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Section 1: 8-K (8-K)

8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D)

OF THE SECURITIES EXCHANGE ACT OF 1934

DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): NOVEMBER 3, 2016

Commission File Number: 0-24260

 

LOGO

 

 

AMEDISYS, INC.

(Exact Name of Registrant as specified in its Charter)

 

 

 

Delaware   11-3131700

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

3854 American Way, Suite A, Baton Rouge, LA 70816

(Address of principal executive offices, including zip code)

(225) 292-2031 or (800) 467-2662

(Registrant’s telephone number, including area code)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


SECTION 2 — FINANCIAL INFORMATION

 

ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On November 3, 2016, Amedisys, Inc. (“we,” “us,” “our” or the “Company”) issued a press release announcing our financial results for the three and nine-month periods ended September 30, 2016. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

The information presented in Item 2.02 of this Current Report on Form 8-K and Exhibit 99.1 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, unless we specifically state that the information is to be considered “filed” under the Exchange Act or specifically incorporate it by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act.

SECTION 7 – REGULATION FD

 

ITEM 7.01. REGULATION FD DISCLOSURE

Item 2.02 of this Current Report on Form 8-K is incorporated herein by reference.

In addition, a copy of the supplemental slides which will be discussed during the Company’s earnings call at 11:00 a.m. ET on Friday, November 4, 2016 is attached to this report as Exhibit 99.2 and incorporated herein by reference.

The information presented in Item 7.01 of this Current Report on Form 8-K shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, unless we specifically state that the information is to be considered “filed” under the Exchange Act or specifically incorporate it by reference in any filing under the Securities Act or the Exchange Act.

SECTION 9 – FINANCIAL STATEMENTS AND EXHIBITS

 

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS

(d) Exhibits.

 

99.1    Press release dated November 3, 2016, announcing the Company’s financial results for the three and nine-month periods ended September 30, 2016 (furnished only)
99.2    Supplemental slides provided in connection with the third quarter 2016 earnings call of the Company (furnished only)


Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

AMEDISYS, INC.
(Registrant)
By:  

/s/ Scott G. Ginn

  Scott G. Ginn
  Senior Vice President of Finance and Accounting
  (Principal Accounting Officer)

DATE: November 3, 2016


Exhibit Index

 

Exhibit
No.

  

Description

99.1    Press release dated November 3, 2016, announcing the Company’s financial results for the three and nine-month periods ended September 30, 2016 (furnished only)
99.2    Supplemental slides provided in connection with the third quarter 2016 earnings call of the Company (furnished only)
(Back To Top)

Section 2: EX-99.1 (EX-99.1)

EX-99.1

Exhibit 99.1

 

LOGO

 

Contact:    Investor Contact:    Media Contact:
   Amedisys, Inc.    Amedisys, Inc.
   David Castille    Kendra Kimmons
   Managing Director, Treasury/Finance    Managing Director, Marketing & Communications
   (225) 299-3391    (225) 299-3720
   david.castille@amedisys.com    kendra.kimmons@amedisys.com

AMEDISYS REPORTS THIRD QUARTER FINANCIAL RESULTS

AMEDISYS TO HOST CONFERENCE CALL NOVEMBER 4, 2016 AT 11:00 A.M. ET

BATON ROUGE, Louisiana (November 3, 2016) — Amedisys, Inc. (NASDAQ: AMED), a leading home health and hospice company, today reported its financial results for the three and nine-month periods ended September 30, 2016.

Three-Month Periods Ended September 30, 2016 and 2015

 

    Net service revenue increased $35.2 million to $361.6 million compared to $326.4 million in 2015.

 

    Net income attributable to Amedisys, Inc. of $11.4 million compared to $8.4 million in 2015.

 

    Net income attributable to Amedisys, Inc. per diluted share of $0.34 per diluted share compared to $0.25 in 2015.

Adjusted Results*

 

    Adjusted net service revenue of $361.6 million compared to $326.4 million in 2015.

 

    Adjusted net income attributable to Amedisys, Inc. of $12.1 million compared to $11.5 million in 2015.

 

    Adjusted net income attributable to Amedisys, Inc. per diluted share of $0.36 compared to $0.34 in 2015.

 

    Adjusted EBITDA (defined as net income (loss) attributable to Amedisys, Inc. before provision for income taxes, net interest expense and depreciation and amortization excluding certain items) of $25.6 million compared to $26.4 million in 2015.

Nine-Month Periods Ended September 30, 2016 and 2015

 

    Net service revenue increased $129.0 million to $1,071.2 million compared to $942.2 million in 2015.

 

    Net income attributable to Amedisys, Inc. of $28.3 million compared to $15.9 million net loss in 2015.

 

    Net income attributable to Amedisys, Inc. per diluted share increased $1.32 to $0.84 compared to $0.48 net loss per diluted share in 2015.

Adjusted Results*

 

    Adjusted net service revenue of $1,072.1 million compared to $942.2 million in 2015.

 

    Adjusted net income attributable to Amedisys, Inc. of $37.2 million compared to $35.8 million in 2015.

 

    Adjusted net income attributable to Amedisys, Inc. per diluted share of $1.10 compared to $1.09 in 2015.

 

    Adjusted EBITDA of $79.4 million compared to $84.4 million in 2015.

* See pages 10 and 11 for the reconciliations of non-GAAP financial measures to GAAP measures.

Paul B. Kusserow, President and Chief Executive Officer stated, “I am extremely proud of our organization for their dedication to delivering high-quality, low-cost care to our patients while the company continues to undergo a significant transition. Our employees delivered solid results across all three business segments. As outlined in our earnings preannouncement last week, we did encounter some challenges in home health volumes as well as increased health insurance and bad debt expenses. However, as of October 31, our last group of care centers is live on HomeCare HomeBase, an effort that involved training over 11,000 employees over the course of only 15 months. We are focused on continued growth and delivering on the operational efficiencies we have promised our shareholders. At the same time, we are actively pursuing opportunities to reinvest in our business and deploy capital toward accretive acquisitions. We are extremely excited about the opportunities in front of us as we continue to execute on our strategy.”

We urge caution in considering the current trends disclosed in this press release. The home health and hospice industry is highly competitive and subject to intensive regulations, and trends are subject to numerous factors, risks, and uncertainties, some of which are referenced in the cautionary language below and others that are described more fully in our reports filed with the Securities and Exchange Commission (“SEC”) including our Annual Report on Form 10-K for the fiscal year ended December 31, 2015, and subsequent Quarterly Reports on Form 10-Q, and current reports on Form 8-K which can be found on the SEC’s internet website, http://www.sec.gov, and our internet website, http://www.amedisys.com. We disclaim any obligations to update disclosed information on trends.

 

1


Earnings Call and Webcast Information

To participate on the conference call, please call a few minutes before 11:00 a.m. ET to either (877) 524-8416 (Toll-Free) or (412) 902-1028 (Toll). A replay of the conference call will be available through December 3, 2016 by dialing (877) 660-6853 (Toll-Free) or (201) 612-7415 (Toll) and entering conference ID #13648537.

A live webcast of the call will be accessible through our website on our Investor Relations section at the following web address: http://investors.amedisys.com.

Amedisys, Inc. (the “Company”) is headquartered in Baton Rouge, Louisiana and our common stock trades on the NASDAQ Global Select Market under the symbol “AMED”.

Additional information

Our company website address is www.amedisys.com. We use our website as a channel of distribution for important company information. Important information, including press releases, analyst presentations and financial information regarding our company, is routinely posted on and accessible on the Investor Relations subpage of our website, which is accessible by clicking on the tab labeled “Investors” on our website home page. We also use our website to expedite public access to time-critical information regarding our company in advance of or in lieu of distributing a press release or a filing with the SEC disclosing the same information. Therefore, investors should look to the Investor Relations subpage of our website for important and time-critical information. Visitors to our website can also register to receive automatic e-mail and other notifications alerting them when new information is made available on the Investor Relations subpage of our website.

Forward-Looking Statements

When included in this press release, words like “believes,” “belief,” “expects,” “plans,” “anticipates,” “intends,” “projects,” “estimates,” “may,” “might,” “would,” “should” and similar expressions are intended to identify forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve a variety of risks and uncertainties that could cause actual results to differ materially from those described therein. These risks and uncertainties include, but are not limited to the following: changes in Medicare and other medical payment levels, our ability to open care centers, acquire additional care centers and integrate and operate these care centers effectively, changes in or our failure to comply with existing Federal and State laws or regulations or the inability to comply with new government regulations on a timely basis, competition in the home health industry, changes in the case mix of patients and payment methodologies, changes in estimates and judgments associated with critical accounting policies, our ability to maintain or establish new patient referral sources, our ability to attract and retain qualified personnel, changes in payments and covered services due to the economic downturn and deficit spending by Federal and State governments, future cost containment initiatives undertaken by third-party payors, our access to financing due to the volatility and disruption of the capital and credit markets, our ability to meet debt service requirements and comply with covenants in debt agreements, business disruptions due to natural disasters or acts of terrorism, our ability to integrate and manage our information systems, our ability to comply with requirements stipulated in our corporate integrity agreement and changes in law or developments with respect to any litigation relating to the Company, including various other matters, many of which are beyond our control.

Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on any forward-looking statement as a prediction of future events. We expressly disclaim any obligation or undertaking and we do not intend to release publicly any updates or changes in our expectations concerning the forward-looking statements or any changes in events, conditions or circumstances upon which any forward-looking statement may be based, except as required by law.

Non-GAAP Financial Measures

This press release includes the following non-GAAP financial measures as defined under SEC rules: (1) EBITDA, defined as net income (loss) attributable to Amedisys, Inc. before provision for income taxes, net interest expense and depreciation and amortization; (2) adjusted EBITDA, defined as EBITDA excluding certain items; (3) adjusted net service revenue, defined as net service revenue excluding certain items; (4) adjusted net income attributable to Amedisys, Inc., defined as net income (loss) attributable to Amedisys, Inc. excluding certain items; and (5) adjusted net income attributable to Amedisys, Inc. per diluted share, defined as net income (loss) attributable to Amedisys, Inc. common stockholders per diluted share excluding certain items. In accordance with SEC rules, we have provided herein a reconciliation of these non-GAAP financial measures to the most directly comparable measures under GAAP. Management believes that these are useful gauges of our performance and are common measures used in our industry to assess relative financial performance among companies.

 

2


AMEDISYS, INC. AND SUBSIDIARIES

SELECT CONSOLIDATED FINANCIAL STATEMENT DATA AND SUPPLEMENTAL INFORMATION

(Amounts in thousands, except share, per share data and statistical information)

Balance Sheet Information

 

     September 30, 2016     December 31, 2015  
     (Unaudited)        
ASSETS     

Current assets:

    

Cash and cash equivalents

   $ 8,915     $ 27,502  

Patient accounts receivable, net of allowance for doubtful accounts of $16,710 and $16,526

     162,500       125,010  

Prepaid expenses

     9,948       8,110  

Other current assets

     12,070       14,641  
  

 

 

   

 

 

 

Total current assets

     193,433       175,263  

Property and equipment, net of accumulated depreciation of $144,055 and $141,793

     42,960       42,695  

Goodwill

     284,552       261,663  

Intangible assets, net of accumulated amortization of $27,180 and $25,386

     47,249       44,047  

Deferred income taxes

     113,797       125,245  

Other assets, net

     39,741       32,802  
  

 

 

   

 

 

 

Total assets

   $ 721,732     $ 681,715  
  

 

 

   

 

 

 
LIABILITIES AND EQUITY     

Current liabilities:

    

Accounts payable

   $ 33,088     $ 25,682  

Payroll and employee benefits

     78,754       72,546  

Accrued expenses

     65,112       71,965  

Current portion of long-term obligations

     5,220       5,000  
  

 

 

   

 

 

 

Total current liabilities

     182,174       175,193  

Long-term obligations, less current portion

     88,874       91,630  

Other long-term obligations

     4,306       4,456  
  

 

 

   

 

 

 

Total liabilities

     275,354       271,279  
  

 

 

   

 

 

 

Equity:

    

Preferred stock, $0.001 par value, 5,000,000 shares authorized; none issued or outstanding

     —         —    

Common stock, $0.001 par value, 60,000,000 shares authorized; 35,195,655 and 34,786,966 shares issued; and 33,551,441 and 33,607,282 shares outstanding

     35       35  

Additional paid-in capital

     531,112       504,290  

Treasury stock at cost, 1,644,214 and 1,179,684 shares of common stock

     (46,253     (26,966

Accumulated other comprehensive income

     15       15  

Retained earnings

     (39,462     (67,806
  

 

 

   

 

 

 

Total Amedisys, Inc. stockholders’ equity

     445,447       409,568  

Noncontrolling interests

     931       868  
  

 

 

   

 

 

 

Total equity

     446,378       410,436  
  

 

 

   

 

 

 

Total liabilities and equity

   $ 721,732     $ 681,715  
  

 

 

   

 

 

 

 

3


Statement of Operations Information (Unaudited)

 

     For the Three-Month Periods
Ended September 30,
    For the Nine-Month Periods
Ended September 30,
 
     2016     2015     2016     2015  

Net service revenue

   $ 361,595     $ 326,450     $ 1,071,158     $ 942,174  

Cost of service, excluding depreciation and amortization

     212,124       186,772       620,466       533,432  

General and administrative expenses:

        

Salaries and benefits

     77,019       69,993       231,079       209,797  

Non-cash compensation

     4,750       3,060       12,556       7,637  

Other

     42,658       39,551       134,951       114,734  

Provision for doubtful accounts

     5,471       3,638       13,664       9,370  

Depreciation and amortization

     5,214       4,646       14,662       15,798  

Asset impairment charge

     —         2,075       —         77,268  
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses

     347,236       309,735       1,027,378       968,036  
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income (loss)

     14,359       16,715       43,780       (25,862

Other income (expense):

        

Interest income

     14       7       45       33  

Interest expense

     (1,136     (4,936     (3,551     (9,778

Equity in earnings from equity method investments

     3,244       1,924       3,602       8,701  

Miscellaneous, net

     1,713       1,330       3,106       3,962  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total other income (expense), net

     3,835       (1,675     3,202       2,918  
  

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) before income taxes

     18,194       15,040       46,982       (22,944

Income tax (expense) benefit

     (6,693     (6,465     (18,323     7,560  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

     11,501       8,575       28,659       (15,384

Net income attributable to noncontrolling interests

     (66     (135     (315     (548
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) attributable to Amedisys, Inc.

   $ 11,435     $ 8,440     $ 28,344     $ (15,932
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic earnings per common share:

        

Net income (loss) attributable to Amedisys, Inc. common stockholders

   $ 0.34     $ 0.25     $ 0.86     $ (0.48

Weighted average shares outstanding

     33,309       33,128       33,142       32,957  

Diluted earnings per common share:

        

Net income (loss) attributable to Amedisys, Inc. common stockholders

   $ 0.34     $ 0.25     $ 0.84     $ (0.48

Weighted average shares outstanding

     33,823       33,631       33,699       32,957  

 

4


Cash Flow and Days Revenue Outstanding, Net Information (Unaudited)

 

     For the Three-Month Periods
Ended September 30,
    For the Nine-Month Periods
Ended September 30,
 
     2016     2015     2016     2015  

Net cash provided by operating activities

   $ 6,803     $ 30,704     $ 33,698     $ 87,741  

Net cash used in investing activities

     (7,649     (8,037     (45,400     (19,859

Net cash (used in) provided by financing activities

     (207     1,183       (6,885     (18,863
  

 

 

   

 

 

   

 

 

   

 

 

 

Net (decrease) increase in cash and cash equivalents

     (1,053     23,850       (18,587     49,019  

Cash and cash equivalents at beginning of period

     9,968       33,201       27,502       8,032  
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 8,915     $ 57,051     $ 8,915     $ 57,051  
  

 

 

   

 

 

   

 

 

   

 

 

 

Days revenue outstanding, net (1)

     40.0       33.1       40.0       33.1  

 

(1) Our calculation of days revenue outstanding, net at September 30, 2016 and 2015 is derived by dividing our ending patient accounts receivable (i.e., net of estimated revenue adjustments and allowance for doubtful accounts) by our average daily net patient revenue for the three-month period ended September 30, 2016 and 2015, respectively.

 

5


Supplemental Information - Home Health

 

     For the Three-Month Periods Ended September 30,  
     2016     2015  

Financial Information (in millions):

    

Medicare

   $ 203.9     $ 190.2  

Non-Medicare

     65.0       63.2  
  

 

 

   

 

 

 

Net service revenue

     268.9       253.4  

Cost of service

     162.4       150.0  
  

 

 

   

 

 

 

Gross margin

     106.5       103.4  

Other operating expenses

     77.4       70.0  
  

 

 

   

 

 

 

Operating income

   $ 29.1     $ 33.4  
  

 

 

   

 

 

 

Key Statistical Data:

    

Medicare:

    

Same Store Volume (1):

    

Revenue

     1     3

Admissions

     1     4

Recertifications

     (3 %)      0

Total (2):

    

Admissions

     47,625       44,434  

Recertifications

     25,522       25,420  

Completed episodes

     71,948       67,288  

Visits

     1,266,780       1,208,853  

Average revenue per completed episode (3)

   $ 2,841     $ 2,821  

Visits per completed episode (4)

     17.5       17.5  

Non-Medicare:

    

Same Store Volume (1):

    

Revenue

     4     22

Admissions

     (1 %)      21

Recertifications

     1     15

Total (2):

    

Admissions

     24,335       24,792  

Recertifications

     9,479       9,447  

Visits

     506,729       504,441  

Total (2):

    

Cost per Visit

   $ 91.58     $ 87.54  

Visits

     1,773,509       1,713,294  

 

6


     For the Nine-Month Periods Ended September 30,  
     2016     2015  

Financial Information (in millions):

    

Medicare

   $ 619.2     $ 565.8  

Non-Medicare

     198.0       176.8  
  

 

 

   

 

 

 

Net service revenue

     817.2       742.6  

Cost of service

     483.6       431.0  
  

 

 

   

 

 

 

Gross margin

     333.6       311.6  

Other operating expenses

     230.5       204.0  
  

 

 

   

 

 

 

Operating income

   $ 103.1     $ 107.6  
  

 

 

   

 

 

 

Key Statistical Data:

    

Medicare:

    

Same Store Volume (1):

    

Revenue

     3     2

Admissions

     3     2

Recertifications

     1     (2 %) 

Total (2):

    

Admissions

     147,025       133,973  

Recertifications

     77,565       74,386  

Completed episodes

     218,007       200,301  

Visits

     3,893,568       3,580,751  

Average revenue per completed episode (3)

   $ 2,835     $ 2,816  

Visits per completed episode (4)

     17.5       17.4  

Non-Medicare:

    

Same Store Volume (1):

    

Revenue

     12     19

Admissions

     4     17

Recertifications

     11     13

Total (2):

    

Admissions

     74,139       71,733  

Recertifications

     28,945       26,072  

Visits

     1,549,760       1,424,595  

Total (2):

    

Cost per Visit

   $ 88.83     $ 86.10  

Visits

     5,443,328       5,005,346  

 

(1) Same store Medicare and Non-Medicare revenue, admissions or recertifications growth (decline) is the percent increase (decrease) in our Medicare and Non-Medicare revenue, admissions or recertifications for the period as a percent of the Medicare and Non-Medicare revenue, admissions or recertifications of the prior period.
(2) Total includes acquisitions.
(3) Average Medicare revenue per completed episode is the average Medicare revenue earned for each Medicare completed episode of care which includes the impact of sequestration.
(4) Medicare visits per completed episode are the home health Medicare visits on completed episodes divided by the home health Medicare episodes completed during the period.

 

7


Supplemental Information - Hospice

 

     For the Three-Month Periods Ended September 30,  
     2016     2015  

Financial Information (in millions):

    

Medicare

   $ 77.0     $ 68.6  

Non-Medicare

     5.0       4.4  
  

 

 

   

 

 

 

Net service revenue

     82.0       73.0  

Cost of service

     41.9       36.8  
  

 

 

   

 

 

 

Gross margin

     40.1       36.2  

Other operating expenses

     19.3       16.9  
  

 

 

   

 

 

 

Operating income

   $ 20.8     $ 19.3  
  

 

 

   

 

 

 

Key Statistical Data:

    

Same Store Volume (1):

    

Medicare revenue

     12     17

Non-Medicare revenue

     14     14

Hospice admissions

     16     26

Average daily census

     14     17

Total (2):

    

Hospice admissions

     5,751       4,962  

Average daily census

     6,087       5,346  

Revenue per day, net

   $ 146.49     $ 148.47  

Cost of service per day

   $ 74.77     $ 74.82  

Average length of stay

     92       92  

 

     For the Nine-Month Periods Ended September 30,  
     2016     2015  

Financial Information (in millions):

    

Medicare

   $ 217.0     $ 187.6  

Non-Medicare

     13.8       12.0  
  

 

 

   

 

 

 

Net service revenue

     230.8       199.6  

Cost of service

     120.1       102.4  
  

 

 

   

 

 

 

Gross margin

     110.7       97.2  

Other operating expenses

     55.6       48.2  
  

 

 

   

 

 

 

Operating income

   $ 55.1     $ 49.0  
  

 

 

   

 

 

 

Key Statistical Data:

    

Same Store Volume (1):

    

Medicare revenue

     16     10

Non-Medicare revenue

     15     11

Hospice admissions

     18     14

Average daily census

     17     8

Total (2):

    

Hospice admissions

     16,757       14,239  

Average daily census

     5,776       4,947  

Revenue per day, net

   $ 145.86     $ 147.79  

Cost of service per day

   $ 75.89     $ 75.87  

Average length of stay

     94       90  

 

(1) Same store Medicare and Non-Medicare revenue, Hospice admissions or average daily census growth (decline) is the percent increase (decrease) in our Medicare and Non-Medicare revenue, Hospice admissions or average daily census for the period as a percent of the Medicare and Non-Medicare revenue, Hospice admissions or average daily census of the prior period.
(2) Total includes acquisitions.

 

8


Supplemental Information - Corporate

 

     For the Three-Month Periods Ended September 30,  
     2016      2015  

Financial Information (in millions):

     

Other operating expenses

   $ 32.7      $ 30.8  

Depreciation and amortization

     3.3        3.1  
  

 

 

    

 

 

 

Total before impairment (1)

   $ 36.0      $ 33.9  
  

 

 

    

 

 

 

 

     For the Nine-Month Periods Ended September 30,  
     2016      2015  

Financial Information (in millions):

     

Other operating expenses

   $ 106.4      $ 94.3  

Depreciation and amortization

     9.3        10.8  
  

 

 

    

 

 

 

Total before impairment (1)

   $ 115.7      $ 105.1  
  

 

 

    

 

 

 

 

(1) Total of $36.0 million on a GAAP basis for the three-month period ended September 30, 2015 (including $2.1 million asset impairment charge). Total of $182.4 million on a GAAP basis for the nine-month period ended September 30, 2015 (including $77.3 million asset impairment charge).

 

9


AMEDISYS, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP FINANCIAL STATEMENTS

(Amounts in thousands)

(Unaudited)

Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) and Adjusted EBITDA:

 

     For the Three-Month Periods
Ended September 30,
     For the Nine-Month Periods
Ended September 30,
 
     2016      2015      2016      2015  

Net income (loss) attributable to Amedisys, Inc.

   $ 11,435      $ 8,440      $ 28,344      $ (15,932

Add:

           

Income tax expense (benefit)

     6,693        6,465        18,323        (7,560

Interest expense, net

     1,122        4,929        3,506        9,745  

Depreciation and amortization

     5,214        4,646        14,662        15,798  
  

 

 

    

 

 

    

 

 

    

 

 

 

EBITDA (1) (7)

     24,464        24,480        64,835        2,051  

Add:

           

Certain items (2)

     1,158        5,100        14,560        85,567  

Debt refinance costs (2)

     —          (3,212      —          (3,212
  

 

 

    

 

 

    

 

 

    

 

 

 

Adjusted EBITDA (3) (7)

   $ 25,622      $ 26,368      $ 79,395      $ 84,406  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

Adjusted Net Service Revenue Reconciliation:

 

     For the Three-Month Periods
Ended September 30,
     For the Nine-Month Periods
Ended September 30,
 
     2016      2015      2016      2015  

Net service revenue

   $ 361,595      $ 326,450      $ 1,071,158      $ 942,174  

Add:

           

Certain items (2)

     —          —          948        —    
  

 

 

    

 

 

    

 

 

    

 

 

 

Adjusted net service revenue (4) (7)

   $ 361,595      $ 326,450      $ 1,072,106      $ 942,174  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

Adjusted Net Income Attributable to Amedisys, Inc. Reconciliation:

 

     For the Three-Month Periods
Ended September 30,
     For the Nine-Month Periods
Ended September 30,
 
     2016      2015      2016      2015  

Net income (loss) attributable to Amedisys, Inc.

   $ 11,435      $ 8,440      $ 28,344      $ (15,932

Add:

           

Certain items (2)

     700        3,086        8,809        51,768  
  

 

 

    

 

 

    

 

 

    

 

 

 

Adjusted net income attributable to Amedisys, Inc. (5) (7)

   $ 12,135      $ 11,526      $ 37,153      $ 35,836  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

Adjusted Net Income Attributable to Amedisys, Inc. per Diluted Share:

 

     For the Three-Month Periods
Ended September 30,
     For the Nine-Month Periods
Ended September 30,
 
     2016      2015      2016      2015  

Net income (loss) attributable to Amedisys, Inc. common stockholders per diluted share

   $ 0.34      $ 0.25      $ 0.84      $ (0.48

Add:

           

Certain items (2)

     0.02        0.09        0.26        1.57  
  

 

 

    

 

 

    

 

 

    

 

 

 

Adjusted net income attributable to Amedisys, Inc. common stockholders per diluted share (6) (7)

   $ 0.36      $ 0.34      $ 1.10      $ 1.09  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(1) EBITDA is defined as net income (loss) attributable to Amedisys, Inc. before provision for income taxes, net interest expense, and depreciation and amortization.

 

10


(2) The following details the certain items for the three and nine-month periods ended September 30, 2016 and 2015:

 

     For the Three-Month Period
Ended September 30, 2016
     For the Nine-Month Period
Ended September 30, 2016
 
     (Income) Expense      (Income) Expense  

HCHB implementation

   $ 1,993      $ 7,025  

Acquisition costs

     467        2,509  

Legal fees - non-routine

     374        2,350  

Legal settlements

     (1,242      (2,048

Restructuring activity

     1,965        5,669  

Third party audit reserve

     —          948  

Disaster relief

     338        338  

Miscellaneous, other (income) expense, net

     (2,737      (2,231
  

 

 

    

 

 

 

Total

   $ 1,158      $ 14,560  
  

 

 

    

 

 

 

Net of tax

     700        8,809  
  

 

 

    

 

 

 

Diluted EPS

     0.02        0.26  
  

 

 

    

 

 

 

 

     For the Three-Month Period
Ended September 30, 2015
     For the Nine-Month Period
Ended September 30, 2015
 
     (Income) Expense      (Income) Expense  

Wage and Hour litigation

   $ —        $ 8,000  

HCHB implementation

     2,048        2,048  

Legal fees - non-routine

     286        286  

Legal settlements

     (1,014      (2,139

Inventory and Data Security Reporting

     —          2,121  

Asset impairment

     2,075        77,268  

Restructuring activity

     56        2,735  

Debt refinance costs

     3,212        3,212  

Miscellaneous, other (income) expense, net

     (1,563      (7,964
  

 

 

    

 

 

 

Total

   $ 5,100      $ 85,567  
  

 

 

    

 

 

 

Net of tax

   $ 3,086      $ 51,768  
  

 

 

    

 

 

 

Diluted EPS

   $ 0.09      $ 1.57  
  

 

 

    

 

 

 

 

(3) Adjusted EBITDA is defined as EBITDA, as defined in footnote 1, excluding certain items as described in footnote 2.
(4) Adjusted net service revenue is defined as net service revenue plus certain items as described in footnote 2.
(5) Adjusted net income attributable to Amedisys, Inc. is defined as net income (loss) attributable to Amedisys, Inc. excluding certain items as described in footnote 2.
(6) Adjusted net income attributable to Amedisys, Inc. common stockholders per diluted share is defined as diluted income (loss) per share excluding the earnings per share effect of certain items as described in footnote 2.
(7) EBITDA, adjusted EBITDA, adjusted net service revenue, adjusted net income attributable to Amedisys, Inc. and adjusted net income attributable to Amedisys, Inc. common stockholders per diluted share should not be considered as an alternative to, or more meaningful than, income before income taxes, cash flow from operating activities, or other traditional indicators of operating performance. These calculations may not be comparable to a similarly titled measure reported by other companies, since not all companies calculate these non-GAAP financial measures in the same manner.

 

11

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Section 3: EX-99.2 (EX-99.2)

EX-99.2

Slide 0

Amedisys 3Q16 Earnings Call Supplemental Materials November 2016 Exhibit 99.2


Slide 1

Forward-looking Statements This presentation may include forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based upon current expectations and assumptions about our business that are subject to a variety of risks and uncertainties that could cause actual results to differ materially from those described in this presentation. You should not rely on forward-looking statements as a prediction of future events. Additional information regarding factors that could cause actual results to differ materially from those discussed in any forward-looking statements are described in reports and registration statements we file with the SEC, including our Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, copies of which are available on the Amedisys internet website http://www.amedisys.com or by contacting the Amedisys Investor Relations department at (225) 292-2031. We disclaim any obligation to update any forward-looking statements or any changes in events, conditions or circumstances upon which any forward-looking statement may be based except as required by law. www.amedisys.com NASDAQ: AMED We encourage everyone to visit the Investors Section of our website at www.amedisys.com, where we have posted additional important information such as press releases, profiles concerning our business and clinical operations and control processes, and SEC filings. We intend to use our website to expedite public access to time-critical information regarding the Company in advance of or in lieu of distributing a press release or a filing with the SEC disclosing the same information.


Slide 2

Highlights and Summary Financial Results (Adjusted) – 3Q 2016 (1) Amedisys Consolidated Revenue Growth: +11% EBITDA: $26M EBITDA Margin: 7.1% EPS: $0.36 Amedisys Highlights Same Store Admissions: Medicare FFS: +1% Total Episodic: +3% Non-episodic: (7%) Other Statistics: Medicare recert rate (3): 35% Cost per visit: +5% Home Health Same Store Metrics: Billable hours/quarter: +8% Clients served: +11% Personal Care Same Store Volume: Admissions: +16% ADC: +14% Other Statistics: Cost per day: 0% Hospice Net debt: $88M Leverage ratio: 0.8x (net) CFFO bef. WC change (2) : $35M Free cash flow (2) : $4M Balance Sheet and Cash Flow Adjusted Financial Results The financial results for the three-month periods ended September 30, 2015 and September 30, 2016 are adjusted for certain items and should be considered a non-GAAP financial measure. A reconciliation of these non-GAAP financial measures is included in the corresponding 8-K detailing quarterly results for each respective reporting period. CFFO before working capital change defined as cash flow from operations before working capital changes. Free cash flow defined as cash flow from operations less routine capital expenditures and required debt repayments. Recert Rate excluding Infinity impact and HCHB disruption: 37%


Slide 3

Home Health and Hospice Segment (Adjusted) – 3Q 2016 (1) Medicare same store growth positive but below plan (+1%); revenue mix holding steady (76% Medicare FFS) Non-Medicare per visit admissions declined 7% during 3Q16 compared to prior year CPV increase driven by planned salary increases, HCHB disruption and health insurance expenses (75% of y/y increase) Home Health Highlights Sixth straight quarter of double digit same store admissions growth; 12% y/y revenue increase Gross revenue per day down 1% y/y; gross margin contracted 70 basis points Cost per day flat Hospice Highlights The financial results for the three-month periods ended September 30, 2015 and September 30, 2016 are adjusted for certain items and should be considered a non-GAAP financial measure. A reconciliation of these non-GAAP financial measures is included in the corresponding 8-K detailing quarterly results for each respective reporting period. Segment EBITDA does not include any corporate G&A expenses Recert Rate excluding Infinity impact and HCHB disruption: 37% (3)


Slide 4

General & Administrative Expenses – Adjusted (1,2) Highlights Year over year total G&A as a percentage of revenue decreased of 80 basis points despite inclusion of roughly $7M related to acquisitions; declined 130 bps since high point in 1Q16 Home health segment G&A: 40 bps y/y increase as % of revenue; mainly driven by health insurance increases and HCHB fees being allocated to the segment as implementation progresses Hospice segment G&A: 80 bps decrease y/y as % of revenue Corporate G&A: 70 bps decrease y/y and 110 bps since 1Q16 as % of total revenue The financial results for the three-month periods ended September 30, 2015, December 31, 2015, March 31, 2016, June 30, 2016, and September 30, 2016 are adjusted for certain items and should be considered a non-GAAP financial measure. A reconciliation of these non-GAAP financial measures is included in the corresponding 8-K detailing quarterly results for each respective reporting period. Adjusted G&A expenses do not include bad debt expense or depreciation and amortization.


Slide 5

Amedisys Strategy: Four Areas of Focus Updated 3Q 2016 Clinicians Patient Health Clinicians Patient Health Outstanding Outcomes for Our Patients In Their Homes Amedisys Care Centers & Clinical Teams Current: All centers went live on HCHB Oct. 31, 2016 Over 90% of savings initiatives currently underway HCHB 2.0 – platform optimization training for the field Future Goal: Realize HCHB enabled $46M in annualized improvement Current: Quality of Patient care score: 3.74 based on October release 50% of centers at 4.0+ STARs in new preview data Patient Survey score: 3.76 Future Goals: All HH care centers at 4.0+ STARs at end of 2017 Top of Hospice quality measures Current: HH: 3Q16 same store Medicare admissions growth +1%, episodic +3%, non-episodic (7%) HH: Medicare mix: 76% of revenue HOSP: 3Q16 same store admissions growth 16% Inorganic: TTM deployed $100M in capital on M&A Future Goal: HH targeting 5-6% annual organic growth through redesign and productivity of sales force Current: September full-time employee voluntary turnover was 18.0% down from 18.7%; total turnover of 22.8% down from 23.7% Productivity tool build and being piloted Future Goals: Overall turnover target of 22% by year end 2016 10% productivity improvement by year end 2017 Driving Growth Operational Excellence and Efficiency Employer of Choice Clinical Distinction Outstanding Outcomes for Our Patients In Their Homes Amedisys Care Centers & Clinical Teams


Slide 6

How We’re Tracking Clinical Distinction Employer of Choice Operational Excellence & Efficiency Driving Growth Outstanding Outcomes for Our Patients In Their Homes Care Centers & Clinical Teams Status Category Update Ongoing Initiative STARS Good progress on QPC Stars with January 17 preview score of 3.91 vs. 3.50 from previous year VBP Value Based Purchasing (VBP) has seen strong performance in internal reporting, and we expect to be a net receiver of funds in 2018 Protocols / Clinical Standardization Create innovative industry-leading, clinical programs and define, develop and implement standardized care protocols at point of care Turnover Overall turnover dropped to 22.8% with full time turnover down to 18% Productivity Proprietary productivity and staffing tool being piloted – tool will optimize clinical capacity while allowing clinicians to work “at the top of their license” HCHB Rollout & Disruption Last 32 care centers rolled-out HCHB Oct. 31st. Completed installation in 15 month. Choppiness is deeper, than originally predicated, but will wind down in 1Q’17 HCHB 2.0 Re-training the field to become system “super-users” or drive out more efficiencies Cost Initiatives Achieved ~$4.7M of cost initiatives in 3Q 2016 – we continue to be on pace to deliver targeted savings by 4Q’17 Accounts Receivable DSO increased 3 days from 2Q 2016 to 40 by end of 3Q 2016. Expected to return to normal during 1Q’17 Home Health Growth below expectations for quarter - over 50% of census in some stage of HCHB implementation in 3Q’16. Initial 2017 growth projections strong, regulatory headwinds impactful Hospice SS Hospice admissions +16%. 6th consecutive quarter of double digit growth Personal Care Billable hours/quarter: +8%, Clients served: +11%. Integration process best-in-class M&A $100M in capital deployed in last 12 months. Pipeline remains strong, maintaining pricing discipline. Reimbursement Home Health final rule announced. Changes in scoring being evaluated internally. PCR delayed Clinical leadership developing protocols for 2017 rollout. Will use to drive care standardization and deliver resources at site of care Continued focus on People through engagement planning and development opportunities Productivity and staffing tool has been developed and is being piloted in the field will drive capacity Piloting Home Health Sales Reorg initiatives - results are encouraging, with 2% incremental Medicare growth driven by increased staff productivity. Targeting 5-6% annual organic growth rate Focusing M&A efforts across all business lines, while maintain multiple discipline Reimbursement headwinds in Home Health and tailwinds in Hospice in 2017 Disruption of ~$18,000 per care center will wind down in early 2017 at which time focus will shift to HCHB 2.0 training A/R increase related to process changes from HCHB implementation (billing from two systems until AMS2 wind down). HCHB 2.0 training and AMS2 sunset will improve A/R


Slide 7

Clinical Distinction: Improvements in Stars Metric Jul 16 Release Oct 16 Release Jan 17 Preview Quality of Patient Care 3.59 3.74 3.91 Entities at 4+ Stars 36% 50% 65% Quality of Patient Care (QPC) Value Based Purchasing QPC Star Average PS Star Average Amedisys VBP State Avg 3.83 3.64 Large Cohort VBP Comp Avg1 3.51 3.50 January 2017 Quality of Patient Care Average will be the biggest period-to-period increase of star performance to date with 65% of Amedisys providers at 4+ Stars Four Amedisys providers rated at 5-Stars in the January 2017 Preview Patient Satisfaction (HHCAHPS) results remain stronger than overall industry average Currently TWO care centers below 3-Stars, down from TEN at the start of 2016 and FOUR in previous release. Goal is ZERO by April 2017 Performance in VBP States Relative to Industry Metric Apr 16 Release Jul 16 Release Oct 16 Release Patient Satisfaction Star 3.90 3.88 3.76 Performance Over Industry +7% +6% +5% Patient Satisfaction (PS) 1Large cohort VBP Comp Avg the QPC average of all non-AMED providers with HHCAHPS Stars results in VBP states Internal analysis suggests that we will be a net receiver of funds in 2018 though reimbursement methodology makes +3% achievement challenged QPC Industry Performance PS Industry Performance Note: Top Competitor Avg weighted by CCN count and include LHC, Kindred, AFAM, HLS and BKD Scoring methodology changed dropped entire industry’s PS STAR scores


Slide 8

Quality Correlations – Growth and Turnover Investment in quality to drive clinical distinction shows correlation with growth and turnover General trend is accelerating growth for 4+ STAR rated agencies (6% overall) Similar trend for turnover Correlation between STAR ratings and growth is statistically significant Conclusion: Agencies that perform better on STARs results tended to see better growth/turnover numbers during this period. Summary Summary Star Rating Y/Y Growth Voluntary Turnover 2.5 (11%) N/A 3.0 (4%) 35% 3.5 3% 27% 4.0 6% 23% 4.5 6% 19% 5.0 14% 18%


Slide 9

Becoming Employer of Choice: Improving Return on Human Capital Total voluntary turnover continues to decline, closing in on goal of 22% by end of 2016 Corporate and two regions have achieved annual goal Implementation of HCHB allowing for increase in productivity targets Piloting proprietary resource allocation and productivity tool to maximize visiting clinician’s capacity to achieve growth targets Voluntary Turnover Total Voluntary Turnover Full-Time Voluntary Turnover 3Q’16 Turnover 2Q’16 Turnover 1Q’16 Turnover 83% of visits 5% of visits 10% of visits 2% of visits *Trailing 12 months *


Slide 10

Operational Excellence: Roadmap to EBITDA Improvement HCHB disruption cost deeper than originally estimated but still contained to 2016 Disruption ($M) Incremental disruption driven by: recert rate impact, increased: OT pay, wireless, mileage, and other back office costs Revised Disruption: ~$18,000 per care center plus ~$600,000 of incremental corporate expense per quarter Minimal to no impact in early 2017 *1Q’16 updated from original estimate of ($0.4)


Slide 11

$46M in annualized savings identified - increased visibility into efficiency initiatives *Run rate: $46.4M Efficiencies and Disruption ($M) Operational Excellence: Roadmap to EBITDA Improvement All centers officially on HCHB Nov. 1. Disruption costs have been deeper than originally estimated but contained and return to normal 60-90 days post-implementation. 2/28/17 last post-implementation day for final care center cohort. Tracking towards projected $46M annualized savings by YE 2017 15


Slide 12

Operational Excellence: HCHB Implementation Timeline During 3Q 2016 ~50% of our patient census were in some phase of HCHB implementation. Note: Since rollout started, 1 Hospice and 2 Home Health centers closed Clinician adoption to new workflow Reporting and clinical excellence classes have been effective in driving quality Staffing model savings are being realized Field leaders own implementation process What’s Going Well 6 of 9 regions have experienced recert disruption related to HCHB implementation Have seen temporary increases in wireless, OT/Admin, mileage and help desk costs Incremental increases return to normal with 60-90 days (post HCHB implementation) Implementation Disruption and Impact Update Care Centers Census Total Care Centers in any phase of implementation: 15 74 115 163 174 97 68 0


Slide 13

$82.86 $79.01 Components 3Q’15 3Q’16 Variance Detail Mitigation Plan Salaries $60.12 $62.34 $2.22 $1.00 driven by salary increases $0.50 HCHB disruption due to Admin/OT $0.40 clinician mix Expect normal levels post HCHB. Will reduce as rollout is completed Initiative focused on optimizing clinician mix (RN / LPN, PT / PTA) Contractors $2.48 $2.61 $0.13 Trend down since 1Q16 and sequentially; ~$0.40/visit in total Contractor utilization decreases as clinician capacity increases post HCHB Benefits $9.93 $10.94 $1.01 Health insurance driving ~$1.00 of increase Focused on cost containment and spend optimization Transportation & Supplies $6.48 $6.97 $0.49 HCHB-driven duplicative transportation costs Return to normal levels post HCHB *Visiting Staff CPV $79.01 $82.86 $3.85 Clinical Managers $8.53 $8.72 $0.19 Fixed cost associated with non-visiting clinicians Unit cost reduced as volume increases Total CPV $87.54 $91.58 $4.04 Operational Excellence: Cost Per Visit (CPV) CPV increase driven by planned raises, health insurance costs, and HCHB disruption *Note: Direct comparison with industry competitors CPV calculation


Slide 14

Driving Top Line Growth: Positive Metrics Across Business Segments We continue to grow across all lines of business 234 Opportunities Prospected 45 Opportunities Under Review 13 Active Processes * Includes 3,792 (Q1), 3,958 (Q2) and 3,608 (Q3) completed episodes from Infinity acquisition 7% Growth 14% Growth Personal Care Total Hours / Quarter 37% Growth * Includes 19,000 (3Q15), 60,000 (4Q15), 62,000 (1Q16), 63,000 (2Q16) and 114,000 (3Q16) hours related to acquired assets


Slide 15

CMS Update: Home Health and Hospice Reimbursement Pending detailed claims analysis of Final Rule Home Health Medicare Reimbursement FY16 FY17 Proposed Market basket update 2.3% 2.8% Productivity adjustment (0.4%) (0.5%) Rebasing (2.4%) (2.3%) Nominal case-mix adjustment (1.0%) (1.0%) Net impact – Industry (1.5%) (1.0%) Case mix reweighting / Other Company Specific Impact (0.2%) ~(1.5%) Approximate Impact ($M / %) ($14) / (1.7%) ($20 / (2.5%) Hospice Medicare Reimbursement FY16 FY17 Final Market basket update 2.4% 2.7% Productivity adjustment (0.8%) (0.6%) Routine LOS Reimbursement Change (1.6%) -- Net impact – Industry 0.0% 2.1% Approximate Impact to Amedisys ($M) $0 $6 Annual Pricing Impact – Consolidated ($M) ($14) ($14)


Slide 16

Debt and Liquidity Metrics Net debt defined as total debt outstanding ($97M) less cash balance ($9M). Leverage ratio (net) is defined as net debt divided by last twelve months adjusted EBITDA ($107M). Liquidity defined as the sum of cash balance and available revolving line of credit. Despite deploying over $100M toward acquisitions and share repurchases in the past 15 months, total leverage remains close ~1.0x and stands at 0.8x on a net debt basis Credit facility and cash provide significant dry powder for accretive acquisitions and/or other capital deployment options


Slide 17

Adjusted EBITDA to Free Cash Flow Reconciliation (1,2) The financial results for the three-month periods ended September 30, 2015, December 31, 2015, March 31, 2016, June 30, 2016, and September 30, 2016 are adjusted for certain items and should be considered a non-GAAP financial measure. A reconciliation of these non-GAAP financial measures is included in the corresponding 8-K detailing quarterly results for each respective reporting period. Free cash flow defined as cash flow from operations less routine capital expenditures and required debt repayments.


Slide 18

Income Statement Adjustments (1) The financial results for the three-month periods ended September 30, 2015, December 31, 2015, March 31, 2016, June 30, 2016, and September 30, 2016 are adjusted for certain items and should be considered a non-GAAP financial measure. A reconciliation of these non-GAAP financial measures is included in the corresponding 8-K detailing quarterly results for each respective reporting period. Income Statement $000s Line Item Q414 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 Reduction of cost report reserve Revenue -1059 Third Party Audit reserve Revenue 948 G&A Acquisition costs G&A, Salary and benefits 502 154 101 Restructuring Activity G&A, Salary and benefits 3323 230 1149 1201 2044 HCHB implementation G&A, Salary and benefits -644 307 56 Restructuring Activity G&A, Non-cash compensation -174 -556 -493 Restructuring Activity G&A, Other 1061 849 414 HCHB implementation G&A, Other 2048 2383 2440 2286 1937 Acquisition costs G&A, Other 1046 1202 183 366 Legal fees - non-routine G&A, Other 8000 286 2824 1517 459 374 Disaster Relief G&A, Other 339 Other Items Asset impairment Asset impairment 899 2075 Debt refinance costs Interest expense 3212 Legal settlements Other, Miscellaneous, net -1,113 -307 -1014 -5314 -541 -265 -1242 Miscellaneous, other (income) expense, net Other, Miscellaneous, net -3945 -1563 436 70 -2738 Total -,214 6,427 5,100 -,120 7,766 5,636 1,158 EPS Impact $-0.01 $0.12 $9.1387688013335661E-2 $0.02 $0.14000000000000001 $0.1 $0.02 Home Health Adjustments 3,615 Acquisition related costs 1,046 Exit and restructuring activity costs - HSP #N/A 0 45 0 Department of Justice - legal fees #N/A 0 0 286 459 Inventory and Data Security Reporting Wage and Hour litigation 8,000 Exit and restructuring activity costs #N/A 0 1,646 56 Asset impairment #N/A 899 0 0 DOJ 0 0 0 0 Debt Costs 0 0 0 0 Legal settlement #N/A -1,113 0 -1,014 -,596 Noncontrolling interests impairment charge 0 0 0 0 D&O Proceeds 0 0 0 0 Valley Writeoff 0 0 0 0 Tax Adjustment 0 0 0 0 Gain/loss on sale of care centers #N/A 0 0 -,184 Loss on sale of plane 0 0 0 0 Relator fees Other G&A 0 0 0 Loss on disposal of inpatient facility #N/A 0 0 0 Deferred financing fees #N/A 0 0 3,212 Unrealized gain on investment #N/A 0 -3,945 -1,379 Partial claim recovery Misc, net 0 -,307 0 -4,718 Building write down Asset Impairment 0 0 2,075 HCHB Implementation Other G&A 0 0 2,048 2,383 Life Insurance proceeds Misc, net 0 0 0 Total pre-tax impact -,214 5,439 5,100 2,189 EPS Impact $-0.01 $0.1262119310200544 $9.1387688013335661E-2


Slide 19

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