Cost Savings Initiatives, Acquisition and Integration Activities and Legal Settlements

During 2013, 2012 and 2011, the Company recorded net charges of $27.5 million, $5.7 million and $49.1 million, respectively, relating to cost savings initiatives and other restructuring, acquisition and integration activities and legal settlements. These charges were recorded in selling, general and administrative expenses in the Company’s consolidated statements of comprehensive income.

Cost Savings Initiatives

2013 Initiatives

During 2013, the Company undertook a corporate restructuring initiative, referred to as "One Gentiva", to better align its home health, hospice and community care businesses under a common regional management structure. In addition, the Company undertook a branch rationalization initiative to review under performing branches. As a result of this review, the Company has closed or consolidated 77 branches through early 2014. As such, the Company recorded charges of $8.7 million in 2013, primarily related to severance and facility lease costs.

2011 / 2012 Initiatives

During 2011 and early 2012, the Company undertook a comprehensive review of its branch structure, support infrastructure and other significant expenditures in order to reduce its ongoing operating costs given the challenging rate environment facing the Company. As a result of this effort, the Company (i) closed or divested 46 home health branches and 13 hospice branches and (ii) significantly reduced staffing levels in regional, area and corporate support functions. In connection with these activities, during 2013, 2012 and 2011, the Company recorded charges of $0.1 million, $1.7 million and $15.3 million.

Acquisition and Integration Activities

During 2013, the Company recorded charges of $18.8 million, primarily related to the Company's acquisition of Harden. These costs consisted of (i) severance and lease costs associated with consolidation of branches in overlapping markets and consolidation of back office functions, (ii) legal, accounting and other professional fees and expenses associated with the transaction, (iii) write-off of prepaid debt issuance costs associated with the termination of the Company's former credit agreement.

During 2012, the Company recorded positive adjustments to the acquisition and integration reserves of $1.0 million, primarily relating to favorable lease settlements associated with the acquisition of Odyssey.

During 2011, the Company recorded charges of $7.9 million in connection with costs of acquisition and integration activities, primarily related to the Odyssey transaction. These costs consisted of legal, accounting and other professional fees and expenses, costs of obtaining required regulatory approvals, write-off of prepaid fees in connection with the termination of the Company’s 2006 credit agreement and severance costs.

Legal Settlements

For the year ended December 31, 2012, the Company recorded legal settlements of $5.0 million related to the settlement of the Wilkie wage and hour lawsuit.

For the year ended December 31, 2011, the Company recorded legal settlements of $26.0 million related to a settlement with the United States regarding Odyssey's provision of continuous care services prior to the Company's acquisition of Odyssey in August 2010.

The costs incurred and cash expenditures associated with these activities during 2013, 2012 and 2011 were as follows (in thousands):



	Cost Savings Initiatives			Acquisition & Integration			Legal Settlements			Total
Balance at December 31, 2010	$	2,893		$	3,984		$	12,500		$	19,377
Charge in 2011	15,259			7,879			26,000			49,138
Cash expenditures	(7,680		)	(8,155		)	(12,500		)	(28,335		)
Non-cash expenditures	(1,801		)	—			—			(1,801		)
Balance at December 31, 2011	8,671			3,708			26,000			38,379
Charge in 2012	1,701			(989		)	4,958			5,670
Cash expenditures	(8,544		)	(1,492		)	(30,958		)	(40,994		)
Non-cash expenditures	(143		)	(216		)	—			(359		)
Balance at December 31, 2012	1,685			1,011			—			2,696
Charge in 2013	8,742			18,797			—			27,539
Cash expenditures	(3,525		)	(9,550		)	—			(13,075		)
Non-cash expenditures	(656		)	(79		)	—			(735		)
Non-cash reclassification	476			(476		)	—			—
Balance at December 31, 2013	$	6,722		$	9,703		$	—		$	16,425

The balance of unpaid charges relating to cost savings initiatives, and acquisition and integration activities aggregated $16.4 million and $2.7 million at December 31, 2013 and December 31, 2012, respectively. These items were included in other accrued expenses in the Company's consolidated balance sheets.