SEGMENT INFORMATION

6 Months Ended

Jun. 30, 2012

SEGMENT INFORMATION

8. SEGMENT INFORMATION

Our operations involve servicing patients through our two reportable business segments: home health and hospice. Our home health segment delivers a wide range of services in the homes of individuals who may be recovering from surgery, have a chronic disability or terminal illness or need assistance with the essential activities of daily living. Our hospice segment provides palliative care and comfort to terminally ill patients and their families. The “other” column in the following tables consists of costs relating to corporate support functions that are not directly attributable to a specific segment.

During the three-month period ended March 31, 2012 and during 2011, we closed three and 29 care centers, respectively, which are reflected as discontinued operations in accordance with applicable accounting guidance. See Note 4 for additional information. Prior periods have been reclassified to conform to the current presentation.

Management evaluates performance and allocates resources based on the operating income of the reportable segments, which excludes corporate expenses, but includes revenues and all other costs directly attributable to the specific segment. Segment assets are not reviewed by the company’s chief operating decision maker and therefore are not disclosed below (amounts in millions).

	For the Three-Month Periods Ended June 30,2012
	Home Health		Hospice		Other			Total
Net service revenue	$	304.8	$	73.7	$	—		$	378.5
Cost of service, excluding depreciation and amortization		174.3		38.0		—			212.3
General and administrative expenses		68.4		13.4		54.3			136.1
Provision for doubtful accounts		4.0		0.7		—			4.7
Depreciation and amortization		3.4		0.3		6.2			9.9
Operating expenses		250.1		52.4		60.5			363.0
Operating (loss) income	$	54.7	$	21.3	$	(60.5	)	$	15.5
	For the Three-Month Periods Ended June 30,2011
	Home Health		Hospice		Other			Total
Net service revenue	$	321.6	$	46.8	$	—		$	368.4
Cost of service, excluding depreciation and amortization		164.2		25.2		—			189.4
General and administrative expenses		70.5		9.2		47.4			127.1
Provision for doubtful accounts		2.2		0.1		—			2.3
Depreciation and amortization		3.7		0.2		5.6			9.5
Operating expenses		240.6		34.7		53.0			328.3
Operating (loss) income	$	81.0	$	12.1	$	(53.0	)	$	40.1
	For the Six-Month Periods Ended June 30,2012
	Home Health		Hospice		Other			Total
Net service revenue	$	606.2	$	143.1	$	—		$	749.3
Cost of service, excluding depreciation and amortization		346.3		74.5		—			420.8
General and administrative expenses		138.8		26.1		105.1			270.0
Provision for doubtful accounts		9.1		1.5		—			10.6
Depreciation and amortization		6.6		0.6		12.7			19.9
Operating expenses		500.8		102.7		117.8			721.3
Operating (loss) income	$	105.4	$	40.4	$	(117.8	)	$	28.0
	For the Six-Month Periods Ended June 30,2011
	Home Health		Hospice		Other			Total
Net service revenue	$	642.4	$	85.3	$	—		$	727.7
Cost of service, excluding depreciation and amortization		331.3		45.4		—			376.7
General and administrative expenses		144.0		17.1		95.6			256.7
Provision for doubtful accounts		5.3		0.1		—			5.4
Depreciation and amortization		6.7		0.3		11.7			18.7
Operating expenses		487.3		62.9		107.3			657.5
Operating (loss) income	$	155.1	$	22.4	$	(107.3	)	$	70.2