Business Segment Information

12 Months Ended

Dec. 31, 2012

Segment Reporting [Abstract]

Business Segment Information

Business Segment Information

The Company’s operations involve servicing its patients and customers through its Home Health segment and its Hospice segment.

Home Health

The Home Health segment is comprised of direct home nursing and therapy services operations, including specialty programs. The Company conducts direct home nursing and therapy services operations through licensed and Medicare-certified agencies, located in 38 states, from which the Company provides various combinations of skilled nursing and therapy services and paraprofessional nursing services to adult and elder patients. The Company’s direct home nursing and therapy services operations also deliver services to its customers through focused specialty programs that include:

• Gentiva Orthopedics, which provides individualized home orthopedic rehabilitation services to patients recovering from joint replacement or other major orthopedic surgery;

• Gentiva Safe Strides^®, which provides therapies for patients with balance issues who are prone to injury or immobility as a result of falling;

• Gentiva Cardiopulmonary, which helps patients and their physicians manage heart and lung health in a home-based environment;

• Gentiva Neurorehabilitation, which helps patients who have experienced a neurological injury or condition by removing the obstacles to healing in the patient’s home; and

• Gentiva Senior Health, which addresses the needs of patients with age-related diseases and issues to effectively and safely stay in their homes.

In addition, through May 31, 2012, the Company provided consulting services to home health agencies, which included operational support, billing and collection activities, and on-site agency support and consulting. For 2011 and 2010, the Company’s Rehab Without Walls^® and IDOA businesses and the HME and IV business are reflected as discontinued operations in accordance with applicable accounting guidance. See Note 4 for additional information.

Hospice

The Hospice segment serves terminally ill patients and their families through Medicare-certified providers operating in 30 states. Comprehensive management of the healthcare services and products needed by hospice patients and their families are provided through the use of an interdisciplinary team. Depending on a patient’s needs, each hospice patient is assigned an interdisciplinary team comprised of a physician, nurse(s), home health aide(s), medical social worker(s), chaplain, dietary counselor and bereavement coordinator, as well as other care professionals. The Hospice segment has under development focused specialty programs that include:

• Memory Care Specialty Program, which will provide an individualized disease management program addressing the physical needs specific to Alzheimer’s and dementia patients and support mechanisms for their caregivers; and

• Cardiac Specialty Program, which will help patients and their physicians aggressively manage symptoms associated with heart disease, focusing on quality of life and pain control.

Corporate Expenses

Corporate expenses consist of costs relating to executive management and corporate and administrative support functions that are not directly attributable to a specific segment, including equity-based compensation expense. Corporate and administrative support functions represent primarily information services, accounting and finance, tax compliance, risk management, procurement, marketing, clinical administration, training, legal and human resource benefits and administration.

Other Information

The Company’s senior management evaluates performance and allocates resources based on operating contributions of the reportable segments, which exclude corporate expenses, depreciation, amortization and net interest costs, but include revenues and all other costs (including special items) directly attributable to the specific segment. Segment assets represent net accounts receivable, identifiable intangible assets, goodwill, and certain other assets associated with segment activities. All other assets are assigned to corporate assets for the benefit of all segments for the purposes of segment disclosure.

Segment net revenues by major payer source were as follows (in millions):

	For Year
	2012						2011						2010
	Home Health		Hospice		Total		Home Health		Hospice		Total		Home Health		Hospice		Total
Medicare	$	749.0	$	715.5	$	1,464.6	$	799.2	$	729.1	$	1,528.3	$	822.7	$	326.2	$	1,148.9
Medicaid and Local Government	46.8		27.7		74.4		52.3		30.8		83.1		59.8		14.2		74.0
Commercial Insurance and Other:
Paid at episodic rates	85.2		—		85.2		77.7		—		77.7		86.4		—		86.4
Other	67.0		21.6		88.6		83.4		26.3		109.7		94.1		11.1		105.2
Total net revenues	$	948.0	$	764.8	$	1,712.8	$	1,012.6	$	786.2	$	1,798.8	$	1,063.0	$	351.5	$	1,414.5

Segment information about the Company's operations is as follows (in thousands):

	Home Health				Hospice				Total
For the for the year ended December 31, 2012
Net revenue	$	948,019			$	764,785			$	1,712,804
Operating contribution	$	125,445	(1	)	$	133,133	(1	)	$	258,578
Corporate expenses									(83,700		)	(1	)
Goodwill, intangibles and other long-lived asset impairment									(19,132		)	(3	)
Depreciation and amortization									(26,581		)
Gain on sale of businesses									8,014
Interest expense and other, net									(89,947		)	(2	)
Income from continuing operations before income taxes and equity in loss of affiliate									$	47,232
Segment assets	$	242,603	(3	)	$	858,502	(3	)	$	1,101,105
Corporate assets									409,829
Total assets									$	1,510,934
For the for the year ended December 31, 2011
Net revenue	$	1,012,566			$	786,212			$	1,798,778
Operating contribution	$	126,194	(1	)	$	139,723	(1	)	$	265,917
Corporate expenses									(115,861		)	(1	)
Goodwill, intangibles and other long-lived asset impairment									(643,305		)	(3	)
Dividend income									8,590			(4	)
Depreciation and amortization									(30,140		)
Gain on sale of assets and businesses, net									1,061
Interest expense and other, net									(88,610		)	(2	)
Loss from continuing operations before income taxes and equity in earnings of affiliate									$	(602,348	)
Segment assets	$	239,751	(3	)	$	905,284	(3	)	$	1,145,035
Corporate assets									385,293
Total assets									$	1,530,328
For the for the year ended December 31, 2010
Net revenue	$	1,062,944			$	351,515			$	1,414,459
Operating contribution	$	205,469	(1	)	$	72,276	(1	)	$	277,745
Corporate expenses									(127,745		)	(1	)
Depreciation and amortization									(22,479		)
Gain on sale of assets and businesses, net									103
Interest expense and other, net									(39,030		)
Loss from continuing operations before income taxes and equity in earnings of affiliate									$	88,594
Segment assets	$	656,540			$	1,054,006			$	1,710,546
Corporate assets									409,582			(3	)
Total assets									$	2,120,128

(1) For the years ended December 31, 2012, 2011 and 2010, the Company recorded charges relating to cost savings initiatives and other restructuring costs, acquisition and integration costs and legal settlements of $5.7 million, $49.1 million and $46.0 million, respectively. See Note 10 for additional information.

The charges were reflected as follows for segment reporting purposes (in millions):

	2012			2011		2010
Home Health	$	5.6		$	7.7	$	11.8
Hospice	0.4			3.7		0.3
Corporate expenses	(0.3		)	37.7		33.9
Total	$	5.7		$	49.1	$	46.0

(2) For the year ended December 31, 2012, interest expense and other, net included charges of $0.5 million relating to the write-off of deferred debt issuance costs associated with the revolving credit facility. In addition, interest expense and other, net for the year ended December 31, 2011 included charges of $3.8 million associated with terminating the Company’s interest rate swaps in connection with the refinancing of the Company’s Term Loan A and Term Loan B under the Company’s credit agreement. See Note 10 for additional information.

(3) For the year ended December 31, 2012, the Company recorded non-cash impairment charges associated with a write-off of its trade name intangibles of $19.1 million in connection with the Company's initiative to re-brand its operations under the Gentiva name. Home Health and Hospice assets were reduced by $6.0 million and $13.1 million, respectively, as of December 31, 2012 as a result of the impairment.

For the year ended December 31, 2011, the Company recorded non-cash impairment charges associated with goodwill, intangibles and other long-lived assets of $643.3 million. This charge was the result of (i) changes in the Company's business climate, (ii) uncertainties around Medicare reimbursement as the federal government worked to reduce the federal deficit, (iii) a significant decline in the price of the Company's common stock during the fiscal year, (iv) a write-down of software and (v) a change in the estimated fair value of real estate. Home Health, Hospice and corporate assets were reduced by $408.4 million, $193.7 million and $41.2 million, respectively, as of December 31, 2011, as a result of the impairment.

(4) For the year ended December 31, 2011, the Company recognized dividend income of $8.6 million as a result of the sale of a portion of the Company’s combined common and preferred ownership of CareCentrix.