KINDRED HEALTHCARE, INC

CIK:0001060009|SEC Filings

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Revenues	$ 1,513,789	$ 1,539,490
Salaries, wages and benefits	845,854	839,813
Supplies	75,008	80,101
Other operating expenses	135,717	158,824
General and administrative expenses (exclusive of depreciation and amortization expense included below)	265,372	275,503
Other (income) expense	(607)	30
Impairment charges		474
Restructuring charges	8,109	10,006
Depreciation and amortization	24,789	29,820
Interest expense	61,032	59,328
Investment income	(197)	(509)
Operating expenses	1,486,254	1,526,933
Income from continuing operations before income taxes	27,535	12,557
Provision for income taxes	1,228	2,234
Income from continuing operations	26,307	10,323
Discontinued operations, net of income taxes:
Income (loss) from operations	(8,770)	5,059
Loss on divestiture of operations	(5,790)	(6,166)
Income (loss) from discontinued operations	(14,560)	(1,107)
Net income (loss)	11,747	9,216
Earnings attributable to noncontrolling interests:
Continuing operations	(12,792)	(10,483)
Discontinued operations	(660)	(4,481)
(Earnings) loss attributable to noncontrolling interests	(13,452)	(14,964)
Loss attributable to Kindred	(1,705)	(5,748)
Amounts attributable to Kindred stockholders:
Income (loss) from continuing operations	13,515	(160)
Loss from discontinued operations	(15,220)	(5,588)
Loss attributable to Kindred	$ (1,705)	$ (5,748)
Basic:
Income (loss) from continuing operations	$ 0.15
Discontinued operations:
Income (loss) from operations	(0.11)
Loss on divestiture of operations	(0.06)	$ (0.07)
Loss from discontinued operations	0.17	0.07
Net loss	(0.02)	(0.07)
Diluted:
Income (loss) from continuing operations	0.15
Discontinued operations:
Income (loss) from operations	(0.11)
Loss on divestiture of operations	(0.06)	(0.07)
Loss from discontinued operations	(0.17)	(0.07)
Net loss	$ (0.02)	$ (0.07)
Shares used in computing earnings (loss) per common share:
Basic	88,526	87,085
Diluted	88,526	87,085
Cash dividends declared and paid per common share		$ 0.12
Building
Rent	$ 62,488	$ 64,656
Equipment
Rent	$ 8,689	$ 8,887

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Cash flows from operating activities:
Net income	$ 11,747	$ 9,216
Add back loss from discontinued operations, net of income taxes	14,560	1,107
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation expense	22,322	25,191
Amortization of intangible assets	2,467	4,629
Amortization of stock-based compensation costs	4,261	3,026
Amortization of deferred financing costs	4,254	4,132
Payment of capitalized lender fees related to debt amendment		(5,403)
Provision for doubtful accounts	2,910	6,425
Deferred income taxes	411	1,227
Impairment charges		474
Other	270	6,258
Change in operating assets and liabilities:
Accounts receivable	(77,785)	(79,752)
Inventories and other assets	(18,292)	(4,983)
Accounts payable	(19,680)	(10,425)
Income taxes	1,084	2,291
Due to third party payors	(8,135)	(4,745)
Other accrued liabilities	(38,743)	(42,973)
Net cash used in operating activities of discontinued operations	(34,054)	(8,293)
Net cash used in operating activities	(132,403)	(92,598)
Cash flows from investing activities:
Routine capital expenditures	(15,910)	(10,346)
Development capital expenditures	(3,542)	(5,433)
Acquisitions, net of cash acquired		(3,150)
Sale of assets	13,225
Purchase of insurance subsidiary investments		(22,308)
Sale of insurance subsidiary investments		18,699
Net change in other investments	91	29
Other	(233)	154
Net cash provided by (used in) investing activities of discontinued operations	7,204	(1,601)
Net cash provided by (used in) investing activities	835	(23,956)
Cash flows from financing activities:
Proceeds from borrowings under revolving credit	429,700	478,600
Repayment of borrowings under revolving credit	(310,200)	(343,400)
Repayment of term loan	(3,508)	(3,509)
Repayment of other long-term debt	(203)	(284)
Payment of deferred financing costs	(56)	(79)
Payment of dividend for mandatory redeemable preferred stock		(3,010)
Dividends paid		(10,228)
Contributions made by noncontrolling interests	165
Distributions to noncontrolling interests	(27,228)	(25,801)
Payroll tax payments for equity awards issuance	(3,044)	(2,255)
Net cash provided by financing activities	85,626	90,034
Change in cash, cash equivalents and restricted cash	(45,942)	(26,520)
Cash, cash equivalents and restricted cash at beginning of period	218,463	324,168
Cash, cash equivalents and restricted cash at end of period	172,521	297,648
Supplemental information:
Interest payments	76,283	74,839
Income tax refunds	266	1,240
Distributions to noncontrolling interests:
Continuing operations	(11,038)	(8,785)
Discontinued operations	$ (16,190)	$ (17,016)

CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) - USD ($)
$ in Thousands

Mar. 31, 2018

Dec. 31, 2017

Current assets:

Cash and cash equivalents

$ 108,759

$ 160,254

Insurance subsidiary investments

22,407

22,546

Accounts receivable less allowance for loss of $67,227 ─ March 31, 2018 and $96,899 ─ December 31, 2017

1,165,044

1,122,532

Inventories

21,635

21,716

Income taxes

3,462

4,546

Assets held for sale

8,937

17,335

Other (Note 13)

69,828

60,610

Current assets

1,400,072

1,409,539

Property and equipment

1,686,791

1,682,965

Accumulated depreciation

(961,272)

(946,986)

Property and equipment, net

725,519

735,979

Goodwill

2,188,391

2,188,566

Intangible assets less accumulated amortization of $64,836 ─ March 31, 2018 and $77,603 ─ December 31, 2017

601,368

604,338

Insurance subsidiary investments

27,771

28,988

Other (Note 13)

263,242

265,307

Total assets

^[1]

5,206,363

5,232,717

Current liabilities:

Accounts payable

147,143

191,827

Salaries, wages and other compensation

337,838

352,179

Due to third party payors

26,772

35,321

Professional liability risks

60,671

60,767

Accrued lease termination fees

7,557

7,610

Other accrued liabilities (Note 13)

214,227

263,977

Long-term debt due within one year

14,482

14,638

Current liabilities

808,690

926,319

Long-term debt

3,266,364

3,146,972

Professional liability risks

276,551

276,829

Deferred tax liabilities

37,196

36,881

Deferred credits and other liabilities (Note 13)

492,170

497,954

Commitments and contingencies (Note 12)

Stockholders' equity:

Common stock, $0.25 par value; authorized 175,000 shares; issued 91,279 shares ─ March 31, 2018 and 91,454 shares ─ December 31, 2017

22,820

22,864

Capital in excess of par value

1,714,504

1,713,179

Accumulated other comprehensive income

9,675

6,179

Accumulated deficit

(1,632,432)

(1,618,896)

Stockholders' equity

114,567

123,326

Noncontrolling interests

210,825

224,436

Total equity

325,392

347,762

Total liabilities and equity

^[1]

$ 5,206,363

$ 5,232,717

[1]

The Company’s consolidated assets as of March 31, 2018 and December 31, 2017 include total assets of variable interest entities of $405.5 million and $405.8 million, respectively, which can only be used to settle the obligations of the variable interest entities. The Company’s consolidated liabilities as of March 31, 2018 and December 31, 2017 include total liabilities of variable interest entities of $43.5 million and $43.9 million, respectively. See note 1 of the notes to unaudited condensed consolidated financial statements