Background and Basis of Presentation

12 Months Ended

Dec. 31, 2013

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Background and Basis of Presentation

Background and Basis of Presentation

Gentiva Health Services, Inc. (“Gentiva” or the “Company”) provides home health, hospice, and community care services throughout most of the United States. The Company’s operations involve servicing its patients and customers through (i) its Home Health segment, (ii) its Hospice segment and (iii) its Community Care segment. Discontinued operations represent services provided to patients through the Company's Rehab Without Walls^® business and the Company’s homemaker services business in Illinois ("IDOA").

Effective October 18, 2013, the Company completed the acquisition of certain net assets relating to the home health, hospice and community care businesses of Harden Healthcare Holdings, Inc. ("Harden") pursuant to an Agreement and Plan of Merger dated as of September 18, 2013. Total consideration for the acquisition was $426.8 million, exclusive of transaction costs, consisting of approximately $365.0 million in cash, $53.8 million in shares of Gentiva's common stock and additional contingent consideration of $9.5 million, recorded at estimated fair value of approximately $8.1 million. See Note 4.

In connection with the acquisition, the Company entered into a new Senior Secured Credit Agreement providing for (i) a six-year $670 million Term Loan B facility, (ii) a five-year $155 million Term Loan C facility and (iii) a five-year $100 million revolving credit facility, which replaced the Company's existing credit agreement. The Company's existing credit agreement was terminated upon consummation of the Harden transaction. The Company utilized a combination of cash on hand and proceeds from the new senior secured term loan facility and a portion of the new revolving credit facility to fund the acquisition consideration, repay all amounts outstanding under Harden's then existing credit facility, which was then terminated, and repay all amounts outstanding under the Company's then existing credit facility, which was then terminated. See Note 12.

In addition, during 2013 the Company completed three other acquisitions for total cash consideration of $6.1 million. These transactions were done primarily to extend the Company's geographic coverage areas for home health and hospice services.

A summary of the transactions for 2013, 2012 and 2011 and the consideration paid are as follows (in millions):

Acquisitions:	Geographic Service Area	Date	Consideration
Harden Healthcare Holdings, Inc	Nationwide	October 18, 2013	$	426.8
Appalachian Regional Health Systems	North Carolina	September 30, 2013	2.7
Wake Forest Baptist Health Care at Home, LLC	North Carolina	August 23, 2013	2.4
Hope Hospice, Inc.	Indiana	April 30, 2013	1.0
Family Home Care Corporation	Washington and Idaho	August 31, 2012	12.3
North Mississippi Hospice	Mississippi	August 31, 2012	4.7
Advocate Hospice	Indiana	July 22, 2012	5.5
Odyssey HealthCare of Augusta, LLC	Georgia	April 29, 2011	0.3

In addition, during 2012 the Company sold various home health and hospice operations based in Louisiana and Phoenix and sold off its consulting business. A summary of the Company's operations which were sold during 2012 and 2011 are as follows (in millions):

Dispositions:	Date	Consideration
Phoenix area hospice operations	November 30, 2012	$	3.5
Gentiva Consulting	May 31, 2012	0.3
Louisiana home health and hospice operations	Second Quarter 2012	6.4
Certain home health branches-Utah, Michigan, Nevada and Brooklyn, New York	Fourth Quarter 2011	1.6

Furthermore, during 2011 the Company sold its IDOA business based in Illinois and its Rehab Without Walls^® business. A summary of these transactions follows (in millions):

Discontinued operations:	Date	Consideration
IDOA	October 14, 2011	$	2.4
Rehab Without Walls®	September 10, 2011	9.8

The Company considered these business units as operating segments and, as such, the financial results of these businesses were reported as discontinued operations for all periods presented in the Company’s consolidated financial statements.

During 2011, the Company sold its equity investment in CareCentrix Holdings Inc. The Company recorded accumulated and unpaid dividends on the preferred shares of approximately $8.6 million for the year ended December 31, 2011, which are reflected in dividend income in the Company’s consolidated statement of comprehensive income. The Company also recorded a net gain of approximately $67.1 million, which is reflected in equity in net earnings of CareCentrix, including gain on sale in the Company’s consolidated statement of comprehensive income. See Note 7 for additional information.

The impact of these transactions have been reflected in the Company's results of operations and financial condition from their respective closing dates. See Note 4 for more information.