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0000950123-11-019686.txt : 20110228
0000950123-11-019686.hdr.sgml : 20110228
20110228152017
ACCESSION NUMBER: 0000950123-11-019686
CONFORMED SUBMISSION TYPE: 10-K
PUBLIC DOCUMENT COUNT: 21
CONFORMED PERIOD OF REPORT: 20101231
FILED AS OF DATE: 20110228
DATE AS OF CHANGE: 20110228
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: CHEMED CORP
CENTRAL INDEX KEY: 0000019584
STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-HOME HEALTH CARE SERVICES [8082]
IRS NUMBER: 310791746
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 10-K
SEC ACT: 1934 Act
SEC FILE NUMBER: 001-08351
FILM NUMBER: 11645531
BUSINESS ADDRESS:
STREET 1: 2600 CHEMED CTR
STREET 2: 255 E FIFTH ST
CITY: CINCINNATI
STATE: OH
ZIP: 45202
BUSINESS PHONE: (513)762-6900
MAIL ADDRESS:
STREET 1: 2600 CHEMED CTR
STREET 2: 255 E FIFTH STREET
CITY: CINCINNATI
STATE: OH
ZIP: 45202
FORMER COMPANY:
FORMER CONFORMED NAME: ROTO-ROOTER INC
DATE OF NAME CHANGE: 20030613
FORMER COMPANY:
FORMER CONFORMED NAME: CHEMED CORP
DATE OF NAME CHANGE: 19920703
10-K
1
l41914e10vk.htm
FORM 10-K
e10vk
2600 Chemed Center, 255 East Fifth Street, Cincinnati, Ohio
(Address of principal executive offices)
45202-4726
(Zip Code)
(513) 762-6900
(Registrants Telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
Name of each exchange
on which registered
Capital Stock Par Value $1 Per Share
New York Stock Exchange
Securities registered pursuant to Section 12(b) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of
the Securities Act. Yes þ No o
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or
Section 15(d) of the Act. Yes o No þ
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes þ No o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is
not contained herein, and will not be contained, to the best of registrants knowledge, if
definitive proxy or information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. Yes o No þ
Indicate by check mark whether the registrant has submitted electronically and posted on its
corporate Web site, if any, every Interactive Data File required to be submitted and posted
pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months
(or for such shorter period that the registrant was required to submit and post such files). Yes þ No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check One):
Large accelerated filer þ
Accelerated filer o
Non-accelerated filer o (Do not check if a smaller reporting company)
Smaller reporting company o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Yes o No þ
The aggregate market value of the voting stock held by non-affiliates of the registrant, based upon
the average bid and asked price of said stock on the New York Stock Exchange Composite
Transaction Listing on June 30, 2010 ($54.96 per share), was $1,221,507,160.
At February 15, 2011, 21,124,973 shares of Chemed Capital Stock (par value $1 per share) were
outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Document
Where Incorporated
2010 Annual Report to Stockholders (specified portions)
Proxy Statement for Annual Meeting to be held May 16, 2011
The Company was incorporated in Delaware in 1970 as a subsidiary of W. R. Grace & Co. and
succeeded to the business of W. R. Grace & Co.s Specialty Products Group as of April 30, 1971 and
remained a subsidiary of W. R. Grace & Co. until March 10, 1982. As used herein, Company refers
to Chemed Corporation, and its subsidiaries and Grace refers to W. R. Grace & Co. and its
subsidiaries.
On March 10, 1982, the Company transferred to Dearborn Chemical Company, a wholly owned
subsidiary of the Company, the business and assets of the Companys Dearborn Group, including the
stock of certain subsidiaries within the Dearborn Group, plus $185 million in cash, and Dearborn
Chemical Company assumed the Dearborn Groups liabilities. Thereafter, on March 10, 1982 the
Company transferred all of the stock of Dearborn Chemical Company to Grace in exchange for
33,481,604 shares of the capital stock of the Company owned by Grace with the result that Grace no
longer has any ownership interest in the Company.
On December 31, 1986, the Company completed the sale of substantially all of the business and
assets of Vestal Laboratories, Inc., a wholly owned subsidiary. The Company received cash payments
aggregating approximately $67.4 million over the four-year period following the closing, the
substantial portion of which was received on December 31, 1986.
On April 2, 1991, the Company completed the sale of DuBois Chemicals, Inc. (DuBois), a
wholly owned subsidiary, to the Diversey Corporation (Diversey), then a subsidiary of The Molson
Companies Ltd. Under terms of the sale, Diversey agreed to pay the Company net cash payments
aggregating $223.4 million, including deferred payments aggregating $32.4 million.
On December 21, 1992, the Company acquired The Veratex Corporation and related businesses
(Veratex Group) from Omnicare, Inc. The purchase price was $62.1 million in cash paid at
closing, plus a post-closing payment of $1.5 million (paid in April 1993) based on the net assets
of Veratex.
Effective January 1, 1994, the Company acquired all the capital stock of Patient Care, Inc.
(Patient Care), for cash payments aggregating $20.6 million, plus 35,000 shares of the Companys
Capital Stock. An additional cash payment of $1.0 million was made on March 31, 1996 and another
payment of $1.0 million was made on March 31, 1997.
In July 1995, the Companys Omnia Group (formerly Veratex Group) completed the sale of the
business and assets of its Veratex Retail division to Henry Schein, Inc. (HSI) for $10 million in
cash plus a $4.1 million note for which payment was received in December 1995.
Effective September 17, 1996 the Company completed a merger of a subsidiary of the Company,
Chemed Acquisition Corp., and Roto-Rooter, Inc. pursuant to a Tender Offer commenced on August 8,
1996 to acquire any and all of the outstanding shares of Common Stock of Roto-Rooter, Inc. for
$41.00 per share in cash.
On September 24, 1997 the Company completed the sale of its wholly owned business comprising
the Omnia Group to Banta Corporation for $50 million in cash and $2.3 million in deferred payments.
Effective September 30,1997, the Company completed a merger between its 81-percent-owned
subsidiary, National Sanitary Supply Company, and a wholly owned subsidiary of Unisource Worldwide,
Inc. for $21.00 per share, with total payments of $138.3 million.
Effective October 11, 2002, the Company sold its Patient Care subsidiary (Patient Care) to an
investor group that included Schroder Ventures Life Sciences Group, Oak Investment Partners,
Prospect Partners and Salix
Ventures. The cash proceeds to the Company totaled $57.5 million, of which $5.0 million was placed
in escrow pending settlement of Patient Cares receivables with third-party payers. Of this
amount, $2.5 million was distributed as of October 2003, $1.7 million was distributed as of
November 2004 and the remainder was distributed as of October 2006.
Effective February 24, 2004, the Company completed a merger of its wholly owned indirect
subsidiary, Marlin Merger Corp., and Vitas Healthcare Corporation. Under the terms of the merger
agreement, Vitas stockholders received cash of $30.00 per share. The transaction, including the
refinancing of existing Vitas debt and other payments made in connection with the merger, totaled
approximately $415 million in cash.
On December 22, 2004, the Board of Directors authorized the discontinuance of the operations
of the Companys Service America segment, through an asset sale to the employees of Service
America. The acquiring corporation purchased a substantial majority of Service Americas assets in
exchange for assuming substantially all of Service Americas liabilities in May 2005. Included in
the assets acquired was a receivable from the Company for approximately $4.7 million. The Company
paid $1 million of the receivable upon closing and the remainder was paid over the following year
in 11 equal monthly installments.
During 2010 the Company conducted its business operations in two segments: Vitas Group
(Vitas) and the Roto-Rooter Group (Roto-Rooter).
Forward Looking Statements
This Annual Report contains or incorporates by reference certain forward looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995. The Company intends
such statements to be subject to the safe harbors created by that legislation. Such statements
involve risks and uncertainties that could cause actual results of operations to differ materially
from these forward looking statements.
Financial Information about Industry Segments
The required segment and geographic data for the Companys continuing operations (as described
below) for three years ended December 31, 2008, 2009 and 2010 are shown in Note 5 of the Notes to
Consolidated Financial Statements on pages 17-18 of the 2010 Annual Report to Stockholders and are
incorporated herein by reference.
Description of Business by Segment
The information called for by this item is included within Note 5 of the Notes to Consolidated
Financial Statements appearing on pages 17-18 of the 2010 Annual Report to Stockholders is
incorporated herein by reference.
Product and Market Development
Each segment of the Companys business engages in a continuing program for the development and
marketing of new services and products. While new products and services and new market development
are important factors for the growth of each active segment of the Companys business, the Company
does not expect that any new products and services or marketing effort, including those in the
development stage, will require the investment of a material amount of the Companys assets.
Raw Materials
The principal raw materials needed for the Companys manufacturing operations are purchased
from United States sources. Product sales from goods manufactured by Roto-Rooter represent less
than 3% of Chemeds
total service revenues and sales. No segment of the Company experienced any material raw material
shortages during 2010, although such shortages may occur in the future. Products manufactured and
sold by the Companys Roto-Rooter segment generally may be reformulated to avoid the adverse impact
of specific raw material shortage.
Patents, Service Marks and Licenses
The Roto-Rooterâ trademarks and service marks have been used and advertised since 1935
by Roto-Rooter Corporation, a wholly owned indirect subsidiary of the Company. The
Roto-Rooterâ marks are among the most highly recognized trademarks and service marks in the
United States. The Company considers the Roto-Rooterâ marks to be a valuable asset and a
significant factor in the marketing of Roto-Rooters franchises, products and services and the
products and services provided by its franchises.
Vitas and Innovative Hospice Care are trademarks and servicemarks of Vitas Healthcare
Corporation. The Company and its subsidiaries also own certain trade secrets including training
manuals, cost information, customer information and software source codes.
Competition
Roto-Rooter
All aspects of the sewer, drain, and pipe cleaning and plumbing repair businesses are highly
competitive. Competition is, however, fragmented in most markets with local and regional firms
providing the primary competition. The principal methods of competition are advertising, range of
services provided, name recognition, emergency-service availability, speed and quality of customer
service, service guarantees, and pricing.
No individual customer or market group is critical to the total sales of this segment.
Vitas
Hospice care in the United States is competitive. Because programs for hospice services are
generally uniform, Vitas competes primarily on the basis of its ability to deliver quality,
responsive services. Vitas is one of the nations largest provider of hospice services in a market
dominated primarily by small, non-profit, community-based hospices. Approximately 49% of all
hospices are not-for-profit. Because the hospice care market is highly fragmented, Vitas competes
with a large number of organizations.
Vitas also competes with a number of national and regional hospice providers, including
Gentiva Health Services, Inc., hospitals, nursing homes, home health agencies and other health care
providers. Many providers offer home care to patients who are terminally ill, and some actively
market palliative care and hospice-like programs. In addition, various health care companies have
diversified into the hospice market. Some of these health care companies have greater financial
resources than Vitas.
Relatively few barriers to entry exist in the majority of markets served by Vitas.
Accordingly, other companies that are not currently providing hospice care may enter these markets
and expand the variety of services they offer to include hospice.
Research and Development
The Company engages in a continuous program directed toward the development of new services,
products and processes, the improvement of existing services, products and processes, and the
development of new and different uses of existing products. The research and development
expenditures from continuing operations have not been nor are they expected to be material.
Roto-Rooters franchising activities are subject to various federal and state franchising laws
and regulations, including the rules and regulations of the Federal Trade Commission (the FTC)
regarding the offering or sale of franchises. The rules and regulations of the FTC require that
Roto-Rooter provide all the prospective franchises with specific information regarding the
franchise program and Roto-Rooter in the form of a detailed franchise offering circular. In
addition, a number of states require Roto-Rooter to register its franchise offering prior to
offering or selling franchises in the state. Various state laws also provide for certain rights in
favor of franchisees, including (i) limitations on the franchisors ability to terminate a
franchise except for good cause, (ii) restrictions on the franchisors ability to deny renewal of a
franchise, (iii) circumstances under which the franchisor may be required to purchase certain
inventory of franchisees when a franchise is terminated or not renewed in violation of such laws,
and (iv) provisions relating to arbitration. Roto-Rooters ability to engage in the plumbing
repair business is also subject to certain limitations and restrictions imposed by state and local
licensing laws and regulations.
Vitas
General. The health care industry and Vitas hospice programs are subject to extensive
federal and state regulation. Vitas hospices are licensed as required under state law as either
hospices or home health agencies, or both, depending on the regulatory requirements of each
particular state. In addition, Vitas hospices are required to meet certain conditions of
participation to be eligible to receive payments as hospices under Medicare and Medicaid programs.
All of Vitas hospices, other than those currently in development, are certified for participation
as hospices in the Medicare program, and are also eligible to receive payments as hospices from the
Medicaid program in each of the states in which Vitas operates. Vitas hospices are subject to
periodic survey by governmental authorities or private accrediting entities to assure compliance
with state licensing, certification and accreditation requirements.
Medicare Conditions of Participation. Federal regulations require that a hospice program
satisfy certain Conditions Of Participation (COP) to be certified and receive Medicare payment
for the services it provides. Failure to comply with the conditions of participation may result in
sanctions, up to and including decertification from the Medicare program. See Surveys and Audits
below.
The Medicare COP for hospice programs include the following:
Governing Body. Each hospice must have a governing body that assumes full responsibility for
the policies and the overall operation of the hospice and for ensuring that all services are
provided in a manner consistent with accepted standards of practice. The governing body must
designate one individual who is responsible for the day-to-day management of the hospice.
Medical Director. Each hospice must have a medical director who is a physician and who
assumes responsibility for overseeing the medical component of the hospices patient care program.
Direct Provision of Core Services. Medicare limits those services for which the hospice may
use individual independent contractors or contract agencies to provide care to patients.
Specifically, substantially all nursing, social work, and counseling services must be provided
directly by hospice employees meeting specific educational and professional standards. During
periods of peak patient loads or under extraordinary circumstances, the hospice may be permitted to
use contract workers, but the hospice must agree in writing to maintain professional, financial and
administrative responsibility for the services provided by those individuals or entities.
Professional Management of Non-Core Services. A hospice may arrange to have non-core services
such as therapy services, home health aide services, medical supplies or drugs provided by a
non-employee or outside entity.
If the hospice elects to use an independent contractor to provide non-core services, however,
the hospice must retain professional management responsibility for the arranged services and ensure
that the services are furnished in a safe and effective manner by qualified personnel, and in
accordance with the patients plan of care.
Plan of Care. The patients attending physician, the medical director or the designated
hospice physician, and interdisciplinary team must establish an individualized written plan of care
prior to providing care to any hospice patient. The plan must assess the patients needs and
identify services to be provided to meet those needs and must be reviewed and updated at specified
intervals.
Continuation of Care. A hospice may not discontinue or reduce care provided to a Medicare
beneficiary if the individual becomes unable to pay for that care.
Informed Consent. The hospice must obtain the informed consent of the hospice patient, or the
patients legal representative, that specifies the type of care services that may be provided as
hospice care.
Training. A hospice must provide ongoing training for its employees.
Quality Assurance. A hospice must conduct ongoing and comprehensive self-assessments of the
quality and appropriateness of care it provides and that its contractors provide under arrangements
to hospice patients.
Interdisciplinary Team. A hospice must designate an interdisciplinary team to provide or
supervise hospice care services. The interdisciplinary team develops and updates plans of care,
and establishes policies governing the day-to-day provision of hospice services. The team must
include at least a physician, registered nurse, social worker and spiritual or other counselor. A
registered nurse must be designated to coordinate the plan of care.
Volunteers. Hospice programs are required to recruit and train volunteers to provide patient
care services or administrative services. Volunteer services must be provided in an amount equal
to at least five percent of the total patient care hours provided by all paid hospice employees and
contract staff.
Licensure. Each hospice and all hospice personnel must be licensed, certified or registered
in accordance with applicable federal, state and local laws and regulations.
Central Clinical Records. Hospice programs must maintain clinical records for each hospice
patient that are organized in such a way that they may be easily retrieved. The clinical records
must be complete and accurate and protected against loss, destruction, and unauthorized use.
Surveys and Audits. Hospice programs are subject to periodic survey by federal and state
regulatory authorities and private accrediting entities to ensure compliance with applicable
licensing and certification requirements and accreditation standards. Regulators conduct periodic
surveys of hospice programs and provide reports containing statements of deficiencies for alleged
failure to comply with various regulatory requirements. Survey reports and statements of
deficiencies are common in the healthcare industry. In most cases, the hospice program and
regulatory authorities will agree upon any steps to be taken to bring the hospice into compliance
with applicable regulatory requirements. In some cases, however, a state or federal regulatory
authority may take a number of adverse actions against a hospice program, including the imposition
of fines, temporary suspension of admission of new patients to the hospices service or, in extreme
circumstances, decertification from participation in the Medicare or Medicaid programs or
revocation of the hospices license.
From time to time Vitas receives survey reports containing statements of deficiencies. Vitas
reviews such reports and takes appropriate corrective action. Vitas believes that its hospices are
in material compliance with applicable licensure and certification requirements. If a Vitas
hospice were found to be out of compliance and actions were taken against a Vitas hospice, they
could materially adversely affect the hospices ability to continue to
operate, to provide certain services and to participate in the Medicare and Medicaid programs,
which could materially adversely affect Vitas.
Billing Audits/ Claims Reviews. The Medicare program and its fiscal intermediaries and other
payors periodically conduct pre-payment or post-payment reviews and other reviews and audits of
health care claims, including hospice claims. There is pressure from state and federal governments
and other payors to scrutinize health care claims to determine their validity and appropriateness.
In order to conduct these reviews, the payor requests documentation from Vitas and then reviews
that documentation to determine compliance with applicable rules and regulations, including the
eligibility of patients to receive hospice benefits, the appropriateness of the care provided to
those patients and the documentation of that care. During the past several years, Vitas claims
have been subject to review and audit. We make appropriate provisions in our accounting records to
reduce our revenue for anticipated denial of payment related to these audits and reviews. We
believe our hospice programs comply with all payor requirements at the time of billing. However,
we cannot predict whether future billing reviews or similar audits by payors will result in
material denials or reductions in revenue.
Certificate of Need Laws and Other Restrictions. Some states, including Florida, have
certificate of need or similar health planning laws that apply to hospice care providers. These
states may require some form of state agency review or approval prior to opening a new hospice
program, to adding or expanding hospice services, to undertaking significant capital expenditures
or under other specified circumstances. Approval under these certificate of need laws is
generally conditioned on the showing of a demonstrable need for services in the community. Vitas
may seek to develop, acquire or expand hospice programs in states having certificate of need laws.
To the extent that state agencies require Vitas to obtain a certificate of need or other similar
approvals to expand services at existing hospice programs or to make acquisitions or develop
hospice programs in new or existing geographic markets, Vitas plans could be adversely affected by
a failure to obtain such certificate or approval. In addition, competitors may seek
administratively or judicially to challenge such an approval or proposed approval by the state
agency. Such a challenge, whether or not ultimately successful, could adversely affect Vitas.
Limitations on For-Profit Ownership. A few states have laws that restrict the development and
expansion of for-profit hospice programs. For example, in New York, a hospice generally cannot be
owned by a corporation that has another corporation as a stockholder. These types of restrictions
could affect Vitas ability to expand into New York, or in other jurisdictions with similar
restrictions.
Limits on the Acquisition or Conversion of Non-Profit Health Care Organizations. A number of
states have enacted laws that restrict the ability of for-profit entities to acquire or otherwise
assume the operations of a non-profit health care provider. Some states may require government
review, public hearings, and/or government approval of transactions in which a for-profit entity
proposes to purchase certain non-profit healthcare organizations. Heightened scrutiny of these
transactions may significantly increase the costs associated with future acquisitions of non-profit
hospice programs in some states, otherwise increase the difficulty in completing those acquisitions
or prevent them entirely. Vitas cannot assure that it will not encounter regulatory or
governmental obstacles in connection with any proposed acquisition of non-profit hospice programs
in the future.
Professional Licensure and Participation Agreements. Many hospice employees are subject to
federal and state laws and regulations governing the ethics and practice of their profession,
including physicians, physical, speech and occupational therapists, social workers, home health
aides, pharmacists and nurses. In addition, those professionals who are eligible to participate in
the Medicare, Medicaid or other federal health care programs as individuals must not have been
excluded from participation in those programs at any time.
State Licensure of Hospice. Each of Vitas hospices must be licensed in the state in which it
operates. State licensure rules and regulations require that Vitas hospices maintain certain
standards and meet certain requirements, which may vary from state to state. Vitas believes that
its hospices are in material compliance with applicable licensure requirements. If a Vitas hospice
were found to be out of compliance and actions were taken
against a Vitas hospice, they could materially adversely affect the hospices ability to continue
to operate, to provide certain services and to participate in the Medicare and Medicaid programs,
which could materially adversely affect Vitas.
Overview of Government PaymentsGeneral. Over 90% of Vitas revenue consisted of payments
from the Medicare and Medicaid programs. Such payments are made primarily on a per diem basis.
Under the per diem reimbursement methodology, Vitas is essentially at risk for the cost of eligible
services provided to hospice patients. Profitability is therefore largely dependent upon Vitas
ability to manage the costs of providing hospice services to patients. Increases in operating
costs, such as labor and supply costs that are subject to inflation and other increases, without a
compensating increase in Medicare and Medicaid rates, could have a material adverse effect on
Vitas business in the future. The Medicare and Medicaid programs are increasing pressure to
control health care costs and to decrease or limit increases in reimbursement rates for health care
services. As with most government programs, the Medicare and Medicaid programs are subject to
statutory and regulatory changes, possible retroactive and prospective rate and payment
adjustments, administrative rulings, freezes and funding reductions, all of which may adversely
affect the level of program payments and could have a material adverse effect on Vitas business.
Vitas levels of revenues and profitability are subject to the effect of legislative and regulatory
changes, including possible reductions in coverage or payment rates, or changes in methods of
payment, by the Medicare and Medicaid programs.
Overview of Government Payments Medicare
Medicare Eligibility Criteria. To receive Medicare payment for hospice services, the hospice
medical director and, if the patient has one, the patients attending physician, must certify and
describe in a brief narrative that the patient has a life expectancy of six months or less if the
illness runs its normal course. This determination is made based on the physicians clinical
judgement. Due to the uncertainty of such prognoses, however, it is likely and expected that some
percentage of hospice patients will not die within six months of entering a hospice program. The
Medicare program (among other third-party payers) recognizes that terminal illnesses often do not
follow an entirely predictable course, and therefore the hospice benefit remains available to
beneficiaries so long as the hospice physician or the patients attending physician continues to
certify that the patients life expectancy remains six months or less. Specifically, the Medicare
hospice benefit provides for two initial 90-day benefit periods followed by an unlimited number of
60-day periods. In order to qualify for hospice care, a Medicare beneficiary must elect hospice
care and waive any right to other Medicare benefits related to his or her terminal illness. A
Medicare beneficiary may revoke his or her election of the Medicare hospice benefit at any time and
resume receiving regular Medicare benefits. The patient may elect the hospice benefit again at a
later date so long as he or she remains eligible. Increased regulatory scrutiny of compliance with
the Medicare six-month eligibility rule has impacted the hospice industry. The Medicare program,
however, has reaffirmed that Medicare hospice beneficiaries are not limited to six months of
coverage and that there is no limit on how long a Medicare beneficiary can continue to receive
hospice benefits and services, provided that the beneficiary continues to meet the eligibility
criteria under the Medicare hospice program.
Levels of Care. Medicare pays for hospice services on a prospective payment system basis
under which Vitas receives an established payment rate for each day that it provides hospice
services to a Medicare beneficiary. These rates are subject to annual adjustments for inflation
and vary based upon the geographic location where the services are provided. The rate Vitas
receives depends on which of the following four levels of care is being provided to the
beneficiary:
Routine Home Care. The routine home care rate is paid for each day that a patient is in a
hospice program and is not receiving one of the other categories of hospice care. The
routine home care rate does not vary based upon the volume or intensity of services provided
by the hospice program.
General Inpatient Care. The general inpatient care rate is paid when a patient requires
inpatient services for a short period for pain control or symptom management which cannot be
managed in other settings.
General inpatient care services must be provided in a Medicare or Medicaid certified
hospital or long-term care facility or at a freestanding inpatient hospice facility with the
required registered nurse staffing.
Continuous Home Care. Continuous home care, which Vitas refers to as Intensive Comfort
Care, is provided to patients while at home, during periods of crisis when intensive
monitoring and care, primarily nursing care, is required in order to achieve palliation or
management of acute medical symptoms. Continuous home care requires a minimum of 8 hours of
care within a 24-hour day, which begins and ends at midnight. The care must be
predominantly nursing care provided by either a registered nurse or licensed practical
nurse. While the published Medicare continuous home care rates are daily rates, Medicare
actually pays for continuous home care in fifteen minute increments. This fifteen minute
rate is calculated by dividing the daily rate by 96.
Respite Care. Respite care permits a hospice patient to receive services on an inpatient
basis for a short period of time in order to provide relief for the patients family or
other caregivers from the demands of caring for the patient. A hospice can receive payment
for respite care for a given patient for up to five consecutive days at a time, after which
respite care is reimbursed at the routine home care rate.
Medicare Payment for Physician Services. Payment for direct patient care physician services
delivered by hospice physicians is billed separately by the hospice to the Medicare fiscal
intermediary and paid at the lesser of the actual charge or the Medicare allowable charge for these
services. This payment is in addition to the per diem rates Vitas receives for hospice care.
Payment for hospice physicians administrative and general supervisory activities is included in
the daily rates discussed above. Payments for attending physician professional services (other
than services furnished by hospice physicians) are not paid to the hospice, but rather are paid
directly to the attending physician by the Medicare fiscal intermediary. For fiscal 2010, 2% of
Vitas net revenue was attributable to physician services.
Medicare Limits on Hospice Care Payments. Medicare payments for hospice services are subject
to two additional limits or caps. Each of Vitas hospice programs is separately subject to both
of these caps. Both of these caps are determined on an annual basis for the period running
from November 1 through October 31 of each year.
First, under a Medicare rule known as the 80-20 rule applicable to the Medicare inpatient
services, if the number of inpatient care days furnished by a hospice to Medicare beneficiaries
exceeds 20% of the total days of hospice care furnished by such hospice to Medicare beneficiaries,
Medicare payments to the hospice for inpatient care days exceeding the cap are reduced to the
routine home care rate. Vitas has never exceeded the inpatient cap.
Second, Medicare payments to a hospice are also subject to a separate cap based on overall
average payments per admission. Any payments exceeding this overall hospice cap must be refunded
by the hospice. This cap was set at $23,874.98 per admission for the twelve-month period ended on
October 31, 2010, and is adjusted annually to account for inflation. Vitas hospices may be
subject to future payment reductions or recoupments as the result of this cap. As of December 31,
2010 we recorded a $62,000 liability for 2010 related to one program. We recorded a cap liability
in the fourth quarter of 2010 of $1.1 million for three programs for the first quarter of the 2011
Medicare cap year measurement period.
Medicare Managed Care Programs. The Medicare program has entered into contracts with managed
care companies to provide managed care benefits to Medicare beneficiaries who elect to participate
in managed care programs. These managed care programs are commonly referred to as Medicare HMOs,
Medicare + Choice or Medicare risk products. Vitas provides hospice care to Medicare beneficiaries
who participate in these managed care programs, and Vitas is paid for services provided to these
beneficiaries in the same way and at the same rates as those of other Medicare beneficiaries who
are not in a Medicare managed care program. Under current Medicare policy, Medicare pays the
hospice directly for services provided to these managed care program participants and then reduces
the standard per-member, per-month payment that the managed care program otherwise receives.
Medicaid Coverage and Reimbursements. State Medicaid programs are another source of Vitas
net patient revenue. Medicaid is a state-administered program financed by state funds and matching
federal funds to provide medical assistance to the indigent and certain other eligible persons. In
1986, hospice services became an optional state Medicaid benefit. For those states that elect to
provide a hospice benefit, the Medicaid program is required to pay the hospice at rates at least
equal to the rates provided under Medicare and calculated using the same methodology. States
maintain flexibility to establish their own hospice election procedures and to limit the number and
duration of benefit periods for which they will pay for hospice services. Reimbursement from state
Medicaid programs in 2010 accounted for 5% of Vitas revenues.
Nursing Home Residents. For Vitas patients who receive nursing home care under a state
Medicaid program and who elect hospice care under Medicare or Medicaid, Vitas contracts with
nursing homes for the nursing homes provision of room and board services. In addition to the
applicable Medicare or Medicaid hospice daily or hourly rate, the state generally must pay Vitas an
amount equal to at least 95% of the Medicaid daily nursing home rate for room and board services
furnished to the patient by the nursing home. Under Vitas standard nursing home contracts, Vitas
pays the nursing home for these room and board services at the Medicaid daily nursing home rate.
Adjustments to Medicare and Medicaid Payment Rates. Payment rates under the Medicare and
Medicaid programs are adjusted annually based upon the Hospital Market Basket Index and the
Consumer Price Index; however, the adjustments have historically been less than actual inflation.
On October 1, 2007, the base rates increased by 3.3%. On October 1, 2008 the base rates increased
by 2.5%. This rate increased by approximately 1% in February 2009. On October 1, 2009 the base
rate increased by 1.4%. On October 1, 2010 the base rates increased by 1.8%. These base rates are
further modified by the Hospice Wage Index to reflect local differences in wages according to the
revised wage index. It is possible that there will be further modifications to the rate structure
under which the Medicare or Medicaid programs pay for hospice care services. Any future reductions
in the rate of increase in Medicare and Medicaid payments may have an adverse impact on Vitas net
patient service revenue and profitability.
Other Healthcare Regulations
Federal and State Anti-Kickback Laws and Safe Harbor Provisions. The federal Anti-Kickback
Law makes it a felony to knowingly and willingly offer, pay, solicit or receive any form of
remuneration in exchange for referring, recommending, arranging, purchasing, leasing or ordering
items or services covered by a federal health care program including Medicare or Medicaid. The
Anti-Kickback Law applies regardless of whether the remuneration is provided directly or
indirectly, in cash or in kind. Although the Anti-Kickback statute does not prohibit all financial
transactions or relationships that providers of healthcare items or services may have with each
other, interpretations of the law have been very broad. Under current law, courts and federal
regulatory authorities have stated that this law is violated if even one purpose (as opposed to the
sole or primary purpose) of the arrangement is to induce referrals.
Violations of the Anti-Kickback Law carry potentially severe penalties including imprisonment
of up to five years, criminal fines of up to $25,000 per act, civil money penalties of up to
$50,000 per act, and additional damages of up to three times the amounts claimed or remuneration
offered or paid. Federal law also authorizes exclusion from the Medicare and Medicaid programs for
violations of the Anti-Kickback Law.
The Anti-Kickback Law contains several statutory exceptions to the broad prohibition. In
addition, Congress authorized the Office of Inspector General (OIG) to publish numerous safe
harbors that exempt some practices from enforcement action under the Anti-Kickback Law and related
laws. These statutory exceptions and regulatory safe harbors protect various bona fide employment
relationships, contracts for the rental of space or equipment, personal service arrangements, and
management contracts, among other things, provided that certain
conditions set forth in the statute or regulations are satisfied. The safe harbor regulations,
however, do not comprehensively describe all lawful relationships between healthcare providers and
referral sources, and the failure of an arrangement to satisfy all of the requirements of a
particular safe harbor does not mean that the arrangement is unlawful. Failure to comply with the
safe harbor provisions, however, may mean that the arrangement will be subject to scrutiny.
Many states, including states where Vitas does business, have adopted similar prohibitions
against payments that are intended to induce referrals of patients, regardless of the source of
payment. Some of these state laws lack explicit safe harbors that may be available under federal
law. Sanctions under these state anti-kickback laws may include civil money penalties, license
suspension or revocation, exclusion from the Medicare or Medicaid programs, and criminal fines or
imprisonment. Little precedent exists regarding the interpretation or enforcement of these
statutes.
Vitas is required under the Medicare conditions of participation and some state licensing laws
to contract with numerous healthcare providers and practitioners, including physicians, hospitals
and nursing homes, and to arrange for these individuals or entities to provide services to Vitas
patients. In addition, Vitas has contracts with other suppliers, including pharmacies, ambulance
services and medical equipment companies. Some of these individuals or entities may refer, or be
in a position to refer, patients to Vitas, and Vitas may refer, or be in a position to refer,
patients to these individuals or entities. These arrangements may not qualify for a safe harbor.
Vitas from time to time seeks guidance from regulatory counsel as to the changing and evolving
interpretations and the potential applicability of these anti-kickback laws to its programs, and in
response thereto, takes such actions as it deems appropriate. The Company generally believes that
Vitas contracts and arrangements with providers, practitioners and suppliers do not violate
applicable anti-kickback laws. However, the Company cannot assure that such laws will ultimately
be interpreted in a manner consistent with Vitas practices.
HIPAA Anti-Fraud Provisions. HIPAA includes several revisions to existing health care fraud
laws by permitting the imposition of civil monetary penalties in cases involving violations of the
anti-kickback statute or contracting with excluded providers. In addition, HIPAA created new
statutes making it a federal felony to engage in fraud, theft, embezzlement, or the making of false
statements with respect to healthcare benefit programs, which include private, as well as
government programs. In addition, federal enforcement officials have the ability to exclude from
the Medicare and Medicaid programs any investors, officers and managing employees associated with
business entities that have committed healthcare fraud, even if the investor, officer or employee
had no actual knowledge of the fraud.
OIG Fraud Alerts, Advisory Opinions and Other Program Guidance. In 1976, Congress established
the OIG to, among other things, identify and eliminate fraud, abuse and waste in HHS programs. To
identify and resolve such problems, the OIG conducts audits, investigations and inspections across
the country and issues public pronouncements identifying practices that may be subject to
heightened scrutiny. In the last several years, there have been a number of hospice related audits
and reviews conducted. These reviews and recommendations have included:
Ensuring that Medicare hospice eligibility determinations are made in accordance
with the Medicare regulations; and
Revising the annual cap on hospice benefits to better reflect the cost of care
provided.
From time to time, various federal and state agencies, such as HHS and the OIG, issue a
variety of pronouncements, including fraud alerts, the OIGs Annual Work Plan and other reports,
identifying practices that may be subject to heightened governmental scrutiny. The Company cannot
predict what, if any, changes may be implemented in coverage, reimbursement, or enforcement
policies as a result of these OIG reviews and recommendations.
On April 7, 2005 the Company announced the Office of Inspector General (OIG) for the
Department of Health and Human Services served Vitas with civil subpoenas relating to Vitas
alleged failure to appropriately bill Medicare and Medicaid for hospice services. As part of this
investigation, the OIG selected medical records for 320 past and current patients from Vitas three
largest programs for review. It also sought policies and procedures dating back to 1998 covering
admissions, certifications, recertifications, and discharges. During the third quarter of 2005 and
again in May 2006, the OIG requested additional information of the Company. The court dismissed a
related qui tam complaint filed in U.S. District Court for the Southern District of Florida with
prejudice in July 2007. The plaintiffs appealed this dismissal, which the Court of Appeals
affirmed. The government continues to investigate the complaints allegations. In March 2009, we
received a letter from the government reiterating the basis of their investigation.
In May 2009, Vitas received an administrative subpoena from the U.S. Department of Justice
requesting Vitas deliver to the OIG documents, patient records, and policy and procedure manuals
for headquarters and its Texas programs concerning hospice services provided for the period
January 1, 2003 to the date of the letter. In August 2009, the OIG selected medical records for 59
past and current patients from a Texas program for review. Based on the early stage of the
investigation and the limited information we have at this time, we cannot predict the outcome of
this investigation. We believe that we are in material compliance with Medicare and Medicaid rules
and regulations applicable to hospice providers. In February 2010, we received a companion request
(CID) to this from the State of Texas Attorney General, seeking related documents. In September
2010 we recived a second CID and a second administrative subpoena seeking related documents.
Federal False Claims Acts. The federal law includes several criminal and civil false claims
provisions, which provide that knowingly submitting claims for items or services that were not
provided as represented may result in the imposition of multiple damages, administrative civil
money penalties, criminal fines, imprisonment, and/or exclusion from participation in federally
funded healthcare programs, including Medicare and Medicaid. In addition, the OIG may impose
extensive and costly corporate integrity requirements upon a healthcare provider that is the
subject of a false claims judgement or settlement. These requirements may include the creation of
a formal compliance program, the appointment of a government monitor, and the imposition of annual
reporting requirements and audits conducted by an independent review organization to monitor
compliance with the terms of the agreement and relevant laws and regulations.
The Civil False Claims Act prohibits the known filing of a false claim or the known use of
false statements to obtain payments. Penalties for violations include fines ranging from $5,500 to
$11,000, plus treble damages, for each claim filed. Provisions in the Civil False Claims Act also
permit individuals to bring actions against individuals or businesses in the name of the government
as so called qui tam relators. If a qui tam relators claim is successful, he or she is entitled
to share the governments recovery.
Both direct enforcement activity by the government and quit tam actions have increased
significantly in recent years and have increased the risk that a healthcare company may have to
defend a false claims action, pay fines or be excluded from the Medicare and/or Medicaid programs
as a result of an investigation arising out of this type of an action. Because of the complexity
of the government regulations applicable to the healthcare industry, the Company cannot assure that
Vitas will not be the subject of other actions under the False Claims Act.
State False Claims Laws. Several states in which Vitas currently operates have adopted state
false claims laws that mirror to some degree the federal false claims laws. While these statutes
vary in scope and effect, the penalties for violating these false claims laws include
administrative, civil and/or criminal fines and penalties, imprisonment, and the imposition of
multiple damages.
The Stark Law and State Physician Self-Referral Laws. Section 1877 of the Social Security
Act, commonly known as the Stark Law, prohibits physicians from referring Medicare or Medicaid
patients for designated health services to entities in which they hold an ownership or investment
interest or with whom they have a compensation
arrangement, subject to a number of statutory and regulatory exceptions. Penalties for violating
the Stark Law are severe and include:
Denial of payment;
Civil monetary penalties of $15,000 per referral or $1,000,000 for circumvention
schemes;
Assessments equal to 200% of the dollar value of each such service provided; and
Exclusion from the Medicare and Medicaid programs.
Hospice care itself is not specifically listed as a designated health service; however,
certain services that Vitas provides, or in the future may provide, are among the services
identified as designated health services for purposes of the self-referral laws. The Company
cannot assure that future regulatory changes will not result in hospice services becoming subject
to the Stark Laws ownership, investment or compensation prohibitions in the future.
Many states where Vitas operates have laws similar to the Stark Law, but with broader effect
because they apply regardless of the source of payment for care. Penalties similar to those listed
above as well as the loss of state licensure may be imposed in the event of a violation of these
state self-referral laws. Little precedent exists regarding the interpretation or enforcement of
these statutes.
Civil Monetary Penalties. The Civil Monetary Penalties Statute provides that civil penalties
ranging between $10,000 and $50,000 per claim or act may be imposed on any person or entity that
knowingly submits improperly filed claims for federal health benefits or that offers or makes
payment to induce a beneficiary or provider to reduce or limit the use of health care services or
to use a particular provider or supplier. Civil monetary penalties may be imposed for violations
of the anti-kickback statute and for the failure to return known overpayments, among other things.
Prohibition on Employing or Contracting with Excluded Providers. The Social Security Act and
federal regulations state that individuals or entities that have been convicted of a criminal
offense related to the delivery of an item or service under Medicare or Medicaid programs or that
have been convicted, under state and federal law, of a criminal offense relating to neglect or
abuse of residents in connection with the delivery of a healthcare item or service cannot
participate in any federal health care programs, including Medicare and Medicaid. Additionally,
individuals and entities convicted of fraud, that have had their licenses revoked or suspended, or
that have failed to provide services of adequate quality also may be excluded from the Medicare and
Medicaid programs. Federal regulations prohibit Medicare providers, including hospice programs,
from submitting claims for items or services or their related costs if an excluded provider
furnished those items or services. The OIG maintains a list of excluded persons and entities.
Nonetheless, it is possible that Vitas might unknowingly bill for services provided by an excluded
person or entity with whom it contracts. The penalty for contracting with an excluded provider may
range from civil monetary penalties of $50,000 and damages of up to three times the amount of
payment that was inappropriately received.
Corporate Practice of Medicine and Fee Splitting. Most states have laws that restrict or
prohibit anyone other than a licensed physician, including business entities such as corporations,
from employing physicians and/or prohibit payments or fee-splitting arrangements between physicians
and corporations or unlicensed individuals. Penalties for violations of corporate practice of
medicine and fee-splitting laws vary from state to state, but may include civil or criminal
penalties, the restructuring or termination of the business arrangements between the physician and
unlicensed individual or business entity, or even the loss of the physicians license to practice
medicine. These laws vary widely from state to state both in scope and origin (e.g. statute,
regulation, Attorney General opinion, court ruling, agency policy) and in most instances have been
subject to only limited interpretation by the courts or regulatory bodies.
Vitas employs or contracts with physicians to provide medical direction and patient care
services to its patients. Vitas has made efforts in those states where certain contracting or fee
arrangements are restricted or prohibited to structure those arrangements in compliance with the
applicable laws and regulations. Despite these efforts, however, the Company cannot assure that
agency officials charged with enforcing these laws will not interpret Vitas contracts with
employed or independent contractor physicians as violating the relevant laws or regulations.
Future determinations or interpretations by individual states with corporate practice of medicine
or fee splitting restrictions may force Vitas to restructure its arrangements with physicians in
those locations.
Health Information Practices. There currently are numerous legislative and regulatory
initiatives at both the state and federal levels that address patient privacy concerns. In
particular, federal regulations issued under the Health Insurance Portability and Accountability
Act of 1996 (HIPAA) require Vitas to protect the privacy and security of patients individual
health information. HIPAA does not automatically preempt applicable state laws and regulations
concerning Vitas use, disclosure and maintenance of patient health information, which means that
Vitas is subject to a complex regulatory scheme that, in many instances, requires Vitas to comply
with both federal and state laws and regulations.
In August 2000, HHS published final regulations establishing health care transaction
standards, and code sets for the electronic transmission of health care information in connection
with certain transactions, such as billing or health plan eligibility (the Transactions
Standard). The Centers for Medicare and Medicaid Services (CMS) is the division of HHS that is
responsible for interpreting and enforcing the Transactions Standard. Failure to comply with the
Transactions Standard may subject covered entities, including Vitas, to civil monetary penalties
and possibly to criminal penalties. Vitas believes that it is in compliance with the Transactions
Standard and developed an appropriate contingency plan as encouraged by CMS.
Additional Federal and State Regulation. Federal and state governments also regulate various
aspects of the hospice industry. In particular, Vitas operations are subject to federal and state
health regulatory laws covering professional services, the dispensing of drugs and certain types of
hospice activities. Some of Vitas employees are subject to state laws and regulations governing
the ethics and professional practice of medicine, respiratory therapy, pharmacy and nursing.
Compliance with Health Regulatory Laws. Vitas maintains an internal regulatory compliance
review program and from time to time retains regulatory counsel for guidance on compliance matters.
The Company cannot assure, however, that Vitas practices, if reviewed, would be found to be in
compliance with applicable health regulatory laws, as such laws ultimately may be interpreted, or
that any non-compliance with such laws would not have a material adverse effect, including an
effect on its brand reputation, on Vitas.
Environmental Matters
Roto-Rooters operations are subject to various federal, state, and local laws and regulations
regarding environmental matters and other aspects of the operation of a sewer and drain cleaning,
HVAC and plumbing services business. For certain other activities, such as septic tank and grease
trap pumping, Roto-Rooter is subject to state and local environmental health and sanitation
regulations.
At December 31, 2010, the Companys accrual for its estimated liability for potential
environmental cleanup and related costs arising from the sale of DuBois Chemicals Inc. (DuBois)
amounted to $1.7 million. Of this balance, $901,000 is included in other liabilities and $826,000
is included in other current liabilities. The Company is contingently liable for additional
DuBois-related environmental cleanup and related costs up to a maximum of $14.9 million. On the
basis of a continuing evaluation of the Companys potential liability, and in consultation with the
Companys environmental attorney, management believes that it is not probable this additional
liability will be paid. Accordingly, no provision for this contingent liability has been recorded.
Although it is not presently possible to reliably project the timing of payments related to the
Companys potential liability for
environmental costs, management believes that any adjustments to its recorded liability will not
materially adversely affect its financial position or results of operations.
The Company, to the best of its knowledge, is currently in compliance in all material respects
with the environmental laws and regulations affecting its operations. Such environmental laws,
regulations and enforcement proceedings have not required the Company to make material increases in
or modifications to its capital expenditures and they have not had a material adverse effect on
sales or net income. Capital expenditures for the purpose of complying with environmental laws and
regulations during 2011 and 2012 with respect to continuing operations are not expected to be
material in amount; there can be no assurance, however, that presently unforeseen legislative
enforcement actions will not require additional expenditures.
Employees
On December 31, 2010, Chemed Corporation had a total of 13,058 employees.
Available Information
The Companys Internet address is www.chemed.com . The Companys Annual Report on Form 10-K,
quarterly reports on Form 10-Q, and current reports on Form 8-K, and amendments to those reports
filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act are electronically
available through the SEC (http://www.sec.gov) or the Companys website as soon as reasonably
practicable after such reports are filed with, or furnished to, the SEC.
Annual reports, press releases, Board Committee charters, Code of Ethics, Corporate governance
guidelines and other printed materials may be obtained from the website or from Chemed Investor
Relations without charge by writing to 2600 Chemed Center, 255 East Fifth Street, Cincinnati, Ohio
45202 or by calling 800-2CHEMED or 513-762-6429.
Item 1A. Risk Factors
You should carefully consider the risks described below. They are not the only ones facing
the Company. Other risks and uncertainties not currently known to us or that we deem to be
immaterial may also materially and adversely affect our business, financial condition, or results
of operations.
GENERAL
We have incurred debt to finance the operations of the Company.
The Company has debt service obligations that may restrict our operating flexibility. We
cannot assure you that our cash flow from operations will be sufficient to service our debt, which
may require us to borrow additional funds, or restructure or otherwise refinance our debt. In
addition, the Company has the ability to expand its debt and borrowing capacity subject to various
restrictions and covenants defined by its creditors. The interest rate the Company pays will
fluctuate from time to time based upon a number of factors including current LIBOR rates and
Company operating performance. Significant changes in these factors could result in a material
change in the Companys interest expense.
Our indebtedness could have important consequences for our business. Among other things, our
indebtedness may:
Limit our flexibility in planning for, or reacting to, changes in the markets
in which we compete;
Place us at a competitive disadvantage relative to our competitors with less
indebtedness;
Increase our exposure to interest rate increases due to variable interest rates
on certain borrowings;
Limit our ability to complete future acquisitions;
Limit our ability to make capital expenditures;
Render us more vulnerable to general adverse economic and industry conditions;
and
Require us to dedicate a substantial portion of our cash flow to service and
repay our debt.
Servicing our indebtedness will require a significant amount of cash, and our ability to
generate cash depends on many factors beyond our control.
Our ability to repay or to refinance our indebtedness and to pay interest on our indebtedness
will depend on our operating performance, which may be affected by factors beyond our control.
These factors could include operating difficulties, increased operating costs, our competitors
actions and regulatory developments. Our ability to meet our debt service and other obligations
may depend in significant part on the extent to which we successfully implement our business
strategy. We cannot assure you that we will be able to implement our strategy fully or that the
anticipated results of our strategy will be realized. Current credit market conditions may make it
difficult for us to obtain new financing or refinance our current debt on terms and conditions
acceptable to us.
If our cash flows and capital resources are insufficient to fund our debt service obligations,
we may be forced to reduce or delay capital expenditures, sell assets, seek additional equity
capital or restructure our debt. We cannot assure you that our cash flows and capital resources
will be sufficient to make scheduled payments of principal and interest on our indebtedness in the
future or that alternative measures would successfully meet our debt service obligations.
As certain of our obligations under our credit facilities and certain other borrowings could
bear interest at floating rates, an increase in interest rates could further increase our debt
service costs and adversely affect our cash flows.
We have debt that is convertible into shares based on the Companys stock price. This could
significantly dilute the ownership percentage of current stockholders.
The agreements and instruments governing our outstanding debt contain restrictions and limitations
that could significantly impact our ability to operate our business and adversely affect the price
of our Capital Stock.
The operating and financial restrictions and covenants in our instruments of indebtedness
restrict our ability to:
Incur additional debt;
Pay dividends, make redemptions and purchases of Capital Stock and make other
restricted payments;
Engage in business other than permitted businesses;
Engage in sale/leaseback transactions;
Engage in mergers or consolidations;
Make capital expenditures;
Make guarantees;
Make investments and acquisitions;
Enter into operating leases;
Hedge interest rates; and
Prepay other debt.
Moreover, if we are unable to meet the terms of the financial covenants or if we breach any of
these covenants, a default could result under one or more of these agreements. A default, if not
waived by our lenders, could accelerate repayment of our outstanding indebtedness. If acceleration
occurs, we may not be able to repay our debt and it is unlikely that we would be able to borrow
sufficient additional funds to refinance such debt on acceptable terms. In the event of any
default under our credit facilities, the lenders thereunder could elect to declare all outstanding
borrowings, together with accrued and unpaid interest and other fees, to be due and payable, and to
require us to apply all of our available cash to repay these borrowings, any of which would be an
event of default.
We depend on our management team and the loss of their service could have a material adverse effect
on our business, financial condition and results of operations.
Our success depends to a large extent upon the continued services of our executive management
team. The loss of key personnel could have a material adverse effect on our business, financial
condition, results of operations and cash flows. Additionally, we cannot assure you that we will be
able to attract or retain other skilled personnel in the future.
Environmental compliance costs and liabilities could increase our expenses and adversely affect our
financial condition.
Our operations are subject to numerous environmental, health and safety laws and regulations
that prohibit or restrict the discharge of pollutants into the environment and regulate employee
exposure to hazardous substance
in the workplace. Failure to comply with these laws could subject us to material costs and
liabilities, including civil and criminal fines, costs to cleanup contamination we cause and, in
some circumstances, costs to cleanup contamination we discover on our own property but did not
cause.
Because we use and generate hazardous materials in some of our operations, we are potentially
subject to material liabilities relating to the cleanup of contamination and personal injury
claims. In addition, we have retained certain environmental liabilities in connection with the
sale of former businesses. We are currently funding the cleanup of historical contamination at one
of our former properties and contributing to the cleanup of third-party sites as a result of our
sale of our former subsidiary DuBois Chemicals Inc. Although we have established a reserve for
these liabilities, actual cleanup costs may exceed our current estimates due to factors beyond our
control, such as the discovery of additional contamination or the enforcement of more stringent
cleanup requirements. New laws and regulations or their stricter enforcement, the discovery of
presently unknown conditions or the receipt of additional claims for indemnification could require
us to incur costs or become the basis for new or increased liabilities including impairment of our
brand that could have a material adverse effect on our business, financial condition and results of
operations.
We are subject to certain anti-takeover statutes that might make it more difficult to effect a
change in control of the Company.
We are subject to the anti-takeover provisions of Section 203 of the Delaware General
Corporation Law, which prohibits us from engaging in a business combination with an interested
stockholder for a period of three years after the date of the transaction in which the person
became an interested stockholder, unless the business combination is approved in a prescribed
manner. The application of Section 203 could have the effect of delaying or preventing a change of
control that could be advantageous to stockholders.
An adverse ruling against us in certain litigation could have an adverse effect on our financial
condition and results of operations.
We are involved in litigation incidental to the conduct of our business currently and from
time to time. The damages claimed against us in some of these cases are substantial.
See the Legal Proceedings sections of this 10-K for discussion of particular matters.
We cannot assure you that we will prevail in pending cases. Regardless of the outcome, such
litigation is costly to manage, investigate and defend, and the related defense costs, diversion of
managements time and related publicity may adversely affect the conduct of our business and the
results of our operations.
ROTO-ROOTER
We face intense competition from numerous, fragmented competitors. If we do not compete
effectively, our business may suffer.
We face intense competition from numerous competitors, many of whom have less leverage than we
do. The sewer, drain and pipe cleaning, and plumbing repair businesses are highly fragmented, with
the bulk of the industries consisting of local and regional competitors. We compete primarily on
the basis of advertising, range of services provided, name recognition, availability of emergency
service, speed and quality of customer service, service guarantees and pricing. Our competitors
may succeed in developing new or enhanced products and services more successful than ours and in
marketing and selling existing and new products and services better than we do. In addition, new
competitors may emerge. We cannot make any assurances that we will continue to be able to compete
successfully with any of these companies.
Our operations are subject to numerous laws and regulations, exposing us to potential claims and
compliance costs that could adversely affect our business.
We are subject to federal, state and local laws and regulations relating to franchising,
insurance and other aspects of our business. These are discussed in greater detail under
Government Regulations in the Description of Business section hereof. If we fail to comply with
existing or future laws and regulations, we may be subject to governmental or judicial fines and
sanctions. Our franchising activities are subject to various federal and state franchising laws
and regulations, including the rules and regulations of the Federal Trade Commission (the FTC)
regarding the offering or sale of franchises. The rules and regulations of the FTC require us to
provide all of our prospective franchisees with specific information regarding us and our franchise
program in the form of a detailed franchise offering circular. In addition, a number of states
require us to register our franchise offering prior to offering or selling franchises in such
states. Various state laws also provide for certain rights in favor of franchisees, including (i)
limitations on the franchisors ability to terminate a franchise except for good cause, (ii)
restrictions on the franchisors ability to deny renewal of a franchise, (iii) circumstances under
which the franchisor may be required to purchase certain inventory of franchisees when a franchise
is terminated or not renewed in violation of such laws and (iv) provisions relating to arbitration.
The ability to engage in the plumbing repair business is also subject to certain limitations and
restrictions imposed by the state and local licensing laws and regulations. We cannot predict
what legislation or regulations affecting our business will be enacted in the future, how existing
or future laws or regulations will be enforced, administered and interpreted, or the amount of
future expenditures that may be required to comply with these laws or regulations. Compliance
costs associated with governmental regulations could have a material adverse effect on our
business, financial condition and results of operations.
VITAS
Vitas is highly dependent on payments from Medicare and Medicaid. If there are changes in the rate
or methods governing these payments, Vitas net patient service revenue and profits could
materially decline.
In excess of 90% of Vitas net patient service revenue consists of payments from the Medicare
and Medicaid programs. Such payments are made primarily on a per diem basis, subject to annual
reimbursement caps. Because Vitas receives a per diem fee to provide eligible services to all
patients, Vitas profitability is largely dependent upon its ability to manage the costs of
providing hospice services to patients. Increases in operating costs, such as labor and supply
costs that are subject to inflation, without a compensating increase in Medicare and Medicaid
rates, could have a material adverse effect on Vitas business in the future. Medicare and
Medicaid currently adjust the various hospice payment rates annually based primarily on the
increase or decrease of the hospital wage index basket, regionally adjusted. However, the
increases may be less than actual inflation. Vitas profitability could be negatively impacted if
this adjustment were eliminated or reduced, or if Vitas costs of providing hospice services
increased more than the annual adjustment. In addition, cost pressures resulting from shorter
patient lengths of stay and the use of more expensive forms of palliative care, including drugs and
drug delivery systems, could negatively impact Vitas profitability. Many payors are increasing
pressure to control health care costs. In addition, both public and private payors are increasing
pressure to decrease, or limit increases in, reimbursement rates for health care services. Vitas
levels of revenue and profitability will be subject to the effect of possible reductions in
coverage or payment rates by third-party payors, including payment rates from Medicare and
Medicaid.
Each state that maintains a Medicaid program has the option to provide reimbursement for
hospice services at reimbursement rates generally required to be at least as much as Medicare
rates. All states in which Vitas operates cover Medicaid hospice services; however, we cannot
assure you that the states in which Vitas is presently operating or states into which Vitas could
expand operations will continue to cover Medicaid hospice services. In addition, the Medicare and
Medicaid programs are subject to statutory and regulatory changes, retroactive and prospective rate
and payment adjustments, administrative rulings, freezes and funding reductions, all of which may
adversely affect the level of program payments and could have a material adverse effect on Vitas
business. We cannot assure that Medicare and/or Medicaid payments to hospices will not decrease.
Reductions in amounts paid
by government programs for services or changes in methods or regulations governing payments could
cause Vitas net patient service revenue and profits to materially decline.
Approximately 25% of Vitas hospice patients reside in nursing homes. Changes in the laws and
regulations regarding payments for hospice services and room and board provided to Vitas hospice
patients residing in nursing homes could reduce its net patient service revenue and profitability.
For Vitas hospice patients receiving nursing home care under certain state Medicaid programs
who elect hospice care under Medicare and Medicaid, the state generally must pay Vitas, in addition
to the applicable Medicare or Medicaid hospice per diem rate, an amount equal to at least 95% of
the Medicaid per diem nursing home rate for room and board furnished to the patient by the
nursing home. Vitas contracts with various nursing homes for the nursing homes provision of
certain room and board services that the nursing homes would otherwise provide Medicaid nursing
home patients. Vitas bills and collects from the applicable state Medicaid program an amount equal
to approximately 95% of the amount that would otherwise have been paid directly to the nursing home
under the states Medicaid plan. Under Vitas standard nursing home contracts, it pays the nursing
home for these room and board services at approximately 100% of the Medicaid per diem nursing
home rate.
The reduction or elimination of Medicare and Medicaid payments for hospice patients residing
in nursing homes would reduce Vitas net patient service revenue and profitability. In addition,
changes in the way nursing homes are reimbursed for room and board services provided to hospice
patients residing in nursing homes could affect Vitas ability to serve patients in nursing homes.
If Vitas is unable to maintain relationships with existing patient referral sources or to establish
new referral sources, Vitas growth and profitability could be adversely affected.
Vitas success is heavily dependent on referrals from physicians, long-term care facilities,
hospitals and other institutional health care providers, managed care companies, insurance
companies and other patient referral sources in the communities that its hospice locations serve,
as well as on its ability to maintain good relations with these referral sources. Vitas referral
sources may refer their patients to other hospice care providers or not to a hospice provider at
all. Vitas growth and profitability depend significantly on its ability to establish and maintain
close working relationships with these patient referral sources and to increase awareness and
acceptance of hospice care by its referral sources and their patients. We cannot assure you that
Vitas will be able to maintain its existing relationships or that it will be able to develop and
maintain new relationships in existing or new markets. Vitas loss of existing relationships or
its failure to develop new relationships could adversely affect its ability to expand or maintain
its operations and operate profitably. Moreover, we cannot assure you that awareness or acceptance
of hospice care will increase or remain at current levels.
Vitas operates in an industry that is subject to extensive government regulation and claims
reviews, and changes in law and regulatory interpretations could reduce its net patient service
revenue and profitability and adversely affect its financial condition and results of operations.
The healthcare industry is subject to extensive federal, state and local laws, rules and
regulations relating to, among others:
Payment for services;
Conduct of operations, including fraud and abuse, anti-kickback prohibitions,
self-referral prohibitions and false claims;
Various state approval requirements, such as facility and professional
licensure, certificate of need, compliance surveys and other certification or
recertification requirements.
Changes in these laws, rules and regulations or in interpretations thereof could reduce Vitas
net patient service revenue and profitability. Vitas ability to comply with such regulations is a
key factor in determining the success of its business. See the Government Regulations section of
this 10-K for a greater description of these matters.
Fraud and Abuse Laws. Vitas contracts with a significant number of health care providers and
practitioners, including physicians, hospitals and nursing homes and arranges for these entities to
provide services to Vitas patients. Some of these health care providers and practitioners may
refer, or be in a position to refer, patients to Vitas (or Vitas may refer patients to them).
These arrangements may not qualify for a safe harbor. Vitas from time to time seeks guidance from
regulatory counsel as to the changing and evolving interpretations and the potential applicability
of the Anti-Kickback Law to its programs, and in response thereto, takes such actions as it deems
appropriate. Vitas generally believes that its contracts and arrangements with providers,
practitioners and suppliers should not be found to violate the Anti-Kickback Law. However, we
cannot assure you that such laws will ultimately be interpreted in a manner consistent with Vitas
practices.
Several health care reform proposals have included an expansion of the Anti-Kickback Law to
include referrals of any patients regardless of payor source, which is similar to the scope of
certain laws that have been enacted at the state level. In addition, a number of states in which
Vitas operates have laws, which vary from state to state, prohibiting certain direct or indirect
remuneration or fee-splitting arrangements between health care providers, regardless of payor
source, for the referral of patients to a particular provider.
The federal Ethics in Patient Referral Act, Section 1877 of the Social Security Act (commonly
known as the Stark Law) prohibits physicians from referring Medicare or Medicaid patients for
designated health services to entities in which they hold an ownership or investment interest or
with whom they have a compensation arrangement, subject to certain statutory or regulatory
exceptions. We cannot assure you that future statutory or regulatory changes will not result in
hospice services being subject to the Stark Laws ownership, investment, compensation or referral
prohibitions. Several states in which Vitas operates have similar laws which likewise are subject
to change. Any such changes could adversely affect the business, financial condition and operating
results of Vitas.
Further, under separate statutes, submission of claims for items or services that are not
provided as claimed may lead to civil money penalties, criminal fines and imprisonment and/or
exclusion from participation in Medicare, Medicaid and other federally funded state health care
programs. These false claims statutes include the federal False Claims Act, which allows any
person to bring suit on behalf of the federal government, known as a qui tam action, alleging false
or fraudulent Medicare or Medicaid claims or other violations of the statute and to share in any
amounts paid by the entity to the government in fines or settlement. See the discussion of the
governmental investigations pending against Vitas under Other Healthcare Regulations, above.
Certificate of Need Laws. Many states, including Florida, have certificate of need laws or
other similar health planning laws that apply to hospice care providers. These states may require
some form of state agency review or approval prior to opening a new hospice program, to adding or
expanding hospice services, to undertaking significant capital expenditures or under other
specified circumstances. Approval under these certificate of need laws is generally conditioned on
the showing of a demonstrable need for services in the community. Vitas may seek to develop,
acquire or expand hospice programs in states having certificate of need laws. To the extent that
state agencies require Vitas to obtain a certificate of need or other similar approvals to expand
services at existing hospice programs or to make acquisitions or develop hospice programs in new or
existing geographical markets, Vitas plans could be adversely affected by a failure to obtain a
certificate or approval. In addition, competitors may seek
administratively or judicially to challenge such an approval or proposed approval by the state
agency. Such a challenge, whether or not ultimately successful, could adversely affect Vitas.
Other Federal and State Regulations. The federal government and all states regulate various
aspects of the hospice industry and Vitas business. In particular, Vitas operations are subject
to federal and state health regulatory laws, including those covering professional services, the
dispensing of drugs and certain types of hospice activities. Certain of Vitas employees are
subject to state laws and regulations governing professional practice. Vitas operations are
subject to periodic survey by governmental authorities and private accrediting entities to assure
compliance with applicable state licensing, and Medicare and Medicaid certification and
accreditation standards, as the case may be. From time to time in the ordinary course of business,
Vitas receives survey reports noting deficiencies for alleged failure to comply with applicable
requirements. Vitas reviews such reports and takes appropriate corrective action. The failure to
effect such action could result in one of Vitas hospice programs being terminated from the
Medicare hospice program. Any termination of one or more of Vitas hospice locations from the
Medicare hospice program could adversely affect Vitas net patient service revenue and
profitability and adversely affect its financial condition and results of operations. The failure
to obtain, renew or maintain any of the required regulatory approvals, certifications or licenses
could materially adversely affect Vitas business and could prevent the programs involved from
offering products and services to patients. In addition, laws and regulations often are adopted to
regulate new products, services and industries. We cannot assure you that either the states or the
federal government will not impose additional regulations on Vitas activities, which might
materially adversely affect Vitas, including impairing the value of its brand.
Claims Review. The Medicare and Medicaid programs and their fiscal intermediaries and other
payors periodically conduct pre-payment or post-payment reviews and other reviews and audits of
health care claims, including hospice claims. As a result of such reviews or audits, Vitas could
be required to return any amounts found to be overpaid, or amounts found to be overpaid could be
recouped through reductions in future payments. There is pressure from state and federal
governments and other payors to scrutinize health care claims to determine their validity and
appropriateness. During the past several years, Vitas claims have been subject to review and
audit. We cannot assure you that reviews and/or similar audits of Vitas claims will not result in
material recoupments, denials or other actions that could have a material adverse effect on Vitas
business, financial condition and results of operations. See the discussion of OIG investigations
pending against Vitas under Other Health Care Regulations, above.
Regulation and Provision of Continuous Home Care. Vitas provides continuous home care to
patients requiring such care. Continuous home care is provided to patients while at home, during
periods of crisis when intensive monitoring and care, primarily nursing care, is required in order
to achieve palliation or management of acute medical symptoms. Continuous home care requires a
minimum of 8 hours of care within a 24-hour day, which begins and ends at midnight. The care must
be predominantly nursing care provided by either a registered nurse or licensed practical nurse.
Continuous home care can be challenging for a hospice to provide for a number of reasons,
including the need to have available sufficient skilled and trained staff to furnish such care, the
need to manage the staffing and provision of such care, and a shortage of nurses that can make it
particularly difficult to attract and retain nurses that are required to furnish a majority of such
care. Medicare reimbursement for continuous home care has been calculated by multiplying the
applicable continuous home care hourly rate by the number of hours of care provided. If the care
was provided for less than one hour, Medicare requires reporting in 15-minute increments of care
provided, with no rounding.
Medicare reimbursement for continuous home care is subject to a number of requirements posing
further challenges for a hospice providing such care. For example, if a patient requires skilled
interventions for palliation or symptom management that can be accomplished in less than 8
aggregate hours within the 24-hour period, if the majority of care can be accomplished by someone
other than a registered nurse or a licensed practical nurse (e.g., if a majority of care is
furnished by a home health aide or homemaker), or if for any reason less than 8 hours of direct
care are provided (such as when a patient dies before 8 AM even if 7 or more hours of care has been
provided), the care rendered cannot be reimbursed by Medicare at the continuous home care rate
(although the care instead may be eligible for Medicare reimbursement at the reduced routine home
care day rate). As a result of such requirements, Vitas may incur the costs of providing services
intended to be continuous home care services yet be unable to bill or be reimbursed for such
services at the continuous home care rate. We cannot assure you that challenges in providing
continuous home care will not cause Vitas net patient service revenue and profits to materially
decline or that reviews and/or similar audits of Vitas claims will not result in material
recoupments, denials or other actions that could have a material adverse effect on Vitas business,
financial condition and results of operations.
Compliance. Vitas maintains an internal regulatory compliance review program and from time to
time retains regulatory counsel for guidance on compliance matters. We cannot assure you, however,
that Vitas practices, if reviewed, would be found to be in compliance with applicable health
regulatory laws, as such laws ultimately may be interpreted, or that any non-compliance with such
laws would not have a material adverse effect on Vitas.
Federal and state legislative and regulatory initiatives could require Vitas to expend substantial
sums on acquiring, implementing and supporting new information systems, which could negatively
impact its profitability.
There are currently numerous legislative and regulatory initiatives at both the state and
federal levels that address patient privacy concerns. We cannot predict the total financial or
other impact of the regulations on Vitas operations. In addition, although Vitas management
believes it is in compliance with the requirement of patient privacy regulations, we cannot assure
you that Vitas will not be found to have violated state and federal laws, rules or guidelines
surrounding patient privacy. Compliance with current and future HIPAA requirements or any other
federal or state privacy initiatives could require Vitas to make substantial investments, which
could negatively impact its profitability and cash flows.
Vitas growth strategies may not be successful, which could adversely affect its business.
A significant element of Vitas growth strategy is expected to include expansion of its
business in new and existing markets. This aspect of Vitas growth strategy may not be successful,
which could adversely impact its growth and profitability. We cannot assure you that Vitas will be
able to:
Identify markets that meet its selection criteria for new hospice locations;
Hire and retain qualified management teams to operate each of its new hospice
locations;
Manage a large and geographically diverse group of hospice locations;
Become Medicare and Medicaid certified in new markets;
Generate sufficient hospice admissions in new markets to operate profitably in
these new markets;
Compete effectively with existing hospices in new markets; or
Obtain state licensure and/or a certificate of need from appropriate state
agencies in new markets.
In addition to growing existing locations and developing new hospice locations, Vitas growth
is expected to include expansion through acquisition of other hospices. We cannot assure you that
Vitas acquisition strategy will be successful. The success of Vitas acquisition strategy depends
upon a number of factors, including:
Its ability to identify suitable acquisition candidates;
Its ability to negotiate favorable acquisition terms, including purchase price,
which may be adversely affected due to increased competition with other buyers;
The availability of financing on favorable terms, or at all;
Its ability to integrate effectively the systems and operations of acquired
hospices;
Its ability to retain key personnel of acquired hospices; and
Its ability to obtain required regulatory approvals.
Acquisitions involve a number of other risks, including diversion of managements attention
from other business concerns and assuming known or unknown liabilities of acquired hospices,
including liabilities for failure to comply with health care laws and regulations. Integrating
acquired hospices may place significant strains on Vitas current operating and financial systems
and controls. Vitas may not successfully overcome these risks or any other problems encountered in
connection with its acquisition strategy.
In addition, since 1990, Vitas has acquired hospice programs, some of which involved
acquisitions of hospice programs from not-for-profit entities. Vitas believes that acquisitions of
not-for-profit programs are generally more complex than acquisitions from for-profit entities and
that a substantial number of acquisition opportunities are likely to involve acquisitions from
not-for-profit entities. Such acquisitions are subject to provisions of the Internal Revenue Code
and, in certain states, state attorney general powers, which have been interpreted to require that
the consideration paid for the assets purchased be at fair market value and, where applicable, that
any fees paid for services be reasonable. In many states there is no mechanism for state attorney
general pre-clearance of transactions to assure that applicable standards have been met. Entities
that acquired not-for-profit hospices could face potential liability if the acquisition transaction
is not structured to comply with Internal Revenue Code and state law requirements, and in some
cases the transaction could be enjoined or subject to rescission. The acquisition of
not-for-profit businesses, including the fairness of the purchase price paid, has received
increasing regulatory scrutiny by state attorneys general and other regulatory authorities.
Although Vitas believes that reasonable actions have been taken to date to establish the fair
market value of assets purchased in prior acquisitions of hospice operations from not-for-profit
entities and the reasonableness of fees paid for services, we cannot assure you that such
transactions or any future similar transactions will not be challenged or that, if challenged, the
results of such challenge would not have a material adverse effect on Vitas business.
Vitas loss of key management personnel or its inability to hire and retain skilled employees could
adversely affect its business, financial condition and results of operations.
Vitas future success significantly depends upon the continued service of its senior
management personnel. The loss of one or more of Vitas key senior management personnel or its
inability to hire and retain new skilled employees could negatively impact Vitas ability to
maintain or increase patient referrals, a key aspect of its growth strategy, and could adversely
affect its future operating results.
Competition for skilled employees is intense, and the process of locating and recruiting
skilled employees with the combination of qualifications and attributes required to care
effectively for terminally ill patients and their families can be difficult and lengthy. We cannot
assure you that Vitas will be successful in attracting, retaining or training highly skilled
nursing, management, community education, operations, admissions and other personnel. Vitas
business could be disrupted and its growth and profitability negatively impacted if it is unable to
attract and retain skilled employees.
A nationwide shortage of qualified nurses could adversely affect Vitas profitability, growth
and ability to continue to provide quality, responsive hospice services to its patients as nursing
wages and benefits increase.
The substantial majority of Vitas workforce is nurses. Vitas depends on qualified nurses to
provide quality, responsive hospice services to its patients. The current nationwide shortage of
qualified nurses impacts some of the markets in which Vitas provides hospice services. In response
to this shortage, Vitas has adjusted its wages and benefits to recruit and retain nurses and to
engage contract nurses. Vitas inability to attract and retain qualified nurses could adversely
affect its ability to provide quality, responsive hospice services to its patients and its ability
to increase or maintain patient census in those markets. Increases in the wages and benefits
required to attract and retain qualified nurses or an increase in reliance on contract nurses could
negatively impact profitability.
Vitas may not be able to compete successfully against other hospice providers, and competitive
pressures may limit its ability to maintain or increase its market position and adversely affect
its profitability, financial condition and results of operations.
Hospice care in the United States is highly competitive. In many areas in which Vitas
hospices are located, they compete with a large number of organizations, including:
Community-based hospice providers;
National and regional companies;
Hospital-based hospice and palliative care programs;
Physician groups;
Nursing homes;
Home health agencies;
Infusion therapy companies; and
Nursing agencies.
Various health care companies have diversified into the hospice market. Other companies,
including hospitals and health care organizations that are not currently providing hospice care,
may enter the markets Vitas serves and expand the variety of services offered to include hospice
care. We cannot assure you that Vitas will not encounter increased competition in the future that
could limit its ability to maintain or increase its market position, including competition from
parties in a position to impact referrals to Vitas. Such increased competition could have a
material adverse effect on Vitas business, financial condition and results of operations.
Changes in rates or methods of payment for Vitas services could adversely affect its revenues and
profits.
Managed care organizations have grown substantially in terms of the percentage of the
population they cover and their control over an increasing portion of the health care economy.
Managed care organizations have continued to consolidate to enhance their ability to influence the
delivery of health care services and to exert pressure to control health care costs. Vitas has a
number of contractual arrangements with managed care organizations and other similar parties.
Vitas provides hospice care to many Medicare beneficiaries who receive their non-hospice
health care services from health maintenance organizations (HMOs) under Medicare risk contracts.
Under such contracts
between HMOs and the federal Department of Health and Human Services, the Medicare payments for
hospice services are excluded from the per-member, per-month payment from Medicare to HMOs and
instead are paid directly by Medicare to the hospices. As a result, Vitas payments for Medicare
beneficiaries enrolled in Medicare risk HMOs are processed in the same way with the same rates as
other Medicare beneficiaries. We cannot assure, however, that payment for hospice services will
continue to be excluded from HMO payment under Medicare risk contracts and similar Medicare managed
care plans or that if not excluded, managed care organization or other large third-party payors
would not use their power to influence and exert pressure on health care providers to reduce costs
in a manner that could have a material adverse effect on Vitas business, financial condition and
results of operations.
Liability claims may have an adverse effect on Vitas, and its insurance coverage may be inadequate.
Participants in the hospice industry are subject to lawsuits alleging negligence, product
liability or other similar legal theories, many of which involve large claims and significant
defense costs. From time to time, Vitas is subject to such and other types of lawsuits. See the
description below under Legal Proceedings. The ultimate liability for claims, if any, could have a
material adverse effect on its financial condition or operating results. Although Vitas currently
maintains liability insurance intended to cover the claims, we cannot assure you that the coverage
limits of such insurance policies will be adequate or that all such claims will be covered by the
insurance. In addition, Vitas insurance policies must be renewed annually and may be subject to
cancellation during the policy period. While Vitas has been able to obtain liability insurance in
the past, such insurance varies in cost, is difficult to obtain and may not be available in the
future on terms acceptable to Vitas, if at all.
A successful claim in excess of the insurance coverage could have a material adverse effect on
Vitas. Claims, regardless of their merit or eventual outcome, also may have a material adverse
effect on Vitas business and reputation due to the costs of litigation, diversion of managements
time and related publicity.
Vitas procures professional liability coverage on a claims-made basis. The insurance
contracts specify that coverage is available only during the term of each insurance contract.
Vitas management intends to renew or replace the existing claims-made policy annually but such
coverage is difficult to obtain, may be subject to cancellation and may be written by carriers that
are unable, or unwilling to pay claims. During fiscal 2001, Vitas was notified that one of its
prior carriers was ordered into rehabilitation, and in early fiscal 2002, into liquidation,
creating the possibility that certain prior year claims could be underinsured or uninsured.
Certain claims have been asserted where the coverage would be the responsibility of this prior
carrier and/or other carriers that may not have the financial wherewithal to satisfy the claims.
Additionally, some risks and liabilities, including claims for punitive damages, are not covered by
insurance.
Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
The Companys corporate offices and the headquarters for the Roto-Rooter Group are located in
Cincinnati, Ohio. Roto-Rooter has manufacturing and distribution center facilities in West Des
Moines, Iowa and has 71 leased and owned office and service facilities in 27 states. Vitas
headquartered in Miami, operates 45 programs from 135 leased facilities and 32 inpatient units in
15 states and the District of Columbia.
All owned property is held in fee and is subject to the security interests of the holders of
our debt instruments. The leased properties have lease terms ranging from one year to seven years.
Management does not foresee any difficulty in renewing or replacing the remainder of its current
leases. The Company considers all of its
major operating properties to be maintained in good operating condition and to be generally
adequate for present and anticipated needs.
Item 3. Legal Proceedings
Vitas is party to a class action lawsuit filed in the Superior Court of California, Los
Angeles County, in September 2006 by Bernadette Santos, Keith Knoche and Joyce White. This case
alleges failure to pay overtime and failure to provide meal and rest periods to a purported class
of California admissions nurses, chaplains and sales representatives. The case seeks payment of
penalties, interest and Plaintiffs attorney fees. Vitas contests these allegations. In December
2009, the trial court denied plaintiffs motion for class certification. The lawsuit is in its
early stage and we are unable to estimate our potential liability, if any, with respect to these
allegations.
On March 1, 2010 Anthony Morangelli and Frank Ercole filed a class action lawsuit in federal
district court for the Eastern District of New York seeking unpaid minimum wages and overtime
service technician compensation from Roto-Rooter Services Company and Chemed. They also seek
payment of penalties, interest and Plaintiffs attorney fees. The Company contests these
allegations. In September 2010, the Court conditionally certified a nationwide class of service
technicians, excluding those who signed dispute resolution agreements agreeing to arbitrate claims
arising out of their employment. There has been no final determination of the merits of collective
treatment of the case. We are unable to estimate our potential liability, if any, related to this
case.
Regardless of outcome, such litigation can adversely affect the Company through defense costs,
diversion of managements time, and related publicity. In the normal course of business, we are a
party to various claims and legal proceedings. We record a reserve for these matters when an
adverse outcome is probable and the amount of the potential liability is reasonably estimable.
See also the OIG investigations pending against Vitas under Other Health Care Regulations,
above.
Executive Vice President and Chief
Financial Officer
March 5, 2004 (4)
Arthur V. Tucker, Jr.
61
Vice President and Controller
February 1, 1989 (5)
(1)
Mr. K. J. McNamara is President and Chief Executive Officer of the Company and has held these
positions since August 1994 and May 2001, respectively. Previously, he served as an Executive
Vice President, Secretary and General Counsel of the Company, since November 1993, August 1986
and August 1986, respectively. He previously held the position of Vice President of the
Company, from August 1986 to May 1992.
(2)
Mr. T.S. OToole is an Executive Vice President of the Company and has held this position
since May 1992. He is also Chief Executive Officer of Vitas, a wholly owned subsidiary of the
Company, and has held this position since February 24, 2004. Previously, from May 1992 to
February 24, 2004, he also served the Company as Treasurer.
(3)
Mr. S. S. Lee is an Executive Vice President of the Company and has held this position since
May 15, 2000. Mr. Lee is also Chairman and Chief Executive Officer of Roto-Rooter Services
Company, a wholly owned subsidiary of the Company, and has held this position since January
1999. Previously, he served as a Senior Vice President of Roto-Rooter Services Company from
May 1997 to January 1999.
(4)
Mr. D. P. Williams is an Executive Vice President and the Chief Financial Officer of the
company and has held these positions since August 10, 2007 and March 5, 2004, respectively.
Mr. Williams is also Senior Vice President and Chief Financial Officer of Roto-Rooter Group,
Inc., and has held these positions since January 1999.
(5)
Mr. A. V. Tucker, Jr. is a Vice President and Controller of the Company and has held these
positions since February 1989. From May 1983 to February 1989, he held the position of
Assistant Controller of the Company.
Each executive officer holds office until the annual election at the next annual
organizational meeting of the Board of Directors of the Company which is scheduled to be held on
May 16, 2011.
Item 5. Market for the Registrants Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
The Companys Capital Stock (par value $1 per share) is traded on the New York Stock Exchange
under the symbol CHE. The range of the high and low sale prices on the New York Stock Exchange and
dividends paid per share for each quarter of 2009 and 2010 are set forth below.
Closing
Dividends Paid
High
Low
Per Share
2009
First Quarter
$
44.86
$
34.20
$
.06
Second Quarter
43.01
37.18
.06
Third Quarter
45.11
36.76
.12
Fourth Quarter
48.79
43.50
.12
2010
First Quarter
$
57.18
$
46.41
$
.12
Second Quarter
58.34
51.31
.12
Third Quarter
57.30
49.52
.14
Fourth Quarter
64.66
55.41
.14
Future dividends are necessarily dependent upon the Companys earnings and financial
condition, compliance with certain debt covenants and other factors not presently determinable.
As of February 15, 2011, there were approximately 2,389 stockholders of record of the
Companys Capital Stock. This number only includes stockholders of record and does not include
stockholders with shares beneficially held in nominee name or within clearinghouse positions of
brokers, banks or other institutions.
During 2010, the number of shares of Capital Stock repurchased by the Company, the weighted
average price paid for each share, the cumulative shares repurchased under each program and the
dollar amounts remaining under each program were as follows:
On April 26, 2007, our Board of Directors authorized a $150 million share repurchase plan with no
expiration date.
On May 20, 2008, our Board of Directors authorized an additional $56 million under the April 2007
Program.
On December 27, 2010, our Board of Directors authorized an additional $70 million under the April
2007 Program.
As of December 31, 2010, the number of stock options outstanding under the Companys equity
compensation plans, the weighted average exercise price of outstanding options, and the number of
securities remaining available for issuance were as follows:
Equity Compensation
plans approved by
stockholders
2,564,366
$
47.37
2,027,073
Equity Compensation
plans not approved
by stockholders (1)
22,280
26.54
TOTAL
2,586,646
$
47.19
2,027,073
(1)
In May 1999 the Board of Directors adopted the 1999 Long-Term Employee Incentive Plan without
stockholder approval. This plan permits the Company to grant up to 500,000 shares of
non-qualified options and stock awards to a broad base of salaried and hourly employees
(excluding officers and directors) of the Company. Except for the exclusion of officers and
directors, this plan has the same general terms and provisions as the 2006 Stock Incentive
Plan. In addition, pursuant to this plan no individual may be granted more than 50,000 stock
options in a calendar year, the aggregate number of the shares of Capital Stock which may be
issued pursuant to stock incentives in the form of Stock Awards shall not be more than
270,000, and no stock incentives shall be granted under the plan after May 17, 2009.
Comparative Stock Performance
The graph below compares the yearly percentage change in the Companys cumulative total
stockholder return on Capital Stock (as measured by dividing (i) the sum of (A) the cumulative
amount of dividends for the period December 31, 2005, to December 31, 2010, assuming dividend
reinvestment, and (B) the difference between the Companys share price at December 31, 2005 and
December 31, 2010; by (ii) the share price at December 31, 2005) with the cumulative total return,
assuming reinvestment of dividends, of the (1) S&P 500 Stock Index and (2) Dow Jones Industrial
Diversified Index.
The information called for by this Item for the five years ended December 31, 2010 is set
forth on page 34 of the 2010 Annual Report to Stockholders and is incorporated herein by reference.
Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
The information called for by this Item is set forth on pages 38 through 51 of the 2010 Annual
Report to Stockholders and is incorporated herein by reference.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
The Companys primary market risk exposure relates to interest rate risk exposure through its
variable interest line of credit. At December 31, 2010 the Company had no variable rate debt
outstanding. For each $10 million dollars borrowed under the credit facility, an increase or
decrease of 100 basis points (1% point), increases or decreases the Companys annual interest
expense by $100,000.
The Company continually evaluates this interest rate exposure and periodically weighs the cost
versus the benefit of fixing the variable interest rates through a variety of hedging techniques.
The market value of the Companys long-term debt at December 31, 2010 is approximately $189.1
million versus a carrying value of $159.2 million.
Item 8. Financial Statements and Supplementary Data
The consolidated financial statements, together with the report thereon of
PricewaterhouseCoopers LLP dated February 28, 2011, appearing on pages 1 through 31 of the 2010
Annual Report to Stockholders, along with the Supplementary Data (Unaudited Summary of Quarterly
Results) appearing on pages 32-33, are incorporated herein by reference.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
The Companys management, under the supervision of and with the participation of the Companys
President and Chief Executive Officer, Executive Vice President and Chief Financial Officer and
Vice President and Controller, has evaluated the effectiveness of the Companys disclosure controls
and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934, as amended (the Exchange Act), as of the end of the period covered by this
report. Based on such evaluation, the Companys President and
Chief Executive Officer, Executive Vice President and Chief Financial Officer and Vice President
and Controller have concluded that, as of the end of such period, the Companys disclosure controls
and procedures are effective and are reasonably designed to ensure that all material information
relating to the Company required to be included in the Companys reports filed or submitted under
the Exchange Act is recorded, processed, summarized and reported within the time periods specified
in the rules and forms of the Securities and Exchange Commission and that such information is
accumulated and communicated to management, including the President and Chief Executive Officer,
Executive Vice President and Chief Financial Officer and Vice President and Controller, as
appropriate, to allow timely decisions regarding required disclosure.
Managements Report on Internal Control Over Financial Reporting
Refer to Managements Report on Internal Control over Financial Reporting and Report of
Independent Registered Public Accounting Firm on pages 1 and 2 of the Companys 2010 Annual Report
to Stockholders, which are incorporated herein by reference.
Changes in Internal Control Over Financial Reporting
There have not been any changes in the Companys internal control over financial reporting, as
such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act during the Companys
fiscal quarter ended December 31, 2010 that have materially affected, or are reasonably likely to
materially affect, the Companys internal control over financial reporting.
Item 9B. Other Information
Not applicable.
PART III
Item 10. Directors, Executive Officers and Corporate Governance
The directors of the Company are:
Kevin J. McNamara
Joel F. Gemunder
Patrick P. Grace
Thomas C. Hutton
Walter L. Krebs
Andrea R. Lindell
Thomas P. Rice
Donald E. Saunders
George J. Walsh III
Frank E. Wood
The additional information required under this Item is set forth in the Companys 2011 Proxy
Statement and in Part I hereof under the caption Executive Officers of the Registrant and is
incorporated herein by reference.
The Company has adopted a Code of Ethics that applies to the Companys principal executive
officer, principal financial officer, principal accounting officer, directors and employees. A
copy of this Code of Ethics is incorporated with this report as Exhibit 14 and it is also posted on
the Companys Web site, www.chemed.com.
Item 11. Executive Compensation
Information required under this Item is set forth in the Companys 2011 Proxy Statement, which
is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
Information required under this Item is set forth in the Companys 2011 Proxy Statement, which
is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions and Director Independence.
Information required under this Item is set forth in the Companys 2011 Proxy Statement, which
is incorporated herein by reference.
A description of related party transactions is shown in Note 20 of the Notes to Consolidated
Financial Statements on page 27 of the 2010 Annual Report to Stockholders and is incorporated
herein by reference.
Item 14. Principal Accountant Fees and Services
Audit Fees
PricewaterhouseCoopers LLP billed the Company $1,530,000 for 2009 and $1,568,000 for 2010.
These fees were for professional services rendered for the integrated audit of the Companys annual
financial statements and of its internal control over financial reporting, review of the financial
statements included in the Companys Forms 10-Q and review of documents filed with the SEC.
Audit-Related Fees
PricewaterhouseCoopers LLP billed the Company $221,000 and $131,000 for 2009 and 2010,
respectively, for audit-related services. These services were related to the audit of one of
Vitas Florida subsidiaries.
Tax Fees
No such services were rendered in 2009 or 2010.
All Other Fees
No other services were rendered in 2009. For 2010, $30,000 was billed for Information
Technology Consulting Services.
The Audit Committee has adopted a policy which requires the Committees pre-approval of audit
and non-audit services performed by the independent auditor to assure that the provision of such
services does not impair the auditors independence. The Audit Committee pre-approved all of the
audit and non-audit services rendered by PricewaterhouseCoopers LLP as listed above.
Certificate of Incorporation of Chemed Corporation.*
3.2
Certificate of Amendment to Certificate of Incorporation.*
3.3
By-Laws of Chemed Corporation.*
10.1
1999 Stock Incentive Plan.*,**
10.2
1999 Long-Term Employee Incentive Plan as amended through May 20, 2002.*,**
10.3
2002 Stock Incentive Plan.*,**
10.4
2002 Executive Long-Term Incentive Plan, as amended May 18, 2004.*,**
10.5
2004 Stock Incentive Plan.*,**
10.6
2006 Stock Incentive Plan, as amended August 11, 2006.*,**
10.7
2010 Stock Incentive Plan.*,**
10.8
Repurchase Agreement dated May 8, 2007 by and among Chemed Corporation, J.P. Morgan Securities Inc. and
Citigroup Global Markets, Inc.*
10.9
Convertible Senior Note Indenture dated May 14, 2007 for 1.875% Convertible Senior Notes due 2014 by
and among Chemed Corporation, the Subsidiary Guarantors and LaSalle Bank NA, as Trustee.*
10.10
Employment Agreement with David P. Williams dated December 1, 2006.*,**
10.11
First Amendment to Employment Agreement with David P. Williams dated July 9, 2009.*,**
10.12
Employment Agreement with Timothy S. OToole dated May 6, 2007.*,**
10.13
First Amendment to Employment Agreement with Timothy S. OToole dated July 9, 2009.*,**
10.14
Employment Agreement with Kevin J. McNamara dated May 3, 2008.*,**
10.15
First Amendment to Employment Agreement with Kevin J. McNamara dated July 9, 2009.*,**
10.16
Registration Rights Agreement, dated May 14, 2007 by and among Chemed Corporation, J.P. Morgan
Securities, Inc. and Citigroup Global Markets Inc.*
Chemed/Roto-Rooter Savings & Retirement Plan, effective January 1, 1999.*,**
10.26
First Amendment to Chemed/Roto-Rooter Savings & Retirement Plan, effective September 6, 2000.*,**
10.27
Second Amendment to Chemed/Roto-Rooter Savings & Retirement Plan, effective January 1, 2001.*,**
10.28
Third Amendment to Chemed/Roto-Rooter Savings & Retirement Plan, effective December 12, 2001.*,**
10.29
Directors Emeriti Plan.*,**
10.30
Chemed Corporation Change in Control Severance Plan, as amended July 9, 2009.*,**
10.31
Chemed Corporation Senior Executive Severance Policy, as amended July 9, 2009.*,**
10.32
Roto-Rooter Deferred Compensation Plan No. 1, as amended January 1, 1998.*,**
10.33
Roto-Rooter Deferred Compensation Plan No. 2.*,**
10.34
Agreement and Plan of Merger, dated as of December 18, 2003, among Roto-Rooter, Inc., Marlin Merger
Corp. and Vitas Healthcare Corporation.*
10.35
Credit Agreement, dated as of May 2, 2007, among Chemed Corporation, the lenders from time to time parties thereto and J.P. Morgan Chase Bank, NA, as Administrative Agent.*
10.35a
Credit Agreement Exhibits, dated as of May 2, 2007, among Chemed Corporation, the lenders from time to
time parties thereto and J.P. Morgan Chase Bank, NA, as Administrative Agent.
Credit Agreement Schedules, dated as of May 2, 2007, among Chemed Corporation, the lenders from time to
time parties thereto and J.P. Morgan Chase Bank, NA, as Administrative Agent.
10.36
Form of Restricted Stock Award.*,**
10.37
Form of Stock Option Grant.*,**
12
Computation of Ratio to Earnings to Fixed Charges.
13
2010 Annual Report to Stockholders.
14
Policies on Business Ethics of Chemed Corporation.*
21
Subsidiaries of Chemed Corporation.
23
Consent of Independent Registered Public Accounting Firm.
24
Powers of Attorney.
31.1
Certification by Kevin J. McNamara pursuant to Rule 13a-14(a)/15d-14(a) of the Exchange Act of 1934.
31.2
Certification by David P. Williams pursuant to Rule 13a-14(a)/15d-14(a) of the Exchange Act of 1934.
31.3
Certification by Arthur V. Tucker, Jr. pursuant to Rule 13a-14(a)/15d-14(a) of the Exchange Act of 1934.
32.1
Certification by Kevin J. McNamara pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2
Certification by David P. Williams pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.3
Certification by Arthur V. Tucker, Jr. pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
This exhibit is being filed by means of incorporation by reference (see Index to Exhibits on page E-1).
Each other exhibit is being filed with this Annual Report on Form 10-K.
**
Management contract or compensatory plan or arrangement.
Financial Statement Schedule
See Index to Financial Statements and Financial Statement Schedule on page S-1.
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
February 28, 2011
CHEMED CORPORATION
By
/s/ Kevin J. McNamara
Kevin J. McNamara
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in the capacities and on the
dates indicated.
Signature
Title
Date
/s/ Kevin J. McNamara
President and Chief
Kevin J. McNamara
Executive Officer and
a Director (Principal
Executive Officer)
/s/ David P. Williams
Executive Vice President and Chief
David P. Williams
Financial Officer
(Principal Financial Officer)
/s/ Arthur V. Tucker, Jr.
Vice President and
February 28, 2011
Arthur V. Tucker, Jr.
Controller
(Principal Accounting
Officer)
Joel F. Gemunder*
Thomas P. Rice*
Patrick P. Grace*
Donald E. Saunders*
Thomas C. Hutton*
George J Walsh III*
Directors
Walter L. Krebs*
Frank E. Wood*
Andrea R. Lindell*
*
Naomi C. Dallob by signing her name hereto signs this document on behalf of each of the persons indicated
above pursuant to powers of attorney duly executed by such persons and filed with the Securities and Exchange
Commission.
Indicates page numbers in Chemed Corporation 2010 Annual Report to Stockholders
The consolidated financial statements of Chemed Corporation listed above, appearing in the
2010 Annual Report to Stockholders, are incorporated herein by reference. The Financial Statement
Schedule should be read in conjunction with the consolidated financial statements listed above.
Schedules not included have been omitted because they are not applicable or the required
information is shown in the financial statements or notes thereto as listed above.
Report of Independent Registered Public Accounting
Firm on Financial Statement Schedule
To the Board of Directors of Chemed Corporation
Our audits of the consolidated financial statements and the effectiveness of internal control over
financial reporting referred to in our report dated February 28, 2011 appearing in the 2010 Annual
Report to Stockholders of Chemed Corporation (which report and consolidated financial statements
are incorporated by reference in this Annual Report on Form 10-K) also included an audit of the
financial statement schedule listed in Item 15(a)(2) of this Form 10-K. In our opinion, this
financial statement schedule presents fairly, in all material respects, the information set forth
therein when read in conjunction with the related consolidated financial statements.
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
VALUATION AND QUALIFYING ACCOUNTS
(IN THOUSANDS)
DR/(CR)
ADDITIONS
(CHARGED)
CREDITED
(CHARGED)
BALANCE AT
TO COSTS
CREDITED
BALANCE
BEGINNING
AND
TO OTHER
DEDUCTIONS
AT END
DESCRIPTION
OF PERIOD
EXPENSES
ACCOUNTS
(a)
OF PERIOD
Allowances for doubtful
accounts (b)
For the year 2010
$
(12,595
)
$
(9,118
)
$
(472
)
$
8,853
$
(13,332
)
For the year 2009
$
(10,320
)
$
(10,861
)
$
(656
)
$
9,242
$
(12,595
)
For the year 2008
$
(9,746
)
$
(9,870
)
$
13
$
9,283
$
(10,320
)
Allowances for doubtful
accounts notes
receivable (c)
For the year 2010
$
(408
)
$
40
$
$
$
(368
)
For the year 2009
$
(482
)
$
28
$
44
$
2
$
(408
)
For the year 2008
$
(529
)
$
51
$
(13
)
$
9
$
(482
)
(a)
With respect to allowances for doubtful accounts, deductions include accounts considered uncollectible or
written off, payments, companies divested, etc.
(b)
Classified in consolidated balance sheet as a reduction of accounts receivable.
(c)
Classified in consolidated balance sheet as a reduction of other assets.
Certificate of Incorporation of
Chemed Corporation
Form S-3
Reg. No. 33-44177
11/26/91
4.1
3.2
Certificate of Amendment to
Certificate of Incorporation
Form 8-K
5/16/06
3.1
3.3
By-Laws of Chemed Corporation
as amended November 10, 2009
Form 8-K
11/13/09
3.1
10.1
1999 Stock Incentive Plan
Form 10-K
3/29/00, **
10.11
10.2
1999 Long Term Employee
Incentive Plan as amended
through May 20, 2002
Form 10-K
3/28/03, **
10.16
10.3
2002 Stock Incentive Plan
Form 10-K
3/28/03, **
10.17
10.4
2002 Executive Long-
Incentive Plan, as amended
May 18, 2004
Form 10-Q
8/19/04, **
10.16
10.5
2004 Stock Incentive Plan
Proxy Statement
3/25/04, **
A
10.6
2006 Stock Incentive Plan,
as amended August 11, 2006
Form 10-Q
8/14/06, **
10.1
10.7
2010 Stock Incentive Plan
Form 8-K
5/18/10, **
99.1
10.8
Repurchase Agreement dated
May 8, 2007 by and among
Chemed Corporation, J.P.
Morgan Securities Inc. and
Citigroup Global Markets, Inc.
Form 8-K
5/17/07
1.1
10.9
Convertible Senior Note
Indenture dated May 14, 2007
for 1.875% Convertible Senior
Notes due 2014 by and among
Chemed Corporation, the
Subsidiary Guarantors and
LaSalle Bank NA, as Trustee.
Form 8-KA
5/22/07
4.1
10.10
Employment Agreement with David
P. Williams dated December 1,
2006.
Amendment No. 2 to Excess Benefits
Plan, effective November 7, 2003
Form 10-K
3/12/04, **
10.26
10.24
Non-Employee Directors Deferred
Compensation Plan
Form 10-K
3/24/88, **
10.10
10.25
Chemed/Roto-Rooter Savings &
Retirement Plan, effective
January 1, 1999
Form 10-K
3/25/99, **
10.25
10.26
First Amendment to Chemed/Roto-Rooter
Savings & Retirement
Plan effective September 6, 2000
Form 10-K
3/28/02, **
10.22
10.27
Second Amendment to Chemed/Roto-Rooter
Savings & Retirement
Plan effective January 1, 2001
Form 10-K
3/28/02, **
10.23
10.28
Third Amendment to Chemed/Roto-Rooter
Savings & Retirement
Plan effective December 12, 2001
Form 10-K
3/28/02, **
10.24
10.29
Directors Emeriti Plan
Form 10-Q
5/12/88, **
10.11
10.30
Change in Control Severance
Plan as amended July 9, 2009.
Form 10-Q
7/31/09, **
10.05
10.31
Senior Executive Severance
Policy as amended July 9, 2009.
Form 10-Q
7/31/09, **
10.04
10.32
Roto-Rooter Deferred Compensation
Plan No. 1, as amended January 1,
1998
Form 10-K
3/28/01, **
10.37
10.33
Roto-Rooter Deferred Compensation
Plan No. 2
Form 10-K
3/28/01, **
10.38
10.34
Agreement and Plan of Merger,
dated as of December 18, 2003,
among Roto-Rooter, Inc., Marlin
Merger Corp. and Vitas Healthcare
Corporation
Form 8-K
12/19/03
99.2
10.35
Credit Agreement, dated as of
May 2, 2007, among Chemed
Corporation, the lenders from
time to time parties thereto
and J. P. Morgan Chase Bank,
NA, as Administrative Agent.
Form 8-K
5/07/07
10.01
10.35a
Credit Agreement Exhibits, dated as of
May 2, 2007, among Chemed
Corporation, the lenders from
time to time parties thereto
and J.P. Morgan Chase Bank,
NA, as Administrative Agent
*
10.35b
Credit Agreement Schedules, dated as of
May 2, 2007, among Chemed
Corporation, the lenders from
time to time parties thereto
and J.P. Morgan Chase Bank,
NA, as Administrative Agent
To each of the Agents and the Lenders
party to the Financing Agreement
referenced below
Re:
Chemed Corporation
Ladies and Gentlemen:
I am General Counsel to Chemed Corporation, a Delaware corporation (the Borrower),
and in such capacity have acted as counsel to the Borrower and the subsidiaries of the Borrower
identified on Schedule I hereto (the Subsidiaries and together with the Borrower, collectively,
the Loan Parties), in connection with the Credit Agreement of even date herewith (the
Credit Agreement), by and among the Borrower, the lenders party thereto (each a
Lender and collectively, the Lenders) and JPMorgan Chase Bank, N.A. (in such
capacity, the Administrative Agent). This opinion is being delivered to you pursuant to
Section 4.1.5(a) of the Credit Agreement. All capitalized terms used and not defined herein have
the same meanings herein as set forth in the Credit Agreement.
In that connection, I have examined, caused the examination of, or am otherwise familiar with,
originals, or copies certified or otherwise identified to my satisfaction, of such documents,
corporate records and other instruments as I have deemed necessary or appropriate for purposes of
this opinion, including (i) the Credit Agreement, (ii) the Pledge and Security Agreement, (iii) the
Guaranty Agreement and (iv) charter and by-laws or other formation documents, as applicable, for
each Loan Party. The documents described in clauses (i), (ii) and (iii) and of the immediately
preceding sentence are sometimes referred to as the Specified Loan Documents. I have
also relied, with respect to certain factual matters, on the representations and warranties of each
Loan Party contained in the Specified Loan Documents and have assumed compliance by each Loan Party
with the terms of the Specified Loan Documents.
In rendering my opinion, I have assumed (i) the due authorization of the Specified Loan
Documents by all parties thereto other than the Subsidiaries incorporated in states other than the
State of Delaware that are identified on Schedule II hereto (the Non-Delaware
Subsidiaries) and (ii) each party to the Specified Loan Documents (other than the Non-Delaware
Subsidiaries) has the full power, authority and legal right to enter into and perform its
obligations under the Specified Loan Documents to which it is a party.
Based upon the foregoing, and subject to the qualifications hereinafter set forth, I am of the
opinion that:
1. Each of the Non-Delaware Subsidiaries (other than Vitas Healthcare of Texas, L.P.) has all
requisite corporate power and authority to conduct its business as now conducted and to execute and
deliver each Specified Loan Document to which it is a party, and to consummate the transactions
contemplated by the Specified Loan Documents to which it is a party. Vitas Healthcare of Texas,
L.P. has the limited liability partnership power and authority to conduct its business as now
conducted and to execute and deliver each Specified Loan Document to which it is a party, and to
consummate the transactions contemplated by the Specified Loan Documents to which it is a party.
Each of the Non-Delaware Subsidiaries is in good standing in the laws of its respective State of
Incorporation (as identified on Schedule II hereto).
2. Each Loan Party is duly qualified to do business as a foreign corporation and is in good
standing in each jurisdiction in which the character of the properties owned or leased by it or in
which the transaction of its business makes such qualification necessary, except in jurisdictions
where the absence of any such qualification could not reasonably be expected to result in a
Material Adverse Effect.
3. The execution and delivery by each Loan Party of each Specified Loan Document to which such
Loan Party is a party, as applicable, and the performances by such Loan Party of its obligations
thereunder, (a) have been duly authorized by all necessary corporate action, limited partnership
action or limited liability company action, as applicable, and (b) do not contravene its charter or
by-laws or other formation documents, as applicable.
4. The execution and delivery by each Loan Party of each Specified Loan Document to which it
is a party and the performances by such Loan Party of its obligations thereunder, (a) do not
violate the terms of any indenture, mortgage, deed of trust, loan agreement, lease agreement or any
other agreement known to me to which it or any of its properties may be bound and the violation of
which could reasonably be expected to have, singly or in the aggregate, a Material Adverse Effect
and (b) do not result in the creation of any lien, security interest or other charge or encumbrance
upon or with respect to any of its properties pursuant to the terms of any contractual restriction
binding on it or any of its properties that could reasonably be expected to have, singly or in the
aggregate, a Material Adverse Effect, other than pursuant to or as permitted by the Loan Documents.
My opinion does not extend to compliance by any Loan Party with the Senior Unsecured Indenture
Documents or any financial ratio or limitation in any contractual restriction expressed as a dollar
amount (or an amount expressed in another currency) or to performance under any contractual
restriction in the Specified Loan Documents to the extent it restricts actions required under the
agreements in clause (a) of the preceding sentence.
5. Each Specified Loan Document has been duly executed and delivered by each Loan Party which
is a party thereto.
6. The securities described on Schedule III (the Pledged Securities) have been duly
authorized and validly issued, are fully paid and nonassessable and the Pledge and Security
Agreement accurately identifies the Pledged Securities.
7. To my knowledge, there is no pending or threatened action, suit or proceeding involving any
Loan Party before any court or other Governmental Authority or any arbitrator that could reasonably
be expected to have a Material Adverse Effect.
8. No authorization, approval or other action by, and no notice to, consent of, order of or
filing with, any United States Federal or Florida, Iowa, Massachusetts, Nevada, Ohio or Texas
governmental authority is required to be made or obtained by any of the Non-Delaware Subsidiaries
in connection with the execution, delivery and performance by any Non-Delaware Subsidiary of the
Specified Loan Documents to which it is a party, other than (i) such reports to United States
governmental authorities regarding international capital and foreign currency transactions as may
be required pursuant to 31 C.F.R. Part 128, (ii) those that have been made or obtained and are in
full force and effect or as to which the failure to be made or obtained or to be in full force and
effect should not result, individually or in the aggregate, in a material adverse effect on
Borrower and its Subsidiaries, taken as a whole, (iii) such registrations, filings and approvals
under Federal or state laws as may be necessary in connection with the exercise of remedies or sale
of collateral or the granting of additional security interests or guarantees pursuant to the
Specified Loan Documents, (iv) such registrations, filings or approvals that are required in order
to perfect or record security interests granted under the Specified Loan Documents and (v) such
registrations, filings and approvals that may be required because of the legal or regulatory status
of any Lender or because of any other facts specifically pertaining to any Lender.
9. No Loan Party is required to register as an investment company as such term is defined in
the Investment Company Act of 1940.
I understand that you are satisfying yourselves as to the status under Section 548 of the
Bankruptcy Code and applicable state fraudulent conveyance laws of the obligations of the Loan
Parties under the Loan Documents and I express no opinion thereon. I also express no opinion as to
the application or effect of any health care laws or regulations to which Vitas Healthcare
Corporation or any of its subsidiaries is subject or the necessity of any authorization, approval
or action by, or any notice to, consent of, order of, or a filing with, any Governmental Authority
pursuant to any such laws or regulations.
I am admitted to practice only in the State of Ohio and I express no other opinion as to
matters governed by any laws other than the laws of Delaware, Florida, Iowa, Massachusetts, Nevada,
Ohio and Texas and the Federal law of the United States of America.
My opinion is rendered only to the Administrative Agent and the Lenders under the Credit
Agreement and is solely for their benefit in connection with the above transactions. In addition,
I hereby consent to reliance on this opinion by a permitted assign of a Lenders interest in the
Credit Agreement, provided that such permitted assign becomes a Lender on or prior to the
90th day after the date of this opinion. I am opining as to the matters herein only as of the date
hereof, and, while you are authorized to deliver copies of this opinion to such permitted assigns
and they are permitted to rely on this opinion, the rights to do so do not imply any obligation on
my part to update this opinion. This opinion may not be relied upon by any other person or for any
other purpose or used, circulated, quoted or otherwise referred to for any other purpose.
Very truly yours,
Schedule I
Loan Party
Jurisdiction of Organization
COMFORT CARE HOLDINGS CO.
Nevada
Jet Resource, Inc.
Delaware
ROTO-ROOTER CORPORATION
Iowa
ROTO-ROOTER SERVICES COMPANY
Iowa
NUROTOCO OF MASSACHUSETTS, INC.
Massachusetts
Consolidated HVAC, Inc.
Ohio
Roto-Rooter Group, Inc.
Delaware
R.R. UK, Inc.
Delaware
ROTO-ROOTER DEVELOPMENT COMPANY
Delaware
Vitas Healthcare Corporation
Delaware
VITAS Healthcare Corporation of Arizona
Delaware
VITAS Healthcare Corporation of Georgia
Delaware
Vitas Healthcare Corporation of California
Delaware
Vitas Healthcare Corporation of Central Florida
Delaware
Vitas Healthcare Corporation of Florida
Florida
Vitas Healthcare Corporation of Illinois
Delaware
VITAS HEALTHCARE CORPORATION OF OHIO
Delaware
Vitas Healthcare Corporation Atlantic
Delaware
Vitas Healthcare Corporation Midwest
Delaware
VITAS HME Solutions, Inc.
Delaware
Vitas Holdings Corporation
Delaware
Hospice Care Incorporated
Delaware
VITAS CARE SOLUTIONS, INC.
Delaware
Vitas Hospice Services, L.L.C.
Delaware
Vitas Healthcare of Texas, L.P.
Texas
Schedule II
Non-Delaware Subsidiary
Jurisdiction of Organization
COMFORT CARE HOLDINGS CO.
Nevada
ROTO-ROOTER CORPORATION
Iowa
ROTO-ROOTER SERVICES COMPANY
Iowa
NUROTOCO OF MASSACHUSETTS, INC.
Massachusetts
Consolidated HVAC, Inc.
Ohio
Vitas Healthcare Corporation of Florida
Florida
Vitas Healthcare of Texas, L.P.
Texas
Schedule III
Shares of Common
Stock owned by the
Grantor Subject
Issuer
Grantor
to Pledge
COMFORT CARE HOLDINGS CO.
CHEMED CORPORATION
1,000
Jet Resource, Inc.
CHEMED CORPORATION
1,000
Roto-Rooter Group, Inc.
CHEMED CORPORATION
1,000
ROTO-ROOTER DEVELOPMENT
COMPANY
ROTO-ROOTER CORPORATION
1,000
ROTO-ROOTER CORPORATION
Roto-Rooter Group, Inc.
1,000
ROTO-ROOTER SERVICES COMPANY
Roto-Rooter Group, Inc.
1,000
R.R. UK, Inc.
Roto-Rooter Group, Inc.
1000
NUROTOCO OF MASSACHUSETTS,
INC.
ROTO-ROOTER SERVICES COMPANY
1
999
Consolidated HVAC, Inc.
ROTO-ROOTER SERVICES COMPANY
1,000
Vitas Healthcare Corporation
COMFORT CARE HOLDINGS CO.
1,000
Vitas Healthcare
Corporation of California
Vitas Hospice Services, L.L.C.
1,000
Vitas Healthcare
Corporation of Central
Florida
Vitas Hospice Services, L.L.C.
1,000
Vitas Healthcare
Corporation of Florida
Vitas Hospice Services, L.L.C.
100
Vitas Healthcare
Corporation of Illinois
Vitas Hospice Services, L.L.C.
1,000
VITAS HEALTHCARE
CORPORATION OF OHIO
Vitas Hospice Services, L.L.C.
1,000
VITAS HEALTHCARE
CORPORATION ATLANTIC
Vitas Hospice Services, L.L.C.
1,000
VITAS HEALTHCARE
CORPORATION MIDWEST
Vitas Hospice Services, L.L.C.
1,000
VITAS HME Solutions, Inc.
Vitas Hospice Services, L.L.C.
1,000
Vitas Holdings Corporation
Vitas Hospice Services, L.L.C.
1,000
Hospice Care Incorporated
Vitas Hospice Services, L.L.C.
1,000
VITAS CARE SOLUTIONS, INC.
Vitas Hospice Services L.L.C.
1,000
VITAS Healthcare
Corporation of Georgia
Vitas Hospice Services, L.L.C.
1,000
VITAS Healthcare
Corporation of Arizona
Vitas Hospice Services, L.L.C.
1,000
EXHIBIT A-2
FORM OF CRAVATH SWAINE & MOORE LLP OPINION
Attached
May 2, 2007
Chemed Corporation
Ladies and Gentlemen:
We have acted as special New York counsel to Chemed Corporation, a Delaware corporation (the
Borrower), in connection with the Credit Agreement of even date herewith (the Credit
Agreement), among the Borrower, the lenders party thereto (collectively, the
Lenders) and JPMorgan Chase Bank, N.A., as administrative agent for the Lenders (in such
capacity, the Administrative Agent). This opinion is being delivered to you pursuant to
Section 4.1.5(b) of the Credit Agreement. Capitalized terms used but not defined herein have the
meanings assigned to them in the Credit Agreement.
In that connection, we have examined originals, or copies certified or otherwise identified to
our satisfaction, of such documents, corporate records and other instruments as we have deemed
necessary or appropriate for purposes of this opinion, including:
(i) the Credit Agreement,
(ii) the Pledge and Security Agreement, and
(iii) the Guaranty Agreement,
The documents described in clauses (i), (ii) and (iii) of the immediately preceding sentence are
sometimes referred to herein as the Agreements. We have also relied, with respect to certain
factual matters, on the representations and warranties of each Credit Party contained in the
Agreements and have assumed compliance by each Credit Party with the terms of the Agreements.
In rendering our opinion, we have assumed (a) the genuineness of all signatures, (b) the due
existence of each Credit Party, (c) that each Credit Party has all necessary power, authority and
legal right to execute and deliver the Agreements to which it is a party and to perform its
obligations thereunder, (d) the due authorization, execution and delivery of the Agreements by all
parties thereto, (e) the authenticity of all documents submitted to us as originals, (f) the
conformity to original documents of all documents submitted to us as copies and (g) that the choice
of New York law contained in the Agreements was not qualified by giving effect to Federal laws
applicable to national banks.
Based on the foregoing and subject to the qualifications hereinafter set forth, we are of
opinion as follows:
1. The execution and delivery by each Credit Party of the Agreements to which it is a party,
the performance by each Credit Party of its obligations thereunder and the grant by each Grantor
and Pledgor (each as defined in the Pledge and Security Agreement) of security interests pursuant
to the Pledge and Security Agreement will not violate any law, rule or regulation of the United
States of America or the State of New York.
2. To the extent governed by New York law, each Agreement constitutes a legal, valid and
binding obligation of each Credit Party party thereto, enforceable against such Credit Party in
accordance with its terms, subject in each case to applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and other similar laws relating to or affecting
creditors rights generally from time to time in effect and to general principles of equity
(including, without limitation, concepts of materiality, reasonableness, good faith and fair
dealing), regardless of whether considered in a proceeding in equity or at law. The foregoing
opinion is subject to the following qualifications: (i) certain provisions of the Agreements are or
may be unenforceable in whole or part under the laws of the State of New York, but the inclusion of
such provisions does not affect the validity of the Agreements or the liens and security interests
purported to be created by the Agreements, and the Agreements contain adequate provisions for the
practical realization of the principal rights and benefits intended to be afforded thereby, (ii)
insofar as provisions contained in the Agreements provide for indemnification or limitations on
liability, the enforceability thereof may be limited by public policy considerations, (iii) the
availability of a decree for specific performance or an injunction is subject to the discretion of
the court requested to issue any such decree or injunction and (iv) we express no opinion as to the
effect of the laws of any jurisdiction other than the State of New York where any Lender may be
located or where enforcement of the Agreements may be sought that limit the rates of interest
legally chargeable or collectible.
3. No authorization, approval or other action by, and no notice to, consent of, order of or
filing with, any United States Federal or New York State governmental authority is required to be
made or obtained by any Loan Party in connection with the execution, delivery and performance by
any Credit Party of the Agreements to which it is a party or the grant by each Grantor and Pledgor
of the security interests under the Pledge and Security Agreement, other than (i) such reports to
United States governmental authorities regarding international capital and foreign currency
transactions as may be required pursuant to 31 C.F.R. Part 128, (ii) those that have been made or
obtained and are in full force and effect or as to which the failure to be made or obtained or to
be in full force and effect should not result, individually or in the aggregate, in a material
adverse effect on Borrower and its Subsidiaries, taken as a whole, (iii) such registrations,
filings and approvals under Federal or state laws as may be necessary in connection with the
exercise of remedies or sale of collateral or the granting of additional security interests or
guarantees pursuant to the Agreements, (iv) such registrations, filings or approvals that are
required in order to perfect or record security interests granted under the Agreements and (v) such
registrations, filings and approvals that may be required because of the legal or regulatory status
of any Lender or because of any other facts specifically pertaining to any Lender.
4. Assuming that the Borrower complies with the provisions of the Credit Agreement relating to
the use of proceeds of the Loans, the making of the Loans under the Credit
Agreement on the date hereof does not violate Regulation T, U or X of the Board of Governors
of the Federal Reserve System.
5. The provisions of the Pledge and Security Agreement are sufficient to create in favor of
the Administrative Agent a security interest in all right, title and interest of each Credit Party
party thereto in such of the Collateral (as defined therein) as constitutes accounts, chattel
paper, documents, equipment, general intangibles, goods, instruments, inventory and
investment property within the meaning of the Uniform Commercial Code of the State of New York as
in effect on the date hereof (the New York UCC) (such of the Collateral being hereinafter
referred to as the Specified UCC Collateral), to the extent that the creation of security
interests in the Specified UCC Collateral is governed by the New York UCC.
6. Upon delivery to and the continued possession by the Administrative Agent, in each case in
the State of New York, of all certificates evidencing the securities described in Annex I hereto
and pledged on the date hereof under the Pledge and Security Agreement that constitute certificated
securities within the meaning of Article 8 of the New York UCC (the Pledged Certificates), issued
or endorsed in the name of the Administrative Agent or in blank or together with stock powers
properly executed in the name of the Administrative Agent or in blank with respect thereto, the
security interest in favor of the Administrative Agent for the benefit of the Holders of Secured
Obligations in such Pledged Certificates will be perfected. The security interest in such Pledged
Certificates will be prior to any security interest, lien, charge or encumbrance that must be
perfected by possession or filing under the New York UCC, to the extent that the creation and
perfection of security interests in such Pledged Certificates is governed by the New York UCC.
The opinion expressed in this paragraph 6 is based on the assumption that the Administrative
Agent has obtained control (for purposes of Article 9 of the New York UCC) of, and the Holders of
Secured Obligations have acquired their security interest in, the Pledged Certificates for value.
For purposes of the foregoing sentence, the term value shall have the meaning given to such term
in the New York UCC.
7. Our opinions expressed in paragraphs 5 and 6 are further qualified as follows:
1. we express no opinion as to (i) rights in or title to the Pledged Certificates or
any Collateral held by any Credit Party or (ii) the completeness or accuracy of the
description in such documents of any Collateral;
2. we express no opinion as to the creation or perfection of any security interests (i)
in any item of Collateral other than (as to creation and perfection) the Pledged
Certificates and (as to creation) the Specified UCC Collateral or (ii) in any item of
Collateral that is expressly excluded from the application of the New York UCC pursuant to
Section 9-109 thereof;
3. we express no opinion as to the perfection of any security interest in any
proceeds (as such term is defined in the New York UCC) and note that the creation and
perfection of any such interest is limited to the extent set forth in Section 9-315 of
the New York UCC;
4. except as specifically set forth in paragraph 6, we express no opinion as to the
priority of any security interest created under the Agreements, and we express no opinion in
paragraph 6 as to the relative priority of the security interest in the Pledged Certificates
as against (i) any claim or lien in favor of the United States of America or any agency or
instrumentality thereof (including, without limitation, Federal tax liens and liens under
Title IV of the Employee Retirement Income Security Act of 1974, as amended), (ii) the claim
of a lien creditor to the extent set forth in Section 9-317 or 9-323 of the New York UCC or
(iii) another secured party with a perfected security interest in other property of any
Credit Party to the extent any item of Collateral constitutes proceeds of such other
creditors property to the extent set forth in Section 9-322 of the New York UCC or (iv) in
the case of certificated securities, negotiable documents or instruments (as defined in
Section 9-102(a)(47) of the New York UCC), another secured party with a security interest
perfected without filing or the taking of possession to the extent set forth in Section
9-312(e) of the New York UCC;
5. in the case of property that becomes Collateral after the date hereof, Section 552
of Title 11 of the United States Code (the Bankruptcy Code) limits the extent to
which property acquired by a debtor after the commencement of a case under the Bankruptcy
Code may be subject to a security interest arising from a security agreement entered into by
the debtor before the commencement of such case;
6. we express no opinion as to the validity or enforceability of any security interest
in goods (as defined in the New York UCC) that have been bought by a buyer in the ordinary
course of business (as defined in Section 1-201 of the New York UCC);
7. we express no opinion regarding any copyrights, patents, trademarks, service marks
or other intellectual property, the proceeds thereof, or money due with respect to the
lease, license or use thereof except to the extent Article 9 of the New York UCC may be
applicable to the foregoing, and we express no opinion as to the effect of any Federal laws
relating to copyrights, patents, trademarks, service marks or other intellectual property on
the opinions expressed herein;
8. we express no opinion as to security interests in any item of collateral subject to
any restriction on or prohibition against assignment or transfer contained in or otherwise
applicable to such item of collateral or any contract, agreement, license, permit, security,
instrument or document constituting, evidencing or relating to such item, except to the
extent that any such restriction or prohibition is rendered ineffective pursuant to any of
Sections 9-406 through 9-409, inclusive, of the New York UCC. We note that even though the
New York UCC may render such a restriction or prohibition ineffective for purposes of
creation or perfection of a security interest, nonetheless, in many cases, such a security
interest may represent only limited rights in the related items of collateral and be subject
to various restrictions (including restrictions on rights of use, assignment and
enforcement); and
9. we express no opinion as to any Collateral constituting claims against any
government or governmental agency, including any Collateral that is subject to the Federal
Assignment of Claims Act.
We express no opinion herein as to any provision in any Agreement that (a) relates to the
subject matter jurisdiction of any Federal court of the United States of America, or any Federal
appellate court, to adjudicate any controversy related to the Agreements (such as the provision
found in Section 15.2 of the Credit Agreement), (b) contains a waiver of an inconvenient forum
(such as the provision found in Section 15.2 of the Credit Agreement), (c) relates to a right of
setoff in respect of purchases of interests in loans (such as the provision found in Section 11.2
of the Credit Agreement) or with respect to parties that may not hold mutual debts (such as the
provision found in Section 11.1 of the Credit Agreement), (d) provides for liquidated damages, (e)
relates to the waiver of rights to jury trial (such as the provision found in Section 15.3 of the
Credit Agreement), (f) relates to governing law to the extent that it purports to affect the choice
of law governing perfection and the effect of perfection and non-perfection of security interests
or (h) relates to any arrangement or similar fee payable to any arranger (including the Arranger
and the Administrative Agent) of the commitments or loans under the Credit Agreement or any fee not
set forth in the Agreements. We also express no opinion as to (v) the enforceability of the
provisions of any Agreement to the extent that such provisions constitute a waiver of illegality as
a defense to performance of contract obligations or any other defense to performance which cannot,
as a matter of law, be effectively waived, (w) whether a state court outside the State of New York
or a Federal court of the United States would give effect to the choice of New York law provided
for in the Agreements, (x) with respect to any Credit Party organized under the laws of the State
of Delaware, the effect of any provision in the certificate of incorporation of such Credit Party
of the type permitted by Section 102(b)(2) of the General Corporation Law of the State of Delaware,
(y) the effect of qualifying the choice of New York law by giving effect to Federal laws applicable
to national banks or (z) the application or effect of any laws or regulations relating to the
provision of healthcare products or services to which Vitas Healthcare Corporation or any Credit
Party or any of its subsidiaries is subject or the necessity of any authorization, approval or
action by, or any notice to, consent of, order of, or a filing with, any Governmental Authority
pursuant to any such laws or regulations.
We understand that you are satisfying yourselves as to the status under Section 548 of the
Bankruptcy Code and applicable state fraudulent conveyance laws of the obligations of each Credit
Party and the security interests of the Agent and the Lenders under the Agreements, and we express
no opinion thereon.
We are admitted to practice only in the State of New York, and we express no opinion as to
matters governed by any laws other than the laws of the State of New York and the Federal law of
the United States of America. Our opinions relating to security interests are limited to Article 8
and Article 9 of the New York UCC and do not address (i) laws of jurisdictions other than New York,
and laws of New York except for Article 8 or Article 9, as the case may be, (ii) collateral of a
type not subject to Article 8 or Article 9 of the New York UCC, (iii) what law governs perfection
and the effect of perfection or non-perfection of such security interests or (iv) the effect, if
any, of laws of jurisdictions other than New York on the creation, perfection or priority of such
security interests.
This opinion is rendered only to the Administrative Agent and the Lenders under the Credit
Agreement and is solely for their benefit in connection with the above transactions. In addition,
we hereby consent to reliance on this opinion by a permitted assign of a Lenders interest in the
Credit Agreement, provided that such permitted assign becomes a Lender on or prior to the
90th day after the date of this opinion. We are opining as to the matters herein only as of the
date hereof, and, while you are authorized to deliver copies of this opinion to such permitted
assigns and they are permitted to rely on this opinion, the rights to do so do not imply any
obligation on our part to update this opinion. This opinion may not be relied upon by any other
person or for any other purpose or used, circulated, quoted or otherwise referred to for any other
purpose.
Very truly yours,
JPMorgan Chase Bank, N.A., as
Administrative Agent for the Lenders
under the Pledge and Security
Agreement referred to above,
JPMorgan Chase Bank, N.A., as Administrative
Agent under the Credit Agreement
referred to above, and each of the lending
and other financial institutions
party to the Credit Agreement
In care of:
JPMorgan Chase Bank, N.A.
8044 Montgomery Road, Floor 3
Cincinnati, OH 45236
Annex I
Issuer
Loan Party
Certificate Number
COMFORT CARE HOLDINGS CO.
CHEMED CORPORATION
1
Jet Resource, Inc.
CHEMED CORPORATION
1
Roto-Rooter Group, Inc.
CHEMED CORPORATION
2
ROTO-ROOTER DEVELOPMENT
COMPANY
ROTO-ROOTER CORPORATION
1
ROTO-ROOTER CORPORATION
Roto-Rooter Group, Inc.
2
ROTO-ROOTER SERVICES
COMPANY
Roto-Rooter Group, Inc.
226
R.R. UK, Inc.
Roto-Rooter Group, Inc.
1
NUROTOCO OF
MASSACHUSETTS, INC.
ROTO-ROOTER SERVICES
COMPANY
1
2
Consolidated HVAC, Inc.
ROTO-ROOTER SERVICES
COMPANY
2
Vitas Healthcare
Corporation
COMFORT CARE HOLDINGS
CO.
Vitas Healthcare
Corporation of California
Vitas Hospice
Services, L.L.C.
2
Vitas Healthcare
Corporation of Central
Florida
Vitas Hospice
Services, L.L.C.
2
Vitas Healthcare
Corporation of Florida
Vitas Hospice
Services, L.L.C.
4
Vitas Healthcare
Corporation of Illinois
Vitas Hospice
Services, L.L.C.
1
VITAS HEALTHCARE
CORPORATION OF OHIO
Vitas Hospice
Services, L.L.C.
2
VITAS HEALTHCARE
CORPORATION ATLANTIC
Vitas Hospice
Services, L.L.C.
2
VITAS HEALTHCARE
CORPORATION MIDWEST
Vitas Hospice
Services, L.L.C.
1
VITAS HME Solutions, Inc.
Vitas Hospice
Services, L.L.C.
2
Vitas Holdings Corporation
Vitas Hospice
Services, L.L.C.
3
Hospice Care Incorporated
Vitas Hospice
Services, L.L.C.
2
VITAS CARE SOLUTIONS, INC.
Vitas Hospice Services
L.L.C.
1
VITAS Healthcare
Corporation of Georgia
Vitas Hospice
Services, L.L.C.
5
VITAS Healthcare
Corporation of Arizona
Vitas Hospice
Services, L.L.C.
1
EXHIBIT A-3
FORM OF RICHARDS, LAYTON & FINGER, P.A. OPINION
Attached
EXHIBIT B
FORM OF COMPLIANCE CERTIFICATE
To:
The Lenders under the
Credit Agreement described below
This Compliance Certificate is furnished pursuant to that certain Credit Agreement, dated as
of May [__], 2007 (as the same may be amended, restated, supplemented or otherwise modified from
time to time, the Credit Agreement), among Chemed Corporation, a Delaware corporation, as
the Borrower (the Borrower), certain financial institutions from time to time party
thereto as lenders (the Lenders) and JPMorgan Chase Bank, National Association, as
Administrative Agent for itself and the other Lenders (the Administrative Agent). Unless
otherwise defined herein, capitalized terms used in this Compliance Certificate have the meanings
ascribed thereto in the Credit Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected __________ of the Borrower;1 and
2. Schedule I attached hereto sets forth financial data and computations evidencing the
Borrowers compliance with certain covenants of the Credit Agreement, all of which data and
computations are true and correct.
The foregoing certifications, together with the computations set forth in Schedule I hereto
and the financial statements delivered with this Certificate in support hereof, are made and
delivered this ___ day of __________, 20__.
CHEMED CORPORATION, as the Borrower
By:
Name:
Title:
[Chief Financial Officer][Treasurer]
1
Per Section 6.1.3 of the Credit Agreement,
this certificate is to be completed and executed by the chief financial officer
or treasurer.
B-1
SCHEDULE I TO COMPLIANCE CERTIFICATE
Compliance
as of _________ ___,
20___ (the Compliance Date) with
Provisions of Sections [6.20], [6.21], [6.22], [6.23] and [6.26] of the Credit Agreement
I.
FINANCIAL COVENANTS
A.
LEVERAGE RATIO (Section 6.20)
(1)
Consolidated Funded Indebtedness
(a)
Consolidated Indebtedness (includes
only amounts classified on balance sheet as long-term
Indebtedness)
$___________
(b)
Stated or face amount of all Letters of
Credit
(other than Letters of Credit to the extent
collateralized by cash or Cash Equivalent
Instruments)
+
$___________
(c)
Consolidated Funded Indebtedness (sum
of (a)
plus (b))
$___________
(2)
Consolidated EBITDA
(a)
Consolidated Net Income from continuing operations
$___________
(b)
Consolidated Interest Expense
+
$___________
(c)
Expense for taxes paid or accrued
+
$___________
(d)
Depreciation
+
$___________
(e)
Amortization expense of the Borrower
and its consolidated Subsidiaries (including
amortization recorded in connection with the
application of Financial Accounting Standard No. 142
(Goodwill and Other Intangibles))
+
$___________
(f)
Dividends, distributions and payments
under
any employee stock award or incentive plans
plus any employment taxes, cash fringes
and employee benefit charges payable in
connection therewith
+
$___________
B-2
(g)
All other non-cash charges of the
Borrower and its consolidated Subsidiaries (excluding
any such non-cash charge to the extent it represents an
accrual of or reserve for cash expenditures in any
future period)
+
$___________
(h)
Interest income and non-cash items of
income
of the Borrower and its consolidated
Subsidiaries
-
$___________
(i)
The aggregate amount of the awards
remitted by the Borrower to its senior management under
the current Multi-Year Management Incentive Plans
(provided that no more than $5,000,000 of cash
compensation, payments or awards remitted to
senior management shall be included in this
calculation)
+
$___________
(j)
Non-cash charges arising from
compensation expense as a result of Financial
Accounting Standards Board Statement 123R, Share Based
Payments
+
$___________
(k)
Any loss incurred by the Borrower as a
result of the early extinguishment of Indebtedness,
including
in connection with redemption of the Senior
Unsecured Notes
+
$___________
(l)
All non-recurring costs and expenses
incurred in connection with the consummation of any
Permitted Acquisition, Investment, asset disposition,
issuance or repayment of debt, issuance of equity
securities refinancing transaction or amendment or
modification of any debt instrument (in each case,
including any such transaction consummated prior to the
Closing Date and any such transaction undertaken but
not yet completed) and any non-recurring charges or
non-recurring costs incurred as a result of such
transaction, including all such costs, expenses and
charges in connection with the Convertible Note
Offering and the redemption, and refinancing pursuant
to the Credit Agreement, of the Senior Unsecured Notes
+
$___________
(m)
Yellow Pages Advertising Expense
+
$___________
B-3
(n)
Up to $25,000,000 in respect of
litigation costs and expenses (including settlement
amounts) related to matters settled prior to the
Closing Date and matters disclosed in the Borrowers
Form 10-Q Quarterly report filed with the SEC for the
fiscal quarter ended March 31, 2007
+
$___________
(o)
Consolidated EBITDA
=
$___________
(3)
Leverage Ratio (Ratio of A(1)(c) to A(2)(o))
_______to1.00
(4)
Maximum Leverage Ratio for any fiscal quarter is
required to be equal to or less than the ratio set forth below
opposite the final day of such Fiscal Quarter:
Fiscal Quarter Ending
Maximum Leverage Ratio
As of the Closing Date
3.75 to 1.00
June 30, 2007
3.75 to 1.00
September 30, 2007
3.75 to 1.00
December 31, 2007
3.75 to 1.00
March 31, 2008
3.75 to 1.00
Each fiscal quarter thereafter
3.50 to 1.00
B.
FIXED CHARGE COVERAGE RATIO (Section 6.21)
(1)
(a)
Consolidated EBITDA (A(2)(o) above)
$___________
(b)
Consolidated Capital Expenditures
-
$___________
(c)
Total:
$___________
(2)
(a)
Consolidated Interest Expense
$___________
(b)
Consolidated Current Maturities
(including,
without limitation, Capitalized Lease
Obligations)
+
$___________
B-4
(c)
Cash dividends paid on equity interests of the Borrower
+
$___________
(d)
Expenses for cash income taxes paid
+
$___________
(e)
Total:
$___________
(3)
Fixed Charge Coverage Ratio (Ratio of B(1)(c) to B(2)(e))
________ to1.00
(4)
Fixed Charge Coverage Ratio for any Fiscal Quarter is
required to be equal to or greater than 1.50 to 1.00.
C.
MINIMUM CONSOLIDATED NET WORTH (Section 6.22)
(1)
Closing Date Net Worth Amount
(a)
The aggregate amount paid to repurchase
the Borrowers capital stock during the period
beginning on the Closing Date and ended on the
six-month anniversary thereof (or, if earlier, on the
Compliance Date)
$___________
(b)
The excess of $350,000,000 over the lesser
of $100,000,000 and (a)
$___________
(2)
50% of the sum of Consolidated Net Income (if positive)
earned in each fiscal quarter beginning with the fiscal quarter
ending on June 30, 2007
$___________
(3)
Minimum Consolidated Net Worth (the sum of C(1)(b)
and C(2)):
$___________
(4)
State whether Consolidated Net Worth was equal to or
greater than C(3) (Consolidated Net Worth is required to be
greater than or equal to item C(3) at the Compliance Date)
Yes/No
II.
OTHER MISCELLANEOUS PROVISIONS
A.
OPERATING LEASES (Section 6.23)
(1)
The annual aggregate amount of liabilities of the
Borrower and its Subsidiaries under Operating Leases, synthetic
leases or tax ownership operating leases (not to exceed
$30,000,000)
$___________
B.
CREDIT PARTIES ASSET VALUE (Section 6.26)
(1)
Credit Parties Asset Value (not to be less than
$700,000,000 at the end of any fiscal quarter)
$___________
B-5
EXHIBIT C
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption (the Assignment and Assumption) is dated as of the
Effective Date set forth below and is entered into by and between [Insert name of Assignor] (the
Assignor) and [Insert name of Assignee] (the Assignee). Capitalized terms used
but not defined herein shall have the meanings given to them in the Credit Agreement identified
below (as amended, the Credit Agreement), receipt of a copy of which is hereby
acknowledged by the Assignee. The Terms and Conditions set forth in Annex 1 attached hereto are
hereby agreed to and incorporated herein by reference and made a part of this Assignment and
Assumption as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the
Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to
and in accordance with the Terms and Conditions and the Credit Agreement, as of the Effective Date
inserted by the Administrative Agent as contemplated below, the interest in and to all of the
Assignors rights and obligations in its capacity as a Lender under the Credit Agreement and any
other documents or instruments delivered pursuant thereto that represents the amount and percentage
interest identified below of all of the Assignors outstanding rights and obligations under the
respective facilities identified below (including, without limitation, any letters of credit,
guaranties and swingline loans included in such facilities and, to the extent permitted to be
assigned under applicable law, all claims (including without limitation contract claims, tort
claims, malpractice claims, statutory claims and all other claims at law or in equity), suits,
causes of action and any other right of the Assignor against any Person whether known or unknown
arising under or in connection with the Credit Agreement, any other documents or instruments
delivered pursuant thereto or the loan transactions governed thereby) (the Assigned Interest).
Such sale and assignment is without recourse to the Assignor and, except as expressly provided in
this Assignment and Assumption, without representation or warranty by the Assignor.
1.
Assignor:
2.
Assignee:
[and is an Affiliate/Approved
Fund of [identify Lender]2]
3.
Borrower:
Chemed Corporation
4.
Agent:
JPMorgan Chase Bank, National Association
as the Administrative Agent under the Credit Agreement
5.
Credit Agreement: The Credit Agreement dated as of May [__], 2007 among the
2
Select as applicable.
C-1
Borrower, the Lenders, and the Administrative Agent.
6.
Assigned Interest:
Aggregate Amount of
Amount of
Commitment/Loans
Commitment/Loans
Percentage Assigned of
Facility Assigned
for all Lenders*
Assigned*
Commitment/Loans3
____________4
$
$
_______
%
____________
$
$
_______
%
____________
$
$
_______
%
7.
Trade Date:
________________________5
Effective Date: ____________, 20__ [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE
EFFECTIVE DATE OF RECORDATION OF TRANSFER BY THE ADMINISTRATIVE AGENT.]
The terms set forth in this Assignment and Assumption are hereby agreed to:
ASSIGNOR
[NAME OF ASSIGNOR]
By:
Title:
ASSIGNEE
[NAME OF ASSIGNEE]
By:
Title:
[Consented to and]6 Accepted:
JPMORGAN CHASE BANK, National Association, as
Administrative Agent
By:
Title:
*
Amount to be adjusted by the counterparties to take into
account any payments or prepayments made between the Trade Date and the
Effective Date.
3
Set forth, to at least 9 decimals, as a percentage of
the Commitment/Loans of all Lenders thereunder.
4
Fill in the appropriate terminology for the
types of facilities under the Credit Agreement that are being assigned under
this Agreement.
5
Insert if satisfaction of minimum amounts is
to be determined as of the Trade Date.
6
To be added only if the consent of the
Administrative Agent is required by the terms of the Credit Agreement.
C-2
[Consented to:]7
[CHEMED CORPORATION,
as Borrower]
By:
Title:
7
To be added only if the consent of the
Borrower is required by the terms of the Credit Agreement.
C-3
ANNEX 1
TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
1. Representations and Warranties.
1.1 Assignor. The Assignor represents and warrants that (i) it is the legal and
beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any
lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken
all action necessary, to execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby. Neither the Assignor nor any of its officers, directors,
employees, agents or attorneys shall be responsible for (i) any statements, warranties or
representations made in or in connection with the Credit Agreement or any other Loan Document, (ii)
the execution, legality, validity, enforceability, genuineness, sufficiency, perfection, priority,
collectibility, or value of the Loan Documents or any collateral thereunder, (iii) the financial
condition of the Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in
respect of any Loan Document, (iv) the performance or observance by the Borrower, any of its
Subsidiaries or Affiliates or any other Person of any of their respective obligations under any
Loan Document, (v) inspecting any of the property, books or records of the Borrower, or any
guarantor, or (vi) any mistake, error of judgment, or action taken or omitted to be taken in
connection with the Loans or the Loan Documents.
1.2. Assignee. The Assignee (a) represents and warrants that (i) it has full power
and authority, and has taken all action necessary, to execute and deliver this Assignment and
Assumption and to consummate the transactions contemplated hereby and to become a Lender under the
Credit Agreement, (ii) from and after the Effective Date, it shall be bound by the provisions of
the Credit Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have
the obligations of a Lender thereunder, (iii) agrees that its payment instructions and notice
instructions are as set forth in Schedule 1 to this Assignment and Assumption, (iv) confirms that
none of the funds, monies, assets or other consideration being used to make the purchase and
assumption hereunder are plan assets as defined under ERISA and that its rights, benefits and
interests in and under the Loan Documents will not be plan assets under ERISA, (v) agrees to
indemnify and hold the Assignor harmless against all losses, costs and expenses (including, without
limitation, reasonable attorneys fees) and liabilities incurred by the Assignor in connection with
or arising in any manner from the Assignees non-performance of the obligations assumed under this
Assignment and Assumption, (vi) it has received a copy of the Credit Agreement, together with
copies of financial statements and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this Assignment and
Assumption and to purchase the Assigned Interest on the basis of which it has made such analysis
and decision independently and without reliance on the Administrative Agent or any other Lender,
and (vii) attached as Schedule 1 to this Assignment and Assumption is any documentation required to
be delivered by the Assignee with respect to its tax status pursuant to the terms of the Credit
Agreement, duly completed and executed by the Assignee and (b) agrees that (i) it will,
independently and without reliance on the Administrative Agent, the Assignor or any other Lender,
and based on such documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in
C-4
taking or not taking action under the Loan Documents, and (ii) it will perform in accordance
with their terms all of the obligations which by the terms of the Loan Documents are required to be
performed by it as a Lender.
2. Payments. The Assignee shall pay the Assignor, on the Effective Date, the amount
agreed to by the Assignor and the Assignee. From and after the Effective Date, the Administrative
Agent shall make all payments in respect of the Assigned Interest (including payments of principal,
interest, fees and other amounts) to the Assignor for amounts which have accrued to but excluding
the Effective Date and to the Assignee for amounts which have accrued from and after the Effective
Date.
3. General Provisions. This Assignment and Assumption shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and assigns. This
Assignment and Assumption may be executed in any number of counterparts, which together shall
constitute one instrument. Delivery of an executed counterpart of a signature page of this
Assignment and Assumption by telecopy shall be effective as delivery of a manually executed
counterpart of this Assignment and Assumption. This Assignment and Assumption shall be governed
by, and construed in accordance with, the internal law of the State of New York.
C-5
SCHEDULE 1
ADMINISTRATIVE QUESTIONNAIRE
(Schedule to be supplied by Closing Unit or Trading Documentation Unit)
US AND NON-US TAX INFORMATION REPORTING REQUIREMENTS
(Schedule to be supplied by Closing Unit or Trading Documentation Unit)
C-6
EXHIBIT D
FORM OF LOAN/ CREDIT RELATED MONEY TRANSFER INSTRUCTIONS
To JPMorgan Chase Bank, National Association,
as Administrative Agent (the Administrative Agent) under the Credit Agreement
described below.
Re:
Credit Agreement, dated as of May [__], 2007 (as the same may
be amended, restated, supplemented or otherwise modified from time to time, the
Credit Agreement), among Chemed Corporation, a Delaware corporation,
as the Borrower (the Borrower), certain financial institutions party
thereto as lenders (the Lenders) and the Administrative Agent.
Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned thereto in the Credit Agreement.
The Administrative Agent is specifically authorized and directed to act upon the following
standing money transfer instructions with respect to the proceeds of Advances or other extensions
of credit from time to time until receipt by the Administrative Agent of a specific written
revocation of such instructions by the Borrower, provided, however, that the
Administrative Agent may otherwise transfer funds as hereafter directed in writing by the Borrower
in accordance with Section 13.1 of the Credit Agreement or based on any telephonic notice made in
accordance with Section 2.14 of the Credit Agreement.
Facility Identification Number(s)
Customer/Account Name Chemed Corporation
Transfer Funds To
For Account No.
Reference/Attention To
Authorized Officer (Customer Representative)
Date ______________
(Please Print)
Signature
Bank Officer Name
Date ______________
(Please Print)
Signature
D-1
EXHIBIT E-1
FORM OF REVOLVING LOAN NOTE
$[__________]
[DATE]
CHEMED CORPORATION, a Delaware corporation (the Borrower), promises to pay to
[LENDER] or its registered assigns (the Lender) [_______] DOLLARS ($[_________]) or, if
less, the aggregate unpaid principal amount of all Revolving Loans made by the Lender to Borrower
pursuant to the Credit Agreement (as hereinafter defined), in immediately available funds at the
place specified pursuant to Article II of the Credit Agreement, together with interest on the
unpaid principal amount hereof at the rates and on the dates set forth in the Credit Agreement.
The Borrower shall pay, in Dollars, the principal of and accrued and unpaid interest on the
Revolving Loans in full on the Revolving Loan Termination Date and shall make such mandatory
payments as are required to be made under the terms of Article II of the Credit Agreement.
The Lender shall, and is hereby authorized to, record on the schedule attached hereto, or to
otherwise record in accordance with its usual practice, the date and amount of each Revolving Loan
and the date and amount of each principal payment hereunder.
This Revolving Loan Note is one of the Notes issued pursuant to, and is entitled to the
benefits of, the Credit Agreement, dated as of May [__], 2007 (as the same may be amended,
restated, supplemented or otherwise modified from time to time, the Credit Agreement),
among the Borrower, the financial institutions from time party thereto as lenders (the
Lenders) and JPMorgan Chase Bank, National Association, as Administrative Agent, to which
Credit Agreement reference is hereby made for a statement of the terms and conditions governing
this Note, including the terms and conditions under which this Note may be prepaid or its maturity
date accelerated. Capitalized terms used herein and not otherwise defined herein are used with the
meanings attributed to them in the Credit Agreement. This Note is also entitled to the benefits of
the Collateral Documents and the obligations evidenced hereby are secured by the Liens granted
under the Collateral Documents.
This Note shall be governed by, and construed in accordance with, the internal laws, but
without regard to the conflict of law provisions, of the State of New York, but giving effect to
federal laws applicable to national banks.
E-1-1
CHEMED CORPORATION, as the Borrower
By:
Name:
Title:
E-1-2
SCHEDULE OF REVOLVING LOANS AND PAYMENTS OF PRINCIPAL
TO
REVOLVING LOAN NOTE OF CHEMED CORPORATION
[DATE]
Principal
Principal
Amount of
Amount
Unpaid
Date
Revolving Loan
Paid
Balance
E-1-3
EXHIBIT E-2
FORM OF TERM LOAN NOTE
$[__________]
[DATE]
CHEMED CORPORATION, a Delaware corporation (the Borrower), promises to pay to
[LENDER] or its registered assigns (the Lender) [_______] DOLLARS ($[_________]) or, if
less, the aggregate unpaid principal amount of the Term Loan made by the Lender to Borrower
pursuant to the Credit Agreement (as hereinafter defined), in immediately available funds at place
specified pursuant to Article II of the Credit Agreement, together with interest on the unpaid
principal amount hereof at the rates and on the dates set forth in the Credit Agreement. The
Borrower shall pay, in Dollars, the principal of and accrued and unpaid interest on the Term Loan
in full on the Term Loan Maturity Date. The principal indebtedness evidenced hereby shall be
payable in installments as set forth in Article II of the Credit Agreement with a final installment
payable on the Term Loan Maturity Date.
The Lender shall, and is hereby authorized to, record on the schedule attached hereto, or to
otherwise record in accordance with its usual practice, the date and amount of the Term Loan and
the date and amount of each principal payment hereunder.
This Term Loan Note is one of the Notes issued pursuant to, and is entitled to the benefits
of, the Credit Agreement, dated as of May [__], 2007 (as the same may be amended, restated,
supplemented or otherwise modified from time to time, the Credit Agreement), among the
Borrower, the financial institutions from time to time party thereto as lenders (the
Lenders) and JPMorgan Chase Bank, National Association, as Administrative Agent, to which
Credit Agreement reference is hereby made for a statement of the terms and conditions governing
this Note, including the terms and conditions under which this Note may be prepaid or its maturity
date accelerated. Capitalized terms used herein and not otherwise defined herein are used with the
meanings attributed to them in the Credit Agreement. This Note is also entitled to the benefits of
the Collateral Documents and the obligations evidenced hereby are secured by the Liens granted
under the Collateral Documents.
This Note shall be governed by, and construed in accordance with, the internal laws, but
without regard to the conflict of law provisions, of the State of New York, but giving effect to
federal laws applicable to national banks.
E-2-1
CHEMED CORPORATION, as the Borrower
By:
Name:
Title:
E-2-2
SCHEDULE OF TERM LOANS AND PAYMENTS OF PRINCIPAL
TO
TERM LOAN NOTE OF CHEMED CORPORATION
[DATE]
Principal
Maturity
Principal
Amount of
of Interest
Amount
Unpaid
Date
Term Loan
Period
Paid
Balance
E-2-3
EXHIBIT F
FORM OF OFFICERS CERTIFICATE
OFFICERS CERTIFICATE
I, the undersigned, hereby certify to the Administrative Agent and the Lenders (each as
defined below) that I am the ________________ of Chemed Corporation, a corporation duly organized
and existing under the laws of the State of Delaware (the Borrower). Capitalized terms
used herein and not otherwise defined herein are as defined in that certain Credit Agreement, dated
as of May [__], 2007 (as the same may be amended, restated, supplemented or otherwise modified from
time to time, the Credit Agreement), among the Borrower, the financial institutions from
time to time party thereto as lenders (the Lenders) and JPMorgan Chase Bank, National
Association, as Administrative Agent. Capitalized terms used herein shall have the meanings set
forth in the Credit Agreement.
I further certify to the Administrative Agent and the Lenders, as such officer and not
individually, that, pursuant to Section 6.1.3 of the Credit Agreement, as of the date
hereof:
1. No Event of Default or Unmatured Event of Default has occurred and is
continuing [other than the following (describe the nature of the Event of
Default or Unmatured Event of Default and the status thereof)].
[2. The representations and warranties of the Borrower contained in Article
V of the Credit Agreement are true and correct in all material respects on
and as of the date of this Certificate to the same extent as though made on and
as of the date hereof except to the extent any such representation or warranty
is stated to relate solely to an earlier date, in which case such representation
or warranty shall have been true and correct on and as of such earlier
date.]8
[3. Other than as disclosed in public filings with the Securities and Exchange
Commission prior to the initial Credit Extension Date, no material adverse
change in the business, assets, condition (financial or otherwise), or Property
of the Borrower and its Subsidiaries, taken as a whole, has occurred since
December 31,
2006.]9
IN WITNESS WHEREOF, I hereby subscribe my name on behalf of the Borrower on this ____ day of
___________, 20__.
CHEMED CORPORATION, as the Borrower
By:
8
Bracketed language will only be included in
the Officers Certificate delivered on the Closing Date.
9
Bracketed language will only be included in
the Officers Certificate delivered on the Closing Date.
For the purposes of this Schedule, the following terms have the following meanings, subject to
the final paragraph of this Schedule:
Financials means the annual or quarterly financial statements of the Borrower delivered
pursuant to Section 6.1.
Level I Status exists at any date if, as of the last day of the fiscal quarter of the
Borrower referred to in the most recent Financials, the Leverage Ratio is less than 1.00 to 1.00.
Level II Status exists at any date if, as of the last day of the fiscal quarter of the
Borrower referred to in the most recent Financials, the Leverage Ratio is equal to or greater than
1.00 to 1.00 but less than 1.50 to 1.00.
Level III Status exists at any date if, as of the last day of the fiscal quarter of the
Borrower referred to in the most recent Financials, the Leverage Ratio is equal to or greater than
1.50 to 1.00 but less than 2.00 to 1.00.
Level IV Status exists at any date if, as of the last day of the fiscal quarter of the
Borrower referred to in the most recent Financials, the Leverage Ratio is greater than or equal to
2.00 to 1.00 but less than 2.50 to 1.00.
Level V Status exists at any date if, as of the last day of the fiscal quarter of the
Borrower referred to in the most recent Financials, the Leverage Ratio is greater than or equal to
2.50 to 1.00 but less than 3.00 to 1.00.
Level VI Status exists at any date, if, as of the last day of the fiscal quarter of the
Borrower referred to in the most recent Financials, the Leverage Ratio is greater than or equal to
3.00 to 1.00.
Status means either Level I Status, Level II Status, Level III Status, Level IV Status,
Level V Status or Level VI Status.
The Applicable Margin and Applicable Fee Rate shall be determined in accordance with foregoing
table based on the Borrowers Status as reflected in the then most recent Financials. Adjustments,
if any, to the Applicable Margin or Applicable Fee Rate shall be effective five Business Days after
the Administrative Agent has received the applicable Financials. If the Borrower fails to deliver
the Financials to the Administrative Agent at the time required pursuant to Section 6.1, then the
Applicable Margin and Applicable Fee Rate shall be the highest Applicable Margin and Applicable Fee
Rate set forth in the foregoing table until five days after such Financials are so delivered.
Notwithstanding the foregoing, Level II Status shall be in effect until the Administrative
Agent receives the Financials for the Borrowers fiscal quarter ending on June 30, 2007 and
adjustments to the Applicable Margin and Applicable Fee Rate shall thereafter be effected in
accordance with the preceding paragraph.
CREDIT AGREEMENT SCHEDULES
Schedule 2.20
Existing Letters of Credit
(3)
(5)
(1)
(2)
BANK
(4)
COMPANY/PURPOSE
IN U.S. DOLLARS
RATE(c)
(L.C. NUMBER)
IN FAVOR OF
(PERIOD COVERED)
(1)
$
24,269
1.000
%
JP MORGAN CHASE
(SLT430047)
LUMBERMENS MUTUAL
CASUALTY CO.
CHEMED INSURANCE
(3/10/04-10/1/07)
(2)
$
4,093,000
1.000
%
JP MORGAN CHASE
(SLT430046)
NATIONAL UNION FIRE
INSURANCE COMPANY OF
PITTSBURGH, PA
CHEMED INSURANCE
(3/10/04-10/1/07)
(3)
$
25,000
1.000
%
JP MORGAN CHASE
(SLT335291)
CITY OF CHICAGO, IL
DEPT OF
TRANSPORTATION
RRSC STANDBY
(10/28/02-12/31/2009)
(4)
$
5,000
1.000
%
JP MORGAN CHASE
(SLT332674)
TOWN OF RIVERHEAD, NY
RIVERHEAD SEWER
DISTRICT
RRSC STANDBY
(8/13/03-7/31/07)
(5)
$
3,000,000
(f)
1.000
%
JP MORGAN CHASE
(SLT334126)
FEDERAL INSURANCE
COMPANY CHUBB
COMMERCIAL INSURANCE
CHEMED INSURANCE
(4/1/03-4/1/08)
(6)
$
3,529,000
(a)
1.000
%
JP MORGAN CHASE.
(SLT430044)
CONTINENTAL CASUALTY
TRANSPORTATION
INSURANCE CO.
CHEMED INSURANCE
(3/10/04-10/1/07)
(7)
$
13,000,000
(b)
1.000
%
JP MORGAN CHASE.
(SLT430109)
ZURICH AMERICAN
INSURANCE CO
CHEMED INSURANCE
(3/31/04-3/31/08)
(8)
$
1,647,190
(e)
1.000
%
JP MORGAN CHASE.
(SLT430043)
RELIANCE INSURANCE
COMPANY
VITAS INSURANCE
(3/10/04-10/1/07)
(9)
$
7,500,000
(d)
1.000
%
JP MORGAN CHASE
(SLT430041)
SENTRY INSURANCE
VITAS INSURANCE
(3/10/04-10/1/07)
(10)
$
1,500,000
1.000
%
JP MORGAN CHASE
(SLT430042)
SENTRY INSURANCE
VITAS INSURANCE
(3/10/04-10/1/07)
(11)
$
10,000
1.000
%
JP MORGAN CHASE
(S-214667)
CITY OF LAKEWOOD, CO
DIRECTOR OR PUBLIC
WORKS
RRSC STANDBY
(11/21/05-11/30/07)
(12)
$
34,333,459
TOTAL LETTERS OF CREDIT
(a)
Reduced by $3,985,000 on 2/2/05. Reduced by $1,649,000 on 12/8/05.
(b)
Increased by $4,000,000 on 4/19/05, Increased by $3.0 million on 4/7/06, Increased by $1.0
million on 4/17/07.
(c)
As of 3/8/07 Level Pricing Changed to 1.00%
(d)
Increased by $2,000,000 on 10/18/05. Increased $3.8 million on 7/11/06.
(e)
Increased by $47,190 on 7/11/06.
(f)
Reduced by $1,800,000 on 9/7/06.
Schedules 5.8 Subsidiaries
Comfort Care Holdings Co.
Jet Resource, Inc.
Roto-Rooter Corporation
Roto-Rooter Services Company
Nurotoco of Massachusetts, Inc.
Roto-Rooter Group, Inc.
RR UK, Inc.
Roto-Rooter Development Company
Consolidated HVAC, Inc.
Vitas Healthcare Corporation
Vitas Hospice Services, L.L.C.
Vitas Healthcare Corporation of Illinois
Vitas Healthcare Corporation of California
Vitas Healthcare Corporation of Ohio
Vitas Healthcare Corporation of Florida
Vitas Healthcare Corporation of Central Florida
Vitas HME Solutions, Inc.
Vitas Holdings Corporation
Vitas Healthcare of Texas, L.P.
Hospice Care Incorporated
Vitas Healthcare Corporation of Georgia
Vitas Healthcare Corporation of Arizona
Vitas Healthcare Corporation Atlantic
Vitas Healthcare Corporation Midwest
Vitas Care Solutions, Inc.
Schedule 6.13
Existing Investments
Grantor
Issuer
Type
Amount
(1)
Chemed Corporation
Roto-Rooter Development Company
Intercompany Receivable
$
3,761,617
(2)
Chemed Corporation
Roto-Rooter Corporation
Intercompany Receivable
$
5,716,700
(3)
Chemed Corporation
Consolidated HVAC, Inc.
Intercompany Receivable
$
51,570,376
(4)
Chemed Corporation
Comfort Care Holdings Co.
Intercompany Receivable
$
39,721,071
(5)
Chemed Corporation
Jet Resource, Inc.
Intercompany Receivable
$
1,193,640
(6)
Chemed Corporation
Comfort Care Holdings Co.
Note Receivable
$
312,397,376
(7)
Chemed Corporation
Patient Care, Inc.
Note Receivable
$
14,701,379
(8)
Chemed Corporation
Patient Care, Inc.
Warrants
$
1,445,000
(9)
Roto-Rooter Services Co.
Various independent contractors (total of 29)
Notes Receivable
$
1,802,748
(10)
Roto-Rooter Group Inc.
Roto-Rooter of Canada Ltd.
Intercompany Receivable
$
162,331
(11)
Roto-Rooter Services Co.
Roto-Rooter of Canada Ltd.
Intercompany Receivable
$
2,633,769
(12)
Various Roto Rooter wholly owned subsidiaries
Complete Plumbing Service Inc.
Intercompany Receivable
$
2,264,334
Schedule 6.14
Existing Indebtedness
Credit Party
Payable to
Amount
Roto-Rooter Service Company
Wray
$
46,665
Roto-Rooter Service Company
Kissans
$
4,579
Roto-Rooter Service Company
McCoy
$
148,753
Roto-Rooter Service Company
Logar, Inc.
$
198,794
Each of these promissory notes is part of the purchase price for an acquisition of certain assets.
VITAS ENTITIES
None.
Schedule 6.15
Existing Liens; Closing Date Surety Bond Liens
Debtor Name: Vitas Healthcare of Texas, L.P.
Filing Date;
Jurisdiction/Filing Office
Thru Date
Number
Secured Party; Collateral
Texas
UCC Liens Secretary of
State
12/03/03
04/16/02;
020026788003
RSCPF
Fredricksburg,
L.P.; Blanket Lien
on all property
located in leased
premises at 5430
Fredricksburg Road,
San Antonio, TX
Schedule 6.16
Transactions with Affiliates
None.
Schedule 6.18
Subsidiary Covenants
None.
EX-12
4
l41914exv12.htm
EX-12
exv12
EXHIBIT 12
CHEMED CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(in thousands, except ratios)
2006
2007
2008
2009
2010
Pretax income from continuing operations
$
90,284
$
98,161
$
115,404
$
120,620
$
133,831
Additions:
Fixed charges
23,625
21,554
18,983
18,840
19,139
Amortization of capitalized interest
2
4
5
5
331
Deductions:
Capitalized interest
(751
)
(951
)
(659
)
(258
)
Adjusted income
$
113,160
$
118,768
$
133,733
$
139,207
$
153,301
Fixed Charges:
Interest expense
$
17,468
$
14,921
$
12,123
$
11,599
$
11,959
Capitalized interest
751
951
659
258
Interest component of rental expense
5,406
5,682
6,201
6,983
7,180
Fixed charges
$
23,625
$
21,554
$
18,983
$
18,840
$
19,139
Ratio of earnings to fixed charges (a)
4.8
x
5.5
x
7.0
x
7.4
x
8.0
x
Additional earnings needed to achieve
1:1 ratio coverage
n.a.
n.a.
n.a.
n.a.
n.a.
(a)
For purposes of computing the ratio of earnings to fixed charges,
pretax income from continuing operations has
been added to fixed charges and adjusted for capitalized interest to
derive adjusted income. Fixed charges consist
of interest expense on debt (including the amortization of deferred
financing costs), capitalized interest, prepayment
penalties on the early extinguishment of debt and one-third (the
proportion deemed representative of the interest component)
of rental expense. Fixed charge amounts include interest from both
continuing and discontinued operations.
EX-13
5
l41914exv13.htm
EX-13
exv13
Exhibit 13
Chemed Corporation and Subsidiary Companies
Financial Review
Contents
Report of Independent Registered Public Accounting Firm
2
Consolidated Statement of Income
3
Consolidated Balance Sheet
4
Consolidated Statement of Cash Flows
5
Consolidated Statement of Changes in Stockholders Equity
6
Notes to Consolidated Financial Statements
7
Unaudited Summary of Quarterly Results
32
Selected Financial Data
34
Unaudited Consolidating Statements of Income
35
Managements Discussion and Analysis of Financial Conditions and
Results of Operations
38
Officers and Directors Listing and Corporate Information
IBC
MANAGEMENTS REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
The Companys management is responsible for establishing and maintaining adequate internal
control over financial reporting, as that term is defined in Exchange Act Rules 13a-15(f) and
15d-15(f). A companys internal control over financial reporting is a process designed to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting
principles. A companys internal control over financial reporting includes those policies and
procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately
and fairly reflect the transactions and disposition of the assets of the company; (ii) provide
reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorization of management and
directors of the company; and (iii) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the Companys assets that could have
a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent
or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are
subject to the risk that controls may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate.
The Companys management, including the President and Chief Executive Officer, Executive Vice
President and Chief Financial Officer and Vice President and Controller, has conducted an
evaluation of the effectiveness of its internal control over financial reporting as of December 31,
2010, based on the framework established in Internal ControlIntegrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this
evaluation, management concluded that internal control over financial reporting was effective as of
December 31, 2010, based on criteria in Internal ControlIntegrated Framework issued by COSO.
PricewaterhouseCoopers LLP, our independent registered public accounting firm, has audited the
effectiveness of the Companys internal control over financial reporting as of December 31, 2010,
as stated in their report which appears on page 2.
1
Chemed Corporation and Subsidiary Companies
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of Chemed Corporation
In our opinion, the accompanying consolidated balance sheet and the related consolidated statements
of income, stockholders equity and cash flows present fairly, in all material respects, the
financial position of Chemed Corporation and its subsidiaries at December 31, 2010 and 2009, and
the results of their operations and their cash flows for each of the three years in the period
ended December 31, 2010 in conformity with accounting principles generally accepted in the United
States of America. Also in our opinion, the Company maintained, in all material respects,
effective internal control over financial reporting as of December 31, 2010, based on criteria
established in Internal Control Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO). The Companys management is responsible for these
financial statements, for maintaining effective internal control over financial reporting and for
its assessment of the effectiveness of internal control over financial reporting, included in the
accompanying Managements Report on Internal Control over Financial Reporting. Our responsibility
is to express opinions on these financial statements and on the Companys internal control over
financial reporting based on our integrated audits. We conducted our audits in accordance with the
standards of the Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement and whether effective internal control over
financial reporting was maintained in all material respects. Our audits of the financial
statements included examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and significant estimates made
by management, and evaluating the overall financial statement presentation. Our audit of internal
control over financial reporting included obtaining an understanding of internal control over
financial reporting, assessing the risk that a material weakness exists, and testing and evaluating
the design and operating effectiveness of internal control based on the assessed risk. Our audits
also included performing such other procedures as we considered necessary in the circumstances. We
believe that our audits provide a reasonable basis for our opinions.
A companys internal control over financial reporting is a process designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting principles. A
companys internal control over financial reporting includes those policies and procedures that (i)
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company
are being made only in accordance with authorizations of management and directors of the company;
and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the companys assets that could have a material effect on the
financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or
detect misstatements. Also, projections of any evaluation of effectiveness to future periods are
subject to the risk that controls may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate.
Cincinnati, Ohio
February 28, 2011
2
Chemed Corporation and Subsidiary Companies
CONSOLIDATED STATEMENT OF INCOME
(in thousands, except per share data)
For the Years Ended December 31,
2010
2009
2008
Continuing Operations
Service revenues and sales
$
1,280,545
$
1,190,236
$
1,148,941
Cost of services provided and goods sold (excluding depreciation)
906,016
834,574
810,547
Selling, general and administrative expenses
201,964
197,426
175,333
Depreciation
24,386
21,535
21,581
Amortization
4,657
6,367
5,924
Other operating expenses (Note 7)
3,989
2,699
Total costs and expenses
1,137,023
1,063,891
1,016,084
Income from operations
143,522
126,345
132,857
Interest expense
(11,959
)
(11,599
)
(12,123
)
Gain on extinguishment of debt (Note 3)
3,406
Other income/(expense)net (Note 11)
2,268
5,874
(8,736
)
Income before income taxes
133,831
120,620
115,404
Income taxes (Note 12)
(52,000
)
(46,583
)
(47,035
)
Income from continuing operations
81,831
74,037
68,369
Discontinued Operations, Net of Income Taxes (Note 9)
(253
)
(1,088
)
Net Income
$
81,831
$
73,784
$
67,281
Earnings Per Share (Note 16)
Income from continuing operations
$
3.62
$
3.30
$
2.97
Net Income
$
3.62
$
3.29
$
2.92
Average number of shares outstanding
22,587
22,451
23,058
Diluted Earnings Per Share (Note 16)
Income from continuing operations
$
3.55
$
3.26
$
2.93
Net Income
$
3.55
$
3.24
$
2.88
Average number of shares outstanding
23,031
22,742
23,374
The Notes to Consolidated Financial Statements are integral parts of this statement.
3
Chemed Corporation and Subsidiary Companies
CONSOLIDATED BALANCE SHEET
(in thousands, except shares and per share data)
December 31,
2010
2009
Assets
Current assets
Cash and cash equivalents (Note 10)
$
49,917
$
112,416
Accounts receivable less allowances of $13,332 (2009 $12,595)
112,999
53,461
Inventories
7,728
7,543
Current deferred income taxes (Note 12)
15,098
13,701
Prepaid income taxes
770
749
Prepaid expenses
10,285
10,388
Total current assets
196,797
198,258
Investments of deferred compensation plans held in trust (Notes 15 and 17)
28,304
24,158
Properties and equipment, at cost, less accumulated depreciation (Note 13)
79,292
75,358
Identifiable intangible assets less accumulated amortization of $27,438 (2009 $25,349) (Note 6)
Deferred compensation payable in Company stock (Note 15)
1,959
1,956
Total Stockholders Equity
462,049
477,162
Total Liabilities and Stockholders Equity
$
830,161
$
819,470
The Notes to Consolidated Financial Statements are integral parts of this statement.
4
Chemed Corporation and Subsidiary Companies
CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands)
For the Years Ended December 31,
2010
2009
2008
Cash Flows from Operating Activities
Net income
$
81,831
$
73,784
$
67,281
Adjustments to reconcile net income to net cash provided by operations:
Depreciation and amortization
29,043
27,902
27,505
Provision for uncollectible accounts receivable
9,078
10,833
9,820
Stock option expense
7,762
8,639
7,303
Amortization of discount on covertible notes
7,081
6,617
6,560
Noncash portion of long-term incentive compensation
4,161
4,385
Provision for deferred income taxes (Note 12)
(2,409
)
4,979
(2,772
)
Amortization of debt issuance costs
654
632
618
Discontinued operations (Note 9)
253
1,088
Noncash gain on early extinguishment of debt (Note 3)
(3,406
)
Loss on impairment of equipment (Note 7)
2,699
Changes in operating assets and liabilities, excluding amounts acquired in business combinations:
Decrease/(increase) in accounts receivable
(68,656
)
33,754
(6,659
)
Decrease/(increase) in inventories
(151
)
29
(898
)
Decrease/(increase) in prepaid expenses
332
(455
)
305
Increase/(decrease) in accounts payable and other current liabilities
13,810
(8,109
)
5,585
Increase/(decrease) in income taxes
4,825
623
(776
)
Decrease/(increase) in other assets
(4,398
)
(1,678
)
5,480
Increase/(decrease) in other liabilities
5,999
272
(6,423
)
Excess tax benefit on share-based compensation
(3,357
)
(1,955
)
(2,422
)
Other sources
407
327
1,195
Net cash provided by operating activities
86,012
160,832
112,083
Cash Flows from Investing Activities
Capital expenditures
(25,639
)
(21,496
)
(26,094
)
Business combinations, net of cash acquired (Note 8)
(9,469
)
(1,919
)
(11,200
)
Proceeds from sales of property and equipment
290
1,577
387
Net proceeds/(uses) of discontinued operations (Note 9)
(156
)
(630
)
8,824
Other uses
(726
)
(374
)
(544
)
Net cash used by investing activities
(35,700
)
(22,842
)
(28,627
)
Cash Flows from Financing Activities
Purchases of treasury stock (Note 21)
(109,330
)
(4,225
)
(69,788
)
Dividends paid
(11,881
)
(8,157
)
(5,543
)
Proceeds from exercise of stock options (Note 4)
5,327
545
291
Excess tax benefit on share-based compensation
3,357
1,955
2,422
Increase/(decrease) in cash overdraft payable
(581
)
2,891
(856
)
Repayment of long-term debt (Note 3)
(14,669
)
(18,713
)
Net change in revolving line of credit
(8,200
)
8,200
Other sources/(uses)
297
658
(829
)
Net cash used by financing activities
(112,811
)
(29,202
)
(84,816
)
Increase/(decrease) in cash and cash equivalents
(62,499
)
108,788
(1,360
)
Cash and cash equivalents at beginning of year
112,416
3,628
4,988
Cash and cash equivalents at end of year
$
49,917
$
112,416
$
3,628
The Notes to Consolidated Financial Statements are integral parts of this statement.
5
Chemed Corporation and Subsidiary Companies
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS EQUITY
Deferred
Compensation
Treasury
Payable in
Capital
Paid-in
Retained
Stock-
Company
(in thousands, except per share data)
Stock
Capital
Earnings
at Cost
Stock
Total
Balance at December 31, 2007
$
29,261
$
301,098
$
276,001
$
(213,041
)
$
2,481
$
395,800
Net income
67,281
67,281
Dividends paid ($.24 per share)
(5,543
)
(5,543
)
Stock awards and exercise of stock options (Note 4)
254
15,752
(6,253
)
9,753
Purchases of treasury stock (Note 21)
(67,125
)
(67,125
)
Repurchase of conversion feature of notes
(2,117
)
(2,117
)
Other
(1,217
)
442
(443
)
(1,218
)
Balance at December 31, 2008
29,515
313,516
337,739
(285,977
)
2,038
396,831
Net income
73,784
73,784
Dividends paid ($.36 per share)
(8,157
)
(8,157
)
Stock awards and exercise of stock options (Note 4)
376
21,741
(7,305
)
14,812
Purchases of treasury stock (Note 21)
(742
)
(742
)
Other
633
83
(82
)
634
Balance at December 31, 2009
29,891
335,890
403,366
(293,941
)
1,956
477,162
Net income
81,831
81,831
Dividends paid ($.52 per share)
(11,881
)
(11,881
)
Stock awards and exercise of stock options (Note 4)
491
28,541
(10,615
)
18,417
Purchases of treasury stock (Note 21)
(104,139
)
(104,139
)
Other
576
80
3
659
Balance at December 31, 2010
$
30,382
$
365,007
$
473,316
$
(408,615
)
$
1,959
$
462,049
The Notes to Consolidated Financial Statements are integral parts of this statement.
6
Chemed Corporation and Subsidiary Companies
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Chemed Corporation and Subsidiary Companies
1.
Summary of Significant Accounting Policies
NATURE OF OPERATIONS
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 and drain cleaning 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.
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of Chemed Corporation and its
wholly owned subsidiaries. All significant intercompany transactions have been eliminated.
We have analyzed the provisions of the Financial Accounting Standards Board (FASB)
authoritative guidance on the consolidation of variable interest entities relative to our
contractual relationships with Roto-Rooters independent contractors and franchisees. The
guidance requires the primary beneficiary of a Variable Interest Entity (VIE) to consolidate
the accounts of the VIE. Based upon the guidance provided by the FASB, we have concluded that
neither the independent contractors nor the franchisees are VIEs.
CASH EQUIVALENTS
Cash equivalents comprise short-term, highly liquid investments, including money market
funds that have original maturities of three months or less.
ACCOUNTS AND LOANS RECEIVABLE AND CONCENTRATION OF RISK
Accounts and loans receivable are recorded at the principal balance outstanding less
estimated allowances for uncollectible accounts. For the Roto-Rooter segment, allowances for
trade accounts receivable are generally provided for accounts more than 90 days past due,
although collection efforts continue beyond that time. Due to the small number of loans
receivable outstanding, allowances for loan losses are determined on a case-by-case basis. For
the VITAS segment, allowances for accounts receivable are provided on accounts based on expected
collection rates by payer types. The expected collection rate is based on both historical
averages and known current trends. Final write-off of overdue accounts or loans receivable is
made when all reasonable collection efforts have been made and payment is not forthcoming. We
closely monitor our receivables and periodically review procedures for granting credit to
attempt to hold losses to a minimum.
As of December 31, 2010 and 2009, approximately 72% and 43%, respectively, of VITAS total
accounts receivable balance were due from Medicare and 20% and 39%, respectively, of VITAS
total accounts receivable balance were due from various state Medicaid programs. Combined
accounts receivable from Medicare and Medicaid represent 88% of the net accounts receivable in
the accompanying consolidated balance sheet as of December 31, 2010.
As of December 31, 2010, VITAS has approximately $2.8 million in unbilled revenue included
in accounts receivable (December 31, 2009 $9.9 million). The unbilled revenue at VITAS
relates to hospice programs currently undergoing focused medical reviews (FMR). During FMR,
surveyors working on behalf of the U.S. Federal government review certain patient files for
compliance with Medicare regulations. During the time the patient file is under review, we are
unable to bill for care provided to those patients. We make appropriate provisions to reduce
our accounts receivable balance for any governmental or other payer reviews resulting in denials
of patient service revenue. We believe our hospice programs comply with all payer requirements
at the time of billing. However, we cannot predict whether future billing reviews or similar
audits by payers will result in material denials or reductions in revenue.
INVENTORIES
Substantially all of the inventories are either general merchandise or finished goods.
Inventories are stated at the lower of cost or market. For determining the value of
inventories, cost methods that reasonably approximate the first-in, first-out (FIFO) method
are used.
7
Chemed Corporation and Subsidiary Companies
DEPRECIATION AND PROPERTIES AND EQUIPMENT
Depreciation of properties and equipment is computed using the straight-line method over
the estimated useful lives of the assets. Leasehold improvements are amortized over the lesser
of the remaining lease terms (excluding option terms) or their useful lives. Expenditures for
maintenance, repairs, renewals and betterments that do not materially prolong the useful lives
of the assets are expensed as incurred. The cost of property retired or sold and the related
accumulated depreciation are removed from the accounts, and the resulting gain or loss is
reflected currently in income.
Expenditures for major software purchases and software developed for internal use are
capitalized and depreciated using the straight-line method over the estimated useful lives of
the assets. For software developed for internal use, external direct costs for materials and
services and certain internal payroll and related fringe benefit costs are capitalized in
accordance with the FASBs authoritative guidance on accounting for the costs of computer
software developed or obtained for internal use.
The weighted average lives of our property and equipment at December 31, 2010, were:
Buildings
11.4
yrs.
Transportation equipment
14.6
Machinery and equipment
5.6
Computer software
4.7
Furniture and fixtures
4.8
GOODWILL AND INTANGIBLE ASSETS
Identifiable, definite-lived intangible assets arise from purchase business combinations
and are amortized using either an accelerated method or the straight-line method over the
estimated useful lives of the assets. The selection of an amortization method is based on which
method best reflects the economic pattern of usage of the asset. The VITAS trade name is
considered to have an indefinite life. Goodwill and the VITAS trade name are tested at least
annually for impairment.
The date of our annual goodwill and indefinite-lived intangible asset impairment analysis
is October 1. For all reporting units included in continuing operations, the impairment tests
indicated that the fair value of our goodwill exceeds its carrying amount. Our goodwill and
VITAS trade name are not impaired.
We consider that Roto-Rooter Co. (RRC), Roto-Rooter Services Co. (RRSC) and VITAS are
appropriate reporting units. We consider RRC and RRSC as separate reporting units but one
operating segment. This is appropriate as they each have their own set of general ledger
accounts that can be analyzed at one level below an operating segment per the definition of a
reporting unit in FASB guidance.
We used two methods to estimate the business enterprise value of each reporting unit (a)
a comparison to key enterprise value ratios of publicly traded market competitors and (b) an
allocation of total Chemed market value at October 1, 2010 to each reporting unit. The final
estimate of the business enterprise value of each reporting unit was determined using a simple
average of the two methods.
For valuing the VITAS tradename, we performed a discounted cash flow analysis on the
expected theoretical royalty cash stream from the VITAS tradename.
The weighted average lives of our identifiable, definite-lived intangible assets at December
31, 2010, were:
Covenants not to compete
6.4
yrs.
Reacquired franchise rights
6.7
Referral networks
10.0
Customer lists
13.3
LONG-LIVED ASSETS
If we believe a triggering event may have occurred that indicates a possible impairment of
our long-lived assets, we perform an estimate and valuation of the future benefits of our
long-lived assets (other than goodwill and the VITAS trade name) based on key financial
indicators. If the projected undiscounted cash flows of a major business unit indicate that
property and equipment or identifiable, definite-lived intangible assets have been impaired, a
write-down to fair value is made.
8
Chemed Corporation and Subsidiary Companies
OTHER ASSETS
Debt issuance costs are included in other assets. Issuance costs related to revolving
credit agreements are amortized using the straight line method, over the life of the agreement.
All are other issuance costs are amortized using the effective interest method over the life of
the debt.
We capitalize the direct costs of obtaining licenses to operate either hospice programs or
plumbing operations subject to a minimum capitalization threshold. These costs are amortized
over the life of the license using the straight-line method. Certain licenses are granted
without an expiration and thus, we believe them to be indefinite-lived assets subject to
impairment testing on at least an annual basis.
REVENUE RECOGNITION
Both the VITAS segment and Roto-Rooter segment recognize service revenues and sales when
the earnings process has been completed. Generally, this occurs when services are provided or
products are delivered. Sales of Roto-Rooter products, including drain cleaning machines and
drain cleaning solution, comprise less than 3% of our total service revenues and sales for each
of the three years in the period ended December 31, 2010.
CHARITY CARE
VITAS provides charity care, in certain circumstances, to patients without charge when
management of the hospice program determines that the patient does not have the financial
wherewithal to make payment. There is no revenue or associated accounts receivable in the
accompanying consolidated financial statements related to charity care.
The cost of providing charity care during the years ended December 31, 2010, 2009 and 2008
was $7.2 million, $6.3 million and $7.1 million, respectively. The cost of charity care is
calculated by taking the ratio of charity care days to total days of care and multiplying by
total cost of care.
SALES TAX
The Roto-Rooter segment collects sales tax from customers when required by state and
federal laws. We record the amount of sales tax collected net in the accompanying consolidated
statement of income.
GUARANTEES
In the normal course of business, Roto-Rooter enters into various guarantees and
indemnifications in our relationships with customers and others. These arrangements include
guarantees of services for periods ranging from one day to one year and product satisfaction
guarantees. Mainly due to our technicians being commission-based, guarantees and
indemnifications do not materially impact our financial condition, results of operations or cash
flows. Therefore, no liability for guarantees has been recorded as of December 31, 2010 or
2009.
OPERATING EXPENSES
Cost of services provided and goods sold (excluding depreciation) includes salaries, wages
and benefits of service providers and field personnel, material costs, medical supplies and
equipment, pharmaceuticals, insurance costs, service vehicle costs and other expenses directly
related to providing service revenues or generating sales. Selling, general and administrative
expenses include salaries, wages, stock option expense and benefits of selling, marketing and
administrative employees, advertising expenses, communications and branch telephone expenses,
office rent and operating costs, legal, banking and professional fees and other administrative
costs. The cost associated with VITAS sales personnel is included in cost of services provided
and goods sold (excluding depreciation).
ADVERTISING
We expense the production costs of advertising the first time the advertising takes place.
The costs of telephone directory listings are expensed when the directories are placed in
circulation. These directories are generally in circulation for approximately one year, at
which point they are typically replaced by the publisher with a new directory. We generally pay
for directory placement assuming it is in circulation for one year. If the directory is in
circulation for less than or greater than one year, we receive a credit or additional billing,
as necessary. We do not control the timing of when a new directory is placed in circulation.
Advertising expense in continuing operations for the year ended December 31, 2010, was $27.7
million (2009 $27.0 million; 2008 $26.8 million).
COMPUTATION OF EARNINGS PER SHARE
Earnings per share are computed using the weighted average number of shares of capital
stock outstanding. Diluted earnings per share reflect the dilutive impact of our outstanding
stock options and nonvested stock awards. Stock options whose exercise price is greater than
the average market price of our stock are excluded from the computation of diluted earnings per
share.
9
Chemed Corporation and Subsidiary Companies
STOCK-BASED COMPENSATION PLANS
Stock-based compensation cost is measured at the grant date, based on the fair value of the
award and recognized as expense over the employees requisite service period on a straight-line
basis.
INSURANCE ACCRUALS
For our Roto-Rooter segment and Corporate Office, we 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 at
$500,000. 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 self-insure for workers compensation claims. Currently, VITAS
exposure on any single claim is capped at $750,000. For VITAS self-insurance accruals for
workers compensation, the valuation methods used are similar to those used internally for our
other business units.
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.
TAXES ON INCOME
Deferred taxes are provided on an asset and liability method whereby deferred tax assets
are recognized for deductible temporary differences and operating loss carry-forwards and
deferred tax liabilities are recognized for taxable temporary differences. Temporary
differences are the differences between the reported amount of assets and liabilities and their
tax basis. Deferred tax assets are reduced by a valuation allowance when, in our opinion, it is
more likely than not that some portion or all of the deferred tax assets will not be realized.
Deferred tax assets and liabilities are adjusted for the effects of changes in laws and rates on
the date of enactment.
We are subject to income taxes in Canada, U.S. federal and most state jurisdictions.
Significant judgment is required to determine our provision for income taxes. Our financial
statements reflect expected future tax consequences of such uncertain positions assuming the
taxing authorities full knowledge of the position and all relevant facts.
ESTIMATES
The preparation of consolidated financial statements in conformity with accounting
principles generally accepted in the United States requires us to make estimates and assumptions
that affect amounts reported in the consolidated financial statements and accompanying notes.
Actual results could differ from those estimates. Disclosures of aftertax expenses and
adjustments are based on estimates of the effective income tax rates for the applicable
segments.
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.
To the extent it is available and management deems it prudent, we carry commercial insurance
against such claims. We establish reserves for specific, uninsured liabilities in connection
with regulatory and legal action that we deem to be probable and estimable. We record legal
fees associated with legal and regulatory actions as the costs are incurred.
2.
Hospice Revenue Recognition
VITAS recognizes revenue at the estimated realizable amount due from third-party payers,
which are primarily Medicare and Medicaid. Payers may deny payment for services in whole or in
part on the basis that such services are not eligible for coverage and do not qualify for
reimbursement. We estimate denials each period and make adequate provision in the financial
statements. The estimate of denials is based on historical trends and known circumstances and
does not vary materially from period to period on an aggregate basis. Medicare billings are
subject to certain limitations, as described below.
10
Chemed Corporation and Subsidiary Companies
The allowance for doubtful accounts for VITAS comprises the following (in thousands):
Medicare
Medicaid
Other
Total
Beginning Balance January 1, 2009
$
5,255
$
2,115
$
1,069
$
8,439
Bad debt provision
4,760
3,014
1,819
9,593
Contractual adjustments/(revenue reduction)
613
613
Write-offs
(3,440
)
(2,446
)
(1,821
)
(7,707
)
Ending Balance December 31, 2009
6,575
2,683
1,680
10,938
Bad debt provision
2,991
3,051
1,857
7,899
Contractual adjustments/(revenue reduction)
472
472
Write-offs
(2,263
)
(2,653
)
(2,592
)
(7,508
)
Ending Balance December 31, 2010
$
7,303
$
3,081
$
1,417
$
11,801
VITAS is subject to certain limitations on Medicare payments for services.
Specifically, if the number of inpatient care days any hospice program provides to Medicare
beneficiaries exceeds 20% of the total days of hospice care such program provided to all
Medicare patients for an annual period beginning September 28, the days in excess of the 20%
figure may be reimbursed only at the routine homecare rate. None of VITAS hospice programs
exceeded the payment limits on inpatient services in 2010, 2009 or 2008.
VITAS is also subject to a Medicare annual per-beneficiary cap (Medicare cap).
Compliance with the Medicare cap is measured by comparing the total Medicare payments received
under a Medicare provider number with respect to services provided to all Medicare hospice care
beneficiaries in the program or programs covered by that Medicare provider number between
November 1 of each year and October 31 of the following year with the product of the
per-beneficiary cap amount and the number of Medicare beneficiaries electing hospice care for
the first time from that hospice program or programs from September 28 through September 27 of
the following year.
We actively monitor each of our hospice programs, by provider number, as to their specific
admission, discharge rate and median length of stay data in an attempt to determine whether
revenues are likely to exceed the annual per-beneficiary Medicare cap. Should we determine that
revenues for a program are likely to exceed the Medicare cap based on projected trends, we
attempt to institute corrective actions, which include changes to the patient mix and increased
patient admissions. However, should we project our corrective action will not prevent that
program from exceeding its Medicare cap, we estimate the amount of revenue recognized during the
period that will require repayment to the Federal government under the Medicare cap and record
the amount as a reduction to service revenue.
Our estimate of the Medicare cap liability is particularly sensitive to allocations made by
our fiscal intermediary relative to patient transfers between hospices. We are allocated a
percentage of the Medicare cap based on the days a patient spent in our care as compared to the
total days a patient spent in all hospice care. The allocation for patient transfers cannot be
determined until a patient dies. As the number of days a patient spends in hospice is based on
a future event, this allocation process may take several years. Therefore, we use only
first-time Medicare admissions in our estimate of the Medicare cap billing limitation. This
method assumes that credit received for patients who transfer into our program will be offset by
credit lost from patients who transfer out of our program. The amount we record is our best
estimate of the liability as of the date of the financial statements but could change as more
patient information becomes available.
During the year ended December 31, 2010, we reversed Medicare cap liability for amounts
recorded in the fourth quarter of 2009 for two programs projected 2010 measurement period
liability. This reversal was partially offset by the Medicare cap liability for three programs
projected 2011 measurement period liability. For the year ended December 31, 2009, we recorded
pretax charges in continuing operations for the estimated Medicare cap liability for two
programs projected liability through year end for the 2010 measurement period. The majority of
the liability relates to one program which is VITAS largest hospice. This amount was
subsequently reversed during the 2010 fiscal year due to increased admission trends. Shown
below is the Medicare cap liability activity for the years ended December 31, 2010 and 2009 (in
thousands):
11
Chemed Corporation and Subsidiary Companies
2010
2009
Beginning Balance January 1,
$
1,981
$
338
Expense 2011 measurement period
1,110
Expense/(reversal) 2010 measurement period
(1,720
)
1,783
Reversal 2009 measurement period
(235
)
Other retroactive billings
95
Ending Balance December 31,
$
1,371
$
1,981
The U.S. government revises hospice reimbursement rates on an annual basis using the
Hospice Wage Index (HWI) and the Consumer Price Index plus a phase out of the Budget Neutrality
Adjustment Factor (BNAF). The HWI is geographically adjusted to reflect local differences in
wages. The BNAF is a portion of inflation calculated in prior years that is being eliminated or
phased out over a seven year period. In August 2008, the U.S. government announced a 25%
reduction in the BNAF for its fiscal 2009 (October 2008 through September 2009) pursuant to a
three year phase-out of the BNAF. The February 2009 American Recovery and Reinvestment Act
mandated a one year delay in the BNAF phase-out. As a result, included in the twelve months
ended December 31, 2009, is $1.95 million of revenue for the retroactive price increase related
to services provided by VITAS in the fourth quarter of 2008.
In August 2009, the Centers for Medicare and Medicaid Services (CMS) revised the phase-out
schedule of the BNAF. CMS reduced the increase in hospice reimbursement by 10% of the BNAF
effective October 1, 2009. The remaining 90% of the BNAF will be phased out over the next six
years by revising the October 1 reimbursement adjustment by 15% of the original BNAF inflation
factor. Based upon this revised schedule, 100% of the BNAF will be eliminated on October 1,
2015.
3. Long-Term Debt and Lines of Credit
As of December 31, 2010, we have long-term debt of $159.2 million (December 31, 2009 -
$152.1 million). This long-term debt is related in its entirety to our Convertible Notes that
are due in full, in 2014.
2007
REFINANCING
Our 2007 credit facility includes a $175 million revolving credit facility and a $100
million expansion feature. The facility has a 5-year maturity with principal payments on the
revolving credit facility due at maturity. Interest is payable quarterly at a floating rate
equal to our choice of various indices plus a specified margin based on our leverage ratio. The
interest rate at the inception of the agreement was LIBOR plus 0.875%.
In May 2007, we issued $200 million of Senior Convertible Notes due 2014 (the Notes) at a
price of $1,000 per Note, less an underwriting fee of $27.50 per Note. We received
approximately $194 million in net proceeds from the sale of the Notes after paying underwriting
fees, legal and other expenses. We pay interest on the Notes on May 15 and November 15 of each
year, beginning on November 15, 2007. The Notes mature on May 15, 2014. The Notes are guaranteed
on an unsecured senior basis by each of our subsidiaries that are a borrower or a guarantor
under any senior credit facility, as defined in the Indenture. The Notes were convertible,
under certain circumstances, into our Capital Stock at an initial conversion rate of 12.3874
shares per $1,000 principal amount of Notes. This conversion rate is equivalent to an initial
conversion price of approximately $80.73 per share. Prior to March 1, 2014, holders may convert
their Notes under certain circumstances. On and after March 1, 2014, the Notes will be
convertible at any time prior to the close of business three days prior to the stated maturity
date of the Notes. Upon conversion of a Note, if the conversion value is $1,000 or less, holders
will receive cash equal to the lesser of $1,000 or the conversion value of the number of shares
of our Capital Stock. If the conversion value exceeds $1,000, in addition to this, holders will
receive shares of our Capital Stock for the excess amount. The Indenture contains customary
terms and covenants that upon certain events of default, including without limitation, failure
to pay when due any principal amount, a fundamental change or certain cross defaults in other
agreements or instruments, occurring and continuing; either the trustee or the holders of 25% in
aggregate principal amount of the Notes may declare the principal of the Notes and any accrued
and unpaid interest through the date of such declaration immediately due and payable. In the
case of certain events of bankruptcy or insolvency relating to any significant subsidiary or to
us, the principal amount of the Notes and accrued interest automatically becomes due and
payable.
The conversion rate on the Notes is adjusted upon certain corporate events including a
quarterly dividend payment in excess of $0.06 per share. In February 2010 and May 2010, we
declared quarterly dividends of $0.12 per share. In August 2010 and November 2010, we declared
quarterly dividends of $0.14 per share. This has the effect of changing the conversion rate to
12.484 ($80.10 per share) at December 31, 2010.
12
Chemed Corporation and Subsidiary Companies
Pursuant to the FASBs guidance on accounting for derivative instruments indexed to, and
potentially settled in a companys own stock as well as the guidance on the meaning of indexed
to a companys own stock, the Notes are accounted for as convertible debt in the accompanying
consolidated balance sheet and the embedded options within the Notes have not been accounted for
as separate derivatives.
In conjunction with the Notes, we entered into a purchased call transaction and a warrant
transaction (written call) with JPMorgan Chase, National Association and Citibank, N.A. (the
Counterparties). The purchased call options cover approximately 2,477,000 shares of our
Capital Stock, which under most circumstances represents the maximum number of shares of Capital
Stock that underlie the Notes. Concurrently with entering into the purchased call options, we
entered into warrant transactions with each of the Counterparties. Pursuant to the warrant
transactions, we sold to the Counterparties warrants to purchase in the aggregate approximately
2,477,000 shares of our Capital Stock. In most cases, the sold warrants may not be exercised
prior to the maturity of the Notes.
The purchased call options and sold warrants are separate contracts with the
Counterparties, are not part of the terms of the Notes and do not affect the rights of holders
under the Notes. A holder of the Notes will not have any rights with respect to the purchased
call options or the sold warrants. The purchased call options are expected to reduce the
potential dilution upon conversion of the Notes if the market value per share of the Capital
Stock at the time of exercise is greater than the conversion price of the Notes at time of
exercise. The sold warrants have an exercise price of $105.44 and are expected to result in some
dilution should the price of our Capital Stock exceed this exercise price.
Our net cost for these transactions was approximately $27.3 million. Pursuant to FASBs
authoritative guidance, the purchased call option and the sold warrants are accounted for as
equity transactions. Therefore, our net cost was recorded as a decrease in stockholders equity
in the accompanying consolidated balance sheet.
In May 2008, the FASB issued authoritative guidance for accounting for convertible debt
instruments that may be settled in cash upon conversion including partial cash settlement. This
guidance requires all such convertible debentures to be separately accounted for as debt and
equity pieces of the instrument. At inception of the convertible instrument, cash flows related
to the convertible instrument are to be discounted using a market rate of interest. We adopted
the provisions of the guidance on January 1, 2009 and applied the guidance retrospectively.
Upon adoption, the Notes had a discount of approximately $55.1 million. For 2008 interest
expense increased and retained earnings decreased $6.1 million, ($4.0 million, net of
income taxes). The increase in interest expense results in a reduction in EPS and diluted EPS of
$0.20.
The following amounts are included in our consolidated balance sheet related to the Notes
(in thousands):
December 31,
2010
2009
Principal amount of convertible debentures
$
186,956
$
186,956
Unamortized debt discount
(27,748
)
(34,829
)
Carrying amount of convertible debentures
$
159,208
$
152,127
Additional paid in capital (net of tax)
$
31,310
$
31,310
The following amounts comprise interest expense included in our consolidated income
statement (in thousands):
December 31,
2010
2009
2008
Cash interest expense
$
4,224
$
4,350
$
4,945
Non-cash amortization of debt discount
7,081
6,617
6,560
Amortization of debt costs
654
632
618
Total interest expense
$
11,959
$
11,599
$
12,123
The unamortized debt discount is amortized using the effective interest method over the
remaining life of the Notes. The effective rate on the Notes after adoption of the standard
is 6.875%.
The average interest rate for our long-term debt was 1.9% for the years ended December 31,
2010 and 2009.
13
Chemed Corporation and Subsidiary Companies
In the fourth quarter of 2008, we purchased approximately $13.0 million face value of our
Convertible Notes due 2014 for approximately $8.5 million. This resulted in a pre-tax net gain
of $3.4 million comprised of $3.7 million related to the purchase of the Convertible Notes
partially offset by $300,000 in the write-off of unamortized debt issuance costs. The net gain
was recorded as a gain on extinguishment of debt in the accompanying statement of income in
2008.
Capitalized interest was not material for any of the periods shown. Summarized below are
the total amounts of interest paid during the years ended December 31 (in thousands):
2010
$
4,113
2009
4,667
2008
5,628
DEBT COVENANTS
Collectively, the 2007 Facility and the Notes require us to meet certain restrictive
non-financial and financial covenants. We are in compliance with all non-financial debt
covenants as of December 31, 2010. The restrictive financial covenants are defined in the
credit agreement and include maximum leverage ratios, minimum fixed charge coverage and
consolidated net worth ratios, limits on operating leases and minimum asset value limits. We
are in compliance with the financial debt covenants as of December 31, 2010, as follows:
Description
Requirement
Chemed
Leverage Ratio (Consolidated
Indebtedness/Consolidated Adj.
EBITDA)
< 3.50 to 1.00
1.15 to 1.00
Fixed Charge Coverage Ratio
(Consolidated Free Cash
Flow/Consolidated Fixed Charges)
> 1.50 to 1.00
2.26 to 1.00
Minimum Net Worth
> $350.3 million
$393.4 million
Annual Operating Lease Commitment
< $30.0 million
$17.8 million
Credit Party Asset Value
> $700.0 million
$809.3 million
We have issued $28.0 million in standby letters of credit as of December 31, 2010,
mainly for insurance purposes. Issued letters of credit reduce our available credit under the
revolving credit agreement. As of December 31, 2010, we have approximately $147.0 million of
unused lines of credit available and eligible to be drawn down under our revolving credit
facility, excluding the expansion feature. We have made no borrowings from our line of credit
during the year ended December 31, 2010.
4.
Stock-Based Compensation Plans
We provide employees the opportunity to acquire our stock through a number of plans, as follows:
We have six stock incentive plans under which 8,450,000 shares can be issued to key
employees through a grant of stock awards and/or options to purchase shares. The
Compensation/Incentive Committee (CIC) of the Board of Directors administers these
plans. All options granted under these plans provide for a purchase price equal to
the market value of the stock at the date of grant. The latest plan, covering a total
of 1,750,000 shares, was adopted in May 2010. The plans are not qualified, restricted
or incentive plans under the U.S. Internal Revenue Code. The terms of each plan
differ slightly; however, stock options issued under the plans generally have a
maximum term of 10 years. Under one plan, adopted in 1999, up to 500,000 shares may
be issued to employees who are not our officers or directors.
In May 2002, our shareholders approved the adoption of the Executive Long-Term
Incentive Plan (LTIP) covering our officers and key employees. The CIC periodically
approves a pool of shares to be awarded based on stock price hurdles, EBITDA targets
and a discretionary component for the LTIP.
In May 2009, the CIC approved a new stock-price target portion of the Companys LTIP. The new stock price
hurdles are as follows:
14
Chemed Corporation and Subsidiary Companies
Stock
Shares
Price
to be
Hurdle
Issued
$54.00
22,500
$58.00
33,750
$62.00
33,750
Total
90,000
The stock price hurdles must be achieved during 30 trading days out of any 60
trading day period during the three years ending February 28, 2012.
In December 2010, we met the $58.00 stock price target of our Long-Term Incentive Plan.
On December 9, 2010, the Compensation/Incentive Committee
of the Board of Directors (CIC) approved a stock grant of 41,100 shares (including
7,350 shares from the discretionary pool) and the related allocation to participants.
The pretax cost of the stock grant was $2.9 million and is included in selling, general
and administrative expense in the accompanying consolidated statement of income.
In April 2010, we met the $54.00 stock price target of our Long-Term Incentive Plan. On
April 16, 2010, the Compensation/Incentive Committee of the Board of Directors (CIC)
approved a stock grant of 27,900 shares (including 5,400 shares from the discretionary
pool) and the related allocation to participants. The pretax cost of the stock grant was
$1.8 million and is included in selling, general and administrative expense in the
accompanying consolidated statement of income.
In October 2009, we met the cumulative EBITDA target established in 2007 and on November
10, 2009 the CIC approved a stock grant of 96,200 shares and the related allocation to
participants. The pretax cost of the stock grant was $5.0 million and is included in
selling, general and administrative expenses in the accompanying consolidated statement
of income.
In November 2009, the CIC approved a pool of shares to be awarded based on new EBITDA
targets. The participants of the LTIP may be awarded 80,000 shares of capital stock if
we attain Adjusted EBITDA of either $640 million for the three-year period beginning
January 1, 2010, or $825 million for the four-year period beginning January 1, 2010. The
CIC also established a discretionary pool of 37,000 shares of capital stock.
We maintain an Employee Stock Purchase Plan (ESPP). The ESPP allows eligible
participants to purchase our shares through payroll deductions at current market
value. We pay administrative and broker fees associated with the ESPP. Shares
purchased for the ESPP are purchased on the open market and credited directly to
participants accounts. In accordance with the FASBs guidance, the ESPP is
non-compensatory.
For the years ended December 31, 2010, 2009 and 2008, we recorded $2.6 million, $2.3
million and $1.9 million, respectively, in amortization expense in the accompanying statement of
income for stock-based compensation related to the amortization of restricted stock awards
granted. For the years ended December 31, 2010, 2009 and 2008, we recorded $7.8 million, $8.6
million and $7.3 million, respectively, in selling, general and administrative expenses for
stock-based compensation related to stock options granted. There were no capitalized
stock-based compensation costs for any period presented.
As of December 31, 2010, approximately $3.9 million of total unrecognized compensation
costs related to non-vested stock awards are expected to be recognized over a weighted average
period of 2.1 years. As of December 31, 2010, approximately $8.4 million of total unrecognized
compensation costs related to non-vested stock options are expected to be recognized over a
weighted average period of 1.7 years.
15
Chemed Corporation and Subsidiary Companies
The following table summarizes stock option and award activity:
Stock Options
Stock Awards
Weighted
Weighted
Number
Average
Number
Average
of
Exercise
of
Grant-Date
Shares
Price
Shares
Price
Stock-based compensation shares:
Outstanding at January 1, 2010
2,452,227
$
43.36
169,975
$
47.87
Granted
515,100
52.76
125,472
57.13
Exercised/Vested
(365,763
)
29.40
(143,827
)
55.82
Canceled/Forfeited
(14,918
)
45.94
Outstanding at December 31,
2010
2,586,646
$
47.19
151,620
$
48.00
Vested at December 31, 2010
1,572,913
$
47.47
The weighted average contractual life of outstanding and exercisable options was 5.7
years at December 31, 2010.
Options outstanding at December 31, 2010, were in the following exercise price ranges:
Weighted
Average
Number of
Exercise
Aggregate
Exercise Price Range
Options
Price
Intrinsic Value
$0 to $27.18
203,604
$
20.18
$
8,822,000
$27.19 to $40.78
577,416
$
35.21
$
16,341,000
$40.79 to $70.00
1,347,326
$
49.34
$
19,092,000
The total intrinsic value of stock options exercised during the years ended December
31, 2010, 2009 and 2008 was $10.1 million, $5.1 million and $5.2 million,
respectively. The total intrinsic value of stock options that were
vested during the years ended December 31,
2010, 2009 and 2008 was $27.7 million, $15.5 million and $11.3 million, respectively.
The total intrinsic value of stock awards that were vested during the
years ended December
31, 2010, 2009, and 2008 was $8.4 million, $5.6 million and $3.4 million, respectively. The
total fair value of stock options that vested during 2010, 2009 and 2008 was $7.9 million,
$7.8 million and $6.0 million, respectively.
The total intrinsic
value of stock awards vested during the years ended December 31,
2010, 2009 and 2008 was $8.4 million, $5.6 million and $3.4 million,
respectively.
The total fair value of stock awards vested during the
years ended December 31, 2010, 2009 and 2008 was $8.0 million, $5.4 million and $1.8 million,
respectively. The total cash received from employees as a result of employee stock option
exercises for the years ended December 31, 2010, 2009 and 2008 was $5.3 million, $545,000 and
$291,000, respectively. In connection with these exercises, the excess tax benefits realized
for the years ended December 31, 2010, 2009 and 2008, were $3.4 million, $2.0 million and $2.4
million, respectively. We settle employee stock options with newly issued shares.
We estimate the fair value of stock options using the Black-Scholes valuation model,
consistent with the provisions of the FASBs and the Securities and Exchange Commissions
(SEC) guidance. We determine expected term, volatility, dividend yield and forfeiture rate
based on our historical experience. We believe that historical experience is the best indicator
of these factors. For purposes of determining the key assumptions and the related fair value of
the options granted, we analyzed the participants of the LTIP separately from the other stock
option recipients. The assumptions we used to value the 2010, 2009 and 2008 grants are as
follows:
2010
2009
2008
LTIP
LTIP
LTIP
Participants
All Others
Participants
All Others
Participants
All Others
Stock price on date of issuance
$
52.76
$
52.76
$
44.02
$
44.02
$
33.75
$
33.75
Grant date fair value per share
$
15.57
$
14.55
$
14.95
$
12.49
$
11.18
$
10.18
Number of options granted
331,500
183,600
320,000
188,600
325,000
183,600
Expected term (years)
5.4
4.5
5.7
4.1
5.7
4.3
Risk free rate of return
2.62
%
2.09
%
1.91
%
1.44
%
3.08
%
2.92
%
Volatility
33.0
%
34.5
%
35.0
%
35.0
%
31.8
%
34.0
%
Dividend yield
1.5
%
1.5
%
0.6
%
0.6
%
0.7
%
0.7
%
Forfeiture rate
4.4
%
5.5
%
5.20
%
16
Chemed Corporation and Subsidiary Companies
5.
Segments and Nature of the Business
Our segments include the VITAS segment and the Roto-Rooter segment. Relative contributions
of each segment to service revenues and sales were 72% and 28%, respectively, in both 2010 and
2009. The vast majority of our service revenues and sales from continuing operations are
generated from business within the United States.
The reportable segments have been defined along service lines, which is consistent with the
way the businesses are managed. In determining reportable segments, the Roto-Rooter Services and
Roto-Rooter Franchising and Products operating units of the Roto-Rooter segment have been
aggregated on the basis of possessing similar operating and economic characteristics. The
characteristics of these operating segments and the basis for aggregation are reviewed annually.
Accordingly, the reportable segments are defined as follows:
The VITAS segment provides hospice services for patients with severe, life-limiting
illnesses. This type of care is aimed at making the terminally ill patients end of
life as comfortable and pain-free as possible. Hospice care is typically available to
patients who have been initially certified or re-certified as terminally ill (i.e., a
prognosis of six months or less) by their attending physician, if any, and the hospice
physician. VITAS offers all levels of hospice care in a given market, including
routine home care, inpatient care and continuous care. Over 90% of VITAS revenues
are derived through the Medicare and Medicaid reimbursement programs.
The Roto-Rooter segment provides repair and maintenance services to residential and
commercial accounts using the Roto-Rooter registered service marks. Such services
include plumbing and sewer, drain and pipe cleaning. They are delivered through
company-owned and operated territories, independent contractor-operated territories
and franchised locations. This segment also manufactures and sells products and
equipment used to provide such services.
We report corporate administrative expenses and unallocated investing and financing
income and expense not directly related to either segment as Corporate. Corporate
administrative expense includes the stewardship, accounting and reporting, legal, tax
and other costs of operating a publicly held corporation. Corporate investing and
financing income and expenses include the costs and income associated with corporate
debt and investment arrangements. Historically, we have recorded stock award
amortization as a corporate expense. In the first quarter of 2010, our CODM
determined that this was an on-going, operational expense and should be reported
within the appropriate business segment. Accordingly, stock award amortization has
been reclassified to the corresponding business segment for all periods presented.
Segment data for our continuing operations are set forth below (in thousands):
For the Years Ended December 31,
2010
2009
2008
Revenues by Type of Service
VITAS
Routine homecare
$
666,562
$
615,408
$
585,891
Continuous care
153,050
141,272
124,894
General inpatient
105,588
97,356
97,895
Estimated BNAF
1,950
Medicare cap
610
(1,643
)
(235
)
Total segment
925,810
854,343
808,445
Roto-Rooter
Sewer and drain cleaning
135,704
136,503
146,150
Plumbing repair and maintenance
168,625
151,072
145,831
Independent contractors
22,943
21,620
21,968
HVAC repair and maintenance
4,183
4,031
4,059
Other products and services
23,280
22,667
22,488
Total segment
354,735
335,893
340,496
Total service revenues and sales
$
1,280,545
$
1,190,236
$
1,148,941
17
Chemed Corporation and Subsidiary Companies
For the Years Ended December 31,
2010
2009
2008
Aftertax Segment Earnings/(Loss)
VITAS
$
79,796
$
71,696
$
64,304
Roto-Rooter
31,678
33,040
33,427
Total
111,474
104,736
97,731
Corporate
(29,643
)
(30,699
)
(29,362
)
Discontinued operations
(253
)
(1,088
)
Net income
$
81,831
$
73,784
$
67,281
Interest Income
VITAS
$
4,852
$
4,581
$
5,336
Roto-Rooter
2,661
2,587
3,824
Total
7,513
7,168
9,160
Corporate
175
83
489
Intercompany eliminations
(7,244
)
(6,828
)
(8,907
)
Total interest income
$
444
$
423
$
742
Interest Expense
VITAS
$
131
$
374
$
155
Roto-Rooter
233
186
246
Total
364
560
401
Corporate
11,595
11,039
11,722
Total interest expense
$
11,959
$
11,599
$
12,123
Income Tax Provision
VITAS
$
48,601
$
43,637
$
38,458
Roto-Rooter
19,547
20,372
20,644
Total
68,148
64,009
59,102
Corporate
(16,148
)
(17,426
)
(12,067
)
Total income tax provision
$
52,000
$
46,583
$
47,035
Identifiable Assets
VITAS
$
531,247
$
476,621
$
523,178
Roto-Rooter
205,601
191,254
188,003
Total
736,848
667,875
711,181
Corporate
93,313
151,595
48,441
Total identifiable assets
$
830,161
$
819,470
$
759,622
Additions to Long-Lived Assets
VITAS
$
16,787
$
14,913
$
8,797
Roto-Rooter
17,975
8,067
18,906
Total
34,762
22,980
27,703
Corporate
18
448
9,492
Total additions to long-lived assets
$
34,780
$
23,428
$
37,195
Depreciation and Amortization
VITAS
$
18,900
$
17,973
$
17,651
Roto-Rooter
8,289
8,509
8,607
Total
27,189
26,482
26,258
Corporate
1,854
1,420
1,247
Total depreciation and amortization
$
29,043
$
27,902
$
27,505
18
Chemed Corporation and Subsidiary Companies
6. Goodwill and Intangible Assets
Amortization of definite-lived intangible assets from continuing operations for the years
ended December 31, 2010, 2009, 2008 was $2.1 million, $4.0 million and $4.0 million,
respectively. The following is a schedule by year of projected amortization expense for
definite-lived intangible assets (in thousands):
2011
$
1,402
2012
1,399
2013
1,399
2014
427
2015
217
Thereafter
266
The balance in identifiable intangible assets comprises the following (in thousands):
Gross
Accumulated
Net Book
Asset
Amortization
Value
December 31, 2010
Referral networks
$
21,140
$
(17,427
)
$
3,713
Covenants not to compete
9,211
(8,814
)
397
Customer lists
1,223
(1,089
)
134
Reacquired franchise rights
974
(108
)
866
Subtotal definite-lived intangibles
32,548
(27,438
)
5,110
VITAS trade name
51,300
51,300
Total
$
83,848
$
(27,438
)
$
56,410
December 31, 2009
Referral networks
$
21,200
$
(16,240
)
$
4,960
Covenants not to compete
9,092
(8,006
)
1,086
Customer lists
1,227
(1,060
)
167
Reacquired franchise rights
450
(43
)
407
Subtotal definite-lived intangibles
31,969
(25,349
)
6,620
VITAS trade name
51,300
51,300
Total
$
83,269
$
(25,349
)
$
57,920
7. Other Operating Expenses
There were no other operating expenses from continuing operations for the period ended
December 31, 2010.
For the twelve-month period ended December 31, 2009, we recorded pretax expenses of $4.0
million related to the costs of a contested proxy solicitation.
In December 2008, the Executive Committee of the Board of Directors authorized us to place
a 29 year-old, eight passenger Hawker jet for sale. We determined that this asset met the
definition of held for sale under the FASBs guidance on, accounting for the impairment or
disposal of long-lived assets. As a result, we discontinued depreciation on the jet and
wrote-down the asset to its fair value less selling costs resulting in a pre-tax charge to other
operating expenses net of approximately $2.7 million. In March 2009, we sold the jet and
recognized a $112,000 gain on disposal.
19
Chemed Corporation and Subsidiary Companies
8. Business Combinations
During 2010, we completed four business combinations within the Roto-Rooter segment for
$9.5 million in cash to increase our market penetration in Kansas City, Missouri, St. Louis,
Missouri, Jefferson City, Missouri and Spokane Washington. We made no acquisitions within the
VITAS segment during 2010. The purchase price of these acquisitions was allocated as follows
(in thousands):
Working capital
$
268
Identifiable intangible assets
589
Goodwill
8,225
Other assets and liabilities net
387
$
9,469
During 2009, we completed two business combinations within the Roto-Rooter segment for
$1.9 million in cash to increase our market penetration in Detroit, Michigan and Grand Rapids,
Michigan. We made no acquisitions within the VITAS segment during 2009.
During 2008, we completed four business combinations within the Roto-Rooter segment for
$11.2 million in cash to increase our market penetration in Colorado Springs, Colorado; Dayton,
Ohio; Eugene, Oregon; and Topeka, Kansas. We made no acquisitions within the VITAS segment
during 2008.
The unaudited pro forma results of operations, assuming purchase business combinations
completed in 2010 and 2009 were completed on January 1, 2009, do not materially impact the
accompanying consolidated financial statements. The results of operations of each of the above
business combinations are included in our results of operations from the date of the respective
acquisition.
9. Discontinued Operations
Discontinued operations comprise (in thousands, except per share amounts):
For the Years Ended December 31,
2010
2009
2008
Adjustment to accruals of operations discontinued in prior years:
Casualty insurance costs
$
$
(400
)
$
(1,719
)
Loss before income taxes
(400
)
(1,719
)
All other income taxes
147
631
Total adjustments
(253
)
(1,088
)
Total discontinued operations
$
$
(253
)
$
(1,088
)
Earnings/(loss) per share
$
$
0.01
$
0.05
Diluted earnings/(loss) per share
$
$
0.02
$
0.05
At December 31, 2010 and 2009, the accrual for our estimated liability for potential
environmental cleanup and related costs arising from the sale of DuBois amounted to $1.7
million. Of the 2010 balance, $826,000 is included in other current liabilities and $901,000 is
included in other liabilities (long-term). We are contingently liable for additional
DuBois-related environmental cleanup and related costs up to a maximum of $14.9 million. On the
basis of a continuing evaluation of the potential liability, we believe it is not probable this
additional liability will be paid. Accordingly, no provision for this contingent liability has
been recorded. The potential liability is not insured, and the recorded liability does not
assume the recovery of insurance proceeds. Also, the environmental liability has not been
discounted because it is not possible to reliably project the timing of payments. We believe
that any adjustments to our recorded liability will not materially adversely affect our
financial position, results of operations or cash flows.
At December 31, 2010, other current liabilities include accruals of $1.0 million and other
liabilities (long-term) include accruals of $1.1 million for costs related to discontinued
operations. The estimated timing of payments of these liabilities follows (in thousands):
20
Chemed Corporation and Subsidiary Companies
2011
$
1,043
2012
300
Thereafter
831
$
2,174
10. Cash Overdrafts and Cash Equivalents
Included in accounts payable are cash overdrafts of $11.1 million and $11.7 million as of
December 31, 2010 and 2009, respectively.
From time to time throughout the year, we invest excess cash in money market funds or
repurchase agreements directly with major commercial banks. We do not physically hold the
collateral for repurchase agreements, but the term is less than 10 days. We closely monitor the
creditworthiness of the institutions with which we invest our overnight funds and the quality of
the collateral underlying those investments. We had $45.5 million in cash equivalents as of
December 31, 2010. There was $109.4 million in cash equivalents as of December 31, 2009. The
weighted average rate of return for our cash equivalents was 0.1% in 2010 and 0.3% in 2009.
11. Other Income/ (Expense) Net
Other income/ (expense)net from continuing operations comprises the following (in
thousands):
For the
Years Ended December 31,
2010
2009
2008
Market value gains/(losses) on assets held in deferred compensation trust
$
2,210
$
5,802
$
(9,140
)
Loss on disposal of property and equipment
(425
)
(369
)
(415
)
Interest income
444
423
742
Other net
39
18
77
Total other income/(expense)
$
2,268
$
5,874
$
(8,736
)
The offset for market value gains or losses on assets held in deferred compensation trust
is recorded in selling, general and administrative expenses.
12. Income Taxes
The provision for income taxes comprises the following (in thousands):
For the Years Ended December 31,
2010
2009
2008
Continuing Operations:
Current
U.S. federal
$
46,789
$
36,182
$
42,914
U.S. state and local
6,981
4,960
6,226
Foreign
639
462
667
Deferred
U.S. federal, state and local
(2,418
)
4,980
(2,710
)
Foreign
9
(1
)
(62
)
Total
$
52,000
$
46,583
$
47,035
Discontinued Operations:
Current U.S. federal
$
$
(65
)
$
(735
)
Current U.S. state and local
(5
)
(55
)
Deferred U.S. federal, state and local
(77
)
159
Total
$
$
(147
)
$
(631
)
21
Chemed Corporation and Subsidiary Companies
A summary of the temporary differences that give rise to deferred tax assets/ (liabilities)
follows (in thousands):
December 31,
2010
2009
Accrued liabilities
$
26,334
$
23,609
Stock compensation expense
10,257
7,991
Allowance for uncollectible accounts receivable
2,695
1,862
State net operating loss carryforwards
1,379
1,439
Other
2,763
2,420
Deferred income tax assets
43,428
37,321
Amortization of intangible assets
(40,135
)
(37,975
)
Accelerated tax depreciation
(10,499
)
(9,495
)
Currents assets
(1,148
)
(1,179
)
Other
(1,397
)
(623
)
Deferred income tax liabilities
(53,179
)
(49,272
)
Net deferred income tax liabilities
$
(9,751
)
$
(11,951
)
Included in other assets at December 31, 2010, are deferred income tax assets of
$236,000 (2009 $272,000). At December 31, 2010 and 2009, state net operating loss
carryforwards were $26.0 million and $26.6 million, respectively. These net operating losses
will expire, in varying amounts, between 2011 and 2030. Based on our history of operating
earnings, we have determined that our operating income will, more likely than not, be sufficient
to ensure realization of our deferred income tax assets.
After FASBs adoption of FASBs guidance on accounting for uncertain income taxes in 2007,
we had approximately $1.3 million in unrecognized tax benefits. The majority of this amount
would affect our effective tax rate, if recognized in a future period. The years ended December
31, 2007, and forward remain open for review for Federal income tax purposes. The earliest open
year relating to any of our material state jurisdictions is the fiscal year ended December 31,
2005. During the next twelve months, we do not anticipate a material net change in unrecognized
tax benefits.
As permitted by this guidance, we classify interest related to our accrual for uncertain
tax positions in separate interest accounts. As of December 31, 2010 and 2009, we have
approximately $114,000 and $149,000, respectively, accrued in interest payable related to
uncertain tax positions. These accruals are included in other current liabilities in the
accompanying consolidated balance sheet. Net interest expense related to uncertain tax
positions included in interest expense in the accompanying consolidated statement of income is
not material.
A roll forward of the significant changes to our unrecognized tax benefits is as follows
(in thousands):
2010
2009
2008
Balance at January 1,
$
1,010
$
1,202
$
1,169
Unrecognized tax benefits due to positions taken in current year
119
136
413
Gross change due to positions taken in prior years
53
Decrease due to settlement with taxing authorities
(214
)
(174
)
Decrease due to expiration of statute of limitations
(425
)
(93
)
(259
)
Other
(21
)
Balance at December 31,
$
704
$
1,010
$
1,202
22
Chemed Corporation and Subsidiary Companies
The difference between the actual income tax provision for continuing operations and the
income tax provision calculated at the statutory U.S. federal tax rate is explained as follows
(in thousands):
For
the Years Ended December 31,
2010
2009
2008
Income tax provision calculated using the statutory rate of 35%
$
46,841
$
42,217
$
40,391
State and local income taxes, less federal income tax effect
4,509
3,837
3,928
Nondeductible expenses
908
829
891
Impact of deferred compensation plans
(27
)
(190
)
3,084
R&D tax credit
(656
)
Other net
(231
)
(110
)
(603
)
Income tax provision
$
52,000
$
46,583
$
47,035
Effective tax rate
38.9
%
38.6
%
40.8
%
Summarized below are the total amounts of income taxes paid during the years ended
December 31 (in thousands):
2010
$
49,532
2009
40,872
2008
50,535
Provision has not been made for additional taxes on $35.1 million of undistributed
earnings of our domestic subsidiaries. Should we elect to sell our interest in all of these
businesses rather than to effect a tax-free liquidation, additional taxes amounting to
approximately $12.9 million would be incurred based on current income tax rates.
13. Properties and Equipment
A summary of properties and equipment follows (in thousands):
December 31,
2010
2009
Land
$
1,360
$
1,360
Buildings
32,788
29,699
Transportation equipment
18,837
17,318
Machinery and equipment
58,706
53,017
Computer software
47,203
26,147
Furniture and fixtures
51,277
45,133
Projects under development
1,817
17,865
Total properties and equipment
211,988
190,539
Less accumulated depreciation
(132,696
)
(115,181
)
Net properties and equipment
$
79,292
$
75,358
The net book value of computer software at December 31, 2010 and 2009, was $18.9
million and $9.1 million, respectively. Depreciation expense for computer software was $5.9
million, $4.2 million and $4.3 million for the years ended December 31, 2010, 2009 and 2008,
respectively.
14. Lease Arrangements
We have operating leases that cover our corporate office headquarters, various warehouse
and office facilities, office equipment and transportation equipment. The remaining terms of
these leases range from one year to seven years, and in most cases we expect that these leases
will be renewed or replaced by other leases in the normal course of business. We have no
significant capital leases as of December 31, 2010 or 2009.
23
Chemed Corporation and Subsidiary Companies
The following is a summary of future minimum rental payments and sublease rentals to be
received under operating leases that have initial or remaining noncancelable terms in excess of
one year at December 31, 2010 (in thousands):
2011
$
17,777
2012
13,099
2013
10,207
2014
6,996
2015
4,727
Thereafter
1,620
Total minimum rental payments
54,426
Less: minimum sublease rentals
(47
)
Net minimum rental payments
$
54,379
Total rental expense incurred under operating leases for continuing operations follows
(in thousands):
For the Years Ended December 31,
2010
2009
2008
Total rental payments
$
21,777
$
21,219
$
18,867
Less sublease rentals
(237
)
(270
)
(265
)
Net rental expense
$
21,540
$
20,949
$
18,602
15. Pension and Retirement Plans
Retirement obligations under various plans cover substantially all full-time employees who
meet age and/or service eligibility requirements. The major plans providing retirement benefits
to our employees are defined contribution plans. Expenses charged to continuing operations for
our retirement and profit-sharing plans, excess benefit plans and other similar plans were $11.4
million, $15.1 million and $2.7 million for the years ended December 31, 2010, 2009 and 2008,
respectively. These expenses include the impact of market gains and losses on assets held in
deferred compensation plans.
We have excess benefit plans for key employees whose participation in the qualified plans
is limited by U.S. Employee Retirement Income Security Act requirements. Benefits are determined
based on theoretical participation in the qualified plans. Benefits are only invested in mutual
funds, and participants are not permitted to diversify accumulated benefits in shares of our
stock. Trust assets invested in shares of our stock are included in treasury stock, and the
corresponding liability is included in a separate component of stockholders equity. At December
31, 2010, these trusts held 99,494 shares or $2.0 million of our stock (2009 102,027 shares
or $1.9 million).
24
Chemed Corporation and Subsidiary Companies
16.
Earnings Per Share
The computation of earnings per share follows (in thousands, except per share data):
Income from Continuing Operations
Net Income
For the Years Ended
Earnings per
Earnings
December 31,
Income
Shares
Share
Income
Shares
per Share
2010
Earnings
$
81,831
22,587
$
3.62
$
81,831
22,587
$
3.62
Dilutive stock options
348
348
Nonvested stock awards
96
96
Diluted earnings
$
81,831
23,031
$
3.55
$
81,831
23,031
$
3.55
2009
Earnings
$
74,037
22,451
$
3.30
$
73,784
22,451
$
3.29
Dilutive stock options
229
229
Nonvested stock awards
62
62
Diluted earnings
$
74,037
22,742
$
3.26
$
73,784
22,742
$
3.24
2008
Earnings
$
68,369
23,058
$
2.97
$
67,281
23,058
$
2.92
Dilutive stock options
287
287
Nonvested stock awards
29
29
Diluted earnings
$
68,369
23,374
$
2.93
$
67,281
23,374
$
2.88
During 2010, 970,900 stock options were excluded from the computation of diluted
earnings per share as their exercise prices were greater than the average market price during
most of the year. During 2009, 819,917 stock options were also excluded. During 2008, 827,917
stock options were also excluded.
Diluted earnings per share may be impacted in future periods as the result of the issuance
of our $200 million Notes and related purchased call options and sold warrants. Per FASBs
authoritative guidance on the effect of contingently convertible instruments on diluted earnings
per share and convertible bonds with issuer option to settle for cash upon conversion, we will
not include any shares related to the Notes in our calculation of diluted earnings per share
until our average stock price for a quarter exceeds the current conversion price. We would then
include in our diluted earnings per share calculation those shares issuable using the treasury
stock method. The amount of shares issuable is based upon the amount by which the average stock
price for the quarter exceeds the conversion price. The purchased call option does not impact
the calculation of diluted earnings per share, as it is always anti-dilutive. The sold warrants
become dilutive when our average stock price for a quarter exceeds the strike price of the
warrant.
The following table provides examples of how changes in our stock price impact the number
of shares that would be included in our diluted earnings per share calculation. It also shows
the impact on the number of shares issuable upon conversion of the Notes and settlement of the
purchased call options and sold warrants:
25
Chemed Corporation and Subsidiary Companies
Shares
Total Treasury
Shares Due
Incremental
Underlying 1.875%
Method
to the Company
Shares Issued by
Share
Convertible
Warrant
Incremental
under Notes
the Company
Price
Notes
Shares
Shares (a)
Hedges
upon Conversion (b)
$
80.73
18,136
18,136
(19,401
)
(1,265
)
90.73
273,379
273,379
(292,452
)
(19,073
)
100.73
477,943
477,943
(511,289
)
(33,346
)
110.73
645,559
119,282
764,841
(690,600
)
74,241
120.73
785,408
316,210
1,101,618
(840,206
)
261,412
130.73
903,861
483,010
1,386,871
(966,924
)
419,947
a)
Represents the number of incremental shares that must be included in the calculation of fully diluted shares under U.S. GAAP.
b)
Represents the number of incremental shares to be issued by the Company upon conversion of the Notes assuming concurrent settlement of
the note hedges and warrants.
17. Financial Instruments
FASBs authoritative guidance on fair value measurements defines a hierarchy which
prioritizes the inputs in fair value measurements. Level 1 measurements are measurements using
quoted prices in active markets for identical assets or liabilities. Level 2 measurements use
significant other observable inputs. Level 3 measurements are measurements using significant
unobservable inputs which require a company to develop its own assumptions. In recording the
fair value of assets and liabilities, companies must use the most reliable measurement
available.
The following shows the carrying value, fair value and the hierarchy for our financial
instruments as of December 31, 2010 (in thousands):
Fair Value Measure
Quoted Prices in
Active Markets for
Significant Other
Significant
Identical Assets
Observable Inputs
Unobservable Inputs
Carrying Value
(Level 1)
(Level 2)
(Level 3)
Mutual fund
investments of
deferred compensation
plans held in trust
$
28,304
$
28,304
$
$
Long-term debt
159,208
189,065
For cash and cash equivalents, accounts receivable and accounts payable, the carrying
amount is a reasonable estimate of fair value because of the liquidity and short-term nature of
these instruments.
18. Loans Receivable from Independent Contractors
At December 31, 2010, we had contractual arrangements with 63 independent contractors to
provide plumbing repair and drain cleaning services under sublicensing agreements using the
Roto-Rooter name in lesser-populated areas of the United States and Canada. The arrangements
give the independent contractors the right to conduct a plumbing and drain cleaning business
using the Roto-Rooter name in a specified territory in exchange for a royalty based on a
percentage of labor sales, generally approximately 40%. We also pay for certain telephone
directory advertising in these areas, lease certain capital equipment and provide operating
manuals to serve as resources for operating a plumbing and drain cleaning business. The
contracts are generally cancelable upon 90 days written notice (without cause) or upon a few
days notice (with cause). The independent contractors are responsible for running the
businesses as they believe best.
Our maximum exposure to loss from arrangements with our independent contractors at December
31, 2010 is approximately $1.1 million (2009 $1.3 million). The exposure to loss is mainly
the result of loans provided to the independent contractors. In most cases, these loans are
partially secured by receivables and equipment owned by the independent contractor. The
interest rates on the loans range from zero to 8% per annum, and the remaining terms of the
loans range from 2.5 months to 5.4 years at December 31, 2010. During 2010, we recorded
revenues of $22.9 million (2009 $21.6 million; 2008 $22.0 million) and pretax profits of
$10.7 million (2009 $9.5 million; 2008 $9.5 million) from our independent contractors.
26
Chemed Corporation and Subsidiary Companies
19. Legal and Regulatory Matters
Litigation
On March 1, 2010 Anthony Morangelli and Frank Ercole filed a class action lawsuit in
federal district court for the Eastern District of New York seeking unpaid minimum wages and
overtime service technician compensation from Roto-Rooter and Chemed. They also seek payment of
penalties, interest and plaintiffs attorney fees. We contest these allegations. In September
2010, the Court conditionally certified a nationwide class of service technicians, excluding
those who signed dispute resolution agreements in which they agreed to arbitrate claims arising
out of their employment. There has been no final determination of the merits of collective
treatment of the case. We are unable to estimate our potential liability, if any, with respect
to this case.
VITAS is party to a class action lawsuit filed in the Superior Court of California, Los
Angeles County, in September 2006 by Bernadette Santos, Keith Knoche and Joyce White. This case
alleges failure to pay overtime and failure to provide meal and rest periods to a purported
class of California admissions nurses, chaplains and sales representatives. The case seeks
payment of penalties, interest and Plaintiffs attorney fees. VITAS contests these allegations.
In December 2009, the trial court denied Plaintiffs motion for class certification. We are
unable to estimate our potential liability, if any, with respect to this case.
Regardless of outcome, defense of litigation adversely affects us through defense costs,
diversion of our time and related publicity.
Regulatory Matters
In May 2009, VITAS received an administrative subpoena from the U.S. Department of Justice
requesting VITAS deliver to the OIG documents, patient records, and policy and procedure manuals
for headquarters and its Texas programs concerning hospice services provided for the period
January 1, 2003 to the date of the letter. In August 2009, the OIG selected medical records for
59 past and current patients from a Texas program for review. In February 2010, VITAS received
a companion civil investigative demand (CID) from the state of Texas Attorney Generals
Office, seeking related documents. In September 2010, it received a second CID and a second
administrative subpoena seeking related documents. We can neither predict the outcome of this
investigation nor estimate our potential liability, if any. We believe that we are in
compliance with Medicare and Medicaid rules and regulations applicable to hospice providers
In April 2005, the Office of Inspector General (OIG) for the Department of Health and
Human Services served VITAS with civil subpoenas relating to VITAS alleged failure to
appropriately bill Medicare and Medicaid for hospice services. As part of this investigation,
the OIG selected medical records for 320 past and current patients from VITAS three largest
programs for review. It also sought policies and procedures dating back to 1998 covering
admissions, certifications, recertifications and discharges. During the third quarter of 2005
and again in May 2006, the OIG requested additional information from us. The Court dismissed a
related qui tam complaint filed in U.S. District Court for the Southern District of Florida with
prejudice in July 2007. The plaintiffs appealed this dismissal, which the Court of Appeals
affirmed. The government continues to investigate the complaints allegations. In March 2009,
we received a letter from the government reiterating the basis of their investigation. We are
unable to estimate our potential liability, if any, with respect to this matter.
The costs to comply with either of these investigations were not material for any period
presented. Regardless of outcome, responding to the subpoenas can adversely affect us through
defense costs, diversion of our time and related publicity.
20. Related Party Transactions
VITAS has two pharmacy services agreements (Agreements) with Omnicare, Inc. and its
subsidiaries (OCR) whereby OCR provides specified pharmacy services for VITAS and its hospice
patients in geographical areas served by both VITAS and OCR. The Agreements renew automatically
for one-year terms. Either party may cancel the Agreements at the end of any term by giving 90
days prior written notice. VITAS made purchases from OCR of $36.1 million, $33.1 million and
$32.9 million for the years ended December 31, 2010, 2009 and 2008, respectively. VITAS
accounts payable to OCR and its subsidiaries are not material at December 31, 2010 and 2009.
Mr. Joel F. Gemunder retired as President and Chief Executive Officer of OCR during the
third quarter of 2010 and is a director of the Company. Ms. Andrea Lindell is a director of
both OCR and the Company. Mr. Kevin J. McNamara, President, Chief Executive Officer and a director of the Company, is a
director emeritus of OCR. We believe that the terms of these agreements are no less favorable
to VITAS than we could negotiate with an unrelated party.
27
Chemed Corporation and Subsidiary Companies
21. Capital Stock Transactions
For the year ended December 31, 2010, we repurchased 1.6 million shares at a weighted
average cost per share of $63.14 under the April 2007 program. For the year ended December 31,
2009, we repurchased 15,900 shares at a weighted average cost per share of $46.65 under the
April 2007 program. On December 27, 2010 our Board of Directors authorized an additional $70
million to the April 2007 stock repurchase program. On May 19, 2008 our Board of Directors
authorized an additional $56 million to the April 2007 stock repurchase program. On April 26,
2007, our Board of Directors authorized a $150 million stock repurchase program.
22. Subsequent Events
In February 2011, our Board of Directors authorized a $100 million expansion to our share
repurchase authority.
In February 2011, the CIC approved a new stock-price target portion of the Companys LTIP.
The new stock price hurdles are as follows:
Stock Price
Shares to be
Hurdle
Issued
$79.00
25,000
$85.00
25,000
$90.00
25,000
Total
75,000
The stock price hurdles must be achieved during 30 trading days out of any 60 trading day
period during the three years ending February 18, 2014.
In February 2011, the CIC approved a time-based LTIP award of 42,000 shares that cliff vest
in four years. The pre-tax cost of the award was $2.7 million.
In January 2011, we met the $62 stock price target of our LTIP. On
January 14, 2011 the CIC approved a stock grant of 41,100 shares (including 7,350 shares from
the discretionary pool) and the related allocation to participants. The pretax cost of the
stock grant was $3.0 million.
28
Chemed Corporation and Subsidiary Companies
23. Guarantor Subsidiaries
Our 1.875% Senior Convertible Notes issued on May 14, 2007, are fully and unconditionally
guaranteed on an unsecured, joint and severally liable basis by our 100% owned subsidiaries. The
equity method has been used with respect to the parent companys (Chemed) investment in
subsidiaries. No consolidating adjustment column is presented for the condensed consolidating
statement of cash flow since there were no signficant consolidating entries for the periods
presented. The following condensed, consolidating financial data present the composition of the
parent company, the guarantor subsidiaries and the non-guarantor subsidiaries as of December 31,
2010 and 2009, and for the years ended December 31, 2010, 2009 and 2008 (in thousands):
Guarantor
Non-Guarantor
Consolidating
December 31, 2010
Parent
Subsidiaries
Subsidiaries
Adjustments
Consolidated
ASSETS
Cash and cash equivalents
$
45,324
$
(1,571
)
$
6,164
$
$
49,917
Accounts receivable, less allowances
802
111,716
481
112,999
Intercompany receivables
172,426
(172,426
)
Inventories
7,191
537
7,728
Current deferred income taxes
(688
)
15,666
120
15,098
Prepaid income taxes
2,787
(1,809
)
(208
)
770
Prepaid expenses
782
9,244
259
10,285
Total current assets
49,007
312,863
7,353
(172,426
)
196,797
Investments of deferred compensation plans held in trust
28,304
28,304
Properties and equipment, at cost, less accumulated
depreciation
12,513
64,743
2,036
79,292
Identifiable intangible assets less accumulated amortization
56,410
56,410
Goodwill
453,864
4,479
458,343
Other assets
6,049
2,791
2,175
11,015
Investments in subsidiaries
716,815
18,696
(735,511
)
Total assets
$
784,384
$
909,367
$
44,347
$
(907,937
)
$
830,161
LIABILITIES AND STOCKHOLDERS EQUITY
Accounts payable
$
4,924
$
50,457
$
448
$
$
55,829
Intercompany payables
167,067
5,359
(172,426
)
Income taxes
(7,190
)
8,745
(394
)
1,161
Accrued insurance
906
35,586
36,492
Accrued compensation
4,235
35,016
468
39,719
Other current liabilities
1,549
13,447
1,145
16,141
Total current liabilities
171,491
143,251
7,026
(172,426
)
149,342
Deferred income taxes
(11,356
)
45,168
(8,727
)
25,085
Long-term debt
159,208
159,208
Deferred compensation liabilities
27,851
27,851
Other liabilities
2,992
3,123
511
6,626
Stockholders equity
462,049
717,825
17,686
(735,511
)
462,049
Total liabilities and stockholders equity
$
784,384
$
909,367
$
44,347
$
(907,937
)
$
830,161
Guarantor
Non-Guarantor
Consolidating
December 31, 2009
Parent
Subsidiaries
Subsidiaries
Adjustments
Consolidated
ASSETS
Cash and cash equivalents
$
109,331
$
(1,221
)
$
4,306
$
$
112,416
Accounts receivable, less allowances
618
52,303
540
53,461
Intercompany receivables
149,888
(149,888
)
Inventories
7,009
534
7,543
Current deferred income taxes
(378
)
14,048
31
13,701
Prepaid income taxes
(3,227
)
4,161
(185
)
749
Prepaid expenses
770
9,545
73
10,388
Total current assets
107,114
235,733
5,299
(149,888
)
198,258
Investments of deferred compensation plans held in trust
24,158
24,158
Properties and equipment, at cost, less accumulated
depreciation
10,309
62,912
2,137
75,358
Identifiable intangible assets less accumulated amortization
57,920
57,920
Goodwill
445,662
4,380
450,042
Other assets
11,190
2,232
312
13,734
Investments in subsidiaries
643,572
15,523
(659,095
)
Total assets
$
772,185
$
819,982
$
36,286
$
(808,983
)
$
819,470
LIABILITIES AND STOCKHOLDERS EQUITY
Accounts payable
$
(2,411
)
$
54,084
$
398
$
$
52,071
Intercompany payables
147,744
2,144
(149,888
)
Income taxes
(2,145
)
2,159
49
63
Accrued insurance
1,231
33,930
35,161
Accrued compensation
4,235
30,020
407
34,662
Other current liabilities
1,643
11,367
1,117
14,127
Total current liabilities
150,297
131,560
4,115
(149,888
)
136,084
Deferred income taxes
(10,549
)
43,183
(6,710
)
25,924
Long-term debt
152,127
152,127
Deferred compensation liabilities
23,637
23,637
Other liabilities
3,148
1,388
4,536
Stockholders equity
477,162
643,851
15,244
(659,095
)
477,162
Total liabilities and stockholders equity
$
772,185
$
819,982
$
36,286
$
(808,983
)
$
819,470
29
Chemed Corporation and Subsidiary Companies
Guarantor
Non-Guarantor
Consolidating
For the year ended December 31, 2010
Parent
Subsidiaries
Subsidiaries
Adjustments
Consolidated
Continuing Operations
Net sales and service revenues
$
$
1,254,856
$
25,689
$
$
1,280,545
Cost of services provided and goods sold
892,596
13,420
906,016
Selling, general and administrative expenses
23,262
170,223
8,479
201,964
Depreciation
860
22,732
794
24,386
Amortization
1,404
3,253
4,657
Total costs and expenses
25,526
1,088,804
22,693
1,137,023
Income/ (loss) from operations
(25,526
)
166,052
2,996
143,522
Interest expense
(11,596
)
(363
)
(11,959
)
Other (expense)/income net
15,520
(15,451
)
2,199
2,268
Income/ (loss) before income taxes
(21,602
)
150,238
5,195
133,831
Income tax (provision)/ benefit
6,859
(56,905
)
(1,954
)
(52,000
)
Equity in net income of subsidiaries
96,574
3,308
(99,882
)
Net income
$
81,831
$
96,641
$
3,241
$
(99,882
)
$
81,831
Guarantor
Non-Guarantor
Consolidating
For the year ended December 31, 2009
Parent
Subsidiaries
Subsidiaries
Adjustments
Consolidated
Continuing Operations
Net sales and service revenues
$
$
1,166,972
$
23,264
$
$
1,190,236
Cost of services provided and goods sold
822,788
11,786
834,574
Selling, general and administrative expenses
23,199
163,600
10,627
197,426
Depreciation
602
20,221
712
21,535
Amortization
1,222
5,145
6,367
Other operating expenses
3,989
3,989
Total costs and expenses
29,012
1,011,754
23,125
1,063,891
Income/ (loss) from operations
(29,012
)
155,218
139
126,345
Interest expense
(11,040
)
(565
)
6
(11,599
)
Other (expense)/income net
5,428
(5,422
)
5,868
5,874
Income/ (loss) before income taxes
(34,624
)
149,231
6,013
120,620
Income tax (provision)/ benefit
12,058
(56,543
)
(2,098
)
(46,583
)
Equity in net income of subsidiaries
96,603
4,043
(100,646
)
Income from continuing operations
74,037
96,731
3,915
(100,646
)
74,037
Discontinued Operations
(253
)
(253
)
Net income
$
73,784
$
96,731
$
3,915
$
(100,646
)
$
73,784
Guarantor
Non-Guarantor
Consolidating
For the year ended December 31, 2008
Parent
Subsidiaries
Subsidiaries
Adjustments
Consolidated
Continuing Operations
Net sales and service revenues
$
$
1,124,063
$
24,878
$
$
1,148,941
Cost of services provided and goods sold
798,173
12,374
810,547
Selling, general and administrative expenses
19,644
158,214
(2,525
)
175,333
Depreciation
504
20,382
695
21,581
Amortization
960
4,964
5,924
Other operating expenses
2,699
2,699
Total costs and expenses
23,807
981,733
10,544
1,016,084
Income/ (loss) from operations
(23,807
)
142,330
14,334
132,857
Interest expense
(11,722
)
(398
)
(3
)
(12,123
)
Gain on extinguishment of debt
3,406
3,406
Other (expense)/income net
4,381
(4,070
)
(9,047
)
(8,736
)
Income/ (loss) before income taxes
(27,742
)
137,862
5,284
115,404
Income tax (provision)/ benefit
10,036
(51,849
)
(5,222
)
(47,035
)
Equity in net income of subsidiaries
86,075
1,403
(87,478
)
Income from continuing operations
68,369
87,416
62
(87,478
)
68,369
Discontinued Operations
(1,088
)
(1,088
)
Net income
$
67,281
$
87,416
$
62
$
(87,478
)
$
67,281
30
Chemed Corporation and Subsidiary Companies
Guarantor
Non-Guarantor
For the year ended December 31, 2010
Parent
Subsidiaries
Subsidiaries
Consolidated
Cash Flow from Operating Activities:
Net cash provided by operating activities
$
2,862
$
81,781
$
1,369
$
86,012
Cash Flow from Investing Activities:
Capital expenditures
(18
)
(24,677
)
(944
)
(25,639
)
Business combinations, net of cash acquired
(9,469
)
(9,469
)
Proceeds from sale of property and equipment
275
15
290
Other sources/(uses) net
(157
)
(963
)
238
(882
)
Net cash used by investing activities
(175
)
(34,834
)
(691
)
(35,700
)
Cash Flow from Financing Activities:
Purchases of treasury stock
(109,326
)
(4
)
(109,330
)
Dividends paid to shareholders
(11,881
)
(11,881
)
Proceeds from exercise of stock options
5,327
5,327
Realized excess tax benefit on share based compensation
3,357
3,357
Change in cash overdrafts payable
1,645
(2,226
)
(581
)
Change in intercompany accounts
44,135
(45,071
)
936
Other sources net
49
248
297
Net cash provided/ (used) by financing activities
(66,694
)
(47,297
)
1,180
(112,811
)
Net increase/(decrease) in cash and cash equivalents
(64,007
)
(350
)
1,858
(62,499
)
Cash and cash equivalents at beginning of year
109,331
(1,221
)
4,306
112,416
Cash and cash equivalents at end of period
$
45,324
$
(1,571
)
$
6,164
$
49,917
Guarantor
Non-Guarantor
For the year ended December 31, 2009
Parent
Subsidiaries
Subsidiaries
Consolidated
Cash Flow from Operating Activities:
Net cash provided by operating activities
$
950
$
153,387
$
6,495
$
160,832
Cash Flow from Investing Activities:
Capital expenditures
(448
)
(20,394
)
(654
)
(21,496
)
Business combinations, net of cash acquired
(1,919
)
(1,919
)
Net payments from sale of discontinued operations
(328
)
(302
)
(630
)
Proceeds from sale of property and equipment
1,285
292
1,577
Other sources/(uses) net
(255
)
(302
)
183
(374
)
Net cash provided/(used) by investing activities
254
(22,625
)
(471
)
(22,842
)
Cash Flow from Financing Activities:
Change in cash overdrafts payable
19
2,872
2,891
Change in intercompany accounts
140,674
(135,226
)
(5,448
)
Dividends paid to shareholders
(8,157
)
(8,157
)
Purchases of treasury stock
(4,225
)
(4,225
)
Proceeds from exercise of stock options
545
545
Realized excess tax benefit on share based compensation
1,955
1,955
Net decrease in revolving line of credit
(8,200
)
(8,200
)
Repayment of long-term debt
(14,500
)
(169
)
(14,669
)
Other sources/(uses) net
(49
)
338
369
658
Net cash provided/ (used) by financing activities
108,062
(132,185
)
(5,079
)
(29,202
)
Net increase/(decrease) in cash and cash equivalents
109,266
(1,423
)
945
108,788
Cash and cash equivalents at beginning of year
65
202
3,361
3,628
Cash and cash equivalents at end of period
$
109,331
$
(1,221
)
$
4,306
$
112,416
Guarantor
Non-Guarantor
For the year ended December 31, 2008
Parent
Subsidiaries
Subsidiaries
Consolidated
Cash Flow from Operating Activities:
Net cash provided/(used) by operating activities
$
(8,912
)
$
118,904
$
2,091
$
112,083
Cash Flow from Investing Activities:
Capital expenditures
(9,492
)
(15,576
)
(1,026
)
(26,094
)
Business combinations, net of cash acquired
(11,200
)
(11,200
)
Net proceeds from sale of discontinued operations
8,824
8,824
Proceeds from sale of property and equipment
10
342
35
387
Other sources/(uses) net
(660
)
123
(7
)
(544
)
Net cash used by investing activities
(1,318
)
(26,311
)
(998
)
(28,627
)
Cash Flow from Financing Activities:
Change in cash overdrafts payable
(1,106
)
250
(856
)
Change in intercompany accounts
90,906
(91,249
)
343
Dividends paid to shareholders
(5,543
)
(5,543
)
Purchases of treasury stock
(69,788
)
(69,788
)
Proceeds from exercise of stock options
291
291
Realized excess tax benefit on share based compensation
2,422
2,422
Net increase in revolving line of credit
8,200
8,200
Repayment of long-term debt
(18,551
)
(162
)
(18,713
)
Other sources/(uses) net
(413
)
354
(770
)
(829
)
Net cash provided/ (used) by financing activities
6,418
(90,807
)
(427
)
(84,816
)
Net increase/(decrease) in cash and cash equivalents
(3,812
)
1,786
666
(1,360
)
Cash and cash equivalents at beginning of year
3,877
(1,584
)
2,695
4,988
Cash and cash equivalents at end of period
$
65
$
202
$
3,361
$
3,628
31
Chemed Corporation and Subsidiary Companies
UNAUDITED SUMMARY OF QUARTERLY RESULTS
Chemed Corporation and Subsidiary Companies
(in thousands, except per share and footnote data)
First
Second
Third
Fourth
Total
For the Year Ended December 31, 2010
Quarter
Quarter
Quarter
Quarter
Year
Continuing Operations
Total service revenues and sales
$
308,813
$
314,995
$
320,451
$
336,286
$
1,280,545
Gross profit
$
89,676
$
91,293
$
92,536
$
101,024
$
374,529
Income from operations
$
34,445
$
33,856
$
36,755
$
38,466
$
143,522
Interest expense
(2,952
)
(2,999
)
(2,995
)
(3,013
)
(11,959
)
Other income/(expense)net
186
10
222
1,850
2,268
Income before income taxes
31,679
30,867
33,982
37,303
133,831
Income taxes
(12,321
)
(12,012
)
(12,994
)
(14,673
)
(52,000
)
Net Income (a)
$
19,358
$
18,855
$
20,988
$
22,630
$
81,831
Earnings Per Share (a)
Net income
$
0.86
$
0.83
$
0.93
$
1.00
$
3.62
Average number of shares outstanding
22,593
22,644
22,597
22,534
22,587
Diluted Earnings Per Share (a)
Net income
$
0.84
$
0.82
$
0.91
$
0.98
$
3.55
Average number of shares outstanding
23,021
23,080
22,996
23,070
23,031
(a)
The following amounts are included in income from continuing operations during the respective
quarter (in thousands):
First
Second
Third
Fourth
Total
Quarter
Quarter
Quarter
Quarter
Year
Pretax (cost)/benefit:
Stock option expense
$
(2,051
)
$
(2,346
)
$
(1,968
)
$
(1,397
)
$
(7,762
)
Noncash impact of change in accounting for
convertible debt
(1,655
)
(1,688
)
(1,721
)
(1,756
)
(6,820
)
Long-term incentive compensation
(1,799
)
(2,935
)
(4,734
)
Acquisition expenses
(324
)
(324
)
Expenses of class action litigation
(105
)
(322
)
(1,426
)
(1,853
)
Expenses incurred in connection with the Office
of Inspector General investigation
(160
)
(118
)
(112
)
(622
)
(1,012
)
Total
$
(3,866
)
$
(6,056
)
$
(4,123
)
$
(8,460
)
$
(22,505
)
Aftertax (cost)/benefit:
Stock option expense
$
(1,298
)
$
(1,484
)
$
(1,244
)
$
(883
)
$
(4,909
)
Noncash impact of change in accounting for
convertible debt
(1,047
)
(1,068
)
(1,088
)
(1,110
)
(4,313
)
Long-term incentive compensation
(1,124
)
(1,833
)
(2,957
)
Acquisition expenses
(198
)
(198
)
Expenses of class action litigation
(63
)
(194
)
(869
)
(1,126
)
Expenses incurred in connection with the Office
of Inspector General investigation
(99
)
(74
)
(69
)
(385
)
(627
)
Total
$
(2,444
)
$
(3,813
)
$
(2,595
)
$
(5,278
)
$
(14,130
)
32
Chemed Corporation and Subsidiary Companies
UNAUDITED SUMMARY OF QUARTERLY RESULTS
(in thousands, except per share and footnote data)
First
Second
Third
Fourth
Total
For the Year Ended December 31, 2009
Quarter
Quarter
Quarter
Quarter
Year
Continuing Operations
Total service revenues and sales .
$
294,938
$
295,255
$
296,794
$
303,249
$
1,190,236
Gross profit
$
87,925
$
87,918
$
87,906
$
91,913
$
355,662
Income from operations
$
34,726
$
27,938
$
32,786
$
30,895
$
126,345
Interest expense
(2,844
)
(3,142
)
(2,853
)
(2,760
)
(11,599
)
Other income/(expense)net
(276
)
3,358
1,733
1,059
5,874
Income before income taxes
31,606
28,154
31,666
29,194
120,620
Income taxes
(12,267
)
(10,904
)
(12,456
)
(10,956
)
(46,583
)
Income from continuing operations
(a)
19,339
17,250
19,210
18,238
74,037
Discontinued Operations
(253
)
(253
)
Net Income (a)
$
19,339
$
17,250
$
19,210
$
17,985
$
73,784
Earnings Per Share (a)
Income from continuing operations
$
0.86
$
0.77
$
0.86
$
0.81
$
3.30
Net income
$
0.86
$
0.77
$
0.86
$
0.80
$
3.29
Average number of shares
outstanding
22,394
22,417
22,461
22,551
22,451
Diluted Earnings Per Share (a)
Income from continuing operations
$
0.85
$
0.76
$
0.84
$
0.80
$
3.26
Net income
$
0.85
$
0.76
$
0.84
$
0.78
$
3.24
Average number of shares
outstanding
22,647
22,672
22,744
22,937
22,742
(a)
The following amounts are included in income from continuing operations during the
respective quarter (in thousands):
First
Second
Third
Fourth
Total
Quarter
Quarter
Quarter
Quarter
Year
Pretax (cost)/benefit:
Stock option expense
$
(2,042
)
$
(2,443
)
$
(2,214
)
$
(1,940
)
$
(8,639
)
Noncash impact of change in accounting for convertible debt
(1,530
)
(1,561
)
(1,591
)
(1,623
)
(6,305
)
Non-taxable income from certain investments held in
deferred compensation trusts
1,211
1,211
Expenses associated with contested proxy solicitiation
(545
)
(3,444
)
(3,989
)
Expenses incurred in connection with the Office
of Inspector General investigation
(13
)
(86
)
(343
)
(144
)
(586
)
Long-term incentive compensation
(5,007
)
(5,007
)
Costs related to litigation settlements
(882
)
(882
)
Total
$
(2,919
)
$
(7,534
)
$
(4,148
)
$
(9,596
)
$
(24,197
)
Aftertax (cost)/benefit:
Stock option expense
$
(1,292
)
$
(1,544
)
$
(1,401
)
$
(1,227
)
$
(5,464
)
Noncash impact of change in accounting for convertible debt
(968
)
(987
)
(1,006
)
(1,027
)
(3,988
)
Non-taxable income from certain investments held in
deferred compensation trusts
1,211
1,211
Income tax impact of nondeductible losses on investments
held in deferred compensation trusts
(475
)
20
(455
)
Expenses associated with contested proxy solicitiation
(345
)
(2,180
)
(2,525
)
Expenses incurred in connection with the Office
of Inspector General investigation
(8
)
(53
)
(213
)
(89
)
(363
)
Long-term incentive compensation
(3,134
)
(3,134
)
Costs related to litigation settlements
(534
)
(534
)
Total
$
(1,877
)
$
(4,744
)
$
(2,620
)
$
(6,011
)
$
(15,252
)
33
SELECTED FINANCIAL DATA
Chemed Corporation and Subsidiary Companies
(in thousands, except per share and footnote data, ratios, percentages and personnel)
2010
2009
2008
2007
2006
Summary of Operations
Continuing operations (a)
Service revenues and sales
$
1,280,545
$
1,190,236
$
1,148,941
$
1,100,058
$
1,018,587
Gross profit (excluding depreciation)
374,529
355,662
338,394
332,992
288,464
Depreciation
24,386
21,535
21,581
20,118
16,775
Amortization
4,657
6,367
5,924
5,270
5,255
Income from operations
143,522
126,345
132,857
122,755
104,979
Income from continuing operations (b)
81,831
74,037
68,369
60,440
57,722
Net income (b)
81,831
73,784
67,281
61,641
50,651
Earnings per share
Income from continuing operations
$
3.62
$
3.30
$
2.97
$
2.46
$
2.21
Net income
3.62
3.29
2.92
2.51
1.94
Average number of shares outstanding
22,587
22,451
23,058
24,520
26,118
Diluted earnings per share
Income from continuing operations
$
3.55
$
3.26
$
2.93
$
2.41
$
2.16
Net income
3.55
3.24
2.88
2.46
1.90
Average number of shares outstanding
23,031
22,742
23,374
25,077
26,669
Cash dividends per share
$
0.52
$
0.36
$
0.24
$
0.24
$
0.24
Financial PositionYear-End
Cash and cash equivalents
$
49,917
$
112,416
$
3,628
$
4,988
$
29,274
Working capital/(deficit)
47,455
62,174
(18,142
)
(13,427
)
(3,951
)
Current ratio
1.32
1.46
0.88
0.91
0.98
Properties and equipment, at cost less
accumulated depreciation
$
79,292
$
75,358
$
76,962
$
74,513
$
70,140
Total assets
830,161
819,470
759,622
768,945
791,461
Long-term debt
159,208
152,127
158,210
163,715
150,331
Stockholders equity
462,049
477,162
396,831
395,800
421,361
Other StatisticsContinuing Operations
Capital expenditures
$
25,639
$
21,496
$
26,094
$
26,640
$
21,987
Number of employees
13,058
12,308
11,884
11,783
11,621
(a)
Continuing operations exclude VITAS of Arizona, discontinued in 2006, Service America, discontinued in 2004 and Patient Care discontinued in 2002
(b)
The following amounts are included in income from continuing operations during the respective year (in thousands):
2010
2009
2008
2007
2006
After-tax benefit/(cost):
Stock option expense
$
(4,909
)
$
(5,464
)
$
(4,619
)
$
(2,962
)
$
(769
)
Noncash impact of change in accounting for convertible debt
(4,313
)
(3,988
)
(4,006
)
(2,335
)
Long-term incentive compensation
(2,957
)
(3,134
)
(4,427
)
Expenses associated with contested proxy solicitation
(2,525
)
Non-taxable income on certain investments held in deferred
compensation trusts
1,211
Costs related to litigation settlements
(1,126
)
(534
)
(1,168
)
(169
)
Income tax impact of nondeductible losses on investments
held in deferred compensation trusts
(455
)
(3,062
)
(46
)
Expenses incurred in connection with the Office of Inspector
General investigation
(627
)
(363
)
(28
)
(141
)
(662
)
Acquisition Expense
(198
)
Gain/(loss) on extinguishment of debt
2,934
(8,778
)
(273
)
Loss on impairment of transportation equipment
(1,714
)
Unreserved prior-years insurance claim
(358
)
Income tax credits or adjustments related to prior years
322
2,115
Gain on sale of property
724
Loss on impairment of investment
(918
)
Other
296
296
Total
$
(14,130
)
$
(15,252
)
$
(10,531
)
$
(18,837
)
$
(380
)
34
CHEMED CORPORATION AND SUBSIDIARY COMPANIES UNAUDITED CONSOLIDATING STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 2010
(in thousands)(unaudited)
Chemed
VITAS
Roto-Rooter
Corporate
Consolidated
2010
Service revenues and sales
$
925,810
$
354,735
$
$
1,280,545
Cost of services provided and goods sold
709,094
196,922
906,016
Selling, general and administrative expenses
73,755
100,731
27,478
201,964
Depreciation
16,161
7,775
450
24,386
Amortization
2,739
514
1,404
4,657
Total costs and expenses
801,749
305,942
29,332
1,137,023
Income/(loss) from operations
124,061
48,793
(29,332
)
143,522
Interest expense
(131
)
(233
)
(11,595
)
(11,959
)
Intercompany interest income/(expense)
4,632
2,612
(7,244
)
Other income/(expense)net
(165
)
53
2,380
2,268
Income/(loss) before income taxes
128,397
51,225
(45,791
)
133,831
Income taxes
(48,601
)
(19,547
)
16,148
(52,000
)
Net income/(loss)
$
79,796
$
31,678
$
(29,643
)
$
81,831
(a)
The following amounts are included in income from continuing operations (in thousands):
Chemed
VITAS
Roto-Rooter
Corporate
Consolidated
Pretax benefit/(cost):
Stock option expense
$
$
$
(7,762
)
$
(7,762
)
Noncash impact of change in accounting for convertible debt
(6,820
)
(6,820
)
Long-term incentive compensation
(4,734
)
(4,734
)
Expenses of class action litigation
(1,853
)
(1,853
)
Acquisition Expense
(68
)
(256
)
(324
)
Expenses incurred in connection with the Office of Inspector
General investigation
(1,012
)
(1,012
)
Total
$
(1,080
)
$
(2,109
)
$
(19,316
)
$
(22,505
)
VITAS
Roto-Rooter
Corporate
Consolidated
After-tax benefit/(cost):
Stock option expense
$
$
$
(4,909
)
$
(4,909
)
Noncash impact of change in accounting for convertible debt
(4,313
)
(4,313
)
Long-term incentive compensation
(2,957
)
(2,957
)
Expenses of class action litigation
(1,126
)
(1,126
)
Acquisition Expense
(42
)
(156
)
(198
)
Expenses incurred in connection with the Office of Inspector
General investigation
(627
)
(627
)
Total
$
(669
)
$
(1,282
)
$
(12,179
)
$
(14,130
)
35
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
UNAUDITED CONSOLIDATING STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 2009
(in thousands)(unaudited)
Chemed
VITAS
Roto-Rooter
Corporate
Consolidated
2009
Service revenues and sales
$
854,343
$
335,893
$
$
1,190,236
Cost of services provided and goods sold
653,212
181,362
834,574
Selling, general and administrative expenses
71,643
95,073
30,710
197,426
Depreciation
13,269
8,068
198
21,535
Amortization
4,704
441
1,222
6,367
Other operating expenses
3,989
3,989
Total costs and expenses
742,828
284,944
36,119
1,063,891
Income/(loss) from operations
111,515
50,949
(36,119
)
126,345
Interest expense
(374
)
(186
)
(11,039
)
(11,599
)
Intercompany interest income/(expense)
4,314
2,514
(6,828
)
Other income/(expense)net
(122
)
135
5,861
5,874
Income/(loss) before income taxes
115,333
53,412
(48,125
)
120,620
Income taxes
(43,637
)
(20,372
)
17,426
(46,583
)
Income/(loss) from continuing operations
71,696
33,040
(30,699
)
74,037
Discontinued operations
(253
)
(253
)
Net income/(loss)
$
71,696
$
33,040
$
(30,952
)
$
73,784
(a)
The following amounts are included in income from continuing operations (in thousands):
Chemed
VITAS
Roto-Rooter
Corporate
Consolidated
Pretax benefit/(cost):
Stock option expense
$
$
$
(8,639
)
$
(8,639
)
Noncash impact of change in accounting for convertible debt
(6,305
)
(6,305
)
Long-term incentive compensation
(5,007
)
(5,007
)
Expenses associated with contested proxy solicitation
(3,989
)
(3,989
)
Non-taxable income on certain investments held in deferred
compensation trusts
1,211
1,211
Costs related to litigation settlements
(882
)
(882
)
Expenses incurred in connection with the Office of Inspector
General investigation
(586
)
(586
)
Gain/(loss) on extinguishment of debt
Total
$
(586
)
$
(882
)
$
(22,729
)
$
(24,197
)
VITAS
Roto-Rooter
Corporate
Consolidated
After-tax benefit/(cost):
Stock option expense
$
$
$
(5,464
)
$
(5,464
)
Noncash impact of change in accounting for convertible debt
(3,988
)
(3,988
)
Long-term incentive compensation
(3,134
)
(3,134
)
Expenses associated with contested proxy solicitation
(2,525
)
(2,525
)
Non-taxable income on certain investments held in deferred
compensation trusts
1,211
1,211
Income tax impact of nondeductible losses on investments
held in deferred compensation trusts
(455
)
(455
)
Costs related to litigation settlements
(534
)
(534
)
Expenses incurred in connection with the Office of Inspector
General investigation
(363
)
(363
)
Gain/(loss) on extinguishment of debt
Total
$
(363
)
$
(534
)
$
(14,355
)
$
(15,252
)
36
CHEMED CORPORATION AND SUBSIDIARY COMPANIES UNAUDITED CONSOLIDATING STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 2008
(in thousands)(unaudited)
Chemed
VITAS
Roto-Rooter
Corporate
Consolidated
2008
Service revenues and sales
$
808,445
$
340,496
$
$
1,148,941
Cost of services provided and goods sold
625,177
185,370
810,547
Selling, general and administrative expenses
67,750
95,971
11,612
175,333
Depreciation
13,000
8,294
287
21,581
Amortization
4,651
313
960
5,924
Other operating expenses
2,699
2,699
Total costs and expenses
710,578
289,948
15,558
1,016,084
Income/(loss) from operations
97,867
50,548
(15,558
)
132,857
Interest expense
(155
)
(246
)
(11,722
)
(12,123
)
Intercompany interest income/(expense)
5,199
3,708
(8,907
)
Gain on extinguishment of debt
3,406
3,406
Other income/(expense)net
(149
)
61
(8,648
)
(8,736
)
Income/(loss) before income taxes
102,762
54,071
(41,429
)
115,404
Income taxes
(38,458
)
(20,644
)
12,067
(47,035
)
Income/(loss) from continuing operations
64,304
33,427
(29,362
)
68,369
Discontinued operations
(1,088
)
(1,088
)
Net income/(loss)
$
64,304
$
33,427
$
(30,450
)
$
67,281
(a)
The following amounts are included in income from continuing operations (in thousands):
Chemed
VITAS
Roto-Rooter
Corporate
Consolidated
Pretax benefit/(cost):
Stock option expense
$
$
$
(7,303
)
$
(7,303
)
Noncash impact of change in accounting for convertible debt
(6,139
)
(6,139
)
Impairment loss on transportation equipment
(2,699
)
(2,699
)
Gain on extinguishment of debt
3,406
3,406
Unreserved prior-years insurance claim
(597
)
(597
)
Expenses incurred in connection with the Office of Inspector
General investigation
(46
)
(46
)
Total
$
(46
)
$
(597
)
$
(12,735
)
$
(13,378
)
VITAS
Roto-Rooter
Corporate
Consolidated
After-tax benefit/(cost):
Stock option expense
$
$
$
(4,619
)
$
(4,619
)
Noncash impact of change in accounting for convertible debt
(4,006
)
(4,006
)
Impairment loss on transportation equipment
(1,714
)
(1,714
)
Gain on extinguishment of debt
2,934
2,934
Income tax impact of non-deductible net market losses
on investments held in deferred compensation trusts
(3,062
)
(3,062
)
Unreserved prior-years insurance claim
(358
)
(358
)
Expenses incurred in connection with the Office of Inspector
General investigation
(28
)
(28
)
Income tax credit related to prior years
322
322
Total
$
294
$
(358
)
$
(10,467
)
$
(10,531
)
37
Chemed Corporation and Subsidiary Companies
MANAGEMENTS 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 and drain cleaning 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 following is a summary of the key operating results for the years ended December 31, 2010,
2009 and 2008 (in thousands except percentages and per share amounts):
2010
2009
2008
Consolidated service revenues and sales
$
1,280,545
$
1,190,236
$
1,148,941
Consolidated income from continuing
operations
$
81,831
$
74,037
$
68,369
Diluted EPS from continuing operations
$
3.55
$
3.26
$
2.93
Adjusted EBITDA
$
189,395
$
177,050
$
161,754
Adjusted EBITDA as a % of revenue
14.8
%
14.9
%
14.1
%
*
See page 50 for reconciliation to GAAP measures
EBITDA and Adjusted EBITDA are not measures derived in accordance with GAAP. We use Adjusted
EBITDA as a measure of earnings for our LTIP awards. We provide EBITDA and Adjusted EBITDA to help
readers evaluate our operating results, compare our operating performance with that of similar
companies that have different capital structures and help evaluate our ability to meet future debt
service, capital expenditure and working capital requirements. Our EBITDA and Adjusted EBITDA
should not be considered in isolation or as a substitute for comparable measures presented in
accordance with GAAP. A reconciliation of our net income to our Adjusted EBITDA is presented in
tables following the Critical Accounting Policy section.
2010 versus 2009
The increase in consolidated service revenues and sales from 2009 to 2010 was driven by an
8.4% increase at VITAS and a 5.6% increase at Roto-Rooter. The increase at VITAS was the result of
an increase in average daily census (ADC) of 6.1%, driven by an increase in admissions of 5.6%,
combined with Medicare price increases of approximately 1.3%. The increase at Roto-Rooter was
driven by a 7.3% price and mix shift increase as well as a 0.4% increase in job count.
Consolidated income from continuing operations increased 10.5% over prior year mainly as a result
of the increase in revenues, which allowed us to further leverage our current cost structure.
Diluted EPS from continuing operations increased as the result of increased earnings. Adjusted
earnings before interest, taxes, depreciation and amortization (EBITDA) increased 7.0% from 2009
to 2010 mainly as a result of increased earnings.
2009 versus 2008
The increase in consolidated service revenues and sales from 2008 to 2009 was driven by a 5.7%
increase at VITAS offset by an approximate 1.4% decrease at Roto-Rooter. The increase at VITAS was
the result of an increase in ADC of 1%, Medicare price increases and an
increase due to changes in the mix of care. The decrease at Roto-Rooter was driven by a 7%
decrease in the job count offset by an approximate 6% price and mix shift increase. Consolidated
income from continuing operations and diluted EPS from continuing operations increased as a result
of higher service revenues and sales, which allowed us to further leverage our current cost
structure. Adjusted EBITDA increased 9.5% from 2008 to 2009 and Adjusted EBITDA as a percent of
revenue increased from 14.1% to 14.9%.
Impact of Current Market Conditions
We expect Roto-Rooter to achieve full-year 2011 revenue growth of 5% to 8%. This is a result
of increased pricing of approximately 3.0%, a favorable mix shift to higher revenue jobs, with job
count flat to up 3%. Adjusted EBITDA margin for 2011 is estimated in the range of 16.5% to 17.5%.
We expect VITAS to achieve full-year 2011 revenue growth, prior to Medicare cap, of 7% to 9%.
Admissions are estimated to increase 5% to 7%. This revenue estimate includes the October 1, 2010,
2.1% increase in average hospice
38
Chemed Corporation and Subsidiary Companies
reimbursement rates. We also expect VITAS to have estimated
Medicare contractual billing limitations of $5.0 million. Adjusted EBITDA margin for 2011 is
estimated to be in the range of 15.3% to 16.3%.
LIQUIDITY AND CAPITAL RESOURCES
Significant factors affecting our cash flows during 2010 and financial position at December
31, 2010, include the following:
Our continuing operations generated cash of $86.0 million;
We repurchased $109.3 million of our stock using cash on hand;
Accounts receivable increased $68.7 million due to timing of receipts;
We spent $25.6 million on capital expenditures.
The ratio of total debt to total capital was 25.6% at December 31, 2010, compared with 24.2%
at December 31, 2009. Our current ratio was 1.32 and 1.46 at December 31, 2010 and 2009,
respectively.
Collectively, the 2007 Facility and the Notes require us to meet certain restrictive
non-financial and financial covenants. We are in compliance with all non-financial debt covenants
as of December 31, 2010. The restrictive financial covenants are defined in the credit agreement
and include maximum leverage ratios, minimum fixed charge coverage and consolidated net worth
ratios, limits on operating leases and minimum asset value limits. We are in compliance with all
financial debt covenants as of December 31, 2010, as follows:
Description
Requirement
Chemed
Leverage Ratio (Consolidated
Indebtedness/Consolidated Adj.
EBITDA)
< 3.50 to 1.00
1.15 to 1.00
Fixed Charge Coverage Ratio
(Consolidated Free Cash
Flow/Consolidated Fixed Charges)
> 1.50 to 1.00
2.26 to 1.00
Minimum Net Worth
> $350.3 million
$393.4 million
Annual Operating Lease Commitment
< $30.0 million
$17.8 million
Credit Party Asset Value
> $700.0 million
$809.3 million
We forecast to be in compliance with all debt covenants through fiscal 2011.
We have issued $28.0 million in standby letters of credit as of December 31, 2010, mainly for
insurance purposes. Issued letters of credit reduce our available credit under the revolving
credit agreement. As of December 31, 2010, we have approximately $147.0 million of unused lines of
credit available and eligible to be drawn down under our revolving credit facility, excluding the
expansion feature. We have not borrowed against our line of credit for 2010. 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 repurchase, acquisitions, and increased
dividends to determine the most beneficial use of available capital resources.
39
Chemed Corporation and Subsidiary Companies
CASH FLOW
Our cash flows for 2010, 2009 and 2008 are summarized as follows (in millions):
For the Years Ended December 31,
2010
2009
2008
Net cash provided by operating activities
$
86.0
$
160.8
$
112.1
Capital expenditures
(25.6
)
(21.5
)
(26.1
)
Operating cash excess after capital expenditures
60.4
139.3
86.0
Purchase of treasury stock
(109.3
)
(4.2
)
(69.8
)
Repayment of long-term debt
(22.9
)
(18.7
)
Business combinations
(9.5
)
(1.9
)
(11.2
)
Net proceeds/(uses) from sale of discontinued operations
(0.2
)
(0.6
)
8.8
Proceeds from issuance of long-term debt, net of costs
8.2
Dividends paid
(11.9
)
(8.2
)
(5.5
)
Proceeds from exercise of stock options
5.3
0.5
0.3
Othernet
2.7
6.8
0.5
(Decrease)/increase in cash and cash equivalents
$
(62.5
)
$
108.8
$
(1.4
)
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. To
the extent it is available and management deems it prudent, we carry commercial insurance against
such claims. 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 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.
In connection with the sale of DuBois Chemicals, Inc. (DuBois) in 1991, we provided
allowances and accruals relating to several long-term costs, including income tax matters, lease
commitments and environmental costs. Also, in conjunction with the sales of The Omnia Group
(Omnia) and National Sanitary Supply Company in 1997 and the sale of Service America Network Inc.
(Service America) in 2005, we provided long-term allowances and accruals relating to costs of
severance arrangements, lease commitments and income tax matters. Additionally, we retain
liability for casualty insurance claims for Service America and Patient Care that were incurred
prior to the disposal date. In connection with the sale of VITAS Phoenix operation in November
2006, we have accrued an estimate of our total exposure for the Medicare Cap through the date of
sale. In the aggregate, we believe these allowances and accruals are adequate as of
December 31, 2010. Based on reviews of our environmental-related liabilities under the DuBois sale
agreement, we have estimated our remaining liability to be $1.7 million. As of December 31, 2010,
we are contingently liable for additional cleanup and related costs up to a maximum of $14.9
million. We do not believe it is probable that we will be required to make any payment towards
this contingent liability. Thus, no provision has been recorded in accordance with the applicable
accounting guidance.
On March 1, 2010 Anthony Morangelli and Frank Ercole filed a class action lawsuit in federal
district court for the Eastern District of New York seeking unpaid minimum wages and overtime
service technician compensation from Roto-Rooter and Chemed. They also seek payment of penalties,
interest and plaintiffs attorney fees. We contest these allegations. In September 2010, the
Court conditionally certified a nationwide class of service technicians, excluding those who signed
dispute resolution agreements in which they agreed to arbitrate claims arising out of their
employment. There has been no final determination of the merits of collective treatment of the
case. We are unable to estimate our potential liability, if any, with respect to this case.
VITAS is party to a class action lawsuit filed in the Superior Court of California, Los
Angeles County, in September 2006 by Bernadette Santos, Keith Knoche and Joyce White. This case
alleges failure to pay overtime and failure to provide meal and rest periods to a purported class
of California admissions nurses, chaplains and sales representatives. The case seeks payment of
penalties, interest and Plaintiffs attorney fees. VITAS contests these allegations. In December
2009, the trial court denied Plaintiffs motion for class certification. We are unable to estimate
our potential liability, if any, with respect to this case.
40
Chemed Corporation and Subsidiary Companies
Regardless of outcome, defense of litigation adversely affects us through defense costs,
diversion of our time and related publicity.
In May 2009, VITAS received an administrative subpoena from the U.S. Department of Justice
requesting VITAS deliver to the OIG documents, patient records, and policy and procedure manuals
for headquarters and its Texas programs concerning hospice services provided for the period January
1, 2003 to the date of the letter. In August 2009, the OIG selected medical records for 59 past
and current patients from a Texas program for review. In February 2010, VITAS received a
companion civil investigative demand (CID) from the state of Texas Attorney Generals Office,
seeking related documents. In September 2010, it received a second CID and a second administrative
subpoena seeking related documents. We can neither predict the outcome of this investigation nor
estimate our potential liability, if any. We believe that we are in compliance with Medicare and
Medicaid rules and regulations applicable to hospice providers.
In April 2005, the Office of Inspector General (OIG) for the Department of Health and Human
Services served VITAS with civil subpoenas relating to VITAS alleged failure to appropriately bill
Medicare and Medicaid for hospice services. As part of this investigation, the OIG selected
medical records for 320 past and current patients from VITAS three largest programs for review.
It also sought policies and procedures dating back to 1998 covering admissions, certifications,
recertifications and discharges. During the third quarter of 2005 and again in May 2006, the OIG
requested additional information from us. The Court dismissed a related qui tam complaint filed in
U.S. District Court for the Southern District of Florida with prejudice in July 2007. The
plaintiffs appealed this dismissal, which the Court of Appeals affirmed. The government continues
to investigate the complaints allegations. In March 2009, we received a letter from the
government reiterating the basis of their investigation. We are unable to estimate our potential
liability, if any, with respect to this matter.
The costs to comply with either of these investigations were not material for any period
presented. Regardless of outcome, responding to the subpoenas can adversely affect us through
defense costs, diversion of our time and related publicity.
CONTRACTUAL OBLIGATIONS
The table below summarizes our debt and contractual obligations as of December 31, 2010 (in
thousands):
Less than
After
Total
1 year
1-3 Years
4 -5 Years
5 Years
Long-term debt obligations (a)
$
186,956
$
$
186,956
$
$
Interest on long-term debt
12,466
3,562
8,904
Operating lease obligations
54,426
17,777
23,305
11,722
1,622
Purchase obligations (b)
55,829
55,829
Other long-term obligations (c)
32,770
2,459
2,460
27,851
Total contractual cash obligations
$
342,447
$
77,168
$
221,624
$
14,182
$
29,473
(a)
Represents the face value of the
obligation.
(b)
Purchase obligations primarily consist of accounts payable at December 31, 2010.
(c)
Other long-term obligations comprise largely pension and excess benefit obligations.
41
Chemed Corporation and Subsidiary Companies
RESULTS OF OPERATIONS
2010 Versus 2009 Consolidated Results
Set forth below are the year-to-year changes in the components of the statement of operations
relating to continuing operations for 2010 versus 2009 (in thousands, except percentages):
Favorable/(Unfavorable)
Amount
Percent
Service revenues and sales
VITAS
$
71,467
8
Roto-Rooter
18,842
6
Total
90,309
8
Cost of services provided and goods sold
(71,442
)
(9
)
Selling, general and administrative expenses
(4,538
)
(2
)
Depreciation
(2,851
)
(13
)
Amortization
1,710
27
Other expenses
3,989
100
Income from operations
17,177
14
Interest expense
(360
)
(3
)
Other income net
(3,606
)
(61
)
Income before income taxes
13,211
11
Income taxes
(5,417
)
(12
)
Income from continuing operations
$
7,794
11
Our service revenues and sales for the year ended December 31, 2010 increased $90.3
million or 7.6% over the comparable prior year. The VITAS segment accounted for $71.5 million of
the increase and Roto-Rooter accounted for $18.8 million of the increase.
The VITAS segment revenue increase is the result of the following (dollars in thousands):
Amount
Percent
Routine homecare
$
51,154
8
Continuous care
11,778
8
General inpatient
8,232
9
Estimated BNAF
(1,950
)
(100
)
Medicare cap
2,253
137
Total revenues
$
71,467
8
The increase in VITAS revenue from 2009 to 2010 was a result of increased ADC of 6.1%
driven by an increase in admissions of 5.6%, combined with Medicare price increases of
approximately 1.3%. The ADC increase was driven by an 6.1% increase in routine homecare, an
increase of 5.3% in continuous care, and an 6.9% increase in general inpatient. ADC is a key
measure we use to monitor volume growth in our hospice programs. Changes in total program
admissions, discharges and average length of stay for our patients are the main drivers of changes
in ADC. The $1.95 million in BNAF was recorded in the first quarter of 2009 but related to hospice
care provided in the fourth quarter of 2008 and did not recur in 2010. The Medicare cap amount
recorded in 2010 relates to the reversal of $1.7 million, net of Medicare cap liability for the
2010 measurement period recorded in the fourth quarter of 2009 offset by $1.1 million in Medicare
cap liability for three programs projected 2011 measurement period liability.
The Roto-Rooter segment revenue increase is the result of the following (dollars in
thousands):
Amount
Percent
Plumbing
$
17,553
12
Sewer and drain cleaning
(799
)
(1
)
Other
2,088
4
Total revenues
$
18,842
6
42
Chemed Corporation and Subsidiary Companies
Plumbing revenues for 2010 increased from 2009 due to a 10.2% increase in the average
price per job and an increase of 3.7% in the number of jobs performed. The increase in the
plumbing price per job was driven by a combination of increased pricing and favorable job mix shift
to more expensive jobs such as excavation. Our excavation job count increased by 21.5% compared to
2009. The average revenue per excavation job is approximately 5.5 times greater than other average
plumbing jobs. Sewer and drain cleaning revenues for 2010 decreased from 2009 due to a 1.1%
decrease in jobs performed partially offset by a 2.4% increase in the average price per job. The
increase in other revenues is attributable to an increase in our independent contractor operations
and an increase in product sales.
The consolidated gross margin was 29.2% in 2010 versus 29.9% in 2009. On a segment basis,
VITAS gross margin was 23.4% in 2010 and 23.5% in 2009. Roto-Rooters gross margin was 44.5% in
2010 and 46.0% in 2009. VITAS gross margin was essentially flat compared to 2009. Roto-Rooters
gross margin decreased as a result of higher casualty and medical insurance expense as well as the
continued mix shift to excavation which has higher revenue per job but slightly slower gross margin
percentage per job.
Selling, general and administrative expenses (SG&A) for 2010 comprise (in thousands):
2010
2009
SG&A expenses before long-term incentive
compensation and the impact of market gains
of deferred compensation plans
$
195,020
$
187,828
Long-term incentive compensation
4,734
5,007
Impact of market value gains on liabilities
held in deferred compensation trusts
2,210
4,591
Total SG&A expenses
$
201,964
$
197,426
Normal salary increases and revenue related expenses between periods account for the 3.8% increase
in SG&A expenses before long-term incentive compensation and the impact of market gains of deferred
compensation plans
Depreciation expense increased $2.9 million (13.6%) in 2010 mainly due to the installation of
patient capture software at our VITAS segment in the second quarter of 2010.
There were no other operating expenses for 2010. Other operating expenses for 2009 of $4.0
million are related to the expenses of a contested proxy solicitation.
Interest expense increased $360,000 (3.1%) from 2009 to 2010 mainly due to an increase in bond
discount amortization related to accounting for our convertible notes.
Other income for 2010 and 2009 comprise (in thousands):
2010
2009
Market value gains on assets held in deferred
compensation trusts
$
2,210
$
4,591
Loss on disposal of property and equipment
(425
)
(369
)
Interest income
444
423
Gain on settlement of company-owned life
insurance
1,211
Other
39
18
Total other income
$
2,268
$
5,874
Our effective tax rate was 38.9% in 2010 compared to 38.6% in 2009.
In December 2009, we recorded a $400,000 pre-tax charge for retrospective casualty insurance
claims related to our discontinued operations. There was no such charge in 2010.
43
Chemed Corporation and Subsidiary Companies
Income from continuing operations for both periods include the following aftertax adjustments
that increased/ (reduced) aftertax earnings (in thousands):
2010
2009
VITAS
Costs associated with the OIG investigation
$
(627
)
$
(363
)
Acquisition Expense
(42
)
Roto-Rooter
Costs related to litigation settlements
(1,126
)
(534
)
Acquisition Expense
(156
)
Corporate
Long-term incentive compensation
(2,957
)
(3,134
)
Noncash impact of change in accounting for convertible debt
(4,313
)
(3,988
)
Stock option expense
(4,909
)
(5,464
)
Expenses associated with contested proxy solicitation
(2,525
)
Impact of non-deductible losses and non-taxable gains on
investments held in deferred compensation trusts
756
Total
$
(14,130
)
$
(15,252
)
2010 Versus 2009 Segment Results
The change in net income for 2010 versus 2009 is due to (in thousands, except percentages):
Increase/(Decrease)
Amount
Percent
VITAS
$
8,100
11
Roto-Rooter
(1,362
)
(4
)
Corporate
1,056
3
Discontinued operations
253
100
$
8,047
11
2009 Versus 2008 Consolidated Results
Set forth below are the year-to-year changes in the components of the statement of operations
relating to continuing operations for 2009 versus 2008 (in thousands, except percentages):
Favorable/(Unfavorable)
Amount
Percent
Service revenues and sales
VITAS
$
45,898
6
Roto-Rooter
(4,603
)
(2
)
Total
41,295
4
Cost of services provided and goods sold
(24,027
)
(3
)
Selling, general and administrative expenses
(22,093
)
(13
)
Depreciation
46
Amortization
(443
)
(7
)
Other expenses
(1,290
)
(48
)
Income from operations
(6,512
)
(5
)
Interest expense
524
4
Gain on extinguishment of debt
(3,406
)
(100
)
Other income net
14,610
167
Income before income taxes
5,216
5
Income taxes
452
1
Income from continuing operations
$
5,668
8
44
Chemed Corporation and Subsidiary Companies
Our service revenues and sales for the year ended December 31, 2009 increased $41.3
million or 3.6% over the comparable prior year. The VITAS segment accounted for $45.9 million of
the increase offset by a $4.6 million revenue decrease for the Roto-Rooter segment.
The VITAS segment revenue increase is the result of the following (dollars in thousands):
Amount
Percent
Routine homecare
$
29,517
5
Continuous care
16,378
13
General inpatient
(539
)
(1
)
Estimated BNAF
1,950
Medicare cap
(1,408
)
599
Total revenues
$
45,898
6
The revenue increase for VITAS includes increases in the Medicare reimbursement rate of
approximately 3.5% as well as a $1.95 million increase for the BNAF, recorded in the first quarter
of 2009 but related to hospice care provided in the fourth quarter of 2008. In addition, the ADC
for routine homecare and continuous care increased 0.9% and 7.4%, respectively, from 2008. ADC for
general inpatient decreased 2.6% from 2008 to 2009. ADC is a key measure we use to monitor volume
growth in our hospice programs. Changes in total program admissions, discharges and average length
of stay for our patients are the main drivers of changes in ADC. The Medicare cap amount recorded
in 2009 relates predominantly to one programs liability through year end for the 2010 measurement
period. We are currently pursuing corrective actions to attempt to mitigate the liability before
the end of the measurement period. The 2008 revenue reduction for Medicare cap relates to one
programs liability through year end for the 2009 measurement period. This amount was subsequently
reversed during the 2009 fiscal year due to improved admission trends.
The Roto-Rooter segment revenue decrease is the result of the following (dollars in
thousands):
Amount
Percent
Plumbing
$
5,241
4
Sewer and drain cleaning
(9,647
)
(7
)
Other
(197
)
Total revenues
$
(4,603
)
(1
)
Plumbing revenues for 2009 increased from 2008 due to a 13% increase in the average price
per job offset by an 8% decrease in the number of jobs performed. The increase in the plumbing
price per job was driven mainly by job mix. Our excavation job count increased by 13% compared to
2008. The average revenue per excavation job is approximately 5 times greater than other average
plumbing jobs. Sewer and drain cleaning revenues for 2009 decreased from 2008 due to a 7% decrease
in jobs performed partially offset by a 1% increase in the average price per job. Other revenue
types are essentially flat when compared with 2008.
The consolidated gross margin was 29.9% in 2009 versus 29.5% in 2008. On a segment basis,
VITAS gross margin was 23.5% in 2009 and 22.7% in 2008. Roto-Rooters gross margin was 46.0% in
2009 and 45.6% in 2008. The increase in VITAS gross margin is a result of the $1.95 million BNAF
adjustment related to the fourth quarter of 2008 and refinements to scheduled field labor, offset
by an increase to Medicare cap liability of $1.4 million. Roto-Rooters gross margin increased
primarily as a result of favorable technician turnover rates and lower health insurance expense.
Selling, general and administrative expenses (SG&A) for 2009 increased $22.1 million (13%).
Included in SG&A is a $13.1 million increase related to the increase in our deferred compensation
liability due to improved stock market performance. The offset to the increased liability is
recorded in other (non-operating) income and expense. Also included in the SG&A increase is a 2009
LTIP award of $5.0 million, an increase of $1.3 million in stock option expense, an increase in OIG
expense of $540,000 and $882,000 related to litigation settlements. The remaining change in SG&A
is the result of typical cost of living increases for salaries and benefits plus increases in
certain selling expenses which vary based on changes in revenue.
Other operating expenses for 2009 of $4.0 million are related to the expenses of a contested
proxy solicitation. The $2.7 million of operating expense for 2008 relates to an impairment
charge on an eight passenger Hawker jet built in 1979. In
45
Chemed Corporation and Subsidiary Companies
December 2008, the Executive Committee
of the Board of Directors authorized us to place the 29 year-old Hawker for sale. We determined
that this asset met the definition of held for sale under FASBs guidance. As a result, we
discontinued depreciation on the jet and wrote-down the asset to its fair value less selling costs
resulting in a pre-tax charge to other operating expenses net of approximately $2.7 million. In
March 2009, we sold the jet and recognized an $112,000 gain on disposal.
Interest expense decreased $524,000 (4%) from 2008 to 2009 mainly due to repayment in 2008 of
$13.0 million face value of our Convertible Notes due May 2014 and repayment of remaining term loan
in 2009.
Other income/ (expense) net was $5.9 million income in 2009 compared to an $8.7 million
expense in 2008. The change is primarily the result of a $14.9 million gain from investments held
in deferred compensation plans due to market conditions.
Our effective tax rate was 38.6% in 2009 compared to 40.8% in 2008. The decrease in the
effective income tax rate is due primarily due to the impact of non-taxable gains and
non-deductible losses on investments in our deferred compensation benefit trusts.
In December 2009, we recorded a $400,000 pre-tax charge for retrospective casualty insurance
claims related to our discontinued operations. In 2008, the amount recorded for retrospective
casualty insurance claims related to discontinued operations was a $1.7 million pre-tax charge.
Income from continuing operations for both periods include the following aftertax adjustments
that increased/ (reduced) aftertax earnings (in thousands):
2009
2008
VITAS
Costs associated with the OIG investigation
$
(363
)
$
(28
)
Tax adjustments required upon expiration of statutes
322
Roto-Rooter
Costs related to litigation settlements
(534
)
Unreserved prior years insurance claims
(358
)
Corporate
Stock option expense
(5,464
)
(4,619
)
Noncash impact of change in accounting for convertible debt
(3,988
)
(4,006
)
Long-term incentive compensation
(3,134
)
Expenses associated with contested proxy solicitation
(2,525
)
Impact of non-deductible losses and non-taxable gains on
investments held in deferred compensation trusts
756
(3,062
)
Gain on extinguishment of debt
2,934
Impairment of transportation equipment
(1,714
)
Total
$
(15,252
)
$
(10,531
)
2009 Versus 2008 Segment Results
The change in net income for 2009 versus 2008 is due to (in thousands, except percentages):
Increase/(Decrease)
Amount
Percent
VITAS
$
7,392
12
Roto-Rooter
(387
)
(1
)
Corporate
(1,337
)
5
Discontinued operations
835
77
$
6,503
10
46
Chemed Corporation and Subsidiary Companies
CRITICAL ACCOUNTING POLICIES
Revenue Recognition
For both the Roto-Rooter and VITAS segments, service revenues and sales are recognized when
the earnings process has been completed. Generally, this occurs when services are provided or
products are delivered. Sales of Roto-Rooter products, including drain cleaning machines and drain
cleaning solution, comprise less than 3% of our total service revenues and sales for each of the
three years in the period ended December 31, 2010.
VITAS recognizes revenue at the estimated net realizable amount due from third-party payers,
which are primarily Medicare and Medicaid. Payers may deny payment for services in whole or in
part on the basis that such services are not eligible for coverage and do not qualify for
reimbursement. We estimate denials each period and make adequate provision in the financial
statements. The estimate of denials is based on historical trends and known circumstances and
generally does not vary materially from period to period on an aggregate basis. Medicare billings
are subject to certain limitations, as described below.
VITAS is subject to certain limitations on Medicare payments for services. Specifically, if
the number of inpatient care days any hospice program provides to Medicare beneficiaries exceeds
20% of the total days of Medicare hospice care such program provides to all patients for an annual
period beginning September 28, the days in excess of the 20% figure may be reimbursed only at the
routine homecare rate. We have never had a program reach the inpatient cap. None of our hospice
programs are expected to be within 30% of the inpatient cap for the 2010 measurement period while
the majority of our programs have expected cushion in excess of 75% of the inpatient cap. Due to
the significant cushion at each program, we do not anticipate it to be reasonably likely that any
program will be subject to the inpatient cap in the foreseeable future.
VITAS is also subject to a Medicare annual per-beneficiary cap. Compliance with the Medicare
cap is measured by comparing the total Medicare payments received under a Medicare provider number
with respect to services provided to all Medicare hospice care beneficiaries in the program or
programs covered by that Medicare provider number between November 1 of each year and October 31 of
the following year with the product of the per-beneficiary cap amount and the number of Medicare
beneficiaries electing hospice care for the first time from that hospice program or programs during
the relevant period.
We actively monitor each of our hospice programs, by provider number, as to their specific
admissions, discharge rate and median length of stay data in an attempt to determine whether they
are likely to exceed the Medicare cap. Should we determine that a provider number is likely to
exceed the Medicare cap based on projected trends, we attempt to institute corrective action to
influence the patient mix or to increase patient admissions. However, should we project our
corrective action will not prevent that program from exceeding its Medicare cap, we estimate the
amount of revenue recognized during the period that will require repayment to the Federal
government under the Medicare cap and record that amount as a reduction in service revenue.
Our estimate of the Medicare cap liability is particularly sensitive to allocations made by
our fiscal intermediary relative to patient transfers between hospices. We are allocated a
percentage of the Medicare cap based on the total days a patient spent in hospice care. The
allocation for patient transfers cannot be determined until a patient dies. As the number of days
a patient spends in hospice is based on a future event, this allocation process may take several
years. Therefore, we use only first time Medicare admissions in our estimate of the Medicare cap
billing limitation. This method assumes that credit received for patients who transfer into our
program will be offset by credit lost from patients who transfer out of our program. If the actual
relationship of transfers in and transfers out for a given measurement period proves to be
different for any program at or near a billing limitation, our estimate of the liability would
increase or decrease on a dollar-for-dollar basis. While our method has historically been
materially accurate, each program can vary during a given measurement period.
During the year ended December 31, 2010, we reversed Medicare cap liability for amounts
recorded in the fourth quarter of 2009 for two programs projected 2010 measurement period
liability. This reversal was partially offset by the Medicare cap liability for three programs
projected 2011 measurement period liability. For the year ended December 31, 2009, we recorded
pretax charges in continuing operations for the estimated Medicare cap liability for two programs
projected liability through year end for the 2010 measurement period. The majority of the
liability relates to one program which is VITAS largest hospice. This amount was subsequently
reversed during the 2010 fiscal year due to increased admission trends. Shown below is the
Medicare cap liability activity for the years end December 31, 2010 and 2009 (in thousands):
47
Chemed Corporation and Subsidiary Companies
2010
2009
Beginning Balance January 1,
$
1,981
$
338
Expense - 2011 measurement period
1,110
Expense/(reversal) - 2010 measurement period
(1,720
)
1,783
Reversal - 2009 measurement period
(235
)
Other retroactive billings
95
Ending Balance December 31,
$
1,371
$
1,981
The U.S. government revises hospice reimbursement rates on an annual basis using the Hospice
Wage Index (HWI) and Consumer Price Index (CPI) plus a phase out of the Budget Neutrality
Adjustment Factor (BNAF). The HWI is geographically adjusted to reflect local differences in
wages. The BNAF is a portion of inflation calculated in prior years that is being eliminated or
phased out over a seven year period. In August 2008, the U.S. government announced a 25% reduction
in the BNAF for its fiscal 2009 (October 2008 through September 2009) pursuant to a three year
phase-out of the BNAF. The February 2009 American Recovery and Reinvestment Act mandated a one
year delay in the BNAF phase-out. As a result, included in the twelve months ended December 31,
2009 results, is $1.95 million of revenue for the retroactive price increase related to services
provided by VITAS in the fourth quarter of 2008.
In August 2009, the Centers for Medicare and Medicaid Services (CMS) revised the phase-out
schedule of the BNAF. CMS reduced the increase in hospice reimbursement by 10% of the BNAF
effective October 1, 2009. The remaining 90% of the BNAF will be phased out over the next six
years by revising the October 1 reimbursement adjustment by 15% of the original BNAF inflation
factor. Based upon this revised schedule, 100% of the BNAF will be eliminated on October 1, 2015.
Insurance Accruals
For the Roto-Rooter segment and Chemeds Corporate Office, we 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 at $500,000. 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 self-insure for workers compensation claims. Currently, VITAS
exposure on any single claim is capped at $750,000. For VITAS self-insurance accruals for
workers compensation, the valuation methods used are similar to those used internally for our
other business units.
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, 2010, 2009 and 2008 were net, pretax debits/(credits) of
$165,000, ($1.9 million) and ($52,000), 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 for all
of our continuing operations would increase or decrease the accrued insurance liability at December
31, 2010, by $1.9 million or 5.3%. 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 $2.8 million as of December 31, 2010.
Income Taxes
Deferred taxes are provided on an asset and liability method whereby deferred tax assets are
recognized for deductible temporary differences and operating loss carry-forwards and deferred tax
liabilities are recognized for taxable temporary differences. Temporary differences are the
differences between the reported amount of assets and liabilities and their tax basis. Deferred
tax assets are reduced by a valuation allowance when, in our opinion, it is more likely than not
that
48
Chemed Corporation and Subsidiary Companies
some portion or all of the deferred tax assets will not be realized. Deferred tax assets and
liabilities are adjusted for the effects of changes in laws and rates on the date of enactment.
We are subject to income taxes in the Federal and most state jurisdictions. We are
periodically audited by various taxing authorities. Significant judgment is required to determine
our provision for income taxes. We adopted FASBs authoritative guidance on accounting for
uncertainty in income taxes, which prescribes a comprehensive model for how to recognize, measure,
present and disclose in financial statements uncertain tax positions taken or expected to be taken
on a tax return. Upon adoption of this guidance, the financial statements reflect expected future
tax consequences of such uncertain positions assuming the taxing authorities full knowledge of the
position and all relevant facts.
Goodwill and Intangible Assets
Identifiable, definite-lived intangible assets arise from purchase business combinations and
are amortized using either an accelerated method or the straight-line method over the estimated
useful lives of the assets. The selection of an amortization method is based on which method best
reflects the economic pattern of usage of the asset. The VITAS trade name is considered to have an
indefinite life. Goodwill and the VITAS trade name are tested at least annually for impairment.
The valuation of goodwill and the VITAS trade name is dependent upon many factors, some of which
are market-driven and beyond our control. The valuation of goodwill and the VITAS trade name
indicate no impairment. We have significant excess of estimated market value over our asset base
for each reporting unit tested at October 1, 2009 and do not expect that an impairment charge is
likely in the foreseeable future. However, we are unable to predict all factors that may impact
future impairment analysis.
Stock-based Compensation Plans
Stock-based compensation cost is measured at the grant date, based on the fair value of the
award and recognized as expense over the employees requisite service period on a straight-line
basis. We estimate the fair value of stock options using the Black-Scholes valuation model,
consistent with the guidance provided by the FASB and the SEC. We determine expected term,
volatility, dividend yield and forfeiture rate based on our historical experience. We believe that
historical experience is the best indicator of these factors.
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. To
the extent it is available and management deems it prudent, we carry commercial insurance against
such claims. We establish reserves for specific, uninsured liabilities in connection with
regulatory and legal action that we deem to be probable and estimable. We record legal fees
associated with legal and regulatory actions as the costs are incurred.
49
Chemed Corporation and Subsidiary Companies
Consolidating Summary of Adjusted EBITDA
(in thousands)
Chemed
2010
VITAS
Roto-Rooter
Corporate
Consolidated
Net income/(loss)
$
79,796
$
31,678
$
(29,643
)
$
81,831
Add/(deduct):
Interest expense
131
233
11,595
11,959
Income taxes
48,601
19,547
(16,148
)
52,000
Depreciation
16,161
7,775
450
24,386
Amortization
2,739
514
1,404
4,657
EBITDA
147,428
59,747
(32,342
)
174,833
Add/(deduct):
Long-term incentive compensation
4,734
4,734
Litigation settlement costs
1,853
1,853
Legal expenses of OIG investigation
1,012
1,012
Acquisition Expense
68
256
324
Stock option expense
7,762
7,762
Advertising cost adjustment
(679
)
(679
)
Interest income
(220
)
(49
)
(175
)
(444
)
Intercompany interest/(expense)
(4,632
)
(2,612
)
7,244
Adjusted EBITDA
$
143,656
$
58,516
$
(12,777
)
$
189,395
Chemed
2009
VITAS
Roto-Rooter
Corporate
Consolidated
Net income/(loss)
$
71,696
$
33,040
$
(30,952
)
$
73,784
Add/(deduct):
Discontinued operations
253
253
Interest expense
374
186
11,039
11,599
Income taxes
43,637
20,372
(17,426
)
46,583
Depreciation
13,269
8,068
198
21,535
Amortization
4,704
441
1,222
6,367
EBITDA
133,680
62,107
(35,666
)
160,121
Add/(deduct):
Long-term incentive compensation
5,007
5,007
Non-taxable income from certain investments held in
deferred compensation trusts
(1,211
)
(1,211
)
Litigation settlement costs
882
882
Expenses associated with contested proxy solicitation
3,989
3,989
Legal expenses of OIG investigation
586
586
Stock option expense
8,639
8,639
Advertising cost adjustment
(540
)
(540
)
Interest income
(267
)
(73
)
(83
)
(423
)
Intercompany interest/(expense)
(4,314
)
(2,514
)
6,828
Adjusted EBITDA
$
129,685
$
59,862
$
(12,497
)
$
177,050
Chemed
2008
VITAS
Roto-Rooter
Corporate
Consolidated
Net income/(loss)
$
64,304
$
33,427
$
(30,450
)
$
67,281
Add/(deduct):
Discontinued operations
1,088
1,088
Interest expense
155
246
11,722
12,123
Income taxes
38,458
20,644
(12,067
)
47,035
Depreciation
13,000
8,294
287
21,581
Amortization
4,651
313
960
5,924
EBITDA
120,568
62,924
(28,460
)
155,032
Add/(deduct):
Unreserved insurance claim
597
597
Impairment loss on transportation equipment
2,699
2,699
Legal expenses of OIG investigation
46
46
Stock option expense
7,303
7,303
Gain on extinguishment of debt
(3,406
)
(3,406
)
Advertising cost adjustment
225
225
Interest income
(137
)
(116
)
(489
)
(742
)
Intercompany interest/(expense)
(5,199
)
(3,708
)
8,907
Adjusted EBITDA
$
115,278
$
59,922
$
(13,446
)
$
161,754
50
Chemed Corporation and Subsidiary Companies
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
OPERATING STATISTICS FOR VITAS SEGMENT
(unaudited)
Three Months Ended December 31,
Year Ended December 31,
OPERATING STATISTICS
2010
2009
2010
2009
Net revenue ($000)
Homecare
$
176,517
$
159,248
$
666,562
$
615,408
Inpatient
27,344
24,550
105,588
97,356
Continuous care
39,463
35,593
153,050
141,272
Total before Medicare cap allowance and 2008 BNAF
$
243,324
$
219,391
$
925,200
$
854,036
Estimated BNAF
1,950
Medicare cap allowance
(1,056
)
(1,835
)
610
(1,643
)
Total
$
242,268
$
217,556
$
925,810
$
854,343
Net revenue as a percent of total
before Medicare cap allowance
Homecare
72.6
%
72.6
%
72.0
%
72.1
%
Inpatient
11.2
11.2
11.4
11.4
Continuous care
16.2
16.2
16.6
16.5
Total before Medicare cap allowance and 2008 BNAF
100.0
100.0
100.0
100.0
Estimated BNAF
0.2
Medicare cap allowance
(0.4
)
(0.8
)
0.1
(0.2
)
Total
99.6
%
99.2
%
100.1
%
100.0
%
Average daily census (days)
Homecare
8,851
7,933
8,476
7,730
Nursing home
3,193
3,253
3,207
3,281
Routine homecare
12,044
11,186
11,683
11,011
Inpatient
436
407
434
406
Continuous care
600
556
596
563
Total
13,080
12,149
12,713
11,980
Total Admissions
14,776
13,677
58,526
55,420
Total Discharges
15,038
13,667
57,817
54,814
Average length of stay (days)
80.8
76.4
78.1
76.0
Median length of stay (days)
15.0
14.0
14.0
14.0
ADC by major diagnosis
Neurological
33.9
%
33.0
%
33.6
%
33.0
%
Cancer
18.3
18.8
18.4
19.1
Cardio
11.7
11.9
11.9
12.1
Respiratory
6.6
6.3
6.6
6.4
Other
29.5
30.0
29.5
29.4
Total
100.0
%
100.0
%
100.0
%
100.0
%
Admissions by major diagnosis
Neurological
19.5
%
18.8
%
18.8
%
18.1
%
Cancer
34.4
35.8
34.5
35.7
Cardio
11.0
10.4
11.3
11.5
Respiratory
7.4
7.5
8.0
7.5
Other
27.7
27.5
27.4
27.2
Total
100.0
%
100.0
%
100.0
%
100.0
%
Direct patient care margins
Routine homecare
54.4
%
52.5
%
52.8
%
52.0
%
Inpatient
14.4
11.6
13.6
14.6
Continuous care
22.6
20.1
21.4
20.2
Homecare margin drivers (dollars per patient day)
Labor costs
$
51.97
$
51.89
$
52.57
$
52.27
Drug costs
7.89
7.58
7.81
7.63
Home medical equipment
5.84
6.91
6.48
6.86
Medical supplies
2.67
2.55
2.56
2.42
Inpatient margin drivers (dollars per patient day)
Labor costs
$
305.19
$
300.26
$
299.54
$
287.16
Continuous care margin drivers (dollars per patient day)
Labor costs
$
533.32
$
534.60
$
531.69
$
527.27
Bad debt expense as a percent of revenues
0.7
%
1.1
%
0.9
%
1.1
%
Accounts receivable
Days of revenue outstanding- excluding unapplied Medicare payments
38.2
48.3
N.A.
N.A.
Days of revenue outstanding- including unapplied Medicare payments
36.5
18.0
N.A.
N.A.
51
Chemed Corporation and Subsidiary Companies
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 REGARDING
FORWARD-LOOKING INFORMATION
In addition to historical information, this report contains forward-looking statements and
performance trends that are based upon assumptions subject to certain known and unknown risks,
uncertainties, contingencies and other factors. Such forward-looking statements and trends include,
but are not limited to, the impact of laws and regulations on our operations, our estimate of
future effective income tax rates and the recoverability of deferred tax assets. Variances in any
or all of the risks, uncertainties, contingencies, and other factors from our assumptions could
cause actual results to differ materially from these forward-looking statements and trends. Our
ability to deal with the unknown outcomes of these events, many of which are beyond our control,
may affect the reliability of our projections and other financial matters.
52
EX-21
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EX-21
exv21
EXHIBIT 21
SUBSIDIARIES OF CHEMED CORPORATION
The following is a list of subsidiaries of the Company as of December 31, 2010: Other
subsidiaries which have been omitted from the list would not, when considered in the aggregate,
constitute a significant subsidiary. Each of the companies is incorporated under the laws of the
state following its name. The percentage given for each company represents the percentage of
voting securities of such company owned by the Company or, where indicated, subsidiaries of the
Company as of December 31, 2010.
All of the majority owned companies listed below are included in the consolidated financial
statements as of December 31, 2010.
Chemed RT, Inc. (Delaware, 100%)
Comfort Care Holdings Co. (Nevada, 100%)
Consolidated HVAC, Inc. (Ohio, 100% by Roto-Rooter Services Company)
Jet Resource, Inc. (Delaware, 100%)
Nurotoco of Massachusetts, Inc. (Massachusetts, 100% by Roto-Rooter Services Company)
Nurotoco of New Jersey, Inc. (Delaware, 80% by Roto-Rooter Services Company)
Roto RT, Inc. (Delaware, 100% by Roto-Rooter Group, Inc.)
Roto-Rooter Canada, Ltd. (British Columbia, 100% by Roto-Rooter Services Company)
Roto-Rooter Corporation (Iowa, 100% by Roto-Rooter Group, Inc.)
Roto-Rooter Development Company (Delaware, 100% by Roto-Rooter Corporation)
Roto-Rooter Group, Inc. (Delaware, 100%)
Roto-Rooter Services Company (Iowa, 100% by Roto-Rooter Group, Inc.)
RR Plumbing Services Corporation (New York, 49% by Roto-Rooter Group, Inc.; included within
the consolidated financial statements as a consolidated subsidiary)
R.R. UK, Inc. (Delaware, 100% by Roto-Rooter Group, Inc.)
VITAS Care Solutions, Inc. (Delaware, 100% by VITAS Hospice Services L.L.C.)
VITAS Healthcare Corporation (Delaware, 100% by Comfort Care Holdings Co.)
VITAS Hospice Services, L.L.C. (Delaware, 100% by VITAS Healthcare Corporation)
VITAS Healthcare Corporation of Arizona (Delaware, 100% by VITAS Hospice Services, L.L.C.)
VITAS Healthcare Corporation of California (Delaware, 100% by VITAS Hospice Services,
L.L.C.)
VITAS Healthcare Corporation of Illinois (Delaware, 100% by VITAS Hospice Services, L.L.C.)
VITAS Healthcare Corporation of Florida (Florida, 100% by VITAS Hospice Services, L.L.C.)
VITAS Healthcare Corporation of Ohio (Delaware, 100% by VITAS Hospice Services, L.L.C.)
VITAS Healthcare Corporation of Atlantic (Delaware, 100% by VITAS Hospice Services, L.L.C.)
VITAS Healthcare of Texas, L.P. (Texas, 99% by VITAS Holding Corporation, the limited
partner, 1% by VITAS Hospice Services, L.L.C., the general partner)
VITAS Healthcare Corporation of Georgia (Delaware, 100% by VITAS Hospice Services, L.L.C.)
VITAS HME Solutions, Inc. (Delaware, 100% by VITAS Hospice Services, L.L.C.)
VITAS of North Florida, Inc. (Florida, 100% by VITAS Hospice Services, L.L.C.)
VITAS Holdings Corporation (Delaware, 100% by VITAS Hospice Services, L.L.C.)
VITAS Solutions, Inc. (Delaware, 100% by VITAS Hospice Services, L.L.C.)
Hospice Care Incorporated (Delaware, 100% by VITAS Hospice Services, L.L.C.)
EX-23
7
l41914exv23.htm
EX-23
exv23
EXHIBIT 23
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (No.
333-145555) and Forms S-8 (Nos. 2- 87202, 2-80712, 33-65244, 33-61063, 333-109104, 333-118714,
333-34525, 333-87071, 333-134107, 333-87073 and 333-167733) of Chemed Corporation of our report
dated February 28, 2011 relating to the financial statements and the effectiveness of internal
control over financial reporting, which appears in the Annual Report to Stockholders, which is
incorporated in this Annual Report on Form 10-K. We also consent to the incorporation by reference
of our report dated February 28, 2011 relating to the financial statement schedule, which appears
in this Form 10-K.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Cincinnati, Ohio
February 28, 2011
EX-24
8
l41914exv24.htm
EX-24
exv24
EXHIBIT 24
POWER OF ATTORNEY
The undersigned director of CHEMED CORPORATION (Company) hereby appoints KEVIN J. MCNAMARA
and NAOMI C. DALLOB as his true and lawful attorneys-in-fact for the purpose of signing the
Companys Annual Report on Form 10-K for the year ended December 31, 2010, and all amendments
thereto, to be filed with the Securities and Exchange Commission. Each of such attorneys-in-fact
is appointed with full power to act without the other.
Dated:
February 24, 2011
/s/ Joel F. Gemunder
Joel F. Gemunder
POWER OF ATTORNEY
The undersigned director of CHEMED CORPORATION (Company) hereby appoints KEVIN J. MCNAMARA
and NAOMI C. DALLOB as his true and lawful attorneys-in-fact for the purpose of signing the
Companys Annual Report on Form 10-K for the year ended December 31, 2010, and all amendments
thereto, to be filed with the Securities and Exchange Commission. Each of such attorneys-in-fact
is appointed with full power to act without the other.
Dated: February 23, 2011
/s/ Patrick P. Grace
Patrick P. Grace
POWER OF ATTORNEY
The undersigned director of CHEMED CORPORATION (Company) hereby appoints KEVIN J. MCNAMARA
and NAOMI C. DALLOB as his true and lawful attorneys-in-fact for the purpose of signing the
Companys Annual Report on Form 10-K for the year ended December 31, 2010, and all amendments
thereto, to be filed with the Securities and Exchange Commission. Each of such attorneys-in-fact
is appointed with full power to act without the other.
Dated: February 23, 2011
/s/ Thomas C. Hutton
Thomas C. Hutton
POWER OF ATTORNEY
The undersigned director of CHEMED CORPORATION (Company) hereby appoints KEVIN J. MCNAMARA
and NAOMI C. DALLOB as his true and lawful attorneys-in-fact for the purpose of signing the
Companys Annual Report on Form 10-K for the year ended December 31, 2010, and all amendments
thereto, to be filed with the Securities and Exchange Commission. Each of such attorneys-in-fact
is appointed with full power to act without the other.
Dated:
February 23, 2011
/s/ Thomas P. Rice
Thomas P. Rice
POWER OF ATTORNEY
The undersigned director of CHEMED CORPORATION (Company) hereby appoints KEVIN J. MCNAMARA
and NAOMI C. DALLOB as his true and lawful attorneys-in-fact for the purpose of signing the
Companys Annual Report on Form 10-K for the year ended December 31, 2010, and all amendments
thereto, to be filed with the Securities and Exchange Commission. Each of such attorneys-in-fact
is appointed with full power to act without the other.
Dated:
February 23, 2011
/s/ Donald E. Saunders
Donald E. Saunders
POWER OF ATTORNEY
The undersigned director of CHEMED CORPORATION (Company) hereby appoints KEVIN J. MCNAMARA
and NAOMI C. DALLOB as his true and lawful attorneys-in-fact for the purpose of signing the
Companys Annual Report on Form 10-K for the year ended December 31, 2010, and all amendments
thereto, to be filed with the Securities and Exchange Commission. Each of such attorneys-in-fact
is appointed with full power to act without the other.
Dated: February 23, 2011
/s/ George J. Walsh III
George J. Walsh III
POWER OF ATTORNEY
The undersigned director of CHEMED CORPORATION (Company) hereby appoints KEVIN J. MCNAMARA
and NAOMI C. DALLOB as his true and lawful attorneys-in-fact for the purpose of signing the
Companys Annual Report on Form 10-K for the year ended December 31, 2010, and all amendments
thereto, to be filed with the Securities and Exchange Commission. Each of such attorneys-in-fact
is appointed with full power to act without the other.
Dated:
February 23, 2011
/s/ Frank E. Wood
Frank E. Wood
POWER OF ATTORNEY
The undersigned director of CHEMED CORPORATION (Company) hereby appoints KEVIN J. MCNAMARA
and NAOMI C. DALLOB as his true and lawful attorneys-in-fact for the purpose of signing the
Companys Annual Report on Form 10-K for the year ended December 31, 2010, and all amendments
thereto, to be filed with the Securities and Exchange Commission. Each of such attorneys-in-fact
is appointed with full power to act without the other.
Dated:
February 23, 2011
/s/ Walter L. Krebs
Walter L. Krebs
POWER OF ATTORNEY
The undersigned director of CHEMED CORPORATION (Company) hereby appoints KEVIN J. MCNAMARA
and NAOMI C. DALLOB as his true and lawful attorneys-in-fact for the purpose of signing the
Companys Annual Report on Form 10-K for the year ended December 31, 2010, and all amendments
thereto, to be filed with the Securities and Exchange Commission. Each of such attorneys-in-fact
is appointed with full power to act without the other.
Dated: February 23, 2011
/s/ Andrea R. Lindell
Andrea R. Lindell
EX-31.1
9
l41914exv31w1.htm
EX-31.1
exv31w1
EXHIBIT 31.1
CERTIFICATION PURSUANT TO RULES 13a-14(a)/15d-14(a) OF THE EXCHANGE ACT OF 1934
I, Kevin J. McNamara, certify that:
1.
I have reviewed this annual report on Form 10-K of Chemed Corporation (registrant);
2.
Based on my knowledge, this report does not contain any untrue statement of material fact
or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the
period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included
in this annual report, fairly present in all material respects the financial condition,
results of operations, and cash flow of the registrant as of, and for, the periods presented
in this report;
4.
The registrants other certifying officers and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act
Rule 13a-15(f) and 15d-15(f)) for the registrant and have:
a)
Designed such disclosure controls and procedures, or caused such disclosure
controls or procedures to be designed under our supervision, to ensure that material
information relating to the registrant, including its consolidated subsidiaries, is made
known to us by other within those entities, particularly during the period in which this
report is being prepared;
b)
Designed such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally
accepted accounting principles;
c)
Evaluated the effectiveness of the registrants disclosure controls and
procedures and presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this report
based on such evaluation; and
d)
Disclosed in this report any change in the registrants internal control over
financial reporting that occurred during the registrants most recent fiscal quarter
(the registrants fourth fiscal quarter in the case of an annual report) that has
materially affected, or is reasonably likely to materially affect, the registrants
internal control over financial reporting; and
5.
The registrants other certifying officers and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the registrants auditors and
the audit committee of registrants board of directors or persons performing the equivalent
function:
a)
All significant deficiencies and material weaknesses in the design or operation
of internal control over financial reporting which are reasonably likely to adversely
affect the registrants ability to record, process, summarize and report financial
information; and
b)
Any fraud, whether or not material, that involves management or other employees
who have a significant role in the registrants internal control over financial
reporting.
Dated: February 28, 2011
/s/ Kevin J. McNamara
Kevin J. McNamara
(President and Chief Executive Officer)
EX-31.2
10
l41914exv31w2.htm
EX-31.2
exv31w2
EXHIBIT 31.2
CERTIFICATION PURSUANT TO RULES 13a-14(a)/15d-14(a) OF THE EXCHANGE ACT OF 1934
I, David P. Williams, certify that:
1.
I have reviewed this annual report on Form 10-K of Chemed Corporation (registrant);
2.
Based on my knowledge, this report does not contain any untrue statement of material fact
or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the
period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included
in this annual report, fairly present in all material respects the financial condition,
results of operations, and cash flow of the registrant as of, and for, the periods presented
in this report;
4.
The registrants other certifying officers and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act
Rule 13a-15(f) and 15d-15(f)) for the registrant and have:
a)
Designed such disclosure controls and procedures, or caused such disclosure
controls or procedures to be designed under our supervision, to ensure that material
information relating to the registrant, including its consolidated subsidiaries, is made
known to us by other within those entities, particularly during the period in which this
report is being prepared;
b)
Designed such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally
accepted accounting principles;
c)
Evaluated the effectiveness of the registrants disclosure controls and
procedures and presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this report
based on such evaluation; and
d)
Disclosed in this report any change in the registrants internal control over
financial reporting that occurred during the registrants most recent fiscal quarter
(the registrants fourth fiscal quarter in the case of an annual report) that has
materially affected, or is reasonably likely to materially affect, the registrants
internal control over financial reporting; and
5.
The registrants other certifying officers and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the registrants auditors and
the audit committee of registrants board of directors or persons performing the equivalent
function:
a)
All significant deficiencies and material weaknesses in the design or operation
of internal control over financial reporting which are reasonably likely to adversely
affect the registrants ability to record, process, summarize and report financial
information; and
b)
Any fraud, whether or not material, that involves management or other employees
who have a significant role in the registrants internal control over financial
reporting.
Dated: February 28, 2011
/s/ David P. Williams
David P. Williams
(Executive Vice President and Chief Financial Officer)
EX-31.3
11
l41914exv31w3.htm
EX-31.3
exv31w3
EXHIBIT 31.3
CERTIFICATION PURSUANT TO RULES 13a-14(a)/15d-14(a) OF THE EXCHANGE ACT OF 1934
I, Arthur V. Tucker, Jr., certify that:
1.
I have reviewed this annual report on Form 10-K of Chemed Corporation (registrant);
2.
Based on my knowledge, this report does not contain any untrue statement of material fact
or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the
period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included
in this annual report, fairly present in all material respects the financial condition,
results of operations, and cash flow of the registrant as of, and for, the periods presented
in this report;
4.
The registrants other certifying officers and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act
Rule 13a-15(f) and 15d-15(f)) for the registrant and have:
a)
Designed such disclosure controls and procedures, or caused such disclosure
controls or procedures to be designed under our supervision, to ensure that material
information relating to the registrant, including its consolidated subsidiaries, is made
known to us by other within those entities, particularly during the period in which this
report is being prepared;
b)
Designed such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally
accepted accounting principles;
c)
Evaluated the effectiveness of the registrants disclosure controls and
procedures and presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this report
based on such evaluation; and
d)
Disclosed in this report any change in the registrants internal control over
financial reporting that occurred during the registrants most recent fiscal quarter
(the registrants fourth fiscal quarter in the case of an annual report) that has
materially affected, or is reasonably likely to materially affect, the registrants
internal control over financial reporting; and
5.
The registrants other certifying officers and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the registrants auditors and
the audit committee of registrants board of directors or persons performing the equivalent
function:
a)
All significant deficiencies and material weaknesses in the design or operation
of internal control over financial reporting which are reasonably likely to adversely
affect the registrants ability to record, process, summarize and report financial
information; and
b)
Any fraud, whether or not material, that involves management or other employees
who have a significant role in the registrants internal control over financial
reporting.
Dated: February 28, 2011
/s/ Arthur V. Tucker, Jr.
Arthur V. Tucker, Jr.
(Vice President and Controller)
EX-32.1
12
l41914exv32w1.htm
EX-32.1
exv32w1
EXHIBIT 32.1
CERTIFICATION BY KEVIN J. MCNAMARA
PURUSANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned, as President and
Chief Executive Officer of Chemed Corporation (Company), does hereby certify that:
1)
The Companys Annual Report on Form 10-K for the year ending December 31,
2010 (Report), fully complies with the requirements of Section 13(a) or 15(d) of the
Securities Exchange Act of 1934; and
2)
The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.
Dated: February 28, 2011
/s/ Kevin J. McNamara
Kevin J. McNamara
(President and Chief Executive Officer)
EX-32.2
13
l41914exv32w2.htm
EX-32.2
exv32w2
EXHIBIT 32.2
CERTIFICATION DAVID P. WILLIAMS
PURUSANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned, as Executive Vice
President and Chief Financial Officer of Chemed Corporation (Company), does hereby certify that:
1)
The Companys Annual Report on Form 10-K for the year ending December 31,
2010 (Report), fully complies with the requirements of Section 13(a) or 15(d) of the
Securities Exchange Act of 1934; and
2)
The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.
Dated: February 28, 2011
/s/ David P. Williams
David P. Williams
(Executive Vice President and Chief Financial Officer)
EX-32.3
14
l41914exv32w3.htm
EX-32.3
exv32w3
EXHIBIT 32.3
CERTIFICATION BY ARTHUR V. TUCKER, JR.
PURUSANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned, as Vice President
and Controller of Chemed Corporation (Company), does hereby certify that:
1)
The Companys Annual Report on Form 10-K for the year ending December 31,
2010 (Report), fully complies with the requirements of Section 13(a) or 15(d) of the
Securities Exchange Act of 1934; and
2)
The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.
Dated: February 28, 2011
/s/ Arthur V. Tucker, Jr.
Arthur V. Tucker, Jr.
(Vice President and Controller)
EX-101.INS
15
che-20101231.xml
EX-101 INSTANCE DOCUMENT
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<div style="margin-top: 12pt; font-size: 10pt;" align="left"><b>10. Cash Overdrafts and Cash Equivalents</b> </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Included in accounts payable are cash overdrafts of $11.1 million and $11.7 million as of December 31, 2010 and 2009, respectively. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> From time to time throughout the year, we invest excess cash in money market funds or repurchase agreements directly with major commercial banks. We do not physically hold the collateral for repurchase agreements, but the term is less than 10 days. We closely monitor the creditworthiness of the institutions with which we invest our overnight funds and the quality of the collateral underlying those investments. We had $45.5 million in cash equivalents as of December 31, 2010. There was $109.4 million in cash equivalents as of December 31, 2009. The weighted average rate of return for our cash equivalents was 0.1% in 2010 and 0.3% in 2009. </div></div> </div>19560001959000275050002790200029043000<div> <div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 12pt; font-size: 10pt;" align="left"><b>18. Loans Receivable from Independent Contractors</b> </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> At December 31, 2010, we had contractual arrangements with 63 independent contractors to provide plumbing repair and drain cleaning services under sublicensing agreements using the Roto-Rooter name in lesser-populated areas of the United States and Canada. The arrangements give the independent contractors the right to conduct a plumbing and drain cleaning business using the Roto-Rooter name in a specified territory in exchange for a royalty based on a percentage of labor sales, generally approximately 40%. We also pay for certain telephone directory advertising in these areas, lease certain capital equipment and provide operating manuals to serve as resources for operating a plumbing and drain cleaning business. The contracts are generally cancelable upon 90 days' written notice (without cause) or upon a few days notice (with cause). The independent contractor
s are responsible for running the businesses as they believe best. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Our maximum exposure to loss from arrangements with our independent contractors at December 31, 2010 is approximately $1.1 million (2009 — $1.3 million). The exposure to loss is mainly the result of loans provided to the independent contractors. In most cases, these loans are partially secured by receivables and equipment owned by the independent contractor. The interest rates on the loans range from zero to 8% per annum, and the remaining terms of the loans range from 2.5 months to 5.4 years at December 31, 2010. During 2010, we recorded revenues of $22.9 million (2009 — $21.6 million; 2008 — $22.0 million) and pretax profits of $10.7 million (2009 — $9.5 million; 2008 — $9.5 million) from our independent contractors. </div>
<p style="font-size: 10pt;" align="left"> </p></div> </div>8200000-82000008824000-630000-15600043850004161000-2117000-2117000<div>
<div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 12pt; font-size: 10pt;" align="left"><b>SELECTED FINANCIAL DATA</b> </div>
<div style="margin-top: 6pt; font-size: 10pt;" align="left"><i>Chemed Corporation and Subsidiary Companies</i>
<div style="border-bottom: #000000 0px solid; width: 100%; font-size: 1px;"> </div><i>(in thousands, except per share and footnote data, ratios, percentages and personnel)</i> </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="40%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center"><b>2010</b></td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center">2009</td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center">2008</td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center">2007</td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center">2006</td></tr>
<tr style="font-size: 1px;"><td style="border-top: #000000 1px solid;" colspan="21" align="left"> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Summary of Operations</b></div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Continuing operations (a)</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Service revenues and sales</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">1,280,545</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">1,190,236</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">1,148,941</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">1,100,058</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">1,018,587</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Gross profit (excluding depreciation)</div></td>
<td> </td>
<td> </td>
<td align="right">374,529</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">355,662</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">338,394</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">332,992</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">288,464</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Depreciation</div></td>
<td> </td>
<td> </td>
<td align="right">24,386</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">21,535</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">21,581</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">20,118</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">16,775</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Amortization</div></td>
<td> </td>
<td> </td>
<td align="right">4,657</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6,367</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,924</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,270</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,255</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Income from operations </div></td>
<td> </td>
<td> </td>
<td align="right">143,522</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">126,345</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">132,857</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">122,755</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">104,979</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Income from continuing operations (b)</div></td>
<td> </td>
<td> </td>
<td align="right">81,831</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">74,037</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">68,369</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">60,440</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">57,722</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Net income (b)</div></td>
<td> </td>
<td> </td>
<td align="right">81,831</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">73,784</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">67,281</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">61,641</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">50,651</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Earnings per share</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Income from continuing operations</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">3.62</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">3.30</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">2.97</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">2.46</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">2.21</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Net income</div></td>
<td> </td>
<td> </td>
<td align="right">3.62</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3.29</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2.92</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2.51</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1.94</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Average number of shares outstanding</div></td>
<td> </td>
<td> </td>
<td align="right">22,587</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">22,451</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">23,058</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">24,520</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">26,118</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Diluted earnings per share</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Income from continuing operations</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">3.55</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">3.26</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">2.93</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">2.41</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">2.16</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Net income</div></td>
<td> </td>
<td> </td>
<td align="right">3.55</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3.24</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2.88</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2.46</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1.90</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Average number of shares outstanding</div></td>
<td> </td>
<td> </td>
<td align="right">23,031</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">22,742</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">23,374</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">25,077</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">26,669</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Cash dividends per share</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">0.52</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">0.36</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">0.24</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">0.24</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">0.24</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Financial Position—Year-End</b></div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Cash and cash equivalents</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">49,917</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">112,416</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">3,628</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">4,988</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">29,274</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Working capital/(deficit)</div></td>
<td> </td>
<td> </td>
<td align="right">47,455</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">62,174</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(18,142</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(13,427</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(3,951</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Current ratio</div></td>
<td> </td>
<td> </td>
<td align="right">1.32</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1.46</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.88</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.91</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.98</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Properties and equipment, at cost less accumulated depreciation</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">79,292</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">75,358</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">76,962</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">74,513</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">70,140</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total assets</div></td>
<td> </td>
<td> </td>
<td align="right">830,161</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">819,470</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">759,622</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">768,945</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">791,461</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Long-term debt</div></td>
<td> </td>
<td> </td>
<td align="right">159,208</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">152,127</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">158,210</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">163,715</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">150,331</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Stockholders' equity</div></td>
<td> </td>
<td> </td>
<td align="right">462,049</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">477,162</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">396,831</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">395,800</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">421,361</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Other Statistics—Continuing Operations</b></div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Capital expenditures</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">25,639</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">21,496</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">26,094</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">26,640</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">21,987</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Number of employees</div></td>
<td> </td>
<td> </td>
<td align="right">13,058</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">12,308</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">11,884</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">11,783</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">11,621</td>
<td> </td></tr></table></div>
<div align="left">
<div style="margin-top: 16pt; width: 18%; font-size: 3pt; border-top: #000000 1px solid;"> </div></div>
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr><td width="3%"> </td>
<td width="1%"> </td>
<td width="96%"> </td></tr>
<tr valign="top"><td nowrap="nowrap" align="left">(a)</td>
<td> </td>
<td>Continuing operations exclude VITAS of Arizona, discontinued in 2006, Service America, discontinued in 2004 and Patient Care discontinued in 2002</td></tr>
<tr style="font-size: 3pt;"><td> </td></tr>
<tr valign="top"><td nowrap="nowrap" align="left">(b)</td>
<td> </td>
<td>The following amounts are included in income from continuing operations during the respective year (in thousands):</td></tr></table>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="40%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2010</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">2009</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">2008</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">2007</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">2006</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">After-tax benefit/(cost):</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Stock option expense</div></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>$</b></td>
<td align="right"><b>(4,909</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(5,464</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(4,619</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(2,962</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(769</td>
<td nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Noncash impact of change in accounting for convertible debt</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(4,313</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3,988</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(4,006</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,335</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Long-term incentive compensation</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(2,957</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3,134</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(4,427</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Expenses associated with contested proxy solicitation</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,525</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Non-taxable income on certain investments held in deferred compensation trusts</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,211</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Costs related to litigation settlements</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(1,126</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(534</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,168</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(169</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Income tax impact of nondeductible losses on investments held in deferred compensation trusts</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(455</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3,062</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(46</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Expenses incurred in connection with the Office of Inspector General investigation</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(627</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(363</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(28</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(141</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(662</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Acquisition Expense</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(198</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Gain/(loss) on extinguishment of debt</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,934</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(8,778</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(273</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Loss on impairment of transportation equipment</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,714</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Unreserved prior-year's insurance claim</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(358</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Income tax credits or adjustments related to prior years</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">322</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,115</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Gain on sale of property</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">724</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Loss on impairment of investment</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(918</td>
<td nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Other</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">296</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">296</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 30px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Total</div></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>$</b></td>
<td align="right"><b>(14,130</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(15,252</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(10,531</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(18,837</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(380</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div></div>
<div style="font-family: 'Times New Roman',Times,serif;">
<div align="center"> </div></div> </div>false--12-31FY20102010-12-3110-K000001958421124973YesLarge Accelerated Filer1221507160CHEMED CORPNoYes52071000558290005346100011299900063000116100033589000036500700011950003270004070001259500013332000656000066170007081000618000632000654000819470000830161000198258000196797000<div> <div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 6pt; font-size: 10pt;" align="left"><b>8. Business Combinations</b> </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> During 2010, we completed four business combinations within the Roto-Rooter segment for $9.5 million in cash to increase our market penetration in Kansas City, Missouri, St. Louis, Missouri, Jefferson City, Missouri and Spokane Washington. We made no acquisitions within the VITAS segment during 2010. The purchase price of these acquisitions was allocated as follows (in thousands): </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="88%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Working capital</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">268</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Identifiable intangible assets</div></td>
<td> </td>
<td> </td>
<td align="right">589</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Goodwill</div></td>
<td> </td>
<td> </td>
<td align="right">8,225</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Other assets and liabilities — net</div></td>
<td> </td>
<td> </td>
<td align="right">387</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td align="left">$</td>
<td align="right">9,469</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> During 2009, we completed two business combinations within the Roto-Rooter segment for $1.9 million in cash to increase our market penetration in Detroit, Michigan and Grand Rapids, Michigan. We made no acquisitions within the VITAS segment during 2009. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> During 2008, we completed four business combinations within the Roto-Rooter segment for $11.2 million in cash to increase our market penetration in Colorado Springs, Colorado; Dayton, Ohio; Eugene, Oregon; and Topeka, Kansas. We made no acquisitions within the VITAS segment during 2008. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> The unaudited pro forma results of operations, assuming purchase business combinations completed in 2010 and 2009 were completed on January 1, 2009, do not materially impact the accompanying consolidated financial statements. The results of operations of each of the above business combinations are included in our results of operations from the date of the respective acquisition. </div></div> </div>4988000362800011241600049917000-1360000108788000-624990001088000253000<div> <div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 6pt; font-size: 10pt;" align="left"><b>19. Legal and Regulatory Matters</b> </div>
<div style="margin-top: 6pt; font-size: 10pt;" align="left"> <b><i>Litigation</i></b> </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> On March 1, 2010 Anthony Morangelli and Frank Ercole filed a class action lawsuit in federal district court for the Eastern District of New York seeking unpaid minimum wages and overtime service technician compensation from Roto-Rooter and Chemed. They also seek payment of penalties, interest and plaintiffs' attorney fees. We contest these allegations. In September 2010, the Court conditionally certified a nationwide class of service technicians, excluding those who signed dispute resolution agreements in which they agreed to arbitrate claims arising out of their employment. There has been no final determination of the merits of collective treatment of the case. We are unable to estimate our potential liability, if any, with respect to this case. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> VITAS is party to a class action lawsuit filed in the Superior Court of California, Los Angeles County, in September 2006 by Bernadette Santos, Keith Knoche and Joyce White. This case alleges failure to pay overtime and failure to provide meal and rest periods to a purported class of California admissions nurses, chaplains and sales representatives. The case seeks payment of penalties, interest and Plaintiffs' attorney fees. VITAS contests these allegations. In December 2009, the trial court denied Plaintiffs' motion for class certification. We are unable to estimate our potential liability, if any, with respect to this case. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Regardless of outcome, defense of litigation adversely affects us through defense costs, diversion of our time and related publicity. </div>
<div style="margin-top: 6pt; font-size: 10pt;" align="left"> <b><i>Regulatory Matters</i></b> </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> In May 2009, VITAS received an administrative subpoena from the U.S. Department of Justice requesting VITAS deliver to the OIG documents, patient records, and policy and procedure manuals for headquarters and its Texas programs concerning hospice services provided for the period January 1, 2003 to the date of the letter. In August 2009, the OIG selected medical records for 59 past and current patients from a Texas program for review. In February 2010, VITAS received a companion civil investigative demand ("CID") from the state of Texas Attorney General's Office, seeking related documents. In September 2010, it received a second CID and a second administrative subpoena seeking related documents. We can neither predict the outcome of this investigation nor estimate our potential liability, if any. We believe that we are in compliance w
ith Medicare and Medicaid rules and regulations applicable to hospice providers </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> In April 2005, the Office of Inspector General ("OIG") for the Department of Health and Human Services served VITAS with civil subpoenas relating to VITAS' alleged failure to appropriately bill Medicare and Medicaid for hospice services. As part of this investigation, the OIG selected medical records for 320 past and current patients from VITAS' three largest programs for review. It also sought policies and procedures dating back to 1998 covering admissions, certifications, recertifications and discharges. During the third quarter of 2005 and again in May 2006, the OIG requested additional information from us. The Court dismissed a related qui tam complaint filed in U.S. District Court for the Southern District of Florida with prejudice in July 2007. The plaintiffs appealed this dismissal, which the Court of Appeals affirmed. The government continues
to investigate the complaint's allegations. In March 2009, we received a letter from the government reiterating the basis of their investigation. We are unable to estimate our potential liability, if any, with respect to this matter. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> The costs to comply with either of these investigations were not material for any period presented. Regardless of outcome, responding to the subpoenas can adversely affect us through defense costs, diversion of our time and related publicity. </div></div> </div>0.240.360.521180000000800000002989062830381863298910003038200081054700083457400090601600010160840001063891000113702300023637000278510002415800028304000-27720004979000-240900013701000150980002592400025085000215810002153500024386000<div>
<div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 6pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td width="1%" nowrap="nowrap" align="left"><b>4.</b></td>
<td width="1%"> </td>
<td><b>Stock-Based Compensation Plans</b></td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> We provide employees the opportunity to acquire our stock through a number of plans, as follows: </div>
<div style="margin-top: 6pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td style="background: none transparent scroll repeat 0% 0%;" width="6%"> </td>
<td width="3%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td>
<td>We have six stock incentive plans under which 8,450,000 shares can be issued to key employees through a grant of stock awards and/or options to purchase shares. The Compensation/Incentive Committee ("CIC") of the Board of Directors administers these plans. All options granted under these plans provide for a purchase price equal to the market value of the stock at the date of grant. The latest plan, covering a total of 1,750,000 shares, was adopted in May 2010. The plans are not qualified, restricted or incentive plans under the U.S. Internal Revenue Code. The terms of each plan differ slightly; however, stock options issued under the plans generally have a maximum term of 10 years. Under one plan, adopted in 1999, up to 500,000 shares may be issued to employees who are not our officers or directors.</td></tr>
<tr><td style="font-size: 6pt;"> </td></tr>
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td style="background: none transparent scroll repeat 0% 0%;" width="6%"> </td>
<td width="3%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td>
<td>In May 2002, our shareholders approved the adoption of the Executive Long-Term Incentive Plan ("LTIP") covering our officers and key employees. The CIC periodically approves a pool of shares to be awarded based on stock price hurdles, EBITDA targets and a discretionary component for the LTIP.</td></tr>
<tr><td style="font-size: 6pt;"> </td></tr>
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td style="background: none transparent scroll repeat 0% 0%;" width="6%"> </td>
<td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td>
<td>In May 2009, the CIC approved a new stock-price target portion of the Company's LTIP. The new stock price hurdles are as follows:</td></tr></table></div></div>
<div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 12pt; font-size: 10pt;" align="left"> </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="88%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td nowrap="nowrap" align="left"><b>Stock</b></td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center"><b>Shares</b></td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td nowrap="nowrap" align="left"><b>Price</b></td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center"><b>to be</b></td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="left"><b>Hurdle</b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="3" nowrap="nowrap" align="center"><b>Issued</b></td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">$54.00</div></td>
<td> </td>
<td> </td>
<td align="right">22,500</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">$58.00</div></td>
<td> </td>
<td> </td>
<td align="right">33,750</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">$62.00</div></td>
<td> </td>
<td> </td>
<td align="right">33,750</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total</div></td>
<td> </td>
<td> </td>
<td align="right">90,000</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" align="right"> </td>
<td> </td></tr></table></div>
<div style="margin-top: 6pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td style="background: none transparent scroll repeat 0% 0%;" width="6%"> </td>
<td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td>
<td>The stock price hurdles must be achieved during 30 trading days out of any 60 trading day period during the three years ending February 28, 2012.</td></tr></table></div>
<div style="margin-top: 6pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td style="background: none transparent scroll repeat 0% 0%;" width="6%"> </td>
<td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td>
<td>In December 2010, we met the $58.00 stock price target of our Long-Term Incentive Plan. On December 9, 2010, the Compensation/Incentive Committee of the Board of Directors ("CIC") approved a stock grant of 41,100 shares (including 7,350 shares from the discretionary pool) and the related allocation to participants. The pretax cost of the stock grant was $2.9 million and is included in selling, general and administrative expense in the accompanying consolidated statement of income.</td></tr></table></div>
<div style="margin-top: 6pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td style="background: none transparent scroll repeat 0% 0%;" width="6%"> </td>
<td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td>
<td>In April 2010, we met the $54.00 stock price target of our Long-Term Incentive Plan. On April 16, 2010, the Compensation/Incentive Committee of the Board of Directors ("CIC") approved a stock grant of 27,900 shares (including 5,400 shares from the discretionary pool) and the related allocation to participants. The pretax cost of the stock grant was $1.8 million and is included in selling, general and administrative expense in the accompanying consolidated statement of income.</td></tr></table></div>
<div style="margin-top: 6pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td style="background: none transparent scroll repeat 0% 0%;" width="6%"> </td>
<td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td>
<td>In October 2009, we met the cumulative EBITDA target established in 2007 and on November 10, 2009 the CIC approved a stock grant of 96,200 shares and the related allocation to participants. The pretax cost of the stock grant was $5.0 million and is included in selling, general and administrative expenses in the accompanying consolidated statement of income.</td></tr></table></div>
<div style="margin-top: 6pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td style="background: none transparent scroll repeat 0% 0%;" width="6%"> </td>
<td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td>
<td>In November 2009, the CIC approved a pool of shares to be awarded based on new EBITDA targets. The participants of the LTIP may be awarded 80,000 shares of capital stock if we attain Adjusted EBITDA of either $640 million for the three-year period beginning January 1, 2010, or $825 million for the four-year period beginning January 1, 2010. The CIC also established a discretionary pool of 37,000 shares of capital stock.</td></tr></table></div>
<div style="margin-top: 6pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td style="background: none transparent scroll repeat 0% 0%;" width="6%"> </td>
<td width="3%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td>
<td>We maintain an Employee Stock Purchase Plan ("ESPP"). The ESPP allows eligible participants to purchase our shares through payroll deductions at current market value. We pay administrative and broker fees associated with the ESPP. Shares purchased for the ESPP are purchased on the open market and credited directly to participants' accounts. In accordance with the FASB's guidance, the ESPP is non-compensatory.</td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> For the years ended December 31, 2010, 2009 and 2008, we recorded $2.6 million, $2.3 million and $1.9 million, respectively, in amortization expense in the accompanying statement of income for stock-based compensation related to the amortization of restricted stock awards granted. For the years ended December 31, 2010, 2009 and 2008, we recorded $7.8 million, $8.6 million and $7.3 million, respectively, in selling, general and administrative expenses for stock-based compensation related to stock options granted. There were no capitalized stock-based compensation costs for any period presented. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> As of December 31, 2010, approximately $3.9 million of total unrecognized compensation costs related to non-vested stock awards are expected to be recognized over a weighted average period of 2.1 years. As of December 31, 2010, approximately $8.4 million of total unrecognized compensation costs related to non-vested stock options are expected to be recognized over a weighted average period of 1.7 years. </div></div>
<div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> The following table summarizes stock option and award activity: </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="6" nowrap="nowrap" align="center"><b>Stock Options</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="6" nowrap="nowrap" align="center"><b>Stock Awards</b></td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Weighted</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Weighted</b></td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Number</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Average</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Number</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Average</b></td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>of</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Exercise</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>of</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Grant-Date</b></td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Shares</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Price</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Shares</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Price</b></td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Stock-based compensation shares:</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Outstanding at January 1, 2010</div></td>
<td> </td>
<td> </td>
<td align="right">2,452,227</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">43.36</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">169,975</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">47.87</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Granted</div></td>
<td> </td>
<td> </td>
<td align="right">515,100</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">52.76</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">125,472</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">57.13</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Exercised/Vested</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(365,763</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">29.40</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(143,827</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">55.82</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Canceled/Forfeited</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(14,918</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">45.94</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Outstanding at December 31, 2010</div></td>
<td> </td>
<td> </td>
<td align="right">2,586,646</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">47.19</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">151,620</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">48.00</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Vested at December 31, 2010</div></td>
<td> </td>
<td> </td>
<td align="right">1,572,913</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">47.47</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> The weighted average contractual life of outstanding and exercisable options was 5.7 years at December 31, 2010. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Options outstanding at December 31, 2010, were in the following exercise price ranges: </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="64%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center"><b>Weighted</b></td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center"><b>Average</b></td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center"><b>Number of</b></td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center"><b>Exercise</b></td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center"><b>Aggregate</b></td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="left"><b>Exercise Price Range</b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="3" nowrap="nowrap" align="center"><b>Options</b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="3" nowrap="nowrap" align="center"><b>Price</b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="3" nowrap="nowrap" align="center"><b>Intrinsic Value</b></td></tr>
<tr style="background: #cceeff;" valign="bottom"><td valign="top">
<div style="text-indent: 0px; margin-left: 0px;">$0 to $27.18 </div></td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">203,604</td>
<td valign="top" nowrap="nowrap"> </td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right">$</td>
<td valign="top" align="right">20.18</td>
<td valign="top" nowrap="nowrap"> </td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right">$</td>
<td valign="top" align="right">8,822,000</td>
<td valign="top" nowrap="nowrap"> </td></tr>
<tr valign="bottom"><td valign="top">
<div style="text-indent: 0px; margin-left: 0px;">$27.19 to $40.78 </div></td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">577,416</td>
<td valign="top" nowrap="nowrap"> </td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right">$</td>
<td valign="top" align="right">35.21</td>
<td valign="top" nowrap="nowrap"> </td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right">$</td>
<td valign="top" align="right">16,341,000</td>
<td valign="top" nowrap="nowrap"> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td valign="top">
<div style="text-indent: 0px; margin-left: 0px;">$40.79 to $70.00 </div></td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">1,347,326</td>
<td valign="top" nowrap="nowrap"> </td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right">$</td>
<td valign="top" align="right">49.34</td>
<td valign="top" nowrap="nowrap"> </td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right">$</td>
<td valign="top" align="right">19,092,000</td>
<td valign="top" nowrap="nowrap"> </td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> The total intrinsic value of stock options exercised during the years ended December 31, 2010, 2009 and 2008 was $10.1 million, $5.1 million and $5.2 million, respectively. The total intrinsic value of stock options that were vested during the years ended December 31, 2010, 2009 and 2008 was $27.7 million, $15.5 million and $11.3 million, respectively. The total intrinsic value of stock awards that were vested during the years ended December 31, 2010, 2009, and 2008 was $8.4 million, $5.6 million and $3.4 million, respectively. The total fair value of stock options that vested during 2010, 2009 and 2008 was $7.9 million, $7.8 million and $6.0 million, respectively. The total intrinsic value of stock awards vested during the years ended December 31, 2010, 2009 and 2008 was $8.4 million, $5.6 million and $3.4 million, respectively. The
total fair value of stock awards vested during the years ended December 31, 2010, 2009 and 2008 was $8.0 million, $5.4 million and $1.8 million, respectively. The total cash received from employees as a result of employee stock option exercises for the years ended December 31, 2010, 2009 and 2008 was $5.3 million, $545,000 and $291,000, respectively. In connection with these exercises, the excess tax benefits realized for the years ended December 31, 2010, 2009 and 2008, were $3.4 million, $2.0 million and $2.4 million, respectively. We settle employee stock options with newly issued shares. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> We estimate the fair value of stock options using the Black-Scholes valuation model, consistent with the provisions of the FASB's and the Securities and Exchange Commission's ("SEC") guidance. We determine expected term, volatility, dividend yield and forfeiture rate based on our historical experience. We believe that historical experience is the best indicator of these factors. For purposes of determining the key assumptions and the related fair value of the options granted, we analyzed the participants of the LTIP separately from the other stock option recipients. The assumptions we used to value the 2010, 2009 and 2008 grants are as follows: </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="28%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="7" nowrap="nowrap" align="center"><b>2010</b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="7" nowrap="nowrap" align="center">2009</td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="7" nowrap="nowrap" align="center">2008</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center"><b>LTIP</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center">LTIP</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center">LTIP</td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="3" nowrap="nowrap" align="center"><b>Participants</b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="3" nowrap="nowrap" align="center"><b>All Others</b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="3" nowrap="nowrap" align="center">Participants</td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="3" nowrap="nowrap" align="center">All Others</td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="3" nowrap="nowrap" align="center">Participants</td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="3" nowrap="nowrap" align="center">All Others</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Stock price on date of issuance</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">52.76</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">52.76</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">44.02</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">44.02</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">33.75</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">33.75</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Grant date fair value per share</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">15.57</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">14.55</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">14.95</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">12.49</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">11.18</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">10.18</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Number of options granted</div></td>
<td> </td>
<td> </td>
<td align="right">331,500</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">183,600</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">320,000</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">188,600</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">325,000</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">183,600</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Expected term (years)</div></td>
<td> </td>
<td> </td>
<td align="right">5.4</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5.7</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4.1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5.7</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4.3</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Risk free rate of return</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">2.62</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">2.09</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">1.91</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">1.44</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">3.08</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">2.92</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Volatility</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">33.0</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">34.5</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">35.0</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">35.0</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">31.8</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">34.0</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Dividend yield</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">1.5</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">1.5</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">0.6</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">0.6</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">0.7</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">0.7</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Forfeiture rate</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">4.4</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">5.5</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">5.20</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr></table></div></div> </div>-1088000-253000554300055430008157000815700011881000118810002.923.293.622.883.243.55<div>
<div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 6pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td width="1%" nowrap="nowrap" align="left"><b>16.</b></td>
<td width="1%"> </td>
<td><b>Earnings Per Share</b></td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> The computation of earnings per share follows (in thousands, except per share data): </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="28%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="10" nowrap="nowrap" align="center"><b>Income from Continuing Operations</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="10" nowrap="nowrap" align="center"><b>Net Income</b></td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td nowrap="nowrap" align="left"><b>For the Years Ended</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Earnings per</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Earnings</b></td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="left"><b>December 31,</b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Income</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Shares</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Share</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Income</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Shares</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>per Share</b></td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>2010</b></div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;"><b>Earnings</b></div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>81,831</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>22,587</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>3.62</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>81,831</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>22,587</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>3.62</b></td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;"><b>Dilutive stock options</b></div></td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>348</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>348</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;"><b>Nonvested stock awards</b></div></td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>96</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>96</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;"><b>Diluted earnings</b></div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>81,831</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>23,031</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>3.55</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>81,831</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>23,031</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>3.55</b></td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">2009</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Earnings</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">74,037</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">22,451</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3.30</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">73,784</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">22,451</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3.29</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Dilutive stock options</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">229</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">229</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Nonvested stock awards</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">62</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">62</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Diluted earnings</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">74,037</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">22,742</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3.26</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">73,784</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">22,742</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3.24</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">2008</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Earnings</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">68,369</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">23,058</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2.97</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">67,281</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">23,058</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2.92</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Dilutive stock options</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">287</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">287</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Nonvested stock awards</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">29</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">29</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Diluted earnings</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">68,369</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">23,374</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2.93</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">67,281</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">23,374</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2.88</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> During 2010, 970,900 stock options were excluded from the computation of diluted earnings per share as their exercise prices were greater than the average market price during most of the year. During 2009, 819,917 stock options were also excluded. During 2008, 827,917 stock options were also excluded. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Diluted earnings per share may be impacted in future periods as the result of the issuance of our $200 million Notes and related purchased call options and sold warrants. Per FASB's authoritative guidance on the effect of contingently convertible instruments on diluted earnings per share and convertible bonds with issuer option to settle for cash upon conversion, we will not include any shares related to the Notes in our calculation of diluted earnings per share until our average stock price for a quarter exceeds the current conversion price. We would then include in our diluted earnings per share calculation those shares issuable using the treasury stock method. The amount of shares issuable is based upon the amount by which the average stock price for the quarter exceeds the conversion price. The purchased call option does not impact the calculation of diluted earnin
gs per share, as it is always anti-dilutive. The sold warrants become dilutive when our average stock price for a quarter exceeds the strike price of the warrant. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> The following table provides examples of how changes in our stock price impact the number of shares that would be included in our diluted earnings per share calculation. It also shows the impact on the number of shares issuable upon conversion of the Notes and settlement of the purchased call options and sold warrants: </div></div>
<div style="font-family: 'Times New Roman',Times,serif;">
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center"><b>Shares</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center"><b>Total Treasury</b></td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center"><b>Shares Due</b></td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center"><b>Incremental</b></td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center"><b>Underlying 1.875%</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center"><b>Method</b></td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center"><b>to the Company</b></td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center"><b>Shares Issued by</b></td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td colspan="3" nowrap="nowrap" align="center"><b>Share</b></td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center"><b>Convertible</b></td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center"><b>Warrant</b></td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center"><b>Incremental</b></td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center"><b>under Notes</b></td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center"><b>the Company</b></td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td style="border-bottom: #000000 1px solid;" colspan="3" nowrap="nowrap" align="center"><b>Price</b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="3" nowrap="nowrap" align="center"><b>Notes</b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="3" nowrap="nowrap" align="center"><b>Shares</b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="3" nowrap="nowrap" align="center"><b>Shares (a)</b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="3" nowrap="nowrap" align="center"><b>Hedges</b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="3" nowrap="nowrap" align="center"><b>upon Conversion (b)</b></td></tr>
<tr style="background: #cceeff;" valign="bottom"><td valign="top" nowrap="nowrap" align="right">$</td>
<td valign="top" align="right">80.73</td>
<td valign="top" nowrap="nowrap"> </td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">18,136</td>
<td valign="top" nowrap="nowrap"> </td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">—</td>
<td valign="top" nowrap="nowrap"> </td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">18,136</td>
<td valign="top" nowrap="nowrap"> </td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">(19,401</td>
<td valign="top" nowrap="nowrap">)</td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">(1,265</td>
<td valign="top" nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">90.73</td>
<td valign="top" nowrap="nowrap"> </td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">273,379</td>
<td valign="top" nowrap="nowrap"> </td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">—</td>
<td valign="top" nowrap="nowrap"> </td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">273,379</td>
<td valign="top" nowrap="nowrap"> </td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">(292,452</td>
<td valign="top" nowrap="nowrap">)</td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">(19,073</td>
<td valign="top" nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">100.73</td>
<td valign="top" nowrap="nowrap"> </td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">477,943</td>
<td valign="top" nowrap="nowrap"> </td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">—</td>
<td valign="top" nowrap="nowrap"> </td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">477,943</td>
<td valign="top" nowrap="nowrap"> </td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">(511,289</td>
<td valign="top" nowrap="nowrap">)</td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">(33,346</td>
<td valign="top" nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">110.73</td>
<td valign="top" nowrap="nowrap"> </td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">645,559</td>
<td valign="top" nowrap="nowrap"> </td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">119,282</td>
<td valign="top" nowrap="nowrap"> </td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">764,841</td>
<td valign="top" nowrap="nowrap"> </td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">(690,600</td>
<td valign="top" nowrap="nowrap">)</td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">74,241</td>
<td valign="top" nowrap="nowrap"> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">120.73</td>
<td valign="top" nowrap="nowrap"> </td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">785,408</td>
<td valign="top" nowrap="nowrap"> </td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">316,210</td>
<td valign="top" nowrap="nowrap"> </td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">1,101,618</td>
<td valign="top" nowrap="nowrap"> </td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">(840,206</td>
<td valign="top" nowrap="nowrap">)</td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">261,412</td>
<td valign="top" nowrap="nowrap"> </td></tr>
<tr valign="bottom"><td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">130.73</td>
<td valign="top" nowrap="nowrap"> </td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">903,861</td>
<td valign="top" nowrap="nowrap"> </td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">483,010</td>
<td valign="top" nowrap="nowrap"> </td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">1,386,871</td>
<td valign="top" nowrap="nowrap"> </td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">(966,924</td>
<td valign="top" nowrap="nowrap">)</td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">419,947</td>
<td valign="top" nowrap="nowrap"> </td></tr></table></div>
<div align="left">
<div style="margin-top: 16pt; width: 18%; font-size: 3pt; border-top: #000000 1px solid;"> </div></div>
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr><td width="3%"> </td>
<td width="1%"> </td>
<td width="96%"> </td></tr>
<tr valign="top"><td nowrap="nowrap" align="left">a)</td>
<td> </td>
<td>Represents the number of incremental shares that must be included in the calculation of fully diluted shares under U.S. GAAP.</td></tr>
<tr style="font-size: 3pt;"><td> </td></tr>
<tr valign="top"><td nowrap="nowrap" align="left">b)</td>
<td> </td>
<td>Represents the number of incremental shares to be issued by the Company upon conversion of the Notes assuming concurrent settlement of</td></tr>
<tr style="font-size: 3pt;"><td> </td></tr>
<tr valign="top"><td nowrap="nowrap" align="left"> </td>
<td> </td>
<td>the note hedges and warrants.</td></tr></table></div> </div>34662000397190002422000195500033570002422000195500033570003406000<div> <div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 12pt; font-size: 10pt;" align="left"><b>17. Financial Instruments</b> </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> FASB's authoritative guidance on fair value measurements defines a hierarchy which prioritizes the inputs in fair value measurements. Level 1 measurements are measurements using quoted prices in active markets for identical assets or liabilities. Level 2 measurements use significant other observable inputs. Level 3 measurements are measurements using significant unobservable inputs which require a company to develop its own assumptions. In recording the fair value of assets and liabilities, companies must use the most reliable measurement available. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> The following shows the carrying value, fair value and the hierarchy for our financial instruments as of December 31, 2010 (in thousands): </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="52%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="11" nowrap="nowrap" align="center">Fair Value Measure</td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center">Quoted Prices in</td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center"> </td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center">Active Markets for</td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center">Significant Other</td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center">Significant</td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center">Identical Assets</td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center">Observable Inputs</td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center">Unobservable Inputs</td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="3" nowrap="nowrap" align="center">Carrying Value</td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="3" nowrap="nowrap" align="center">(Level 1)</td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="3" nowrap="nowrap" align="center">(Level 2)</td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="3" nowrap="nowrap" align="center">(Level 3)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Mutual fund investments of deferred compensation plans held in trust</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">28,304</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">28,304</td>
<td> </td>
<td> </td>
<td align="right">$ </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="right">$ </td>
<td align="right">—</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Long-term debt</div></td>
<td> </td>
<td> </td>
<td align="right">159,208</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">189,065</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> For cash and cash equivalents, accounts receivable and accounts payable, the carrying amount is a reasonable estimate of fair value because of the liquidity and short-term nature of these instruments.</div></div> </div>25349000274380003406000450042000458343000<div> <div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 6pt; font-size: 10pt;" align="left"><b>6. Goodwill and Intangible Assets</b> </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Amortization of definite-lived intangible assets from continuing operations for the years ended December 31, 2010, 2009, 2008 was $2.1 million, $4.0 million and $4.0 million, respectively. The following is a schedule by year of projected amortization expense for definite-lived intangible assets (in thousands): </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="88%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">2011</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1,402</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">2012</div></td>
<td> </td>
<td> </td>
<td align="right">1,399</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">2013</div></td>
<td> </td>
<td> </td>
<td align="right">1,399</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">2014</div></td>
<td> </td>
<td> </td>
<td align="right">427</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">2015</div></td>
<td> </td>
<td> </td>
<td align="right">217</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Thereafter</div></td>
<td> </td>
<td> </td>
<td align="right">266</td>
<td> </td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> The balance in identifiable intangible assets comprises the following (in thousands): </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="64%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Gross</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Accumulated</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Net Book</td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Asset</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Amortization</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Value</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><u><b>December 31, 2010</b></u></div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Referral networks</b></div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>21,140</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"><b>$</b></td>
<td align="right"><b>(17,427</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>3,713</b></td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Covenants not to compete</b></div></td>
<td> </td>
<td> </td>
<td align="right"><b>9,211</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(8,814</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td> </td>
<td align="right"><b>397</b></td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Customer lists</b></div></td>
<td> </td>
<td> </td>
<td align="right"><b>1,223</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(1,089</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td> </td>
<td align="right"><b>134</b></td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Reacquired franchise rights</b></div></td>
<td> </td>
<td> </td>
<td align="right"><b>974</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(108</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td> </td>
<td align="right"><b>866</b></td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;"><b>Subtotal — definite-lived intangibles</b></div></td>
<td> </td>
<td> </td>
<td align="right"><b>32,548</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(27,438</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td> </td>
<td align="right"><b>5,110</b></td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>VITAS trade name</b></div></td>
<td> </td>
<td> </td>
<td align="right"><b>51,300</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>51,300</b></td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;"><b>Total</b></div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>83,848</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"><b>$</b></td>
<td align="right"><b>(27,438</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>56,410</b></td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><u>December 31, 2009</u></div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Referral networks</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">21,200</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(16,240</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">4,960</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Covenants not to compete</div></td>
<td> </td>
<td> </td>
<td align="right">9,092</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(8,006</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">1,086</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Customer lists</div></td>
<td> </td>
<td> </td>
<td align="right">1,227</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,060</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">167</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Reacquired franchise rights</div></td>
<td> </td>
<td> </td>
<td align="right">450</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(43</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">407</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Subtotal — definite-lived intangibles</div></td>
<td> </td>
<td> </td>
<td align="right">31,969</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(25,349</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">6,620</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">VITAS trade name</div></td>
<td> </td>
<td> </td>
<td align="right">51,300</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">51,300</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Total</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">83,269</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(25,349</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">57,920</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td></tr></table></div></div> </div>26990006836900074037000818310001154040001206200001338310002.973.303.622.933.263.55<div>
<div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 12pt; font-size: 10pt;" align="left"><b>12. Income Taxes</b> </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> The provision for income taxes comprises the following (in thousands): </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="64%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="10" nowrap="nowrap" align="center">For the Years Ended December 31,</td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2010</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2009</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">2008</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Continuing Operations:</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Current</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">U.S. federal</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>46,789</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">36,182</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">42,914</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">U.S. state and local</div></td>
<td> </td>
<td> </td>
<td align="right"><b>6,981</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,960</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6,226</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Foreign</div></td>
<td> </td>
<td> </td>
<td align="right"><b>639</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">462</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">667</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Deferred</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">U.S. federal, state and local</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(2,418</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td> </td>
<td align="right">4,980</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,710</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Foreign</div></td>
<td> </td>
<td> </td>
<td align="right"><b>9</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(62</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 60px;">Total</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>52,000</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">46,583</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">47,035</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Discontinued Operations:</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Current U.S. federal</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(65</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(735</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Current U.S. state and local</div></td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(5</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(55</td>
<td nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Deferred U.S. federal, state and local</div></td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(77</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">159</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 60px;">Total</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(147</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(631</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<p style="font-size: 10pt;" align="right"> A summary of the temporary differences that give rise to deferred tax assets/ (liabilities) follows (in thousands): </p></div>
<div style="font-family: 'Times New Roman',Times,serif;">
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="6" nowrap="nowrap" align="center">December 31,</td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2010</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">2009</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Accrued liabilities</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>26,334</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">23,609</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Stock compensation expense</div></td>
<td> </td>
<td> </td>
<td align="right"><b>10,257</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7,991</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Allowance for uncollectible accounts receivable</div></td>
<td> </td>
<td> </td>
<td align="right"><b>2,695</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,862</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">State net operating loss carryforwards</div></td>
<td> </td>
<td> </td>
<td align="right"><b>1,379</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,439</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Other</div></td>
<td> </td>
<td> </td>
<td align="right"><b>2,763</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,420</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Deferred income tax assets</div></td>
<td> </td>
<td> </td>
<td align="right"><b>43,428</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">37,321</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Amortization of intangible assets</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(40,135</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(37,975</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Accelerated tax depreciation</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(10,499</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(9,495</td>
<td nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Currents assets</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(1,148</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,179</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Other</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(1,397</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(623</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Deferred income tax liabilities</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(53,179</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(49,272</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Net deferred income tax liabilities</div></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>$</b></td>
<td align="right"><b>(9,751</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(11,951</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Included in other assets at December 31, 2010, are deferred income tax assets of $236,000 (2009 — $272,000). At December 31, 2010 and 2009, state net operating loss carryforwards were $26.0 million and $26.6 million, respectively. These net operating losses will expire, in varying amounts, between 2011 and 2030. Based on our history of operating earnings, we have determined that our operating income will, more likely than not, be sufficient to ensure realization of our deferred income tax assets. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> After FASB's adoption of FASB's guidance on accounting for uncertain income taxes in 2007, we had approximately $1.3 million in unrecognized tax benefits. The majority of this amount would affect our effective tax rate, if recognized in a future period. The years ended December 31, 2007, and forward remain open for review for Federal income tax purposes. The earliest open year relating to any of our material state jurisdictions is the fiscal year ended December 31, 2005. During the next twelve months, we do not anticipate a material net change in unrecognized tax benefits. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> As permitted by this guidance, we classify interest related to our accrual for uncertain tax positions in separate interest accounts. As of December 31, 2010 and 2009, we have approximately $114,000 and $149,000, respectively, accrued in interest payable related to uncertain tax positions. These accruals are included in other current liabilities in the accompanying consolidated balance sheet. Net interest expense related to uncertain tax positions included in interest expense in the accompanying consolidated statement of income is not material. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> A roll forward of the significant changes to our unrecognized tax benefits is as follows (in thousands): </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="64%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2010</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">2009</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">2008</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Balance at January 1,</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>1,010</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,202</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,169</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Unrecognized tax benefits due to positions taken in current year</div></td>
<td> </td>
<td> </td>
<td align="right"><b>119</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">136</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">413</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Gross change due to positions taken in prior years</div></td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">53</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Decrease due to settlement with taxing authorities</div></td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(214</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(174</td>
<td nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Decrease due to expiration of statute of limitations</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(425</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(93</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(259</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Other</div></td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(21</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Balance at December 31,</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>704</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,010</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,202</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<p style="font-size: 10pt;" align="left"> The difference between the actual income tax provision for continuing operations and the income tax provision calculated at the statutory U.S. federal tax rate is explained as follows (in thousands): </p></div>
<div style="font-family: 'Times New Roman',Times,serif;">
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="64%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="10" nowrap="nowrap" align="center">For the Years Ended December 31,</td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2010</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">2009</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">2008</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Income tax provision calculated using the statutory rate of 35%</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>46,841</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">42,217</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">40,391</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">State and local income taxes, less federal income tax effect</div></td>
<td> </td>
<td> </td>
<td align="right"><b>4,509</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,837</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,928</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Nondeductible expenses</div></td>
<td> </td>
<td> </td>
<td align="right"><b>908</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">829</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">891</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Impact of deferred compensation plans</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(27</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(190</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">3,084</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">R&D tax credit</div></td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(656</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Other —net</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(231</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(110</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(603</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Income tax provision</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>52,000</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">46,583</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">47,035</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Effective tax rate</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>38.9</b></td>
<td nowrap="nowrap"><b>%</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">38.6</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">40.8</td>
<td nowrap="nowrap">%</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Summarized below are the total amounts of income taxes paid during the years ended December 31 (in thousands): </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="88%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>2010</b></div></td>
<td> </td>
<td align="left">$</td>
<td align="right">49,532</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">2009</div></td>
<td> </td>
<td> </td>
<td align="right">40,872</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">2008</div></td>
<td> </td>
<td> </td>
<td align="right">50,535</td>
<td> </td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Provision has not been made for additional taxes on $35.1 million of undistributed earnings of our domestic subsidiaries. Should we elect to sell our interest in all of these businesses rather than to effect a tax-free liquidation, additional taxes amounting to approximately $12.9 million would be incurred based on current income tax rates. </div></div> </div>4703500046583000520000005585000-8109000138100006659000-3375400068656000-7760006230004825000898000-29000151000-548000016780004398000-64230002720005999000-8560002891000-581000-305000455000-332000579200005641000012123000115990001195900075430007728000<div>
<div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 12pt; font-size: 10pt;" align="left"><b>14. Lease Arrangements</b> </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> We have operating leases that cover our corporate office headquarters, various warehouse and office facilities, office equipment and transportation equipment. The remaining terms of these leases range from one year to seven years, and in most cases we expect that these leases will be renewed or replaced by other leases in the normal course of business. We have no significant capital leases as of December 31, 2010 or 2009. </div>
<p style="font-size: 10pt;" align="right"> The following is a summary of future minimum rental payments and sublease rentals to be received under operating leases that have initial or remaining noncancelable terms in excess of one year at December 31, 2010 (in thousands): </p></div>
<div style="font-family: 'Times New Roman',Times,serif;">
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="88%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">2011</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">17,777</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">2012</div></td>
<td> </td>
<td> </td>
<td align="right">13,099</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">2013</div></td>
<td> </td>
<td> </td>
<td align="right">10,207</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">2014</div></td>
<td> </td>
<td> </td>
<td align="right">6,996</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">2015</div></td>
<td> </td>
<td> </td>
<td align="right">4,727</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Thereafter</div></td>
<td> </td>
<td> </td>
<td align="right">1,620</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total minimum rental payments</div></td>
<td> </td>
<td> </td>
<td align="right">54,426</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Less: minimum sublease rentals</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(47</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Net minimum rental payments</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">54,379</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Total rental expense incurred under operating leases for continuing operations follows (in thousands): </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="64%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="10" nowrap="nowrap" align="center">For the Years Ended December 31,</td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2010</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">2009</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">2008</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Total rental payments</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>21,777</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">21,219</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">18,867</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Less sublease rentals</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(237</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(270</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(265</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Net rental expense</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>21,540</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">20,949</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">18,602</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div></div> </div>342308000368112000819470000830161000136084000149342000152127000159208000<div>
<div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"><b>3. Long-Term Debt and Lines of Credit</b> </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> As of December 31, 2010, we have long-term debt of $159.2 million (December 31, 2009 - $152.1 million). This long-term debt is related in its entirety to our Convertible Notes that are due in full, in 2014. </div>
<div style="margin-top: 12pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td width="3%"> </td>
<td width="1%" nowrap="nowrap" align="left"><i>2007</i></td>
<td width="1%"> </td>
<td><i>REFINANCING</i></td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Our 2007 credit facility includes a $175 million revolving credit facility and a $100 million expansion feature. The facility has a 5-year maturity with principal payments on the revolving credit facility due at maturity. Interest is payable quarterly at a floating rate equal to our choice of various indices plus a specified margin based on our leverage ratio. The interest rate at the inception of the agreement was LIBOR plus 0.875%. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> In May 2007, we issued $200 million of Senior Convertible Notes due 2014 (the "Notes") at a price of $1,000 per Note, less an underwriting fee of $27.50 per Note. We received approximately $194 million in net proceeds from the sale of the Notes after paying underwriting fees, legal and other expenses. We pay interest on the Notes on May 15 and November 15 of each year, beginning on November 15, 2007. The Notes mature on May 15, 2014. The Notes are guaranteed on an unsecured senior basis by each of our subsidiaries that are a borrower or a guarantor under any senior credit facility, as defined in the Indenture. The Notes were convertible, under certain circumstances, into our Capital Stock at an initial conversion rate of 12.3874 shares per $1,000 principal amount of Notes. This conversion rate is equivalent to an in
itial conversion price of approximately $80.73 per share. Prior to March 1, 2014, holders may convert their Notes under certain circumstances. On and after March 1, 2014, the Notes will be convertible at any time prior to the close of business three days prior to the stated maturity date of the Notes. Upon conversion of a Note, if the conversion value is $1,000 or less, holders will receive cash equal to the lesser of $1,000 or the conversion value of the number of shares of our Capital Stock. If the conversion value exceeds $1,000, in addition to this, holders will receive shares of our Capital Stock for the excess amount. The Indenture contains customary terms and covenants that upon certain events of default, including without limitation, failure to pay when due any principal amount, a fundamental change or certain cross defaults in other agreements or instruments, occurring and continuing; either the trustee or the holders of 25% in aggregate principal amount of the Notes may declare th
e principal of the Notes and any accrued and unpaid interest through the date of such declaration immediately due and payable. In the case of certain events of bankruptcy or insolvency relating to any significant subsidiary or to us, the principal amount of the Notes and accrued interest automatically becomes due and payable. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> The conversion rate on the Notes is adjusted upon certain corporate events including a quarterly dividend payment in excess of $0.06 per share. In February 2010 and May 2010, we declared quarterly dividends of $0.12 per share. In August 2010 and November 2010, we declared quarterly dividends of $0.14 per share. This has the effect of changing the conversion rate to 12.484 ($80.10 per share) at December 31, 2010. </div></div>
<div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Pursuant to the FASB's guidance on accounting for derivative instruments indexed to, and potentially settled in a company's own stock as well as the guidance on the meaning of "indexed to a company's own stock," the Notes are accounted for as convertible debt in the accompanying consolidated balance sheet and the embedded options within the Notes have not been accounted for as separate derivatives. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> In conjunction with the Notes, we entered into a purchased call transaction and a warrant transaction (written call) with JPMorgan Chase, National Association and Citibank, N.A. (the "Counterparties"). The purchased call options cover approximately 2,477,000 shares of our Capital Stock, which under most circumstances represents the maximum number of shares of Capital Stock that underlie the Notes. Concurrently with entering into the purchased call options, we entered into warrant transactions with each of the Counterparties. Pursuant to the warrant transactions, we sold to the Counterparties warrants to purchase in the aggregate approximately 2,477,000 shares of our Capital Stock. In most cases, the sold warrants may not be exercised prior to the maturity of the Notes. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> The purchased call options and sold warrants are separate contracts with the Counterparties, are not part of the terms of the Notes and do not affect the rights of holders under the Notes. A holder of the Notes will not have any rights with respect to the purchased call options or the sold warrants. The purchased call options are expected to reduce the potential dilution upon conversion of the Notes if the market value per share of the Capital Stock at the time of exercise is greater than the conversion price of the Notes at time of exercise. The sold warrants have an exercise price of $105.44 and are expected to result in some dilution should the price of our Capital Stock exceed this exercise price. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Our net cost for these transactions was approximately $27.3 million. Pursuant to FASB's authoritative guidance, the purchased call option and the sold warrants are accounted for as equity transactions. Therefore, our net cost was recorded as a decrease in stockholders' equity in the accompanying consolidated balance sheet. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> In May 2008, the FASB issued authoritative guidance for accounting for convertible debt instruments that may be settled in cash upon conversion including partial cash settlement. This guidance requires all such convertible debentures to be separately accounted for as debt and equity pieces of the instrument. At inception of the convertible instrument, cash flows related to the convertible instrument are to be discounted using a market rate of interest. We adopted the provisions of the guidance on January 1, 2009 and applied the guidance retrospectively. Upon adoption, the Notes had a discount of approximately $55.1 million. For 2008 interest expense increased and retained earnings decreased $6.1 million, ($4.0 million, net of income taxes). The increase in interest expense results in a reduction in EPS and diluted EPS of $0.20. </
div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> The following amounts are included in our consolidated balance sheet related to the Notes (in thousands): </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="6" nowrap="nowrap" align="center">December 31,</td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2010</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">2009</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Principal amount of convertible debentures</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">186,956</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">186,956</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Unamortized debt discount</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(27,748</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(34,829</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Carrying amount of convertible debentures</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">159,208</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">152,127</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Additional paid in capital (net of tax)</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">31,310</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">31,310</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> The following amounts comprise interest expense included in our consolidated income statement (in thousands): </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="64%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="10" nowrap="nowrap" align="center">December 31,</td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2010</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">2009</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">2008</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Cash interest expense</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">4,224</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">4,350</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">4,945</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Non-cash amortization of debt discount</div></td>
<td> </td>
<td> </td>
<td align="right">7,081</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6,617</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6,560</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Amortization of debt costs</div></td>
<td> </td>
<td> </td>
<td align="right">654</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">632</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">618</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Total interest expense</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">11,959</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">11,599</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">12,123</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> The unamortized debt discount is amortized using the effective interest method over the remaining life of the Notes. The effective rate on the Notes after adoption of the standard is 6.875%. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> The average interest rate for our long-term debt was 1.9% for the years ended December 31, 2010 and 2009. </div></div>
<div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> In the fourth quarter of 2008, we purchased approximately $13.0 million face value of our Convertible Notes due 2014 for approximately $8.5 million. This resulted in a pre-tax net gain of $3.4 million comprised of $3.7 million related to the purchase of the Convertible Notes partially offset by $300,000 in the write-off of unamortized debt issuance costs. The net gain was recorded as a gain on extinguishment of debt in the accompanying statement of income in 2008. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Capitalized interest was not material for any of the periods shown. Summarized below are the total amounts of interest paid during the years ended December 31 (in thousands): </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="88%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>2010</b></div></td>
<td> </td>
<td align="right"><b>$</b></td>
<td align="right"><b>4,113</b></td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">2009</div></td>
<td> </td>
<td> </td>
<td align="right">4,667</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">2008</div></td>
<td> </td>
<td> </td>
<td align="right">5,628</td>
<td> </td></tr></table></div>
<div style="margin-top: 6pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td width="1%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td>
<td><i>DEBT COVENANTS</i></td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Collectively, the 2007 Facility and the Notes require us to meet certain restrictive non-financial and financial covenants. We are in compliance with all non-financial debt covenants as of December 31, 2010. The restrictive financial covenants are defined in the credit agreement and include maximum leverage ratios, minimum fixed charge coverage and consolidated net worth ratios, limits on operating leases and minimum asset value limits. We are in compliance with the financial debt covenants as of December 31, 2010, as follows: </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="66%"> </td>
<td width="2%"> </td>
<td width="15%"> </td>
<td width="2%"> </td>
<td width="15%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="left">Description</td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="left">Requirement</td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="left">Chemed</td></tr>
<tr valign="bottom"><td valign="top">
<div style="text-indent: 0px; margin-left: 0px;"> </div></td>
<td> </td>
<td valign="top" align="left"> </td>
<td> </td>
<td valign="top" align="left"> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td valign="top">
<div style="text-indent: 0px; margin-left: 0px;">Leverage Ratio (Consolidated Indebtedness/Consolidated Adj. EBITDA) </div></td>
<td> </td>
<td valign="top" align="left">< 3.50 to 1.00 </td>
<td> </td>
<td valign="top" align="left">1.15 to 1.00</td></tr>
<tr valign="bottom"><td valign="top">
<div style="text-indent: 0px; margin-left: 0px;"> </div></td>
<td> </td>
<td valign="top" align="left"> </td>
<td> </td>
<td valign="top" align="left"> </td></tr>
<tr valign="bottom"><td valign="top">
<div style="text-indent: 0px; margin-left: 0px;">Fixed Charge Coverage Ratio (Consolidated Free Cash Flow/Consolidated Fixed Charges) </div></td>
<td> </td>
<td valign="top" align="left">> 1.50 to 1.00 </td>
<td> </td>
<td valign="top" align="left">2.26 to 1.00</td></tr>
<tr valign="bottom"><td valign="top">
<div style="text-indent: 0px; margin-left: 0px;"> </div></td>
<td> </td>
<td valign="top" align="left"> </td>
<td> </td>
<td valign="top" align="left"> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td valign="top">
<div style="text-indent: 0px; margin-left: 0px;">Minimum Net Worth </div></td>
<td> </td>
<td valign="top" align="left">> $350.3 million </td>
<td> </td>
<td valign="top" align="left">$393.4 million</td></tr>
<tr valign="bottom"><td valign="top">
<div style="text-indent: 0px; margin-left: 0px;"> </div></td>
<td> </td>
<td valign="top" align="left"> </td>
<td> </td>
<td valign="top" align="left"> </td></tr>
<tr valign="bottom"><td valign="top">
<div style="text-indent: 0px; margin-left: 0px;">Annual Operating Lease Commitment </div></td>
<td> </td>
<td valign="top" align="left">< $30.0 million </td>
<td> </td>
<td valign="top" align="left">$17.8 million</td></tr>
<tr valign="bottom"><td valign="top">
<div style="text-indent: 0px; margin-left: 0px;"> </div></td>
<td> </td>
<td valign="top" align="left"> </td>
<td> </td>
<td valign="top" align="left"> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td valign="top">
<div style="text-indent: 0px; margin-left: 0px;">Credit Party Asset Value </div></td>
<td> </td>
<td valign="top" align="left">> $700.0 million </td>
<td> </td>
<td valign="top" align="left">$809.3 million</td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> We have issued $28.0 million in standby letters of credit as of December 31, 2010, mainly for insurance purposes. Issued letters of credit reduce our available credit under the revolving credit agreement. As of December 31, 2010, we have approximately $147.0 million of unused lines of credit available and eligible to be drawn down under our revolving credit facility, excluding the expansion feature. We have made no borrowings from our line of credit during the year ended December 31, 2010. </div></div> </div>-84816000-29202000-112811000-28627000-22842000-3570000011208300016083200086012000672810006728100073784000737840008183100081831000132857000126345000143522000137340001101500026990003989000<div> <div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 6pt; font-size: 10pt;" align="left"><b>11. Other Income/ (Expense) —Net</b> </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Other income/ (expense)—net from continuing operations comprises the following (in thousands): </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="64%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="10" nowrap="nowrap" align="center">For the Years Ended December 31,</td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2010</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">2009</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">2008</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Market value gains/(losses) on assets held in deferred compensation trust</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">2,210</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">5,802</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(9,140</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Loss on disposal of property and equipment</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(425</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(369</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(415</td>
<td nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Interest income</div></td>
<td> </td>
<td> </td>
<td align="right">444</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">423</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">742</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Other — net</div></td>
<td> </td>
<td> </td>
<td align="right">39</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">18</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">77</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total other income/(expense)</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">2,268</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">5,874</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(8,736</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<div style="margin-top: 6pt; font-size: 10pt;" align="left"> The offset for market value gains or losses on assets held in deferred compensation trust is recorded in selling, general and administrative expenses. </div></div> </div>141270001614100045360006626000-873600058740002268000544000374000726000671250006712500074200074200010413900010413900069788000422500010933000055430008157000118810001120000019190009469000260940002149600025639000<div> <div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 12pt; font-size: 10pt;" align="left"><b>15. Pension and Retirement Plans</b> </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Retirement obligations under various plans cover substantially all full-time employees who meet age and/or service eligibility requirements. The major plans providing retirement benefits to our employees are defined contribution plans. Expenses charged to continuing operations for our retirement and profit-sharing plans, excess benefit plans and other similar plans were $11.4 million, $15.1 million and $2.7 million for the years ended December 31, 2010, 2009 and 2008, respectively. These expenses include the impact of market gains and losses on assets held in deferred compensation plans. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> We have excess benefit plans for key employees whose participation in the qualified plans is limited by U.S. Employee Retirement Income Security Act requirements. Benefits are determined based on theoretical participation in the qualified plans. Benefits are only invested in mutual funds, and participants are not permitted to diversify accumulated benefits in shares of our stock. Trust assets invested in shares of our stock are included in treasury stock, and the corresponding liability is included in a separate component of stockholders' equity. At December 31, 2010, these trusts held 99,494 shares or $2.0 million of our stock (2009 — 102,027 shares or $1.9 million). </div></div> </div>1038800010285000749000770000-829000658000297000387000157700029000029100054500053270007535800079292000<div> <div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 12pt; font-size: 10pt;" align="left"><b>13. Properties and Equipment</b> </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> A summary of properties and equipment follows (in thousands): </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="6" nowrap="nowrap" align="center">December 31,</td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2010</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">2009</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Land</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>1,360</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,360</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Buildings</div></td>
<td> </td>
<td> </td>
<td align="right"><b>32,788</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">29,699</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Transportation equipment</div></td>
<td> </td>
<td> </td>
<td align="right"><b>18,837</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">17,318</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Machinery and equipment</div></td>
<td> </td>
<td> </td>
<td align="right"><b>58,706</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">53,017</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Computer software</div></td>
<td> </td>
<td> </td>
<td align="right"><b>47,203</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">26,147</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Furniture and fixtures</div></td>
<td> </td>
<td> </td>
<td align="right"><b>51,277</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">45,133</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Projects under development</div></td>
<td> </td>
<td> </td>
<td align="right"><b>1,817</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">17,865</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total properties and equipment</div></td>
<td> </td>
<td> </td>
<td align="right"><b>211,988</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">190,539</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Less accumulated depreciation</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(132,696</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(115,181</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Net properties and equipment</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>79,292</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">75,358</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> The net book value of computer software at December 31, 2010 and 2009, was $18.9 million and $9.1 million, respectively. Depreciation expense for computer software was $5.9 million, $4.2 million and $4.3 million for the years ended December 31, 2010, 2009 and 2008, respectively. </div></div> </div>9820000108330009078000<div>
<div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 6pt; font-size: 10pt;" align="left"><b>UNAUDITED SUMMARY OF QUARTERLY RESULTS</b> </div>
<div style="margin-top: 6pt; font-size: 10pt;" align="left"><b>Chemed Corporation and Subsidiary Companies<br />(in thousands, except per share and footnote data)</b> </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="40%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>First</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Second</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Third</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Fourth</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Total</b></td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td nowrap="nowrap" align="left"><b>For the Year Ended December 31, 2010</b></td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Quarter</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Quarter</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Quarter</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Quarter</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Year</b></td>
<td> </td></tr>
<tr style="font-size: 1px;"><td style="border-top: #000000 1px solid;" colspan="21" align="left"> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Continuing Operations</b></div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;"><b>Total service revenues and sales</b></div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>308,813</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>314,995</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>320,451</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>336,286</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>1,280,545</b></td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;"><b>Gross profit</b></div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>89,676</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>91,293</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>92,536</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>101,024</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>374,529</b></td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;"><b>Income from operations</b></div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>34,445</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>33,856</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>36,755</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>38,466</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>143,522</b></td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;"><b>Interest expense</b></div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(2,952</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(2,999</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(2,995</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(3,013</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(11,959</b></td>
<td nowrap="nowrap"><b>)</b></td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;"><b>Other income/(expense)—net</b></div></td>
<td> </td>
<td> </td>
<td align="right"><b>186</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>10</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>222</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>1,850</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>2,268</b></td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;"><b>Income before income taxes</b></div></td>
<td> </td>
<td> </td>
<td align="right"><b>31,679</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>30,867</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>33,982</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>37,303</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>133,831</b></td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;"><b>Income taxes</b></div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(12,321</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(12,012</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(12,994</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(14,673</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(52,000</b></td>
<td nowrap="nowrap"><b>)</b></td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Net Income (a)</b></div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>19,358</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>18,855</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>20,988</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>22,630</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>81,831</b></td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Earnings Per Share (a)</b></div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;"><b>Net income</b></div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>0.86</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>0.83</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>0.93</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>1.00</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>3.62</b></td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;"><b>Average number of shares outstanding</b></div></td>
<td> </td>
<td> </td>
<td align="right"><b>22,593</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>22,644</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>22,597</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>22,534</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>22,587</b></td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Diluted Earnings Per Share (a)</b></div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;"><b>Net income</b></div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>0.84</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>0.82</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>0.91</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>0.98</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>3.55</b></td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;"><b>Average number of shares outstanding</b></div></td>
<td> </td>
<td> </td>
<td align="right"><b>23,021</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>23,080</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>22,996</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>23,070</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>23,031</b></td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<div align="left">
<div style="margin-top: 16pt; width: 18%; font-size: 3pt; border-top: #000000 1px solid;"> </div></div>
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr><td width="3%"> </td>
<td width="1%"> </td>
<td width="96%"> </td></tr>
<tr valign="top"><td nowrap="nowrap" align="left"><b>(a)</b></td>
<td> </td>
<td><b>The following amounts are included in income from continuing operations during the respective quarter (in thousands):</b></td></tr></table>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="40%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>First</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Second</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Third</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Fourth</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Total</b></td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Quarter</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Quarter</b></td>
<td style="border-bottom: #000000 1px solid;"> </td>
<td style="border-bottom: #000000 1px solid;"> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Quarter</b></td>
<td style="border-bottom: #000000 1px solid;"> </td>
<td style="border-bottom: #000000 1px solid;"> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Quarter</b></td>
<td style="border-bottom: #000000 1px solid;"> </td>
<td style="border-bottom: #000000 1px solid;"> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Year</b></td>
<td style="border-bottom: #000000 1px solid;"> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Pretax (cost)/benefit:</b></div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;"><b>Stock option expense</b></div></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>$</b></td>
<td align="right"><b>(2,051</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>$</b></td>
<td align="right"><b>(2,346</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>$</b></td>
<td align="right"><b>(1,968</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>$</b></td>
<td align="right"><b>(1,397</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>$</b></td>
<td align="right"><b>(7,762</b></td>
<td nowrap="nowrap"><b>)</b></td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;"><b>Noncash impact of change in accounting for convertible debt</b></div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(1,655</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(1,688</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(1,721</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(1,756</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(6,820</b></td>
<td nowrap="nowrap"><b>)</b></td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;"><b>Long-term incentive compensation</b></div></td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(1,799</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(2,935</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(4,734</b></td>
<td nowrap="nowrap"><b>)</b></td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;"><b>Acquisition expenses</b></div></td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(324</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(324</b></td>
<td nowrap="nowrap"><b>)</b></td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;"><b>Expenses of class action litigation</b></div></td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(105</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(322</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(1,426</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(1,853</b></td>
<td nowrap="nowrap"><b>)</b></td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;"><b>Expenses incurred in connection with the Office of Inspector General investigation</b></div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(160</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(118</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(112</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(622</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(1,012</b></td>
<td nowrap="nowrap"><b>)</b></td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 30px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;"><b>Total</b></div></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>$</b></td>
<td align="right"><b>(3,866</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>$</b></td>
<td align="right"><b>(6,056</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>$</b></td>
<td align="right"><b>(4,123</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>$</b></td>
<td align="right"><b>(8,460</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>$</b></td>
<td align="right"><b>(22,505</b></td>
<td nowrap="nowrap"><b>)</b></td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 30px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Aftertax (cost)/benefit:</b></div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;"><b>Stock option expense</b></div></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>$</b></td>
<td align="right"><b>(1,298</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>$</b></td>
<td align="right"><b>(1,484</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>$</b></td>
<td align="right"><b>(1,244</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>$</b></td>
<td align="right"><b>(883</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>$</b></td>
<td align="right"><b>(4,909</b></td>
<td nowrap="nowrap"><b>)</b></td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;"><b>Noncash impact of change in accounting for convertible debt</b></div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(1,047</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(1,068</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(1,088</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(1,110</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(4,313</b></td>
<td nowrap="nowrap"><b>)</b></td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;"><b>Long-term incentive compensation</b></div></td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(1,124</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(1,833</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(2,957</b></td>
<td nowrap="nowrap"><b>)</b></td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;"><b>Acquisition expenses</b></div></td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(198</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(198</b></td>
<td nowrap="nowrap"><b>)</b></td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;"><b>Expenses of class action litigation</b></div></td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(63</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(194</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(869</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(1,126</b></td>
<td nowrap="nowrap"><b>)</b></td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;"><b>Expenses incurred in connection with the Office of Inspector General investigation</b></div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(99</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(74</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(69</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(385</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(627</b></td>
<td nowrap="nowrap"><b>)</b></td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 30px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;"><b>Total</b></div></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>$</b></td>
<td align="right"><b>(2,444</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>$</b></td>
<td align="right"><b>(3,813</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>$</b></td>
<td align="right"><b>(2,595</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>$</b></td>
<td align="right"><b>(5,278</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>$</b></td>
<td align="right"><b>(14,130</b></td>
<td nowrap="nowrap"><b>)</b></td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 30px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<p style="font-size: 10pt;" align="left"> </p></div>
<div style="font-family: 'Times New Roman',Times,serif;">
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="40%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">First</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Second</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Third</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Fourth</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Total</td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td nowrap="nowrap" align="left">For the Year Ended December 31, 2009</td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Quarter</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Quarter</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Quarter</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Quarter</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Year</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td style="border-top: #000000 1px solid;" colspan="21" align="left"> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Continuing Operations</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total service revenues and sales .</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">294,938</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">295,255</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">296,794</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">303,249</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,190,236</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Gross profit </div></td>
<td> </td>
<td align="left">$</td>
<td align="right">87,925</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">87,918</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">87,906</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">91,913</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">355,662</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Income from operations </div></td>
<td> </td>
<td align="left">$</td>
<td align="right">34,726</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">27,938</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">32,786</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">30,895</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">126,345</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Interest expense </div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,844</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3,142</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,853</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,760</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(11,599</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Other income/(expense)—net</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(276</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">3,358</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,733</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,059</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,874</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Income before income taxes </div></td>
<td> </td>
<td> </td>
<td align="right">31,606</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">28,154</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">31,666</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">29,194</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">120,620</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Income taxes</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(12,267</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(10,904</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(12,456</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(10,956</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(46,583</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Income from continuing operations (a)</div></td>
<td> </td>
<td> </td>
<td align="right">19,339</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">17,250</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">19,210</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">18,238</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">74,037</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Discontinued Operations</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(253</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(253</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Net Income (a)</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">19,339</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">17,250</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">19,210</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">17,985</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">73,784</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Earnings Per Share (a)</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Income from continuing operations</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">0.86</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.77</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.86</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.81</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3.30</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Net income</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">0.86</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.77</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.86</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.80</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3.29</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Average number of shares outstanding</div></td>
<td> </td>
<td> </td>
<td align="right">22,394</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">22,417</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">22,461</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">22,551</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">22,451</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Diluted Earnings Per Share (a)</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Income from continuing operations</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">0.85</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.76</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.84</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.80</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3.26</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Net income</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">0.85</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.76</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.84</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.78</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3.24</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Average number of shares outstanding</div></td>
<td> </td>
<td> </td>
<td align="right">22,647</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">22,672</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">22,744</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">22,937</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">22,742</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<div align="left">
<div style="margin-top: 16pt; width: 18%; font-size: 3pt; border-top: #000000 1px solid;"> </div></div>
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr><td width="3%"> </td>
<td width="1%"> </td>
<td width="96%"> </td></tr>
<tr valign="top"><td nowrap="nowrap" align="left">(a)</td>
<td> </td>
<td>The following amounts are included in income from continuing operations during the respective quarter (in thousands):</td></tr></table>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="40%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">First</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Second</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Third</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Fourth</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Total</td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Quarter</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Quarter</td>
<td style="border-bottom: #000000 1px solid;"> </td>
<td style="border-bottom: #000000 1px solid;"> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Quarter</td>
<td style="border-bottom: #000000 1px solid;"> </td>
<td style="border-bottom: #000000 1px solid;"> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Quarter</td>
<td style="border-bottom: #000000 1px solid;"> </td>
<td style="border-bottom: #000000 1px solid;"> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Year</td>
<td style="border-bottom: #000000 1px solid;"> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Pretax (cost)/benefit:</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Stock option expense</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(2,042</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(2,443</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(2,214</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(1,940</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(8,639</td>
<td nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Noncash impact of change in accounting for convertible debt</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,530</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,561</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,591</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,623</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(6,305</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Non-taxable income from certain investments held in deferred compensation trusts</div></td>
<td> </td>
<td> </td>
<td align="right">1,211</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,211</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Expenses associated with contested proxy solicitiation</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(545</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3,444</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3,989</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Expenses incurred in connection with the Office of Inspector General investigation</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(13</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(86</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(343</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(144</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(586</td>
<td nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Long-term incentive compensation</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(5,007</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(5,007</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Costs related to litigation settlements</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(882</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(882</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 30px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Total</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(2,919</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(7,534</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(4,148</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(9,596</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(24,197</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 30px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Aftertax (cost)/benefit:</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Stock option expense</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(1,292</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(1,544</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(1,401</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(1,227</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(5,464</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Noncash impact of change in accounting for convertible debt</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(968</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(987</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,006</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,027</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3,988</td>
<td nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Non-taxable income from certain investments held in deferred compensation trusts</div></td>
<td> </td>
<td> </td>
<td align="right">1,211</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,211</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Income tax impact of nondeductible losses on investments held in deferred compensation trusts</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(475</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">20</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(455</td>
<td nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Expenses associated with contested proxy solicitiation</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(345</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,180</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,525</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Expenses incurred in connection with the Office of Inspector General investigation</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(8</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(53</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(213</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(89</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(363</td>
<td nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Long-term incentive compensation</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3,134</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3,134</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Costs related to litigation settlements</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(534</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(534</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 30px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Total</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(1,877</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(4,744</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(2,620</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(6,011</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(15,252</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 30px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div></div> </div><div> <div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 12pt; font-size: 10pt;" align="left"><b>20. Related Party Transactions</b> </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> VITAS has two pharmacy services agreements ("Agreements") with Omnicare, Inc. and its subsidiaries ("OCR") whereby OCR provides specified pharmacy services for VITAS and its hospice patients in geographical areas served by both VITAS and OCR. The Agreements renew automatically for one-year terms. Either party may cancel the Agreements at the end of any term by giving 90 days prior written notice. VITAS made purchases from OCR of $36.1 million, $33.1 million and $32.9 million for the years ended December 31, 2010, 2009 and 2008, respectively. VITAS' accounts payable to OCR and its subsidiaries are not material at December 31, 2010 and 2009. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Mr. Joel F. Gemunder retired as President and Chief Executive Officer of OCR during the third quarter of 2010 and is a director of the Company. Ms. Andrea Lindell is a director of both OCR and the Company. Mr. Kevin J. McNamara, President, Chief Executive Officer and a director of the Company, is a director emeritus of OCR. We believe that the terms of these agreements are no less favorable to VITAS than we could negotiate with an unrelated party. </div></div> </div>1871300014669000403366000473316000<div>
<div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 6pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td width="1%" nowrap="nowrap" align="left"><b>2.</b></td>
<td width="1%"> </td>
<td><b>Hospice Revenue Recognition</b></td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> VITAS recognizes revenue at the estimated realizable amount due from third-party payers, which are primarily Medicare and Medicaid. Payers may deny payment for services in whole or in part on the basis that such services are not eligible for coverage and do not qualify for reimbursement. We estimate denials each period and make adequate provision in the financial statements. The estimate of denials is based on historical trends and known circumstances and does not vary materially from period to period on an aggregate basis. Medicare billings are subject to certain limitations, as described below. </div></div>
<div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> The allowance for doubtful accounts for VITAS comprises the following (in thousands): </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Medicare</td>
<td style="border-bottom: #000000 1px solid;"> </td>
<td style="border-bottom: #000000 1px solid;"> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Medicaid</td>
<td style="border-bottom: #000000 1px solid;"> </td>
<td style="border-bottom: #000000 1px solid;"> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Other</td>
<td style="border-bottom: #000000 1px solid;"> </td>
<td style="border-bottom: #000000 1px solid;"> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Total</td>
<td style="border-bottom: #000000 1px solid;"> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Beginning Balance — January 1, 2009</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">5,255</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2,115</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,069</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">8,439</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Bad debt provision</div></td>
<td> </td>
<td> </td>
<td align="right">4,760</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,014</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,819</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">9,593</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Contractual adjustments/(revenue reduction)</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">613</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">613</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Write-offs</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3,440</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,446</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,821</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(7,707</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Ending Balance — December 31, 2009</b></div></td>
<td> </td>
<td align="left"><b> </b></td>
<td align="right"><b>6,575</b></td>
<td> </td>
<td> </td>
<td align="left"><b> </b></td>
<td align="right"><b>2,683</b></td>
<td> </td>
<td> </td>
<td align="left"><b> </b></td>
<td align="right"><b>1,680</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>10,938</b></td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Bad debt provision</b></div></td>
<td> </td>
<td> </td>
<td align="right"><b>2,991</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>3,051</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>1,857</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>7,899</b></td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Contractual adjustments/(revenue reduction)</b></div></td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>472</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>472</b></td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Write-offs</b></div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(2,263</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(2,653</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(2,592</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(7,508</b></td>
<td nowrap="nowrap"><b>)</b></td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Ending Balance — December 31, 2010</b></div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>7,303</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>3,081</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>1,417</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>11,801</b></td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> VITAS is subject to certain limitations on Medicare payments for services. Specifically, if the number of inpatient care days any hospice program provides to Medicare beneficiaries exceeds 20% of the total days of hospice care such program provided to all Medicare patients for an annual period beginning September 28, the days in excess of the 20% figure may be reimbursed only at the routine homecare rate. None of VITAS' hospice programs exceeded the payment limits on inpatient services in 2010, 2009 or 2008. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> VITAS is also subject to a Medicare annual per-beneficiary cap ("Medicare cap"). Compliance with the Medicare cap is measured by comparing the total Medicare payments received under a Medicare provider number with respect to services provided to all Medicare hospice care beneficiaries in the program or programs covered by that Medicare provider number between November 1 of each year and October 31 of the following year with the product of the per-beneficiary cap amount and the number of Medicare beneficiaries electing hospice care for the first time from that hospice program or programs from September 28 through September 27 of the following year. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> We actively monitor each of our hospice programs, by provider number, as to their specific admission, discharge rate and median length of stay data in an attempt to determine whether revenues are likely to exceed the annual per-beneficiary Medicare cap. Should we determine that revenues for a program are likely to exceed the Medicare cap based on projected trends, we attempt to institute corrective actions, which include changes to the patient mix and increased patient admissions. However, should we project our corrective action will not prevent that program from exceeding its Medicare cap, we estimate the amount of revenue recognized during the period that will require repayment to the Federal government under the Medicare cap and record the amount as a reduction to service revenue. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Our estimate of the Medicare cap liability is particularly sensitive to allocations made by our fiscal intermediary relative to patient transfers between hospices. We are allocated a percentage of the Medicare cap based on the days a patient spent in our care as compared to the total days a patient spent in all hospice care. The allocation for patient transfers cannot be determined until a patient dies. As the number of days a patient spends in hospice is based on a future event, this allocation process may take several years. Therefore, we use only first-time Medicare admissions in our estimate of the Medicare cap billing limitation. This method assumes that credit received for patients who transfer into our program will be offset by credit lost from patients who transfer out of our program. The amount we record is our best estimate of the liability as of the date of the finan
cial statements but could change as more patient information becomes available. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> During the year ended December 31, 2010, we reversed Medicare cap liability for amounts recorded in the fourth quarter of 2009 for two programs' projected 2010 measurement period liability. This reversal was partially offset by the Medicare cap liability for three programs' projected 2011 measurement period liability. For the year ended December 31, 2009, we recorded pretax charges in continuing operations for the estimated Medicare cap liability for two programs' projected liability through year end for the 2010 measurement period. The majority of the liability relates to one program which is VITAS' largest hospice. This amount was subsequently reversed during the 2010 fiscal year due to increased admission trends. Shown below is the Medicare cap liability activity for the years ended December 31, 2010 and 2009 (in thousands): </div></div>
;
<div style="font-family: 'Times New Roman',Times,serif;">
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">2010</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">2009</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Beginning Balance January 1,</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1,981</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">338</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Expense — 2011 measurement period</div></td>
<td> </td>
<td> </td>
<td align="right">1,110</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Expense/(reversal) — 2010 measurement period</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,720</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">1,783</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Reversal — 2009 measurement period</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(235</td>
<td nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Other retroactive billings</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">95</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Ending Balance December 31,</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1,371</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,981</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> The U.S. government revises hospice reimbursement rates on an annual basis using the Hospice Wage Index (HWI) and the Consumer Price Index plus a phase out of the Budget Neutrality Adjustment Factor (BNAF). The HWI is geographically adjusted to reflect local differences in wages. The BNAF is a portion of inflation calculated in prior years that is being eliminated or phased out over a seven year period. In August 2008, the U.S. government announced a 25% reduction in the BNAF for its fiscal 2009 (October 2008 through September 2009) pursuant to a three year phase-out of the BNAF. The February 2009 American Recovery and Reinvestment Act mandated a one year delay in the BNAF phase-out. As a result, included in the twelve months ended December 31, 2009, is $1.95 million of revenue for the retroactive price increase rel
ated to services provided by VITAS in the fourth quarter of 2008. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> In August 2009, the Centers for Medicare and Medicaid Services (CMS) revised the phase-out schedule of the BNAF. CMS reduced the increase in hospice reimbursement by 10% of the BNAF effective October 1, 2009. The remaining 90% of the BNAF will be phased out over the next six years by revising the October 1 reimbursement adjustment by 15% of the original BNAF inflation factor. Based upon this revised schedule, 100% of the BNAF will be eliminated on October 1, 2015. </div></div> </div>114894100011902360001280545000<div>
<div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 6pt; font-size: 10pt;" align="left"><b>23. Guarantor Subsidiaries</b> </div>
<div style="margin-top: 6pt; font-size: 10pt;" align="left"> Our 1.875% Senior Convertible Notes issued on May 14, 2007, are fully and unconditionally guaranteed on an unsecured, joint and severally liable basis by our 100% owned subsidiaries. The equity method has been used with respect to the parent company's (Chemed) investment in subsidiaries. No consolidating adjustment column is presented for the condensed consolidating statement of cash flow since there were no signficant consolidating entries for the periods presented. The following condensed, consolidating financial data present the composition of the parent company, the guarantor subsidiaries and the non-guarantor subsidiaries as of December 31, 2010 and 2009, and for the years ended December 31, 2010, 2009 and 2008 (in thousands): </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="40%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Guarantor</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Non-Guarantor</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Consolidating</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"> </td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="left"><b><i>December 31, 2010</i></b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Parent</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Subsidiaries</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Subsidiaries</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Adjustments</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Consolidated</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>ASSETS</b></div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Cash and cash equivalents</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">45,324</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(1,571</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">6,164</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">49,917</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Accounts receivable, less allowances</div></td>
<td> </td>
<td> </td>
<td align="right">802</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">111,716</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">481</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">112,999</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Intercompany receivables</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">172,426</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(172,426</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Inventories</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7,191</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">537</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7,728</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Current deferred income taxes</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(688</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">15,666</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">120</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">15,098</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Prepaid income taxes</div></td>
<td> </td>
<td> </td>
<td align="right">2,787</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,809</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(208</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">770</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Prepaid expenses</div></td>
<td> </td>
<td> </td>
<td align="right">782</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">9,244</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">259</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">10,285</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total current assets</div></td>
<td> </td>
<td> </td>
<td align="right">49,007</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">312,863</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7,353</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(172,426</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">196,797</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Investments of deferred compensation plans held in trust</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">28,304</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">28,304</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Properties and equipment, at cost, less accumulated depreciation</div></td>
<td> </td>
<td> </td>
<td align="right">12,513</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">64,743</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,036</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">79,292</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Identifiable intangible assets less accumulated amortization</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">56,410</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">56,410</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Goodwill</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">453,864</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,479</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">458,343</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Other assets</div></td>
<td> </td>
<td> </td>
<td align="right">6,049</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,791</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,175</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">11,015</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Investments in subsidiaries</div></td>
<td> </td>
<td> </td>
<td align="right">716,815</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">18,696</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(735,511</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total assets</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">784,384</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">909,367</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">44,347</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(907,937</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">830,161</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>LIABILITIES AND STOCKHOLDERS' EQUITY</b></div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Accounts payable</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">4,924</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">50,457</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">448</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">55,829</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Intercompany payables</div></td>
<td> </td>
<td> </td>
<td align="right">167,067</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,359</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(172,426</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Income taxes</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(7,190</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">8,745</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(394</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,161</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Accrued insurance</div></td>
<td> </td>
<td> </td>
<td align="right">906</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">35,586</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">36,492</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Accrued compensation</div></td>
<td> </td>
<td> </td>
<td align="right">4,235</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">35,016</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">468</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">39,719</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Other current liabilities</div></td>
<td> </td>
<td> </td>
<td align="right">1,549</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">13,447</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,145</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">16,141</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total current liabilities</div></td>
<td> </td>
<td> </td>
<td align="right">171,491</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">143,251</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7,026</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(172,426</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">149,342</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Deferred income taxes</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(11,356</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">45,168</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(8,727</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">25,085</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Long-term debt</div></td>
<td> </td>
<td> </td>
<td align="right">159,208</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">159,208</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Deferred compensation liabilities</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">27,851</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">27,851</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Other liabilities</div></td>
<td> </td>
<td> </td>
<td align="right">2,992</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,123</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">511</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6,626</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Stockholders' equity</div></td>
<td> </td>
<td> </td>
<td align="right">462,049</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">717,825</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">17,686</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(735,511</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">462,049</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total liabilities and stockholders' equity</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">784,384</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">909,367</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">44,347</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(907,937</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">830,161</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="40%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Guarantor</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Non-Guarantor</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Consolidating</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"> </td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="left"><b><i>December 31, 2009</i></b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Parent</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Subsidiaries</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Subsidiaries</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Adjustments</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Consolidated</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>ASSETS</b></div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Cash and cash equivalents</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">109,331</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(1,221</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">4,306</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">112,416</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Accounts receivable, less allowances</div></td>
<td> </td>
<td> </td>
<td align="right">618</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">52,303</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">540</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">53,461</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Intercompany receivables</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">149,888</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(149,888</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Inventories</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7,009</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">534</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7,543</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Current deferred income taxes</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(378</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">14,048</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">31</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">13,701</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Prepaid income taxes</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3,227</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">4,161</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(185</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">749</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Prepaid expenses</div></td>
<td> </td>
<td> </td>
<td align="right">770</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">9,545</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">73</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">10,388</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total current assets</div></td>
<td> </td>
<td> </td>
<td align="right">107,114</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">235,733</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,299</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(149,888</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">198,258</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Investments of deferred compensation plans held in trust</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">24,158</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">24,158</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Properties and equipment, at cost, less accumulated depreciation</div></td>
<td> </td>
<td> </td>
<td align="right">10,309</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">62,912</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,137</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">75,358</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Identifiable intangible assets less accumulated amortization</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">57,920</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">57,920</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Goodwill</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">445,662</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,380</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">450,042</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Other assets</div></td>
<td> </td>
<td> </td>
<td align="right">11,190</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,232</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">312</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">13,734</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Investments in subsidiaries</div></td>
<td> </td>
<td> </td>
<td align="right">643,572</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">15,523</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(659,095</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total assets</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">772,185</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">819,982</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">36,286</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(808,983</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">819,470</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>LIABILITIES AND STOCKHOLDERS' EQUITY</b></div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Accounts payable</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(2,411</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">54,084</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">398</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">52,071</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Intercompany payables</div></td>
<td> </td>
<td> </td>
<td align="right">147,744</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,144</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(149,888</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Income taxes</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,145</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">2,159</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">49</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">63</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Accrued insurance</div></td>
<td> </td>
<td> </td>
<td align="right">1,231</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">33,930</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">35,161</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Accrued compensation</div></td>
<td> </td>
<td> </td>
<td align="right">4,235</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">30,020</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">407</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">34,662</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Other current liabilities</div></td>
<td> </td>
<td> </td>
<td align="right">1,643</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">11,367</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,117</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">14,127</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total current liabilities</div></td>
<td> </td>
<td> </td>
<td align="right">150,297</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">131,560</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,115</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(149,888</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">136,084</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Deferred income taxes</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(10,549</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">43,183</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(6,710</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">25,924</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Long-term debt</div></td>
<td> </td>
<td> </td>
<td align="right">152,127</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">152,127</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Deferred compensation liabilities</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">23,637</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">23,637</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Other liabilities</div></td>
<td> </td>
<td> </td>
<td align="right">3,148</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,388</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,536</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Stockholders' equity</div></td>
<td> </td>
<td> </td>
<td align="right">477,162</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">643,851</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">15,244</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(659,095</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">477,162</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total liabilities and stockholders' equity</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">772,185</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">819,982</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">36,286</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(808,983</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">819,470</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<p style="font-size: 10pt;" align="right"> </p></div>
<div style="font-family: 'Times New Roman',Times,serif;">
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="40%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Guarantor</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Non-Guarantor</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Consolidating</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"> </td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="left"><b><i>For the year ended December 31, 2010</i></b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Parent</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Subsidiaries</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Subsidiaries</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Adjustments</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Consolidated</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Continuing Operations</b></div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Net sales and service revenues</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,254,856</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">25,689</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,280,545</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Cost of services provided and goods sold</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">892,596</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">13,420</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">906,016</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Selling, general and administrative expenses</div></td>
<td> </td>
<td> </td>
<td align="right">23,262</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">170,223</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">8,479</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">201,964</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Depreciation</div></td>
<td> </td>
<td> </td>
<td align="right">860</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">22,732</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">794</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">24,386</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Amortization</div></td>
<td> </td>
<td> </td>
<td align="right">1,404</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,253</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,657</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total costs and expenses</div></td>
<td> </td>
<td> </td>
<td align="right">25,526</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,088,804</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">22,693</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,137,023</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Income/ (loss) from operations</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(25,526</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">166,052</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,996</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">143,522</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Interest expense</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(11,596</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(363</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(11,959</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Other (expense)/income — net</div></td>
<td> </td>
<td> </td>
<td align="right">15,520</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(15,451</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">2,199</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,268</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Income/ (loss) before income taxes</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(21,602</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">150,238</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,195</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">133,831</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Income tax (provision)/ benefit</div></td>
<td> </td>
<td> </td>
<td align="right">6,859</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(56,905</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,954</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(52,000</td>
<td nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Equity in net income of subsidiaries</div></td>
<td> </td>
<td> </td>
<td align="right">96,574</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,308</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(99,882</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Net income</b></div></td>
<td> </td>
<td align="left">$</td>
<td align="right">81,831</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">96,641</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3,241</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(99,882</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">81,831</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="40%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Guarantor</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Non-Guarantor</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Consolidating</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"> </td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="left"><i>For the year ended December 31, 2009</i></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Parent</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Subsidiaries</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Subsidiaries</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Adjustments</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Consolidated</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Continuing Operations</b></div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Net sales and service revenues</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,166,972</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">23,264</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,190,236</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Cost of services provided and goods sold</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">822,788</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">11,786</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">834,574</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Selling, general and administrative expenses</div></td>
<td> </td>
<td> </td>
<td align="right">23,199</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">163,600</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">10,627</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">197,426</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Depreciation</div></td>
<td> </td>
<td> </td>
<td align="right">602</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">20,221</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">712</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">21,535</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Amortization</div></td>
<td> </td>
<td> </td>
<td align="right">1,222</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,145</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6,367</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Other operating expenses</div></td>
<td> </td>
<td> </td>
<td align="right">3,989</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,989</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total costs and expenses</div></td>
<td> </td>
<td> </td>
<td align="right">29,012</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,011,754</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">23,125</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,063,891</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Income/ (loss) from operations</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(29,012</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">155,218</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">139</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">126,345</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Interest expense</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(11,040</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(565</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">6</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(11,599</td>
<td nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Other (expense)/income — net</div></td>
<td> </td>
<td> </td>
<td align="right">5,428</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(5,422</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">5,868</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,874</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Income/ (loss) before income taxes</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(34,624</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">149,231</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6,013</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">120,620</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Income tax (provision)/ benefit</div></td>
<td> </td>
<td> </td>
<td align="right">12,058</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(56,543</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,098</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(46,583</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Equity in net income of subsidiaries</div></td>
<td> </td>
<td> </td>
<td align="right">96,603</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,043</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(100,646</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Income from continuing operations</div></td>
<td> </td>
<td> </td>
<td align="right">74,037</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">96,731</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,915</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(100,646</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">74,037</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Discontinued Operations</b></div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(253</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(253</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Net income</b></div></td>
<td> </td>
<td align="left">$</td>
<td align="right">73,784</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">96,731</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3,915</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(100,646</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">73,784</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="40%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Guarantor</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Non-Guarantor</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Consolidating</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"> </td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="left"><i>For the year ended December 31, 2008</i></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Parent</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Subsidiaries</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Subsidiaries</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Adjustments</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Consolidated</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Continuing Operations</b></div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Net sales and service revenues</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,124,063</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">24,878</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,148,941</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Cost of services provided and goods sold</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">798,173</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">12,374</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">810,547</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Selling, general and administrative expenses</div></td>
<td> </td>
<td> </td>
<td align="right">19,644</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">158,214</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,525</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">175,333</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Depreciation</div></td>
<td> </td>
<td> </td>
<td align="right">504</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">20,382</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">695</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">21,581</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Amortization</div></td>
<td> </td>
<td> </td>
<td align="right">960</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,964</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,924</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Other operating expenses</div></td>
<td> </td>
<td> </td>
<td align="right">2,699</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,699</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total costs and expenses</div></td>
<td> </td>
<td> </td>
<td align="right">23,807</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">981,733</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">10,544</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,016,084</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Income/ (loss) from operations</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(23,807</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">142,330</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">14,334</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">132,857</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Interest expense</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(11,722</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(398</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(12,123</td>
<td nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Gain on extinguishment of debt</div></td>
<td> </td>
<td> </td>
<td align="right">3,406</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,406</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Other (expense)/income — net</div></td>
<td> </td>
<td> </td>
<td align="right">4,381</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(4,070</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(9,047</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(8,736</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Income/ (loss) before income taxes</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(27,742</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">137,862</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,284</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">115,404</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Income tax (provision)/ benefit</div></td>
<td> </td>
<td> </td>
<td align="right">10,036</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(51,849</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(5,222</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(47,035</td>
<td nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Equity in net income of subsidiaries</div></td>
<td> </td>
<td> </td>
<td align="right">86,075</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,403</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(87,478</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Income from continuing operations</div></td>
<td> </td>
<td> </td>
<td align="right">68,369</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">87,416</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">62</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(87,478</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">68,369</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Discontinued Operations</b></div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,088</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,088</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Net income</b></div></td>
<td> </td>
<td align="left">$</td>
<td align="right">67,281</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">87,416</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">62</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(87,478</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">67,281</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<p style="font-size: 10pt;" align="left"> </p></div>
<div style="font-family: 'Times New Roman',Times,serif;">
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Guarantor</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Non-Guarantor</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"> </td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="left"><b><i>For the year ended December 31, 2010</i></b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Parent</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Subsidiaries</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Subsidiaries</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Consolidated</b></td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Cash Flow from Operating Activities:</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Net cash provided by operating activities</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">2,862</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">81,781</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,369</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">86,012</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Cash Flow from Investing Activities:</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Capital expenditures</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(18</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(24,677</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(944</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(25,639</td>
<td nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Business combinations, net of cash acquired</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(9,469</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(9,469</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Proceeds from sale of property and equipment</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">275</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">15</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">290</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Other sources/(uses) — net</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(157</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(963</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">238</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(882</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Net cash used by investing activities</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(175</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(34,834</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(691</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(35,700</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Cash Flow from Financing Activities:</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Purchases of treasury stock</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(109,326</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(4</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(109,330</td>
<td nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Dividends paid to shareholders</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(11,881</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(11,881</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Proceeds from exercise of stock options</div></td>
<td> </td>
<td> </td>
<td align="right">5,327</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,327</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Realized excess tax benefit on share based compensation</div></td>
<td> </td>
<td> </td>
<td align="right">3,357</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,357</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Change in cash overdrafts payable</div></td>
<td> </td>
<td> </td>
<td align="right">1,645</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,226</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(581</td>
<td nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Change in intercompany accounts</div></td>
<td> </td>
<td> </td>
<td align="right">44,135</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(45,071</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">936</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Other sources — net</div></td>
<td> </td>
<td> </td>
<td align="right">49</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">248</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">297</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Net cash provided/ (used) by financing activities</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(66,694</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(47,297</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">1,180</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(112,811</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Net increase/(decrease) in cash and cash equivalents</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(64,007</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(350</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">1,858</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(62,499</td>
<td nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Cash and cash equivalents at beginning of year</div></td>
<td> </td>
<td> </td>
<td align="right">109,331</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,221</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">4,306</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">112,416</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Cash and cash equivalents at end of period</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">45,324</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(1,571</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">6,164</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">49,917</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Guarantor</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Non-Guarantor</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"> </td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="left"><b><i>For the year ended December 31, 2009</i></b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Parent</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Subsidiaries</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Subsidiaries</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Consolidated</b></td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Cash Flow from Operating Activities:</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Net cash provided by operating activities</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">950</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">153,387</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">6,495</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">160,832</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Cash Flow from Investing Activities:</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Capital expenditures</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(448</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(20,394</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(654</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(21,496</td>
<td nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Business combinations, net of cash acquired</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,919</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,919</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Net payments from sale of discontinued operations</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(328</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(302</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(630</td>
<td nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Proceeds from sale of property and equipment</div></td>
<td> </td>
<td> </td>
<td align="right">1,285</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">292</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,577</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Other sources/(uses) — net</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(255</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(302</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">183</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(374</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Net cash provided/(used) by investing activities</div></td>
<td> </td>
<td> </td>
<td align="right">254</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(22,625</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(471</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(22,842</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Cash Flow from Financing Activities:</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Change in cash overdrafts payable</div></td>
<td> </td>
<td> </td>
<td align="right">19</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,872</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,891</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Change in intercompany accounts</div></td>
<td> </td>
<td> </td>
<td align="right">140,674</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(135,226</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(5,448</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Dividends paid to shareholders</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(8,157</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(8,157</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Purchases of treasury stock</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(4,225</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(4,225</td>
<td nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Proceeds from exercise of stock options</div></td>
<td> </td>
<td> </td>
<td align="right">545</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">545</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Realized excess tax benefit on share based compensation</div></td>
<td> </td>
<td> </td>
<td align="right">1,955</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,955</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Net decrease in revolving line of credit</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(8,200</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(8,200</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Repayment of long-term debt</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(14,500</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(169</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(14,669</td>
<td nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Other sources/(uses) — net</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(49</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">338</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">369</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">658</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Net cash provided/ (used) by financing activities</div></td>
<td> </td>
<td> </td>
<td align="right">108,062</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(132,185</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(5,079</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(29,202</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Net increase/(decrease) in cash and cash equivalents</div></td>
<td> </td>
<td> </td>
<td align="right">109,266</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,423</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">945</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">108,788</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Cash and cash equivalents at beginning of year</div></td>
<td> </td>
<td> </td>
<td align="right">65</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">202</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,361</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,628</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Cash and cash equivalents at end of period</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">109,331</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(1,221</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">4,306</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">112,416</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Guarantor</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Non-Guarantor</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"> </td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="left"><b><i>For the year ended December 31, 2008</i></b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Parent</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Subsidiaries</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Subsidiaries</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Consolidated</b></td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Cash Flow from Operating Activities:</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Net cash provided/(used) by operating activities</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(8,912</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">118,904</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2,091</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">112,083</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Cash Flow from Investing Activities:</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Capital expenditures</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(9,492</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(15,576</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,026</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(26,094</td>
<td nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Business combinations, net of cash acquired</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(11,200</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(11,200</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Net proceeds from sale of discontinued operations</div></td>
<td> </td>
<td> </td>
<td align="right">8,824</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">8,824</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Proceeds from sale of property and equipment</div></td>
<td> </td>
<td> </td>
<td align="right">10</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">342</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">35</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">387</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Other sources/(uses) — net</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(660</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">123</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(7</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(544</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Net cash used by investing activities</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,318</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(26,311</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(998</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(28,627</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Cash Flow from Financing Activities:</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Change in cash overdrafts payable</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,106</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">250</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(856</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Change in intercompany accounts</div></td>
<td> </td>
<td> </td>
<td align="right">90,906</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(91,249</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">343</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Dividends paid to shareholders</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(5,543</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(5,543</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Purchases of treasury stock</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(69,788</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(69,788</td>
<td nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Proceeds from exercise of stock options</div></td>
<td> </td>
<td> </td>
<td align="right">291</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">291</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Realized excess tax benefit on share based compensation</div></td>
<td> </td>
<td> </td>
<td align="right">2,422</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,422</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Net increase in revolving line of credit</div></td>
<td> </td>
<td> </td>
<td align="right">8,200</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">8,200</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Repayment of long-term debt</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(18,551</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(162</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(18,713</td>
<td nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Other sources/(uses) — net</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(413</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">354</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(770</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(829</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Net cash provided/ (used) by financing activities</div></td>
<td> </td>
<td> </td>
<td align="right">6,418</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(90,807</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(427</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(84,816</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Net increase/(decrease) in cash and cash equivalents</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3,812</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">1,786</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">666</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,360</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Cash and cash equivalents at beginning of year</div></td>
<td> </td>
<td> </td>
<td align="right">3,877</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,584</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">2,695</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,988</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Cash and cash equivalents at end of period</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">65</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">202</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3,361</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3,628</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div></div> </div><div>
<div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 6pt; font-size: 10pt;" align="left"><b>9. Discontinued Operations</b> </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Discontinued operations comprise (in thousands, except per share amounts): </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="64%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="10" nowrap="nowrap" align="center">For the Years Ended December 31,</td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2010</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">2009</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">2008</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Adjustment to accruals of operations discontinued in prior years:</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Casualty insurance costs</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(400</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(1,719</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Loss before income taxes</div></td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(400</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,719</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">All other income taxes</div></td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">147</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">631</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Total adjustments</div></td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(253</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,088</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 60px;">Total discontinued operations</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(253</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(1,088</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Earnings/(loss) per share</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.01</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.05</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Diluted earnings/(loss) per share</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.02</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.05</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> At December 31, 2010 and 2009, the accrual for our estimated liability for potential environmental cleanup and related costs arising from the sale of DuBois amounted to $1.7 million. Of the 2010 balance, $826,000 is included in other current liabilities and $901,000 is included in other liabilities (long-term). We are contingently liable for additional DuBois-related environmental cleanup and related costs up to a maximum of $14.9 million. On the basis of a continuing evaluation of the potential liability, we believe it is not probable this additional liability will be paid. Accordingly, no provision for this contingent liability has been recorded. The potential liability is not insured, and the recorded liability does not assume the recovery of insurance proceeds. Also, the environmental liability has not been discounted because it is not possible to reliably
project the timing of payments. We believe that any adjustments to our recorded liability will not materially adversely affect our financial position, results of operations or cash flows. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> At December 31, 2010, other current liabilities include accruals of $1.0 million and other liabilities (long-term) include accruals of $1.1 million for costs related to discontinued operations. The estimated timing of payments of these liabilities follows (in thousands): </div></div>
<div style="font-family: 'Times New Roman',Times,serif;">
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="88%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">2011</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1,043</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">2012</div></td>
<td> </td>
<td> </td>
<td align="right">300</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Thereafter</div></td>
<td> </td>
<td> </td>
<td align="right">831</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td align="left">$</td>
<td align="right">2,174</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td></tr></table></div></div> </div><div> <div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 12pt; font-size: 10pt;" align="left"><b>7. Other Operating Expenses</b> </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> There were no other operating expenses from continuing operations for the period ended December 31, 2010. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> For the twelve-month period ended December 31, 2009, we recorded pretax expenses of $4.0 million related to the costs of a contested proxy solicitation. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> In December 2008, the Executive Committee of the Board of Directors authorized us to place a 29 year-old, eight passenger Hawker jet for sale. We determined that this asset met the definition of held for sale under the FASB's guidance on, accounting for the impairment or disposal of long-lived assets. As a result, we discontinued depreciation on the jet and wrote-down the asset to its fair value less selling costs resulting in a pre-tax charge to other operating expenses — net of approximately $2.7 million. In March 2009, we sold the jet and recognized a $112,000 gain on disposal. </div></div> </div><div> <div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 6pt; font-size: 10pt;" align="left"><b>22. Subsequent Events</b> </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> In February 2011, our Board of Directors authorized a $100 million expansion to our share repurchase authority. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> In February 2011, the CIC approved a new stock-price target portion of the Company's LTIP. The new stock price hurdles are as follows: </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="88%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td nowrap="nowrap" align="left"><b>Stock Price</b></td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center"><b>Shares to be</b></td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="left"><b>Hurdle</b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="3" nowrap="nowrap" align="center"><b>Issued</b></td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">$79.00</div></td>
<td> </td>
<td> </td>
<td align="right">25,000</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">$85.00</div></td>
<td> </td>
<td> </td>
<td align="right">25,000</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">$90.00</div></td>
<td> </td>
<td> </td>
<td align="right">25,000</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total</div></td>
<td> </td>
<td> </td>
<td align="right">75,000</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" align="right"> </td>
<td> </td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left">The stock price hurdles must be achieved during 30 trading days out of any 60 trading day period during the three years ending February 18, 2014. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> In February 2011, the CIC approved a time-based LTIP award of 42,000 shares that cliff vest in four years. The pre-tax cost of the award was $2.7 million. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> In January 2011, we met the $62 stock price target of our LTIP. On January 14, 2011 the CIC approved a stock grant of 41,100 shares (including 7,350 shares from the discretionary pool) and the related allocation to participants. The pretax cost of the stock grant was $3.0 million. </div></div> </div><div> <div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 18pt; font-size: 10pt;" align="center"><b>CHEMED CORPORATION AND SUBSIDIARY COMPANIES<br />VALUATION AND QUALIFYING ACCOUNTS<br />(IN THOUSANDS)<br />DR/(CR)</b> </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="40%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="6" nowrap="nowrap" align="center"><b>ADDITIONS</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"> </td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>(CHARGED)</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"> </td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>CREDITED</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>(CHARGED)</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"> </td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>BALANCE AT</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>TO COSTS</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>CREDITED</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>BALANCE</b></td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>BEGINNING</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>AND</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>TO OTHER</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>DEDUCTIONS</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>AT END</b></td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="left"><b>DESCRIPTION</b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>OF PERIOD</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>EXPENSES</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>ACCOUNTS</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>(a)</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>OF PERIOD</b></td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Allowances for doubtful accounts (b)</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">For the year 2010</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">(12,595</td>
<td>)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(9,118</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(472</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">8,853</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(13,332</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">For the year 2009</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">(10,320</td>
<td>)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(10,861</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(656</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">9,242</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(12,595</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">For the year 2008</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(9,746</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(9,870</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">13</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">9,283</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(10,320</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Allowances for doubtful accounts — notes receivable (c)</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">For the year 2010</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">(408</td>
<td>)</td>
<td> </td>
<td align="left">$</td>
<td align="right">40</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(368</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">For the year 2009</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">(482</td>
<td>)</td>
<td> </td>
<td align="left">$</td>
<td align="right">28</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">44</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(408</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">For the year 2008</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(529</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">51</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(13</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">9</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(482</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<div align="left">
<div style="margin-top: 16pt; width: 18%; font-size: 3pt; border-top: #000000 1px solid;"> </div></div>
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr><td width="3%"> </td>
<td width="1%"> </td>
<td width="96%"> </td></tr>
<tr valign="top"><td nowrap="nowrap" align="left">(a)</td>
<td> </td>
<td>With respect to allowances for doubtful accounts, deductions include accounts considered uncollectible or written off, payments, companies divested, etc.</td></tr>
<tr style="font-size: 3pt;"><td> </td></tr>
<tr valign="top"><td nowrap="nowrap" align="left">(b)</td>
<td> </td>
<td>Classified in consolidated balance sheet as a reduction of accounts receivable.</td></tr>
<tr style="font-size: 3pt;"><td> </td></tr>
<tr valign="top"><td nowrap="nowrap" align="left">(c)</td>
<td> </td>
<td>Classified in consolidated balance sheet as a reduction of other assets.</td></tr></table></div> </div><div>
<div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 6pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td width="1%" nowrap="nowrap" align="left"><b>5.</b></td>
<td width="1%"> </td>
<td><b>Segments and Nature of the Business</b></td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Our segments include the VITAS segment and the Roto-Rooter segment. Relative contributions of each segment to service revenues and sales were 72% and 28%, respectively, in both 2010 and 2009. The vast majority of our service revenues and sales from continuing operations are generated from business within the United States. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> The reportable segments have been defined along service lines, which is consistent with the way the businesses are managed. In determining reportable segments, the Roto-Rooter Services and Roto-Rooter Franchising and Products operating units of the Roto-Rooter segment have been aggregated on the basis of possessing similar operating and economic characteristics. The characteristics of these operating segments and the basis for aggregation are reviewed annually. Accordingly, the reportable segments are defined as follows: </div>
<div style="margin-top: 6pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td style="background: none transparent scroll repeat 0% 0%;" width="6%"> </td>
<td width="3%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td>
<td>The VITAS segment provides hospice services for patients with severe, life-limiting illnesses. This type of care is aimed at making the terminally ill patient's end of life as comfortable and pain-free as possible. Hospice care is typically available to patients who have been initially certified or re-certified as terminally ill (i.e., a prognosis of six months or less) by their attending physician, if any, and the hospice physician. VITAS offers all levels of hospice care in a given market, including routine home care, inpatient care and continuous care. Over 90% of VITAS' revenues are derived through the Medicare and Medicaid reimbursement programs.</td></tr>
<tr><td style="font-size: 6pt;"> </td></tr>
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td style="background: none transparent scroll repeat 0% 0%;" width="6%"> </td>
<td width="3%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td>
<td>The Roto-Rooter segment provides repair and maintenance services to residential and commercial accounts using the Roto-Rooter registered service marks. Such services include plumbing and sewer, drain and pipe cleaning. They are delivered through company-owned and operated territories, independent contractor-operated territories and franchised locations. This segment also manufactures and sells products and equipment used to provide such services.</td></tr>
<tr><td style="font-size: 6pt;"> </td></tr>
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td style="background: none transparent scroll repeat 0% 0%;" width="6%"> </td>
<td width="3%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td>
<td>We report corporate administrative expenses and unallocated investing and financing income and expense not directly related to either segment as "Corporate". Corporate administrative expense includes the stewardship, accounting and reporting, legal, tax and other costs of operating a publicly held corporation. Corporate investing and financing income and expenses include the costs and income associated with corporate debt and investment arrangements. Historically, we have recorded stock award amortization as a corporate expense. In the first quarter of 2010, our CODM determined that this was an on-going, operational expense and should be reported within the appropriate business segment. Accordingly, stock award amortization has been reclassified to the corresponding business segment for all periods presented.</td></tr></table></div>
<div style="margin-top: 18pt; font-size: 10pt;" align="center">Segment data for our continuing operations are set forth below (in thousands): </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="64%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="10" nowrap="nowrap" align="center">For the Years Ended December 31,</td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2010</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">2009</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">2008</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Revenues by Type of Service</b></div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">VITAS</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Routine homecare</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>666,562</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">615,408</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">585,891</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Continuous care</div></td>
<td> </td>
<td> </td>
<td align="right"><b>153,050</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">141,272</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">124,894</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">General inpatient</div></td>
<td> </td>
<td> </td>
<td align="right"><b>105,588</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">97,356</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">97,895</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Estimated BNAF</div></td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,950</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Medicare cap</div></td>
<td> </td>
<td> </td>
<td align="right"><b>610</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,643</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(235</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 30px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Total segment</div></td>
<td> </td>
<td> </td>
<td align="right"><b>925,810</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">854,343</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">808,445</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Roto-Rooter</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Sewer and drain cleaning</div></td>
<td> </td>
<td> </td>
<td align="right"><b>135,704</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">136,503</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">146,150</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Plumbing repair and maintenance</div></td>
<td> </td>
<td> </td>
<td align="right"><b>168,625</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">151,072</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">145,831</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Independent contractors</div></td>
<td> </td>
<td> </td>
<td align="right"><b>22,943</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">21,620</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">21,968</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">HVAC repair and maintenance</div></td>
<td> </td>
<td> </td>
<td align="right"><b>4,183</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,031</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,059</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Other products and services</div></td>
<td> </td>
<td> </td>
<td align="right"><b>23,280</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">22,667</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">22,488</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 30px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Total segment</div></td>
<td> </td>
<td> </td>
<td align="right"><b>354,735</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">335,893</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">340,496</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Total service revenues and sales</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>1,280,545</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,190,236</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,148,941</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div></div>
<div style="font-family: 'Times New Roman',Times,serif;">
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="64%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="10" nowrap="nowrap" align="center">For the Years Ended December 31,</td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2010</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">2009</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">2008</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Aftertax Segment Earnings/(Loss)</b></div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">VITAS</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>79,796</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">71,696</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">64,304</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Roto-Rooter</div></td>
<td> </td>
<td> </td>
<td align="right"><b>31,678</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">33,040</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">33,427</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total</div></td>
<td> </td>
<td> </td>
<td align="right"><b>111,474</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">104,736</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">97,731</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Corporate</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(29,643</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(30,699</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(29,362</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Discontinued operations</div></td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(253</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,088</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Net income</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>81,831</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">73,784</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">67,281</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Interest Income</b></div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">VITAS</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>4,852</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">4,581</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">5,336</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Roto-Rooter</div></td>
<td> </td>
<td> </td>
<td align="right"><b>2,661</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,587</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,824</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total</div></td>
<td> </td>
<td> </td>
<td align="right"><b>7,513</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7,168</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">9,160</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Corporate</div></td>
<td> </td>
<td> </td>
<td align="right"><b>175</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">83</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">489</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Intercompany eliminations</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(7,244</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(6,828</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(8,907</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total interest income</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>444</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">423</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">742</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Interest Expense</b></div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">VITAS</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>131</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">374</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">155</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Roto-Rooter</div></td>
<td> </td>
<td> </td>
<td align="right"><b>233</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">186</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">246</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total</div></td>
<td> </td>
<td> </td>
<td align="right"><b>364</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">560</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">401</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Corporate</div></td>
<td> </td>
<td> </td>
<td align="right"><b>11,595</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">11,039</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">11,722</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total interest expense</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>11,959</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">11,599</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">12,123</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Income Tax Provision</b></div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">VITAS</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>48,601</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">43,637</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">38,458</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Roto-Rooter</div></td>
<td> </td>
<td> </td>
<td align="right"><b>19,547</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">20,372</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">20,644</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total</div></td>
<td> </td>
<td> </td>
<td align="right"><b>68,148</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">64,009</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">59,102</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Corporate</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(16,148</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(17,426</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(12,067</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total income tax provision</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>52,000</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">46,583</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">47,035</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Identifiable Assets</b></div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">VITAS</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>531,247</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">476,621</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">523,178</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Roto-Rooter</div></td>
<td> </td>
<td> </td>
<td align="right"><b>205,601</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">191,254</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">188,003</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total</div></td>
<td> </td>
<td> </td>
<td align="right"><b>736,848</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">667,875</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">711,181</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Corporate</div></td>
<td> </td>
<td> </td>
<td align="right"><b>93,313</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">151,595</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">48,441</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total identifiable assets</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>830,161</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">819,470</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">759,622</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Additions to Long-Lived Assets</b></div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">VITAS</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>16,787</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">14,913</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">8,797</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Roto-Rooter</div></td>
<td> </td>
<td> </td>
<td align="right"><b>17,975</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">8,067</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">18,906</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total</div></td>
<td> </td>
<td> </td>
<td align="right"><b>34,762</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">22,980</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">27,703</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Corporate</div></td>
<td> </td>
<td> </td>
<td align="right"><b>18</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">448</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">9,492</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total additions to long-lived assets</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>34,780</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">23,428</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">37,195</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Depreciation and Amortization</b></div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">VITAS</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>18,900</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">17,973</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">17,651</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Roto-Rooter</div></td>
<td> </td>
<td> </td>
<td align="right"><b>8,289</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">8,509</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">8,607</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total</div></td>
<td> </td>
<td> </td>
<td align="right"><b>27,189</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">26,482</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">26,258</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Corporate</div></td>
<td> </td>
<td> </td>
<td align="right"><b>1,854</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,420</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,247</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total depreciation and amortization</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>29,043</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">27,902</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">27,505</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td></tr></table></div></div> </div>3516100036492000175333000197426000201964000<div>
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<div style="margin-top: 6pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td width="1%" nowrap="nowrap" align="left"><b>1.</b></td>
<td width="1%"> </td>
<td><b>Summary of Significant Accounting Policies</b></td></tr></table></div>
<div style="margin-top: 6pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td width="1%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td>
<td><i>NATURE OF OPERATIONS</i></td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> 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 and drain cleaning 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. </div>
<div style="margin-top: 6pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td width="1%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td>
<td><i>PRINCIPLES OF CONSOLIDATION</i></td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> The consolidated financial statements include the accounts of Chemed Corporation and its wholly owned subsidiaries. All significant intercompany transactions have been eliminated. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> We have analyzed the provisions of the Financial Accounting Standards Board ("FASB") authoritative guidance on the consolidation of variable interest entities relative to our contractual relationships with Roto-Rooter's independent contractors and franchisees. The guidance requires the primary beneficiary of a Variable Interest Entity ("VIE") to consolidate the accounts of the VIE. Based upon the guidance provided by the FASB, we have concluded that neither the independent contractors nor the franchisees are VIEs. </div>
<div style="margin-top: 6pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td width="1%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td>
<td><i>CASH EQUIVALENTS</i></td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Cash equivalents comprise short-term, highly liquid investments, including money market funds that have original maturities of three months or less. </div>
<div style="margin-top: 6pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td width="1%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td>
<td><i>ACCOUNTS AND LOANS RECEIVABLE AND CONCENTRATION OF RISK</i></td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Accounts and loans receivable are recorded at the principal balance outstanding less estimated allowances for uncollectible accounts. For the Roto-Rooter segment, allowances for trade accounts receivable are generally provided for accounts more than 90 days past due, although collection efforts continue beyond that time. Due to the small number of loans receivable outstanding, allowances for loan losses are determined on a case-by-case basis. For the VITAS segment, allowances for accounts receivable are provided on accounts based on expected collection rates by payer types. The expected collection rate is based on both historical averages and known current trends. Final write-off of overdue accounts or loans receivable is made when all reasonable collection efforts have been made and payment is not forthcoming. We closely monitor our receivables and periodically review
procedures for granting credit to attempt to hold losses to a minimum. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> As of December 31, 2010 and 2009, approximately 72% and 43%, respectively, of VITAS' total accounts receivable balance were due from Medicare and 20% and 39%, respectively, of VITAS' total accounts receivable balance were due from various state Medicaid programs. Combined accounts receivable from Medicare and Medicaid represent 88% of the net accounts receivable in the accompanying consolidated balance sheet as of December 31, 2010. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> As of December 31, 2010, VITAS has approximately $2.8 million in unbilled revenue included in accounts receivable (December 31, 2009 — $9.9 million). The unbilled revenue at VITAS relates to hospice programs currently undergoing focused medical reviews ("FMR"). During FMR, surveyors working on behalf of the U.S. Federal government review certain patient files for compliance with Medicare regulations. During the time the patient file is under review, we are unable to bill for care provided to those patients. We make appropriate provisions to reduce our accounts receivable balance for any governmental or other payer reviews resulting in denials of patient service revenue. We believe our hospice programs comply with all payer requirements at the time of billing. However, we cannot predict whether future billing reviews or similar audit
s by payers will result in material denials or reductions in revenue. </div>
<div style="margin-top: 6pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td width="1%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td>
<td><i>INVENTORIES</i></td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Substantially all of the inventories are either general merchandise or finished goods. Inventories are stated at the lower of cost or market. For determining the value of inventories, cost methods that reasonably approximate the first-in, first-out ("FIFO") method are used. </div></div>
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<div style="margin-top: 6pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td width="1%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td>
<td><i>DEPRECIATION AND PROPERTIES AND EQUIPMENT</i></td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Depreciation of properties and equipment is computed using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized over the lesser of the remaining lease terms (excluding option terms) or their useful lives. Expenditures for maintenance, repairs, renewals and betterments that do not materially prolong the useful lives of the assets are expensed as incurred. The cost of property retired or sold and the related accumulated depreciation are removed from the accounts, and the resulting gain or loss is reflected currently in income. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Expenditures for major software purchases and software developed for internal use are capitalized and depreciated using the straight-line method over the estimated useful lives of the assets. For software developed for internal use, external direct costs for materials and services and certain internal payroll and related fringe benefit costs are capitalized in accordance with the FASB's authoritative guidance on accounting for the costs of computer software developed or obtained for internal use. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> The weighted average lives of our property and equipment at December 31, 2010, were: </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Buildings</div></td>
<td> </td>
<td> </td>
<td align="right">11.4</td>
<td> </td>
<td colspan="3" align="center">yrs.</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Transportation equipment</div></td>
<td> </td>
<td> </td>
<td align="right">14.6</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Machinery and equipment</div></td>
<td> </td>
<td> </td>
<td align="right">5.6</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Computer software</div></td>
<td> </td>
<td> </td>
<td align="right">4.7</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Furniture and fixtures</div></td>
<td> </td>
<td> </td>
<td align="right">4.8</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr></table></div>
<div style="margin-top: 6pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td width="1%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td>
<td><i>GOODWILL AND INTANGIBLE ASSETS</i></td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Identifiable, definite-lived intangible assets arise from purchase business combinations and are amortized using either an accelerated method or the straight-line method over the estimated useful lives of the assets. The selection of an amortization method is based on which method best reflects the economic pattern of usage of the asset. The VITAS trade name is considered to have an indefinite life. Goodwill and the VITAS trade name are tested at least annually for impairment. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> The date of our annual goodwill and indefinite-lived intangible asset impairment analysis is October 1. For all reporting units included in continuing operations, the impairment tests indicated that the fair value of our goodwill exceeds its carrying amount. Our goodwill and VITAS trade name are not impaired. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> We consider that Roto-Rooter Co. (RRC), Roto-Rooter Services Co. (RRSC) and VITAS are appropriate reporting units. We consider RRC and RRSC as separate reporting units but one operating segment. This is appropriate as they each have their own set of general ledger accounts that can be analyzed at "one level below an operating segment" per the definition of a reporting unit in FASB guidance. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> We used two methods to estimate the business enterprise value of each reporting unit — (a) a comparison to key enterprise value ratios of publicly traded market competitors and (b) an allocation of total Chemed market value at October 1, 2010 to each reporting unit. The final estimate of the business enterprise value of each reporting unit was determined using a simple average of the two methods. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> For valuing the VITAS tradename, we performed a discounted cash flow analysis on the expected theoretical royalty cash stream from the VITAS tradename. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> The weighted average lives of our identifiable, definite-lived intangible assets at December 31, 2010, were: </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Covenants not to compete</div></td>
<td> </td>
<td> </td>
<td align="right">6.4</td>
<td> </td>
<td colspan="3" align="center">yrs.</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Reacquired franchise rights</div></td>
<td> </td>
<td> </td>
<td align="right">6.7</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Referral networks</div></td>
<td> </td>
<td> </td>
<td align="right">10.0</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Customer lists</div></td>
<td> </td>
<td> </td>
<td align="right">13.3</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr></table></div>
<div style="margin-top: 6pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td width="1%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td>
<td><i>LONG-LIVED ASSETS</i></td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> If we believe a triggering event may have occurred that indicates a possible impairment of our long-lived assets, we perform an estimate and valuation of the future benefits of our long-lived assets (other than goodwill and the VITAS trade name) based on key financial indicators. If the projected undiscounted cash flows of a major business unit indicate that property and equipment or identifiable, definite-lived intangible assets have been impaired, a write-down to fair value is made. </div></div>
<div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 6pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td width="1%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td>
<td><i>OTHER ASSETS</i></td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Debt issuance costs are included in other assets. Issuance costs related to revolving credit agreements are amortized using the straight line method, over the life of the agreement. All are other issuance costs are amortized using the effective interest method over the life of the debt. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> We capitalize the direct costs of obtaining licenses to operate either hospice programs or plumbing operations subject to a minimum capitalization threshold. These costs are amortized over the life of the license using the straight-line method. Certain licenses are granted without an expiration and thus, we believe them to be indefinite-lived assets subject to impairment testing on at least an annual basis. </div>
<div style="margin-top: 6pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td width="1%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td>
<td><i>REVENUE RECOGNITION</i></td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Both the VITAS segment and Roto-Rooter segment recognize service revenues and sales when the earnings process has been completed. Generally, this occurs when services are provided or products are delivered. Sales of Roto-Rooter products, including drain cleaning machines and drain cleaning solution, comprise less than 3% of our total service revenues and sales for each of the three years in the period ended December 31, 2010. </div>
<div style="margin-top: 6pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td width="1%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td>
<td><i>CHARITY CARE</i></td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> VITAS provides charity care, in certain circumstances, to patients without charge when management of the hospice program determines that the patient does not have the financial wherewithal to make payment. There is no revenue or associated accounts receivable in the accompanying consolidated financial statements related to charity care. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> The cost of providing charity care during the years ended December 31, 2010, 2009 and 2008 was $7.2 million, $6.3 million and $7.1 million, respectively. The cost of charity care is calculated by taking the ratio of charity care days to total days of care and multiplying by total cost of care. </div>
<div style="margin-top: 6pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td width="1%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td>
<td><i>SALES TAX</i></td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> The Roto-Rooter segment collects sales tax from customers when required by state and federal laws. We record the amount of sales tax collected net in the accompanying consolidated statement of income. </div>
<div style="margin-top: 6pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td width="1%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td>
<td><i>GUARANTEES</i></td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> In the normal course of business, Roto-Rooter enters into various guarantees and indemnifications in our relationships with customers and others. These arrangements include guarantees of services for periods ranging from one day to one year and product satisfaction guarantees. Mainly due to our technicians being commission-based, guarantees and indemnifications do not materially impact our financial condition, results of operations or cash flows. Therefore, no liability for guarantees has been recorded as of December 31, 2010 or 2009. </div>
<div style="margin-top: 6pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td width="1%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td>
<td><i>OPERATING EXPENSES</i></td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Cost of services provided and goods sold (excluding depreciation) includes salaries, wages and benefits of service providers and field personnel, material costs, medical supplies and equipment, pharmaceuticals, insurance costs, service vehicle costs and other expenses directly related to providing service revenues or generating sales. Selling, general and administrative expenses include salaries, wages, stock option expense and benefits of selling, marketing and administrative employees, advertising expenses, communications and branch telephone expenses, office rent and operating costs, legal, banking and professional fees and other administrative costs. The cost associated with VITAS sales personnel is included in cost of services provided and goods sold (excluding depreciation). </div>
<div style="margin-top: 6pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td width="1%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td>
<td><i>ADVERTISING</i></td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> We expense the production costs of advertising the first time the advertising takes place. The costs of telephone directory listings are expensed when the directories are placed in circulation. These directories are generally in circulation for approximately one year, at which point they are typically replaced by the publisher with a new directory. We generally pay for directory placement assuming it is in circulation for one year. If the directory is in circulation for less than or greater than one year, we receive a credit or additional billing, as necessary. We do not control the timing of when a new directory is placed in circulation. Advertising expense in continuing operations for the year ended December 31, 2010, was $27.7 million (2009 — $27.0 million; 2008 — $26.8 million). </div>
<div style="margin-top: 6pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td width="1%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td>
<td><i>COMPUTATION OF EARNINGS PER SHARE</i></td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Earnings per share are computed using the weighted average number of shares of capital stock outstanding. Diluted earnings per share reflect the dilutive impact of our outstanding stock options and nonvested stock awards. Stock options whose exercise price is greater than the average market price of our stock are excluded from the computation of diluted earnings per share. </div></div>
<div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 6pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td width="1%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td>
<td><i>STOCK-BASED COMPENSATION PLANS</i></td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Stock-based compensation cost is measured at the grant date, based on the fair value of the award and recognized as expense over the employee's requisite service period on a straight-line basis. </div>
<div style="margin-top: 6pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td width="1%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td>
<td><i>INSURANCE ACCRUALS</i></td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> For our Roto-Rooter segment and Corporate Office, we 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 at $500,000. 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 wheth
er 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. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> For the VITAS segment, we self-insure for workers' compensation claims. Currently, VITAS' exposure on any single claim is capped at $750,000. For VITAS' self-insurance accruals for workers' compensation, the valuation methods used are similar to those used internally for our other business units. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> 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. </div>
<div style="margin-top: 6pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td width="1%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td>
<td><i>TAXES ON INCOME</i></td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Deferred taxes are provided on an asset and liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carry-forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amount of assets and liabilities and their tax basis. Deferred tax assets are reduced by a valuation allowance when, in our opinion, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in laws and rates on the date of enactment. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> We are subject to income taxes in Canada, U.S. federal and most state jurisdictions. Significant judgment is required to determine our provision for income taxes. Our financial statements reflect expected future tax consequences of such uncertain positions assuming the taxing authorities' full knowledge of the position and all relevant facts. </div>
<div style="margin-top: 6pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td width="1%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td>
<td><i>ESTIMATES</i></td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Disclosures of aftertax expenses and adjustments are based on estimates of the effective income tax rates for the applicable segments. </div>
<div style="margin-top: 6pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td width="1%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td>
<td><i>CONTINGENCIES</i></td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> 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. To the extent it is available and management deems it prudent, we carry commercial insurance against such claims. We establish reserves for specific, uninsured liabilities in connection with regulatory and legal action that we deem to be probable and estimable. We record legal fees associated with legal and regulatory actions as the costs are incurred. </div></div> </div>477162000462049000395800000301098000292610002481000276001000-213041000396831000313516000295150002038000337739000-285977000477162000335890000298910001956000403366000-293941000462049000365007000303820001959000473316000-408615000<div> <div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 6pt; font-size: 10pt;" align="left"><b>21. Capital Stock Transactions</b> </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> For the year ended December 31, 2010, we repurchased 1.6 million shares at a weighted average cost per share of $63.14 under the April 2007 program. For the year ended December 31, 2009, we repurchased 15,900 shares at a weighted average cost per share of $46.65 under the April 2007 program. On December 27, 2010 our Board of Directors authorized an additional $70 million to the April 2007 stock repurchase program. On May 19, 2008 our Board of Directors authorized an additional $56 million to the April 2007 stock repurchase program. On April 26, 2007, our Board of Directors authorized a $150 million stock repurchase program. </div></div> </div>-1218000-1217000-443000442000634000633000-8200083000659000576000300080000975300015752000254000-62530001481200021741000376000-73050001841700028541000491000-1061500073030008639000776200072750709103185293941000408615000233740002274200023031000230580002245100022587000EX-101.SCH
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<div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 12pt; font-size: 10pt;" align="left"><b>12. Income Taxes</b> </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> The provision for income taxes comprises the following (in thousands): </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="64%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="10" nowrap="nowrap" align="center">For the Years Ended December 31,</td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2010</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2009</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">2008</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Continuing Operations:</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Current</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">U.S. federal</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>46,789</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">36,182</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">42,914</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">U.S. state and local</div></td>
<td> </td>
<td> </td>
<td align="right"><b>6,981</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,960</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6,226</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Foreign</div></td>
<td> </td>
<td> </td>
<td align="right"><b>639</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">462</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">667</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Deferred</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">U.S. federal, state and local</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(2,418</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td> </td>
<td align="right">4,980</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,710</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Foreign</div></td>
<td> </td>
<td> </td>
<td align="right"><b>9</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(62</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 60px;">Total</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>52,000</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">46,583</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">47,035</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Discontinued Operations:</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Current U.S. federal</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(65</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(735</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Current U.S. state and local</div></td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(5</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(55</td>
<td nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Deferred U.S. federal, state and local</div></td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(77</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">159</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 60px;">Total</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(147</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(631</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<p style="font-size: 10pt;" align="right"> A summary of the temporary differences that give rise to deferred tax assets/ (liabilities) follows (in thousands): </p></div>
<div style="font-family: 'Times New Roman',Times,serif;">
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="6" nowrap="nowrap" align="center">December 31,</td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2010</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">2009</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Accrued liabilities</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>26,334</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">23,609</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Stock compensation expense</div></td>
<td> </td>
<td> </td>
<td align="right"><b>10,257</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7,991</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Allowance for uncollectible accounts receivable</div></td>
<td> </td>
<td> </td>
<td align="right"><b>2,695</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,862</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">State net operating loss carryforwards</div></td>
<td> </td>
<td> </td>
<td align="right"><b>1,379</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,439</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Other</div></td>
<td> </td>
<td> </td>
<td align="right"><b>2,763</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,420</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Deferred income tax assets</div></td>
<td> </td>
<td> </td>
<td align="right"><b>43,428</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">37,321</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Amortization of intangible assets</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(40,135</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(37,975</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Accelerated tax depreciation</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(10,499</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(9,495</td>
<td nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Currents assets</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(1,148</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,179</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Other</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(1,397</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(623</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Deferred income tax liabilities</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(53,179</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(49,272</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Net deferred income tax liabilities</div></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>$</b></td>
<td align="right"><b>(9,751</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(11,951</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Included in other assets at December 31, 2010, are deferred income tax assets of $236,000 (2009 — $272,000). At December 31, 2010 and 2009, state net operating loss carryforwards were $26.0 million and $26.6 million, respectively. These net operating losses will expire, in varying amounts, between 2011 and 2030. Based on our history of operating earnings, we have determined that our operating income will, more likely than not, be sufficient to ensure realization of our deferred income tax assets. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> After FASB's adoption of FASB's guidance on accounting for uncertain income taxes in 2007, we had approximately $1.3 million in unrecognized tax benefits. The majority of this amount would affect our effective tax rate, if recognized in a future period. The years ended December 31, 2007, and forward remain open for review for Federal income tax purposes. The earliest open year relating to any of our material state jurisdictions is the fiscal year ended December 31, 2005. During the next twelve months, we do not anticipate a material net change in unrecognized tax benefits. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> As permitted by this guidance, we classify interest related to our accrual for uncertain tax positions in separate interest accounts. As of December 31, 2010 and 2009, we have approximately $114,000 and $149,000, respectively, accrued in interest payable related to uncertain tax positions. These accruals are included in other current liabilities in the accompanying consolidated balance sheet. Net interest expense related to uncertain tax positions included in interest expense in the accompanying consolidated statement of income is not material. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> A roll forward of the significant changes to our unrecognized tax benefits is as follows (in thousands): </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="64%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2010</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">2009</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">2008</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Balance at January 1,</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>1,010</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,202</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,169</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Unrecognized tax benefits due to positions taken in current year</div></td>
<td> </td>
<td> </td>
<td align="right"><b>119</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">136</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">413</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Gross change due to positions taken in prior years</div></td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">53</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Decrease due to settlement with taxing authorities</div></td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(214</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(174</td>
<td nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Decrease due to expiration of statute of limitations</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(425</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(93</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(259</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Other</div></td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(21</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Balance at December 31,</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>704</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,010</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,202</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<p style="font-size: 10pt;" align="left"> The difference between the actual income tax provision for continuing operations and the income tax provision calculated at the statutory U.S. federal tax rate is explained as follows (in thousands): </p></div>
<div style="font-family: 'Times New Roman',Times,serif;">
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="64%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="10" nowrap="nowrap" align="center">For the Years Ended December 31,</td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2010</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">2009</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">2008</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Income tax provision calculated using the statutory rate of 35%</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>46,841</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">42,217</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">40,391</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">State and local income taxes, less federal income tax effect</div></td>
<td> </td>
<td> </td>
<td align="right"><b>4,509</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,837</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,928</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Nondeductible expenses</div></td>
<td> </td>
<td> </td>
<td align="right"><b>908</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">829</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">891</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Impact of deferred compensation plans</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(27</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(190</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">3,084</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">R&D tax credit</div></td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(656</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Other —net</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(231</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(110</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(603</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Income tax provision</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>52,000</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">46,583</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">47,035</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Effective tax rate</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>38.9</b></td>
<td nowrap="nowrap"><b>%</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">38.6</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">40.8</td>
<td nowrap="nowrap">%</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Summarized below are the total amounts of income taxes paid during the years ended December 31 (in thousands): </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="88%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>2010</b></div></td>
<td> </td>
<td align="left">$</td>
<td align="right">49,532</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">2009</div></td>
<td> </td>
<td> </td>
<td align="right">40,872</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">2008</div></td>
<td> </td>
<td> </td>
<td align="right">50,535</td>
<td> </td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Provision has not been made for additional taxes on $35.1 million of undistributed earnings of our domestic subsidiaries. Should we elect to sell our interest in all of these businesses rather than to effect a tax-free liquidation, additional taxes amounting to approximately $12.9 million would be incurred based on current income tax rates. </div></div> </div>12. Income Taxes
The provision for income taxes comprises the following (in thousands):falsefalsefalsefalsefalseOtherus-types:textBlockItemTypestringDescription containing the entire income tax disclosure. Examples include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax
carryback, and tax uncertainties information. This element may be used as a single block of text to encapsulate the entire disclosure including data and tables.Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Paragraph h
-Article 4
Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 109
-Paragraph 136, 172
Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 109
-Paragraph 43, 44, 45, 46, 47, 48, 49
falsefalse12Income TaxesUnKnownUnKnownUnKnownUnKnownfalsetrueXML
23
R29.xml
IDEA: Subsequent Events
2.2.0.25falsefalse12201 - Disclosure - Subsequent Eventstruefalsefalse1falsefalseUSDfalsefalse1/1/2010 - 12/31/2010
USD ($)
USD ($) / shares
$Duration_1_1_2010_To_12_31_2010http://www.sec.gov/CIK0000019584duration2010-01-01T00:00:002010-12-31T00:00:00Unit1Standardhttp://www.xbrl.org/2003/iso4217USDiso42170Unit13Dividehttp://www.xbrl.org/2003/iso4217USDiso4217http://www.xbrl.org/2003/instancesharesxbrli0Unit12Standardhttp://www.xbrl.org/2003/instancesharesxbrli0USDUSD$2true0che_SubsequentEventsAbstractchefalsenadurationSubsequent Events [Abstract]falsefalse<
IsSubReportEnd>falsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00falsefalsefalsefalsefalseOtherxbrli:stringItemTypestringSubsequent Events [Abstract]falsefalse3false0us-gaap_ScheduleOfSubsequentEventsTextBlockus-gaaptruenadurationNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalseterselabel1falsefalsefalse00<div> <div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 6pt; font-size: 10pt;" align="left"><b>22. Subsequent Events</b> </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> In February 2011, our Board of Directors authorized a $100 million expansion to our share repurchase authority. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> In February 2011, the CIC approved a new stock-price target portion of the Company's LTIP. The new stock price hurdles are as follows: </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="88%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td nowrap="nowrap" align="left"><b>Stock Price</b></td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center"><b>Shares to be</b></td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="left"><b>Hurdle</b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="3" nowrap="nowrap" align="center"><b>Issued</b></td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">$79.00</div></td>
<td> </td>
<td> </td>
<td align="right">25,000</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">$85.00</div></td>
<td> </td>
<td> </td>
<td align="right">25,000</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">$90.00</div></td>
<td> </td>
<td> </td>
<td align="right">25,000</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total</div></td>
<td> </td>
<td> </td>
<td align="right">75,000</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" align="right"> </td>
<td> </td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left">The stock price hurdles must be achieved during 30 trading days out of any 60 trading day period during the three years ending February 18, 2014. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> In February 2011, the CIC approved a time-based LTIP award of 42,000 shares that cliff vest in four years. The pre-tax cost of the award was $2.7 million. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> In January 2011, we met the $62 stock price target of our LTIP. On January 14, 2011 the CIC approved a stock grant of 41,100 shares (including 7,350 shares from the discretionary pool) and the related allocation to participants. The pretax cost of the stock grant was $3.0 million. </div></div> </div>22. Subsequent Events
In February 2011, our Board of Directors authorized a $100 million expansion to our sharefalsefalsefalsefalsefalseOtherus-types:textBlockItemTypestringDescribes disclosed significant events or transactions that occurred after the balance sheet date, but before the issuance of the financial statements. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, losses resulting from fire or flood, losses on receivables, significant realized and unrealized gains and losses that result from chan
ges in quoted market prices of securities, declines in market prices of inventory, changes in authorized or issued debt (SEC), significant foreign exchange rate changes, substantial loans to insiders or affiliates, significant long-term investments, and substantial dividends not in the ordinary course of business.Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 5
-Paragraph 11
falsefalse12Subsequent EventsUnKnownUnKnownUnKnownUnKnownfalsetrueXML
24
R11.xml
IDEA: Stock-Based Compensation Plans
2.2.0.25falsefalse10401 - Disclosure - Stock-Based Compensation Planstruefalsefalse1falsefalseUSDfalsefalse1/1/2010 - 12/31/2010
USD ($)
USD ($) / shares
$Duration_1_1_2010_To_12_31_2010http://www.sec.gov/CIK0000019584duration2010-01-01T00:00:002010-12-31T00:00:00Unit1Standardhttp://www.xbrl.org/2003/iso4217USDiso42170Unit13Dividehttp://www.xbrl.org/2003/iso4217USDiso4217http://www.xbrl.org/2003/instancesharesxbrli0Unit12Standardhttp://www.xbrl.org/2003/instancesharesxbrli0USDUSD$2true0che_StockBasedCompensationPlansAbstractchefalsenadurationStock-Based Compensation Plansfalsefalsefalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00falsefalsefalsefalsefalseOtherxbrli:stringItemTypestringStock-Based Compensation Plansfalsefalse3false0us-gaap_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlockus-gaaptruenadurationNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalseterselabel1falsefalsefalse00<div>
<div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 6pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td width="1%" nowrap="nowrap" align="left"><b>4.</b></td>
<td width="1%"> </td>
<td><b>Stock-Based Compensation Plans</b></td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> We provide employees the opportunity to acquire our stock through a number of plans, as follows: </div>
<div style="margin-top: 6pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td style="background: none transparent scroll repeat 0% 0%;" width="6%"> </td>
<td width="3%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td>
<td>We have six stock incentive plans under which 8,450,000 shares can be issued to key employees through a grant of stock awards and/or options to purchase shares. The Compensation/Incentive Committee ("CIC") of the Board of Directors administers these plans. All options granted under these plans provide for a purchase price equal to the market value of the stock at the date of grant. The latest plan, covering a total of 1,750,000 shares, was adopted in May 2010. The plans are not qualified, restricted or incentive plans under the U.S. Internal Revenue Code. The terms of each plan differ slightly; however, stock options issued under the plans generally have a maximum term of 10 years. Under one plan, adopted in 1999, up to 500,000 shares may be issued to employees who are not our officers or directors.</td></tr>
<tr><td style="font-size: 6pt;"> </td></tr>
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td style="background: none transparent scroll repeat 0% 0%;" width="6%"> </td>
<td width="3%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td>
<td>In May 2002, our shareholders approved the adoption of the Executive Long-Term Incentive Plan ("LTIP") covering our officers and key employees. The CIC periodically approves a pool of shares to be awarded based on stock price hurdles, EBITDA targets and a discretionary component for the LTIP.</td></tr>
<tr><td style="font-size: 6pt;"> </td></tr>
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td style="background: none transparent scroll repeat 0% 0%;" width="6%"> </td>
<td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td>
<td>In May 2009, the CIC approved a new stock-price target portion of the Company's LTIP. The new stock price hurdles are as follows:</td></tr></table></div></div>
<div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 12pt; font-size: 10pt;" align="left"> </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="88%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td nowrap="nowrap" align="left"><b>Stock</b></td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center"><b>Shares</b></td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td nowrap="nowrap" align="left"><b>Price</b></td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center"><b>to be</b></td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="left"><b>Hurdle</b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="3" nowrap="nowrap" align="center"><b>Issued</b></td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">$54.00</div></td>
<td> </td>
<td> </td>
<td align="right">22,500</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">$58.00</div></td>
<td> </td>
<td> </td>
<td align="right">33,750</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">$62.00</div></td>
<td> </td>
<td> </td>
<td align="right">33,750</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total</div></td>
<td> </td>
<td> </td>
<td align="right">90,000</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" align="right"> </td>
<td> </td></tr></table></div>
<div style="margin-top: 6pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td style="background: none transparent scroll repeat 0% 0%;" width="6%"> </td>
<td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td>
<td>The stock price hurdles must be achieved during 30 trading days out of any 60 trading day period during the three years ending February 28, 2012.</td></tr></table></div>
<div style="margin-top: 6pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td style="background: none transparent scroll repeat 0% 0%;" width="6%"> </td>
<td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td>
<td>In December 2010, we met the $58.00 stock price target of our Long-Term Incentive Plan. On December 9, 2010, the Compensation/Incentive Committee of the Board of Directors ("CIC") approved a stock grant of 41,100 shares (including 7,350 shares from the discretionary pool) and the related allocation to participants. The pretax cost of the stock grant was $2.9 million and is included in selling, general and administrative expense in the accompanying consolidated statement of income.</td></tr></table></div>
<div style="margin-top: 6pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td style="background: none transparent scroll repeat 0% 0%;" width="6%"> </td>
<td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td>
<td>In April 2010, we met the $54.00 stock price target of our Long-Term Incentive Plan. On April 16, 2010, the Compensation/Incentive Committee of the Board of Directors ("CIC") approved a stock grant of 27,900 shares (including 5,400 shares from the discretionary pool) and the related allocation to participants. The pretax cost of the stock grant was $1.8 million and is included in selling, general and administrative expense in the accompanying consolidated statement of income.</td></tr></table></div>
<div style="margin-top: 6pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td style="background: none transparent scroll repeat 0% 0%;" width="6%"> </td>
<td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td>
<td>In October 2009, we met the cumulative EBITDA target established in 2007 and on November 10, 2009 the CIC approved a stock grant of 96,200 shares and the related allocation to participants. The pretax cost of the stock grant was $5.0 million and is included in selling, general and administrative expenses in the accompanying consolidated statement of income.</td></tr></table></div>
<div style="margin-top: 6pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td style="background: none transparent scroll repeat 0% 0%;" width="6%"> </td>
<td width="3%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td>
<td>In November 2009, the CIC approved a pool of shares to be awarded based on new EBITDA targets. The participants of the LTIP may be awarded 80,000 shares of capital stock if we attain Adjusted EBITDA of either $640 million for the three-year period beginning January 1, 2010, or $825 million for the four-year period beginning January 1, 2010. The CIC also established a discretionary pool of 37,000 shares of capital stock.</td></tr></table></div>
<div style="margin-top: 6pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td style="background: none transparent scroll repeat 0% 0%;" width="6%"> </td>
<td width="3%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td>
<td>We maintain an Employee Stock Purchase Plan ("ESPP"). The ESPP allows eligible participants to purchase our shares through payroll deductions at current market value. We pay administrative and broker fees associated with the ESPP. Shares purchased for the ESPP are purchased on the open market and credited directly to participants' accounts. In accordance with the FASB's guidance, the ESPP is non-compensatory.</td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> For the years ended December 31, 2010, 2009 and 2008, we recorded $2.6 million, $2.3 million and $1.9 million, respectively, in amortization expense in the accompanying statement of income for stock-based compensation related to the amortization of restricted stock awards granted. For the years ended December 31, 2010, 2009 and 2008, we recorded $7.8 million, $8.6 million and $7.3 million, respectively, in selling, general and administrative expenses for stock-based compensation related to stock options granted. There were no capitalized stock-based compensation costs for any period presented. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> As of December 31, 2010, approximately $3.9 million of total unrecognized compensation costs related to non-vested stock awards are expected to be recognized over a weighted average period of 2.1 years. As of December 31, 2010, approximately $8.4 million of total unrecognized compensation costs related to non-vested stock options are expected to be recognized over a weighted average period of 1.7 years. </div></div>
<div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> The following table summarizes stock option and award activity: </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="6" nowrap="nowrap" align="center"><b>Stock Options</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="6" nowrap="nowrap" align="center"><b>Stock Awards</b></td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Weighted</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Weighted</b></td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Number</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Average</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Number</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Average</b></td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>of</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Exercise</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>of</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Grant-Date</b></td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Shares</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Price</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Shares</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Price</b></td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Stock-based compensation shares:</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Outstanding at January 1, 2010</div></td>
<td> </td>
<td> </td>
<td align="right">2,452,227</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">43.36</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">169,975</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">47.87</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Granted</div></td>
<td> </td>
<td> </td>
<td align="right">515,100</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">52.76</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">125,472</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">57.13</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Exercised/Vested</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(365,763</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">29.40</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(143,827</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">55.82</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Canceled/Forfeited</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(14,918</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">45.94</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Outstanding at December 31, 2010</div></td>
<td> </td>
<td> </td>
<td align="right">2,586,646</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">47.19</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">151,620</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">48.00</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Vested at December 31, 2010</div></td>
<td> </td>
<td> </td>
<td align="right">1,572,913</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">47.47</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> The weighted average contractual life of outstanding and exercisable options was 5.7 years at December 31, 2010. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Options outstanding at December 31, 2010, were in the following exercise price ranges: </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="64%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center"><b>Weighted</b></td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center"><b>Average</b></td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center"><b>Number of</b></td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center"><b>Exercise</b></td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center"><b>Aggregate</b></td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="left"><b>Exercise Price Range</b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="3" nowrap="nowrap" align="center"><b>Options</b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="3" nowrap="nowrap" align="center"><b>Price</b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="3" nowrap="nowrap" align="center"><b>Intrinsic Value</b></td></tr>
<tr style="background: #cceeff;" valign="bottom"><td valign="top">
<div style="text-indent: 0px; margin-left: 0px;">$0 to $27.18 </div></td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">203,604</td>
<td valign="top" nowrap="nowrap"> </td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right">$</td>
<td valign="top" align="right">20.18</td>
<td valign="top" nowrap="nowrap"> </td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right">$</td>
<td valign="top" align="right">8,822,000</td>
<td valign="top" nowrap="nowrap"> </td></tr>
<tr valign="bottom"><td valign="top">
<div style="text-indent: 0px; margin-left: 0px;">$27.19 to $40.78 </div></td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">577,416</td>
<td valign="top" nowrap="nowrap"> </td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right">$</td>
<td valign="top" align="right">35.21</td>
<td valign="top" nowrap="nowrap"> </td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right">$</td>
<td valign="top" align="right">16,341,000</td>
<td valign="top" nowrap="nowrap"> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td valign="top">
<div style="text-indent: 0px; margin-left: 0px;">$40.79 to $70.00 </div></td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">1,347,326</td>
<td valign="top" nowrap="nowrap"> </td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right">$</td>
<td valign="top" align="right">49.34</td>
<td valign="top" nowrap="nowrap"> </td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right">$</td>
<td valign="top" align="right">19,092,000</td>
<td valign="top" nowrap="nowrap"> </td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> The total intrinsic value of stock options exercised during the years ended December 31, 2010, 2009 and 2008 was $10.1 million, $5.1 million and $5.2 million, respectively. The total intrinsic value of stock options that were vested during the years ended December 31, 2010, 2009 and 2008 was $27.7 million, $15.5 million and $11.3 million, respectively. The total intrinsic value of stock awards that were vested during the years ended December 31, 2010, 2009, and 2008 was $8.4 million, $5.6 million and $3.4 million, respectively. The total fair value of stock options that vested during 2010, 2009 and 2008 was $7.9 million, $7.8 million and $6.0 million, respectively. The total intrinsic value of stock awards vested during the years ended December 31, 2010, 2009 and 2008 was $8.4 million, $5.6 million and $3.4 million, respectively. The
total fair value of stock awards vested during the years ended December 31, 2010, 2009 and 2008 was $8.0 million, $5.4 million and $1.8 million, respectively. The total cash received from employees as a result of employee stock option exercises for the years ended December 31, 2010, 2009 and 2008 was $5.3 million, $545,000 and $291,000, respectively. In connection with these exercises, the excess tax benefits realized for the years ended December 31, 2010, 2009 and 2008, were $3.4 million, $2.0 million and $2.4 million, respectively. We settle employee stock options with newly issued shares. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> We estimate the fair value of stock options using the Black-Scholes valuation model, consistent with the provisions of the FASB's and the Securities and Exchange Commission's ("SEC") guidance. We determine expected term, volatility, dividend yield and forfeiture rate based on our historical experience. We believe that historical experience is the best indicator of these factors. For purposes of determining the key assumptions and the related fair value of the options granted, we analyzed the participants of the LTIP separately from the other stock option recipients. The assumptions we used to value the 2010, 2009 and 2008 grants are as follows: </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="28%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="7" nowrap="nowrap" align="center"><b>2010</b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="7" nowrap="nowrap" align="center">2009</td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="7" nowrap="nowrap" align="center">2008</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center"><b>LTIP</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center">LTIP</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center">LTIP</td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="3" nowrap="nowrap" align="center"><b>Participants</b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="3" nowrap="nowrap" align="center"><b>All Others</b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="3" nowrap="nowrap" align="center">Participants</td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="3" nowrap="nowrap" align="center">All Others</td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="3" nowrap="nowrap" align="center">Participants</td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="3" nowrap="nowrap" align="center">All Others</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Stock price on date of issuance</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">52.76</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">52.76</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">44.02</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">44.02</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">33.75</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">33.75</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Grant date fair value per share</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">15.57</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">14.55</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">14.95</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">12.49</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">11.18</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">10.18</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Number of options granted</div></td>
<td> </td>
<td> </td>
<td align="right">331,500</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">183,600</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">320,000</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">188,600</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">325,000</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">183,600</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Expected term (years)</div></td>
<td> </td>
<td> </td>
<td align="right">5.4</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4.5</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5.7</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4.1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5.7</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4.3</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Risk free rate of return</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">2.62</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">2.09</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">1.91</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">1.44</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">3.08</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">2.92</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Volatility</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">33.0</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">34.5</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">35.0</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">35.0</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">31.8</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">34.0</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Dividend yield</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">1.5</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">1.5</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">0.6</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">0.6</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">0.7</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">0.7</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Forfeiture rate</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">4.4</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">5.5</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">5.20</td>
<td nowrap="nowrap">%</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr></table></div></div> </div>4.
Stock-Based Compensation Plans
We provide employees the opportunity to acquire our stock through a number of plans, asfalsefalsefalsefalsefalseOtherus-types:textBlockItemTypestringDisclosure of compensation-related costs for share-based compensation which may include disclosure of policies, compensation plan details, allocation of stock compensation, incentive distributions, share-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.Re
ference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 123R
-Paragraph 64, 65, A240
Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Statement of Position (SOP)
-Number 93-6
-Paragraph 53
Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 14
falsefalse12Stock-Based Compensation PlansUnKnownUnKnownUnKnownUnKnownfalsetrueXML
25
R10.xml
IDEA: Long-Term Debt and Lines of Credit
2.2.0.25falsefalse10301 - Disclosure - Long-Term Debt and Lines of Credittruefalsefalse1falsefalseUSDfalsefalse1/1/2010 - 12/31/2010
USD ($)
USD ($) / shares
$Duration_1_1_2010_To_12_31_2010http://www.sec.gov/CIK0000019584duration2010-01-01T00:00:002010-12-31T00:00:00Unit1Standardhttp://www.xbrl.org/2003/iso4217USDiso42170Unit13Dividehttp://www.xbrl.org/2003/iso4217USDiso4217http://www.xbrl.org/2003/instancesharesxbrli0Unit12Standardhttp://www.xbrl.org/2003/instancesharesxbrli0USDUSD$2true0us-gaap_LongTermDebtAbstractus-gaaptruenadurationNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00falsefalsefalsefalsefalseOtherxbrli:stringItemTypestringNo definition available.falsefalse3false0us-gaap_LongTermDebtTextBlockus-gaaptruenadurationNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalseterselabel1falsefalsefalse00<div>
<div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"><b>3. Long-Term Debt and Lines of Credit</b> </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> As of December 31, 2010, we have long-term debt of $159.2 million (December 31, 2009 - $152.1 million). This long-term debt is related in its entirety to our Convertible Notes that are due in full, in 2014. </div>
<div style="margin-top: 12pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td width="3%"> </td>
<td width="1%" nowrap="nowrap" align="left"><i>2007</i></td>
<td width="1%"> </td>
<td><i>REFINANCING</i></td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Our 2007 credit facility includes a $175 million revolving credit facility and a $100 million expansion feature. The facility has a 5-year maturity with principal payments on the revolving credit facility due at maturity. Interest is payable quarterly at a floating rate equal to our choice of various indices plus a specified margin based on our leverage ratio. The interest rate at the inception of the agreement was LIBOR plus 0.875%. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> In May 2007, we issued $200 million of Senior Convertible Notes due 2014 (the "Notes") at a price of $1,000 per Note, less an underwriting fee of $27.50 per Note. We received approximately $194 million in net proceeds from the sale of the Notes after paying underwriting fees, legal and other expenses. We pay interest on the Notes on May 15 and November 15 of each year, beginning on November 15, 2007. The Notes mature on May 15, 2014. The Notes are guaranteed on an unsecured senior basis by each of our subsidiaries that are a borrower or a guarantor under any senior credit facility, as defined in the Indenture. The Notes were convertible, under certain circumstances, into our Capital Stock at an initial conversion rate of 12.3874 shares per $1,000 principal amount of Notes. This conversion rate is equivalent to an in
itial conversion price of approximately $80.73 per share. Prior to March 1, 2014, holders may convert their Notes under certain circumstances. On and after March 1, 2014, the Notes will be convertible at any time prior to the close of business three days prior to the stated maturity date of the Notes. Upon conversion of a Note, if the conversion value is $1,000 or less, holders will receive cash equal to the lesser of $1,000 or the conversion value of the number of shares of our Capital Stock. If the conversion value exceeds $1,000, in addition to this, holders will receive shares of our Capital Stock for the excess amount. The Indenture contains customary terms and covenants that upon certain events of default, including without limitation, failure to pay when due any principal amount, a fundamental change or certain cross defaults in other agreements or instruments, occurring and continuing; either the trustee or the holders of 25% in aggregate principal amount of the Notes may declare th
e principal of the Notes and any accrued and unpaid interest through the date of such declaration immediately due and payable. In the case of certain events of bankruptcy or insolvency relating to any significant subsidiary or to us, the principal amount of the Notes and accrued interest automatically becomes due and payable. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> The conversion rate on the Notes is adjusted upon certain corporate events including a quarterly dividend payment in excess of $0.06 per share. In February 2010 and May 2010, we declared quarterly dividends of $0.12 per share. In August 2010 and November 2010, we declared quarterly dividends of $0.14 per share. This has the effect of changing the conversion rate to 12.484 ($80.10 per share) at December 31, 2010. </div></div>
<div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Pursuant to the FASB's guidance on accounting for derivative instruments indexed to, and potentially settled in a company's own stock as well as the guidance on the meaning of "indexed to a company's own stock," the Notes are accounted for as convertible debt in the accompanying consolidated balance sheet and the embedded options within the Notes have not been accounted for as separate derivatives. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> In conjunction with the Notes, we entered into a purchased call transaction and a warrant transaction (written call) with JPMorgan Chase, National Association and Citibank, N.A. (the "Counterparties"). The purchased call options cover approximately 2,477,000 shares of our Capital Stock, which under most circumstances represents the maximum number of shares of Capital Stock that underlie the Notes. Concurrently with entering into the purchased call options, we entered into warrant transactions with each of the Counterparties. Pursuant to the warrant transactions, we sold to the Counterparties warrants to purchase in the aggregate approximately 2,477,000 shares of our Capital Stock. In most cases, the sold warrants may not be exercised prior to the maturity of the Notes. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> The purchased call options and sold warrants are separate contracts with the Counterparties, are not part of the terms of the Notes and do not affect the rights of holders under the Notes. A holder of the Notes will not have any rights with respect to the purchased call options or the sold warrants. The purchased call options are expected to reduce the potential dilution upon conversion of the Notes if the market value per share of the Capital Stock at the time of exercise is greater than the conversion price of the Notes at time of exercise. The sold warrants have an exercise price of $105.44 and are expected to result in some dilution should the price of our Capital Stock exceed this exercise price. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Our net cost for these transactions was approximately $27.3 million. Pursuant to FASB's authoritative guidance, the purchased call option and the sold warrants are accounted for as equity transactions. Therefore, our net cost was recorded as a decrease in stockholders' equity in the accompanying consolidated balance sheet. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> In May 2008, the FASB issued authoritative guidance for accounting for convertible debt instruments that may be settled in cash upon conversion including partial cash settlement. This guidance requires all such convertible debentures to be separately accounted for as debt and equity pieces of the instrument. At inception of the convertible instrument, cash flows related to the convertible instrument are to be discounted using a market rate of interest. We adopted the provisions of the guidance on January 1, 2009 and applied the guidance retrospectively. Upon adoption, the Notes had a discount of approximately $55.1 million. For 2008 interest expense increased and retained earnings decreased $6.1 million, ($4.0 million, net of income taxes). The increase in interest expense results in a reduction in EPS and diluted EPS of $0.20. </
div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> The following amounts are included in our consolidated balance sheet related to the Notes (in thousands): </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="6" nowrap="nowrap" align="center">December 31,</td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2010</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">2009</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Principal amount of convertible debentures</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">186,956</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">186,956</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Unamortized debt discount</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(27,748</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(34,829</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Carrying amount of convertible debentures</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">159,208</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">152,127</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Additional paid in capital (net of tax)</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">31,310</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">31,310</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> The following amounts comprise interest expense included in our consolidated income statement (in thousands): </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="64%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="10" nowrap="nowrap" align="center">December 31,</td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2010</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">2009</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">2008</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Cash interest expense</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">4,224</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">4,350</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">4,945</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Non-cash amortization of debt discount</div></td>
<td> </td>
<td> </td>
<td align="right">7,081</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6,617</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6,560</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Amortization of debt costs</div></td>
<td> </td>
<td> </td>
<td align="right">654</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">632</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">618</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Total interest expense</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">11,959</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">11,599</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">12,123</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> The unamortized debt discount is amortized using the effective interest method over the remaining life of the Notes. The effective rate on the Notes after adoption of the standard is 6.875%. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> The average interest rate for our long-term debt was 1.9% for the years ended December 31, 2010 and 2009. </div></div>
<div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> In the fourth quarter of 2008, we purchased approximately $13.0 million face value of our Convertible Notes due 2014 for approximately $8.5 million. This resulted in a pre-tax net gain of $3.4 million comprised of $3.7 million related to the purchase of the Convertible Notes partially offset by $300,000 in the write-off of unamortized debt issuance costs. The net gain was recorded as a gain on extinguishment of debt in the accompanying statement of income in 2008. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Capitalized interest was not material for any of the periods shown. Summarized below are the total amounts of interest paid during the years ended December 31 (in thousands): </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="88%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>2010</b></div></td>
<td> </td>
<td align="right"><b>$</b></td>
<td align="right"><b>4,113</b></td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">2009</div></td>
<td> </td>
<td> </td>
<td align="right">4,667</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">2008</div></td>
<td> </td>
<td> </td>
<td align="right">5,628</td>
<td> </td></tr></table></div>
<div style="margin-top: 6pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td width="1%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td>
<td><i>DEBT COVENANTS</i></td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Collectively, the 2007 Facility and the Notes require us to meet certain restrictive non-financial and financial covenants. We are in compliance with all non-financial debt covenants as of December 31, 2010. The restrictive financial covenants are defined in the credit agreement and include maximum leverage ratios, minimum fixed charge coverage and consolidated net worth ratios, limits on operating leases and minimum asset value limits. We are in compliance with the financial debt covenants as of December 31, 2010, as follows: </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="66%"> </td>
<td width="2%"> </td>
<td width="15%"> </td>
<td width="2%"> </td>
<td width="15%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="left">Description</td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="left">Requirement</td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="left">Chemed</td></tr>
<tr valign="bottom"><td valign="top">
<div style="text-indent: 0px; margin-left: 0px;"> </div></td>
<td> </td>
<td valign="top" align="left"> </td>
<td> </td>
<td valign="top" align="left"> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td valign="top">
<div style="text-indent: 0px; margin-left: 0px;">Leverage Ratio (Consolidated Indebtedness/Consolidated Adj. EBITDA) </div></td>
<td> </td>
<td valign="top" align="left">< 3.50 to 1.00 </td>
<td> </td>
<td valign="top" align="left">1.15 to 1.00</td></tr>
<tr valign="bottom"><td valign="top">
<div style="text-indent: 0px; margin-left: 0px;"> </div></td>
<td> </td>
<td valign="top" align="left"> </td>
<td> </td>
<td valign="top" align="left"> </td></tr>
<tr valign="bottom"><td valign="top">
<div style="text-indent: 0px; margin-left: 0px;">Fixed Charge Coverage Ratio (Consolidated Free Cash Flow/Consolidated Fixed Charges) </div></td>
<td> </td>
<td valign="top" align="left">> 1.50 to 1.00 </td>
<td> </td>
<td valign="top" align="left">2.26 to 1.00</td></tr>
<tr valign="bottom"><td valign="top">
<div style="text-indent: 0px; margin-left: 0px;"> </div></td>
<td> </td>
<td valign="top" align="left"> </td>
<td> </td>
<td valign="top" align="left"> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td valign="top">
<div style="text-indent: 0px; margin-left: 0px;">Minimum Net Worth </div></td>
<td> </td>
<td valign="top" align="left">> $350.3 million </td>
<td> </td>
<td valign="top" align="left">$393.4 million</td></tr>
<tr valign="bottom"><td valign="top">
<div style="text-indent: 0px; margin-left: 0px;"> </div></td>
<td> </td>
<td valign="top" align="left"> </td>
<td> </td>
<td valign="top" align="left"> </td></tr>
<tr valign="bottom"><td valign="top">
<div style="text-indent: 0px; margin-left: 0px;">Annual Operating Lease Commitment </div></td>
<td> </td>
<td valign="top" align="left">< $30.0 million </td>
<td> </td>
<td valign="top" align="left">$17.8 million</td></tr>
<tr valign="bottom"><td valign="top">
<div style="text-indent: 0px; margin-left: 0px;"> </div></td>
<td> </td>
<td valign="top" align="left"> </td>
<td> </td>
<td valign="top" align="left"> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td valign="top">
<div style="text-indent: 0px; margin-left: 0px;">Credit Party Asset Value </div></td>
<td> </td>
<td valign="top" align="left">> $700.0 million </td>
<td> </td>
<td valign="top" align="left">$809.3 million</td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> We have issued $28.0 million in standby letters of credit as of December 31, 2010, mainly for insurance purposes. Issued letters of credit reduce our available credit under the revolving credit agreement. As of December 31, 2010, we have approximately $147.0 million of unused lines of credit available and eligible to be drawn down under our revolving credit facility, excluding the expansion feature. We have made no borrowings from our line of credit during the year ended December 31, 2010. </div></div> </div>3. Long-Term Debt and Lines of Credit
As of December 31, 2010, we have long-term debt of $159.2 millionfalsefalsefalsefalsefalseOtherus-types:textBlockItemTypestringThis element may be used as a single block of text to encapsulate the entire disclosure for long-term borrowings including data and tables.Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 02
-Paragraph 22
-Article 5
falsefalse12Long-Term Debt and Lines of CreditUnKnownUnKnownUnKnownUnKnownfalsetrueXML
26
R30.xml
IDEA: Guarantor Subsidiaries
2.2.0.25falsefalse12301 - Disclosure - Guarantor Subsidiariestruefalsefalse1falsefalseUSDfalsefalse1/1/2010 - 12/31/2010
USD ($)
USD ($) / shares
$Duration_1_1_2010_To_12_31_2010http://www.sec.gov/CIK0000019584duration2010-01-01T00:00:002010-12-31T00:00:00Unit1Standardhttp://www.xbrl.org/2003/iso4217USDiso42170Unit13Dividehttp://www.xbrl.org/2003/iso4217USDiso4217http://www.xbrl.org/2003/instancesharesxbrli0Unit12Standardhttp://www.xbrl.org/2003/instancesharesxbrli0USDUSD$2true0che_GuarantorSubsidiariesAbstractchefalsenadurationGuarantor Subsidiariesfalsefalsefalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00falsefalsefalsefalsefalseOtherxbrli:stringItemTypestringGuarantor Subsidiariesfalsefalse3false0us-gaap_ScheduleOfCondensedFinancialStatementsTextBlockus-gaaptruenadurationNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalseterselabel1falsefalsefalse00<div>
<div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 6pt; font-size: 10pt;" align="left"><b>23. Guarantor Subsidiaries</b> </div>
<div style="margin-top: 6pt; font-size: 10pt;" align="left"> Our 1.875% Senior Convertible Notes issued on May 14, 2007, are fully and unconditionally guaranteed on an unsecured, joint and severally liable basis by our 100% owned subsidiaries. The equity method has been used with respect to the parent company's (Chemed) investment in subsidiaries. No consolidating adjustment column is presented for the condensed consolidating statement of cash flow since there were no signficant consolidating entries for the periods presented. The following condensed, consolidating financial data present the composition of the parent company, the guarantor subsidiaries and the non-guarantor subsidiaries as of December 31, 2010 and 2009, and for the years ended December 31, 2010, 2009 and 2008 (in thousands): </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="40%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Guarantor</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Non-Guarantor</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Consolidating</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"> </td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="left"><b><i>December 31, 2010</i></b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Parent</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Subsidiaries</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Subsidiaries</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Adjustments</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Consolidated</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>ASSETS</b></div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Cash and cash equivalents</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">45,324</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(1,571</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">6,164</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">49,917</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Accounts receivable, less allowances</div></td>
<td> </td>
<td> </td>
<td align="right">802</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">111,716</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">481</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">112,999</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Intercompany receivables</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">172,426</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(172,426</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Inventories</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7,191</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">537</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7,728</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Current deferred income taxes</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(688</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">15,666</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">120</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">15,098</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Prepaid income taxes</div></td>
<td> </td>
<td> </td>
<td align="right">2,787</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,809</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(208</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">770</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Prepaid expenses</div></td>
<td> </td>
<td> </td>
<td align="right">782</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">9,244</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">259</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">10,285</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total current assets</div></td>
<td> </td>
<td> </td>
<td align="right">49,007</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">312,863</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7,353</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(172,426</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">196,797</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Investments of deferred compensation plans held in trust</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">28,304</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">28,304</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Properties and equipment, at cost, less accumulated depreciation</div></td>
<td> </td>
<td> </td>
<td align="right">12,513</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">64,743</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,036</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">79,292</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Identifiable intangible assets less accumulated amortization</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">56,410</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">56,410</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Goodwill</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">453,864</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,479</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">458,343</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Other assets</div></td>
<td> </td>
<td> </td>
<td align="right">6,049</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,791</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,175</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">11,015</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Investments in subsidiaries</div></td>
<td> </td>
<td> </td>
<td align="right">716,815</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">18,696</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(735,511</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total assets</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">784,384</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">909,367</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">44,347</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(907,937</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">830,161</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>LIABILITIES AND STOCKHOLDERS' EQUITY</b></div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Accounts payable</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">4,924</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">50,457</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">448</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">55,829</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Intercompany payables</div></td>
<td> </td>
<td> </td>
<td align="right">167,067</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,359</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(172,426</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Income taxes</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(7,190</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">8,745</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(394</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,161</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Accrued insurance</div></td>
<td> </td>
<td> </td>
<td align="right">906</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">35,586</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">36,492</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Accrued compensation</div></td>
<td> </td>
<td> </td>
<td align="right">4,235</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">35,016</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">468</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">39,719</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Other current liabilities</div></td>
<td> </td>
<td> </td>
<td align="right">1,549</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">13,447</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,145</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">16,141</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total current liabilities</div></td>
<td> </td>
<td> </td>
<td align="right">171,491</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">143,251</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7,026</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(172,426</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">149,342</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Deferred income taxes</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(11,356</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">45,168</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(8,727</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">25,085</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Long-term debt</div></td>
<td> </td>
<td> </td>
<td align="right">159,208</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">159,208</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Deferred compensation liabilities</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">27,851</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">27,851</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Other liabilities</div></td>
<td> </td>
<td> </td>
<td align="right">2,992</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,123</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">511</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6,626</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Stockholders' equity</div></td>
<td> </td>
<td> </td>
<td align="right">462,049</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">717,825</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">17,686</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(735,511</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">462,049</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total liabilities and stockholders' equity</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">784,384</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">909,367</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">44,347</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(907,937</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">830,161</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="40%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Guarantor</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Non-Guarantor</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Consolidating</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"> </td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="left"><b><i>December 31, 2009</i></b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Parent</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Subsidiaries</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Subsidiaries</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Adjustments</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Consolidated</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>ASSETS</b></div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Cash and cash equivalents</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">109,331</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(1,221</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">4,306</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">112,416</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Accounts receivable, less allowances</div></td>
<td> </td>
<td> </td>
<td align="right">618</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">52,303</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">540</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">53,461</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Intercompany receivables</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">149,888</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(149,888</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Inventories</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7,009</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">534</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7,543</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Current deferred income taxes</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(378</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">14,048</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">31</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">13,701</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Prepaid income taxes</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3,227</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">4,161</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(185</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">749</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Prepaid expenses</div></td>
<td> </td>
<td> </td>
<td align="right">770</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">9,545</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">73</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">10,388</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total current assets</div></td>
<td> </td>
<td> </td>
<td align="right">107,114</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">235,733</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,299</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(149,888</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">198,258</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Investments of deferred compensation plans held in trust</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">24,158</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">24,158</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Properties and equipment, at cost, less accumulated depreciation</div></td>
<td> </td>
<td> </td>
<td align="right">10,309</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">62,912</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,137</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">75,358</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Identifiable intangible assets less accumulated amortization</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">57,920</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">57,920</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Goodwill</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">445,662</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,380</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">450,042</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Other assets</div></td>
<td> </td>
<td> </td>
<td align="right">11,190</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,232</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">312</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">13,734</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Investments in subsidiaries</div></td>
<td> </td>
<td> </td>
<td align="right">643,572</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">15,523</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(659,095</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total assets</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">772,185</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">819,982</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">36,286</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(808,983</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">819,470</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>LIABILITIES AND STOCKHOLDERS' EQUITY</b></div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Accounts payable</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(2,411</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">54,084</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">398</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">52,071</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Intercompany payables</div></td>
<td> </td>
<td> </td>
<td align="right">147,744</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,144</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(149,888</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Income taxes</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,145</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">2,159</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">49</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">63</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Accrued insurance</div></td>
<td> </td>
<td> </td>
<td align="right">1,231</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">33,930</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">35,161</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Accrued compensation</div></td>
<td> </td>
<td> </td>
<td align="right">4,235</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">30,020</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">407</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">34,662</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Other current liabilities</div></td>
<td> </td>
<td> </td>
<td align="right">1,643</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">11,367</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,117</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">14,127</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total current liabilities</div></td>
<td> </td>
<td> </td>
<td align="right">150,297</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">131,560</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,115</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(149,888</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">136,084</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Deferred income taxes</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(10,549</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">43,183</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(6,710</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">25,924</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Long-term debt</div></td>
<td> </td>
<td> </td>
<td align="right">152,127</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">152,127</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Deferred compensation liabilities</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">23,637</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">23,637</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Other liabilities</div></td>
<td> </td>
<td> </td>
<td align="right">3,148</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,388</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,536</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Stockholders' equity</div></td>
<td> </td>
<td> </td>
<td align="right">477,162</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">643,851</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">15,244</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(659,095</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">477,162</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total liabilities and stockholders' equity</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">772,185</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">819,982</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">36,286</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(808,983</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">819,470</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<p style="font-size: 10pt;" align="right"> </p></div>
<div style="font-family: 'Times New Roman',Times,serif;">
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="40%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Guarantor</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Non-Guarantor</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Consolidating</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"> </td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="left"><b><i>For the year ended December 31, 2010</i></b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Parent</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Subsidiaries</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Subsidiaries</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Adjustments</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Consolidated</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Continuing Operations</b></div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Net sales and service revenues</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,254,856</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">25,689</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,280,545</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Cost of services provided and goods sold</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">892,596</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">13,420</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">906,016</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Selling, general and administrative expenses</div></td>
<td> </td>
<td> </td>
<td align="right">23,262</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">170,223</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">8,479</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">201,964</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Depreciation</div></td>
<td> </td>
<td> </td>
<td align="right">860</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">22,732</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">794</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">24,386</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Amortization</div></td>
<td> </td>
<td> </td>
<td align="right">1,404</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,253</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,657</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total costs and expenses</div></td>
<td> </td>
<td> </td>
<td align="right">25,526</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,088,804</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">22,693</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,137,023</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Income/ (loss) from operations</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(25,526</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">166,052</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,996</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">143,522</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Interest expense</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(11,596</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(363</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(11,959</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Other (expense)/income — net</div></td>
<td> </td>
<td> </td>
<td align="right">15,520</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(15,451</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">2,199</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,268</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Income/ (loss) before income taxes</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(21,602</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">150,238</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,195</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">133,831</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Income tax (provision)/ benefit</div></td>
<td> </td>
<td> </td>
<td align="right">6,859</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(56,905</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,954</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(52,000</td>
<td nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Equity in net income of subsidiaries</div></td>
<td> </td>
<td> </td>
<td align="right">96,574</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,308</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(99,882</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Net income</b></div></td>
<td> </td>
<td align="left">$</td>
<td align="right">81,831</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">96,641</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3,241</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(99,882</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">81,831</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="40%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Guarantor</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Non-Guarantor</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Consolidating</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"> </td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="left"><i>For the year ended December 31, 2009</i></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Parent</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Subsidiaries</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Subsidiaries</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Adjustments</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Consolidated</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Continuing Operations</b></div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Net sales and service revenues</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,166,972</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">23,264</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,190,236</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Cost of services provided and goods sold</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">822,788</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">11,786</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">834,574</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Selling, general and administrative expenses</div></td>
<td> </td>
<td> </td>
<td align="right">23,199</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">163,600</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">10,627</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">197,426</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Depreciation</div></td>
<td> </td>
<td> </td>
<td align="right">602</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">20,221</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">712</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">21,535</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Amortization</div></td>
<td> </td>
<td> </td>
<td align="right">1,222</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,145</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6,367</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Other operating expenses</div></td>
<td> </td>
<td> </td>
<td align="right">3,989</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,989</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total costs and expenses</div></td>
<td> </td>
<td> </td>
<td align="right">29,012</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,011,754</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">23,125</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,063,891</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Income/ (loss) from operations</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(29,012</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">155,218</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">139</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">126,345</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Interest expense</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(11,040</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(565</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">6</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(11,599</td>
<td nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Other (expense)/income — net</div></td>
<td> </td>
<td> </td>
<td align="right">5,428</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(5,422</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">5,868</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,874</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Income/ (loss) before income taxes</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(34,624</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">149,231</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6,013</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">120,620</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Income tax (provision)/ benefit</div></td>
<td> </td>
<td> </td>
<td align="right">12,058</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(56,543</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,098</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(46,583</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Equity in net income of subsidiaries</div></td>
<td> </td>
<td> </td>
<td align="right">96,603</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,043</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(100,646</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Income from continuing operations</div></td>
<td> </td>
<td> </td>
<td align="right">74,037</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">96,731</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,915</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(100,646</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">74,037</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Discontinued Operations</b></div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(253</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(253</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Net income</b></div></td>
<td> </td>
<td align="left">$</td>
<td align="right">73,784</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">96,731</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3,915</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(100,646</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">73,784</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="40%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Guarantor</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Non-Guarantor</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Consolidating</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"> </td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="left"><i>For the year ended December 31, 2008</i></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Parent</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Subsidiaries</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Subsidiaries</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Adjustments</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Consolidated</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Continuing Operations</b></div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Net sales and service revenues</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,124,063</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">24,878</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,148,941</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Cost of services provided and goods sold</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">798,173</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">12,374</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">810,547</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Selling, general and administrative expenses</div></td>
<td> </td>
<td> </td>
<td align="right">19,644</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">158,214</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,525</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">175,333</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Depreciation</div></td>
<td> </td>
<td> </td>
<td align="right">504</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">20,382</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">695</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">21,581</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Amortization</div></td>
<td> </td>
<td> </td>
<td align="right">960</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,964</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,924</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Other operating expenses</div></td>
<td> </td>
<td> </td>
<td align="right">2,699</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,699</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total costs and expenses</div></td>
<td> </td>
<td> </td>
<td align="right">23,807</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">981,733</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">10,544</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,016,084</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Income/ (loss) from operations</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(23,807</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">142,330</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">14,334</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">132,857</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Interest expense</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(11,722</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(398</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(12,123</td>
<td nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Gain on extinguishment of debt</div></td>
<td> </td>
<td> </td>
<td align="right">3,406</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,406</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Other (expense)/income — net</div></td>
<td> </td>
<td> </td>
<td align="right">4,381</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(4,070</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(9,047</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(8,736</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Income/ (loss) before income taxes</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(27,742</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">137,862</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,284</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">115,404</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Income tax (provision)/ benefit</div></td>
<td> </td>
<td> </td>
<td align="right">10,036</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(51,849</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(5,222</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(47,035</td>
<td nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Equity in net income of subsidiaries</div></td>
<td> </td>
<td> </td>
<td align="right">86,075</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,403</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(87,478</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Income from continuing operations</div></td>
<td> </td>
<td> </td>
<td align="right">68,369</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">87,416</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">62</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(87,478</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">68,369</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Discontinued Operations</b></div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,088</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,088</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Net income</b></div></td>
<td> </td>
<td align="left">$</td>
<td align="right">67,281</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">87,416</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">62</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(87,478</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">67,281</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<p style="font-size: 10pt;" align="left"> </p></div>
<div style="font-family: 'Times New Roman',Times,serif;">
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Guarantor</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Non-Guarantor</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"> </td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="left"><b><i>For the year ended December 31, 2010</i></b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Parent</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Subsidiaries</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Subsidiaries</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Consolidated</b></td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Cash Flow from Operating Activities:</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Net cash provided by operating activities</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">2,862</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">81,781</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,369</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">86,012</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Cash Flow from Investing Activities:</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Capital expenditures</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(18</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(24,677</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(944</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(25,639</td>
<td nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Business combinations, net of cash acquired</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(9,469</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(9,469</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Proceeds from sale of property and equipment</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">275</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">15</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">290</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Other sources/(uses) — net</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(157</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(963</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">238</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(882</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Net cash used by investing activities</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(175</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(34,834</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(691</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(35,700</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Cash Flow from Financing Activities:</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Purchases of treasury stock</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(109,326</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(4</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(109,330</td>
<td nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Dividends paid to shareholders</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(11,881</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(11,881</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Proceeds from exercise of stock options</div></td>
<td> </td>
<td> </td>
<td align="right">5,327</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,327</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Realized excess tax benefit on share based compensation</div></td>
<td> </td>
<td> </td>
<td align="right">3,357</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,357</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Change in cash overdrafts payable</div></td>
<td> </td>
<td> </td>
<td align="right">1,645</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,226</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(581</td>
<td nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Change in intercompany accounts</div></td>
<td> </td>
<td> </td>
<td align="right">44,135</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(45,071</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">936</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Other sources — net</div></td>
<td> </td>
<td> </td>
<td align="right">49</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">248</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">297</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Net cash provided/ (used) by financing activities</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(66,694</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(47,297</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">1,180</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(112,811</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Net increase/(decrease) in cash and cash equivalents</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(64,007</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(350</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">1,858</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(62,499</td>
<td nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Cash and cash equivalents at beginning of year</div></td>
<td> </td>
<td> </td>
<td align="right">109,331</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,221</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">4,306</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">112,416</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Cash and cash equivalents at end of period</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">45,324</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(1,571</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">6,164</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">49,917</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Guarantor</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Non-Guarantor</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"> </td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="left"><b><i>For the year ended December 31, 2009</i></b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Parent</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Subsidiaries</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Subsidiaries</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Consolidated</b></td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Cash Flow from Operating Activities:</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Net cash provided by operating activities</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">950</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">153,387</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">6,495</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">160,832</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Cash Flow from Investing Activities:</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Capital expenditures</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(448</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(20,394</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(654</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(21,496</td>
<td nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Business combinations, net of cash acquired</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,919</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,919</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Net payments from sale of discontinued operations</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(328</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(302</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(630</td>
<td nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Proceeds from sale of property and equipment</div></td>
<td> </td>
<td> </td>
<td align="right">1,285</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">292</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,577</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Other sources/(uses) — net</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(255</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(302</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">183</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(374</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Net cash provided/(used) by investing activities</div></td>
<td> </td>
<td> </td>
<td align="right">254</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(22,625</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(471</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(22,842</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Cash Flow from Financing Activities:</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Change in cash overdrafts payable</div></td>
<td> </td>
<td> </td>
<td align="right">19</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,872</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,891</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Change in intercompany accounts</div></td>
<td> </td>
<td> </td>
<td align="right">140,674</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(135,226</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(5,448</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Dividends paid to shareholders</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(8,157</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(8,157</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Purchases of treasury stock</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(4,225</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(4,225</td>
<td nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Proceeds from exercise of stock options</div></td>
<td> </td>
<td> </td>
<td align="right">545</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">545</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Realized excess tax benefit on share based compensation</div></td>
<td> </td>
<td> </td>
<td align="right">1,955</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,955</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Net decrease in revolving line of credit</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(8,200</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(8,200</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Repayment of long-term debt</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(14,500</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(169</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(14,669</td>
<td nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Other sources/(uses) — net</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(49</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">338</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">369</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">658</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Net cash provided/ (used) by financing activities</div></td>
<td> </td>
<td> </td>
<td align="right">108,062</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(132,185</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(5,079</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(29,202</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Net increase/(decrease) in cash and cash equivalents</div></td>
<td> </td>
<td> </td>
<td align="right">109,266</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,423</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">945</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">108,788</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Cash and cash equivalents at beginning of year</div></td>
<td> </td>
<td> </td>
<td align="right">65</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">202</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,361</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,628</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Cash and cash equivalents at end of period</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">109,331</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(1,221</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">4,306</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">112,416</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Guarantor</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Non-Guarantor</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"> </td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="left"><b><i>For the year ended December 31, 2008</i></b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Parent</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Subsidiaries</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Subsidiaries</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Consolidated</b></td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Cash Flow from Operating Activities:</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Net cash provided/(used) by operating activities</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(8,912</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">118,904</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2,091</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">112,083</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Cash Flow from Investing Activities:</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Capital expenditures</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(9,492</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(15,576</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,026</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(26,094</td>
<td nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Business combinations, net of cash acquired</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(11,200</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(11,200</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Net proceeds from sale of discontinued operations</div></td>
<td> </td>
<td> </td>
<td align="right">8,824</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">8,824</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Proceeds from sale of property and equipment</div></td>
<td> </td>
<td> </td>
<td align="right">10</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">342</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">35</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">387</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Other sources/(uses) — net</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(660</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">123</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(7</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(544</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Net cash used by investing activities</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,318</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(26,311</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(998</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(28,627</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Cash Flow from Financing Activities:</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Change in cash overdrafts payable</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,106</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">250</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(856</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Change in intercompany accounts</div></td>
<td> </td>
<td> </td>
<td align="right">90,906</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(91,249</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">343</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Dividends paid to shareholders</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(5,543</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(5,543</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Purchases of treasury stock</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(69,788</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(69,788</td>
<td nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Proceeds from exercise of stock options</div></td>
<td> </td>
<td> </td>
<td align="right">291</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">291</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Realized excess tax benefit on share based compensation</div></td>
<td> </td>
<td> </td>
<td align="right">2,422</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,422</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Net increase in revolving line of credit</div></td>
<td> </td>
<td> </td>
<td align="right">8,200</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">8,200</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Repayment of long-term debt</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(18,551</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(162</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(18,713</td>
<td nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Other sources/(uses) — net</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(413</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">354</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(770</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(829</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Net cash provided/ (used) by financing activities</div></td>
<td> </td>
<td> </td>
<td align="right">6,418</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(90,807</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(427</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(84,816</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Net increase/(decrease) in cash and cash equivalents</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3,812</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">1,786</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">666</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,360</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Cash and cash equivalents at beginning of year</div></td>
<td> </td>
<td> </td>
<td align="right">3,877</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,584</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">2,695</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,988</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Cash and cash equivalents at end of period</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">65</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">202</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3,361</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3,628</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div></div> </div>23. Guarantor Subsidiaries
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nd the consolidation eliminations, will be included in order that the respective monetary amounts for each of the domains will aggregate to the respective amounts on the consolidated financial statements. The line items are the various captions used to compile the condensed financial statements. Using extensions, most, if not all, of the elements representing condensed financial statement captions will be the same as those used for the consolidated financial statements captions.Reference 1: http://www.xbrl.org/2003/role/presentationRef
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IDEA: Summary of Significant Accounting Policies
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USD ($)
USD ($) / shares
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<div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 6pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td width="1%" nowrap="nowrap" align="left"><b>1.</b></td>
<td width="1%"> </td>
<td><b>Summary of Significant Accounting Policies</b></td></tr></table></div>
<div style="margin-top: 6pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td width="1%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td>
<td><i>NATURE OF OPERATIONS</i></td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> 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 and drain cleaning 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. </div>
<div style="margin-top: 6pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td width="1%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td>
<td><i>PRINCIPLES OF CONSOLIDATION</i></td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> The consolidated financial statements include the accounts of Chemed Corporation and its wholly owned subsidiaries. All significant intercompany transactions have been eliminated. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> We have analyzed the provisions of the Financial Accounting Standards Board ("FASB") authoritative guidance on the consolidation of variable interest entities relative to our contractual relationships with Roto-Rooter's independent contractors and franchisees. The guidance requires the primary beneficiary of a Variable Interest Entity ("VIE") to consolidate the accounts of the VIE. Based upon the guidance provided by the FASB, we have concluded that neither the independent contractors nor the franchisees are VIEs. </div>
<div style="margin-top: 6pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td width="1%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td>
<td><i>CASH EQUIVALENTS</i></td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Cash equivalents comprise short-term, highly liquid investments, including money market funds that have original maturities of three months or less. </div>
<div style="margin-top: 6pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td width="1%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td>
<td><i>ACCOUNTS AND LOANS RECEIVABLE AND CONCENTRATION OF RISK</i></td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Accounts and loans receivable are recorded at the principal balance outstanding less estimated allowances for uncollectible accounts. For the Roto-Rooter segment, allowances for trade accounts receivable are generally provided for accounts more than 90 days past due, although collection efforts continue beyond that time. Due to the small number of loans receivable outstanding, allowances for loan losses are determined on a case-by-case basis. For the VITAS segment, allowances for accounts receivable are provided on accounts based on expected collection rates by payer types. The expected collection rate is based on both historical averages and known current trends. Final write-off of overdue accounts or loans receivable is made when all reasonable collection efforts have been made and payment is not forthcoming. We closely monitor our receivables and periodically review
procedures for granting credit to attempt to hold losses to a minimum. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> As of December 31, 2010 and 2009, approximately 72% and 43%, respectively, of VITAS' total accounts receivable balance were due from Medicare and 20% and 39%, respectively, of VITAS' total accounts receivable balance were due from various state Medicaid programs. Combined accounts receivable from Medicare and Medicaid represent 88% of the net accounts receivable in the accompanying consolidated balance sheet as of December 31, 2010. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> As of December 31, 2010, VITAS has approximately $2.8 million in unbilled revenue included in accounts receivable (December 31, 2009 — $9.9 million). The unbilled revenue at VITAS relates to hospice programs currently undergoing focused medical reviews ("FMR"). During FMR, surveyors working on behalf of the U.S. Federal government review certain patient files for compliance with Medicare regulations. During the time the patient file is under review, we are unable to bill for care provided to those patients. We make appropriate provisions to reduce our accounts receivable balance for any governmental or other payer reviews resulting in denials of patient service revenue. We believe our hospice programs comply with all payer requirements at the time of billing. However, we cannot predict whether future billing reviews or similar audit
s by payers will result in material denials or reductions in revenue. </div>
<div style="margin-top: 6pt;">
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<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td width="1%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td>
<td><i>INVENTORIES</i></td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Substantially all of the inventories are either general merchandise or finished goods. Inventories are stated at the lower of cost or market. For determining the value of inventories, cost methods that reasonably approximate the first-in, first-out ("FIFO") method are used. </div></div>
<div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 6pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td width="1%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td>
<td><i>DEPRECIATION AND PROPERTIES AND EQUIPMENT</i></td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Depreciation of properties and equipment is computed using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized over the lesser of the remaining lease terms (excluding option terms) or their useful lives. Expenditures for maintenance, repairs, renewals and betterments that do not materially prolong the useful lives of the assets are expensed as incurred. The cost of property retired or sold and the related accumulated depreciation are removed from the accounts, and the resulting gain or loss is reflected currently in income. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Expenditures for major software purchases and software developed for internal use are capitalized and depreciated using the straight-line method over the estimated useful lives of the assets. For software developed for internal use, external direct costs for materials and services and certain internal payroll and related fringe benefit costs are capitalized in accordance with the FASB's authoritative guidance on accounting for the costs of computer software developed or obtained for internal use. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> The weighted average lives of our property and equipment at December 31, 2010, were: </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Buildings</div></td>
<td> </td>
<td> </td>
<td align="right">11.4</td>
<td> </td>
<td colspan="3" align="center">yrs.</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Transportation equipment</div></td>
<td> </td>
<td> </td>
<td align="right">14.6</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Machinery and equipment</div></td>
<td> </td>
<td> </td>
<td align="right">5.6</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Computer software</div></td>
<td> </td>
<td> </td>
<td align="right">4.7</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Furniture and fixtures</div></td>
<td> </td>
<td> </td>
<td align="right">4.8</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr></table></div>
<div style="margin-top: 6pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td width="1%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td>
<td><i>GOODWILL AND INTANGIBLE ASSETS</i></td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Identifiable, definite-lived intangible assets arise from purchase business combinations and are amortized using either an accelerated method or the straight-line method over the estimated useful lives of the assets. The selection of an amortization method is based on which method best reflects the economic pattern of usage of the asset. The VITAS trade name is considered to have an indefinite life. Goodwill and the VITAS trade name are tested at least annually for impairment. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> The date of our annual goodwill and indefinite-lived intangible asset impairment analysis is October 1. For all reporting units included in continuing operations, the impairment tests indicated that the fair value of our goodwill exceeds its carrying amount. Our goodwill and VITAS trade name are not impaired. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> We consider that Roto-Rooter Co. (RRC), Roto-Rooter Services Co. (RRSC) and VITAS are appropriate reporting units. We consider RRC and RRSC as separate reporting units but one operating segment. This is appropriate as they each have their own set of general ledger accounts that can be analyzed at "one level below an operating segment" per the definition of a reporting unit in FASB guidance. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> We used two methods to estimate the business enterprise value of each reporting unit — (a) a comparison to key enterprise value ratios of publicly traded market competitors and (b) an allocation of total Chemed market value at October 1, 2010 to each reporting unit. The final estimate of the business enterprise value of each reporting unit was determined using a simple average of the two methods. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> For valuing the VITAS tradename, we performed a discounted cash flow analysis on the expected theoretical royalty cash stream from the VITAS tradename. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> The weighted average lives of our identifiable, definite-lived intangible assets at December 31, 2010, were: </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Covenants not to compete</div></td>
<td> </td>
<td> </td>
<td align="right">6.4</td>
<td> </td>
<td colspan="3" align="center">yrs.</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Reacquired franchise rights</div></td>
<td> </td>
<td> </td>
<td align="right">6.7</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Referral networks</div></td>
<td> </td>
<td> </td>
<td align="right">10.0</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Customer lists</div></td>
<td> </td>
<td> </td>
<td align="right">13.3</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr></table></div>
<div style="margin-top: 6pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td width="1%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td>
<td><i>LONG-LIVED ASSETS</i></td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> If we believe a triggering event may have occurred that indicates a possible impairment of our long-lived assets, we perform an estimate and valuation of the future benefits of our long-lived assets (other than goodwill and the VITAS trade name) based on key financial indicators. If the projected undiscounted cash flows of a major business unit indicate that property and equipment or identifiable, definite-lived intangible assets have been impaired, a write-down to fair value is made. </div></div>
<div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 6pt;">
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<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td width="1%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td>
<td><i>OTHER ASSETS</i></td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Debt issuance costs are included in other assets. Issuance costs related to revolving credit agreements are amortized using the straight line method, over the life of the agreement. All are other issuance costs are amortized using the effective interest method over the life of the debt. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> We capitalize the direct costs of obtaining licenses to operate either hospice programs or plumbing operations subject to a minimum capitalization threshold. These costs are amortized over the life of the license using the straight-line method. Certain licenses are granted without an expiration and thus, we believe them to be indefinite-lived assets subject to impairment testing on at least an annual basis. </div>
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<td width="1%"> </td>
<td><i>REVENUE RECOGNITION</i></td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Both the VITAS segment and Roto-Rooter segment recognize service revenues and sales when the earnings process has been completed. Generally, this occurs when services are provided or products are delivered. Sales of Roto-Rooter products, including drain cleaning machines and drain cleaning solution, comprise less than 3% of our total service revenues and sales for each of the three years in the period ended December 31, 2010. </div>
<div style="margin-top: 6pt;">
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<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td width="1%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td>
<td><i>CHARITY CARE</i></td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> VITAS provides charity care, in certain circumstances, to patients without charge when management of the hospice program determines that the patient does not have the financial wherewithal to make payment. There is no revenue or associated accounts receivable in the accompanying consolidated financial statements related to charity care. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> The cost of providing charity care during the years ended December 31, 2010, 2009 and 2008 was $7.2 million, $6.3 million and $7.1 million, respectively. The cost of charity care is calculated by taking the ratio of charity care days to total days of care and multiplying by total cost of care. </div>
<div style="margin-top: 6pt;">
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<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td width="1%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td>
<td><i>SALES TAX</i></td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> The Roto-Rooter segment collects sales tax from customers when required by state and federal laws. We record the amount of sales tax collected net in the accompanying consolidated statement of income. </div>
<div style="margin-top: 6pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td width="1%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td>
<td><i>GUARANTEES</i></td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> In the normal course of business, Roto-Rooter enters into various guarantees and indemnifications in our relationships with customers and others. These arrangements include guarantees of services for periods ranging from one day to one year and product satisfaction guarantees. Mainly due to our technicians being commission-based, guarantees and indemnifications do not materially impact our financial condition, results of operations or cash flows. Therefore, no liability for guarantees has been recorded as of December 31, 2010 or 2009. </div>
<div style="margin-top: 6pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td width="1%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td>
<td><i>OPERATING EXPENSES</i></td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Cost of services provided and goods sold (excluding depreciation) includes salaries, wages and benefits of service providers and field personnel, material costs, medical supplies and equipment, pharmaceuticals, insurance costs, service vehicle costs and other expenses directly related to providing service revenues or generating sales. Selling, general and administrative expenses include salaries, wages, stock option expense and benefits of selling, marketing and administrative employees, advertising expenses, communications and branch telephone expenses, office rent and operating costs, legal, banking and professional fees and other administrative costs. The cost associated with VITAS sales personnel is included in cost of services provided and goods sold (excluding depreciation). </div>
<div style="margin-top: 6pt;">
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<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td width="1%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td>
<td><i>ADVERTISING</i></td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> We expense the production costs of advertising the first time the advertising takes place. The costs of telephone directory listings are expensed when the directories are placed in circulation. These directories are generally in circulation for approximately one year, at which point they are typically replaced by the publisher with a new directory. We generally pay for directory placement assuming it is in circulation for one year. If the directory is in circulation for less than or greater than one year, we receive a credit or additional billing, as necessary. We do not control the timing of when a new directory is placed in circulation. Advertising expense in continuing operations for the year ended December 31, 2010, was $27.7 million (2009 — $27.0 million; 2008 — $26.8 million). </div>
<div style="margin-top: 6pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td width="1%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td>
<td><i>COMPUTATION OF EARNINGS PER SHARE</i></td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Earnings per share are computed using the weighted average number of shares of capital stock outstanding. Diluted earnings per share reflect the dilutive impact of our outstanding stock options and nonvested stock awards. Stock options whose exercise price is greater than the average market price of our stock are excluded from the computation of diluted earnings per share. </div></div>
<div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 6pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td width="1%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td>
<td><i>STOCK-BASED COMPENSATION PLANS</i></td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Stock-based compensation cost is measured at the grant date, based on the fair value of the award and recognized as expense over the employee's requisite service period on a straight-line basis. </div>
<div style="margin-top: 6pt;">
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<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td width="1%" nowrap="nowrap" align="left"> </td>
<td width="1%"> </td>
<td><i>INSURANCE ACCRUALS</i></td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> For our Roto-Rooter segment and Corporate Office, we 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 at $500,000. 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 wheth
er 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. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> For the VITAS segment, we self-insure for workers' compensation claims. Currently, VITAS' exposure on any single claim is capped at $750,000. For VITAS' self-insurance accruals for workers' compensation, the valuation methods used are similar to those used internally for our other business units. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> 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. </div>
<div style="margin-top: 6pt;">
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<td width="1%"> </td>
<td><i>TAXES ON INCOME</i></td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Deferred taxes are provided on an asset and liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carry-forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amount of assets and liabilities and their tax basis. Deferred tax assets are reduced by a valuation allowance when, in our opinion, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in laws and rates on the date of enactment. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> We are subject to income taxes in Canada, U.S. federal and most state jurisdictions. Significant judgment is required to determine our provision for income taxes. Our financial statements reflect expected future tax consequences of such uncertain positions assuming the taxing authorities' full knowledge of the position and all relevant facts. </div>
<div style="margin-top: 6pt;">
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<td width="1%"> </td>
<td><i>ESTIMATES</i></td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Disclosures of aftertax expenses and adjustments are based on estimates of the effective income tax rates for the applicable segments. </div>
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<td width="1%"> </td>
<td><i>CONTINGENCIES</i></td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> 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. To the extent it is available and management deems it prudent, we carry commercial insurance against such claims. We establish reserves for specific, uninsured liabilities in connection with regulatory and legal action that we deem to be probable and estimable. We record legal fees associated with legal and regulatory actions as the costs are incurred. </div></div> </div>1.
Summary of Significant Accounting Policies
NATURE OF OPERATIONS
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-Number 22
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IDEA: Pension and Retirement Plans
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USD ($)
USD ($) / shares
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<div style="margin-top: 12pt; font-size: 10pt;" align="left"><b>15. Pension and Retirement Plans</b> </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Retirement obligations under various plans cover substantially all full-time employees who meet age and/or service eligibility requirements. The major plans providing retirement benefits to our employees are defined contribution plans. Expenses charged to continuing operations for our retirement and profit-sharing plans, excess benefit plans and other similar plans were $11.4 million, $15.1 million and $2.7 million for the years ended December 31, 2010, 2009 and 2008, respectively. These expenses include the impact of market gains and losses on assets held in deferred compensation plans. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> We have excess benefit plans for key employees whose participation in the qualified plans is limited by U.S. Employee Retirement Income Security Act requirements. Benefits are determined based on theoretical participation in the qualified plans. Benefits are only invested in mutual funds, and participants are not permitted to diversify accumulated benefits in shares of our stock. Trust assets invested in shares of our stock are included in treasury stock, and the corresponding liability is included in a separate component of stockholders' equity. At December 31, 2010, these trusts held 99,494 shares or $2.0 million of our stock (2009 — 102,027 shares or $1.9 million). </div></div> </div>15. Pension and Retirement Plans
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29
R31.xml
IDEA: Unaudited Summary of Quarterly Results
2.2.0.25falsefalse12401 - Disclosure - Unaudited Summary of Quarterly Resultstruefalsefalse1falsefalseUSDfalsefalse1/1/2010 - 12/31/2010
USD ($)
USD ($) / shares
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<div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 6pt; font-size: 10pt;" align="left"><b>UNAUDITED SUMMARY OF QUARTERLY RESULTS</b> </div>
<div style="margin-top: 6pt; font-size: 10pt;" align="left"><b>Chemed Corporation and Subsidiary Companies<br />(in thousands, except per share and footnote data)</b> </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="40%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>First</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Second</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Third</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Fourth</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Total</b></td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td nowrap="nowrap" align="left"><b>For the Year Ended December 31, 2010</b></td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Quarter</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Quarter</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Quarter</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Quarter</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Year</b></td>
<td> </td></tr>
<tr style="font-size: 1px;"><td style="border-top: #000000 1px solid;" colspan="21" align="left"> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Continuing Operations</b></div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;"><b>Total service revenues and sales</b></div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>308,813</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>314,995</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>320,451</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>336,286</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>1,280,545</b></td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;"><b>Gross profit</b></div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>89,676</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>91,293</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>92,536</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>101,024</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>374,529</b></td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;"><b>Income from operations</b></div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>34,445</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>33,856</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>36,755</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>38,466</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>143,522</b></td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;"><b>Interest expense</b></div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(2,952</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(2,999</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(2,995</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(3,013</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(11,959</b></td>
<td nowrap="nowrap"><b>)</b></td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;"><b>Other income/(expense)—net</b></div></td>
<td> </td>
<td> </td>
<td align="right"><b>186</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>10</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>222</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>1,850</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>2,268</b></td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;"><b>Income before income taxes</b></div></td>
<td> </td>
<td> </td>
<td align="right"><b>31,679</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>30,867</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>33,982</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>37,303</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>133,831</b></td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;"><b>Income taxes</b></div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(12,321</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(12,012</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(12,994</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(14,673</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(52,000</b></td>
<td nowrap="nowrap"><b>)</b></td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Net Income (a)</b></div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>19,358</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>18,855</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>20,988</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>22,630</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>81,831</b></td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Earnings Per Share (a)</b></div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;"><b>Net income</b></div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>0.86</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>0.83</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>0.93</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>1.00</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>3.62</b></td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;"><b>Average number of shares outstanding</b></div></td>
<td> </td>
<td> </td>
<td align="right"><b>22,593</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>22,644</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>22,597</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>22,534</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>22,587</b></td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Diluted Earnings Per Share (a)</b></div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;"><b>Net income</b></div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>0.84</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>0.82</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>0.91</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>0.98</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>3.55</b></td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;"><b>Average number of shares outstanding</b></div></td>
<td> </td>
<td> </td>
<td align="right"><b>23,021</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>23,080</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>22,996</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>23,070</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>23,031</b></td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<div align="left">
<div style="margin-top: 16pt; width: 18%; font-size: 3pt; border-top: #000000 1px solid;"> </div></div>
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr><td width="3%"> </td>
<td width="1%"> </td>
<td width="96%"> </td></tr>
<tr valign="top"><td nowrap="nowrap" align="left"><b>(a)</b></td>
<td> </td>
<td><b>The following amounts are included in income from continuing operations during the respective quarter (in thousands):</b></td></tr></table>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="40%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>First</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Second</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Third</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Fourth</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Total</b></td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Quarter</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Quarter</b></td>
<td style="border-bottom: #000000 1px solid;"> </td>
<td style="border-bottom: #000000 1px solid;"> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Quarter</b></td>
<td style="border-bottom: #000000 1px solid;"> </td>
<td style="border-bottom: #000000 1px solid;"> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Quarter</b></td>
<td style="border-bottom: #000000 1px solid;"> </td>
<td style="border-bottom: #000000 1px solid;"> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Year</b></td>
<td style="border-bottom: #000000 1px solid;"> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Pretax (cost)/benefit:</b></div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;"><b>Stock option expense</b></div></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>$</b></td>
<td align="right"><b>(2,051</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>$</b></td>
<td align="right"><b>(2,346</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>$</b></td>
<td align="right"><b>(1,968</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>$</b></td>
<td align="right"><b>(1,397</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>$</b></td>
<td align="right"><b>(7,762</b></td>
<td nowrap="nowrap"><b>)</b></td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;"><b>Noncash impact of change in accounting for convertible debt</b></div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(1,655</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(1,688</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(1,721</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(1,756</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(6,820</b></td>
<td nowrap="nowrap"><b>)</b></td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;"><b>Long-term incentive compensation</b></div></td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(1,799</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(2,935</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(4,734</b></td>
<td nowrap="nowrap"><b>)</b></td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;"><b>Acquisition expenses</b></div></td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(324</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(324</b></td>
<td nowrap="nowrap"><b>)</b></td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;"><b>Expenses of class action litigation</b></div></td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(105</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(322</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(1,426</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(1,853</b></td>
<td nowrap="nowrap"><b>)</b></td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;"><b>Expenses incurred in connection with the Office of Inspector General investigation</b></div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(160</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(118</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(112</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(622</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(1,012</b></td>
<td nowrap="nowrap"><b>)</b></td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 30px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;"><b>Total</b></div></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>$</b></td>
<td align="right"><b>(3,866</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>$</b></td>
<td align="right"><b>(6,056</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>$</b></td>
<td align="right"><b>(4,123</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>$</b></td>
<td align="right"><b>(8,460</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>$</b></td>
<td align="right"><b>(22,505</b></td>
<td nowrap="nowrap"><b>)</b></td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 30px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Aftertax (cost)/benefit:</b></div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;"><b>Stock option expense</b></div></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>$</b></td>
<td align="right"><b>(1,298</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>$</b></td>
<td align="right"><b>(1,484</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>$</b></td>
<td align="right"><b>(1,244</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>$</b></td>
<td align="right"><b>(883</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>$</b></td>
<td align="right"><b>(4,909</b></td>
<td nowrap="nowrap"><b>)</b></td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;"><b>Noncash impact of change in accounting for convertible debt</b></div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(1,047</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(1,068</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(1,088</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(1,110</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(4,313</b></td>
<td nowrap="nowrap"><b>)</b></td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;"><b>Long-term incentive compensation</b></div></td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(1,124</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(1,833</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(2,957</b></td>
<td nowrap="nowrap"><b>)</b></td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;"><b>Acquisition expenses</b></div></td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(198</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(198</b></td>
<td nowrap="nowrap"><b>)</b></td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;"><b>Expenses of class action litigation</b></div></td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(63</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(194</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(869</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(1,126</b></td>
<td nowrap="nowrap"><b>)</b></td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;"><b>Expenses incurred in connection with the Office of Inspector General investigation</b></div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(99</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(74</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(69</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(385</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(627</b></td>
<td nowrap="nowrap"><b>)</b></td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 30px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;"><b>Total</b></div></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>$</b></td>
<td align="right"><b>(2,444</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>$</b></td>
<td align="right"><b>(3,813</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>$</b></td>
<td align="right"><b>(2,595</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>$</b></td>
<td align="right"><b>(5,278</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>$</b></td>
<td align="right"><b>(14,130</b></td>
<td nowrap="nowrap"><b>)</b></td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 30px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<p style="font-size: 10pt;" align="left"> </p></div>
<div style="font-family: 'Times New Roman',Times,serif;">
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="40%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">First</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Second</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Third</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Fourth</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Total</td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td nowrap="nowrap" align="left">For the Year Ended December 31, 2009</td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Quarter</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Quarter</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Quarter</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Quarter</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Year</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td style="border-top: #000000 1px solid;" colspan="21" align="left"> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Continuing Operations</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total service revenues and sales .</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">294,938</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">295,255</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">296,794</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">303,249</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,190,236</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Gross profit </div></td>
<td> </td>
<td align="left">$</td>
<td align="right">87,925</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">87,918</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">87,906</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">91,913</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">355,662</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Income from operations </div></td>
<td> </td>
<td align="left">$</td>
<td align="right">34,726</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">27,938</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">32,786</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">30,895</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">126,345</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Interest expense </div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,844</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3,142</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,853</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,760</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(11,599</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Other income/(expense)—net</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(276</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">3,358</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,733</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,059</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,874</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Income before income taxes </div></td>
<td> </td>
<td> </td>
<td align="right">31,606</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">28,154</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">31,666</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">29,194</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">120,620</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Income taxes</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(12,267</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(10,904</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(12,456</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(10,956</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(46,583</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Income from continuing operations (a)</div></td>
<td> </td>
<td> </td>
<td align="right">19,339</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">17,250</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">19,210</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">18,238</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">74,037</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Discontinued Operations</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(253</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(253</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Net Income (a)</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">19,339</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">17,250</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">19,210</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">17,985</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">73,784</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Earnings Per Share (a)</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Income from continuing operations</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">0.86</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.77</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.86</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.81</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3.30</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Net income</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">0.86</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.77</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.86</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.80</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3.29</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Average number of shares outstanding</div></td>
<td> </td>
<td> </td>
<td align="right">22,394</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">22,417</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">22,461</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">22,551</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">22,451</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Diluted Earnings Per Share (a)</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Income from continuing operations</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">0.85</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.76</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.84</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.80</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3.26</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Net income</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">0.85</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.76</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.84</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.78</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3.24</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Average number of shares outstanding</div></td>
<td> </td>
<td> </td>
<td align="right">22,647</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">22,672</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">22,744</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">22,937</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">22,742</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<div align="left">
<div style="margin-top: 16pt; width: 18%; font-size: 3pt; border-top: #000000 1px solid;"> </div></div>
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr><td width="3%"> </td>
<td width="1%"> </td>
<td width="96%"> </td></tr>
<tr valign="top"><td nowrap="nowrap" align="left">(a)</td>
<td> </td>
<td>The following amounts are included in income from continuing operations during the respective quarter (in thousands):</td></tr></table>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="40%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">First</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Second</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Third</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Fourth</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Total</td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Quarter</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Quarter</td>
<td style="border-bottom: #000000 1px solid;"> </td>
<td style="border-bottom: #000000 1px solid;"> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Quarter</td>
<td style="border-bottom: #000000 1px solid;"> </td>
<td style="border-bottom: #000000 1px solid;"> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Quarter</td>
<td style="border-bottom: #000000 1px solid;"> </td>
<td style="border-bottom: #000000 1px solid;"> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Year</td>
<td style="border-bottom: #000000 1px solid;"> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Pretax (cost)/benefit:</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Stock option expense</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(2,042</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(2,443</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(2,214</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(1,940</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(8,639</td>
<td nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Noncash impact of change in accounting for convertible debt</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,530</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,561</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,591</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,623</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(6,305</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Non-taxable income from certain investments held in deferred compensation trusts</div></td>
<td> </td>
<td> </td>
<td align="right">1,211</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,211</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Expenses associated with contested proxy solicitiation</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(545</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3,444</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3,989</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Expenses incurred in connection with the Office of Inspector General investigation</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(13</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(86</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(343</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(144</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(586</td>
<td nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Long-term incentive compensation</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(5,007</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(5,007</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Costs related to litigation settlements</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(882</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(882</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 30px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Total</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(2,919</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(7,534</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(4,148</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(9,596</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(24,197</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 30px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Aftertax (cost)/benefit:</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Stock option expense</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(1,292</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(1,544</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(1,401</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(1,227</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(5,464</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Noncash impact of change in accounting for convertible debt</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(968</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(987</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,006</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,027</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3,988</td>
<td nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Non-taxable income from certain investments held in deferred compensation trusts</div></td>
<td> </td>
<td> </td>
<td align="right">1,211</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,211</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Income tax impact of nondeductible losses on investments held in deferred compensation trusts</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(475</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">20</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(455</td>
<td nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Expenses associated with contested proxy solicitiation</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(345</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,180</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,525</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Expenses incurred in connection with the Office of Inspector General investigation</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(8</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(53</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(213</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(89</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(363</td>
<td nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Long-term incentive compensation</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3,134</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3,134</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Costs related to litigation settlements</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(534</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(534</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 30px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Total</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(1,877</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(4,744</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(2,620</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(6,011</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(15,252</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 30px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div></div> </div>UNAUDITED SUMMARY OF QUARTERLY RESULTS
Chemed Corporation and Subsidiary Companies(in thousands, except per share and footnote data)falsefalsefalsefalsefalseOtherus-types:textBlockItemTypestringThis element can be used to disclose the entire quarterly financial data disclosure in the annual financial statements as a single block of text. The disclosure includes a tabular presentation of financial information for each fiscal quarter for the current and previous year, including revenues, gross profit, income (loss) before extraordinary items and cumulative effect of a change in accounting principle and earnings per share data. It also inclu
des an indication if the information in the note is unaudited, comments on the aggregate effect of year-end adjustments, and an explanation of matters or transactions that affect comparability or are pertinent to an understanding of the information furnished. Alternatively, the details of this disclosure can be reported using the elements in this group, or by using other taxonomy elements and applying the appropriate quarterly date and period contexts when creating an instance document. For example, the element for "Interest and Dividend Income, Operating" may be used by financial institutions from the Statement of Income, applying the appropriate quarterly date and period context when creating an instance document.Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 6
-Section G
-Subsection 1
Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Principles Board Opinion (APB)
-Number 28
-Paragraph 23, 24
Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Principles Board Opinion (APB)
-Number 28
-Paragraph 30
-Subparagraph a-j
Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 302
-Paragraph a
falsefalse12Unaudited Summary of Quarterly ResultsUnKnownUnKnownUnKnownUnKnownfalsetrueXML
30
R18.xml
IDEA: Other Income/ (Expense) - Net
2.2.0.25falsefalse11101 - Disclosure - Other Income/ (Expense) - Nettruefalsefalse1falsefalseUSDfalsefalse1/1/2010 - 12/31/2010
USD ($)
USD ($) / shares
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<div style="margin-top: 6pt; font-size: 10pt;" align="left"><b>11. Other Income/ (Expense) —Net</b> </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Other income/ (expense)—net from continuing operations comprises the following (in thousands): </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="64%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="10" nowrap="nowrap" align="center">For the Years Ended December 31,</td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2010</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">2009</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">2008</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Market value gains/(losses) on assets held in deferred compensation trust</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">2,210</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">5,802</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(9,140</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Loss on disposal of property and equipment</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(425</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(369</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(415</td>
<td nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Interest income</div></td>
<td> </td>
<td> </td>
<td align="right">444</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">423</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">742</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Other — net</div></td>
<td> </td>
<td> </td>
<td align="right">39</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">18</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">77</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total other income/(expense)</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">2,268</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">5,874</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(8,736</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<div style="margin-top: 6pt; font-size: 10pt;" align="left"> The offset for market value gains or losses on assets held in deferred compensation trust is recorded in selling, general and administrative expenses. </div></div> </div>11. Other Income/ (Expense) —Net
Other income/ (expense)—net from continuing operations comprises the following (infalsefalsefalsefalsefalseOtherus-types:textBlockItemTypestringDiscloses other income or other expense items (both operating and nonoperating). Sources of nonoperating income or nonoperating expense that should be disclosed in this note, or in the income statement, include amounts earned from dividends, interest on securities, profits (losses) on securities, net and miscellaneous other income or income deductions.Reference 1
: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 03
-Paragraph 3, 6, 7, 9
-Article 5
falsefalse12Other Income/ (Expense) - NetUnKnownUnKnownUnKnownUnKnownfalsetrueXML
31
R32.xml
IDEA: Selected Financial Data
2.2.0.25falsefalse12501 - Disclosure - Selected Financial Datatruefalsefalse1falsefalseUSDfalsefalse1/1/2010 - 12/31/2010
USD ($)
USD ($) / shares
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<div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 12pt; font-size: 10pt;" align="left"><b>SELECTED FINANCIAL DATA</b> </div>
<div style="margin-top: 6pt; font-size: 10pt;" align="left"><i>Chemed Corporation and Subsidiary Companies</i>
<div style="border-bottom: #000000 0px solid; width: 100%; font-size: 1px;"> </div><i>(in thousands, except per share and footnote data, ratios, percentages and personnel)</i> </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="40%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center"><b>2010</b></td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center">2009</td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center">2008</td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center">2007</td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center">2006</td></tr>
<tr style="font-size: 1px;"><td style="border-top: #000000 1px solid;" colspan="21" align="left"> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Summary of Operations</b></div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Continuing operations (a)</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Service revenues and sales</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">1,280,545</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">1,190,236</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">1,148,941</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">1,100,058</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">1,018,587</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Gross profit (excluding depreciation)</div></td>
<td> </td>
<td> </td>
<td align="right">374,529</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">355,662</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">338,394</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">332,992</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">288,464</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Depreciation</div></td>
<td> </td>
<td> </td>
<td align="right">24,386</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">21,535</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">21,581</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">20,118</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">16,775</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Amortization</div></td>
<td> </td>
<td> </td>
<td align="right">4,657</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6,367</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,924</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,270</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,255</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Income from operations </div></td>
<td> </td>
<td> </td>
<td align="right">143,522</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">126,345</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">132,857</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">122,755</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">104,979</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Income from continuing operations (b)</div></td>
<td> </td>
<td> </td>
<td align="right">81,831</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">74,037</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">68,369</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">60,440</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">57,722</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Net income (b)</div></td>
<td> </td>
<td> </td>
<td align="right">81,831</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">73,784</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">67,281</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">61,641</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">50,651</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Earnings per share</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Income from continuing operations</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">3.62</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">3.30</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">2.97</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">2.46</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">2.21</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Net income</div></td>
<td> </td>
<td> </td>
<td align="right">3.62</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3.29</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2.92</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2.51</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1.94</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Average number of shares outstanding</div></td>
<td> </td>
<td> </td>
<td align="right">22,587</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">22,451</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">23,058</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">24,520</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">26,118</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Diluted earnings per share</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Income from continuing operations</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">3.55</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">3.26</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">2.93</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">2.41</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">2.16</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Net income</div></td>
<td> </td>
<td> </td>
<td align="right">3.55</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3.24</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2.88</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2.46</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1.90</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Average number of shares outstanding</div></td>
<td> </td>
<td> </td>
<td align="right">23,031</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">22,742</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">23,374</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">25,077</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">26,669</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Cash dividends per share</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">0.52</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">0.36</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">0.24</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">0.24</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">0.24</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Financial Position—Year-End</b></div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Cash and cash equivalents</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">49,917</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">112,416</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">3,628</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">4,988</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">29,274</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Working capital/(deficit)</div></td>
<td> </td>
<td> </td>
<td align="right">47,455</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">62,174</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(18,142</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(13,427</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(3,951</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Current ratio</div></td>
<td> </td>
<td> </td>
<td align="right">1.32</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1.46</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.88</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.91</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">0.98</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Properties and equipment, at cost less accumulated depreciation</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">79,292</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">75,358</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">76,962</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">74,513</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">70,140</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total assets</div></td>
<td> </td>
<td> </td>
<td align="right">830,161</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">819,470</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">759,622</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">768,945</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">791,461</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Long-term debt</div></td>
<td> </td>
<td> </td>
<td align="right">159,208</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">152,127</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">158,210</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">163,715</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">150,331</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Stockholders' equity</div></td>
<td> </td>
<td> </td>
<td align="right">462,049</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">477,162</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">396,831</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">395,800</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">421,361</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Other Statistics—Continuing Operations</b></div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Capital expenditures</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">25,639</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">21,496</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">26,094</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">26,640</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">21,987</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Number of employees</div></td>
<td> </td>
<td> </td>
<td align="right">13,058</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">12,308</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">11,884</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">11,783</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">11,621</td>
<td> </td></tr></table></div>
<div align="left">
<div style="margin-top: 16pt; width: 18%; font-size: 3pt; border-top: #000000 1px solid;"> </div></div>
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr><td width="3%"> </td>
<td width="1%"> </td>
<td width="96%"> </td></tr>
<tr valign="top"><td nowrap="nowrap" align="left">(a)</td>
<td> </td>
<td>Continuing operations exclude VITAS of Arizona, discontinued in 2006, Service America, discontinued in 2004 and Patient Care discontinued in 2002</td></tr>
<tr style="font-size: 3pt;"><td> </td></tr>
<tr valign="top"><td nowrap="nowrap" align="left">(b)</td>
<td> </td>
<td>The following amounts are included in income from continuing operations during the respective year (in thousands):</td></tr></table>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="40%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2010</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">2009</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">2008</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">2007</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">2006</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">After-tax benefit/(cost):</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Stock option expense</div></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>$</b></td>
<td align="right"><b>(4,909</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(5,464</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(4,619</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(2,962</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(769</td>
<td nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Noncash impact of change in accounting for convertible debt</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(4,313</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3,988</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(4,006</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,335</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Long-term incentive compensation</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(2,957</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3,134</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(4,427</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Expenses associated with contested proxy solicitation</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,525</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Non-taxable income on certain investments held in deferred compensation trusts</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,211</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Costs related to litigation settlements</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(1,126</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(534</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,168</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(169</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Income tax impact of nondeductible losses on investments held in deferred compensation trusts</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(455</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3,062</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(46</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Expenses incurred in connection with the Office of Inspector General investigation</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(627</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(363</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(28</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(141</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(662</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Acquisition Expense</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(198</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Gain/(loss) on extinguishment of debt</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,934</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(8,778</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(273</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Loss on impairment of transportation equipment</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,714</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Unreserved prior-year's insurance claim</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(358</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Income tax credits or adjustments related to prior years</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">322</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,115</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Gain on sale of property</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">724</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Loss on impairment of investment</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(918</td>
<td nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Other</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">296</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">296</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 30px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Total</div></td>
<td> </td>
<td nowrap="nowrap" align="left"><b>$</b></td>
<td align="right"><b>(14,130</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(15,252</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(10,531</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(18,837</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(380</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div></div>
<div style="font-family: 'Times New Roman',Times,serif;">
<div align="center"> </div></div> </div>SELECTED FINANCIAL DATA
Chemed Corporation and Subsidiary Companies
(in thousands, except per share and footnote data, ratios, percentages and personnel)falsefalsefalsefalsefalseOtherus-types:textBlockItemTypestringSelected Financial Data [Text Block]No authoritative reference available.falsefalse12Selected Financial DataUnKnownUnKnownUnKnownUnKnownfalsetrueXML
32
R12.xml
IDEA: Segments and Nature of the Business
2.2.0.25falsefalse10501 - Disclosure - Segments and Nature of the Businesstruefalsefalse1falsefalseUSDfalsefalse1/1/2010 - 12/31/2010
USD ($)
USD ($) / shares
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<div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 6pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td width="1%" nowrap="nowrap" align="left"><b>5.</b></td>
<td width="1%"> </td>
<td><b>Segments and Nature of the Business</b></td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Our segments include the VITAS segment and the Roto-Rooter segment. Relative contributions of each segment to service revenues and sales were 72% and 28%, respectively, in both 2010 and 2009. The vast majority of our service revenues and sales from continuing operations are generated from business within the United States. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> The reportable segments have been defined along service lines, which is consistent with the way the businesses are managed. In determining reportable segments, the Roto-Rooter Services and Roto-Rooter Franchising and Products operating units of the Roto-Rooter segment have been aggregated on the basis of possessing similar operating and economic characteristics. The characteristics of these operating segments and the basis for aggregation are reviewed annually. Accordingly, the reportable segments are defined as follows: </div>
<div style="margin-top: 6pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td style="background: none transparent scroll repeat 0% 0%;" width="6%"> </td>
<td width="3%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td>
<td>The VITAS segment provides hospice services for patients with severe, life-limiting illnesses. This type of care is aimed at making the terminally ill patient's end of life as comfortable and pain-free as possible. Hospice care is typically available to patients who have been initially certified or re-certified as terminally ill (i.e., a prognosis of six months or less) by their attending physician, if any, and the hospice physician. VITAS offers all levels of hospice care in a given market, including routine home care, inpatient care and continuous care. Over 90% of VITAS' revenues are derived through the Medicare and Medicaid reimbursement programs.</td></tr>
<tr><td style="font-size: 6pt;"> </td></tr>
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td style="background: none transparent scroll repeat 0% 0%;" width="6%"> </td>
<td width="3%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td>
<td>The Roto-Rooter segment provides repair and maintenance services to residential and commercial accounts using the Roto-Rooter registered service marks. Such services include plumbing and sewer, drain and pipe cleaning. They are delivered through company-owned and operated territories, independent contractor-operated territories and franchised locations. This segment also manufactures and sells products and equipment used to provide such services.</td></tr>
<tr><td style="font-size: 6pt;"> </td></tr>
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td style="background: none transparent scroll repeat 0% 0%;" width="6%"> </td>
<td width="3%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td>
<td>We report corporate administrative expenses and unallocated investing and financing income and expense not directly related to either segment as "Corporate". Corporate administrative expense includes the stewardship, accounting and reporting, legal, tax and other costs of operating a publicly held corporation. Corporate investing and financing income and expenses include the costs and income associated with corporate debt and investment arrangements. Historically, we have recorded stock award amortization as a corporate expense. In the first quarter of 2010, our CODM determined that this was an on-going, operational expense and should be reported within the appropriate business segment. Accordingly, stock award amortization has been reclassified to the corresponding business segment for all periods presented.</td></tr></table></div>
<div style="margin-top: 18pt; font-size: 10pt;" align="center">Segment data for our continuing operations are set forth below (in thousands): </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="64%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="10" nowrap="nowrap" align="center">For the Years Ended December 31,</td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2010</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">2009</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">2008</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Revenues by Type of Service</b></div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">VITAS</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Routine homecare</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>666,562</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">615,408</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">585,891</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Continuous care</div></td>
<td> </td>
<td> </td>
<td align="right"><b>153,050</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">141,272</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">124,894</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">General inpatient</div></td>
<td> </td>
<td> </td>
<td align="right"><b>105,588</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">97,356</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">97,895</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Estimated BNAF</div></td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,950</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Medicare cap</div></td>
<td> </td>
<td> </td>
<td align="right"><b>610</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,643</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(235</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 30px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Total segment</div></td>
<td> </td>
<td> </td>
<td align="right"><b>925,810</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">854,343</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">808,445</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Roto-Rooter</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Sewer and drain cleaning</div></td>
<td> </td>
<td> </td>
<td align="right"><b>135,704</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">136,503</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">146,150</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Plumbing repair and maintenance</div></td>
<td> </td>
<td> </td>
<td align="right"><b>168,625</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">151,072</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">145,831</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Independent contractors</div></td>
<td> </td>
<td> </td>
<td align="right"><b>22,943</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">21,620</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">21,968</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">HVAC repair and maintenance</div></td>
<td> </td>
<td> </td>
<td align="right"><b>4,183</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,031</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">4,059</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Other products and services</div></td>
<td> </td>
<td> </td>
<td align="right"><b>23,280</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">22,667</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">22,488</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 30px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Total segment</div></td>
<td> </td>
<td> </td>
<td align="right"><b>354,735</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">335,893</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">340,496</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Total service revenues and sales</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>1,280,545</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,190,236</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,148,941</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div></div>
<div style="font-family: 'Times New Roman',Times,serif;">
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="64%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="10" nowrap="nowrap" align="center">For the Years Ended December 31,</td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2010</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">2009</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">2008</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Aftertax Segment Earnings/(Loss)</b></div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">VITAS</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>79,796</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">71,696</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">64,304</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Roto-Rooter</div></td>
<td> </td>
<td> </td>
<td align="right"><b>31,678</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">33,040</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">33,427</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total</div></td>
<td> </td>
<td> </td>
<td align="right"><b>111,474</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">104,736</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">97,731</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Corporate</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(29,643</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(30,699</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(29,362</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Discontinued operations</div></td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(253</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,088</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Net income</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>81,831</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">73,784</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">67,281</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Interest Income</b></div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">VITAS</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>4,852</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">4,581</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">5,336</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Roto-Rooter</div></td>
<td> </td>
<td> </td>
<td align="right"><b>2,661</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,587</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,824</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total</div></td>
<td> </td>
<td> </td>
<td align="right"><b>7,513</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">7,168</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">9,160</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Corporate</div></td>
<td> </td>
<td> </td>
<td align="right"><b>175</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">83</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">489</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Intercompany eliminations</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(7,244</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(6,828</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(8,907</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total interest income</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>444</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">423</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">742</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Interest Expense</b></div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">VITAS</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>131</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">374</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">155</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Roto-Rooter</div></td>
<td> </td>
<td> </td>
<td align="right"><b>233</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">186</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">246</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total</div></td>
<td> </td>
<td> </td>
<td align="right"><b>364</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">560</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">401</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Corporate</div></td>
<td> </td>
<td> </td>
<td align="right"><b>11,595</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">11,039</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">11,722</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total interest expense</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>11,959</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">11,599</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">12,123</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Income Tax Provision</b></div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">VITAS</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>48,601</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">43,637</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">38,458</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Roto-Rooter</div></td>
<td> </td>
<td> </td>
<td align="right"><b>19,547</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">20,372</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">20,644</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total</div></td>
<td> </td>
<td> </td>
<td align="right"><b>68,148</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">64,009</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">59,102</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Corporate</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(16,148</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(17,426</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(12,067</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total income tax provision</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>52,000</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">46,583</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">47,035</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Identifiable Assets</b></div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">VITAS</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>531,247</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">476,621</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">523,178</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Roto-Rooter</div></td>
<td> </td>
<td> </td>
<td align="right"><b>205,601</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">191,254</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">188,003</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total</div></td>
<td> </td>
<td> </td>
<td align="right"><b>736,848</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">667,875</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">711,181</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Corporate</div></td>
<td> </td>
<td> </td>
<td align="right"><b>93,313</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">151,595</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">48,441</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total identifiable assets</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>830,161</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">819,470</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">759,622</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Additions to Long-Lived Assets</b></div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">VITAS</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>16,787</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">14,913</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">8,797</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Roto-Rooter</div></td>
<td> </td>
<td> </td>
<td align="right"><b>17,975</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">8,067</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">18,906</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total</div></td>
<td> </td>
<td> </td>
<td align="right"><b>34,762</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">22,980</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">27,703</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Corporate</div></td>
<td> </td>
<td> </td>
<td align="right"><b>18</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">448</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">9,492</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total additions to long-lived assets</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>34,780</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">23,428</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">37,195</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Depreciation and Amortization</b></div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">VITAS</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>18,900</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">17,973</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">17,651</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Roto-Rooter</div></td>
<td> </td>
<td> </td>
<td align="right"><b>8,289</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">8,509</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">8,607</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total</div></td>
<td> </td>
<td> </td>
<td align="right"><b>27,189</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">26,482</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">26,258</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Corporate</div></td>
<td> </td>
<td> </td>
<td align="right"><b>1,854</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,420</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,247</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total depreciation and amortization</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>29,043</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">27,902</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">27,505</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td></tr></table></div></div> </div>5.
Segments and Nature of the Business
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-Section Appendix E
-Paragraph 289
falsefalse20false0us-gaap_SelfInsuranceReserveus-gaaptruecreditinstantNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalseterselabel1truefalsefalse3649200036492falsefalsefalsefalsefalse2truefalsefalse3516100035161falsefalsefalsefalsefalseMonetaryxbrli:monetaryItemTypemonetaryCarrying amount of accrued known and estimated losses incurred as of the balance sheet date for which no insurance coverage exists, and for which a claim has been made or is probable of being asserted, typically arising from workmen's' compensation-type of incidents and personal injury to nonemployees from accidents on the entity's property.No authoritative reference available.falsefalse21false0us-gaap_EmployeeRelatedLiabilitiesCurrentus-gaaptruecreditinstantNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalse1truefalsefalse3971900039719falsefalsefalsefalsefalse2truefalsefalse3466200034662falsefalsefalsefalsefalseMonetaryxbrli:monetaryItemTypemonetaryTotal of the carrying values as of the balance sheet date of obligations incurred through that date and payable for obligations related to services received from employees, such as accrued salaries and bonuses, payroll taxes and fringe benefits. Used to reflect the current portion of the liabilities (due within one year or within the normal operating cycle if longer).Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 02
-Paragraph 20
-Article 5
falsefalse22false0us-gaap_OtherLiabilitiesCurrentus-gaaptruecreditinstantNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalselabel1truefalsefalse1614100016141falsefalsefalsefalsefalse2truefalsefalse1412700014127falsefalsefalsefalsefalseMonetaryxbrli:monetaryItemTypemonetaryAggregate carrying amount, as of the balance sheet date, of current obligations not separately disclosed in the balance sheet due to materiality considerations. Current liabilities are expected to be paid within one year (or the normal operating cycle, if longer).Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 02
-Paragraph 20
-Article 5
Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Research Bulletin (ARB)
-Number 43
-Chapter 3
-Section A
-Paragraph 8
Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 6
-Paragraph 15
falsefalse23false0us-gaap_LiabilitiesCurrentus-gaaptruecreditinstantNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalsetotallabel1truefalsefalse149342000149342falsefalsefalsefalsefalse2truefalsefalse136084000136084falsefalsefalsefalsefalseMonetary
xbrli:monetaryItemTypemonetaryTotal obligations incurred as part of normal operations that are expected to be paid during the following twelve months or within one business cycle, if longer.Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 02
-Paragraph 21
-Article 5
truefalse24false0us-gaap_DeferredTaxLiabilitiesNoncurrentus-gaaptruecreditinstantNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalse1truefalsefals
e2508500025085falsefalsefalsefalsefalse2truefalsefalse2592400025924falsefalsefalsefalsefalseMonetaryxbrli:monetaryItemTypemonetaryRepresents the noncurrent portion of deferred tax liabilities, which result from applying the applicable tax rate to net taxable temporary differences pertaining to each jurisdiction to which the entity is obligated to pay income tax. A noncurrent taxable temporary difference is a difference between the tax basis and the carrying amount of a noncurrent asset or liability in the financial statements prepared in accordance with generally accepted accounting principles. In a classified statement of financial position, an enterprise shall separate deferred tax liabilities and assets into a current amount and a noncurrent amount. Deferred tax liabilities and assets shall be classified as current or noncurrent based on the classification of the related asset or liability for financial reporting. A deferred tax liability or asset that is not related to an asset or liability for financial reporting, including defe
rred tax assets related to carryforwards, shall be classified according to the expected reversal date of the temporary difference.Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 109
-Paragraph 41, 42
falsefalse25false0us-gaap_LongTermDebtNoncurrentus-gaaptruecreditinstantNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalseterselabel1truefalsefalse159208000159208falsefalsefalsefalsefalse2truefalsefalse152127000152127falsefalsefalsefalsefalseMonetaryxbrli:monetaryItemTypemonetarySum of the carrying values as of the balance sheet date of all long-term debt, which is debt initially having maturities due after one year from the balance sheet date or beyond the operating cycle, if longer, but excluding the portions thereof scheduled to be repaid within one year (current maturities) or the normal operating cycle, if longer, and after deducting unamortized discount or premiums, if any.Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 02
-Paragraph 22
-Article 5
falsefalse26false0us-gaap_DeferredCompensationLiabilityClassifiedNoncurrentus-gaaptruecreditinstantNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalse1truefalsefalse2785100027851falsefalsefalsefalsefalse2truefalsefalse2363700023637falsefalsefalsefalsefalseMonetaryxbrli:monetaryItemTypemonetaryAggregate carrying value as of the balance sheet date of the liabilities for all deferred compensation arrangements payable beyond one year (or the operating cycle, if longer).No authoritative reference available.falsefalse27false0us-gaap_OtherLiabilitiesNoncurrentus-gaaptruecreditinstantNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalselabel1truefalsefalse66260006626falsefalsefalsefalsefalse2truefalsefalse45360004536falsefalsefalsefalsefalseMonetaryxbrli:monetaryItemTypemonetaryAggregate carrying amount, as of the balance sheet date, of noncurrent obligations not separately disclosed in the balance sheet due to materiality considerations. Noncurrent liabilities are expected to be paid after one year (or the normal operating cycle, if longer).Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 02
-Paragraph 24
-Article 5
falsefalse28false0us-gaap_Liabilitiesus-gaaptruecreditinstantNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalsetotallabel1truefalsefal
se368112000368112falsefalsefalsefalsefalse2truefalsefalse342308000342308falsefalsefalsefalsefalseMonetaryxbrli:monetaryItemTypemonetarySum of the carrying amounts as of the balance sheet date of all liabilities that are recognized. Liabilities are probable future sacrifices of economic benefits arising from present obligations of an entity to transfer assets or provide services to other entities in the future.No authoritative reference available.truefalse29false0us-gaap_CommitmentsAndContingencies2009us-gaaptruenadurationNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00 falsefalsefalsefalsefalse2falsefalsefalse00 falsefalsefalsefalsefalseOtherxbrli:stringItemTypestringRepresents the caption on the face of the balance sheet to indicate that the entity has entered into (1) purchase or supply arrangements that will require expending a portion of its resources to meet the terms thereof, and (2) is exposed to potential losses or, less frequently, gains, arising from (a) possible claims against a company's resources due to future performance under
contract terms, and (b) possible losses or likely gains from uncertainties that will ultimately be resolved when one or more future events that are deemed likely to occur do occur or fail to occur. This caption alerts the reader that one or more notes to the financial statements disclose pertinent information about the entity's commitments and contingencies.Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 03
-Paragraph 19
-Article 7
Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 5
-Paragraph 8, 9
Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 02
-Paragraph 25
-Article 5
Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 03
-Paragraph 17
-Article 9
falsefalse30true0us-gaap_StockholdersEquityAbstractus-gaaptruenadurationNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00falsefalsefalsefalsefalse2falsefalsefalse00falsefalsefalsefalsefalseOtherxbrli:s
tringItemTypestringNo definition available.falsefalse31false0us-gaap_CommonStockValueus-gaaptruecreditinstantNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalse1truefalsefalse3038200030382falsefalsefalsefalsefalse2truefalsefalse2989100029891falsefalsefalsefalsefalseMonetaryxbrli:monetaryItemTypemonetaryDollar value of issued common stock whether issued at par value, no par or stated value. This item includes treasury stock repurchased by the entity. Note: elements for number of common shares, par value and other disclosure concepts are in another section within stockholders' equity.Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 02
-Paragraph 30
-Article 5
falsefalse32false0us-gaap_AdditionalPaidInCapitalCommonStockus-gaaptruecreditinstantNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalse1truefalsefalse365007000365007falsefalsefalsefalsefalse2truefalsefalse335890000335890falsefalsefalsefalsefalseMonetaryxbrli:monetaryItemTypemonetaryValue received from shareholders in common stock-related transactions that are in excess of par value or stated value and amounts received from other stock-related transactions. Includes only common stock transactions (excludes preferred stock transactions). May be called contributed capital, capital in excess of par, capital surplus, or paid-in capital.Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 02
-Paragraph 31
-Article 5
falsefalse33false0us-gaap_RetainedEarningsAccumulatedDeficitus-gaaptruecreditinstantNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalselabel1truefalsefalse473316000473316falsefalsefalsefalsefalse2truefalsefalse403366000403366falsefalsefalsefalsefalseMonetar
yxbrli:monetaryItemTypemonetaryThe cumulative amount of the reporting entity's undistributed earnings or deficit.Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Principles Board Opinion (APB)
-Number 12
-Paragraph 10
Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 02
-Paragraph 31
-Article 5
Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 04
-Article 3
falsefalse34false0us-gaap_TreasuryStockValueus-gaaptruedebitinstantNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsetruenegated1truefalsef
alse-408615000-408615falsefalsefalsefalsefalse2truefalsefalse-293941000-293941falsefalsefalsefalsefalseMonetaryxbrli:monetaryItemTypemonetaryValue of common and preferred shares of an entity that were issued, repurchased by the entity, and are held in its treasury. Treasury stock is issued but is not outstanding. This stock has no voting rights and receives no dividends. Note that treasury stock may be recorded at its total cost or separately as par (or stated) value and additional paid in capital. Note: number of treasury shares concept is in another section within stockholders' equity.Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name FASB Technical Bulletin (FTB)
-Number 85-6
-Paragraph 3
falsefalse35false0che_DeferredCompensationPayableInCompanyStockchefalsecreditinstantValue of stock payable under a deferred compensation plan.falsefalsefalsefalsefalsefalsefalsefalsefalsefalseterselabel1truefalsefalse19590001959falsefalsefalsefalsefalse2truefalsefalse19560001956falsefalsefalsefalsefalseMonetaryxbrli:monetaryItemTypemonetaryValue of stock payable under a deferred compensation plan.No authoritative reference available.falsefalse36false0us-gaap_StockholdersEquityus-gaaptruecreditinstantNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalsetotallabel1truefalsefalse462049000462049falsefalsefalsefalsefalse2truefalsefalse477162000477162falsefalsefalsefalsefalseMonetaryxbrli:monetaryItemTypemonetaryTotal of all Stockholders' Equity (deficit) items, net of receivables from officers, directors owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity.
ElementDefenition>Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Research Bulletin (ARB)
-Number 51
-Paragraph A3
-Appendix A
Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 4
-Section E
Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 02
-Paragraph 29, 30, 31
-Article 5
truefalse37false0us-gaap_LiabilitiesAndStockholdersEquityus-gaaptruecreditinstantNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalsetotallabel1truefalsefalse830161000830161falsetruefalsefalsefalse2truefalsefalse819470000819470falsetruefalsefalsefalseMonetaryxbrli:monetaryItemTypemonetaryTotal of all Liabilities and Stockholders' Equity items.Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 02
-Paragraph 32
-Article 5
Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 03
-Paragraph 25
-Article 7
truefalse235CONSOLIDATED BALANCE SHEET (USD $)ThousandsUnKnownUnKnownUnKnownfalsetrueXML
34
R14.xml
IDEA: Other Operating Expenses
2.2.0.25falsefalse10701 - Disclosure - Other Operating Expensestruefalsefalse1falsefalseUSDfalsefalse1/1/2010 - 12/31/2010
USD ($)
USD ($) / shares
$Duration_1_1_2010_To_12_31_2010http://www.sec.gov/CIK0000019584duration2010-01-01T00:00:002010-12-31T00:00:00Unit1Standardhttp://www.xbrl.org/2003/iso4217USDiso42170Unit13Dividehttp://www.xbrl.org/2003/iso4217USDiso4217http://www.xbrl.org/2003/instancesharesxbrli0Unit12Standardhttp://www.xbrl.org/2003/instancesharesxbrli0USDUSD$2true0che_OtherOperatingExpensesAbstractchefalsenadurationOther Operating Expensesfalsefalsefalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00falsefalsefalsefalsefalseOtherxbrli:stringItemTypestringOther Operating Expensesfalsefalse3false0us-gaap_ScheduleOfOtherOperatingCostAndExpenseByComponentTextBlockus-gaaptruenadurationNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalseverboselabel1falsefalsefalse00<div> <div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 12pt; font-size: 10pt;" align="left"><b>7. Other Operating Expenses</b> </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> There were no other operating expenses from continuing operations for the period ended December 31, 2010. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> For the twelve-month period ended December 31, 2009, we recorded pretax expenses of $4.0 million related to the costs of a contested proxy solicitation. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> In December 2008, the Executive Committee of the Board of Directors authorized us to place a 29 year-old, eight passenger Hawker jet for sale. We determined that this asset met the definition of held for sale under the FASB's guidance on, accounting for the impairment or disposal of long-lived assets. As a result, we discontinued depreciation on the jet and wrote-down the asset to its fair value less selling costs resulting in a pre-tax charge to other operating expenses — net of approximately $2.7 million. In March 2009, we sold the jet and recognized a $112,000 gain on disposal. </div></div> </div>7. Other Operating Expenses
There were no other operating expenses from continuing operations for the period endedfalsefalsefalsefalsefalseOtherus-types:textBlockItemTypestringSchedule of each detailed component of other operating costs and expenses that are applicable to sales and revenues, but not included in the cost of sales in the Income Statement.Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 03
-Paragraph 3
-Article 5
falsefalse12Other Operating ExpensesUnKnownUnKnownUnKnownUnKnownfalsetrueXML
35
R15.xml
IDEA: Business Combinations
2.2.0.25falsefalse10801 - Disclosure - Business Combinationstruefalsefalse1falsefalseUSDfalsefalse1/1/2010 - 12/31/2010
USD ($)
USD ($) / shares
$Duration_1_1_2010_To_12_31_2010http://www.sec.gov/CIK0000019584duration2010-01-01T00:00:002010-12-31T00:00:00Unit1Standardhttp://www.xbrl.org/2003/iso4217USDiso42170Unit13Dividehttp://www.xbrl.org/2003/iso4217USDiso4217http://www.xbrl.org/2003/instancesharesxbrli0Unit12Standardhttp://www.xbrl.org/2003/instancesharesxbrli0USDUSD$2true0us-gaap_BusinessAcquisitionPurchasePriceAllocationAbstractus-gaaptruenadurationNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00falsefalsefalsefalsefalseOtherxbrli:stringItem
TypestringNo definition available.falsefalse3false0us-gaap_BusinessCombinationDisclosureTextBlockus-gaaptruenadurationNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalseverboselabel
1falsefalsefalse00<div> <div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 6pt; font-size: 10pt;" align="left"><b>8. Business Combinations</b> </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> During 2010, we completed four business combinations within the Roto-Rooter segment for $9.5 million in cash to increase our market penetration in Kansas City, Missouri, St. Louis, Missouri, Jefferson City, Missouri and Spokane Washington. We made no acquisitions within the VITAS segment during 2010. The purchase price of these acquisitions was allocated as follows (in thousands): </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="88%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Working capital</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">268</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Identifiable intangible assets</div></td>
<td> </td>
<td> </td>
<td align="right">589</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Goodwill</div></td>
<td> </td>
<td> </td>
<td align="right">8,225</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Other assets and liabilities — net</div></td>
<td> </td>
<td> </td>
<td align="right">387</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td align="left">$</td>
<td align="right">9,469</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> During 2009, we completed two business combinations within the Roto-Rooter segment for $1.9 million in cash to increase our market penetration in Detroit, Michigan and Grand Rapids, Michigan. We made no acquisitions within the VITAS segment during 2009. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> During 2008, we completed four business combinations within the Roto-Rooter segment for $11.2 million in cash to increase our market penetration in Colorado Springs, Colorado; Dayton, Ohio; Eugene, Oregon; and Topeka, Kansas. We made no acquisitions within the VITAS segment during 2008. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> The unaudited pro forma results of operations, assuming purchase business combinations completed in 2010 and 2009 were completed on January 1, 2009, do not materially impact the accompanying consolidated financial statements. The results of operations of each of the above business combinations are included in our results of operations from the date of the respective acquisition. </div></div> </div>8. Business Combinations
During 2010, we completed four business combinations within the Roto-Rooter segment forfalsefalsefalsefalsefalseOtherus-types:textBlockItemTypestringDescription of a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. This element may be used as a single block of text to encapsulate the entire disclosure (including data and tables) regarding business combinations, including leverage buyout transactions (as applicable).Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 141
-Paragraph 51, 52
Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Emerging Issues Task Force (EITF)
-Number 88-16
Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 141R
-Paragraph 67-73
Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 141R
-Paragraph F4
-Subparagraph e
-Appendix F
falsefalse12Business CombinationsUnKnownUnKnownUnKnownUnKnownfalsetrueXML
36
R24.xml
IDEA: Financial Instruments
2.2.0.25falsefalse11701 - Disclosure - Financial Instrumentstruefalsefalse1falsefalseUSDfalsefalse1/1/2010 - 12/31/2010
USD ($)
USD ($) / shares
$Duration_1_1_2010_To_12_31_2010http://www.sec.gov/CIK0000019584duration2010-01-01T00:00:002010-12-31T00:00:00Unit1Standardhttp://www.xbrl.org/2003/iso4217USDiso42170Unit13Dividehttp://www.xbrl.org/2003/iso4217USDiso4217http://www.xbrl.org/2003/instancesharesxbrli0Unit12Standardhttp://www.xbrl.org/2003/instancesharesxbrli0USDUSD$2true0che_FinancialInstrumentsAbstractchefalsenadurationFinancial Instrumentsfalsefalsefalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00falsefalsefalsefalsefalseOtherxbrli:stringItemTypestringFinancial Instrumentsfalsefalse3false0us-gaap_FairValueDisclosuresTextBlockus-gaaptruenadurationNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalseterselabel1falsefalsefalse00<div> <div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 12pt; font-size: 10pt;" align="left"><b>17. Financial Instruments</b> </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> FASB's authoritative guidance on fair value measurements defines a hierarchy which prioritizes the inputs in fair value measurements. Level 1 measurements are measurements using quoted prices in active markets for identical assets or liabilities. Level 2 measurements use significant other observable inputs. Level 3 measurements are measurements using significant unobservable inputs which require a company to develop its own assumptions. In recording the fair value of assets and liabilities, companies must use the most reliable measurement available. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> The following shows the carrying value, fair value and the hierarchy for our financial instruments as of December 31, 2010 (in thousands): </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="52%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="11" nowrap="nowrap" align="center">Fair Value Measure</td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center">Quoted Prices in</td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center"> </td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center">Active Markets for</td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center">Significant Other</td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center">Significant</td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center">Identical Assets</td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center">Observable Inputs</td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center">Unobservable Inputs</td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="3" nowrap="nowrap" align="center">Carrying Value</td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="3" nowrap="nowrap" align="center">(Level 1)</td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="3" nowrap="nowrap" align="center">(Level 2)</td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="3" nowrap="nowrap" align="center">(Level 3)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Mutual fund investments of deferred compensation plans held in trust</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">28,304</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">28,304</td>
<td> </td>
<td> </td>
<td align="right">$ </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="right">$ </td>
<td align="right">—</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Long-term debt</div></td>
<td> </td>
<td> </td>
<td align="right">159,208</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">189,065</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> For cash and cash equivalents, accounts receivable and accounts payable, the carrying amount is a reasonable estimate of fair value because of the liquidity and short-term nature of these instruments.</div></div> </div>17. Financial Instruments
FASB's authoritative guidance on fair value measurements defines a hierarchy which prioritizes thefalsefalsefalsefalsefalseOtherus-types:textBlockItemTypestringThis item represents the complete disclosure regarding the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments, assets, and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together w
ith their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the Company is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risk is are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for it
ems presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15B
-Subparagraph a, b
Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 3, 10, 14, 15
Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 133
-Paragraph 44A, 44B
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-Name Statement of Financial Accounting Standard (FAS)
-Number 157
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-Number 107
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-Number 107
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-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 159
-Paragraph 17-22, 27, 28
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37
R20.xml
IDEA: Properties and Equipment
2.2.0.25falsefalse11301 - Disclosure - Properties and Equipmenttruefalsefalse1falsefalseUSDfalsefalse1/1/2010 - 12/31/2010
USD ($)
USD ($) / shares
$Duration_1_1_2010_To_12_31_2010http://www.sec.gov/CIK0000019584duration2010-01-01T00:00:002010-12-31T00:00:00Unit1Standardhttp://www.xbrl.org/2003/iso4217USDiso42170Unit13Dividehttp://www.xbrl.org/2003/iso4217USDiso4217http://www.xbrl.org/2003/instancesharesxbrli0Unit12Standardhttp://www.xbrl.org/2003/instancesharesxbrli0USDUSD$2true0us-gaap_PropertyPlantAndEquipmentAbstractus-gaaptruenadurationNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00falsefalsefalsefalsefalseOtherxbrli:stringItemTypestringNo definition available.falsefalse3false0us-gaap_PropertyPlantAndEquipmentTextBlockus-gaaptruenadurationNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalseterselabel1falsefalsefalse00<div> <div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 12pt; font-size: 10pt;" align="left"><b>13. Properties and Equipment</b> </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> A summary of properties and equipment follows (in thousands): </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="6" nowrap="nowrap" align="center">December 31,</td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2010</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">2009</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Land</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>1,360</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,360</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Buildings</div></td>
<td> </td>
<td> </td>
<td align="right"><b>32,788</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">29,699</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Transportation equipment</div></td>
<td> </td>
<td> </td>
<td align="right"><b>18,837</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">17,318</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Machinery and equipment</div></td>
<td> </td>
<td> </td>
<td align="right"><b>58,706</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">53,017</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Computer software</div></td>
<td> </td>
<td> </td>
<td align="right"><b>47,203</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">26,147</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Furniture and fixtures</div></td>
<td> </td>
<td> </td>
<td align="right"><b>51,277</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">45,133</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Projects under development</div></td>
<td> </td>
<td> </td>
<td align="right"><b>1,817</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">17,865</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total properties and equipment</div></td>
<td> </td>
<td> </td>
<td align="right"><b>211,988</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">190,539</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Less accumulated depreciation</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(132,696</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(115,181</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Net properties and equipment</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>79,292</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">75,358</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> The net book value of computer software at December 31, 2010 and 2009, was $18.9 million and $9.1 million, respectively. Depreciation expense for computer software was $5.9 million, $4.2 million and $4.3 million for the years ended December 31, 2010, 2009 and 2008, respectively. </div></div> </div>13. Properties and Equipment
A summary of properties and equipment follows (in thousands):falsefalsefalsefalsefalseOtherus-types:textBlockItemTypestringDisclosure of long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, building and production equipment.Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Principles Board Opinion (APB)
-Number 12
-Paragraph 5
Reference 2: http://www.xbrl.org/2003/role/presentationRef
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-Name Regulation S-X (SX)
-Number 210
-Section 02
-Paragraph 13
-Subparagraph b
-Article 5
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38
R4.xml
IDEA: CONSOLIDATED BALANCE SHEET (Parenthetical)
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USD ($)
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-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 02
-Paragraph 4
-Article 5
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ryxbrli:monetaryItemTypemonetaryThe accumulated amount of amortization of a major finite-lived intangible asset class. A major class is composed of intangible assets that can be grouped together because they are similar, either by their nature or by their use in the operations of a company.Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 142
-Paragraph 45
-Subparagraph a(1)
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-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 02
-Paragraph 30
-Article 5
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decimalFace amount or stated value of common stock per share; generally not indicative of the fair market value per share.Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 129
-Paragraph 4
Reference 2: http://www.xbrl.org/2003/role/presentationRef
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-Name Regulation S-X (SX)
-Number 210
-Section 02
-Paragraph 30
-Article 5
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-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 02
-Paragraph 30
-Article 5
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-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
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39
R27.xml
IDEA: Related Party Transactions
2.2.0.25falsefalse12001 - Disclosure - Related Party Transactionstruefalsefalse1falsefalseUSDfalsefalse1/1/2010 - 12/31/2010
USD ($)
USD ($) / shares
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<div style="margin-top: 12pt; font-size: 10pt;" align="left"><b>20. Related Party Transactions</b> </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> VITAS has two pharmacy services agreements ("Agreements") with Omnicare, Inc. and its subsidiaries ("OCR") whereby OCR provides specified pharmacy services for VITAS and its hospice patients in geographical areas served by both VITAS and OCR. The Agreements renew automatically for one-year terms. Either party may cancel the Agreements at the end of any term by giving 90 days prior written notice. VITAS made purchases from OCR of $36.1 million, $33.1 million and $32.9 million for the years ended December 31, 2010, 2009 and 2008, respectively. VITAS' accounts payable to OCR and its subsidiaries are not material at December 31, 2010 and 2009. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Mr. Joel F. Gemunder retired as President and Chief Executive Officer of OCR during the third quarter of 2010 and is a director of the Company. Ms. Andrea Lindell is a director of both OCR and the Company. Mr. Kevin J. McNamara, President, Chief Executive Officer and a director of the Company, is a director emeritus of OCR. We believe that the terms of these agreements are no less favorable to VITAS than we could negotiate with an unrelated party. </div></div> </div>20. Related Party Transactions
VITAS has two pharmacy services agreements ("Agreements") with Omnicare, Inc. and itsfalsefalsefalsefalsefalseOtherus-types:textBlockItemTypestringThis element may be used for the entire related party transactions disclosure as a single block of text. Disclosure may include: the nature of the relationship(s), a description of the transactions, the amount of the transactions, the effects of any change in the method of establishing the terms of the transaction from the previous period, stated interest rate, expiration date, terms and manner of settlemen
t per the agreement with the related party, and amounts due to or from related parties. If the entity and one or more other entities are under common ownership or management control and this control affects the operating results or financial position, disclosure includes the nature of the control relationship even if there are no transactions between the entities. Disclosure may also include the aggregate amount of current and deferred tax expense for each statement of earnings presented where the entity is a member of a group that files a consolidated tax return, the amount of any tax related balances due to or from affiliates as of the date of each statement of financial position presented, the principal provisions of the method by which the consolidated amount of current and deferred tax expense is allocated to the members of the group and the nature and effect of any changes in that method. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) su
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-Name Regulation S-X (SX)
-Number 210
-Section 04
-Paragraph b
-Article 3A
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-Number 210
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-Name Statement of Financial Accounting Standard (FAS)
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40
R33.xml
IDEA: Valuation and Qualifying Accounts
2.2.0.25falsefalse12601 - Disclosure - Valuation and Qualifying Accountstruefalsefalse1falsefalseUSDfalsefalse1/1/2010 - 12/31/2010
USD ($)
USD ($) / shares
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<div style="margin-top: 18pt; font-size: 10pt;" align="center"><b>CHEMED CORPORATION AND SUBSIDIARY COMPANIES<br />VALUATION AND QUALIFYING ACCOUNTS<br />(IN THOUSANDS)<br />DR/(CR)</b> </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="40%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="6" nowrap="nowrap" align="center"><b>ADDITIONS</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"> </td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>(CHARGED)</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"> </td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>CREDITED</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>(CHARGED)</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"> </td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>BALANCE AT</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>TO COSTS</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>CREDITED</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>BALANCE</b></td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>BEGINNING</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>AND</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>TO OTHER</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>DEDUCTIONS</b></td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>AT END</b></td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="left"><b>DESCRIPTION</b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>OF PERIOD</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>EXPENSES</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>ACCOUNTS</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>(a)</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>OF PERIOD</b></td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Allowances for doubtful accounts (b)</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">For the year 2010</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">(12,595</td>
<td>)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(9,118</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(472</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">8,853</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(13,332</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">For the year 2009</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">(10,320</td>
<td>)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(10,861</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(656</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">9,242</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(12,595</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">For the year 2008</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(9,746</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(9,870</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">13</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">9,283</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(10,320</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Allowances for doubtful accounts — notes receivable (c)</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">For the year 2010</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">(408</td>
<td>)</td>
<td> </td>
<td align="left">$</td>
<td align="right">40</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(368</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">For the year 2009</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">(482</td>
<td>)</td>
<td> </td>
<td align="left">$</td>
<td align="right">28</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">44</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(408</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">For the year 2008</div></td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(529</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">51</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(13</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">9</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(482</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<div align="left">
<div style="margin-top: 16pt; width: 18%; font-size: 3pt; border-top: #000000 1px solid;"> </div></div>
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr><td width="3%"> </td>
<td width="1%"> </td>
<td width="96%"> </td></tr>
<tr valign="top"><td nowrap="nowrap" align="left">(a)</td>
<td> </td>
<td>With respect to allowances for doubtful accounts, deductions include accounts considered uncollectible or written off, payments, companies divested, etc.</td></tr>
<tr style="font-size: 3pt;"><td> </td></tr>
<tr valign="top"><td nowrap="nowrap" align="left">(b)</td>
<td> </td>
<td>Classified in consolidated balance sheet as a reduction of accounts receivable.</td></tr>
<tr style="font-size: 3pt;"><td> </td></tr>
<tr valign="top"><td nowrap="nowrap" align="left">(c)</td>
<td> </td>
<td>Classified in consolidated balance sheet as a reduction of other assets.</td></tr></table></div> </div>CHEMED CORPORATION AND SUBSIDIARY COMPANIESVALUATION AND QUALIFYING ACCOUNTS(IN THOUSANDS)DR/(CR)falsefalsefalsefalsefalseOtherus-types:textBlockItemTypestringAn element designated to encapsulate the entire schedule of any allowance and reserve accounts (their beginning and ending balances, as well as a reconciliation by type of activity during the period). Alternatively, disclosure of the required information may be with
in the footnotes to the financial statements or a supplemental schedule to the financial statements.Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 09
-Article 12
falsefalse12Valuation and Qualifying AccountsUnKnownUnKnownUnKnownUnKnownfalsetrueXML
41
R16.xml
IDEA: Discontinued Operations
2.2.0.25falsefalse10901 - Disclosure - Discontinued Operationstruefalsefalse1falsefalseUSDfalsefalse1/1/2010 - 12/31/2010
USD ($)
USD ($) / shares
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<div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 6pt; font-size: 10pt;" align="left"><b>9. Discontinued Operations</b> </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Discontinued operations comprise (in thousands, except per share amounts): </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="64%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="10" nowrap="nowrap" align="center">For the Years Ended December 31,</td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2010</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">2009</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">2008</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Adjustment to accruals of operations discontinued in prior years:</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Casualty insurance costs</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(400</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(1,719</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Loss before income taxes</div></td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(400</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,719</td>
<td nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">All other income taxes</div></td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">147</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">631</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Total adjustments</div></td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(253</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,088</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 60px;">Total discontinued operations</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(253</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(1,088</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Earnings/(loss) per share</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.01</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.05</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Diluted earnings/(loss) per share</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.02</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">0.05</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> At December 31, 2010 and 2009, the accrual for our estimated liability for potential environmental cleanup and related costs arising from the sale of DuBois amounted to $1.7 million. Of the 2010 balance, $826,000 is included in other current liabilities and $901,000 is included in other liabilities (long-term). We are contingently liable for additional DuBois-related environmental cleanup and related costs up to a maximum of $14.9 million. On the basis of a continuing evaluation of the potential liability, we believe it is not probable this additional liability will be paid. Accordingly, no provision for this contingent liability has been recorded. The potential liability is not insured, and the recorded liability does not assume the recovery of insurance proceeds. Also, the environmental liability has not been discounted because it is not possible to reliably
project the timing of payments. We believe that any adjustments to our recorded liability will not materially adversely affect our financial position, results of operations or cash flows. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> At December 31, 2010, other current liabilities include accruals of $1.0 million and other liabilities (long-term) include accruals of $1.1 million for costs related to discontinued operations. The estimated timing of payments of these liabilities follows (in thousands): </div></div>
<div style="font-family: 'Times New Roman',Times,serif;">
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="88%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">2011</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1,043</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">2012</div></td>
<td> </td>
<td> </td>
<td align="right">300</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Thereafter</div></td>
<td> </td>
<td> </td>
<td align="right">831</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td align="left">$</td>
<td align="right">2,174</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td></tr></table></div></div> </div>9. Discontinued Operations
Discontinued operations comprise (in thousands, except per share amounts):falsefalsefalsefalsefalseOtherus-types:textBlockItemTypestringText block for income statement, balance sheet and additional disclosures relating to disposal groups, including those classified as components of the entity (discontinued operations). May include the facts and circumstances leading to the expected or completed disposal or to changes in the plan of sale, manner and timing of disposal, the gain or loss recognized in the income statement and the income statement caption
that includes that gain or loss, amounts of revenues and pretax profit or loss reported in discontinued operations, the classification and carrying value of the assets and liabilities comprising the disposal group, and the segment in which the disposal group was reported. Also includes the nature and amount of adjustments to amounts previously reported in discontinued operations such as resolution of contingencies arising from the disposal transaction or the operations of the component prior to disposal.Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 144
-Paragraph 43, 44, 45, 47, 48
falsefalse12Discontinued OperationsUnKnownUnKnownUnKnownUnKnownfalsetrueXML
42
R28.xml
IDEA: Capital Stock Transactions
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USD ($)
USD ($) / shares
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<div style="margin-top: 6pt; font-size: 10pt;" align="left"><b>21. Capital Stock Transactions</b> </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> For the year ended December 31, 2010, we repurchased 1.6 million shares at a weighted average cost per share of $63.14 under the April 2007 program. For the year ended December 31, 2009, we repurchased 15,900 shares at a weighted average cost per share of $46.65 under the April 2007 program. On December 27, 2010 our Board of Directors authorized an additional $70 million to the April 2007 stock repurchase program. On May 19, 2008 our Board of Directors authorized an additional $56 million to the April 2007 stock repurchase program. On April 26, 2007, our Board of Directors authorized a $150 million stock repurchase program. </div></div> </div>21. Capital Stock Transactions
For the year ended December 31, 2010, we repurchased 1.6 million shares at a weightedfalsefalsefalsefalsefalseOtherus-types:textBlockItemTypestringDisclosures related to accounts comprising shareholders' equity, including other comprehensive income. Includes: (1) balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings; (2) accumulated balance for each classification of other comprehensive income and total amount of comprehensive income; (3) amount and nature of changes in separate ac
counts, including the number of shares authorized and outstanding, number of shares issued upon exercise and conversion, and for other comprehensive income, the adjustments for reclassifications to net income; (4) rights and privileges of each class of stock authorized; (5) basis of treasury stock, if other than cost, and amounts paid and accounting treatment for treasury stock purchased significantly in excess of market; (6) dividends paid or payable per share and in the aggregate for each class of stock for each period presented; (7) dividend restrictions and accumulated preferred dividends in arrears (in aggregate and per share amount); (8) retained earnings appropriations or restrictions, such as dividend restrictions; (9) impact of change in accounting principle, initial adoption of new accounting principle and correction of an error in previously issued financial statements; (10) shares held in trust for Employee Stock Ownership Plan (ESOP); (11) deferred compensation related to issuance of capital sto
ck; (12) note received for issuance of stock; (13) unamortized discount on shares; (14) description, terms and number of warrants or rights outstanding; (15) shares under subscription and subscription receivables; effective date of new retained earnings after quasi-reorganization and deficit eliminated by quasi-reorganization and, for a period of at least ten years after the effective date, the point in time from which the new retained dates; and (16) retroactive effective of subsequent change in capital structure.Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 5
-Paragraph 15
Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 04
-Article 3
Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Paragraph d
-Article 4
Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 4
-Section C, E
Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Principles Board Opinion (APB)
-Number 12
-Paragraph 10
Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 02
-Paragraph 29, 30, 31
-Article 5
Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Research Bulletin (ARB)
-Number 43
-Chapter 1
-Section B
-Paragraph 7, 11A
Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 129
-Paragraph 2, 3, 4, 5, 6, 7, 8
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-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Article 4
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43
R9.xml
IDEA: Hospice Revenue Recognition
2.2.0.25falsefalse10201 - Disclosure - Hospice Revenue Recognitiontruefalsefalse1falsefalseUSDfalsefalse1/1/2010 - 12/31/2010
USD ($)
USD ($) / shares
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1falsefalsefalse00<div>
<div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 6pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td width="1%" nowrap="nowrap" align="left"><b>2.</b></td>
<td width="1%"> </td>
<td><b>Hospice Revenue Recognition</b></td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> VITAS recognizes revenue at the estimated realizable amount due from third-party payers, which are primarily Medicare and Medicaid. Payers may deny payment for services in whole or in part on the basis that such services are not eligible for coverage and do not qualify for reimbursement. We estimate denials each period and make adequate provision in the financial statements. The estimate of denials is based on historical trends and known circumstances and does not vary materially from period to period on an aggregate basis. Medicare billings are subject to certain limitations, as described below. </div></div>
<div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> The allowance for doubtful accounts for VITAS comprises the following (in thousands): </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="52%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Medicare</td>
<td style="border-bottom: #000000 1px solid;"> </td>
<td style="border-bottom: #000000 1px solid;"> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Medicaid</td>
<td style="border-bottom: #000000 1px solid;"> </td>
<td style="border-bottom: #000000 1px solid;"> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Other</td>
<td style="border-bottom: #000000 1px solid;"> </td>
<td style="border-bottom: #000000 1px solid;"> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Total</td>
<td style="border-bottom: #000000 1px solid;"> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Beginning Balance — January 1, 2009</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">5,255</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2,115</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,069</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">8,439</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Bad debt provision</div></td>
<td> </td>
<td> </td>
<td align="right">4,760</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3,014</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,819</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">9,593</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Contractual adjustments/(revenue reduction)</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">613</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">613</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Write-offs</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(3,440</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(2,446</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,821</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(7,707</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Ending Balance — December 31, 2009</b></div></td>
<td> </td>
<td align="left"><b> </b></td>
<td align="right"><b>6,575</b></td>
<td> </td>
<td> </td>
<td align="left"><b> </b></td>
<td align="right"><b>2,683</b></td>
<td> </td>
<td> </td>
<td align="left"><b> </b></td>
<td align="right"><b>1,680</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>10,938</b></td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Bad debt provision</b></div></td>
<td> </td>
<td> </td>
<td align="right"><b>2,991</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>3,051</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>1,857</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>7,899</b></td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Contractual adjustments/(revenue reduction)</b></div></td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>472</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>472</b></td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Write-offs</b></div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(2,263</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(2,653</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(2,592</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(7,508</b></td>
<td nowrap="nowrap"><b>)</b></td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Ending Balance — December 31, 2010</b></div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>7,303</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>3,081</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>1,417</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>11,801</b></td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> VITAS is subject to certain limitations on Medicare payments for services. Specifically, if the number of inpatient care days any hospice program provides to Medicare beneficiaries exceeds 20% of the total days of hospice care such program provided to all Medicare patients for an annual period beginning September 28, the days in excess of the 20% figure may be reimbursed only at the routine homecare rate. None of VITAS' hospice programs exceeded the payment limits on inpatient services in 2010, 2009 or 2008. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> VITAS is also subject to a Medicare annual per-beneficiary cap ("Medicare cap"). Compliance with the Medicare cap is measured by comparing the total Medicare payments received under a Medicare provider number with respect to services provided to all Medicare hospice care beneficiaries in the program or programs covered by that Medicare provider number between November 1 of each year and October 31 of the following year with the product of the per-beneficiary cap amount and the number of Medicare beneficiaries electing hospice care for the first time from that hospice program or programs from September 28 through September 27 of the following year. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> We actively monitor each of our hospice programs, by provider number, as to their specific admission, discharge rate and median length of stay data in an attempt to determine whether revenues are likely to exceed the annual per-beneficiary Medicare cap. Should we determine that revenues for a program are likely to exceed the Medicare cap based on projected trends, we attempt to institute corrective actions, which include changes to the patient mix and increased patient admissions. However, should we project our corrective action will not prevent that program from exceeding its Medicare cap, we estimate the amount of revenue recognized during the period that will require repayment to the Federal government under the Medicare cap and record the amount as a reduction to service revenue. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Our estimate of the Medicare cap liability is particularly sensitive to allocations made by our fiscal intermediary relative to patient transfers between hospices. We are allocated a percentage of the Medicare cap based on the days a patient spent in our care as compared to the total days a patient spent in all hospice care. The allocation for patient transfers cannot be determined until a patient dies. As the number of days a patient spends in hospice is based on a future event, this allocation process may take several years. Therefore, we use only first-time Medicare admissions in our estimate of the Medicare cap billing limitation. This method assumes that credit received for patients who transfer into our program will be offset by credit lost from patients who transfer out of our program. The amount we record is our best estimate of the liability as of the date of the finan
cial statements but could change as more patient information becomes available. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> During the year ended December 31, 2010, we reversed Medicare cap liability for amounts recorded in the fourth quarter of 2009 for two programs' projected 2010 measurement period liability. This reversal was partially offset by the Medicare cap liability for three programs' projected 2011 measurement period liability. For the year ended December 31, 2009, we recorded pretax charges in continuing operations for the estimated Medicare cap liability for two programs' projected liability through year end for the 2010 measurement period. The majority of the liability relates to one program which is VITAS' largest hospice. This amount was subsequently reversed during the 2010 fiscal year due to increased admission trends. Shown below is the Medicare cap liability activity for the years ended December 31, 2010 and 2009 (in thousands): </div></div>
;
<div style="font-family: 'Times New Roman',Times,serif;">
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="76%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">2010</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">2009</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Beginning Balance January 1,</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1,981</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">338</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Expense — 2011 measurement period</div></td>
<td> </td>
<td> </td>
<td align="right">1,110</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Expense/(reversal) — 2010 measurement period</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,720</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">1,783</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Reversal — 2009 measurement period</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(235</td>
<td nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Other retroactive billings</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">95</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Ending Balance December 31,</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1,371</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">1,981</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> The U.S. government revises hospice reimbursement rates on an annual basis using the Hospice Wage Index (HWI) and the Consumer Price Index plus a phase out of the Budget Neutrality Adjustment Factor (BNAF). The HWI is geographically adjusted to reflect local differences in wages. The BNAF is a portion of inflation calculated in prior years that is being eliminated or phased out over a seven year period. In August 2008, the U.S. government announced a 25% reduction in the BNAF for its fiscal 2009 (October 2008 through September 2009) pursuant to a three year phase-out of the BNAF. The February 2009 American Recovery and Reinvestment Act mandated a one year delay in the BNAF phase-out. As a result, included in the twelve months ended December 31, 2009, is $1.95 million of revenue for the retroactive price increase rel
ated to services provided by VITAS in the fourth quarter of 2008. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> In August 2009, the Centers for Medicare and Medicaid Services (CMS) revised the phase-out schedule of the BNAF. CMS reduced the increase in hospice reimbursement by 10% of the BNAF effective October 1, 2009. The remaining 90% of the BNAF will be phased out over the next six years by revising the October 1 reimbursement adjustment by 15% of the original BNAF inflation factor. Based upon this revised schedule, 100% of the BNAF will be eliminated on October 1, 2015. </div></div> </div>2.
Hospice Revenue Recognition
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-Name Statement of Financial Accounting Standard (FAS)
-Number 95
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-Name Statement of Financial Accounting Standard (FAS)
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lsefalse332000332falsefalsefalsefalsefalse2truefalsefalse-455000-455falsefalsefalsefalsefalse3truefalsefalse305000305falsefalsefalsefalsefalseMonetaryxbrli:monetaryItemTypemonetaryThe net change during the reporting period in the amount of outstanding money paid in advance for goods or services that bring economic benefits for future periods.Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 95
-Paragraph 28
falsefalse20false0us-gaap_IncreaseDecreaseInAccountsPayableus-gaaptruedebitdurationNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalselabel1truefalsefalse1381000013810falsefalsefalsefalsefalse2truefalsefalse-8109000-8109falsefalsefalsefalsefalse3truefalsefalse55850005585falsefalsefalsefalsefalseMonetaryxbrli:monetaryItemTypemonetaryThe net change during the reporting period in the aggregate amount of obligations due within one year (or one business cycle). This may include trade payables, amounts due to related parties, royalties payable, and other obligations.Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
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1truefalsefalse48250004825falsefalsefalsefalsefalse2truefalsefalse623000623falsefalsefalsefalsefalse<
Cell>3truefalsefalse-776000-776falsefalsefalsefalsefalseMonetaryxbrli:monetaryItemTypemonetaryThe net change during the period in the amount of cash payments due to taxing authorities for taxes that are based on the reporting entity's earnings.Reference 1: http://www.xbrl.org/2003/role/presentationRef
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-Name Statement of Financial Accounting Standard (FAS)
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/IsNumeric>falsefalse54800005480falsefalsefalsefalsefalseMonetaryxbrli:monetaryItemTypemonetaryThe net change during the reporting period in other operating assets not otherwise defined in the taxonomy.Reference 1: http://www.xbrl.org/2003/role/presentationRef
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-Name Statement of Financial Accounting Standard (FAS)
-Number 95
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DisplayZeroAsNone>false59990005999falsefalsefalsefalsefalse2truefalsefalse272000272falsefalsefalsefalsefalse3truefalse
IsRatio>false-6423000-6423falsefalsefalsefalsefalseMonetaryxbrli:monetaryItemTypemonetaryThe net change during the reporting period in other operating obligations not otherwise defined in the taxonomy.Reference 1: http://www.xbrl.org/2003/role/presentationRef
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-Name Statement of Financial Accounting Standard (FAS)
-Number 95
-Paragraph 28
falsefalse24false0us-gaap_ExcessTaxBenefitFromShareBasedCompensationOperatingActivitiesus-gaaptruecreditdurationNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsetruenegated1truefalsefalse-3357000-3357falsefalsefalsefalsefalse2truefalsefalse-1955000-1955falsefalsefalsefalsefalse3truefalsefalse-2422000-2422falsefalsefalsefalsefalseMonetaryxbrli:monetaryItemTypemonetaryReductions in the entity's income taxes that arise when compensation cost (from non-qualified share-based compensation) recognized on the entity's tax return exceeds compensation cost from share-based compensation recognized in financial statements. This element reduces net cash provided by operating activities.Reference 1: http://www.xbrl.org/2003/role/presentationRef
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se3truefalsefalse11950001195falsefalsefalsefalsefalseMonetaryxbrli:monetaryItemTypemonetaryTransactions that do not result in cash inflows or outflows in the period in which they occur, but affect net income and thus are removed when calculating net cash flow from operating activities using the indirect cash flow method. This element is used when there is not a more specific and appropriate
element.Reference 1: http://www.xbrl.org/2003/role/presentationRef
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-Number 95
-Paragraph 28
falsefalse26false0us-gaap_NetCashProvidedByUsedInOperatingActivitiesus-gaaptruenadurationNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalsetotallabel1truefalsefalse8601200086012falsefalsefalsefalsefalse2truefalsefalse160832000160832falsefalsefalsefalsefalse3truefalsefalse112083000112083falsefalsefalsefalsefalseMonetaryxbrli:monetaryItemTypemonetaryThe net cash from (used in) all of the entity's operating activities, including those of discontinued operations, of the reporting entity. Operating activities generally involve producing and delivering goods and providing services. Operating activity cash flows include transactions, adjustments, and changes in value that are not defined as investing or financing activ
ities.Reference 1: http://www.xbrl.org/2003/role/presentationRef
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-Name Statement of Financial Accounting Standard (FAS)
-Number 95
-Paragraph 28
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-Name Statement of Financial Accounting Standard (FAS)
-Number 95
-Paragraph 26
truefalse27true0us-gaap_NetCashProvidedByUsedInInvestingActivitiesAbstractus-gaaptruenadurationNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalse1falsefalse
IsRatio>false00falsefalsefalsefalsefalse2falsefalsefalse00falsefalsefalsefalsefalse3falsefalsefalse00falsefalsefalsefalsefalseOtherxbrli:stringItemTypestringNo definition available.falsefalse28false0us-gaap_PaymentsToAcquirePropertyPlantAndEquipmentus-gaaptruecredit<
/BalanceType>durationNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsetruenegated1truefalsefalse-25639000-25639falsefalsefalse<
/DisplayDateInUSFormat>falsefalse2truefalsefalse-21496000-21496falsefalsefalsefalsefalse3truefalsefalse-26094000-26094falsefalsefalsefalsefalseMonetaryxbrli:monetaryItemTypemonetaryThe cash outflow associated with the acquisition of long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale; includes cash outflows to pay for construction of self-constructed assets.Reference 1: http://www.xbrl.org/2003/role/presentationRef
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-Paragraph 15
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-Number 95
-Paragraph 17
-Subparagraph c
falsefalse29false0us-gaap_PaymentsToAcquireBusinessesNetOfCashAcquiredus-gaaptruecreditdurationNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsetruenegated1truefals
efalse-9469000-9469falsefalsefalsefalsefalse2truefalsefalse-1919000-1919falsefalsefalsefalsefalse3truefalsefalse-11200000-11200falsefalsefalsefalsefalseMonetaryxbrli:monetaryItemTypemonetaryThe cash outflow associated with the acquisition of a business, net of the cash acquired from the purchase.Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 95
-Paragraph 15, 17
falsefalse30false0us-gaap_ProceedsFromSaleOfPropertyPlantAndEquipmentus-gaaptruedebitdurationNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalselabel1
truefalsefalse290000290falsefalsefalsefalsefalse2truefalsefalse15770001577falsefalsefalsefalsefalse3truefalsefalse387000387falsefalsefalsefalsefalseMonetaryxbrli:monetaryItemTypemonetaryThe cash inflow from the sale of long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale.Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 95
-Paragraph 15
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-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 95
-Paragraph 16
-Subparagraph c
falsefalse31false0che_NetProceedsUsesFromSaleOfDiscontinuedOperationschefalsedebitdurationSources/(uses) related to settlement of disposal of discontinued operationsfalsefalsefalsefalsefalsefalsefalsefalsefalsefalseterselabel1truefalsefalse-156000-156falsefalsefalsefalsefalse2truefalsefalse-630000-630falsefalsefalsefalsefalse3truefalsefalse88240008824falsefalsefalsefalsefalseMonetaryxbrli:monetaryItemTypemonetarySources/(uses) related to settlement of disposal of discontinued operationsNo authoritative reference available.falsefalse
Row>32false0us-gaap_PaymentsForProceedsFromOtherInvestingActivitiesus-gaaptruecreditdurationNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsetruenegated1truefalsefalse-726000-726falsefalsefalsefalsefalse2truefalsefalse-374000-374falsefalsefalsefalsefalse3truefalsefalse-544000-544falsefalsefalsefalsefalseMonetaryxbrli:monetaryItemTypemonetaryThe net cash outflow (inflow) from other investing activities. This element is used when there is not a more specific and appropriate element in the taxonomy.Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 95
-Paragraph 15
falsefalse33false0us-gaap_NetCashProvidedByUsedInInvestingActivitiesus-gaaptruedebitdurationNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalsetotallabel1truefalsefalse-35700000-35700falsefalsefalsefalsefalse2truefalsefalse-22842000-22842falsefalsefalsefalsefalse3truefalsefalse-28627000-28627falsefalsefalsefalsefalseMonetaryxbrli:monetaryItemTypemonetaryThe net cash inflow (outflow) from investing activity.Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 95
-Paragraph 26
truefalse34true0us-gaap_NetCashProvidedByUsedInFinancingActivitiesAbstractus-gaaptruenadurationNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00falsefalsefalsefalsefalse2falsefalsefalse00falsefalsefalsefalsefalse3falsefalse<
DisplayZeroAsNone>false00falsefalsefalsefalsefalseOtherxbrli:stringItemTypestringNo definition available.falsefalse35false0us-gaap_PaymentsForRepurchaseOfEquityus-gaaptruecreditdurationNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsetruenegated1truefalsefalse-109330000-109330falsefalsefalsefalsefalse2truefalsefalse-4225000-4225falsefalsefalsefalsefalse3truefalsefalse-69788000-69788falsefalsefals
efalsefalseMonetaryxbrli:monetaryItemTypemonetaryThe cash outflow to reacquire common and preferred stock.Reference 1: http://www.xbrl.org/2003/role/presentationRef
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-Name Statement of Financial Accounting Standard (FAS)
-Number 95
-Paragraph 18
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-Name Statement of Financial Accounting Standard (FAS)
-Number 95
-Paragraph 20
-Subparagraph a
falsefalse36false0us-gaap_PaymentsOfDividendsCommonStockus-gaaptruecreditdurationNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsetruenegated1truef
alsefalse-11881000-11881falsefalsefalsefalsefalse2truefalsefalse-8157000-8157falsefalsefalsefalsefalse3truefalsefalse-5543000-5543falsefalsefalsefalsefalseMonetaryxbrli:monetaryItemTypemonetaryThe cash outflow from the distribution of an entity's earnings in the form of dividends to common shareholders.Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 95
-Paragraph 18
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-Number 95
-Paragraph 20
-Subparagraph a
falsefalse37false0us-gaap_ProceedsFromStockOptionsExercisedus-gaaptruedebitdurationNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalseterselabel1truefalsefalse53270005327falsefalsefalsefalsefalse2truefalsefalse545000545falsefalsefalsefalsefalse3truefalsefalse291000291falsefalsefalsefalsefalseMonetaryxbrli:monetaryItemTypemonetaryThe cash inflow associated with the amount received from holders exercising their stock options.Reference 1: http://www.xbrl.org/2003/role/presentationRef
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-Name Statement of Financial Accounting Standard (FAS)
-Number 95
-Paragraph 18
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-Name Statement of Financial Accounting Standard (FAS)
-Number 123R
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-Subparagraph i
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-Name Statement of Financial Accounting Standard (FAS)
-Number 95
-Paragraph 19
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falsefalse38false0us-gaap_ExcessTaxBenefitFromShareBasedCompensationFinancingActivitiesus-gaaptruedebitdurationNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalseterselabel1truefalsefalse33570003357falsefalsefalsefalsefalse2truefalsefalse19550001955falsefalsefalsefalsefalse3truefalsefalse24220002422falsefalsefalsefalsefalseMonetaryxbrli:monetaryItemTypemonetaryReductions in the entity's income taxes that arise when compensation cost (from non-qualified share-based compensation) recognized on the entity's tax return exceeds compensation cost from share-based compensation recognized in financial statements. This element represents the cash inflow reported in the enterprise's finan
cing activities.Reference 1: http://www.xbrl.org/2003/role/presentationRef
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-Name Statement of Financial Accounting Standard (FAS)
-Number 123R
-Paragraph A240
-Subparagraph i
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-Publisher FASB
-Name Emerging Issues Task Force (EITF)
-Number 00-15
-Paragraph 3
falsefalse39false0us-gaap_IncreaseDecreaseInOutstandingChecksFinancingActivitiesus-gaaptruedebitdurationNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalseterselabel1<
IsNumeric>truefalsefalse-581000-581falsefalsefalsefalsefalse2truefalsefalse28910002891falsefalsefalsefalsefalse3truefalsefalse-856000-856falsefalsefalsefalsefalseMonetaryxbrli:monetaryItemTypemonetaryThe change in cash during the period due to the net increase or decrease in outstanding checks, the liability that represents checks that have been issued but that have not cleared. The entity may classify these cash flows as financing or operating activities.Reference 1: http://www.xbrl.org/2
003/role/presentationRef
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-Number 95
-Paragraph 18, 19, 20
falsefalse40false0us-gaap_RepaymentsOfLongTermDebtus-gaaptruecreditdurationNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsetruenegated1falsefalsefalse00 falsefalsefalsefalsefalse2truefalsefalse-14669000-14669falsefalsefalsefalsefalse3truefalsefalse-18713000-18713falsefalsefalsefalsefalseMonetaryxbrli:monetaryItemTypemonetaryThe cash outflow for debt initially having maturity due after one year or beyond the normal operating cycle, if longer.Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 95
-Paragraph 18
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-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 95
-Paragraph 20
-Subparagraph b
falsefalse41false0che_NetIncreaseDecreaseOfRevolvingLineOfCreditchefalsedebitdurationNet change in revolving line of credit.falsefalsefalsefalsefalsefalsefalsefalsefalsefalseterselabel1fals
efalsefalse00 falsefalsefalsefalsefalse2truefalsefalse-8200000-8200falsefalsefalsefalsefalse3truefalsefalse82000008200falsefalsefalsefalsefalseMonetaryxbrli:monetaryItemTypemonetaryNet change in revolving line of credit.No authoritative reference available.falsefalse42false0us-gaap_ProceedsFromPaymentsForOtherFinancingActivitiesus-gaaptruedebitdurationNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalseterselabel1truefalsefalse297000297falsefalsefalsefalsefalse2truefalsefalse658000658falsefalsefalsefalsefalse3truefalsefalse-829000-829falsefalsefalsefalsefalseMonetaryxbrli:monetaryItemTypemonetaryThe net cash inflow (outflow) from other financing activities. This element is used when there is not a more specific and appropriate element in the taxonomy.Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 95
-Paragraph 18, 19, 20
falsefalse43false0us-gaap_NetCashProvidedByUsedInFinancingActivitiesus-gaaptruedebitdurationNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalsetotallabel1truefal
sefalse-112811000-112811falsefalsefalsefalsefalse2truefalsefalse-29202000-29202falsefalsefalsefalsefalse3truefalsefalse-84816000-84816falsefalsefalsefalsefalseMonetaryxbrli:monetaryItemTypemonetaryThe net cash inflow (outflow) from financing activity for the period.Reference 1: http://www.xbrl.org/2003/role/presentationRef
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-Name Statement of Financial Accounting Standard (FAS)
-Number 95
-Paragraph 26
truefalse44false0us-gaap_CashAndCashEquivalentsPeriodIncreaseDecreaseus-gaaptruenadurationNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalsetotallabel1truefalsefalse-62499000-62499falsefalsefalsefalsefalse2truefalsefalse108788000108788falsefalsefalsefalsefalse3truefalsefalse-1360000-1360falsefalsefalsefalsefalseMonetaryxbrli:monetaryItemTypemonetaryThe net change between the beginning and ending balance of cash and cash equivalents.Reference 1: http://www.xbrl.org/2003/role/presentationRef
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-Number 95
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truefalse45false0us-gaap_CashAndCashEquivalentsAtCarryingValueus-gaaptruedebitinstantNo definition available.falsefalsefalsefalsefalsefalsefalsetruefalsefalseperiodstartlabel1tr
uefalsefalse112416000112416falsefalsefalsefalsefalse2truefalsefalse36280003628falsefalsefalsefalsefalse3truefalsefalse49880004988falsefalsefalsefalsefalseMonetaryxbrli:monetaryItemTypemonetaryIncludes currency on hand as well as demand deposits with banks or financial institutions. It also includes other kinds of accounts that have the general characteristics of demand deposits in that the Entity may deposit additional funds at any time and also effectively may withdraw funds at any time without prior notice or penalty. Cash eq
uivalents, excluding items classified as marketable securities, include short-term, highly liquid investments that are both readily convertible to known amounts of cash, and so near their maturity that they present minimal risk of changes in value because of changes in interest rates. Generally, only investments with original maturities of three months or less qualify under that definition. Original maturity means original maturity to the entity holding the investment. For example, both a three-month US Treasury bill and a three-year Treasury note purchased three months from maturity qualify as cash equivalents. However, a Treasury note purchased three years ago does not become a cash equivalent when its remaining maturity is three months. Compensating balance arrangements that do not legally restrict the withdrawal or usage of cash amounts may be reported as Cash and Cash Equivalents, while legally restricted deposits held as compensating balances against borrowing arrangements, contracts entered into with
others, or company statements of intention with regard to particular deposits should not be reported as cash and cash equivalents.Reference 1: http://www.xbrl.org/2003/role/presentationRef
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-Number 95
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-Name Statement of Financial Accounting Standard (FAS)
-Number 95
-Paragraph 7
-Footnote 1
Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 02
-Paragraph 1
-Article 5
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/IsNumeric>falsefalse4991700049917falsetruefalsefalsefalse2truefalsefalse112416000112416falsetruefalsefalsefalse3<
IsNumeric>truefalsefalse36280003628falsetruefalsefalsefalseMonetaryxbrli:monetaryItemTypemonetaryIncludes currency on hand as well as demand deposits with banks or financial institutions. It also includes other kinds of accounts that have the general characteristics of demand deposits in that the Entity may deposit additional funds at any time and also effectively may withdraw funds at any time without prior notice or penalty. Cash equiva
lents, excluding items classified as marketable securities, include short-term, highly liquid investments that are both readily convertible to known amounts of cash, and so near their maturity that they present minimal risk of changes in value because of changes in interest rates. Generally, only investments with original maturities of three months or less qualify under that definition. Original maturity means original maturity to the entity holding the investment. For example, both a three-month US Treasury bill and a three-year Treasury note purchased three months from maturity qualify as cash equivalents. However, a Treasury note purchased three years ago does not become a cash equivalent when its remaining maturity is three months. Compensating balance arrangements that do not legally restrict the withdrawal or usage of cash amounts may be reported as Cash and Cash Equivalents, while legally restricted deposits held as compensating balances against borrowing arrangements, contracts entered into with othe
rs, or company statements of intention with regard to particular deposits should not be reported as cash and cash equivalents.Reference 1: http://www.xbrl.org/2003/role/presentationRef
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-Name Statement of Financial Accounting Standard (FAS)
-Number 95
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-Name Statement of Financial Accounting Standard (FAS)
-Number 95
-Paragraph 8, 9
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-Name Statement of Financial Accounting Standard (FAS)
-Number 95
-Paragraph 7
-Footnote 1
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-Name Regulation S-X (SX)
-Number 210
-Section 02
-Paragraph 1
-Article 5
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46
R23.xml
IDEA: Earnings Per Share
2.2.0.25falsefalse11601 - Disclosure - Earnings Per Sharetruefalsefalse1falsefalseUSDfalsefalse1/1/2010 - 12/31/2010
USD ($)
USD ($) / shares
$Duration_1_1_2010_To_12_31_2010http://www.sec.gov/CIK0000019584duration2010-01-01T00:00:002010-12-31T00:00:00Unit1Standardhttp://www.xbrl.org/2003/iso4217USDiso42170Unit13Dividehttp://www.xbrl.org/2003/iso4217USDiso4217http://www.xbrl.org/2003/instancesharesxbrli0Unit12Standardhttp://www.xbrl.org/2003/instancesharesxbrli0USDUSD$2true0us-gaap_EarningsPerShareAbstractus-gaaptruenadurationNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00falsefalsefalsefalsefalseOtherxbrli:stringItemTypestringNo definition available.falsefalse3false0us-gaap_EarningsPerShareTextBlockus-gaaptruenadurationNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalseterselabel1falsefalsefalse00<div>
<div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 6pt;">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr style="background: none transparent scroll repeat 0% 0%; color: #000000; font-size: 10pt;" valign="top"><td width="1%" nowrap="nowrap" align="left"><b>16.</b></td>
<td width="1%"> </td>
<td><b>Earnings Per Share</b></td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> The computation of earnings per share follows (in thousands, except per share data): </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="28%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="10" nowrap="nowrap" align="center"><b>Income from Continuing Operations</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="10" nowrap="nowrap" align="center"><b>Net Income</b></td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td nowrap="nowrap" align="left"><b>For the Years Ended</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Earnings per</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center"><b>Earnings</b></td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="left"><b>December 31,</b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Income</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Shares</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Share</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Income</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>Shares</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>per Share</b></td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>2010</b></div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;"><b>Earnings</b></div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>81,831</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>22,587</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>3.62</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>81,831</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>22,587</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>3.62</b></td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;"><b>Dilutive stock options</b></div></td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>348</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>348</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;"><b>Nonvested stock awards</b></div></td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>96</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>96</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;"><b>Diluted earnings</b></div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>81,831</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>23,031</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>3.55</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>81,831</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>23,031</b></td>
<td> </td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>3.55</b></td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">2009</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Earnings</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">74,037</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">22,451</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3.30</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">73,784</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">22,451</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3.29</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Dilutive stock options</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">229</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">229</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Nonvested stock awards</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">62</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">62</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Diluted earnings</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">74,037</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">22,742</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3.26</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">73,784</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">22,742</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">3.24</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">2008</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Earnings</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">68,369</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">23,058</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2.97</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">67,281</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">23,058</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2.92</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Dilutive stock options</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">287</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">287</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Nonvested stock awards</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">29</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">29</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Diluted earnings</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">68,369</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">23,374</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2.93</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">67,281</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">23,374</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">2.88</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> During 2010, 970,900 stock options were excluded from the computation of diluted earnings per share as their exercise prices were greater than the average market price during most of the year. During 2009, 819,917 stock options were also excluded. During 2008, 827,917 stock options were also excluded. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Diluted earnings per share may be impacted in future periods as the result of the issuance of our $200 million Notes and related purchased call options and sold warrants. Per FASB's authoritative guidance on the effect of contingently convertible instruments on diluted earnings per share and convertible bonds with issuer option to settle for cash upon conversion, we will not include any shares related to the Notes in our calculation of diluted earnings per share until our average stock price for a quarter exceeds the current conversion price. We would then include in our diluted earnings per share calculation those shares issuable using the treasury stock method. The amount of shares issuable is based upon the amount by which the average stock price for the quarter exceeds the conversion price. The purchased call option does not impact the calculation of diluted earnin
gs per share, as it is always anti-dilutive. The sold warrants become dilutive when our average stock price for a quarter exceeds the strike price of the warrant. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> The following table provides examples of how changes in our stock price impact the number of shares that would be included in our diluted earnings per share calculation. It also shows the impact on the number of shares issuable upon conversion of the Notes and settlement of the purchased call options and sold warrants: </div></div>
<div style="font-family: 'Times New Roman',Times,serif;">
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center"><b>Shares</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center"><b>Total Treasury</b></td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center"><b>Shares Due</b></td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center"><b>Incremental</b></td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center"><b>Underlying 1.875%</b></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center"><b>Method</b></td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center"><b>to the Company</b></td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center"><b>Shares Issued by</b></td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td colspan="3" nowrap="nowrap" align="center"><b>Share</b></td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center"><b>Convertible</b></td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center"><b>Warrant</b></td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center"><b>Incremental</b></td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center"><b>under Notes</b></td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center"><b>the Company</b></td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td style="border-bottom: #000000 1px solid;" colspan="3" nowrap="nowrap" align="center"><b>Price</b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="3" nowrap="nowrap" align="center"><b>Notes</b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="3" nowrap="nowrap" align="center"><b>Shares</b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="3" nowrap="nowrap" align="center"><b>Shares (a)</b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="3" nowrap="nowrap" align="center"><b>Hedges</b></td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="3" nowrap="nowrap" align="center"><b>upon Conversion (b)</b></td></tr>
<tr style="background: #cceeff;" valign="bottom"><td valign="top" nowrap="nowrap" align="right">$</td>
<td valign="top" align="right">80.73</td>
<td valign="top" nowrap="nowrap"> </td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">18,136</td>
<td valign="top" nowrap="nowrap"> </td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">—</td>
<td valign="top" nowrap="nowrap"> </td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">18,136</td>
<td valign="top" nowrap="nowrap"> </td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">(19,401</td>
<td valign="top" nowrap="nowrap">)</td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">(1,265</td>
<td valign="top" nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">90.73</td>
<td valign="top" nowrap="nowrap"> </td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">273,379</td>
<td valign="top" nowrap="nowrap"> </td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">—</td>
<td valign="top" nowrap="nowrap"> </td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">273,379</td>
<td valign="top" nowrap="nowrap"> </td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">(292,452</td>
<td valign="top" nowrap="nowrap">)</td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">(19,073</td>
<td valign="top" nowrap="nowrap">)</td></tr>
<tr style="background: #cceeff;" valign="bottom"><td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">100.73</td>
<td valign="top" nowrap="nowrap"> </td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">477,943</td>
<td valign="top" nowrap="nowrap"> </td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">—</td>
<td valign="top" nowrap="nowrap"> </td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">477,943</td>
<td valign="top" nowrap="nowrap"> </td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">(511,289</td>
<td valign="top" nowrap="nowrap">)</td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">(33,346</td>
<td valign="top" nowrap="nowrap">)</td></tr>
<tr valign="bottom"><td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">110.73</td>
<td valign="top" nowrap="nowrap"> </td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">645,559</td>
<td valign="top" nowrap="nowrap"> </td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">119,282</td>
<td valign="top" nowrap="nowrap"> </td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">764,841</td>
<td valign="top" nowrap="nowrap"> </td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">(690,600</td>
<td valign="top" nowrap="nowrap">)</td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">74,241</td>
<td valign="top" nowrap="nowrap"> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">120.73</td>
<td valign="top" nowrap="nowrap"> </td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">785,408</td>
<td valign="top" nowrap="nowrap"> </td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">316,210</td>
<td valign="top" nowrap="nowrap"> </td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">1,101,618</td>
<td valign="top" nowrap="nowrap"> </td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">(840,206</td>
<td valign="top" nowrap="nowrap">)</td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">261,412</td>
<td valign="top" nowrap="nowrap"> </td></tr>
<tr valign="bottom"><td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">130.73</td>
<td valign="top" nowrap="nowrap"> </td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">903,861</td>
<td valign="top" nowrap="nowrap"> </td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">483,010</td>
<td valign="top" nowrap="nowrap"> </td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">1,386,871</td>
<td valign="top" nowrap="nowrap"> </td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">(966,924</td>
<td valign="top" nowrap="nowrap">)</td>
<td> </td>
<td valign="top" nowrap="nowrap" align="right"> </td>
<td valign="top" align="right">419,947</td>
<td valign="top" nowrap="nowrap"> </td></tr></table></div>
<div align="left">
<div style="margin-top: 16pt; width: 18%; font-size: 3pt; border-top: #000000 1px solid;"> </div></div>
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr><td width="3%"> </td>
<td width="1%"> </td>
<td width="96%"> </td></tr>
<tr valign="top"><td nowrap="nowrap" align="left">a)</td>
<td> </td>
<td>Represents the number of incremental shares that must be included in the calculation of fully diluted shares under U.S. GAAP.</td></tr>
<tr style="font-size: 3pt;"><td> </td></tr>
<tr valign="top"><td nowrap="nowrap" align="left">b)</td>
<td> </td>
<td>Represents the number of incremental shares to be issued by the Company upon conversion of the Notes assuming concurrent settlement of</td></tr>
<tr style="font-size: 3pt;"><td> </td></tr>
<tr valign="top"><td nowrap="nowrap" align="left"> </td>
<td> </td>
<td>the note hedges and warrants.</td></tr></table></div> </div>16.
Earnings Per Share
The computation of earnings per share follows (in thousands, except per share data):falsefalsefalsefalsefalseOtherus-types:textBlockItemTypestringThis element may be used to capture the complete disclosure pertaining to an entity's earnings per share.Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 128
-Paragraph 40
falsefalse12Earnings Per ShareUnKnownUnKnownUnKnownUnKnownfalsetrueXML
47
defnref.xml
IDEA: XBRL DOCUMENT
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reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.The current period expense charged against earnings on long-lived, physical assets which are not intended for resale, to allocate or recognize the cost of such assets over their useful lives; or to record the reduction in book value of an intangible asset over the benefit period of such asset; or to record current period expense charged against earnings related to stock awards.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.The aggregate amount of recurring noncash expense charged against earnings in the period to allocate the cost of intangible assets over their estimated remaining economic lives as well as expense associated with the amortization of stock awards.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.Value of stock payable under a deferred compensation plan.No authoritative reference available.Loans Receivable from Independent Contractors [Text Block]No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.No authoritative reference available.Cash Overdrafts And Cash Equivalents [Text Block]No authoritative reference available.No authoritative reference available.No authoritative reference available.Repurchase of conversion feature of notes.No authoritative 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48
R21.xml
IDEA: Lease Arrangements
2.2.0.25falsefalse11401 - Disclosure - Lease Arrangementstruefalsefalse1falsefalseUSDfalsefalse1/1/2010 - 12/31/2010
USD ($)
USD ($) / shares
$Duration_1_1_2010_To_12_31_2010http://www.sec.gov/CIK0000019584duration2010-01-01T00:00:002010-12-31T00:00:00Unit1Standardhttp://www.xbrl.org/2003/iso4217USDiso42170Unit13Dividehttp://www.xbrl.org/2003/iso4217USDiso4217http://www.xbrl.org/2003/instancesharesxbrli0Unit12Standardhttp://www.xbrl.org/2003/instancesharesxbrli0USDUSD$2true0che_LeaseArrangementsAbstractchefalsenadurationLease Arrangements [Abstract]falsefalsefalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00falsefalsefalsefalsefalseOtherxbrli:stringItemTypestringLease Arrangements [Abstract]falsefalse3false0us-gaap_LeasesOfLesseeDisclosureTextBlockus-gaaptruenadurationNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalseterselabel1falsefalsefalse00<div>
<div style="font-family: 'Times New Roman',Times,serif;">
<div style="margin-top: 12pt; font-size: 10pt;" align="left"><b>14. Lease Arrangements</b> </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> We have operating leases that cover our corporate office headquarters, various warehouse and office facilities, office equipment and transportation equipment. The remaining terms of these leases range from one year to seven years, and in most cases we expect that these leases will be renewed or replaced by other leases in the normal course of business. We have no significant capital leases as of December 31, 2010 or 2009. </div>
<p style="font-size: 10pt;" align="right"> The following is a summary of future minimum rental payments and sublease rentals to be received under operating leases that have initial or remaining noncancelable terms in excess of one year at December 31, 2010 (in thousands): </p></div>
<div style="font-family: 'Times New Roman',Times,serif;">
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="88%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">2011</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">17,777</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">2012</div></td>
<td> </td>
<td> </td>
<td align="right">13,099</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">2013</div></td>
<td> </td>
<td> </td>
<td align="right">10,207</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">2014</div></td>
<td> </td>
<td> </td>
<td align="right">6,996</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">2015</div></td>
<td> </td>
<td> </td>
<td align="right">4,727</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Thereafter</div></td>
<td> </td>
<td> </td>
<td align="right">1,620</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Total minimum rental payments</div></td>
<td> </td>
<td> </td>
<td align="right">54,426</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Less: minimum sublease rentals</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(47</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Net minimum rental payments</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">54,379</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Total rental expense incurred under operating leases for continuing operations follows (in thousands): </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="64%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="10" nowrap="nowrap" align="center">For the Years Ended December 31,</td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center"><b>2010</b></td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">2009</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">2008</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Total rental payments</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>21,777</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">21,219</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">18,867</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Less sublease rentals</div></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(237</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(270</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(265</td>
<td nowrap="nowrap">)</td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Net rental expense</div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>21,540</b></td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">20,949</td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">18,602</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr></table></div></div> </div>14. Lease Arrangements
We have operating leases that cover our corporate office headquarters, various warehouse and officefalsefalsefalsefalsefalseOtherus-types:textBlockItemTypestringDisclosure of lessee entity's leasing arrangements including, but not limited to, all of the following: (a.) The basis on which contingent rental payments are determined, (b.) The existence and terms of renewal or purchase options and escalation clauses, (c.) Restrictions imposed by lease agreements, such as those concerning dividends, additional debt, and further leasing. This element can be u
sed to disclose the entity's entire lease disclosure as a single block of text.Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 13
-Paragraph 16
falsefalse12Lease ArrangementsUnKnownUnKnownUnKnownUnKnownfalsetrueXML
49
R13.xml
IDEA: Goodwill and Intangible Assets
2.2.0.25falsefalse10601 - Disclosure - Goodwill and Intangible Assetstruefalsefalse1falsefalseUSDfalsefalse1/1/2010 - 12/31/2010
USD ($)
USD ($) / shares
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<div style="margin-top: 6pt; font-size: 10pt;" align="left"><b>6. Goodwill and Intangible Assets</b> </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Amortization of definite-lived intangible assets from continuing operations for the years ended December 31, 2010, 2009, 2008 was $2.1 million, $4.0 million and $4.0 million, respectively. The following is a schedule by year of projected amortization expense for definite-lived intangible assets (in thousands): </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="88%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">2011</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">1,402</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">2012</div></td>
<td> </td>
<td> </td>
<td align="right">1,399</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">2013</div></td>
<td> </td>
<td> </td>
<td align="right">1,399</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">2014</div></td>
<td> </td>
<td> </td>
<td align="right">427</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">2015</div></td>
<td> </td>
<td> </td>
<td align="right">217</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Thereafter</div></td>
<td> </td>
<td> </td>
<td align="right">266</td>
<td> </td></tr></table></div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> The balance in identifiable intangible assets comprises the following (in thousands): </div>
<div align="center">
<table style="font-size: 10pt;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr valign="bottom"><td width="64%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Gross</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Accumulated</td>
<td> </td>
<td> </td>
<td colspan="2" nowrap="nowrap" align="center">Net Book</td>
<td> </td></tr>
<tr style="font-size: 8pt;" valign="bottom"><td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Asset</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Amortization</td>
<td> </td>
<td> </td>
<td style="border-bottom: #000000 1px solid;" colspan="2" nowrap="nowrap" align="center">Value</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><u><b>December 31, 2010</b></u></div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Referral networks</b></div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>21,140</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"><b>$</b></td>
<td align="right"><b>(17,427</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>3,713</b></td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Covenants not to compete</b></div></td>
<td> </td>
<td> </td>
<td align="right"><b>9,211</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(8,814</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td> </td>
<td align="right"><b>397</b></td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Customer lists</b></div></td>
<td> </td>
<td> </td>
<td align="right"><b>1,223</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(1,089</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td> </td>
<td align="right"><b>134</b></td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>Reacquired franchise rights</b></div></td>
<td> </td>
<td> </td>
<td align="right"><b>974</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(108</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td> </td>
<td align="right"><b>866</b></td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;"><b>Subtotal — definite-lived intangibles</b></div></td>
<td> </td>
<td> </td>
<td align="right"><b>32,548</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right"><b>(27,438</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td> </td>
<td align="right"><b>5,110</b></td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><b>VITAS trade name</b></div></td>
<td> </td>
<td> </td>
<td align="right"><b>51,300</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>—</b></td>
<td> </td>
<td> </td>
<td> </td>
<td align="right"><b>51,300</b></td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;"><b>Total</b></div></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>83,848</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"><b>$</b></td>
<td align="right"><b>(27,438</b></td>
<td nowrap="nowrap"><b>)</b></td>
<td> </td>
<td align="left"><b>$</b></td>
<td align="right"><b>56,410</b></td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;"><u>December 31, 2009</u></div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Referral networks</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">21,200</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(16,240</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">4,960</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Covenants not to compete</div></td>
<td> </td>
<td> </td>
<td align="right">9,092</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(8,006</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">1,086</td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Customer lists</div></td>
<td> </td>
<td> </td>
<td align="right">1,227</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(1,060</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">167</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">Reacquired franchise rights</div></td>
<td> </td>
<td> </td>
<td align="right">450</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(43</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">407</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 30px;">Subtotal — definite-lived intangibles</div></td>
<td> </td>
<td> </td>
<td align="right">31,969</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(25,349</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td> </td>
<td align="right">6,620</td>
<td> </td></tr>
<tr style="background: #cceeff;" valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 15px;">VITAS trade name</div></td>
<td> </td>
<td> </td>
<td align="right">51,300</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">51,300</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 1px solid;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td></tr>
<tr valign="bottom"><td>
<div style="text-indent: -15px; margin-left: 45px;">Total</div></td>
<td> </td>
<td align="left">$</td>
<td align="right">83,269</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(25,349</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td align="left">$</td>
<td align="right">57,920</td>
<td> </td></tr>
<tr style="font-size: 1px;"><td>
<div style="text-indent: -15px; margin-left: 15px;"> </div></td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td>
<td style="border-top: #000000 3px double;" colspan="2" nowrap="nowrap" align="right"> </td>
<td> </td>
<td> </td></tr></table></div></div> </div>6. Goodwill and Intangible Assets
Amortization of definite-lived intangible assets from continuing operations for the yearsfalsefalsefalsefalsefalseOtherus-types:textBlockItemTypestringDiscloses the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangibl
e assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain or loss on disposal of a reporting unit). If any part of goodwill has not been a
llocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made
to a previous estimate of an impairment loss. This element may be used as a single block of text to include the entire intangible asset disclosure including data and tables.Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 142
-Paragraph 42, 43, 44, 45, 46, 47
falsefalse12Goodwill and Intangible AssetsUnKnownUnKnownUnKnownUnKnownfalsetrueXML
50
R26.xml
IDEA: Legal and Regulatory Matters
2.2.0.25falsefalse11901 - Disclosure - Legal and Regulatory Matterstruefalsefalse1falsefalseUSDfalsefalse1/1/2010 - 12/31/2010
USD ($)
USD ($) / shares
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<div style="margin-top: 6pt; font-size: 10pt;" align="left"><b>19. Legal and Regulatory Matters</b> </div>
<div style="margin-top: 6pt; font-size: 10pt;" align="left"> <b><i>Litigation</i></b> </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> On March 1, 2010 Anthony Morangelli and Frank Ercole filed a class action lawsuit in federal district court for the Eastern District of New York seeking unpaid minimum wages and overtime service technician compensation from Roto-Rooter and Chemed. They also seek payment of penalties, interest and plaintiffs' attorney fees. We contest these allegations. In September 2010, the Court conditionally certified a nationwide class of service technicians, excluding those who signed dispute resolution agreements in which they agreed to arbitrate claims arising out of their employment. There has been no final determination of the merits of collective treatment of the case. We are unable to estimate our potential liability, if any, with respect to this case. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> VITAS is party to a class action lawsuit filed in the Superior Court of California, Los Angeles County, in September 2006 by Bernadette Santos, Keith Knoche and Joyce White. This case alleges failure to pay overtime and failure to provide meal and rest periods to a purported class of California admissions nurses, chaplains and sales representatives. The case seeks payment of penalties, interest and Plaintiffs' attorney fees. VITAS contests these allegations. In December 2009, the trial court denied Plaintiffs' motion for class certification. We are unable to estimate our potential liability, if any, with respect to this case. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> Regardless of outcome, defense of litigation adversely affects us through defense costs, diversion of our time and related publicity. </div>
<div style="margin-top: 6pt; font-size: 10pt;" align="left"> <b><i>Regulatory Matters</i></b> </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> In May 2009, VITAS received an administrative subpoena from the U.S. Department of Justice requesting VITAS deliver to the OIG documents, patient records, and policy and procedure manuals for headquarters and its Texas programs concerning hospice services provided for the period January 1, 2003 to the date of the letter. In August 2009, the OIG selected medical records for 59 past and current patients from a Texas program for review. In February 2010, VITAS received a companion civil investigative demand ("CID") from the state of Texas Attorney General's Office, seeking related documents. In September 2010, it received a second CID and a second administrative subpoena seeking related documents. We can neither predict the outcome of this investigation nor estimate our potential liability, if any. We believe that we are in compliance w
ith Medicare and Medicaid rules and regulations applicable to hospice providers </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> In April 2005, the Office of Inspector General ("OIG") for the Department of Health and Human Services served VITAS with civil subpoenas relating to VITAS' alleged failure to appropriately bill Medicare and Medicaid for hospice services. As part of this investigation, the OIG selected medical records for 320 past and current patients from VITAS' three largest programs for review. It also sought policies and procedures dating back to 1998 covering admissions, certifications, recertifications and discharges. During the third quarter of 2005 and again in May 2006, the OIG requested additional information from us. The Court dismissed a related qui tam complaint filed in U.S. District Court for the Southern District of Florida with prejudice in July 2007. The plaintiffs appealed this dismissal, which the Court of Appeals affirmed. The government continues
to investigate the complaint's allegations. In March 2009, we received a letter from the government reiterating the basis of their investigation. We are unable to estimate our potential liability, if any, with respect to this matter. </div>
<div style="margin-top: 6pt; margin-left: 2%; font-size: 10pt;" align="left"> The costs to comply with either of these investigations were not material for any period presented. Regardless of outcome, responding to the subpoenas can adversely affect us through defense costs, diversion of our time and related publicity. </div></div> </div>19. Legal and Regulatory Matters
Litigation
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