# CHEMED CORP (CHE) FY 2024 MD&A

Verbatim Item 7 Management's Discussion and Analysis from CHEMED CORP's 10-K for fiscal year 2024.

SEC filing source: https://www.sec.gov/Archives/edgar/data/19584/000156276225000038/che-20241231x10k.htm
Accession: 0001562762-25-000038
Filing date: 2025-02-28
Report date: 2024-12-31
Extracted from a later financial-section MD&A body after the formal Item 7 span was a short reference.
Confidence: high

Company profile: /company/CHE/
All MD&A years: /company/CHE/mda/
Previous year: /company/CHE/mda/fy2023/ (FY 2023)
Next year: /company/CHE/mda/fy2025/ (FY 2025)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

EXECUTIVE SUMMARY

We operate through our two wholly owned subsidiaries: VITAS Healthcare Corporation (“VITAS”) and Roto-Rooter Group, Inc. (“Roto-Rooter”). VITAS focuses on hospice care that helps make terminally ill patients' final days as comfortable as possible. Through its team of doctors, nurses, home health aides, social workers, clergy and volunteers, VITAS provides direct medical services to patients, as well as spiritual and emotional counseling to both patients and their families. Roto-Rooter is focused on providing plumbing, drain cleaning, excavation, water restoration and other related services to both residential and commercial customers. Through its network of company-owned branches, Independent Contractors and franchisees, Roto-Rooter offers plumbing and drain cleaning service to over 90% of the U.S. population.

The vast majority of the Company’s operations are located in the United States. As both operations are service companies, our employees are the most critical resource of the Company. We have very little or no exposure related to customers, vendors or employees in other regions of the world.

The following is a summary of the key operating results for the years ended December 31, 2024, 2023 and 2022 (in thousands except percentages and per share amounts):

[[GREPCENT_TABLE]]
[["","","2024","","","2023","","","2022"],["Consolidated service revenues and sales","$","2,431,287","","$","2,264,417","","$","2,134,963"],["Consolidated net income","$","301,999","","$","272,509","","$","249,624"],["Diluted EPS","$","19.89","","$","17.93","","$","16.53"],["Adjusted net income","$","351,188","","$","308,515","","$","283,609"],["Adjusted diluted EPS","$","23.13","","$","20.30","","$","18.78"],["Adjusted EBITDA","$","503,002","","$","451,897","","$","432,660"],["Adjusted EBITDA as a % of revenue","","20.7","%","","20.0","%","","20.3","%"]]
[[/GREPCENT_TABLE]]

Adjusted net income, adjusted diluted EPS, earnings before interest, taxes and depreciation and amortization (“EBITDA”) and Adjusted EBITDA are not measures derived in accordance with GAAP. We use Adjusted EPS as a measure of earnings for certain long-term incentive awards. We use adjusted EBITDA to determine compliance with certain debt covenants. We provide non-GAAP measures to help readers evaluate our operating results and compare our operating performance with that of similar companies that have different capital structures. Our non-GAAP measures should not be considered in isolation or as a substitute for comparable measures presented in accordance with GAAP. Reconciliations of our non-GAAP measures are presented in tables following the Critical Accounting Policies section.

2024 versus 2023

The increase in consolidated service revenues and sales from 2024 to 2023 was a result of a 16.4% increase at VITAS and a 5.2% decrease at Roto-Rooter. The increase in service revenues at VITAS is comprised primarily of a 14.1% increase in days-of-care, and a geographically weighted average Medicare reimbursement rate increase of approximately 2.8%. Acuity mix shift negatively impacted revenue growth by 110-basis points when compared to prior year revenue and level-of-care mix. The combination of Medicare cap and other contra revenue changes increased revenue growth by 60-basis points. The decrease in service revenues at Roto-Rooter was driven by a decrease in all lines of service.

The pandemic created a significant shortage of licensed healthcare workers industry wide. VITAS was not immune to this shortage. As a result, on July 1, 2022, VITAS implemented a hiring and retention bonus program for its licensed healthcare workers. It is a temporary program intended to help VITAS attract and retain licensed healthcare workers in light of the pandemic induced healthcare worker shortage. An eligible employee must continue in employment for a period of one-year from July 1st to receive a bonus. Additionally, employees hired between July 1, 2022 and June 30, 2023 are eligible if they continue employment for a one-year period from their hire date. Total payments for the retention bonus program were $39.2 million.

On April 17, 2024, VITAS completed the purchase of all hospice operations and an assisted living facility from Covenant Health and Community Services, Inc d/b/a/ Covenant Care (“Covenant”) for an aggregated purchase price of $85.0 million in cash.

Revenue for the Covenant acquisition for 2024, was approximately $31.0 million to $32.0 million and this translated to net income of approximately $5.0 million to $6.0 million. Adjusted EBITDA for 2024 attributed to Covenant is between $7.0 million and $8.0 million.

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The pro forma revenue and earnings for the Company for the years ended December 31, 2024 and 2023 as if the Covenant acquisition made in 2024 was completed on January 1, 2023 are as follows (in thousands, except per share data):

[[GREPCENT_TABLE]]
[["","","For the Years Ended December 31,"],["","","2024","","2023"],["Service revenues and sales","","$","2,448,419","","$","2,320,177"],["Net income","","$","306,224","","$","279,615"],["Earnings per share","","$","20.38","","$","18.58"],["Diluted earnings per share","","$","20.16","","$","18.40"]]
[[/GREPCENT_TABLE]]

In late September and early October 2024, Hurricanes Helene and Milton impacted the panhandle of Florida and other parts of the southeastern United States. They did not result in any significant property loss or damage to VITAS. However, as with other similar events, we did experience a slowdown in admission activity while health systems prepared for the hurricane and then dealt with the aftermath.

2023 versus 2022

The increase in consolidated service revenues and sales from 2023 to 2022 was a result of a 9.4% increase at VITAS and a 1.7% increase at Roto-Rooter. The increase in service revenues at Roto-Rooter was driven by an increase in plumbing, excavation and water restoration offset by a decrease in drain cleaning. The increase in service revenues at VITAS is comprised primarily of a 7.4% increase in days-of-care, and a geographically weighted average Medicare reimbursement rate increase of approximately 2.4%, partially offset by 50-basis points as a result of CMS reimplementing sequestration that was suspended at the start of the pandemic in 2020. Acuity mix shift had minimal impact for the year when compared to prior year revenue and level-of-care mix.

The pandemic created a significant shortage of licensed healthcare workers industry wide. VITAS was not immune to this shortage. As a result, on July 1, 2022, VITAS implemented a hiring and retention bonus program for its licensed healthcare workers. It was a temporary program intended to help VITAS attract and retain licensed healthcare workers in light of the pandemic induced healthcare worker shortage. An eligible employee must have continued in employment for a period of one-year from July 1st to receive a bonus. Additionally, employees hired between July 1, 2022 and June 30, 2023 were eligible if they continue employment for a one-year period from their hire date. A total of $40.5 million had been accrued since the start of the program. Payments totaling $31.6 million were made from July 2023 to December 2023. The remaining accrued amount was paid over the following three quarters.

Starting with the September 30, 2023 quarter, Chemed is no longer excluding the cost of the Retention Program when presenting non-GAAP operating metrics in current or prior periods.

During the period from May 1, 2020 through March 31, 2022, the 2% Medicare sequestration reimbursement cut was suspended. For the year ended December 31, 2022, approximately $8.6 million, was recognized as revenue due to the suspension of sequestration. Sequestration was phased back into place at 1% from April 1, 2022 to June 30, 2022 and the full 2% thereafter.

Impact of Current Market Conditions

VITAS 2025 revenue, prior to Medicare Cap, is estimated to increase 10.5% to 11.3% when compared to 2024. ADC is estimated to increase 8.5% to 9.0%. Full year adjusted EBITDA margin, prior to Medicare Cap, is estimated to be 18.4% to 18.9%. Medicare Cap billing limitations are estimated to be $9.5 million in calendar year 2025.

Roto-Rooter is forecasted to achieve full-year 2025 revenue growth of 2.4% to 3.0%. Roto-Rooter’s adjusted EBITDA margin for 2025 is expected to be 25.7% to 26.3%.

Based upon the above, full-year 2025 earnings per diluted share, excluding: non-cash expense for stock options, tax benefits from stock option exercises, costs related to litigation, and other discrete items, is estimated to be in the range of $24.94 to $25.45. This compares to full-year 2024 adjusted earnings per diluted share of $23.13.

The 2025 earnings trajectory is heavily weighted towards the second half of the year. Roto-Rooter’s revenue and associated income is expected to accelerate during the year, as Roto-Rooter management’s business improvement initiatives continue to build momentum. Additionally, the first quarter of 2024 was Roto-Rooter’s strongest quarter making for difficult comparison at the beginning of the year. VITAS’ revenue growth and EBITDA margin, prior to Medicare Cap in the second and third quarters, will be adversely impacted by the initiatives required to moderate the impact of the Medicare Cap rate differential. The impact to the first quarter for VITAS will be mostly offset by the results of the Covenant acquisition which occurred in April 2024.

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The 2025 guidance assumes an effective corporate tax rate on adjusted earnings of 24.0% and a diluted share count of 14.8 million shares.

LIQUIDITY AND CAPITAL RESOURCES

Significant factors affecting our cash flows during 2024 and financial position at December 31, 2024, include the following:

Our operations generated cash of $417.5 million.

We repurchased $361.4 million of our stock.

We spent $97.4 million on business combinations, due primarily to the Covenant acquisition at VITAS.

We spent $49.5 million on capital expenditures.

We paid $27.1 million in dividends.

A $10.3 million decrease in accounts receivable due to timing of receipts.

A $24.8 million increase in investments of deferred compensation plans due to market valuation gains. This resulted in a similar increase in the liability associated with deferred compensation plans.

A $81.7 million increase in goodwill, due primarily to the Covenant acquisition at VITAS.

A $19.9 million decrease in accounts payable due to timing of payments.

A $12.7 million decrease in other current liabilities mainly due to payments of legal settlements at VITAS and Roto-Rooter and payments of the retention bonus program implemented at VITAS.

The Company had no debt outstanding at December 31, 2024 and 2023. Our current ratio was 1.4 and 1.6 at December 31, 2024 and 2023, respectively.

On June 28, 2022, we replaced our existing credit facility with a fifth amended and restated Credit Agreement (“2022 Credit Facilities”). Terms of the 2022 Credit Facilities consist of a five-year $450.0 million revolver as well as a five-year $100.0 million term loan. The 2022 Credit Facilities have a floating interest rate that is generally SOFR plus an additional tiered rate which varies based on our current leverage ratio. As of December 31, 2024 the interest rate is SOFR plus 100 basis points. The 2022 Credit Facilities include an expansion feature that provides the Company the opportunity to increase its revolver and/or term loan by an additional $250.0 million.

We made prepayments totaling $75.0 million plus a regularly scheduled payment of $1.25 million in the first quarter of 2023 on the $100.0 million term loan. We paid the remaining balance of $21.3 million on April 28, 2023. There were no prepayment penalties associated with this repayment. This prepayment reduced the total borrowing capacity of the 2022 Credit Facilities from $550.0 million to $450.0 million.

The 2022 Credit Facilities contains the following quarterly financial covenants effective as of December 31, 2024:

[[GREPCENT_TABLE]]
[["","","","","Chemed"],["Description","","Requirement","","December 31, 2024"],["Leverage Ratio (Consolidated Indebtedness/Consolidated Adj. EBITDA)",""," 3.50 to 1.00","","(0.06) to 1.00"],["Interest Coverage Ratio (Consolidated Adj. EBITDA/Consolidated Interest Expense)",""," 3.00 to 1.00","","275.64 to 1.00"]]
[[/GREPCENT_TABLE]]

We forecast to be in compliance with all debt covenants through fiscal 2025.

We have issued $45.5 million in standby letters of credit as of December 31, 2024, mainly for insurance purposes. Issued letters of credit reduce our available credit under the revolving credit agreement. As of December 31, 2024, we have approximately $404.5 million of unused lines of credit available and eligible to be drawn down under our revolving credit facility. We believe our cash flow from operating activities and our unused eligible lines of credit are sufficient to fund our obligations and operate our business in the near and long term. We continually evaluate cash utilization alternatives, including share repurchase, debt repayment, acquisitions, and increased dividends to determine the most beneficial use of available capital resources.

‎

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CASH FLOW

Our cash flows for 2024, 2023 and 2022 are summarized as follows (in millions):

[[GREPCENT_TABLE]]
[["","","For the Years Ended December 31,"],["","","2024","","","2023","","","2022"],["Net cash provided by operating activities","$","417.5","","$","330.3","","$","309.9"],["Capital expenditures","","(49.5)","","","(56.9)","","","(57.3)"],["Net cash provided for operating activities after capital expenditures","","368.0","","","273.4","","","252.6"],["Purchase of treasury stock in the open market","","(361.4)","","","(67.7)","","","(114.5)"],["Business combinations","","(97.4)","","","(4.0)","","","(3.5)"],["Proceeds from exercise of stock options","","56.5","","","102.2","","","45.0"],["Dividends paid","","(27.1)","","","(23.5)","","","(22.0)"],["Change in cash overdraft payable","","(15.7)","","","15.7","","","(11.9)"],["Capital stock surrendered to pay taxes on on stock-based compensation","","(9.5)","","","(9.6)","","","(15.6)"],["Net decrease in long-term debt","","-","","","(97.5)","","","(87.5)"],["Other--net","","1.0","","","0.8","","","(1.4)"],["(Decrease)/increase in cash and cash equivalents","$","(85.6)","","$","189.8","","$","41.2"]]
[[/GREPCENT_TABLE]]

2024 versus 2023

Net cash provided by operating activities increased $87.2 million from December 31, 2023 to December 31, 2024. The main drivers are an increase in earnings of $29.5 million combined with working capital changes. Significant changes in our accounts receivable balances are driven mainly by the timing of payments received from the Federal government at our VITAS subsidiary. We typically receive a payment in excess of $55.0 million from the Federal government from hospice services every other Friday. The timing of year end will have a significant impact on the accounts receivable at VITAS. These changes generally normalize over a two-year period, as cash flow variations in one year are offset in the following year. The swing in accounts receivable increased cash flow by $52.2 million between 2024 and 2023.

In 2024, we repurchased 638,235 shares of Chemed capital stock at a weighted average price of $562.08 per share. In 2023, we repurchased 132,969 shares of Chemed stock at a weighted average price of $555.12 per share. Based on our current operations and our current sources of capital, we believe we have the ability to continue our current share repurchase program into the foreseeable future.

2023 versus 2022

Net cash provided by operating activities increased $20.4 million from December 31, 2022 to December 31, 2023. The main drivers are an increase in earnings of $22.9 million combined with an increase of $22.9 million for deferred income taxes provision due to the impact of the effective state rate change and an accelerated deduction taken in 2022 for the OAS deposit, a decrease of $35.8 million in cash outflows for other assets due to the OAS deposit recorded in 2022 offset by a reduction of $16.2 million in other liabilities for payments made on the retention bonus program at VITAS. Additionally, significant changes in our accounts receivable balances are driven mainly by the timing of payments received from the Federal government at our VITAS subsidiary. We typically receive a payment in excess of $42.0 million from the Federal government from hospice services every other Friday. The timing of year end will have a significant impact on the accounts receivable at VITAS. These changes generally normalize over a two-year period, as cash flow variations in one year are offset in the following year. The swing in accounts receivable reduced cash flow by $39.1 million between 2023 and 2022.

In 2023, we repurchased 132,969 shares of Chemed capital stock at a weighted average price of $555.12 per share. In 2022, we repurchased 232,500 shares of Chemed stock at a weighted average price of $490.64 per share. Based on our current operations and our current sources of capital, we believe we have the ability to continue our current share repurchase program into the foreseeable future.

COMMITMENTS AND CONTINGENCIES

We are subject to various lawsuits and claims in the normal course of our business. In addition, we periodically receive communications from governmental and regulatory agencies concerning compliance with Medicare and Medicaid billing requirements at our VITAS subsidiary. We establish reserves for specific, uninsured liabilities in connection with regulatory and legal action that we deem to be probable and estimable. We disclose the existence of regulatory and legal actions when we believe it is reasonably possible that a loss could occur in connection with the specific action. In most instances, we are unable to make a reasonable estimate of any

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reasonably possible liability due to the uncertainty of the outcome and stage of litigation. We record legal fees associated with legal and regulatory actions as the costs are incurred.

Please see Note 18 in the Notes to the Consolidated Financial Statements for a description of current material legal and regulatory matters.

CONTRACTUAL OBLIGATIONS

The table below summarizes our debt and contractual obligations as of December 31, 2024 (in thousands):

[[GREPCENT_TABLE]]
[["","","","","","","Less than","","","","","","","","","After"],["","","","Total","","","1 year","","","1-3 Years","","","3-5 Years","","","5 Years"],["Lease liabilities","","","140,844","","","44,613","","","55,755","","","26,690","","","13,786"],["Purchase obligations (a)","","","44,146","","","44,146","","","-","","","-","","","-"],["Other long-term obligations (b)","","","137,016","","","2,745","","","5,490","","","2,745","","","126,036"],["Total contractual cash obligations","","$","322,006","","$","91,504","","$","61,245","","$","29,435","","$","139,822"],["(a) Purchase obligations consist of accounts payable at December 31, 2024."],["(b) Other long-term obligations comprise largely excess benefit obligations."]]
[[/GREPCENT_TABLE]]

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RESULTS OF OPERATIONS

2024 Versus 2023 – Consolidated Results

Set forth below are the year-to-year changes in the components of the statement of operations relating to income for 2024 versus 2023 (in thousands, except percentages):

[[GREPCENT_TABLE]]
[["","","","","Increase/(Decrease)"],["","","2024","","","2023","","Percent"],["Service revenues and sales"],["VITAS","$","1,530,978","","$","1,315,065","","16.4"],["Roto-Rooter","","900,309","","","949,352","","(5.2)"],["Total","","2,431,287","","","2,264,417","","7.4"],["Cost of services provided and goods sold","","1,576,939","","","1,465,602","","7.6"],["Selling, general and administrative expenses","","424,360","","","395,120","","7.4"],["Depreciation","","52,864","","","50,802","","4.1"],["Amortization","","10,185","","","10,063","","1.2"],["Other operating expenses","","446","","","2,261","","(80.3)"],["Total cost and expenses","","2,064,794","","","1,923,848","","7.3"],["Income from operations","","366,493","","","340,569","","7.6"],["Interest expense","","(1,780)","","","(3,108)","","42.7"],["Other income/(expense) - net","","34,752","","","12,906","","169.3"],["Income before income taxes","","399,465","","","350,367","","14.0"],["Income taxes","","(97,466)","","","(77,858)","","(25.2)"],["Net income","$","301,999","","$","272,509","","10.8"]]
[[/GREPCENT_TABLE]]

The VITAS segment revenue is as follows (dollars in thousands):

[[GREPCENT_TABLE]]
[["","","","","","","","Increase/(Decrease)"],["","","2024","","","2023","","Percent"],["Routine homecare","$","1,326,488","","$","1,136,437","","16.7"],["Inpatient care","","120,604","","","112,419","","7.3"],["Continuous care","","99,746","","","85,674","","16.4"],["Other","","19,455","","","13,582","","43.2"],["Subtotal","","1,566,293","","","1,348,112","","16.2"],["Medicare cap adjustment","","(8,414)","","","(8,000)","","(5.2)"],["Implicit price concessions","","(13,597)","","","(14,196)","","4.2"],["Room and board, net","","(13,304)","","","(10,851)","","(22.6)"],["Net revenue","$","1,530,978","","$","1,315,065","","16.4"]]
[[/GREPCENT_TABLE]]

Days of care are as follows:

[[GREPCENT_TABLE]]
[["","","Days of Care","","Increase/(Decrease)"],["","","2024","","","2023","","Percent"],["Routine homecare","","6,277,961","","","5,457,963","","15.0"],["Nursing home","","1,230,726","","","1,118,728","","10.0"],["Respite","","37,961","","","26,605","","42.7"],["Subtotal routine homecare and respite","","7,546,648","","","6,603,296","","14.3"],["Continuous care","","106,299","","","101,905","","4.3"],["General inpatient","","95,524","","","88,631","","7.8"],["Total days of care","","7,748,471","","","6,793,832","","14.1"]]
[[/GREPCENT_TABLE]]

The increase in service revenues at VITAS is comprised primarily of a 14.1% increase in days-of-care, and a geographically weighted average Medicare reimbursement rate increase of approximately 2.8%. Acuity mix shift negatively impacted revenue growth

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by 110-basis points when compared to prior year revenue and level-of-care mix. The combination of Medicare cap and other contra revenue changes increased revenue growth by 60-basis points.

The Roto-Rooter segment revenue is as follows (dollars in thousands):

[[GREPCENT_TABLE]]
[["","","","","","","","Increase/(Decrease)"],["","","2024","","","2023","","Percent"],["Drain cleaning","$","237,534","","$","249,069","","(4.6)"],["Plumbing","","181,370","","","196,695","","(7.8)"],["Excavation","","227,413","","","233,196","","(2.5)"],["Other","","883","","","936","","(5.7)"],["Subtotal - short term core","","647,200","","","679,896","","(4.8)"],["Water restoration","","178,016","","","185,550","","(4.1)"],["Independent contractors","","72,777","","","85,749","","(15.1)"],["Franchisee fees","","5,814","","","5,658","","2.8"],["Other","","23,329","","","19,083","","22.3"],["Gross revenue","","927,136","","","975,936","","(5.0)"],["Implicit price concessions and credit memos","","(26,827)","","","(26,584)","","(0.9)"],["Net revenue","$","900,309","","$","949,352","","(5.2)"]]
[[/GREPCENT_TABLE]]

The decrease in plumbing revenues for 2024 versus 2023 is attributable to a 1.6% decrease in price and service mix shift and a 6.2% decrease in job count. The decrease in drain cleaning revenues for 2024 versus 2023 is attributable to a 2.9% increase in price and service mix shift offset by a 7.5% decrease in job count. Excavation and water restoration jobs are generally sold as a result of initial calls from customers regarding drain cleaning issues. As a result, the 2.5% decrease in excavation revenue and 5.7% decrease in water restoration revenue are mainly a function of the decreased plumbing and drain cleaning jobs. Contractor operations decreased 15.1%.

The consolidated gross margin excluding depreciation was 35.1% in 2024 versus 35.3% in 2023. On a segment basis, VITAS’ gross margin excluding depreciation was 25.1% in 2024 and 22.6% in 2023. The increase in gross margin at VITAS is mostly the result of increased revenues and the expiration of the retention bonus program. Roto-Rooter’s gross margin excluding depreciation was 52.2% in 2024 and 52.8% in 2023.

Selling, general and administrative expenses (“SG&A”) for 2024 and 2023 comprise (in thousands):

[[GREPCENT_TABLE]]
[["","","2024","","","2023"],["SG&A expenses before long-term incentive compensation, and the impact of market"],["value adjustments related to deferred compensation trusts","$","384,069","","$","377,027"],["Long-term incentive compensation","","20,152","","","11,689"],["Impact of market value adjustments related to assets held in deferred compensation trusts","","20,139","","","6,404"],["Total SG&A expenses","$","424,360","","$","395,120"]]
[[/GREPCENT_TABLE]]

SG&A expenses before long-term incentive compensation and the impact of market value adjustments related to deferred compensation trusts for 2024 were up 1.9% when compared to 2023. This increase was mainly a result of normal salary increases and an increase in variable selling expenses, primarily increased marketing expenses at Roto-Rooter.

Included in the allocation of the purchase price for Roto-Rooter’s 2019 acquisitions was $59.2 million related to reacquired franchise rights. Reacquired franchise rights, included in identifiable intangibles on the Consolidated Balance Sheets, are amortized over the period remaining in each individual franchise agreement. The average amortization period for reacquired franchise rights for the acquisitions made in 2019 is 7.4 years. In 2024 and 2023, amortization expense from the reacquired franchise rights for these two acquisitions was $8.1 million compared to the franchise fee revenue recognized from all other Roto-Rooter franchises, nationwide, of $5.7 million.

‎

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Other operating expense for 2024 and 2023 comprise (in thousands):

[[GREPCENT_TABLE]]
[["","","2024","","","2023"],["Loss on disposal of property and equipment","$","446","","$","211"],["Litigation settlements","","-","","","2,050"],["Total other operating expenses","$","446","","$","2,261"]]
[[/GREPCENT_TABLE]]

Other income-net for 2024 and 2023 comprise (in thousands):

[[GREPCENT_TABLE]]
[["","","2024","","","2023"],["Market value adjustments related to deferred compensation trusts","$","20,139","","$","6,404"],["Interest income","","14,610","","","6,270"],["Other","","3","","","232"],["Total other income - net","$","34,752","","$","12,906"]]
[[/GREPCENT_TABLE]]

Our effective tax rate reconciliation is as follows:

[[GREPCENT_TABLE]]
[["","","2024","","","2023"],["Income tax provision calculated using the statutory rate","$","83,888","","$","73,577"],["State and local income taxes, less federal income tax effect","","11,811","","","2,306"],["Nondeductible expenses","","7,438","","","6,600"],["Excess stock compensation tax benefits","","(4,442)","","","(4,330)"],["Other-net","","(1,229)","","","(295)"],["Income tax provision","$","97,466","","$","77,858"],["Effective tax rate","","24.4","%","","22.2","%"]]
[[/GREPCENT_TABLE]]

During the third quarter of 2023, the Company recognized a tax benefit from realignment of its state and local corporate tax structure based on the location of operating resources and profitability by business segment. This benefit includes a reduction in current state and local tax expense and a one time benefit of $4.2 million in reduction of deferred tax liabilities reflecting the lower tax rates.

Net income for both periods include the following after-tax adjustments that increased/(reduced) after-tax earnings (in thousands):

[[GREPCENT_TABLE]]
[["","","2024","","","2023"],["VITAS"],["Acquisition expense","$","(832)","","$","-"],["Impact of deferred rate tax change","","-","","","1,772"],["Roto-Rooter"],["Amortization of reacquired franchise agreements","","(7,216)","","","(7,216)"],["Acquisition expense","","(26)","","","-"],["Impact of deferred rate tax change","","-","","","3,559"],["Litigation settlements","","-","","","(1,577)"],["Corporate"],["Stock option expense","","(27,053)","","","(25,405)"],["Long-term incentive compensation","","(13,167)","","","(10,379)"],["Severance arrangement","","(5,337)","","","-"],["Impact of deferred rate tax change","","-","","","(1,090)"],["Excess tax benefits on stock compensation","","4,442","","","4,330"],["Total","$","(49,189)","","$","(36,006)"]]
[[/GREPCENT_TABLE]]

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2024 Versus 2023– Segment Results

Net income/(loss) for 2024 versus 2023 (in thousands):

[[GREPCENT_TABLE]]
[["","","2024","","","2023"],["VITAS","$","216,819","","$","158,509"],["Roto-Rooter","","160,046","","","188,241"],["Corporate","","(74,866)","","","(74,241)"],["","$","301,999","","$","272,509"]]
[[/GREPCENT_TABLE]]

VITAS’ after-tax earnings increased mainly to higher revenue and the expiration of the retention bonus program. After-tax earnings as a percent of revenue at VITAS in 2024 was 14.2% as compared to 12.1% in 2023.

Roto-Rooter’s after-tax earnings decreased due to lower revenue and a $3.6 million tax benefit due to the impact of the deferred rate tax change in 2023 which did not recur in 2024. Roto-Rooter’s after-tax earnings as a percent of revenue at Roto-Rooter in 2024 was 17.8% as compared to 19.8% in 2023.

After-tax Corporate expenses for 2024 increased 0.8% when compared to 2023 due mainly to a $5.3 million severance agreement in 2024 and a $1.1 million tax expense due to the impact of the deferred rate tax change in 2023, which did not recur in 2024.

‎

81

RESULTS OF OPERATIONS

2023 Versus 2022 – Consolidated Results

Set forth below are the year-to-year changes in the components of the statement of operations relating to income for 2023 versus 2022 (in thousands, except percentages):

[[GREPCENT_TABLE]]
[["","","","","Increase/(Decrease)"],["","","2023","","","2022","","Percent"],["Service revenues and sales"],["VITAS","$","1,315,065","","$","1,201,564","","9.4"],["Roto-Rooter","","949,352","","","933,399","","1.7"],["Total","","2,264,417","","","2,134,963","","6.1"],["Cost of services provided and goods sold","","1,465,602","","","1,369,877","","7.0"],["Selling, general and administrative expenses","","395,120","","","358,727","","10.1"],["Depreciation","","50,802","","","49,102","","3.5"],["Amortization","","10,063","","","10,070","","(0.1)"],["Other operating expenses","","2,261","","","3,691","","(38.7)"],["Total cost and expenses","","1,923,848","","","1,791,467","","7.4"],["Income from operations","","340,569","","","343,496","","(0.9)"],["Interest expense","","(3,108)","","","(4,584)","","32.2"],["Other (expense)/income - net","","12,906","","","(9,233)","","(239.8)"],["Income before income taxes","","350,367","","","329,679","","6.3"],["Income taxes","","(77,858)","","","(80,055)","","2.7"],["Net income","$","272,509","","$","249,624","","9.2"]]
[[/GREPCENT_TABLE]]

The VITAS segment revenue is as follows (dollars in thousands):

[[GREPCENT_TABLE]]
[["","","","","","","","Increase/(Decrease)"],["","","2023","","","2022","","Percent"],["Routine homecare","$","1,136,437","","$","1,039,211","","9.4"],["Continuous care","","85,674","","","77,000","","11.3"],["Inpatient care","","112,419","","","102,361","","9.8"],["Other","","13,582","","","12,438","","9.2"],["Subtotal","","1,348,112","","","1,231,010","","9.5"],["Medicare cap adjustment","","(8,000)","","","(7,868)","","(1.7)"],["Implicit price concessions","","(14,196)","","","(12,004)","","(18.3)"],["Room and board, net","","(10,851)","","","(9,574)","","(13.3)"],["Net revenue","$","1,315,065","","$","1,201,564","","9.4"]]
[[/GREPCENT_TABLE]]

Days of care are as follows:

[[GREPCENT_TABLE]]
[["","","Days of Care","","Increase/(Decrease)"],["","","2023","","","2022","","Percent"],["Routine homecare","","5,457,963","","","5,086,021","","7.3"],["Nursing home","","1,118,728","","","1,036,816","","7.9"],["Respite","","26,605","","","23,905","","11.3"],["Subtotal routine homecare and respite","","6,603,296","","","6,146,742","","7.4"],["Continuous care","","101,905","","","81,890","","24.4"],["General inpatient","","88,631","","","95,431","","(7.1)"],["Total days of care","","6,793,832","","","6,324,063","","7.4"]]
[[/GREPCENT_TABLE]]

The increase in service revenues at VITAS is comprised primarily of a 7.4% increase in days-of-care, and a geographically weighted average Medicare reimbursement rate increase of approximately 2.4%, partially offset by 50-basis points as a result of CMS reimplementing sequestration that was suspended at the start of the pandemic in 2020. Acuity mix shift had minimal impact for the year when compared to prior year revenue and level-of-care mix.

82

The Roto-Rooter segment revenue is as follows (dollars in thousands):

[[GREPCENT_TABLE]]
[["","","","","","","","Increase/(Decrease)"],["","","2023","","","2022","","Percent"],["Drain cleaning","$","249,069","","$","261,606","","(4.8)"],["Plumbing","","196,695","","","194,274","","1.2"],["Excavation","","233,196","","","222,945","","4.6"],["Other","","936","","","708","","32.2"],["Subtotal - short term core","","679,896","","","679,533","","0.1"],["Water restoration","","185,550","","","169,434","","9.5"],["Independent contractors","","85,749","","","84,442","","1.5"],["Franchisee fees","","5,658","","","5,591","","1.2"],["Other","","19,083","","","16,859","","13.2"],["Gross revenue","","975,936","","","955,859","","2.1"],["Implicit price concessions and credit memos","","(26,584)","","","(22,460)","","(18.4)"],["Net revenue","$","949,352","","$","933,399","","1.7"]]
[[/GREPCENT_TABLE]]

The increase in plumbing revenues for 2023 versus 2022 is attributable to an 8.6% increase in price and service mix shift offset by a 7.4% decrease in job count. The decrease in drain cleaning revenues for 2023 versus 2022 is attributable to an 11.2% decrease in job count offset by a 6.4% increase in price and service mix shift. Excavation and water restoration jobs are generally sold as a result of initial calls from customers regarding drain cleaning issues. As a result, the 4.6% increase in excavation revenue and 9.5% increase in water restoration revenue are mainly a function of the size and severity of drain cleaning issues we encounter on a yearly basis. As these services generally represent emergency level work, declines in the total volume of drain cleaning jobs may not necessarily result in a decline in the number of water restoration or excavation jobs. Contractor operations increased 1.5%.

The consolidated gross margin excluding depreciation was 35.3% in 2023 versus 35.8% in 2022. On a segment basis, VITAS’ gross margin excluding depreciation was 22.6% in 2023 and 22.4% in 2022. Roto-Rooter’s gross margin excluding depreciation was 52.8% in 2023 and 53.1% in 2022.

Selling, general and administrative expenses (“SG&A”) for 2023 and 2022 comprise (in thousands):

[[GREPCENT_TABLE]]
[["","","2023","","","2022"],["SG&A expenses before long-term incentive compensation, and the impact of market"],["value adjustments related to deferred compensation trusts","$","377,027","","$","360,896"],["Long-term incentive compensation","","11,689","","","(9,970)"],["Impact of market value adjustments related to assets held in deferred compensation trusts","","6,404","","","7,801"],["Total SG&A expenses","$","395,120","","$","358,727"]]
[[/GREPCENT_TABLE]]

SG&A expenses before long-term incentive compensation and the impact of market value adjustments related to deferred compensation trusts for 2023 were up 4.5% when compared to 2022. This increase was mainly a result of the increase in selling expenses and normal salary increases.

Included in the allocation of the purchase price for Roto-Rooter’s 2019 acquisitions was $59.2 million related to reacquired franchise rights. Reacquired franchise rights, included in identifiable intangibles on the Consolidated Balance Sheets, are amortized over the period remaining in each individual franchise agreement. The average amortization period for reacquired franchise rights for the acquisitions made in 2019 is 7.4 years. In 2023 and 2022, amortization expense from the reacquired franchise rights for these two acquisitions was $8.1 million compared to the franchise fee revenue recognized from all other Roto-Rooter franchises, nationwide, of $5.7 million.

Other operating expense for 2023 and 2022 comprise (in thousands):

[[GREPCENT_TABLE]]
[["","","2023","","","2022"],["Litigation settlements","$","2,050","","$","4,000"],["(Gain)/Loss on disposal of property and equipment","","211","","","(309)"],["Total other operating expenses","$","2,261","","$","3,691"]]
[[/GREPCENT_TABLE]]

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83

Other (expense)/income-net for 2023 and 2022 comprise (in thousands):

[[GREPCENT_TABLE]]
[["","","2023","","","2022"],["Market value gains on assets held in deferred"],["compensation trusts","$","6,404","","$","(9,970)"],["Interest income","","6,270","","","355"],["Other","","232","","","382"],["Total other (expense)/income","$","12,906","","$","(9,233)"]]
[[/GREPCENT_TABLE]]

Our effective tax rate reconciliation is as follows:

[[GREPCENT_TABLE]]
[["","","2023","","","2022"],["Income tax provision calculated using the statutory rate","$","73,577","","$","69,233"],["State and local income taxes, less federal income tax effect","","2,306","","","10,207"],["Nondeductible expenses","","6,600","","","6,958"],["Excess stock compensation tax benefits","","(4,330)","","","(5,928)"],["Other-net","","(295)","","","(415)"],["Income tax provision","$","77,858","","$","80,055"],["Effective tax rate","","22.2","%","","24.3","%"]]
[[/GREPCENT_TABLE]]

Net income for both periods include the following after-tax adjustments that increased/(reduced) after-tax earnings (in thousands):

[[GREPCENT_TABLE]]
[["","","2023","","","2022"],["VITAS"],["Impact of deferred rate tax change","$","1,772","","$","-"],["Litigation settlements","","-","","","(2,984)"],["Direct costs related to COVID-19","","-","","","(231)"],["Medicare cap sequestration adjustment","","-","","","(103)"],["Roto-Rooter"],["Amortization of reacquired franchise agreements","","(7,216)","","","(6,915)"],["Impact of deferred rate tax change","","3,559","","","-"],["Litigation settlements","","(1,577)","","","(726)"],["Corporate"],["Stock option expense","","(25,405)","","","(22,028)"],["Long-term incentive compensation","","(10,379)","","","(6,858)"],["Excess tax benefits on stock compensation","","4,330","","","5,928"],["Impact of deferred rate tax change","","(1,090)","","","-"],["Direct costs related to COVID-19","","-","","","(68)"],["Total","$","(36,006)","","$","(33,985)"]]
[[/GREPCENT_TABLE]]

2023 Versus 2022 – Segment Results

Net income/(loss) for 2023 versus 2022 (in thousand):

[[GREPCENT_TABLE]]
[["","","2023","","","2022"],["VITAS","$","158,509","","$","131,452"],["Roto-Rooter","","188,241","","","186,120"],["Corporate","","(74,241)","","","(67,948)"],["","$","272,509","","$","249,624"]]
[[/GREPCENT_TABLE]]

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84

VITAS’ after-tax earnings increased due mainly to higher revenue. Additionally, VITAS had a $3.0 million after-tax legal settlement expense in 2022 which did not recur in 2023 and $1.8 million tax benefit related to the impact of the deferred rate tax change. After-tax earnings as a percent of revenue at VITAS in 2023 was 12.1% as compared to 10.9% in 2022.

Roto-Rooter’s after-tax earnings as a percent of revenue at Roto-Rooter in 2023 was 19.8% as compared to 19.9% in 2022.

After-tax Corporate expenses for 2023 increased 9.3% when compared to 2022 due mainly to a $3.4 million increase in after-tax stock option expense and an increase in after-tax long-term incentive compensation of $3.5 million offset by a $1.6 million decrease in excess tax benefits on stock compensation.

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85

CRITICAL ACCOUNTING ESTIMATES

VITAS Revenue Implicit Price Concessions

Service revenue for VITAS is reported at the amount that reflects the ultimate consideration we expect to receive in exchange for providing patient care. These amounts are due from third-party payors, primarily government programs (Medicare and Medicaid) or commercial health insurers. Revenue is recorded at the government-mandated service level rate or the contractually agreed-upon service level rate, whichever is applicable for the patient being served. At the same time, a reduction in revenue is estimated and recorded for expected contractual adjustments. These contractual adjustments are referred to as “implicit price concessions”. Implicit price concessions at VITAS are considered critical accounting estimates as they involve a significant amount of judgment by management. Over 95% of VITAS’ revenue is from Medicare or Medicaid, resulting in the majority of implicit price concessions being related to Federal or state payors. The remainder of this discussion focuses on the process related to these Federal or state related implicit price concessions.

The laws and regulations governing hospice services are voluminous. Federal and state agencies, or their designated intermediaries, scrutinize hospice claims under various review initiatives to determine their validity and appropriateness. These reviews generally target specific categories of patients and are not statistically chosen. The Company has processes and procedures in place to help ensure compliance. The estimate of implicit price concessions is based on two main assumptions, as follows:

There are a small percentage of claims that are rejected by the payor soon after billing. These claims generally contain a minor non-medical, documentation defect in the billing process. The estimated implicit price concession for this type of claim is based mainly on historical experience which is relatively consistent from year-to-year. The implicit price concession estimate relating to this assumption is not material.

There are claims subject to the review process described above which are initially denied by the reviewer. There are many reasons that a claim may be denied including, but not limited to: defects in the non-medical documentation; a difference of opinion with respect to the medical condition of the patient; or a perceived lack of adequate medical documentation. Each denial is researched by a team of internal VITAS employees. There is a standard appeal process for any claim we believe was inappropriately denied. The appeal for these claims may take several months if not years to make it through the entire appeal process. The estimated implicit price concession for this type of claim is based on a number of key factors, including our historical success rate of appeal, settlement history for similar reviews, the types of reviews being conducted and the overall current review environment.

Our estimate currently assumes that we ultimately do not receive consideration for approximately 20% to 30% of claims currently selected for review or expected to be selected for review. If our current estimate changes by 1%, there would be a $1.8 million impact on our estimate of implicit price concessions.

Our estimates of implicit price concessions at VITAS are updated and reviewed quarterly based on the most recent facts available. Subsequent changes in facts and circumstances are recorded in the period they become known. There have been no changes to the assumptions that would significantly impact our estimate of implicit price concessions.

Insurance Accruals

For the Roto-Rooter segment and Chemed’s Corporate Office, we initially self-insure for all casualty insurance claims (workers’ compensation, auto liability and general liability). As a result, we closely monitor and frequently evaluate our historical claims experience to estimate the appropriate level of accrual for self-insured claims. Our third-party administrator (“TPA”) processes and reviews claims on a monthly basis. Currently, our exposure on any single claim is capped by stop-loss coverage at $750,000, with the exception of auto liability claims which are capped at $3.0 million of stop-loss coverage. In developing our estimates, we accumulate historical claims data for the previous 10 years to calculate loss development factors (“LDF”) by insurance coverage type. LDFs are applied to known claims to estimate the ultimate potential liability for known and unknown claims for each open policy year. LDFs are updated annually. Because this methodology relies heavily on historical claims data, the key risk is whether the historical claims are an accurate predictor of future claims exposure. The risk also exists that certain claims have been incurred and not reported on a timely basis. To mitigate these risks, in conjunction with our TPA, we closely monitor claims to ensure timely accumulation of data and compare claims trends with the industry experience of our TPA.

For the VITAS segment, we initially self-insure for workers’ compensation claims. Currently, VITAS’ exposure on any single claim is capped at $1,000,000, due to stop loss insurance held with a commercial insurance carrier. For VITAS’ self-insurance accruals for workers’ compensation, the valuation methods used are similar to those used internally for our other business units. We are also insured for other risks with respect to professional liability with a deductible of $1,000,000.

86

Our casualty insurance liabilities are recorded gross before any estimated recovery for amounts exceeding our stop loss limits. Estimated recoveries from insurance carriers are recorded as accounts receivable. Claims experience adjustments to our casualty and workers’ compensation accrual for the years ended December 31, 2024, 2023 and 2022, were net pretax credits of ($10,374,000), ($6,862,000), and ($5,790,000), respectively.

As an indication of the sensitivity of the accrued liability to reported claims, our analysis indicates that a 1% across-the-board increase or decrease in the amount of projected losses would increase or decrease the accrued insurance liability at December 31, 2024 by $5.0 million or 8.9%. While the amount recorded represents our best estimate of the casualty and workers’ compensation insurance liability, we have calculated, based on historical claims experience, the actual loss could reasonably be expected to increase or decrease by approximately $500,000 as of December 31, 2024.

‎

87

[[GREPCENT_TABLE]]
[["Chemed Corporation and Subsidiary Companies"],["Unaudited Consolidating Summaries and Reconciliations of Adjusted EBITDA (in thousands)"],["","","","","","","","","","","","Chemed"],["2024","","VITAS","","Roto-Rooter","","Corporate","","Consolidated"],["","Net income/(loss)","$","216,819","","$","160,046","","$","(74,866)","","$","301,999"],["","Add/(deduct):"],["","Interest expense","","171","","","431","","","1,178","","","1,780"],["","Income taxes","","67,414","","","48,510","","","(18,458)","","","97,466"],["","Depreciation","","20,362","","","32,452","","","50","","","52,864"],["","Amortization","","105","","","10,080","","","-","","","10,185"],["","EBITDA","","304,871","","","251,519","","","(92,096)","","","464,294"],["","Add/(deduct):"],["","Intercompany interest/(expense)","","(20,211)","","","(14,397)","","","34,608","","","-"],["","Interest income","","(224)","","","(69)","","","(14,317)","","","(14,610)"],["","Stock option expense","","-","","","-","","","32,033","","","32,033"],["","Long-term incentive compensation","","-","","","-","","","14,815","","","14,815"],["","Severance arrangement","","-","","","-","","","5,337","","","5,337"],["","Acquisition expense","","1,099","","","34","","","-","","","1,133"],["","Adjusted EBITDA","$","285,535","","$","237,087","","$","(19,620)","","$","503,002"],["","","","","","","","","","","","Chemed"],["2023","","VITAS","","Roto-Rooter","","Corporate","","Consolidated"],["","Net income/(loss)","$","158,509","","$","188,241","","$","(74,241)","","$","272,509"],["","Add/(deduct):"],["","Interest expense","","180","","","442","","","2,486","","","3,108"],["","Income taxes","","46,115","","","50,125","","","(18,382)","","","77,858"],["","Depreciation","","19,959","","","30,790","","","53","","","50,802"],["","Amortization","","104","","","9,959","","","-","","","10,063"],["","EBITDA","","224,867","","","279,557","","","(90,084)","","","414,340"],["","Add/(deduct):"],["","Intercompany interest/(expense)","","(19,400)","","","(11,918)","","","31,318","","","-"],["","Interest income","","(1,078)","","","(125)","","","(5,067)","","","(6,270)"],["","Stock option expense","","-","","","-","","","30,082","","","30,082"],["","Long-term incentive compensation","","-","","","-","","","11,689","","","11,689"],["","Litigation settlement","","-","","","2,056","","","-","","","2,056"],["","Adjusted EBITDA","$","204,389","","$","269,570","","$","(22,062)","","$","451,897"],["","","","","","","","","","","","Chemed"],["2022","","VITAS","","Roto-Rooter","","Corporate","","Consolidated"],["","Net income/(loss)","$","131,452","","$","186,120","","$","(67,948)","","$","249,624"],["","Add/(deduct):"],["","Interest expense","","172","","","396","","","4,016","","","4,584"],["","Income taxes","","43,000","","","58,695","","","(21,640)","","","80,055"],["","Depreciation","","21,955","","","27,075","","","72","","","49,102"],["","Amortization","","101","","","9,969","","","-","","","10,070"],["","EBITDA","","196,680","","","282,255","","","(85,500)","","","393,435"],["","Add/(deduct):"],["","Intercompany interest/(expense)","","(18,901)","","","(9,345)","","","28,246","","","-"],["","Interest income","","(218)","","","(138)","","","1","","","(355)"],["","Stock option expense","","-","","","-","","","26,254","","","26,254"],["","Long-term incentive compensation","","-","","","-","","","7,801","","","7,801"],["","Litigation settlement","","4,000","","","-","","","-","","","4,000"],["","Direct costs related to COVID-19","","310","","","988","","","89","","","1,387"],["","Medicare cap sequestration adjustment","","138","","","-","","","-","","","138"],["","Adjusted EBITDA","$","182,009","","$","273,760","","$","(23,109)","","$","432,660"]]
[[/GREPCENT_TABLE]]

‎

88

[[GREPCENT_TABLE]]
[["CHEMED CORPORATION AND SUBSIDIARY COMPANIES"],["RECONCILIATION OF ADJUSTED NET INCOME"],["(in thousands, except per share data)(unaudited)"],["","For the Years Ended December 31,"],["","2024","","2023","","2022"],["Net income as reported","$","301,999","","$","272,509","","$","249,624"],["Add/(deduct) pre-tax cost of:"],["Stock option expense","","32,033","","","30,082","","","26,254"],["Long-term incentive compensation","","14,815","","","11,689","","","7,801"],["Amortization of reacquired franchise agreements","","9,408","","","9,408","","","9,408"],["Severance","","5,337","","","-","","","-"],["Acquisition expense","","1,133","","","-","","","-"],["Litigation settlements","","-","","","2,056","","","4,000"],["COVID-19 expenses","","-","","","-","","","1,387"],["Medicare cap sequestration adjustment","","-","","","-","","","138"],["Add/(deduct) tax impacts:"],["Tax impact of the above pre-tax adjustments (1)","","(9,095)","","","(8,658)","","","(9,075)"],["Tax impact of deferred tax rate change","","-","","","(4,241)","","","-"],["Excess tax benefits on stock compensation","","(4,442)","","","(4,330)","","","(5,928)"],["Adjusted net income","$","351,188","","$","308,515","","$","283,609"],["Diluted Earnings Per Share As Reported"],["Net income","$","19.89","","$","17.93","","$","16.53"],["Average number of shares outstanding","","15,186","","","15,200","","","15,099"],["Adjusted Diluted Earnings Per Share"],["Net income","$","23.13","","$","20.30","","$","18.78"],["Average number of shares outstanding","","15,186","","","15,200","","","15,099"],["(1) The tax impact of pre-tax adjustments was calculated using the effective tax rate of the operating unit for which each adjustment is associated."],["The \"Footnotes to Financial Statements\" are integral parts of this financial information."]]
[[/GREPCENT_TABLE]]

‎

89

[[GREPCENT_TABLE]]
[["CHEMED CORPORATION AND SUBSIDIARY COMPANIES"],["OPERATING STATISTICS FOR VITAS SEGMENT(unaudited)"],["","Three Months Ended December 31,","","Year Ended December 31,"],["OPERATING STATISTICS","2024","","2023","","2024","","2023"],["Net revenue ($000)"],["Homecare","$","358,507","","$","303,883","","$","1,326,488","","$","1,136,437"],["Inpatient","","31,307","","","28,107","","","120,604","","","112,419"],["Continuous care","","25,451","","","22,620","","","99,746","","","85,674"],["Other","","5,556","","","3,844","","","19,455","","","13,582"],["Subtotal","$","420,821","","$","358,454","","$","1,566,293","","$","1,348,112"],["Room and board, net","","(3,867)","","","(2,535)","","","(13,304)","","","(10,851)"],["Contractual allowances","","(3,521)","","","(3,546)","","","(13,597)","","","(14,196)"],["Medicare cap allowance","","(2,425)","","","(2,375)","","","(8,414)","","","(8,000)"],["Total","$","411,008","","$","349,998","","$","1,530,978","","$","1,315,065"],["Net revenue as a percent of total before Medicare cap allowance"],["Homecare","","85.2","%","","84.8","%","","84.7","%","","84.3","%"],["Inpatient","","7.4","","","7.8","","","7.7","","","8.3"],["Continuous care","","6.0","","","6.3","","","6.4","","","6.4"],["Other","","1.4","","","1.1","","","1.2","","","1.0"],["Subtotal","","100.0","","","100.0","","","100.0","","","100.0"],["Room and board, net","","(0.9)","","","(0.7)","","","(0.8)","","","(0.8)"],["Contractual allowances","","(0.8)","","","(1.0)","","","(0.9)","","","(1.1)"],["Medicare cap allowance","","(0.6)","","","(0.7)","","","(0.5)","","","(0.6)"],["Total","","97.7","%","","97.6","%","","97.8","%","","97.5","%"],["Days of Care"],["Homecare","","1,656,206","","","1,439,494","","","6,277,961","","","5,457,963"],["Nursing home","","322,713","","","285,616","","","1,230,726","","","1,118,728"],["Respite","","11,155","","","7,394","","","37,961","","","26,605"],["Subtotal routine homecare and respite","","1,990,074","","","1,732,504","","","7,546,648","","","6,603,296"],["Inpatient","","27,235","","","24,918","","","106,299","","","101,905"],["Continuous care","","23,189","","","23,001","","","95,524","","","88,631"],["Total","","2,040,498","","","1,780,423","","","7,748,471","","","6,793,832"],["Number of days in relevant time period","","92","","","92","","","366","","","365"],["Average daily census (\"ADC\") (days)"],["Homecare","","18,002","","","15,646","","","17,153","","","14,953"],["Nursing home","","3,508","","","3,105","","","3,363","","","3,065"],["Respite","","121","","","80","","","104","","","73"],["Subtotal routine homecare and respite","","21,631","","","18,831","","","20,620","","","18,091"],["Inpatient","","296","","","271","","","290","","","279"],["Continuous care","","252","","","250","","","261","","","243"],["Total","","22,179","","","19,352","","","21,171","","","18,613"],["Total Admissions","","16,427","","","15,867","","","67,447","","","63,431"],["Total Discharges","","16,333","","","15,705","","","64,618","","","61,242"],["Average length of stay (days)","","105.5","","","105.9","","","103.0","","","102.2"],["Median length of stay (days)","","18.0","","","17.0","","","17.0","","","16.0"],["ADC by major diagnosis"],["Cerebro","","44.2","%","","42.8","%","","44.0","%","","42.5","%"],["Neurological","","12.9","","","13.7","","","13.2","","","15.3"],["Cancer","","9.9","","","10.3","","","10.0","","","10.5"],["Cardio","","16.2","","","16.2","","","16.2","","","16.1"],["Respiratory","","6.9","","","7.0","","","7.1","","","7.1"],["Other","","9.9","","","10.0","","","9.5","","","8.5"],["Total","","100.0","%","","100.0","%","","100.0","%","","100.0","%"],["Admissions by major diagnosis"],["Cerebro","","28.0","%","","26.5","%","","27.8","%","","26.4","%"],["Neurological","","7.0","","","8.3","","","7.6","","","9.4"],["Cancer","","25.9","","","25.9","","","25.3","","","26.0"],["Cardio","","15.3","","","15.4","","","15.6","","","16.0"],["Respiratory","","9.8","","","10.1","","","9.9","","","10.1"],["Other","","14.0","","","13.8","","","13.8","","","12.1"],["Total","","100.0","%","","100.0","%","","100.0","%","","100.0","%"],["Bad debt expense as a percent of revenues","","0.9","%","","1.0","%","","0.9","%","","1.1","%"],["Accounts receivable --Days of revenue outstanding- excluding unapplied Medicare payments","40.0","","","37.8","","","N.A.","","","N.A."],["Accounts receivable--Days of revenue outstanding- including unapplied Medicare payments","28.5","","","36.0","","","N.A.","","","N.A."]]
[[/GREPCENT_TABLE]]

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