10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x    Quarterly Report Under Section 13 or 15 (d) of the Securities Exchange Act of 1934 For the Quarterly Period Ended September 30, 2013

o    Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number: 1-8351

CHEMED CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	31-0791746
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)
255 E. Fifth Street, Suite 2600, Cincinnati, Ohio	45202
(Address of principal executive offices)	(Zip code)
(513) 762-6500 (Registrant’s telephone number, including area code)

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 periods that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No o

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 x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Large accelerated filer x Accelerated filer o Non-accelerated filer o Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No x

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Class	Amount	Date
Capital Stock $1 Par Value	17,634,176 Shares	September 30, 2013

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CHEMED CORPORATION AND

SUBSIDIARY COMPANIES

Index

	Page No.
PART I.    FINANCIAL INFORMATION:
Item 1.  Financial Statements
Unaudited Consolidated Balance Sheet -
September 30, 2013 and December 31, 2012	3
Unaudited Consolidated Statement of Income -
Three and nine months ended September 30, 2013 and 2012	4
Unaudited Consolidated Statement of Cash Flows -
Nine months ended September 30, 2013 and 2012	5
Notes to Unaudited Consolidated Financial Statements	6
Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.  Quantitative and Qualitative Disclosures about Market Risk	34
Item 4.  Controls and Procedures	34
PART II.   OTHER INFORMATION
Item 1.    Legal Proceedings	34
Item 1A. Risk Factors	34
Item 2.    Unregistered Sales of Equity Securities and Use of  Proceeds	35
Item 3.    Defaults Upon Senior Securities	35
Item 4.    Mine Safety Disclosures	35
Item 5.    Other Information	35
Item 6.    Exhibits	36
EX – 31.1
EX – 31.2
EX – 31.3
EX – 32.1
EX – 32.2
EX – 32.3
EX – 101.INS
EX – 101.SCH
EX – 101.CAL
EX – 101.DEF
EX – 101.LAB
EX – 101.PRE

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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
UNAUDITED CONSOLIDATED BALANCE SHEET
(in thousands, except share and per share data)
	September 30,			December 31,
	2013			2012
ASSETS
Current assets
Cash and cash equivalents	$	83,204		$	69,531
Accounts receivable less allowances of $12,555 (2012 - $10,892)		80,117			93,333
Inventories		6,729			7,058
Current deferred income taxes		25,101			13,659
Prepaid income taxes		3,538			2,643
Prepaid expenses		17,684			11,447
Total current assets		216,373			197,671
Investments of deferred compensation plans		40,683			36,089
Properties and equipment, at cost, less accumulated depreciation of $178,720 (2012 - $164,607)		89,800			91,934
Identifiable intangible assets less accumulated amortization of $31,633 (2012 - $30,414)		56,979			57,177
Goodwill		466,940			465,832
Other assets		10,765			10,923
Total Assets	$	881,540		$	859,626
LIABILITIES
Current liabilities
Accounts payable	$	44,523		$	48,472
Current portion of long-term debt		181,340			-
Income taxes		5,529			4,938
Accrued insurance		41,737			40,654
Accrued compensation		46,689			45,457
Other current liabilities		56,536			17,301
Total current liabilities		376,354			156,822
Deferred income taxes		27,454			27,662
Long-term debt		-			174,890
Deferred compensation liabilities		39,406			35,599
Other liabilities		11,499			11,362
Total Liabilities		454,713			406,335
Commitments and contingencies
STOCKHOLDERS' EQUITY
Capital stock - authorized 80,000,000 shares $1 par; issued 32,085,561 shares (2012 - 31,589,366 shares)		32,086			31,589
Paid-in capital		469,934			437,364
Retained earnings		666,894			623,035
Treasury stock - 14,548,735 shares (2012 - 13,057,270)		(744,210	)		(640,732	)
Deferred compensation payable in Company stock		2,123			2,035
Total Stockholders' Equity		426,827			453,291
Total Liabilities and Stockholders' Equity	$	881,540		$	859,626
See accompanying notes to unaudited consolidated financial statements.

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CHEMED CORPORATION AND SUBSIDIARY COMPANIES
UNAUDITED CONSOLIDATED STATEMENT OF INCOME
(in thousands, except per share data)
	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
Service revenues and sales	$	340,886		$	354,353		$	1,064,725		$	1,061,466
Cost of services provided and goods sold (excluding depreciation)		243,184			256,610			762,850			771,423
Selling, general and administrative expenses		48,870			52,955			157,537			155,892
Depreciation		6,971			6,557			20,665			19,178
Amortization		1,190			1,135			3,498			3,375
Other operating expenses		11,461			1,126			26,221			1,126
Total costs and expenses		311,676			318,383			970,771			950,994
Income from operations		29,210			35,970			93,954			110,472
Interest expense		(3,500	)		(3,743	)		(11,291	)		(11,032	)
Other income/(expense) - net		(90	)		1,840			3,312			2,965
Income before income taxes		25,620			34,067			85,975			102,405
Income taxes		(8,188	)		(13,222	)		(31,657	)		(39,841	)
Net income	$	17,432		$	20,845		$	54,318		$	62,564
Earnings Per Share
Net income	$	0.96		$	1.10		$	2.95		$	3.30
Average number of shares outstanding		18,184			18,960			18,436			18,977
Diluted Earnings Per Share
Net income	$	0.94		$	1.07		$	2.89		$	3.23
Average number of shares outstanding		18,522			19,404			18,824			19,382
Cash Dividends Per Share	$	0.20		$	0.18		$	0.56		$	0.50
See accompanying notes to unaudited consolidated financial statements.

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CHEMED CORPORATION AND SUBSIDIARY COMPANIES
UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands)
	Nine Months Ended
	September 30,
	2013			2012
Cash Flows from Operating Activities
Net income	$	54,318		$	62,564
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization		24,163			22,553
Deferred income taxes		(11,681	)		(6,808	)
Provision for uncollectible accounts receivable		8,211			7,303
Amortization of discount on convertible notes		6,450			6,028
Stock option expense		4,732			6,709
Amortization of debt issuance costs		1,421			940
Noncash long-term incentive compensation		1,161			-
Changes in operating assets and liabilities, excluding
amounts acquired in business combinations:
Decrease/(increase) in accounts receivable		5,293			(30,409	)
Decrease in inventories		329			1,029
Decrease/(increase) in prepaid expenses		(6,183	)		1,554
Increase in accounts payable and other current liabilities		48,967			4,454
Increase in income taxes		1,923			1,292
Increase in other assets		(5,002	)		(3,944	)
Increase in other liabilities		3,978			6,648
Excess tax benefit on share-based compensation		(2,507	)		(2,714	)
Other sources		285			138
Net cash provided by operating activities		135,858			77,337
Cash Flows from Investing Activities
Capital expenditures		(18,887	)		(26,489	)
Business combinations, net of cash acquired		(2,210	)		(5,900	)
Other sources		139			528
Net cash used by investing activities		(20,958	)		(31,861	)
Cash Flows from Financing Activities
Purchases of treasury stock		(89,611	)		(11,724	)
Dividends paid		(10,459	)		(9,641	)
Capital stock surrendered to pay taxes on stock-based compensation		(4,280	)		(3,236	)
Proceeds from exercise of stock options		13,125			10,483
Excess tax benefit on share-based compensation		2,507			2,714
Decrease in cash overdrafts payable		(10,928	)		(3,299	)
Debt issuance costs		(1,108	)		-
Other sources/(uses)		(473	)		442
Net cash used by financing activities		(101,227	)		(14,261	)
Increase in Cash and Cash Equivalents		13,673			31,215
Cash and cash equivalents at beginning of year		69,531			38,081
Cash and cash equivalents at end of period	$	83,204		$	69,296
See accompanying notes to unaudited consolidated financial statements.

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CHEMED CORPORATION AND SUBSIDIARY COMPANIES

Notes to Unaudited Consolidated Financial Statements

1.   Basis of Presentation

As used herein, the terms "We," "Company" and "Chemed" refer to Chemed Corporation or Chemed Corporation and its consolidated subsidiaries.

We have prepared the accompanying unaudited consolidated financial statements of Chemed in accordance with Rule 10-01 of SEC Regulation S-X.  Consequently, we have omitted certain disclosures required under generally accepted accounting principles in the United States (“GAAP”) for complete financial statements. The December 31, 2012 balance sheet data were derived from audited financial statements but do not include all disclosures required by GAAP.  However, in our opinion, the financial statements presented herein contain all adjustments, consisting only of normal recurring adjustments, necessary to state fairly our financial position, results of operations and cash flows.  These financial statements are prepared on the same basis as and should be read in conjunction with the Consolidated Financial Statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2012.

2.   Revenue Recognition

Both the VITAS segment and the 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.  VITAS recognizes revenue at the estimated realizable amount due from third-party payers.  Medicare payments are subject to certain limitations, as described below.

As of September 30, 2013, VITAS has approximately $224,000 in unbilled revenue included in accounts receivable (December 31, 2012 - $457,000).  The unbilled revenue at VITAS relates to hospice programs currently undergoing various patient file reviews.  Surveyors working on behalf of the various payers review certain patient files for compliance with applicable 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.  However, we cannot predict whether future billing reviews or similar audits by payers will result in material denials or reductions in revenue.

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 they are likely to exceed the annual per-beneficiary Medicare cap (“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 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 the amount as a reduction to patient revenue.

During the three and nine month periods ended September 30, 2013, we reversed Medicare cap liability of $873,000 for amounts recorded in the fourth quarter of 2012 for three programs’ projected 2013 measurement period liability.  We reversed these amounts as improving admissions trends in these programs indicate that the liability had been eliminated.  During 2013 this reversal was offset by a $4.0 million Medicare cap liability for one program’s projected 2013 measurement period liability.

Shown below is the Medicare cap liability activity for the fiscal periods ended (in thousands):

	September 30,
	2013			2012
Beginning balance January 1,		$	1,261		$	2,965
2013 measurement period			3,161			-
2012 measurement period			-			(2,577	)
Ending balance September 30,		$	4,422		$	388

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Vitas provides charity care, in certain circumstances, to patients without charge when management of the hospice program determines, at the time services are performed, 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 charity care is calculated by taking the ratio of charity care days to total days of care and multiplying by total cost of care.  The cost of charity care is as follows (in thousands):

Three months ended September 30,				Nine months ended September 30,
2013		2012		2013		2012
$	1,909	$	1,983	$	5,793	$	6,021

3.   Segments

Service revenues and sales and after-tax earnings by business segment are as follows (in thousands):

	Three months ended September 30,						Nine months ended September 30,
	2013			2012			2013			2012
Service Revenues and Sales
VITAS	$	254,001		$	267,990		$	788,896		$	794,050
Roto-Rooter		86,885			86,363			275,829			267,416
Total	$	340,886		$	354,353		$	1,064,725		$	1,061,466
After-tax Earnings
VITAS	$	14,608		$	21,940		$	55,237		$	61,999
Roto-Rooter		8,181			6,145			19,218			21,715
Total		22,789			28,085			74,455			83,714
Corporate		(5,357	) *		(7,240	)		(20,137	) *		(21,150	)
Net income	$	17,432		$	20,845		$	54,318		$	62,564

*Corporate includes a credit of $1.8 million related to the expiration of tax statutes for uncertain tax positions recorded in prior years.

We report corporate administrative expenses and unallocated investing and financing income and expense not directly related to either segment as “Corporate”.

4.  Earnings per Share

Earnings per share (“EPS”) are computed using the weighted average number of shares of capital stock outstanding.  Earnings and diluted earnings per share are computed as follows (in thousands, except per share data):

			Net Income
For the Three Months Ended September 30,		Income		Shares	Earnings per Share
2013
	Earnings	$	17,432	18,184	$	0.96
	Dilutive stock options		-	235
	Nonvested stock awards		-	103
	Diluted earnings	$	17,432	18,522	$	0.94
2012
	Earnings	$	20,845	18,960	$	1.10
	Dilutive stock options		-	341
	Nonvested stock awards		-	103
	Diluted earnings	$	20,845	19,404	$	1.07

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			Net Income
For the Nine Months Ended September 30,		Income		Shares	Earnings per Share
2013
	Earnings	$	54,318	18,436	$	2.95
	Dilutive stock options		-	287
	Nonvested stock awards		-	101
	Diluted earnings	$	54,318	18,824	$	2.89
2012
	Earnings	$	62,564	18,977	$	3.30
	Dilutive stock options		-	313
	Nonvested stock awards		-	92
	Diluted earnings	$	62,564	19,382	$	3.23

For the three and nine-month periods ended September 30, 2013, 434,000 and 31,000, respectively, stock options were excluded from the computation of diluted earnings per share because they would have been anti-dilutive. For the three and nine-month period ended September 30, 2012, 1.4 million stock options were excluded from the computation of diluted earnings per share.

Diluted earnings per share may be impacted in the future as the result of the issuance of our 1.875% Senior Convertible Notes (the “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 an 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 at September 30, 2013.  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:

		Shares				Total Treasury		Shares Due			Incremental
		Underlying 1.875%				Method		to the Company			Shares Issued/
Share		Convertible		Warrant		Incremental		under Notes			(Received) by the Company
Price		Notes		Shares		Shares (a)		Hedges			upon Conversion (b)
$	80.73		61,766		-		61,766		(66,076	)		(4,310	)
$	90.73		317,009		-		317,009		(339,127	)		(22,118	)
$	100.73		521,573		-		521,573		(557,964	)		(36,391	)
$	110.73		689,189		121,511		810,700		(737,274	)		73,426
$	120.73		829,038		322,121		1,151,159		(886,880	)		264,279
$	130.73		947,492		492,040		1,439,532		(1,013,599	)		425,933

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 1.875% Convertible Notes, assuming concurrent settlement of the note hedges and warrants.

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5.   Long-Term Debt

On January 18, 2013, we replaced our existing credit agreement with our Revolving Credit Facility (“2013 Credit Agreement”).  Terms of the 2013 Credit Agreement consist of a five-year, $350 million revolving credit facility.  This 2013 Credit Agreement has a floating interest rate that is currently LIBOR plus 125 basis points.  The 2013 Credit Agreement also includes a $150 million expansion feature.  Debt issuance costs associated with the existing credit agreement were not material.  With respect to the 2013 Credit Agreement, deferred financing costs are immaterial.  The 2013 Credit Agreement contains the following quarterly financial covenants:

Description	Requirement
Leverage Ratio (Consolidated Indebtedness/Consolidated  Adj. EBITDA)	< 3.50 to 1.00
Fixed Charge Coverage Ratio (Consolidated Free Cash Flow/Consolidated Fixed Charges)	> 1.50 to 1.00
Annual Operating Lease Commitment	< $30.0 million

We are in compliance with all debt covenants as of September 30, 2013.  We have issued $32.9 million in standby letters of credit as of September 30, 2013 for insurance purposes.  Issued letters of credit reduce our available credit under the 2013 Credit Agreement.  As of September 30, 2013, we have approximately $317.1 million of unused lines of credit available and eligible to be drawn down under our revolving credit facility, excluding the $150 million expansion feature.

The following amounts are included in our consolidated balance sheet related to the Notes:

	September 30, 2013			December 31, 2012
Principal amount of convertible debentures	$	186,956		$	186,956
Unamortized debt discount		(5,616	)		(12,066	)
Carrying amount of convertible debentures	$	181,340		$	174,890
Additional paid in capital (net of tax)	$	31,310		$	31,310

In the second quarter of 2013, the principal amount of the convertible debentures was reclassified to current as the amounts are due in May 2014.

The following amounts comprise interest expense included in our consolidated income statement (in thousands):

	Three months ended September 30,				Nine months ended September 30,
	2013		2012		2013		2012
Cash interest expense	$	990	$	1,381	$	3,420	$	4,064
Non-cash amortization of debt discount		2,186		2,043		6,450		6,028
Amortization and write-off of debt costs		324		319		1,421		940
Total interest expense	$	3,500	$	3,743	$	11,291	$	11,032

The unamortized debt discount is being amortized using the effective interest method over the remaining life of the Notes.  The effective rate on the Notes is approximately 6.875% as of September 30, 2013.

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6.   Other Income/(expense) – Net

Other income/(expense) -- net comprises the following (in thousands):

	Three months ended September 30,				Nine months ended September 30,
	2013		2012		2013		2012
Market value gains/(losses) on assets held in
deferred compensation trust	$	(189)	$	1,576	$	2,346	$	2,761
Loss on disposal of property and equipment		(101)		(80)		(180)		(228)
Interest income		192		291		1,165		401
Other - net		8		53		(19)		31
Total other income/(expense) - net	$	(90)	$	1,840	$	3,312	$	2,965

 7.   Stock-Based Compensation Plans

On February 20, 2013, the Compensation/Incentive Committee of the Board of Directors (“CIC”) approved a grant of 28,992 shares of restricted stock to certain key employees.  The restricted shares cliff vest four years from the date of issuance.  The cumulative compensation expense related to the restricted stock award is $2.3 million and will be recognized ratably over the 4 year vesting period.  We assumed no forfeitures in determining the cumulative compensation expense of the grant.

8.   Independent Contractor Operations

The Roto-Rooter segment sublicenses with 68 independent contractors to operate certain plumbing repair and drain cleaning businesses in lesser-populated areas of the United States and Canada.  We had notes receivable from our independent contractors as of September 30, 2013 totaling $1.4 million (December 31, 2012 - $1.3 million).  In most cases these loans are fully or partially secured by equipment owned by the contractor.  The interest rates on the loans range from 0% to 8% per annum and the remaining terms of the loans range from 2 months to 5 years at September 30, 2013.  We recorded the following from our independent contractors (in thousands):

	Three months ended September 30,					Nine months ended September 30,
	2013			2012		2013		2012
Revenues		$	8,054	$	6,942	$	24,418	$	20,434
Pretax profits			4,243		3,611		13,015		10,424

9.   Retirement Plans

All of the Company’s plans that provide retirement and similar benefits are defined contribution plans.  These expenses include the impact of market gains and losses on assets held in deferred compensation plans.  Expenses for the Company’s pension and profit-sharing plans, excess benefit plans and other similar plans are as follows (in thousands):

Three months ended September 30,				Nine months ended September 30,
2013		2012		2013		2012
$	2,098	$	2,646	$	9,796	$	8,501

10.  Legal and Regulatory Matters

The VITAS segment of the Company’s business operates in a heavily-regulated industry.  As a result, the Company is subjected to inquiries and investigations by various government agencies, as well as to lawsuits, including qui tam actions.  The following sections describe the various ongoing lawsuits and investigations of which the Company is currently aware.  Unless otherwise indicated, it is not possible at this time for us to estimate either the timing or outcome of any of those matters, or whether any potential loss, or range of potential losses, is probable or estimable.

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Regulatory Matters and Litigation

In February 2010, Chemed and Roto-Rooter were named as defendants in a lawsuit filed in the United States District Court for the Eastern District of New York, Anthony Morangelli, et al., v. Chemed Corp. and Roto-Rooter Services Co., No. 10 CV-00876 (BMC).  The named plaintiffs, current and former technicians employed by Roto-Rooter who were paid on a commission basis, asserted against Chemed and Roto-Rooter claims for violation of the Fair Labor Standards Act (“FLSA”) and claims for violations of the labor laws of multiple states.  In June 2013 the parties reached an agreement to settle the case for $14.3 million plus applicable payroll taxes ($9.0 million after tax), which is subject to Court approval.  As such, $14.8 million is recorded as other operating expense in the quarter ended June 30, 2013 Statement of Income.

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, Bernadette Santos, et al. v. Vitas Healthcare Corporation of California, BC359356.  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.    In December 2009, the trial court denied Plaintiffs’ motion for class certification.  In July 2011, the Court of Appeals affirmed denial of class certification on the travel time, meal and rest period claims, and reversed the trial court’s denial on the off-the-clock and sales representation exemption claims.  Plaintiffs filed an appeal of this decision.  In September 2012, in response to an order of reconsideration, the Court of Appeals reiterated its previous rulings.  In March 2013, the Court granted summary judgment dismissing the sales representatives’ claims as they are exempt employees.  In October 2013 we reached agreement, subject to Court approval, to settle the case for $10.3 million plus applicable payroll taxes ($6.5 million aftertax).  As such, $10.5 million is recorded as other operating expense in the quarter ended September 30, 2013 Statement of Income.

On January 12, 2012, a putative class action lawsuit was filed in the U.S. District Court for the Southern District of Ohio against the Company, Kevin McNamara, David Williams, and Timothy O’Toole, In re Chemed Corp. Securities Litigation, Civil Action No. 1:12-cv-28 (S.D. Ohio).  On June 18, 2012, an amended complaint was filed alleging violation of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 against all Defendants, and violation of Section 20(a) of the Securities Exchange Act of 1934 against Messrs. McNamara, Williams, and O’Toole.  The suit’s allegations concern the VITAS hospice segment of the Company’s business.  Plaintiffs seek, on behalf of a putative class of purchasers of Chemed Capital Stock, compensatory damages in an unspecified amount and attorneys’ fees and expenses, arising from Defendants’ alleged failure to disclose an alleged fraudulent scheme at VITAS to enroll ineligible hospice patients and to fraudulently obtain payments from the federal government.  Defendants filed motions to dismiss the amended complaint on August 17, 2012, which were pending when the parties reached an agreement to settle the action.  On June 7, 2013, following the filing of U.S. v. VITAS, discussed below, Plaintiffs filed a motion for leave to file a second amended complaint.  Defendants oppose this motion. On September 16, 2013, Plaintiffs, on behalf of a putative class of purchasers of Chemed Capital Stock between February 15, 2010, and May 3, 2013, inclusive, executed a Settlement Term Sheet with Defendants (“Settlement”), reaching an agreement in principle to settle this case in full and with prejudice, and to provide Defendants with full releases of all claims that are or could have been asserted by Plaintiffs in exchange for payment of $6.0 million by our insurer into a settlement fund for the benefit of the putative class.  The Settlement has been recorded as an accrual and offsetting prepaid in the accompanying Balance Sheet. This Settlement is subject to final documentation by the parties as well as Court approval.  Defendants agreed to enter into this Settlement in order to eliminate the burden, expense and distraction of further litigation.

In June 2011, the U.S. Attorney provided the Company with a partially unsealed qui tam complaint filed under seal in the U.S. District Court for the Western District of Texas, United States, et al. ex rel. Urick v. Vitas HME Solutions, Inc. et al., 5:08-cv-0663 (“Urick”).  The U.S. Attorney filed a notice in May 2012 stating that it had decided not to intervene in the case at that time but indicating that it continues to investigate the allegations.  In June 2012, the complaint was unsealed.  The complaint asserts violations of the federal False Claims Act and the Texas Medicaid Fraud Prevention Act based on allegations of a conspiracy to submit to Medicare and Medicaid false claims involving hospice services for ineligible patients, unnecessary medical supplies, failing to satisfy certain prerequisites for payment, and altering patient records, including backdating patient revocations.  The suit was brought by Barbara Urick, a registered nurse in VITAS’s San Antonio program, against VITAS, certain of its affiliates, and several former VITAS employees, including physicians Justo Cisneros and Antonio Cavasos and nurses Sally Schwenk, Diane Anest, and Edith Reed.  In September 2012 and July 2013, the plaintiff dismissed all claims against the individual defendants.  The complaint was served on the VITAS entities on April 12, 2013.

Also in June 2011, the U.S. Attorney provided the Company with a partially unsealed qui tam complaint filed under seal in the U.S. District Court for the Northern District of Illinois, United States, et al. ex rel. Spottiswood v. Chemed Corp., 1:07-cv-4566 (“Spottiswood”).  In April 2012, the complaint was unsealed.  The U.S. Attorney and Attorney General for the State of Illinois filed notices in April and May 2012, respectively, stating that they had decided not to intervene in the case at that time but indicating that they continue to investigate the allegations.  Plaintiff filed an amended complaint in November 2012.  The complaint asserts violations of the federal False Claims Act and the Illinois Whistleblower Reward and Protection Act based on allegations that VITAS fraudulently billed Medicare and Medicaid for providing unwarranted continuous care services.  The suit was brought by Laura Spottiswood, a former part-time pool registered nurse at VITAS, against Chemed, VITAS, and a VITAS affiliate.  The complaint was served on the defendants on April 12, 2013.  On May 29 and June 4, 2013, respectively, the Court granted the government’s motion to partially intervene in Spottiswood and in Urick on the allegations that Vitas submitted or caused to be submitted false or fraudulent claims for continuous care and routine home care on behalf of certain ineligible Medicare beneficiaries.  The Court also transferred them to the U.S. District Court for the Western District of Missouri under docket Nos. 4:13-cv-505 and 4:13-cv-563, respectively.

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On May 2, 2013, the government filed a False Claims Act complaint against the Company and certain of its hospice-related subsidiaries in the U.S. District Court for the Western District of Missouri, United States v. VITAS Hospice Services, LLC, et al., 4:13-cv-00449-BCW (the “2013 Action”).  Prior to that date, the Company received various subpoenas from the U.S. Department of Justice and OIG that have been previously disclosed. The 2013 Action alleges that, since at least 2002, VITAS, and since 2004, the Company, submitted or caused the submission of false claims to the Medicare program by (a) billing Medicare for continuous home care services when the patients were not eligible, the services were not provided, or the medical care was inappropriate, and (b) billing Medicare for patients who were not eligible for the Medicare hospice benefit because they did not have a life expectancy of six months or less if their illnesses ran their normal course.  This complaint seeks treble damages, statutory penalties, and the costs of the action, plus interest.  On August 1, 2013, the government filed its First Amended Complaint in the 2013 Action.  The First Amended Complaint changed and supplemented some of the allegations, but did not otherwise expand the causes of action or the nature of the relief sought against VITAS.  The defendants filed a motion to dismiss on September 24, 2013.  

On May 6, 2013, the U.S. District Court for the Western District of Missouri, at the request of the government, unsealed a qui tam complaint against VITAS and VITAS Healthcare Corporation of California,United States ex rel. Charles Gonzales v. Vitas Healthcare Corporation, et al., CV 12-0761-R (“Gonzales”).  The case was transferred from the Central District of California to the Western District of Missouri under docket No. 4:13-cv-344.  The government has filed a notice of election to intervene in the Gonzales complaint.  The Gonzales complaint alleges that VITAS’ Los Angeles program falsely certified and recertified patients as eligible for the Medicare Hospice Benefit.  It alleges violations of the False Claims Act and seeks treble damages, civil penalties, recovery of costs, attorneys’ fees and expenses, and pre- and post-judgment interest.  

On September 25, 2013, the Court granted a joint motion by the government, the relators, and VITAS to consolidate the Spottiswood, Urick, and Gonzales complaints with the 2013 Action.  As a result, the First Amended Complaint will govern the consolidated claims brought by the United States and the relators for all purposes.  The relators and VITAS have stipulated that certain non-intervened claims will not be pursued by the relators.

VITAS has also received document subpoenas in related state matters.  In February 2010, VITAS received a civil investigative demand (“CID”) from the Texas Attorney General seeking documents from January 1, 2002 through the date of the CID, and interrogatory responses in connection with an investigation of possible fraudulent submission of Medicaid claims for non-qualifying patients and fraudulent shifting of costs from VITAS to the State of Texas and the United States.  The CID requested similar information sought by prior Department of Justice subpoenas, including policy and procedure manuals and information concerning Medicare and Medicaid billing, patient statistics and sales and marketing practices, together with information concerning record-keeping and retention practices, and medical records concerning 117 patients.  In September 2010, VITAS received a second CID from the Texas Attorney General seeking additional documents concerning business plans and results, revocation forms for certain patients, and electronic documents of 10 current and former employees.  In July 2012, VITAS received an investigative subpoena from the Florida Attorney General seeking documents previously produced in the course of prior government investigations as well as, for the period January 1, 2007 through the date of production, billing records and procedures: information concerning business results, plans, and strategies; documents concerning patient eligibility for hospice care; and certain information concerning employees and their compensation.

The Company intends to defend vigorously against the allegations in each of the above lawsuits.    The Company had a net recovery for these investigations, due to a one-time insurance reimbursement of $1.0 million for certain legal costs, for the three month period ended September 30, 2013 of $591,000. The net costs to comply with these investigations were $1.4 million for the nine month period ended September 30, 2013. Regardless of the outcome of any of the preceding matters, responding to the subpoenas and dealing with the various regulatory agencies and opposing parties can adversely affect us through defense costs, potential payments, diversion of management time, and related publicity.  Although the Company intends to defend them vigorously, there can be no assurance that those suits will not have a material adverse effect on the Company.

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11.   Concentration of Risk

VITAS has 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 three-year terms.  Either party may cancel the Agreements at the end of any term by giving 30 days prior written notice.  VITAS made purchases from OCR of $9.7 million and $10.6 million for the three months ended September 30, 2013 and 2012, respectively.  VITAS made purchases from OCR of $29.3 million and $30.9 million for the nine months ended September 30, 2013 and 2012, respectively For the three and nine month periods ending September 30, 2013 and 2012, respectively, purchases from this vendor represent approximately 90% of all pharmacy services used by VITAS.

12.   Cash Overdrafts and Cash Equivalents

Included in accounts payable at September 30, 2013 is cash overdrafts payable of $1.3 million (December 31, 2012 - $12.2 million).

From time to time throughout the year, we invest excess cash in money market funds with major commercial banks. We closely monitor the creditworthiness of the institutions with which we invest our overnight funds.  We had $41.0 million in cash equivalents as of September 30, 2013.  There was $56.6 million in cash equivalents as of December 31, 2012.  The weighted average rate of return for our cash equivalents was 0.07% for September 30, 2013 and 0.2% for December 31, 2012.

13.   Financial Instruments

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.

The following shows the carrying value, fair value and the hierarchy for our financial instruments as of September 30, 2013 (in thousands):

			Fair Value Measure
	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Mutual fund investments of deferred
compensation plans held in trust	$	40,683	$	40,683	$	-	$	-
Long-term debt		181,340		195,257		-		-

The following shows the carrying value, fair value and the hierarchy for our financial instruments as of December 31, 2012 (in thousands):

			Fair Value Measure
	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Mutual fund investments of deferred
compensation plans held in trust	$	36,089	$	36,089	$	-	$	-
Long-term debt		174,890		197,874		-		-

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.

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14.   Capital Stock Repurchase Plan Transactions

We repurchased the following capital stock for the three and nine-months ended September 30, 2013 and 2012:

	Three months ended September 30,				Nine months ended September 30,
	2013		2012		2013		2012
Shares repurchased		1,032,754		9,334		1,313,455		209,234
Weighted average price per share	$	68.91	$	62.75	$	68.23	$	56.03

In February 2013, the Board of Directors authorized an additional $100 million for stock repurchase under Chemed’s existing share repurchase program. We currently have $25.1 million of authorization remaining under this share repurchase plan.

15.  Other Operating Expenses

Other operating expenses comprise (in thousands):

	Three months ended September 30,				Nine months ended September 30,
	2013		2012			2013		2012
Litigation settlement of VITAS segment (a)	$	10,500	$	-		$	10,500	$	-
Settlements of Roto-Rooter segment (b)		961		-			15,721		-
Severance and other operating costs related
to closing Roto-Rooter's HVAC business		-		1,126			-		1,126
Total other operating expenses	$	11,461	$	1,126		$	26,221	$	1,126

(a) Santos claims discussed in Note 10.

(b) Morganelli claims discussed in Note 10 and estimated cost of certain customer claims currently under negotiation.

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16.   Guarantor Subsidiaries

Our 1.875% Notes are fully and unconditionally guaranteed on an unsecured, jointly, and severally liable basis by certain of our 100% owned subsidiaries.  The following unaudited, condensed, consolidating financial data presents the composition of the parent company (Chemed), the guarantor subsidiaries and the non-guarantor subsidiaries as of September 30, 2013 and December 31, 2012 for the balance sheet, the three and nine months ended September 30, 2013 and September 30, 2012 for the income statement and the nine months ended September 30, 2013 and September 30, 2012 for the statement of cash flows  (dollars in thousands):

September 30, 2013			Guarantor			Non-Guarantor		Consolidating
	Parent		Subsidiaries			Subsidiaries		Adjustments			Consolidated
ASSETS
Cash and cash equivalents	$	84,842	$	(10,511	)	$	8,873	$	-		$	83,204
Accounts receivable, including intercompany		960		496,001			741		(417,585	)		80,117
Inventories		-		6,175			554		-			6,729
Current deferred income taxes		-		27,237			177		(2,313	)		25,101
Prepaid income taxes		6,583		-			218		(3,263	)		3,538
Prepaid expenses		7,199		10,245			240		-			17,684
Total current assets		99,584		529,147			10,803		(423,161	)		216,373
Investments of deferred compensation plans		-		-			40,683		-			40,683
Properties and equipment, at cost less accumulated depreciation		10,361		76,957			2,482		-			89,800
Identifiable intangible assets less accumulated amortization		-		56,979			-		-			56,979
Goodwill		-		462,489			4,451		-			466,940
Other assets		18,155		1,770			15,177		(24,337	)		10,765
Investments in subsidiaries		924,423		27,629			-		(952,052	)		-
Total assets	$	1,052,523	$	1,154,971		$	73,596	$	(1,399,550	)	$	881,540
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable, including intercompany	$	421,662	$	35,005		$	5,441	$	(417,585	)	$	44,523
Current portion of long-term debt		181,340		-			-		-			181,340
Income taxes		5,034		3,349			409		(3,263	)		5,529
Accrued insurance		153		41,584			-		-			41,737
Accrued compensation		3,226		43,131			332		-			46,689
Other current liabilities		11,023		47,646			180		(2,313	)		56,536
Total current liabilities		622,438		170,715			6,362		(423,161	)		376,354
Deferred income taxes		-		51,791			-		(24,337	)		27,454
Deferred compensation liabilities		-		-			39,406		-			39,406
Other liabilities		3,258		7,265			976		-			11,499
Stockholders' equity		426,827		925,200			26,852		(952,052	)		426,827
Total liabilities and stockholders' equity	$	1,052,523	$	1,154,971		$	73,596	$	(1,399,550	)	$	881,540
December 31, 2012			Guarantor			Non-Guarantor		Consolidating
	Parent		Subsidiaries			Subsidiaries		Adjustments			Consolidated
ASSETS
Cash and cash equivalents	$	56,342	$	4,674		$	8,515	$	-		$	69,531
Accounts receivable, including intercompany		925		427,341			889		(335,822	)		93,333
Inventories		-		6,505			553		-			7,058
Current deferred income taxes		-		14,633			173		(1,147	)		13,659
Prepaid income taxes		4,043		-			-		(1,400	)		2,643
Prepaid expenses		564		10,656			227		-			11,447
Total current assets		61,874		463,809			10,357		(338,369	)		197,671
Investments of deferred compensation plans		-		-			36,089		-			36,089
Properties and equipment, at cost less accumulated depreciation		10,984		78,236			2,714		-			91,934
Identifiable intangible assets less accumulated amortization		-		57,177			-		-			57,177
Goodwill		-		461,277			4,555		-			465,832
Other assets		19,025		2,005			13,797		(23,904	)		10,923
Investments in subsidiaries		874,692		24,298			-		(898,990	)		-
Total assets	$	966,575	$	1,086,802		$	67,512	$	(1,261,263	)	$	859,626
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable, including intercompany	$	325,916	$	53,934		$	4,444	$	(335,822	)	$	48,472
Income taxes		1,019		3,816			1,503		(1,400	)		4,938
Accrued insurance		1,339		39,315			-		-			40,654
Accrued compensation		4,119		40,891			447		-			45,457
Other current liabilities		2,786		13,903			1,759		(1,147	)		17,301
Total current liabilities		335,179		151,859			8,153		(338,369	)		156,822
Deferred income taxes		-		51,566			-		(23,904	)		27,662
Long-term debt		174,890		-			-		-			174,890
Deferred compensation liabilities		-		-			35,599		-			35,599
Other liabilities		3,215		7,352			795		-			11,362
Stockholders' equity		453,291		876,025			22,965		(898,990	)		453,291
Total liabilities and stockholders' equity	$	966,575	$	1,086,802		$	67,512	$	(1,261,263	)	$	859,626

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For the three months ended September 30, 2013				Guarantor			Non-Guarantor			Consolidating
	Parent			Subsidiaries			Subsidiaries			Adjustments			Consolidated
Continuing Operations
Service revenues and sales	$	-		$	333,750		$	7,136		$	-		$	340,886
Cost of services provided and goods sold		-			239,122			4,062			-			243,184
Selling, general and administrative expenses		5,562			42,113			1,195			-			48,870
Depreciation		240			6,497			234			-			6,971
Amortization		501			689			-			-			1,190
Other operating expenses		-			11,461			-			-			11,461
Total costs and expenses		6,303			299,882			5,491			-			311,676
Income/ (loss) from operations		(6,303	)		33,868			1,645			-			29,210
Interest expense		(3,579	)		(131	)		210			-			(3,500	)
Other (expense)/income - net		3,944			(3,840	)		(194	)		-			(90	)
Income/ (loss) before income taxes		(5,938	)		29,897			1,661			-			25,620
Income tax (provision)/ benefit		2,042			(11,393	)		1,163			-			(8,188	)
Equity in net income of subsidiaries		21,328			2,086			-			(23,414	)		-
Net income	$	17,432		$	20,590		$	2,824		$	(23,414	)	$	17,432
For the three months ended September 30, 2012				Guarantor			Non-Guarantor			Consolidating
	Parent			Subsidiaries			Subsidiaries			Adjustments			Consolidated
Continuing Operations
Service revenues and sales	$	-		$	347,384		$	6,969		$	-		$	354,353
Cost of services provided and goods sold		-			252,688			3,922			-			256,610
Selling, general and administrative expenses		5,991			43,992			2,972			-			52,955
Depreciation		237			6,099			221			-			6,557
Amortization		486			649			-			-			1,135
Other operating expenses		-			1,126			-			-			1,126
Total costs and expenses		6,714			304,554			7,115			-			318,383
Income/ (loss) from operations		(6,714	)		42,830			(146	)		-			35,970
Interest expense		(3,517	)		(211	)		(15	)		-			(3,743	)
Other (expense)/income - net		4,450			(4,184	)		1,574			-			1,840
Income/ (loss) before income taxes		(5,781	)		38,435			1,413			-			34,067
Income tax (provision)/ benefit		1,877			(14,560	)		(539	)		-			(13,222	)
Equity in net income of subsidiaries		24,749			885			-			(25,634	)		-
Net income	$	20,845		$	24,760		$	874		$	(25,634	)	$	20,845
For the nine months ended September 30, 2013				Guarantor			Non-Guarantor			Consolidating
	Parent			Subsidiaries			Subsidiaries			Adjustments			Consolidated
Continuing Operations
Service revenues and sales	$	-		$	1,042,449		$	22,276		$	-		$	1,064,725
Cost of services provided and goods sold		-			750,230			12,620			-			762,850
Selling, general and administrative expenses		17,290			133,419			6,828			-			157,537
Depreciation		718			19,241			706			-			20,665
Amortization		1,480			2,018			-			-			3,498
Other operating expenses		-			26,221			-			-			26,221
Total costs and expenses		19,488			931,129			20,154			-			970,771
Income/ (loss) from operations		(19,488	)		111,320			2,122			-			93,954
Interest expense		(11,089	)		(384	)		182			-			(11,291	)
Other (expense)/income - net		12,526			(11,549	)		2,335			-			3,312
Income/ (loss) before income taxes		(18,051	)		99,387			4,639			-			85,975
Income tax (provision)/ benefit		6,036			(37,755	)		62			-			(31,657	)
Equity in net income of subsidiaries		66,333			4,057			-			(70,390	)		-
Net income	$	54,318		$	65,689		$	4,701		$	(70,390	)	$	54,318
For the nine months ended September 30, 2012				Guarantor			Non-Guarantor			Consolidating
	Parent			Subsidiaries			Subsidiaries			Adjustments			Consolidated
Continuing Operations
Service revenues and sales	$	-		$	1,040,015		$	21,451		$	-		$	1,061,466
Cost of services provided and goods sold		-			759,549			11,874			-			771,423
Selling, general and administrative expenses		17,124			131,695			7,073			-			155,892
Depreciation		704			17,816			658			-			19,178
Amortization		1,437			1,938			-			-			3,375
Other operating expenses		-			1,126			-			-			1,126
Total costs and expenses		19,265			912,124			19,605			-			950,994
Income/ (loss) from operations		(19,265	)		127,891			1,846			-			110,472
Interest expense		(10,437	)		(551	)		(44	)		-			(11,032	)
Other (expense)/income - net		13,196			(12,982	)		2,751			-			2,965
Income/ (loss) before income taxes		(16,506	)		114,358			4,553			-			102,405
Income tax (provision)/ benefit		5,376			(43,442	)		(1,775	)		-			(39,841	)
Equity in net income of subsidiaries		73,694			2,857			-			(76,551	)		-
Net income	$	62,564		$	73,773		$	2,778		$	(76,551	)	$	62,564

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For the nine months ended September 30, 2013				Guarantor			Non-Guarantor
	Parent			Subsidiaries			Subsidiaries			Consolidated
Cash Flow from Operating Activities:
Net cash provided by operating activities	$	16,336		$	118,998		$	524		$	135,858
Cash Flow from Investing Activities:
Capital expenditures		(96	)		(18,297	)		(494	)		(18,887	)
Business combinations, net of cash acquired		-			(2,210	)		-			(2,210	)
Other sources/(uses) - net		(53	)		171			21			139
Net cash used by investing activities		(149	)		(20,336	)		(473	)		(20,958	)
Cash Flow from Financing Activities:
Increase /(decrease) in cash overdrafts payable		5,378			(16,306	)		-			(10,928	)
Change in intercompany accounts		96,731			(97,541	)		810			-
Dividends paid		(10,459	)		-			-			(10,459	)
Debt issuance costs		(1,108	)		-			-			(1,108	)
Capital stock surrendered to pay taxes on stock-based compensation		(4,280	)		-			-			(4,280	)
Purchases of treasury stock		(89,611	)		-			-			(89,611	)
Proceeds from exercise of stock options		13,125			-			-			13,125
Excess tax benefit on share-based compensation		2,507			-			-			2,507
Other sources/(uses) - net		30			-			(503	)		(473	)
Net cash provided/(used) by financing activities		12,313			(113,847	)		307			(101,227	)
Net increase/(decrease) in cash and cash equivalents		28,500			(15,185	)		358			13,673
Cash and cash equivalents at beginning of year		56,342			4,674			8,515			69,531
Cash and cash equivalents at end of period	$	84,842		$	(10,511	)	$	8,873		$	83,204
For the nine months ended September 30, 2012				Guarantor			Non-Guarantor
	Parent			Subsidiaries			Subsidiaries			Consolidated
Cash Flow from Operating Activities:
Net cash provided by operating activities	$	1,486		$	74,206		$	1,645		$	77,337
Cash Flow from Investing Activities:
Capital expenditures		(196	)		(25,491	)		(802	)		(26,489	)
Business combinations, net of cash acquired		-			(5,900	)		-			(5,900	)
Other sources/(uses) - net		201			359			(32	)		528
Net cash provided/(used) by investing activities		5			(31,032	)		(834	)		(31,861	)
Cash Flow from Financing Activities:
Increase/(decrease) in cash overdrafts payable		(4,580	)		1,281			-			(3,299	)
Change in intercompany accounts		40,489			(40,022	)		(467	)		-
Dividends paid		(9,641	)		-			-			(9,641	)
Capital stock surrendered to pay taxes on stock-based compensation		(3,236	)		-			-			(3,236	)
Purchases of treasury stock		(11,724	)		-			-			(11,724	)
Proceeds from exercise of stock options		10,483			-			-			10,483
Excess tax benefit on share-based compensation		2,714			-			-			2,714
Other sources/(uses) - net		(17	)		(1	)		460			442
Net cash provided/(used) by financing activities		24,488			(38,742	)		(7	)		(14,261	)
Net increase in cash and cash equivalents		25,979			4,432			804			31,215
Cash and cash equivalents at beginning of year		32,470			(1,422	)		7,033			38,081
Cash and cash equivalents at end of period	$	58,449		$	3,010		$	7,837		$	69,296

-17-

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

Executive Summary

We operate through our two wholly-owned subsidiaries, VITAS Healthcare Corporation and Roto-Rooter Group, Inc.  VITAS focuses on hospice care that helps make terminally ill patients’ final days as comfortable as possible.  Through its teams 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’s services are 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 (in thousands except per share amounts):

	Three months ended September 30,						Nine months ended September 30,
	2013			2012			2013			2012
Service revenues and sales	$	340,886		$	354,353		$	1,064,725		$	1,061,466
Net income	$	17,432		$	20,845		$	54,318		$	62,564
Diluted EPS	$	0.94		$	1.07		$	2.89		$	3.23
Adjusted net income	$	25,098		$	24,749		$	78,470		$	72,419
Adjusted diluted EPS	$	1.36		$	1.28		$	4.17		$	3.74
Adjusted EBITDA	$	49,739		$	49,020		$	153,978		$	143,533
Adjusted EBITDA as a % of revenue		14.6	%		13.8	%		14.5	%		13.5	%

Adjusted net income, adjusted diluted EPS, earnings before interest, taxes and depreciation and amortization (“EBITDA”) and Adjusted EBITDA are not measures derived in accordance with GAAP.  We use Adjusted EBITDA as a measure of earnings for our long-term incentive plan awards.  We provide non-GAAP measures 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 non-GAAP measures should not be considered in isolation or as a substitute for comparable measures presented in accordance with GAAP.  A reconciliation of our non-GAAP measures are presented on pages 31- 33.

For the three months ended September 30, 2013, the decrease in consolidated service revenues and sales was driven by a 0.6% increase at Roto-Rooter and a 5.2% decrease at VITAS.  The increase in service revenues at Roto-Rooter was driven by a 3.7% increase in price and mix shift offset by a 4.9% decrease in job count. The remaining difference relates to increases in contractor and Roto-Rooter Corp. revenues.  The decrease in service revenues at VITAS was a result of Medicare reimbursement rates including the effects of sequestration, declining approximately 1.1%, decreased ADC of 0.3%, a $3.2 million Medicare cap charge during the quarter and level of care mix shift.  Consolidated net income decreased 16.4% as a result of the lower revenue at VITAS and tentative litigation settlements at Vitas and Roto-Rooter.  Diluted EPS decreased 12.1% as a result of the decrease in net income offset by a lower number of shares outstanding.  Adjusted EBITDA as a percent of revenue increased 0.8% mainly as a result of improved gross profit margins at Roto-Rooter.  See page 34 for additional VITAS operating metrics.

For the nine months ended September 30, 2013, the increase in consolidated service revenues and sales was driven by a 3.1% increase at Roto-Rooter and a 0.6% decrease at VITAS.  The increase in service revenues at Roto-Rooter was driven by a 3.2% increase in price and mix shift offset by a 1.2% decrease in job count.  The remaining difference relates to increases in contractor and Roto-Rooter Corp. revenues.  The decrease in service revenues at VITAS was a result of a decrease in Medicare reimbursement rates, a $3.2 million net Medicare cap charge (compared to a $2.6 million reversal in the same period of 2012) and level of care mix shift offset by increased ADC of 3.0%.  Consolidated net income decreased 13.2% primarily as a result of lower revenue at VITAS and tentative litigation settlements at VITAS and Roto-Rooter.  Diluted EPS decreased 10.5% as a result of the decrease in net income offset by a lower number of shares outstanding.  Adjusted EBITDA as a percent of revenue increased 1.0% mainly as a result of improved gross profit margins at Roto-Rooter.  See page 34 for additional VITAS operating metrics.

Effective October 1, 2012, Medicare increased the hospice reimbursement rates by approximately 0.9% and effective April 1, 2013, as a result of sequestration, Medicare reduced hospice reimbursement rates for Medicare beneficiaries 2.0% for a net decline of 1.1% in reimbursement rates.   VITAS expects its full-year 2013 revenue, prior to Medicare cap, to be approximately 1% below the prior year.  Admissions are estimated to decline approximately 3.0%.  Adjusted EBITDA margin, prior to Medicare cap, is estimated to be 14.5% to 15.0%.  Medicare cap is estimated to be $1.8 million in the fourth quarter of 2013. Roto-Rooter expects full-year 2013 revenue growth of 2.5%.  The revenue estimate is a result of increased pricing of approximately 3.2% and job count essentially equal to the prior year.  We anticipate that our operating income and cash flows will be sufficient to operate our businesses and meet any commitments for the foreseeable future.

-18-

Financial Condition

Liquidity and Capital Resources

Material changes in the balance sheet accounts from December 31, 2012 to September 30, 2013 include the following:

• A $39.2 million increase in other current liabilities primarily due to tentative litigation settlements and the Medicare cap liability.

• A $13.2 million decrease in accounts receivable related to the timing of receipts.

• A $11.4 million increase in current deferred income taxes due to the accrual of tentative litigation settlements.

• A reclass of our convertible notes from long-term to current as they are due in May 2014.

Net cash provided by operating activities increased $58.5 million primarily as a result of a decrease in accounts receivable and an increase in other current liabilities.  Management continually evaluates cash utilization alternatives, including share repurchase, debt repurchase, acquisitions and increased dividends to determine the most beneficial use of available capital resources.

We have issued $32.9 million in standby letters of credit as of September 30, 2013, for insurance purposes.  Issued letters of credit reduce our available credit under the revolving credit agreement.  As of September 30, 2013, we have approximately $317.1 million of unused lines of credit available and eligible to be drawn down under our revolving credit facility, excluding the $150 million expansion feature. Management believes its liquidity and sources of capital are satisfactory for the Company’s needs in the foreseeable future.

Commitments and Contingencies

Collectively, the terms of our credit agreements require us to meet various financial covenants, to be tested quarterly.  We are in compliance with all financial and other debt covenants as of September 30, 2013 and anticipate remaining in compliance throughout 2013.

The VITAS segment of the Company’s business operates in a heavily-regulated industry.  As a result, the Company is subjected to inquiries and investigations by various government agencies, as well as to lawsuits, including qui tam actions.  The following sections describe the various ongoing lawsuits and investigations of which the Company is currently aware.  Unless otherwise indicated, it is not possible at this time for us to estimate either the timing or outcome of any of those matters, or whether any potential loss, or range of potential losses, is probable or estimable.

In February 2010, Chemed and Roto-Rooter were named as defendants in a lawsuit filed in the United States District Court for the Eastern District of New York, Anthony Morangelli, et al., v. Chemed Corp. and Roto-Rooter Services Co., No. 10 CV-00876 (BMC).  The named plaintiffs, current and former technicians employed by Roto-Rooter who were paid on a commission basis, asserted against Chemed and Roto-Rooter claims for violation of the Fair Labor Standards Act (“FLSA”) and claims for violations of the labor laws of multiple states.  In June 2013 the parties reached an agreement to settle the case for $14.3 million plus applicable payroll taxes ($9.0 million after tax), which is subject to Court approval.  As such, $14.8 million is recorded as other operating expense in the quarter ended June 30, 2013 Statement of Income.

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, Bernadette Santos, et al. v. Vitas Healthcare Corporation of California, BC359356.  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.    In December 2009, the trial court denied Plaintiffs’ motion for class certification.  In July 2011, the Court of Appeals affirmed denial of class certification on the travel time, meal and rest period claims, and reversed the trial court’s denial on the off-the-clock and sales representation exemption claims.  Plaintiffs filed an appeal of this decision.  In September 2012, in response to an order of reconsideration, the Court of Appeals reiterated its previous rulings.  In March 2013, the Court granted summary judgment dismissing the sales representatives’ claims as they are exempt employees.  In October 2013 we reached agreement, subject to Court approval, to settle the case for $10.3 million plus applicable payroll taxes ($6.5 million aftertax).  As such, $10.5 million is recorded as other operating expense in the quarter ended September 30, 2013 Statement of Income.

-19-

On January 12, 2012, a putative class action lawsuit was filed in the U.S. District Court for the Southern District of Ohio against the Company, Kevin McNamara, David Williams, and Timothy O’Toole, In re Chemed Corp. Securities Litigation, Civil Action No. 1:12-cv-28 (S.D. Ohio);.  On June 18, 2012, an amended complaint was filed alleging violation of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 against all Defendants, and violation of Section 20(a) of the Securities Exchange Act of 1934 against Messrs. McNamara, Williams, and O’Toole.  The suit’s allegations concern the VITAS hospice segment of the Company’s business.  Plaintiffs seek, on behalf of a putative class of purchasers of Chemed Capital Stock, compensatory damages in an unspecified amount and attorneys’ fees and expenses, arising from Defendants’ alleged failure to disclose an alleged fraudulent scheme at VITAS to enroll ineligible hospice patients and to fraudulently obtain payments from the federal government.  Defendants filed motions to dismiss the amended complaint on August 17, 2012, which were pending when the parties reached an agreement to settle the action. On June 7, 2013, following the filing of U.S. v. VITAS, discussed below, Plaintiffs filed a motion for leave to file a second amended complaint.  Defendants oppose this motion. On September 16, 2013, Plaintiffs, on behalf of a putative class of purchasers of Chemed Capital Stock between February 15, 2010, and May 3, 2013, inclusive, executed a Settlement Term Sheet with Defendants (“Settlement”), reaching an agreement in principle to settle this case in full and with prejudice, and to provide Defendants with full releases of all claims that are or could have been asserted by Plaintiffs in exchange for payment of $6.0 million by our insurer into a settlement fund for the benefit of the putative class.  The Settlement has been recorded as an accrual and offsetting prepaid in the accompanying Balance Sheet.  This Settlement is subject to final documentation by the parties as well as Court approval. Defendants agreed to enter into this Settlement in order to eliminate the burden, expense and distraction of further litigation.

In June 2011, the U.S. Attorney provided the Company with a partially unsealed qui tam complaint filed under seal in the U.S. District Court for the Western District of Texas, United States, et al. ex rel. Urick v. Vitas HME Solutions, Inc. et al., 5:08-cv-0663 (“Urick”).  The U.S. Attorney filed a notice in May 2012 stating that it had decided not to intervene in the case at that time but indicating that it continues to investigate the allegations.  In June 2012, the complaint was unsealed.  The complaint asserts violations of the federal False Claims Act and the Texas Medicaid Fraud Prevention Act based on allegations of a conspiracy to submit to Medicare and Medicaid false claims involving hospice services for ineligible patients, unnecessary medical supplies, failing to satisfy certain prerequisites for payment, and altering patient records, including backdating patient revocations.  The suit was brought by Barbara Urick, a registered nurse in VITAS’s San Antonio program, against VITAS, certain of its affiliates, and several former VITAS employees, including physicians Justo Cisneros and Antonio Cavasos and nurses Sally Schwenk, Diane Anest, and Edith Reed.  In September 2012 and July 2013, the plaintiff dismissed all claims against the individual defendants.  The complaint was served on the VITAS entities on April 12, 2013.

Also in June 2011, the U.S. Attorney provided the Company with a partially unsealed qui tam complaint filed under seal in the U.S. District Court for the Northern District of Illinois, United States, et al. ex rel. Spottiswood v. Chemed Corp., 1:07-cv-4566 (“Spottiswood”).  In April 2012, the complaint was unsealed.  The U.S. Attorney and Attorney General for the State of Illinois filed notices in April and May 2012, respectively, stating that they had decided not to intervene in the case at that time but indicating that they continue to investigate the allegations.  Plaintiff filed an amended complaint in November 2012.  The complaint asserts violations of the federal False Claims Act and the Illinois Whistleblower Reward and Protection Act based on allegations that VITAS fraudulently billed Medicare and Medicaid for providing unwarranted continuous care services.  The suit was brought by Laura Spottiswood, a former part-time pool registered nurse at VITAS, against Chemed, VITAS, and a VITAS affiliate.  The complaint was served on the defendants on April 12, 2013.  On May 29 and June 4, 2013, respectively, the Court granted the government’s motion to partially intervene in Spottiswood and in Urick on the allegations that Vitas submitted or caused to be submitted false or fraudulent claims for continuous care and routine home care on behalf of certain ineligible Medicare beneficiaries.  The Court also transferred them to the U.S. District Court for the Western District of Missouri under docket Nos. 4:13-cv-505 and 4:13-cv-563, respectively.

On May 2, 2013, the government filed a False Claims Act complaint against the Company and certain of its hospice-related subsidiaries in the U.S. District Court for the Western District of Missouri, United States v. VITAS Hospice Services, LLC, et al., 4:13-cv-00449-BCW (the “2013 Action”).  Prior to that date, the Company received various subpoenas from the U.S. Department of Justice and OIG that have been previously disclosed. The 2013 Action alleges that, since at least 2002, VITAS, and since 2004, the Company, submitted or caused the submission of false claims to the Medicare program by (a) billing Medicare for continuous home care services when the patients were not eligible, the services were not provided, or the medical care was inappropriate, and (b) billing Medicare for patients who were not eligible for the Medicare hospice benefit because they did not have a life expectancy of six months or less if their illnesses ran their normal course.  This complaint seeks treble damages, statutory penalties, and the costs of the action, plus interest.  On August 1, 2013, the government filed its First Amended Complaint in the 2013 Action.  The First Amended Complaint changed and supplemented some of the allegations, but did not otherwise expand the causes of action or the nature of the relief sought against VITAS.  The defendants filed a motion to dismiss on September 24, 2013.  

On May 6, 2013, the U.S. District Court for the Western District of Missouri, at the request of the government, unsealed a qui tam complaint against VITAS and VITAS Healthcare Corporation of California,United States ex rel. Charles Gonzales v. Vitas Healthcare Corporation, et al., CV 12-0761-R (“Gonzales”).  The case was transferred from the Central District of California to the Western District of Missouri under docket No. 4:13-cv-344.  The government has filed a notice of election to intervene in the Gonzales complaint.  The Gonzales complaint alleges that VITAS’ Los Angeles program falsely certified and recertified patients as eligible for the Medicare Hospice Benefit.  It alleges violations of the False Claims Act and seeks treble damages, civil penalties, recovery of costs, attorneys’ fees and expenses, and pre- and post-judgment interest.  

-20-

On September 25, 2013, the Court granted a joint motion by the government, the relators, and VITAS to consolidate the Spottiswood, Urick, and Gonzales complaints with the 2013 Action.  As a result, the First Amended Complaint will govern the consolidated claims brought by the United States and the relators for all purposes.  The relators and VITAS have stipulated that certain non-intervened claims will not be pursued by the relators.

VITAS has also received document subpoenas in related state matters.  In February 2010, VITAS received a civil investigative demand (“CID”) from the Texas Attorney General seeking documents from January 1, 2002 through the date of the CID, and interrogatory responses in connection with an investigation of possible fraudulent submission of Medicaid claims for non-qualifying patients and fraudulent shifting of costs from VITAS to the State of Texas and the United States.  The CID requested similar information sought by prior Department of Justice subpoenas, including policy and procedure manuals and information concerning Medicare and Medicaid billing, patient statistics and sales and marketing practices, together with information concerning record-keeping and retention practices, and medical records concerning 117 patients.  In September 2010, VITAS received a second CID from the Texas Attorney General seeking additional documents concerning business plans and results, revocation forms for certain patients, and electronic documents of 10 current and former employees.  In July 2012, VITAS received an investigative subpoena from the Florida Attorney General seeking documents previously produced in the course of prior government investigations as well as, for the period January 1, 2007 through the date of production, billing records and procedures: information concerning business results, plans, and strategies; documents concerning patient eligibility for hospice care; and certain information concerning employees and their compensation.

The Company intends to defend vigorously against the allegations in each of the above lawsuits.    The Company had a net recovery for these investigations, due to a one-time insurance reimbursement of $1.0 million for certain legal costs, for the three month period ended September 30, 2013 of $591,000. The net costs to comply with these investigations were $1.4 million for the nine month period ended September 30, 2013.  Regardless of the outcome of any of the preceding matters, responding to the subpoenas and dealing with the various regulatory agencies can adversely affect us through defense costs, potential payments, diversion of management time, and related publicity.  Although the Company intends to defend them vigorously, there can be no assurance that those suits will not have a material adverse effect on the Company.

Results of Operations

Three months ended September 30, 2013 versus  2012 - Consolidated Results

Our service revenues and sales for the third quarter of 2013 decreased 3.8% versus services and sales revenues for the third quarter of 2012.  Of this decrease, $14.0 million was attributable to VITAS offset by a $522,000 increase at Roto-Rooter.  The following chart shows the components of those changes (in thousands):

	Increase/(Decrease)
	Amount			Percent
VITAS
Routine homecare	$	(1,288	)	(0.7	)
Continuous care		(6,264	)	(14.9	)
General inpatient		(3,258	)	(11.6	)
Medicare cap		(3,179	)	-
Roto-Rooter
Plumbing		(346	)	(0.8	)
Drain cleaning		(155	)	(0.5	)
Contractor operations		1,112		16.0
HVAC operations		1		100.0
Other		(90	)	(1.7	)
Total	$	(13,467	)	(3.8	)

The decrease in VITAS’ revenues for the third quarter of 2013 versus the third quarter of 2012 was a combination of Medicare reimbursement rates including the effect of sequestration declining approximately 1.1%, decreased ADC of 0.3%, and level of care mix shift.  In the third quarter of 2013, VITAS recorded a Medicare Cap charge of $3.2 million related to one program’s projected 2013 Medicare Cap liability.  This compares with no Medicare Cap liability recorded in the third quarter of 2012.  The ADC decrease was driven by a 0.7% increase in routine homecare, a decrease of 13.0% in continuous care and a decrease of 9.3% in general inpatient.  In excess of 90% of VITAS’ service revenues for the period were from Medicare and Medicaid.

-21-

The decrease in plumbing revenues for the third quarter of 2013 versus 2012 is attributable to a 4.8% decrease in job count offset by a 4.0% increase in price and mix shift.  Drain cleaning revenues for the third quarter of 2013 versus 2012 reflect a 4.5% decrease in the number of jobs perfomed offset by a 4.0% increase in price and mix shift.  Contractor operations revenue increased 16.0% for the third quarter of 2013 due to four acquisitions that were completed in 2012 as well as improved operating conditions.  HVAC revenues were essentially zero as a result of the shut-down of Roto-Rooter’s one remaining HVAC operation during the third quarter of 2012.

The consolidated gross margin was 28.7% in the third quarter of 2013 as compared with 27.6% in the third quarter of 2012.  On a segment basis, VITAS’ gross margin was 22.3% in the third quarter of 2013 and 22.2% in the third quarter of 2012.  The Roto-Rooter segment’s gross margin was 47.3% for the third quarter of 2013 as compared with 44.3% for the third quarter of 2012.  The increase in Roto-Rooter’s gross margin is the result of higher revenue, lower health care and casualty insurance costs and reduced field operating expenses.

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

	Three months ended September 30,
	2013			2012
SG&A expenses before the impact of market gains/(losses) of deferred compensation
plans, long-term incentive compensation, and OIG investigation expenses	$	49,705		$	50,896
Long-term incentive compensation		(55	)		-
Expenses/(cost recovery) related to OIG investigation		(591	)		483
Impact of market value gains/(losses) on liabilities held in
deferred compensation trusts		(189	)		1,576
Total SG&A expenses	$	48,870		$	52,955

SG&A expenses before long-term incentive compensation, expenses related to OIG investigation and the impact of market gains/(losses) of deferred compensation plans for the third quarter of 2013 were down 2.3% when compared to the third quarter of 2012.

	Three months ended September 30,
	2013		2012
Litigation settlement of VITAS segment (a)	$	10,500		$	-
Settlements of Roto-Rooter segment (b)		961			-
Severance and other operating costs related
to closing Roto-Rooter's HVAC business		-			1,126
Total other operating expenses	$	11,461		$	1,126
(a) Santos claims discussed in Note 10.
(b) Estimated cost of certain customer claims currently under negotiation.

Other income - net comprise (in thousands):

	Three months ended September 30,
	2013			2012
Market value gains/(losses) on assets held in deferred
compensation trusts	$	(189	)	$	1,576
Loss on disposal of property and equipment		(101	)		(80	)
Interest income		192			291
Other		8			53
Total other income/(expense) - net	$	(90	)	$	1,840

-22-

Our effective income tax rate was 32.0% in the third quarter of 2013 compared to 38.8% for the third quarter of 2012.  This is a result of a $1.8 million credit related to the expiration of tax statutes for uncertain tax positions recorded in prior years.

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

	Three months ended September 30,
	2013			2012
VITAS
Litigation settlement	$	(6,510	)	$	-
Legal expenses of OIG investigation		367			(300	)
Acquisition expenses		(11	)		(1	)
Roto-Rooter
Litigation settlement		(584	)		-
Expenses related to litigation settlements		(269	)		(70	)
HVAC shut down costs		-			(649	)
Acquisition expenses		(1	)		(52	)
Corporate
Stock option expense		(1,030	)		(1,516	)
Noncash impact of change in accounting for convertible debt		(1,375	)		(1,272	)
Uncertain tax position adjustments		1,782			-
Long-term incentive compensation		(34	)		-
Expenses related to securities litigation		(1	)		(44	)
Total	$	(7,666	)	$	(3,904	)

Three months ended September 30, 2013 versus 2012 - Segment Results

The change in after-tax earnings for the third quarter of 2013 versus the third quarter of 2012 is due to (in thousands):

	Increase/(Decrease)
	Amount				Percent
VITAS		$	(7,332	)		(33.4	)
Roto-Rooter			2,036			33.1
Corporate			1,883			26.0
		$	(3,413	)		(16.4	)

-23-

Results of Operations

Nine months ended September 30, 2013 versus  2012 - Consolidated Results

Our service revenues and sales for the first nine months of 2013 increased 0.3% versus services and sales revenues for the first nine months of 2012.  Of this increase, $8.4 million was attributable to Roto-Rooter offset by a $5.2 million decrease at VITAS.  The following chart shows the components of those changes (in thousands):

	Increase/(Decrease)
	Amount			Percent
VITAS
Routine homecare	$	15,899		2.8
Continuous care		(8,015	)	(6.3	)
General inpatient		(7,300	)	(8.4
Medicare cap		(5,738	)	(222.7	)
Roto-Rooter
Plumbing		685		0.5
Drain cleaning		5,242		5.2
Contractor operations		3,984		19.5
HVAC operations		(1,121	)	(100.0	)
Other		(377	)	(2.2	)
Total	$	3,259		0.3

The decrease in VITAS’ revenues for the first nine months of 2013 versus the first nine months of 2012 is a result of, increased ADC of 3.0%, offset by a Medicare reimbursement rate decrease and level of care mix shift.  In the first nine months, VITAS recorded a net Medicare Cap charge of $3.2 million related to eliminating the Medicare Cap billing limitation recorded in the fourth quarter of 2012 offset by one programs’ projected 2013 Medicare Cap liability.  This compares to $2.6 million of additional revenue recorded in the first nine months of 2012.  The ADC decrease was driven by a 3.7% increase in routine homecare, offset by a decrease of 4.8% in continuous care and a decrease of 5.6% in general inpatient.  In excess of 90% of VITAS’ service revenues for the period were from Medicare and Medicaid.

The increase in plumbing revenues for the first nine months of 2013 versus 2012 is attributable to a 4.3% decrease in job count offset by a 4.8% increase in price and mix shift.  Drain cleaning revenues for the first nine months of 2013 versus 2012 reflect a 1.0% increase in the number of jobs perfomed as well as a 4.2% increase in price and mix shift.  Contractor operations revenue increased 19.5% for the first nine months of 2013 due to four acquisitions that were completed in 2012 as well as improved operating conditions.  HVAC operations decreased as a result of the shut-down of Roto-Rooter’s one remaining HVAC operation during the third quarter of 2012.

The consolidated gross margin was 28.4% for the first nine months of 2013 as compared with 27.3% in the first nine months of 2012.  On a segment basis, VITAS’ gross margin was 21.9% for the first nine months of 2013 and 21.7% for the first nine months of 2012.  The Roto-Rooter segment’s gross margin was 46.9% for the first nine months of 2013 as compared with 44.1% for the first nine months of 2012.  The increase in Roto-Rooter’s gross margin is the result of higher revenue, lower health care and casualty insurance costs and reduced field operating expenses.

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

	Nine months ended September 30,
	2013			2012
SG&A expenses before long-term incentive
compensation and the impact of market gains and
losses of deferred compensation plans	$	154,908		$	152,382
Long-term incentive compensation		(1,161	)		-
Expenses related to OIG investigation		1,444			749
Impact of market value gains on liabilities held in
deferred compensation trusts		2,346			2,761
Total SG&A expenses	$	157,537		$	155,892

-24-

Normal salary increases and revenue related expense increases between periods account for the 1.7% increase in SG&A expenses before long-term incentive compensation, expenses related to OIG investigation and the impact of market gains of deferred compensation plans.

Interest expense for the first nine months of 2013 increased 2.3% when compared to the first nine months of  2012 as a result of the increase in amortization of  bond discount expense and the loss on extinguishment of debt resulting from the replacement of the previous Credit Agreement in January 2013.

Other operating expenses comprise (in thousands):

	Nine months ended September 30,
	2013		2012
Litigation settlement of VITAS segment (a)	$	10,500		$	-
Settlements of Roto-Rooter segment (b)		15,721			-
Severance and other operating costs related
to closing Roto-Rooter's HVAC business		-			1,126
Total other operating expenses	$	26,221		$	1,126
(a) Santos claims discussed in Note 10.
(b) Morangelli claims discussed in Note 10 and estimated cost of certain customer claims currently under negotiation.

Other income - net comprise (in thousands):

	Nine months ended September 30,
	2013			2012
Market value gains on assets held in deferred
compensation trusts	$	2,346		$	2,761
Loss on disposal of property and equipment		(180	)		(228	)
Interest income		1,165			401
Other		(19	)		31
Total other income - net	$	3,312		$	2,965

Our effective income tax rate was 36.8% in the third quarter of 2013 compared to 38.9% for the third quarter of 2012.  This is a result of a $1.8 million credit related to the expiration of tax statutes for uncertain tax positions recorded in prior years.

-25-

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

	Nine Months Ended September 30,
	2013			2012
VITAS
Litigation settlement	$	(6,510	)	$	-
Legal expenses of OIG investigation		(895	)		(465	)
Acquisition expenses		(23	)		(1	)
Roto-Rooter
Litigation settlements		(9,551	)		-
Expenses related to litigation settlements		(699	)		(512	)
HVAC shut down costs		-			(649	)
Expenses of severance arrangements		(184	)		-
Acquisition expenses		(2	)		(73	)
Corporate
Stock option expense		(2,993	)		(4,243	)
Noncash impact of change in accounting for convertible debt		(4,046	)		(3,744	)
Uncertain tax position adjustments		1,782			-
Long-term incentive compensation		(734	)		-
Expenses of securities litigation		(3	)		(168	)
Loss on extinguishment of debt		(294	)		-
Total	$	(24,152	)	$	(9,855	)

Nine months ended September 30, 2013 versus 2012 - Segment Results

The change in after-tax earnings for the first nine months of 2013 versus the first nine months of 2012 is due to (in thousands):

	Increase/(Decrease)
	Amount			Percent
VITAS	$	(6,762	)		(10.9	)
Roto-Rooter		(2,497	)		(11.5	)
Corporate		1,013			4.8
	$	(8,246	)		(13.2	)

-26-

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENT OF INCOME
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2013
(in thousands)(unaudited)
										Chemed
	VITAS			Roto-Rooter			Corporate			Consolidated
2013 (a)
Service revenues and sales	$	254,001		$	86,885		$	-		$	340,886
Cost of services provided and goods sold		197,387			45,797			-			243,184
Selling, general and administrative expenses		18,637			25,009			5,224			48,870
Depreciation		4,545			2,292			134			6,971
Amortization		538			151			501			1,190
Other operating expenses		10,500			961			-			11,461
Total costs and expenses		231,607			74,210			5,859			311,676
Income/(loss) from operations		22,394			12,675			(5,859	)		29,210
Interest expense		(48	)		(82	)		(3,370	)		(3,500	)
Intercompany interest income/(expense)		1,231			579			(1,810	)		-
Other income/(expense)—net		73			8			(171	)		(90	)
Income/(expense) before income taxes		23,650			13,180			(11,210	)		25,620
Income taxes		(9,042	)		(4,999	)		5,853			(8,188	)
Net income/(loss)	$	14,608		$	8,181		$	(5,357	)	$	17,432
(a) The following amounts are included in net income (in thousands):
										Chemed
	VITAS			Roto-Rooter			Corporate			Consolidated
Pretax benefit/(cost):
Stock option expense	$	-		$	-		$	(1,629	)	$	(1,629	)
Noncash impact of accounting for convertible debt		-			-			(2,174	)		(2,174	)
Long-term incentive compensation		-			-			(55	)		(55	)
Litigation settlement		(10,500	)		(961	)		-			(11,461	)
Expenses related to litigation settlements		-			(443	)		-			(443	)
Expenses related to securities litigation		-			-			(1	)		(1	)
Acquisition expenses		(18	)		(3	)		-			(21	)
Expenses/(cost recovery) related to OIG investigation		591			-			-			591
Total	$	(9,927	)	$	(1,407	)	$	(3,859	)	$	(15,193	)
										Chemed
	VITAS			Roto-Rooter			Corporate			Consolidated
After-tax benefit/(cost):
Stock option expense	$	-		$	-		$	(1,030	)	$	(1,030	)
Noncash impact of accounting for convertible debt		-			-			(1,375	)		(1,375	)
Uncertain tax position adjustments		-			-			1,782			1,782
Long-term incentive compensation		-			-			(34	)		(34	)
Litigation settlement		(6,510	)		(584	)		-			(7,094	)
Expenses related to litigation settlements		-			(269	)		-			(269	)
Expenses related to securities litigation		-			-			(1	)		(1	)
Acquisition expenses		(11	)		(1	)		-			(12	)
Expenses related to OIG investigation		367			-			-			367
Total	$	(6,154	)	$	(854	)	$	(658	)	$	(7,666	)

-27-

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENT OF INCOME
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2012
(in thousands)(unaudited)
											Chemed
	VITAS				Roto-Rooter			Corporate			Consolidated
2012 (a)
Service revenues and sales		$	267,990		$	86,363		$	-		$	354,353
Cost of services provided and goods sold			208,473			48,137			-			256,610
Selling, general and administrative expenses			20,148			25,350			7,457			52,955
Depreciation			4,333			2,093			131			6,557
Amortization			489			160			486			1,135
Other operating expenses			-			1,126			-			1,126
Total costs and expenses			233,443			76,866			8,074			318,383
Income/(loss) from operations			34,547			9,497			(8,074	)		35,970
Interest expense			(62	)		(150	)		(3,531	)		(3,743	)
Intercompany interest income/(expense)			795			396			(1,191	)		-
Other income/(expense)—net			176			63			1,601			1,840
Income/(expense) before income taxes			35,456			9,806			(11,195	)		34,067
Income taxes			(13,516	)		(3,661	)		3,955			(13,222	)
Net income/(loss)		$	21,940		$	6,145		$	(7,240	)	$	20,845
(a) The following amounts are included in net income (in thousands):
											Chemed
		VITAS			Roto-Rooter				Corporate		Consolidated
Pretax benefit/(cost):
Stock option expense		$	-		$	-		$	(2,397	)	$	(2,397	)
Noncash impact of accounting for convertible debt			-			-			(2,011	)		(2,011	)
Expenses related to securities litigation			-			-			(68	)		(68	)
Expenses related to litigation settlements			-			(116	)		-			(116	)
Acquisition expenses			(2	)		(85	)		-			(87	)
Expenses of OIG investigation			(483	)		-			-			(483	)
HVAC shut down costs			-			(1,126	)		-			(1,126	)
Total		$	(485	)	$	(1,327	)	$	(4,476	)	$	(6,288	)
											Chemed
		VITAS			Roto-Rooter			Corporate			Consolidated
After-tax benefit/(cost):
Stock option expense		$	-		$	-		$	(1,516	)	$	(1,516	)
Noncash impact of accounting for convertible debt			-			-			(1,272	)		(1,272	)
Expenses related to securities litigation			-			-			(44	)		(44	)
Expenses related to litigation settlements			-			(70	)		-			(70	)
Acquisition expenses			(1	)		(52	)		-			(53	)
Expenses of OIG investigation			(300	)		-			-			(300	)
HVAC shut down costs			-			(649	)		-			(649	)
Total		$	(301	)	$	(771	)	$	(2,832	)	$	(3,904	)

-28-

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENT OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2013
(in thousands)(unaudited)
										Chemed
	VITAS			Roto-Rooter			Corporate			Consolidated
2013 (a)
Service revenues and sales	$	788,896		$	275,829		$	-		$	1,064,725
Cost of services provided and goods sold		616,334			146,516			-			762,850
Selling, general and administrative expenses		61,304			76,901			19,332			157,537
Depreciation		13,579			6,685			401			20,665
Amortization		1,564			454			1,480			3,498
Other operating expenses		10,500			15,721			-			26,221
Total costs and expenses		703,281			246,277			21,213			970,771
Income/(loss) from operations		85,615			29,552			(21,213	)		93,954
Interest expense		(145	)		(239	)		(10,907	)		(11,291	)
Intercompany interest income/(expense)		2,940			1,443			(4,383	)		-
Other income/(expense)—net		878			42			2,392			3,312
Income/(expense) before income taxes		89,288			30,798			(34,111	)		85,975
Income taxes		(34,051	)		(11,580	)		13,974			(31,657	)
Net income/(loss)	$	55,237		$	19,218		$	(20,137	)	$	54,318
(a) The following amounts are included in net income (in thousands):
										Chemed
	VITAS			Roto-Rooter			Corporate			Consolidated
Pretax benefit/(cost):
Stock option expense	$	-		$	-		$	(4,732	)	$	(4,732	)
Noncash impact of accounting for convertible debt		-			-			(6,397	)		(6,397	)
Long-term incentive compensation		-			-			(1,161	)		(1,161	)
Expenses of severance arrangements		-			(302	)		-			(302	)
Loss on extinguishment of debt		-			-			(465	)		(465	)
Litigation settlement		(10,500	)		(15,721	)		-			(26,221	)
Expenses related to litigation settlements		-			(1,151	)		-			(1,151	)
Expenses related to securities litigation		-			-			(4	)		(4	)
Acquisition expenses		(38	)		(4	)		-			(42	)
Expenses related to OIG investigation		(1,444	)		-			-			(1,444	)
Total	$	(11,982	)	$	(17,178	)	$	(12,759	)	$	(41,919	)
										Chemed
	VITAS			Roto-Rooter			Corporate			Consolidated
After-tax benefit/(cost):
Stock option expense	$	-		$	-		$	(2,993	)	$	(2,993	)
Noncash impact of accounting for convertible debt		-			-			(4,046	)		(4,046	)
Long-term incentive compensation		-			-			(734	)		(734	)
Uncertain tax position adjustments		-			-			1,782			1,782
Expenses of severance arrangements		-			(184	)		-			(184	)
Loss on extinguishment of debt		-			-			(294	)		(294	)
Litigation settlement		(6,510	)		(9,551	)		-			(16,061	)
Expenses related to litigation settlements		-			(699	)		-			(699	)
Expenses related to securities litigation		-			-			(3	)		(3	)
Acquisition expenses		(23	)		(2	)		-			(25	)
Expenses related to OIG investigation		(895	)		-			-			(895	)
Total	$	(7,428	)	$	(10,436	)	$	(6,288	)	$	(24,152	)

-29-

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENT OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012
(in thousands)(unaudited)
										Chemed
	VITAS			Roto-Rooter			Corporate			Consolidated
2012 (a)
Service revenues and sales	$	794,050		$	267,416		$	-		$	1,061,466
Cost of services provided and goods sold		621,933			149,490			-			771,423
Selling, general and administrative expenses		60,367			75,875			19,650			155,892
Depreciation		12,521			6,264			393			19,178
Amortization		1,467			471			1,437			3,375
Other operating expenses		-			1,126			-			1,126
Total costs and expenses		696,288			233,226			21,480			950,994
Income/(loss) from operations		97,762			34,190			(21,480	)		110,472
Interest expense		(188	)		(364	)		(10,480	)		(11,032	)
Intercompany interest income/(expense)		2,361			1,221			(3,582	)		-
Other income/(expense)—net		144			9			2,812			2,965
Income/(expense) before income taxes		100,079			35,056			(32,730	)		102,405
Income taxes		(38,080	)		(13,341	)		11,580			(39,841	)
Net income/(loss)	$	61,999		$	21,715		$	(21,150	)	$	62,564
(a) The following amounts are included in net income (in thousands):
										Chemed
	VITAS			Roto-Rooter			Corporate			Consolidated
Pretax benefit/(cost):
Stock option expense	$	-		$	-		$	(6,709	)	$	(6,709	)
Noncash impact of accounting for convertible debt		-			-			(5,919	)		(5,919	)
Expenses related to securities litigation		-			-			(265	)		(265	)
Expenses related to litigation settlements		-			(843	)		-			(843	)
Acquisition expenses		(2	)		(120	)		-			(122	)
Expenses related to OIG investigation		(749	)		-			-			(749	)
HVAC shut down costs		-			(1,126	)		-			(1,126	)
Total	$	(751	)	$	(2,089	)	$	(12,893	)	$	(15,733	)
										Chemed
	VITAS			Roto-Rooter			Corporate			Consolidated
After-tax benefit/(cost):
Stock option expense	$	-		$	-		$	(4,243	)	$	(4,243	)
Noncash impact of accounting for convertible debt		-			-			(3,744	)		(3,744	)
Expenses related to securities litigation		-			-			(168	)		(168	)
Expenses related to litigation settlements		-			(512	)		-			(512	)
Acquisition expenses		(1	)		(73	)		-			(74	)
Expenses related to OIG investigation		(465	)		-			-			(465	)
HVAC shut down costs		-			(649	)		-			(649	)
Total	$	(466	)	$	(1,234	)	$	(8,155	)	$	(9,855	)

-30-

Consolidating Summary and Reconciliation of  Adjusted EBITDA
Chemed Corporation and Subsidiary Companies
(in thousands)													Chemed
For the three months ended September 30, 2013	VITAS					Roto-Rooter			Corporate				Consolidated
Net income/(loss)		$	14,608			$	8,181			$	(5,357	)		$	17,432
Add/(deduct):
Interest expense			48				82				3,370				3,500
Income taxes			9,042				4,999				(5,853	)			8,188
Depreciation			4,545				2,292				134				6,971
Amortization			538				151				501				1,190
EBITDA			28,781				15,705				(7,205	)			37,281
Add/(deduct):
Intercompany interest expense/(income)			(1,231	)			(579	)			1,810				-
Interest income			(163	)			(10	)			(19	)			(192	)
Expenses/(cost recovery) related to OIG investigation			(591	)			-				-				(591	)
Acquisition expenses			18				3				-				21
Litigation settlements			10,500				961				-				11,461
Expenses related to litigation settlements			-				443				-				443
Advertising cost adjustment			-				(369	)			-				(369	)
Stock option expense			-				-				1,629				1,629
Long-term incentive compensation			-				-				55				55
Expenses related to securities litigation			-				-				1				1
Adjusted EBITDA		$	37,314			$	16,154			$	(3,729	)		$	49,739
													Chemed
For the three months ended September 30, 2012	VITAS				Roto-Rooter				Corporate				Consolidated
Net income/(loss)		$	21,940			$	6,145			$	(7,240	)		$	20,845
Add/(deduct):
Interest expense			62				150				3,531				3,743
Income taxes			13,516				3,661				(3,955	)			13,222
Depreciation			4,333				2,093				131				6,557
Amortization			489				160				486				1,135
EBITDA			40,340				12,209				(7,047	)			45,502
Add/(deduct):
Intercompany interest expense/(income)			(795	)			(396	)			1,191				-
Interest income			(256	)			(12	)			(23	)			(291	)
Expenses related to OIG investigation			483				-				-				483
Acquisition expenses			2				85				-				87
HVAC shut down costs			-				1,126				-				1,126
Expenses related to litigation settlements			-				116				-				116
Advertising cost adjustment			-				(468	)			-				(468	)
Stock option expense			-				-				2,397				2,397
Expenses related to securities litigation			-				-				68				68
Adjusted EBITDA		$	39,774			$	12,660			$	(3,414	)		$	49,020

-31-

Consolidating Summary and Reconciliation of  Adjusted EBITDA
Chemed Corporation and Subsidiary Companies
(in thousands)													Chemed
For the nine months ended September 30, 2013	VITAS				Roto-Rooter				Corporate				Consolidated
Net income/(loss)		$	55,237			$	19,218			$	(20,137	)		$	54,318
Add/(deduct):
Interest expense			145				239				10,907				11,291
Income taxes			34,051				11,580				(13,974	)			31,657
Depreciation			13,579				6,685				401				20,665
Amortization			1,564				454				1,480				3,498
EBITDA			104,576				38,176				(21,323	)			121,429
Add/(deduct):
Intercompany interest expense/(income)			(2,940	)			(1,443	)			4,383				-
Interest income			(1,051	)			(66	)			(48	)			(1,165	)
Expenses related to OIG investigation			1,444				-				-				1,444
Acquisition expenses			38				4				-				42
Litigation settlement			10,500				15,721				-				26,221
Expenses related to litigation settlements			-				1,151				-				1,151
Advertising cost adjustment			-				(1,343	)			-				(1,343	)
Expenses of severance arrangements			-				302				-				302
Stock option expense			-				-				4,732				4,732
Long-term incentive compensation			-				-				1,161				1,161
Expenses related to securities litigation			-				-				4				4
Adjusted EBITDA		$	112,567			$	52,502			$	(11,091	)		$	153,978
													Chemed
For the nine months ended September 30, 2012	VITAS				Roto-Rooter				Corporate				Consolidated
Net income/(loss)		$	61,999			$	21,715			$	(21,150	)		$	62,564
Add/(deduct):
Interest expense			188				364				10,480				11,032
Income taxes			38,080				13,341				(11,580	)			39,841
Depreciation			12,521				6,264				393				19,178
Amortization			1,467				471				1,437				3,375
EBITDA			114,255				42,155				(20,420	)			135,990
Add/(deduct):
Intercompany interest expense/(income)			(2,361	)			(1,221	)			3,582				-
Interest income			(328	)			(22	)			(51	)			(401	)
Expenses related to OIG investigation			749				-				-				749
Acquisition expenses			2				120				-				122
HVAC shut down costs			-				1,126				-				1,126
Expenses related to litigation settlements			-				843				-				843
Advertising cost adjustment			-				(1,870	)			-				(1,870	)
Stock option expense			-				-				6,709				6,709
Expenses related to securities litigation			-				-				265				265
Adjusted EBITDA		$	112,317			$	41,131			$	(9,915	)		$	143,533

-32-

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
RECONCILIATION OF ADJUSTED NET INCOME
(in thousands, except per share data)(unaudited)
	Three Months Ended September 30,					Nine Months Ended September 30,
	2013			2012		2013			2012
Net income as reported	$	17,432		$	20,845	$	54,318		$	62,564
Add/(deduct) after-tax cost of:
Litigation settlement		7,094			-		16,061			-
Uncertain tax position adjustments		(1,782	)		-		(1,782	)		-
Additional interest expense resulting from the change
in accounting for the conversion feature of the
convertible notes		1,375			1,272		4,046			3,744
Stock option expense		1,030			1,516		2,993			4,243
HVAC shut down costs		-			649		-			649
Expenses of OIG investigation		(367	)		300		895			465
Expenses related to litigation settlements		269			70		699			512
Long-term incentive compensation		34			-		734			-
Acquisition expenses		12			53		25			74
Expenses related to securities litigation		1			44		3			168
Loss on extinguishment of debt		-			-		294			-
Severance arrangements		-			-		184			-
Adjusted net income	$	25,098		$	24,749	$	78,470		$	72,419
Earnings Per Share As Reported
Net income	$	0.96		$	1.10	$	2.95		$	3.30
Average number of shares outstanding		18,184			18,960		18,436			18,977
Diluted Earnings Per Share As Reported
Net income	$	0.94		$	1.07	$	2.89		$	3.23
Average number of shares outstanding		18,522			19,404		18,824			19,382
Adjusted Earnings Per Share
Net income	$	1.38		$	1.31	$	4.26		$	3.82
Average number of shares outstanding		18,184			18,960		18,436			18,977
Adjusted Diluted Earnings Per Share
Net income	$	1.36		$	1.28	$	4.17		$	3.74
Average number of shares outstanding		18,522			19,404		18,824			19,382
The "Footnotes to Financial Statements" are integral parts of this financial information.

-33-

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
OPERATING STATISTICS FOR VITAS SEGMENT
(unaudited)
	Three Months Ended September 30,						Nine Months Ended September 30,
OPERATING STATISTICS	2013			2012			2013			2012
Net revenue ($000)
Homecare	$	196,476		$	197,764		$	593,410		$	577,511
Inpatient		24,824			28,082			79,181			86,481
Continuous care		35,880			42,144			119,466			127,481
Total before Medicare cap allowance	$	257,180		$	267,990		$	792,057		$	791,473
Medicare cap allowance		(3,179	)		-			(3,161	)		2,577
Total	$	254,001		$	267,990		$	788,896		$	794,050
Net revenue as a percent of total
before Medicare cap allowance
Homecare		76.4	%		73.8	%		74.9	%		73.0	%
Inpatient		9.7			10.5			10.0			10.9
Continuous care		14.0			15.7			15.2			16.1
Total before Medicare cap allowance		100.1			100.0			100.1			100.0
Medicare cap allowance		(1.3	)		-			(0.4	)		0.3
Total		98.8	%		100.0	%		99.7	%		100.3	%
Average daily census (days)
Homecare		10,373			10,123			10,482			9,904
Nursing home		2,911			3,073			2,928			3,031
Routine homecare		13,284			13,196			13,410			12,935
Inpatient		417			460			440			466
Continuous care		540			621			600			630
Total		14,241			14,277			14,450			14,031
Total Admissions		14,555			15,539			47,413			47,773
Total Discharges		14,971			15,340			47,603			47,064
Average length of stay (days)		82.2			78.5			81.3			78.3
Median length of stay (days)		16.0			15.0			15.0			15.0
ADC by major diagnosis
Neurological		37.8	%		33.9	%		36.8	%		34.1	%
Cancer		17.1			17.3			17.0			17.6
Cardio		13.9			11.2			12.8			11.4
Respiratory		7.8			6.7			7.5			6.7
Other		23.4			30.9			25.9			30.2
Total		100.0	%		100.0	%		100.0	%		100.0	%
Admissions by major diagnosis
Neurological		21.0	%		19.3	%		20.3	%		19.3	%
Cancer		34.4			34.0			33.0			33.3
Cardio		13.8			10.5			13.0			11.1
Respiratory		9.0			7.4			9.3			8.1
Other		21.8			28.8			24.4			28.2
Total		100.0	%		100.0	%		100.0	%		100.0	%
Direct patient care margins
Routine homecare		52.5	%		52.5	%		52.2	%		51.8	%
Inpatient		1.7			9.2			5.6			12.0
Continuous care		14.8			19.0			15.8			19.6
Homecare margin drivers (dollars per patient day)
Labor costs	$	54.64		$	54.69		$	55.61		$	55.64
Drug costs		7.52			8.11			7.55			8.25
Home medical equipment		6.67			7.03			6.69			6.88
Medical supplies		2.83			2.77			2.96			2.77
Inpatient margin drivers (dollars per patient day)
Labor costs	$	354.09		$	326.95		$	339.84		$	320.79
Continuous care margin drivers (dollars per patient day)
Labor costs	$	594.25		$	575.21		$	592.15		$	571.56
Bad debt expense as a percent of revenues		0.9	%		0.8	%		0.9	%		0.8	%
Accounts receivable --
Days of revenue outstanding- excluding unapplied Medicare payments		34.6			35.4		n.a			n.a
Days of revenue outstanding- including unapplied Medicare payments		21.9			27.9		n.a			n.a

-34-

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 Regarding Forward-Looking Information

Certain statements contained in this report are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.  The words “believe”, “expect”, “hope”, “anticipate”, “plan” and similar expressions identify forward-looking statements, which speak only as of the date the statement was made.  These forward-looking statements are based on current expectations and assumptions and involve various known and unknown risks, uncertainties, contingencies and other factors, which could cause Chemed’s actual results to differ from those expressed in such forward-looking statements.  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.  In addition, our ability to deal with the unknown outcomes of these events, many of which are beyond our control, may affect the reliability of projections and other financial matters.  Investors are cautioned that such forward-looking statements are subject to inherent risk and there are no assurances that the matters contained in such statements will be achieved.  Chemed does not undertake and specifically disclaims any obligation to publicly update or revise any forward-looking statements, whether as a result of a new information, future events or otherwise.

Item 3.    Quantitative and Qualitative Disclosures about Market Risk

Our primary market risk exposure relates to interest rate risk exposure through variable interest rate borrowings.  At September 30, 2013, we had no variable rate debt outstanding.  At September 30, 2013, the fair value of the Notes approximates $195.3 million which have a face value of $187.0 million.

Item 4.    Controls and Procedures

We carried out an evaluation, under the supervision of our President and Chief Executive Officer and with the participation of the Executive Vice President and Chief Financial Officer and the Vice President and Controller, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report.  Based on that evaluation, the President and Chief Executive Officer, Executive Vice President and Chief Financial Officer and Vice President and Controller have concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.  There has been no change in our internal control over financial reporting that occurred during the quarter covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1.   Legal Proceedings

For information regarding the Company’s legal proceedings, see note 10, Legal and Regulatory Matters, under Part I, Item I of this Quarterly Report on Form 10-Q.

Item 1A. Risk Factors

There have been no material changes from the risk factors previously disclosed in the Company’s most recent Annual Report on Form 10-K.

-35-

Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds

Item 2(c). Purchases of Equity Securities by Issuer and Affiliated Purchasers

The following table shows the activity related to our share repurchase program for the first nine months of 2013:

	Total Number		Weighted Average	Cumulative Shares		Dollar Amount
	of Shares		Price Paid Per	Repurchased Under		Remaining Under
	Repurchased		Share	the Program		The Program
February 2011 Program
January 1 through January 31, 2013	-	$	-	-	$	14,739,197
February 1 through February 28, 2013	-		-	-		114,739,197
March 1 through March 31, 2013	-		-	-	$	114,739,197
First Quarter Total	-	$	-
April 1 through April 30, 2013	-	$	-	-	$	114,739,197
May 31 through May 31, 2013	280,701		65.72	280,701		96,291,009
June 1 through June 30, 2013	-		-	280,701	$	96,291,009
Second Quarter Total	280,701	$	65.72
July 1 through July 31, 2013	219,830	$	70.66	500,531	$	80,758,769
August 1 through August 31, 2013	49,522		71.02	550,053		77,241,690
September 1 through September 30, 2013	763,402		68.26	1,313,455	$	25,128,231
Third Quarter Total	1,032,754	$	68.91
On February 20, 2013, our Board of Directors authorized an additional $100 million under the February 2011 Repurchase
Program.

Item 3.    Defaults Upon Senior Securities

None

Item 4.    Mine Safety Disclosures

None

Item 5.    Other Information

None

-36-

Item 6.    Exhibits

Exhibit No.	Description
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.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.DEF	XBRL Taxonomy Extension Definition Linkbase
101.LAB	XBRL Taxonomy Extension Label Linkbase
101.PRE	XBRL Taxonomy Extension Presentation Linkbase

SIGNATURES

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

			Chemed Corporation
			(Registrant)
Dated:	November 1, 2013	By:	/s/ Kevin J. McNamara
			Kevin J. McNamara
			(President and Chief Executive Officer)
Dated:	November 1, 2013	By:	/s/ David P. Williams
			David P. Williams
			(Executive Vice President and Chief Financial Officer)
Dated:	November 1, 2013	By:	/s/ Arthur V. Tucker, Jr.
			Arthur V. Tucker, Jr.
			(Vice President and Controller)

-37-

EX-31.1

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 quarterly report on Form 10-Q of Chemed Corporation (“registrant”);

2.  Based on my knowledge, this report does not contain any untrue statement of a 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 report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;

4.  The registrant’s 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 and 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 others 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 registrant’s 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 registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter  (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s 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 registrant’s 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 registrant’s internal control over financial reporting.

Date:	November 1, 2013	/s/ Kevin J. McNamara
		Kevin J. McNamara
		(President and Chief
		Executive Officer)

E-1

EX-31.2

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 quarterly report on Form 10-Q of Chemed Corporation (“registrant”);

2.  Based on my knowledge, this report does not contain any untrue statement of a 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 report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;

4.  The registrant’s 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 and 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 others 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 registrant’s 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 registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.  The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s 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 registrant’s 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 registrant’s internal control over financial reporting.

Date:	November 1, 2013	/s/ David P. Williams
		David P. Williams
		(Executive Vice President and
		Chief Financial Officer)

E-2

EX-31.3

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 quarterly report on Form 10-Q of Chemed Corporation (“registrant”);

2.  Based on my knowledge, this report does not contain any untrue statement of a 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 report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;

4.  The registrant’s 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 and 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 others 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 registrant’s 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 registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.  The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s 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 registrant’s 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 registrant’s internal control over financial reporting.

Date:	November 1, 2013	/s/ Arthur V. Tucker, Jr.
		Arthur V. Tucker, Jr.
		(Vice President and
		Controller)

E-3

EX-32.1

EXHIBIT 32.1

CERTIFICATION BY KEVIN J. MCNAMARA

PURSUANT 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 Company’s Quarterly Report on Form 10-Q for the quarter ending September 30, 2013 (“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.

Date:	November 1, 2013	/s/ Kevin J. McNamara
		Kevin J. McNamara
		(President and Chief
		Executive Officer)

E-4

EX-32.2

 EXHIBIT 32.2

CERTIFICATION BY DAVID P. WILLIAMS

PURSUANT 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 Company’s Quarterly Report on Form 10-Q for the quarter ending September 30, 2013 (“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.

Date:	November 1, 2013	/s/ David P. Williams
		David P. Williams
		(Executive Vice President and
		Chief Financial Officer)

E-5

EX-32.3

 EXHIBIT 32.3

CERTIFICATION BY ARTHUR V. TUCKER, JR.

PURSUANT 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 Company’s Quarterly Report on Form 10-Q for the quarter ending September 30, 2013 (“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.

Date:	November 1, 2013	/s/ Arthur V. Tucker, Jr.
		Arthur V. Tucker, Jr.
		(Vice President and Controller)

E-6

XML

Cash Overdrafts And Cash Equivalents

9 Months Ended

Sep. 30, 2013

Cash Overdrafts And Cash Equivalents [Abstract]

Cash Overdrafts And Cash Equivalents

12.  Cash Overdrafts and Cash Equivalents

Included in accounts payable at September 30, 2013 is cash overdrafts payable of $1.3 million (December 31, 2012 - $12.2 million).

From time to time throughout the year, we invest excess cash in money market funds with major commercial banks. We closely monitor the creditworthiness of the institutions with which we invest our overnight funds.  We had $41.0 million in cash equivalents as of September 30, 2013.  There was $56.6 million in cash equivalents as of December 31, 2012.  The weighted average rate of return for our cash equivalents was 0.07% for September 30, 2013 and 0.2% for December 31, 2012.

XML

Other Operating Expenses (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended			9 Months Ended
	Sep. 30, 2013		Sep. 30, 2012	Sep. 30, 2013		Sep. 30, 2012
Other Operating Expenses [Line Items]
Severance and other operating costs related to closing Roto-Rooter's HVAC business			$ 1,126			$ 1,126
Other operating expenses	11,461		1,126	26,221		1,126
Litigation settlement of VITAS segment [Member]
Other Operating Expenses [Line Items]
Litigation settlement	10,500	[1]		10,500	[1]
Settlements of Roto-Rooter segment [Member]
Other Operating Expenses [Line Items]
Litigation settlement	$ 961	[2]		$ 15,721	[2]

[1] Santos claims discussed in Note 10.

[2] Morganelli claims discussed in Note 10 and estimated cost of certain customer claims currently under negotiation.

XML

Consolidated Statement Of Income (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Consolidated Statement Of Income [Abstract]
Service revenues and sales	$ 340,886	$ 354,353	$ 1,064,725	$ 1,061,466
Cost of services provided and goods sold (excluding depreciation)	243,184	256,610	762,850	771,423
Selling, general and administrative expenses	48,870	52,955	157,537	155,892
Depreciation	6,971	6,557	20,665	19,178
Amortization	1,190	1,135	3,498	3,375
Other operating expenses	11,461	1,126	26,221	1,126
Total costs and expenses	311,676	318,383	970,771	950,994
Income from operations	29,210	35,970	93,954	110,472
Interest expense	(3,500)	(3,743)	(11,291)	(11,032)
Other income/(expense) - net	(90)	1,840	3,312	2,965
Income/(loss) before income taxes	25,620	34,067	85,975	102,405
Income taxes	(8,188)	(13,222)	(31,657)	(39,841)
Net income	$ 17,432	$ 20,845	$ 54,318	$ 62,564
Earnings Per Share
Net income	$ 0.96	$ 1.10	$ 2.95	$ 3.30
Average number of shares outstanding	18,184	18,960	18,436	18,977
Diluted Earnings Per Share
Net income	$ 0.94	$ 1.07	$ 2.89	$ 3.23
Average number of shares outstanding	18,522	19,404	18,824	19,382
Cash Dividends Per Share	$ 0.20	$ 0.18	$ 0.56	$ 0.50

XML

Long-Term Debt

9 Months Ended

Sep. 30, 2013

Long-Term Debt [Abstract]

Long-Term Debt

5.   Long-Term Debt

On January 18, 2013, we replaced our existing credit agreement with our Revolving Credit Facility (“2013 Credit Agreement”).  Terms of the 2013 Credit Agreement consist of a five-year, $350 million revolving credit facility.  This 2013 Credit Agreement has a floating interest rate that is currently LIBOR plus 125 basis points.  The 2013 Credit Agreement also includes a $150 million expansion feature.  Debt issuance costs associated with the existing credit agreement were not material.  With respect to the 2013 Credit Agreement, deferred financing costs are immaterial.  The 2013 Credit Agreement contains the following quarterly financial covenants:

Description	Requirement
Leverage Ratio (Consolidated Indebtedness/Consolidated  Adj. EBITDA)	<  3.50 to 1.00
Fixed Charge Coverage Ratio (Consolidated Free Cash Flow/Consolidated Fixed Charges)	>  1.50 to 1.00
Annual Operating Lease Commitment	< $30.0 million

We are in compliance with all debt covenants as of September 30, 2013.  We have issued $32.9 million in standby letters of credit as of September 30, 2013 for insurance purposes.  Issued letters of credit reduce our available credit under the 2013 Credit Agreement.  As of September 30, 2013, we have approximately $317.1 million of unused lines of credit available and eligible to be drawn down under our revolving credit facility, excluding the $150 million expansion feature. 

The following amounts are included in our consolidated balance sheet related to the Notes:

	September 30, 2013		December 31, 2012
Principal amount of convertible debentures	$	186,956	$	186,956
Unamortized debt discount		(5,616)		(12,066)
Carrying amount of convertible debentures	$	181,340	$	174,890
Additional paid in capital (net of tax)	$	31,310	$	31,310

In the second quarter of 2013, the principal amount of the convertible debentures was reclassified to current as the amounts are due in May 2014.

The following amounts comprise interest expense included in our consolidated income statement (in thousands):

	Three months ended September 30,				Nine months ended September 30,
	2013		2012		2013		2012
Cash interest expense	$	990	$	1,381	$	3,420	$	4,064
Non-cash amortization of debt discount		2,186		2,043		6,450		6,028
Amortization and write-off of debt costs		324		319		1,421		940
Total interest expense	$	3,500	$	3,743	$	11,291	$	11,032

The unamortized debt discount is being amortized using the effective interest method over the remaining life of the Notes.  The effective rate on the Notes is approximately 6.875% as of September 30, 2013.

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Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2013

Earnings Per Share [Abstract]

Schedule Of Computation Of Earnings Per Share

			Net Income
For the Three Months Ended September 30,		Income		Shares	Earnings per Share
2013
	Earnings	$	17,432	18,184	$	0.96
	Dilutive stock options		-	235
	Nonvested stock awards		-	103
	Diluted earnings	$	17,432	18,522	$	0.94
2012
	Earnings	$	20,845	18,960	$	1.10
	Dilutive stock options		-	341
	Nonvested stock awards		-	103
	Diluted earnings	$	20,845	19,404	$	1.07
			Net Income
For the Nine Months Ended September 30,		Income		Shares	Earnings per Share
2013
	Earnings	$	54,318	18,436	$	2.95
	Dilutive stock options		-	287
	Nonvested stock awards		-	101
	Diluted earnings	$	54,318	18,824	$	2.89
2012
	Earnings	$	62,564	18,977	$	3.30
	Dilutive stock options		-	313
	Nonvested stock awards		-	92
	Diluted earnings	$	62,564	19,382	$	3.23

Changes In Stock Price Impact On Number Of Shares Included In Diluted Earnings Per Share And Issuable Upon Conversion Of Notes

		Shares		Total Treasury	Shares Due	Incremental
		Underlying 1.875%		Method	to the Company	Shares Issued/
	Share	Convertible	Warrant	Incremental	under Notes	(Received) by the Company
	Price	Notes	Shares	Shares (a)	Hedges	upon Conversion (b)
$	80.73	61,766	-	61,766	(66,076)	(4,310)
$	90.73	317,009	-	317,009	(339,127)	(22,118)
$	100.73	521,573	-	521,573	(557,964)	(36,391)
$	110.73	689,189	121,511	810,700	(737,274)	73,426
$	120.73	829,038	322,121	1,151,159	(886,880)	264,279
$	130.73	947,492	492,040	1,439,532	(1,013,599)	425,933

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 1.875% Convertible Notes, assuming concurrent settlement of the note hedges and warrants.

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Guarantor Subsidiaries (Schedule Of Guarantor Subsidiaries - Income Statement) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Condensed Income Statements, Captions [Line Items]
Service revenues and sales	$ 340,886	$ 354,353	$ 1,064,725	$ 1,061,466
Cost of services provided and goods sold	243,184	256,610	762,850	771,423
Selling, general and administrative expenses	48,870	52,955	157,537	155,892
Depreciation	6,971	6,557	20,665	19,178
Amortization	1,190	1,135	3,498	3,375
Other operating expenses	11,461	1,126	26,221	1,126
Total costs and expenses	311,676	318,383	970,771	950,994
Income/ (loss) from operations	29,210	35,970	93,954	110,472
Interest expense	(3,500)	(3,743)	(11,291)	(11,032)
Other (expense)/income - net	(90)	1,840	3,312	2,965
Income/(loss) before income taxes	25,620	34,067	85,975	102,405
Income tax (provision)/ benefit	(8,188)	(13,222)	(31,657)	(39,841)
Net income	17,432	20,845	54,318	62,564
Consolidating Adjustments [Member]
Condensed Income Statements, Captions [Line Items]
Equity in net income of subsidiaries	(23,414)	(25,634)	(70,390)	(76,551)
Net income	(23,414)	(25,634)	(70,390)	(76,551)
Parent [Member]
Condensed Income Statements, Captions [Line Items]
Selling, general and administrative expenses	5,562	5,991	17,290	17,124
Depreciation	240	237	718	704
Amortization	501	486	1,480	1,437
Total costs and expenses	6,303	6,714	19,488	19,265
Income/ (loss) from operations	(6,303)	(6,714)	(19,488)	(19,265)
Interest expense	(3,579)	(3,517)	(11,089)	(10,437)
Other (expense)/income - net	3,944	4,450	12,526	13,196
Income/(loss) before income taxes	(5,938)	(5,781)	(18,051)	(16,506)
Income tax (provision)/ benefit	2,042	1,877	6,036	5,376
Equity in net income of subsidiaries	21,328	24,749	66,333	73,694
Net income	17,432	20,845	54,318	62,564
Guarantor Subsidiaries [Member]
Condensed Income Statements, Captions [Line Items]
Service revenues and sales	333,750	347,384	1,042,449	1,040,015
Cost of services provided and goods sold	239,122	252,688	750,230	759,549
Selling, general and administrative expenses	42,113	43,992	133,419	131,695
Depreciation	6,497	6,099	19,241	17,816
Amortization	689	649	2,018	1,938
Other operating expenses	11,461	1,126	26,221	1,126
Total costs and expenses	299,882	304,554	931,129	912,124
Income/ (loss) from operations	33,868	42,830	111,320	127,891
Interest expense	(131)	(211)	(384)	(551)
Other (expense)/income - net	(3,840)	(4,184)	(11,549)	(12,982)
Income/(loss) before income taxes	29,897	38,435	99,387	114,358
Income tax (provision)/ benefit	(11,393)	(14,560)	(37,755)	(43,442)
Equity in net income of subsidiaries	2,086	885	4,057	2,857
Net income	20,590	24,760	65,689	73,773
Non-Guarantor Subsidiaries [Member]
Condensed Income Statements, Captions [Line Items]
Service revenues and sales	7,136	6,969	22,276	21,451
Cost of services provided and goods sold	4,062	3,922	12,620	11,874
Selling, general and administrative expenses	1,195	2,972	6,828	7,073
Depreciation	234	221	706	658
Total costs and expenses	5,491	7,115	20,154	19,605
Income/ (loss) from operations	1,645	(146)	2,122	1,846
Interest expense	210	(15)	182	(44)
Other (expense)/income - net	(194)	1,574	2,335	2,751
Income/(loss) before income taxes	1,661	1,413	4,639	4,553
Income tax (provision)/ benefit	1,163	(539)	62	(1,775)
Net income	$ 2,824	$ 874	$ 4,701	$ 2,778

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Financial Instruments

9 Months Ended

Sep. 30, 2013

Financial Instruments [Abstract]

Financial Instruments

13.Financial Instruments

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. 

The following shows the carrying value, fair value and the hierarchy for our financial instruments as of          

September 30, 2013 (in thousands):

				Fair Value Measure
		Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Mutual fund investments of deferred
compensation plans held in trust	$	40,683	$	40,683	$	-	$	-
Long-term debt		181,340		195,257		-		-

The following shows the carrying value, fair value and the hierarchy for our financial instruments as of      December 31, 2012 (in thousands):

				Fair Value Measure
		Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Mutual fund investments of deferred
compensation plans held in trust	$	36,089	$	36,089	$	-	$	-
Long-term debt		174,890		197,874		-		-

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. 

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Legal And Regulatory Matters (Details) (USD $)	3 Months Ended		9 Months Ended		1 Months Ended	3 Months Ended	1 Months Ended	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Jun. 30, 2013 Anthony Morangelli [Member]	Jun. 30, 2013 Anthony Morangelli [Member]	Oct. 31, 2013 Bernadette Santos, Keith Knoche And Joyce White [Member]	Sep. 30, 2013 Bernadette Santos, Keith Knoche And Joyce White [Member]	Sep. 30, 2013 Chemed Corp. Securities Litigation [Member]
Litigation settlement					$ 14,300,000		$ 10,300,000
Litigation settlement after tax amount					9,000,000		6,500,000
Other operating expenses	11,461,000	1,126,000	26,221,000	1,126,000		14,800,000		10,500,000
Loss contigency, damages awarded									6,000,000
Proceeds from insurance reimbursement of certain legal costs	1,000,000
Net recovery of insurance proceeds	591,000
Legal Fees			$ 1,400,000

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Guarantor Subsidiaries (Schedule Of Guarantor Subsidiaries - Statement Of Cash Flows) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Condensed Cash Flow Statements, Captions [Line Items]
Net cash provided by operating activities	$ 135,858	$ 77,337
Capital expenditures	(18,887)	(26,489)
Business combinations, net of cash acquired	(2,210)	(5,900)
Other sources/(uses) - net	139	528
Net cash provided/(used) by investing activities	(20,958)	(31,861)
Increase/(decrease) in cash overdrafts payable	(10,928)	(3,299)
Dividends paid	(10,459)	(9,641)
Debt issuance costs	(1,108)
Capital stock surrendered to pay taxes on stock-based compensation	(4,280)	(3,236)
Purchases of treasury stock	(89,611)	(11,724)
Proceeds from exercise of stock options	13,125	10,483
Excess tax benefit on share-based compensation	2,507	2,714
Other sources/(uses) - net	(473)	442
Net cash provided/(used) by financing activities	(101,227)	(14,261)
Net increase/(decrease) in cash and cash equivalents	13,673	31,215
Cash and cash equivalents at beginning of year	69,531	38,081
Cash and cash equivalents at end of period	83,204	69,296
Parent [Member]
Condensed Cash Flow Statements, Captions [Line Items]
Net cash provided by operating activities	16,336	1,486
Capital expenditures	(96)	(196)
Other sources/(uses) - net	(53)	201
Net cash provided/(used) by investing activities	(149)	5
Increase/(decrease) in cash overdrafts payable	5,378	(4,580)
Change in intercompany accounts	96,731	40,489
Dividends paid	(10,459)	(9,641)
Debt issuance costs	(1,108)
Capital stock surrendered to pay taxes on stock-based compensation	(4,280)	(3,236)
Purchases of treasury stock	(89,611)	(11,724)
Proceeds from exercise of stock options	13,125	10,483
Excess tax benefit on share-based compensation	2,507	2,714
Other sources/(uses) - net	30	(17)
Net cash provided/(used) by financing activities	12,313	24,488
Net increase/(decrease) in cash and cash equivalents	28,500	25,979
Cash and cash equivalents at beginning of year	56,342	32,470
Cash and cash equivalents at end of period	84,842	58,449
Guarantor Subsidiaries [Member]
Condensed Cash Flow Statements, Captions [Line Items]
Net cash provided by operating activities	118,998	74,206
Capital expenditures	(18,297)	(25,491)
Business combinations, net of cash acquired	(2,210)	(5,900)
Other sources/(uses) - net	171	359
Net cash provided/(used) by investing activities	(20,336)	(31,032)
Increase/(decrease) in cash overdrafts payable	(16,306)	1,281
Change in intercompany accounts	(97,541)	(40,022)
Other sources/(uses) - net		(1)
Net cash provided/(used) by financing activities	(113,847)	(38,742)
Net increase/(decrease) in cash and cash equivalents	(15,185)	4,432
Cash and cash equivalents at beginning of year	4,674	(1,422)
Cash and cash equivalents at end of period	(10,511)	3,010
Non-Guarantor Subsidiaries [Member]
Condensed Cash Flow Statements, Captions [Line Items]
Net cash provided by operating activities	524	1,645
Capital expenditures	(494)	(802)
Other sources/(uses) - net	21	(32)
Net cash provided/(used) by investing activities	(473)	(834)
Change in intercompany accounts	810	(467)
Other sources/(uses) - net	(503)	460
Net cash provided/(used) by financing activities	307	(7)
Net increase/(decrease) in cash and cash equivalents	358	804
Cash and cash equivalents at beginning of year	8,515	7,033
Cash and cash equivalents at end of period	$ 8,873	$ 7,837

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Earnings Per Share (Changes In Stock Price Impact On Number Of Shares Included In Diluted Earnings Per Share And Issuable Upon Conversion Of Notes) (Details) (USD $)	9 Months Ended
	Sep. 30, 2013
Earning Per Share [Line Items]
Percent of Senior Convertible Notes	1.875%
80.73 [Member]
Earning Per Share [Line Items]
Share Price	$ 80.73
Conversion of stock, shares converted	(4,310)	[1]
Total Treasury Method Incremental Shares	61,766	[2]
80.73 [Member] | Shares Underlying 1.875% Convertible Notes [Member]
Earning Per Share [Line Items]
Conversion of stock, shares converted	61,766
80.73 [Member] | Shares Due To The Company Under Notes Hedges [Member]
Earning Per Share [Line Items]
Total Treasury Method Incremental Shares	(66,076)
90.73 [Member]
Earning Per Share [Line Items]
Share Price	$ 90.73
Conversion of stock, shares converted	(22,118)	[1]
Total Treasury Method Incremental Shares	317,009	[2]
90.73 [Member] | Shares Underlying 1.875% Convertible Notes [Member]
Earning Per Share [Line Items]
Conversion of stock, shares converted	317,009
90.73 [Member] | Shares Due To The Company Under Notes Hedges [Member]
Earning Per Share [Line Items]
Total Treasury Method Incremental Shares	(339,127)
100.73 [Member]
Earning Per Share [Line Items]
Share Price	$ 100.73
Conversion of stock, shares converted	(36,391)	[1]
Total Treasury Method Incremental Shares	521,573	[2]
100.73 [Member] | Shares Underlying 1.875% Convertible Notes [Member]
Earning Per Share [Line Items]
Conversion of stock, shares converted	521,573
100.73 [Member] | Shares Due To The Company Under Notes Hedges [Member]
Earning Per Share [Line Items]
Total Treasury Method Incremental Shares	(557,964)
110.73 [Member]
Earning Per Share [Line Items]
Share Price	$ 110.73
Conversion of stock, shares converted	73,426	[1]
Warrant Shares	121,511
Total Treasury Method Incremental Shares	810,700	[2]
110.73 [Member] | Shares Underlying 1.875% Convertible Notes [Member]
Earning Per Share [Line Items]
Conversion of stock, shares converted	689,189
110.73 [Member] | Shares Due To The Company Under Notes Hedges [Member]
Earning Per Share [Line Items]
Total Treasury Method Incremental Shares	(737,274)
120.73 [Member]
Earning Per Share [Line Items]
Share Price	$ 120.73
Conversion of stock, shares converted	264,279	[1]
Warrant Shares	322,121
Total Treasury Method Incremental Shares	1,151,159	[2]
120.73 [Member] | Shares Underlying 1.875% Convertible Notes [Member]
Earning Per Share [Line Items]
Conversion of stock, shares converted	829,038
120.73 [Member] | Shares Due To The Company Under Notes Hedges [Member]
Earning Per Share [Line Items]
Total Treasury Method Incremental Shares	(886,880)
130.73 [Member]
Earning Per Share [Line Items]
Share Price	$ 130.73
Conversion of stock, shares converted	425,933	[1]
Warrant Shares	492,040
Total Treasury Method Incremental Shares	1,439,532	[2]
130.73 [Member] | Shares Underlying 1.875% Convertible Notes [Member]
Earning Per Share [Line Items]
Conversion of stock, shares converted	947,492
130.73 [Member] | Shares Due To The Company Under Notes Hedges [Member]
Earning Per Share [Line Items]
Total Treasury Method Incremental Shares	(1,013,599)

[1] Represents the number of incremental shares to be issued by the Company upon conversion of the 1.875% Convertible Notes, assuming concurrent settlement of the note hedges and warrants.

[2] Represents the number of incremental shares that must be included in the calculation of fully diluted shares under U.S. GAAP.

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Independent Contractor Operations (Tables)

9 Months Ended

Sep. 30, 2013

Independent Contractor Operations [Abstract]

Schedule Of Independent Contractors

	Three months ended September 30,				Nine months ended September 30,
	2013		2012		2013		2012
Revenues	$	8,054	$	6,942	$	24,418	$	20,434
Pretax profits		4,243		3,611		13,015		10,424

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Other Income/Expense - Net (Tables)

9 Months Ended

Sep. 30, 2013

Other Income/Expense - Net [Abstract]

Schedule Of Other Income/Expense - Net Comprises

	Three months ended September 30,				Nine months ended September 30,
	2013		2012		2013		2012
Market value gains/(losses) on assets held in
deferred compensation trust	$	(189)	$	1,576	$	2,346	$	2,761
Loss on disposal of property and equipment		(101)		(80)		(180)		(228)
Interest income		192		291		1,165		401
Other - net		8		53		(19)		31
Total other income/(expense) - net	$	(90)	$	1,840	$	3,312	$	2,965

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Independent Contractor Operations (Schedule Of Independent Contractors) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Independent Contractor Operations [Abstract]
Revenues	$ 8,054	$ 6,942	$ 24,418	$ 20,434
Pretax profits	$ 4,243	$ 3,611	$ 13,015	$ 10,424

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Revenue Recognition (Schedule Of Medicare Cap Liability Activity) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Revenue Recognition [Abstract]
Beginning balance January 1,	$ 1,261	$ 2,965
2013 measurement period	3,161
2012 measurement period		(2,577)
Ending balance September 30,	$ 4,422	$ 388

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Long-Term Debt (Financial Debt Covenants) (Details) (USD $) In Millions, unless otherwise specified	9 Months Ended
	Sep. 30, 2013
Debt Instrument [Line Items]
Annual Operating Lease Commitment, Requirement	$ 30.0
Maximum [Member]
Debt Instrument [Line Items]
Leverage Ratio (Consolidated Indebtedness/Consolidated Adj. EBITDA), Requirement	3.50
Fixed Charge Coverage Ratio (Consolidated Free Cash Flow/Consolidated Fixed Charges), Requirement	1.50
Minimum [Member]
Debt Instrument [Line Items]
Leverage Ratio (Consolidated Indebtedness/Consolidated Adj. EBITDA), Requirement	1.00
Fixed Charge Coverage Ratio (Consolidated Free Cash Flow/Consolidated Fixed Charges), Requirement	1.00

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Concentration Of Risk (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Concentration Of Risk [Abstract]
Period of renewal of pharmacy services agreements			3 years
Number of days prior written notice to cancel agreements			30 days
VITAS made purchases from OCR	$ 9.7	$ 10.6	$ 29.3	$ 30.9
Percentage of concentration risk services represent from vendor	90.00%	90.00%	90.00%	90.00%

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Other Operating Expenses (Tables)

9 Months Ended

Sep. 30, 2013

Other Operating Expenses [Abstract]

Schedule Of Other Operating Expenses

	Three months ended September 30,				Nine months ended September 30,
	2013		2012		2013		2012
Litigation settlement of VITAS segment (a)	$	10,500	$	-	$	10,500	$	-
Settlements of Roto-Rooter segment (b)		961		-		15,721		-
Severance and other operating costs related
to closing Roto-Rooter's HVAC business		-		1,126		-		1,126
Total other operating expenses	$	11,461	$	1,126	$	26,221	$	1,126

(a) Santos claims discussed in Note 10.

(b) Morganelli claims discussed in Note 10 and estimated cost of certain customer claims currently under negotiation.

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Other Income/Expense - Net (Schedule Of Other Income - Net Comprises) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Other Income/Expense - Net [Abstract]
Market value gains/(losses) on assets held in deferred compensation trust	$ (189)	$ 1,576	$ 2,346	$ 2,761
Loss on disposal of property and equipment	(101)	(80)	(180)	(228)
Interest income	192	291	1,165	401
Other - net	8	53	(19)	31
Total other income/(expense) - net	$ (90)	$ 1,840	$ 3,312	$ 2,965

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Long-Term Debt (Tables)

9 Months Ended

Sep. 30, 2013

Long-Term Debt [Abstract]

Financial Debt Covenants

Description	Requirement
Leverage Ratio (Consolidated Indebtedness/Consolidated  Adj. EBITDA)	<  3.50 to 1.00
Fixed Charge Coverage Ratio (Consolidated Free Cash Flow/Consolidated Fixed Charges)	>  1.50 to 1.00
Annual Operating Lease Commitment	< $30.0 million

Debt Amounts Included In Consolidated Balance Sheet

	September 30, 2013		December 31, 2012
Principal amount of convertible debentures	$	186,956	$	186,956
Unamortized debt discount		(5,616)		(12,066)
Carrying amount of convertible debentures	$	181,340	$	174,890
Additional paid in capital (net of tax)	$	31,310	$	31,310

Interest Expense Included In Consolidated Income Statement

	Three months ended September 30,				Nine months ended September 30,
	2013		2012		2013		2012
Cash interest expense	$	990	$	1,381	$	3,420	$	4,064
Non-cash amortization of debt discount		2,186		2,043		6,450		6,028
Amortization and write-off of debt costs		324		319		1,421		940
Total interest expense	$	3,500	$	3,743	$	11,291	$	11,032

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Basis Of Presentation

9 Months Ended

Sep. 30, 2013

Basis Of Presentation [Abstract]

Basis Of Presentation

1.  Basis of Presentation

As used herein, the terms "We," "Company" and "Chemed" refer to Chemed Corporation or Chemed Corporation and its consolidated subsidiaries. 

We have prepared the accompanying unaudited consolidated financial statements of Chemed in accordance with Rule 10-01 of SEC Regulation S-X.  Consequently, we have omitted certain disclosures required under generally accepted accounting principles in the United States (“GAAP”) for complete financial statements. TheDecember 31, 2012 balance sheet data were derived from audited financial statements but do not include all disclosures required by GAAP.  However, in our opinion, the financial statements presented herein contain all adjustments, consisting only of normal recurring adjustments, necessary to state fairly our financial position, results of operations and cash flows.  These financial statements are prepared on the same basis as and should be read in conjunction with the Consolidated Financial Statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2012. 

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Segments

9 Months Ended

Sep. 30, 2013

Segments [Abstract]

Segments

3.   Segments

Service revenues and sales and after-tax earnings by business segment are as follows (in thousands):

	Three months ended September 30,					Nine months ended September 30,
	2013			2012		2013			2012
Service Revenues and Sales
VITAS	$	254,001		$	267,990	$	788,896		$	794,050
Roto-Rooter		86,885			86,363		275,829			267,416
Total	$	340,886		$	354,353	$	1,064,725		$	1,061,466
After-tax Earnings
VITAS	$	14,608		$	21,940	$	55,237		$	61,999
Roto-Rooter		8,181			6,145		19,218			21,715
Total		22,789			28,085		74,455			83,714
Corporate		(5,357)	*		(7,240)		(20,137)	*		(21,150)
Net income	$	17,432		$	20,845	$	54,318		$	62,564

*Corporate includes a credit of $1.8 million related to the expiration of tax statutes for uncertain tax positions recorded in prior years.

We report corporate administrative expenses and unallocated investing and financing income and expense not directly related to either segment as “Corporate”.

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Other Income/Expense - Net

9 Months Ended

Sep. 30, 2013

Other Income/Expense - Net [Abstract]

Other Income/Expense - Net

6.   Other Income/(expense)– Net

Other income/(expense) -- net comprises the following (in thousands):

	Three months ended September 30,				Nine months ended September 30,
	2013		2012		2013		2012
Market value gains/(losses) on assets held in
deferred compensation trust	$	(189)	$	1,576	$	2,346	$	2,761
Loss on disposal of property and equipment		(101)		(80)		(180)		(228)
Interest income		192		291		1,165		401
Other - net		8		53		(19)		31
Total other income/(expense) - net	$	(90)	$	1,840	$	3,312	$	2,965

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Earnings Per Share

9 Months Ended

Sep. 30, 2013

Earnings Per Share [Abstract]

Earnings Per Share

4.  Earnings per Share

Earnings per share (“EPS”) are computed using the weighted average number of shares of capital stock outstanding.  Earnings and diluted earnings per share are computed as follows (in thousands, except per share data):

			Net Income
For the Three Months Ended September 30,		Income		Shares	Earnings per Share
2013
	Earnings	$	17,432	18,184	$	0.96
	Dilutive stock options		-	235
	Nonvested stock awards		-	103
	Diluted earnings	$	17,432	18,522	$	0.94
2012
	Earnings	$	20,845	18,960	$	1.10
	Dilutive stock options		-	341
	Nonvested stock awards		-	103
	Diluted earnings	$	20,845	19,404	$	1.07
			Net Income
For the Nine Months Ended September 30,		Income		Shares	Earnings per Share
2013
	Earnings	$	54,318	18,436	$	2.95
	Dilutive stock options		-	287
	Nonvested stock awards		-	101
	Diluted earnings	$	54,318	18,824	$	2.89
2012
	Earnings	$	62,564	18,977	$	3.30
	Dilutive stock options		-	313
	Nonvested stock awards		-	92
	Diluted earnings	$	62,564	19,382	$	3.23

For the three and nine-month periods ended September 30, 2013,434,000and 31,000, respectively, stock options were excluded from the computation of diluted earnings per share because they would have been anti-dilutive. For the three and nine-month period ended September 30, 2012, 1.4 million  stock options were excluded from the computation of diluted earnings per share.

Diluted earnings per share may be impacted in the future as the result of the issuance of our 1.875% Senior Convertible Notes (the “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 an 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 at September 30, 2013.  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:

		Shares		Total Treasury	Shares Due	Incremental
		Underlying 1.875%		Method	to the Company	Shares Issued/
	Share	Convertible	Warrant	Incremental	under Notes	(Received) by the Company
	Price	Notes	Shares	Shares (a)	Hedges	upon Conversion (b)
$	80.73	61,766	-	61,766	(66,076)	(4,310)
$	90.73	317,009	-	317,009	(339,127)	(22,118)
$	100.73	521,573	-	521,573	(557,964)	(36,391)
$	110.73	689,189	121,511	810,700	(737,274)	73,426
$	120.73	829,038	322,121	1,151,159	(886,880)	264,279
$	130.73	947,492	492,040	1,439,532	(1,013,599)	425,933

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 1.875% Convertible Notes, assuming concurrent settlement of the note hedges and warrants.

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Long-Term Debt (Debt Amounts Included In Consolidated Balance Sheet) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Long-Term Debt [Abstract]
Principal amount of convertible debentures	$ 186,956	$ 186,956
Unamortized debt discount	(5,616)	(12,066)
Carry amount of convertible debentures	181,340
Carrying amount of noncurrent convertible debentures		174,890
Additional paid in capital (net of tax)	$ 31,310	$ 31,310

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Retirement Plans (Tables)

9 Months Ended

Sep. 30, 2013

Retirement Plans [Abstract]

Schedule Of Expenses For Retirement, Profit-Sharing Plans, Excess Benefit Plans And Other Similar Plans

Three months ended September 30,				Nine months ended September 30,
2013		2012		2013		2012
$	2,098	$	2,646	$	9,796	$	8,501

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Guarantor Subsidiaries (Tables)

9 Months Ended

Sep. 30, 2013

Guarantor Subsidiaries [Abstract]

Schedule Of Guarantor Subsidiaries - Balance Sheet

September 30, 2013		Guarantor	Non-Guarantor	Consolidating
	Parent	Subsidiaries	Subsidiaries	Adjustments	Consolidated
ASSETS
Cash and cash equivalents	$                     84,842	$                   (10,511)	$                       8,873	$                               -	$                     83,204
Accounts receivable, including intercompany	960	496,001	741	(417,585)	80,117
Inventories	-	6,175	554	-	6,729
Current deferred income taxes	-	27,237	177	(2,313)	25,101
Prepaid income taxes	6,583	-	218	(3,263)	3,538
Prepaid expenses	7,199	10,245	240	-	17,684
Total current assets	99,584	529,147	10,803	(423,161)	216,373
Investments of deferred compensation plans	-	-	40,683	-	40,683
Properties and equipment, at cost less accumulated depreciation	10,361	76,957	2,482	-	89,800
Identifiable intangible assets less accumulated amortization	-	56,979	-	-	56,979
Goodwill	-	462,489	4,451	-	466,940
Other assets	18,155	1,770	15,177	(24,337)	10,765
Investments in subsidiaries	924,423	27,629	-	(952,052)	-
Total assets	$                1,052,523	$                1,154,971	$                     73,596	$              (1,399,550)	$                   881,540
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable, including intercompany	$                   421,662	$                     35,005	$                       5,441	$                 (417,585)	$                     44,523
Current portion of long-term debt	181,340	-	-	-	181,340
Income taxes	5,034	3,349	409	(3,263)	5,529
Accrued insurance	153	41,584	-	-	41,737
Accrued compensation	3,226	43,131	332	-	46,689
Other current liabilities	11,023	47,646	180	(2,313)	56,536
Total current liabilities	622,438	170,715	6,362	(423,161)	376,354
Deferred income taxes	-	51,791	-	(24,337)	27,454
Deferred compensation liabilities	-	-	39,406	-	39,406
Other liabilities	3,258	7,265	976	-	11,499
Stockholders' equity	426,827	925,200	26,852	(952,052)	426,827
Total liabilities and stockholders' equity	$                1,052,523	$                1,154,971	$                     73,596	$              (1,399,550)	$                   881,540
December 31, 2012		Guarantor	Non-Guarantor	Consolidating
	Parent	Subsidiaries	Subsidiaries	Adjustments	Consolidated
ASSETS
Cash and cash equivalents	$                     56,342	$                       4,674	$                       8,515	$                               -	$                     69,531
Accounts receivable, including intercompany	925	427,341	889	(335,822)	93,333
Inventories	-	6,505	553	-	7,058
Current deferred income taxes	-	14,633	173	(1,147)	13,659
Prepaid income taxes	4,043	-	-	(1,400)	2,643
Prepaid expenses	564	10,656	227	-	11,447
Total current assets	61,874	463,809	10,357	(338,369)	197,671
Investments of deferred compensation plans	-	-	36,089	-	36,089
Properties and equipment, at cost less accumulated depreciation	10,984	78,236	2,714	-	91,934
Identifiable intangible assets less accumulated amortization	-	57,177	-	-	57,177
Goodwill	-	461,277	4,555	-	465,832
Other assets	19,025	2,005	13,797	(23,904)	10,923
Investments in subsidiaries	874,692	24,298	-	(898,990)	-
Total assets	$                   966,575	$                1,086,802	$                     67,512	$              (1,261,263)	$                   859,626
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable, including intercompany	$                   325,916	$                     53,934	$                       4,444	$                 (335,822)	$                     48,472
Income taxes	1,019	3,816	1,503	(1,400)	4,938
Accrued insurance	1,339	39,315	-	-	40,654
Accrued compensation	4,119	40,891	447	-	45,457
Other current liabilities	2,786	13,903	1,759	(1,147)	17,301
Total current liabilities	335,179	151,859	8,153	(338,369)	156,822
Deferred income taxes	-	51,566	-	(23,904)	27,662
Long-term debt	174,890	-	-	-	174,890
Deferred compensation liabilities	-	-	35,599	-	35,599
Other liabilities	3,215	7,352	795	-	11,362
Stockholders' equity	453,291	876,025	22,965	(898,990)	453,291
Total liabilities and stockholders' equity	$                   966,575	$                1,086,802	$                     67,512	$              (1,261,263)	$                   859,626

Schedule Of Guarantor Subsidiaries - Income Statement

For the three months ended September 30, 2013		Guarantor	Non-Guarantor	Consolidating
	Parent	Subsidiaries	Subsidiaries	Adjustments	Consolidated
Continuing Operations
Service revenues and sales	$                                               -	$                                   333,750	$                                       7,136	$                                               -	$                                   340,886
Cost of services provided and goods sold	-	239,122	4,062	-	243,184
Selling, general and administrative expenses	5,562	42,113	1,195	-	48,870
Depreciation	240	6,497	234	-	6,971
Amortization	501	689	-	-	1,190
Other operating expenses	-	11,461	-	-	11,461
Total costs and expenses	6,303	299,882	5,491	-	311,676
Income/ (loss) from operations	(6,303)	33,868	1,645	-	29,210
Interest expense	(3,579)	(131)	210	-	(3,500)
Other (expense)/income - net	3,944	(3,840)	(194)	-	(90)
Income/ (loss) before income taxes	(5,938)	29,897	1,661	-	25,620
Income tax (provision)/ benefit	2,042	(11,393)	1,163	-	(8,188)
Equity in net income of subsidiaries	21,328	2,086	-	(23,414)	-
Net income	$                                     17,432	$                                     20,590	$                                       2,824	$                                   (23,414)	$                                     17,432
For the three months ended September 30, 2012		Guarantor	Non-Guarantor	Consolidating
	Parent	Subsidiaries	Subsidiaries	Adjustments	Consolidated
Continuing Operations
Service revenues and sales	$                                               -	$                                   347,384	$                                       6,969	$                                               -	$                                   354,353
Cost of services provided and goods sold	-	252,688	3,922	-	256,610
Selling, general and administrative expenses	5,991	43,992	2,972	-	52,955
Depreciation	237	6,099	221	-	6,557
Amortization	486	649	-	-	1,135
Other operating expenses	-	1,126	-	-	1,126
Total costs and expenses	6,714	304,554	7,115	-	318,383
Income/ (loss) from operations	(6,714)	42,830	(146)	-	35,970
Interest expense	(3,517)	(211)	(15)	-	(3,743)
Other (expense)/income - net	4,450	(4,184)	1,574	-	1,840
Income/ (loss) before income taxes	(5,781)	38,435	1,413	-	34,067
Income tax (provision)/ benefit	1,877	(14,560)	(539)	-	(13,222)
Equity in net income of subsidiaries	24,749	885	-	(25,634)	-
Net income	$                                     20,845	$                                     24,760	$                                          874	$                                   (25,634)	$                                     20,845
For the nine months ended September 30, 2013		Guarantor	Non-Guarantor	Consolidating
	Parent	Subsidiaries	Subsidiaries	Adjustments	Consolidated
Continuing Operations
Service revenues and sales	$                                               -	$                                1,042,449	$                                     22,276	$                                               -	$                                1,064,725
Cost of services provided and goods sold	-	750,230	12,620	-	762,850
Selling, general and administrative expenses	17,290	133,419	6,828	-	157,537
Depreciation	718	19,241	706	-	20,665
Amortization	1,480	2,018	-	-	3,498
Other operating expenses	-	26,221	-	-	26,221
Total costs and expenses	19,488	931,129	20,154	-	970,771
Income/ (loss) from operations	(19,488)	111,320	2,122	-	93,954
Interest expense	(11,089)	(384)	182	-	(11,291)
Other (expense)/income - net	12,526	(11,549)	2,335	-	3,312
Income/ (loss) before income taxes	(18,051)	99,387	4,639	-	85,975
Income tax (provision)/ benefit	6,036	(37,755)	62	-	(31,657)
Equity in net income of subsidiaries	66,333	4,057	-	(70,390)	-
Net income	$                                     54,318	$                                     65,689	$                                       4,701	$                                   (70,390)	$                                     54,318
For the nine months ended September 30, 2012		Guarantor	Non-Guarantor	Consolidating
	Parent	Subsidiaries	Subsidiaries	Adjustments	Consolidated
Continuing Operations
Service revenues and sales	$                                               -	$                                1,040,015	$                                     21,451	$                                               -	$                                1,061,466
Cost of services provided and goods sold	-	759,549	11,874	-	771,423
Selling, general and administrative expenses	17,124	131,695	7,073	-	155,892
Depreciation	704	17,816	658	-	19,178
Amortization	1,437	1,938	-	-	3,375
Other operating expenses	-	1,126	-	-	1,126
Total costs and expenses	19,265	912,124	19,605	-	950,994
Income/ (loss) from operations	(19,265)	127,891	1,846	-	110,472
Interest expense	(10,437)	(551)	(44)	-	(11,032)
Other (expense)/income - net	13,196	(12,982)	2,751	-	2,965
Income/ (loss) before income taxes	(16,506)	114,358	4,553	-	102,405
Income tax (provision)/ benefit	5,376	(43,442)	(1,775)	-	(39,841)
Equity in net income of subsidiaries	73,694	2,857	-	(76,551)	-
Net income	$                                     62,564	$                                     73,773	$                                       2,778	$                                   (76,551)	$                                     62,564

Schedule Of Guarantor Subsidiaries - Statement Of Cash Flows

For the nine months ended September 30, 2013		Guarantor	Non-Guarantor
	Parent	Subsidiaries	Subsidiaries	Consolidated
Cash Flow from Operating Activities:
Net cash provided by operating activities	$               16,336	$             118,998	$                    524	$             135,858
Cash Flow from Investing Activities:
Capital expenditures	(96)	(18,297)	(494)	(18,887)
Business combinations, net of cash acquired	-	(2,210)	-	(2,210)
Other sources/(uses) - net	(53)	171	21	139
Net cash used by investing activities	(149)	(20,336)	(473)	(20,958)
Cash Flow from Financing Activities:
Increase /(decrease) in cash overdrafts payable	5,378	(16,306)	-	(10,928)
Change in intercompany accounts	96,731	(97,541)	810	-
Dividends paid	(10,459)	-	-	(10,459)
Debt issuance costs	(1,108)	-	-	(1,108)
Capital stock surrendered to pay taxes on stock-based compensation	(4,280)	-	-	(4,280)
Purchases of treasury stock	(89,611)	-	-	(89,611)
Proceeds from exercise of stock options	13,125	-	-	13,125
Excess tax benefit on share-based compensation	2,507	-	-	2,507
Other sources/(uses) - net	30	-	(503)	(473)
Net cash provided/(used) by financing activities	12,313	(113,847)	307	(101,227)
Net increase/(decrease) in cash and cash equivalents	28,500	(15,185)	358	13,673
Cash and cash equivalents at beginning of year	56,342	4,674	8,515	69,531
Cash and cash equivalents at end of period	$               84,842	$             (10,511)	$                 8,873	$               83,204
For the nine months ended September 30, 2012		Guarantor	Non-Guarantor
	Parent	Subsidiaries	Subsidiaries	Consolidated
Cash Flow from Operating Activities:
Net cash provided by operating activities	$                 1,486	$               74,206	$                 1,645	$               77,337
Cash Flow from Investing Activities:
Capital expenditures	(196)	(25,491)	(802)	(26,489)
Business combinations, net of cash acquired	-	(5,900)	-	(5,900)
Other sources/(uses) - net	201	359	(32)	528
Net cash provided/(used) by investing activities	5	(31,032)	(834)	(31,861)
Cash Flow from Financing Activities:
Increase/(decrease) in cash overdrafts payable	(4,580)	1,281	-	(3,299)
Change in intercompany accounts	40,489	(40,022)	(467)	-
Dividends paid	(9,641)	-	-	(9,641)
Capital stock surrendered to pay taxes on stock-based compensation	(3,236)	-	-	(3,236)
Purchases of treasury stock	(11,724)	-	-	(11,724)
Proceeds from exercise of stock options	10,483	-	-	10,483
Excess tax benefit on share-based compensation	2,714	-	-	2,714
Other sources/(uses) - net	(17)	(1)	460	442
Net cash provided/(used) by financing activities	24,488	(38,742)	(7)	(14,261)
Net increase in cash and cash equivalents	25,979	4,432	804	31,215
Cash and cash equivalents at beginning of year	32,470	(1,422)	7,033	38,081
Cash and cash equivalents at end of period	$               58,449	$                 3,010	$                 7,837	$               69,296

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Earnings Per Share (Schedule Of Computation Of Earnings Per Share) (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Earnings Per Share [Abstract]
Net Income, Earnings	$ 17,432	$ 20,845	$ 54,318	$ 62,564
Net Income, Earnings, Shares	18,184,000	18,960,000	18,436,000	18,977,000
Net Income, Earnings per Share	$ 0.96	$ 1.10	$ 2.95	$ 3.30
Dilutive stock options, Shares	235,000	341,000	287,000	313,000
Nonvested stock awards, Shares	103,000	103,000	101,000	92,000
Net Income, Diluted Earnings, Shares	18,522,000	19,404,000	18,824,000	19,382,000
Net Income, Diluted Earnings per Share	$ 0.94	$ 1.07	$ 2.89	$ 3.23
Stock options excluded from computation of earnings per share	434,000	1,400,000	31,000	1,400,000

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Guarantor Subsidiaries (Schedule Of Guarantor Subsidiaries - Balance Sheet) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012	Sep. 30, 2012	Dec. 31, 2011
Condensed Balance Sheet Statements, Captions [Line Items]
Cash and cash equivalents	$ 83,204	$ 69,531	$ 69,296	$ 38,081
Accounts receivable, including intercompany	80,117	93,333
Inventories	6,729	7,058
Current deferred income taxes	25,101	13,659
Prepaid income taxes	3,538	2,643
Prepaid expenses	17,684	11,447
Total current assets	216,373	197,671
Investments of deferred compensation plans	40,683	36,089
Properties and equipment, at cost, less accumulated depreciation	89,800	91,934
Identifiable intangible assets less accumulated amortization	56,979	57,177
Goodwill	466,940	465,832
Other assets	10,765	10,923
Total Assets	881,540	859,626
Accounts payable, including intercompany	44,523	48,472
Current portion of long-term debt	181,340
Income taxes	5,529	4,938
Accrued insurance	41,737	40,654
Accrued compensation	46,689	45,457
Other current liabilities	56,536	17,301
Total current liabilities	376,354	156,822
Deferred income taxes	27,454	27,662
Long-term debt		174,890
Deferred compensation liabilities	39,406	35,599
Other liabilities	11,499	11,362
Stockholders' equity	426,827	453,291
Total Liabilities and Stockholders' Equity	881,540	859,626
Parent [Member]
Condensed Balance Sheet Statements, Captions [Line Items]
Cash and cash equivalents	84,842	56,342	58,449	32,470
Accounts receivable, including intercompany	960	925
Prepaid income taxes	6,583	4,043
Prepaid expenses	7,199	564
Total current assets	99,584	61,874
Properties and equipment, at cost, less accumulated depreciation	10,361	10,984
Other assets	18,155	19,025
Investments in subsidiaries	924,423	874,692
Total Assets	1,052,523	966,575
Accounts payable, including intercompany	421,662	325,916
Current portion of long-term debt	181,340
Income taxes	5,034	1,019
Accrued insurance	153	1,339
Accrued compensation	3,226	4,119
Other current liabilities	11,023	2,786
Total current liabilities	622,438	335,179
Long-term debt		174,890
Other liabilities	3,258	3,215
Stockholders' equity	426,827	453,291
Total Liabilities and Stockholders' Equity	1,052,523	966,575
Guarantor Subsidiaries [Member]
Condensed Balance Sheet Statements, Captions [Line Items]
Cash and cash equivalents	(10,511)	4,674	3,010	(1,422)
Accounts receivable, including intercompany	496,001	427,341
Inventories	6,175	6,505
Current deferred income taxes	27,237	14,633
Prepaid expenses	10,245	10,656
Total current assets	529,147	463,809
Properties and equipment, at cost, less accumulated depreciation	76,957	78,236
Identifiable intangible assets less accumulated amortization	56,979	57,177
Goodwill	462,489	461,277
Other assets	1,770	2,005
Investments in subsidiaries	27,629	24,298
Total Assets	1,154,971	1,086,802
Accounts payable, including intercompany	35,005	53,934
Income taxes	3,349	3,816
Accrued insurance	41,584	39,315
Accrued compensation	43,131	40,891
Other current liabilities	47,646	13,903
Total current liabilities	170,715	151,859
Deferred income taxes	51,791	51,566
Other liabilities	7,265	7,352
Stockholders' equity	925,200	876,025
Total Liabilities and Stockholders' Equity	1,154,971	1,086,802
Non-Guarantor Subsidiaries [Member]
Condensed Balance Sheet Statements, Captions [Line Items]
Cash and cash equivalents	8,873	8,515	7,837	7,033
Accounts receivable, including intercompany	741	889
Inventories	554	553
Current deferred income taxes	177	173
Prepaid income taxes	218
Prepaid expenses	240	227
Total current assets	10,803	10,357
Investments of deferred compensation plans	40,683	36,089
Properties and equipment, at cost, less accumulated depreciation	2,482	2,714
Goodwill	4,451	4,555
Other assets	15,177	13,797
Total Assets	73,596	67,512
Accounts payable, including intercompany	5,441	4,444
Income taxes	409	1,503
Accrued compensation	332	447
Other current liabilities	180	1,759
Total current liabilities	6,362	8,153
Deferred compensation liabilities	39,406	35,599
Other liabilities	976	795
Stockholders' equity	26,852	22,965
Total Liabilities and Stockholders' Equity	73,596	67,512
Consolidating Adjustments [Member]
Condensed Balance Sheet Statements, Captions [Line Items]
Accounts receivable, including intercompany	(417,585)	(335,822)
Current deferred income taxes	(2,313)	(1,147)
Prepaid income taxes	(3,263)	(1,400)
Total current assets	(423,161)	(338,369)
Other assets	(24,337)	(23,904)
Investments in subsidiaries	(952,052)	(898,990)
Total Assets	(1,399,550)	(1,261,263)
Accounts payable, including intercompany	(417,585)	(335,822)
Income taxes	(3,263)	(1,400)
Other current liabilities	(2,313)	(1,147)
Total current liabilities	(423,161)	(338,369)
Deferred income taxes	(24,337)	(23,904)
Stockholders' equity	(952,052)	(898,990)
Total Liabilities and Stockholders' Equity	$ (1,399,550)	$ (1,261,263)

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Cash Overdrafts And Cash Equivalents (Details) (USD $) In Millions, unless otherwise specified	9 Months Ended	12 Months Ended
	Sep. 30, 2013	Dec. 31, 2012
Cash Overdrafts And Cash Equivalents [Abstract]
Cash overdrafts included in accounts payable	$ 1.3	$ 12.2
Cash equivalents	$ 41.0	$ 56.6
Cash equivalents weighted average rate of return	0.07%	0.20%

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Independent Contractor Operations (Narrative) (Details) (USD $) In Millions, unless otherwise specified				9 Months Ended
	Sep. 30, 2013	Dec. 31, 2012	Sep. 30, 2013 Settlements of Roto-Rooter segment [Member]	Sep. 30, 2013 Maximum [Member]	Sep. 30, 2013 Minimum [Member]
Independent Contractor Operations [Line Items]
Independent contractors with sublicenses			68
Notes receivable from independent contractors	$ 1.4	$ 1.3
Interest rates on loans				8.00%	0.00%
Terms of the loans to independent contractors, years				5 years	2 months

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Consolidated Balance Sheet (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Consolidated Balance Sheet [Abstract]
Accounts receivable, allowances	$ 12,555	$ 10,892
Properties and equipment, at cost, accumulated depreciation	178,720	164,607
Identifiable intangible assets, accumulated amortization	$ 31,633	$ 30,414
Capital stock - authorized	80,000,000	80,000,000
Capital stock - par value	$ 1	$ 1
Capital stock - issued	32,085,561	31,589,366
Treasury stock	14,548,735	13,057,270

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Retirement Plans

9 Months Ended

Sep. 30, 2013

Retirement Plans [Abstract]

Retirement Plans

9.  Retirement Plans

All of the Company’s plans that provide retirement and similar benefits are defined contribution plans.  These expenses include the impact of market gains and losses on assets held in deferred compensation plans.  Expenses for the Company’s pension and profit-sharing plans, excess benefit plans and other similar plans are as follows (in thousands):

Three months ended September 30,				Nine months ended September 30,
2013		2012		2013		2012
$	2,098	$	2,646	$	9,796	$	8,501

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Consolidated Statement Of Cash Flows (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Cash Flows from Operating Activities
Net income	$ 54,318	$ 62,564
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	24,163	22,553
Deferred income taxes	(11,681)	(6,808)
Provision for uncollectible accounts receivable	8,211	7,303
Amortization of discount on convertible notes	6,450	6,028
Stock option expense	4,732	6,709
Amortization of debt issuance costs	1,421	940
Noncash long-term incentive compensation	1,161
Changes in operating assets and liabilities, excluding amounts acquired in business combinations:
Decrease/(increase) in accounts receivable	5,293	(30,409)
Decrease in inventories	329	1,029
Decrease/(increase) in prepaid expenses	(6,183)	1,554
Increase in accounts payable and other current liabilities	48,967	4,454
Increase in income taxes	1,923	1,292
Increase in other assets	(5,002)	(3,944)
Increase in other liabilities	3,978	6,648
Excess tax benefit on share-based compensation	(2,507)	(2,714)
Other sources	285	138
Net cash provided by operating activities	135,858	77,337
Cash Flows from Investing Activities
Capital expenditures	(18,887)	(26,489)
Business combinations, net of cash acquired	(2,210)	(5,900)
Other sources	139	528
Net cash provided/(used) by investing activities	(20,958)	(31,861)
Cash Flows from Financing Activities
Purchases of treasury stock	(89,611)	(11,724)
Dividends paid	(10,459)	(9,641)
Capital stock surrendered to pay taxes on stock-based compensation	(4,280)	(3,236)
Proceeds from exercise of stock options	13,125	10,483
Excess tax benefit on share-based compensation	2,507	2,714
Decrease in cash overdrafts payable	(10,928)	(3,299)
Debt issuance costs	(1,108)
Other sources/(uses)	(473)	442
Net cash provided/(used) by financing activities	(101,227)	(14,261)
Net increase/(decrease) in cash and cash equivalents	13,673	31,215
Cash and cash equivalents at beginning of year	69,531	38,081
Cash and cash equivalents at end of period	$ 83,204	$ 69,296

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Consolidated Balance Sheet (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
CURRENT ASSETS
Cash and cash equivalents	$ 83,204	$ 69,531
Accounts receivable less allowances of $12,555 (2012 - $10,892)	80,117	93,333
Inventories	6,729	7,058
Current deferred income taxes	25,101	13,659
Prepaid income taxes	3,538	2,643
Prepaid expenses	17,684	11,447
Total current assets	216,373	197,671
Investments of deferred compensation plans	40,683	36,089
Properties and equipment, at cost, less accumulated depreciation of $178,720 (2012- $164,607)	89,800	91,934
Identifiable intangible assets less accumulated amortization of $31,633 (2012 - $30,414)	56,979	57,177
Goodwill	466,940	465,832
Other assets	10,765	10,923
Total Assets	881,540	859,626
CURRENT LIABILITIES
Accounts payable	44,523	48,472
Current portion of long-term debt	181,340
Income taxes	5,529	4,938
Accrued insurance	41,737	40,654
Accrued compensation	46,689	45,457
Other current liabilities	56,536	17,301
Total current liabilities	376,354	156,822
Deferred income taxes	27,454	27,662
Long-term debt		174,890
Deferred compensation liabilities	39,406	35,599
Other liabilities	11,499	11,362
Total Liabilities	454,713	406,335
Commitments and contingencies
STOCKHOLDERS' EQUITY
Capital stock - authorized 80,000,000 shares $1 par; issued 32,085,561 shares (2012 - 31,589,366 shares)	32,086	31,589
Paid-in capital	469,934	437,364
Retained earnings	666,894	623,035
Treasury stock - 14,548,735 shares (2012 - 13,057,270)	(744,210)	(640,732)
Deferred compensation payable in Company stock	2,123	2,035
Total Stockholders' Equity	426,827	453,291
Total Liabilities and Stockholders' Equity	$ 881,540	$ 859,626

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Financial Instruments (Carrying Value, Fair Value And Hierarchy Of Financial Instruments) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Mutual fund investments of deferred compensation plans held in trust, Carrying Value	$ 40,683	$ 36,089
Current portion of long-term debt	181,340
Long-term debt, Carrying Value		174,890
Quoted Prices In Active Markets For Identical Assets (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Mutual fund investments of deferred compensation plans held in trust	40,683	36,089
Long-term debt	$ 195,257	$ 197,874

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Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2013

Financial Instruments [Abstract]

Carrying Value, Fair Value And Hierarchy Of Financial Instruments

The following shows the carrying value, fair value and the hierarchy for our financial instruments as of          

September 30, 2013 (in thousands):

				Fair Value Measure
		Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Mutual fund investments of deferred
compensation plans held in trust	$	40,683	$	40,683	$	-	$	-
Long-term debt		181,340		195,257		-		-

The following shows the carrying value, fair value and the hierarchy for our financial instruments as of      December 31, 2012 (in thousands):

				Fair Value Measure
		Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Mutual fund investments of deferred
compensation plans held in trust	$	36,089	$	36,089	$	-	$	-
Long-term debt		174,890		197,874		-		-

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Segments (Tables)

9 Months Ended

Sep. 30, 2013

Segments [Abstract]

Service Revenues And Sales And After-Tax Earnings By Business Segment

	Three months ended September 30,					Nine months ended September 30,
	2013			2012		2013			2012
Service Revenues and Sales
VITAS	$	254,001		$	267,990	$	788,896		$	794,050
Roto-Rooter		86,885			86,363		275,829			267,416
Total	$	340,886		$	354,353	$	1,064,725		$	1,061,466
After-tax Earnings
VITAS	$	14,608		$	21,940	$	55,237		$	61,999
Roto-Rooter		8,181			6,145		19,218			21,715
Total		22,789			28,085		74,455			83,714
Corporate		(5,357)	*		(7,240)		(20,137)	*		(21,150)
Net income	$	17,432		$	20,845	$	54,318		$	62,564

*Corporate includes a credit of $1.8 million related to the expiration of tax statutes for uncertain tax positions recorded in prior years.

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Stock-Based Compensation Plans (Narrative) (Details) (Restricted Stock [Member], USD $) In Millions, except Share data, unless otherwise specified	0 Months Ended
	Feb. 20, 2013
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted for the period indicated	28,992
Shares vesting period, years	4 years
Cumulative compensation expense	$ 2.3
Cumulative compensation expense recognized ratably over vesting period, years	4 years

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Guarantor Subsidiaries (Narrative) (Details)	9 Months Ended
	Sep. 30, 2013
Guarantor Subsidiaries [Abstract]
Percent of Senior Convertible Notes	1.875%
Percent of owned subsidiaries	100.00%

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Long-Term Debt (Narrative) (Details) (USD $) In Millions, unless otherwise specified	9 Months Ended
	Sep. 30, 2013
Debt Instrument [Line Items]
Revolving credit facility period, years	5 years
Revolving credit facility, borrowing capacity	$ 350
Revolving credit facility, interest rate description	floating interest rate that is currently LIBOR plus 125 basis points
Line of credit expansion feature	150
Standby letters of credit issued	32.9
Unused lines of credit	$ 317.1
Effective rate on Notes	6.875%
LIBOR [Member]
Debt Instrument [Line Items]
Line of credit facility, basis points above LIBOR	1.25%

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Revenue Recognition (Schedule Of Cost Of Charity Care) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Revenue Recognition [Abstract]
Charity care cost	$ 1,909	$ 1,983	$ 5,793	$ 6,021

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Segments (Service Revenues And Sales And After- Tax Earnings By Business Segment) (Details) (USD $)	3 Months Ended			9 Months Ended
	Sep. 30, 2013		Sep. 30, 2012	Sep. 30, 2013		Sep. 30, 2012
Segment Reporting Information [Line Items]
Service revenues and sales	$ 340,886,000		$ 354,353,000	$ 1,064,725,000		$ 1,061,466,000
After-tax Earnings	22,789,000		28,085,000	74,455,000		83,714,000
Net income	17,432,000		20,845,000	54,318,000		62,564,000
Income tax benefit	(1,800,000)
Litigation settlement of VITAS segment [Member]
Segment Reporting Information [Line Items]
Service revenues and sales	254,001,000		267,990,000	788,896,000		794,050,000
After-tax Earnings	14,608,000		21,940,000	55,237,000		61,999,000
Settlements of Roto-Rooter segment [Member]
Segment Reporting Information [Line Items]
Service revenues and sales	86,885,000		86,363,000	275,829,000		267,416,000
After-tax Earnings	8,181,000		6,145,000	19,218,000		21,715,000
Corporate Segment [Member]
Segment Reporting Information [Line Items]
After-tax Earnings	$ (5,357,000)	[1]	$ (7,240,000)	$ (20,137,000)	[1]	$ (21,150,000)

[1] Corporate includes a credit of $1.8 million related to the expiration of tax statutes for uncertain tax positions recorded in prior years.

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Independent Contractor Operations

9 Months Ended

Sep. 30, 2013

Independent Contractor Operations [Abstract]

Independent Contractor Operations

8.   Independent Contractor Operations

The Roto-Rooter segment sublicenses with 68 independent contractors to operate certain plumbing repair and drain cleaning businesses in lesser-populated areas of the United States and Canada.  We had notes receivable from our independent contractors as of September 30, 2013 totaling $1.4 million (December 31, 2012 - $1.3 million).  In most cases these loans are fully or partially secured by equipment owned by the contractor.  The interest rates on the loans range from 0% to 8% per annum and the remaining terms of the loans range from 2 months to 5 years at September 30, 2013.  We recorded the following from our independent contractors (in thousands):

	Three months ended September 30,				Nine months ended September 30,
	2013		2012		2013		2012
Revenues	$	8,054	$	6,942	$	24,418	$	20,434
Pretax profits		4,243		3,611		13,015		10,424

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Capital Stock Repurchase Plan Transactions (Tables)

9 Months Ended

Sep. 30, 2013

Capital Stock Repurchase Plan Transactions [Abstract]

Schedule Of Capital Stock Repurchases

	Three months ended September 30,				Nine months ended September 30,
	2013		2012		2013		2012
Shares repurchased		1,032,754		9,334		1,313,455		209,234
Weighted average price per share	$	68.91	$	62.75	$	68.23	$	56.03

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Long-Term Debt (Interest Expense Included In Consolidated Income Statement) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Long-Term Debt [Abstract]
Cash interest expense	$ 990	$ 1,381	$ 3,420	$ 4,064
Non-cash amortization of debt discount	2,186	2,043	6,450	6,028
Amortization and write-off of debt costs	324	319	1,421	940
Total interest expense	$ 3,500	$ 3,743	$ 11,291	$ 11,032

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Concentration Of Risk

9 Months Ended

Sep. 30, 2013

Concentration Of Risk [Abstract]

Concentration Of Risk

11.  Concentration of Risk

VITAS has 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 three-year terms.  Either party may cancel the Agreements at the end of any term by giving 30 days prior written notice.  VITAS made purchases from OCR of $9.7 million and $10.6 million for the three months ended September 30, 2013 and 2012, respectively.  VITAS made purchases from OCR of $29.3 million and $30.9 million for the nine months ended September 30, 2013 and 2012, respectively For the three and nine month periods ending September 30, 2013 and 2012, respectively, purchases from this vendor represent approximately90% of all pharmacy services used by VITAS.

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Stock-Based Compensation Plans

9 Months Ended

Sep. 30, 2013

Stock-Based Compensation Plans [Abstract]

Stock-Based Compensation Plans

7.   Stock-Based Compensation Plans

On February 20, 2013, the Compensation/Incentive Committee of the Board of Directors (“CIC”) approved a grant of 28,992 shares of restricted stock to certain key employees.  The restricted shares cliff vest four years from the date of issuance.  The cumulative compensation expense related to the restricted stock award is $2.3 million and will be recognized ratably over the 4 year vesting period.  We assumed no forfeitures in determining the cumulative compensation expense of the grant. 

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Revenue Recognition

9 Months Ended

Sep. 30, 2013

Revenue Recognition [Abstract]

Revenue Recognition

2. Revenue Recognition

Both the VITAS segment and the 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.  VITAS recognizes revenue at the estimated realizable amount due from third-party payers.  Medicare payments are subject to certain limitations, as described below.

As of September 30, 2013, VITAS has approximately $224,000 in unbilled revenue included in accounts receivable (December 31, 2012 - $457,000).  The unbilled revenue at VITAS relates to hospice programs currently undergoing various patient file reviews.  Surveyors working on behalf of the various payers review certain patient files for compliance with applicable 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.  However, we cannot predict whether future billing reviews or similar audits by payers will result in material denials or reductions in revenue.

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 they are likely to exceed the annual per-beneficiary Medicare cap (“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 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 the amount as a reduction to patient revenue. 

During the three and nine month periods ended September 30, 2013, we reversed Medicare cap liability of $873,000for amounts recorded in the fourth quarter of 2012 for three programs’ projected 2013 measurement period liability.  We reversed these amounts as improving admissions trends in these programs indicate that the liability had been eliminated.  During 2013 this reversal was offset by a $4.0 million Medicare cap liability for one program’s projected 2013 measurement period liability.

Shown below is the Medicare cap liability activity for the fiscal periods ended (in thousands):

	September 30,
	2013		2012
Beginning balance January 1,	$	1,261	$	2,965
2013 measurement period		3,161		-
2012 measurement period		-		(2,577)
Ending balance September 30,	$	4,422	$	388

Vitas provides charity care, in certain circumstances, to patients without charge when management of the hospice program determines, at the time services are performed, 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 charity care is calculated by taking the ratio of charity care days to total days of care and multiplying by total cost of care.  The cost of charity care is as follows (in thousands):

Three months ended September 30,				Nine months ended September 30,
2013			2012	2013		2012
$	1,909	$	1,983	$	5,793	$	6,021

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Capital Stock Repurchase Plan Transactions (Details) (USD $) In Millions, except Share data, unless otherwise specified	1 Months Ended	3 Months Ended		9 Months Ended
	Feb. 28, 2013	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Capital Stock Repurchase Plan Transactions [Abstract]
Shares repurchased		1,032,754	9,334	1,313,455	209,234
Weighted average price per share		$ 68.91	$ 62.75	$ 68.23	$ 56.03
Stock Repurchase Program, Authorized Amount	$ 100
Stock Repurchase Program, Remaining Authorized Repurchase Amount				$ 25.1

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Retirement Plans (Schedule Of Expenses For Retirement, Profit-Sharing Plans, Excess Benefit Plans And Other Similar Plans) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Retirement Plans [Abstract]
Defined contribution plans	$ 2,098	$ 2,646	$ 9,796	$ 8,501

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Revenue Recognition (Narrative) (Details) (USD $)	3 Months Ended	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2013	Dec. 31, 2012
Revenue Recognition [Line Items]
Unbilled revenue	$ 224,000	$ 224,000	$ 457,000
Increase (decrease) in Medicare cap liability	(873,000)	(873,000)
One Program Projected Measurement Period Liability [Member]
Revenue Recognition [Line Items]
Increase (decrease) in Medicare cap liability		$ 4,000,000

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Capital Stock Repurchase Plan Transactions

9 Months Ended

Sep. 30, 2013

Capital Stock Repurchase Plan Transactions [Abstract]

Capital Stock Repurchase Plan Transactions

14.  Capital Stock Repurchase Plan Transactions

We repurchased the following capital stock for the three and nine-months ended September 30, 2013 and 2012:

	Three months ended September 30,				Nine months ended September 30,
	2013		2012		2013		2012
Shares repurchased		1,032,754		9,334		1,313,455		209,234
Weighted average price per share	$	68.91	$	62.75	$	68.23	$	56.03

In February 2013, the Board of Directors authorized an additional $100 million for stock repurchase under Chemed’s existing share repurchase program. We currently have $25.1  million of authorization remaining under this share repurchase plan.

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Legal And Regulatory Matters

9 Months Ended

Sep. 30, 2013

Legal And Regulatory Matters [Abstract]

Legal And Regulatory Matters

10.  Legal and Regulatory Matters

The VITAS segment of the Company’s business operates in a heavily-regulated industry.  As a result, the Company is subjected to inquiries and investigations by various government agencies, as well as to lawsuits, including qui tam actions.  The following sections describe the various ongoing lawsuits and investigations of which the Company is currently aware.  Unless otherwise indicated, it is not possible at this time for us to estimate either the timing or outcome of any of those matters, or whether any potential loss, or range of potential losses, is probable or estimable.

Regulatory Matters and Litigation

In February 2010, Chemed and Roto-Rooter were named as defendants in a lawsuit filed in the United States District Court for the Eastern District of New York, Anthony Morangelli, et al., v. Chemed Corp. and Roto-Rooter Services Co., No. 10 CV-00876 (BMC).  The named plaintiffs, current and former technicians employed by Roto-Rooter who were paid on a commission basis, asserted against Chemed and Roto-Rooter claims for violation of the Fair Labor Standards Act (“FLSA”) and claims for violations of the labor laws of multiple states.  In June 2013 the parties reached an agreement to settle the case for $14.3 million plus applicable payroll taxes ($9.0 million after tax), which is subject to Court approval.  As such, $14.8 million is recorded as other operating expense in the quarter ended June 30, 2013 Statement of Income.

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, Bernadette Santos, et al. v. Vitas Healthcare Corporation of California, BC359356.  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.    In December 2009, the trial court denied Plaintiffs’ motion for class certification.  In July 2011, the Court of Appeals affirmed denial of class certification on the travel time, meal and rest period claims, and reversed the trial court’s denial on the off-the-clock and sales representation exemption claims.  Plaintiffs filed an appeal of this decision.  In September 2012, in response to an order of reconsideration, the Court of Appeals reiterated its previous rulings.  In March 2013, the Court granted summary judgment dismissing the sales representatives’ claims as they are exempt employees.  In October 2013 we reached agreement, subject to Court approval, to settle the case for $10.3 million plus applicable payroll taxes ($6.5 million aftertax).  As such, $10.5 million is recorded as other operating expense in the quarter ended September 30, 2013 Statement of Income.

On January 12, 2012, a putative class action lawsuit was filed in the U.S. District Court for the Southern District of Ohio against the Company, Kevin McNamara, David Williams, and Timothy O’Toole,In re Chemed Corp. Securities Litigation, Civil Action No. 1:12-cv-28 (S.D. Ohio).  On June 18, 2012, an amended complaint was filed alleging violation of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 against all Defendants, and violation of Section 20(a) of the Securities Exchange Act of 1934 against Messrs. McNamara, Williams, and O’Toole.  The suit’s allegations concern the VITAS hospice segment of the Company’s business.  Plaintiffs seek, on behalf of a putative class of purchasers of Chemed Capital Stock, compensatory damages in an unspecified amount and attorneys’ fees and expenses, arising from Defendants’ alleged failure to disclose an alleged fraudulent scheme at VITAS to enroll ineligible hospice patients and to fraudulently obtain payments from the federal government.  Defendants filed motions to dismiss the amended complaint on August 17, 2012, which were pending when the parties reached an agreement to settle the action.On June 7, 2013, following the filing of U.S. v. VITAS, discussed below, Plaintiffs filed a motion for leave to file a second amended complaint.  Defendants oppose this motion. On September 16, 2013, Plaintiffs, on behalf of a putative class of purchasers of Chemed Capital Stock between February 15, 2010, and May 3, 2013, inclusive, executed a Settlement Term Sheet with Defendants (“Settlement”), reaching an agreement in principle to settle this case in full and with prejudice, and to provide Defendants with full releases of all claims that are or could have been asserted by Plaintiffs in exchange for payment of $6.0 million by our insurer into a settlement fund for the benefit of the putative class.  The Settlement has been recorded as an accrual and offsetting prepaid in the accompanying Balance Sheet. This Settlement is subject to final documentation by the parties as well as Court approval.  Defendants agreed to enter into this Settlement in order to eliminate the burden, expense and distraction of further litigation.

In June 2011, the U.S. Attorney provided the Company with a partially unsealed qui tam complaint filed under seal in the U.S. District Court for the Western District of Texas, United States, et al. ex rel. Urick v. Vitas HME Solutions, Inc. et al., 5:08-cv-0663 (“Urick”).  The U.S. Attorney filed a notice in May 2012 stating that it had decided not to intervene in the case at that time but indicating that it continues to investigate the allegations.  In June 2012, the complaint was unsealed.  The complaint asserts violations of the federal False Claims Act and the Texas Medicaid Fraud Prevention Act based on allegations of a conspiracy to submit to Medicare and Medicaid false claims involving hospice services for ineligible patients, unnecessary medical supplies, failing to satisfy certain prerequisites for payment, and altering patient records, including backdating patient revocations.  The suit was brought by Barbara Urick, a registered nurse in VITAS’s San Antonio program, against VITAS, certain of its affiliates, and several former VITAS employees, including physicians Justo Cisneros and Antonio Cavasos and nurses Sally Schwenk, Diane Anest, and Edith Reed.  In September 2012 and July 2013, the plaintiff dismissed all claims against the individual defendants.  The complaint was served on the VITAS entities on April 12, 2013. 

Also in June 2011, the U.S. Attorney provided the Company with a partially unsealed qui tam complaint filed under seal in the U.S. District Court for the Northern District of Illinois, United States, et al. ex rel. Spottiswood v. Chemed Corp., 1:07-cv-4566 (“Spottiswood”).  In April 2012, the complaint was unsealed.  The U.S. Attorney and Attorney General for the State of Illinois filed notices in April and May 2012, respectively, stating that they had decided not to intervene in the case at that time but indicating that they continue to investigate the allegations.  Plaintiff filed an amended complaint in November 2012.  The complaint asserts violations of the federal False Claims Act and the Illinois Whistleblower Reward and Protection Act based on allegations that VITAS fraudulently billed Medicare and Medicaid for providing unwarranted continuous care services.  The suit was brought by Laura Spottiswood, a former part-time pool registered nurse at VITAS, against Chemed, VITAS, and a VITAS affiliate.  The complaint was served on the defendants on April 12, 2013.  On May 29 and June 4, 2013, respectively, the Court granted the government’s motion to partially intervene in Spottiswood and in Urick on the allegations that Vitas submitted or caused to be submitted false or fraudulent claims for continuous care and routine home care on behalf of certain ineligible Medicare beneficiaries.  The Court also transferred them to the U.S. District Court for the Western District of Missouri under docket Nos. 4:13-cv-505 and 4:13-cv-563, respectively. 

On May 2, 2013, the government filed a False Claims Act complaint against the Company and certain of its hospice-related subsidiaries in the U.S. District Court for the Western District of Missouri, United States v. VITAS Hospice Services, LLC, et al., 4:13-cv-00449-BCW (the “2013 Action”).  Prior to that date, the Company received various subpoenas from the U.S. Department of Justice and OIG that have been previously disclosed. The 2013 Action alleges that, since at least 2002, VITAS, and since 2004, the Company, submitted or caused the submission of false claims to the Medicare program by (a) billing Medicare for continuous home care services when the patients were not eligible, the services were not provided, or the medical care was inappropriate, and (b) billing Medicare for patients who were not eligible for the Medicare hospice benefit because they did not have a life expectancy of six months or less if their illnesses ran their normal course.  This complaint seeks treble damages, statutory penalties, and the costs of the action, plus interest.  On August 1, 2013, the government filed its First Amended Complaint in the 2013 Action.  The First Amended Complaint changed and supplemented some of the allegations, but did not otherwise expand the causes of action or the nature of the relief sought against VITAS.  The defendants filed a motion to dismiss on                  September 24, 2013.  

On May 6, 2013, the U.S. District Court for the Western District of Missouri, at the request of the government, unsealed a qui tam complaint against VITAS and VITAS Healthcare Corporation of California,United States ex rel. Charles Gonzales v. Vitas Healthcare Corporation, et al., CV 12-0761-R (“Gonzales”).  The case was transferred from the Central District of California to the Western District of Missouri under docket No. 4:13-cv-344.  The government has filed a notice of election to intervene in the Gonzales complaint.  The Gonzales complaint alleges that VITAS’ Los Angeles program falsely certified and recertified patients as eligible for the Medicare Hospice Benefit.  It alleges violations of the False Claims Act and seeks treble damages, civil penalties, recovery of costs, attorneys’ fees and expenses, and pre- and post-judgment interest.  

On September 25, 2013, the Court granted a joint motion by the government, the relators, and VITAS to consolidate the Spottiswood,  Urick, and Gonzales complaints with the 2013 Action.  As a result, the First Amended Complaint will govern the consolidated claims brought by the United States and the relators for all purposes.  The relators and VITAS have stipulated that certain non-intervened claims will not be pursued by the relators.

VITAS has also received document subpoenas in related state matters.  In February 2010, VITAS received a civil investigative demand (“CID”) from the Texas Attorney General seeking documents from January 1, 2002 through the date of the CID, and interrogatory responses in connection with an investigation of possible fraudulent submission of Medicaid claims for non-qualifying patients and fraudulent shifting of costs from VITAS to the State of Texas and the United States.  The CID requested similar information sought by prior Department of Justice subpoenas, including policy and procedure manuals and information concerning Medicare and Medicaid billing, patient statistics and sales and marketing practices, together with information concerning record-keeping and retention practices, and medical records concerning 117 patients.  In September 2010, VITAS received a second CID from the Texas Attorney General seeking additional documents concerning business plans and results, revocation forms for certain patients, and electronic documents of 10 current and former employees.  In July 2012, VITAS received an investigative subpoena from the Florida Attorney General seeking documents previously produced in the course of prior government investigations as well as, for the period January 1, 2007 through the date of production, billing records and procedures: information concerning business results, plans, and strategies; documents concerning patient eligibility for hospice care; and certain information concerning employees and their compensation.

The Company intends to defend vigorously against the allegations in each of the above lawsuits.  The Company had a net recovery for these investigations, due to a one-time insurance reimbursement of $1.0 million for certain legal costs, for the three month period ended September 30, 2013 of $591,000. The net costs to comply with these investigations were $1.4 million for the nine month period ended September 30, 2013. Regardless of the outcome of any of the preceding matters, responding to the subpoenas and dealing with the various regulatory agencies and opposing parties can adversely affect us through defense costs, potential payments, diversion of management time, and related publicity.  Although the Company intends to defend them vigorously, there can be no assurance that those suits will not have a material adverse effect on the Company.

XML

Revenue Recognition (Tables)

9 Months Ended

Sep. 30, 2013

Revenue Recognition [Abstract]

Schedule Of Medicare Cap Liability Activity

	September 30,
	2013		2012
Beginning balance January 1,	$	1,261	$	2,965
2013 measurement period		3,161		-
2012 measurement period		-		(2,577)
Ending balance September 30,	$	4,422	$	388

Schedule Of Cost Of Charity Care

Three months ended September 30,				Nine months ended September 30,
2013			2012	2013		2012
$	1,909	$	1,983	$	5,793	$	6,021

XML

Other Operating Expenses

9 Months Ended

Sep. 30, 2013

Other Operating Expenses [Abstract]

Other Operating Expenses

15.  Other Operating Expenses

Other operating expenses comprise (in thousands):

	Three months ended September 30,				Nine months ended September 30,
	2013		2012		2013		2012
Litigation settlement of VITAS segment (a)	$	10,500	$	-	$	10,500	$	-
Settlements of Roto-Rooter segment (b)		961		-		15,721		-
Severance and other operating costs related
to closing Roto-Rooter's HVAC business		-		1,126		-		1,126
Total other operating expenses	$	11,461	$	1,126	$	26,221	$	1,126

(a) Santos claims discussed in Note 10.

(b) Morganelli claims discussed in Note 10 and estimated cost of certain customer claims currently under negotiation.

XML

Document And Entity Information	9 Months Ended
	Sep. 30, 2013
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2013
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2013
Entity Registrant Name	CHEMED CORP
Trading Symbol	CHE
Entity Central Index Key	0000019584
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding	17,634,176

XML

Guarantor Subsidiaries

9 Months Ended

Sep. 30, 2013

Guarantor Subsidiaries [Abstract]

Guarantor Subsidiaries

16.  Guarantor Subsidiaries

Our 1.875% Notes are fully and unconditionally guaranteed on an unsecured, jointly, and severally liable basis by certain of our 100% owned subsidiaries.  The following unaudited, condensed, consolidating financial data presents the composition of the parent company (Chemed), the guarantor subsidiaries and the non-guarantor subsidiaries as of September 30, 2013 and December 31, 2012 for the balance sheet, the three and nine months ended September 30, 2013 and September 30, 2012 for the income statement and the nine months ended September 30, 2013 and September 30, 2012 for the statement of cash flows  (dollars in thousands):

September 30, 2013		Guarantor	Non-Guarantor	Consolidating
	Parent	Subsidiaries	Subsidiaries	Adjustments	Consolidated
ASSETS
Cash and cash equivalents	$                     84,842	$                   (10,511)	$                       8,873	$                               -	$                     83,204
Accounts receivable, including intercompany	960	496,001	741	(417,585)	80,117
Inventories	-	6,175	554	-	6,729
Current deferred income taxes	-	27,237	177	(2,313)	25,101
Prepaid income taxes	6,583	-	218	(3,263)	3,538
Prepaid expenses	7,199	10,245	240	-	17,684
Total current assets	99,584	529,147	10,803	(423,161)	216,373
Investments of deferred compensation plans	-	-	40,683	-	40,683
Properties and equipment, at cost less accumulated depreciation	10,361	76,957	2,482	-	89,800
Identifiable intangible assets less accumulated amortization	-	56,979	-	-	56,979
Goodwill	-	462,489	4,451	-	466,940
Other assets	18,155	1,770	15,177	(24,337)	10,765
Investments in subsidiaries	924,423	27,629	-	(952,052)	-
Total assets	$                1,052,523	$                1,154,971	$                     73,596	$              (1,399,550)	$                   881,540
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable, including intercompany	$                   421,662	$                     35,005	$                       5,441	$                 (417,585)	$                     44,523
Current portion of long-term debt	181,340	-	-	-	181,340
Income taxes	5,034	3,349	409	(3,263)	5,529
Accrued insurance	153	41,584	-	-	41,737
Accrued compensation	3,226	43,131	332	-	46,689
Other current liabilities	11,023	47,646	180	(2,313)	56,536
Total current liabilities	622,438	170,715	6,362	(423,161)	376,354
Deferred income taxes	-	51,791	-	(24,337)	27,454
Deferred compensation liabilities	-	-	39,406	-	39,406
Other liabilities	3,258	7,265	976	-	11,499
Stockholders' equity	426,827	925,200	26,852	(952,052)	426,827
Total liabilities and stockholders' equity	$                1,052,523	$                1,154,971	$                     73,596	$              (1,399,550)	$                   881,540
December 31, 2012		Guarantor	Non-Guarantor	Consolidating
	Parent	Subsidiaries	Subsidiaries	Adjustments	Consolidated
ASSETS
Cash and cash equivalents	$                     56,342	$                       4,674	$                       8,515	$                               -	$                     69,531
Accounts receivable, including intercompany	925	427,341	889	(335,822)	93,333
Inventories	-	6,505	553	-	7,058
Current deferred income taxes	-	14,633	173	(1,147)	13,659
Prepaid income taxes	4,043	-	-	(1,400)	2,643
Prepaid expenses	564	10,656	227	-	11,447
Total current assets	61,874	463,809	10,357	(338,369)	197,671
Investments of deferred compensation plans	-	-	36,089	-	36,089
Properties and equipment, at cost less accumulated depreciation	10,984	78,236	2,714	-	91,934
Identifiable intangible assets less accumulated amortization	-	57,177	-	-	57,177
Goodwill	-	461,277	4,555	-	465,832
Other assets	19,025	2,005	13,797	(23,904)	10,923
Investments in subsidiaries	874,692	24,298	-	(898,990)	-
Total assets	$                   966,575	$                1,086,802	$                     67,512	$              (1,261,263)	$                   859,626
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable, including intercompany	$                   325,916	$                     53,934	$                       4,444	$                 (335,822)	$                     48,472
Income taxes	1,019	3,816	1,503	(1,400)	4,938
Accrued insurance	1,339	39,315	-	-	40,654
Accrued compensation	4,119	40,891	447	-	45,457
Other current liabilities	2,786	13,903	1,759	(1,147)	17,301
Total current liabilities	335,179	151,859	8,153	(338,369)	156,822
Deferred income taxes	-	51,566	-	(23,904)	27,662
Long-term debt	174,890	-	-	-	174,890
Deferred compensation liabilities	-	-	35,599	-	35,599
Other liabilities	3,215	7,352	795	-	11,362
Stockholders' equity	453,291	876,025	22,965	(898,990)	453,291
Total liabilities and stockholders' equity	$                   966,575	$                1,086,802	$                     67,512	$              (1,261,263)	$                   859,626

For the three months ended September 30, 2013		Guarantor	Non-Guarantor	Consolidating
	Parent	Subsidiaries	Subsidiaries	Adjustments	Consolidated
Continuing Operations
Service revenues and sales	$                                               -	$                                   333,750	$                                       7,136	$                                               -	$                                   340,886
Cost of services provided and goods sold	-	239,122	4,062	-	243,184
Selling, general and administrative expenses	5,562	42,113	1,195	-	48,870
Depreciation	240	6,497	234	-	6,971
Amortization	501	689	-	-	1,190
Other operating expenses	-	11,461	-	-	11,461
Total costs and expenses	6,303	299,882	5,491	-	311,676
Income/ (loss) from operations	(6,303)	33,868	1,645	-	29,210
Interest expense	(3,579)	(131)	210	-	(3,500)
Other (expense)/income - net	3,944	(3,840)	(194)	-	(90)
Income/ (loss) before income taxes	(5,938)	29,897	1,661	-	25,620
Income tax (provision)/ benefit	2,042	(11,393)	1,163	-	(8,188)
Equity in net income of subsidiaries	21,328	2,086	-	(23,414)	-
Net income	$                                     17,432	$                                     20,590	$                                       2,824	$                                   (23,414)	$                                     17,432
For the three months ended September 30, 2012		Guarantor	Non-Guarantor	Consolidating
	Parent	Subsidiaries	Subsidiaries	Adjustments	Consolidated
Continuing Operations
Service revenues and sales	$                                               -	$                                   347,384	$                                       6,969	$                                               -	$                                   354,353
Cost of services provided and goods sold	-	252,688	3,922	-	256,610
Selling, general and administrative expenses	5,991	43,992	2,972	-	52,955
Depreciation	237	6,099	221	-	6,557
Amortization	486	649	-	-	1,135
Other operating expenses	-	1,126	-	-	1,126
Total costs and expenses	6,714	304,554	7,115	-	318,383
Income/ (loss) from operations	(6,714)	42,830	(146)	-	35,970
Interest expense	(3,517)	(211)	(15)	-	(3,743)
Other (expense)/income - net	4,450	(4,184)	1,574	-	1,840
Income/ (loss) before income taxes	(5,781)	38,435	1,413	-	34,067
Income tax (provision)/ benefit	1,877	(14,560)	(539)	-	(13,222)
Equity in net income of subsidiaries	24,749	885	-	(25,634)	-
Net income	$                                     20,845	$                                     24,760	$                                          874	$                                   (25,634)	$                                     20,845
For the nine months ended September 30, 2013		Guarantor	Non-Guarantor	Consolidating
	Parent	Subsidiaries	Subsidiaries	Adjustments	Consolidated
Continuing Operations
Service revenues and sales	$                                               -	$                                1,042,449	$                                     22,276	$                                               -	$                                1,064,725
Cost of services provided and goods sold	-	750,230	12,620	-	762,850
Selling, general and administrative expenses	17,290	133,419	6,828	-	157,537
Depreciation	718	19,241	706	-	20,665
Amortization	1,480	2,018	-	-	3,498
Other operating expenses	-	26,221	-	-	26,221
Total costs and expenses	19,488	931,129	20,154	-	970,771
Income/ (loss) from operations	(19,488)	111,320	2,122	-	93,954
Interest expense	(11,089)	(384)	182	-	(11,291)
Other (expense)/income - net	12,526	(11,549)	2,335	-	3,312
Income/ (loss) before income taxes	(18,051)	99,387	4,639	-	85,975
Income tax (provision)/ benefit	6,036	(37,755)	62	-	(31,657)
Equity in net income of subsidiaries	66,333	4,057	-	(70,390)	-
Net income	$                                     54,318	$                                     65,689	$                                       4,701	$                                   (70,390)	$                                     54,318
For the nine months ended September 30, 2012		Guarantor	Non-Guarantor	Consolidating
	Parent	Subsidiaries	Subsidiaries	Adjustments	Consolidated
Continuing Operations
Service revenues and sales	$                                               -	$                                1,040,015	$                                     21,451	$                                               -	$                                1,061,466
Cost of services provided and goods sold	-	759,549	11,874	-	771,423
Selling, general and administrative expenses	17,124	131,695	7,073	-	155,892
Depreciation	704	17,816	658	-	19,178
Amortization	1,437	1,938	-	-	3,375
Other operating expenses	-	1,126	-	-	1,126
Total costs and expenses	19,265	912,124	19,605	-	950,994
Income/ (loss) from operations	(19,265)	127,891	1,846	-	110,472
Interest expense	(10,437)	(551)	(44)	-	(11,032)
Other (expense)/income - net	13,196	(12,982)	2,751	-	2,965
Income/ (loss) before income taxes	(16,506)	114,358	4,553	-	102,405
Income tax (provision)/ benefit	5,376	(43,442)	(1,775)	-	(39,841)
Equity in net income of subsidiaries	73,694	2,857	-	(76,551)	-
Net income	$                                     62,564	$                                     73,773	$                                       2,778	$                                   (76,551)	$                                     62,564

For the nine months ended September 30, 2013		Guarantor	Non-Guarantor
	Parent	Subsidiaries	Subsidiaries	Consolidated
Cash Flow from Operating Activities:
Net cash provided by operating activities	$               16,336	$             118,998	$                    524	$             135,858
Cash Flow from Investing Activities:
Capital expenditures	(96)	(18,297)	(494)	(18,887)
Business combinations, net of cash acquired	-	(2,210)	-	(2,210)
Other sources/(uses) - net	(53)	171	21	139
Net cash used by investing activities	(149)	(20,336)	(473)	(20,958)
Cash Flow from Financing Activities:
Increase /(decrease) in cash overdrafts payable	5,378	(16,306)	-	(10,928)
Change in intercompany accounts	96,731	(97,541)	810	-
Dividends paid	(10,459)	-	-	(10,459)
Debt issuance costs	(1,108)	-	-	(1,108)
Capital stock surrendered to pay taxes on stock-based compensation	(4,280)	-	-	(4,280)
Purchases of treasury stock	(89,611)	-	-	(89,611)
Proceeds from exercise of stock options	13,125	-	-	13,125
Excess tax benefit on share-based compensation	2,507	-	-	2,507
Other sources/(uses) - net	30	-	(503)	(473)
Net cash provided/(used) by financing activities	12,313	(113,847)	307	(101,227)
Net increase/(decrease) in cash and cash equivalents	28,500	(15,185)	358	13,673
Cash and cash equivalents at beginning of year	56,342	4,674	8,515	69,531
Cash and cash equivalents at end of period	$               84,842	$             (10,511)	$                 8,873	$               83,204
For the nine months ended September 30, 2012		Guarantor	Non-Guarantor
	Parent	Subsidiaries	Subsidiaries	Consolidated
Cash Flow from Operating Activities:
Net cash provided by operating activities	$                 1,486	$               74,206	$                 1,645	$               77,337
Cash Flow from Investing Activities:
Capital expenditures	(196)	(25,491)	(802)	(26,489)
Business combinations, net of cash acquired	-	(5,900)	-	(5,900)
Other sources/(uses) - net	201	359	(32)	528
Net cash provided/(used) by investing activities	5	(31,032)	(834)	(31,861)
Cash Flow from Financing Activities:
Increase/(decrease) in cash overdrafts payable	(4,580)	1,281	-	(3,299)
Change in intercompany accounts	40,489	(40,022)	(467)	-
Dividends paid	(9,641)	-	-	(9,641)
Capital stock surrendered to pay taxes on stock-based compensation	(3,236)	-	-	(3,236)
Purchases of treasury stock	(11,724)	-	-	(11,724)
Proceeds from exercise of stock options	10,483	-	-	10,483
Excess tax benefit on share-based compensation	2,714	-	-	2,714
Other sources/(uses) - net	(17)	(1)	460	442
Net cash provided/(used) by financing activities	24,488	(38,742)	(7)	(14,261)
Net increase in cash and cash equivalents	25,979	4,432	804	31,215
Cash and cash equivalents at beginning of year	32,470	(1,422)	7,033	38,081
Cash and cash equivalents at end of period	$               58,449	$                 3,010	$                 7,837	$               69,296