Subsidiary Guarantors (Tables)

3 Months Ended

Mar. 31, 2013

Subsidiary Guarantors

Schedule of condensed consolidating balance sheet

RES-CARE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING BALANCE SHEET

March 31, 2013

(In thousands)

				Guarantor			Non-Guarantor						Consolidated
	ResCare, Inc.			Subsidiaries			Subsidiaries			Eliminations			Total
ASSETS
Current assets:
Cash and cash equivalents	$	40,339		$	3,708		$	2,656		$	—		$	46,703
Accounts receivable, net	20,315			207,843			348			—			228,506
Refundable income taxes	1,251			—			—			—			1,251
Deferred income taxes	17,125			—			—			—			17,125
Prepaid expenses and other current assets	9,089			11,474			497			—			21,060
Total current assets	88,119			223,025			3,501			—			314,645
Property and equipment, net	42,364			52,187			408			—			94,959
Goodwill	282,839			—			5,301			—			288,140
Other intangible assets, net	301,103			18,461			—			—			319,564
Intercompany	—			657,549			69,747			(727,296		)	—
Investment in subsidiaries	938,207			41,782			—			(979,989		)	—
Other assets	20,803			3,084			17			—			23,904
	$	1,673,435		$	996,088		$	78,974		$	(1,707,285	)	$	1,041,212
LIABILITIES AND SHAREHOLDER’S EQUITY
Current liabilities:
Trade accounts payable	$	16,036		$	17,171		$	38		$	—		$	33,245
Accrued expenses	46,833			56,782			832			—			104,447
Current portion of long-term debt	8,750			1,259			1,542			(1,542		)	10,009
Current portion of obligations under capital leases	—			5,834			—			—			5,834
Accrued income taxes	842			—			(40		)	—			802
Total current liabilities	72,461			81,046			2,372			(1,542		)	154,337
Intercompany	725,754			—			—			(725,754		)	—
Long-term liabilities	56,187			181			—			—			56,368
Long-term debt	355,326			877			—			—			356,203
Obligations under capital leases	—			10,732			—			—			10,732
Deferred income taxes	107,753			—			—			—			107,753
Total liabilities	1,317,481			92,836			2,372			(727,296		)	685,393
Preferred shares	—			—			—			—			—
Common stock	—			—			—			—			—
Additional paid-in capital	245,049			476,811			125,104			(601,915		)	245,049
Retained earnings	111,066			426,459			(47,542		)	(378,917		)	111,066
Accumulated other comprehensive (loss) income	(161		)	(18		)	(825		)	843			(161		)
Total shareholder’s equity-Res-Care, Inc.	355,954			903,252			76,737			(979,989		)	355,954
Noncontrolling interest	—			—			(135		)	—			(135		)
Total shareholder’s equity	355,954			903,252			76,602			(979,989		)	355,819
	$	1,673,435		$	996,088		$	78,974		$	(1,707,285	)	$	1,041,212

RES-CARE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING BALANCE SHEET

December 31, 2012

(In thousands)

			Guarantor			Non-Guarantor						Consolidated
	ResCare, Inc.		Subsidiaries			Subsidiaries			Eliminations			Total
ASSETS
Current assets:
Cash and cash equivalents	$	42,633	$	4,795		$	2,706		$	—		$	50,134
Accounts receivable, net	21,515		206,491			371			—			228,377
Refundable income taxes	—		—			—			—			—
Deferred income taxes	17,589		—			—			—			17,589
Prepaid expenses and other current assets	11,620		9,981			515			—			22,116
Total current assets	93,357		221,267			3,592			—			318,216
Property and equipment, net	43,320		53,282			428			—			97,030
Goodwill	282,832		—			5,433			—			288,265
Other intangible assets, net	302,293		19,000			—			—			321,293
Intercompany	—		622,481			70,335			(692,816		)	—
Investment in subsidiaries	900,087		41,782			—			(941,869		)	—
Other assets	24,073		3,064			17			—			27,154
	$	1,645,962	$	960,876		$	79,805		$	(1,634,685	)	$	1,051,958
LIABILITIES AND SHAREHOLDER’S EQUITY
Current liabilities:
Trade accounts payable	$	20,499	$	17,181		$	58		$	—		$	37,738
Accrued expenses	55,299		58,729			848			—			114,876
Current portion of long-term debt	13,098		1,573			1,746			(1,722		)	14,695
Current portion of obligations under capital leases	—		6,052			—			—			6,052
Accrued income taxes	1,843		—			(30		)	—			1,813
Total current liabilities	90,739		83,535			2,622			(1,722		)	175,174
Intercompany	691,094		—			—			(691,094		)	—
Long-term liabilities	56,240		229			—			—			56,469
Long-term debt	357,527		893			—			—			358,420
Obligations under capital leases	—		11,632			—			—			11,632
Deferred income taxes	106,253		—			—			—			106,253
Total liabilities	1,301,853		96,289			2,622			(692,816		)	707,948
Preferred shares	—		—			—			—			—
Common stock	—		—			—			—			—
Additional paid-in capital	244,345		476,811			125,104			(601,915		)	244,345
Retained earnings	99,734		387,794			(47,445		)	(340,349		)	99,734
Accumulated other comprehensive (loss) income	30		(18		)	(377		)	395			30
Total shareholder’s equity-Res-Care, Inc.	344,109		864,587			77,282			(941,869		)	344,109
Noncontrolling interest	—		—			(99		)	—			(99		)
Total shareholder’s equity	344,109		864,587			77,183			(941,869		)	344,010
	$	1,645,962	$	960,876		$	79,805		$	(1,634,685	)	$	1,051,958

Schedule of condensed consolidating statement of comprehensive income

RES-CARE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME

Three Months Ended March 31, 2013

(In thousands)

				Guarantor			Non-Guarantor						Consolidated
	ResCare, Inc.			Subsidiaries			Subsidiaries			Eliminations			Total
Revenues	$	60,452		$	328,250		$	752		$	—		$	389,454
Operating expenses	65,177			302,247			832			—			368,256
Operating (loss) income	(4,725		)	26,003			(80		)	—			21,198
Other expenses (income):
Interest, net	8,295			185			57			—			8,537
Equity in earnings of subsidiaries	(16,215		)	(143		)	—			16,358			—
Total other (income) expenses	(7,920		)	42			57			16,358			8,537
(Loss) income before income taxes	3,195			25,961			(137		)	(16,358		)	12,661
Income tax (benefit) expense	(8,137		)	9,553			(51		)	—			1,365
Net income (loss)	11,332			16,408			(86		)	(16,358		)	11,296
Net loss-noncontrolling interest	—			—			(36		)	—			(36		)
Net income (loss)-Res-Care, Inc.	11,332			16,408			(50		)	(16,358		)	11,332
Other comprehensive income (loss):
Foreign currently translation adjustments	(191		)	—			(191		)	191			(191		)
Comprehensive income (loss) attributable to Res-Care, Inc.	$	11,141		$	16,408		$	(241	)	$	(16,167	)	$	11,141
Total comprehensive income	$	11,141		$	16,408		$	(277	)	$	(16,167	)	$	11,105

RES-CARE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME

Three Months Ended March 31, 2012

(In thousands)

				Guarantor			Non-Guarantor						Consolidated
	ResCare, Inc.			Subsidiaries			Subsidiaries			Eliminations			Total
Revenues	$	64,842		$	331,763		$	737		$	—		$	397,342
Operating expenses	71,017			305,420			859			—			377,296
Operating (loss) income	(6,175		)	26,343			(122		)	—			20,046
Other expenses (income):
Interest, net	10,304			141			(2		)	—			10,443
Equity in earnings of subsidiaries	(15,619		)	(43		)	—			15,662			—
Total other (income) expenses	(5,315		)	98			(2		)	15,662			10,443
(Loss) income before income taxes	(860		)	26,245			(120		)	(15,662		)	9,603
Income tax (benefit) expense	(6,625		)	10,541			(48		)	—			3,868
Net income (loss)	5,765			15,704			(72		)	(15,662		)	5,735
Net loss-noncontrolling interest	—			—			(30		)	—			(30		)
Net income (loss)-Res-Care, Inc.	5,765			15,704			(42		)	(15,662		)	5,765
Other comprehensive income (loss):
Foreign currently translation adjustments	161			—			161			(161		)	161
Comprehensive income (loss) attributable to Res-Care, Inc.	$	5,926		$	15,704		$	119		$	(15,823	)	$	5,926
Total comprehensive income	$	5,926		$	15,704		$	89		$	(15,823	)	$	5,896

Schedule of condensed consolidating statement of cash flows

RES-CARE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

Three Months Ended March 31, 2013

(In thousands)

				Guarantor			Non-Guarantor						Consolidated
	ResCare, Inc.			Subsidiaries			Subsidiaries			Eliminations			Total
Operating activities:
Net income (loss)	$	11,332		$	16,408		$	(86	)	$	(16,358	)	$	11,296
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization	4,221			3,932			42			—			8,195
Amortization of discount and deferred debt issuance costs on notes	870			—			—			—			870
Share-based compensation	704			—			—			—			704
Deferred income taxes, net	1,964			—			—			—			1,964
Provision for losses on accounts receivable	259			1,559			—			—			1,818
Loss from sale of assets	—			102			—			—			102
Equity in earnings of subsidiaries	(16,215		)	(143		)	—			16,358			—
Changes in operating assets and liabilities	25,111			(41,605		)	715			—			(15,779		)
Cash provided by (used in) operating activities	28,246			(19,747		)	671			—			9,170
Investing activities:
Purchases of property and equipment	(2,075		)	(2,006		)	(22		)	—			(4,103		)
Acquisitions of businesses, net of cash acquired	—			(7		)	—			—			(7		)
Proceeds from sale of assets	—			81			—			—			81
Cash used in investing activities	(2,075		)	(1,932		)	(22		)	—			(4,029		)
Financing activities:
Long-term debt (repayments) borrowings	(6,550		)	(150		)	(204		)	—			(6,904		)
Payments on obligations under capital leases	—			(1,594		)	—			—			(1,594		)
Debt issuance costs	(8		)	—			—			—			(8		)
Net payments relating to intercompany financing	(21,907		)	22,402			(495		)	—			—
Cash (used in) provided by financing activities	(28,465		)	20,658			(699		)	—			(8,506		)
Effect of exchange rate changes on cash and cash equivalents	—			(66		)	—			—			(66		)
(Decrease) increase in cash and cash equivalents	(2,294		)	(1,087		)	(50		)	—			(3,431		)
Cash and cash equivalents at beginning of period	42,633			4,795			2,706			—			50,134
Cash and cash equivalents at end of period	$	40,339		$	3,708		$	2,656		$	—		$	46,703

RES-CARE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

Three Months Ended March 31, 2012

(In thousands)

				Guarantor			Non-Guarantor						Consolidated
	ResCare, Inc.			Subsidiaries			Subsidiaries			Eliminations			Total
Operating activities:
Net income (loss)	$	5,765		$	15,704		$	(72	)	$	(15,662	)	$	5,735
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization	4,547			4,256			4			—			8,807
Amortization of discount and deferred debt issuance costs on notes	675			—			—			—			675
Share-based compensation	1,174			—			—			—			1,174
Deferred income taxes, net	1,100			—			—			—			1,100
Provision for losses on accounts receivable	136			1,413			—			—			1,549
Loss from sale of assets	—			35			—			—			35
Equity in earnings of subsidiaries	(15,619		)	(43		)	—			15,662			—
Changes in operating assets and liabilities	58,503			3,756			(82,381		)	—			(20,122		)
Cash provided by (used in) operating activities	56,281			25,121			(82,449		)	—			(1,047		)
Investing activities:
Purchases of property and equipment	(3,059		)	(1,151		)	(51		)	—			(4,261		)
Acquisitions of businesses, net of cash acquired	—			(4,550		)	—			—			(4,550		)
Proceeds from sale of assets	—			10			—			—			10
Cash used in investing activities	(3,059		)	(5,691		)	(51		)	—			(8,801		)
Financing activities:
Long-term debt (repayments) borrowings	(283		)	(718		)	(116		)	—			(1,117		)
Payments on obligations under capital leases	—			(1,497		)	—			—			(1,497		)
Net payments relating to intercompany financing	(64,339		)	(18,310		)	82,649			—			—
Cash (used in) provided by financing activities	(64,622		)	(20,525		)	82,533			—			(2,614		)
Effect of exchange rate changes on cash and cash equivalents	—			64			—			—			64
(Decrease) increase in cash and cash equivalents	(11,400		)	(1,031		)	33			—			(12,398		)
Cash and cash equivalents at beginning of period	16,733			6,547			2,371			—			25,651
Cash and cash equivalents at end of period	$	5,333		$	5,516		$	2,404		$	—		$	13,253