Earnings Release

GENESIS HEALTHCARE ANNOUNCES PLANS TO STRENGTHEN CAPITAL STRUCTURE AND REPORTS THIRD QUARTER 2017 RESULTS
11/8/2017

KENNETT SQUARE, PA – Genesis HealthCare (Genesis, or the Company) (NYSE:GEN), one of the largest post-acute care providers in the United States, today announced it has reached preliminary non-binding agreements with certain landlords and credit parties intended to reduce fixed charges and improve cash flow.  Genesis also announced operating results for the third quarter ended September 30, 2017. 

Capital Structure

Restructuring Plans

Genesis and its counterparties to the Welltower Master Lease, the Sabra Master Leases, the Welltower Bridge Loans, the Term Loans and certain other loans have entered into preliminary non-binding agreements concerning a proposed long-term restructuring of these master leases and loans (the Restructuring Plans) in an effort to strengthen significantly the capital structure of the Company.

These Restructuring Plans include the proposed sale by Sabra and Welltower of certain facilities currently leased to the Company, which the Company intends to re-lease from new third-party landlords at reduced rents. Genesis will also make commercially reasonable efforts to refinance or repay through asset sales, certain of its debt obligations with Welltower which, upon completion, is expected to result in a reduction in interest costs. 

These Restructuring Plans, if and when fully consummated, are expected to reduce the Company’s current cash fixed charges between $80 million and $100 million annually.  This level of reduction in fixed charges is subject to the successful sale of the Welltower and Sabra facilities to new landlords, the successful re-leasing of those facilities to Genesis at reduced rents, the successful refinancing and/or repayment of certain debt obligations and the receipt of additional concessions to be made by other credit parties. Genesis believes the transactions under the proposed restructuring could occur during the first half of 2018.

“We are very appreciative of the constructive and collaborative support of our key credit partners,” noted George V. Hager Jr., Chief Executive Officer of Genesis.  “We look forward to executing on the Restructuring Plans, which upon completion, we believe will result in a significantly strengthened capital structure for the Company, providing adequate liquidity and free cash flow to allow continued investment in our people and our clinical programs.”

“We remain committed to providing outstanding care to our patients and the continued development of our value-based initiatives, which we believe are the keys to long-term shareholder value”.

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