Discontinued Operations

9 Months Ended

Sep. 30, 2014

Discontinued Operations [Abstract]

Discontinued Operations

2. Discontinued Operations

During December 2012, in anticipation of the sale of substantially all of the assets used in its home health business (the Home Health Business), the Company reported the operating results of the Home Health Business as discontinued operations in accordance with ASC 360-10-45, Impairment or Disposal of Long-Lived Assets. On February 7, 2013, the Company entered into the Home Health Purchase Agreement, pursuant to which subsidiaries of LHC Group, Inc. agreed to acquire substantially all the assets of the Home Health Business in Arkansas, Nevada and South Carolina and 90% of the Home Health Business in California and Illinois, with the Company retaining 10% ownership in such locations, for cash consideration of $20,000,000. The transaction was consummated effective March 1, 2013. In addition, the results of operations for an agency in Pennsylvania that was sold on December 30, 2013 and an agency in Idaho that was closed on November 30, 2012 are included in discontinued operations.

The Company has included the financial results of the Home Health Business in discontinued operations for all periods presented. In connection with the discontinued operations presentation, certain financial statement footnotes have also been updated to reflect the impact of discontinued operations.

The following table presents the net service revenues and earnings attributable to discontinued operations, which include the financial results for the three and nine months ended September 30, 2014 and 2013:

		For the Three Months Ended September 30,					For the Nine Months Ended September 30,
		(Amounts in Thousands)					(Amounts in Thousands)
		2014		2013			2014		2013
Net service revenues	$		$			$		$	6,475
Loss before income taxes				(344	)				(1,509	)
Income tax benefit				(141	)				(619	)
Net loss from discontinued operations	$		$	(203	)	$		$	(890	)

The following table presents the net gain on the sale of the Home Health Business, which was recorded March 1, 2013.

		Gain
		(Amounts in
		Thousands)
Gain before income taxes	$	18,838
Income tax benefit		(7,727	)
Net income from discontinued operations		11,111

Pursuant to the Home Health Purchase Agreement, the Company retained $625,000 of accounts receivable, net as of December 31, 2013. In addition, the Company retained the related accrued expenses and accounts payable associated with the Home Health Business as of December 31, 2013.