SEC Form 5
FORM 5 UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

ANNUAL STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934
or Section 30(h) of the Investment Company Act of 1940
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 Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).
  
 Form 3 Holdings Reported.
X
 Form 4 Transactions Reported.
1. Name and Address of Reporting Person*
FRANKLIN MUTUAL ADVISERS LLC
(Last) (First) (Middle)
101 JOHN F. KENNEDY PARKWAY
(Street)
SHORT HILLS NJ 07078
(City) (State) (Zip)
2. Issuer Name and Ticker or Trading Symbol
KINDRED HEALTHCARE, INC [ (KIND) ] 		5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)
Director X 10% Owner
Officer (give title below) Other (specify below)
3. Statement for Issuer's Fiscal Year Ended (Month/Day/Year)
12/31/2005
4. If Amendment, Date of Original Filed (Month/Day/Year)
 6. Individual or Joint/Group Filing (Check Applicable Line)
X Form filed by One Reporting Person
Form filed by More than One Reporting Person
Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1. Title of Security (Instr. 3) 2. Transaction Date (Month/Day/Year) 2A. Deemed Execution Date, if any (Month/Day/Year) 3. Transaction Code (Instr. 8) 4. Securities Acquired (A) or Disposed Of (D) (Instr. 3, 4 and 5) 5. Amount of Securities Beneficially Owned at end of Issuer's Fiscal Year (Instr. 3 and 4) 6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) 7. Nature of Indirect Beneficial Ownership (Instr. 4)
Amount (A) or (D) Price
Common Stock 05/19/2004 J4(1) 2,600(2) A $48.0573(2) 6,291,368(3) D
Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 3) 2. Conversion or Exercise Price of Derivative Security 3. Transaction Date (Month/Day/Year) 3A. Deemed Execution Date, if any (Month/Day/Year) 4. Transaction Code (Instr. 8) 5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5) 6. Date Exercisable and Expiration Date (Month/Day/Year) 7. Title and Amount of Securities Underlying Derivative Security (Instr. 3 and 4) 8. Price of Derivative Security (Instr. 5) 9. Number of derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4) 10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) 11. Nature of Indirect Beneficial Ownership (Instr. 4)
(A) (D) Date Exercisable Expiration Date Title Amount or Number of Shares
Option (Right to Buy)(4) $47.5(2) 07/17/2001 4A(1)(5) 10,000(2) 07/17/2002(6) 07/17/2011 Common Stock 10,000(2) $0 10,000(2) I (1) (5)
Option (Right to Buy)(4) $52(2) 01/01/2002 4A(1)(5) 3,000(2) 01/01/2003(7) 01/01/2012 Common Stock 3,000(2) $0 3,000(2) I (1) (5)
Option (Right to Buy)(4) $18.15(2) 01/01/2003 4A(1)(5) 3,000(2) 01/01/2004(8) 01/01/2013 Common Stock 3,000(2) $0 3,000(2) I (1) (5)
Option (Right to Buy)(4) $51.98(2) 01/01/2004 4A(1)(5) 3,000(2) 01/01/2005(9) 01/01/2014 Common Stock 3,000(2) $0 3,000(2) I (1) (5)
Option (Right to Buy)(4) $27.9 01/10/2005 4A(1)(5) 5,000 01/10/2006(10) 01/10/2015 Common Stock 5,000 $0 5,000 I (1) (5)
Explanation of Responses:
1. See Exhibit 99.1 for text of footnote, which text is incorporated by reference herein.
2. On April 26, 2004, the Issuer's board of directors declared a 2-for-1 stock split in the form of a 100% stock dividend distributed on May 27, 2004 to stockholders of record as of May 10, 2004. The share amount and price reported have not been adjusted to reflect this dividend.
3. Reflects amount post 2-for-1 stock split described in footnote (2) above.
4. This option was granted pursuant to the Kindred Healthcare, Inc. 2001 Stock Option Plan for Non-Employee Directors (Amended and Restated).
5. The grant was made to an employee of Franklin Mutual Advisers, LLC (''FMA'') and previously reported on a Form 4 by such employee. In accordance with FMA's internal policy, all cash and non-cash compensation issued to FMA's employee in connection with his service on the Issuer's Board of Directors will be distributed directly to FMA's advisory clients. Under the advisory contracts with FMA, FMA retains sole voting and investment power over these securities.
6. This option is exercisable in cumulative equal annual installments over four years commencing on 7/17/02.
7. This option is exercisable in cumulative equal annual installments over four years commencing on 01/01/03.
8. This option is exercisable in cumulative equal annual installments over four years commencing on 01/01/04.
9. This option is exercisable in cumulative equal annual installments over four years commencing on 01/01/05.
10. This option is exercisable in cumulative equal annual installments over four years commencing on 01/10/06.
Remarks:
By: Bradley D. Takahashi, Vice President of Franklin Mutual Advisers, LLC 03/03/2006
** Signature of Reporting Person Date
Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
* If the form is filed by more than one reporting person, see Instruction 4 (b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
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