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Kindred Healthcare Announces Fourth Quarter Results

Kindred Healthcare, Inc. (“Kindred” or the “Company”) (NYSE:KND) today announced its operating results for the fourth quarter and year ended December 31, 2012. The Company’s consolidated financial statements include the operating results of RehabCare Group, Inc. (“RehabCare”) since the closing of the acquisition on June 1, 2011. All financial and statistical information included in this press release reflects the continuing operations of the Company’s businesses for all periods presented unless otherwise indicated.

Operating and Financial Highlights:

  • Fourth quarter consolidated revenues grew 2%
    • Hospital and home health combined for revenue gains of 6% compared to last year
  • Hospital division posted solid fourth quarter results
    • Fourth quarter revenues grew 3% and operating income rose 8%
    • While overall admissions were soft, same-store non-government admissions rose 2% compared to last year
  • RehabCare division fourth quarter revenues grew 1% while operating income climbed 53%
    • Operating results were bolstered by 27% growth in hospital-based rehabilitation services as well as strong cash collections and a related $8 million bad debt benefit
    • New Medicare Part B therapy caps reduced skilled rehabilitation therapy operating income by approximately $6 million in the quarter
  • Fourth quarter home health and hospice division revenues and operating income nearly doubled from last year
    • Annualized revenues reach $200 million
    • Home health and hospice operations now reside in 12 of 21 Kindred integrated care markets
  • Company posted strong full-year cash flows in 2012
    • Operating cash flows less routine and development capital spending totaled $97 million
  • Company maintains strong financial position entering 2013
    • Cash flows in excess of routine and development capital spending in 2013 should approximate $90 million
    • Available credit capacity approximated $420 million at December 31, 2012

Fourth Quarter Results

Continuing Operations

Consolidated revenues for the fourth quarter ended December 31, 2012 increased 2% to $1.55 billion compared to $1.52 billion in the same period in 2011. The Company reported a loss from continuing operations for the fourth quarter of 2012 of $80.7 million or $1.56 per diluted share compared to a loss of $65.5 million or $1.28 per diluted share in the fourth quarter of 2011. Operating results for the fourth quarter of 2012 included (a) an asset impairment charge, (b) severance and restructuring costs, (c) transaction-related costs and (d) employee retention costs associated with the upcoming disposal of 54 nursing centers leased from Ventas, Inc. (“Ventas”) (NYSE:VTR) that reduced income from continuing operations by $105.3 million or $2.04 per diluted share. 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 $79.9 million or $1.56 per diluted share.

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