Kindred Healthcare, Inc. (the “Company”) (NYSE:KND) today announced revised earnings guidance for the year ended December 31, 2013 as a result of certain Medicare reimbursement changes included in the recently enacted American Taxpayer Relief Act of 2012.
The Company expects consolidated revenues for 2013 will approximate $5.9 billion. Operating income, or earnings before interest, income taxes, depreciation, amortization and rent, is expected to range from $794 million to $810 million. Rent expense is expected to approximate $387 million, while depreciation and amortization should approximate $189 million. Net interest expense is expected to approximate $113 million. The Company expects to report income from continuing operations for 2013 between $60 million and $70 million or $1.10 to $1.30 per diluted share (based upon diluted shares of 52.7 million). The Company’s previous earnings guidance for 2013 ranged from $1.20 to $1.40 per diluted share.
The Company re-affirmed its operating cash flow guidance for 2013 at a range between $230 million and $250 million. Estimated routine capital expenditures for 2013 are expected to range from $120 million to $130 million, unchanged from previous guidance. In addition to its routine capital expenditures, the Company re-affirmed that its development of new or replacement transitional care hospitals, transitional care centers, and inpatient rehabilitation hospitals will approximate $20 million to $30 million in 2013. Operating cash flows in excess of the Company’s routine and development capital spending programs, which are expected to remain at approximately $90 million for 2013, will be available to repay debt and fund acquisitions.
The Company’s earnings guidance for 2013 assumes that sequestration cuts of 2% related to all of its Medicare revenues will begin on April 1, 2013 and that the previously announced exit in 2013 from 54 skilled nursing facilities currently leased from Ventas, Inc. (“Ventas”) (NYSE:VTR) will be reflected as discontinued operations effective January 1, 2013. The earnings guidance also excludes the effect of any other reimbursement changes, any future acquisitions or dispositions, any impairment charges, and any repurchases of common stock.