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8-K - 8-K - KINDRED HEALTHCARE, INC | d305858d8k.htm |
EXHIBIT 99.1
Contact: | Richard A. Lechleiter | |
Executive Vice President and | ||
Chief Financial Officer | ||
(502) 596-7734 |
KINDRED HEALTHCARE ANNOUNCES FOURTH QUARTER RESULTS
AND PLANS FOR VENTAS LEASE RENEWALS
Excluding Certain Items, Company Reports Fourth Quarter Continuing Operations Diluted EPS of $0.27
Compared to $0.54 in 2010; Full Year EPS of $1.80 Up 17% from Last Years $1.54
Company Reports GAAP Continuing Operations Loss of $1.42 per Diluted Share in the
Fourth Quarter and $1.21 for the Year
Company Reduces Fiscal 2012 Earnings Guidance to $1.35 to $1.55
Company Intends to Allow Ventas Leases for 54 Nursing Centers and 10 Hospitals to Expire in 2013
LOUISVILLE, Ky. (February 23, 2012) Kindred Healthcare, Inc. (Kindred or the Company) (NYSE:KND) today announced its operating results for the fourth quarter and year ended December 31, 2011 as well as its intentions with respect to the renewal of facility leases with its primary landlord, Ventas, Inc. (Ventas) (NYSE:VTR). The Companys consolidated financial statements include the operating results of RehabCare Group, Inc. (RehabCare) since the closing of the acquisition on June 1, 2011.
Highlights (operating data adjusted to exclude certain items):
| Favorable impact of RehabCare acquisition negated by fourth quarter regulatory changes |
| Initial quarter under new RUGs IV and rehabilitation therapy rule changes more challenging than expected |
| Annual impact of new Medicare rules now estimated at $150 million |
| Fourth quarter consolidated continuing operations key metrics compared to last year |
| Revenues grew 34% to $1.5 billion |
| Operating income rose 25% to $200 million |
| Income from continuing operations fell 35% to $14 million |
| Diluted earnings per share declined 50% to $0.27 |
| Fourth quarter operating summary |
| Hospital revenues rose 40%; same-store revenues increased 5% while admissions rose 4% |
| Medicare cuts materially hampered nursing center and rehabilitation therapy results |
| Home health and hospice business reported strong results |
| Company continues to generate significant operating cash flows |
| Excluding transaction-related payments, full year operating cash flows grew 11% to $238 million |
| Company reduces 2012 earnings guidance |
| RehabCare synergy estimate rises to $70 million from $62 million |
| Company expects to implement $50 million to $55 million of additional cost reductions |
| Company expects non-renewal of seven Ventas bundles containing 64 facilities in April 2013 |
| Future growth prospects for these facilities considered limited |
| Many of the facilities do not align with the Companys operating plan and cluster market strategy |
| Expected 2013 EPS dilution of $0.10 to $0.15 from these divestitures considered manageable |
| Divestitures will improve the Companys capital structure over the long term |
680 South Fourth Street Louisville, Kentucky 40202
502.596.7300 www.kindredhealthcare.com
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Kindred Healthcare Announces Fourth Quarter Results
Page 2
February 23, 2012
Fourth Quarter Results
Continuing Operations
Consolidated revenues for the fourth quarter ended December 31, 2011 increased 34% to $1.5 billion compared to $1.1 billion in the same period in 2010. The Company reported a loss from continuing operations for the fourth quarter of 2011 of $72.8 million or $1.42 per diluted share compared to income of $19.7 million or $0.50 per diluted share in the fourth quarter of 2010. Operating results for the fourth quarter of 2011 included asset impairment charges, transaction-related costs and a loss on a hospital divestiture that reduced income from continuing operations by $86.7 million or $1.69 per diluted share. Operating results for the fourth quarter of 2010 included transaction-related costs that reduced income from continuing operations by $1.6 million or $0.04 per diluted share.
During the fourth quarter of 2011, the Company recorded approximately $102 million of pretax asset impairment charges to reflect circumstances in which the carrying value of certain assets exceeded their fair value. Goodwill impairment charges of approximately $46 million resulted primarily from the worse than expected decline in operating results in the Companys rehabilitation division related to Medicare reimbursement changes that became effective on October 1, 2011. The Company also wrote off approximately $54 million of certain hospital and nursing and rehabilitation center intangible assets as part of its regular annual asset impairment testing. In addition, the Company wrote off approximately $2 million of leasehold improvements expended in the quarter at facilities that were considered impaired in a prior period.
Fiscal Year Results
Continuing Operations
Consolidated revenues for the year ended December 31, 2011 increased 27% to $5.5 billion compared to $4.4 billion in the previous year. The Company reported a loss from continuing operations of $56.0 million or $1.21 per diluted share in 2011 compared to income of $56.1 million or $1.42 per diluted share in 2010.
Operating results in 2011 included asset impairment charges, transaction-related costs and a loss on a hospital divestiture that reduced income from continuing operations by $141.1 million or $3.05 per diluted share. Operating results in 2010 included certain items that reduced income from continuing operations by $4.9 million or $0.12 per diluted share.
Management Commentary
Paul J. Diaz, President and Chief Executive Officer of the Company, commented, Despite a very difficult fourth quarter brought on by significant Medicare cuts in both our nursing center and our rehabilitation therapy businesses, fiscal 2011 was an exceptional year for Kindred. Our acquisition of RehabCare in June added meaningful depth and strength to our core hospital and rehabilitation divisions and I am pleased with the highly successful integration of the organizations and the realization of significant cost synergies. Excluding asset impairment charges, transaction-related items and a loss on a hospital divestiture, our full-year diluted earnings per share from continuing operations of $1.80 were 17% higher than the adjusted $1.54 per share in 2010.
Mr. Diaz further noted, In addition to the RehabCare acquisition, we successfully completed a number of transactions to expand our growing home health and hospice business. We expect these acquisitions to continue, primarily in our cluster markets, and we are excited that this business will contribute meaningfully to our earnings going forward.
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Kindred Healthcare Announces Fourth Quarter Results
Page 3
February 23, 2012
Commenting on the Companys liquidity and capital resources, Mr. Diaz noted, Excluding transaction-related payments, our operating cash flows in 2011 grew 11% to $238 million. These results allow us to fund our routine capital spending internally, with the balance available to fund our ongoing acquisition and cluster market development activities. In addition, our $343 million of unused revolving credit capacity at December 31, 2011 provides significant capital for future growth.
Mr. Diaz also commented on the Companys recently issued 2011 Quality and Social Responsibility Report, Kindred is proud to issue its fifth annual Quality and Social Responsibility Report to fulfill our commitment to be transparent about our quality results and our ongoing efforts to improve the care and services for our patients and residents. Mr. Diaz noted that the report links the Companys quality initiatives with its Continue the Care and cluster market strategies. Both policymakers and the marketplace are demanding that healthcare providers participate in coordinated care strategies to improve quality, reduce avoidable hospitalizations and lower costs. Kindreds cluster market strategy is designed to leverage Kindreds national scale to build a continuum of post-acute services in local healthcare delivery markets to achieve these shared goals. Kindred is aggressively developing a post-acute continuum of service lines in local markets, including long-term acute care (LTAC) hospitals, inpatient rehabilitation facilities, sub-acute or transitional care, and home health and hospice services, in order to partner with physician groups, hospitals, health systems and payors to better manage episodes of care while at the same time improving quality and lowering costs.
Earnings Guidance Continuing Operations
The Company updated its earnings guidance for 2012. The earnings guidance provided by the Company excludes the effect of (i) any transaction-related charges, (ii) any other reimbursement changes, (iii) any acquisitions or divestitures, (iv) any impairment charges, or (v) any repurchases of common stock.
The Company expects consolidated revenues for 2012 to approximate $6.3 billion. Operating income, or earnings before interest, income taxes, depreciation, amortization and rent, is expected to range from $868 million to $884 million. Rent expense is expected to approximate $434 million, while depreciation and amortization should approximate $197 million. Net interest expense is expected to approximate $107 million. The Company expects to report income from continuing operations for 2012 between $73 million to $83 million or $1.35 to $1.55 per diluted share (based upon diluted shares of 52.5 million). The Companys previous earnings per diluted share range for 2012 was $1.65 to $1.85.
As a result of the significant volatility in its earnings in connection with recent changes in Medicare reimbursements, the Company is suspending its practice of providing quarterly earnings guidance at this time.
The Company also indicated that it expects cash flows from operations in 2012 to range from $240 million to $260 million. Routine capital expenditures in 2012 are expected to range from $130 million to $140 million, including approximately $16 million of expenditures to complete the information systems integration of RehabCare. The Companys expected routine capital expenditures also include approximately $11 million to upgrade the clinical information systems in its hospital, nursing center and home health businesses.
In addition, the Company continues its ongoing development of several previously announced projects. At December 31, 2011, projects related to the replacement, expansion and upgrade of its hospitals in Dayton, Ohio and Charleston, South Carolina, as well as the development of two new inpatient rehabilitation hospitals in Texas will be completed at an aggregate additional cost of approximately $23 million through 2013 (these expenditures are not included in the routine capital spending estimates discussed above).
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Kindred Healthcare Announces Fourth Quarter Results
Page 4
February 23, 2012
Mr. Diaz remarked, Our 2012 operating plan includes several initiatives to improve our operating results. These plans relate primarily to synergies associated with the RehabCare acquisition, changes in compensation and employee benefit programs and continued reductions in overhead costs.
Our fourth quarter operating results included the realization of approximately $40 million of annualized RehabCare integration synergies. For 2012, we expect these synergies to approach $70 million, up from our previous estimate of $62 million. In addition, we are implementing plans to reduce compensation, employee benefit and overhead costs by approximately $50 million to $55 million over the balance of 2012. These cost reductions should be fully implemented by the end of the third quarter.
Mr. Diaz commented further, Our 2012 earnings outlook reflects a more difficult than expected operating environment under the recent RUGs IV and rehabilitation therapy Medicare rule changes. While we continue to believe that federal policymakers have over-reached in their attempt to adjust the RUGs IV rules, we must intensify our efforts to adjust our operations while still maintaining the quality of our services. Nevertheless, our strategic goals to expand our cluster market development and accelerate growth in areas like home health and contract therapy have not changed in light of current reimbursement pressures.
Ventas Lease Renewals
Under its master lease agreements with Ventas, the Company has 73 nursing and rehabilitation centers and 16 LTAC hospitals within ten separate renewal bundles currently subject to lease renewals. The Company has until April 30, 2012 to exercise these renewals for an additional five-year term. Each renewal bundle contains both nursing and rehabilitation centers and LTAC hospitals. The master lease agreements require that the Company renew all or none of the facilities within a renewal bundle.
The Company intends to renew three renewal bundles containing 19 nursing and rehabilitation centers and six LTAC hospitals (collectively, the Renewal Facilities). The Renewal Facilities contain 2,178 licensed nursing and rehabilitation center beds and 616 licensed hospital beds and generated revenues of approximately $434 million for the year ended December 31, 2011. The current annual rent for the Renewal Facilities approximates $46 million.
The Company also announced that it does not intend to renew seven renewal bundles containing 54 nursing and rehabilitation centers and ten LTAC hospitals (collectively, the Expiring Facilities). The Expiring Facilities contain 6,140 licensed nursing and rehabilitation center beds and 1,066 licensed hospital beds and generated revenues of approximately $790 million for the year ended December 31, 2011. The current annual rent for the Expiring Facilities approximates $77 million. The Company will continue to operate the Expiring Facilities and include the Expiring Facilities in its results from continuing operations through the expiration of the lease term in April 2013.
Management believes that the divestiture of the Expiring Facilities could reduce the Companys consolidated earnings per diluted share by $0.10 to $0.15 in 2013, but will not otherwise materially impact the Companys cash flows or financial position. This estimate is based upon a number of assumptions, including the Companys estimated impact of the recent and impending Medicare reimbursement reductions for nursing centers and LTAC hospitals and its ability to achieve overhead savings in connection with these divestitures.
Mr. Diaz remarked, At this time, we believe it is important to give investors our views on the Ventas renewals. We have evaluated the lease renewals as we would any acquisition. The Renewal Facilities generally meet our targeted investment returns and rent coverage ratios after capital expenditures and otherwise fit within our strategic operating plan.
Mr. Diaz continued, While in general the individual Expiring Facilities are good assets, these bundles as a whole do not satisfy our targeted investment returns or fit within our strategic operating plan. The majority of the Expiring Facilities are outside our cluster markets and many of the nursing and rehabilitation centers that are predominantly chronic care and Medicaid dependent are not well suited for our higher acuity, transitional care
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Kindred Healthcare Announces Fourth Quarter Results
Page 5
February 23, 2012
strategy. Under our operating model, these facilities also have limited growth opportunities and our expected earnings from these operations do not support the allocation of capital, risk or management time over the renewal period. Given the current reimbursement environment, particularly around nursing centers, we believe that our capital investments and management efforts are best focused in other areas of growth including home health, acute rehabilitation units, newer owned LTAC and inpatient rehabilitation hospitals, as well as investments in new integrated care models. In addition, we believe that, over time, these divestitures will substantially improve our capital structure by reducing our lease obligations and related leverage and the earnings leakage associated with rent escalators.
As we have stated previously, we are focused on five key business strategies. First, we must be successful in our core operations by providing quality care and efficiently managing our costs. Second, we remain focused on accelerating our cluster market strategy both from an operational and capital investment perspective. In addition, we will continue to expand our home health and hospice operations. We also are active in developing new integrated care and payment models with other healthcare providers and payors that will be responsive to changes in the marketplace. Finally, we remain focused on re-deploying assets and management time to higher margin businesses. Exiting the Expiring Facilities is another significant step in our re-deployment strategy.
Mr. Diaz concluded, Over the next year, we will cooperate with Ventas as it finds suitable tenants for the Expiring Facilities and effectuate an orderly transition of our patients, employees and operations to the new tenants.
The effectiveness of the renewals is contingent upon there being no event of default under the master lease agreements upon the renewal effective date in April 2013. Additional information regarding the master lease agreements is contained in the Companys Form 10-K for the year ended December 31, 2010 and copies of the master lease agreements filed with the Securities and Exchange Commission.
Conference Call
As previously announced, investors and the general public may access a live webcast of the fourth quarter 2011 conference call through a link on the Companys website at http://investors.kindredhealthcare.com or at www.earnings.com. The conference call will be held February 24 at 11:00 a.m. (Eastern Time).
A telephone replay of the conference call will become available at approximately 2:00 p.m. on February 24 by dialing 888-203-1112, access code: 8694041. The replay will be available through March 4.
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Kindred Healthcare Announces Fourth Quarter Results
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February 23, 2012
Forward-Looking Statements
This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements regarding the Companys expected future financial position, results of operations, cash flows, financing plans, business strategy, budgets, capital expenditures, competitive positions, growth opportunities, plans and objectives of management and statements containing the words such as anticipate, approximate, believe, plan, estimate, expect, project, could, should, will, intend, may and other similar expressions, are forward-looking statements.
Such forward looking statements are inherently uncertain, and stockholders and other potential investors must recognize that actual results may differ materially from the Companys expectations as a result of a variety of factors, including, without limitation, those discussed below. Such forward-looking statements are based upon managements 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 Companys actual results or performance to differ materially from any future results or performance expressed or implied by such forward-looking statements. These statements involve risks, uncertainties and other factors discussed below and detailed from time to time in the Companys filings with the Securities and Exchange Commission.
In addition to the factors set forth above, other factors that may affect the Companys plans or results include, without limitation, (a) the impact of healthcare reform, which will initiate significant reforms to the United States healthcare system, including potential material changes to the delivery of healthcare services and the reimbursement paid for such services by the government or other third party payors. Healthcare reform will impact each of the Companys businesses in some manner. Due to the substantial regulatory changes that will need to be implemented by the Centers for Medicare and Medicaid Services (CMS) and others, and the numerous processes required to implement these reforms, the Company cannot predict which healthcare initiatives will be implemented at the federal or state level, the timing of any such reforms, or the effect such reforms or any other future legislation or regulation will have on the Companys business, financial position, results of operations and liquidity, (b) the impact of final rules issued by CMS on July 29, 2011 which significantly reduced Medicare reimbursement to nursing centers and changed payments for the provision of group therapy services effective October 1, 2011, (c) the impact of the Budget Control Act of 2011 which will automatically reduce federal spending by approximately $1.2 trillion split evenly between domestic and defense spending. At this time, the Company believes this will result in an automatic 2% reduction on each claim submitted to Medicare beginning February 1, 2013, (d) changes in the reimbursement rates or the methods or timing of payment from third party payors, including commercial payors and the Medicare and Medicaid programs, changes arising from and related to the Medicare prospective payment system for LTAC hospitals, including potential changes in the Medicare payment rules, the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, and changes in Medicare and Medicaid reimbursements for the Companys nursing and rehabilitation centers, inpatient rehabilitation hospitals and home health and hospice operations, and the expiration of the Medicare Part B therapy cap exception process, (e) the effects of additional legislative changes and government regulations, interpretation of regulations and changes in the nature and enforcement of regulations governing the healthcare industry, (f) the impact of the Medicare, Medicaid and SCHIP Extension Act of 2007 (the SCHIP Extension Act), including the ability of the Companys hospitals to adjust to potential LTAC certification, medical necessity reviews and the moratorium on future hospital development, (g) the impact of the expiration of several moratoriums in 2012 under the SCHIP Extension Act which could impact the short stay rules, the budget neutrality adjustment as well as implement the 25 Percent Rule, which would limit certain patient admissions, (h) the Companys ability to integrate the operations of the acquired hospitals and rehabilitation services operations and realize the anticipated revenues, economies of scale, cost synergies and productivity gains in connection with the RehabCare acquisition and any other acquisitions undertaken, as and when planned, including the potential for unanticipated issues, expenses and liabilities associated with those acquisitions, (i) the potential for diversion of management time and resources in seeking to integrate RehabCares operations, (j) the impact of the Companys significantly increased levels of indebtedness as a result of the RehabCare acquisition on the Companys funding
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Kindred Healthcare Announces Fourth Quarter Results
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February 23, 2012
costs, operating flexibility and ability to fund ongoing operations, development capital expenditures or other strategic acquisitions with additional borrowings, particularly in light of ongoing volatility in the credit and capital markets, (k) the Companys ability to successfully pursue its development activities, including through acquisitions, and successfully integrate new operations, including the realization of anticipated revenues, economies of scale, cost savings and productivity gains associated with such operations, (l) the potential failure to retain key employees of RehabCare, (m) failure of the Companys facilities to meet applicable licensure and certification requirements, (n) the further consolidation and cost containment efforts of managed care organizations and other third party payors, (o) the Companys ability to meet its rental and debt service obligations, (p) the Companys ability to operate pursuant to the terms of its debt obligations, including its obligations under financings undertaken to complete the RehabCare acquisition, and the Companys ability to operate pursuant to its master lease agreements with Ventas, (q) the condition of the financial markets, including volatility and weakness in the equity, capital and credit markets, which could limit the availability and terms of debt and equity financing sources to fund the requirements of the Companys businesses, or which could negatively impact the Companys investment portfolio, (r) national and regional economic, financial, business and political conditions, including their effect on the availability and cost of labor, credit, materials and other services, (s) the Companys ability to control costs, particularly labor and employee benefit costs, (t) increased operating costs due to shortages in qualified nurses, therapists and other healthcare personnel, (u) the Companys ability to attract and retain key executives and other healthcare personnel, (v) the increase in the costs of defending and insuring against alleged professional liability and other claims and the Companys ability to predict the estimated costs related to such claims, including the impact of differences in actuarial assumptions and estimates compared to eventual outcomes, (w) the Companys ability to successfully reduce (by divestiture of operations or otherwise) its exposure to professional liability and other claims, (x) the Companys ability to successfully dispose of unprofitable facilities, (y) events or circumstances which could result in the impairment of an asset or other charges, (z) changes in generally accepted accounting principles (GAAP) or practices, and changes in tax accounting or tax laws (or authoritative interpretations relating to any of these matters), and (aa) the Companys ability to maintain an effective system of internal control over financial reporting. Many of these factors are beyond the Companys control. The Company cautions investors that any forward-looking statements made by the Company are not guarantees of future performance. The Company disclaims any obligation to update any such factors or to announce publicly the results of any revisions to any of the forward-looking statements to reflect future events or developments.
In addition to the results provided in accordance with GAAP, the Company has provided non-GAAP measurements which present operating results and cash flows from operations for the fourth quarters and years ended December 31, 2011 and 2010 before certain charges or on a core basis. A reconciliation of the non-GAAP measurements to the GAAP measurements is included in this press release.
As noted above, the Companys earnings release includes a financial measure referred to as operating income, or earnings before interest, income taxes, depreciation, amortization and rent. The Companys management uses operating income as a meaningful measure of operational performance in addition to other measures. The Company uses operating income to assess the relative performance of its operating divisions as well as the employees that operate these businesses. In addition, the Company believes this measurement is important because securities analysts and investors use this measurement to compare the Companys performance to other companies in the healthcare industry. The Company believes that income from continuing operations is the most comparable GAAP measure. Readers of the Companys financial information should consider income from continuing operations as an important measure of the Companys financial performance because it provides the most complete measure of its performance. Operating income should be considered in addition to, not as a substitute for, or superior to, financial measures based upon GAAP as an indicator of operating performance. A reconciliation of operating income to income from continuing operations provided in the Condensed Business Segment Data is included in this press release.
About Kindred Healthcare
Kindred Healthcare, Inc., a top-150 private employer in the United States, is a healthcare services company based in Louisville, Kentucky with annual revenues of $6 billion and approximately 77,800 employees in 46 states. At December 31, 2011, Kindred through its subsidiaries provided healthcare services in 2,200 locations, including 121 long-term acute care hospitals, five inpatient rehabilitation hospitals, 224 nursing and rehabilitation centers, 25 sub-acute units, 51 hospice and home care locations, 102 inpatient rehabilitation units (hospital-based) and a contract rehabilitation services business, RehabCare, which served approximately 1,670 non-affiliated facilities. Ranked as one of Fortune magazines Most Admired Healthcare Companies for three years in a row, Kindreds 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.
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Kindred Healthcare Announces Fourth Quarter Results
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February 23, 2012
KINDRED HEALTHCARE, INC.
Financial Summary
(In thousands, except per share amounts)
Three months ended | Year ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Revenues |
$ | 1,522,688 | $ | 1,135,484 | $ | 5,521,763 | $ | 4,359,697 | ||||||||
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Income (loss) from continuing operations |
$ | (72,914 | ) | $ | 19,755 | $ | (56,271 | ) | $ | 56,146 | ||||||
Discontinued operations, net of income taxes: |
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Income from operations |
1,025 | 1,125 | 2,552 | 798 | ||||||||||||
Loss on divestiture of operations |
| (456 | ) | | (453 | ) | ||||||||||
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Income from discontinued operations |
1,025 | 669 | 2,552 | 345 | ||||||||||||
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Net income (loss) |
(71,889 | ) | 20,424 | (53,719 | ) | 56,491 | ||||||||||
Loss attributable to noncontrolling interests |
58 | | 238 | | ||||||||||||
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Income (loss) attributable to Kindred |
$ | (71,831 | ) | $ | 20,424 | $ | (53,481 | ) | $ | 56,491 | ||||||
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Amounts attributable to Kindred stockholders: |
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Income (loss) from continuing operations |
$ | (72,856 | ) | $ | 19,755 | $ | (56,033 | ) | $ | 56,146 | ||||||
Income from discontinued operations |
1,025 | 669 | 2,552 | 345 | ||||||||||||
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Net income (loss) |
$ | (71,831 | ) | $ | 20,424 | $ | (53,481 | ) | $ | 56,491 | ||||||
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Earnings (loss) per common share: |
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Basic: |
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Income (loss) from continuing operations |
$ | (1.42 | ) | $ | 0.50 | $ | (1.21 | ) | $ | 1.42 | ||||||
Discontinued operations: |
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Income from operations |
0.02 | 0.03 | 0.05 | 0.02 | ||||||||||||
Loss on divestiture of operations |
| (0.01 | ) | | (0.01 | ) | ||||||||||
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Net income (loss) |
$ | (1.40 | ) | $ | 0.52 | $ | (1.16 | ) | $ | 1.43 | ||||||
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Diluted: |
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Income (loss) from continuing operations |
$ | (1.42 | ) | $ | 0.50 | $ | (1.21 | ) | $ | 1.42 | ||||||
Discontinued operations: |
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Income from operations |
0.02 | 0.03 | 0.05 | 0.02 | ||||||||||||
Loss on divestiture of operations |
| (0.01 | ) | | (0.01 | ) | ||||||||||
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Net income (loss) |
$ | (1.40 | ) | $ | 0.52 | $ | (1.16 | ) | $ | 1.43 | ||||||
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Shares used in computing earnings (loss) per common share: |
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Basic |
51,335 | 38,790 | 46,280 | 38,738 | ||||||||||||
Diluted |
51,335 | 39,089 | 46,280 | 38,954 |
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Kindred Healthcare Announces Fourth Quarter Results
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February 23, 2012
KINDRED HEALTHCARE, INC.
Condensed Consolidated Statement of Operations
(In thousands, except per share amounts)
Three months ended | Year ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Revenues |
$ | 1,522,688 | $ | 1,135,484 | $ | 5,521,763 | $ | 4,359,697 | ||||||||
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Salaries, wages and benefits |
911,417 | 652,703 | 3,255,815 | 2,505,690 | ||||||||||||
Supplies |
107,760 | 87,103 | 402,014 | 342,197 | ||||||||||||
Rent |
106,616 | 90,777 | 399,257 | 357,372 | ||||||||||||
Other operating expenses |
312,674 | 240,750 | 1,164,480 | 948,609 | ||||||||||||
Other income |
(2,711 | ) | (2,687 | ) | (11,191 | ) | (11,422 | ) | ||||||||
Impairment charges |
102,569 | | 129,281 | | ||||||||||||
Depreciation and amortization |
48,227 | 31,412 | 165,594 | 121,552 | ||||||||||||
Interest expense |
26,244 | 2,843 | 80,919 | 7,090 | ||||||||||||
Investment income |
(242 | ) | (342 | ) | (1,031 | ) | (1,245 | ) | ||||||||
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1,612,554 | 1,102,559 | 5,585,138 | 4,269,843 | |||||||||||||
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Income (loss) from continuing operations before income taxes |
(89,866 | ) | 32,925 | (63,375 | ) | 89,854 | ||||||||||
Provision (benefit) for income taxes |
(16,952 | ) | 13,170 | (7,104 | ) | 33,708 | ||||||||||
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Income (loss) from continuing operations |
(72,914 | ) | 19,755 | (56,271 | ) | 56,146 | ||||||||||
Discontinued operations, net of income taxes: |
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Income from operations |
1,025 | 1,125 | 2,552 | 798 | ||||||||||||
Loss on divestiture of operations |
| (456 | ) | | (453 | ) | ||||||||||
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Income from discontinued operations |
1,025 | 669 | 2,552 | 345 | ||||||||||||
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Net income (loss) |
(71,889 | ) | 20,424 | (53,719 | ) | 56,491 | ||||||||||
Loss attributable to noncontrolling interests |
58 | | 238 | | ||||||||||||
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Income (loss) attributable to Kindred |
$ | (71,831 | ) | $ | 20,424 | $ | (53,481 | ) | $ | 56,491 | ||||||
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|||||||||
Amounts attributable to Kindred stockholders: |
||||||||||||||||
Income (loss) from continuing operations |
$ | (72,856 | ) | $ | 19,755 | $ | (56,033 | ) | $ | 56,146 | ||||||
Income from discontinued operations |
1,025 | 669 | 2,552 | 345 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income (loss) |
$ | (71,831 | ) | $ | 20,424 | $ | (53,481 | ) | $ | 56,491 | ||||||
|
|
|
|
|
|
|
|
|||||||||
Earnings (loss) per common share: |
||||||||||||||||
Basic: |
||||||||||||||||
Income (loss) from continuing operations |
$ | (1.42 | ) | $ | 0.50 | $ | (1.21 | ) | $ | 1.42 | ||||||
Discontinued operations: |
||||||||||||||||
Income from operations |
0.02 | 0.03 | 0.05 | 0.02 | ||||||||||||
Loss on divestiture of operations |
| (0.01 | ) | | (0.01 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income (loss) |
$ | (1.40 | ) | $ | 0.52 | $ | (1.16 | ) | $ | 1.43 | ||||||
|
|
|
|
|
|
|
|
|||||||||
Diluted: |
||||||||||||||||
Income (loss) from continuing operations |
$ | (1.42 | ) | $ | 0.50 | $ | (1.21 | ) | $ | 1.42 | ||||||
Discontinued operations: |
||||||||||||||||
Income from operations |
0.02 | 0.03 | 0.05 | 0.02 | ||||||||||||
Loss on divestiture of operations |
| (0.01 | ) | | (0.01 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income (loss) |
$ | (1.40 | ) | $ | 0.52 | $ | (1.16 | ) | $ | 1.43 | ||||||
|
|
|
|
|
|
|
|
|||||||||
Shares used in computing earnings (loss) per common share: |
||||||||||||||||
Basic |
51,335 | 38,790 | 46,280 | 38,738 | ||||||||||||
Diluted |
51,335 | 39,089 | 46,280 | 38,954 |
- MORE -
Kindred Healthcare Announces Fourth Quarter Results
Page 10
February 23, 2012
KINDRED HEALTHCARE, INC.
Condensed Consolidated Balance Sheet
(In thousands, except per share amounts)
December 31, | December 31, | |||||||
2011 | 2010 | |||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 41,561 | $ | 17,168 | ||||
Cashrestricted |
5,551 | 5,494 | ||||||
Insurance subsidiary investments |
70,425 | 76,753 | ||||||
Accounts receivable less allowance for loss |
994,700 | 631,877 | ||||||
Inventories |
31,060 | 24,327 | ||||||
Deferred tax assets |
17,785 | 13,439 | ||||||
Income taxes |
39,513 | 42,118 | ||||||
Other |
32,687 | 24,862 | ||||||
|
|
|
|
|||||
1,233,282 | 836,038 | |||||||
Property and equipment |
1,975,063 | 1,754,170 | ||||||
Accumulated depreciation |
(916,022 | ) | (857,623 | ) | ||||
|
|
|
|
|||||
1,059,041 | 896,547 | |||||||
Goodwill |
1,084,655 | 242,420 | ||||||
Intangible assets less accumulated amortization |
447,207 | 92,883 | ||||||
Assets held for sale |
5,612 | 7,167 | ||||||
Insurance subsidiary investments |
110,227 | 101,210 | ||||||
Deferred tax assets |
| 88,816 | ||||||
Other |
198,469 | 72,334 | ||||||
|
|
|
|
|||||
Total assets |
$ | 4,138,493 | $ | 2,337,415 | ||||
|
|
|
|
|||||
LIABILITIES AND EQUITY |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 216,801 | $ | 174,495 | ||||
Salaries, wages and other compensation |
407,493 | 291,116 | ||||||
Due to third party payors |
37,306 | 27,115 | ||||||
Professional liability risks |
46,010 | 41,555 | ||||||
Other accrued liabilities |
130,693 | 87,012 | ||||||
Long-term debt due within one year |
10,620 | 91 | ||||||
|
|
|
|
|||||
848,923 | 621,384 | |||||||
Long-term debt |
1,531,882 | 365,556 | ||||||
Professional liability risks |
217,717 | 207,669 | ||||||
Deferred tax liabilities |
17,955 | | ||||||
Deferred credits and other liabilities |
191,771 | 111,047 | ||||||
Noncontrolling interests-redeemable |
9,704 | | ||||||
Equity: |
||||||||
Stockholders equity: |
||||||||
Common stock, $0.25 par value; authorized 175,000 shares; issued 52,116 |
13,029 | 9,874 | ||||||
Capital in excess of par value |
1,138,189 | 828,593 | ||||||
Accumulated other comprehensive income (loss) |
(1,469 | ) | 135 | |||||
Retained earnings |
139,172 | 193,157 | ||||||
|
|
|
|
|||||
1,288,921 | 1,031,759 | |||||||
Noncontrolling interests-nonredeemable |
31,620 | | ||||||
|
|
|
|
|||||
Total equity |
1,320,541 | 1,031,759 | ||||||
|
|
|
|
|||||
Total liabilities and equity |
$ | 4,138,493 | $ | 2,337,415 | ||||
|
|
|
|
- MORE -
Kindred Healthcare Announces Fourth Quarter Results
Page 11
February 23, 2012
KINDRED HEALTHCARE, INC.
Condensed Consolidated Statement of Cash Flows
(In thousands)
Three months ended | Year ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Cash flows from operating activities: |
||||||||||||||||
Net income (loss) |
$ | (71,889 | ) | $ | 20,424 | $ | (53,719 | ) | $ | 56,491 | ||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
||||||||||||||||
Depreciation and amortization |
48,227 | 31,412 | 165,594 | 121,552 | ||||||||||||
Amortization of stock-based compensation costs |
3,208 | 2,600 | 12,819 | 10,714 | ||||||||||||
Payment of lender fees related to debt issuance |
| | (46,232 | ) | | |||||||||||
Provision for doubtful accounts |
13,084 | 6,010 | 35,133 | 24,397 | ||||||||||||
Deferred income taxes |
5,170 | 35,190 | 195 | 21,446 | ||||||||||||
Impairment charges |
102,569 | | 129,281 | | ||||||||||||
Loss on divestiture of discontinued operations |
| 456 | | 453 | ||||||||||||
Other |
4,053 | 2,118 | 5,518 | 252 | ||||||||||||
Change in operating assets and liabilities: |
||||||||||||||||
Accounts receivable |
(36,758 | ) | (23,853 | ) | (144,830 | ) | (45,232 | ) | ||||||||
Inventories and other assets |
(4,451 | ) | (6,720 | ) | (802 | ) | (14,294 | ) | ||||||||
Accounts payable |
299 | 25,139 | 685 | 9,446 | ||||||||||||
Income taxes |
(25,537 | ) | (22,272 | ) | (4,745 | ) | 3,462 | |||||||||
Due to third party payors |
(4,130 | ) | (8,886 | ) | 568 | 1,213 | ||||||||||
Other accrued liabilities |
2,055 | (2,485 | ) | 54,241 | 20,088 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net cash provided by operating activities |
35,900 | 59,133 | 153,706 | 209,988 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Cash flows from investing activities: |
||||||||||||||||
Routine capital expenditures |
(37,640 | ) | (39,788 | ) | (132,903 | ) | (108,896 | ) | ||||||||
Development capital expenditures |
(18,085 | ) | (27,622 | ) | (87,655 | ) | (67,841 | ) | ||||||||
Acquisitions, net of cash acquired |
(4,551 | ) | (191,925 | ) | (715,458 | ) | (279,794 | ) | ||||||||
Sale of assets |
| 649 | 1,714 | 649 | ||||||||||||
Purchase of insurance subsidiary investments |
(9,719 | ) | (9,229 | ) | (35,623 | ) | (43,913 | ) | ||||||||
Sale of insurance subsidiary investments |
8,720 | 9,765 | 46,307 | 82,736 | ||||||||||||
Net change in insurance subsidiary cash and cash equivalents |
(9,343 | ) | 2,091 | (14,213 | ) | (8,521 | ) | |||||||||
Change in other investments |
3 | | 1,003 | 2 | ||||||||||||
Other |
180 | (317 | ) | (512 | ) | 962 | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net cash used in investing activities |
(70,435 | ) | (256,376 | ) | (937,340 | ) | (424,616 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Cash flows from financing activities: |
||||||||||||||||
Proceeds from borrowings under revolving credit |
493,500 | 920,900 | 2,126,800 | 2,030,800 | ||||||||||||
Repayment of borrowings under revolving credit |
(448,500 | ) | (720,400 | ) | (2,198,300 | ) | (1,812,800 | ) | ||||||||
Proceeds from issuance of senior unsecured notes |
| | 550,000 | | ||||||||||||
Proceeds from issuance of term loan, net of discount |
| | 693,000 | | ||||||||||||
Repayment of other long-term debt |
(2,645 | ) | (22 | ) | (350,878 | ) | (86 | ) | ||||||||
Payment of deferred financing costs |
(383 | ) | (1,417 | ) | (9,098 | ) | (2,831 | ) | ||||||||
Issuance of common stock |
| 14 | 3,019 | 49 | ||||||||||||
Purchase of noncontrolling interests in subsidiaries |
| | (7,292 | ) | | |||||||||||
Other |
29 | 15 | 776 | 361 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net cash provided by financing activities |
42,001 | 199,090 | 808,027 | 215,493 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Change in cash and cash equivalents |
7,466 | 1,847 | 24,393 | 865 | ||||||||||||
Cash and cash equivalents at beginning of period |
34,095 | 15,321 | 17,168 | 16,303 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Cash and cash equivalents at end of period |
$ | 41,561 | $ | 17,168 | $ | 41,561 | $ | 17,168 | ||||||||
|
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- MORE -
Kindred Healthcare Announces Fourth Quarter Results
Page 12
February 23, 2012
KINDRED HEALTHCARE, INC.
Condensed Consolidated Statement of Operations
(In thousands, except per share amounts)
2010 Quarters | 2011 Quarters | |||||||||||||||||||||||||||||||||||||||
First | Second | Third | Fourth | Year | First | Second | Third | Fourth | Year | |||||||||||||||||||||||||||||||
Revenues |
$ | 1,089,837 | $ | 1,081,364 | $ | 1,053,012 | $ | 1,135,484 | $ | 4,359,697 | $ | 1,192,421 | $ | 1,292,592 | $ | 1,514,062 | $ | 1,522,688 | $ | 5,521,763 | ||||||||||||||||||||
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|
|
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|
|
|
|
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|
|||||||||||||||||||||
Salaries, wages and benefits |
627,175 | 612,205 | 613,607 | 652,703 | 2,505,690 | 678,695 | 765,133 | 900,570 | 911,417 | 3,255,815 | ||||||||||||||||||||||||||||||
Supplies |
85,886 | 85,455 | 83,753 | 87,103 | 342,197 | 90,022 | 96,718 | 107,514 | 107,760 | 402,014 | ||||||||||||||||||||||||||||||
Rent |
88,319 | 88,981 | 89,295 | 90,777 | 357,372 | 91,453 | 95,677 | 105,511 | 106,616 | 399,257 | ||||||||||||||||||||||||||||||
Other operating expenses |
234,204 | 238,687 | 234,968 | 240,750 | 948,609 | 259,369 | 287,132 | 305,305 | 312,674 | 1,164,480 | ||||||||||||||||||||||||||||||
Other income |
(3,084 | ) | (2,857 | ) | (2,794 | ) | (2,687 | ) | (11,422 | ) | (2,785 | ) | (2,880 | ) | (2,815 | ) | (2,711 | ) | (11,191 | ) | ||||||||||||||||||||
Impairment charges |
| | | | | | | 26,712 | 102,569 | 129,281 | ||||||||||||||||||||||||||||||
Depreciation and amortization |
31,121 | 29,852 | 29,167 | 31,412 | 121,552 | 32,549 | 37,871 | 46,947 | 48,227 | 165,594 | ||||||||||||||||||||||||||||||
Interest expense |
1,307 | 1,298 | 1,642 | 2,843 | 7,090 | 5,728 | 23,157 | 25,790 | 26,244 | 80,919 | ||||||||||||||||||||||||||||||
Investment (income) loss |
(877 | ) | 377 | (403 | ) | (342 | ) | (1,245 | ) | (495 | ) | (257 | ) | (37 | ) | (242 | ) | (1,031 | ) | |||||||||||||||||||||
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|
|||||||||||||||||||||
1,064,051 | 1,053,998 | 1,049,235 | 1,102,559 | 4,269,843 | 1,154,536 | 1,302,551 | 1,515,497 | 1,612,554 | 5,585,138 | |||||||||||||||||||||||||||||||
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|
|||||||||||||||||||||
Income (loss) from continuing operations before income taxes |
25,786 | 27,366 | 3,777 | 32,925 | 89,854 | 37,885 | (9,959 | ) | (1,435 | ) | (89,866 | ) | (63,375 | ) | ||||||||||||||||||||||||||
Provision (benefit) for income taxes |
10,631 | 11,230 | (1,323 | ) | 13,170 | 33,708 | 15,609 | (3,419 | ) | (2,342 | ) | (16,952 | ) | (7,104 | ) | |||||||||||||||||||||||||
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|
|
|
|
|
|||||||||||||||||||||
Income (loss) from continuing operations |
15,155 | 16,136 | 5,100 | 19,755 | 56,146 | 22,276 | (6,540 | ) | 907 | (72,914 | ) | (56,271 | ) | |||||||||||||||||||||||||||
Discontinued operations, net of income taxes: |
||||||||||||||||||||||||||||||||||||||||
Income (loss) from operations |
(154 | ) | 87 | (260 | ) | 1,125 | 798 | (179 | ) | 587 | 1,119 | 1,025 | 2,552 | |||||||||||||||||||||||||||
Gain (loss) on divestiture of operations |
(137 | ) | 54 | 86 | (456 | ) | (453 | ) | | | | | | |||||||||||||||||||||||||||
|
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|
|||||||||||||||||||||
Income (loss) from discontinued operations |
(291 | ) | 141 | (174 | ) | 669 | 345 | (179 | ) | 587 | 1,119 | 1,025 | 2,552 | |||||||||||||||||||||||||||
|
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|
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|
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|
|
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|
|||||||||||||||||||||
Net income (loss) |
14,864 | 16,277 | 4,926 | 20,424 | 56,491 | 22,097 | (5,953 | ) | 2,026 | (71,889 | ) | (53,719 | ) | |||||||||||||||||||||||||||
(Earnings ) loss attributable to noncontrolling interests |
| | | | | | 421 | (241 | ) | 58 | 238 | |||||||||||||||||||||||||||||
|
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|
|||||||||||||||||||||
Income (loss) attributable to Kindred |
$ | 14,864 | $ | 16,277 | $ | 4,926 | $ | 20,424 | $ | 56,491 | $ | 22,097 | $ | (5,532 | ) | $ | 1,785 | $ | (71,831 | ) | $ | (53,481 | ) | |||||||||||||||||
|
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|
|||||||||||||||||||||
Amounts attributable to Kindred stockholders: |
||||||||||||||||||||||||||||||||||||||||
Income (loss) from continuing operations |
$ | 15,155 | $ | 16,136 | $ | 5,100 | $ | 19,755 | $ | 56,146 | $ | 22,276 | $ | (6,119 | ) | $ | 666 | $ | (72,856 | ) | $ | (56,033 | ) | |||||||||||||||||
Income (loss) from discontinued operations |
(291 | ) | 141 | (174 | ) | 669 | 345 | (179 | ) | 587 | 1,119 | 1,025 | 2,552 | |||||||||||||||||||||||||||
|
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|
|||||||||||||||||||||
Net income (loss) |
$ | 14,864 | $ | 16,277 | $ | 4,926 | $ | 20,424 | $ | 56,491 | $ | 22,097 | $ | (5,532 | ) | $ | 1,785 | $ | (71,831 | ) | $ | (53,481 | ) | |||||||||||||||||
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|
|||||||||||||||||||||
Earnings (loss) per common share: |
||||||||||||||||||||||||||||||||||||||||
Basic: |
||||||||||||||||||||||||||||||||||||||||
Income (loss) from continuing operations |
$ | 0.38 | $ | 0.41 | $ | 0.13 | $ | 0.50 | $ | 1.42 | $ | 0.56 | $ | (0.14 | ) | $ | 0.01 | $ | (1.42 | ) | $ | (1.21 | ) | |||||||||||||||||
Discontinued operations: |
||||||||||||||||||||||||||||||||||||||||
Income (loss) from operations |
| | (0.01 | ) | 0.03 | 0.02 | | 0.01 | 0.02 | 0.02 | 0.05 | |||||||||||||||||||||||||||||
Gain (loss) on divestiture of operations |
| | | (0.01 | ) | (0.01 | ) | | | | | | ||||||||||||||||||||||||||||
|
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|
|||||||||||||||||||||
Net income (loss) |
$ | 0.38 | $ | 0.41 | $ | 0.12 | $ | 0.52 | $ | 1.43 | $ | 0.56 | $ | (0.13 | ) | $ | 0.03 | $ | (1.40 | ) | $ | (1.16 | ) | |||||||||||||||||
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|
|||||||||||||||||||||
Diluted: |
||||||||||||||||||||||||||||||||||||||||
Income (loss) from continuing operations |
$ | 0.38 | $ | 0.41 | $ | 0.13 | $ | 0.50 | $ | 1.42 | $ | 0.55 | $ | (0.14 | ) | $ | 0.01 | $ | (1.42 | ) | $ | (1.21 | ) | |||||||||||||||||
Discontinued operations: |
||||||||||||||||||||||||||||||||||||||||
Income (loss) from operations |
| | (0.01 | ) | 0.03 | 0.02 | | 0.01 | 0.02 | 0.02 | 0.05 | |||||||||||||||||||||||||||||
Gain (loss) on divestiture of operations |
| | | (0.01 | ) | (0.01 | ) | | | | | | ||||||||||||||||||||||||||||
|
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|
|
|
|
|
|
|
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|
|
|
|
|
|||||||||||||||||||||
Net income (loss) |
$ | 0.38 | $ | 0.41 | $ | 0.12 | $ | 0.52 | $ | 1.43 | $ | 0.55 | $ | (0.13 | ) | $ | 0.03 | $ | (1.40 | ) | $ | (1.16 | ) | |||||||||||||||||
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|
|||||||||||||||||||||
Shares used in computing earnings (loss) per common share: |
||||||||||||||||||||||||||||||||||||||||
Basic |
38,626 | 38,756 | 38,778 | 38,790 | 38,738 | 39,035 | 43,231 | 51,329 | 51,335 | 46,280 | ||||||||||||||||||||||||||||||
Diluted |
38,859 | 38,914 | 38,838 | 39,089 | 38,954 | 39,543 | 43,231 | 51,406 | 51,335 | 46,280 |
- MORE -
Kindred Healthcare Announces Fourth Quarter Results
Page 13
February 23, 2012
KINDRED HEALTHCARE, INC.
Condensed Business Segment Data
(In thousands)
2010 Quarters | 2011 Quarters | |||||||||||||||||||||||||||||||||||||||
First | Second | Third | Fourth | Year | First | Second | Third | Fourth | Year | |||||||||||||||||||||||||||||||
Revenues: |
||||||||||||||||||||||||||||||||||||||||
Hospital division |
$ | 507,062 | $ | 493,401 | $ | 465,198 | $ | 507,660 | $ | 1,973,321 | $ | 558,974 | $ | 593,425 | $ | 684,781 | $ | 712,812 | $ | 2,549,992 | ||||||||||||||||||||
Nursing center division |
539,321 | 542,215 | 539,914 | 566,435 | 2,187,885 | 567,472 | 568,199 | 571,226 | 547,202 | 2,254,099 | ||||||||||||||||||||||||||||||
Rehabilitation division: |
||||||||||||||||||||||||||||||||||||||||
Skilled nursing rehabilitation services |
95,563 | 97,273 | 99,860 | 111,059 | 403,755 | 114,618 | 161,246 | 252,574 | 246,720 | 775,158 | ||||||||||||||||||||||||||||||
Hospital rehabilitation services |
21,147 | 20,913 | 20,436 | 21,182 | 83,678 | 22,490 | 38,291 | 69,811 | 70,232 | 200,824 | ||||||||||||||||||||||||||||||
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|
|||||||||||||||||||||
116,710 | 118,186 | 120,296 | 132,241 | 487,433 | 137,108 | 199,537 | 322,385 | 316,952 | 975,982 | |||||||||||||||||||||||||||||||
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Home health and hospice division |
3,434 | 3,875 | 3,947 | 6,266 | 17,522 | 8,038 | 10,828 | 15,419 | 26,451 | 60,736 | ||||||||||||||||||||||||||||||
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1,166,527 | 1,157,677 | 1,129,355 | 1,212,602 | 4,666,161 | 1,271,592 | 1,371,989 | 1,593,811 | 1,603,417 | 5,840,809 | |||||||||||||||||||||||||||||||
Eliminations: |
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Skilled nursing rehabilitation services |
(56,127 | ) | (55,809 | ) | (56,323 | ) | (56,365 | ) | (224,624 | ) | (57,081 | ) | (57,587 | ) | (57,922 | ) | (57,087 | ) | (229,677 | ) | ||||||||||||||||||||
Hospital rehabilitation services |
(20,226 | ) | (20,034 | ) | (19,502 | ) | (20,034 | ) | (79,796 | ) | (21,225 | ) | (20,706 | ) | (20,528 | ) | (22,167 | ) | (84,626 | ) | ||||||||||||||||||||
Home health and hospice |
(337 | ) | (470 | ) | (518 | ) | (719 | ) | (2,044 | ) | (865 | ) | (1,104 | ) | (1,299 | ) | (1,475 | ) | (4,743 | ) | ||||||||||||||||||||
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(76,690 | ) | (76,313 | ) | (76,343 | ) | (77,118 | ) | (306,464 | ) | (79,171 | ) | (79,397 | ) | (79,749 | ) | (80,729 | ) | (319,046 | ) | |||||||||||||||||||||
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$ | 1,089,837 | $ | 1,081,364 | $ | 1,053,012 | $ | 1,135,484 | $ | 4,359,697 | $ | 1,192,421 | $ | 1,292,592 | $ | 1,514,062 | $ | 1,522,688 | $ | 5,521,763 | |||||||||||||||||||||
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Income (loss) from continuing operations: |
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Operating income (loss): |
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Hospital division |
$ | 95,440 | $ | 91,790 | $ | 75,784 | $ | 97,343 | $ | 360,357 | $ | 108,385 | $ | 108,465 | $ | 125,701 | $ | 144,891 | (a) | $ | 487,442 | |||||||||||||||||||
Nursing center division |
70,614 | 76,529 | 69,363 | 86,912 | 303,418 | 87,350 | 93,532 | 89,592 | 67,791 | 338,265 | ||||||||||||||||||||||||||||||
Rehabilitation division: |
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Skilled nursing rehabilitation services |
9,575 | 9,325 | 9,580 | 5,223 | 33,703 | 9,159 | 15,978 | 27,575 | 13,204 | 65,916 | ||||||||||||||||||||||||||||||
Hospital rehabilitation services |
5,146 | 4,793 | 4,728 | 4,302 | 18,969 | 5,332 | 8,033 | 15,606 | 14,760 | 43,731 | ||||||||||||||||||||||||||||||
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14,721 | 14,118 | 14,308 | 9,525 | 52,672 | 14,491 | 24,011 | 43,181 | 27,964 | 109,647 | |||||||||||||||||||||||||||||||
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Home health and hospice division |
(38 | ) | (18 | ) | (94 | ) | 84 | (66 | ) | (10 | ) | (447 | ) | 1,107 | 2,453 | 3,103 | ||||||||||||||||||||||||
Corporate: |
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Overhead |
(33,831 | ) | (32,799 | ) | (34,329 | ) | (33,002 | ) | (133,961 | ) | (38,315 | ) | (43,801 | ) | (48,806 | ) | (43,878 | ) | (174,800 | ) | ||||||||||||||||||||
Insurance subsidiary |
(480 | ) | (791 | ) | (783 | ) | (1,099 | ) | (3,153 | ) | (602 | ) | (420 | ) | (750 | ) | (534 | ) | (2,306 | ) | ||||||||||||||||||||
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(34,311 | ) | (33,590 | ) | (35,112 | ) | (34,101 | ) | (137,114 | ) | (38,917 | ) | (44,221 | ) | (49,556 | ) | (44,412 | ) | (177,106 | ) | |||||||||||||||||||||
Impairment charges (b) |
| | | | | | | (26,712 | ) | (102,569 | ) | (129,281 | ) | |||||||||||||||||||||||||||
Transaction costs (c) |
(770 | ) | (955 | ) | (771 | ) | (2,148 | ) | (4,644 | ) | (4,179 | ) | (34,851 | ) | (6,537 | ) | (5,139 | ) | (50,706 | ) | ||||||||||||||||||||
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Operating income |
145,656 | 147,874 | 123,478 | 157,615 | 574,623 | 167,120 | 146,489 | 176,776 | 90,979 | 581,364 | ||||||||||||||||||||||||||||||
Rent |
(88,319 | ) | (88,981 | ) | (89,295 | ) | (90,777 | ) | (357,372 | ) | (91,453 | ) | (95,677 | ) | (105,511 | ) | (106,616 | )(d) | (399,257 | ) | ||||||||||||||||||||
Depreciation and amortization |
(31,121 | ) | (29,852 | ) | (29,167 | ) | (31,412 | ) | (121,552 | ) | (32,549 | ) | (37,871 | ) | (46,947 | ) | (48,227 | ) | (165,594 | ) | ||||||||||||||||||||
Interest, net |
(430 | ) | (1,675 | ) | (1,239 | ) | (2,501 | ) | (5,845 | ) | (5,233 | ) | (22,900 | ) | (25,753 | ) | (26,002 | ) | (79,888 | ) | ||||||||||||||||||||
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Income (loss) from continuing operations before income taxes |
25,786 | 27,366 | 3,777 | 32,925 | 89,854 | 37,885 | (9,959 | ) | (1,435 | ) | (89,866 | ) | (63,375 | ) | ||||||||||||||||||||||||||
Provision (benefit) for income taxes |
10,631 | 11,230 | (1,323 | ) | 13,170 | 33,708 | 15,609 | (3,419 | ) | (2,342 | ) | (16,952 | ) | (7,104 | ) | |||||||||||||||||||||||||
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$ | 15,155 | $ | 16,136 | $ | 5,100 | $ | 19,755 | $ | 56,146 | $ | 22,276 | $ | (6,540 | ) | $ | 907 | $ | (72,914 | ) | $ | (56,271 | ) | ||||||||||||||||||
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(a) | Includes loss on divestiture of a hospital of $1.5 million. |
(b) | Impairment charges for the third quarter of 2011 have been reclassified to conform with the current period presentation. |
(c) | Transaction costs for the 2010 periods have been reclassified to conform with the current period presentation. |
(d) | Includes lease cancellation charge of $1.8 million in connection with the RehabCare acquisition. |
- MORE -
Kindred Healthcare Announces Fourth Quarter Results
Page 14
February 23, 2012
KINDRED HEALTHCARE, INC.
Condensed Consolidating Statement of Operations
(In thousands)
Three months ended December 31, 2011 | ||||||||||||||||||||||||||||||||||||||||
Nursing | Rehabilitation division | Home | Transaction- | |||||||||||||||||||||||||||||||||||||
Hospital | center | Skilled nursing | Hospital | health and | related | |||||||||||||||||||||||||||||||||||
division (a) | division | services | services | Total | hospice | Corporate | costs | Eliminations | Consolidated | |||||||||||||||||||||||||||||||
Revenues |
$ | 712,812 | $ | 547,202 | $ | 246,720 | $ | 70,232 | $ | 316,952 | $ | 26,451 | $ | | $ | | $ | (80,729 | ) | $ | 1,522,688 | |||||||||||||||||||
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Salaries, wages and benefits |
321,657 | 269,454 | 221,404 | 50,151 | 271,555 | 19,155 | 28,976 | 647 | (27 | ) | 911,417 | |||||||||||||||||||||||||||||
Supplies |
77,124 | 28,450 | 843 | 67 | 910 | 1,025 | 251 | | | 107,760 | ||||||||||||||||||||||||||||||
Rent |
52,299 | 49,748 | 1,415 | 72 | 1,487 | 568 | 695 | 1,819 | | 106,616 | ||||||||||||||||||||||||||||||
Other operating expenses |
169,140 | 181,507 | 11,269 | 5,254 | 16,523 | 3,818 | 17,896 | 4,492 | (80,702 | ) | 312,674 | |||||||||||||||||||||||||||||
Other income |
| | | | | | (2,711 | ) | | | (2,711 | ) | ||||||||||||||||||||||||||||
Impairment charges |
54,325 | 2,245 | 45,999 | | 45,999 | | | 102,569 | ||||||||||||||||||||||||||||||||
Depreciation and amortization |
22,448 | 12,554 | 2,617 | 2,349 | 4,966 | 902 | 7,357 | | | 48,227 | ||||||||||||||||||||||||||||||
Interest expense |
228 | 26 | | | | 1 | 25,989 | | | 26,244 | ||||||||||||||||||||||||||||||
Investment income |
(3 | ) | (28 | ) | | | | (1 | ) | (210 | ) | | | (242 | ) | |||||||||||||||||||||||||
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697,218 | 543,956 | 283,547 | 57,893 | 341,440 | 25,468 | 78,243 | 6,958 | (80,729 | ) | 1,612,554 | ||||||||||||||||||||||||||||||
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Income (loss) from continuing operations before income taxes |
$ | 15,594 | $ | 3,246 | $ | (36,827 | ) | $ | 12,339 | $ | (24,488 | ) | $ | 983 | $ | (78,243 | ) | $ | (6,958 | ) | $ | | (89,866 | ) | ||||||||||||||||
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Income tax benefit |
(16,952 | ) | ||||||||||||||||||||||||||||||||||||||
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Loss from continuing operations |
$ | (72,914 | ) | |||||||||||||||||||||||||||||||||||||
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Capital expenditures, excluding acquisitions |
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Routine |
$ | 9,521 | $ | 7,577 | $ | 1,031 | $ | 60 | $ | 1,091 | $ | 65 | $ | 19,386 | $ | | $ | | $ | 37,640 | ||||||||||||||||||||
Development |
13,157 | 4,027 | | | | 901 | | | | 18,085 | ||||||||||||||||||||||||||||||
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$ | 22,678 | $ | 11,604 | $ | 1,031 | $ | 60 | $ | 1,091 | $ | 966 | $ | 19,386 | $ | | $ | | $ | 55,725 | |||||||||||||||||||||
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Three months ended December 31, 2010 | ||||||||||||||||||||||||||||||||||||||||
Nursing | Rehabilitation division | Home | Transaction- | |||||||||||||||||||||||||||||||||||||
Hospital | center | Skilled nursing | Hospital | health and | related | |||||||||||||||||||||||||||||||||||
division | division | services | services | Total | hospice | Corporate | costs | Eliminations | Consolidated | |||||||||||||||||||||||||||||||
Revenues |
$ | 507,660 | $ | 566,435 | $ | 111,059 | $ | 21,182 | $ | 132,241 | $ | 6,266 | $ | | $ | | $ | (77,118 | ) | $ | 1,135,484 | |||||||||||||||||||
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Salaries, wages and benefits |
230,028 | 274,784 | 102,835 | 16,213 | 119,048 | 4,719 | 23,813 | 357 | (46 | ) | 652,703 | |||||||||||||||||||||||||||||
Supplies |
57,884 | 28,131 | 573 | 39 | 612 | 332 | 144 | | | 87,103 | ||||||||||||||||||||||||||||||
Rent |
39,406 | 49,647 | 1,540 | 27 | 1,567 | 122 | 35 | | | 90,777 | ||||||||||||||||||||||||||||||
Other operating expenses |
122,405 | 176,608 | 2,428 | 628 | 3,056 | 1,131 | 12,831 | 1,791 | (77,072 | ) | 240,750 | |||||||||||||||||||||||||||||
Other income |
| | | | | | (2,687 | ) | | | (2,687 | ) | ||||||||||||||||||||||||||||
Depreciation and amortization |
13,421 | 11,646 | 646 | 99 | 745 | 85 | 5,515 | | | 31,412 | ||||||||||||||||||||||||||||||
Interest expense |
2 | 35 | | | | | 2,806 | | | 2,843 | ||||||||||||||||||||||||||||||
Investment income |
(2 | ) | (14 | ) | (2 | ) | | (2 | ) | | (324 | ) | | | (342 | ) | ||||||||||||||||||||||||
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463,144 | 540,837 | 108,020 | 17,006 | 125,026 | 6,389 | 42,133 | 2,148 | (77,118 | ) | 1,102,559 | ||||||||||||||||||||||||||||||
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Income (loss) from continuing operations before income taxes |
$ | 44,516 | $ | 25,598 | $ | 3,039 | $ | 4,176 | $ | 7,215 | $ | (123 | ) | $ | (42,133 | ) | $ | (2,148 | ) | $ | | 32,925 | ||||||||||||||||||
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Provision for income taxes |
13,170 | |||||||||||||||||||||||||||||||||||||||
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Income from continuing operations |
$ | 19,755 | ||||||||||||||||||||||||||||||||||||||
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Capital expenditures, excluding acquisitions |
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Routine |
$ | 13,835 | $ | 12,292 | $ | 1,547 | $ | 208 | $ | 1,755 | $ | 61 | $ | 11,845 | $ | | $ | | $ | 39,788 | ||||||||||||||||||||
Development |
12,257 | 15,365 | | | | | | | | 27,622 | ||||||||||||||||||||||||||||||
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$ | 26,092 | $ | 27,657 | $ | 1,547 | $ | 208 | $ | 1,755 | $ | 61 | $ | 11,845 | $ | | $ | | $ | 67,410 | |||||||||||||||||||||
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(a) | Includes loss on divestiture of a hospital of $1.5 million in other operating expenses. |
- MORE -
Kindred Healthcare Announces Fourth Quarter Results
Page 15
February 23, 2012
KINDRED HEALTHCARE, INC.
Condensed Consolidating Statement of Operations
(In thousands)
Year ended December 31, 2011 | ||||||||||||||||||||||||||||||||||||||||
Hospital division (a) |
Nursing center division |
Rehabilitation division | Home health and hospice |
Corporate | Transaction- related costs |
Eliminations | Consolidated | |||||||||||||||||||||||||||||||||
Skilled nursing services |
Hospital services |
Total | ||||||||||||||||||||||||||||||||||||||
Revenues |
$ | 2,549,992 | $ | 2,254,099 | $ | 775,158 | $ | 200,824 | $ | 975,982 | $ | 60,736 | $ | | $ | | $ | (319,046 | ) | $ | 5,521,763 | |||||||||||||||||||
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Salaries, wages and benefits |
1,164,486 | 1,085,476 | 679,177 | 144,147 | 823,324 | 45,378 | 120,478 | 16,769 | (96 | ) | 3,255,815 | |||||||||||||||||||||||||||||
Supplies |
283,628 | 112,095 | 2,826 | 189 | 3,015 | 2,438 | 838 | | | 402,014 | ||||||||||||||||||||||||||||||
Rent |
189,332 | 198,556 | 6,275 | 228 | 6,503 | 1,366 | 1,681 | 1,819 | | 399,257 | ||||||||||||||||||||||||||||||
Other operating expenses |
614,436 | 718,263 | 27,239 | 12,757 | 39,996 | 9,817 | 66,981 | 33,937 | (318,950 | ) | 1,164,480 | |||||||||||||||||||||||||||||
Other income |
| | | | | | (11,191 | ) | | | (11,191 | ) | ||||||||||||||||||||||||||||
Impairment charges |
57,427 | 25,855 | 45,999 | | 45,999 | | | 129,281 | ||||||||||||||||||||||||||||||||
Depreciation and amortization |
74,910 | 50,040 | 7,191 | 5,637 | 12,828 | 1,449 | 26,367 | | | 165,594 | ||||||||||||||||||||||||||||||
Interest expense |
500 | 102 | | | | 1 | 66,514 | 13,802 | | 80,919 | ||||||||||||||||||||||||||||||
Investment income |
(7 | ) | (86 | ) | (3 | ) | (1 | ) | (4 | ) | (1 | ) | (933 | ) | | | (1,031 | ) | ||||||||||||||||||||||
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2,384,712 | 2,190,301 | 768,704 | 162,957 | 931,661 | 60,448 | 270,735 | 66,327 | (319,046 | ) | 5,585,138 | ||||||||||||||||||||||||||||||
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Income (loss) from continuing operations before income taxes |
$ | 165,280 | $ | 63,798 | $ | 6,454 | $ | 37,867 | $ | 44,321 | $ | 288 | $ | (270,735 | ) | $ | (66,327 | ) | $ | | (63,375 | ) | ||||||||||||||||||
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Income tax benefit |
(7,104 | ) | ||||||||||||||||||||||||||||||||||||||
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Loss from continuing operations |
$ | (56,271 | ) | |||||||||||||||||||||||||||||||||||||
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|
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Capital expenditures, excluding acquisitions (including discontinued operations): |
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Routine |
$ | 46,393 | $ | 34,304 | $ | 1,700 | $ | 238 | $ | 1,938 | $ | 164 | $ | 50,104 | $ | | $ | | $ | 132,903 | ||||||||||||||||||||
Development |
67,321 | 19,167 | | | | 1,167 | | | | 87,655 | ||||||||||||||||||||||||||||||
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$ | 113,714 | $ | 53,471 | $ | 1,700 | $ | 238 | $ | 1,938 | $ | 1,331 | $ | 50,104 | $ | | $ | | $ | 220,558 | |||||||||||||||||||||
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Year ended December 31, 2010 | ||||||||||||||||||||||||||||||||||||||||
Hospital division (b) |
Nursing center division (b) |
Rehabilitation division | Home health and hospice |
Corporate (b) | Transaction- related costs |
Eliminations | Consolidated | |||||||||||||||||||||||||||||||||
Skilled nursing services |
Hospital services |
Total | ||||||||||||||||||||||||||||||||||||||
Revenues |
$ | 1,973,321 | $ | 2,187,885 | $ | 403,755 | $ | 83,678 | $ | 487,433 | $ | 17,522 | $ | | $ | | $ | (306,464 | ) | $ | 4,359,697 | |||||||||||||||||||
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Salaries, wages and benefits |
894,345 | 1,080,344 | 356,171 | 62,173 | 418,344 | 12,880 | 99,480 | 357 | (60 | ) | 2,505,690 | |||||||||||||||||||||||||||||
Supplies |
228,157 | 110,266 | 2,003 | 106 | 2,109 | 1,108 | 557 | | | 342,197 | ||||||||||||||||||||||||||||||
Rent |
152,986 | 198,105 | 5,644 | 106 | 5,750 | 386 | 145 | | | 357,372 | ||||||||||||||||||||||||||||||
Other operating expenses |
490,462 | 693,857 | 11,878 | 2,430 | 14,308 | 3,600 | 48,499 | 4,287 | (306,404 | ) | 948,609 | |||||||||||||||||||||||||||||
Other income |
| | | | | | (11,422 | ) | | | (11,422 | ) | ||||||||||||||||||||||||||||
Depreciation and amortization |
51,639 | 45,471 | 2,169 | 306 | 2,475 | 234 | 21,733 | | | 121,552 | ||||||||||||||||||||||||||||||
Interest expense |
5 | 131 | | | | | 6,954 | | | 7,090 | ||||||||||||||||||||||||||||||
Investment income |
(3 | ) | (70 | ) | (5 | ) | (1 | ) | (6 | ) | | (1,166 | ) | | | (1,245 | ) | |||||||||||||||||||||||
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1,817,591 | 2,128,104 | 377,860 | 65,120 | 442,980 | 18,208 | 164,780 | 4,644 | (306,464 | ) | 4,269,843 | ||||||||||||||||||||||||||||||
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Income from continuing operations before income taxes |
$ | 155,730 | $ | 59,781 | $ | 25,895 | $ | 18,558 | $ | 44,453 | $ | (686 | ) | $ | (164,780 | ) | $ | (4,644 | ) | $ | | 89,854 | ||||||||||||||||||
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Provision for income taxes |
33,708 | |||||||||||||||||||||||||||||||||||||||
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Income from continuing operations |
$ | 56,146 | ||||||||||||||||||||||||||||||||||||||
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Capital expenditures, excluding acquisitions (including discontinued operations): |
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Routine |
$ | 36,967 | $ | 37,024 | $ | 2,356 | $ | 293 | $ | 2,649 | $ | 66 | $ | 32,190 | $ | | $ | | $ | 108,896 | ||||||||||||||||||||
Development |
41,140 | 26,701 | | | | | | | | 67,841 | ||||||||||||||||||||||||||||||
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$ | 78,107 | $ | 63,725 | $ | 2,356 | $ | 293 | $ | 2,649 | $ | 66 | $ | 32,190 | $ | | $ | | $ | 176,737 | |||||||||||||||||||||
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(a) | Includes loss on divestiture of a hospital of $1.5 million in other operating expenses. |
(b) | Includes $2.9 million in aggregate of severance and retirement costs in salaries, wages and benefits (hospital division$ 1.1 million, nursing center division$0.5 million and corporate$1.3 million). |
- MORE -
Kindred Healthcare Announces Fourth Quarter Results
Page 16
February 23, 2012
KINDRED HEALTHCARE, INC.
Condensed Business Segment Data
(Unaudited)
2010 Quarters | 2011 Quarters | |||||||||||||||||||||||||||||||||||||||
First | Second | Third | Fourth | Year | First | Second | Third | Fourth | Year | |||||||||||||||||||||||||||||||
Hospital division data: |
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End of period data: |
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Number of hospitals: |
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Long-term acute care |
83 | 83 | 83 | 89 | 89 | 120 | 120 | 121 | ||||||||||||||||||||||||||||||||
Inpatient rehabilitation |
| | | | | 5 | 5 | 5 | ||||||||||||||||||||||||||||||||
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83 | 83 | 83 | 89 | 89 | 125 | 125 | 126 | |||||||||||||||||||||||||||||||||
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Number of licensed beds: |
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Long-term acute care |
6,580 | 6,576 | 6,563 | 6,887 | 6,889 | 8,609 | 8,597 | 8,597 | ||||||||||||||||||||||||||||||||
Inpatient rehabilitation |
| | | | | 183 | 183 | 183 | ||||||||||||||||||||||||||||||||
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6,580 | 6,576 | 6,563 | 6,887 | 6,889 | 8,792 | 8,780 | 8,780 | |||||||||||||||||||||||||||||||||
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Revenue mix %: |
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Medicare |
56 | 56 | 55 | 58 | 56 | 60 | 60 | 60 | 62 | 60 | ||||||||||||||||||||||||||||||
Medicaid |
9 | 9 | 9 | 9 | 9 | 8 | 8 | 8 | 7 | 8 | ||||||||||||||||||||||||||||||
Medicare Advantage |
10 | 10 | 10 | 9 | 10 | 10 | 10 | 10 | 10 | 10 | ||||||||||||||||||||||||||||||
Commercial insurance and other |
25 | 25 | 26 | 24 | 25 | 22 | 22 | 22 | 21 | 22 | ||||||||||||||||||||||||||||||
Admissions: |
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Medicare |
7,432 | 7,125 | 6,769 | 7,640 | 28,966 | 8,504 | 8,913 | 11,002 | 11,682 | 40,101 | ||||||||||||||||||||||||||||||
Medicaid |
997 | 990 | 1,022 | 1,034 | 4,043 | 1,085 | 1,163 | 1,236 | 1,163 | 4,647 | ||||||||||||||||||||||||||||||
Medicare Advantage |
1,129 | 1,106 | 936 | 1,071 | 4,242 | 1,172 | 1,348 | 1,609 | 1,549 | 5,678 | ||||||||||||||||||||||||||||||
Commercial insurance and other |
2,262 | 2,048 | 1,978 | 2,020 | 8,308 | 2,282 | 2,290 | 2,669 | 2,853 | 10,094 | ||||||||||||||||||||||||||||||
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11,820 | 11,269 | 10,705 | 11,765 | 45,559 | 13,043 | 13,714 | 16,516 | 17,247 | 60,520 | |||||||||||||||||||||||||||||||
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Admissions mix %: |
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Medicare |
63 | 63 | 63 | 65 | 64 | 65 | 65 | 67 | 68 | 66 | ||||||||||||||||||||||||||||||
Medicaid |
8 | 9 | 10 | 9 | 9 | 8 | 8 | 7 | 7 | 8 | ||||||||||||||||||||||||||||||
Medicare Advantage |
10 | 10 | 9 | 9 | 9 | 9 | 10 | 10 | 9 | 9 | ||||||||||||||||||||||||||||||
Commercial insurance and other |
19 | 18 | 18 | 17 | 18 | 18 | 17 | 16 | 16 | 17 | ||||||||||||||||||||||||||||||
Patient days: |
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Medicare |
202,882 | 195,964 | 179,324 | 198,129 | 776,299 | 219,213 | 237,257 | 275,561 | 285,358 | 1,017,389 | ||||||||||||||||||||||||||||||
Medicaid |
47,813 | 45,952 | 48,514 | 46,596 | 188,875 | 45,650 | 45,746 | 48,911 | 48,648 | 188,955 | ||||||||||||||||||||||||||||||
Medicare Advantage |
34,524 | 36,000 | 31,186 | 32,868 | 134,578 | 35,639 | 39,503 | 47,819 | 47,738 | 170,699 | ||||||||||||||||||||||||||||||
Commercial insurance and other |
75,483 | 70,651 | 70,198 | 69,585 | 285,917 | 70,522 | 72,759 | 83,375 | 84,677 | 311,333 | ||||||||||||||||||||||||||||||
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360,702 | 348,567 | 329,222 | 347,178 | 1,385,669 | 371,024 | 395,265 | 455,666 | 466,421 | 1,688,376 | |||||||||||||||||||||||||||||||
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Average length of stay: |
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Medicare |
27.3 | 27.5 | 26.5 | 25.9 | 26.8 | 25.8 | 26.6 | 25.0 | 24.4 | 25.4 | ||||||||||||||||||||||||||||||
Medicaid |
48.0 | 46.4 | 47.5 | 45.1 | 46.7 | 42.1 | 39.3 | 39.6 | 41.8 | 40.7 | ||||||||||||||||||||||||||||||
Medicare Advantage |
30.6 | 32.5 | 33.3 | 30.7 | 31.7 | 30.4 | 29.3 | 29.7 | 30.8 | 30.1 | ||||||||||||||||||||||||||||||
Commercial insurance and other |
33.4 | 34.5 | 35.5 | 34.4 | 34.4 | 30.9 | 31.8 | 31.2 | 29.7 | 30.8 | ||||||||||||||||||||||||||||||
Weighted average |
30.5 | 30.9 | 30.8 | 29.5 | 30.4 | 28.4 | 28.8 | 27.6 | 27.0 | 27.9 |
- MORE -
Kindred Healthcare Announces Fourth Quarter Results
Page 17
February 23, 2012
KINDRED HEALTHCARE, INC.
Condensed Business Segment Data (Continued)
(Unaudited)
2010 Quarters | 2011 Quarters | |||||||||||||||||||||||||||||||||||||||
First | Second | Third | Fourth | Year | First | Second | Third | Fourth | Year | |||||||||||||||||||||||||||||||
Hospital division data (continued): |
||||||||||||||||||||||||||||||||||||||||
Revenues per admission: |
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Medicare |
$ | 38,078 | $ | 38,938 | $ | 37,675 | $ | 38,368 | $ | 38,272 | $ | 39,439 | $ | 40,089 | $ | 37,408 | $ | 37,643 | $ | 38,503 | ||||||||||||||||||||
Medicaid |
45,738 | 42,774 | 42,910 | 41,704 | 43,266 | 42,432 | 41,576 | 40,720 | 44,618 | 42,309 | ||||||||||||||||||||||||||||||
Medicare Advantage |
45,187 | 46,169 | 48,122 | 44,744 | 45,979 | 46,217 | 42,708 | 43,616 | 46,154 | 44,630 | ||||||||||||||||||||||||||||||
Commercial insurance and other |
56,344 | 59,842 | 61,314 | 61,131 | 59,553 | 54,065 | 56,850 | 57,216 | 52,465 | 55,078 | ||||||||||||||||||||||||||||||
Weighted average |
42,899 | 43,784 | 43,456 | 43,150 | 43,313 | 42,856 | 43,271 | 41,462 | 41,330 | 42,135 | ||||||||||||||||||||||||||||||
Revenues per patient day: |
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Medicare |
$ | 1,395 | $ | 1,416 | $ | 1,422 | $ | 1,479 | $ | 1,428 | $ | 1,530 | $ | 1,506 | $ | 1,494 | $ | 1,541 | $ | 1,518 | ||||||||||||||||||||
Medicaid |
954 | 922 | 904 | 925 | 926 | 1,009 | 1,057 | 1,029 | 1,067 | 1,041 | ||||||||||||||||||||||||||||||
Medicare Advantage |
1,478 | 1,418 | 1,444 | 1,458 | 1,449 | 1,520 | 1,457 | 1,468 | 1,498 | 1,485 | ||||||||||||||||||||||||||||||
Commercial insurance and other |
1,688 | 1,735 | 1,728 | 1,775 | 1,730 | 1,749 | 1,789 | 1,832 | 1,768 | 1,786 | ||||||||||||||||||||||||||||||
Weighted average |
1,406 | 1,416 | 1,413 | 1,462 | 1,424 | 1,507 | 1,501 | 1,503 | 1,528 | 1,510 | ||||||||||||||||||||||||||||||
Medicare case mix index (discharged patients only) |
1.21 | 1.21 | 1.19 | 1.17 | 1.19 | 1.21 | 1.22 | 1.17 | 1.14 | 1.18 | ||||||||||||||||||||||||||||||
Average daily census |
4,008 | 3,830 | 3,579 | 3,774 | 3,796 | 4,122 | 4,344 | 4,953 | 5,070 | 4,626 | ||||||||||||||||||||||||||||||
Occupancy % |
68.2 | 66.1 | 62.0 | 64.0 | 65.1 | 68.7 | 65.5 | 62.6 | 63.5 | 64.8 | ||||||||||||||||||||||||||||||
Annualized employee turnover % |
21.8 | 22.6 | 22.3 | 22.0 | 21.2 | 22.1 | 21.4 | 20.3 | ||||||||||||||||||||||||||||||||
Nursing center division data: |
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End of period data: |
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Number of facilities: |
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Nursing and rehabilitation centers: |
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Owned or leased |
218 | 219 | 222 | 222 | 220 | 220 | 220 | 220 | ||||||||||||||||||||||||||||||||
Managed |
4 | 4 | 4 | 4 | 4 | 4 | 4 | 4 | ||||||||||||||||||||||||||||||||
Assisted living facilities |
6 | 7 | 7 | 7 | 6 | 6 | 6 | 6 | ||||||||||||||||||||||||||||||||
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228 | 230 | 233 | 233 | 230 | 230 | 230 | 230 | |||||||||||||||||||||||||||||||||
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Number of licensed beds: |
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Nursing and rehabilitation centers: |
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Owned or leased |
26,711 | 26,760 | 27,030 | 26,957 | 26,767 | 26,687 | 26,687 | 26,663 | ||||||||||||||||||||||||||||||||
Managed |
485 | 485 | 485 | 485 | 485 | 485 | 485 | 485 | ||||||||||||||||||||||||||||||||
Assisted living facilities |
327 | 463 | 463 | 463 | 413 | 413 | 413 | 413 | ||||||||||||||||||||||||||||||||
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27,523 | 27,708 | 27,978 | 27,905 | 27,665 | 27,585 | 27,585 | 27,561 | |||||||||||||||||||||||||||||||||
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Revenue mix %: |
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Medicare |
35 | 34 | 33 | 36 | 35 | 38 | 37 | 36 | 33 | 36 | ||||||||||||||||||||||||||||||
Medicaid |
41 | 41 | 41 | 39 | 40 | 37 | 38 | 38 | 40 | 38 | ||||||||||||||||||||||||||||||
Medicare Advantage |
6 | 7 | 7 | 7 | 7 | 7 | 7 | 7 | 7 | 7 | ||||||||||||||||||||||||||||||
Private and other |
18 | 18 | 19 | 18 | 18 | 18 | 18 | 19 | 20 | 19 |
- MORE -
Kindred Healthcare Announces Fourth Quarter Results
Page 18
February 23, 2012
KINDRED HEALTHCARE, INC.
Condensed Business Segment Data (Continued)
(Unaudited)
2010 Quarters | 2011 Quarters | |||||||||||||||||||||||||||||||||||||||
First | Second | Third | Fourth | Year | First | Second | Third | Fourth | Year | |||||||||||||||||||||||||||||||
Nursing center division data (continued): |
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Patient days (excludes managed facilities): |
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Medicare |
369,102 | 363,149 | 346,837 | 344,018 | 1,423,106 | 370,395 | 358,760 | 345,362 | 334,156 | 1,408,673 | ||||||||||||||||||||||||||||||
Medicaid |
1,312,517 | 1,292,246 | 1,289,643 | 1,287,739 | 5,182,145 | 1,232,620 | 1,229,517 | 1,255,418 | 1,248,442 | 4,965,997 | ||||||||||||||||||||||||||||||
Medicare Advantage |
87,692 | 92,051 | 91,643 | 94,336 | 365,722 | 97,460 | 94,483 | 95,751 | 95,730 | 383,424 | ||||||||||||||||||||||||||||||
Private and other |
397,550 | 415,921 | 437,413 | 453,357 | 1,704,241 | 425,414 | 435,667 | 436,074 | 441,362 | 1,738,517 | ||||||||||||||||||||||||||||||
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2,166,861 | 2,163,367 | 2,165,536 | 2,179,450 | 8,675,214 | 2,125,889 | 2,118,427 | 2,132,605 | 2,119,690 | 8,496,611 | |||||||||||||||||||||||||||||||
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Patient day mix %: |
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Medicare |
17 | 17 | 16 | 16 | 16 | 17 | 17 | 16 | 16 | 17 | ||||||||||||||||||||||||||||||
Medicaid |
61 | 60 | 60 | 59 | 60 | 58 | 58 | 59 | 59 | 58 | ||||||||||||||||||||||||||||||
Medicare Advantage |
4 | 4 | 4 | 4 | 4 | 5 | 4 | 5 | 4 | 5 | ||||||||||||||||||||||||||||||
Private and other |
18 | 19 | 20 | 21 | 20 | 20 | 21 | 20 | 21 | 20 | ||||||||||||||||||||||||||||||
Revenues per patient day: |
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Medicare Part A |
$ | 470 | $ | 469 | $ | 468 | $ | 534 | $ | 485 | $ | 537 | $ | 544 | $ | 550 | $ | 491 | $ | 531 | ||||||||||||||||||||
Total Medicare (including Part B) |
513 | 515 | 519 | 587 | 533 | 579 | 589 | 599 | 544 | 578 | ||||||||||||||||||||||||||||||
Medicaid |
168 | 171 | 171 | 171 | 170 | 172 | 173 | 174 | 176 | 174 | ||||||||||||||||||||||||||||||
Medicare Advantage |
398 | 400 | 405 | 432 | 409 | 416 | 420 | 421 | 405 | 415 | ||||||||||||||||||||||||||||||
Private and other |
238 | 234 | 232 | 228 | 233 | 235 | 240 | 243 | 241 | 240 | ||||||||||||||||||||||||||||||
Weighted average |
249 | 250 | 249 | 260 | 252 | 267 | 268 | 268 | 258 | 265 | ||||||||||||||||||||||||||||||
Average daily census |
24,076 | 23,773 | 23,538 | 23,690 | 23,768 | 23,621 | 23,279 | 23,180 | 23,040 | 23,278 | ||||||||||||||||||||||||||||||
Admissions (excludes managed facilities) |
19,026 | 18,924 | 19,383 | 19,118 | 76,451 | 20,619 | 20,143 | 20,118 | 19,914 | 80,794 | ||||||||||||||||||||||||||||||
Occupancy % |
89.0 | 87.3 | 86.8 | 86.4 | 87.4 | 86.9 | 85.9 | 85.5 | 85.1 | 85.9 | ||||||||||||||||||||||||||||||
Medicare average length of stay |
33.7 | 35.2 | 34.3 | 33.0 | 34.0 | 32.9 | 33.4 | 33.0 | 32.1 | 32.8 | ||||||||||||||||||||||||||||||
Annualized employee turnover % |
36.7 | 38.8 | 39.8 | 39.6 | 37.8 | 39.8 | 40.2 | 39.2 | ||||||||||||||||||||||||||||||||
Rehabilitation division data: |
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Skilled nursing rehabilitation services: |
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Revenue mix %: |
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Company-operated |
59 | 57 | 56 | 51 | 56 | 50 | 36 | 23 | 23 | 30 | ||||||||||||||||||||||||||||||
Non-affiliated |
41 | 43 | 44 | 49 | 44 | 50 | 64 | 77 | 77 | 70 | ||||||||||||||||||||||||||||||
Sites of service (at end of period) |
554 | 568 | 595 | 635 | 641 | 1,848 | 1,835 | 1,774 | ||||||||||||||||||||||||||||||||
Revenue per site |
$ | 172,498 | $ | 171,254 | $ | 167,832 | $ | 174,896 | $ | 686,480 | $ | 178,812 | $ | 137,316 | $ | 137,643 | $ | 139,077 | $ | 592,848 | ||||||||||||||||||||
Therapist productivity % |
83.8 | 84.2 | 82.1 | 78.6 | 82.0 | 80.6 | 81.6 | 80.5 | 80.1 | 80.4 | ||||||||||||||||||||||||||||||
Hospital rehabilitation services: |
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Revenue mix %: |
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Company-operated |
96 | 96 | 95 | 95 | 95 | 94 | 54 | 29 | 32 | 42 | ||||||||||||||||||||||||||||||
Non-affiliated |
4 | 4 | 5 | 5 | 5 | 6 | 46 | 71 | 68 | 58 | ||||||||||||||||||||||||||||||
Sites of service (at end of period): |
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Inpatient rehabilitation units |
| | | 1 | 1 | 104 | 102 | 102 | ||||||||||||||||||||||||||||||||
LTAC hospitals |
85 | 85 | 85 | 91 | 93 | 97 | 99 | 115 | ||||||||||||||||||||||||||||||||
Sub-acute units |
7 | 7 | 7 | 7 | 8 | 22 | 23 | 25 | ||||||||||||||||||||||||||||||||
Outpatient units |
10 | 11 | 11 | 12 | 12 | 119 | 114 | 115 | ||||||||||||||||||||||||||||||||
Other |
2 | 2 | 4 | 4 | 5 | 8 | 7 | 8 | ||||||||||||||||||||||||||||||||
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104 | 105 | 107 | 115 | 119 | 350 | 345 | 365 | |||||||||||||||||||||||||||||||||
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Revenue per site |
$ | 203,337 | $ | 199,174 | $ | 190,986 | $ | 184,193 | $ | 777,690 | $ | 188,989 | $ | 199,661 | $ | 202,352 | $ | 192,410 | $ | 783,412 | ||||||||||||||||||||
Annualized employee turnover % |
12.6 | 14.2 | 15.4 | 14.4 | 14.5 | 17.1 | 16.5 | 16.5 |
- MORE -
Kindred Healthcare Announces Fourth Quarter Results
Page 19
February 23, 2012
KINDRED HEALTHCARE, INC.
Earnings (Loss) Per Common Share Reconciliation (a)
(In thousands, except per share amounts)
Three months ended December 31, | Year ended December 31, | |||||||||||||||||||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||||||||||||||||||
Basic | Diluted | Basic | Diluted | Basic | Diluted | Basic | Diluted | |||||||||||||||||||||||||
Earnings (loss): |
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Amounts attributable to Kindred stockholders: |
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Income (loss) from continuing operations: |
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As reported in Statement of Operations |
$ | (72,856 | ) | $ | (72,856 | ) | $ | 19,755 | $ | 19,755 | $ | (56,033 | ) | $ | (56,033 | ) | $ | 56,146 | $ | 56,146 | ||||||||||||
Allocation to participating unvested restricted stockholders |
| | (347 | ) | (344 | ) | | | (1,015 | ) | (1,009 | ) | ||||||||||||||||||||
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Available to common stockholders |
$ | (72,856 | ) | $ | (72,856 | ) | $ | 19,408 | $ | 19,411 | $ | (56,033 | ) | $ | (56,033 | ) | $ | 55,131 | $ | 55,137 | ||||||||||||
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Discontinued operations, net of income taxes: |
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Income from operations: |
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As reported in Statement of Operations |
$ | 1,025 | $ | 1,025 | $ | 1,125 | $ | 1,125 | $ | 2,552 | $ | 2,552 | $ | 798 | $ | 798 | ||||||||||||||||
Allocation to participating unvested restricted stockholders |
| | (20 | ) | (20 | ) | | | (14 | ) | (14 | ) | ||||||||||||||||||||
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Available to common stockholders |
$ | 1,025 | $ | 1,025 | $ | 1,105 | $ | 1,105 | $ | 2,552 | $ | 2,552 | $ | 784 | $ | 784 | ||||||||||||||||
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Loss on divestiture of operations: |
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As reported in Statement of Operations |
$ | | $ | | $ | (456 | ) | $ | (456 | ) | $ | | $ | | $ | (453 | ) | $ | (453 | ) | ||||||||||||
Allocation to participating unvested restricted stockholders |
| | 8 | 8 | | | 8 | 8 | ||||||||||||||||||||||||
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Available to common stockholders |
$ | | $ | | $ | (448 | ) | $ | (448 | ) | $ | | $ | | $ | (445 | ) | $ | (445 | ) | ||||||||||||
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Net income (loss): |
||||||||||||||||||||||||||||||||
As reported in Statement of Operations |
$ | (71,831 | ) | $ | (71,831 | ) | $ | 20,424 | $ | 20,424 | $ | (53,481 | ) | $ | (53,481 | ) | $ | 56,491 | $ | 56,491 | ||||||||||||
Allocation to participating unvested restricted stockholders |
| | (359 | ) | (356 | ) | | | (1,021 | ) | (1,015 | ) | ||||||||||||||||||||
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Available to common stockholders |
$ | (71,831 | ) | $ | (71,831 | ) | $ | 20,065 | $ | 20,068 | $ | (53,481 | ) | $ | (53,481 | ) | $ | 55,470 | $ | 55,476 | ||||||||||||
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Shares used in the computation: |
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Weighted average shares outstandingbasic computation |
51,335 | 51,335 | 38,790 | 38,790 | 46,280 | 46,280 | 38,738 | 38,738 | ||||||||||||||||||||||||
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Dilutive effect of employee stock options |
| 137 | | 135 | ||||||||||||||||||||||||||||
Dilutive effect of performance-based restricted shares |
| 162 | | 81 | ||||||||||||||||||||||||||||
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Adjusted weighted average shares outstandingdiluted computation |
51,335 | 39,089 | 46,280 | 38,954 | ||||||||||||||||||||||||||||
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Earnings (loss) per common share: |
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Income (loss) from continuing operations |
$ | (1.42 | ) | $ | (1.42 | ) | $ | 0.50 | $ | 0.50 | $ | (1.21 | ) | $ | (1.21 | ) | $ | 1.42 | $ | 1.42 | ||||||||||||
Discontinued operations: |
||||||||||||||||||||||||||||||||
Income from operations |
0.02 | 0.02 | 0.03 | 0.03 | 0.05 | 0.05 | 0.02 | 0.02 | ||||||||||||||||||||||||
Loss on divestiture of operations |
| | (0.01 | ) | (0.01 | ) | | | (0.01 | ) | (0.01 | ) | ||||||||||||||||||||
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Net income (loss) |
$ | (1.40 | ) | $ | (1.40 | ) | $ | 0.52 | $ | 0.52 | $ | (1.16 | ) | $ | (1.16 | ) | $ | 1.43 | $ | 1.43 | ||||||||||||
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(a) | Earnings (loss) per common share are based upon the weighted average number of common shares outstanding during the respective periods. The diluted calculation of earnings (loss) per common share includes the dilutive effect of stock options. The Company follows the provisions of the authoritative guidance for determining whether instruments granted in share-based payment transactions are participating securities, which requires that certain unvested restricted stock be included as a participating security in the basic and diluted earnings (loss) per common share calculation pursuant to the two-class method. |
- MORE -
Kindred Healthcare Announces Fourth Quarter Results
Page 20
February 23, 2012
KINDRED HEALTHCARE, INC.
Reconciliation of Non-GAAP Measurements to GAAP Results
(Unaudited)
(In thousands, except per share amounts and statistics)
In addition to the results provided in accordance with GAAP, the Company has provided a non-GAAP measurement which presents operating results for the fourth quarters and years ended December 31, 2011 and 2010 before certain charges or on a core basis. The charges that were excluded from core operating results for the fourth quarter ended December 31, 2011 relate to transaction, severance, lease cancellation, loss on hospital divestiture and impairment charges. The charges that were excluded from core operating results for the year ended December 31, 2011 relate to transaction, financing, severance, lease cancellation, loss on hospital divestiture and impairment charges. The charges that were excluded from core operating results for the fourth quarter ended December 31, 2010 relate to transaction costs. The charges that are excluded from core operations results for the year ended December 31, 2010 relate to transaction, severance and retirement costs.
The income tax benefit associated with the excluded charges was calculated using an effective income tax rate of 21.9% and 28.4% for the fourth quarter and year ended December 31, 2011, respectively, and an effective income tax rate of 25.3% and 34.7% for the fourth quarter and year ended December 31, 2010, respectively. Certain of the excluded charges for the fourth quarter and year ended December 31, 2011 are not deductible for income tax purposes thus resulting in a lower effective income tax rate than the comparable prior year periods.
This non-GAAP measurement is not intended to replace the presentation of the Company's financial results in accordance with GAAP. The Company believes that the presentation of core operating results provides additional information to investors to facilitate the comparison between periods by excluding certain charges for the fourth quarter and year ended December 31, 2011 and 2010 that the Company believes are not representative of its ongoing operations due to the materiality and nature of the charges. The Company's core operating results also represent a key performance measure for the purposes of evaluating performance internally.
Three months ended December 31, |
Year
ended December 31, |
|||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Detail of charges excluded from core operating results: |
||||||||||||||||
Transaction costs |
($ | 4,492 | ) | ($ | 2,148 | ) | ($ | 33,937 | ) | ($ | 4,644 | ) | ||||
Financing costs (in connection with the RehabCare acquisition) |
| | (13,802 | ) | | |||||||||||
Severance and retirement costs (in connection with the RehabCare acquisition for 2011 periods) |
(647 | ) | | (16,769 | ) | (2,906 | ) | |||||||||
Lease cancellation charge (in connection with the RehabCare acquisition) |
(1,819 | ) | | (1,819 | ) | | ||||||||||
Loss on hospital divestiture |
(1,490 | ) | | (1,490 | ) | | ||||||||||
Impairment charges |
(102,569 | ) | | (129,281 | ) | | ||||||||||
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(111,017 | ) | (2,148 | ) | (197,098 | ) | (7,550 | ) | |||||||||
Income tax benefit |
24,313 | 543 | 56,021 | 2,623 | ||||||||||||
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Charges net of income taxes |
(86,704 | ) | (1,605 | ) | (141,077 | ) | (4,927 | ) | ||||||||
Allocation to participating unvested restricted stockholders |
| 28 | | 89 | ||||||||||||
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Available to common stockholders |
($ | 86,704 | ) | ($ | 1,577 | ) | ($ | 141,077 | ) | ($ | 4,838 | ) | ||||
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Weighted average diluted shares outstanding |
51,335 | 39,089 | 46,280 | 38,954 | ||||||||||||
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Diluted loss per common share related to charges |
($ | 1.69 | ) | ($ | 0.04 | ) | ($ | 3.05 | ) | ($ | 0.12 | ) | ||||
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Reconciliation of adjusted operating income before charges: |
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Operating income before charges |
$ | 200,177 | $ | 159,763 | $ | 762,841 | $ | 582,173 | ||||||||
Detail of charges excluded from core operating results: |
||||||||||||||||
Transaction costs |
(4,492 | ) | (2,148 | ) | (33,937 | ) | (4,644 | ) | ||||||||
Severance and retirement costs |
(647 | ) | | (16,769 | ) | (2,906 | ) | |||||||||
Loss on hospital divestiture |
(1,490 | ) | | (1,490 | ) | | ||||||||||
Impairment charges |
(102,569 | ) | | (129,281 | ) | | ||||||||||
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(109,198 | ) | (2,148 | ) | (181,477 | ) | (7,550 | ) | |||||||||
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Reported operating income |
$ | 90,979 | $ | 157,615 | $ | 581,364 | $ | 574,623 | ||||||||
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Reconciliation of adjusted income from continuing operations before charges: |
||||||||||||||||
Amounts attributable to Kindred stockholders: |
||||||||||||||||
Income from continuing operations before charges |
$ | 13,848 | $ | 21,360 | $ | 85,044 | $ | 61,073 | ||||||||
Charges net of income taxes |
(86,704 | ) | (1,605 | ) | (141,077 | ) | (4,927 | ) | ||||||||
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Reported income (loss) from continuing operations |
($ | 72,856 | ) | $ | 19,755 | ($ | 56,033 | ) | $ | 56,146 | ||||||
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Reconciliation of diluted income per common share from continuing operations before charges: |
||||||||||||||||
Diluted income per common share before charges (a) |
$ | 0.27 | $ | 0.54 | $ | 1.80 | $ | 1.54 | ||||||||
Charges net of income taxes as computed above |
(1.69 | ) | (0.04 | ) | (3.05 | ) | (0.12 | ) | ||||||||
Other |
| | 0.04 | | ||||||||||||
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Reported diluted income (loss) per common share from continuing operations |
($ | 1.42 | ) | $ | 0.50 | ($ | 1.21 | ) | $ | 1.42 | ||||||
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Weighted average diluted shares used to compute diluted income (loss) per common share from continuing operations before charges |
51,371 | 39,089 | 46,587 | 38,954 | ||||||||||||
Reconciliation of effective income tax rate before charges: |
||||||||||||||||
Effective income tax rate before charges |
34.8 | % | 39.1 | % | 36.6 | % | 37.3 | % | ||||||||
Impact of charges on effective income tax rate |
-15.9 | % | 0.9 | % | -25.4 | % | 0.2 | % | ||||||||
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Reported effective income tax rate |
18.9 | % | 40.0 | % | 11.2 | % | 37.5 | % | ||||||||
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(a) | For purposes of computing diluted earnings per common share before charges, income from continuing operations before charges was reduced by $0.2 million and $0.4 million for the fourth quarters ended December 31, 2011 and 2010, respectively, and $1.4 million and $1.1 million for the years ended December 31, 2011 and 2010, respectively, for the allocation of income to participating unvested restricted stockholders. |
- MORE -
Kindred Healthcare Announces Fourth Quarter Results
Page 21
February 23, 2012
KINDRED HEALTHCARE, INC.
Reconciliation of Non-GAAP Measurements to GAAP Results (Continued)
(Unaudited)
(In thousands)
In addition to the results provided in accordance with GAAP, the Company has provided a non-GAAP measurement which presents operating cash flows for the fourth quarters and years ended December 31, 2011 and 2010 excluding certain payments, net of income tax benefit, or on an adjusted basis. The payments that were excluded from adjusted operating cash flows for the fourth quarter ended December 31, 2011 relate to transaction and severance costs, net of income tax benefit. The payments that were excluded from adjusted operating cash flows for the year ended December 31, 2011 relate to financing, transaction and severance costs, net of income tax benefit. The payments that were excluded from operating cash flows for the fourth quarter ended December 31, 2010 relate to transaction costs, net of income tax benefit. The payments that are excluded from adjusted operating cash flows for the year ended December 31, 2010 relate to transaction, severance and retirement costs, net of income tax benefit.
The income tax benefit associated with the excluded payments was calculated using an effective income tax rate of 38.3% and 30.1% for the fourth quarter and year ended December 31, 2011, respectively, and an effective income tax rate of 25.3% and 34.7% for the fourth quarter and year ended December 31, 2010, respectively. Certain of the excluded payments for the fourth quarters and years ended December 31, 2011 and 2010 are not deductible for income tax purposes resulting in variances in the effective income tax rate compared to prior year periods.
This non-GAAP measurement is not intended to replace the presentation of the Company's operating cash flows in accordance with GAAP. The Company believes that the presentation of adjusted operating cash flows provides additional information to investors to facilitate the comparison between periods by excluding certain payments for the fourth quarters and years ended December 31, 2011 and 2010 that the Company believes are not representative of its ongoing operations due to the materiality and nature of the payments. The Company's adjusted operating cash flows also represent a key cash flow measure for the purposes of evaluating cash flows internally.
Three months ended December 31, |
Year
ended December 31, |
|||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Reconciliation of net cash flows provided by operating activities to adjusted operating cash flows: |
||||||||||||||||
Net cash provided by operating activities |
$ | 35,900 | $ | 59,133 | $ | 153,706 | $ | 209,988 | ||||||||
Adjustments to remove certain payments: |
||||||||||||||||
Financing costs: |
||||||||||||||||
Capitalized as deferred financing costs |
| | 46,232 | | ||||||||||||
Charged to interest expense |
| | 13,074 | | ||||||||||||
Transaction costs |
4,369 | 2,111 | 33,827 | 3,821 | ||||||||||||
Severance and retirement costs |
1,038 | | 11,303 | 2,689 | ||||||||||||
Benefit of reduced income tax payments resulting from financing, transaction, severance and retirement costs |
(2,656 | ) | (543 | ) | (20,502 | ) | (2,623 | ) | ||||||||
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2,751 | 1,568 | 83,934 | 3,887 | |||||||||||||
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Adjusted operating cash flows |
$ | 38,651 | $ | 60,701 | $ | 237,640 | $ | 213,875 | ||||||||
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- MORE -
Kindred Healthcare Announces Fourth Quarter Results
Page 22
February 23, 2012
KINDRED HEALTHCARE, INC.
Reconciliation of Earnings Guidance for 2012Continuing Operations
(Unaudited)
(In millions, except per share amounts)
As of February 23, 2012 | As of November 2, 2011 | |||||||||||||||
Low | High | Low | High | |||||||||||||
Operating income |
$ | 868 | $ | 884 | $ | 911 | $ | 928 | ||||||||
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Rent |
434 | 434 | 445 | 445 | ||||||||||||
Depreciation and amortization |
197 | 197 | 200 | 200 | ||||||||||||
Interest, net |
107 | 107 | 110 | 110 | ||||||||||||
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Income from continuing operations before income taxes |
130 | 146 | 156 | 173 | ||||||||||||
Provision for income taxes |
54 | 60 | 63 | 69 | ||||||||||||
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Income from continuing operations |
76 | 86 | 93 | 104 | ||||||||||||
Earnings attributable to noncontrolling interests |
(3 | ) | (3 | ) | (4 | ) | (4 | ) | ||||||||
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Income from continuing operations attributable to the Company |
73 | 83 | 89 | 100 | ||||||||||||
Allocation to participating unvested restricted stockholders |
(2 | ) | (2 | ) | (2 | ) | (2 | ) | ||||||||
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Available to common stockholders |
$ | 71 | $ | 81 | $ | 87 | $ | 98 | ||||||||
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Earnings per diluted share |
$ | 1.35 | $ | 1.55 | $ | 1.65 | $ | 1.85 | ||||||||
Shares used in computing earnings per diluted share |
52.5 | 52.5 | 53.0 | 53.0 |
(a) | The Company's earnings guidance excludes the effect of (i) any transaction-related charges, (ii) any other reimbursement changes, (iii) any acquisitions or divestitures, (iv) any impairment charges, or (v) any repurchases of common stock. |
- END-