Cost Savings Initiatives and Acquisition and Integration Activities

The Company recorded net charges relating to cost savings initiatives and acquisition and integration activities of $5.3 million and $0.1 million for the first quarter of 2014 and 2013, respectively, which were recorded in selling, general and administrative expenses in the Company’s consolidated statements of comprehensive income.

Cost Savings Initiatives

During the fourth quarter of 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 94 branches through the first quarter of 2014. As such, the Company recorded charges of $2.7 million for the first quarter of 2014, primarily related to severance and facility lease costs.

Acquisition and Integration Activities

The Company recorded charges of $2.6 million for the first three months of 2014, 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 and (ii) legal, accounting and other professional fees and expenses associated with the transaction.

During the first quarter of 2013, the Company recorded charges of $0.1 million in connection with costs of acquisition and integration activities, primarily related to the Company's acquisitions of North Mississippi Hospice and Family HomeCare, Inc. in 2012.

The costs incurred and cash expenditures associated with these activities by component were as follows (in thousands):



	Cost Savings Initiatives			Acquisition & Integration			Total
Balance at December 31, 2012	$	1,685		$	1,011		$	2,696
Charge in first quarter 2013	47			94			141
Cash expenditures	(1,104		)	(322		)	(1,426		)
Ending balance at March 31, 2013	$	628		$	783		$	1,411

Balance at December 31, 2013	$	6,722		$	9,703		$	16,425
Charge in first quarter 2014	2,713			2,628			5,341
Cash expenditures	(3,443		)	(3,472		)	(6,915		)
Non-cash expenditures	(60		)	(86		)	(146		)
Ending balance at March 31, 2014	$	5,932		$	8,773		$	14,705

The balance of unpaid charges relating to cost savings initiatives and acquisition and integration activities approximated $14.7 million at March 31, 2014 and $16.4 million at December 31, 2013, which were included in other accrued expenses in the Company’s consolidated balance sheets.