approximate,” “believe,” “plan,” “estimate,” “expect,” “project,” “could,” “would,” “should,” “will,” “intend,” “hope,” “may,” “potential,” “upside,” and other similar expressions. Statements in this earnings 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, and expected outcome of government investigations and other regulatory matters, 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. 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 detailed from time to time in the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with the Securities and Exchange Commission. |
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. |
Non-GAAP Measures |
In addition to the results provided in accordance with GAAP, the Company has provided information in this earnings release to compute certain non-GAAP measures. The use of these non-GAAP measures are not intended to replace the presentation of the Company’s financial results in accordance with GAAP. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are included in the following pages of this earnings release. |
EBITDAR: The Company defines EBITDAR as earnings before interest, income taxes, depreciation, amortization and rent, and believes that the presentation of EBITDAR is useful to the investors because creditors, securities analysts and investors use EBITDAR as a measure of earnings used to compare the performance of companies in the healthcare industry before consideration of the capital structure of fixed assets and financing costs, which can vary significantly among companies. |
For each of the Company’s segments, EBITDAR is a measure of performance used by the Company’s chief operating decision makers in accordance with “Accounting Standard Codification 280—Segment Reporting.” In this context, the Company defines segment EBITDAR as earnings before interest, income taxes, depreciation, amortization, and rent, excluding litigation contingency expense, impairment charges, restructuring charges, transaction costs, and the allocation of support center overhead. |
Core Operating Results: The Company calculates core operating results, including core net income attributable to Kindred, core EBITDAR and core diluted EPS, by excluding charges related to transaction, integration, severance, retirement, retention, impairments, business interruption settlements, research and development, restructuring, debt amendment costs, and litigation. 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’s management uses core net income attributable to Kindred, core EBITDAR and core diluted EPS as meaningful measures of operational performance, and for the attainment of internal incentive compensation goals, in addition to other measures. The Company uses these measures to assess the relative performance and attainment of internal incentive compensation goals of its operating divisions, as well as the employees that operate these businesses. In addition, the Company believes these measures are important, because securities analysts and investors use these measures to compare the Company’s performance to other companies in the healthcare industry. |
Non-GAAP Measures (Continued) |
Same-Hospital Revenues: The same-hospital revenues are calculated by excluding from the Company's Hospital Division revenues the results from four hospitals acquired in 2016, 15 hospitals sold in 2016, three hospitals that closed during 2016, and two hospitals that closed during 2015. The Company believes the presentation of same-hospital revenues provides investors, equity analysts and others with useful information regarding the performance of the Company's hospital operations that are comparable for the periods presented. |
For EBITDAR, core net income attributable to Kindred, and core EBITDAR, the Company believes that income (loss) from continuing operations is the most comparable GAAP measure. For core diluted EPS, the Company believes that GAAP diluted earnings (loss) per share from continuing operations is the most comparable GAAP measure. Readers of the Company’s financial information should consider income (loss) from continuing operations and diluted earnings (loss) per share from continuing operations as important measures of the Company’s financial performance, because they provide the most complete measures of its performance. For same-hospital revenues, the Company believes that reported hospital segment revenues is the most comparable GAAP measure. Readers of the Company’s financial information should consider reported hospital segment revenues as an important measure of the Company’s Hospital Division financial performance because it provides the most complete measure of its performance. Operating results presented on a core basis, as well as a same-hospital basis, 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. |
Also in this earnings release, the Company provides the financial measures of operating cash flows and free cash flows excluding certain items, which the Company refers to as core operating cash flows and core free cash flows, respectively. |
Core Operating Cash Flows: The Company defines core operating cash flows as operating cash flows excluding payments related to transaction, severance, retirement, retention, business interruption settlements, research and development, restructuring charges, debt amendment costs, and litigation, net of income tax benefits. The Company believes that core operating cash flows provide important information to investors for comparability to other companies that use similar measures. Management uses core operating cash flows to evaluate consolidated operating performance and in making decisions related to acquisitions, development capital expenditures, dividends, long-term debt repayments and other uses. |
Core Free Cash Flows: The Company defines core free cash flows as operating cash flows excluding payments related to transaction, severance, retirement, retention, business interruption settlements, research and development, restructuring charges, debt amendment costs, and litigation, net of income tax benefits but including routine capital expenditures and distributions to noncontrolling interests. The Company believes that core free cash flows provide important information to investors for comparability to other companies that use similar measures. Management uses core free cash flows in making decisions related to acquisitions, development capital expenditures, dividends, long-term debt repayments and other uses. |
The Company recognizes that core operating cash flows and core free cash flows are non-GAAP measures and are not intended to replace the presentation of the Company’s cash flows in accordance with GAAP. For core operating cash flows and core free cash flows, 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 because it provides the most complete measure of cash provided by operating activities. Core operating cash flows and core free cash flows should be considered in addition to, not as a substitute for, or superior to, financial measures based upon GAAP as an indicator of the Company’s cash flows provided by operating activities. |
KINDRED HEALTHCARE, INC. | |||||||||||||||||||||
Reconciliation of GAAP Results to Non-GAAP Measures | |||||||||||||||||||||
(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 earnings release to compute certain non-GAAP measures for the three months and year ended December 31, 2016 and 2015 before certain charges or on a core basis. The charges that were excluded from core operating results are denoted in the tables below. | |||||||||||||||||||||
The income tax benefit (provision) associated with the excluded charges, including the deferred tax valuation allowance, was calculated using an effective income tax rate of 1.4% and 129.2% for the three months ended December 31, 2016 and 2015, respectively, and 56.9% and 36.8% for the year ended December 31, 2016 and 2015, respectively. The difference in the effective income tax rate for both periods compared to the same prior year periods is attributable to the deferred tax valuation allowance recorded in 2016 and the composition of charges that are non-deductible for income tax purposes, including the impairment charges, litigation contingency expense and transaction costs. For the three months ended December 31, 2015, the Company recorded an income tax benefit of $47.1 million based upon the final settlement terms of an investigation of RehabCare Group, Inc. by the United States Department of Justice, which was completed in January 2016. The investigation was settled for $126.3 million, including interest, and $125 million of the settlement cost was recorded during the nine months ended September 31, 2015. | |||||||||||||||||||||
Three months ended | Year ended | ||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||||||
Reconciliation of income from continuing operations before charges: | |||||||||||||||||||||
As reported: | |||||||||||||||||||||
Income (loss) from continuing operations attributable to Kindred | ($19,719 | ) | $ | 43,902 | ($671,137 | ) | ($94,427 | ) | |||||||||||||
Diluted income (loss) per common share from continuing operations | ($0.23 | ) | $ | 0.50 | ($7.73 | ) | ($1.12 | ) | |||||||||||||
Weighted average diluted shares outstanding | 86,904 | 87,232 | 86,800 | 84,558 | |||||||||||||||||
Detail of charges: | |||||||||||||||||||||
Restructuring charges: | |||||||||||||||||||||
Facility/branch divestitures and closings | ($6,742 | ) | ($3,288 | ) | ($28,976 | ) | ($9,727 | ) | |||||||||||||
Retention and severance costs | (9,344 | ) | - | (14,393 | ) | (523 | ) | ||||||||||||||
Transaction costs | (837 | ) | - | (2,414 | ) | - | |||||||||||||||
(16,923 | ) | (3,288 | ) | (45,783 | ) | (10,250 | ) | ||||||||||||||
Lease termination costs (charged to rent restructuring charges) | (2,029 | ) | (889 | ) | (61,392 | ) | (2,720 | ) | |||||||||||||
Impairment charges | (4,351 | ) | (18,031 | ) | (342,559 | ) | (18,031 | ) | |||||||||||||
Research and development | (4,293 | ) | - | (11,520 | ) | - | |||||||||||||||
RehabCare customer contract litigation | - | (12,864 | ) | - | (12,864 | ) | |||||||||||||||
Litigation contingency expense | - | (8,261 | ) | (2,840 | ) | (138,648 | ) | ||||||||||||||
Other retirement and severance costs | - | (2,125 | ) | (658 | ) | (7,752 | ) | ||||||||||||||
Other facility/branch sales/closings/consolidations | - | (50 | ) | (821 | ) | (2,136 | ) | ||||||||||||||
Business interruption settlements | 2,069 | - | 3,378 | - | |||||||||||||||||
Debt amendment fees not capitalized | - | - | (1,103 | ) | - | ||||||||||||||||
Gentiva transaction costs: | - | ||||||||||||||||||||
Professional and consulting fees | (1,779 | ) | (2,662 | ) | (5,610 | ) | (37,840 | ) | |||||||||||||
Severance and retention | - | (1,527 | ) | (696 | ) | (60,358 | ) | ||||||||||||||
Lease termination (charged to rent expense) | - | - | (272 | ) | (792 | ) | |||||||||||||||
Pre-closing financing charges (charged to general and administrative expenses) | - | - | - | (6,005 | ) | ||||||||||||||||
Pre-closing financing charges (charged to interest expense) | - | - | - | (17,431 | ) | ||||||||||||||||
Trade name impairment charges | - | - | - | (6,726 | ) | ||||||||||||||||
Other transaction costs | (387 | ) | (1,178 | ) | (2,373 | ) | (4,928 | ) | |||||||||||||
(27,693 | ) | (50,875 | ) | (472,249 | ) | (326,481 | ) | ||||||||||||||
Income tax benefit | 22,385 | 65,738 | 119,987 | 120,040 | |||||||||||||||||
Deferred tax valuation allowance | (22,002 | ) | - | (388,472 | ) | - | |||||||||||||||
Charges net of income taxes | (27,310 | ) | 14,863 | (740,734 | ) | (206,441 | ) | ||||||||||||||
Noncontrolling interest adjustment related to impairment charges | - | - | 1,304 | - | |||||||||||||||||
(27,310 | ) | 14,863 | (739,430 | ) | (206,441 | ) | |||||||||||||||
Allocation to participating unvested restricted stockholders | - | (204 | ) | - | - | ||||||||||||||||
Available to common stockholders | ($27,310 | ) | $ | 14,659 | ($739,430 | ) | ($206,441 | ) | |||||||||||||
Diluted loss per common share related to charges | ($0.31 | ) | $ | 0.17 | ($8.52 | ) | ($2.44 | ) | |||||||||||||
Weighted average diluted shares outstanding | 86,904 | 87,232 | 86,800 | 84,558 | |||||||||||||||||
Core: | |||||||||||||||||||||
Income from continuing operations before charges | $ | 7,591 | $ | 29,039 | $ | 68,293 | $ | 112,014 | |||||||||||||
Diluted earnings per common share from continuing operations before charges (a) | $ | 0.08 | $ | 0.33 | $ | 0.76 | $ | 1.28 | |||||||||||||
Weighted average diluted shares outstanding used to compute earnings per common share from continuing operations before charges | 87,641 | 87,232 | 87,491 | 86,098 | |||||||||||||||||
Reconciliation of effective income tax rate before charges: | |||||||||||||||||||||
Effective income tax rate before charges | 13.5 | % | 25.1 | % | 27.1 | % | 33.3 | % | |||||||||||||
Impact of charges on effective income tax rate | 66.0 | % | 1273.1 | % | 76.6 | % | 11.9 | % | |||||||||||||
Reported effective income tax rate | 79.5 | % | 1298.2 | % | 103.7 | % | 45.2 | % | |||||||||||||
__________ | |||||||||||||||||||||
(a) | For purposes of computing diluted earnings per common share before charges, income from continuing operations before charges was reduced by $0.2 million and $0.4 million for the three months ended December 31, 2016 and 2015, respectively, and by $1.5 million and $1.8 million for the year ended December 31, 2016 and 2015, respectively, for the allocation of income to participating unvested restricted stockholders. | ||||||||||||||||||||
KINDRED HEALTHCARE, INC. | ||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of GAAP Results to Non-GAAP Measures (Continued) | ||||||||||||||||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||||||||||||||
A reconciliation of combined Kindred and Gentiva home health revenues (excluding community care) for each historical period follows: | ||||||||||||||||||||||||||||||||||||||||||||
Fourth quarter | ||||||||||||||||||||||||||||||||||||||||||||
2015 Quarters | 2016 Quarters | % change v. | ||||||||||||||||||||||||||||||||||||||||||
First | Second | Third | Fourth | Year | First | Second | Third | Fourth | Year | prior year | ||||||||||||||||||||||||||||||||||
Kindred | $ | 254,965 | $ | 360,173 | $ | 356,716 | $ | 358,075 | $ | 1,329,929 | $ | 363,730 | $ | 370,327 | $ | 373,980 | $ | 369,198 | $ | 1,477,235 | ||||||||||||||||||||||||
Gentiva | 87,520 | - | - | - | 87,520 | - | - | - | - | - | ||||||||||||||||||||||||||||||||||
$ | 342,485 | $ | 360,173 | $ | 356,716 | $ | 358,075 | $ | 1,417,449 | $ | 363,730 | $ | 370,327 | $ | 373,980 | $ | 369,198 | $ | 1,477,235 | 3.1 | ||||||||||||||||||||||||
A reconciliation of reported revenues to same-hospital revenues for the Hospital Division for each historical period follows: | ||||||||||||||||||||||||||||||||||||||||||||
Fourth quarter | ||||||||||||||||||||||||||||||||||||||||||||
2015 Quarters | 2016 Quarters | % change v. | ||||||||||||||||||||||||||||||||||||||||||
First | Second | Third | Fourth | Year | First | Second | Third | Fourth | Year | prior year | ||||||||||||||||||||||||||||||||||
Reported revenues | $ | 640,483 | $ | 627,206 | $ | 579,497 | $ | 593,593 | $ | 2,440,779 | $ | 643,299 | $ | 633,695 | $ | 575,323 | $ | 530,746 | $ | 2,383,063 | (10.6 | ) | ||||||||||||||||||||||
Hospitals acquired during 2016 (a) | - | - | - | - | - | - | (2,836 | ) | (10,655 | ) | (9,958 | ) | (23,449 | ) | ||||||||||||||||||||||||||||||
Hospitals sold during 2016 (b) | (71,307 | ) | (68,185 | ) | (63,074 | ) | (66,533 | ) | (269,099 | ) | (71,941 | ) | (64,084 | ) | (47,098 | ) | 732 | (182,391 | ) | |||||||||||||||||||||||||
Hospitals closed during 2016 (c) | (7,682 | ) | (7,357 | ) | (7,376 | ) | (7,471 | ) | (29,886 | ) | (8,271 | ) | (8,864 | ) | (8,908 | ) | (183 | ) | (26,226 | ) | ||||||||||||||||||||||||
Hospitals closed during 2015 (d) | (5,508 | ) | (5,188 | ) | (2,160 | ) | 498 | (12,358 | ) | 114 | 78 | (54 | ) | (93 | ) | 45 | ||||||||||||||||||||||||||||
Same-hospital revenues | $ | 555,986 | $ | 546,476 | $ | 506,887 | $ | 520,087 | $ | 2,129,436 | $ | 563,201 | $ | 557,989 | $ | 508,608 | $ | 521,244 | $ | 2,151,042 | 0.2 | |||||||||||||||||||||||
__________ | ||||||||||||||||||||||||||||||||||||||||||||
(a) | Four hospitals acquired during the second quarter of 2016. | |||||||||||||||||||||||||||||||||||||||||||
(b) | Three hospitals sold during the second quarter of 2016 and 12 hospitals sold during the fourth quarter of 2016. | |||||||||||||||||||||||||||||||||||||||||||
(c) | Three hospitals closed during the third quarter of 2016. | |||||||||||||||||||||||||||||||||||||||||||
(d) | One hospital closed during the second quarter of 2015 and one hospital closed during the third quarter of 2015. | |||||||||||||||||||||||||||||||||||||||||||
KINDRED HEALTHCARE, INC. | ||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of GAAP Results to Non-GAAP Measures (Continued) | ||||||||||||||||||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||||||||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||||||||||||||||||||||||||||||||
Three months ended December 31, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||
Charges | ||||||||||||||||||||||||||||||||||||||||||||||
Gentiva | Deferred | |||||||||||||||||||||||||||||||||||||||||||||
Business | transaction | tax | Before | |||||||||||||||||||||||||||||||||||||||||||
As | interruption | Impairment | Research and | Restructuring | and | Other | valuation | charges | ||||||||||||||||||||||||||||||||||||||
reported | settlements | charges | development | charges | integration | transaction | allowance | Total | ("core") | |||||||||||||||||||||||||||||||||||||
Income (loss) from continuing operations: | ||||||||||||||||||||||||||||||||||||||||||||||
Segment EBITDAR: | ||||||||||||||||||||||||||||||||||||||||||||||
Kindred at Home: | ||||||||||||||||||||||||||||||||||||||||||||||
Home health | $ | 61,487 | $ | (302 | ) | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | (302 | ) | $ | 61,185 | ||||||||||||||||||||||||
Hospice | 28,805 | (1,137 | ) | - | - | - | - | - | - | (1,137 | ) | 27,668 | ||||||||||||||||||||||||||||||||||
90,292 | (1,439 | ) | - | - | - | - | - | - | (1,439 | ) | 88,853 | |||||||||||||||||||||||||||||||||||
Hospital division | 91,892 | (630 | ) | - | - | - | - | - | - | (630 | ) | 91,262 | ||||||||||||||||||||||||||||||||||
Kindred Rehabilitation Services: | ||||||||||||||||||||||||||||||||||||||||||||||
Kindred Hospital Rehabilitation Services | 49,314 | - | - | - | - | - | - | - | - | 49,314 | ||||||||||||||||||||||||||||||||||||
RehabCare | 5,578 | - | - | - | - | - | - | - | - | 5,578 | ||||||||||||||||||||||||||||||||||||
54,892 | - | - | - | - | - | - | - | - | 54,892 | |||||||||||||||||||||||||||||||||||||
Nursing center division | 33,658 | - | - | - | - | - | - | - | - | 33,658 | ||||||||||||||||||||||||||||||||||||
Support center | (57,643 | ) | - | - | 4,293 | - | - | - | - | 4,293 | (53,350 | ) | ||||||||||||||||||||||||||||||||||
Impairment charges | (4,351 | ) | - | 4,351 | - | - | - | - | - | 4,351 | - | |||||||||||||||||||||||||||||||||||
Restructuring charges | (16,923 | ) | - | - | - | 16,923 | - | - | - | 16,923 | - | |||||||||||||||||||||||||||||||||||
Transaction costs | (2,166 | ) | - | - | - | - | 1,779 | 387 | - | 2,166 | - | |||||||||||||||||||||||||||||||||||
EBITDAR | 189,651 | (2,069 | ) | 4,351 | 4,293 | 16,923 | 1,779 | 387 | - | 25,664 | 215,315 | |||||||||||||||||||||||||||||||||||
Rent | (94,509 | ) | - | - | - | - | - | - | - | - | (94,509 | ) | ||||||||||||||||||||||||||||||||||
Restructuring charges - rent | (2,029 | ) | - | - | - | 2,029 | - | - | - | 2,029 | - | |||||||||||||||||||||||||||||||||||
Depreciation and amortization | (38,082 | ) | - | - | - | - | - | - | - | - | (38,082 | ) | ||||||||||||||||||||||||||||||||||
Interest, net | (58,629 | ) | - | - | - | - | - | - | - | - | (58,629 | ) | ||||||||||||||||||||||||||||||||||
Income (loss) from continuing operations before income taxes | (3,598 | ) | (2,069 | ) | 4,351 | 4,293 | 18,952 | 1,779 | 387 | - | 27,693 | 24,095 | ||||||||||||||||||||||||||||||||||
Provision for income taxes | 2,860 | (1,692 | ) | 3,559 | 3,511 | 15,501 | 1,190 | 316 | (22,002 | ) | 383 | 3,243 | ||||||||||||||||||||||||||||||||||
(6,458 | ) | $ | (377 | ) | $ | 792 | $ | 782 | $ | 3,451 | $ | 589 | $ | 71 | $ | 22,002 | $ | 27,310 | 20,852 | |||||||||||||||||||||||||||
Noncontrolling interests | (13,261 | ) | (13,261 | ) | ||||||||||||||||||||||||||||||||||||||||||
Income (loss) attributable to Kindred | $ | (19,719 | ) | $ | 7,591 | |||||||||||||||||||||||||||||||||||||||||
Diluted earnings (loss) per common share | $ | (0.23 | ) | $ | 0.08 | |||||||||||||||||||||||||||||||||||||||||
Diluted shares used in computing earnings (loss) per common share | 86,904 | 87,641 | ||||||||||||||||||||||||||||||||||||||||||||
Three months ended December 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||
Charges | ||||||||||||||||||||||||||||||||||||||||||||||
RehabCare | Gentiva | |||||||||||||||||||||||||||||||||||||||||||||
Retirement | Facility/ | customer | transaction | Before | ||||||||||||||||||||||||||||||||||||||||||
As | and | branch | contract | Litigation | Impairment | Restructuring | and | Other | charges | |||||||||||||||||||||||||||||||||||||
reported | severance | closings | litigation | contingency | charges | charges | integration | transaction | Total | ("core") | ||||||||||||||||||||||||||||||||||||
Income from continuing operations: | ||||||||||||||||||||||||||||||||||||||||||||||
Segment EBITDAR: | ||||||||||||||||||||||||||||||||||||||||||||||
Kindred at Home: | ||||||||||||||||||||||||||||||||||||||||||||||
Home health | $ | 68,776 | $ | - | $ | 50 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 50 | $ | 68,826 | ||||||||||||||||||||||||
Hospice | 30,212 | - | - | - | - | - | - | - | - | - | 30,212 | |||||||||||||||||||||||||||||||||||
98,988 | - | 50 | - | - | - | - | - | - | 50 | 99,038 | ||||||||||||||||||||||||||||||||||||
Hospital division | 116,454 | 1,221 | - | - | - | - | - | - | - | 1,221 | 117,675 | |||||||||||||||||||||||||||||||||||
Kindred Rehabilitation Services: | ||||||||||||||||||||||||||||||||||||||||||||||
Kindred Hospital Rehabilitation Services | 44,891 | 207 | - | - | - | - | - | - | - | 207 | 45,098 | |||||||||||||||||||||||||||||||||||
RehabCare | (1,118 | ) | 112 | - | 12,864 | - | - | - | - | - | 12,976 | 11,858 | ||||||||||||||||||||||||||||||||||
43,773 | 319 | - | 12,864 | - | - | - | - | - | 13,183 | 56,956 | ||||||||||||||||||||||||||||||||||||
Nursing center division | 36,601 | - | - | - | - | - | - | - | - | - | 36,601 | |||||||||||||||||||||||||||||||||||
Support center | (63,016 | ) | 585 | - | - | - | - | - | - | - | 585 | (62,431 | ) | |||||||||||||||||||||||||||||||||
Litigation contingency expense | (8,261 | ) | - | - | - | 8,261 | - | - | 8,261 | - | ||||||||||||||||||||||||||||||||||||
Impairment charges | (18,031 | ) | - | - | - | - | 18,031 | - | - | - | 18,031 | - | ||||||||||||||||||||||||||||||||||
Restructuring charges | (3,288 | ) | - | - | - | - | - | 3,288 | - | - | 3,288 | - | ||||||||||||||||||||||||||||||||||
Transaction costs | (5,367 | ) | - | - | - | - | - | - | 4,189 | 1,178 | 5,367 | - | ||||||||||||||||||||||||||||||||||
EBITDAR | 197,853 | 2,125 | 50 | 12,864 | 8,261 | 18,031 | 3,288 | 4,189 | 1,178 | 49,986 | 247,839 | |||||||||||||||||||||||||||||||||||
Rent | (96,934 | ) | - | - | - | - | - | - | - | - | - | (96,934 | ) | |||||||||||||||||||||||||||||||||
Restructuring charges - rent | (889 | ) | - | - | - | - | - | 889 | - | - | 889 | - | ||||||||||||||||||||||||||||||||||
Depreciation and amortization | (40,362 | ) | - | - | - | - | - | - | - | - | - | (40,362 | ) | |||||||||||||||||||||||||||||||||
Interest, net | (55,664 | ) | - | - | - | - | - | - | - | - | - | (55,664 | ) | |||||||||||||||||||||||||||||||||
Income from continuing operations before income taxes | 4,004 | 2,125 | 50 | 12,864 | 8,261 | 18,031 | 4,177 | 4,189 | 1,178 | 50,875 | 54,879 | |||||||||||||||||||||||||||||||||||
Provision (benefit) for income taxes | (51,980 | ) | 836 | 20 | 5,062 | 50,329 | 6,205 | 1,643 | 1,487 | 156 | 65,738 | 13,758 | ||||||||||||||||||||||||||||||||||
55,984 | $ | 1,289 | $ | 30 | $ | 7,802 | $ | (42,068 | ) | $ | 11,826 | $ | 2,534 | $ | 2,702 | $ | 1,022 | $ | (14,863 | ) | 41,121 | |||||||||||||||||||||||||
Noncontrolling interests | (12,082 | ) | (12,082 | ) | ||||||||||||||||||||||||||||||||||||||||||
Income attributable to Kindred | $ | 43,902 | $ | 29,039 | ||||||||||||||||||||||||||||||||||||||||||
Diluted earnings per common share | $ | 0.50 | $ | 0.33 | ||||||||||||||||||||||||||||||||||||||||||
Diluted shares used in computing earnings per common share | 87,232 | 87,232 | ||||||||||||||||||||||||||||||||||||||||||||
KINDRED HEALTHCARE, INC. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of GAAP Results to Non-GAAP Measures (Continued) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
(In thousands, except per share amounts) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended December 31, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Charges | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gentiva | Deferred | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement | Facility/ | Business | transaction | tax | Before | |||||||||||||||||||||||||||||||||||||||||||||||||
As | and | branch | interruption | Litigation | Impairment | Research and | Debt | Restructuring | and | Other | valuation | charges | ||||||||||||||||||||||||||||||||||||||||||
reported | severance | closings | settlements | contingency | charges | development | amendment | charges | integration | transaction | allowance | Total | ("core") | |||||||||||||||||||||||||||||||||||||||||
Income (loss) from continuing operations: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment EBITDAR: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Kindred at Home: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Home health | $ | 279,531 | $ | - | $ | - | $ | (1,611 | ) | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | (1,611 | ) | $ | 277,920 | ||||||||||||||||||||||||
Hospice | 116,326 | - | - | (1,137 | ) | - | - | - | - | - | - | - | - | (1,137 | ) | 115,189 | ||||||||||||||||||||||||||||||||||||||
395,857 | - | - | (2,748 | ) | - | - | - | - | - | - | - | - | (2,748 | ) | 393,109 | |||||||||||||||||||||||||||||||||||||||
Hospital division | 436,071 | - | - | (630 | ) | - | - | - | - | - | - | - | - | (630 | ) | 435,441 | ||||||||||||||||||||||||||||||||||||||
Kindred Rehabilitation Services: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Kindred Hospital Rehabilitation Services | 197,123 | - | 747 | - | - | - | - | - | - | - | - | - | 747 | 197,870 | ||||||||||||||||||||||||||||||||||||||||
RehabCare | 40,082 | - | - | - | - | - | - | - | - | - | - | - | - | 40,082 | ||||||||||||||||||||||||||||||||||||||||
237,205 | - | 747 | - | - | - | - | - | - | - | - | - | 747 | 237,952 | |||||||||||||||||||||||||||||||||||||||||
Nursing center division | 127,342 | - | - | - | - | - | - | - | - | - | - | - | - | 127,342 | ||||||||||||||||||||||||||||||||||||||||
Support center | (257,006 | ) | 658 | - | - | - | - | 11,520 | 1,103 | - | - | - | - | 13,281 | (243,725 | ) | ||||||||||||||||||||||||||||||||||||||
Litigation contingency expense | (2,840 | ) | - | - | - | 2,840 | - | - | - | - | - | - | - | 2,840 | - | |||||||||||||||||||||||||||||||||||||||
Impairment charges | (342,559 | ) | - | - | - | - | 342,559 | - | - | - | - | - | - | 342,559 | - | |||||||||||||||||||||||||||||||||||||||
Restructuring charges | (45,783 | ) | - | - | - | - | - | - | - | 45,783 | - | - | - | 45,783 | - | |||||||||||||||||||||||||||||||||||||||
Transaction costs | (8,679 | ) | - | - | - | - | - | - | - | - | 6,306 | 2,373 | - | 8,679 | - | |||||||||||||||||||||||||||||||||||||||
EBITDAR | 539,608 | 658 | 747 | (3,378 | ) | 2,840 | 342,559 | 11,520 | 1,103 | 45,783 | 6,306 | 2,373 | - | 410,511 | 950,119 | |||||||||||||||||||||||||||||||||||||||
Rent | (390,534 | ) | - | 74 | - | - | - | - | - | - | 272 | - | - | 346 | (390,188 | ) | ||||||||||||||||||||||||||||||||||||||
Restructuring charges - rent | (61,392 | ) | - | - | - | - | - | - | - | 61,392 | - | - | - | 61,392 | - | |||||||||||||||||||||||||||||||||||||||
Depreciation and amortization | (159,402 | ) | - | - | - | - | - | - | - | - | - | - | - | - | (159,402 | ) | ||||||||||||||||||||||||||||||||||||||
Interest, net | (231,485 | ) | - | - | - | - | - | - | - | - | - | - | - | - | (231,485 | ) | ||||||||||||||||||||||||||||||||||||||
Income (loss) from continuing operations before income taxes | (303,205 | ) | 658 | 821 | (3,378 | ) | 2,840 | 342,559 | 11,520 | 1,103 | 107,175 | 6,578 | 2,373 | - | 472,249 | 169,044 | ||||||||||||||||||||||||||||||||||||||
Provision for income taxes | 314,330 | 263 | 328 | (1,349 | ) | 36 | 69,438 | 4,599 | 440 | 42,788 | 2,497 | 947 | (388,472 | ) | (268,485 | ) | 45,845 | |||||||||||||||||||||||||||||||||||||
(617,535 | ) | 395 | 493 | (2,029 | ) | 2,804 | 273,121 | 6,921 | 663 | 64,387 | 4,081 | 1,426 | 388,472 | 740,734 | 123,199 | |||||||||||||||||||||||||||||||||||||||
Noncontrolling interests | (53,602 | ) | - | - | - | - | (1,304 | ) | - | - | - | - | - | - | (1,304 | ) | (54,906 | ) | ||||||||||||||||||||||||||||||||||||
Income (loss) attributable to Kindred | $ | (671,137 | ) | $ | 395 | $ | 493 | $ | (2,029 | ) | $ | 2,804 | $ | 271,817 | $ | 6,921 | $ | 663 | $ | 64,387 | $ | 4,081 | $ | 1,426 | $ | 388,472 | $ | 739,430 | $ | 68,293 | ||||||||||||||||||||||||
Diluted earnings (loss) per common share | $ | (7.73 | ) | $ | 0.76 | |||||||||||||||||||||||||||||||||||||||||||||||||
Diluted shares used in computing earnings (loss) per common share | 86,800 | 87,491 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended December 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Charges | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
RehabCare | Gentiva | Gentiva | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement | Facility/ | customer | pre-closing | transaction | Before | |||||||||||||||||||||||||||||||||||||||||||||||||
As | and | branch | contract | Litigation | Impairment | Restructuring | financing | and | Other | charges | ||||||||||||||||||||||||||||||||||||||||||||
reported | severance | closings | litigation | contingency | charges | charges | costs | integration | transaction | Total | ("core") | |||||||||||||||||||||||||||||||||||||||||||
Income (loss) from continuing operations: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment EBITDAR: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Kindred at Home: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Home health | $ | 256,173 | $ | - | $ | 523 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 523 | $ | 256,696 | ||||||||||||||||||||||||||||||
Hospice | 109,120 | - | - | - | - | - | - | - | - | - | - | 109,120 | ||||||||||||||||||||||||||||||||||||||||||
365,293 | - | 523 | - | - | - | - | - | - | - | 523 | 365,816 | |||||||||||||||||||||||||||||||||||||||||||
Hospital division | 478,205 | 1,887 | 1,029 | - | - | - | - | - | - | - | 2,916 | 481,121 | ||||||||||||||||||||||||||||||||||||||||||
Kindred Rehabilitation Services: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Kindred Hospital Rehabilitation Services | 176,127 | 207 | - | - | - | - | - | - | - | - | 207 | 176,334 | ||||||||||||||||||||||||||||||||||||||||||
RehabCare | 43,815 | 897 | - | 12,864 | - | - | - | - | - | - | 13,761 | 57,576 | ||||||||||||||||||||||||||||||||||||||||||
219,942 | 1,104 | - | 12,864 | - | - | - | - | - | - | 13,968 | 233,910 | |||||||||||||||||||||||||||||||||||||||||||
Nursing center division | 149,364 | - | 584 | - | - | - | - | - | - | - | 584 | 149,948 | ||||||||||||||||||||||||||||||||||||||||||
Support center | (255,229 | ) | 4,761 | - | - | - | - | - | - | - | - | 4,761 | (250,468 | ) | ||||||||||||||||||||||||||||||||||||||||
Litigation contingency expense | (138,648 | ) | - | - | - | 138,648 | - | - | - | - | - | 138,648 | - | |||||||||||||||||||||||||||||||||||||||||
Impairment charges | (24,757 | ) | - | - | - | - | 24,757 | - | - | - | - | 24,757 | - | |||||||||||||||||||||||||||||||||||||||||
Restructuring charges | (10,250 | ) | - | - | - | - | - | 10,250 | - | - | - | 10,250 | - | |||||||||||||||||||||||||||||||||||||||||
Transaction costs | (109,131 | ) | - | - | - | - | - | - | 6,005 | 98,198 | 4,928 | 109,131 | - | |||||||||||||||||||||||||||||||||||||||||
EBITDAR | 674,789 | 7,752 | 2,136 | 12,864 | 138,648 | 24,757 | 10,250 | 6,005 | 98,198 | 4,928 | 305,538 | 980,327 | ||||||||||||||||||||||||||||||||||||||||||
Rent | (379,889 | ) | - | - | - | - | - | - | - | 792 | - | 792 | (379,097 | ) | ||||||||||||||||||||||||||||||||||||||||
Restructuring charges - rent | (2,720 | ) | - | - | - | - | - | 2,720 | - | - | - | 2,720 | - | |||||||||||||||||||||||||||||||||||||||||
Depreciation and amortization | (157,251 | ) | - | - | - | - | - | - | - | - | - | - | (157,251 | ) | ||||||||||||||||||||||||||||||||||||||||
Interest, net | (229,589 | ) | - | - | - | - | - | - | 17,431 | - | - | 17,431 | (212,158 | ) | ||||||||||||||||||||||||||||||||||||||||
Income (loss) from continuing operations before income taxes | (94,660 | ) | 7,752 | 2,136 | 12,864 | 138,648 | 24,757 | 12,970 | 23,436 | 98,990 | 4,928 | 326,481 | 231,821 | |||||||||||||||||||||||||||||||||||||||||
Provision (benefit) for income taxes | (42,797 | ) | 3,063 | 844 | 5,084 | 51,965 | 8,890 | 5,126 | 9,261 | 34,266 | 1,541 | 120,040 | 77,243 | |||||||||||||||||||||||||||||||||||||||||
(51,863 | ) | $ | 4,689 | $ | 1,292 | $ | 7,780 | $ | 86,683 | $ | 15,867 | $ | 7,844 | $ | 14,175 | $ | 64,724 | $ | 3,387 | $ | 206,441 | 154,578 | ||||||||||||||||||||||||||||||||
Noncontrolling interests | (42,564 | ) | (42,564 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Income (loss) attributable to Kindred | $ | (94,427 | ) | $ | 112,014 | |||||||||||||||||||||||||||||||||||||||||||||||||
Diluted earnings (loss) per common share | $ | (1.12 | ) | $ | 1.28 | |||||||||||||||||||||||||||||||||||||||||||||||||
Diluted shares used in computing earnings (loss) per common share | 84,558 | 86,098 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
KINDRED HEALTHCARE, INC. | |||||||||||||||||||||||||||||||||||||||||||
Reconciliation of GAAP Results to Non-GAAP Measures (Continued) | |||||||||||||||||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||||||||||||||||
(In thousands, except per share amounts) | |||||||||||||||||||||||||||||||||||||||||||
Three months ended March 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||
Charges | |||||||||||||||||||||||||||||||||||||||||||
Gentiva | |||||||||||||||||||||||||||||||||||||||||||
Retirement | Business | transaction | Before | ||||||||||||||||||||||||||||||||||||||||
As | and | interruption | Litigation | Impairment | Research and | Restructuring | and | Other | charges | ||||||||||||||||||||||||||||||||||
reported | severance | settlements | contingency | charges | development | charges | integration | transaction | Total | ("core") | |||||||||||||||||||||||||||||||||
Income from continuing operations: | |||||||||||||||||||||||||||||||||||||||||||
Segment EBITDAR: | |||||||||||||||||||||||||||||||||||||||||||
Kindred at Home: | |||||||||||||||||||||||||||||||||||||||||||
Home health | $ | 66,941 | $ | - | $ | (1,138 | ) | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | (1,138 | ) | $ | 65,803 | |||||||||||||||||||
Hospice | 24,866 | - | - | - | - | - | - | - | - | - | 24,866 | ||||||||||||||||||||||||||||||||
91,807 | - | (1,138 | ) | - | - | - | - | - | - | (1,138 | ) | 90,669 | |||||||||||||||||||||||||||||||
Hospital division | 135,495 | - | - | - | - | - | - | - | - | - | 135,495 | ||||||||||||||||||||||||||||||||
Kindred Rehabilitation Services: | |||||||||||||||||||||||||||||||||||||||||||
Kindred Hospital Rehabilitation Services | 47,870 | - | - | - | - | - | - | - | - | - | 47,870 | ||||||||||||||||||||||||||||||||
RehabCare | 11,987 | - | - | - | - | - | - | - | - | - | 11,987 | ||||||||||||||||||||||||||||||||
59,857 | - | - | - | - | - | - | - | - | - | 59,857 | |||||||||||||||||||||||||||||||||
Nursing center division | 30,100 | - | - | - | - | - | - | - | - | - | 30,100 | ||||||||||||||||||||||||||||||||
Support center | (70,808 | ) | 658 | - | - | - | 863 | - | - | - | 1,521 | (69,287 | ) | ||||||||||||||||||||||||||||||
Litigation contingency expense | (1,910 | ) | - | - | 1,910 | - | - | - | - | - | 1,910 | - | |||||||||||||||||||||||||||||||
Impairment charges | (7,788 | ) | - | - | - | 7,788 | - | - | - | - | 7,788 | - | |||||||||||||||||||||||||||||||
Restructuring charges | (1,701 | ) | - | - | - | - | - | 1,701 | - | - | 1,701 | - | |||||||||||||||||||||||||||||||
Transaction costs | (1,685 | ) | - | - | - | - | - | - | 1,603 | 82 | 1,685 | - | |||||||||||||||||||||||||||||||
EBITDAR | 233,367 | 658 | (1,138 | ) | 1,910 | 7,788 | 863 | 1,701 | 1,603 | 82 | 13,467 | 246,834 | |||||||||||||||||||||||||||||||
Rent | (97,517 | ) | - | - | - | - | - | - | - | - | - | (97,517 | ) | ||||||||||||||||||||||||||||||
Restructuring charges - rent | (251 | ) | - | - | - | - | - | 251 | - | - | 251 | - | |||||||||||||||||||||||||||||||
Depreciation and amortization | (40,681 | ) | - | - | - | - | - | - | - | - | - | (40,681 | ) | ||||||||||||||||||||||||||||||
Interest, net | (57,245 | ) | - | - | - | - | - | - | - | - | - | (57,245 | ) | ||||||||||||||||||||||||||||||
Income from continuing operations before income taxes | 37,673 | 658 | (1,138 | ) | 1,910 | 7,788 | 863 | 1,952 | 1,603 | 82 | 13,718 | 51,391 | |||||||||||||||||||||||||||||||
Provision for income taxes | 11,836 | 226 | (391 | ) | 656 | 2,674 | 296 | 670 | 551 | 28 | 4,710 | 16,546 | |||||||||||||||||||||||||||||||
25,837 | $ | 432 | $ | (747 | ) | $ | 1,254 | $ | 5,114 | $ | 567 | $ | 1,282 | $ | 1,052 | $ | 54 | $ | 9,008 | 34,845 | |||||||||||||||||||||||
Noncontrolling interests | (12,514 | ) | (12,514 | ) | |||||||||||||||||||||||||||||||||||||||
Income attributable to Kindred | $ | 13,323 | $ | 22,331 | |||||||||||||||||||||||||||||||||||||||
Diluted earnings per common share | $ | 0.15 | $ | 0.25 | |||||||||||||||||||||||||||||||||||||||
Diluted shares used in computing earnings per common share | 87,249 | 87,249 | |||||||||||||||||||||||||||||||||||||||||
Three months ended March 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||
Charges | |||||||||||||||||||||||||||||||||||||||||||
Gentiva | Gentiva | ||||||||||||||||||||||||||||||||||||||||||
Retirement | Facility/ | pre-closing | transaction | Before | |||||||||||||||||||||||||||||||||||||||
As | and | branch | Litigation | Impairment | Restructuring | financing | and | Other | charges | ||||||||||||||||||||||||||||||||||
reported | severance | closings | contingency | charges | charges | costs | integration | transaction | Total | ("core") | |||||||||||||||||||||||||||||||||
Income (loss) from continuing operations: | |||||||||||||||||||||||||||||||||||||||||||
Segment EBITDAR: | |||||||||||||||||||||||||||||||||||||||||||
Kindred at Home: | |||||||||||||||||||||||||||||||||||||||||||
Home health | $ | 46,798 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 46,798 | |||||||||||||||||||||
Hospice | 16,996 | - | - | - | - | - | - | - | - | - | 16,996 | ||||||||||||||||||||||||||||||||
63,794 | - | - | - | - | - | - | - | - | - | 63,794 | |||||||||||||||||||||||||||||||||
Hospital division | 134,111 | - | 675 | - | - | - | - | - | - | 675 | 134,786 | ||||||||||||||||||||||||||||||||
Kindred Rehabilitation Services: | |||||||||||||||||||||||||||||||||||||||||||
Kindred Hospital Rehabilitation Services | 44,564 | - | - | - | - | - | - | - | - | - | 44,564 | ||||||||||||||||||||||||||||||||
RehabCare | 15,708 | 785 | - | - | - | - | - | - | - | 785 | 16,493 | ||||||||||||||||||||||||||||||||
60,272 | 785 | - | - | - | - | - | - | - | 785 | 61,057 | |||||||||||||||||||||||||||||||||
Nursing center division | 36,963 | - | - | - | - | - | - | - | - | - | 36,963 | ||||||||||||||||||||||||||||||||
Support center | (66,565 | ) | 4,176 | - | - | - | - | - | - | - | 4,176 | (62,389 | ) | ||||||||||||||||||||||||||||||
Litigation contingency expense | (95,000 | ) | - | - | 95,000 | - | - | - | - | - | 95,000 | - | |||||||||||||||||||||||||||||||
Impairment charges | (6,726 | ) | - | - | - | 6,726 | - | - | - | - | 6,726 | - | |||||||||||||||||||||||||||||||
Restructuring charges | (1,619 | ) | - | - | - | - | 1,619 | - | - | - | 1,619 | - | |||||||||||||||||||||||||||||||
Transaction costs | (94,702 | ) | - | - | - | - | - | 6,005 | 86,598 | 2,099 | 94,702 | - | |||||||||||||||||||||||||||||||
EBITDAR | 30,528 | 4,961 | 675 | 95,000 | 6,726 | 1,619 | 6,005 | 86,598 | 2,099 | 203,683 | 234,211 | ||||||||||||||||||||||||||||||||
Rent | (91,788 | ) | - | - | - | - | - | - | 589 | - | 589 | (91,199 | ) | ||||||||||||||||||||||||||||||
Restructuring charges - rent | (352 | ) | - | - | - | - | 352 | - | - | - | 352 | - | |||||||||||||||||||||||||||||||
Depreciation and amortization | (38,935 | ) | - | - | - | - | - | - | - | - | - | (38,935 | ) | ||||||||||||||||||||||||||||||
Interest, net | (61,777 | ) | - | - | - | - | - | 17,431 | - | - | 17,431 | (44,346 | ) | ||||||||||||||||||||||||||||||
Income (loss) from continuing operations before income taxes | (162,324 | ) | 4,961 | 675 | 95,000 | 6,726 | 1,971 | 23,436 | 87,187 | 2,099 | 222,055 | 59,731 | |||||||||||||||||||||||||||||||
Provision (benefit) for income taxes | (27,736 | ) | 2,133 | 290 | - | 2,891 | 848 | 10,075 | 33,063 | 902 | 50,202 | 22,466 | |||||||||||||||||||||||||||||||
(134,588 | ) | $ | 2,828 | $ | 385 | $ | 95,000 | $ | 3,835 | $ | 1,123 | $ | 13,361 | $ | 54,124 | $ | 1,197 | $ | 171,853 | 37,265 | |||||||||||||||||||||||
Noncontrolling interests | (8,847 | ) | (8,847 | ) | |||||||||||||||||||||||||||||||||||||||
Income (loss) attributable to Kindred | $ | (143,435 | ) | $ | 28,418 | ||||||||||||||||||||||||||||||||||||||
Diluted earnings (loss) per common share | $ | (1.80 | ) | $ | 0.34 | ||||||||||||||||||||||||||||||||||||||
Diluted shares used in computing earnings (loss) per common share | 79,575 | 82,422 | |||||||||||||||||||||||||||||||||||||||||
KINDRED HEALTHCARE, INC. | |||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of GAAP Results to Non-GAAP Measures (Continued) | |||||||||||||||||||||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||||||||||||||||||||
(In thousands, except per share amounts) | |||||||||||||||||||||||||||||||||||||||||||||||
Three months ended June 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||
Charges | |||||||||||||||||||||||||||||||||||||||||||||||
Gentiva | |||||||||||||||||||||||||||||||||||||||||||||||
Business | transaction | Before | |||||||||||||||||||||||||||||||||||||||||||||
As | interruption | Litigation | Impairment | Research and | Debt | Restructuring | and | Other | charges | ||||||||||||||||||||||||||||||||||||||
reported | settlements | contingency | charges | development | amendment | charges | integration | transaction | Total | ("core") | |||||||||||||||||||||||||||||||||||||
Income from continuing operations: | |||||||||||||||||||||||||||||||||||||||||||||||
Segment EBITDAR: | |||||||||||||||||||||||||||||||||||||||||||||||
Kindred at Home: | |||||||||||||||||||||||||||||||||||||||||||||||
Home health | $ | 76,030 | $ | (171 | ) | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | (171 | ) | $ | 75,859 | |||||||||||||||||||||||
Hospice | 31,329 | - | - | - | - | - | - | - | - | - | 31,329 | ||||||||||||||||||||||||||||||||||||
107,359 | (171 | ) | - | - | - | - | - | - | - | (171 | ) | 107,188 | |||||||||||||||||||||||||||||||||||
Hospital division | 125,932 | - | - | - | - | - | - | - | - | - | 125,932 | ||||||||||||||||||||||||||||||||||||
Kindred Rehabilitation Services: | |||||||||||||||||||||||||||||||||||||||||||||||
Kindred Hospital Rehabilitation Services | 50,469 | - | - | - | - | - | - | - | - | - | 50,469 | ||||||||||||||||||||||||||||||||||||
RehabCare | 13,269 | - | - | - | - | - | - | - | - | - | 13,269 | ||||||||||||||||||||||||||||||||||||
63,738 | - | - | - | - | - | - | - | - | - | 63,738 | |||||||||||||||||||||||||||||||||||||
Nursing center division | 33,662 | - | - | - | - | - | - | - | - | - | 33,662 | ||||||||||||||||||||||||||||||||||||
Support center | (66,804 | ) | - | - | - | 3,076 | 1,103 | - | - | - | 4,179 | (62,625 | ) | ||||||||||||||||||||||||||||||||||
Litigation contingency expense | (930 | ) | - | 930 | - | - | - | - | - | - | 930 | - | |||||||||||||||||||||||||||||||||||
Impairment charges | (6,131 | ) | - | - | 6,131 | - | - | - | - | - | 6,131 | - | |||||||||||||||||||||||||||||||||||
Restructuring charges | (4,346 | ) | - | - | - | - | - | 4,346 | - | - | 4,346 | - | |||||||||||||||||||||||||||||||||||
Transaction costs | (1,846 | ) | - | - | - | - | - | - | 1,674 | 172 | 1,846 | - | |||||||||||||||||||||||||||||||||||
EBITDAR | 250,634 | (171 | ) | 930 | 6,131 | 3,076 | 1,103 | 4,346 | 1,674 | 172 | 17,261 | 267,895 | |||||||||||||||||||||||||||||||||||
Rent | (100,093 | ) | - | - | - | - | - | - | - | - | - | (100,093 | ) | ||||||||||||||||||||||||||||||||||
Restructuring charges - rent | (462 | ) | - | - | - | - | - | 462 | - | - | 462 | - | |||||||||||||||||||||||||||||||||||
Depreciation and amortization | (40,257 | ) | - | - | - | - | - | - | - | - | - | (40,257 | ) | ||||||||||||||||||||||||||||||||||
Interest, net | (57,559 | ) | - | - | - | - | - | - | - | - | - | (57,559 | ) | ||||||||||||||||||||||||||||||||||
Income from continuing operations before income taxes | 52,263 | (171 | ) | 930 | 6,131 | 3,076 | 1,103 | 4,808 | 1,674 | 172 | 17,723 | 69,986 | |||||||||||||||||||||||||||||||||||
Provision for income taxes | 17,882 | (123 | ) | (1,307 | ) | 4,403 | 2,209 | 792 | (3,765 | ) | 1,202 | 124 | 3,535 | 21,417 | |||||||||||||||||||||||||||||||||
34,381 | (48 | ) | 2,237 | 1,728 | 867 | 311 | 8,573 | 472 | 48 | 14,188 | 48,569 | ||||||||||||||||||||||||||||||||||||
Noncontrolling interests | (13,522 | ) | - | - | (1,016 | ) | - | - | - | - | - | (1,016 | ) | (14,538 | ) | ||||||||||||||||||||||||||||||||
Income attributable to Kindred | $ | 20,859 | $ | (48 | ) | $ | 2,237 | $ | 712 | $ | 867 | $ | 311 | $ | 8,573 | $ | 472 | $ | 48 | $ | 13,172 | $ | 34,031 | ||||||||||||||||||||||||
Diluted earnings per common share | $ | 0.23 | $ | 0.38 | |||||||||||||||||||||||||||||||||||||||||||
Diluted shares used in computing earnings per common share | 87,500 | 87,500 | |||||||||||||||||||||||||||||||||||||||||||||
Three months ended June 30, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||
Charges | |||||||||||||||||||||||||||||||||||||||||||||||
Gentiva | |||||||||||||||||||||||||||||||||||||||||||||||
Facility/ | transaction | Before | |||||||||||||||||||||||||||||||||||||||||||||
As | branch | Litigation | Restructuring | and | Other | charges | |||||||||||||||||||||||||||||||||||||||||
reported | closings | contingency | charges | integration | transaction | Total | ("core") | ||||||||||||||||||||||||||||||||||||||||
Income from continuing operations: | |||||||||||||||||||||||||||||||||||||||||||||||
Segment EBITDAR: | |||||||||||||||||||||||||||||||||||||||||||||||
Kindred at Home: | |||||||||||||||||||||||||||||||||||||||||||||||
Home health | $ | 72,917 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 72,917 | |||||||||||||||||||||||||||||||
Hospice | 27,887 | - | - | - | - | - | - | 27,887 | |||||||||||||||||||||||||||||||||||||||
100,804 | - | - | - | - | - | - | 100,804 | ||||||||||||||||||||||||||||||||||||||||
Hospital division | 131,532 | - | - | - | - | - | - | 131,532 | |||||||||||||||||||||||||||||||||||||||
Kindred Rehabilitation Services: | |||||||||||||||||||||||||||||||||||||||||||||||
Kindred Hospital Rehabilitation Services | 44,531 | - | - | - | - | - | - | 44,531 | |||||||||||||||||||||||||||||||||||||||
RehabCare | 14,681 | - | - | - | - | - | - | 14,681 | |||||||||||||||||||||||||||||||||||||||
59,212 | - | - | - | - | - | - | 59,212 | ||||||||||||||||||||||||||||||||||||||||
Nursing center division | 39,877 | 584 | - | - | - | - | 584 | 40,461 | |||||||||||||||||||||||||||||||||||||||
Support center | (70,209 | ) | - | - | - | - | - | - | (70,209 | ) | |||||||||||||||||||||||||||||||||||||
Litigation contingency expense | (3,925 | ) | - | 3,925 | - | - | - | 3,925 | - | ||||||||||||||||||||||||||||||||||||||
Restructuring charges | (2,802 | ) | - | - | 2,802 | - | - | 2,802 | - | ||||||||||||||||||||||||||||||||||||||
Transaction costs | (5,216 | ) | - | - | - | 4,342 | 874 | 5,216 | - | ||||||||||||||||||||||||||||||||||||||
EBITDAR | 249,273 | 584 | 3,925 | 2,802 | 4,342 | 874 | 12,527 | 261,800 | |||||||||||||||||||||||||||||||||||||||
Rent | (95,731 | ) | - | - | - | 203 | - | 203 | (95,528 | ) | |||||||||||||||||||||||||||||||||||||
Restructuring charges - rent | (671 | ) | - | - | 671 | - | - | 671 | - | ||||||||||||||||||||||||||||||||||||||
Depreciation and amortization | (38,625 | ) | - | - | - | - | - | - | (38,625 | ) | |||||||||||||||||||||||||||||||||||||
Interest, net | (56,140 | ) | - | - | - | - | - | - | (56,140 | ) | |||||||||||||||||||||||||||||||||||||
Income from continuing operations before income taxes | 58,106 | 584 | 3,925 | 3,473 | 4,545 | 874 | 13,401 | 71,507 | |||||||||||||||||||||||||||||||||||||||
Provision for income taxes | 24,396 | 62 | 416 | 368 | 386 | 93 | 1,325 | 25,721 | |||||||||||||||||||||||||||||||||||||||
33,710 | $ | 522 | $ | 3,509 | $ | 3,105 | $ | 4,159 | $ | 781 | $ | 12,076 | 45,786 | ||||||||||||||||||||||||||||||||||
Noncontrolling interests | (11,735 | ) | (11,735 | ) | |||||||||||||||||||||||||||||||||||||||||||
Income attributable to Kindred | $ | 21,975 | $ | 34,051 | |||||||||||||||||||||||||||||||||||||||||||
Diluted earnings per common share | $ | 0.25 | $ | 0.39 | |||||||||||||||||||||||||||||||||||||||||||
Diluted shares used in computing earnings per common share | 86,402 | 86,402 | |||||||||||||||||||||||||||||||||||||||||||||
KINDRED HEALTHCARE, INC. | |||||||||||||||||||||||||||||||||||||||||
Reconciliation of GAAP Results to Non-GAAP Measures (Continued) | |||||||||||||||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||||||||||||||
(In thousands, except per share amounts) | |||||||||||||||||||||||||||||||||||||||||
Three months ended September 30, 2016 | |||||||||||||||||||||||||||||||||||||||||
Charges | |||||||||||||||||||||||||||||||||||||||||
Gentiva | Deferred | ||||||||||||||||||||||||||||||||||||||||
Facility/ | transaction | tax | Before | ||||||||||||||||||||||||||||||||||||||
As | branch | Impairment | Research and | Restructuring | and | Other | valuation | charges | |||||||||||||||||||||||||||||||||
reported | closings | charges | development | charges | integration | transaction | allowance | Total | ("core") | ||||||||||||||||||||||||||||||||
Income (loss) from continuing operations: | |||||||||||||||||||||||||||||||||||||||||
Segment EBITDAR: | |||||||||||||||||||||||||||||||||||||||||
Kindred at Home: | |||||||||||||||||||||||||||||||||||||||||
Home health | $ | 75,073 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 75,073 | |||||||||||||||||||||
Hospice | 31,326 | - | - | - | - | - | - | - | - | 31,326 | |||||||||||||||||||||||||||||||
106,399 | - | - | - | - | - | - | - | - | 106,399 | ||||||||||||||||||||||||||||||||
Hospital division | 82,752 | - | - | - | - | - | - | - | - | 82,752 | |||||||||||||||||||||||||||||||
Kindred Rehabilitation Services: | |||||||||||||||||||||||||||||||||||||||||
Kindred Hospital Rehabilitation Services | 49,470 | 747 | - | - | - | - | - | - | 747 | 50,217 | |||||||||||||||||||||||||||||||
RehabCare | 9,248 | - | - | - | - | - | - | - | - | 9,248 | |||||||||||||||||||||||||||||||
58,718 | 747 | - | - | - | - | - | - | 747 | 59,465 | ||||||||||||||||||||||||||||||||
Nursing center division | 29,922 | - | - | - | - | - | - | - | - | 29,922 | |||||||||||||||||||||||||||||||
Support center | (61,751 | ) | - | - | 3,288 | - | - | - | - | 3,288 | (58,463 | ) | |||||||||||||||||||||||||||||
Impairment charges | (324,289 | ) | - | 324,289 | - | - | - | - | - | 324,289 | - | ||||||||||||||||||||||||||||||
Restructuring charges | (22,813 | ) | - | - | - | 22,813 | - | - | - | 22,813 | - | ||||||||||||||||||||||||||||||
Transaction costs | (2,982 | ) | - | - | - | - | 1,250 | 1,732 | - | 2,982 | - | ||||||||||||||||||||||||||||||
EBITDAR | (134,044 | ) | 747 | 324,289 | 3,288 | 22,813 | 1,250 | 1,732 | - | 354,119 | 220,075 | ||||||||||||||||||||||||||||||
Rent | (98,415 | ) | 74 | - | - | - | 272 | - | - | 346 | (98,069 | ) | |||||||||||||||||||||||||||||
Restructuring charges - rent | (58,650 | ) | - | - | - | 58,650 | - | - | - | 58,650 | - | ||||||||||||||||||||||||||||||
Depreciation and amortization | (40,382 | ) | - | - | - | - | - | - | - | - | (40,382 | ) | |||||||||||||||||||||||||||||
Interest, net | (58,052 | ) | - | - | - | - | - | - | - | - | (58,052 | ) | |||||||||||||||||||||||||||||
Income (loss) from continuing operations before income taxes | (389,543 | ) | 821 | 324,289 | 3,288 | 81,463 | 1,522 | 1,732 | - | 413,115 | 23,572 | ||||||||||||||||||||||||||||||
Provision for income taxes | 281,752 | 288 | 58,173 | 1,154 | 28,599 | 535 | 608 | (366,470 | ) | (277,113 | ) | 4,639 | |||||||||||||||||||||||||||||
(671,295 | ) | 533 | 266,116 | 2,134 | 52,864 | 987 | 1,124 | 366,470 | 690,228 | 18,933 | |||||||||||||||||||||||||||||||
Noncontrolling interests | (14,305 | ) | - | (288 | ) | - | - | - | - | - | (288 | ) | (14,593 | ) | |||||||||||||||||||||||||||
Income (loss) attributable to Kindred | $ | (685,600 | ) | $ | 533 | $ | 265,828 | $ | 2,134 | $ | 52,864 | $ | 987 | $ | 1,124 | $ | 366,470 | $ | 689,940 | $ | 4,340 | ||||||||||||||||||||
Diluted earnings (loss) per common share | $ | (7.89 | ) | $ | 0.05 | ||||||||||||||||||||||||||||||||||||
Diluted shares used in computing earnings (loss) per common share | 86,869 | 87,529 | |||||||||||||||||||||||||||||||||||||||
Three months ended September 30, 2015 | |||||||||||||||||||||||||||||||||||||||||
Charges | |||||||||||||||||||||||||||||||||||||||||
Gentiva | |||||||||||||||||||||||||||||||||||||||||
Retirement | Facility/ | transaction | Before | ||||||||||||||||||||||||||||||||||||||
As | and | branch | Litigation | Restructuring | and | Other | charges | ||||||||||||||||||||||||||||||||||
reported | severance | closings | contingency | charges | integration | transaction | Total | ("core") | |||||||||||||||||||||||||||||||||
Income (loss) from continuing operations: | |||||||||||||||||||||||||||||||||||||||||
Segment EBITDAR: | |||||||||||||||||||||||||||||||||||||||||
Kindred at Home: | |||||||||||||||||||||||||||||||||||||||||
Home health | $ | 67,682 | $ | - | $ | 473 | $ | - | $ | - | $ | - | $ | - | $ | 473 | $ | 68,155 | |||||||||||||||||||||||
Hospice | 34,025 | - | - | - | - | - | - | - | 34,025 | ||||||||||||||||||||||||||||||||
101,707 | - | 473 | - | - | - | - | 473 | 102,180 | |||||||||||||||||||||||||||||||||
Hospital division | 96,108 | 666 | 354 | - | - | - | - | 1,020 | 97,128 | ||||||||||||||||||||||||||||||||
Kindred Rehabilitation Services: | |||||||||||||||||||||||||||||||||||||||||
Kindred Hospital Rehabilitation Services | 42,141 | - | - | - | - | - | - | - | 42,141 | ||||||||||||||||||||||||||||||||
RehabCare | 14,544 | - | - | - | - | - | - | - | 14,544 | ||||||||||||||||||||||||||||||||
56,685 | - | - | - | - | - | - | - | 56,685 | |||||||||||||||||||||||||||||||||
Nursing center division | 35,923 | - | - | - | - | - | - | - | 35,923 | ||||||||||||||||||||||||||||||||
Support center | (55,439 | ) | - | - | - | - | - | - | - | (55,439 | ) | ||||||||||||||||||||||||||||||
Litigation contingency expense | (31,462 | ) | - | - | 31,462 | - | - | - | 31,462 | - | |||||||||||||||||||||||||||||||
Restructuring charges | (2,541 | ) | - | - | - | 2,541 | - | - | 2,541 | - | |||||||||||||||||||||||||||||||
Transaction costs | (3,846 | ) | - | - | - | - | 3,069 | 777 | 3,846 | - | |||||||||||||||||||||||||||||||
EBITDAR | 197,135 | 666 | 827 | 31,462 | 2,541 | 3,069 | 777 | 39,342 | 236,477 | ||||||||||||||||||||||||||||||||
Rent | (95,436 | ) | - | - | - | - | - | - | - | (95,436 | ) | ||||||||||||||||||||||||||||||
Restructuring charges - rent | (808 | ) | - | - | - | 808 | - | - | 808 | - | |||||||||||||||||||||||||||||||
Depreciation and amortization | (39,329 | ) | - | - | - | - | - | - | - | (39,329 | ) | ||||||||||||||||||||||||||||||
Interest, net | (56,008 | ) | - | - | - | - | - | - | - | (56,008 | ) | ||||||||||||||||||||||||||||||
Income from continuing operations before income taxes | 5,554 | 666 | 827 | 31,462 | 3,349 | 3,069 | 777 | 40,150 | 45,704 | ||||||||||||||||||||||||||||||||
Provision for income taxes | 12,523 | 196 | 243 | 429 | 982 | 697 | 228 | 2,775 | 15,298 | ||||||||||||||||||||||||||||||||
(6,969 | ) | $ | 470 | $ | 584 | $ | 31,033 | $ | 2,367 | $ | 2,372 | $ | 549 | $ | 37,375 | 30,406 | |||||||||||||||||||||||||
Noncontrolling interests | (9,900 | ) | (9,900 | ) | |||||||||||||||||||||||||||||||||||||
Income (loss) attributable to Kindred | $ | (16,869 | ) | $ | 20,506 | ||||||||||||||||||||||||||||||||||||
Diluted earnings (loss) per common share | $ | (0.20 | ) | $ | 0.23 | ||||||||||||||||||||||||||||||||||||
Diluted shares used in computing earnings (loss) per common share | 86,184 | 86,892 | |||||||||||||||||||||||||||||||||||||||
KINDRED HEALTHCARE, INC. | ||||||||||||||||||||
Reconciliation of GAAP Results to Non-GAAP Measures (Continued) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Three months ended | Year ended | |||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||||||
Reconciliation of net cash flows provided by operating activities to core operating cash flows and core free cash flows: | ||||||||||||||||||||
Net cash flows provided by operating activities | $ | 146,914 | $ | 70,195 | $ | 184,962 | $ | 163,262 | ||||||||||||
Adjustments to remove certain payments (including payments made for discontinued operations) included in net cash flows provided by operating activities: | ||||||||||||||||||||
Transaction, severance, research and development, retirement, and retention | 13,546 | 4,548 | 34,535 | 106,648 | ||||||||||||||||
Business interruption settlements | - | - | (1,309 | ) | - | |||||||||||||||
Ventas, Inc. lease termination fee | 4,998 | - | 8,498 | 40,000 | ||||||||||||||||
Capitalized lender fees related to debt refinancing | - | - | 7,375 | 28,012 | ||||||||||||||||
Other debt refinancing costs (expensed) | - | - | 917 | 40,439 | ||||||||||||||||
Other lease termination fees | - | - | - | 353 | ||||||||||||||||
Litigation | - | - | 133,523 | 16,575 | ||||||||||||||||
18,544 | 4,548 | 183,539 | 232,027 | |||||||||||||||||
Net cash flows provided by operating activities excluding certain items before income tax benefit of certain payments | 165,458 | 74,743 | 368,501 | 395,289 | ||||||||||||||||
Benefit of reduced income tax payments resulting from certain payments | (23,012 | ) | (20,861 | ) | (69,686 | ) | (77,156 | ) | ||||||||||||
Net cash flows provided by operating activities excluding certain items (core operating cash flows) | 142,446 | 53,882 | 298,815 | 318,133 | ||||||||||||||||
Less routine capital expenditures | (27,349 | ) | (41,240 | ) | (96,052 | ) | (121,931 | ) | ||||||||||||
Less distributions to noncontrolling interests | (10,745 | ) | (10,635 | ) | (45,985 | ) | (42,458 | ) | ||||||||||||
Free cash flows excluding certain items (core free cash flows) | $ | 104,352 | $ | 2,007 | $ | 156,778 | $ | 153,744 |
View source version on businesswire.com: http://www.businesswire.com/news/home/20170227006536/en/
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