Kindred Healthcare (KND)

Strategic divestitures

The Company expects to dispose of two hospitals in 2009 and generate approximately $8 million in proceeds from the sales.

During the first quarter of 2008, the Company sold two nursing centers for approximately $6 million.

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ITEM 2.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Strategic divestitures

In September 2008, we purchased for resale a previously leased LTAC hospital for $22 million and announced our intention to dispose of another LTAC hospital and its related operations. We expect to dispose of these two hospitals in 2009 and generate approximately $8 million in proceeds from the sales.

Immediately prior to the Spin-off Transaction, KPS incurred $125 million of bank debt, the proceeds of which were distributed to us. We used these proceeds to reduce outstanding borrowings under our revolving credit facility.

In June 2007, we paid approximately $176 million to purchase the Ventas Facilities with borrowings under our revolving credit facility. During 2007 and 2008, we sold the Ventas Facilities for approximately $95 million. See note 3 of the notes to consolidated financial statements.

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In January 2007, we paid $37 million as part of the consideration to complete the HCP Transaction. We also divested the 11 nursing centers acquired in the HCP Transaction during 2007 and received proceeds of $78 million, which were used to repay borrowings under our revolving credit facility.

Strategic divestitures

In September 2008, we purchased for resale a previously leased LTAC hospital for $22 million and announced our intention to dispose of another LTAC hospital and its related operations. We expect to dispose of these two hospitals in 2009 and generate approximately $8 million in proceeds from the sales.

Immediately prior to the Spin-off Transaction, KPS incurred $125 million of bank debt, the proceeds of which were distributed to us. We used these proceeds to reduce outstanding borrowings under our revolving credit facility.

In June 2007, we paid approximately $176 million to purchase the Ventas Facilities with borrowings under our revolving credit facility. During 2007 and 2008, we sold the Ventas Facilities for approximately $95 million. See note 3 of the notes to consolidated financial statements.

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In January 2007, we paid $37 million as part of the consideration to complete the HCP Transaction. We also divested the 11 nursing centers acquired in the HCP Transaction during 2007 and received proceeds of $78 million, which were used to repay borrowings under our revolving credit facility.

Strategic divestitures

In September 2008, the Company purchased for resale a LTAC hospital in Massachusetts for $22 million that was previously leased and announced its intention to dispose of a LTAC hospital in California and its related operations. The Company expects to dispose of these two hospitals within one year and to generate approximately $11 million in proceeds from the sales.

In June 2007, the Company paid approximately $176 million to complete the Facility Acquisitions with borrowings under the Company’s revolving credit facility. As of September 30, 2008, the Company had sold all of the Facilities for approximately $95 million.

In January 2007, the Company paid $37 million to complete the HCP Transaction. The Company divested the 11 nursing centers acquired in the HCP Transaction during the first nine months of 2007 for approximately $78 million.

Strategic divestitures

In June 2007, the Company paid approximately $176 million to complete the Facility Acquisitions with borrowings under the Company’s revolving credit facility. As of June 30, 2008, the Company had sold 20 of the Facilities for approximately $94 million.

In January 2007, the Company paid $37 million to complete the HCP Transaction. The Company also divested the 11 nursing centers acquired in the HCP Transaction during the first six months of 2007 for approximately $78 million.

Strategic divestitures

During the first quarter of 2008, the Company sold two nursing centers for approximately $6 million. The Company expects to dispose of five nursing centers and one hospital held for sale at March 31, 2008 during the remainder of 2008 and generate between $7 million and $17 million in proceeds from these sales.

In the first quarter of 2007, the Company paid $37 million to complete the HCP Transaction. The Company also divested ten of the eleven nursing centers acquired in the HCP Transaction in the first quarter of 2007 and received proceeds of approximately $75 million, which were used to repay borrowings under the Company’s revolving credit facility.

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ITEM 2.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Strategic divestitures

Immediately prior to the Spin-off Transaction, KPS incurred $125 million of bank debt, the proceeds of which were distributed to us. We used these proceeds to reduce outstanding borrowings under our revolving credit facility.

In June 2007, we paid approximately $176 million to purchase the Ventas Facilities with borrowings under our revolving credit facility. During 2007, we sold 14 of the Ventas Facilities for approximately $67 million. We intend to complete the divestiture of the remaining Ventas Facilities during 2008. We expect to generate between $13 million and $23 million in proceeds from the sale of the remaining Ventas Facilities and the related operations. See note 3 of the notes to consolidated financial statements.

In January 2007, we paid $37 million as part of the consideration to complete the HCP Transaction. We also divested the 11 nursing centers acquired in the HCP Transaction during 2007 and received proceeds of $78 million, which were used to repay borrowings under our revolving credit facility.

Strategic divestitures

SIZE="2">Immediately prior to the Spin-off Transaction, KPS incurred $125 million of bank debt, the proceeds of which were distributed to us. We used these proceeds to reduce outstanding borrowings under our revolving credit facility.

In June 2007, we paid approximately $176 million to purchase the Ventas Facilities with borrowings under our revolving credit
facility. During 2007, we sold 14 of the Ventas Facilities for approximately $67 million. We intend to complete the divestiture of the remaining Ventas Facilities during 2008. We expect to generate between $13 million and $23 million in
proceeds from the sale of the remaining Ventas Facilities and the related operations. See note 3 of the notes to consolidated financial statements.

SIZE="2">In January 2007, we paid $37 million as part of the consideration to complete the HCP Transaction. We also divested the 11 nursing centers acquired in the HCP Transaction during 2007 and received proceeds of $78 million, which
were used to repay borrowings under our revolving credit facility.