Kindred Healthcare Board of Directors Declares Quarterly Cash Dividend of $0.12 Per Share

  Kindred Healthcare Board of Directors Declares Quarterly Cash Dividend of
  $0.12 Per Share

Business Wire

LOUISVILLE, Ky. -- February 20, 2014

Kindred Healthcare, Inc. (“Kindred” or the “Company”) (NYSE:KND) today
announced that its Board of Directors approved the payment of the regular
quarterly cash dividend to its shareholders. The quarterly cash dividend of
$0.12 per common share will be paid on March 27, 2014 to shareholders of
record as of the close of business on March 6, 2014. Future declarations of
quarterly dividends will be subject to the approval of Kindred’s Board of
Directors.

Forward-Looking Statements

This press release includes forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. All statements regarding the
Company’s expected future financial position, results of operations, cash
flows, financing plans, business strategy, budgets, capital expenditures,
competitive positions, growth opportunities, plans and objectives of
management and statements containing the words such as “anticipate,”
“approximate,” “believe,” “plan,” “estimate,” “expect,” “project,” “could,”
“should,” “will,” “intend,” “may” and other similar expressions, are
forward-looking statements. Statements in this press release concerning the
Company’s business outlook or future economic performance, anticipated
profitability, revenues, expenses or other financial items, and product or
services line growth, together with other statements that are not historical
facts, are forward-looking statements that are estimates reflecting the best
judgment of the Company based upon currently available information.

Such forward-looking statements are inherently uncertain, and stockholders and
other potential investors must recognize that actual results may differ
materially from the Company’s expectations as a result of a variety of
factors, including, without limitation, those discussed below. Such
forward-looking statements are based upon management’s current expectations
and include known and unknown risks, uncertainties and other factors, many of
which the Company is unable to predict or control, that may cause the
Company’s actual results or performance to differ materially from any future
results or performance expressed or implied by such forward-looking
statements. These statements involve risks, uncertainties and other factors
discussed below and detailed from time to time in the Company’s filings with
the Securities and Exchange Commission.

In addition to the factors set forth above, other factors that may affect the
Company’s plans, results or stock price include, without limitation, (a) the
impact of healthcare reform, which will initiate significant changes to the
United States healthcare system, including potential material changes to the
delivery of healthcare services and the reimbursement paid for such services
by the government or other third party payors, including reforms resulting
from the Patient Protection and Affordable Care Act and the Healthcare
Education and Reconciliation Act (collectively, the “ACA”) or future deficit
reduction measures adopted at the federal or state level. Healthcare reform is
affecting each of the Company’s businesses in some manner. Potential future
efforts in the U.S. Congress to repeal, amend, modify or retract funding for
various aspects of the ACA create additional uncertainty about the ultimate
impact of the ACA on the Company and the healthcare industry. Due to the
substantial regulatory changes that will need to be implemented by the Centers
for Medicare and Medicaid Services (“CMS”) and others, and the numerous
processes required to implement these reforms, the Company cannot predict
which healthcare initiatives will be implemented at the federal or state
level, the timing of any such reforms, or the effect such reforms or any other
future legislation or regulation will have on the Company’s business,
financial position, results of operations and liquidity, (b) the impact of the
final rules issued by CMS on August 1, 2012 which, among other things, will
reduce Medicare reimbursement to the Company’s transitional care (“TC”)
hospitals in 2013 and beyond by imposing a budget neutrality adjustment and
modifying the short-stay outlier rules, (c) the impact of the final rules
issued by CMS on July 29, 2011 which significantly reduced Medicare
reimbursement to the Company’s nursing centers and changed payments for the
provision of group therapy services effective October1, 2011, (d) the impact
of the Budget Control Act of 2011 (as amended by the American Taxpayer Relief
Act of 2012 (the “Taxpayer Relief Act”)) which instituted an automatic 2%
reduction on each claim submitted to Medicare beginning April1, 2013, (e) the
Company’s ability to adjust to the new patient criteria for long-term acute
care (“LTAC”) hospitals under the Pathway for SGR Reform Act of 2013, which
will reduce the population of patients eligible for the Company’s hospital
services and change the basis upon which the Company is paid, (f) the impact
of the Taxpayer Relief Act which, among other things, reduces Medicare
payments by an additional 25% for subsequent procedures when multiple therapy
services are provided on the same day. At this time, the Company believes that
the rules related to multiple therapy services will reduce the Company’s
Medicare revenues by $25 million to $30 million on an annual basis, (g)
changes in the reimbursement rates or the methods or timing of payment from
third party payors, including commercial payors and the Medicare and Medicaid
programs, changes arising from and related to the Medicare prospective payment
system for LTAC hospitals, including potential changes in the Medicare payment
rules, the Medicare Prescription Drug, Improvement, and Modernization Act of
2003, and changes in Medicare and Medicaid reimbursement for the Company’s TC
hospitals, nursing centers, inpatient rehabilitation hospitals and home health
and hospice operations, and the expiration of the Medicare Part B therapy cap
exception process, (h) the effects of additional legislative changes and
government regulations, interpretation of regulations and changes in the
nature and enforcement of regulations governing the healthcare industry, (i)
the ability of the Company’s hospitals and nursing centers to adjust to
medical necessity reviews, (j) the costs of defending and insuring against
alleged professional liability and other claims (including those related to
pending whistleblower and wage and hour class action lawsuits against the
Company) and the Company’s ability to predict the estimated costs and reserves
related to such claims, including the impact of differences in actuarial
assumptions and estimates compared to eventual outcomes, (k) the impact of the
Company’s significant level of indebtedness on the Company’s funding costs,
operating flexibility and ability to fund ongoing operations, development
capital expenditures or other strategic acquisitions with additional
borrowings, (l) the Company’s ability to successfully redeploy its capital and
proceeds of asset sales in pursuit of its business strategy and pursue its
development activities, including through acquisitions, and successfully
integrate new operations, including the realization of anticipated revenues,
economies of scale, cost savings and productivity gains associated with such
operations, as and when planned, including the potential impact of
unanticipated issues, expenses and liabilities associated with those
activities, (m) the Company’s ability to pay a dividend as, when and if
declared by the Board of Directors, in compliance with applicable laws and the
Company’s debt and other contractual arrangements, (n) the failure of the
Company’s facilities to meet applicable licensure and certification
requirements, (o) the further consolidation and cost containment efforts of
managed care organizations and other third party payors, (p) the Company’s
ability to meet its rental and debt service obligations, (q) the Company’s
ability to operate pursuant to the terms of its debt obligations, and comply
with its covenants thereunder, and the Company’s ability to operate pursuant
to its master lease agreements with Ventas, Inc. (NYSE:VTR), (r) the condition
of the financial markets, including volatility and weakness in the equity,
capital and credit markets, which could limit the availability and terms of
debt and equity financing sources to fund the requirements of the Company’s
businesses, or which could negatively impact the Company’s investment
portfolio, (s) the Company’s ability to control costs, particularly labor and
employee benefit costs, (t) the Company’s ability to successfully reduce (by
divestiture of operations or otherwise) its exposure to professional liability
and other claims, (u) the Company’s obligations under various laws to
self-report suspected violations of law by the Company to various government
agencies, including any associated obligation to refund overpayments to
government payors, fines and other sanctions, (v) national and regional
economic, financial, business and political conditions, including their effect
on the availability and cost of labor, credit, materials and other services,
(w) increased operating costs due to shortages in qualified nurses, therapists
and other healthcare personnel, (x) the Company’s ability to attract and
retain key executives and other healthcare personnel, (y) the Company’s
ability to successfully dispose of unprofitable facilities, (z) events or
circumstances which could result in the impairment of an asset or other
charges, such as the impact of the Medicare reimbursement regulations that
resulted in the Company recording significant impairment charges in the last
three fiscal years, (aa) changes in generally accepted accounting principles
or practices, and changes in tax accounting or tax laws (or authoritative
interpretations relating to any of these matters), and (bb) the Company’s
ability to maintain an effective system of internal control over financial
reporting.

Many of these factors are beyond the Company’s control. The Company cautions
investors that any forward-looking statements made by the Company are not
guarantees of future performance. The Company disclaims any obligation to
update any such factors or to announce publicly the results of any revisions
to any of the forward-looking statements to reflect future events or
developments.

About Kindred Healthcare

Kindred Healthcare, Inc., a top-150 private employer in the United States, is
a FORTUNE 500 healthcare services company based in Louisville, Kentucky with
annual revenues of approximately $5 billion and approximately 63,000 employees
in 47 states. At December 31, 2013, Kindred through its subsidiaries provided
healthcare services in 2,280 locations, including 101 transitional care
hospitals, five inpatient rehabilitation hospitals, 100 nursing centers, 22
sub-acute units, 159 Kindred at Home hospice, home health and non-medical home
care locations, 104 inpatient rehabilitation units (hospital-based) and a
contract rehabilitation services business, RehabCare, which served 1,789
non-affiliated facilities. Ranked as one of Fortune magazine’s Most Admired
Healthcare Companies for five years in a row, Kindred’s mission is to promote
healing, provide hope, preserve dignity and produce value for each patient,
resident, family member, customer, employee and shareholder we serve. For more
information, go to www.kindredhealthcare.com. You can also follow us on
Twitter and Facebook.

Contact:

Kindred Healthcare, Inc.
Hank Robinson, 502-596-7732
Senior Vice President, Tax and Treasurer
 
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