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NYSE:KND
InvestorPresentation June2012
KINDREDHEALTHCARE ContinuetheCare
ForwardLookingStatements
ThispresentationincludesforwardlookingstatementswithinthemeaningofSection 27AoftheSecuritiesActof1933,asamended,andSection 21EoftheSecuritiesExchangeActof1934,asamended.Allstatementsregarding Kindredsexpectedfuturefinancialposition,resultsofoperations,cashflows,financingplans,businessstrategy,budgets,capitalexpenditures,competitivepositions,growthopportunities,plansandobjectivesofmanagementand statementscontainingthewordssuchasanticipate, approximate, believe, plan, estimate, expect, project, could, should, will, intend, may andothersimilarexpressions,areforwardlookingstatements. Suchforwardlookingstatementsareinherentlyuncertain,andstockholdersandotherpotentialinvestorsmustrecognizethatactualresultsmaydiffermateriallyfromKindredsexpectationsasaresultofavarietyoffactors, including,withoutlimitation,thosediscussedbelow.Suchforwardlookingstatementsarebaseduponmanagementscurrentexpectationsandincludeknownandunknownrisks,uncertaintiesandotherfactors,manyofwhich Kindredisunabletopredictorcontrol,thatmaycauseKindredsactualresultsorperformancetodiffermateriallyfromanyfutureresultsorperformanceexpressedorimpliedbysuchforwardlookingstatements.These statementsinvolverisks,uncertaintiesandotherfactorsdiscussedbelowanddetailedfromtimetotimeinKindredsfilingswiththeSecuritiesandExchangeCommission(theSEC). Inadditiontothefactorssetforthabove,otherfactorsthatmayaffecttheCompanysplansorresultsinclude,withoutlimitation,(a)theimpactofhealthcarereform,whichwillinitiatesignificantreformstotheUnitedStates healthcaresystem,includingpotentialmaterialchangestothedeliveryofhealthcareservicesandthereimbursementpaidforsuchservicesbythegovernmentorotherthirdpartypayors,includingreformsresultingfromthe PatientProtectionandAffordableCareActandtheHealthcareEducationandReconciliationAct(collectively,theACA).HealthcarereformisaffectingcertainoftheCompanysbusinessesandtheCompanyexpectsthatitwill impactalloftheminsomemanner.Thereisalsothepossibility thatimplementationoftheprovisionsexpandinghealthinsurancecoverageortheentireACAwillbedelayed,revisedoreliminatedasaresultofcourtchallengesand effortstorepealoramendthelaw.TheU.S.SupremeCourthasheardoralargumentontheconstitutionalityoftheACAandisexpectedtoreachadecisionin2012.Thesecourtproceedings,the 2012presidentialelectionand pendingeffortsintheU.S.Congresstorepeal,amendorretract fundingforvariousaspectsoftheACAcreateadditionaluncertaintyabouttheultimateimpactoftheACA,oranyportionsoftheACAthatsurvivetheconstitutional challenge,ontheCompanyandthehealthcareindustry.DuetothesubstantialregulatorychangesthatwillneedtobeimplementedbytheCentersforMedicareandMedicaidServices(CMS)andothers,thenumerousprocesses requiredtoimplementthesereforms,andpendingjudicialreview oftheACA,theCompanycannotpredictwhichhealthcareinitiativeswillbeimplementedatthefederalorstatelevel,thetimingofanysuchreforms,ortheeffect suchreformsoranyotherfuturelegislationorregulationwillhaveontheCompanysbusiness,financialposition,resultsofoperationsandliquidity,(b)theimpactoftheproposedrulesissuedbyCMSonApril 24,2012which, amongotherthings,wouldreduceMedicarereimbursementtotheCompanyslongtermacutecare(LTAC)hospitalsin2013andbeyondbyimposingabudgetneutralityadjustmentandmodifyingtheshortstayoutlierrules,(c) theimpactoffinalrulesissuedbyCMSonJuly29,2011whichsignificantlyreducedMedicarereimbursementtonursingcentersandchangedpaymentsfortheprovisionofgrouptherapyserviceseffectiveOctober 1,2011,(d)the impactoftheBudgetControlActof2011whichwillautomaticallyreducefederalspendingbyapproximately$1.2trillionsplitevenlybetweendomesticanddefensespending.Atthistime,theCompanybelievesthiswillresultinan automatic2%reductiononeachclaimsubmittedtoMedicarebeginningFebruary 1,2013,(e)changesinthereimbursementratesorthemethodsortimingofpaymentfromthirdpartypayors,includingcommercialpayors andthe MedicareandMedicaidprograms,changesarisingfromandrelated totheMedicareprospectivepaymentsystemforLTAChospitals,includingpotentialchangesintheMedicarepaymentrules,theMedicarePrescriptionDrug, Improvement,andModernizationActof2003,andchangesinMedicareandMedicaidreimbursementsfortheCompanysLTAChospitals,nursingandrehabilitationcenters,inpatientrehabilitationhospitalsandhomehealthand hospiceoperations,andtheexpirationoftheMedicarePartBtherapycapexceptionprocess,(f)theeffectsofadditionallegislativechangesandgovernmentregulations,interpretationofregulationsandchangesinthenatureand enforcementofregulationsgoverningthehealthcareindustry,(g)theimpactoftheMedicare,MedicaidandSCHIPExtensionActof2007(whichwasextendedbytheACA),includingtheabilityof theCompanyshospitalstoadjust topotentialLTACcertification,medicalnecessityreviewsandthemoratoriumonfuturehospitaldevelopment,(h)theimpactoftheCompanyssignificantlyincreasedlevelsofindebtednessasaresultoftheRehabCareGroup,Inc. acquisitionontheCompanysfundingcosts,operatingflexibilityandabilitytofundongoingoperations,developmentcapitalexpendituresorotherstrategicacquisitionswithadditionalborrowings,(i)theCompanysabilityto successfullypursueitsdevelopmentactivities,includingthroughacquisitions,andsuccessfullyintegratenewoperations,includingtherealizationofanticipatedrevenues,economiesofscale,costsavingsandproductivitygains associatedwithsuchoperations,asandwhenplanned,includingthepotentialimpactofunanticipatedissues,expensesandliabilitiesassociatedwiththoseactivities,(j)thefailureoftheCompanysfacilitiestomeetapplicable licensureandcertificationrequirements,(k)thefurtherconsolidationandcostcontainmenteffortsofmanagedcareorganizationsandotherthirdpartypayors,(l)theCompanysabilitytomeetitsrentalanddebtservice obligationsanditsotherobligationsundertherelatedagreements,(m)theconditionofthefinancialmarkets,includingvolatilityandweaknessintheequity,capitalandcreditmarkets,whichcouldlimittheavailabilityandtermsof debtandequityfinancingsourcestofundtherequirementsoftheCompanysbusinesses,orwhichcouldnegativelyimpacttheCompanysinvestmentportfolio,(n)nationalandregionaleconomic,financial,businessandpolitical conditions,includingtheireffectontheavailabilityandcostoflabor,credit,materialsandotherservices,(o)theCompanysabilitytocontrolcosts,particularlylaborandemployeebenefitcosts,(p)increasedoperatingcostsdue toshortagesinqualifiednurses,therapistsandotherhealthcarepersonnel,(q)theCompanysabilitytoattractandretainkeyexecutivesandotherhealthcarepersonnel,(r)theincreaseinthecostsofdefendingandinsuring againstallegedprofessionalliabilityandotherclaimsandtheCompanysabilitytopredicttheestimatedcostsrelatedtosuchclaims, includingtheimpactofdifferencesinactuarialassumptionsandestimatescomparedtoeventual outcomes,(s)theCompanysabilitytosuccessfullyreduce(bydivestitureofoperationsorotherwise)itsexposuretoprofessionalliabilityandotherclaims,(t)theCompanysabilitytosuccessfullydisposeofunprofitablefacilities, (u)eventsorcircumstanceswhichcouldresultintheimpairment ofanassetorothercharges,suchastheimpactoftheMedicarereimbursementregulationsthatresultedintheCompanyrecordingsignificantimpairmentcharges in2011,(v)changesingenerallyacceptedaccountingprinciples orpractices,andchangesintaxaccountingortaxlaws(orauthoritativeinterpretationsrelatingtoanyofthesematters),and(w)theCompanysabilitytomaintainan effectivesystemofinternalcontroloverfinancialreporting.ManyofthesefactorsarebeyondtheCompanyscontrol.TheCompanycautionsinvestorsthatanyforwardlookingstatementsmadebytheCompanyarenot guaranteesoffutureperformance.TheCompanydisclaimsanyobligationtoupdateanysuchfactorsortoannouncepubliclytheresultsofanyrevisionstoanyoftheforwardlookingstatementstoreflectfutureeventsor developments. Theinformationbeingprovidedtodayisasofthisdateonlyand Kindreddisclaimsanyobligationtoupdateanysuchfactorsortoannouncepubliclytheresultsofanyrevisionstoanyoftheforwardlookingstatementstoreflect futureeventsordevelopments.AdditionalinformationconcerningKindred,includingourSECfilingsandacopyofthispresentation,isavailableonourwebsitewww.kindredhealthcare.com,undertheheadingInvestors. ReconciliationofnonGAAPFinancialMeasures TheappendixtothispresentationandourwebsitealsoincludereconciliationsofanynonGAAPfinancialmeasureswementioninourpresentationstotheir correspondingGAAPmeasures.Thereconciliationsonourwebsitemay befoundatwww.kindredhealthcare.com undertheheadingInvestors.
KINDREDHEALTHCARE ContinuetheCare
PremierProviderofRehabilitationServices andPostAcuteCareintheUnitedStates
$6.5billiontotalrevenues(1) 2,142locations,450facilitiesin46states(2) 61,800patientsandresidentsperday(2) 76,000dedicatedemployees(2)
Business Mix(1)
20%
($1.3billion)
44%
($2.9billion)
RehabCare
1%
($0.1billion)
40%
($2.6billion)
LTAC/IRF Hospitals
35%
($2.2billion)
Home Health
28%
Medicare
Medicaid
KINDREDHEALTHCARE ContinuetheCare
LeadingDiversifiedPostAcuteProvider
WithFocusonDevelopingClusterMarketServiceOfferings
LTAC Hospitals (120) Inpatient Rehabilitation Hospitals (6) Hospital-Based Acute Rehab Units (100) Nursing and Rehabilitation Centers (224) RehabCare Total Sites of Service (2,082) Home Health and Hospice (52) Existing Cluster Market (13) Potential Cluster Market (7)
As of March 31, 2012
KINDREDHEALTHCARE ContinuetheCare
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Lowerhealthcarecostsbyreducinglengthsofstayinacutecare hospitals
(andthroughoutanepisodeofcare)
Participateinthedevelopmentofnewcaredeliveryandpaymentmodels
Tobettercoordinatecareandmanagepatientswithchronicconditions, includingthedualeligibles Toreduceavoidablerehospitalizationswithourpartnersthrough our integratedcaremanagementteamsandprotocols
KINDREDHEALTHCARE ContinuetheCare
DeliveringonQuality,ValueandInnovationinPatientCareDelivery
KindredHealthcare
KINDREDHEALTHCARE ContinuetheCare
DeliveringonQuality,ValueandInnovationinPatientCareDelivery
KindredHealthcare
KINDREDHEALTHCARE ContinuetheCare
HospitalDivision
$2.9billionRevenues(1) $540millionOperatingIncome(2)
LongTermAcuteCareHospitals(LTACs) 120LTAChospitals(3) 8,510licensedbeds(3) InpatientRehabilitationHospitals(IRFs) 6IRFs(3) 229licensedbeds(3) Consistentlyoutperformsnationalbenchmarksonkey qualityindicators InQ12012,samestoreadmissiongrowthof2%resultedin operatingincomemarginimprovementto21.0% Q12012operatingincomegrew48%to$161millionversus lastyear(2) withsuccessfulintegrationof36RehabCare Hospitals PortfolioUpdate
OpenedSeattleFirstHillinFebruary2012with50LTACbedsand 30subacutebeds OpenedHumble,TXfreestandingIRF inFebruary2012,with46beds OpenedAustin,TXfreestandingreplacementIRFinMay2012,whichadded 30additionalbeds ExpecttoopenDayton,OHandCharleston,SCreplacementLTAChospitals inQ32012,whichwilladd126LTACand72subacutelicensedbeds CompanyenteredintonewleasewithVentas for10hospitalsoriginallyset toexpirein2013
Revenue Mix(1)
Insurance/Other Medicare
32%
$0.9 billion
61%
$1.8 billion
Medicaid
7%
$0.2 billion
126
119 100
22
20
19
18
KINDREDHEALTHCARE ContinuetheCare
NursingCenterDivision
$2.2billionRevenues(1) $317millionOperatingIncome(2)
37TransitionalCareCenters(TCCs)(3) 95NursingandRehabilitation Centers(withTCUs)(3) 92SkilledNursingCenters(TraditionalSNFs)(3) ChallengingoperatingenvironmentundernewRUGs IVrulesandongoingMedicaidratepressures PortfolioUpdate CompanywillallowVentas leasesfor54non strategicnursingcenterstoexpireinApril2013 Qualityperformanceranks1st amonglargeproviders onsurveysandnationalbenchmarksinkeyareas Q112admissiongrowthof1%offsetbyincreasing dischargestohomeanddeclininglengthofstay
Revenue Mix(1)
Private/Other Medicaid
26%
$0.6 billion
39%
$0.8 billion
Number of Facilities
Medicare
35%
$0.8 billion
324 277
227
224
223
207
KINDREDHEALTHCARE ContinuetheCare
$1.3billionRevenues(1) $125millionOperatingIncome(2)
2,082sitesofserviceservedthrough 8,760therapists(3) Including100hospitalbasedacute rehabilitationunits(3)
Providesacompellingvaluepropositiontoour Hospital(HRS)andSkilledNursing(SRS)partners throughadvancedtechsystems,clinicalprograms andhighlytrainedtherapistteam SuccessfullyintegratingSRSandHRSbusinessesfrom theRehabCareacquisition Operatingmarginsimprovedto9.2%inQ112from 8.8%inQ411 HRS=8signedandopenedthroughMay2012 SRS=91signedand74openedthroughMay2012
Business Mix(1)
22%
$0.3 billion
2,500 2,000
HRS SRS
Third Party
Affiliated
78%
$1.0 billion
471 471
KINDREDHEALTHCARE ContinuetheCare
10
$114millionAnnualizedRevenues(1)
52sitesofservice 34inKindredsClusterMarkets 2,200employeesserving5,400patients onadailybasis
Buildingmanagementteam,includingsales, clinicaloperationsandITcapabilitiesto supportacceleratedexpansion Q1Revenuesof$28Million DevelopmentUpdate ProfessionalAcquisition 27locations(September11) SynergyHomeHealthAcquisition 2locations(October11) ActivepipelineofopportunitiesinKindred ClusterMarkets In2012,wehaveopened10newbranch locationswithplanstoopenanother11 locationsbeforetheendoftheyear.
Business Mix
1%
Revenue Mix(1)
8% 28%
64%
DME PrivateDuty Hospice HomeHealth Medicaid ($10million) Medicare ($72million) Commercial Insurance/ Other ($32million)
(1)
AnnualizedbaseduponrevenuesforthethreemonthsendedMarch31,2012 (divisionalrevenuesbeforeintercompanyeliminations)duetorecentacquisitions.
KINDREDHEALTHCARE ContinuetheCare
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TremendousOpportunitiesExisttoBetterManagePatient CareforPatientsDischargedFromAcuteCareHospitals
Currentlythereare47.6millionMedicarebeneficiarieswithanestimated7,000 individualsaddedtotheprogrameachday.*
35%ofMedicareBeneficiariesareDischargedfromAcuteHospitalstoPostAcuteCare
INPATIENT REHAB
OUTPATIENT REHAB
2% 2%
10% 11%
41% 52%
9% 21%
37% 61%
Source:RTI,2009:ExaminingPostAcuteCareRelationshipsinanIntegratedHospitalSystem
*Source:KaiserFamilyFoundation,2011statehealthfacts.org,andAARP2011projections
KINDREDHEALTHCARE ContinuetheCare
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36%
Skilled Nursing and Rehab Centers
28%
Home
5%
Inpatient Rehab Facility
77%
Home
13%
Skilled Nursing and Rehab Centers
52% Home
33%with Home Health
(1)
Source:KindredInternalData,2011data.
KINDREDHEALTHCARE ContinuetheCare
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PositionedtoTakeAdvantageofChanging HealthcareLandscape
UniquelyPositionedForBundledOrEpisodicPaymentEnvironment
INPATIENT REHAB
FREESTANDING/HIH
OUTPATIENT REHAB
HOSPICE
ADULTDAY CARE
HOME
Patient Illness Severity KINDREDHEALTHCARE ContinuetheCare 14
ClusterMarketStrategy
DesignedToImproveCareCoordinationandDriveAdmissionsGrowth
Astrategytopositionassets/service linesanddeploycapitaltotake advantageofanincreasingly integratedhealthcaredelivery system Diversepostacuteservicelines andclinicalprogramstosupporta continuumofcarewithinanACOor abundledpaymentenvironment Strengthenlinkageswithacute hospitals,managedcarepayors, andphysiciansacrosssettings
Potentialbenefitsincludeimproved carecoordination,reduced rehospitalizations,lowercosts andadmissionsgrowth
KINDREDHEALTHCARE ContinuetheCare
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BusinessStrategy
SuccessintheCore
Takecareofourteammatesandpromoteperformanceimprovement Continuetoimprovequalityandclinicaloutcomes Promoteourvaluepropositionandgrowadmissionsandrehabcontracts ExecuteonRehabCaresynergiesandothercostreductioninitiatives
AccelerateourClusterMarket(NetworkDevelopment)Strategy
Developservicelinesandintegratedcaremanagementcapabilitiesacross thecarecontinuum Expandandintegratehealthsystem,physicianandmanagedcarerelationships ContinuetoinvestinIT(electronichealthrecord)linkages
KINDREDHEALTHCARE ContinuetheCare
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FinancialUpdate
KINDREDHEALTHCARE ContinuetheCare
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FinancialHighlightsQ12012
Solidstarttotheyearreflectingoperationalstabilization Revenuesgrew33%to$1.6billionfromQ12011
RehabCareacquisitionadded$364millioninrevenues
KINDREDHEALTHCARE ContinuetheCare
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OperationalHighlights Q12012
HospitalresultsbolsteredbyRehabCareacquisition,volumegrowth andcostefficiencies
Admissionsgrewby40%fromlastyear,samefacilityadmissionsgrew2% Operatingincomegrew48%to$161million
KINDREDHEALTHCARE ContinuetheCare
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OperatingMargins
Significant LTAC margin improvement was more than offset by regulatory changes in Nursing Center and RehabCare businesses.
KINDREDHEALTHCARE ContinuetheCare 20
RegulatoryUpdate
OnApril24th,CMSpublishedproposedratesforLTAChospitalsforthefiscalyear beginningOctober1,2012 CMSprojectsLTACspendingtoincreaseby1.9%.Basedonourreviewofthe proposedrule,weexpectLTACMedicarepaymentrateswillbeflatin2013 comparedtocurrentrates.Theproposedruledoesnotincludetheimpactofa2% sequestrationpaymentreductionmandatedbyCongressthatisexpectedtobegin inFebruary2013. Theproposedrulealsowould:
Beginathreeyearphaseinofa3.75%budgetneutralityadjustmentwhichwouldreduce ratesby1.3%in2013 Restoreapaymentreductionforveryshortstayoutliers(0.5%reductionin2013) Provideaoneyearextensionofthemoratoriumofthe25%Rule pendingtheresultsof ongoingresearchtobetterdefinetheroleandcriteriaforLTAC hospitalsintheMedicare program Allowfortheexpirationofthemoratoriumonthedevelopmentor expansionofLTAC hospitals
EarningsGuidanceRanges Fiscal2012*
(Inmillions,exceptpershareamounts)
As of May 1, 2012 Low High Revenues Operating income Income from continuing operations before income taxes Available to common stockholders Earnings per diluted share Operating cash flows Routine capital expenditures $ 6,300 868 130 71 1.35 240 130 $ 6,300 884 146 81 1.55 260 140
* The Company's earnings guidance excludes the effect of (1) any costs associated with the closing of a regional office and a LTAC hospital, (2) any transaction-related charges, (3) any other reimbursement changes, (4) any acquisitions or divestitures, (5) any impairment charges, or (6) any repurchases of common stock.
KINDREDHEALTHCARE ContinuetheCare
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ImprovedFinancialFlexibility
Financingarrangementsprovidehighercapacityat favorableterms
$219millionofrevolvingcreditcapacityavailableatMarch31 Favorablepricinginplaceforbothsecuredandunsecured financing Financialcovenantssupportoperationalflexibility
Q1fixedchargecoveragewas1.68vs.1.25covenantlevel Q1adjustedleveragewas4.69vs.6.00covenantlevel Operatingincomecushiontotalednearly$200millionatMarch31
Extendedtenorofagreements
Revolvingcredit 2016 Termloan 2018 Unsecurednotes 2019
KINDREDHEALTHCARE ContinuetheCare
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Ventas Leases
Kindredrecentlyannouncedthatithadenteredintoanew10year leaseagreementwithVentas for10LTAChospitalswhoseleaseterm wassettoexpireinApril2013 Theagreementalsoprovidesbothcompaniesmoreflexibilityto acceleratethetransferofthe54nursingcenterswhoseleasesexpire April2013andwillnotberenewed Thefinancialeffectin2013ofenteringintothenewleasealongwith thenonrenewalofthe54nursingcentersisexpectedtobeslightly accretivetoKindredsconsolidatedearningspershare
KINDREDHEALTHCARE ContinuetheCare
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StrategicCapitalAllocationFramework
FRAMEWORK CONSIDERATIONS
Ownmoreofourownrealestate
PaydowndebtincurredinRHB acquisition
Reduceadjustedleverageovertime
KINDREDHEALTHCARE ContinuetheCare
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CapitalInvestmentComparison
$0.250
Home Health & Hospice $0.200 DeNovo LTAC/IRF Hospital (Owned) EPS / $100M Spend
$0.100
$0.050
KINDREDHEALTHCARE ContinuetheCare
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InvestmentRationale
Eachyear,nearly9millionpeople 24,000aday aredischargedfrom shorttermacutecarehospitalsandrequiresomeformofpostacute care Asthelargestdiversifiedpostacuteprovider,Kindredisuniquely positionedtogrowandsucceedinwhatwillbeanincreasingly integratedhealthcaredeliverysystem Kindredhasatrackrecordofprovidingquality,costeffectivecare, operationalexcellenceandconsistentlevelsoffreecashflows Ourexperiencedmanagementteam,robusttechnologyplatform,and demonstratedabilitytoadapttochange,togetherwithoursuccessful organicdevelopmentstrategy,offerthepotentialforcreatingsignificant valueforshareholdersovertime
KINDREDHEALTHCARE ContinuetheCare
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KINDRED HEALTHCARE
NYSE:KND
InvestorPresentation June2012
KINDREDHEALTHCARE ContinuetheCare
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Appendix
KINDREDHEALTHCARE ContinuetheCare
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ConsolidatedBalancedScorecard
March2012YTD Performanceasmeasuredagainst2012goals
EBITDARM
35%
EBITDAM
People
10% TotalEmployee Turnover
Quality& Service
15%
Growth
15%
Efficiency
10%
Capital
10%
Organizational Excellence
5%
HospitalDivision
HospitalDivision
HospitalDivision
A/RDays
HospitalDivision
NursingCenter Division
NursingCenter Division
NursingCenter Division
NursingCenter Division
RehabCareDivision
RehabCareDivision
RehabCareDivision
RehabCareDivision
PeopleFirst Division
PeopleFirst Division
PeopleFirst Division
PeopleFirst Division
KINDREDHEALTHCARE ContinuetheCare
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HospitalDivision BalancedScorecard
March2012YTD STIPMeasures
EBITDARM
30%
People
10%
Quality&Service
15%
Growth
15%
Efficiency
15%
Capital
10%
ShortTermIncentive Plan
ARDays (NonMedicare)
KINDREDHEALTHCARE ContinuetheCare
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NursingCenterDivision BalancedScorecard
March2012YTD STIPMeasures
EBITDARM
30%
People
10%
Quality&Service
15%
Growth
15%
Efficiency
15%
Capital
10%
ShortTerm IncentivePlan
A/RDays
KINDREDHEALTHCARE ContinuetheCare
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RehabCareDivision BalancedScorecard
March2012YTD STIPMeasures
EBITDARM
30%
People
10%
Quality&Service
10%
Growth
20%
Efficiency
15%
Capital
10%
ShortTermIncentivePlan
Employee Turnover%
ContributionMargin % SRSCostPerMinute
DaysSales Outstanding
ClinicalProgram Implementation
KINDREDHEALTHCARE ContinuetheCare
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EBITDARM
45%
People
ShortTermIncentive Plan
7.5%
Quality&Service
7.5%
Growth
17.5%
Efficiency
7.5%
Capital
10%
Employee Turnover
OutcomeMeasures ExceedAverages
CaseloadperFTE
ARDays
PatientSatisfaction
KINDREDHEALTHCARE ContinuetheCare
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ReconciliationofNonGAAPMeasures
(Inmillions)
Year ended Decem ber 31, 2008 2009 2010 First Quarter 2011 First Quarter 2012
2007 Incom e (loss) from continuing operations: Operating income (loss): Hospital division $ Nursing center division Rehabilitation division Home health and hospice division Pharmacy division Corporate: Overhead Insurance subsidiary Impairment charges Transaction costs Operating income Rent Depreciation and amortization Interest, net Income (loss) from continuing operations before income taxes Provision (benefit) for income taxes $
2011
365 295 34 18
360 304 53 -
108 87 15 -
161 66 30 2 -
(175) (2) (177) (129) (51) 582 (399) (166) (80) (63) (7) (56)
KINDREDHEALTHCARE ContinuetheCare
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ReconciliationofNonGAAPMeasures(Continued)
(Inmillions,expectpershareamounts)
Three months ended March 31, 2012 2011 Detail of charges: Severance and other miscellaneous costs Lease cancellation charge Transaction costs Loss on hospital divestiture Impairment charges Financing costs (in connection with RehabCare acquisition) Income tax benefit Charges net of income taxes Allocation to participating unvested restricted stockholders Available to common stockholders Weighted average diluted shares outstanding Diluted loss per common share related to charges Reconciliation of income from continuing operations before charges: Income from continuing operations before charges Charges Reported income (loss) from continuing operations ($2) (2) (1) (5) 2 (3) ($3) 51.6 ($0.05) (4) (2) (6) 2 (4) ($4) 39.5 ($0.10) Three months ended December 31, 2011 ($1) (2) (4) (2) (102) (111) 24 (87) ($87) 51.3 ($1.69)
Reconciliation of diluted earnings per common share from continuing operations before charges: Diluted earnings per common share before charges (a) $0.40 Charges (0.05) Reported diluted earnings per common share $0.35
(a)
(a) For purposes of computing diluted earnings per share, income from continuing operations before charges was reduced by $0.3 million, $0.5 million
and $0.2 million for the three months ended March 31, 2012, March 31, 2011 and December 31, 2011, respectively, for the allocation of income to participating unvested restricted stockholders.
KINDREDHEALTHCARE ContinuetheCare
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KINDRED HEALTHCARE
NYSE:KND
InvestorPresentation June2012
KINDREDHEALTHCARE ContinuetheCare
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