Background and Basis of Presentation

9 Months Ended

Sep. 30, 2013

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Background and Basis of Presentation

Background and Basis of Presentation

Gentiva Health Services, Inc. (“Gentiva” or the “Company”) provides home health services and hospice care throughout most of the United States. The Company’s operations involve servicing its patients and customers through (i) its Home Health segment and (ii) its Hospice segment.

On October 18, 2013, the Company completed the acquisition of Harden Healthcare Holdings, Inc. ("Harden") and its home health, hospice and community care businesses, pursuant to an Agreement and Plan of Merger dated as of September 18, 2013, for an aggregate purchase price of approximately $408.8 million, consisting of approximately $355.0 million in cash and $53.8 million in shares of Gentiva's common stock. In connection with the acquisition, the Company entered into a new Senior Secured Credit Agreement providing for (i) a six year $670 million Term Loan B facility, (ii) a five year $155 million Term Loan C facility and (iii) a five year $100 million revolving credit facility, which replaced the Company's existing credit agreement. The Company's existing credit agreement, which is described in Note 11, was terminated upon consummation of the Harden transaction. During the third quarter of 2013, the Company incurred approximately $1.5 million of costs associated with the Harden transaction as more fully described in Note 8. See Note 18 for further information.

During the first nine months of 2013, the Company completed three acquisitions for total consideration of $6.1 million. These transactions were done primarily to extend the Company's geographic coverage areas for home health and hospice services.

A summary of the transactions for 2013 and 2012 and the consideration paid are as follows (in millions):

Acquisitions:	Geographic Service Area	Date	Consideration
Appalachian Regional Health Systems	North Carolina	September 30, 2013	$	2.7
Wake Forest Baptist Health Care at Home, LLC	North Carolina	August 23, 2013	2.4
Hope Hospice, Inc.	Indiana	April 30, 2013	1.0
Family Home Care Corporation	Washington and Idaho	August 31, 2012	12.3
North Mississippi Hospice	Mississippi	August 31, 2012	4.7
Advocate Hospice	Indiana	July 22, 2012	5.5

In addition, during the first nine months of 2012, the Company sold various home health and hospice operations based in Louisiana and sold off its consulting business. A summary of the Company's operations which were sold during the first nine months of 2012 is as follows (in millions):

Dispositions:	Date	Consideration
Gentiva Consulting	May 31, 2012	$	0.3
Louisiana home health and hospice operations	Second Quarter 2012	6.4

See Note 4 for additional information on the Company's acquisitions and dispositions.

The accompanying interim consolidated financial statements are unaudited and have been prepared by the Company using accounting principles consistent with those described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and, in the opinion of management, include all adjustments necessary for a fair statement of financial position, results of operations and cash flows for each period presented. Certain information and disclosures normally included in the consolidated statements of financial position, comprehensive income and cash flows prepared in conformity with accounting principles generally accepted in the United States of America have been condensed or omitted as permitted by such rules and regulations. Results for interim periods are not necessarily indicative of results for a full year. The year-end balance sheet data was derived from audited financial statements.

The Company’s consolidated financial statements include the accounts and operations of the Company and its subsidiaries in which the Company owns more than a 50 percent interest. Noncontrolling interests, which relate to the minority ownership held by third party investors in certain of the Company’s hospice programs, are reported below net income (loss) under the heading “Net income attributable to noncontrolling interests” in the Company’s consolidated statements of comprehensive income and presented as a component of equity in the Company’s consolidated balance sheets. All balances and transactions between the consolidated entities have been eliminated.