LOUISVILLE, Ky.--(BUSINESS WIRE)--Kindred Healthcare, Inc. (“Kindred” or the “Company”) (NYSE:KND) today announced its operating results for the third quarter ended September 30, 2016.
Benjamin A. Breier, President and Chief Executive Officer of the Company, commented, “We are taking proactive strategic steps to position Kindred for long-term success against the backdrop of dynamic changes in the healthcare services industry. Our plan to exit the skilled nursing facility business, together with the significant cost realignment initiative we are undertaking in connection with the exit, are substantial steps forward in our continuing effort to transform Kindred’s strategy and growth profile to enhance shareholder value.”
Mr. Breier added, “Over the past few years we have dramatically transformed the composition of Kindred, and our drivers of profitability and growth. Following our exit of the skilled nursing facility business and the associated cost realignment initiative, Kindred’s earnings stream, cash flow generation and leverage profile will be substantially improved, including significant reductions of fixed costs such as rent and capital expenditures. Over time, when complete, we expect approximately half of Kindred’s earnings before interest and income taxes (“EBIT”) to come from Kindred at Home, the nation’s largest home health, hospice and community care provider, roughly one-quarter of Kindred’s EBIT to come from our Long-Term Acute Care (“LTAC”) Hospital Division, and the remaining approximately one-quarter of EBIT from Kindred’s Rehabilitation Services Division, which includes one of the fastest growing inpatient rehabilitation facilities (“IRF”) businesses in the country.”
Plan to Exit the Skilled Nursing Facility Business
Mr. Breier continued, “Our strategic decision to exit the skilled nursing facility business as an owner and operator is the final step in a process that began years ago when Kindred operated approximately 300 skilled nursing facilities. This decision will reduce annual rent obligations by approximately $90 million and annual capital expenditures by approximately $30 million. In addition, Kindred will optimize its overhead structure by eliminating approximately $70 million to $100 million(1) of divisional and corporate overhead above the facility level, much of which is associated with supporting our skilled nursing facilities.”
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| (1) | See Forward-Looking Statements beginning on page 14. | |||
| (2) | See reconciliation of generally accepted accounting principles (“GAAP”) results to non-GAAP results beginning on page 14. As used herein, “EBITDAR” means earnings before interest, income taxes, depreciation, amortization and rent. | |||
| (3) | The income tax benefit used to compute after-tax cost is before the deferred tax valuation allowance is applied. | |||
| (4) | In connection with the previously announced sale of twelve hospitals to a group of entities under the name “Curahealth”, which are affiliates of a private investment fund sponsored by Nautic Partners, LLC, on October 1, 2016 (the “Curahealth Disposal”), the Company recorded a lease termination fee of $51.8 million ($31.4 million net of income taxes) and loss on sale of $8.1 million ($4.9 million net of income taxes) in the third quarter of 2016. In addition, the Company closed three LTAC hospitals in the third quarter and incurred facility closing and other costs totaling $17.6 million ($10.7 million net of income taxes). | |||
LTAC Criteria
Mr. Breier continued, “In preparation for LTAC patient criteria, during recent months we completed the strategic sale, swap or closure of 20 LTAC hospitals, executing a critical component of our multi-faceted criteria mitigation strategy. These actions leave Kindred with a meaningfully reshaped portfolio of 82 LTAC hospitals, with strategically reduced unused bed capacity in many of the markets we serve.
“Effective September 1, 2016, all of our ongoing LTAC hospitals were being reimbursed under the new criteria model. For the month of September, approximately 86% of our ongoing Hospital Division revenue came from Medicare compliant patients, managed care and commercial patients, and patients from other payors such as Medicaid. The remaining 14% of revenue was from Medicare site-neutral patients. The unmitigated revenue impact of LTAC criteria for the ongoing hospital portfolio in September was approximately $8 million.
“After two years of preparation, and based on early feedback, we are confident in our ability to successfully navigate through this transition. We continue to expect that by the end of 2017, on a run rate basis, we will mitigate roughly half of the impact of this reimbursement change. We expect to have many more insights on these trends and our experience with criteria once we complete our first full quarter,” remarked Mr. Breier.
Continued Growth in other Business Lines
Mr. Breier continued, “We remain optimistic about the growth opportunities in our home health, hospice, community care and IRF businesses. During the quarter, we acquired a large home health, hospice and community care business in Arkansas and continued to work through integration activities in our Kindred at Home (“KAH”) Division. We are pleased with the strong volume and revenue growth in KAH as well as our Kindred Hospital Rehabilitation Services (“KHRS”) business and will continue our efforts to expand these businesses through organic growth, acquisitions and joint venture arrangements.
“We also continue to make great progress in developing our post-acute benefits management capabilities. Our future will be driven by our ability to not only care for patients, but to manage populations through a unique bundle of technology-enabled care management capabilities. We believe these combined actions are setting the foundation for a stronger Kindred as we drive effective patient-centered care solutions and proactively address the changing healthcare marketplace,” remarked Mr. Breier.
All financial and statistical information included in this press release reflects the continuing operations of the Company’s businesses for all periods presented unless otherwise indicated.
Third Quarter Consolidated Results(1):
- Consolidated revenues were $1.8 billion, a 1.6% year-over-year increase, while the GAAP loss from continuing operations was $671.3 million compared to a loss of $7.0 million in the same period in 2015. The increase in the GAAP loss from continuing operations was primarily attributable to non-cash goodwill and property impairment charges totaling $324.3 million ($266.1 million(2) net of income taxes), a non-cash deferred tax valuation allowance of $366.5 million and restructuring charges related to the sale or closure of 15 LTAC hospitals of $77.5 million ($47.0 million(2) net of income taxes). Core EBITDAR declined 6.9% to $220.1 million compared to $236.5 million in the same period in 2015, primarily due to declines in average daily census in both the Nursing Center and RehabCare business segments, lower Medicare revenue rates under LTAC patient criteria, and Hospital Division closing costs and labor pressures.
- GAAP operating cash flows were $36.0 million compared to $132.3 million for the same period a year ago. Core operating cash flows were $30.3 million compared to $128.4 million for the same period a year ago. Core free cash flows were $3.7 million compared to $82.3 million in the same period a year ago. The decline in both GAAP and core operating and free cash flows in the third quarter of 2016 was primarily attributable to certain timing differences and other items increasing cash required to fund working capital, much of which is expected to be transitional in nature and recouped over the balance of 2016 and into early 2017. Both GAAP and core operating and free cash flow were also impacted in the third quarter by lower earnings.
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| (1) | See reconciliation of GAAP results to non-GAAP results beginning on page 14. | |||
| (2) | The income tax benefit used to compute after-tax cost is before the deferred tax valuation allowance is applied. | |||
Third Quarter Consolidated Results(1)(Continued):
- GAAP diluted loss per share from continuing operations was $7.89 as compared to $0.20 a year ago. The increase in GAAP diluted loss per share from continuing operations was primarily attributable to an increase in certain charges in the third quarter of 2016. GAAP diluted loss per share in the third quarter of 2016 includes after-tax costs of $689.9 million or $7.94 per diluted share of charges related to impairments, deferred tax asset valuation allowance, restructuring, transaction, integration, and research and development costs. GAAP diluted loss per share in the third quarter of 2015 includes $40.2 million ($37.4 million net of income taxes) or $0.43 per diluted share of charges related to restructuring, transaction, integration and litigation costs. Core diluted earnings per share (“EPS”) from continuing operations was $0.05 as compared to $0.23 a year ago. The decline in core diluted EPS was attributable to the same factors discussed above that contributed to a decline in core EBITDAR, plus a 3% increase in aggregate rent, depreciation and amortization, and net interest expense.
- The Company recorded a $261.1 million non-cash goodwill impairment charge in the third quarter to reflect an adjustment to the carrying value of its Hospital Division reporting unit. The Company also recorded a $24.9 million non-cash property and equipment impairment charge primarily related to the Nursing Center Division.
- The Company recorded a $366.5 million non-cash deferred tax valuation allowance in the third quarter based upon current expectations of GAAP and taxable losses in 2016 combined with cumulative years of historical GAAP and taxable losses incurred primarily from restructuring and transactional activities, refinancing fees and litigation settlements. This non-cash charge is included in the third quarter income tax provision and will have no impact on the Company’s ability to utilize its net operating loss (“NOL”) carryforwards on a cash basis as Kindred earns taxable income in future periods.
Third Quarter Segment Results(1)(2):
KAH, which comprises our home health, hospice, community care and home-based primary care businesses, recorded third quarter revenues that increased 5.5% over the prior year period to $638.5 million with home health episodic admissions growing 3.7% and hospice average daily census growing 5.4% compared to the same period last year. Segment EBITDAR (GAAP) increased 4.6% to $106.4 million as compared to $101.7 million and core EBITDAR increased 4.1% to $106.4 million compared to $102.2 million, both compared to the prior year period. On a same-store basis, home health episodes grew 6.9% and hospice admissions grew 8.3% over the prior year period.
Kindred’s Hospital Division third quarter revenues declined 0.7% from the prior year period to $575.3 million due to its full entrance into LTAC patient criteria, and the closure of three LTAC hospitals within the period. These declines were offset partially by a 1% increase in same-hospital admissions and a 3.3% increase in same-hospital commercial revenue rates. Segment EBITDAR (GAAP) in the Hospital Division for the third quarter declined 13.9% to $82.8 million from $96.1 million a year ago, and core EBITDAR for the third quarter declined 14.8% to $82.8 million from $97.1 million a year ago, both due primarily to LTAC patient criteria and increases in labor costs. These results also reflect an unbudgeted EBITDAR decline compared to expectations in the third quarter of 2016 of $3.2 million related to the operations of LTAC hospitals acquired in a facility swap transaction in the second quarter of 2016, and $3.9 million related to the operations of three LTAC hospitals closed in the third quarter of 2016.
Kindred Rehabilitation Services (“KRS”) Division, which comprises our hospital-based rehabilitation segment, recorded third quarter revenues that declined 2.0% from the prior year period to $361.5 million. Segment EBITDAR (GAAP) for KRS increased 3.6% to $58.7 million as compared to $56.7 million in the prior year period and core EBITDAR increased 4.9% to $59.5 million compared to $56.7 million a year ago. Strong performance in the third quarter from KHRS IRFs was offset by the continuing impact of previously reported contract losses in RehabCare, which occurred primarily in 2015. The KHRS segment achieved strong revenue growth of 13.1%, and segment EBITDAR (GAAP) and core EBITDAR grew 17.4% and 19.2%, respectively, compared to the same period a year ago, with IRF same-hospital discharges growing 5.9% during the quarter. RehabCare revenues declined 12.3% to $192.5 million. RehabCare third quarter segment EBITDAR (GAAP) and core EBITDAR both declined 36.4% to $9.3 million from $14.5 million a year ago.
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| (1) | See reconciliation of GAAP results to non-GAAP results beginning on page 14. | |||
| (2) | See same-hospital and full segment data on pages 9 through 13. | |||
Third Quarter Segment Results(1)(2)(Continued):
Kindred’s Nursing Center Division third quarter revenues declined 0.1% to $270.3 million compared to the same period last year. Segment EBITDAR (GAAP) and core EBITDAR both declined 16.7% to $29.9 million compared to $35.9 million a year ago, as a result of a 0.7% decline in average daily census, patient mix deterioration and higher labor costs.
2016 Outlook
All forward-looking non-GAAP financial measures contained in this section “2016 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 address the probable significance of the unavailable information.
The Company’s outlook excludes transaction costs, the effect of any reimbursement changes, debt refinancing costs, severance, retirement, retention, restructuring costs, litigation and related contingency expense, integration costs, business interruption settlements, research and development, any further acquisitions or divestitures, any impairment charges, deferred tax asset valuation allowance, any further issuances of common stock or any repurchases of common stock.
Kindred today updated its outlook for 2016. Kindred expects:
- Annual revenues of approximately $7.2 billion (previously $7.2 billion to $7.3 billion).
- Core EBITDAR of $950 million to $970 million (previously $970 million to $1.010 billion). Please note that approximately $10 million of this adjustment was due to items previously excluded from guidance.(3)
- Core diluted EPS from continuing operations of $0.70 to $0.80 per share (previously $0.80 to $1.00 per share). Please note that approximately $0.03 per share of this adjustment was due to items previously excluded from guidance.(3)(4)
Mr. Breier concluded, “While our results for the third quarter were within our guidance range, we are reducing our financial outlook for the balance of 2016. Our change in expectations is primarily impacted by significant headwinds facing the skilled nursing facility business and labor cost challenges impacting both the Company and the healthcare industry in general. Our exposure to the challenges facing the nursing center industry is expected to amount to between $40 million to $50 million of EBITDAR compared to our operating plan for the year upon which our guidance was based. Our decision to reduce guidance for the balance of 2016, exit the skilled nursing facility business and substantially reduce our overhead is directly related to these challenges.”
The Company will update its outlook for 2017 with its fourth quarter earnings release in February 2017, which will reflect the planned exit from the skilled nursing facility business and associated cost realignment initiative.
Stephen D. Farber, Executive Vice President and Chief Financial Officer of Kindred, noted, “We expect our full exit from the skilled nursing facility business, upon completion, to be positive for future cash flows. In the near term, we have previously discussed our expectation that Kindred will generate roughly $300 million per year in core operating cash flows and approximately half of that amount in core free cash flows. With our revised earnings outlook for 2016, we would expect a relatively proportionate adjustment to cash flows. We also expect a number of timing-related working capital items to modestly impact Kindred’s cash flows over the balance of the year and into early 2017.”
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| (1) | See reconciliation of GAAP results to non-GAAP results beginning on page 14. | |||
| (2) | See same-hospital and full segment data on pages 9 through 13. | |||
| (3) | Contributing to the reduction of 2016 outlook are two events (a) the Curahealth Disposal and reduced hospital earnings, compared to the budget upon which previous guidance was based, and (b) reimbursement rate reductions announced by the Center for Medicare and Medicaid Services on August 2, 2016. Each of these required a $5 million reduction in core EBITDAR guidance and the latter required a $0.03 reduction in core diluted EPS guidance. | |||
| (4) | The EPS estimate is based upon an estimated weighted average annual diluted share count for 2016 of 87.5 million shares. | |||
2016 Outlook (Continued)
Mr. Farber continued, “Every quarter we experience routine working capital and initiative-related timing differences with cash flows that should be expected as a matter of course by those that follow and model the Company. In the third quarter these items accounted for much of the difference in year-over-year cash flow performance. For example, during the third quarter licensure transfers related to recent acquisitions had a $16 million temporary negative impact. These transfers are now complete and we expect to process the billing backlog before the end of the year. There are also frequent calendar-driven timing issues, such as an extra payroll cycle in the third quarter compared to prior year, which had a negative $30 million impact on cash flows this period, and one less Medicare payment cycle during the third quarter compared to the prior year, which had a negative impact on reported LTAC collections of approximately $35 million. Additionally, during the quarter two of our payors, one large commercial payor and one state Medicaid payor, both had systems problems that slowed down payment processing and increased accounts receivable in the third quarter by approximately $13 million.”
Mr. Farber concluded, “Cash flow remains a core focus for Kindred, and the non-cash deferred tax asset valuation allowance charge this quarter will have no impact on our ability to utilize our NOLs going forward as Kindred earns taxable income. Finally, we ended the quarter with excellent liquidity, with approximately $160 million drawn on our $900 million asset-based revolving credit facility.”
The Kindred Board of Directors declared a cash dividend of $0.12 per share on the Company’s common stock payable on December 9, 2016 to shareholders of record as of the close of business on November 21, 2016.
Conference Call
As previously announced, investors and the general public may access a live webcast of the third quarter 2016 conference call through a link on the Company’s website at http://investors.kindredhealthcare.com. The conference call will be held on November 8 at 9:00 a.m. (Eastern Time).
A telephone replay of the conference call will become available at approximately 12:00 p.m. on November 8 by dialing (719) 457-0820, access code: 6877746. The replay will be available through November 18.
Forward-Looking Statements and Non-GAAP Reconciliations
See page 14 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(1). As of October 1, 2016, Kindred through its subsidiaries had approximately 102,200 employees providing healthcare services in 2,702 locations in 46 states, including 82 LTAC hospitals, 19 inpatient rehabilitation hospitals, 91 nursing centers, 19 sub-acute units, 647 Kindred at Home home health, hospice and non-medical home care sites of service, 104 inpatient rehabilitation units (hospital-based) and contract rehabilitation service businesses which served 1,740 non-affiliated sites of service. Ranked as one of Fortune magazine’s Most Admired Healthcare Companies for seven 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.
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| (1) | Revenues based upon Kindred consolidated revenues for the twelve months ended September 30, 2016. | |||
| KINDRED HEALTHCARE, INC. | ||||||||||||||||||||
| Condensed Consolidated Statement of Operations | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| (In thousands, except per share amounts) | ||||||||||||||||||||
| Three months ended | Nine months ended | |||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||||||
| Revenues | $ | 1,793,527 | $ | 1,764,516 | $ | 5,473,568 | $ | 5,273,958 | ||||||||||||
| Salaries, wages and benefits | 957,644 | 922,140 | 2,812,812 | 2,704,920 | ||||||||||||||||
| Supplies | 95,500 | 96,551 | 294,326 | 288,059 | ||||||||||||||||
| Rent | 98,415 | 95,436 | 296,025 | 282,955 | ||||||||||||||||
| Other operating expenses | 217,364 | 207,837 | 649,915 | 617,681 | ||||||||||||||||
| General and administrative expenses | 310,407 | 307,500 | 998,559 | 1,043,986 | ||||||||||||||||
| Other income | (446 | ) | (650 | ) | (1,909 | ) | (1,699 | ) | ||||||||||||
| Litigation contingency expense | - | 31,462 | 2,840 | 130,387 | ||||||||||||||||
| Impairment charges | 324,289 | - | 338,208 | 6,726 | ||||||||||||||||
| Restructuring charges | 81,463 | 3,349 | 88,223 | 8,793 | ||||||||||||||||
| Depreciation and amortization | 40,382 | 39,329 | 121,320 | 116,889 | ||||||||||||||||
| Interest expense | 59,862 | 56,440 | 175,417 | 176,128 | ||||||||||||||||
| Investment income | (1,810 | ) | (432 | ) | (2,561 | ) | (2,203 | ) | ||||||||||||
| 2,183,070 | 1,758,962 | 5,773,175 | 5,372,622 | |||||||||||||||||
| Income (loss) from continuing operations before income taxes | (389,543 | ) | 5,554 | (299,607 | ) | (98,664 | ) | |||||||||||||
| Provision for income taxes | 281,752 | 12,523 | 311,470 | 9,183 | ||||||||||||||||
| Loss from continuing operations | (671,295 | ) | (6,969 | ) | (611,077 | ) | (107,847 | ) | ||||||||||||
| Discontinued operations, net of income taxes: | ||||||||||||||||||||
| Income (loss) from operations | (12 | ) | 2,269 | 2,422 | (1,744 | ) | ||||||||||||||
| Gain on divestiture of operations | - | - | 179 | 983 | ||||||||||||||||
| Income (loss) from discontinued operations | (12 | ) | 2,269 | 2,601 | (761 | ) | ||||||||||||||
| Net loss | (671,307 | ) | (4,700 | ) | (608,476 | ) | (108,608 | ) | ||||||||||||
| (Earnings) loss attributable to noncontrolling interests: | ||||||||||||||||||||
| Continuing operations | (14,305 | ) | (9,900 | ) | (40,341 | ) | (30,482 | ) | ||||||||||||
| Discontinued operations | (1 | ) | 1 | (6 | ) | 32 | ||||||||||||||
| (14,306 | ) | (9,899 | ) | (40,347 | ) | (30,450 | ) | |||||||||||||
| Loss attributable to Kindred | $ | (685,613 | ) | $ | (14,599 | ) | $ | (648,823 | ) | $ | (139,058 | ) | ||||||||
| Amounts attributable to Kindred stockholders: | ||||||||||||||||||||
| Loss from continuing operations | $ | (685,600 | ) | $ | (16,869 | ) | $ | (651,418 | ) | $ | (138,329 | ) | ||||||||
| Income (loss) from discontinued operations | (13 | ) | 2,270 | 2,595 | (729 | ) | ||||||||||||||
| Net loss | $ | (685,613 | ) | $ | (14,599 | ) | $ | (648,823 | ) | $ | (139,058 | ) | ||||||||
| Loss per common share: | ||||||||||||||||||||
| Basic: | ||||||||||||||||||||
| Loss from continuing operations | $ | (7.89 | ) | $ | (0.20 | ) | $ | (7.51 | ) | $ | (1.65 | ) | ||||||||
| Discontinued operations: | ||||||||||||||||||||
| Income (loss) from operations | - | 0.03 | 0.03 | (0.02 | ) | |||||||||||||||
| Gain on divestiture of operations | - | - | - | 0.01 | ||||||||||||||||
| Income (loss) from discontinued operations | - | 0.03 | 0.03 | (0.01 | ) | |||||||||||||||
| Net loss | $ | (7.89 | ) | $ | (0.17 | ) | $ | (7.48 | ) | $ | (1.66 | ) | ||||||||
| Diluted: | ||||||||||||||||||||
| Loss from continuing operations | $ | (7.89 | ) | $ | (0.20 | ) | $ | (7.51 | ) | $ | (1.65 | ) | ||||||||
| Discontinued operations: | ||||||||||||||||||||
| Income (loss) from operations | - | 0.03 | 0.03 | (0.02 | ) | |||||||||||||||
| Gain on divestiture of operations | - | - | - | 0.01 | ||||||||||||||||
| Income (loss) from discontinued operations | - | 0.03 | 0.03 | (0.01 | ) | |||||||||||||||
| Net loss | $ | (7.89 | ) | $ | (0.17 | ) | $ | (7.48 | ) | $ | (1.66 | ) | ||||||||
| Shares used in computing loss per common share: | ||||||||||||||||||||
| Basic | 86,869 | 86,184 | 86,766 | 83,960 | ||||||||||||||||
| Diluted | 86,869 | 86,184 | 86,766 | 83,960 | ||||||||||||||||
| Cash dividends declared and paid per common share | $ | 0.12 | $ | 0.12 | $ | 0.36 | $ | 0.36 | ||||||||||||
| KINDRED HEALTHCARE, INC. | ||||||||||
| Condensed Consolidated Balance Sheet | ||||||||||
| (Unaudited) | ||||||||||
| (In thousands, except per share amounts) | ||||||||||
| September 30, | December 31, | |||||||||
| 2016 | 2015 | |||||||||
| ASSETS | ||||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ | 139,430 | $ | 98,758 | ||||||
| Insurance subsidiary investments | 105,346 | 106,638 | ||||||||
| Accounts receivable less allowance for loss | 1,266,545 | 1,194,868 | ||||||||
| Inventories | 25,262 | 27,791 | ||||||||
| Income taxes | 12,416 | 11,790 | ||||||||
| Other | 94,876 | 61,054 | ||||||||
| 1,643,875 | 1,500,899 | |||||||||
| Property and equipment | 2,070,421 | 2,162,398 | ||||||||
| Accumulated depreciation | (1,192,870 | ) | (1,190,402 | ) | ||||||
| 877,551 | 971,996 | |||||||||
| Goodwill | 2,422,473 | 2,669,810 | ||||||||
| Intangible assets less accumulated amortization | 804,602 | 755,655 | ||||||||
| Insurance subsidiary investments | 195,517 | 204,498 | ||||||||
| Deferred tax assets | - | 104,130 | ||||||||
| Acquisition deposit | - | 18,489 | ||||||||
| Other | 283,322 | 242,782 | ||||||||
| Total assets | $ | 6,227,340 | $ | 6,468,259 | ||||||
| LIABILITIES AND EQUITY | ||||||||||
| Current liabilities: | ||||||||||
| Accounts payable | $ | 203,426 | $ | 187,061 | ||||||
| Salaries, wages and other compensation | 390,743 | 404,925 | ||||||||
| Due to third party payors | 57,945 | 36,251 | ||||||||
| Professional liability risks | 61,036 | 64,099 | ||||||||
| Other accrued liabilities | 280,305 | 394,246 | ||||||||
| Long-term debt due within one year | 27,889 | 24,630 | ||||||||
| 1,021,344 | 1,111,212 | |||||||||
| Long-term debt | 3,316,174 | 3,086,348 | ||||||||
| Professional liability risks | 283,048 | 263,273 | ||||||||
| Deferred tax liabilities | 200,334 | - | ||||||||
| Deferred credits and other liabilities | 354,246 | 301,379 | ||||||||
| Equity: | ||||||||||
| Stockholders' equity: | ||||||||||
|
Common stock, $0.25 par value; authorized 175,000 shares; issued 85,187 shares - September 30, 2016 and 83,792 shares - December 31, 2015 |
21,297 | 20,948 | ||||||||
| Capital in excess of par value | 1,717,165 | 1,737,747 | ||||||||
| Accumulated other comprehensive loss | (4,334 | ) | (2,632 | ) | ||||||
| Accumulated deficit | (905,137 | ) | (256,209 | ) | ||||||
| 828,991 | 1,499,854 | |||||||||
| Noncontrolling interests | 223,203 | 206,193 | ||||||||
| Total equity | 1,052,194 | 1,706,047 | ||||||||
| Total liabilities and equity | $ | 6,227,340 | $ | 6,468,259 | ||||||
| KINDRED HEALTHCARE, INC. | ||||||||||||||||||||
| Condensed Consolidated Statement of Cash Flows | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| (In thousands) | ||||||||||||||||||||
| Three months ended | Nine months ended | |||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||||||
| Cash flows from operating activities: | ||||||||||||||||||||
| Net loss | $ | (671,307 | ) | $ | (4,700 | ) | $ | (608,476 | ) | $ | (108,608 | ) | ||||||||
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Adjustments to reconcile net loss to net cash provided by operating activities: |
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| Depreciation expense | 34,914 | 31,867 | 103,306 | 95,325 | ||||||||||||||||
| Amortization of intangible assets | 5,468 | 7,728 | 18,251 | 22,196 | ||||||||||||||||
| Amortization of stock-based compensation costs | 3,015 | 3,194 | 13,058 | 15,764 | ||||||||||||||||
| Amortization of deferred financing costs | 3,987 | 3,554 | 11,262 | 10,155 | ||||||||||||||||
| Payment of capitalized lender fees related to debt issuance | (42 | ) | - | (7,375 | ) | (28,012 | ) | |||||||||||||
| Provision for doubtful accounts | 10,009 | 11,014 | 30,955 | 29,817 | ||||||||||||||||
| Deferred income taxes | (84,173 | ) | 3,556 | (54,875 | ) | (894 | ) | |||||||||||||
| Impairment charges | 324,289 | - | 338,208 | 6,726 | ||||||||||||||||
| Gain on divestiture of discontinued operations | - | - | (179 | ) | (983 | ) | ||||||||||||||
| Other | 6,303 | 3,485 | 7,262 | 10,457 | ||||||||||||||||
| Change in operating assets and liabilities: | ||||||||||||||||||||
| Accounts receivable | (42,832 | ) | 25,990 | (143,953 | ) | (13,399 | ) | |||||||||||||
| Inventories and other assets | 11,871 | 8,767 | (3,522 | ) | 44,181 | |||||||||||||||
| Accounts payable | 11,995 | (353 | ) | 24,451 | (12,788 | ) | ||||||||||||||
| Income taxes | 364,925 | 37,491 | 365,705 | 33,646 | ||||||||||||||||
| Due to third party payors | 24,809 | 15,008 | 20,317 | (3,965 | ) | |||||||||||||||
| Other accrued liabilities | 32,851 | (14,311 | ) | (76,347 | ) | (6,551 | ) | |||||||||||||
| Net cash provided by operating activities | 36,082 | 132,290 | 38,048 | 93,067 | ||||||||||||||||
| Cash flows from investing activities: | ||||||||||||||||||||
| Routine capital expenditures | (21,873 | ) | (35,422 | ) | (68,703 | ) | (80,691 | ) | ||||||||||||
| Development capital expenditures | (8,386 | ) | (5,760 | ) | (27,112 | ) | (12,066 | ) | ||||||||||||
| Acquisitions, net of cash acquired | (49,329 | ) | (2,002 | ) | (77,040 | ) | (663,757 | ) | ||||||||||||
| Acquisition deposits | - | - | 18,489 | 195,000 | ||||||||||||||||
| Sale of assets | 3,739 | 3,884 | 4,962 | 7,061 | ||||||||||||||||
| 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 | (22,427 | ) | (16,357 | ) | (75,422 | ) | (59,186 | ) | ||||||||||||
| Sale of insurance subsidiary investments | 31,875 | 15,987 | 78,478 | 50,780 | ||||||||||||||||
| Net change in insurance subsidiary cash and cash equivalents | (14,680 | ) | (2,633 | ) | 8,479 | (8,396 | ) | |||||||||||||
| Proceeds from note receivable | - | 25,000 | - | 25,000 | ||||||||||||||||
| Net change in other investments | 51 | 176 | (33,347 | ) | 375 | |||||||||||||||
| Other | (150 | ) | 1,383 | (1,277 | ) | 590 | ||||||||||||||
| Net cash provided by (used in) investing activities | (81,180 | ) | (15,744 | ) | (172,493 | ) | 828,148 | |||||||||||||
| Cash flows from financing activities: | ||||||||||||||||||||
| Proceeds from borrowings under revolving credit | 489,200 | 259,700 | 1,267,200 | 1,414,850 | ||||||||||||||||
| Repayment of borrowings under revolving credit | (388,100 | ) | (349,700 | ) | (1,215,800 | ) | (1,319,850 | ) | ||||||||||||
| 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 | ) | (3,003 | ) | (10,019 | ) | (9,008 | ) | ||||||||||||
| Repayment of other long-term debt | (276 | ) | (500 | ) | (826 | ) | (1,400 | ) | ||||||||||||
| Payment of deferred financing costs | (50 | ) | (301 | ) | (342 | ) | (3,284 | ) | ||||||||||||
| Issuance of common stock in connection with employee benefit plans | - | 329 | - | 534 | ||||||||||||||||
|
Payment of costs associated with issuance of common stock and tangible equity units |
- | - | - | (915 | ) | |||||||||||||||
| Payment of dividend for mandatory redeemable preferred stock | (2,904 | ) | (2,703 | ) | (8,558 | ) | (8,135 | ) | ||||||||||||
| Dividends paid | (10,224 | ) | (10,065 | ) | (30,517 | ) | (30,067 | ) | ||||||||||||
| Contributions made by noncontrolling interests | 4,993 | 1,492 | 11,261 | 1,492 | ||||||||||||||||
| Distributions to noncontrolling interests | (4,694 | ) | (10,685 | ) | (35,240 | ) | (31,823 | ) | ||||||||||||
| Purchase of noncontrolling interests | - | - | (1,000 | ) | - | |||||||||||||||
| Other | 35 | 245 | 108 | 1,457 | ||||||||||||||||
| Net cash provided by (used in) financing activities | 84,472 | (115,191 | ) | 175,117 | (964,512 | ) | ||||||||||||||
| Change in cash and cash equivalents | 39,374 | 1,355 | 40,672 | (43,297 | ) | |||||||||||||||
| Cash and cash equivalents at beginning of period | 100,056 | 119,536 | 98,758 | 164,188 | ||||||||||||||||
| Cash and cash equivalents at end of period | $ | 139,430 | $ | 120,891 | $ | 139,430 | $ | 120,891 | ||||||||||||
| KINDRED HEALTHCARE, INC. | |||||||||||||||||||||||||||||||||||||||
| Condensed Consolidated and Business Segment Data | |||||||||||||||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||||||||||||||
| (In thousands, except per share amounts) | |||||||||||||||||||||||||||||||||||||||
| Third quarter | |||||||||||||||||||||||||||||||||||||||
| 2015 Quarters | 2016 Quarters | % change v. | |||||||||||||||||||||||||||||||||||||
| First | Second | Third | Fourth | First | Second | Third | prior year | ||||||||||||||||||||||||||||||||
| Condensed consolidated income statement data: | |||||||||||||||||||||||||||||||||||||||
| GAAP presentation: | |||||||||||||||||||||||||||||||||||||||
| Revenues | $ | 1,675,967 | $ | 1,833,475 | $ | 1,764,516 | $ | 1,780,949 | $ | 1,837,971 | $ | 1,842,070 | $ | 1,793,527 | 1.6 | ||||||||||||||||||||||||
| Operating expenses | 1,645,791 | 1,584,873 | 1,568,189 | 1,583,985 | 1,604,855 | 1,591,898 | 1,986,221 | 26.7 | |||||||||||||||||||||||||||||||
| Rent | 91,788 | 95,731 | 95,436 | 96,934 | 97,517 | 100,093 | 98,415 | 3.1 | |||||||||||||||||||||||||||||||
| Depreciation and amortization | 38,935 | 38,625 | 39,329 | 40,362 | 40,681 | 40,257 | 40,382 | 2.7 | |||||||||||||||||||||||||||||||
| Interest, net | 61,777 | 56,140 | 56,008 | 55,664 | 57,245 | 57,559 | 58,052 | 3.6 | |||||||||||||||||||||||||||||||
|
Income (loss) from continuing operations before income taxes |
(162,324 | ) | 58,106 | 5,554 | 4,004 | 37,673 | 52,263 | (389,543 | ) | NM | |||||||||||||||||||||||||||||
| Provision (benefit) for income taxes | (27,736 | ) | 24,396 | 12,523 | (51,980 | ) | 11,836 | 17,882 | 281,752 | NM | |||||||||||||||||||||||||||||
| Income (loss) from continuing operations | (134,588 | ) | 33,710 | (6,969 | ) | 55,984 | 25,837 | 34,381 | (671,295 | ) | NM | ||||||||||||||||||||||||||||
| Noncontrolling interests | (8,847 | ) | (11,735 | ) | (9,900 | ) | (12,082 | ) | (12,514 | ) | (13,522 | ) | (14,305 | ) | 44.5 | ||||||||||||||||||||||||
| Net income (loss) attributable to Kindred | $ | (143,435 | ) | $ | 21,975 | $ | (16,869 | ) | $ | 43,902 | $ | 13,323 | $ | 20,859 | $ | (685,600 | ) | NM | |||||||||||||||||||||
| Diluted EPS | $ | (1.80 | ) | $ | 0.25 | $ | (0.20 | ) | $ | 0.50 | $ | 0.15 | $ | 0.23 | $ | (7.89 | ) | NM | |||||||||||||||||||||
| Diluted shares | 79,575 | 86,402 | 86,184 | 87,232 | 87,249 | 87,500 | 86,869 | 0.8 | |||||||||||||||||||||||||||||||
| Core presentation (a): | |||||||||||||||||||||||||||||||||||||||
| EBITDAR | $ | 234,211 | $ | 261,800 | $ | 236,477 | $ | 247,839 | $ | 246,834 | $ | 267,895 | $ | 220,075 | (6.9 | ) | |||||||||||||||||||||||
| Rent | 91,199 | 95,528 | 95,436 | 96,934 | 97,517 | 100,093 | 98,069 | 2.8 | |||||||||||||||||||||||||||||||
| Interest, net | 44,346 | 56,140 | 56,008 | 55,664 | 57,245 | 57,559 | 58,052 | 3.6 | |||||||||||||||||||||||||||||||
| Provision for income taxes | 22,466 | 25,721 | 15,298 | 13,758 | 16,546 | 21,417 | 4,639 | (69.7 | ) | ||||||||||||||||||||||||||||||
| Net income attributable to Kindred | 28,418 | 34,051 | 20,506 | 29,039 | 22,331 | 34,031 | 4,340 | (78.8 | ) | ||||||||||||||||||||||||||||||
| Core diluted EPS | $ | 0.34 | $ | 0.39 | $ | 0.23 | $ | 0.33 | $ | 0.25 | $ | 0.38 | $ | 0.05 | (78.3 | ) | |||||||||||||||||||||||
| Diluted shares | 82,422 | 86,402 | 86,892 | 87,232 | 87,249 | 87,500 | 87,529 | 0.7 | |||||||||||||||||||||||||||||||
| Revenues by segment: | |||||||||||||||||||||||||||||||||||||||
| Hospital division | $ | 640,483 | $ | 627,206 | $ | 579,497 | $ | 593,593 | $ | 643,299 | $ | 633,695 | $ | 575,323 | (0.7 | ) | |||||||||||||||||||||||
| Kindred at Home: | |||||||||||||||||||||||||||||||||||||||
| Home health | 300,867 | 427,820 | 424,054 | 425,759 | 430,035 | 438,556 | 449,958 | 6.1 | |||||||||||||||||||||||||||||||
| Hospice | 119,057 | 178,005 | 181,140 | 178,325 | 176,426 | 185,641 | 188,575 | 4.1 | |||||||||||||||||||||||||||||||
| 419,924 | 605,825 | 605,194 | 604,084 | 606,461 | 624,197 | 638,533 | 5.5 | ||||||||||||||||||||||||||||||||
| Kindred Rehabilitation Services: | |||||||||||||||||||||||||||||||||||||||
| Kindred Hospital Rehabilitation Services | 151,564 | 152,544 | 149,435 | 155,579 | 165,774 | 169,815 | 169,018 | 13.1 | |||||||||||||||||||||||||||||||
| RehabCare | 252,595 | 236,791 | 219,518 | 206,582 | 204,248 | 196,075 | 192,480 | (12.3 | ) | ||||||||||||||||||||||||||||||
| 404,159 | 389,335 | 368,953 | 362,161 | 370,022 | 365,890 | 361,498 | (2.0 | ) | |||||||||||||||||||||||||||||||
| Nursing center division | 274,308 | 273,870 | 270,510 | 273,387 | 272,227 | 272,395 | 270,259 | (0.1 | ) | ||||||||||||||||||||||||||||||
| 1,738,874 | 1,896,236 | 1,824,154 | 1,833,225 | 1,892,009 | 1,896,177 | 1,845,613 | 1.2 | ||||||||||||||||||||||||||||||||
| Eliminations | (62,907 | ) | (62,761 | ) | (59,638 | ) | (52,276 | ) | (54,038 | ) | (54,107 | ) | (52,086 | ) | (12.7 | ) | |||||||||||||||||||||||
| $ | 1,675,967 | $ | 1,833,475 | $ | 1,764,516 | $ | 1,780,949 | $ | 1,837,971 | $ | 1,842,070 | $ | 1,793,527 | 1.6 | |||||||||||||||||||||||||
|
__________ |
|||||||||||||||||||||||||||||||||||||||
| NM = not meaningful | |||||||||||||||||||||||||||||||||||||||
|
(a) See reconciliation of GAAP results to non-GAAP results beginning on page 14. |
|||||||||||||||||||||||||||||||||||||||
| KINDRED HEALTHCARE, INC. | |||||||||||||||||||||||||||||||||||||||||
| Condensed Consolidated and Business Segment Data (Continued) | |||||||||||||||||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||||||||||||||||
| (In thousands, except statistics) | |||||||||||||||||||||||||||||||||||||||||
| Third quarter | |||||||||||||||||||||||||||||||||||||||||
| 2015 Quarters | 2016 Quarters | % change v. | |||||||||||||||||||||||||||||||||||||||
| First | Second | Third | Fourth | First | Second | Third | prior year | ||||||||||||||||||||||||||||||||||
| Segment EBITDAR (GAAP) (a): | |||||||||||||||||||||||||||||||||||||||||
| Hospital division | $ | 134,111 | $ | 131,532 | $ | 96,108 | $ | 116,454 | $ | 135,495 | $ | 125,932 | $ | 82,752 | (13.9 | ) | |||||||||||||||||||||||||
| Kindred at Home: | |||||||||||||||||||||||||||||||||||||||||
| Home health | 46,798 | 72,917 | 67,682 | 68,776 | 66,941 | 76,030 | 75,073 | 10.9 | |||||||||||||||||||||||||||||||||
| Hospice | 16,996 | 27,887 | 34,025 | 30,212 | 24,866 | 31,329 | 31,326 | (7.9 | ) | ||||||||||||||||||||||||||||||||
| 63,794 | 100,804 | 101,707 | 98,988 | 91,807 | 107,359 | 106,399 | 4.6 | ||||||||||||||||||||||||||||||||||
| Kindred Rehabilitation Services: | |||||||||||||||||||||||||||||||||||||||||
| Kindred Hospital Rehabilitation Services | 44,564 | 44,531 | 42,141 | 44,891 | 47,870 | 50,469 | 49,470 | 17.4 | |||||||||||||||||||||||||||||||||
| RehabCare | 15,708 | 14,681 | 14,544 | (1,118 | ) | 11,987 | 13,269 | 9,248 | (36.4 | ) | |||||||||||||||||||||||||||||||
| 60,272 | 59,212 | 56,685 | 43,773 | 59,857 | 63,738 | 58,718 | 3.6 | ||||||||||||||||||||||||||||||||||
| Nursing center division | 36,963 | 39,877 | 35,923 | 36,601 | 30,100 | 33,662 | 29,922 | (16.7 | ) | ||||||||||||||||||||||||||||||||
| Core EBITDAR by segment (b): | |||||||||||||||||||||||||||||||||||||||||
| Hospital division | $ | 134,786 | $ | 131,532 | $ | 97,128 | $ | 117,675 | $ | 135,495 | $ | 125,932 | $ | 82,752 | (14.8 | ) | |||||||||||||||||||||||||
| Kindred at Home: | |||||||||||||||||||||||||||||||||||||||||
| Home health | 46,798 | 72,917 | 68,155 | 68,826 | 65,803 | 75,859 | 75,073 | 10.2 | |||||||||||||||||||||||||||||||||
| Hospice | 16,996 | 27,887 | 34,025 | 30,212 | 24,866 | 31,329 | 31,326 | (7.9 | ) | ||||||||||||||||||||||||||||||||
| 63,794 | 100,804 | 102,180 | 99,038 | 90,669 | 107,188 | 106,399 | 4.1 | ||||||||||||||||||||||||||||||||||
| Kindred Rehabilitation Services: | |||||||||||||||||||||||||||||||||||||||||
| Kindred Hospital Rehabilitation Services | 44,564 | 44,531 | 42,141 | 45,098 | 47,870 | 50,469 | 50,217 | 19.2 | |||||||||||||||||||||||||||||||||
| RehabCare | 16,493 | 14,681 | 14,544 | 11,858 | 11,987 | 13,269 | 9,248 | (36.4 | ) | ||||||||||||||||||||||||||||||||
| 61,057 | 59,212 | 56,685 | 56,956 | 59,857 | 63,738 | 59,465 | 4.9 | ||||||||||||||||||||||||||||||||||
| Nursing center division | 36,963 | 40,461 | 35,923 | 36,601 | 30,100 | 33,662 | 29,922 | (16.7 | ) | ||||||||||||||||||||||||||||||||
| Support center | (62,389 | ) | (70,209 | ) | (55,439 | ) | (c) | (62,431 | ) | (69,287 | ) | (62,625 | ) | (58,463 | ) | (c) | 5.5 | ||||||||||||||||||||||||
| $ | 234,211 | $ | 261,800 | $ | 236,477 | $ | 247,839 | $ | 246,834 | $ | 267,895 | $ | 220,075 | (6.9 | ) | ||||||||||||||||||||||||||
| EBITDAR margin by segment: | |||||||||||||||||||||||||||||||||||||||||
| Hospital division | 20.9 | 21.0 | 16.6 | 19.6 | 21.1 | 19.9 | 14.4 | (2.2 | ) | ||||||||||||||||||||||||||||||||
| Kindred at Home: | |||||||||||||||||||||||||||||||||||||||||
| Home health | 15.6 | 17.0 | 16.0 | 16.2 | 15.6 | 17.3 | 16.7 | 0.7 | |||||||||||||||||||||||||||||||||
| Hospice | 14.3 | 15.7 | 18.8 | 16.9 | 14.1 | 16.9 | 16.6 | (2.2 | ) | ||||||||||||||||||||||||||||||||
| Kindred at Home | 15.2 | 16.6 | 16.8 | 16.4 | 15.1 | 17.2 | 16.7 | (0.1 | ) | ||||||||||||||||||||||||||||||||
| Kindred Rehabilitation Services: | |||||||||||||||||||||||||||||||||||||||||
| Kindred Hospital Rehabilitation Services | 29.4 | 29.2 | 28.2 | 28.9 | 28.9 | 29.7 | 29.3 | 1.1 | |||||||||||||||||||||||||||||||||
| RehabCare | 6.2 | 6.2 | 6.6 | (0.5 | ) | 5.9 | 6.8 | 4.8 | (1.8 | ) | |||||||||||||||||||||||||||||||
| Kindred Rehabilitation Services | 14.9 | 15.2 | 15.4 | 12.1 | 16.2 | 17.4 | 16.2 | 0.8 | |||||||||||||||||||||||||||||||||
| Nursing center division | 13.5 | 14.6 | 13.3 | 13.4 | 11.1 | 12.4 | 11.1 | (2.2 | ) | ||||||||||||||||||||||||||||||||
| Core EBITDAR margin by segment: | |||||||||||||||||||||||||||||||||||||||||
| Hospital division | 21.0 | 21.0 | 16.8 | 19.8 | 21.1 | 19.9 | 14.4 | (2.4 | ) | ||||||||||||||||||||||||||||||||
| Kindred at Home: | |||||||||||||||||||||||||||||||||||||||||
| Home health | 15.6 | 17.0 | 16.1 | 16.2 | 15.3 | 17.3 | 16.7 | 0.6 | |||||||||||||||||||||||||||||||||
| Hospice | 14.3 | 15.7 | 18.8 | 16.9 | 14.1 | 16.9 | 16.6 | (2.2 | ) | ||||||||||||||||||||||||||||||||
| Kindred at Home | 15.2 | 16.6 | 16.9 | 16.4 | 15.0 | 17.2 | 16.7 | (0.2 | ) | ||||||||||||||||||||||||||||||||
| Kindred Rehabilitation Services: | |||||||||||||||||||||||||||||||||||||||||
| Kindred Hospital Rehabilitation Services | 29.4 | 29.2 | 28.2 | 29.0 | 28.9 | 29.7 | 29.7 | 1.5 | |||||||||||||||||||||||||||||||||
| RehabCare | 6.5 | 6.2 | 6.6 | 5.7 | 5.9 | 6.8 | 4.8 | (1.8 | ) | ||||||||||||||||||||||||||||||||
| Kindred Rehabilitation Services | 15.1 | 15.2 | 15.4 | 15.7 | 16.2 | 17.4 | 16.4 | 1.0 | |||||||||||||||||||||||||||||||||
| Nursing center division | 13.5 | 14.8 | 13.3 | 13.4 | 11.1 | 12.4 | 11.1 | (2.2 | ) | ||||||||||||||||||||||||||||||||
| Consolidated | 14.0 | 14.3 | 13.4 | 13.9 | 13.4 | 14.5 | 12.3 | (1.1 | ) | ||||||||||||||||||||||||||||||||
|
__________ |
|||||||||||||||||||||||||||||||||||||||||
|
(a) Segment EBITDAR includes reclassification of restructuring charges from segment EBITDAR to the new consolidated statement of operations caption, Restructuring charges, for all historical periods. |
|||||||||||||||||||||||||||||||||||||||||
|
(b) See reconciliation of GAAP results to non-GAAP results beginning on page 14. |
|||||||||||||||||||||||||||||||||||||||||
|
(c) Includes changes in estimate of $9 million and $4 million for the third quarters of 2015 and 2016, respectively, to lower incentive compensation costs recorded in prior periods. |
|||||||||||||||||||||||||||||||||||||||||
| KINDRED HEALTHCARE, INC. | ||||||||||||||||||||||||||||||||
| Condensed Business Segment Data (Continued) | ||||||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||||||
| Third quarter | ||||||||||||||||||||||||||||||||
| 2015 Quarters | 2016 Quarters | % change v. | ||||||||||||||||||||||||||||||
| First | Second | Third | Fourth | First | Second | Third | prior year | |||||||||||||||||||||||||
| Hospital division: | ||||||||||||||||||||||||||||||||
| End of period data: | ||||||||||||||||||||||||||||||||
| Number of transitional care hospitals | 97 | 96 | 95 | 95 | 95 | 97 | 94 | |||||||||||||||||||||||||
| Number of licensed beds | 7,147 | 7,124 | 7,094 | 7,094 | 7,089 | 7,067 | 6,890 | |||||||||||||||||||||||||
| Revenue mix %: | ||||||||||||||||||||||||||||||||
| Medicare | 56.8 | 55.2 | 57.1 | 57.3 | 57.8 | 55.5 | 54.6 | |||||||||||||||||||||||||
| Medicaid | 5.5 | 5.3 | 5.3 | 5.1 | 4.2 | 4.2 | 4.0 | |||||||||||||||||||||||||
| Medicare Advantage | 11.9 | 11.6 | 10.8 | 11.1 | 11.5 | 12.0 | 12.1 | |||||||||||||||||||||||||
| Medicaid Managed | 4.7 | 5.6 | 6.1 | 6.2 | 5.6 | 6.3 | 7.3 | |||||||||||||||||||||||||
| Commercial insurance and other | 21.1 | 22.3 | 20.7 | 20.3 | 20.9 | 22.0 | 22.0 | |||||||||||||||||||||||||
| Admissions: | ||||||||||||||||||||||||||||||||
| Medicare | 8,775 | 8,267 | 7,976 | 8,169 | 8,919 | 8,253 | 7,861 | (1.4 | ) | |||||||||||||||||||||||
| Medicaid | 610 | 610 | 556 | 520 | 463 | 386 | 375 | (32.6 | ) | |||||||||||||||||||||||
| Medicare Advantage | 1,555 | 1,352 | 1,212 | 1,304 | 1,453 | 1,382 | 1,327 | 9.5 | ||||||||||||||||||||||||
| Medicaid Managed | 643 | 675 | 646 | 612 | 733 | 768 | 861 | 33.3 | ||||||||||||||||||||||||
| Commercial insurance and other | 1,868 | 1,815 | 1,763 | 1,701 | 1,871 | 1,807 | 1,727 | (2.0 | ) | |||||||||||||||||||||||
| 13,451 | 12,719 | 12,153 | 12,306 | 13,439 | 12,596 | 12,151 | - | |||||||||||||||||||||||||
| Patient days: | ||||||||||||||||||||||||||||||||
| Medicare | 228,483 | 218,577 | 210,870 | 210,409 | 229,004 | 219,013 | 202,482 | (4.0 | ) | |||||||||||||||||||||||
| Medicaid | 28,663 | 25,213 | 23,167 | 21,795 | 21,134 | 19,409 | 16,781 | (27.6 | ) | |||||||||||||||||||||||
| Medicare Advantage | 48,448 | 44,740 | 39,585 | 41,079 | 45,760 | 47,697 | 43,241 | 9.2 | ||||||||||||||||||||||||
| Medicaid Managed | 22,013 | 24,833 | 24,412 | 24,802 | 25,341 | 27,267 | 28,534 | 16.9 | ||||||||||||||||||||||||
| Commercial insurance and other | 62,241 | 62,922 | 58,631 | 57,321 | 62,769 | 63,009 | 59,856 | 2.1 | ||||||||||||||||||||||||
| 389,848 | 376,285 | 356,665 | 355,406 | 384,008 | 376,395 | 350,894 | (1.6 | ) | ||||||||||||||||||||||||
| Average length of stay: | ||||||||||||||||||||||||||||||||
| Medicare | 26.0 | 26.4 | 26.4 | 25.8 | 25.7 | 26.5 | 25.8 | (2.3 | ) | |||||||||||||||||||||||
| Medicaid | 47.0 | 41.3 | 41.7 | 41.9 | 45.6 | 50.3 | 44.7 | 7.2 | ||||||||||||||||||||||||
| Medicare Advantage | 31.2 | 33.1 | 32.7 | 31.5 | 31.5 | 34.5 | 32.6 | (0.3 | ) | |||||||||||||||||||||||
| Medicaid Managed | 34.2 | 36.8 | 37.8 | 40.5 | 34.6 | 35.5 | 33.1 | (12.4 | ) | |||||||||||||||||||||||
| Commercial insurance and other | 33.3 | 34.7 | 33.3 | 33.7 | 33.5 | 34.9 | 34.7 | 4.2 | ||||||||||||||||||||||||
| Weighted average | 29.0 | 29.6 | 29.3 | 28.9 | 28.6 | 29.9 | 28.9 | (1.4 | ) | |||||||||||||||||||||||
| Revenues per admission: | ||||||||||||||||||||||||||||||||
| Medicare | $ | 41,483 | $ | 41,892 | $ | 41,451 | $ | 41,656 | $ | 41,717 | $ | 42,579 | $ | 39,945 | (3.6 | ) | ||||||||||||||||
| Medicaid | 57,594 | 54,795 | 55,415 | 57,724 | 57,928 | 69,797 | 61,338 | 10.7 | ||||||||||||||||||||||||
| Medicare Advantage | 48,908 | 53,578 | 51,495 | 50,680 | 51,080 | 55,105 | 52,363 | 1.7 | ||||||||||||||||||||||||
| Medicaid Managed | 46,740 | 51,950 | 54,976 | 60,263 | 49,287 | 51,696 | 48,631 | (11.5 | ) | |||||||||||||||||||||||
| Commercial insurance and other | 72,395 | 77,110 | 68,151 | 70,735 | 71,651 | 77,193 | 73,515 | 7.9 | ||||||||||||||||||||||||
| Weighted average | 47,616 | 49,312 | 47,683 | 48,236 | 47,868 | 50,309 | 47,348 | (0.7 | ) | |||||||||||||||||||||||
| Revenues per patient day: | ||||||||||||||||||||||||||||||||
| Medicare | $ | 1,593 | $ | 1,584 | $ | 1,568 | $ | 1,617 | $ | 1,625 | $ | 1,605 | $ | 1,551 | (1.1 | ) | ||||||||||||||||
| Medicaid | 1,226 | 1,326 | 1,330 | 1,377 | 1,269 | 1,388 | 1,371 | 3.1 | ||||||||||||||||||||||||
| Medicare Advantage | 1,570 | 1,619 | 1,577 | 1,609 | 1,622 | 1,597 | 1,607 | 1.9 | ||||||||||||||||||||||||
| Medicaid Managed | 1,365 | 1,412 | 1,455 | 1,487 | 1,426 | 1,456 | 1,467 | 0.8 | ||||||||||||||||||||||||
| Commercial insurance and other | 2,173 | 2,224 | 2,049 | 2,099 | 2,136 | 2,214 | 2,121 | 3.5 | ||||||||||||||||||||||||
| Weighted average | 1,643 | 1,667 | 1,625 | 1,670 | 1,675 | 1,684 | 1,640 | 0.9 | ||||||||||||||||||||||||
|
Medicare case mix index (discharged patients only) |
1.166 | 1.163 | 1.150 | 1.164 | 1.163 | 1.179 | 1.172 | 1.9 | ||||||||||||||||||||||||
| Average daily census | 4,332 | 4,135 | 3,877 | 3,863 | 4,220 | 4,136 | 3,814 | (1.6 | ) | |||||||||||||||||||||||
| Occupancy % | 69.2 | 66.1 | 62.2 | 62.2 | 68.0 | 67.5 | 61.6 | (1.0 | ) | |||||||||||||||||||||||
| Same-hospital data: | ||||||||||||||||||||||||||||||||
| Revenues ($ 000s) (a) | $ | 634,975 | $ | 605,410 | $ | 555,282 | $ | 571,925 | $ | 643,413 | $ | 619,427 | $ | 556,091 | 0.1 | |||||||||||||||||
| Admissions: | ||||||||||||||||||||||||||||||||
| Medicare | 8,652 | 8,031 | 7,659 | 7,933 | 8,919 | 8,083 | 7,571 | (1.1 | ) | |||||||||||||||||||||||
| Medicaid | 602 | 557 | 508 | 454 | 463 | 371 | 371 | (27.0 | ) | |||||||||||||||||||||||
| Medicare Advantage | 1,546 | 1,299 | 1,166 | 1,238 | 1,453 | 1,339 | 1,292 | 10.8 | ||||||||||||||||||||||||
| Medicaid Managed | 640 | 640 | 619 | 590 | 733 | 761 | 861 | 39.1 | ||||||||||||||||||||||||
| Commercial insurance and other | 1,840 | 1,746 | 1,680 | 1,624 | 1,871 | 1,751 | 1,658 | (1.3 | ) | |||||||||||||||||||||||
| 13,280 | 12,273 | 11,632 | 11,839 | 13,439 | 12,305 | 11,753 | 1.0 | |||||||||||||||||||||||||
| Patient days: | ||||||||||||||||||||||||||||||||
| Medicare | 225,992 | 212,221 | 202,690 | 204,128 | 229,004 | 214,629 | 194,857 | (3.9 | ) | |||||||||||||||||||||||
| Medicaid | 28,458 | 22,999 | 21,203 | 19,481 | 21,134 | 18,340 | 16,467 | (22.3 | ) | |||||||||||||||||||||||
| Medicare Advantage | 48,276 | 42,863 | 37,272 | 39,122 | 45,760 | 46,522 | 41,955 | 12.6 | ||||||||||||||||||||||||
| Medicaid Managed | 21,933 | 23,722 | 23,329 | 24,136 | 25,341 | 26,795 | 28,526 | 22.3 | ||||||||||||||||||||||||
| Commercial insurance and other | 61,715 | 60,559 | 56,377 | 54,899 | 62,769 | 60,984 | 57,168 | 1.4 | ||||||||||||||||||||||||
| 386,374 | 362,364 | 340,871 | 341,766 | 384,008 | 367,270 | 338,973 | (0.6 | ) | ||||||||||||||||||||||||
| Total average length of stay | 29.1 | 29.5 | 29.3 | 28.9 | 28.6 | 29.8 | 28.8 | (1.7 | ) | |||||||||||||||||||||||
| Total revenues per patient day | $ | 1,643 | $ | 1,671 | $ | 1,629 | $ | 1,673 | $ | 1,676 | $ | 1,687 | $ | 1,641 | 0.7 | |||||||||||||||||
|
__________ |
||||||||||||||||||||||||||||||||
|
(a) See reconciliation of same-hospital revenues to reported revenues for the Hospital Division on page 17. |
||||||||||||||||||||||||||||||||
| KINDRED HEALTHCARE, INC. | ||||||||||||||||||||||||||||||||
| Condensed Business Segment Data (Continued) | ||||||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||||||
| Third quarter | ||||||||||||||||||||||||||||||||
| 2015 Quarters | 2016 Quarters | % change v. | ||||||||||||||||||||||||||||||
| First | Second | Third | Fourth | First | Second | Third | prior year | |||||||||||||||||||||||||
| Pro forma hospital data (a): | ||||||||||||||||||||||||||||||||
| End of period data: | ||||||||||||||||||||||||||||||||
| Number of transitional care hospitals | 82 | 82 | 82 | 82 | 82 | 82 | 82 | |||||||||||||||||||||||||
| Number of licensed beds | 6,112 | 6,112 | 6,112 | 6,112 | 6,107 | 6,107 | 6,107 | |||||||||||||||||||||||||
| Revenue mix %: | ||||||||||||||||||||||||||||||||
| Medicare | 57.3 | 55.5 | 57.7 | 57.7 | 57.9 | 55.3 | 54.2 | |||||||||||||||||||||||||
| Medicaid | 4.9 | 4.7 | 4.8 | 4.5 | 3.9 | 3.9 | 3.6 | |||||||||||||||||||||||||
| Medicare Advantage | 11.6 | 11.4 | 10.4 | 11.1 | 11.4 | 11.9 | 12.4 | |||||||||||||||||||||||||
| Medicaid Managed | 4.7 | 5.6 | 6.1 | 6.2 | 5.6 | 6.4 | 7.6 | |||||||||||||||||||||||||
| Commercial insurance and other | 21.5 | 22.8 | 21.0 | 20.5 | 21.2 | 22.5 | 22.2 | |||||||||||||||||||||||||
| Admissions: | ||||||||||||||||||||||||||||||||
| Medicare | 7,813 | 7,382 | 7,192 | 7,385 | 7,989 | 7,372 | 7,084 | (1.5 | ) | |||||||||||||||||||||||
| Medicaid | 530 | 548 | 511 | 447 | 430 | 358 | 343 | (32.9 | ) | |||||||||||||||||||||||
| Medicare Advantage | 1,330 | 1,143 | 1,065 | 1,123 | 1,261 | 1,198 | 1,188 | 11.5 | ||||||||||||||||||||||||
| Medicaid Managed | 562 | 609 | 572 | 547 | 632 | 702 | 792 | 38.5 | ||||||||||||||||||||||||
| Commercial insurance and other | 1,625 | 1,576 | 1,524 | 1,474 | 1,642 | 1,604 | 1,504 | (1.3 | ) | |||||||||||||||||||||||
| 11,860 | 11,258 | 10,864 | 10,976 | 11,954 | 11,234 | 10,911 | 0.4 | |||||||||||||||||||||||||
| Patient days: | ||||||||||||||||||||||||||||||||
| Medicare | 204,423 | 195,427 | 190,223 | 190,718 | 204,796 | 194,955 | 181,518 | (4.6 | ) | |||||||||||||||||||||||
| Medicaid | 21,489 | 18,559 | 17,272 | 15,357 | 15,470 | 14,053 | 12,085 | (30.0 | ) | |||||||||||||||||||||||
| Medicare Advantage | 41,908 | 38,440 | 33,795 | 36,305 | 39,995 | 42,045 | 39,646 | 17.3 | ||||||||||||||||||||||||
| Medicaid Managed | 19,537 | 22,351 | 21,700 | 22,063 | 22,421 | 24,893 | 26,698 | 23.0 | ||||||||||||||||||||||||
| Commercial insurance and other | 54,988 | 54,697 | 51,485 | 50,779 | 55,455 | 55,653 | 53,015 | 3.0 | ||||||||||||||||||||||||
| 342,345 | 329,474 | 314,475 | 315,222 | 338,137 | 331,599 | 312,962 | (0.5 | ) | ||||||||||||||||||||||||
| Average length of stay: | ||||||||||||||||||||||||||||||||
| Medicare | 26.2 | 26.5 | 26.4 | 25.8 | 25.6 | 26.4 | 25.6 | (3.0 | ) | |||||||||||||||||||||||
| Medicaid | 40.5 | 33.9 | 33.8 | 34.4 | 36.0 | 39.3 | 35.2 | 4.1 | ||||||||||||||||||||||||
| Medicare Advantage | 31.5 | 33.6 | 31.7 | 32.3 | 31.7 | 35.1 | 33.4 | 5.4 | ||||||||||||||||||||||||
| Medicaid Managed | 34.8 | 36.7 | 37.9 | 40.3 | 35.5 | 35.5 | 33.7 | (11.1 | ) | |||||||||||||||||||||||
| Commercial insurance and other | 33.8 | 34.7 | 33.8 | 34.4 | 33.8 | 34.7 | 35.2 | 4.1 | ||||||||||||||||||||||||
| Weighted average | 28.9 | 29.3 | 28.9 | 28.7 | 28.3 | 29.5 | 28.7 | (0.7 | ) | |||||||||||||||||||||||
| Revenues per admission: | ||||||||||||||||||||||||||||||||
| Medicare | $ | 41,885 | $ | 42,228 | $ | 41,877 | $ | 41,948 | $ | 41,912 | $ | 42,845 | $ | 39,694 | (5.2 | ) | ||||||||||||||||
| Medicaid | 52,950 | 48,186 | 49,075 | 53,935 | 51,710 | 62,187 | 54,801 | 11.7 | ||||||||||||||||||||||||
| Medicare Advantage | 49,940 | 56,232 | 51,048 | 53,235 | 52,084 | 56,517 | 54,072 | 5.9 | ||||||||||||||||||||||||
| Medicaid Managed | 48,002 | 52,017 | 55,653 | 61,296 | 51,511 | 52,419 | 50,027 | (10.1 | ) | |||||||||||||||||||||||
| Commercial insurance and other | 75,632 | 81,332 | 71,996 | 74,530 | 74,752 | 80,026 | 76,737 | 6.6 | ||||||||||||||||||||||||
| Weighted average | 48,197 | 49,944 | 48,065 | 48,931 | 48,356 | 50,827 | 47,591 | (1.0 | ) | |||||||||||||||||||||||
| Revenues per patient day: | ||||||||||||||||||||||||||||||||
| Medicare | $ | 1,601 | $ | 1,595 | $ | 1,583 | $ | 1,624 | $ | 1,635 | $ | 1,620 | $ | 1,549 | (2.1 | ) | ||||||||||||||||
| Medicaid | 1,306 | 1,423 | 1,452 | 1,570 | 1,437 | 1,584 | 1,555 | 7.1 | ||||||||||||||||||||||||
| Medicare Advantage | 1,585 | 1,672 | 1,609 | 1,647 | 1,642 | 1,610 | 1,620 | 0.7 | ||||||||||||||||||||||||
| Medicaid Managed | 1,381 | 1,417 | 1,467 | 1,520 | 1,452 | 1,478 | 1,484 | 1.2 | ||||||||||||||||||||||||
| Commercial insurance and other | 2,235 | 2,343 | 2,131 | 2,163 | 2,213 | 2,306 | 2,177 | 2.2 | ||||||||||||||||||||||||
| Weighted average | 1,670 | 1,707 | 1,660 | 1,704 | 1,709 | 1,722 | 1,659 | (0.1 | ) | |||||||||||||||||||||||
| Average daily census | 3,804 | 3,621 | 3,418 | 3,426 | 3,716 | 3,644 | 3,402 | (0.5 | ) | |||||||||||||||||||||||
|
__________ |
||||||||||||||||||||||||||||||||
|
(a) All historical statistics have been adjusted to present the ongoing hospital division portfolio. |
||||||||||||||||||||||||||||||||
| KINDRED HEALTHCARE, INC. | ||||||||||||||||||||||||||||||||
| Condensed Business Segment Data (Continued) | ||||||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||||||
| Third quarter | ||||||||||||||||||||||||||||||||
| 2015 Quarters | 2016 Quarters | % change v. | ||||||||||||||||||||||||||||||
| First | Second | Third | Fourth | First | Second | Third | 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 | |||||||||||||||||||||||||
| Revenue mix %: | ||||||||||||||||||||||||||||||||
| Medicare | 80.9 | 80.4 | 80.0 | 80.0 | 79.8 | 79.3 | 78.1 | |||||||||||||||||||||||||
| Medicaid | 2.1 | 2.1 | 2.1 | 2.1 | 2.1 | 2.1 | 2.5 | |||||||||||||||||||||||||
| Commercial and other | 7.3 | 7.9 | 8.2 | 8.5 | 8.4 | 8.2 | 8.6 | |||||||||||||||||||||||||
| Commercial paid at episodic rates | 9.7 | 9.6 | 9.7 | 9.4 | 9.7 | 10.4 | 10.8 | |||||||||||||||||||||||||
| Episodic revenues ($ 000s) | $ | 308,317 | $ | 324,027 | $ | 319,820 | $ | 320,698 | $ | 325,821 | $ | 332,193 | $ | 332,562 | 4.0 | |||||||||||||||||
| Total episodic admissions | 69,936 | 67,808 | 66,753 | 66,157 | 71,426 | 70,212 | 69,219 | 3.7 | ||||||||||||||||||||||||
| Medicare episodic admissions | 61,186 | 59,394 | 58,479 | 57,804 | 62,011 | 60,730 | 59,823 | 2.3 | ||||||||||||||||||||||||
| Total episodes | 110,980 | 109,599 | 108,519 | 108,300 | 113,887 | 113,278 | 113,256 | 4.4 | ||||||||||||||||||||||||
| Episodes per admission | 1.59 | 1.62 | 1.63 | 1.64 | 1.59 | 1.61 | 1.64 | 0.6 | ||||||||||||||||||||||||
| Revenue per episode | $ | 2,778 | $ | 2,956 | $ | 2,947 | $ | 2,961 | $ | 2,861 | $ | 2,933 | $ | 2,936 | (0.4 | ) | ||||||||||||||||
| Hospice: | ||||||||||||||||||||||||||||||||
| Sites of service (at end of period) | 190 | 185 | 181 | 175 | 177 | 177 | 185 | |||||||||||||||||||||||||
| Admissions | 13,164 | 12,574 | 12,091 | 12,129 | 13,234 | 13,149 | 12,916 | 6.8 | ||||||||||||||||||||||||
| Average length of stay | 95 | 93 | 101 | 100 | 92 | 91 | 98 | (3.0 | ) | |||||||||||||||||||||||
| Patient days | 1,150,841 | 1,190,604 | 1,211,291 | 1,185,330 | 1,183,908 | 1,238,584 | 1,277,125 | 5.4 | ||||||||||||||||||||||||
| Revenue per patient day | $ | 151 | $ | 150 | $ | 150 | $ | 150 | $ | 149 | $ | 150 | $ | 148 | (1.3 | ) | ||||||||||||||||
| Average daily census | 12,787 | 13,084 | 13,166 | 12,884 | 13,010 | 13,611 | 13,882 | 5.4 | ||||||||||||||||||||||||
|
Community Care and other revenues (included in Home Health business segment) ($ 000s) |
$ | 65,530 | $ | 67,647 | $ | 67,338 | $ | 67,684 | $ | 66,305 | $ | 68,229 | $ | 75,978 | 12.8 | |||||||||||||||||
| Kindred Rehabilitation Services: | ||||||||||||||||||||||||||||||||
| Kindred Hospital Rehabilitation Services: | ||||||||||||||||||||||||||||||||
| Freestanding IRFs: | ||||||||||||||||||||||||||||||||
| End of period data: | ||||||||||||||||||||||||||||||||
| Number of IRFs | 16 | 16 | 18 | 18 | 19 | 19 | 19 | |||||||||||||||||||||||||
| Number of licensed beds | 829 | 829 | 919 | 919 | 969 | 969 | 969 | |||||||||||||||||||||||||
| Discharges (a) | 3,806 | 3,927 | 3,941 | 4,317 | 4,448 | 4,646 | 4,644 | 17.8 | ||||||||||||||||||||||||
| Same-hospital discharges (a) | 3,806 | 3,927 | 3,842 | 4,040 | 4,016 | 4,089 | 4,069 | 5.9 | ||||||||||||||||||||||||
| Occupancy % (a) | 73.2 | 71.5 | 68.7 | 68.0 | 70.6 | 70.6 | 68.8 | 0.1 | ||||||||||||||||||||||||
| Average length of stay (a) | 13.7 | 13.1 | 13.2 | 12.7 | 13.2 | 12.9 | 12.7 | (3.8 | ) | |||||||||||||||||||||||
| Revenue per discharge (a) | $ | 19,517 | $ | 19,325 | $ | 18,992 | $ | 18,640 | $ | 19,731 | $ | 19,318 | $ | 19,599 | 3.2 | |||||||||||||||||
| Contract services: | ||||||||||||||||||||||||||||||||
| Sites of service (at end of period): | ||||||||||||||||||||||||||||||||
| Inpatient rehabilitation units | 100 | 99 | 101 | 100 | 104 | 105 | 104 | |||||||||||||||||||||||||
| LTAC hospitals | 120 | 120 | 119 | 119 | 119 | 121 | 120 | |||||||||||||||||||||||||
| Sub-acute units | 8 | 8 | 7 | 7 | 7 | 7 | 7 | |||||||||||||||||||||||||
| Outpatient units | 138 | 139 | 135 | 130 | 139 | 138 | 139 | |||||||||||||||||||||||||
| 366 | 366 | 362 | 356 | 369 | 371 | 370 | ||||||||||||||||||||||||||
| Revenue per site | $ | 211,151 | $ | 209,436 | $ | 206,041 | $ | 210,978 | $ | 211,417 | $ | 215,798 | $ | 210,810 | 2.3 | |||||||||||||||||
| RehabCare: | ||||||||||||||||||||||||||||||||
| Sites of service (at end of period) | 1,829 | 1,789 | 1,821 | 1,798 | 1,767 | 1,759 | 1,754 | |||||||||||||||||||||||||
| Revenue per site | $ | 138,106 | $ | 132,359 | $ | 120,548 | $ | 114,896 | $ | 115,590 | $ | 111,470 | $ | 109,738 | (9.0 | ) | ||||||||||||||||
| Nursing center division: | ||||||||||||||||||||||||||||||||
| End of period data: | ||||||||||||||||||||||||||||||||
| Number of nursing centers | 90 | 90 | 90 | 90 | 92 | 92 | 91 | |||||||||||||||||||||||||
| Number of licensed beds | 11,535 | 11,535 | 11,535 | 11,535 | 11,815 | 11,815 | 11,568 | |||||||||||||||||||||||||
| Admissions (b) | 10,376 | 9,831 | 9,558 | 9,237 | 9,815 | 9,480 | 9,698 | 1.5 | ||||||||||||||||||||||||
| Medicare average length of stay (b) | 28.9 | 28.9 | 28.5 | 28.4 | 28.2 | 28.4 | 27.4 | (3.9 | ) | |||||||||||||||||||||||
| Patient days (b) | 861,278 | 852,691 | 851,332 | 845,924 | 846,578 | 842,681 | 845,037 | (0.7 | ) | |||||||||||||||||||||||
| Revenues per patient day (b) | $ | 319 | $ | 321 | $ | 318 | $ | 323 | $ | 322 | $ | 323 | $ | 320 | 0.6 | |||||||||||||||||
| Average daily census (b) | 9,570 | 9,370 | 9,254 | 9,195 | 9,303 | 9,260 | 9,185 | (0.7 | ) | |||||||||||||||||||||||
| Occupancy % (b) | 81.3 | 79.6 | 78.6 | 78.1 | 77.3 | 76.7 | 77.5 | (1.4 | ) | |||||||||||||||||||||||
|
__________ |
||||||||||||||||||||||||||||||||
|
(a) Excludes non-consolidating IRF. |
||||||||||||||||||||||||||||||||
|
(b) Excludes managed facilities. |
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| 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 discussed herein, as well as the Company's ability to realize the anticipated benefits, 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 the words such as “anticipate,” “approximate,” “believe,” “plan,” “estimate,” “expect,” “project,” “could,” “would,” “should,” “will,” “intend,” “may,” “potential,” “upside,” and other similar expressions. Statements in this earnings release concerning the Company’s business outlook or future economic performance, anticipated profitability, revenues, expenses, dividends or other financial items, 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 Measurements |
| 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 Measurements (Continued) |
| Same-Hospital Revenues: The same-hospital revenues are calculated by excluding from the Company's Hospital Division revenues the results from five hospitals acquired in 2016, three 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 Measurements | ||||||||||||||||||||
| (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 measurements for the three months and nine months ended September 30, 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 associated with the excluded charges was calculated using an effective income tax rate of 67.1% and 6.9% for the three months ended September 30, 2016 and 2015, respectively, and 60.5% and 19.7% for the nine months ended September 30, 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 and the composition of charges that are non-deductible for income tax purposes, including the impairment charges and litigation contingency expense. | ||||||||||||||||||||
| Three months ended | Nine months ended | |||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||||||
| Reconciliation of income from continuing operations before charges: | ||||||||||||||||||||
| As reported: | ||||||||||||||||||||
| Loss from continuing operations attributable to Kindred | ($685,600 | ) | ($16,869 | ) | ($651,418 | ) | ($138,329 | ) | ||||||||||||
| Diluted loss per common share from continuing operations | ($7.89 | ) | ($0.20 | ) | ($7.51 | ) | ($1.65 | ) | ||||||||||||
| Weighted average diluted shares outstanding | 86,869 | 86,184 | 86,766 | 83,960 | ||||||||||||||||
| Detail of charges: | ||||||||||||||||||||
| Restructuring charges: | ||||||||||||||||||||
| Facility/branch divestitures and closings | ($20,212 | ) | ($2,416 | ) | ($22,234 | ) | ($6,439 | ) | ||||||||||||
| Severance costs | (2,109 | ) | (125 | ) | (5,049 | ) | (523 | ) | ||||||||||||
| Transaction costs | (492 | ) | - | (1,577 | ) | - | ||||||||||||||
| (22,813 | ) | (2,541 | ) | (28,860 | ) | (6,962 | ) | |||||||||||||
| Lease termination costs (charged to rent expense) | (58,650 | ) | (808 | ) | (59,363 | ) | (1,831 | ) | ||||||||||||
| Impairment charges | (324,289 | ) | - | (338,208 | ) | - | ||||||||||||||
| Research and development | (3,288 | ) | - | (7,227 | ) | - | ||||||||||||||
| Litigation contingency expense | - | (31,462 | ) | (2,840 | ) | (130,387 | ) | |||||||||||||
| Other retirement and severance costs | - | (666 | ) | (658 | ) | (5,627 | ) | |||||||||||||
| Other facility/branch sales/closings/consolidations | (821 | ) | (827 | ) | (821 | ) | (2,086 | ) | ||||||||||||
| Business interruption settlements | - | - | 1,309 | - | ||||||||||||||||
| Debt amendment fees not capitalized | - | - | (1,103 | ) | - | |||||||||||||||
| Gentiva transaction costs: | ||||||||||||||||||||
| Professional and consulting fees | (1,464 | ) | (1,113 | ) | (3,831 | ) | (35,178 | ) | ||||||||||||
| Severance and retention | 214 | (1,956 | ) | (696 | ) | (58,831 | ) | |||||||||||||
| Lease termination (charged to rent expense) | (272 | ) | - | (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 | (1,732 | ) | (777 | ) | (1,986 | ) | (3,750 | ) | ||||||||||||
| (413,115 | ) | (40,150 | ) | (444,556 | ) | (275,606 | ) | |||||||||||||
| Income tax benefit | (277,113 | ) | 2,775 | (268,868 | ) | 54,302 | ||||||||||||||
| Charges net of income taxes | (690,228 | ) | (37,375 | ) | (713,424 | ) | (221,304 | ) | ||||||||||||
| Noncontrolling interest adjustment related to impairment charges | 288 | - | 1,304 | - | ||||||||||||||||
| (689,940 | ) | (37,375 | ) | (712,120 | ) | (221,304 | ) | |||||||||||||
| Allocation to participating unvested restricted stockholders | - | - | - | - | ||||||||||||||||
| Available to common stockholders | ($689,940 | ) | ($37,375 | ) | ($712,120 | ) | ($221,304 | ) | ||||||||||||
| Diluted loss per common share related to charges | ($7.94 | ) | ($0.43 | ) | ($8.21 | ) | ($2.64 | ) | ||||||||||||
| Weighted average diluted shares outstanding | 86,869 | 86,184 | 86,766 | 83,960 | ||||||||||||||||
| Core: | ||||||||||||||||||||
| Income from continuing operations before charges | $ | 4,340 | $ | 20,506 | $ | 60,702 | $ | 82,975 | ||||||||||||
| Diluted earnings per common share from continuing operations before charges (a) | $ | 0.05 | $ | 0.23 | $ | 0.68 | $ | 0.95 | ||||||||||||
|
Weighted average diluted shares outstanding used to compute earnings per common share from continuing operations before charges |
87,529 | 86,892 | 87,426 | 85,691 | ||||||||||||||||
| Reconciliation of effective income tax rate before charges: | ||||||||||||||||||||
| Effective income tax rate before charges | 19.7 | % | 33.5 | % | 29.4 | % | 35.9 | % | ||||||||||||
| Impact of charges on effective income tax rate | 52.6 | % | 192.0 | % | 74.6 | % | -26.6 | % | ||||||||||||
| Reported effective income tax rate | 72.3 | % | 225.5 | % | 104.0 | % | 9.3 | % | ||||||||||||
|
__________ |
||||||||||||||||||||
|
(a) For purposes of computing diluted earnings per common share before charges, income from continuing operations before charges was reduced by $0.1 million and $0.3 million for the three months ended September 30, 2016 and 2015, respectively, and by $1.3 million and $1.5 million for the nine months ended September 30, 2016 and 2015, respectively, for the allocation of income to participating unvested restricted stockholders. |
||||||||||||||||||||
| KINDRED HEALTHCARE, INC. | ||||||||||||||||||||||||||||||||||||||
| Reconciliation of GAAP Results to Non-GAAP Measurements (Continued) | ||||||||||||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||||||||||||
| (In thousands) | ||||||||||||||||||||||||||||||||||||||
| A reconciliation of combined Kindred and Gentiva home health revenues (excluding community care) for each historical period follows: | ||||||||||||||||||||||||||||||||||||||
| Third quarter | ||||||||||||||||||||||||||||||||||||||
| 2015 Quarters | 2016 Quarters | % change v. | ||||||||||||||||||||||||||||||||||||
| First | Second | Third | Fourth | First | Second | Third | prior year | |||||||||||||||||||||||||||||||
| Kindred | $ | 254,965 | $ | 360,173 | $ | 356,716 | $ | 358,075 | $ | 363,730 | $ | 370,327 | $ | 373,980 | ||||||||||||||||||||||||
| Gentiva | 87,520 | - | - | - | - | - | - | |||||||||||||||||||||||||||||||
| $ | 342,485 | $ | 360,173 | $ | 356,716 | $ | 358,075 | $ | 363,730 | $ | 370,327 | $ | 373,980 | 4.8 | ||||||||||||||||||||||||
| A reconciliation of reported revenues to same-hospital revenues for the Hospital Division for each historical period follows: | ||||||||||||||||||||||||||||||||||||||
| Third quarter | ||||||||||||||||||||||||||||||||||||||
| 2015 Quarters | 2016 Quarters | % change v. | ||||||||||||||||||||||||||||||||||||
| First | Second | Third | Fourth | First | Second | Third | prior year | |||||||||||||||||||||||||||||||
| Reported revenues | $ | 640,483 | $ | 627,206 | $ | 579,497 | $ | 593,593 | $ | 643,299 | $ | 633,695 | $ | 575,323 | (0.7 | ) | ||||||||||||||||||||||
| Hospitals acquired and sold during 2016 (a) | - | (16,608 | ) | (14,679 | ) | (14,695 | ) | - | (14,346 | ) | (13,731 | ) | ||||||||||||||||||||||||||
| Hospitals closed during 2016 (b) | - | - | (7,376 | ) | (7,471 | ) | - | - | (5,447 | ) | ||||||||||||||||||||||||||||
| Hospitals closed during 2015 (c) | (5,508 | ) | (5,188 | ) | (2,160 | ) | 498 | 114 | 78 | (54 | ) | |||||||||||||||||||||||||||
| Same-hospital revenues | $ | 634,975 | $ | 605,410 | $ | 555,282 | $ | 571,925 | $ | 643,413 | $ | 619,427 | $ | 556,091 | 0.1 | |||||||||||||||||||||||
|
__________ |
||||||||||||||||||||||||||||||||||||||
|
(a) Five hospitals acquired and three hospitals sold during the second quarter of 2016. |
||||||||||||||||||||||||||||||||||||||
|
(b) Three hospitals closed during the third quarter of 2016. |
||||||||||||||||||||||||||||||||||||||
|
(c) 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 Measurements (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: | |||||||||||||||||||||||||||||||||||||||||||||
| Hospital division | $ | 82,752 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 82,752 | |||||||||||||||||||||||||
| Kindred at Home: | |||||||||||||||||||||||||||||||||||||||||||||
| Home health | 75,073 | - | - | - | - | - | - | - | - | 75,073 | |||||||||||||||||||||||||||||||||||
| Hospice | 31,326 | - | - | - | - | - | - | - | - | 31,326 | |||||||||||||||||||||||||||||||||||
| 106,399 | - | - | - | - | - | - | - | - | 106,399 | ||||||||||||||||||||||||||||||||||||
| 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 (benefit) 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 from continuing operations: | |||||||||||||||||||||||||||||||||||||||||||||
| Segment EBITDAR: | |||||||||||||||||||||||||||||||||||||||||||||
| Hospital division | $ | 96,108 | $ | 666 | $ | 354 | $ | - | $ | - | $ | - | $ | - | $ | 1,020 | $ | 97,128 | |||||||||||||||||||||||||||
| Kindred at Home: | |||||||||||||||||||||||||||||||||||||||||||||
| Home health | 67,682 | - | 473 | - | - | - | - | 473 | 68,155 | ||||||||||||||||||||||||||||||||||||
| Hospice | 34,025 | - | - | - | - | - | - | - | 34,025 | ||||||||||||||||||||||||||||||||||||
| 101,707 | - | 473 | - | - | - | - | 473 | 102,180 | |||||||||||||||||||||||||||||||||||||
| 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 Measurements (Continued) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (In thousands, except per share amounts) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Nine months ended September 30, 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: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Hospital division | $ | 344,179 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 344,179 | |||||||||||||||||||||||||||||||||||
| Kindred at Home: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Home health | 218,044 | - | - | (1,309 | ) | - | - | - | - | - | - | - | - | (1,309 | ) | 216,735 | |||||||||||||||||||||||||||||||||||||||||||||||
| Hospice | 87,521 | - | - | - | - | - | - | - | - | - | - | - | - | 87,521 | |||||||||||||||||||||||||||||||||||||||||||||||||
| 305,565 | - | - | (1,309 | ) | - | - | - | - | - | - | - | - | (1,309 | ) | 304,256 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Kindred Rehabilitation Services: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Kindred Hospital Rehabilitation Services | 147,809 | - | 747 | - | - | - | - | - | - | - | - | - | 747 | 148,556 | |||||||||||||||||||||||||||||||||||||||||||||||||
| RehabCare | 34,504 | - | - | - | - | - | - | - | - | - | - | - | - | 34,504 | |||||||||||||||||||||||||||||||||||||||||||||||||
| 182,313 | - | 747 | - | - | - | - | - | - | - | - | - | 747 | 183,060 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Nursing center division | 93,684 | - | - | - | - | - | - | - | - | - | - | - | - | 93,684 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Support center | (199,363 | ) | 658 | - | - | - | - | 7,227 | 1,103 | - | - | - | - | 8,988 | (190,375 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
| Litigation contingency expense | (2,840 | ) | - | - | - | 2,840 | - | - | - | - | - | - | - | 2,840 | - | ||||||||||||||||||||||||||||||||||||||||||||||||
| Impairment charges | (338,208 | ) | - | - | - | - | 338,208 | - | - | - | - | - | - | 338,208 | - | ||||||||||||||||||||||||||||||||||||||||||||||||
| Restructuring charges | (28,860 | ) | - | - | - | - | - | - | - | 28,860 | - | - | - | 28,860 | - | ||||||||||||||||||||||||||||||||||||||||||||||||
| Transaction costs | (6,513 | ) | - | - | - | - | - | - | - | - | 4,527 | 1,986 | - | 6,513 | - | ||||||||||||||||||||||||||||||||||||||||||||||||
| EBITDAR | 349,957 | 658 | 747 | (1,309 | ) | 2,840 | 338,208 | 7,227 | 1,103 | 28,860 | 4,527 | 1,986 | - | 384,847 | 734,804 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Rent | (296,025 | ) | - | 74 | - | - | - | - | - | - | 272 | - | - | 346 | (295,679 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
| Restructuring charges - rent | (59,363 | ) | - | - | - | - | - | - | - | 59,363 | - | - | - | 59,363 | - | ||||||||||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | (121,320 | ) | - | - | - | - | - | - | - | - | - | - | - | - | (121,320 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
| Interest, net | (172,856 | ) | - | - | - | - | - | - | - | - | - | - | - | - | (172,856 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
|
Income (loss) from continuing operations before income taxes |
(299,607 | ) | 658 | 821 | (1,309 | ) | 2,840 | 338,208 | 7,227 | 1,103 | 88,223 | 4,799 | 1,986 | - | 444,556 | 144,949 | |||||||||||||||||||||||||||||||||||||||||||||||
| Provision (benefit) for income taxes | 311,470 | 235 | 293 | (468 | ) | 32 | 64,179 | 2,582 | 394 | 27,930 | 1,715 | 710 | (366,470 | ) | (268,868 | ) | 42,602 | ||||||||||||||||||||||||||||||||||||||||||||||
| (611,077 | ) | 423 | 528 | (841 | ) | 2,808 | 274,029 | 4,645 | 709 | 60,293 | 3,084 | 1,276 | 366,470 | 713,424 | 102,347 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Noncontrolling interests | (40,341 | ) | - | - | - | - | (1,304 | ) | - | - | - | - | - | - | (1,304 | ) | (41,645 | ) | |||||||||||||||||||||||||||||||||||||||||||||
| Income (loss) attributable to Kindred | $ | (651,418 | ) | $ | 423 | $ | 528 | $ | (841 | ) | $ | 2,808 | $ | 272,725 | $ | 4,645 | $ | 709 | $ | 60,293 | $ | 3,084 | $ | 1,276 | $ | 366,470 | $ | 712,120 | $ | 60,702 | |||||||||||||||||||||||||||||||||
| Diluted earnings (loss) per common share | $ | (7.51 | ) | $ | 0.68 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Diluted shares used in computing earnings (loss) per common share |
86,766 | 87,426 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Nine months ended September 30, 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: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Hospital division | $ | 361,751 | $ | 666 | $ | 1,029 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 1,695 | $ | 363,446 | |||||||||||||||||||||||||||||||||||||||||
| Kindred at Home: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Home health | 187,397 | - | 473 | - | - | - | - | - | - | 473 | 187,870 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Hospice | 78,908 | - | - | - | - | - | - | - | - | - | 78,908 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 266,305 | - | 473 | - | - | - | - | - | - | 473 | 266,778 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Kindred Rehabilitation Services: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Kindred Hospital Rehabilitation Services | 131,236 | - | - | - | - | - | - | - | - | - | 131,236 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| RehabCare | 44,933 | 785 | - | - | - | - | - | - | - | 785 | 45,718 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 176,169 | 785 | - | - | - | - | - | - | - | 785 | 176,954 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Nursing center division | 112,763 | - | 584 | - | - | - | - | - | - | 584 | 113,347 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Support center | (192,213 | ) | 4,176 | - | - | - | - | - | - | - | 4,176 | (188,037 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Litigation contingency expense | (130,387 | ) | - | - | 130,387 | - | - | - | - | - | 130,387 | - | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Impairment charges | (6,726 | ) | - | - | - | 6,726 | - | - | - | - | 6,726 | - | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Restructuring charges | (6,962 | ) | - | - | - | - | 6,962 | - | - | - | 6,962 | - | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Transaction costs | (103,764 | ) | - | - | - | - | - | 6,005 | 94,009 | 3,750 | 103,764 | - | |||||||||||||||||||||||||||||||||||||||||||||||||||
| EBITDAR | 476,936 | 5,627 | 2,086 | 130,387 | 6,726 | 6,962 | 6,005 | 94,009 | 3,750 | 255,552 | 732,488 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rent | (282,955 | ) | - | - | - | - | - | - | 792 | - | 792 | (282,163 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Restructuring charges - rent | (1,831 | ) | - | - | - | - | 1,831 | - | - | - | 1,831 | - | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | (116,889 | ) | - | - | - | - | - | - | - | - | - | (116,889 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest, net | (173,925 | ) | - | - | - | - | - | 17,431 | - | - | 17,431 | (156,494 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
|
Income (loss) from continuing operations before income taxes |
(98,664 | ) | 5,627 | 2,086 | 130,387 | 6,726 | 8,793 | 23,436 | 94,801 | 3,750 | 275,606 | 176,942 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Provision (benefit) for income taxes | 9,183 | 2,202 | 816 | 2,108 | 2,633 | 3,442 | 9,173 | 32,460 | 1,468 | 54,302 | 63,485 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| (107,847 | ) | $ | 3,425 | $ | 1,270 | $ | 128,279 | $ | 4,093 | $ | 5,351 | $ | 14,263 | $ | 62,341 | $ | 2,282 | $ | 221,304 | 113,457 | |||||||||||||||||||||||||||||||||||||||||||
| Noncontrolling interests | (30,482 | ) | (30,482 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income (loss) attributable to Kindred | $ | (138,329 | ) | $ | 82,975 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Diluted earnings (loss) per common share | $ | (1.65 | ) | $ | 0.95 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Diluted shares used in computing earnings (loss) per common share |
83,960 | 85,691 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| KINDRED HEALTHCARE, INC. | ||||||||||||||||||||||||||||||||||||||||||||||||
| Reconciliation of GAAP Results to Non-GAAP Measurements (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: | ||||||||||||||||||||||||||||||||||||||||||||||||
| Hospital division | $ | 135,495 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 135,495 | ||||||||||||||||||||||||||
| 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 | ||||||||||||||||||||||||||||||||||||
| 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: | ||||||||||||||||||||||||||||||||||||||||||||||||
| Hospital division | $ | 134,111 | $ | - | $ | 675 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 675 | $ | 134,786 | ||||||||||||||||||||||||||
| Kindred at Home: | ||||||||||||||||||||||||||||||||||||||||||||||||
| Home health | 46,798 | - | - | - | - | - | - | - | - | - | 46,798 | |||||||||||||||||||||||||||||||||||||
| Hospice | 16,996 | - | - | - | - | - | - | - | - | - | 16,996 | |||||||||||||||||||||||||||||||||||||
| 63,794 | - | - | - | - | - | - | - | - | - | 63,794 | ||||||||||||||||||||||||||||||||||||||
| 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 Measurements (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: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Hospital division | $ | 125,932 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 125,932 | ||||||||||||||||||||||||||||||
| Kindred at Home: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Home health | 76,030 | (171 | ) | - | - | - | - | - | - | - | (171 | ) | 75,859 | |||||||||||||||||||||||||||||||||||||||
| Hospice | 31,329 | - | - | - | - | - | - | - | - | - | 31,329 | |||||||||||||||||||||||||||||||||||||||||
| 107,359 | (171 | ) | - | - | - | - | - | - | - | (171 | ) | 107,188 | ||||||||||||||||||||||||||||||||||||||||
| 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: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Hospital division | $ | 131,532 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 131,532 | ||||||||||||||||||||||||||||||||||||
| Kindred at Home: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Home health | 72,917 | - | - | - | - | - | - | 72,917 | ||||||||||||||||||||||||||||||||||||||||||||
| Hospice | 27,887 | - | - | - | - | - | - | 27,887 | ||||||||||||||||||||||||||||||||||||||||||||
| 100,804 | - | - | - | - | - | - | 100,804 | |||||||||||||||||||||||||||||||||||||||||||||
| 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 Measurements (Continued) | ||||||||||||||||||||||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||||||||||||||||||||||
| (In thousands, except per share amounts) | ||||||||||||||||||||||||||||||||||||||||||||||||
| 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: | ||||||||||||||||||||||||||||||||||||||||||||||||
| Hospital division | $ | 116,454 | $ | 1,221 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 1,221 | $ | 117,675 | ||||||||||||||||||||||||||
| Kindred at Home: | ||||||||||||||||||||||||||||||||||||||||||||||||
| Home health | 68,776 | - | 50 | - | - | - | - | - | - | 50 | 68,826 | |||||||||||||||||||||||||||||||||||||
| Hospice | 30,212 | - | - | - | - | - | - | - | - | - | 30,212 | |||||||||||||||||||||||||||||||||||||
| 98,988 | - | 50 | - | - | - | - | - | - | 50 | 99,038 | ||||||||||||||||||||||||||||||||||||||
| 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 Measurements (Continued) | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| (In thousands) | ||||||||||||||||||||
| Three months ended | Nine months ended | |||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||||||
| Reconciliation of net cash flows provided by operating activities to free cash flows: | ||||||||||||||||||||
| Net cash flows provided by operating activities | $ | 36,082 | $ | 132,290 | $ | 38,048 | $ | 93,067 | ||||||||||||
|
Adjustments to remove certain payments (including payments made for discontinued operations) included in net cash flows provided by operating activities: |
||||||||||||||||||||
| Transaction, severance, retirement and retention | 8,898 | 5,251 | 20,989 | 102,100 | ||||||||||||||||
| Business interruption settlements | - | - | (1,309 | ) | - | |||||||||||||||
| Ventas, Inc. lease termination fee | - | - | 3,500 | 40,000 | ||||||||||||||||
| Capitalized lender fees related to debt refinancing | 42 | - | 7,375 | 28,012 | ||||||||||||||||
| Other debt refinancing costs (expensed) | 291 | 13,438 | 917 | 40,439 | ||||||||||||||||
| Other lease termination fees | - | - | - | 353 | ||||||||||||||||
| Litigation | 3,074 | - | 133,523 | 16,575 | ||||||||||||||||
| 12,305 | 18,689 | 164,995 | 227,479 | |||||||||||||||||
|
Net cash flows provided by operating activities excluding certain items before income tax benefit of certain payments |
48,387 | 150,979 | 203,043 | 320,546 | ||||||||||||||||
| Benefit of reduced income tax payments resulting from certain payments | (18,048 | ) | (22,541 | ) | (46,674 | ) | (56,295 | ) | ||||||||||||
|
Net cash flows provided by operating activities excluding certain items (core operating cash flows) |
30,339 | 128,438 | 156,369 | 264,251 | ||||||||||||||||
| Less routine capital expenditures | (21,873 | ) | (35,422 | ) | (68,703 | ) | (80,691 | ) | ||||||||||||
| Less distributions to noncontrolling interests | (4,694 | ) | (10,685 | ) | (35,240 | ) | (31,823 | ) | ||||||||||||
| Free cash flows excluding certain items (core free cash flows) | $ | 3,772 | $ | 82,331 | $ | 52,426 | $ | 151,737 | ||||||||||||
