Exhibit 99.1

Contact:	Richard A. Lechleiter
	Executive Vice President and Chief Financial Officer
	(502) 596-7734

KINDRED HEALTHCARE FIRST QUARTER RESULTS

EXCEED COMPANY’S GUIDANCE

Company Reports $0.57 per Diluted Share from Continuing Operations Compared to Last Year’s $0.42

First Quarter EPS Guidance Range was $0.40 to $0.50

Company Maintains 2009 EPS Range of $1.35 to $1.45

Company Provides Second Quarter 2009 EPS Guidance of $0.28 to $0.38

LOUISVILLE, Ky. (May 4, 2009) – Kindred Healthcare, Inc. (the “Company”) (NYSE:KND) today announced its operating results for the first quarter ended March 31, 2009. All financial and statistical information included in this press release reflects the continuing operations of the Company’s businesses for all periods presented unless otherwise indicated.

First Quarter Highlights:

• Consolidated revenues rose 3% to $1.1 billion

— Each operating division reported revenue growth compared to last year

• Diluted earnings per share grew 36% to $0.57 compared to last year’s $0.42

— Earnings growth was driven by operating income growth in all three divisions and lower corporate overhead

— Consolidated operating income grew 7% to $157 million

— First quarter capital-related costs were flat with the first quarter of 2008

• Hospital operating margins improved

— Reported admissions declined 2% from last year partly resulting from leap year in 2008

— Same-store aggregate admissions declined 1%

— Same-store non-government admissions grew 12%

• Nursing center results were in line with expectations despite softer volumes

— Revenue mix and overall occupancy were relatively unchanged from last year

— Annualized employee turnover declined to 38% from 48% in the first quarter of 2008

• Peoplefirst operating income grew 35% in the quarter

— Revenue growth and productivity improvements drove $4 million increase in operating income

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680 South Fourth Street        Louisville, Kentucky 40202

502.596.7300        www.kindredhealthcare.com

Kindred Healthcare First Quarter Results Exceed Company’s Guidance

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May 4, 2009

First Quarter Results

Continuing Operations

Consolidated revenues for the first quarter ended March 31, 2009 rose 3% to $1.1 billion. Income from continuing operations for the first quarter of 2009 totaled $22.4 million or $0.57 per diluted share compared to $16.5 million or $0.42 per diluted share in the first quarter last year.

Discontinued Operations

During the past few years, the Company has entered into transactions related to the divestiture of unprofitable businesses. For accounting purposes, the historical operating results of these businesses and losses associated with these operations have been classified as discontinued operations in the Company’s consolidated statement of operations for all historical periods.

For the first quarter of 2009, the Company reported income from discontinued operations totaling $0.4 million or $0.01 per diluted share compared to a loss of $1.8 million or $0.05 per diluted share in the first quarter of 2008.

Other Quarterly Information

During the first quarter of 2009, the Company received a distribution of $34 million from its limited purpose insurance subsidiary to be used for general corporate purposes. The distribution, which had no impact on earnings, resulted primarily from the insurance subsidiary’s improved professional liability underwriting results. These funds were used to repay borrowings under the Company’s revolving credit facility.

Management Commentary

Paul J. Diaz, President and Chief Executive Officer of the Company, remarked, “We are pleased to report a good start to the year. Our first quarter results illustrate how our continued focus on our employees, patients and residents can create additional shareholder value through better operational execution. Our first quarter operating income grew by approximately $11 million or 7% compared to the same period last year as we reported solid operational improvements in each of our three divisions. Because our capital-related costs were relatively unchanged in the period, we reported 36% growth in earnings per diluted share compared to last year’s first quarter.”

Mr. Diaz further commented, “While our hospital and nursing center volumes were somewhat soft in the first quarter, we did a better job of managing our costs, particularly contract labor and premium pay, in line with our patient census levels. In Peoplefirst rehabilitation services, we saw solid revenue growth combined with impressive productivity gains that produced 35% growth in first quarter operating income compared to last year.”

Commenting on the Company’s financial position, Mr. Diaz noted, “Our first quarter 2009 operating cash flows were well ahead of last year as we continued to improve our accounts receivable collections. As a result, our accounts receivable balance at March 31, 2009 was relatively unchanged from a year ago while days of revenue in accounts receivable declined by 2%. In addition, we continued to maintain higher cash balances to further enhance our financial strength in a generally difficult credit market.”

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May 4, 2009

With respect to the Company’s ongoing development activities, Mr. Diaz remarked, “We are continuing to develop five additional hospitals that will open over the next couple of years, and we are reviewing other opportunities to acquire nursing and rehabilitation centers in strategic markets.”

2009 Earnings Guidance – Continuing Operations

The Company maintained its 2009 earnings guidance for continuing operations. The Company expects consolidated revenues for 2009 to approximate $4.4 billion. Operating income, or earnings before interest, income taxes, depreciation, amortization and rent, is expected to range from $582 million to $588 million. Rent expense is expected to approximate $355 million, while depreciation, amortization and net interest expense are expected to approximate $134 million. Income from continuing operations for 2009 is expected to approximate $54 million to $57 million or $1.35 to $1.45 per diluted share (based upon diluted shares of 39 million).

The Company also provided its earnings outlook for the second quarter of 2009, estimating income from continuing operations to range from $11 million to $15 million or $0.28 to $0.38 per diluted share (based upon diluted shares of 39 million).

As previously indicated to investors, the Company continues to believe that the typical seasonal weakness in the third quarter will likely result in earnings per share between break-even and $0.10 for the period.

The Company indicated that the earnings guidance for continuing operations reflects the anticipated impact of (a) proposed rules issued by the Centers for Medicare and Medicaid Services (“CMS”) on May 1, 2009 related to payment rates for long-term acute care (“LTAC”) hospitals and nursing centers and (b) the Company’s transactions with Ventas, Inc. (“Ventas”) (NYSE:VTR) announced on April 30, 2009 to renew certain leases and to acquire six under-performing leased nursing centers for resale. The Company also indicated that the earnings guidance does not reflect any material acquisitions or divestitures and does not take into account any repurchases of common stock.

Mr. Diaz noted, “We look forward to continued progress in each of our operating divisions as we focus on the execution of our strategic operating plan. As in the past, high satisfaction levels from our patients, residents, customers, employees and physicians will continue to drive our operating results and business success.”

Webcast of Conference Call

As previously announced, investors and the general public can access a live webcast of the first quarter 2009 conference call through a link on Kindred’s website at www.kindredhealthcare.com. The conference call will be held May 5, 2009 at 10:00 a.m. (Eastern Time).

A telephone replay of the conference call will be available at approximately 1:00 p.m. on May 5 by dialing (719) 457-0820, access code: 8854864. The replay will be available through May 13.

Investor Day

As previously announced, the Company will host its second annual Investor Day on Wednesday, May 6 in New York City. The event will be webcast live beginning at 10:00 a.m. (Eastern Time) and conclude at approximately 1:00 p.m.

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The webcast of this presentation may be accessed via the Company’s website at www.kindredhealthcare.com or at http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=129959&eventID=2147015.

Any written materials accompanying the Investor Day presentation will be available on Kindred’s website at the time of the presentation and the webcast and written materials will be archived at www.kindredhealthcare.com following the event.

Investors interested in attending the event should contact Ms. Teresa Kappner by email: teresa.kappner@kindredhealthcare.com or phone: (502) 596-7276.

Forward-Looking Statements

This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements regarding the Company’s expected future financial position, results of operations, cash flows, financing plans, business strategy, budgets, capital expenditures, competitive positions, growth opportunities, plans and objectives of management and statements containing the words such as “anticipate,” “approximate,” “believe,” “plan,” “estimate,” “expect,” “project,” “could,” “should,” “will,” “intend,” “may” and other similar expressions, are forward-looking statements.

Such forward-looking statements are inherently uncertain, and stockholders and other potential investors must recognize that actual results may differ materially from the Company’s expectations as a result of a variety of factors, including, without limitation, those discussed below. Such forward-looking statements are based upon management’s current expectations and include known and unknown risks, uncertainties and other factors, many of which the Company is unable to predict or control, that may cause the Company’s actual results or performance to differ materially from any future results or performance expressed or implied by such forward-looking statements. These statements involve risks, uncertainties and other factors discussed below and detailed from time to time in the Company’s filings with the Securities and Exchange Commission.

In addition to the factors set forth above, other factors that may affect the Company’s plans or results include, without limitation, (a) changes in the reimbursement rates or the methods or timing of payment from third party payors, including the Medicare and Medicaid programs, changes arising from and related to the Medicare prospective payment system for LTAC hospitals, including potential changes in the Medicare payment rules, the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, and changes in Medicare and Medicaid reimbursements for the Company’s nursing centers; (b) the impact of the Medicare, Medicaid and SCHIP Extension Act of 2007, including the ability of the Company’s hospitals to adjust to potential LTAC certification, medical necessity reviews and the three-year moratorium on future hospital development; (c) the effects of healthcare reform and government regulations, interpretation of regulations and changes in the nature and enforcement of regulations governing the healthcare industry; (d) failure of the Company’s facilities to meet applicable licensure and certification requirements; (e) the further consolidation of managed care organizations and other third party payors; (f) the Company’s ability to meet its rental and debt service obligations; (g) the Company’s ability to operate pursuant to the terms of its debt obligations and its master lease agreements with Ventas; (h) the condition of the financial markets, including volatility and deterioration in the equity, capital and credit markets, which could limit the availability and terms of debt and equity financing sources to fund the requirements of the Company’s businesses, or which could negatively impact the Company’s investment portfolio; (i) national and regional economic, financial, business and political conditions, including their effect on the availability and cost of labor, credit, materials and other services; (j) the Company’s ability to control costs, particularly labor and employee benefit costs; (k) increased operating

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May 4, 2009

costs due to shortages in qualified nurses, therapists and other healthcare personnel; (l) the Company’s ability to attract and retain key executives and other healthcare personnel; (m) the increase in the costs of defending and insuring against alleged professional liability claims and the Company’s ability to predict the estimated costs related to such claims, including the impact of differences in actuarial assumptions and estimates compared to eventual outcomes; (n) the Company’s ability to successfully reduce (by divestiture of operations or otherwise) its exposure to professional liability claims; (o) the Company’s ability to successfully pursue its development activities and successfully integrate new operations, including the realization of anticipated revenues, economies of scale, cost savings and productivity gains associated with such operations; (p) the Company’s ability to successfully dispose of unprofitable facilities; (q) events or circumstances which could result in impairment of an asset or other charges; (r) changes in generally accepted accounting principles or practices; and (s) the Company’s ability to maintain an effective system of internal control over financial reporting. Many of these factors are beyond the Company’s control. The Company cautions investors that any forward-looking statements made by the Company are not guarantees of future performance. The Company disclaims any obligation to update any such factors or to announce publicly the results of any revisions to any of the forward-looking statements to reflect future events or developments.

As noted above, the Company’s earnings guidance includes the financial measure referred to as operating income. The Company’s management uses operating income as a meaningful measure of operational performance in addition to other measures. The Company uses operating income to assess the relative performance of its operating divisions as well as the employees that operate these businesses. In addition, the Company believes this measurement is important because securities analysts and investors use this measurement to compare the Company’s performance to other companies in the healthcare industry. The Company believes that income from continuing operations is the most comparable measure, in relation to generally accepted accounting principles, to operating income. Readers of the Company’s financial information should consider income from continuing operations as an important measure of the Company’s financial performance because it provides the most complete measure of its performance. Operating income should be considered in addition to, not as a substitute for, or superior to, financial measures based upon generally accepted accounting principles as an indicator of operating performance. A reconciliation of the estimated operating income to income from continuing operations provided in the Company’s earnings guidance is included in this press release.

About Kindred Healthcare

Kindred Healthcare, Inc. is a healthcare services company, based in Louisville, Kentucky, with annual revenues of over $4 billion and approximately 54,800 employees in 40 states. At March 31, 2009, Kindred through its subsidiaries provided healthcare services in 661 locations, including 82 long-term acute care hospitals, 228 skilled nursing centers and a contract rehabilitation services business, Peoplefirst rehabilitation services, which served 351 non-affiliated facilities. Ranked first in Fortune magazine’s Most Admired Companies “Health Care: Medical Facilities” category, Kindred’s mission is to promote healing, provide hope, preserve dignity and produce value for each patient, resident, family member, customer, employee and shareholder we serve. For more information, go to www.kindredhealthcare.com.

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KINDRED HEALTHCARE, INC.

Financial Summary

(Unaudited)

(In thousands, except per share amounts)

	Three months ended
	March 31,
	2009		2008
Revenues	$	1,083,312	$	1,048,523
Income from continuing operations	$	22,353	$	16,507
Income (loss) from discontinued operations, net of income taxes		407		(1,817	)
Net income	$	22,760	$	14,690
Earnings per common share:
Basic:
Income from continuing operations	$	0.57	$	0.43
Income (loss) from discontinued operations		0.01		(0.05	)
Net income	$	0.58	$	0.38
Diluted:
Income from continuing operations	$	0.57	$	0.42
Income (loss) from discontinued operations		0.01		(0.05	)
Net income	$	0.58	$	0.37
Shares used in computing earnings per common share:
Basic		38,184		37,444
Diluted		38,315		38,061

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KINDRED HEALTHCARE, INC.

Condensed Consolidated Statement of Operations

(Unaudited)

(In thousands, except per share amounts)

	Three months ended
	March 31,
	2009			2008
Revenues	$	1,083,312		$	1,048,523
Salaries, wages and benefits		624,173			601,251
Supplies		81,159			78,632
Rent		86,779			85,180
Other operating expenses		224,179			227,303
Other income		(2,872	)		(4,717	)
Depreciation and amortization		30,805			31,055
Interest expense		2,478			4,921
Investment income		(1,476	)		(3,248	)
		1,045,225			1,020,377
Income from continuing operations before income taxes		38,087			28,146
Provision for income taxes		15,734			11,639
Income from continuing operations		22,353			16,507
Income (loss) from discontinued operations, net of income taxes		407			(1,817	)
Net income	$	22,760		$	14,690
Earnings per common share:
Basic:
Income from continuing operations	$	0.57		$	0.43
Income (loss) from discontinued operations		0.01			(0.05	)
Net income	$	0.58		$	0.38
Diluted:
Income from continuing operations	$	0.57		$	0.42
Income (loss) from discontinued operations		0.01			(0.05	)
Net income	$	0.58		$	0.37
Shares used in computing earnings per common share:
Basic		38,184			37,444
Diluted		38,315			38,061

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KINDRED HEALTHCARE, INC.

Condensed Consolidated Balance Sheet

(Unaudited)

(In thousands, except per share amounts)

	March 31, 2009			December 31, 2008
ASSETS
Current assets:
Cash and cash equivalents	$	143,450		$	140,795
Cash - restricted		5,502			5,104
Insurance subsidiary investments		159,041			196,983
Accounts receivable less allowance for loss		690,431			611,032
Inventories		22,531			22,325
Deferred tax assets		57,777			58,296
Income taxes		3,827			47,257
Other		30,080			20,843
		1,112,639			1,102,635
Property and equipment		1,433,630			1,392,636
Accumulated depreciation		(687,101	)		(656,676	)
		746,529			735,960
Goodwill		72,806			72,244
Intangible assets less accumulated amortization		64,177			64,367
Assets held for sale		7,790			7,786
Insurance subsidiary investments		46,927			48,610
Deferred tax assets		103,910			100,751
Other		50,126			49,408
	$	2,204,904		$	2,181,761
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	154,078		$	178,246
Salaries, wages and other compensation		265,282			281,542
Due to third party payors		42,523			33,122
Professional liability risks		53,204			55,447
Other accrued liabilities		76,910			76,832
Long-term debt due within one year		82			81
		592,079			625,270
Long-term debt		368,612			349,433
Professional liability risks		199,823			187,804
Deferred credits and other liabilities		105,519			104,279
Stockholders' equity:
Common stock, $0.25 par value; authorized 175,000 shares; issued 39,053 shares - March 31, 2009 and 38,909 shares - December 31, 2008		9,763			9,727
Capital in excess of par value		814,095			812,141
Accumulated other comprehensive loss		(4,473	)		(3,619	)
Retained earnings		119,486			96,726
		938,871			914,975
	$	2,204,904		$	2,181,761

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KINDRED HEALTHCARE, INC.

Condensed Consolidated Statement of Cash Flows

(Unaudited)

(In thousands)

	Three months ended March 31,
	2009		2008
Cash flows from operating activities:
Net income	$	22,760	$	14,690
Adjustments to reconcile net income to net cash provided by (used in) operating activities
Depreciation and amortization		30,805		31,405
Amortization of stock-based compensation costs		2,439		3,769
Provision for doubtful accounts		7,016		8,372
Deferred income taxes		(2,179)		(4,718)
Other		204		(576)
Change in operating assets and liabilities:
Accounts receivable		(86,415)		(102,143)
Inventories and other assets		(7,535)		(7,172)
Accounts payable		(7,885)		352
Income taxes		43,223		41,596
Due to third party payors		9,401		(3,491)
Other accrued liabilities		(8,070)		8,122
Net cash provided by (used in) operating activities		3,764		(9,794)
Cash flows from investing activities:
Purchase of property and equipment		(39,986)		(24,940)
Acquisitions		(15,604)		(2,080)
Sale of assets		—		6,479
Purchase of insurance subsidiary investments		(36,257)		(35,233)
Sale of insurance subsidiary investments		54,092		38,899
Net change in insurance subsidiary cash and cash equivalents		20,458		39,953
Other		(953)		1,094
Net cash provided by (used in) investing activities		(18,250)		24,172
Cash flows from financing activities:
Proceeds from borrowings under revolving credit		390,800		375,000
Repayment of borrowings under revolving credit		(371,600)		(394,200)
Repayment of long-term debt		(20)		(294)
Payment of deferred financing costs		(309)		(131)
Issuance of common stock		—		722
Other		(1,730)		(11,460)
Net cash provided by (used in) financing activities		17,141		(30,363)
Change in cash and cash equivalents		2,655		(15,985)
Cash and cash equivalents at beginning of period		140,795		32,877
Cash and cash equivalents at end of period	$	143,450	$	16,892

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KINDRED HEALTHCARE, INC.

Condensed Consolidated Statement of Operations

(Unaudited)

(In thousands, except per share amounts)

	2008 Quarters												Year			First Quarter 2009
	First			Second			Third			Fourth
Revenues	$	1,048,523		$	1,041,911		$	1,010,680		$	1,050,282		$	4,151,396		$	1,083,312
Salaries, wages and benefits		601,251			596,161			606,468			605,793			2,409,673			624,173
Supplies		78,632			81,567			78,586			81,625			320,410			81,159
Rent		85,180			87,424			86,444			85,904			344,952			86,779
Other operating expenses		227,303			217,387			211,584			211,752			868,026			224,179
Other income		(4,717	)		(5,167	)		(4,313	)		(3,210	)		(17,407	)		(2,872	)
Depreciation and amortization		31,055			30,930			29,432			29,996			121,413			30,805
Interest expense		4,921			2,907			3,710			3,835			15,373			2,478
Investment income		(3,248	)		(2,337	)		(672	)		(844	)		(7,101	)		(1,476	)
		1,020,377			1,008,872			1,011,239			1,014,851			4,055,339			1,045,225
Income (loss) from continuing operations before income taxes		28,146			33,039			(559	)		35,431			96,057			38,087
Provision (benefit) for income taxes		11,639			13,232			(1,345	)		13,638			37,164			15,734
Income from continuing operations		16,507			19,807			786			21,793			58,893			22,353
Discontinued operations, net of income taxes:
Income (loss) from operations		(1,817	)		(858	)		12			831			(1,832	)		407
Gain (loss) on divestiture of operations		—			2,712			(22,058	)		(1,430	)		(20,776	)		—
Net income (loss)	$	14,690		$	21,661		$	(21,260	)	$	21,194		$	36,285		$	22,760
Earnings (loss) per common share:
Basic:
Income from continuing operations	$	0.43		$	0.51		$	0.02		$	0.56		$	1.52		$	0.57
Discontinued operations:
Income (loss) from operations		(0.05	)		(0.02	)		—			0.02			(0.05	)		0.01
Gain (loss) on divestiture of operations		—			0.07			(0.58	)		(0.04	)		(0.55	)		—
Net income (loss)	$	0.38		$	0.56		$	(0.56	)	$	0.54		$	0.92		$	0.58
Diluted:
Income from continuing operations	$	0.42		$	0.50		$	0.02		$	0.56		$	1.50		$	0.57
Discontinued operations:
Income (loss) from operations		(0.05	)		(0.02	)		—			0.02			(0.05	)		0.01
Gain (loss) on divestiture of operations		—			0.07			(0.57	)		(0.04	)		(0.54	)		—
Net income (loss)	$	0.37		$	0.55		$	(0.55	)	$	0.54		$	0.91		$	0.58
Shares used in computing earnings (loss) per common share:
Basic		37,444			37,714			38,034			38,123			37,830			38,184
Diluted		38,061			38,474			38,894			38,265			38,397			38,315

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KINDRED HEALTHCARE, INC.

Condensed Business Segment Data

(Unaudited)

(In thousands)

	2008 Quarters												Year			First Quarter 2009
	First			Second			Third			Fourth
Revenues:
Hospital division	$	476,167		$	461,064		$	434,774		$	465,317		$	1,837,322		$	492,509
Health services division		534,793			542,207			535,737			542,680			2,155,417			544,940
Rehabilitation division		104,499			106,318			106,796			109,707			427,320			117,647
		1,115,459			1,109,589			1,077,307			1,117,704			4,420,059			1,155,096
Eliminations		(66,936	)		(67,678	)		(66,627	)		(67,422	)		(268,663	)		(71,784	)
	$	1,048,523		$	1,041,911		$	1,010,680		$	1,050,282		$	4,151,396		$	1,083,312
Income from continuing operations:
Operating income (loss):
Hospital division	$	96,802		$	85,886		$	64,818		$	97,861		$	345,367		$	100,899
Health services division		74,200			90,446			78,801			83,485			326,932			75,860
Rehabilitation division		11,486			10,178			7,448			8,959			38,071			15,453
Corporate:
Overhead		(34,931	)		(33,200	)		(30,937	)		(33,951	)		(133,019	)		(34,087	)
Insurance subsidiary		(1,503	)		(1,347	)		(1,775	)		(2,032	)		(6,657	)		(1,452	)
		(36,434	)		(34,547	)		(32,712	)		(35,983	)		(139,676	)		(35,539	)
Operating income		146,054			151,963			118,355			154,322			570,694			156,673
Rent		(85,180	)		(87,424	)		(86,444	)		(85,904	)		(344,952	)		(86,779	)
Depreciation and amortization		(31,055	)		(30,930	)		(29,432	)		(29,996	)		(121,413	)		(30,805	)
Interest, net		(1,673	)		(570	)		(3,038	)		(2,991	)		(8,272	)		(1,002	)
Income (loss) from continuing operations before income taxes		28,146			33,039			(559	)		35,431			96,057			38,087
Provision (benefit) for income taxes		11,639			13,232			(1,345	)		13,638			37,164			15,734
	$	16,507		$	19,807		$	786		$	21,793		$	58,893		$	22,353

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May 4, 2009

KINDRED HEALTHCARE, INC.

Condensed Business Segment Data (Continued)

(Unaudited)

(In thousands)

	2008 Quarters								Year		First Quarter 2009
	First		Second		Third		Fourth
Rent:
Hospital division	$	35,907	$	37,750	$	36,461	$	36,198	$	146,316	$	36,445
Health services division		47,883		48,175		48,551		48,282		192,891		48,852
Rehabilitation division		1,358		1,393		1,405		1,399		5,555		1,451
Corporate		32		106		27		25		190		31
	$	85,180	$	87,424	$	86,444	$	85,904	$	344,952	$	86,779
Depreciation and amortization:
Hospital division	$	11,303	$	11,455	$	11,719	$	13,673	$	48,150	$	12,512
Health services division		14,389		13,677		11,794		10,176		50,036		12,000
Rehabilitation division		387		485		547		546		1,965		547
Corporate		4,976		5,313		5,372		5,601		21,262		5,746
	$	31,055	$	30,930	$	29,432	$	29,996	$	121,413	$	30,805
Capital expenditures, excluding acquisitions (including discontinued operations):
Hospital division	$	13,556	$	20,022	$	19,736	$	15,903	$	69,217	$	14,330
Health services division		7,135		10,744		19,746		12,468		50,093		21,840
Rehabilitation division		282		280		271		329		1,162		190
Corporate:
Information systems		3,832		8,616		7,051		6,864		26,363		3,453
Other		135		258		489		960		1,842		173
	$	24,940	$	39,920	$	47,293	$	36,524	$	148,677	$	39,986

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Kindred Healthcare First Quarter Results Exceed Company’s Guidance

Page 13

May 4, 2009

KINDRED HEALTHCARE, INC.

Condensed Business Segment Data (Continued)

(Unaudited)

											First Quarter 2009
	2008 Quarters
	First		Second		Third		Fourth		Year
Hospital data:
End of period data:
Number of hospitals		81		81		82		82				82
Number of licensed beds		6,358		6,358		6,428		6,482				6,520
Revenue mix %:
Medicare		57		56		54		55		55		56
Medicaid		9		9		11		11		10		10
Medicare Advantage		8		9		9		10		9		10
Commercial insurance and other		26		26		26		24		26		24
Admissions:
Medicare		7,920		7,268		6,786		7,054		29,028		7,421
Medicaid		1,034		1,008		1,148		1,043		4,233		1,052
Medicare Advantage		901		849		869		968		3,587		1,094
Commercial insurance and other		1,814		1,799		1,748		1,727		7,088		1,921
		11,669		10,924		10,551		10,792		43,936		11,488
Admissions mix %:
Medicare		68		67		64		65		66		65
Medicaid		9		9		11		10		10		9
Medicare Advantage		8		8		8		9		8		9
Commercial insurance and other		15		16		17		16		16		17
Patient days:
Medicare		216,737		210,064		188,832		190,794		806,427		197,377
Medicaid		50,335		50,676		54,108		53,304		208,423		50,868
Medicare Advantage		28,453		29,219		28,529		31,744		117,945		35,229
Commercial insurance and other		66,270		67,847		64,449		63,688		262,254		65,509
		361,795		357,806		335,918		339,530		1,395,049		348,983
Average length of stay:
Medicare		27.4		28.9		27.8		27.0		27.8		26.6
Medicaid		48.7		50.3		47.1		51.1		49.2		48.4
Medicare Advantage		31.6		34.4		32.8		32.8		32.9		32.2
Commercial insurance and other		36.5		37.7		36.9		36.9		37.0		34.1
Weighted average		31.0		32.8		31.8		31.5		31.8		30.4
Revenues per admission:
Medicare	$	34,128	$	35,717	$	34,721	$	36,029	$	35,127	$	37,262
Medicaid		41,853		42,271		40,798		50,577		43,816		45,160
Medicare Advantage		42,167		46,448		45,679		46,305		45,148		46,387
Commercial insurance and other		68,691		66,385		64,431		65,774		66,345		61,286
Weighted average		40,806		42,206		41,207		43,117		41,818		42,872
Revenues per patient day:
Medicare	$	1,247	$	1,236	$	1,248	$	1,332	$	1,264	$	1,401
Medicaid		860		841		866		990		890		934
Medicare Advantage		1,335		1,350		1,391		1,412		1,373		1,440
Commercial insurance and other		1,880		1,760		1,748		1,784		1,793		1,797
Weighted average		1,316		1,289		1,294		1,370		1,317		1,411
Medicare case mix index (discharged patients only)		1.12		1.16		1.14		1.17		1.15		1.22
Average daily census		3,976		3,932		3,651		3,691		3,812		3,878
Occupancy %		67.9		67.1		62.2		62.1		64.8		66.0
Annualized employee turnover %		25.0		25.9		25.7		25.2				21.3

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Kindred Healthcare First Quarter Results Exceed Company’s Guidance

Page 14

May 4, 2009

KINDRED HEALTHCARE, INC.

Condensed Business Segment Data (Continued)

(Unaudited)

											First Quarter 2009
	2008 Quarters
	First		Second		Third		Fourth		Year
Nursing center data:
End of period data:
Number of nursing centers:
Owned or leased		224		224		224		224				224
Managed		4		4		4		4				4
		228		228		228		228				228
Number of licensed beds:
Owned or leased		28,371		28,251		28,210		28,040				27,915
Managed		485		485		485		485				485
		28,856		28,736		28,695		28,525				28,400
Revenue mix %:
Medicare		35		35		33		34		34		35
Medicaid		42		43		44		43		43		42
Medicare Advantage		5		4		5		4		5		5
Private and other		18		18		18		19		18		18
Patient days (excludes managed facilities):
Medicare		409,902		402,269		370,782		367,775		1,550,728		381,463
Medicaid		1,394,925		1,387,374		1,430,461		1,417,661		5,630,421		1,368,286
Medicare Advantage		61,724		65,258		64,616		61,737		253,335		74,368
Private and other		432,787		424,769		438,056		441,008		1,736,620		421,756
		2,299,338		2,279,670		2,303,915		2,288,181		9,171,104		2,245,873
Patient day mix %:
Medicare		18		18		16		16		17		17
Medicaid		61		61		62		62		61		61
Medicare Advantage		3		3		3		3		3		3
Private and other		18		18		19		19		19		19
Revenues per patient day:
Medicare Part A	$	429	$	431	$	434	$	456	$	437	$	457
Total Medicare (including Part B)		461		466		475		498		474		497
Medicaid		160		168		163		164		164		166
Medicare Advantage		390		394		395		413		398		403
Private and other		228		227		229		230		229		234
Weighted average		232		238		232		237		235		243
Average daily census		25,267		25,051		25,043		24,872		25,058		24,954
Admissions		18,987		18,288		17,583		17,821		72,679		18,845
Occupancy %		89.2		89.0		89.1		88.9		89.0		89.3
Medicare average length of stay		35.1		35.8		36.5		34.7		35.5		34.8
Annualized employee turnover %		48.2		50.2		51.0		48.9				37.9
Rehabilitation data:
Revenue mix %:
Company-operated		65		64		62		61		63		61
Non-affiliated		35		36		38		39		37		39
Sites of service (at end of period)		650		658		659		655				661
Revenue per site	$	160,767	$	161,578	$	162,058	$	167,492			$	177,984
Therapist productivity %		81.9		81.3		80.1		82.3		81.4		84.8
Annualized employee turnover %		13.1		13.5		13.2		13.3				10.9

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Kindred Healthcare First Quarter Results Exceed Company’s Guidance

Page 15

May 4, 2009

KINDRED HEALTHCARE, INC.

Earnings Per Share Reconciliation (a)

(Unaudited)

(In thousands, except per share amounts)

	Three months ended March 31,
	2009						2008
	Basic			Diluted			Basic			Diluted
Earnings:
Income from continuing operations:
As reported in Statement of Operations	$	22,353		$	22,353		$	16,507		$	16,507
Allocation to participating unvested restricted stockholders		(422	)		(421	)		(421	)		(415	)
Available to common stockholders	$	21,931		$	21,932		$	16,086		$	16,092
Income (loss) from discontinued operations, net of income taxes:
As reported in Statement of Operations	$	407		$	407		$	(1,817	)	$	(1,817	)
Allocation to participating unvested restricted stockholders		(8	)		(8	)
Available to common stockholders	$	399		$	399		$	(1,817	)	$	(1,817	)
Net income:
As reported in Statement of Operations	$	22,760		$	22,760		$	14,690		$	14,690
Allocation to participating unvested restricted stockholders		(430	)		(429	)		(421	)		(415	)
Available to common stockholders	$	22,330		$	22,331		$	14,269		$	14,275
Shares used in the computation:
Weighted average shares outstanding - basic computation		38,184			38,184			37,444			37,444
Dilutive effect of employee stock options					131						617
Adjusted weighted average shares outstanding - diluted computation					38,315						38,061
Earnings per common share:
Income from continuing operations	$	0.57		$	0.57		$	0.43		$	0.42
Income (loss) from discontinued operations		0.01			0.01			(0.05	)		(0.05	)
Net income	$	0.58		$	0.58		$	0.38		$	0.37

(a) Earnings per share are based upon the weighted average number of common shares outstanding during the respective periods. The diluted calculation of earnings per common share includes the dilutive effect of stock options. On January 1, 2009, Kindred adopted Financial Accounting Standards Board Staff Position Emerging Issues Task Force 03-6-1, "Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities," which requires that certain unvested restricted stock be included as a participating security in the basic and diluted earnings per common share calculation pursuant to the two-class method which allocates earnings to the participating securities in the calculation.

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Kindred Healthcare First Quarter Results Exceed Company’s Guidance

Page 16

May 4, 2009

KINDRED HEALTHCARE, INC.

Reconciliation of Earnings Guidance for 2009 - Continuing Operations

(Unaudited)

(In millions, except per share amounts)

	2009 Earnings Guidance Ranges (a)
	As of May 4, 2009				As of February 19, 2009
	Low		High		Low		High
Operating income	$	582	$	588	$	587	$	593
Rent		355		355		360		360
Depreciation and amortization		126		126		126		126
Interest, net		8		8		8		8
Income from continuing operations before income taxes		93		99		93		99
Provision for income taxes		39		42		39		42
Income from continuing operations		54		57	$	54	$	57
Allocation to participating unvested restricted stockholders		1		1
Available to common stockholders	$	53	$	56
Earnings per diluted share	$	1.35	$	1.45	$	1.35	$	1.45
Shares used in computing earnings per diluted share		39.0		39.0		39.5		39.5

(a) The Company indicated that the earnings guidance for continuing operations reflects the anticipated impact of (a) proposed rules issued by CMS on May 1, 2009 related to payment rates for LTAC hospitals and nursing centers and (b) the Company's transactions with Ventas announced on April 30, 2009 to renew certain leases and to acquire six under-performing leased nursing centers for resale. The Company also indicated that the earnings guidance does not reflect any material acquisitions or divestitures and does not take into account any repurchases of common stock.

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