UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2016
OR
¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to .
Commission file number: 001-14057
KINDRED HEALTHCARE, INC.
(Exact name of registrant as specified in its charter)
|
Delaware |
|
61-1323993 |
|
(State or other jurisdiction of incorporation or organization) |
|
(I.R.S. Employer Identification No.) |
|
680 South Fourth Street Louisville, KY |
|
40202 |
|
(Address of principal executive offices) |
|
(Zip Code) |
(502) 596-7300
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
|
Large accelerated filer |
|
x |
|
Accelerated filer |
|
¨ |
|
Non-accelerated filer |
|
¨ |
|
Smaller reporting company |
|
¨ |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
|
Class of Common Stock |
|
Outstanding at July 31, 2016 |
|
Common stock, $0.25 par value |
|
85,253,198 shares |
1 of 83
FORM 10-Q
INDEX
|
|
|
Page |
|
PART I. FINANCIAL INFORMATION |
|
|
|
Item 1. |
Financial Statements (Unaudited): |
|
|
|
3 |
|
|
|
4 |
|
|
|
Condensed Consolidated Balance Sheet –June 30, 2016 and December 31, 2015 |
5 |
|
|
6 |
|
|
|
7 |
|
|
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
46 |
|
Item 3. |
79 |
|
|
Item 4. |
80 |
|
|
PART II. OTHER INFORMATION |
|
|
|
Item 1. |
81 |
|
|
Item 2. |
81 |
|
|
Item 6. |
82 |
|
2
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
(In thousands, except per share amounts)
|
|
Three months ended |
|
|
Six months ended |
|
||||||||||
|
|
June 30, |
|
|
June 30, |
|
||||||||||
|
|
2016 |
|
|
2015 |
|
|
2016 |
|
|
2015 |
|
||||
|
Revenues |
$ |
1,842,070 |
|
|
$ |
1,833,475 |
|
|
$ |
3,680,041 |
|
|
$ |
3,509,442 |
|
|
Salaries, wages and benefits |
|
928,954 |
|
|
|
935,687 |
|
|
|
1,855,168 |
|
|
|
1,782,780 |
|
|
Supplies |
|
99,410 |
|
|
|
98,237 |
|
|
|
198,826 |
|
|
|
191,508 |
|
|
Rent |
|
100,555 |
|
|
|
96,402 |
|
|
|
198,323 |
|
|
|
188,542 |
|
|
Other operating expenses |
|
217,850 |
|
|
|
212,117 |
|
|
|
432,551 |
|
|
|
409,844 |
|
|
General and administrative expenses (exclusive of depreciation and amortization expense included below) |
|
338,672 |
|
|
|
334,805 |
|
|
|
694,199 |
|
|
|
740,907 |
|
|
Other income |
|
(511 |
) |
|
|
(569 |
) |
|
|
(1,463 |
) |
|
|
(1,049 |
) |
|
Litigation contingency expense |
|
930 |
|
|
|
3,925 |
|
|
|
2,840 |
|
|
|
98,925 |
|
|
Impairment charges |
|
6,131 |
|
|
|
- |
|
|
|
13,919 |
|
|
|
6,726 |
|
|
Depreciation and amortization |
|
40,257 |
|
|
|
38,625 |
|
|
|
80,938 |
|
|
|
77,560 |
|
|
Interest expense |
|
58,056 |
|
|
|
57,170 |
|
|
|
115,555 |
|
|
|
119,688 |
|
|
Investment income |
|
(497 |
) |
|
|
(1,030 |
) |
|
|
(751 |
) |
|
|
(1,771 |
) |
|
|
|
1,789,807 |
|
|
|
1,775,369 |
|
|
|
3,590,105 |
|
|
|
3,613,660 |
|
|
Income (loss) from continuing operations before income taxes |
|
52,263 |
|
|
|
58,106 |
|
|
|
89,936 |
|
|
|
(104,218 |
) |
|
Provision (benefit) for income taxes |
|
17,882 |
|
|
|
24,396 |
|
|
|
29,718 |
|
|
|
(3,340 |
) |
|
Income (loss) from continuing operations |
|
34,381 |
|
|
|
33,710 |
|
|
|
60,218 |
|
|
|
(100,878 |
) |
|
Discontinued operations, net of income taxes: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from operations |
|
3,016 |
|
|
|
(589 |
) |
|
|
2,434 |
|
|
|
(4,013 |
) |
|
Gain (loss) on divestiture of operations |
|
(83 |
) |
|
|
983 |
|
|
|
179 |
|
|
|
983 |
|
|
Income (loss) from discontinued operations |
|
2,933 |
|
|
|
394 |
|
|
|
2,613 |
|
|
|
(3,030 |
) |
|
Net income (loss) |
|
37,314 |
|
|
|
34,104 |
|
|
|
62,831 |
|
|
|
(103,908 |
) |
|
(Earnings) loss attributable to noncontrolling interests: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
|
(13,522 |
) |
|
|
(11,735 |
) |
|
|
(26,036 |
) |
|
|
(20,582 |
) |
|
Discontinued operations |
|
(3 |
) |
|
|
2 |
|
|
|
(5 |
) |
|
|
31 |
|
|
|
|
(13,525 |
) |
|
|
(11,733 |
) |
|
|
(26,041 |
) |
|
|
(20,551 |
) |
|
Income (loss) attributable to Kindred |
$ |
23,789 |
|
|
$ |
22,371 |
|
|
$ |
36,790 |
|
|
$ |
(124,459 |
) |
|
Amounts attributable to Kindred stockholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations |
$ |
20,859 |
|
|
$ |
21,975 |
|
|
$ |
34,182 |
|
|
$ |
(121,460 |
) |
|
Income (loss) from discontinued operations |
|
2,930 |
|
|
|
396 |
|
|
|
2,608 |
|
|
|
(2,999 |
) |
|
Net income (loss) |
$ |
23,789 |
|
|
$ |
22,371 |
|
|
$ |
36,790 |
|
|
$ |
(124,459 |
) |
|
Earnings (loss) per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations |
$ |
0.24 |
|
|
$ |
0.25 |
|
|
$ |
0.39 |
|
|
$ |
(1.47 |
) |
|
Discontinued operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from operations |
|
0.03 |
|
|
|
(0.01 |
) |
|
|
0.03 |
|
|
|
(0.05 |
) |
|
Gain (loss) on divestiture of operations |
|
- |
|
|
|
0.01 |
|
|
|
- |
|
|
|
0.01 |
|
|
Income (loss) from discontinued operations |
|
0.03 |
|
|
|
- |
|
|
|
0.03 |
|
|
|
(0.04 |
) |
|
Net income (loss) |
$ |
0.27 |
|
|
$ |
0.25 |
|
|
$ |
0.42 |
|
|
$ |
(1.51 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations |
$ |
0.23 |
|
|
$ |
0.25 |
|
|
$ |
0.38 |
|
|
$ |
(1.47 |
) |
|
Discontinued operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from operations |
|
0.03 |
|
|
|
(0.01 |
) |
|
|
0.03 |
|
|
|
(0.05 |
) |
|
Gain (loss) on divestiture of operations |
|
- |
|
|
|
0.01 |
|
|
|
- |
|
|
|
0.01 |
|
|
Income (loss) from discontinued operations |
|
0.03 |
|
|
|
- |
|
|
|
0.03 |
|
|
|
(0.04 |
) |
|
Net income (loss) |
$ |
0.26 |
|
|
$ |
0.25 |
|
|
$ |
0.41 |
|
|
$ |
(1.51 |
) |
|
Shares used in computing earnings (loss) per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
86,836 |
|
|
|
86,045 |
|
|
|
86,713 |
|
|
|
82,828 |
|
|
Diluted |
|
87,500 |
|
|
|
86,402 |
|
|
|
87,374 |
|
|
|
82,828 |
|
|
Cash dividends declared and paid per common share |
$ |
0.12 |
|
|
$ |
0.12 |
|
|
$ |
0.24 |
|
|
$ |
0.24 |
|
See accompanying notes.
3
KINDRED HEALTHCARE, INC.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)
(In thousands)
|
|
Three months ended |
|
|
Six months ended |
|
||||||||||
|
|
June 30, |
|
|
June 30, |
|
||||||||||
|
|
2016 |
|
|
2015 |
|
|
2016 |
|
|
2015 |
|
||||
|
Net income (loss) |
$ |
37,314 |
|
|
$ |
34,104 |
|
|
$ |
62,831 |
|
|
$ |
(103,908 |
) |
|
Other comprehensive income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available-for-sale securities (Note 9): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in unrealized investment gains (losses) |
|
573 |
|
|
|
(144 |
) |
|
|
1,183 |
|
|
|
137 |
|
|
Reclassification of (gains) losses realized in net income (loss) |
|
(4 |
) |
|
|
5 |
|
|
|
131 |
|
|
|
- |
|
|
Net change |
|
569 |
|
|
|
(139 |
) |
|
|
1,314 |
|
|
|
137 |
|
|
Interest rate swaps (Note 1): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in unrealized gains (losses) |
|
313 |
|
|
|
728 |
|
|
|
(5,783 |
) |
|
|
(1,264 |
) |
|
Reclassification of ineffectiveness realized in net income (loss) |
|
- |
|
|
|
32 |
|
|
|
- |
|
|
|
29 |
|
|
Reclassification of (gains) losses realized in net income (loss), net of payments |
|
2 |
|
|
|
12 |
|
|
|
393 |
|
|
|
(12 |
) |
|
Net change |
|
315 |
|
|
|
772 |
|
|
|
(5,390 |
) |
|
|
(1,247 |
) |
|
Income tax expense (benefit) related to items of other comprehensive income (loss) |
|
(322 |
) |
|
|
(237 |
) |
|
|
1,816 |
|
|
|
450 |
|
|
Other comprehensive income (loss) |
|
562 |
|
|
|
396 |
|
|
|
(2,260 |
) |
|
|
(660 |
) |
|
Comprehensive income (loss) |
|
37,876 |
|
|
|
34,500 |
|
|
|
60,571 |
|
|
|
(104,568 |
) |
|
Earnings attributable to noncontrolling interests |
|
(13,525 |
) |
|
|
(11,733 |
) |
|
|
(26,041 |
) |
|
|
(20,551 |
) |
|
Comprehensive income (loss) attributable to Kindred |
$ |
24,351 |
|
|
$ |
22,767 |
|
|
$ |
34,530 |
|
|
$ |
(125,119 |
) |
See accompanying notes.
4
KINDRED HEALTHCARE, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
(In thousands, except per share amounts)
|
|
June 30, |
|
|
December 31, |
|
||
|
|
2016 |
|
|
2015 |
|
||
|
ASSETS |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
100,056 |
|
|
$ |
98,758 |
|
|
Insurance subsidiary investments |
|
96,330 |
|
|
|
106,638 |
|
|
Accounts receivable less allowance for loss of $64,851 ─ June 30, 2016 and $62,896 ─ December 31, 2015 |
|
1,264,540 |
|
|
|
1,194,868 |
|
|
Inventories |
|
28,178 |
|
|
|
27,791 |
|
|
Income taxes |
|
11,223 |
|
|
|
11,790 |
|
|
Other |
|
70,384 |
|
|
|
61,054 |
|
|
|
|
1,570,711 |
|
|
|
1,500,899 |
|
|
|
|
|
|
|
|
|
|
|
Property and equipment |
|
2,165,547 |
|
|
|
2,162,398 |
|
|
Accumulated depreciation |
|
(1,226,072 |
) |
|
|
(1,190,402 |
) |
|
|
|
939,475 |
|
|
|
971,996 |
|
|
|
|
|
|
|
|
|
|
|
Goodwill |
|
2,690,202 |
|
|
|
2,669,810 |
|
|
Intangible assets less accumulated amortization of $107,784 ─ June 30, 2016 and $94,221 ─ December 31, 2015 |
|
781,203 |
|
|
|
755,655 |
|
|
Assets held for sale |
|
4,459 |
|
|
|
613 |
|
|
Insurance subsidiary investments |
|
199,075 |
|
|
|
204,498 |
|
|
Deferred tax assets |
|
81,324 |
|
|
|
104,130 |
|
|
Acquisition deposit |
|
- |
|
|
|
18,489 |
|
|
Other |
|
281,073 |
|
|
|
242,169 |
|
|
Total assets (a) |
$ |
6,547,522 |
|
|
$ |
6,468,259 |
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
$ |
196,952 |
|
|
$ |
187,061 |
|
|
Salaries, wages and other compensation |
|
419,251 |
|
|
|
404,925 |
|
|
Due to third party payors |
|
33,136 |
|
|
|
36,251 |
|
|
Professional liability risks |
|
60,367 |
|
|
|
64,099 |
|
|
Other accrued liabilities |
|
271,972 |
|
|
|
394,246 |
|
|
Long-term debt due within one year |
|
27,793 |
|
|
|
24,630 |
|
|
|
|
1,009,471 |
|
|
|
1,111,212 |
|
|
|
|
|
|
|
|
|
|
|
Long-term debt |
|
3,218,679 |
|
|
|
3,086,348 |
|
|
Professional liability risks |
|
277,844 |
|
|
|
263,273 |
|
|
Deferred credits and other liabilities |
|
312,001 |
|
|
|
301,379 |
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies (Note 11) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity: |
|
|
|
|
|
|
|
|
Stockholder's equity: |
|
|
|
|
|
|
|
|
Common stock, $0.25 par value; authorized 175,000 shares; issued 85,266 shares ─ June 30, 2016 and 83,792 shares ─ December 31, 2015 |
|
21,317 |
|
|
|
20,948 |
|
|
Capital in excess of par value |
|
1,724,018 |
|
|
|
1,737,747 |
|
|
Accumulated other comprehensive loss |
|
(4,892 |
) |
|
|
(2,632 |
) |
|
Accumulated deficit |
|
(219,514 |
) |
|
|
(256,209 |
) |
|
|
|
1,520,929 |
|
|
|
1,499,854 |
|
|
Noncontrolling interests |
|
208,598 |
|
|
|
206,193 |
|
|
Total equity |
|
1,729,527 |
|
|
|
1,706,047 |
|
|
Total liabilities (a) and equity |
$ |
6,547,522 |
|
|
$ |
6,468,259 |
|
|
(a) |
The Company’s consolidated assets as of June 30, 2016 and December 31, 2015 include total assets of variable interest entities of $401.1 million and $389.0 million, respectively, which can only be used to settle the obligations of the variable interest entities. The Company’s consolidated liabilities as of June 30, 2016 and December 31, 2015 include total liabilities of variable interest entities of $46.5 million and $39.7 million, respectively. See note 1 of the notes to unaudited condensed consolidated financial statements. |
See accompanying notes.
5
KINDRED HEALTHCARE, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
(In thousands)
|
|
Three months ended |
|
|
Six months ended |
|
||||||||||
|
|
June 30, |
|
|
June 30, |
|
||||||||||
|
|
2016 |
|
|
2015 |
|
|
2016 |
|
|
2015 |
|
||||
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
$ |
37,314 |
|
|
$ |
34,104 |
|
|
$ |
62,831 |
|
|
$ |
(103,908 |
) |
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation expense |
|
34,435 |
|
|
|
31,313 |
|
|
|
68,392 |
|
|
|
63,458 |
|
|
Amortization of intangible assets |
|
5,957 |
|
|
|
7,536 |
|
|
|
12,783 |
|
|
|
14,468 |
|
|
Amortization of stock-based compensation costs |
|
5,639 |
|
|
|
6,746 |
|
|
|
10,043 |
|
|
|
12,570 |
|
|
Amortization of deferred financing costs |
|
3,708 |
|
|
|
3,539 |
|
|
|
7,275 |
|
|
|
6,601 |
|
|
Payment of capitalized lender fees related to debt issuance |
|
(7,333 |
) |
|
|
- |
|
|
|
(7,333 |
) |
|
|
(28,012 |
) |
|
Provision for doubtful accounts |
|
9,221 |
|
|
|
10,511 |
|
|
|
20,946 |
|
|
|
18,803 |
|
|
Deferred income taxes |
|
17,802 |
|
|
|
21,130 |
|
|
|
29,298 |
|
|
|
(4,450 |
) |
|
Impairment charges |
|
6,131 |
|
|
|
- |
|
|
|
13,919 |
|
|
|
6,726 |
|
|
(Gain) loss on divestiture of discontinued operations |
|
83 |
|
|
|
(983 |
) |
|
|
(179 |
) |
|
|
(983 |
) |
|
Other |
|
656 |
|
|
|
4,975 |
|
|
|
959 |
|
|
|
6,972 |
|
|
Change in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable |
|
(13,229 |
) |
|
|
(7,733 |
) |
|
|
(101,121 |
) |
|
|
(39,389 |
) |
|
Inventories and other assets |
|
(10,161 |
) |
|
|
(17,608 |
) |
|
|
(15,393 |
) |
|
|
35,414 |
|
|
Accounts payable |
|
23,077 |
|
|
|
(12,900 |
) |
|
|
12,456 |
|
|
|
(12,435 |
) |
|
Income taxes |
|
707 |
|
|
|
1,923 |
|
|
|
780 |
|
|
|
(3,845 |
) |
|
Due to third party payors |
|
351 |
|
|
|
(3,554 |
) |
|
|
(4,492 |
) |
|
|
(18,973 |
) |
|
Other accrued liabilities |
|
20,670 |
|
|
|
21,380 |
|
|
|
(109,198 |
) |
|
|
7,760 |
|
|
Net cash provided by (used in) operating activities |
|
135,028 |
|
|
|
100,379 |
|
|
|
1,966 |
|
|
|
(39,223 |
) |
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Routine capital expenditures |
|
(28,724 |
) |
|
|
(24,500 |
) |
|
|
(46,830 |
) |
|
|
(45,269 |
) |
|
Development capital expenditures |
|
(8,707 |
) |
|
|
(518 |
) |
|
|
(18,726 |
) |
|
|
(6,306 |
) |
|
Acquisitions, net of cash acquired |
|
(1,372 |
) |
|
|
(2,684 |
) |
|
|
(27,711 |
) |
|
|
(661,755 |
) |
|
Acquisition deposits |
|
- |
|
|
|
- |
|
|
|
18,489 |
|
|
|
195,000 |
|
|
Sale of assets |
|
142 |
|
|
|
2,229 |
|
|
|
1,223 |
|
|
|
3,177 |
|
|
Proceeds from senior unsecured notes offering held in escrow |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1,350,000 |
|
|
Interest in escrow for senior unsecured notes |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
23,438 |
|
|
Purchase of insurance subsidiary investments |
|
(20,154 |
) |
|
|
(16,911 |
) |
|
|
(52,995 |
) |
|
|
(42,829 |
) |
|
Sale of insurance subsidiary investments |
|
15,713 |
|
|
|
12,764 |
|
|
|
46,603 |
|
|
|
34,793 |
|
|
Net change in insurance subsidiary cash and cash equivalents |
|
13,201 |
|
|
|
(5,205 |
) |
|
|
23,159 |
|
|
|
(5,763 |
) |
|
Net change in other investments |
|
583 |
|
|
|
175 |
|
|
|
(33,398 |
) |
|
|
199 |
|
|
Other |
|
792 |
|
|
|
(798 |
) |
|
|
(1,127 |
) |
|
|
(793 |
) |
|
Net cash provided by (used in) investing activities |
|
(28,526 |
) |
|
|
(35,448 |
) |
|
|
(91,313 |
) |
|
|
843,892 |
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from borrowings under revolving credit |
|
244,300 |
|
|
|
347,700 |
|
|
|
778,000 |
|
|
|
1,155,150 |
|
|
Repayment of borrowings under revolving credit |
|
(524,600 |
) |
|
|
(360,100 |
) |
|
|
(827,700 |
) |
|
|
(970,150 |
) |
|
Proceeds from issuance of term loan, net of discount |
|
198,100 |
|
|
|
- |
|
|
|
198,100 |
|
|
|
199,000 |
|
|
Proceeds from other long-term debt |
|
- |
|
|
|
- |
|
|
|
750 |
|
|
|
- |
|
|
Repayment of Gentiva debt |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(1,177,363 |
) |
|
Repayment of term loan |
|
(3,508 |
) |
|
|
(6,005 |
) |
|
|
(6,511 |
) |
|
|
(6,005 |
) |
|
Repayment of other long-term debt |
|
(270 |
) |
|
|
(459 |
) |
|
|
(550 |
) |
|
|
(900 |
) |
|
Payment of deferred financing costs |
|
(141 |
) |
|
|
(445 |
) |
|
|
(292 |
) |
|
|
(2,983 |
) |
|
Issuance of common stock in connection with employee benefit plans |
|
- |
|
|
|
139 |
|
|
|
- |
|
|
|
205 |
|
|
Payment of costs associated with issuance of common stock and tangible equity units |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(915 |
) |
|
Payment of dividend for mandatory redeemable preferred stock |
|
(2,853 |
) |
|
|
(2,654 |
) |
|
|
(5,654 |
) |
|
|
(5,432 |
) |
|
Dividends paid |
|
(10,225 |
) |
|
|
(10,027 |
) |
|
|
(20,293 |
) |
|
|
(20,002 |
) |
|
Contributions made by noncontrolling interests |
|
1,900 |
|
|
|
- |
|
|
|
6,268 |
|
|
|
- |
|
|
Distributions to noncontrolling interests |
|
(14,231 |
) |
|
|
(10,119 |
) |
|
|
(30,546 |
) |
|
|
(21,138 |
) |
|
Purchase of noncontrolling interests |
|
- |
|
|
|
- |
|
|
|
(1,000 |
) |
|
|
- |
|
|
Other |
|
- |
|
|
|
50 |
|
|
|
73 |
|
|
|
1,212 |
|
|
Net cash provided by (used in) financing activities |
|
(111,528 |
) |
|
|
(41,920 |
) |
|
|
90,645 |
|
|
|
(849,321 |
) |
|
Change in cash and cash equivalents |
|
(5,026 |
) |
|
|
23,011 |
|
|
|
1,298 |
|
|
|
(44,652 |
) |
|
Cash and cash equivalents at beginning of period |
|
105,082 |
|
|
|
96,525 |
|
|
|
98,758 |
|
|
|
164,188 |
|
|
Cash and cash equivalents at end of period |
$ |
100,056 |
|
|
$ |
119,536 |
|
|
$ |
100,056 |
|
|
$ |
119,536 |
|
|
Supplemental information: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest payments |
$ |
33,796 |
|
|
$ |
31,640 |
|
|
$ |
107,472 |
|
|
$ |
66,450 |
|
|
Income tax payments |
|
1,297 |
|
|
|
909 |
|
|
|
1,109 |
|
|
|
1,139 |
|
|
Issuance of common stock in Gentiva Merger (see Note 2) |
|
- |
|
|
|
2,353 |
|
|
|
- |
|
|
|
177,441 |
|
|
Non-cash contribution made by noncontrolling interest |
|
- |
|
|
|
- |
|
|
|
2,800 |
|
|
|
- |
|
See accompanying notes.
6
KINDRED HEALTHCARE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 – BASIS OF PRESENTATION
Business
Kindred Healthcare, Inc. is a healthcare services company that through its subsidiaries operates transitional care (“TC”) hospitals, a home health, hospice and community care business, inpatient rehabilitation hospitals (“IRFs”), a contract rehabilitation services business, nursing centers, and assisted living facilities across the United States (collectively, the “Company” or “Kindred”). At June 30, 2016, the Company’s hospital division operated 97 TC hospitals (certified as long-term acute care (“LTAC”) hospitals under the Medicare program) in 22 states. The Company’s Kindred at Home division primarily provided home health, hospice, and community care services from 617 sites of service in 40 states. The Company’s Kindred Rehabilitation Services division operated 19 IRFs and 105 hospital-based acute rehabilitation units (“ARUs”) (certified as IRFs), and provided rehabilitation services primarily in hospitals and long-term care settings in 46 states. The Company’s nursing center division operated 92 nursing centers and seven assisted living facilities in 19 states.
Gentiva merger
On October 9, 2014, the Company entered into an Agreement and Plan of Merger (the “Gentiva Merger Agreement”) with Gentiva Health Services, Inc. (“Gentiva”), providing for the Company’s acquisition of Gentiva (the “Gentiva Merger”). On February 2, 2015, the Company consummated the Gentiva Merger, with Gentiva continuing as the surviving company and the Company’s wholly owned subsidiary.
Discontinued operations
The Company has completed seve