The strength of the company's operating performance resulted in Manor Care's Board of Directors increasing the quarterly cash dividend on the company's common stock to 16 cents per share from 15 cents per share, a 7 percent increase. The dividend is payable on February 27, 2006 to shareholders of record on February 13, 2006. The Board also authorized $100 million for share repurchase through the end of 2006, which is in addition to the $41 million that remains outstanding under a previous authority.

Paul A. Ormond, Manor Care chairman, president and CEO, said, "During the fourth quarter, we continued to build census in our skilled nursing centers, taking it to its highest level in 2005, and 50 basis points higher than the 2004 fourth quarter. This was a reflection of our ongoing operational focus on promoting our capability to provide excellent outcomes for those requiring post-acute complex medical care and intensive rehabilitation and helping them quickly return to the community. As a result of this shift in our mix and growth in our capabilities, over half of our nursing center admissions today are able to be discharged within 30 days. This ongoing focus in 2005 enabled us to increase our Medicare revenues as the year progressed and take our quality mix of Medicare, private pay and managed care/insurance revenues to a company high of 71 percent."

Medicare revenues in the company's skilled nursing operations during the quarter increased 16 percent compared with the fourth quarter of 2004 due to the mix shift, volume growth and a reimbursement rate increase of about 3 percent on October 1, 2005. The shift in mix will enable the company to partially offset the Medicare rate decrease incurred beginning January 1, 2006, which otherwise would reduce the Medicare per diem by approximately $17 per patient day. Medicaid rates increased during the year but were largely offset by provider taxes. The company also announced that all eligible patients within its skilled nursing centers are receiving their prescribed medications under Medicare's new Part D prescription drug program and that a prescription drug plan has been identified for 100 percent of its dual eligible (Medicare and Medicaid) patients.

"Our hospice and home health business also continued to grow in 2005, led by our hospice operations," Mr. Ormond continued. "Hospice provides excellent opportunities for growth, both organically and through select acquisitions. To support the strategic growth of this business, in the second half of 2005 we acquired two hospice operations, purchased an oncology home care business and began construction of a new inpatient hospice facility. Hospice revenues were up 15 percent in the 2005 fourth quarter from a year ago."

In addition to the hospice and home care investments during the year, Manor Care opened a new nursing center and completed seven nursing center expansions. Four new skilled nursing centers are under construction, and 28 nursing center expansions, including 19 related to expanding physical therapy capabilities, are ongoing.

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