Skilled Healthcare Group Reports Full Year 2012 Adjusted EPS Of $0.72

    Skilled Healthcare Group Reports Full Year 2012 Adjusted EPS Of $0.72

PR Newswire

FOOTHILL RANCH, Calif., Feb. 11, 2013

FOOTHILL RANCH, Calif., Feb.11, 2013 /PRNewswire/ -- Skilled Healthcare
Group, Inc. (NYSE: SKH) today announced its consolidated financial operating
results for the three and twelve-month period ended December31, 2012.

"Our strong cash flows from operating activities of $43 million for the 2012
year enabled us to reduce our debt by $26.5 million to $449.0 million as of
December 31, 2012, in spite of the significant challenges associated with the
extraordinary Medicare rate cut and anti-efficiency program changes that
discourage group and concurrent therapy, which took effect in the fourth
quarter of 2011 for our skilled nursing businesses, followed by the initiation
of a new Manual Medical Review by CMS for therapy services under Medicare Part
B," said Boyd Hendrickson, Chairman and Chief Executive Officer of Skilled
Healthcare Group.

Mr. Hendrickson continued, "In spite of these challenges, I am proud of the
remarkable job done by the clinical professionals providing care in our
agencies and facilities to remain focused on maintaining high quality patient
care."

Fourth Quarter 2012 Results
Revenue for the quarter ended December31, 2012 was $219.2 million, an
increase of 2.4% when compared to $214.1 million in the fourth quarter of
2011. Skilled mix^1 decreased 70 basis points to 21.3% in the fourth quarter
of 2012 from 22.0% in the fourth quarter of 2011. Quality mix^2 in the fourth
quarter of 2012 decreased 130 basis points to 68.5%, compared to 69.8% in the
prior year period.

EBITDA^3 was $23.8 million, or 10.8% of revenue, for the quarter ended
December31, 2012, a decrease of 9.8% compared to $26.4 million, or 12.3% of
revenue, in the same period a year ago. EBITDAR^3 was $28.6 million, or 13.0%
of revenue, for the quarter ended December31, 2012, a decrease of 8.3%
compared to $31.2 million, or 14.6% of revenue, for the quarter ended
December31, 2011.

Net income for the quarter ended December31, 2012 totaled $5.7 million, as
compared to $6.7 million for the fourth quarter of 2011. Adjusted net income^4
for the quarter ended December 31, 2012, totaled $6.1 million, a decrease of
9.0% compared to adjusted net income of $6.7 million for the fourth quarter of
2011. Adjusted net income excludes certain items as described in the
Reconciliation of Income (Loss) Before Provision for Income Taxes to Adjusted
Net Income table at the end of this press release.

Net income per diluted share was $0.15 for the quarter ended December31,
2012, as compared to $0.18 for the same period in 2011. Adjusted net income
per diluted share was $0.16 for the quarter ended December 31, 2012, a
decrease of 11.1% compared to adjusted net income per diluted share of $0.18
for the quarter ended December 31, 2011.

Long-Term Care Services Segment
Revenue for our long-term care services segment in the quarter ended
December31, 2012 was $165.8 million, an increase of $0.4 million, or 0.2%, as
compared to $165.4 million for the same period a year ago. Revenue for this
segment represented 75.6% of total revenue in the fourth quarter of 2012,
compared to 77.3% of total revenue in the fourth quarter of 2011.

Therapy Services Segment
Revenue for Hallmark Rehabilitation, our rehabilitation therapy services
segment, was $25.7 million for the quarter ended December31, 2012, an
increase of $1.9 million, or 8.4%, compared to the same period a year ago.
Third-party rehabilitation therapy accounted for 11.7% of total revenue in the
fourth quarter of 2012, compared to 11.1% of total revenue in the fourth
quarter of 2011.

Hospice and Home Health Services Segment
Revenue for Signature Hospice and Home Health, our hospice and home health
care services segment, was $27.7 million in the fourth quarter of 2012, an
increase of $2.8 million, or 11.2%, compared to $24.9 million in the fourth
quarter of 2011. Average daily hospice census grew to 1,379 for the
three-months ended December31, 2012 from 1,330 for the three-months ended
December31, 2011, an increase of 3.7%. The increase in census was due in
significant part to the October 2011 acquisition of two hospice agencies.

Full Year 2012 Results
Revenue for the twelve-months ended December 31, 2012 was $872.6 million, an
increase of 0.5% when compared to $868.4 million in the twelve-months ended
December 31, 2011. Skilled mix decreased 110 basis points to 22.1% in 2012
from 23.2% in 2011. Quality mix in 2012 decreased 140 basis points to 69.4%,
compared to 70.8% in the prior year period.

Adjusted EBITDA^3 was $100.8 million, or 11.6% of revenue, for 2012, a
decrease of 22.5% compared to $130.0 million, or 15.0% of revenue, in the same
period a year ago. Adjusted EBITDAR^5 was $119.3 million, or 13.7% of
revenue, for 2012, a decrease of 19.6% compared to $148.4 million, or 17.1% of
revenue, for 2011. Adjusted EBITDA includes certain items we have excluded
from adjusted net income per diluted share, such as legal expenses for
non-routine matters, IT outsourcing evaluation costs and amounts we recorded
in 2012 for our 2011 hospice cap accrual.

Net income for 2012 was $21.6 million, as compared to a net loss ^ of $204.0
million for 2011, which was attributable in large part to a non-cash
intangible asset impairment charge of $270.5 million in the third quarter of
2011. Adjusted net income for 2012, totaled $27.2 million, a decrease of
35.2% compared to adjusted net income of $42.0 million for 2011. Adjusted net
income for 2012, excludes certain items as described in the Reconciliation of
Income (Loss) Before Provision for Income Taxes to Adjusted Net Income table
at the end of this press release.

Net income per diluted share was $0.57 for 2012, as compared to net loss per
share of $5.49 for 2011. Adjusted net income per diluted share was $0.72 for
2012, a decrease of 36.2% compared to adjusted net income per diluted share of
$1.13 for the same period in 2011. Additionally, outstanding debt has been
reduced by $26.5 million since December 31, 2011.

Long-Term Care Services Segment
Revenue for our long-term care services segment in 2012 was $661.5 million, a
decrease of $30.8 million, or 4.5%, as compared to $692.3 million for 2011.
Revenue for this segment represented 75.7% of total revenue in 2012, compared
to 79.8% of total revenue in 2011. The decrease in revenue was primarily
related to lower reimbursement rates from the impact of the October 2011
Medicare rate cut, a decrease in our skilled mix, and a shift from Medicare
days to Managed Medicare days as more seniors elect Medicare Advantage.

Therapy Services Segment
Revenue for Hallmark Rehabilitation, our rehabilitation therapy services
segment, was $104.4 million for 2012, an increase of $11.6 million, or 12.5%,
compared to 2011. Third-party rehabilitation therapy accounted for 12.0% of
total revenue in 2012, compared to 10.7% of total revenue in 2011.

Hospice and Home Health Services Segment
Revenue for Signature Hospice and Home Health, our hospice and home health
care services segment, was $106.7 million in 2012, an increase of $23.4
million, or 28.1%, compared to $83.3 million in 2011. Average daily hospice
census grew to 1,397 for 2012 from 1,269 for 2011, an increase of 10.1%. The
increase in census was due in significant part to our October 2011 acquisition
of two Cornerstone hospice agencies.

2013 Guidance
Skilled Healthcare Group, Inc. expects full year 2013 consolidated revenue to
be between $885 million and $895 million, EBITDA to be in the range of $101
million to $105 million, EBITDAR to be in the range of $120.5 million to
$124.5 million and net income per common diluted share to be between $0.67 and
$0.73. This guidance assumes the following:

  oSequestration effective March 1, 2013
  oMedicare market basket increase of 2% beginning October 1, 2013
  o2013 capital expenditures of approximately $20 to $23 million
  oAverage interest rate on outstanding debt of approximately 7.8%
  oNo benefit from HUD financing
  oAn effective tax rate of 39%
  oWeighted average shares outstanding of 37.8 million
  oNo additional acquisitions, developments or divestitures

Conference Call
A conference call and webcast will be held tomorrow, Tuesday, February 12th,
at 9:00 a.m. Pacific Time (12:00 noon Eastern Time) to discuss Skilled
Healthcare Group's consolidated financial results for the fourth quarter and
full year 2012 and its outlook for 2013.

To participate in the call, interested parties may dial (800) 847-9525 and
reference conference 94284653. Alternatively, interested parties may access
the call in listen-only mode at www.skilledhealthcaregroup.com. A replay of
the conference call will be available after 12:00 noon Pacific Time at
www.skilledhealthcaregroup.com.

About Skilled Healthcare Group, Inc.
Skilled Healthcare Group, Inc., based in Foothill Ranch, California, is a
holding company with subsidiary healthcare services companies, which in the
aggregate had trailing twelve month revenue of approximately $873 million and
approximately 15,000 employees as of December 31, 2012. Skilled Healthcare
Group and its wholly-owned companies, collectively referred to as the
"Company," operate long-term care facilities and provide a wide range of
post-acute care services, with a strategic emphasis on sub-acute specialty
health care. The Company operates long-term care facilities in California,
Iowa, Kansas, Missouri, Nebraska, Nevada, New Mexico and Texas, including 74
skilled nursing facilities that offer sub-acute care and rehabilitative and
specialty health skilled nursing care, and 22 assisted living facilities that
provide room and board and social services. In addition, the Company provides
physical, occupational and speech therapy in Company-operated facilities and
unaffiliated facilities. Furthermore, the Company provides hospice and home
health care in Arizona, California, Idaho, Montana, New Mexico and Nevada. The
Company leases 5 skilled nursing facilities in California to an unaffiliated
third party operator. References made in this release to "Skilled Healthcare,"
"the Company," "we," "us" and "our" refer to Skilled Healthcare Group, Inc.
and each of its wholly-owned companies. More information about Skilled
Healthcare is available at www.skilledhealthcaregroup.com.

Footnotes
    Skilled mix represents the number of Medicare and non-Medicaid managed
    care patient days at Skilled Healthcare Group's affiliated skilled nursing
(1) facilities divided by the total number of patient days at Skilled
    Healthcare Group's affiliated skilled nursing facilities for any given
    period.
(2) Quality mix represents non-Medicaid revenue as a percentage of total
    revenue.
    EBITDA is net income before depreciation, amortization and interest
    expense (net of interest income) and the provision for income taxes.
    EBITDAR is EBITDA excluding facility rent expense. Adjusted earnings
(3) before interest, taxes, depreciation and amortization, or Adjusted EBITDA,
    reflects the non-GAAP adjustments to net income that are reflected in the
    Reconciliation of Net Income to EBITDA, Adjusted EBITDA and Adjusted
    EBITDAR in this press release.
    Adjusted net income per diluted share and adjusted net income each reflect
(4) the non-GAAP adjustments to income before provision for income taxes that
    are reflected in the Reconciliation of Income (Loss) Before Provision for
    Income Taxes to Adjusted Net Income table in this press release.
    Adjusted EBITDAR is Adjusted EBITDA excluding facility rent expense as
(5) reflected in the Reconciliation of Net Income to EBITDA, Adjusted EBITDA
    and Adjusted EBITDAR table in this press release.

Forward-Looking Statements
This release includes "forward-looking statements." You can identify these
statements by the fact that they do not relate strictly to historical or
current facts. These statements contain words such as "may," "will,"
"project," "might," "expect," "believe," "anticipate," "intend," "could,"
"would," "estimate," "continue" or "pursue," or the negative or other
variations thereof or comparable terminology. They include statements about
Skilled Healthcare's expectations for 2013 full year consolidated revenue,
EBITDA, EBITDAR and net income per diluted share. These forward-looking
statements are based on current expectations and projections about future
events, including the assumptions stated in this release.

Investors are cautioned that forward-looking statements are not guarantees of
future performance or results and involve risks and uncertainties that cannot
be predicted or quantified and, consequently, the actual performance of
Skilled Healthcare may differ materially from that expressed or implied by
such forward-looking statements.

Additionally, the Company faces a number of other risks and uncertainties,
including, but not limited to, the factors described in Skilled Healthcare's
Annual Report on Form 10-K for the year ended December31, 2012 filed with the
Securities and Exchange Commission (including the sections entitled "Risk
Factors" and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" contained therein).

Any forward-looking statements are made only as of the date of this release.
Skilled Healthcare disclaims any obligation to update the forward-looking
statements. Investors are cautioned not to place undue reliance on these
forward-looking statements.

Any forward-looking statements are made only as of the date of this release.
Skilled Healthcare disclaims any obligation to update the forward-looking
statements. Investors are cautioned not to place undue reliance on these
forward-looking statements.



Skilled Healthcare Group, Inc.

Condensed Consolidated Statements of Operations

(In thousands, except per share data)
                              Three Months Ended
                                                      Year Ended December 31,
                              December 31,
                              2012        2011        2012        2011
Revenue:                      (Unaudited)             (Audited)
Net patient service revenue   $ 218,443   $ 213,340   $ 869,563   $ 866,194
Lease facility revenue        769         746         3,060       2,239
                              219,212     214,086     872,623     868,433
Expenses:
Cost of services (exclusive
of rent cost of revenue and   185,385     177,021     730,974     697,279
depreciation and amortization
shown below)
Rent cost of revenue          4,773       4,869       18,507      18,399
General and administrative    5,701       6,177       24,249      25,730
Litigation settlement costs,  —           —           —           (4,488)
(net of recoveries)
Depreciation and amortization 6,276       6,193       25,400      25,229
Impairment of long-lived      —           —           —           270,478
assets
                              202,135     194,260     799,130     1,032,627
Other (expenses) income:
Interest expense              (8,884)     (9,675)     (37,760)    (38,994)
Interest income               110         161         512         714
Other (expense) income, net   (52)        (22)        (32)        (499)
Equity in earnings of joint   526         372         1,948       1,955
venture
Debt retirement costs         —           —           (4,126)     —
Total other (expenses)        (8,300)     (9,164)     (39,458)    (36,824)
income, net
Income (loss) before          8,777       10,662      34,035      (201,018)
provision for income taxes
Provision for income taxes    3,082       3,936       12,438      3,025
Net income (loss)             $ 5,695     $ 6,726     $ 21,597    $ (204,043)
Income (loss) per share,      $ 0.15      $ 0.18      $ 0.58      $ (5.49)
basic
Income (loss) per share,      $ 0.15      $ 0.18      $ 0.57      $ (5.49)
diluted
Weighted-average common       37,437      37,179      37,389      37,145
shares outstanding, basic
Weighted-average common       37,543      37,285      37,589      37,145
shares outstanding, diluted



Skilled Healthcare Group, Inc.

Condensed Consolidated Balance Sheet and Cash Flow Data

(In thousands)

(Audited)
                                          December31, 2012  December31, 2011
Balance Sheet Data:
ASSETS
Cash and cash equivalents                 $    2,003         $    16,017
Other current assets                      136,822            129,513
Property and equipment and leased         380,658            386,294
facility assets, net
Goodwill                                  85,609             84,299
Other assets                              77,544             81,076
Total assets                              $    682,636       $    697,199
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities less current portion  $    90,965        $    99,780
of long-term debt
Other long-term liabilities               42,873             48,340
Long-term debt                            448,967            475,483
Stockholders' equity                      99,831             73,596
Total liabilities and stockholders'       $    682,636       $    697,199
equity
                                          Year Ended December 31,
                                          2012               2011
Cash Flows Data:
Net cash provided by operating activities $    42,676        $    99,380
Net cash used in investing activities     (19,525)           (39,917)
Net cash used in financing activities     (37,165)           (47,638)
(Decrease) increase in cash and cash      (14,014)           11,825
equivalents
Cash and cash equivalents at beginning of 16,017             4,192
period
Cash and cash equivalents at end of       $    2,003         $    16,017
period



Skilled Healthcare Group, Inc.

Consolidated Key Performance Indicators

(Unaudited)
The following table summarizes our key performance indicators, along with
other statistics, for each of the dates or periods indicated
                            Three Months Ended
                                                    Year Ended December 31,
                            December 31,
                            2012        2011        2012         2011
Occupancy statistics
(skilled nursing
facilities):
Available beds in service   8,809       8,809       8,809        8,809
at end of period
Available patient days      810,490     811,377     3,224,062    3,249,449
Actual patient days         672,024     673,330     2,675,234    2,698,994
Occupancy percentage        82.9     %  83.0     %  83.0      %  83.1        %
Average daily number of     7,305       7,319       7,309        7,395
patients
Hospice average daily       1,379       1,330       1,397        1,269
census
Home health episodic-based  2,174       1,723       8,341        5,239
admissions
Home health episodic-based  472         322         1,624        885
recertifications
EBITDA (in thousands)       $ 23,827    $ 26,369    $ 96,683     $ (137,509)
Adjusted EBITDA (in         $ 23,827    $ 26,369    $ 100,809    $ 130,042
thousands)
Adjusted EBITDA margin      10.9     %  12.3     %  11.6      %  15.0        %
Adjusted EBITDAR (in        $ 28,600    $ 31,238    $ 119,316    $ 148,441
thousands)
Adjusted EBITDAR margin     13.0     %  14.6     %  13.7      %  17.1        %
Revenue per patient day
(skilled nursing facilities
prior to intercompany
eliminations):
LTC only Medicare (Part A)  $ 519       $ 505       $ 512        $ 558
Medicare blended rate (Part 577         567         573          616
A & B)
Managed care (Part A)       380         381         382          386
Managed care blended rate  390         392         391          391
(Part A & B)
Medicaid                    163         156         160          154
Private and other           173         172         172          173
Weighted-average for all    $ 236       $ 235       $ 236        $ 246
Patient days by payor
(skilled nursing
facilities):
Medicare                    81,890      92,921      349,205      404,419
Managed care                61,069      55,271      240,951      221,796
Total skilled mix days      142,959     148,192     590,156      626,215
Private pay and other       109,255     111,354     428,823      435,257
Medicaid                    419,810     413,784     1,656,255    1,637,522
Total days                  672,024     673,330     2,675,234    2,698,994
Patient days as a
percentage of total patient
days (skilled nursing
facilities):
Medicare                    12.2     %  13.8     %  13.1      %  15.0        %
Managed care                9.1         8.2         9.0          8.2
Skilled Mix                 21.3        22.0        22.1         23.2
Private pay and other       16.3        16.5        16.0         16.1
Medicaid                    62.4        61.5        61.9         60.7
Total                       100.0    %  100.0    %  100.0     %  100.0       %
Revenue from (total
company):
Medicare                    32.6     %  35.0     %  33.6      %  37.4        %
Managed care, private pay,  35.9        34.8        35.8         33.4
and other
Quality mix                 68.5        69.8        69.4         70.8
Medicaid                    31.5        30.2        30.6         29.2
Total                       100.0    %  100.0    %  100.0     %  100.0       %



Skilled Healthcare Group, Inc.

Facility Ownership

(Unaudited)
                                                            As of December 31,
                                                            2012       2011
Facilities:
Skilled nursing facilities operated:
Owned                                                       52         52
Leased                                                      22         22
Total skilled nursing facilities operated                   74         74
Total licensed beds                                         9,181      9,183
Skilled nursing facilities leased to unaffiliated third     5          5
party operator
Assisted living facilities
Owned                                                       21         21
Leased                                                      1          2
Total assisted living facilities                            22         23
Total licensed beds                                         1,228      1,312
Total facilities                                            101        102
Percentage owned facilities                                 77.2   %   76.5  %



Skilled Healthcare Group, Inc.

Reconciliation of Net Income (Loss) to EBITDA, Adjusted EBITDA and Adjusted
EBITDAR

(In thousands)

(Unaudited)
                                Three Months Ended
                                                      Year Ended December 31,
                                December 31,
                                2012       2011       2012        2011
Net income (loss)               $ 5,695    $ 6,726    $ 21,597    $ (204,043)
Interest expense, net of        8,774      9,514      37,248      38,280
interest income
Provision for income taxes      3,082      3,936      12,438      3,025
Depreciation and amortization   6,276      6,193      25,400      25,229
expense
EBITDA                          23,827     26,369     96,683      (137,509)
Recovery of expenses related to —          —          —           (265)
Westside divestiture
Debt retirement costs           —          —          4,126       —
Disposals of property and       —          —          —           290
equipment
Expenses related to the
exploration of strategic        —          —          —           716
alternatives
Exit costs related to the       —          —          —           820
Northern California divestiture
Litigation settlement costs,    —          —          —           (4,488)
(net of recoveries)
Impairment of long-lived assets —          —          —           270,478
Adjusted EBITDA                 23,827     26,369     100,809     130,042
Rent cost of revenue            4,773      4,869      18,507      18,399
Adjusted EBITDAR                $ 28,600   $ 31,238   $ 119,316   $ 148,441



Skilled Healthcare Group, Inc.

Reconciliation of Income (Loss) Before Provision for Income Taxes to Adjusted
Net Income

(In thousands, except per share data)

(Unaudited)
                              Three Months Ended
                                                     Year Ended December 31,
                              December 31,
                              2012       2011        2012        2011
Income (loss) from operations $ 8,777    $ 10,662    $ 34,035    $ (201,018)
Debt retirement costs         —          —           4,126       —
Double bond interest expense  —          —           1,192       —
for bond
Recovery of expenses related  —          —           —           (265)
to Westside divestiture
Disposals of property and     —          —           —           290
equipment
Impairment of long-lived      —          —           —           270,478
assets
Litigation settlement costs,  —          —           —           (4,488)
net of recoveries
Expenses related to the
exploration of strategic      —          —           —           716
alternatives
Exit costs related to the
Northern California           —          —           —           820
divestiture
Legal Expenses for            634        —           1,226       —
non-routine matters
IT outsourcing evaluation     110        —           514         —
costs
2011 Hospice cap accrual      —          —           1,900       —
Adjusted income before        9,521      10,662      42,993      66,533
provision for income taxes
Provision for income taxes    3,383      3,936       15,768      24,928
Add back tax credit valuation
allowance related to Northern —          —           —           (388)
California divestiture
Adjusted net income           $ 6,138    $ 6,726     $ 27,225    $ 41,993
Weighted-average common       37,543     37,285      37,589      37,353
shares outstanding, diluted
Adjusted net income per       $ 0.16     $ 0.18      $ 0.72      $ 1.13
share, diluted
Effective tax rate            35.5    %  36.9     %  36.7     %  36.9        %



Skilled Healthcare Group, Inc.

Reconciliation of Forecasted Net Income to Forecasted EBITDA and Forecasted
EBITDAR

Year Ending December 31, 2013

(In millions)

(Unaudited)
                                            Outlook
                                            Low                 High
Net income guidance                         $    25.3           $   27.8
Interest expense, net of interest income    34.0                34.0
Provision for income taxes                  16.2                17.7
Depreciation and amortization expense       25.5                25.5
EBITDA guidance                             101.0               105.0
Rent cost of revenue                        19.5                19.5
EBITDAR guidance                            $    120.5          $   124.5



We believe that a report of adjusted net income per share, EBITDA, EBITDAR,
Adjusted EBITDA and Adjusted EBITDAR provides consistency in our financial
reporting and provides a basis for the comparison of results of core business
operations between our current, past and future periods. Adjusted net income
per share, EBITDA, EBITDAR, Adjusted EBITDA and Adjusted EBITDAR are primary
indicators management uses for planning and forecasting in future periods,
including trending and analyzing the core operating performance of our
business from period-to-period without the effect of U.S. GAAP expenses,
revenues and gains (losses) that are unrelated to the day-to-day performance
of our consolidated and segmented business. We also use adjusted net income
per share, EBITDA, EBITDAR, Adjusted EBITDA and Adjusted EBITDAR to benchmark
the performance of our consolidated and segmented business against expected
results, analyzing year-over-year trends as described below and to compare our
operating performance to that of our competitors.

Management uses adjusted net income per share, EBITDA, EBITDAR, Adjusted
EBITDA and Adjusted EBITDAR to assess the performance of our core business
operations, to prepare operating budgets and to measure our performance
against those budgets on a consolidated and segment level. Segment management
uses these metrics to measure performance on a business unit by business unit
basis. We typically use adjusted net income per share, Adjusted EBITDA and
Adjusted EBITDAR for these purposes on a consolidated basis as the adjustments
to adjusted net income per share, EBITDA and EBITDAR are not generally
allocable to any individual business unit and we typically use EBITDA and
EBITDAR to compare the operating performance of each skilled nursing and
assisted living facility, as well as to assess the performance of our
operating segments. EBITDA, EBITDAR, Adjusted EBITDA and Adjusted EBITDAR are
useful in this regard because they do not include such costs as interest
expense (net of interest income), income taxes, depreciation and amortization
expense, rent cost of revenue (in the case of EBITDAR and Adjusted EBITDAR)
and special charges, which may vary from business unit to business unit and
period-to-period depending upon various factors, including the method used to
finance the business, the amount of debt that we have determined to incur,
whether a facility is owned or leased, the date of acquisition of a facility
or business, the original purchase price of a facility or business unit or the
tax law of the state in which a business unit operates. These types of
charges are dependent on factors unrelated to the underlying business unit
performance. As a result, we believe that the use of adjusted net income per
share, EBITDA, EBITDAR, Adjusted EBITDA and Adjusted EBITDAR provides a
meaningful and consistent comparison of our underlying business units between
periods by eliminating certain items required by U.S. GAAP which have little
or no significance to their day-to-day operations.

The use of adjusted net income per share, EBITDA, EBITDAR, Adjusted EBITDA,
Adjusted EBITDAR and other non-GAAP financial measures has certain
limitations. Our presentation of adjusted net income per share, EBITDA,
EBITDAR, Adjusted EBITDA, Adjusted EBITDAR or other non-GAAP financial
measures may be different from the presentation used by other companies and
therefore comparability may be limited. Depreciation and amortization expense,
interest expense, income taxes and other items have been and will be incurred
and are not reflected in the presentation of adjusted net income per share,
EBITDA, EBITDAR, Adjusted EBITDA or Adjusted EBITDAR. Each of these items
should also be considered in the overall evaluation of our results.
Additionally, adjusted net income per share, EBITDA, EBITDAR, Adjusted EBITDA,
Adjusted EBITDAR do not consider capital expenditures and other investing
activities and should not be considered as a measure of our liquidity. We
compensate for these limitations by providing the relevant disclosure of our
depreciation and amortization, interest and income taxes, capital expenditures
and other items both in our reconciliations to the U.S. GAAP financial
measures and in our consolidated financial statements, all of which should be
considered when evaluating our performance.

Adjusted net income per share, EBITDA, EBITDAR, Adjusted EBITDA, Adjusted
EBITDAR and certain other non-GAAP financial measures are used in addition to
and in conjunction with results presented in accordance with U.S. GAAP.
Adjusted net income per share, EBITDA, EBITDAR, Adjusted EBITDA, Adjusted
EBITDAR and other non-GAAP financial measures should not be considered as an
alternative to net income, operating income, or any other operating
performance measure prescribed by U.S. GAAP, nor should these measures be
relied upon to the exclusion of U.S. GAAP financial measures. Adjusted net
income per share, EBITDA, EBITDAR, Adjusted EBITDA, Adjusted EBITDAR and other
non-GAAP financial measures reflect additional ways of viewing our operations
that we believe, when viewed with our U.S. GAAP results and the
reconciliations to the corresponding U.S. GAAP financial measures, provide a
more complete understanding of factors and trends affecting our business than
could be obtained absent this disclosure. You are strongly encouraged to
review our financial information in its entirety and not to rely on any single
financial measure.

Investor Contact:
Skilled Healthcare Group, Inc.
Dev Ghose or Chris Felfe
(949) 282-5800

SOURCE Skilled Healthcare Group, Inc.

Website: http://www.skilledhealthcaregroup.com
 
Press spacebar to pause and continue. Press esc to stop.