Form S-4 Highlander Nursing, L.l.c.

S-4 - Registration of securities, business combinations

Published: 2014-12-15 17:00:00
Submitted: 2014-12-15
d829606ds4.htm FORM S-4


ENT> S-4 1 d829606ds4.htm FORM S-4

FORM S-4

Table of Contents

As filed with the Securities and Exchange Commission on December 15, 2014

Registration No. 333-          

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Form S-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

KINDRED HEALTHCARE, INC.

(Exact name of registrant as specified in its charter)

 

 

Delaware

(State or other jurisdiction of incorporation or organization)

8050

(Primary standard industrial classification code number)

61-1323993

(I.R.S. Employer Identification No.)

680 South Fourth Street

Louisville, Kentucky 40202-2412

(502) 596-7300

(Address, including zip code, and telephone number, including area code, of principal executive offices)

and the Guarantors identified in Table of Additional Registrant Guarantors below

 

 

 

Joseph L. Landenwich, Esq.

Co-General Counsel and Corporate Secretary

Kindred Healthcare, Inc.

680 South Fourth Street

Louisville, Kentucky 40202

(502) 596-7300

 

Nicolas Grabar, Esq.

Cleary Gottlieb Steen & Hamilton LLP

One Liberty Plaza

New York, New York 10006

(212) 225-2000

(Copies of all communications, including
communications sent to agent for service)

(Name, address, including zip code, and telephone number,
including area code, of agent for service)
 

 

 

Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective.

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.  

¨

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  

¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  

¨

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  
¨
  (Do not check if a smaller reporting company)
   Smaller reporting company  
¨

 

 

CALCULATION OF REGISTRATION FEE

 

 

Title of each class of

securities to be registered

 

Amount

to be

registered

 
Proposed
maximum
offering price
per unit
 

Proposed
maximum
aggregate

offering price(1)

 

Amount of

registration fee(2)

6.375% Senior Notes due 2022

  $500,000,000   100%   $500,000,000   $58,100

Guarantees for the 6.375% Senior Notes due 2022

  (3)   (3)   (3)   (3)

 

 

(1) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457 under the Securities Act of 1933, as amended (the “Securities Act”).
(2) Calculated pursuant to Rule 457 under the Securities Act.
(3) Pursuant to Rule 457(n) under the Securities Act, no registration fee is required with respect to the guarantees.

 

 

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act or until the registration statement shall become effective on such date as the Securities and Exchange Commission (the “SEC”), acting pursuant to said Section 8(a), may determine.

 

 

 


Table of Contents

TABLE OF ADDITIONAL REGISTRANT GUARANTORS

 

Exact Name of Additional

Registrant

As Specified in its Charter*

  

State or Other

Jurisdiction of

Incorporation or

Organization

   I.R.S. Employer
Identification No.
   Primary Standard
Industrial
Classification Code
Number
  

Address, including Zip

Code, and Telephone

Number,

including Area Code, of

Principal Executive Offices

Aberdeen Holdings, Inc.

   Texas    72-2695805    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Able Home Healthcare, Inc.

   Texas    77-0601595    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Advanced Oncology Services, Inc.

   Florida    65-0180784    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

American VitalCare, L.L.C.

   California    22-2646452    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Avery Manor Nursing, L.L.C.

   Delaware    20-3618851    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Bayberry Care Center, L.L.C.

   Delaware    20-4454621    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Braintree Nursing, L.L.C.

   Delaware    20-3618766    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

BWB Sunbelt Home Health Services, LLC

   Texas    75-1901342    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

California Nursing Centers, L.L.C.

   Delaware    20-4454493    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Care Center of Rossmoor, L.L.C.

   Delaware    20-4454602    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Central Arizona Home Health Care, Inc.

   Arizona    86-0714789    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Clear Lake Rehabilitation Hospital, L.L.C.

   Delaware    20-2971820    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300


Table of Contents

Exact Name of Additional

Registrant

As Specified in its Charter*

  

State or Other

Jurisdiction of

Incorporation or

Organization

   I.R.S. Employer
Identification No.
   Primary Standard
Industrial
Classification Code
Number
  

Address, including Zip

Code, and Telephone

Number,

including Area Code, of

Principal Executive Offices

Compass Hospice, Inc.

   Texas    27-0001235    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Country Estates Nursing, L.L.C.

   Delaware    20-3618740    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Courtland Gardens Health Center, Inc.

   Connecticut    06-1149454    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Focus Care Health Resources, Inc.

   Texas    75-2784006    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Foothill Nursing Company Partnership

   California    91-1473634    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Forestview Nursing, L.L.C.

   Delaware    20-3618900    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

GBA Holding, Inc.

   Texas    75-2855493    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

GBA West, LLC

   Texas    26-2944774    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Goddard Nursing, L.L.C.

   Delaware    20-3618957    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Greenbrae Care Center, L.L.C.

   Delaware    20-4454677    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Greens Nursing and Assisted Living, L.L.C.

   Delaware    20-2822083    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Harborlights Nursing, L.L.C.

   Delaware    20-3618878    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300


Table of Contents

Exact Name of Additional

Registrant

As Specified in its Charter*

  

State or Other

Jurisdiction of

Incorporation or

Organization

   I.R.S. Employer
Identification No.
   Primary Standard
Industrial
Classification Code
Number
  

Address, including Zip

Code, and Telephone

Number,

including Area Code, of

Principal Executive Offices

Haven Health, LLC

   Delaware    26-1425546    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Helian ASC of Northridge, Inc.

   California    77-0277817    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Helian Health Group, Inc.

   Delaware    95-4070276    8093   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

HHS Healthcare Corp.

   Delaware    90-0527683    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Highgate Nursing, L.L.C.

   Delaware    20-3618795    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Highlander Nursing, L.L.C.

   Delaware    20-3618815    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Hillhaven—MSC Partnership

   California    93-1023838    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Home Health of Rural Texas, Inc.

   Texas    75-2374091    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Home Health Services, Inc.

   Utah    87-0494759    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Homecare Holdings, Inc.

   Florida    65-0837269    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Homestead Health and Rehabilitation Center, L.L.C.

   Delaware    20-3329906    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

IntegraCare Holdings, Inc.

   Delaware    20-8781607    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300


Table of Contents

Exact Name of Additional

Registrant

As Specified in its Charter*

  

State or Other

Jurisdiction of

Incorporation or

Organization

   I.R.S. Employer
Identification No.
   Primary Standard
Industrial
Classification Code
Number
  

Address, including Zip

Code, and Telephone

Number,

including Area Code, of

Principal Executive Offices

IntegraCare Home Health Services, Inc.

   Texas    75-2865632    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

IntegraCare Hospice of Abilene, LLC

   Texas    61-1655487    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

IntegraCare Intermediate Holdings, Inc.

   Delaware    20-8781715    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

IntegraCare of Abilene, LLC

   Texas    26-4630561    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

IntegraCare of Albany, LLC

   Texas    26-2915050    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

IntegraCare of Athens-Home Health, LLC

   Texas    27-2139332    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

IntegraCare of Athens-Hospice, LLC

   Texas    27-2139269    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

IntegraCare of Granbury, LLC

   Texas    26-1908767    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

IntegraCare of Littlefield, LLC

   Texas    26-4618941    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

IntegraCare of Olney Home Health, LLC

   Texas    81-0638801    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

IntegraCare of Texas, LLC

   Texas    20-8768235    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

IntegraCare of West

Texas-Home
Health, LLC

   Texas    27-0686207    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300


Table of Contents

Exact Name of Additional

Registrant

As Specified in its Charter*

  

State or Other

Jurisdiction of

Incorporation or

Organization

   I.R.S. Employer
Identification No.
   Primary Standard
Industrial
Classification Code
Number
  

Address, including Zip

Code, and Telephone

Number,

including Area Code, of

Principal Executive Offices

IntegraCare of West
Texas-Hospice, LLC

   Texas    27-0686137    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

IntegraCare of Wichita Falls, LLC

   Texas    27-0686266    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

J. B. Thomas Hospital, Inc.

   Massachusetts    04-3209212    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KAH Development 1, L.L.C.

   Delaware    46-3869231    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KAH Development 2, L.L.C.

   Delaware    46-3877624    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KAH Development 3, L.L.C.

   Delaware    46-3892868    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KAH Development 4, L.L.C.

   Delaware    46-3902994    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KAH Development 5, L.L.C.

   Delaware    46-3924999    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KAH Development 6, L.L.C.

   Delaware    46-3936305    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KAH Development 7, L.L.C.

   Delaware    46-3945997    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KAH Development 8, L.L.C.

   Delaware    46-3958634    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KAH Development 9, L.L.C.

   Delaware    46-3971480    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300


Table of Contents

Exact Name of Additional

Registrant

As Specified in its Charter*

  

State or Other

Jurisdiction of

Incorporation or

Organization

   I.R.S. Employer
Identification No.
   Primary Standard
Industrial
Classification Code
Number
  

Address, including Zip

Code, and Telephone

Number,

including Area Code, of

Principal Executive Offices

KAH Development 10, L.L.C.

   Delaware    46-3992741    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KAH Development 11, L.L.C.

   Delaware    46-3982070    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KAH Development 12, L.L.C.

   Delaware    46-4002959    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KAH Development 13, L.L.C.

   Delaware    46-4015730    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KAH Development 14, L.L.C.

   Delaware    46-4025157    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KAH Development 15, L.L.C.

   Delaware    46-4033562    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Kindred Braintree Hospital, L.L.C.

   Delaware    20-3618938    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Kindred Development 4, L.L.C.

   Delaware    20-2822034    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Kindred Development 7, L.L.C.

   Delaware    20-2822097    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Kindred Development 8, L.L.C.

   Delaware    20-2822116    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Kindred Development 9, L.L.C.

   Delaware    20-2822132    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Kindred Development 10, L.L.C.

   Delaware    20-2822148    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300


Table of Contents

Exact Name of Additional

Registrant

As Specified in its Charter*

  

State or Other

Jurisdiction of

Incorporation or

Organization

   I.R.S. Employer
Identification No.
   Primary Standard
Industrial
Classification Code
Number
  

Address, including Zip

Code, and Telephone

Number,

including Area Code, of

Principal Executive Offices

Kindred Development 11, L.L.C.

   Delaware    20-2822172    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Kindred Development 12, L.L.C.

   Delaware    20-2822200    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Kindred Development 13, L.L.C.

   Delaware    20-2822219    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Kindred Development 15, L.L.C.

   Delaware    20-2822255    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Kindred Development 17, L.L.C.

   Delaware    20-3329727    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Kindred Development 27, L.L.C.

   Delaware    20-3329890    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Kindred Development 29, L.L.C.

   Delaware    20-3329915    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Kindred Development Holdings 3, L.L.C.

   Delaware    20-2822011    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Kindred Development Holdings 5, L.L.C.

   Delaware    20-2822056    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Kindred Healthcare Operating, Inc.

   Delaware    52-2085484    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Kindred Healthcare Services, Inc.

   Delaware    61-1264993    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Kindred Hospice Services, L.L.C.

   Delaware    26-0717945    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300


Table of Contents

Exact Name of Additional

Registrant

As Specified in its Charter*

  

State or Other

Jurisdiction of

Incorporation or

Organization

   I.R.S. Employer
Identification No.
   Primary Standard
Industrial
Classification Code
Number
  

Address, including Zip

Code, and Telephone

Number,

including Area Code, of

Principal Executive Offices

Kindred Hospital-Palm Beach, L.L.C.

   Delaware    20-3329716    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Kindred Hospital-Pittsburgh-North Shore, L.L.C.

   Delaware    20-2822240    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Kindred Hospitals East, L.L.C.

   Delaware    52-2085555    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Kindred Hospitals Limited Partnership

   Delaware    52-2085561    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Kindred Hospitals West, L.L.C.

   Delaware    52-2085556    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Kindred Hospital-Springfield, L.L.C.

   Delaware    20-3329924    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Kindred Hospital-Toledo, L.L.C.

   Delaware    20-2821971    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Kindred Nevada, L.L.C.

   Delaware    52-2085559    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Kindred Nursing Centers Central Limited Partnership

   Delaware    52-2134134    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Kindred Nursing Centers East, L.L.C.

   Delaware    52-2085557    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Kindred Nursing Centers Limited Partnership

   Delaware    52-2085562    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Kindred Nursing Centers North, L.L.C.

   Delaware    52-2134130    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300


Table of Contents

Exact Name of Additional

Registrant

As Specified in its Charter*

  

State or Other

Jurisdiction of

Incorporation or

Organization

   I.R.S. Employer
Identification No.
   Primary Standard
Industrial
Classification Code
Number
  

Address, including Zip

Code, and Telephone

Number,

including Area Code, of

Principal Executive Offices

Kindred Nursing Centers South, L.L.C.

   Delaware    52-2134132    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Kindred Nursing Centers West, L.L.C.

   Delaware    52-2085558    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Kindred Rehab Services, Inc.

   Delaware    33-0359338    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Kindred Systems, Inc.

   Delaware    61-1239343    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Development 50, L.L.C.

   Delaware    26-0717534    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Development 51, L.L.C.

   Delaware    26-0717557    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Development 52, L.L.C.

   Delaware    32-0315911    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Development 53, L.L.C.

   Delaware    26-0717649    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Development 54, L.L.C.

   Delaware    26-0717650    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Development 55, L.L.C.

   Delaware    26-0717700    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Development 56, L.L.C.

   Delaware    26-0717720    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Development 57, L.L.C.

   Delaware    26-0717861    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300


Table of Contents

Exact Name of Additional

Registrant

As Specified in its Charter*

  

State or Other

Jurisdiction of

Incorporation or

Organization

   I.R.S. Employer
Identification No.
   Primary Standard
Industrial
Classification Code
Number
  

Address, including Zip

Code, and Telephone

Number,

including Area Code, of

Principal Executive Offices

KND Development 58, L.L.C.

   Delaware    26-0717881    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Development 59, L.L.C.

   Delaware    26-0717903    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Development 60, L.L.C.

   Delaware    58-2182891    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Development 61, L.L.C.

   Delaware    65-0549911    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Development 62, L.L.C.

   Delaware    46-0893880    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Development 63, L.L.C.

   Delaware    46-0905418    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Hospital Real Estate Holdings, L.L.C.

   Delaware    26-2162659    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Real Estate 1, L.L.C.

   Delaware    26-0709558    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Real Estate 2, L.L.C.

   Delaware    26-0709578    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Real Estate 3, L.L.C.

   Delaware    26-0709614    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Real Estate 4, L.L.C.

   Delaware    26-0709645    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Real Estate 5, L.L.C.

   Delaware    26-0710006    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300


Table of Contents

Exact Name of Additional

Registrant

As Specified in its Charter*

  

State or Other

Jurisdiction of

Incorporation or

Organization

   I.R.S. Employer
Identification No.
   Primary Standard
Industrial
Classification Code
Number
  

Address, including Zip

Code, and Telephone

Number,

including Area Code, of

Principal Executive Offices

KND Real Estate 6, L.L.C.

   Delaware    26-0710041    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Real Estate 7, L.L.C.

   Delaware    26-0710089    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Real Estate 8, L.L.C.

   Delaware    26-0710126    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Real Estate 9, L.L.C.

   Delaware    26-0710175    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Real Estate 10, L.L.C.

   Delaware    26-0710197    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Real Estate 11, L.L.C.

   Delaware    26-0710226    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Real Estate 12, L.L.C.

   Delaware    26-0710270    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Real Estate 13, L.L.C.

   Delaware    26-0710286    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Real Estate 14, L.L.C.

   Delaware    26-0710314    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Real Estate 15, L.L.C.

   Delaware    26-0710335    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Real Estate 16, L.L.C.

   Delaware    26-0710365    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Real Estate 17, L.L.C.

   Delaware    26-0710427    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300


Table of Contents

Exact Name of Additional

Registrant

As Specified in its Charter*

  

State or Other

Jurisdiction of

Incorporation or

Organization

   I.R.S. Employer
Identification No.
   Primary Standard
Industrial
Classification Code
Number
  

Address, including Zip

Code, and Telephone

Number,

including Area Code, of

Principal Executive Offices

KND Real Estate 18, L.L.C.

   Delaware    26-0710446    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Real Estate 19, L.L.C.

   Delaware    26-0710469    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Real Estate 20, L.L.C.

   Delaware    26-0710495    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Real Estate 21, L.L.C.

   Delaware    26-2162815    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Real Estate 22, L.L.C.

   Delaware    26-2162837    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Real Estate 23, L.L.C.

   Delaware    26-2162857    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Real Estate 24, L.L.C.

   Delaware    26-2162868    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Real Estate 25, L.L.C.

   Delaware    26-2162889    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Real Estate 26, L.L.C.

   Delaware    26-2165510    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Real Estate 27, L.L.C.

   Delaware    26-2165558    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Real Estate 28, L.L.C.

   Delaware    26-2165581    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Real Estate 29, L.L.C.

   Delaware    26-2165620    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300


Table of Contents

Exact Name of Additional

Registrant

As Specified in its Charter*

  

State or Other

Jurisdiction of

Incorporation or

Organization

   I.R.S. Employer
Identification No.
   Primary Standard
Industrial
Classification Code
Number
  

Address, including Zip

Code, and Telephone

Number,

including Area Code, of

Principal Executive Offices

KND Real Estate 30, L.L.C.

   Delaware    26-2165832    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Real Estate 31, L.L.C.

   Delaware    26-2165913    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Real Estate 32, L.L.C.

   Delaware    26-2165953    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Real Estate 33, L.L.C.

   Delaware    26-2165984    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Real Estate 34, L.L.C.

   Delaware    26-2166047    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Real Estate 35, L.L.C.

   Delaware    26-2166087    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Real Estate 36, L.L.C.

   Delaware    26-2166429    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Real Estate 37, L.L.C.

   Delaware    26-2166498    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Real Estate 38, L.L.C.

   Delaware    26-2166543    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Real Estate 39, L.L.C.

   Delaware    26-2166600    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Real Estate 40, L.L.C.

   Delaware    26-2166651    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Real Estate 41, L.L.C.

   Delaware    26-2166736    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300


Table of Contents

Exact Name of Additional

Registrant

As Specified in its Charter*

  

State or Other

Jurisdiction of

Incorporation or

Organization

   I.R.S. Employer
Identification No.
   Primary Standard
Industrial
Classification Code
Number
  

Address, including Zip

Code, and Telephone

Number,

including Area Code, of

Principal Executive Offices

KND Real Estate 42, L.L.C.

   Delaware    26-2166781    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Real Estate 43, L.L.C.

   Delaware    26-2166808    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Real Estate 44, L.L.C.

   Delaware    26-2166835    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Real Estate 45, L.L.C.

   Delaware    26-2166872    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Real Estate 46, L.L.C.

   Delaware    45-3605441    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Real Estate 47, L.L.C.

   Delaware    45-3605450    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Real Estate 48, L.L.C.

   Delaware    45-3605455    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Real Estate 49, L.L.C.

   Delaware    45-3605457    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Real Estate 50, L.L.C.

   Delaware    45-3605470    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Real Estate 51, L.L.C.

   Delaware    45-3620952    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Real Estate Holdings, L.L.C.

   Delaware    26-0708352    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

KND Rehab Real Estate Holdings, L.L.C.

   Delaware    26-2162539    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300


Table of Contents

Exact Name of Additional

Registrant

As Specified in its Charter*

  

State or Other

Jurisdiction of

Incorporation or

Organization

   I.R.S. Employer
Identification No.
   Primary Standard
Industrial
Classification Code
Number
  

Address, including Zip

Code, and Telephone

Number,

including Area Code, of

Principal Executive Offices

KND SNF Real Estate Holdings, L.L.C.

   Delaware    26-2162624    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Lafayette Health Care Center, Inc.

   Georgia    58-1815590    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Lafayette Specialty Hospital, L.L.C.

   Delaware    20-2971752    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Laurel Lake Health and Rehabilitation, L.L.C.

   Delaware    20-3618836    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Maine Assisted Living, L.L.C.

   Delaware    20-3618707    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Massachusetts Assisted Living, L.L.C.

   Delaware    20-3618679    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Meadows Nursing, L.L.C.

   Delaware    20-3618981    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Med. Tech. Services of South Florida, Inc.

   Florida    65-0277280    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

MedEquities, Inc.

   California    77-0236579    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Medical Hill Rehab Center, L.L.C.

   Delaware    20-4454548    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Med-Tech Private Care, Inc.

   Florida    65-0937639    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Med-Tech Services of Dade, Inc.

   Florida    65-1033439    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300


Table of Contents

Exact Name of Additional

Registrant

As Specified in its Charter*

  

State or Other

Jurisdiction of

Incorporation or

Organization

   I.R.S. Employer
Identification No.
   Primary Standard
Industrial
Classification Code
Number
  

Address, including Zip

Code, and Telephone

Number,

including Area Code, of

Principal Executive Offices

Med-Tech Services of Palm Beach, Inc.

   Florida    65-0644307    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Mills Medical Practices, LLC

   Ohio    26-3042830    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

New Triumph HealthCare of Texas, L.L.C.

   Texas    20-1576450    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

New Triumph HealthCare, Inc.

   Delaware    20-1601670    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

New Triumph HealthCare, L.L.P.

   Texas    20-1601875    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

North West Texas Home Health Services, LLC

   Texas    75-1902373    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Northland LTACH, LLC

   Delaware    20-4340714    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

NP Plus, LLC

   Delaware    20-5105668    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

NRP Holdings Company

   Delaware    52-2210242    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Outreach Health Services of North Texas, LLC

   Texas    75-2284154    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Outreach Health Services of the Panhandle, LLC

   Texas    75-2378887    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Pacific Coast Care Center, L.L.C.

   Delaware    20-4454527    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300


Table of Contents

Exact Name of Additional

Registrant

As Specified in its Charter*

  

State or Other

Jurisdiction of

Incorporation or

Organization

   I.R.S. Employer
Identification No.
   Primary Standard
Industrial
Classification Code
Number
  

Address, including Zip

Code, and Telephone

Number,

including Area Code, of

Principal Executive Offices

Pacific West Home Care, LLC

   Delaware    45-3193521    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Peoplefirst HomeCare & Hospice of California, L.L.C.

   Delaware    26-3107002    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Peoplefirst HomeCare & Hospice of Colorado, L.L.C.

   Delaware    26-0717967    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Peoplefirst HomeCare & Hospice of Indiana, L.L.C.

   Delaware    26-0717917    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Peoplefirst HomeCare & Hospice of Massachusetts, L.L.C.

   Delaware    26-3106972    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Peoplefirst HomeCare & Hospice of Ohio, L.L.C.

   Delaware    26-0718025    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Peoplefirst HomeCare & Hospice of Utah, L.L.C.

   Delaware    26-3106957    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Peoplefirst HomeCare of Colorado, L.L.C.

   Delaware    26-3106983    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Peoplefirst Virginia, L.L.C.

   Delaware    20-4487458    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

PersonaCare of Connecticut, Inc.

   Connecticut    06-1152293    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

PersonaCare of Huntsville, Inc.

   Delaware    52-1846556    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

PersonaCare of Ohio, Inc.

   Delaware    34-1708224    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300


Table of Contents

Exact Name of Additional

Registrant

As Specified in its Charter*

  

State or Other

Jurisdiction of

Incorporation or

Organization

   I.R.S. Employer
Identification No.
   Primary Standard
Industrial
Classification Code
Number
  

Address, including Zip

Code, and Telephone

Number,

including Area Code, of

Principal Executive Offices

PersonaCare of Reading, Inc.

   Delaware    52-1831134    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

PersonaCare of Wisconsin, Inc.

   Delaware    39-1718735    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

PF Development 5, L.L.C.

   Delaware    26-0718044    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

PF Development 6, L.L.C.

   Delaware    26-3106899    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

PF Development 7, L.L.C.

   Delaware    26-3106911    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

PF Development 8, L.L.C.

   Delaware    26-3106922    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

PF Development 9, L.L.C.

   Delaware    26-3106934    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

PF Development 10, L.L.C.

   Delaware    26-3106949    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

PF Development 15, L.L.C.

   Delaware    26-3107011    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

PF Development 16, L.L.C.

   Delaware    46-0818835    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

PF Development 17, L.L.C.

   Delaware    46-0823977    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

PF Development 18, L.L.C.

   Delaware    46-0833810    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300


Table of Contents

Exact Name of Additional

Registrant

As Specified in its Charter*

  

State or Other

Jurisdiction of

Incorporation or

Organization

   I.R.S. Employer
Identification No.
   Primary Standard
Industrial
Classification Code
Number
  

Address, including Zip

Code, and Telephone

Number,

including Area Code, of

Principal Executive Offices

PF Development 19, L.L.C.

   Delaware    46-0842544
   8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

PF Development 20, L.L.C.

   Delaware    46-0856432    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

PF Development 21, L.L.C.

   Delaware    46-0860128    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

PF Development 22, L.L.C.

   Delaware    46-0872119    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

PF Development 23, L.L.C.

   Delaware    46-0881549    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

PF Development 26, L.L.C.

   Delaware    58-2182892    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

PF Development 27, L.L.C.

   Delaware    58-2182890    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

PHH Acquisition Corp.

   Delaware    20-5043135    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Professional Healthcare at Home, LLC

   California    26-0519402    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Professional Healthcare, LLC

   Delaware    20-5043143    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Rehab Insurance Corporation

   Delaware    45-4743799    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Rehab Staffing, L.L.C.

   Delaware    20-3329753    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300


Table of Contents

Exact Name of Additional

Registrant

As Specified in its Charter*

  

State or Other

Jurisdiction of

Incorporation or

Organization

   I.R.S. Employer
Identification No.
   Primary Standard
Industrial
Classification Code
Number
  

Address, including Zip

Code, and Telephone

Number,

including Area Code, of

Principal Executive Offices

RehabCare Development 2, L.L.C.

   Delaware    45-3621144    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

RehabCare Development 3, L.L.C.

   Delaware    45-3621168    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

RehabCare Development 4, L.L.C.

   Delaware    45-3621198    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

RehabCare Development 5, L.L.C.

   Delaware    45-3621228    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

RehabCare Group East, Inc.

   Delaware    43-1802466    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

RehabCare Group Management Services, Inc.

   Delaware    36-4204216    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

RehabCare Group of Amarillo, L.P.

   Texas    41-2185466    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

RehabCare Group of Arlington, LP

   Texas    11-3746563    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

RehabCare Group of California, L.L.C.

   Delaware    77-0473927    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

RehabCare Group of Texas, L.L.C.

   Texas    75-2742089    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

RehabCare Group, Inc.

   Delaware    51-0265872    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

RehabCare Hospital Holdings, L.L.C.

   Delaware    20-3044067    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300


Table of Contents

Exact Name of Additional

Registrant

As Specified in its Charter*

  

State or Other

Jurisdiction of

Incorporation or

Organization

   I.R.S. Employer
Identification No.
   Primary Standard
Industrial
Classification Code
Number
  

Address, including Zip

Code, and Telephone

Number,

including Area Code, of

Principal Executive Offices

Salt Lake Physical Therapy Associates, Inc.

   Utah    87-0484010    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

SCCI Health Services Corporation

   Delaware    75-2572322    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

SCCI Hospital—Easton, Inc.

   Delaware    20-5508507    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

SCCI Hospital—El Paso, Inc.

   Delaware    74-2983423    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

SCCI Hospital—Mansfield, Inc.

   Delaware    20-5508472    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

SCCI Hospital Ventures, Inc.

   Delaware    75-2670892    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

SCCI Hospitals of America, Inc.

   Delaware    75-2695684    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Senior Home Care, Inc.

   Florida    59-3080333    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

SHC Holding, Inc.

   Delaware    42-1699530    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

SHC Rehab, Inc.

   Florida    27-3976422    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Siena Care Center, L.L.C.

   Delaware    20-4454646    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Smith Ranch Care Center, L.L.C.

   Delaware    20-4454574    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300


Table of Contents

Exact Name of Additional

Registrant

As Specified in its Charter*

  

State or Other

Jurisdiction of

Incorporation or

Organization

   I.R.S. Employer
Identification No.
   Primary Standard
Industrial
Classification Code
Number
  

Address, including Zip

Code, and Telephone

Number,

including Area Code, of

Principal Executive Offices

Southern California Specialty Care, Inc.

   California    95-4494847    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Southern Nevada Home Health Care, Inc.

   Nevada    87-0494757    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Southern Utah Home Health, Inc.

   Utah    87-0480180    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Southern Utah Home Oxygen & Medical Equipment, Inc.

   Utah    87-0548601    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Specialty Healthcare Services, Inc.

   Delaware    75-2663189    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Specialty Hospital of Cleveland, Inc.

   Ohio    34-1901793    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Specialty Hospital of Philadelphia, Inc.

   Pennsylvania    52-2166228    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Specialty Hospital of South Carolina, Inc.

   South Carolina    57-1064023    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Springfield Park View Hospital, L.L.C.

   Delaware    20-3618921    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Symphony Health Services, L.L.C.

   Delaware    55-0839302    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Synergy Healthcare Group, Inc.

   Louisiana    72-1458115    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Synergy Home Care-Acadiana Region, Inc.

   Louisiana    72-1487473    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300


Table of Contents

Exact Name of Additional

Registrant

As Specified in its Charter*

  

State or Other

Jurisdiction of

Incorporation or

Organization

   I.R.S. Employer
Identification No.
   Primary Standard
Industrial
Classification Code
Number
  

Address, including Zip

Code, and Telephone

Number,

including Area Code, of

Principal Executive Offices

Synergy Home Care-Capitol Region, Inc.

   Louisiana    20-1376846    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Synergy Home Care-Central Region, Inc.

   Louisiana    36-4516940    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Synergy Home
Care-Northeastern Region, Inc.

   Louisiana    72-1178497    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Synergy Home Care-Northshore Region, Inc.

   Louisiana    72-1223659    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Synergy Home
Care-Northwestern Region, Inc.

   Louisiana    72-1431394    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Synergy Home
Care-Southeastern Region, Inc.

   Louisiana    72-1429305    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Synergy, Inc.

   Louisiana    94-3419676    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Texas Health Management Group, LLC

   Texas    20-1424756    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

THC—Chicago, Inc.

   Illinois    36-3915965    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

THC—Houston, Inc.

   Texas    75-2504884    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

THC—North Shore, Inc.

   Illinois    61-1316854    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

THC—Orange County, Inc.

   California    33-0629983    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300


Table of Contents

Exact Name of Additional

Registrant

As Specified in its Charter*

  

State or Other

Jurisdiction of

Incorporation or

Organization

   I.R.S. Employer
Identification No.
   Primary Standard
Industrial
Classification Code
Number
  

Address, including Zip

Code, and Telephone

Number,

including Area Code, of

Principal Executive Offices

THC—Seattle, Inc.

   Washington    91-1637321    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

The Therapy Group, Inc.

   Louisiana    72-1220586    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

TherEX, Inc.

   Delaware    62-1732653    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Tower Hill Nursing, L.L.C.

   Delaware    20-3618774    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Transitional Hospitals Corporation of Indiana, Inc.

   Indiana    35-1896219    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Transitional Hospitals Corporation of Louisiana, Inc.

   Louisiana    72-1224577    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Transitional Hospitals Corporation of Nevada, Inc.

   Nevada    88-0304473    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Transitional Hospitals Corporation of New Mexico, Inc.

   New Mexico    85-0415191    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Transitional Hospitals Corporation of Tampa, Inc.

   Florida    59-3170069    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Transitional Hospitals Corporation of Texas, Inc.

   Texas    75-2451969    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Transitional Hospitals Corporation of Wisconsin, Inc.

   Wisconsin    39-1766624    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Trinity Hospice of Texas, LLC

   Texas    75-2900007    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300


Table of Contents

Exact Name of Additional

Registrant

As Specified in its Charter*

  

State or Other

Jurisdiction of

Incorporation or

Organization

   I.R.S. Employer
Identification No.
   Primary Standard
Industrial
Classification Code
Number
  

Address, including Zip

Code, and Telephone

Number,

including Area Code, of

Principal Executive Offices

Triumph HealthCare Holdings, Inc.

   Delaware    20-1601788    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Triumph HealthCare Second Holdings, L.L.C.

   Delaware    20-3379275    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Triumph HealthCare Third Holdings, L.L.C.

   Delaware    20-5265393    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Triumph Hospital Northwest Indiana, Inc.

   Missouri    43-1726280    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Triumph Rehabilitation Hospital Northern Indiana, L.L.C.

   Indiana    27-4061273    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Triumph Rehabilitation Hospital of Northeast Houston, LLC

   Delaware    45-2956602    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Tucker Nursing Center, Inc.

   Georgia    58-1218686    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Tulsa Specialty Hospital L.L.C.

   Delaware    20-2971691    8060   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Vernon Home Health Care Agency, LLC

   Texas    75-1995143    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

VTA Management Services, L.L.C.

   Delaware    55-0839383    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

VTA Staffing Services, LLC

   Delaware    01-0826753    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Wellstream Health Services, LLC

   Texas    74-2380319    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300


Table of Contents

Exact Name of Additional

Registrant

As Specified in its Charter*

  

State or Other

Jurisdiction of

Incorporation or

Organization

   I.R.S. Employer
Identification No.
   Primary Standard
Industrial
Classification Code
Number
  

Address, including Zip

Code, and Telephone

Number,

including Area Code, of

Principal Executive Offices

West Texas, LLC

   Texas    75-1900499    8000   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

Ygnacio Valley Care Center, L.L.C.

   Delaware    20-4454714    8050   

680 South Fourth Street

Louisville, Kentucky

40202-2412

(502) 596-7300

 

* The name, address, including zip code, and telephone number, including area code of the agent for service for each of the additional registrants are the same as Kindred Healthcare, Inc.


Table of Contents

The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is neither an offer to sell nor a solicitation of an offer to purchase these securities in any jurisdiction where the offer or sale is not permitted.

 

SUBJECT TO COMPLETION, DATED DECEMBER 15, 2014

PRELIMINARY PROSPECTUS

 

LOGO

Kindred Healthcare, Inc.

Offer to Exchange any and all of our outstanding unregistered 6.375% Senior Notes due 2022

for $500,000,000 aggregate principal amount of our new 6.375% Senior Notes due 2022

that have been registered under the Securities Act of 1933, as amended (the “Securities Act”)

Terms of the Exchange Offer

 

 

 

    We are offering to exchange any and all of our outstanding unregistered 6.375% Senior Notes due 2022 that were issued on April 9, 2014 (the “Old Notes”) for an equal amount of new 6.375% Senior Notes due 2022 (the “New Notes,” and together with the Old Notes, the “notes”).

 

    The exchange offer expires at 5:00 p.m., New York City time, on                 , 2015 (such date and time, the “Expiration Date,” unless we extend or terminate the exchange offer, in which case the “Expiration Date” will mean the latest date and time to which we extend the exchange offer).

 

    Tenders of the Old Notes may be withdrawn at any time prior to the Expiration Date.

 

    The Old Notes may be exchanged only in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof.

 

    All Old Notes that are validly tendered and not validly withdrawn will be exchanged.

 

    The exchange of the Old Notes for the New Notes will not be a taxable exchange for U.S. federal income tax purposes.

 

    We will not receive any proceeds from the exchange offer.

 

    The terms of the New Notes to be issued in the exchange offer are substantially the same as the terms of the Old Notes, except that the offer of the New Notes is registered under the Securities Act, and the New Notes have no transfer restrictions, registration rights or rights to additional interest.

 

    The New Notes will not be listed on any securities exchange. A public market for the New Notes may not develop, which could make selling the New Notes difficult.

Each broker-dealer that receives the New Notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of such New Notes. The letter of transmittal accompanying this prospectus states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of the New Notes received in exchange for the Old Notes where such Old Notes were acquired by such broker-dealer as a result of market-making activities or other trading activities. For a period of 120 days after the Expiration Date, we will make this prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any such resale. See “Plan of Distribution.”

 

 

Investing in the New Notes to be issued in the exchange offer involves certain risks. See “Risk Factors” beginning on page 14.

 

 

We are not making an offer to exchange the Old Notes in any jurisdiction where the offer is not permitted.

Neither the SEC nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

The date of this prospectus is                 , 2014.


Table of Contents

TABLE OF CONTENTS

 

     Page  

WHERE YOU CAN FIND MORE INFORMATION

     i   

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

     i   

SUMMARY

     1   

RATIO OF EARNINGS TO FIXED CHARGES

     13   

RISK FACTORS

     14   

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

     50   

SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA

     53   

DESCRIPTION OF THE EXCHANGE OFFER

     55   

DESCRIPTION OF THE NOTES

     65   

FORM, BOOK-ENTRY PROCEDURES AND TRANSFER

     122   

CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS

     125   

PLAN OF DISTRIBUTION

     127   

USE OF PROCEEDS

     127   

LEGAL MATTERS

     127   

EXPERTS

     127   

LETTER OF TRANSMITTAL

     A-1   

 

 

We are responsible for the information contained and incorporated by reference in this prospectus. We have not authorized anyone to give you any other information, and we take no responsibility for any other information that others may give you. If you are in a jurisdiction where offers to sell, or solicitations of offers to purchase, the securities offered by this document are unlawful, or if you are a person to whom it is unlawful to direct these types of activities, then the offer presented in this document does not extend to you. The information contained in this document speaks only as of the date of this document unless the information specifically indicates that another date applies.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the SEC a registration statement on Form S-4 to register this exchange offer of the New Notes, which you can access on the SEC’s website at sec.report. This prospectus, which forms part of the registration statement, does not contain all of the information included in that registration statement. For further information about us and about the New Notes offered in this prospectus, you should refer to the registration statement and its exhibits. You may read and copy any materials we file with the SEC at the Public Reference Room maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. You may obtain further information about the operation of the SEC’s Public Reference Room by calling the SEC at 1-800-SEC-0330. These materials are also available to the public from the SEC’s website at sec.report. Please note that the SEC’s website is included in this prospectus as an inactive textual reference only.

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

We “incorporate by reference” into this prospectus certain information we and Gentiva Health Services, Inc. (“Gentiva”) file with the SEC, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is an important part of this prospectus. Certain information that we subsequently file with the SEC will automatically update and supersede information in this prospectus and in our and Gentiva’s other filings with the SEC.

 

i


Table of Contents

We incorporate by reference the documents listed below, which we have already filed with the SEC, and any future filings we make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), after the date of the initial registration statement and prior to the termination of the exchange offer, except that we are not incorporating any information included in a Current Report on Form 8-K that has been or will be furnished (and not filed) with the SEC, unless such information is expressly incorporated herein by a reference in a furnished Current Report on Form 8-K or other furnished document:

 

    our Annual Report on Form 10-K for the year ended December 31, 2013 filed with the SEC on February 28, 2014 (the “Kindred 2013 10-K”) (the financial statements and related audit report and management discussion and analysis have been superseded by the Current Report on Form 8-K filed with the SEC on November 14, 2014);

 

    our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2014 filed with the SEC on May 9, 2014; June 30, 2014 filed with the SEC on August 11, 2014; and September 30, 2014 filed with the SEC on November 7, 2014;

 

    portions of our Definitive Proxy Statement on Schedule 14A filed with the SEC on April 3, 2014 that are incorporated by reference into Part III of our Annual Report on Form 10-K for the year ended December 31, 2013;

 

    our Current Reports on Form 8-K filed with the SEC on October 4, 2011 (Exhibits 99.3 and 99.4 only); January 2, 2014; January 16, 2014; February 4, 2014; February 21, 2014 (Item 8.01 and Exhibit 99.2 only); March 26, 2014; March 27, 2014; March 28, 2014; April 14, 2014 (excluding Item 7.01 and Exhibit 99.1); April 17, 2014; May 8, 2014 (Item 8.01 and Exhibit 99.2 only); May 15, 2014 (Item 8.01 and Exhibit 99.1 only); May 23, 2014; June 3, 2014; June 16, 2014 (SEC Accession No. 0001193125-14-237656); June 16, 2014 (SEC Accession No. 0001193125-14-237710) (Item 8.01 and Exhibit 99.1 only); June 20, 2014; June 25, 2014; July 25, 2014; August 7, 2014 (Item 8.01 and Exhibit 99.2 only); October 9, 2014 (Item 8.01 only); October 14, 2014; October 23, 2014; October 31, 2014; November 3, 2014; November 6, 2014 (SEC Accession No. 0001193125-14-398918); November 6, 2014 (SEC Accession No. 0001193125-14-399781) (Item 8.01 and Exhibit 99.2 only); November 12, 2014 (Item 1.01 only); November 17, 2014; November 20, 2014; November 25, 2014; December 8, 2014; December 12, 2014 and December 15, 2014;

 

    our Current Report on Form 8-K filed with the SEC on November 14, 2014 (including a recast presentation of certain sections of the Kindred 2013 10-K);

 

    our Current Report on Form 8-K filed with the SEC on November 17, 2014 (including the unaudited pro forma condensed combined financial statements as of and for the nine months ended September 30, 2014 and for the year ended December 31, 2013);

 

    “Part I. Financial Information—Item 1. Financial Statements” of Gentiva Health Services, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014 filed with the SEC on November 14, 2014;

 

    “Item 8. Financial Statements and Supplementary Data” of Gentiva Health Services, Inc.’s Annual Report on Form 10-K/A for the year ended December 31, 2013 filed with the SEC on November 14, 2014; and

 

    Gentiva Health Services, Inc.’s Current Report on Form 8-K/A (Amendment No. 1) (Exhibits 99.1 and 99.2 only) filed with the SEC on December 23, 2013.

The representations, warranties and covenants contained in the Merger Agreement (as defined herein) were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to such agreement, may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to such agreement instead of establishing these matters as facts, and may be subject to standards of materiality applicable

 

ii


Table of Contents

to the contracting parties that differ from those applicable to investors. Investors are not third-party beneficiaries under the Merger Agreement and should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the parties thereto or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of representations and warranties may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in Kindred’s or Gentiva’s public disclosures.

Copies of these filings may be obtained at no cost by writing or calling us at the following address and telephone number:

Corporate Secretary

Kindred Healthcare, Inc.

680 South Fourth Street

Louisville, Kentucky 40202

Telephone: (502) 596-7300

To obtain timely delivery of any copies of filings requested, please write or call us no later than five business days before the Expiration Date of the exchange offer. This means that you must request this information no later than                , 2015.

Kindred’s filings above are also available to the public on our website http://www.kindredhealthcare.com. (We have included our website address as an inactive textual reference and do not intend it to be an active link to our website. Information on our website is not part of this prospectus.)

 

iii


Table of Contents

SUMMARY

The following information supplements, and should be read together with, the information contained or incorporated by reference in other parts of this prospectus. This summary highlights selected information from this prospectus. As a result, it does not contain all the information that may be important to you and is qualified in its entirety by more detailed information appearing elsewhere in, or incorporated by reference into, this prospectus. You should carefully read this entire prospectus, including the documents incorporated by reference herein, which are described under “Where You Can Find More Information” and “Incorporation of Certain Information by Reference” before making an investment decision. You should pay special attention to the “Risk Factors” section of this prospectus and the “Risk Factors” sections of our Annual Report on Form 10-K for the year ended December 31, 2013 and our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2014 before making an investment decision.

In this prospectus, unless otherwise specified or the context requires otherwise: (i) references to “we,” “us,” “our,” the “Company,” the “issuer” and “Kindred” are references to Kindred Healthcare, Inc. and its consolidated subsidiaries as of the date hereof; (ii) references to “Gentiva” are references to Gentiva Health Services, Inc. and its consolidated subsidiaries as of the date hereof; and (iii) references to the “combined company” are references to Kindred Healthcare, Inc. and its consolidated subsidiaries (including Gentiva and its consolidated subsidiaries) after the completion of the Transactions, including the Merger (each as defined herein), and assume that the Merger is completed.

With respect to the discussion of the terms of the notes on the cover page, in the section entitled “Summary—Summary of the Exchange Offer,” in the section entitled “Summary—Summary of the New Notes” and in the section entitled “Description of the Notes,” references to “we,” “us” or “our” include only Kindred Healthcare, Inc. and not any other consolidated subsidiaries of Kindred Healthcare, Inc.

Company Overview

General

Kindred is one of the largest diversified post-acute healthcare providers in the United States. At September 30, 2014, Kindred, through its subsidiaries, provided healthcare services in 2,376 locations across 47 states.

We have organized our business into four operating divisions:

 

    Hospital Division—Our hospital division provides long-term acute care (“LTAC”) services to medically complex patients through the operation of a national network of 97 transitional care (“TC”) hospitals with 7,145 licensed beds and five inpatient rehabilitation hospitals (“IRFs”) with 215 licensed beds in 22 states as of September 30, 2014. We operate the second largest network of TC hospitals and IRFs in the United States based upon number of facilities.

 

    Nursing Center Division—Our nursing center division provides quality, cost-effective care through the operation of a national network of 99 nursing centers (12,478 licensed beds) and six assisted living facilities (341 beds) located in 21 states as of September 30, 2014. Through our nursing centers, we provide short stay patients and long stay residents with a full range of medical, nursing, rehabilitative, pharmacy and routine services, including daily dietary, social and recreational services.

 

   

Rehabilitation Division—Our rehabilitation division provides rehabilitation services, including physical and occupational therapies and speech pathology services, to residents and patients of nursing centers, acute and LTAC hospitals, outpatient clinics, home health agencies and assisted living facilities under the name “RehabCare.” Within our rehabilitation division, we are organized into two

 

 

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reportable operating segments: skilled nursing rehabilitation services (“SRS”) and hospital rehabilitation services (“HRS”). Our SRS operations provide contract therapy services primarily to freestanding nursing centers, school districts and hospice providers. As of September 30, 2014, our SRS segment provided rehabilitative services to 1,896 nursing centers in 45 states. Our HRS operations provide program management and therapy services on an inpatient basis in hospital-based inpatient rehabilitation units, LTAC hospitals, sub-acute (or skilled nursing) units, as well as on an outpatient basis to hospital-based and other satellite programs. As of September 30, 2014, our HRS segment operated 102 hospital-based inpatient rehabilitation units and provided rehabilitation services in 117 LTAC hospitals, 10 sub-acute (or skilled nursing) units and 139 outpatient clinics.

 

    Care Management Division—Our care management division primarily provides home health, hospice and private duty services, under the name “Kindred at Home,” to patients in a variety of settings, including homes, nursing centers and other residential settings. As of September 30, 2014, we operated 152 Kindred at Home hospice, home health and non-medical home care locations in 13 states. While minor in scope at this time, our care management division is also developing (1) physician coverage across sites of service, (2) care managers to improve care transitions, (3) information sharing and technology connectivity, (4) patient placement tools, and (5) condition-specific clinical programs and outcome measures.

We believe that the independent focus of each of our divisions on the unique aspects of its business enhances its ability to improve the quality of its operations and achieve operating efficiencies.

All financial and statistical information presented or incorporated by reference in this prospectus reflects the continuing operations of our businesses for all periods presented unless otherwise indicated.

Corporate and Other Information

Our business is conducted through Kindred Healthcare, Inc., a Delaware corporation and the issuer of the New Notes offered hereby, and its consolidated subsidiaries. Our principal executive offices are located at 680 South Fourth Street, Louisville, Kentucky 40202 and our telephone number is (502) 596-7300. Our corporate website address is www.kindredhealthcare.com. We do not incorporate the information contained on, or accessible through, our corporate website into this prospectus, and you should not consider it part of this prospectus.

Recent Developments

We entered into an incremental joinder agreement dated as of December 12, 2014 (the “Incremental ABL Joinder”) to the ABL Credit Agreement dated as of June 1, 2011, as previously amended and restated from time to time (as amended, the “ABL Facility”). See “—Acquisition of Gentiva Health Services—Financing Transactions—Credit Facilities Amendments.”

On December 8, 2014, we launched an unregistered offering of $1.35 billion aggregate principal amount of senior unsecured notes (the “Senior Notes”) in a private placement (the “Senior Notes Offering”). The Senior Notes Offering priced on December 11, 2014 and is expected to close on December 18, 2014. The Senior Notes consist of $750 million aggregate principal amount of 8.00% senior notes due 2020 and $600 million aggregate principal amount of 8.75% senior notes due 2023. See “—Acquisition of Gentiva Health Services—Financing Transactions—Senior Notes Offering.”

On November 25, 2014, we completed the offering of (i) 150,000 7.50% tangible equity units of the Company (the “Units”) for cash and (ii) 5,000,000 shares of common stock, par value $0.25 per share, of the Company (“Common Stock”) for cash. On December 1, 2014, the underwriters exercised their over-allotment options to purchase 22,500 additional Units and 395,759 additional shares of Common Stock. The sale of the additional Units and additional shares of Common Stock closed on December 3, 2014. In this prospectus, we refer to the offering and sale of the Units as the “Units Offering” and the offering and sale of our Common Stock as the “Common Stock Offering.”

 

 

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On November 25, 2014, we entered into a fourth amendment and restatement agreement (the “Term Loan Amendment”) among Kindred, the consenting lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent. The Term Loan Amendment amended and restated the Term Loan Credit Agreement dated as of June 1, 2011, as amended and restated from time to time (as amended, the “Term Loan Facility” and, together with the ABL Facility, the “Credit Facilities”), to, among other items, modify certain provisions to permit the issuance of the Senior Notes into an escrow account, increase the applicable interest rate margins on the term loans, temporarily increase the maximum total leverage ratio permitted under the financial maintenance covenants and modify certain provisions related to the incurrence of debt and the making of acquisitions, investments and restricted payments.

On November 11, 2014, we entered into a definitive agreement (the “Centerre Merger Agreement”) to acquire Centerre Healthcare Corporation (“Centerre”), a national company that operates IRFs in partnership with leading acute care hospitals and health systems, for a purchase price of approximately $195 million in cash (the “Centerre Acquisition”). Centerre currently operates 11 IRFs with a total of 612 beds in joint ventures with acute-care hospital systems in eight states. Centerre has two additional hospitals with a total of 90 beds under construction and scheduled to open in 2015, and additional potential hospitals in various stages of development. The Centerre Acquisition is subject to several conditions to closing, including, among others, approval of the merger agreement by the requisite vote of Centerre’s stockholders, regulatory approvals, consents from certain joint venture partners and certain other customary conditions to closing, including the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”). The Centerre Acquisition is expected to close in the first quarter of 2015.

On November 5, 2014, we announced that upon closing of our acquisition of Gentiva, which is expected in the first quarter of 2015, David A. Causby will become the President of the combined Kindred at Home business. Mr. Causby, currently Gentiva’s President and Chief Operating Officer, will be responsible for the combined company’s home health, hospice, palliative, and community care offerings. Mr. Causby will serve on the Company’s Executive Committee and will report to Benjamin A. Breier, Kindred’s President and Chief Operating Officer.

On October 30, 2014, we announced that Benjamin A. Breier will become Chief Executive Officer on March 31, 2015, succeeding Paul J. Diaz who will become Executive Vice Chairman of Kindred’s board of directors. Mr. Breier will also become a member of Kindred’s board of directors, effective March 31, 2015.

On October 9, 2014, we entered into a definitive agreement to acquire Gentiva, a leading national provider of home health, hospice and community care services in the United States, for a total consideration of approximately $1.8 billion. For additional information, see “Acquisition of Gentiva Health Services.”

Acquisition of Gentiva Health Services

Acquisition Overview

On October 9, 2014, Kindred and Gentiva entered into the Agreement and Plan of Merger, dated as of October 9, 2014 (the “Merger Agreement”), under which Kindred will acquire Gentiva and its subsidiaries (the “Merger”) for (i) $14.50 in cash (the “Cash Consideration”), without interest, and (ii) 0.257 shares of a validly issued, fully paid and nonassessable share of our Common Stock (the “Stock Consideration” and, together with the Cash Consideration, the “Merger Consideration”) per share of Gentiva’s common stock, $0.10 par value (each a “Gentiva Share”). The Merger Agreement provides for the merger of the Merger Sub, a wholly owned subsidiary of the Company, with and into Gentiva, with Gentiva surviving the Merger as a wholly owned subsidiary of the Company. Nothing in this prospectus should be construed as an offer to purchase any of the Gentiva Shares, our Common Stock or the Senior Notes.

 

 

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The combination of Kindred and Gentiva will create a nation-wide integrated care delivery system. The transaction combines two market leaders in complementary specialties and creates a combined company with significantly increased diversity and scale. Further, the transaction will enhance Kindred’s leading position in the post-acute and rehabilitation services market in the United States and will make “Kindred at Home” one of the largest and most geographically diversified home health and hospice providers in the United States. By combining two market leaders, we believe that the Merger will advance the development of our integrated approach to patient care, creating significant value for both companies’ patients, employees and shareholders. The combined company will operate across 47 states with more than 2,860 locations.

If the Merger is completed, we intend to use the net proceeds of the Financing Transactions (as defined below), to fund the Cash Consideration for the Merger, to repay Gentiva’s existing debt and to pay related fees and expenses.

Gentiva Overview

Gentiva Health Services, Inc. is a leading provider of home health services, hospice services and community care services serving patients through approximately 493 locations in 40 states as of September 30, 2014. Gentiva provides a single source for skilled nursing; physical, occupational, speech and neuro-rehabilitation services; hospice services; social work; nutrition; disease management education; help with daily living activities; and other therapies and services. Gentiva’s revenues are generated predominantly from federal and state government programs and, to a minor extent, commercial insurance and individual consumers.

Gentiva organizes its business into three operating segments:

 

    Home Health Segment—provides direct home nursing and therapy services operations, including specialty programs, through approximately 294 locations located in 38 states as of September 30, 2014;

 

    Hospice Segment—serves terminally ill patients and their families through approximately 165 locations operating in 30 states as of September 30, 2014; and

 

    Community Care Segment—serves patients who have chronic or long-term disabilities who need help with routine personal care through approximately 34 locations in four states as of September 30, 2014. These services include help with personal needs, such as bathing and dressing, and household activities, such as laundry and shopping, all of which help enable the patient to remain at home.

On October 18, 2013, Gentiva completed the acquisition of certain assets relating to the home health, hospice and community care businesses of Harden Healthcare Holdings, Inc. (“Harden”) pursuant to an agreement and plan of merger dated as of September 18, 2013 for a total consideration of $426.8 million, exclusive of transaction costs, in a combination of cash and stock.

During 2013, Gentiva undertook a corporate restructuring initiative, referred to as “One Gentiva,” to better align its home health, hospice and community care businesses under a common regional management structure. In addition, it undertook a branch rationalization initiative to review under-performing branches. As a result of this review, Gentiva has closed or consolidated 94 branches through the first half of 2014.

See “Risk Factors—Risk Factors Relating to the Merger” and “Cautionary Statement Regarding Forward-Looking Statements” for risks, uncertainties and other factors that may influence the outcome of our acquisition of Gentiva.

 

 

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Financing Transactions

As described in more detail below, the following transactions (collectively, the “Financing Transactions”) have occurred or are expected to occur in connection with the Merger:

 

    we entered into the Credit Facilities Amendments and plan to borrow approximately $164 million under the ABL Facility (each, as defined below);

 

    we are offering $1.35 billion aggregate principal amount of Senior Notes in the Senior Notes Offering;

 

    we issued 172,500 Units in the Units Offering; and

 

    we issued 5,395,759 shares of Common Stock in the Common Stock Offering.

Credit Facilities Amendments

We entered into an amendment and restatement agreement dated as of October 31, 2014 (the “ABL Amendment”) to the ABL Facility to, among other items, modify certain provisions to permit the issuance of the Senior Notes into escrow. Upon the completion of the Merger and the satisfaction of certain other conditions, the ABL Amendment provides for a further amendment and restatement of the ABL Facility to, among other items, modify certain provisions related to the incurrence of debt and the making of acquisitions, investments and restricted payments.

In addition, we also entered into the Incremental ABL Joinder to the ABL Facility. Upon the completion of the Merger and the satisfaction of certain other conditions, the Incremental ABL Joinder provides for additional revolving commitments in an aggregate principal amount of $150.0 million.

We entered into the Term Loan Amendment on November 25, 2014, which amended and restated the Term Loan Facility, to, among other items, modify certain provisions to permit the issuance of the Senior Notes into escrow, increase the applicable interest rate margins on the term loans, temporarily increase the maximum total leverage ratio permitted under the financial maintenance covenants and modify certain provisions related to the incurrence of debt and the making of acquisitions, investments and restricted payments.

The amendments to the Credit Facilities as set forth in the ABL Amendment, the Incremental ABL Joinder and the Term Loan Amendment are referred to in this prospectus as the “Credit Facilities Amendments.”

Senior Notes Offering

We are offering $1.35 billion aggregate principal amount of Senior Notes in a private placement. The Senior Notes Offering priced on December 11, 2014 and is expected to close on December 18, 2014. The Senior Notes will be issued initially by Kindred Escrow Corp. II, a wholly owned subsidiary of Kindred (the “Escrow Issuer”), and the gross proceeds from the Senior Notes Offering, together with any additional amount sufficient to fund the redemption price and any accrued interest, will be deposited into escrow until the Merger is completed. If the Merger is completed, the Escrow Issuer will be merged with and into Kindred, and as a result we will assume the Escrow Issuer’s obligations under the Senior Notes and the Senior Notes will be guaranteed on a senior unsecured basis by each of our domestic 100% owned restricted subsidiaries that guarantee the Credit Facilities. If the Merger is not completed, the Escrow Issuer will redeem all of the Senior Notes at a redemption price to be specified in the indentures governing the Senior Notes. The indentures governing the Senior Notes are expected to contain customary covenants, including, among others, covenants that restrict our ability and our subsidiaries’ ability to pay dividends, make distributions or redeem or repurchase our capital stock.

 

 

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The foregoing description and any other information regarding the Senior Notes Offering is included herein solely for informational purposes. There can be no assurance that we will complete the Senior Notes Offering. The Senior Notes Offering has not been registered with the SEC, and the Senior Notes were sold privately by means of a confidential offering memorandum and not by means of this prospectus. The Senior Notes have not been registered under the Securities Act or any state securities laws, and may not be offered or sold in the United States or to U.S. persons unless registered under the Securities Act and applicable state securities laws or an exemption from such registration as available.

Units Offering

On November 25, 2014, in an offering registered with the SEC, we completed the sale of 150,000 Units for cash. On December 1, 2014, the underwriters exercised in full their over-allotment option to purchase 22,500 additional Units, which we closed on December 3, 2014. Each Unit is comprised of a prepaid stock purchase contract issued by the Company (a “Purchase Contract”) and one share of 7.25% Mandatory Redeemable Preferred Stock, Series A of the Company (the “Mandatory Redeemable Preferred Stock”) having a final “preferred stock installment payment date” (as defined in the prospectus supplement for the Units Offering) of December 1, 2017 and an initial liquidation preference of $201.58 per share of Mandatory Redeemable Preferred Stock. The net proceeds from the Units Offering, after deducting the underwriting discount and estimated offering expenses, were approximately $166.3 million.

Common Stock Offering

On November 25, 2014, in an offering registered with the SEC, we completed the sale of 5,000,000 shares of our Common Stock for cash. On December 1, 2014, the underwriters exercised their over-allotment option to purchase 395,759 additional shares of Common Stock, which we closed on December 3, 2014. The net proceeds of the Common Stock Offering, after deducting the underwriting discount and estimated offering expenses, were approximately $101.0 million.

The Merger, the Credit Facilities Amendments, the Units Offering, the Common Stock Offering, the Senior Notes Offering and the payment of associated fees and expenses are collectively referred to in this prospectus as the “Transactions.” We cannot assure you that we will complete all of the Financing Transactions on the terms contemplated by this prospectus or at all.

 

 

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Summary of the Exchange Offer

 

Background

On April 9, 2014, we issued $500 million aggregate principal amount of the Old Notes in an unregistered offering. In connection with that offering, we entered into a registration rights agreement on April 9, 2014 (the “Registration Rights Agreement”), in which we agreed, among other things, to complete this exchange offer. Under the terms of the exchange offer, you are entitled to exchange the Old Notes for the New Notes evidencing the same indebtedness and with substantially similar terms. You should read the discussion under the heading “Description of the Notes” for further information regarding the New Notes.

 

The Exchange Offer

We are offering to exchange, for each $1,000 aggregate principal amount of our Old Notes validly tendered and accepted, $1,000 aggregate principal amount of our New Notes in authorized denominations.

 

  We will not pay any accrued and unpaid interest on the Old Notes that we acquire in the exchange offer. Instead, interest on the New Notes will accrue (a) from the later of (i) the last interest payment date on which interest was paid on the Old Note surrendered in exchange for the New Note or (ii) if the Old Note is surrendered for exchange on a date in a period that includes the record date for an interest payment date to occur on or after the date of such exchange and as to which interest will be paid, the date of such interest payment date, or (b) if no interest has been paid, from and including April 9, 2014, the original issue date of the Old Notes.

 

  As of the date of this prospectus, $500 million aggregate principal amount of the Old Notes are outstanding.

 

Denominations of New Notes

Tendering holders of the Old Notes must tender the Old Notes in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof. The New Notes will be issued in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof.

 

Expiration Date

The exchange offer will expire at 5:00 p.m., New York City time, on                 , 2015, unless we extend or terminate the exchange offer in which case the “Expiration Date” will mean the latest date and time to which we extend the exchange offer.

 

Settlement Date

The settlement date of the exchange offer will be as soon as practicable after the Expiration Date of the exchange offer.

 

Withdrawal of Tenders

Tenders of the Old Notes may be withdrawn at any time prior to the Expiration Date.

 

Conditions to the Exchange Offer

Our obligation to consummate the exchange offer is subject to certain customary conditions, which we may assert or waive. See “Description of the Exchange Offer—Conditions to the Exchange Offer.”

 

 

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Procedures for Tendering

To participate in the exchange offer, you must follow the automatic tender offer program (“ATOP”) procedures established by The Depository Trust Company (“DTC”) for tendering the Old Notes held in book-entry form. The ATOP procedures require that the exchange agent receive, prior to the Expiration Date of the exchange offer, a computer-generated message known as an “agent’s message” that is transmitted through ATOP and that DTC confirm that:

 

    DTC has received instructions to exchange your Old Notes; and

 

    you agree to be bound by the terms of the letter of transmittal.

 

  For more details, please read “Description of the Exchange Offer—Terms of the Exchange Offer” and “Description of the Exchange Offer—Procedures for Tendering.” If you elect to have the Old Notes exchanged pursuant to this exchange offer, you must properly tender your Old Notes prior to the Expiration Date. All Old Notes validly tendered and not properly withdrawn will be accepted for exchange. The Old Notes may be exchanged only in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof.

 

Consequences of Failure to Exchange

If we complete the exchange offer and you do not participate in it, then:

 

    your Old Notes will continue to be subject to the existing restrictions upon their transfer;

 

    we will have no further obligation to provide for the registration under the Securities Act of those Old Notes except under certain limited circumstances; and

 

    the liquidity of the market for your Old Notes could be adversely affected.

 

Certain Income Tax Considerations

The exchange pursuant to the exchange offer will not be a taxable event for U.S. federal income tax purposes. See “Certain U.S. Federal Income Tax Considerations” in this prospectus.

 

Use of Proceeds

We will not receive any cash proceeds from the issuance of the New Notes in this exchange offer.

 

Exchange Agent

Wells Fargo Bank, National Association is the exchange agent for the exchange offer.

 

Regulatory Approvals

Other than the federal securities laws, there are no federal or state regulatory requirements that we must comply with and there are no approvals that we must obtain in connection with the exchange offer.

 

 

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Summary of the New Notes

 

Issuer

Kindred Healthcare, Inc., a Delaware corporation.

 

Securities Offered

$500 million aggregate principal amount of 6.375% Senior Notes due 2022.

 

Maturity Date

April 15, 2022.

 

Interest Rate

6.375% per annum, payable semi-annually in arrears on April 15 and October 15 of each year, commencing on October 15, 2014. Interest on the New Notes will accrue (a) from the later of (i) the last interest payment date on which interest was paid on the Old Note surrendered in exchange for the New Note or (ii) if the Old Note is surrendered for exchange on a date in a period that includes the record date for an interest payment date to occur on or after the date of such exchange and as to which interest will be paid, the date of such interest payment date, or (b) if no interest has been paid, from and including April 9, 2014, the original issue date of the Old Notes.

 

Optional Redemption

The New Notes will be redeemable at our option, in whole or in part, at any time on or after April 15, 2017, at the redemption prices set forth in this prospectus, together with accrued and unpaid interest, if any, to the date of redemption.

 

  At any time prior to April 15, 2017, we may redeem up to 35% of the aggregate original principal amount of the New Notes with the proceeds of one or more equity offerings of our common shares at a redemption price of 106.375% of the principal amount of the New Notes, together with accrued and unpaid interest, if any, to the date of redemption.

 

  At any time prior to April 15, 2017, we may also redeem some or all of the New Notes at a redemption price equal to 100% of the principal amount of the New Notes plus accrued and unpaid interest, if any, to the date of redemption, plus a “make-whole” premium.

 

  See “Description of the Notes—Optional Redemption.”

 

Change of Control, Asset Sales

The occurrence of certain changes of control will require us to offer to purchase from you all or a portion of your New Notes at a price equal to 101% of their principal amount, together with accrued and unpaid interest, if any, to the date of purchase. See “Description of the Notes—Repurchase at the Option of Holders—Change of Control.”

 

  Certain asset dispositions may require us, under certain circumstances, to use the proceeds from those asset dispositions to make an offer to purchase the New Notes at 100% of their principal amount, together with accrued and unpaid interest, if any, to the date of purchase. See “Description of the Notes—Repurchase at the Option of Holders—Sales of Assets and Subsidiary Stock.”

 

 

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Guarantees

The New Notes will be fully and unconditionally guaranteed on a senior unsecured basis by all of our domestic 100% owned restricted subsidiaries that guarantee the Credit Facilities. Certain non-100% owned restricted subsidiaries that guarantee the Credit Facilities will not guarantee the New Notes (together with the unrestricted subsidiaries, the “non-guarantor subsidiaries”). All future domestic 100% owned restricted subsidiaries that will guarantee our indebtedness under the Credit Facilities will also fully and unconditionally guarantee the New Notes. The guarantees will be released when the guarantees of our indebtedness under the Credit Facilities are released and in certain other circumstances as described in “Description of the Notes—Subsidiary Guarantees.”

 

  The guarantees will be unsecured senior indebtedness of our guarantors and will have the same ranking with respect to indebtedness of our guarantors as the New Notes will have with respect to our indebtedness.

 

Ranking

The New Notes will:

 

    be our general unsecured senior obligations;

 

    rank equally in right of payment with all of our existing and future senior debt;

 

    be effectively junior in right of payment to our secured debt, including the Credit Facilities, to the extent of the value of the assets securing such debt;

 

    be structurally subordinated to all of the existing and future liabilities (including trade payables) of each of our subsidiaries that do not guarantee the New Notes; and

 

    be senior in right of payment to all of our existing and future subordinated debt.

 

  As of September 30, 2014, after giving effect to the Transactions, (1) the New Notes and related guarantees would have ranked effectively junior to approximately $1.2 billion of senior secured indebtedness consisting solely of borrowings under the Credit Facilities, (2) we would have had additional borrowing capacity under the ABL Facility of approximately $432 million before giving effect to the Incremental ABL Joinder (subject to a borrowing base and after giving effect to approximately $5 million of Kindred’s letters of credit outstanding on September 30, 2014 and approximately $56 million of Gentiva’s letters of credit outstanding on September 30, 2014 that we may assume upon the consummation of the Merger) and (3) the New Notes would be effectively junior to approximately $4 million of secured indebtedness of our non-guarantor subsidiaries, consisting of a bank note.

 

 

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Form and Denomination

The New Notes will be issued in fully-registered form. The New Notes will be represented by one or more global notes, deposited with Wells Fargo Bank, National Association, as trustee (the “Trustee”) as custodian for DTC and registered in the name of Cede & Co., DTC’s nominee. Beneficial interests in the global notes will be shown on, and any transfers will be effective only through, records maintained by DTC and its participants.

 

  The New Notes will be issued in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof.

 

Certain Covenants

The indenture governing the New Notes contains certain covenants that, among other things, limit our and our restricted subsidiaries’ ability to:

 

    incur, assume or guarantee additional indebtedness;

 

    issue redeemable stock and preferred stock;

 

    pay dividends, make distributions or redeem or repurchase capital stock;

 

    prepay, redeem or repurchase debt that is junior in right of payment to the notes;

 

    make loans and investments;

 

    grant or incur liens;

 

    restrict dividends, loans or asset transfers from our subsidiaries;

 

    sell or otherwise dispose of assets, including capital stock of subsidiaries;

 

    enter into transactions with affiliates; and

 

    consolidate or merge with or into, or sell substantially all of our assets to, another person.

 

  These covenants will be subject to a number of important exceptions and qualifications. For more details, see “Description of the Notes.”

 

  If the New Notes are rated investment grade at any time by both Standard & Poor’s Ratings Group, Inc. (“S&P”) and Moody’s Investors Service, Inc. (“Moody’s”), certain of these covenants will be suspended, and the holders of the New Notes will lose the protection of these covenants.

 

Absence of Public Market for the New Notes

The New Notes are a new issue of securities and there is currently no established trading market for the New Notes. We do not intend to apply for a listing of the New Notes on any securities exchange or an automated dealer quotation system. Accordingly, there can be no assurance as to the development or liquidity of any market for the New Notes. The initial purchasers of the Old Notes have advised us that they currently intend to make a market in the notes. However, they are not obligated to do so, and any market making with respect to the notes may be discontinued without notice.

 

 

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Governing Law

The New Notes are governed by, and construed in accordance with, the internal laws of the State of New York.

 

Book-Entry Depository

The Depository Trust Company.

 

Trustee

Wells Fargo Bank, National Association.

 

Risk Factors

In evaluating an investment in the New Notes, prospective investors should carefully consider, along with the other information included in this prospectus, the specific factors set forth under the heading “Risk Factors” in this prospectus and otherwise incorporated by reference herein.

 

 

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RATIO OF EARNINGS TO FIXED CHARGES

Our ratio of earnings to fixed charges for the nine months ended September 30, 2014 and each of the five years in the period ended December 31, 2013 is set forth below. You should read this table in conjunction with the consolidated financial statements and notes incorporated by reference in this prospectus. For the purpose of computing these ratios, “earnings” consists of consolidated pretax income from continuing operations before adjustment for noncontrolling interests in consolidated subsidiaries and income or loss from equity investees, plus fixed charges, distributed income of equity investees and amortization of capitalized interest, less interest capitalized; “fixed charges” consists of interest expense from continuing and discontinued operations, amortized debt discounts and fees, interest capitalized related to indebtedness and an estimated interest component of rental expense.

 

     (dollars in thousands)
Years ended December 31,
     Nine months ended
September 30, 2014
 
     2009          2010              2011              2012              2013         

Ratio of Earnings to Fixed Charges(1)

     1.30x         1.19x         —           —           —           1.05x   

 

(1) For the years ended December 31, 2011, 2012 and 2013, there was a deficiency of earnings to cover fixed charges of $80,877, $17,228 and $53,054, respectively.

 

 

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RISK FACTORS

Investing in the New Notes involves risk. In addition to the other information included or incorporated by reference in this prospectus, including the matters addressed under “Cautionary Statement Regarding

Forward-Looking
Statements,” you should carefully consider the risks and uncertainties described below, as well as the risks discussed in our public filings with the SEC (including under the heading “Risk Factors” in the 2013 Annual Report), before deciding to participate in the exchange offer and to invest in the New Notes. The risks and uncertainties described below and incorporated by reference into this prospectus are not the only ones related to our business, the exchange offer or the New Notes. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also materially and adversely affect our business operations, results of operations, financial condition, liquidity or prospects. The trading price of the New Notes could decline due to the materialization of any of these risks, and you may lose all or part of your original investment in the New Notes.

Risk Factors Relating to Our Indebtedness and the New Notes

Our indebtedness could adversely affect our cash flow and prevent us from fulfilling our obligations, including the New Notes.

We have a substantial amount of indebtedness. As of September 30, 2014, after giving effect to the Transactions, we would have had total indebtedness of approximately $3.0 billion in addition to the availability of approximately $432 million under the ABL Facility before giving effect to the Incremental ABL Joinder (subject to a borrowing base and after giving effect to approximately $5 million of Kindred’s letters of credit outstanding on September 30, 2014 and approximately $56 million of Gentiva’s letters of credit outstanding on September 30, 2014 that Kindred may assume upon the consummation of the Merger). The completion of the Merger and the Centerre Acquisition will significantly increase our aggregate indebtedness. Our substantial amount of indebtedness could have important consequences for you. For example it could:

 

    make it more difficult for us to satisfy our obligations with respect to our indebtedness, including with respect to the New Notes;

 

    increase our vulnerability to general adverse economic and industry conditions;

 

    expose us to fluctuations in the interest rate environment because the interest rates under the Credit Facilities are variable;

 

    require us to dedicate a substantial portion of our cash flow from operations to make payments on our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures, acquisitions, dividends and other general corporate purposes;

 

    limit our ability to borrow additional funds for working capital, capital expenditures, acquisitions and other general purposes;

 

    limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate, which may place us at a competitive disadvantage compared to our competitors that have less debt; and

 

    restrict us from pursuing business opportunities.

Our indebtedness may restrict our current and future operations, which could adversely affect our ability to respond to changes in our business and manage our operations.

The terms of the Credit Facilities and the indenture governing the New Notes include a number of restrictive covenants that impose significant operating and financial restrictions on us and our restricted subsidiaries, including restrictions on our and our restricted subsidiaries’ ability to, among other things:

 

    incur additional indebtedness;

 

 

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    create liens;

 

    consolidate or merge;

 

    sell assets, including capital stock of our subsidiaries;

 

    engage in transactions with our affiliates;

 

    pay dividends on our capital stock or redeem, repurchase or retire our capital stock or indebtedness; and

 

    make investments, loans, advances and acquisitions.

The terms of the Credit Facilities also include certain additional restrictive covenants that impose significant operating and financial restrictions on us and our restricted subsidiaries, including restrictions on our and our restricted subsidiaries’ ability to, among other things:

 

    engage in business other than relating to owning, operating or managing healthcare facilities;

 

    enter into sale and lease-back transactions;

 

    modify certain agreements;

 

    make or incur capital expenditures; and

 

    hold cash and temporary cash investments outside of collateral accounts.

In addition, the Credit Facilities require us to comply with financial covenants, including a maximum leverage ratio and a minimum fixed charge coverage ratio.

Our ability to comply with these agreements may be affected by events beyond our control, including prevailing economic, financial and industry conditions. These covenants could have an adverse effect on our business by limiting our ability to take advantage of financing, merger and acquisition or other opportunities. The breach of any of these covenants or restrictions could result in a default under the Credit Facilities or the indenture governing the New Notes.

Our failure to comply with the agreements relating to our outstanding indebtedness, including as a result of events beyond our control, could result in an event of default that could materially and adversely affect our business, financial condition, results of operations and liquidity.

If there were an event of default under any of the agreements relating to our outstanding indebtedness, including the Credit Facilities and the indenture governing the New Notes, we may not be able to incur additional indebtedness under the Credit Facilities and the holders of the defaulted debt could cause all amounts outstanding with respect to that debt to be due and payable immediately. We cannot assure you that our assets or cash flow would be sufficient to fully repay borrowings under our outstanding debt instruments if accelerated upon an event of default, which could have a material adverse effect on our ability to continue to operate as a going concern. Further, if we are unable to repay, refinance or restructure our secured debt, the holders of such debt could proceed against the collateral securing that indebtedness. In addition, any event of default or declaration of acceleration under one debt instrument also could result in an event of default under one or more of our other debt instruments or under the master lease agreements (“Master Lease Agreements”) with Ventas, Inc. (“Ventas”). Moreover, counterparties to some of our contracts material to our business may have the right to amend or terminate those contracts if we have an event of default or a declaration of acceleration under certain of our indebtedness, which could adversely affect our business, financial condition, results of operations and liquidity.

 

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We, including our subsidiaries, have the ability to incur substantially more indebtedness, including senior secured indebtedness, which could further increase the risks associated with our leverage.

Subject to the restrictions in the Credit Facilities and the indenture governing the New Notes, we, including our subsidiaries, have the ability to incur significant additional indebtedness. In addition, after giving effect to the Merger and related Financing Transactions, we will have the ability to incur additional indebtedness. As of September 30, 2014, after giving effect to the Transactions, we would have had:

 

    $1.2 billion of senior secured indebtedness under the Credit Facilities;

 

    $500 million of senior unsecured indebtedness under the Old Notes;

 

    $1.35 billion aggregate principal amount of Senior Notes offered in the Senior Notes Offering;

 

    $35 million of Mandatory Redeemable Preferred Stock as part of the Units;

 

    approximately $432 million available for borrowing under the ABL Facility before giving effect to the Incremental ABL Joinder (subject to a borrowing base and after giving effect to approximately $5 million of Kindred’s letters of credit outstanding on September 30, 2014 and approximately $56 million of Gentiva’s letters of credit outstanding on September 30, 2014 that Kindred may assume upon the consummation of the Merger) which, if borrowed, would be senior secured indebtedness; and

 

    subject to our compliance with certain covenants and other conditions, we have the option to incur certain additional secured indebtedness and/or additional unsecured indebtedness, which would rank pari passu with the New Notes. The completion of the Merger and the Centerre Acquisition would significantly increase our aggregate indebtedness.

Although the terms of the Credit Facilities and the indenture governing the New Notes include restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of important exceptions, and indebtedness incurred in compliance with these restrictions could be substantial. If we incur significant additional indebtedness, the related risks that we face could increase.

We may not be able to generate sufficient cash to pay rents related to our leased properties and service all of our indebtedness and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.

A substantial portion of our cash flows from operations is dedicated to the payment of rents related to our leased properties, as well as principal and interest obligations on our outstanding indebtedness. Our ability to generate cash depends on many factors beyond our control, and any failure to meet our debt service obligations could harm our business, financial condition and results of operations. Our ability to make payments on and to refinance our indebtedness and to fund working capital needs and planned capital expenditures will depend on our ability to generate cash in the future. This, to a certain extent, is subject to general economic, financial, competitive, business, legislative, regulatory and other factors that are beyond our control.

If our business does not generate sufficient cash flow from operations or if future borrowings are not available to us in an amount sufficient to enable us to pay our indebtedness or to fund our other liquidity needs, we may need to refinance all or a portion of our indebtedness on or before the maturity thereof, sell assets, reduce or delay capital investments or seek to raise additional capital, any of which could have a material adverse effect on our operations. In addition, we may not be able to effect any of these actions, if necessary, on commercially reasonable terms or at all. The terms of existing or future debt instruments may limit or prevent us from taking any of these actions. Our ability to restructure or refinance our indebtedness will depend on the condition of the capital markets and our financial condition at such time. Any refinancing of our debt could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations. In addition, any failure to make scheduled payments of interest and principal on our outstanding indebtedness would likely result in a reduction of our credit rating, which could harm our ability to incur

 

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additional indebtedness on commercially reasonable terms or at all. Our inability to generate sufficient cash flow to satisfy our debt service obligations, or to refinance or restructure our obligations on commercially reasonable terms or at all, would have an adverse effect, which could be material, on our business, financial condition, results of operations and liquidity.

In addition, our Master Lease Agreements and/or our outstanding indebtedness:

 

    require us to dedicate a substantial portion of our cash flow to payments on our rent and interest obligations, thereby reducing the availability of cash flow to fund working capital, capital expenditures and other general corporate activities, including cash dividends;

 

    require us to pledge as collateral substantially all of our assets;

 

    require us to maintain a certain defined fixed coverage ratio above a specified level and a certain defined total indebtedness ratio below a specified level, thereby reducing our financial flexibility;

 

    require us to limit the amount of capital expenditures we can incur in any fiscal year; and

 

    restrict our ability to discontinue the operation of any leased property despite its level of profitability and otherwise restrict our operational flexibility.

These provisions:

 

    could have a material adverse effect on our ability to withstand competitive pressures or adverse economic conditions (including adverse regulatory changes);

 

    could adversely affect our ability to make material acquisitions, obtain future financing or take advantage of business opportunities that may arise;

 

    could increase our vulnerability to a downturn in general economic conditions or in our business; and

 

    could adversely affect our ability to continue to make cash dividends.

An increase in interest rates would increase the cost of servicing our debt and could reduce our profitability.

Borrowings under the Credit Facilities bear interest at variable rates. Interest rate changes could affect the amount of our interest payments, and accordingly, our future earnings and cash flows, assuming other factors are held constant. Pursuant to the terms of the Credit Facilities, we have entered into an interest rate swap that fixes a portion of our interest rate interest payments in order to reduce interest rate volatility; however, any interest rate swaps we enter into do not fully mitigate our interest rate risk. As a result, an increase in interest rates, whether because of an increase in market interest rates or an increase in our own cost of borrowing, would increase the cost of servicing our debt and could materially reduce our profitability. For example, a change of one-eighth percent in the interest rates for the Credit Facilities would increase or decrease annual interest expense by approximately $1 million.

Our failure to pay rent or otherwise comply with the provisions of any of our Master Lease Agreements could materially adversely affect our business, financial position, results of operations and liquidity.

As of September 30, 2014, we lease 38 of our TC hospitals and 45 of our nursing centers from Ventas under our Master Lease Agreements. Our failure to pay the rent or otherwise comply with the provisions of any of our Master Lease Agreements would result in an “Event of Default” under such Master Lease Agreement and also could result in a default under the Credit Facilities and, if repayment of the borrowings under the Credit Facilities were accelerated, also under the indenture governing the notes. Upon an Event of Default, remedies available to Ventas include, without limitation, terminating such Master Lease Agreement, repossessing and reletting the leased properties and requiring us to remain liable for all obligations under such Master Lease Agreement, including the difference between the rent under such Master Lease Agreement and the rent payable as a result of

 

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reletting the leased properties, or requiring us to pay the net present value of the rent due for the balance of the term of such Master Lease Agreement. The exercise of such remedies would have a material adverse effect on our business, financial position, results of operations and liquidity.

For additional information on the Master Lease Agreements, see “Part I—Item 1—Business—Master Lease Agreements” in Kindred’s Annual Report on Form 10-K for the year ended December 31, 2013.

The New Notes will not be secured by any of our assets and therefore will be effectively junior to any secured indebtedness we may incur to the extent of the value of the collateral securing such indebtedness.

The New Notes will be general unsecured obligations ranking effectively junior in right of payment to all existing and future secured indebtedness to the extent of the collateral securing such indebtedness. Our obligations under the New Notes and our guarantors’ obligations under their guarantees of the New Notes are unsecured, but our obligations under the Credit Facilities will be secured by a security interest in substantially all of the assets of the Company and subsidiary guarantors. As of September 30, 2014, after giving effect to the Transactions, we would have had (1) $500 million of senior unsecured indebtedness under the Old Notes, (2) $1.2 billion of senior secured indebtedness consisting solely of borrowings under the Credit Facilities, (3) additional borrowing capacity under the ABL Facility of approximately $432 million before giving effect to the Incremental ABL Joinder (subject to a borrowing base and after giving effect to approximately $5 million of Kindred’s letters of credit outstanding on September 30, 2014 and approximately $56 million of Gentiva’s letters of credit outstanding on September 30, 2014 that Kindred may assume upon the consummation of the Merger), which, if borrowed, would be senior secured indebtedness, and the option (subject to certain conditions) to incur additional incremental term loans under the Term Loan Facility or increase the asset-based revolving credit facility commitments under the ABL Facility by an aggregate amount not to exceed (x) $100 million, plus (y) an amount such that the senior secured leverage ratio (as defined in the Credit Facilities) is equal to or less than 3.50:1.00, and (4) $1.35 billion aggregate principal amount of notes offered in the Senior Notes Offering.

In the event that we are declared bankrupt, become insolvent or are liquidated or reorganized or if we default under the Credit Facilities, the lenders could foreclose on the pledged assets to the exclusion of holders of the New Notes, even if an event of default exists under the indenture governing the New Notes at such time. Furthermore, if the lenders foreclose upon and sell the pledged equity interests in any subsidiary guarantor of the New Notes, then that subsidiary guarantor will be released from its guarantee of the New Notes automatically and immediately upon such sale. In any such event, because the New Notes will not be secured by any of our assets or the equity interests in the subsidiary guarantors, it is possible that there would be no assets remaining from which your claims could be satisfied or, if any assets remained, they might be insufficient to satisfy your claims in full.

The New Notes will be structurally subordinated to all indebtedness of our existing subsidiaries that are not guarantors of the New Notes and our future subsidiaries that do not become guarantors of the New Notes.

The New Notes will not be guaranteed by any of our existing or future non-U.S. subsidiaries or any of our less than 100% owned U.S. subsidiaries. Certain of these non-guarantor subsidiaries guarantee our obligations under the Credit Facilities. As of September 30, 2014, after giving effect to the Transactions, the New Notes would have been structurally subordinated to the Credit Facilities with respect to our non-guarantor subsidiaries that guarantee our obligations under the Credit Facilities but not the New Notes and approximately $4 million of secured indebtedness of our non-guarantor subsidiaries, consisting of a bank note. Accordingly, claims of holders of the New Notes will be structurally subordinated to the claims of creditors of these non-guarantor subsidiaries, including trade creditors. All obligations of our non-guarantor subsidiaries will have to be satisfied before any of the assets of such subsidiaries would be available for distribution, upon a liquidation or otherwise, to us or a guarantor of the New Notes.

 

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In addition, the indenture governing the New Notes permits, subject to some limitations, these non-guarantor subsidiaries to incur additional indebtedness and does not include any limitation on the amount of other liabilities, such as trade payables, that may be incurred by these subsidiaries.

Repayment of our indebtedness, including the New Notes, is dependent on cash flow generated by our subsidiaries.

Our subsidiaries own a significant portion of our assets and conduct a significant portion of our operations. Accordingly, repayment of our indebtedness, including the New Notes, is dependent, to a significant extent, on the generation of cash flow by our subsidiaries and their ability to make such cash available to us, by dividend, debt repayment or otherwise. Unless they are guarantors of the New Notes, our subsidiaries do not have any obligation to pay amounts due on the New Notes or to make funds available for that purpose. Certain of our subsidiaries may not be able to, or may not be permitted to, make distributions to enable us to make payments in respect of our indebtedness, including the New Notes. Each subsidiary is a distinct legal entity and, under certain circumstances, legal and contractual restrictions may limit our ability to obtain cash from our subsidiaries. While the indenture governing the New Notes limits the ability of our restricted subsidiaries to incur consensual restrictions on their ability to pay dividends or make other intercompany payments to us, these limitations are subject to certain qualifications and exceptions. In the event that we do not receive distributions from our subsidiaries, we may be unable to make required principal and interest payments on our outstanding indebtedness, including the New Notes.

Under certain circumstances a court could cancel the New Notes or the related guarantees under fraudulent conveyance laws. If that occurs, you may not receive any payments on the New Notes.

Federal and state fraudulent transfer and conveyance statutes may apply to the issuance of the New Notes and the incurrence of the guarantees. Under federal bankruptcy law and comparable provisions of state fraudulent transfer or conveyance laws, which may vary from state to state, the New Notes or guarantees could be voided as a fraudulent transfer or conveyance if we or any of the guarantors, as applicable: (1) issued the New Notes or incurred the guarantees with the intent of hindering, delaying or defrauding creditors or (2) received less than reasonably equivalent value or fair consideration in return for either issuing the New Notes or incurring the guarantees and, in the case of (2) only, one of the following is also true at the time thereof:

 

    we or any of the guarantors, as applicable, were insolvent or rendered insolvent by reason of the issuance of the New Notes or the incurrence of the guarantees;

 

    the issuance of the New Notes or the incurrence of the guarantees left us or any of the guarantors, as applicable, with an unreasonably small amount of capital to carry on the business;

 

    we or any of the guarantors intended to, or believed that we or such guarantor would, incur debts beyond our or such guarantor’s ability to pay as they mature; or

 

    we or any of the guarantors was a defendant in an action for money damages, or had a judgment for money damages docketed against us or such guarantor if, in either case, after final judgment, the judgment is unsatisfied.

If a court were to find that the issuance of the New Notes or the incurrence of the guarantees was a fraudulent transfer or conveyance, the court could void the payment obligations under the New Notes or such guarantee or subordinate the New Notes or such guarantee to presently existing and future indebtedness of ours or of the related guarantor, or require the holders of the New Notes to repay any amounts received with respect to such guarantee. In the event of a finding that a fraudulent transfer or conveyance occurred, you may not receive any repayment on the New Notes. Further, the voidance of the New Notes could result in an event of default with respect to our and our subsidiaries’ other debt that could result in acceleration of such debt.

 

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As a general matter, value is given for a transfer or an obligation if, in exchange for the transfer or obligation, property is transferred or an antecedent debt is secured or satisfied. A debtor will generally not be considered to have received value in connection with a debt offering if the debtor uses the proceeds of that offering to make a dividend payment or otherwise retire or redeem equity securities issued by the debtor. We cannot be certain as to the standards a court would use to determine whether or not we or the guarantors were solvent at the relevant time or, regardless of the standard that a court uses, that the issuance of the New Notes and the guarantees would not be subordinated to our or any of our guarantors’ other debt.

Generally, an entity would be considered insolvent if, at the time it incurred debt:

 

    the sum of its debts, including contingent liabilities, was greater than the fair saleable value of all its assets;

 

    the present fair saleable value of its assets was less than the amount that would be required to pay its probable liability on its existing debts and liabilities, including contingent liabilities, as they become absolute and mature; or

 

    it could not pay its debts as they become due.

If the guarantees were legally challenged, any guarantee could also be subject to the claim that, since the guarantee was incurred for our benefit, and only indirectly for the benefit of the guarantor, the obligations of the applicable guarantor were incurred for less than fair consideration. A court could thus void the obligations under the guarantees, subordinate them to the applicable guarantor’s other debt or take other action detrimental to the holders of the New Notes.

The indenture governing the New Notes includes a “savings clause” intended to limit each guarantor’s liability under its guarantee to the maximum amount that it could incur without causing the guarantee to be a fraudulent transfer under applicable law. There can be no assurance that this provision will be upheld as intended. In a recent case, the U.S. Bankruptcy Court in the Southern District of Florida found this kind of provision in that case to be ineffective, and held the guarantees to be fraudulent transfers and voided them in their entirety. The United States Court of Appeals for the Eleventh Circuit affirmed the liability findings of the Bankruptcy Court without ruling directly on the enforceability of savings clauses generally. If this decision were followed by other courts, the risk that the guarantees would be deemed fraudulent conveyances would be significantly increased.

There is no established trading market for the New Notes and you may not be able to sell the New Notes readily or at all or at or above the price that you paid.

The New Notes are new securities for which there is no established trading market. We do not intend to apply for the New Notes to be listed on any securities exchange or to arrange for quotation on any automated dealer quotation system. The initial purchasers of the Old Notes have advised us that they intend to make a market in the notes, but they are not obligated to do so and may discontinue any market making in the notes at any time, in their sole discretion. You may not be able to sell the New Notes at a particular time or at favorable prices. As a result, we cannot assure you as to the liquidity of any trading market for the New Notes. Accordingly, you may be required to bear the financial risk of your investment in the New Notes indefinitely. If a trading market were to develop, future trading prices of the New Notes, may be volatile and will depend on many factors, including:

 

    our operating performance and financial condition;

 

    the interest of securities dealers in making a market for them;

 

    prevailing interest rates; and

 

    the market for similar securities.

 

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In addition, the market for non-investment grade debt historically has been subject to disruptions that have caused substantial volatility in the prices of securities similar to the New Notes. The market for the New Notes may be subject to similar disruptions that could adversely affect their value.

We may not have the ability to raise the funds necessary to finance the change of control offer required by the indenture governing the New Notes.

Upon the occurrence of a “change of control,” as defined in the indenture governing the New Notes, we must offer to buy back the New Notes at a price equal to 101% of the principal amount, together with any accrued and unpaid interest, if any, to the date of the repurchase. Our failure to purchase, or give notice of purchase of, the New Notes would be a default under the indenture governing the New Notes. See “Description of the Notes—Repurchase at the Option of Holders—Change of Control.”

Furthermore, certain change of control events would also constitute an event of default under the Credit Facilities. Upon the occurrence of a change of control, the lenders under the Credit Facilities may have the right, among other things, to terminate their lending commitments or to cause all outstanding debt obligations under the Credit Facilities to become due and payable and proceed against the assets securing such debt, any of which actions would prevent us from borrowing under the Credit Facilities to finance a repurchase of the New Notes. We cannot assure you that we will have available funds sufficient to repurchase the New Notes and satisfy other payment obligations that could be triggered upon the change of control. If we do not have sufficient financial resources to effect a change of control offer, we would be required to seek additional financing from outside sources to repurchase the New Notes. We cannot assure you that financing would be available to us on satisfactory terms, or at all.

The definition of change of control in the indenture governing the New Notes includes a phrase relating to the sale, assignment, conveyance, transfer or other disposition of “all or substantially all” of our and our subsidiaries’ assets, taken as a whole. Although there is a limited body of case law interpreting the phrase “substantially all,” there is no precise established definition of the phrase under applicable law. Accordingly, in certain circumstances there may be a degree of uncertainty as to whether a particular transaction would involve a disposition of “all or substantially all” of the property or assets of a person. As a result, it may be unclear as to whether a change of control has occurred and whether a holder of New Notes may require us to make an offer to repurchase the New Notes as described above.

The trading prices for the New Notes will be directly affected by many factors, including our credit rating.

Credit rating agencies continually revise their ratings for companies they follow, including us. Any ratings downgrade could adversely affect the trading prices of the New Notes, or the trading market for the New Notes, to the extent a trading market for the New Notes develops. The condition of the financial and credit markets and prevailing interest rates have fluctuated in the past and are likely to fluctuate in the future and any fluctuation may impact the trading prices of the New Notes.

If the New Notes are rated investment grade at any time by both S&P and Moody’s, certain covenants included in the indenture will be suspended, and the holders of the New Notes will lose the protection of these covenants.

The indenture includes certain covenants that will be suspended and cease to have any effect from and after the first date when the New Notes are rated investment grade by both S&P and Moody’s. See “Description of the Notes—Certain Covenants—Suspension of Covenants.” These covenants restrict, among other things, our ability to pay dividends, incur additional debt and to enter into certain types of transactions. Because we would not be subject to these restrictions at any time that the New Notes are rated investment grade, we would be able to make dividends and distributions and incur substantial additional debt without satisfying the terms of the suspended covenants. If after these covenants are suspended, S&P or Moody’s were to downgrade their ratings of the New

 

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Notes to a non-investment grade level, the covenants would be reinstated and the holders of the New Notes would again have the protection of these covenants. However, any indebtedness incurred or other transactions entered into during such time as the New Notes were rated investment grade would be permitted.

Risk Factors Relating to the Merger

There can be no assurance that we will successfully complete the Merger on the terms or timetable currently proposed or at all.

No assurance can be given that the Merger will be completed when expected, on the terms proposed or at all. The Merger is subject to customary closing conditions, including approval by the Gentiva stockholders, the effectiveness of the related Form S-4, approval of the listing by the NYSE of the Common Stock to be issued in the Merger, the absence of legal prohibitions on the consummation of the Merger, the accuracy of the representations and warranties in the Merger Agreement and the performance by Kindred and Gentiva of their respective obligations under the Merger Agreement. Our obligation to close under the Merger Agreement is also contingent upon the receipt of certain state healthcare and insurance regulatory clearances or approvals (which condition, if not already fulfilled, will be deemed satisfied on February 28, 2015). There can be no assurance that the conditions to closing will be satisfied or waived or that other events will not intervene to delay or prevent the closing of the Merger. Whether or not we acquire Gentiva, we have incurred, and will continue to incur, substantial nonrecurring transaction costs in connection with the Merger. See “—We have incurred, and will continue to incur, significant transaction and Merger-related integration costs in connection with the Merger.”

The Merger is subject to certain governmental and regulatory approvals, which, if delayed, denied or granted with unacceptable conditions, may delay or prevent the completion of the Merger, result in additional expenditure of time and resources and reduce the anticipated benefits of the Merger.

Kindred and Gentiva require certain governmental authorizations, consents, orders and approvals, including certain state licensure and regulatory approvals, in connection with the Merger. The failure to obtain such approvals may delay closing until after February 28, 2015, and may reduce the anticipated benefits of the Merger to Kindred and Gentiva stockholders.

We may not be able to successfully integrate Gentiva’s operations with our own or realize the anticipated benefits of the Merger, which could adversely affect our financial condition, results of operations and business prospects.

We may not be able to successfully integrate Gentiva’s operations with our own, and we may not realize all or any of the expected benefits of the Merger as and when planned. The integration of Gentiva’s operations with Kindred’s will be complex, costly and time consuming. We expect that it will require significant attention from senior management and will impose substantial demands on our operations and personnel, potentially diverting attention from other important pending projects. The difficulties and risks associated with the integration of Gentiva include:

 

    the possibility that we will fail to implement our business plans for the combined company, including as a result of new legislation or regulation in the healthcare industry affecting the timing or costs associated with the operations of the combined company or its integration plan;

 

    possible inconsistencies in the standards, controls, procedures, policies and compensation structures of Kindred and Gentiva;

 

    the possibility that we may have failed to discover liabilities of Gentiva during our due diligence investigation as part of the Merger for which we, as a successor owner, may be responsible;

 

    limitations prior to the completion of the Merger on the ability of management of each of Kindred and Gentiva to work together to develop an integration plan;

 

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    the increased scope and complexity of our operations;

 

    the potential loss of key employees and the costs associated with our efforts to retain key employees;

 

    provisions in Kindred’s and Gentiva’s contracts with third parties that may limit our flexibility to take certain actions;

 

    risks and limitations on our ability to consolidate corporate and administrative infrastructures of the two companies;

 

    obligations that we will have to counterparties of Gentiva that arise as result of the change in control of Gentiva; and

 

    the possibility of unanticipated delays, costs or inefficiencies associated with the integration of Gentiva’s operations with Kindred’s.

As a result of these difficulties and risks, we may not accomplish the integration of Gentiva’s business smoothly, successfully or within our budgetary expectations and anticipated timetable. Accordingly, we may fail to realize some or all of the anticipated benefits of the Merger, such as increase in our scale, diversification, cash flows and operational efficiency and accretion to our earnings per share.

The Merger may not achieve its intended results, including anticipated synergies.

While we expect the Merger to result in a significant amount of synergies and other financial and operational benefits, we may be unable to realize these synergies or other benefits in the timeframe that we expect or at all. Achieving the anticipated benefits, including synergies, is subject to a number of uncertainties, including whether the businesses acquired can be operated in the manner we intend and whether our costs to finance the Merger and integrate the businesses will be consistent with our expectations. Events outside of our control, including, but not limited to, any conditions imposed by governmental authorities, operating changes or regulatory changes, could also adversely affect our ability to realize the anticipated benefits from the Merger. Thus, the integration may be unpredictable, or subject to delays or changed circumstances, and the acquired businesses may not perform in accordance with our expectations. Further, we will incur implementation costs relative to these anticipated synergies, and our expectations with respect to integration or synergies as a result of the Merger may not materialize. Accordingly, you should not place undue reliance on our anticipated synergies. See “—We may not be able to successfully integrate Gentiva’s operations with our own or realize the anticipated benefits of the Merger, which could adversely affect our financial condition, results of operations and business prospects.”

We have incurred, and will continue to incur, significant transaction and Merger-related integration costs in connection with the Merger.

We have incurred and expect to continue to incur a number of costs associated with completing the Merger and integrating the operations of Kindred and Gentiva. Such costs include costs associated with borrowings under or amendments to the Credit Facilities, any premiums in connection with refinancing Gentiva’s debt and the payment of certain fees and expenses incurred in connection with the Merger and related Financing Transactions, including legal and other professional advisor fees. The substantial majority of these costs will be non-recurring expenses and will primarily consist of transaction costs related to the Merger, facilities and systems consolidation costs and employment-related costs. Additional unanticipated costs may be incurred in the integration of the businesses of Kindred and Gentiva. Although we expect that the elimination of duplicative costs, as well as the realization of other efficiencies related to the integration of the businesses, may offset incremental transaction and merger-related costs over time, this net benefit may not be achieved in the near term, or at all.

The pendency of the Merger could adversely affect our business, financial results and operations.

The announcement and pendency of the Merger could cause disruptions and create uncertainty surrounding our business and affect the relationships with our customers and employees. In addition, we have diverted, and will

 

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continue to divert, significant management resources to complete the Merger, which could have a negative impact on our ability to manage existing operations or pursue alternative strategic transactions, which could adversely affect our business, operating results and financial condition.

Uncertainty about the effect of the Merger on Gentiva’s employees and customers may have an adverse effect on Gentiva and, consequently, the combined company.

The uncertainty created by the pending Merger may impair Gentiva’s ability to attract, retain and motivate key personnel until the Merger is completed as current and prospective employees may experience uncertainty about their future roles with the combined company. If key employees of Gentiva depart because of issues relating to the uncertainty and difficulty of integration or a desire not to become our employees, our ability to realize the anticipated benefits of the Merger could be reduced or delayed. In addition, disruptions resulting from the Merger may also affect our relationships with our customers and employees.

We expect to incur substantial additional indebtedness to finance the Merger and the Centerre Acquisition, and may not be able to meet our substantial debt service requirements.

A substantial portion of our cash flows from operations is dedicated to the payment of principal and interest obligations on our outstanding indebtedness. Subject to certain restrictions, we also have the ability to incur substantial additional borrowings. In addition, we intend to incur substantial additional indebtedness in connection with the Merger and the Centerre Acquisition, including as a result of the Senior Notes Offering and anticipated borrowings of $164 million on Kindred’s current ABL Facility. In addition, we entered into the Incremental ABL Joinder, which provides for additional revolving commitments in an aggregate principal amount of $150 million. If we are unable to generate sufficient funds to meet our obligations under our notes, the Senior Notes or our Credit Facilities (including after giving effect to the Merger), we may be required to refinance, restructure or otherwise amend some or all of such obligations, sell assets or raise additional cash through the sale of our equity. We cannot make any assurances that we would be able to obtain such refinancing on terms as favorable as our current financing or that such restructuring, sales of assets or issuances of equity can be accomplished or, if accomplished, would raise sufficient funds to meet these obligations.

Acquiring Gentiva will substantially increase the scale of our Company, which will change the risks to which we are subject.

Gentiva is a large and complex company that will add significantly to the size and scale of our operations if we are successful in closing the Merger. Gentiva reported in its annual report on Form 10-K/A for the year ended December 31, 2013 that it had approximately $1.7 billion in net revenues for 2013 and approximately $1.3 billion in total assets at December 31, 2013. It also reported that it has made numerous acquisitions and operates at approximately 550 locations in 40 states, which could expose us to increased integration, operational, employee management and regulatory risks. Further, after giving effect to the Merger, the percentage of our revenues derived from the Medicare and Medicaid programs will increase. See “Risks Relating to Reimbursement and Regulation of Our Business—Changes in the reimbursement rates or methods or timing of payment from third party payors, including the Medicare and Medicaid programs, or the implementation of other measures to reduce reimbursement for our services and products could result in a substantial reduction in our revenues and operating margins” and “Risks Relating to Our Operations—Possible changes in the acuity of residents and patients, as well as payor mix and payment methodologies, may significantly affect our profitability.” We may have failed to identify all the risks to which the acquisition of Gentiva may expose us or the effects it may have on the price of our shares or on the long-term value of the Company, including any risks related to Gentiva’s compliance with healthcare laws and regulations, contractual obligations and leases and those related to changes in Medicare reimbursement.

 

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Legal proceedings in connection with the Merger could delay or prevent the completion of the Merger.

Purported class action lawsuits have been filed by third parties challenging the proposed Merger and seeking, among other things, to enjoin the completion of the Merger. One of the conditions to the closing of the Merger is that no governmental entity (including any national, state or local governmental authority) having jurisdiction over a party to a Merger Agreement has enacted, issued, enforced or entered any laws or orders that prohibit the completion of the Merger. Because the Merger Agreement contains this condition, if a plaintiff is successful in obtaining an injunction prohibiting completion of the Merger, then the injunction may delay the Merger or prevent the Merger from being completed. In addition, Gentiva and Kindred could incur significant costs or damages in connection with the lawsuits.

Risk Factors Relating to Acquisitions Generally

Any acquisition, investment or strategic alliance that we have made or may make in the future may use significant resources, may be unsuccessful and could expose us to unforeseen liabilities.

Independently of the proposed acquisitions of Gentiva and Centerre, we intend to continue to selectively pursue strategic acquisitions of, investments in, and strategic alliances with, hospitals, IRFs, nursing centers, rehabilitation operations, and home health and hospice operations, particularly where an acquisition may assist us in scaling our operations more rapidly and efficiently than internal growth. Acquisitions, including the Merger and the Centerre acquisition, may involve significant cash expenditures, debt incurrence, additional operating losses, amortization of certain intangible assets of acquired companies, dilutive issuances of equity securities and expenses that could have a material adverse effect on our business, financial position, results of operations and liquidity.

Acquisitions, investments and strategic alliances involve numerous risks. These risks include:

 

    limitations on our ability to identify acquisitions that meet our target criteria and complete such acquisitions on reasonable terms and valuations;

 

    limitations on our ability to access equity or capital to fund acquisitions, including difficulty in obtaining financing for acquisitions at a reasonable cost, or that such financing will contain restrictive covenants that limit our operating flexibility or ability to access additional capital when needed;

 

    entry into markets or businesses in which we may have limited or no experience;

 

    difficulties integrating acquired operations, personnel and information systems, and in realizing projected efficiencies and cost savings, particularly in the case of significant acquisitions;

 

    diversion of management’s time from existing operations;

 

    potential loss of key employees or customers of acquired companies;

 

    inaccurate assessment of assets and liabilities and exposure to undisclosed or unforeseen liabilities of acquired companies, including liabilities for the failure to comply with healthcare laws;

 

    the possibility that we failed to discover liabilities of an acquired company during our due diligence investigation as part of any acquisition for which we, as a successor owner, may be responsible;

 

    obligations that we may have to joint venture partners and other counterparties of an acquired company that arise as a result of a change in control of an acquired company;

 

    obligations that we have to holders of our debt securities and to our lenders under our existing credit facilities, including our obligations to comply with financial covenants; and

 

    impairment of acquired goodwill and intangible assets.

 

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Acquisitions and other strategic opportunities may negatively impact our business, financial position, results of operations and liquidity.

We continue to seek acquisitions and other strategic opportunities for each of our businesses, particularly where we believe an acquisition or strategic opportunity may assist us in scaling our operations more rapidly and efficiently than internal growth. Accordingly, we are often engaged in evaluating potential transactions and other strategic alternatives, some of which may be significant in size, and we may engage in preliminary discussions that may result in one or more transactions. Our business, short-term and long-term financial position, results of operations and liquidity may be impacted if we announce or complete any such transaction or if we incur substantial costs or other losses in connection with any such transaction, whether or not it is completed. Moreover, although we intend to enter into transactions that enhance long-term shareholder value, our ability to achieve this objective would be subject to integration risks, the ability to retain and attract key personnel, the ability to realize synergies and other risks, all of which would be more material with transactions of significant size.

In addition to acquisitions, we also may pursue strategic opportunities involving the construction of new hospitals or nursing centers. The construction of new facilities involves numerous risks, including construction delays, cost over-runs, and the satisfaction of zoning and other regulatory requirements. We may be unable to operate newly constructed facilities profitably and such facilities may involve significant cash expenditures, debt incurrence, additional operating losses, and expenses that could have a material adverse effect on our business, financial position, results of operations and liquidity.

We operate 12 of our facilities and one home health agency through joint ventures with unrelated parties. We are the majority owner of each of those joint ventures. We may enter into additional joint ventures with unrelated parties in the future to acquire, own or operate hospitals, IRFs, nursing centers and/or home health and hospice services. Although, we typically control the day-to-day activities of these joint ventures, the joint venture agreements with our partners often include provisions reserving certain major actions for super-majority approval. Failure to obtain, or delays or substantial time and costs involved in obtaining, our partners’ approval rights, if any, could adversely affect our ability to operate such joint ventures, and could have a material adverse effect on such ventures or our business, financial position, results of operations and liquidity more generally. Such actions may include entering into a new business activity or ceasing an existing activity, taking on substantial debt, admitting new partners, and terminating the venture. In addition, the joint venture agreements may restrict our ability to derive cash from the joint venture and affect our ability to transfer our interest in the joint venture. We may be required to provide additional capital to a joint venture if our partner defaults on its capital obligations.

We may not be successful in completing our acquisition of Centerre, and even if we are successful, we may fail to realize the anticipated benefits of the acquisition.

On November 11, 2014, we entered into the Centerre Merger Agreement to acquire Centerre. Completion of the Centerre Acquisition is subject to various conditions, including, among others, approval of the Centerre Merger Agreement by the requisite vote of Centerre’s stockholders, regulatory approvals, consents from joint venture partners and certain other customary conditions to closing, including the expiration of the waiting period under the HSR Act. In addition, the Centerre Merger Agreement also contains certain termination rights for the Company and Centerre (including if the Centerre Merger is not consummated by March 1, 2015). There can be no assurance that the conditions to closing will be satisfied or waived or that other events will not intervene to delay or prevent the closing of the Centerre Acquisition. We may not be able to successfully integrate Centerre’s operations with our own, and we may be unable to realize any of the expected synergies or other benefits in the timeframe that we expect or at all. Whether or not we acquire Centerre, we have incurred, and will continue to incur, substantial nonrecurring transaction costs in connection with the acquisition.

 

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Risk Factors Relating to Reimbursement and Regulation of Our Business

Healthcare reform has initiated significant changes to the United States healthcare system.

Various healthcare reform provisions became law upon enactment of the Patient Protection and Affordable Care Act and the Healthcare Education and Reconciliation Act (collectively, the “ACA”). The reforms contained in the ACA have impacted each of our businesses in some manner. Several of the reforms are very significant and could ultimately change the nature of our services, the methods of payment for our services and the underlying regulatory environment. The reforms include the possible modifications to the conditions of qualification for payment, bundling payments to cover both acute and post-acute care and the imposition of enrollment limitations on new providers. The ACA also provides for: (1) reductions to the annual market basket payment updates for LTAC hospitals, IRFs, home health agencies and hospice providers, which could result in lower reimbursement than in the preceding year; (2) additional annual “productivity adjustment” reductions to the annual market basket payment update as determined by Centers for Medicare and Medicaid Services (“CMS”) for LTAC hospitals, IRFs, and nursing centers (beginning in federal fiscal year 2012), home health agencies (beginning in federal fiscal year 2015) and hospice providers (beginning in federal fiscal year 2013); (3) new transparency, reporting and certification requirements for nursing centers, including disclosures regarding organizational structure, officers, directors, trustees, managing employees and financial, clinical and other related data; (4) a quality reporting system for hospitals (including LTAC hospitals and IRFs) beginning in federal fiscal year 2014; and (5) reductions in Medicare payments to hospitals (including LTAC hospitals and IRFs) beginning in federal fiscal year 2014 for failure to meet certain quality reporting standards or to comply with standards in new value based purchasing demonstration project programs.

In addition, a primary goal of healthcare reform is to reduce costs, which includes reductions in the reimbursement paid to us and other healthcare providers. Moreover, healthcare reform could negatively impact insurance companies, other third party payors, our customers, as well as other healthcare providers, which may in turn negatively impact our business. As such, healthcare reforms and changes resulting from the ACA, as well as other similar healthcare reforms, could have a material adverse effect on our business, financial position, results of operations and liquidity.

Further, the ACA mandates changes to home health and hospice benefits under Medicare. For home health, the ACA mandates creation of a value-based purchasing program, development of quality measures, a decrease in home health reimbursement beginning with federal fiscal year 2014 that will be phased-in over a four-year period, and a reduction in the outlier cap. In addition, the ACA requires the Secretary of Health and Human Services to test different models for delivery of care, some of which would involve home health services. It also requires the Secretary to establish a national pilot program for integrated care for patients with certain conditions, bundling payment for acute hospital care, physician services, outpatient hospital services (including emergency department services), and post-acute care services, which would include home health. The ACA further directs the Secretary to rebase payments for home health, which will result in a decrease in home health reimbursement beginning in 2014 that will be phased-in over a four-year period. The Secretary is also required to conduct a study to evaluate cost and quality of care among efficient home health agencies regarding access to care and treating Medicare beneficiaries with varying severity levels of illness and provide a report to Congress. Beginning October 1, 2012, the annual market basket rate increase for hospice providers was reduced by a formula that caused payment rates to be lower than in the prior year.

Changes in the reimbursement rates or methods or timing of payment from third party payors, including the Medicare and Medicaid programs, or the implementation of other measures to reduce reimbursement for our services and products could result in a substantial reduction in our revenues and operating margins.

We depend on reimbursement from third party payors, including the Medicare and Medicaid programs, for a substantial portion of our revenues. For the year ended December 31, 2013, we derived approximately 51% of our total revenues (before eliminations) from the Medicare and Medicaid programs and the balance from other

 

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third party payors, such as commercial insurance companies, health maintenance organizations, preferred provider organizations and contracted providers. After the Merger, the percentage of our revenues derived from the Medicare and Medicaid programs will increase. The Medicare and Medicaid programs are highly regulated and subject to frequent and substantial changes. See “Part I—Item 1—Business—Governmental Regulation” of Kindred’s Annual Report on Form 10-K for the year ended December 31, 2013.

Congress continues to discuss deficit reduction measures, leading to a high degree of uncertainty regarding potential reforms to governmental healthcare programs, including Medicare and Medicaid. These discussions, along with other continuing efforts to reform governmental healthcare programs, both as part of the ACA and otherwise, could result in major changes in the healthcare delivery and reimbursement system on a national and state level. Potential reforms include changes directly impacting the government and private reimbursement systems for each of our businesses. Reforms or other changes to the payment systems, including modifications to the conditions of qualification for payment, the imposition of enrollment limitations on new providers, or bundling payments to cover acute and post-acute care or services provided to dually eligible Medicare and Medicaid patients may be proposed or could be adopted by Congress or CMS in the future.

The Budget Control Act of 2011 (as amended by the American Taxpayer Relief Act of 2012 (the “Taxpayer Relief Act”)) instituted an automatic 2% reduction on each claim submitted to Medicare beginning April 1, 2013.

The Taxpayer Relief Act also reduces Medicare payments by an additional 25% for subsequent procedures when multiple therapy services are provided on the same day. We believe that the new rules related to multiple therapy services have reduced our Medicare revenues by $25 million to $30 million on an annual basis.

On August 1, 2012, CMS issued final rules (the “2012 CMS Rules”) which, among other things, reduced Medicare reimbursement to our TC hospitals in 2013 and beyond by imposing a budget neutrality adjustment and modifying the short-stay outlier rules. Effective December 29, 2012, the 2012 CMS Rules: (1) began a three-year phase-in of a 3.75% budget neutrality adjustment, which will reduce LTAC hospital rates by approximately 1.3% in each of 2013, 2014 and 2015; and (2) restored a payment reduction that will limit payments for very short-stay outliers that will reduce our TC hospital payments by approximately 0.5%.

On July 29, 2011, CMS issued final rules (the “2011 CMS Rules”) which, among other things, significantly reduced Medicare payments to nursing centers and changed the reimbursement for the provision of group rehabilitation therapy services to Medicare beneficiaries beginning October 1, 2011. CMS projected the impact of these changes would result in an 11.1% decrease in payments to nursing centers. In addition to these rate changes, the 2011 CMS Rules introduced additional changes to resource utilization grouping (“RUG”) calculations along with adding additional patient assessments. Under the 2011 CMS Rules, group therapy is defined as therapy sessions with four patients who are performing similar therapy activities. In addition, for purposes of assigning patients to RUGs IV payment categories, the minutes of group therapy are divided by four with 25% of the minutes being allocated to each patient. The 2011 CMS Rules also clarify the circumstances for reporting breaks in care of three or more days of therapy and also implement a new change of therapy assessment that is designed to allocate the patient to the RUG level that represents the treatment provided in the last seven days. Both changes produced alterations in the RUG scores billed for the patient and generated additional assessments. The 2011 CMS Rules reduced our revenues on an annual basis by approximately $100 million in our nursing center business and negatively impacted our rehabilitation therapy business by approximately $50 million.

On November 22, 2013, CMS issued final regulations regarding Medicare payment rates for home health agencies effective January 1, 2014. These final regulations implement a net 1.05% reduction consisting of a 2.3% market basket inflation increase, less (1) a 0.62% ICD-9 grouper refinement, and (2) a 2.73% rebasing adjustment mandated under the ACA. Rebasing the rates includes adjustments to the 60-day episode and per visit payment rates, the non-routine medical supply conversion factor and low utilization payment factors. The rebasing is expected to reduce payment rates by 2.8% in each of the next four years, beginning January 1, 2014.

 

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On October 30, 2014, CMS issued final regulations regarding Medicare payment rates for home health agencies effective January 1, 2015. These final regulations implement a net 0.3% reduction consisting of a 2.6% market basket inflation increase, less (1) a 0.5% productivity adjustment, and (2) a 2.4% rebasing adjustment mandated under the ACA.

On August 4, 2014, CMS issued final regulations regarding Medicare payment rates for hospice providers effective October 1, 2014. These final regulations implement a net market basket increase of 2.1% consisting of: (1) a 2.9% market basket inflation increase, less (2) offsets to the standard payment conversion factor mandated by the ACA of: (a) a 0.5% adjustment to account for the effect of a productivity adjustment, and (b) 0.3% as required by statute. In addition, CMS continued the phase-out of the wage index budget neutrality adjustment. CMS has projected the impact of these changes will result in a 1.4% increase in payments to hospice providers.

In February 2012, Congress passed the Job Creation Act which provides for reductions in reimbursement of Medicare bad debts at our hospitals and nursing centers. For the hospitals, the bad debt reimbursement rate for all bad debts was lowered to 65% effective for cost reporting periods beginning on or after October 1, 2012. For the nursing centers, the Job Creation Act provides for a phase-in of the reduction in the rate of reimbursement for bad debts of patients that are dually eligible for Medicare and Medicaid. The rate of reimbursement for bad debts for these dually eligible patients was reduced from 88% to 76% in October 2013 and will be reduced to 65% for cost reporting periods beginning on or after October 1, 2014. The rate of reimbursement for bad debts for patients not dually eligible for both Medicare and Medicaid was reduced from 70% to 65%, effective with cost reporting periods beginning on or after October 1, 2012. Approximately 90% of our Medicare bad debt reimbursements incurred at our nursing centers are associated with patients that are dually eligible.

Weak economic conditions also could adversely affect the budgets of individual states and of the federal government. This could result in attempts to reduce or eliminate payments for federal and state healthcare programs, including Medicare and Medicaid, and could result in an increase in taxes and assessments on our activities. In addition, private third party payors are continuing their efforts to control healthcare costs through direct contracts with healthcare providers, increased utilization review and greater enrollment in managed care programs and preferred provider organizations. These private payors increasingly are demanding discounted fee structures and are requesting that healthcare providers assume more financial risk.

Though we cannot predict what reform proposals will be adopted or finally implemented, healthcare reform and regulations may have a material adverse effect on our business, financial position, results of operations and liquidity through, among other things, decreasing funds available for our services or increasing operating costs. We could be affected adversely by the continuing efforts of governmental and private third party payors to contain healthcare costs. We cannot assure you that reimbursement payments under governmental and private third party payor programs, including Medicare supplemental insurance policies, will remain at levels comparable to present levels or will be sufficient to cover the costs allocable to patients eligible for reimbursement pursuant to these programs. Future changes in third party payor reimbursement rates or methods, including the Medicare and Medicaid programs, or the implementation of other measures to reduce reimbursement for our services and products could result in a material reduction in our revenues. Our operating margins continue to be under pressure because of reduced Medicare reimbursement, deterioration in pricing flexibility, changes in payor mix, changes in length of stay and growth in operating expenses in excess of increases in payments by third party payors. In addition, as a result of competitive pressures, our ability to maintain operating margins through price increases to private patients or commercial payors remains limited. These results could have a material adverse effect on our business, financial position, results of operations and liquidity.

 

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The implementation of new patient criteria for LTAC hospitals under the various legislative changes impacting LTAC hospitals that Congress adopted as part of the Pathway for SGR Reform Act of 2013 (the “LTAC Legislation”) will reduce the population of patients eligible for Long-Term Acute Care Prospective Payment System (“LTAC PPS”) and change the basis upon which we are paid which could adversely affect our revenues and profitability.

The LTAC Legislation creates new Medicare criteria and payment rules for LTAC hospitals. Under the new criteria, LTAC hospitals treating patients with at least a three-day prior stay in an acute care hospital intensive care unit and patients on prolonged mechanical ventilation admitted from an acute care hospital will continue to receive payment under LTAC PPS. Other patients will continue to have access to LTAC care, whether they are admitted to LTAC hospitals from acute care hospitals or directly from other settings or the community. LTAC hospitals will be paid at a “site-neutral” rate for these patients, based on the lesser of per diem Medicare rates paid for patients with the same diagnoses under the prospective payment system for general short-term acute care hospitals (“IPPS”) or LTAC costs.

The effective date of the new patient criteria is October 1, 2015, followed by a two-year phase-in period tied to each LTAC hospital’s cost reporting period. During the phase-in period, payment for patients receiving the site neutral rate will be based 50% on the current LTAC PPS and 50% on the new site neutral rate. Nearly all of our TC hospitals (which are certified as LTAC hospitals under the Medicare program) have a cost reporting period starting on September 1 of each year. Accordingly, the phase-in will not begin for most of our hospitals until September 1, 2016 and full implementation of the new criteria will not begin until September 1, 2018.

We continue to analyze Medicare and internal data to estimate the number of our cases that will continue to be paid under the LTAC PPS rate. At this time, we estimate that approximately 40% of our current LTAC patients will be paid at the site neutral rate under the new criteria once it is fully phased-in. The site-neutral payment rates will be based on the lesser of per diem Medicare rates paid for patients with the same diagnoses under IPPS or LTAC costs. There can be no assurance that these site neutral payments will not be materially less than the payments currently provided under LTAC PPS.

The additional patient criteria imposed by LTAC Legislation will reduce the population of patients eligible for LTAC PPS and change the basis upon which we are paid for other patients. In addition, the LTAC Legislation will be subject to additional governmental regulations and the interpretation and enforcement of those regulations. These changes could have a material adverse effect on our business, financial position, results of operations and liquidity.

We conduct business in a heavily regulated industry, and changes in regulations, the enforcement of these regulations or violations of regulations may result in increased costs or sanctions that reduce our revenues and profitability.

In the ordinary course of our business, we are subject regularly to inquiries and audits by federal and state agencies that oversee applicable healthcare program participation and payment regulations. We also are subject to government investigations. We believe that the regulatory environment surrounding most segments of the healthcare industry will remain intense.

The extensive federal, state and local regulations affecting the healthcare industry include, but are not limited to, regulations relating to licensure, conduct of operations, ownership of facilities, addition of facilities, allowable costs, services and prices for services, facility staffing requirements, qualifications and licensure of staff, environmental and occupational health and safety, and the confidentiality and security of health-related information. In particular, various laws, including the anti-kickback, anti-fraud and abuse amendments codified under the Social Security Act, prohibit certain business practices and relationships that might affect the provision and cost of healthcare services reimbursable under Medicare and Medicaid, including the payment or receipt of remuneration for the referral of patients whose care will be paid by Medicare or other governmental programs.

 

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Sanctions for violating the anti-kickback, anti-fraud and abuse amendments under the Social Security Act include criminal penalties, civil sanctions, fines and possible exclusion from government programs such as Medicare and Medicaid. See “Part I—Item 1—Business—Governmental Regulation” of Kindred’s Annual Report on

Form 10-K
for the year ended December 31, 2013.

Federal and state governments continue to pursue intensive enforcement policies resulting in a significant number of inspections, audits, citations of regulatory deficiencies and other regulatory sanctions including demands for refund of overpayments, terminations from the Medicare and Medicaid programs, bans on Medicare and Medicaid payments for new admissions and civil monetary penalties or criminal penalties. Audits under the CMS Recovery Audit Contractor (“RAC”) and other audits evaluating the medical necessity of services provided are expected to further intensify the regulatory environment surrounding the healthcare industry as third party firms engaged by CMS commence extensive reviews of claims data and medical and other records to identify improper payments to healthcare providers under the Medicare program. If we fail to comply with the extensive laws, regulations and prohibitions applicable to our businesses, we could become ineligible to receive government program reimbursement, suffer civil or criminal penalties or be required to make significant changes to our operations. In addition, we could be forced to expend considerable resources responding to investigations, audits or other enforcement actions related to these laws, regulations or prohibitions. Furthermore, should we lose the licenses for one or more of our facilities as a result of regulatory action or otherwise, we could be in default under our Master Lease Agreements with Ventas, the Credit Facilities and indenture governing the notes. Failure of our staff to satisfy applicable licensure requirements, or of our hospitals, IRFs, nursing centers, our rehabilitation operations, and home health and hospice operations, to satisfy applicable licensure and certification requirements could have a material adverse effect on our business, financial position, results of operations and liquidity.

We are unable to predict the future course of federal, state and local regulation or legislation, including Medicare and Medicaid statutes and regulations, or the intensity of federal and state enforcement actions. Changes in the regulatory framework, including those associated with healthcare reform, and sanctions from various enforcement actions could have a material adverse effect on our business, financial position, results of operations and liquidity.

We face and are currently subject to reviews, audits and investigations under our contracts with federal and state government agencies and other payors, and these reviews, audits and investigations could have adverse findings that may negatively impact our business.

As a result of our participation in the Medicare and Medicaid programs, we face and are currently subject to various governmental reviews, audits and investigations to verify our compliance with these programs and applicable laws and regulations. An increasing level of governmental and private resources is being devoted to the investigation of allegations of fraud and abuse in the Medicare and Medicaid programs, and federal and state regulatory authorities are taking an increasingly strict view of the requirements imposed on healthcare providers by the Social Security Act, the Medicare and Medicaid programs and other applicable laws. We are routinely subject to audits under various government programs, including the RAC program, in which third party firms engaged by CMS conduct extensive reviews of claims data and medical and other records to identify potential improper payments to healthcare providers under the Medicare program. In addition, we, like other hospital and nursing center operators and rehabilitation therapy service providers, are subject to ongoing investigations by the United States Department of Health and Human Services (the “OIG”), the United States Department of Justice (the “DOJ”) and state attorneys general into the billing of rehabilitation and other services provided to Medicare and Medicaid patients, including whether rehabilitation therapy services were properly documented and billed, whether services provided were medically necessary and general compliance with conditions of participation in the Medicare and Medicaid programs. Private pay sources such as third party insurance and managed care entities also often reserve the right to conduct audits. Our costs to respond to and defend reviews, audits and investigations are significant and are likely to increase in the current enforcement environment. These audits and investigations may require us to refund or retroactively adjust amounts that have been paid under the relevant

 

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government program or from other payors. Moreover, an adverse review, audit or investigation also could result in other adverse consequences, particularly if the underlying conduct is found to be pervasive or systemic. These consequences include:

 

    state or federal agencies imposing fines, penalties and other sanctions on us;

 

    loss of our right to participate in the Medicare or Medicaid programs or one or more third party payor networks;

 

    indemnity claims asserted by customers and others for which we provide services; and

 

    damage to our reputation in various markets, which could adversely affect our ability to attract patients, residents and employees.

If they were to occur, these consequences could have a material adverse effect on our business, financial position, results of operations and liquidity. See Note 20 to Kindred’s audited consolidated financial statements for the year ended December 31, 2013, included in Kindred’s Current Report on Form 8-K filed with the SEC on November 14, 2014. See Note 16 to Gentiva’s audited consolidated financial statements included in Gentiva’s Annual Report on Form 10-K/A for the year ended December 31, 2013 and Note 14 to the unaudited condensed consolidated financial statements included in Gentiva’s Quarterly Report on Form 1