Form 425
1
Investor Presentation
Kindred Healthcare, Inc. (NYSE: KND)
March 16, 2011
Filed pursuant to Rule 425 under the Securities Act of 1933 and deemed filed
pursuant to Rule 14a-12 under the Securities Exchange Act of 1934
Filing Person: Kindred Healthcare, Inc.
Commission File No.: 001-14057
Subject Company: RehabCare Group, Inc.
Commission File No.: 001-14655

Forward-Looking Statements
Additional Information About this Transaction 
In
connection
with
the
pending
transaction
with
RehabCare
Group,
Inc.
(“RehabCare”),
Kindred
Healthcare,
Inc.
(“Kindred”)
will
file
with
the
Securities
and
Exchange
Commission (the “SEC”) a Registration Statement on Form S-4 that will include a joint proxy statement of Kindred and RehabCare that also constitutes a prospectus of
Kindred.
Kindred
and
RehabCare
will
mail
the
definitive
proxy
statement/prospectus
to
their
respective
stockholders.
WE
URGE
INVESTORS
AND
SECURITY
HOLDERS
TO
READ
THE
JOINT
PROXY
STATEMENT/PROSPECTUS
REGARDING
THE
PENDING
TRANSACTION
WHEN
IT
BECOMES
AVAILABLE
BECAUSE
IT
WILL
CONTAIN IMPORTANT INFORMATION. 
You may obtain a free copy of the joint proxy statement/prospectus (when available) and other related documents filed by
Kindred
and
RehabCare
with
the
SEC
at
the
SEC’s
website
at
.
The
joint
proxy
statement/prospectus
(when
available)
and
the
other
documents
filed
by
Kindred
and
RehabCare
with
the
SEC
may
also
be
obtained
for
free
by
accessing
Kindred’swebsite
at
www.kindredhealthcare.com
and
clicking
on
the
“Investors”
link
and
then
clicking
on
the
link
for
“SEC
Filings”
or
by
accessing
RehabCare’s
website
at
www.rehabcare.com
and
clicking
on
the
“Investor
Information”
link
and
then
clicking
on
the link for “SEC Filings”.
Participants in this Transaction       
Kindred, RehabCare and their respective directors, executive officers and certain other members of management and employees may be soliciting proxies from their
respective stockholders in favor of the pending transaction.  Information regarding the persons who may, under the rules of the SEC, be considered participants in the
solicitation of stockholders in connection with the pending transaction will be set forth in the joint proxy statement/prospectus when it is filed with the SEC.  You can find
information about Kindred’s executive officers and directors in Kindred’s definitive proxy statement filed with the SEC on April 1, 2010.  You can find information about
RehabCare’s executive officers and directors in its definitive proxy statement filed with the SEC on March 23, 2010.  You can obtain free copies of these documents from
Kindred or RehabCare, respectively, using the contact information above.
Forward-Looking Statements   
Information set forth in this presentation contains forward-looking statements, which involve a number of risks and uncertainties.  Kindred and RehabCare caution readers
that
any
forward-looking
information
is
not
a
guarantee
of
future
performance
and
that
actual
results
could
differ
materially
from
those
contained
in
the
forward-looking
information.  Such forward-looking statements include, but are not limited to, statements about the benefits of the business combination transaction involving Kindred and
RehabCare,
including
future
financial
and
operating
results,
the
combined
company’s
plans,
objectives,
expectations
and
intentions
and
other
statements
that
are
not
historical facts.
The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: (a) the receipt of all required licensure and
regulatory approvals and the satisfaction of the closing conditions to the acquisition of RehabCare by Kindred, including approval of the pending transaction by the
shareholders of the respective companies, and Kindred’s ability to complete the required financing as contemplated by the financing commitment; (b) Kindred’s ability to
integrate the operations of the acquired hospitals and rehabilitation services operations and realize the anticipated revenues, economies of scale, cost synergies and
productivity gains in connection with the RehabCare acquisition and any other acquisitions that may be undertaken during 2011, as and when planned, including the potential
for unanticipated issues, expenses and liabilities associated with those acquisitions and the risk that RehabCare fails to meet its expected financial and operating targets; (c)
the potential for diversion of management time and resources in seeking to complete the RehabCare acquisition and integrate its operations; (d) the potential failure to retain
key employees of RehabCare; (e) the impact of Kindred’s significantly increased levels of indebtedness as a result of the RehabCare acquisition on Kindred’s funding costs,
operating flexibility and ability to fund ongoing operations with additional borrowings, particularly in light of  ongoing volatility in the credit and capital markets; (f) the
potential
for
dilution
to
Kindred
stockholders
as
a
result
of
the
RehabCare
acquisition;
and
(g)
the
ability
of
the
Company
to
operate
pursuant
to
the
terms
of its debt
obligations, including Kindred’s obligations under financings undertaken to complete the RehabCare acquisition, and the ability of Kindred to operate pursuant to its master
lease agreements with Ventas, Inc. (NYSE:VTR).  Additional factors that may affect future results are contained in Kindred’s and RehabCare’s filings with the SEC,
which
are
available
at
the
SEC’s
web
site
at
.
Many
of
these
factors
are
beyond
the
control
of
Kindred
or
RehabCare.
Kindred
and
RehabCare
disclaim
any
obligation to update and revise statements contained in these materials based on new information or otherwise.
2
www.sec.gov
www.sec.gov

3
696
(3)
sites of service,
315
facilities
in
40
states
56,800
(3)
dedicated
employees,
making Kindred
a top-200 private
employer in
the U.S.
(4)
33,800
(3)
patients and
residents
per day
$4.4 billion
(2)
consolidated
revenues
Largest Diversified Post-Acute
Provider in the United States
(1)
(1) Ranking based on revenues.
(2) Revenues for the year ended December 31, 2010.
(3) As of December 31, 2010.
(4) Ranking provided by TMP, Inc.

4
4
$2.0 billion revenues
(1)
HOSPITAL
Long-term Acute Care Hospitals
•
Largest operator in U.S.
(2)
•
89 hospitals with
6,887 licensed beds
(3)
$2.2 billion revenues
(1)
•
Third largest nursing
center operator in U.S.
(2)
•
226 nursing centers with
27,442 licensed beds
(3)
•
7 assisted living facilities with 463
licensed beds
(3)
NURSING CENTER
Nursing and Rehabilitation Centers
$505 million revenues
(1)
•
Second largest contract therapy
company in U.S.
(2)
•
381 external locations served
through 5,900 therapists and
10,600 total employees
(3)
REHABILITATION
Peoplefirst
Rehabilitation
Services
(1)
Revenues for the year ended December 31, 2010  (divisional revenues before intercompany eliminations).
(2)
Ranking based on revenues.
(3)
As of December 31, 2010.
Kindred’s Market Leading Businesses

5
Provide superior clinical outcomes and quality care with an
approach which is patient-centered, disciplined and transparent
Lower cost by reducing lengths of stay in acute care hospitals and
transition patients home at the highest possible level of function
Reduce rehospitalization through our integrated and
interdisciplinary care management teams and protocols
Kindred’s Value Proposition and 
Our “Continue The Care” Campaign

6

7
Investment Rationale
Each year, nearly 9 million people –
23,000 a day –
are discharged from
short-term acute care hospitals that require some form of post-acute care
As the largest diversified post-acute provider, Kindred is uniquely positioned
to grow and succeed in what will be an increasingly integrated healthcare
delivery system
Kindred has a track record of providing quality, cost-effective care,
operational excellence and consistent levels of free cash flows
Our platform and infrastructure, together with our successful organic
development and opportunistic M&A strategy, offer the potential for creating
significant value for shareholders

8
Kindred Update

9
Kindred Update
Kindred
Healthcare,
Inc.
(“Kindred”)
and
RehabCare
Group,
Inc.
(“RehabCare”)
have
announced a transaction whereby Kindred will acquire RehabCare for ~$35/share
Both Companies reported strong Q4 and 2010 clinical and financial results and share a
high
degree
of
confidence
and
visibility
in
their
business
plans
and
estimates
for
2011
The combined Company will have an industry leading position in attractive post-acute
business segments and growing local markets
Kindred
will
be
well
positioned
for
future
growth
in
a
changing
healthcare
landscape
with
the expansion of the combined service offerings
The transaction substantially enhances Kindred’s growth and margin profile
The proposed transaction is highly accretive to Kindred’s earnings and cash flows and
generates
strong
operating
cash
flows
providing
the
ability
to
quickly
delever
and
finance
future growth

10
Both Kindred and RehabCare beat 4Q and 2010 analyst estimates
Summary of Q4 and 2010 Results
Kindred
RehabCare
1)
I/B/E/S consensus as of 2/7/2011.
2)
Reflects income from continuing operations.
3)
Actual revenues exclude Miami IRF.
4)
Includes discontinued operations.
($MM, except EPS Data)
($MM, except EPS Data)
Q4 2010
2010
Consensus
(1)
Actual
% Surprise
Consensus
(1)
Actual
% Surprise
Revenues
1,121.0
1,135.5
1.3%
4,345.0
4,359.7
0.3%
EBITDA
61.0
66.8
9.5%
211.0
217.3
3.0%
EBIT
30.0
35.4
18.0%
90.0
95.7
6.3%
Net Income
(2)
16.0
19.8
23.8%
52.0
56.1
7.9%
EPS
(2)
$0.41
$0.50
22.0%
$1.33
$1.42
6.8%
Q4 2010
2010
Consensus
(1)
Actual
% Surprise
Consensus
(1)
Actual
% Surprise
Revenues
(3)
343.0
339.3
-1.1%
1,347.2
1,329.4
-1.3%
EBITDA
41.5
44.1
6.3%
163.5
164.1
0.4%
EBIT
34.1
36.1
5.9%
133.4
133.6
0.1%
Net Income
(4)
14.9
17.1
14.8%
60.6
62.5
3.1%
EPS
(4)
$0.60
$0.69
15.0%
$2.45
$2.53
3.3%

11
Transaction Overview

12
~$35
/
share
total
($26
/
share
in
cash;
~$9
/
share
in
Kindred
stock)
(1)
$1.3 billion total consideration, including assumption of net debt
Transaction Overview
Consideration
Accretion
Synergies
Kindred and RehabCare have announced a transaction whereby Kindred
will acquire RehabCare for ~$35/share
Transaction
Substantially accretive to Kindred’s earnings and operating cash flows
$40 million in identified annual cost and operating synergies
Full run-rate achieved within two years ($25MM achieved first year)
–
Excluding one time costs
Committed financing from J.P. Morgan, Morgan Stanley and Citi
Financing
Expected Close
On or about June 30, 2011
1)
Based on a fixed exchange ratio.

13
Transaction Overview
J.P.
Morgan,
Morgan
Stanley
and
Citi
have
committed
$1.85Bn
in
debt
financing
Key Capital Considerations
Ability
to
delever
quickly
(Pro
forma
adjusted
leverage
flat
to
current
Kindred
standalone)
Maintain strong balance sheet, liquidity and financial flexibility (approximately $250MM undrawn revolver
capacity at close)
Sources and Uses
(1)                                                              
($MM)
Sources
% of Total
$600MM ABL Revolving Credit Facility
$350
19%
Term Loan B
700
38%
Senior Unsecured Notes
550
30%
Equity Consideration
(3)
228
13%
Total Sources
1,828
100%
Uses
% of Total
Purchase RehabCare Equity (~$35/share)
885
48%
Retire RehabCare Debt
399
22%
Retire Kindred Debt
367
20%
Other
177
10%
Total Uses
1,828
100%
Pro-Forma Capitalization
(1)
($MM)
2011E
(2)
New Borrowings
1,600
Total Debt
1,600
Revenue
EBITDA
(4)
Rent Expense
EBITDAR
(4)
Total Debt / EBITDA
Adjusted Debt
(5)
/ EBITDAR
6,200
6,200
470
487
422
422
892
909
3.4x
3.3x
4.6x
4.5x
5,846
445
414
859
3.6x
4.8x
1,600
1,600
2010PF
(2)
1)
Sources and Uses is as of 12/31/10.  Pro-Forma Capitalization is based on borrowings expected at closing.  Figures may not add due to rounding.
2)
2010PF figures reflect full year run rate of 2010 Kindred acquisitions ($157MM in revenue, $44MM in EBITDAR, $7MM in rent and $37MM of EBITDA benefit) and RehabCare. RehabCare 2010
results do not include the results of discontinued operations (inpatient rehabilitation facility in Miami).  2011 figures display low and high end of guidance which reflects the combined business as if
the transaction closed on 1/1/11.
3)
Based on a fixed exchange ratio.
4)
2010PF and 2011E includes $25MM of run rate synergies. 
5)
Calculated with 6.0x cap rate.

14
Agency Ratings
Corporate Family
Term Loan B
Moody’s
Investors
Service
(1)
B1
Ba3
Standard and
Poor’s
(2)
B+
B+
(1)
Release dated March 14, 2011
(2)
Release dated March 11, 2011

15
Kindred and RehabCare will be the Premier Rehabilitation and
Post-Acute Provider in the United States
Metrics
Kindred
Kindred + RehabCare
Focus
SNF, LTAC and Contract Rehab
SNF, LTAC and Contract Rehab
Scale
(1)
•
States
•
Facilities
•
Beds
•
2010 Revenue (Pro Forma)
•
2010 EBITDA (Pro Forma)
40
322
34,792
$4,517MM
(2)
$254MM
(2)
RehabCare
Contract Rehab and LTAC
42
34
1,788
$1,349MM
$166MM
46
356
36,580
$5,866MM
(2)
$445MM
(2)(3)
Payor Mix (’09)
Business
Mix:
EBITDA
(’10)
(2)
29%
13%
58%
Contract Rehab
SNF
LTAC
40%
24%
36%
Medicaid
Medicare
Commercial
LTAC
SRS
52%
27%
21%
LTAC
SRS
HRS
69%
29%
Medicaid
2%
Medicare
Commercial
45%
35%
3%
17%
LTAC
SNF
HRS
Contract Rehab
11%
8%
62%
19%
LTAC
SNF
HRS
Contract Rehab
51%
20%
29%
Commercial
Medicaid
Medicare
Business
Mix:
Revenue
(’10)
(2)(4)
39%
48%
13%
HRS
47%
42%
11%
Contract Rehab
SNF
LTAC
(1)
RehabCare states include LTAC and IRF locations. Beds include LTACs and freestanding IRFs. Kindred facilities include owned, leased or managed LTACHs, SNFs and ALFs. RehabCare facilities include owned and leased LTACHs.
(2)
Includes the full year benefit of all of the acquisitions Kindred has closed in 2010 ($157MM Revenue and $37MM EBITDA benefit). RehabCare 2010 results includes the results of discontinued operations (inpatient rehabilitation facility in Miami).  Figures may not add due to
rounding.
(3)
Includes $25MM of run rate synergies.
(4)
Revenue excludes the effect of Kindred intercompany eliminations. EBITDA includes intercompany eliminations in Kindred segment EBITDA.

16
Kindred and RehabCare Combined Presence
Kindred Hospitals
Kindred Nursing and Rehabilitation Centers
RehabCare Hospitals
Acute Rehabilitation Units
Existing Cluster Market
Potential New Cluster Market
Transaction enhances Kindred’s Cluster Market Strategy

17
Leading Position in Attractive Growing Businesses
(1) Includes 1,112 facilities from RehabCare and 696 facilities from Kindred.
Multiple earnings streams, multiple avenues for growth
PF Kindred
116
3
5
94
8
8
7
5
2
0
20
40
60
80
100
120
140
13
10
97
121
Freestanding
Hospital Based
207
324
277
227
226
223
0
50
100
150
200
250
300
350
Number of Facilities
315
300
200
108
1,808
1,000
900
471
450
342
471
700
700
1,493
0
500
1,000
1,500
2,000
Third Party
Affiliated
(1)
12
6
15
18
19
111
118
0
20
40
60
80
100
120
140
Number of Facilities
#1 Operator of Hospital Based and Freestanding IRFs
#4 Operator of Skilled Nursing and Rehab Centers
#1 Contract Rehab Manager
#1 Operator of Long-Term Acute Care Hospitals

18
Strategic Rationale

19
Rapidly Changing Post-Acute Market
Multiple Patient Discharge Destinations
SOURCE: RTI, 2009: Examining Post-Acute Care Relationships in an Integrated Hospital System

20
Positioned to Take Advantage of
Changing Healthcare Landscape
“Continue The
Care”
Uniquely Positioned For Bundled Or Episodic Payment Environment
SKILLED
NURSING
FACILITIES
HOSPICE
HOME
HEALTH
CARE
OUTPATIENT
REHAB
ASSISTED
LIVING
ACUTE CARE
HOSPITALS
TRANS
TRANS
CARE
CARE
ICU
ICU
IN-PATIENT
REHAB
LTACs
FREESTANDING/ HIH
Patient Illness Severity
SAU
SAU
TCC
&
TCU
ADULT DAY
CARE

21
Transaction Enhances Financial Profile
(1) Standalone Kindred growth analysis compares 2011 guidance issued on 12/15/10 relative to 2010 standalone performance pro forma full year run rate for all of Kindred’s 2010 acquisitions;
Pro
forma
Kindred
growth
analysis
compares
pro
forma
2011
guidance
relative
to
2010
pro
forma
results,
in
each
case
assuming
the
RehabCare
acquisition
occurred
on
the
first
day
of
each
respective
year
and
includes
first
year
run
rate
synergies
in
both
2010
and
2011
figures.
2011
margin
figures
per
guidance
midpoint
and
compares
standalone
2011
guidance
issued
on
12/15/10
relative
to
pro
forma
2011
guidance.
2011
pro
forma
guidance
reflects
the
combined
business
as
if
the
transaction
closed
on
1/1/11
and
includes
first
year
run
rate
synergies.
EBITDAR Growth
(1)
2010 –
2011
3.5
5.1
2.0
4.0
6.0
Standalone Kindred
Pro Forma Kindred
(%)
EBITDA Growth
(1)
2010 –
2011
6.1
7.9
3.0
5.0
7.0
9.0
Standalone Kindred
Pro Forma Kindred
(%)
EBITDA Margin
(1)
2011
5.6
7.7
0.0
2.0
4.0
6.0
8.0
Standalone Kindred
Pro Forma Kindred
(%)
Net Income Margin
(1)
2011
1.3
1.7
0.0
0.6
1.2
1.8
Standalone Kindred
Pro Forma Kindred
(%)
Enhances Kindred’s growth and operating margin profiles

22
Transaction Reduces Rent and
Fixed Charge Burden
Declining Rent Burden
Enhanced Margin Profile
RehabCare operates a less capital-intensive business model, driving
higher pro forma returns on assets
(1)
Midpoint of guidance issued 12/15/10.
(2)
Midpoint of pro forma guidance which reflects combined business as if the transaction closed 1/1/11.
2011 Operating Leverage
($MM)
Kindred
(1)
Pro Forma
(2)
Revenue
$4,800
$6,200
EBITDAR
640
899
% Margin
13.3%
14.5%
Rent
370
423
% Margin
7.7%
6.8%
EBITDA
270
476
% Margin
5.6%
7.7%
D&A
140
185
% Margin
2.9%
3.0%
EBIT
130
291
% Margin
2.7%
4.7%

23
Growing Portfolio of Owned Real Estate
16
Facilities
43
Facilities
0
10
20
30
40
50
2006
Current Kindred
Kindred has been focused on adding high
quality real estate to balance sheet
–
Acquisitions
–
Development
of
state-of-the-art
LTACHs
and TCCs
–
Exercise of in-the-money purchase
options
Own 16 hospitals; 25 nursing centers and 2
assisted living facilities
Combined company has total PP&E book
value of approximately $1billion
Kindred expects pro forma stabilized
EBITDA
(1)
of approximately $100 million
from owned real estate
(1)  Only includes Kindred facilities

24
Transaction Provides
Significant EPS and Cash Flow Accretion
Low End of
Guidance
Pro-Forma
Impact
Mid Point
High End of
Guidance
2011 EPS Impact
$
%
$0.50
$0.52
$0.55
34%
34%
34%
2011 EPS Guidance
Prev
(1)
New
(2)
$1.45
$1.53
$1.60
$1.95
$2.05
$2.15
(1)
Previous guidance shown is Kindred standalone guidance issued on 12/15/10.
(2)
2011 guidance reflects the combined business as if the transaction closed on 1/1/11.

25
2011 Kindred Guidance
Stand Alone
(2)
Pro Forma
(3)
($MM)
Low
High
Low
High
Revenue
4,800
4,800
6,200
6,200
EBITDA
265
275
470
487
(-) Interest
26
26
118
118
(-) Taxes
40
44
66
73
Cash Flow
199
205
286
296
Cash Flow Margin
4.1%
4.3%
4.6%
4.8%
Strong Free Cash Flows and Ability to Delever
3.5
4.3
4.2
3.9
4.4
0.0
2.0
4.0
6.0
2006
2007
2008
2009
2010
Stand Alone Kindred
(x)
Historical
Adjusted
Debt
/
EBITDAR
(1)
(1)
Calculated with 6.0x cap rate.
(2)
Per guidance midpoint, issued 12/15/2010.
(3)
2011 guidance reflects the combined business as if the transaction closed on 1/1/2011.
Cash Flow Profile
Kindred has operated comfortably with a levered balance sheet
Routine CapEx declines as a % of revenue, improving free cash flow profile

26
26
Strategic and Financial Rationale
Unparalleled combined service offering
No.
1
IRFs,
LTACs
and
SNF
Rehab
management
contracts;
No.
4
standalone
SNFs
Expands
relationships
with
acute
care
networks
through
RehabCare’s
IRFs
and
JV
relationships
Long-term growth prospects supported by strong demographic trends
Leading position in
attractive growing
markets
Well Diversified
Product Offering
Experienced
Management Team
Well positioned to take advantage of the changing healthcare landscape
Strong service offering in post-acute continuum strengthens cluster strategy
Increases facility diversification, potentially creating future cluster locations
Solidifies Kindred's leadership in improving patient care while
decreasing healthcare spending
Average
industry
tenor
of
the
management
team
of
16
years
in
the
industry
and
10
years
at
Kindred
Successfully grown revenue and EBITDA by 88% and 235% respectively since 2000
Recognized as the leading post-acute management team in the market
Pro Forma Kindred will be the post-acute leader with an enhanced financial profile
Focus on adding high quality real estate to the balance sheet
Acquisitions,
development
of
state-of-the-art
LTACHs
and
Transitional
Care
Centers
(TCCs)
Book value of PP&E is approximately $1 billion
Significant cash flow generated by assets that are unencumbered by leases
Strong Asset Base
Strong FCF & Ability
to Delever
Strong
free
cash
flow
and
ability
to
delever
Company is expected to delever on an adjusted basis to current levels by the end of 2011
Proven
ability
to
successfully
operate
and
grow
free
cash
flow
in
a
highly
regulated
environment
Superior cash management through lean working capital

Kindred Has a History of Successfully
Integrating Acquisitions
2002
2003
2005
2006
2007
2008
2009
2010
February 2006:
Commonwealth Communities
Holdings (6 Hospitals, 11 NCs
and 4 ALFs)
November 2010:
Five LTACHs
from Vista
Healthcare
2004
July 2007: (Spin-off)
Kindred and AmerisourceBergen
combine their institutional pharmacy
businesses to form Pharmerica Corp.
27
April 2002:
Specialty Healthcare
Services (6 hospitals)
March 2005:
Pharmacy
Partners (2
pharmacies)
April 2005:
Skilled Care (2
pharmacies)
November 2005:
RXPERTS, Inc.  
(1 Pharmacy)
August 2007:
The Greens Post-
Acute
Rehabilitation
Center
Fountains On the
Greens (Assisted
Living Facility)
October 2007:
Professional
Therapy Solutions
April 2010:
Stratford
Commons (NC
and ALF)
September 2010:
3 Texas NCs
November 2010:
Signature Health
Services
November 2004:
First Stop of Iowa
(1 pharmacy)
August 2006:
EconoMed          
(1 Pharmacy)
ValueScript         
(1 Pharmacy)
PharmaStat         
(1 Pharmacy)
July 2009:
Acclaim
Hospice

28
Track record for operational success based on commitment to quality,
service excellence and a disciplined approach to the business
Experienced management team, robust technology platform, processes
and systems, and a demonstrated ability to adapt to change
Growing businesses through disciplined organic development and
acquisition strategies
Strong cash flows with financial flexibility to finance acquisitions and
development activities
Well positioned to succeed in changing post-acute landscape
Investment Considerations

29
Investor Presentation
Kindred Healthcare, Inc. (NYSE: KND)
March 16, 2011

30
Appendix

31
Kindred Q4 ’10 Highlights
•
Fourth quarter consolidated revenues grew 6% to $1.1 billion
•
Diluted EPS of $0.50 grew 19% from Q4 ‘09
•
Full year operating cash flows exceed $200 million for second consecutive year
•
Routine and development capital expenditures were fully funded through internal
resources in both years
•
Hospitals report growth from last year’s Q4
•
Recent acquisitions drove hospital revenues up 5% to $508 million
•
Operating income grew 3% to $96 million
•
Nursing and rehabilitation centers successfully transitioned to new Medicare payment
system in Q4
•
Revenue growth of 4% driven by increased acuity and clinical services and 4% growth
in admissions
•
Division reports solid 13% growth in operating income
•
Peoplefirst
Rehabilitation adds to customer base and adjusts to new Medicare
rules in
fourth quarter
•
Revenue growth of 21% primarily driven by new customers

32
RehabCare Q4 ’10 Highlights
Excluding transaction related expenses in Q4 ’09, diluted EPS increased
86% year over year to $0.69
Hospital division improved EBITDA margin to 15.2% in the fourth quarter
from 12.9% in the third quarter
Impacted by regulatory changes, Skilled Nursing Rehabilitation Services
division reported 5.8% operating earnings margin in the quarter,
consistent with expectations
Hospital Rehabilitation Services division delivered near record operating
earnings margin of 20.6%
Cash flow from operations of $104 million in 2010 allowed the Company
to pay down debt by $66 million and lower debt to EBITDA ratio to 2.4

Business Segment Buildup
(1)
Segment figures do not sum to totals due to eliminations / corporate expenses. RehabCare figures do not include discontinued operations (Miami IRF). Includes the full year benefit of all of
the acquisitions Kindred has closed in 2010 ($157MM Revenue and $37MM EBITDA benefit)
RehabCare acquisition significantly enhances scale in both the Skilled Nursing
and Hospital Rehab businesses and adds to Kindred’s LTAC business
Hospitals
Rehabilitation Services
Nursing Centers
Total
(1)
Nursing Center
Based
Hospital Based
Total
2010 Pro forma
$MM
Revenue
(1)
Kindred Healthcare
435
84
519
2,093
2,212
4,517
RehabCare
516
180
696
653
0
1,349
Total
951
264
1,215
2,746
2,212
5,866
EBITDAR
(1)
Kindred Healthcare
24
16
40
336
242
618
RehabCare
45
35
80
136
0
216
Total
69
51
120
472
242
834
% Margin
7.3%
19.3%
9.9%
17.2%
10.9%
14.2%
EBITDA
(1)
Kindred Healthcare
18
16
34
176
44
254
RehabCare
45
35
80
86
0
166
Total
63
51
114
262
44
420
% Margin
6.6%
19.3%
9.4%
9.5%
2.0%
7.2%
(+) Synergies
25
Pro Forma EBITDA
445
33

34
Reconciliation of
Non-GAAP Measures
Year ended December 31,
Operating income (loss):
2006
2007
2008
2009
Hospital division
Nursing center division
Rehabilitation division
Pharmacy division
Corporate:
Overhead
Insurance subsidiary
Operating income
Rent
Depreciation and amortization
Interest, net
Income before income taxes
Income taxes
Income from cont. ops.
$364
305
51
-
(135)
(6)
(141)
579
(348)
(126)
(3)
102
39
$63
$ Millions
2010
Fourth
Quarter
2009
$93
77
11
-
(33)
(2)
(35)
146
(88)
(32)
-
26
9
$17
$96
87
9
-
(33)
(1)
(34)
158
(90)
(32)
(3)
33
13
$20
Fourth
Quarter
2010
$383
239
30
49
(157)
(7)
(164)
537
(289)
(115)
1
134
53
$81
$365
295
34
18
(168)
(7)
(175)
537
(338)
(118)
(1)
80
37
$43
$346
322
38
-
(133)
(7)
(140)
566
(339)
(120)
(8)
99
39
$60
$357
303
52
-
(134)
(3)
(137)
575
(357)
(122)
(6)
90
34
$56

35
Investor Presentation
Kindred Healthcare, Inc. (NYSE: KND)
March 16, 2011