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 March 31, 2014

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	17,539,101 Shares	March 31, 2014

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CHEMED CORPORATION AND

SUBSIDIARY COMPANIES

Index

	Page No.
PART I.    FINANCIAL INFORMATION:
Item 1.  Financial Statements
Unaudited Consolidated Balance Sheet -
March 31, 2014 and December 31, 2013	3
Unaudited Consolidated Statement of Income -
Three months ended March 31, 2014 and 2013	4
Unaudited Consolidated Statement of Cash Flows -
Three months ended March 31, 2014 and 2013	5
Notes to Unaudited Consolidated Financial Statements	6
Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.  Quantitative and Qualitative Disclosures about Market Risk	28
Item 4.  Controls and Procedures	28
PART II.   OTHER INFORMATION
Item 1.    Legal Proceedings	28
Item 1A. Risk Factors	28
Item 2.    Unregistered Sales of Equity Securities and Use of  Proceeds	29
Item 3.    Defaults Upon Senior Securities	29
Item 4.    Mine Safety Disclosures	29
Item 5.    Other Information	29
Item 6.    Exhibits	30
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)
	March 31,			December 31,
	2014			2013
ASSETS
Current assets
Cash and cash equivalents	$	39,479		$	84,418
Accounts receivable less allowances of $13,824 (2013 - $12,590)		116,152			91,770
Inventories		6,676			6,703
Current deferred income taxes		13,769			20,257
Prepaid income taxes		3,406			3,690
Prepaid expenses		18,930			17,818
Total current assets		198,412			224,656
Investments of deferred compensation plans		45,732			42,465
Properties and equipment, at cost, less accumulated depreciation of $185,056 (2013 - $180,550)		93,575			92,955
Identifiable intangible assets less accumulated amortization of $32,380 (2013 - $32,055)		56,276			56,556
Goodwill		466,961			466,871
Other assets		7,664			10,198
Total Assets	$	868,620		$	893,701
LIABILITIES
Current liabilities
Accounts payable	$	38,599		$	41,758
Current portion of long-term debt		185,825			183,564
Income taxes		3,967			111
Accrued insurance		39,391			41,859
Accrued compensation		38,233			48,323
Accrued legal		7,154			23,210
Other current liabilities		24,682			25,161
Total current liabilities		337,851			363,986
Deferred income taxes		28,232			27,301
Deferred compensation liabilities		45,498			42,348
Other liabilities		11,106			11,176
Total Liabilities		422,687			444,811
Commitments and contingencies
STOCKHOLDERS' EQUITY
Capital stock - authorized 80,000,000 shares $1 par; issued 32,621,360 shares (2013 - 32,245,226 shares)		32,621			32,245
Paid-in capital		504,883			481,011
Retained earnings		703,385			686,114
Treasury stock - 15,180,456 shares (2013 - 14,660,427)		(797,141	)		(752,634	)
Deferred compensation payable in Company stock		2,185			2,154
Total Stockholders' Equity		445,933			448,890
Total Liabilities and Stockholders' Equity	$	868,620		$	893,701
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 March 31,
	2014			2013
Service revenues and sales	$	358,300		$	366,641
Cost of services provided and goods sold (excluding depreciation)		257,819			264,307
Selling, general and administrative expenses		55,671			55,560
Depreciation		7,149			6,795
Amortization		1,009			1,127
Total costs and expenses		321,648			327,789
Income from operations		36,652			38,852
Interest expense		(3,815	)		(4,094	)
Other income - net		816			1,706
Income before income taxes		33,653			36,464
Income taxes		(13,079	)		(14,186	)
Net income	$	20,574		$	22,278
Earnings Per Share
Net income	$	1.17		$	1.20
Average number of shares outstanding		17,510			18,522
Diluted Earnings Per Share
Net income	$	1.12		$	1.17
Average number of shares outstanding		18,305			19,000
Cash Dividends Per Share	$	0.20		$	0.18
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)
	Three Months Ended
	March 31,
	2014			2013
Cash Flows from Operating Activities
Net income	$	20,574		$	22,278
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization		8,158			7,922
Deferred income taxes		6,841			(681	)
Provision for uncollectible accounts receivable		3,304			2,967
Amortization of discount on convertible notes		2,261			2,114
Stock option expense		1,309			1,491
Amortization of debt issuance costs		337			780
Noncash long-term incentive compensation		373			612
Changes in operating assets and liabilities, excluding
amounts acquired in business combinations:
Increase in accounts receivable		(27,700	)		(36,706	)
Decrease in inventories		27			499
Increase in prepaid expenses		(1,112	)		(1,092	)
Decrease in accounts payable and other current liabilities		(32,561	)		(698	)
Increase in income taxes		5,322			10,139
Increase in other assets		(1,069	)		(3,071	)
Increase in other liabilities		3,080			3,282
Excess tax benefit on share-based compensation		(1,399	)		(1,891	)
Other sources		409			196
Net cash provided/(used) by operating activities		(11,846	)		8,141
Cash Flows from Investing Activities
Capital expenditures		(8,131	)		(5,406	)
Business combinations, net of cash acquired		(250	)		-
Other sources		29			78
Net cash used by investing activities		(8,352	)		(5,328	)
Cash Flows from Financing Activities
Purchases of treasury stock		(32,982	)		-
Dividends paid		(3,303	)		(3,367	)
Capital stock surrendered to pay taxes on stock-based compensation		(2,916	)		(3,389	)
Proceeds from exercise of stock options		13,193			10,168
Excess tax benefit on share-based compensation		1,399			1,891
Increase/(decrease) in cash overdrafts payable		369			(3,165	)
Debt issuance costs		-			(1,107	)
Other uses		(501	)		(419	)
Net cash provided/(used) by financing activities		(24,741	)		612
Increase/(Decrease) in Cash and Cash Equivalents		(44,939	)		3,425
Cash and cash equivalents at beginning of year		84,418			69,531
Cash and cash equivalents at end of period	$	39,479		$	72,956
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, 2013 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 audited Consolidated Financial Statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2013.

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.

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 month period ended March 31, 2014, we reversed Medicare cap liability of $847,000 for amounts recorded in the fourth quarter of 2013 for two programs’ projected 2014 measurement period liability.  We reversed these amounts as improving admissions trends in these programs indicate that the liability had been eliminated for one program and partially eliminated for the other program.

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

	March 31,
	2014			2013
Beginning balance January 1,	$	8,260		$	1,261
2014 measurement period		(847	)		-
2013 measurement period		-			(873	)
Ending balance March 31,	$	7,413		$	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 March 31,
2014		2013
$	1,699	$	1,929

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3.   Segments

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

	Three months ended March 31,
	2014			2013
Service Revenues and Sales
VITAS	$	260,412		$	271,326
Roto-Rooter		97,888			95,315
Total	$	358,300		$	366,641
After-tax Earnings
VITAS	$	18,159		$	20,142
Roto-Rooter		10,033			9,624
Total		28,192			29,766
Corporate		(7,618	)		(7,488	)
Net income	$	20,574		$	22,278

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 March 31,		Income		Shares	Earnings per Share
2014
	Earnings	$	20,574	17,510	$	1.17
	Dilutive stock options		-	362
	Nonvested stock awards		-	148
	Conversion of Notes		-	285
	Diluted earnings	$	20,574	18,305	$	1.12
2013
	Earnings	$	22,278	18,522	$	1.20
	Dilutive stock options		-	371
	Nonvested stock awards		-	107
	Diluted earnings	$	22,278	19,000	$	1.17

For the three-month period ended March 31, 2014, 329,000 stock options were excluded from the computation of diluted earnings per share because they would have been anti-dilutive. For the three-month period ended March 31, 2013, 11,000 stock options were excluded from the computation of diluted earnings per share.

Diluted earnings per share was impacted as the result of our 1.875% Senior Convertible Notes (the “Notes”).  Beginning March 1, 2014, the Notes can be converted into our Capital Stock in accordance with the terms of the Notes.  At March 31, 2014, our share price exceeded the Convertible Note price.  Using the treasury method, the diluted share count was 285,000 shares higher assuming 100% of the Notes are presumed for net share settlement.  The purchased call option is anticipated to offset any shares issued at the maturity of the Notes.  Under generally accepted accounting principles the purchased call option does not impact the calculation of diluted earnings per share as it is always anti-dilutive.  There is no economic dilution anticipated upon conversion as a result of our purchased call options.

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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 March 31, 2014.  We have issued $35.0 million in standby letters of credit as of March 31, 2014 for insurance purposes.  Issued letters of credit reduce our available credit under the 2013 Credit Agreement.  As of March 31, 2014, we have approximately $315.0 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:

	March 31, 2014			December 31, 2013
Principal amount of convertible debentures	$	186,956		$	186,956
Unamortized debt discount		(1,131	)		(3,392	)
Carrying amount of convertible debentures	$	185,825		$	183,564
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 March 31,
	2014		2013
Cash interest expense	$	1,217	$	1,200
Non-cash amortization of debt discount		2,261		2,114
Amortization and write-off of debt costs		337		780
Total interest expense	$	3,815	$	4,094

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 March 31, 2014.

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6.   Other Income – Net

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

	Three months ended March 31,
	2014				2013
Market value gains on assets held in deferred
compensation trust		$	1,162		$	1,472
Loss on disposal of property and equipment			(278	)		(78	)
Interest income - net			(50	)		303
Other - net			(18	)		9
Total other income - net		$	816		$	1,706

 7.   Stock-Based Compensation Plans

On February 21, 2014, the Compensation/Incentive Committee of the Board of Directors (“CIC”) granted 10,340 Performance Stock Units (“PSUs”) contingent upon the achievement of certain total shareholders return (“TSR”) targets as compared to the TSR of a group of peer companies for the three-year period ending December 31, 2016, the date at which such awards may vest.  The cumulative compensation cost of the TSR-based PSUs award to be recorded over the three year service period is $1.2 million.

On February 21, 2014, the CIC also granted 14,061 PSUs contingent upon the achievement of certain earnings per share (“EPS”) targets for the three-year period ending December 31, 2016.  At the end of each reporting period, the Company estimates the number of shares that it believes will ultimately be earned and records that expense over the service period of the award.  We currently estimate the cumulative compensation cost of the EPS-based PSUs to be recorded over the three year service period is $1.2 million.

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 March 31, 2014 totaling $1.5 million (December 31, 2013 - $1.5 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 March 31, 2014.  We recorded the following from our independent contractors (in thousands):

	Three months ended March 31,
	2014			2013
Revenues		$	9,023		$	8,210
Pretax profits			5,159			4,258

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 March 31,
2014		2013
$	3,897	$	4,296

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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 material lawsuits and investigations of which the Company is currently aware.  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

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 opposed this motion.  On September 16, 2013, Plaintiffs executed a Settlement Term Sheet with Defendants, reaching an agreement in principle to settle this case subject to Court approval.  On February 6, 2014, Plaintiffs, on behalf of a putative class of purchasers of Chemed Capital Stock between February 15, 2010 and May 2, 2013, inclusive, executed a stipulation of settlement with defendants, agreeing 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 settlement class (“Settlement”).  The Settlement of $6.0 million has been recorded as an accrual and offsetting prepaid in the accompanying Consolidated Balance Sheet. This Settlement received preliminary Court approval on March 27, 2014 and is scheduled for a final hearing on July 19, 2014.  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., No. 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 partially intervened in Gonzales.  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 federal 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.  The Spottiswood relator filed an action under the Illinois False Claims Act, The State of Illinois ex rel. Laura Spottiswood v. Chemed Corporation, et al., No. 14 L 2786 in the Circuit Court of Cook County, Illinois on March 6, 2014.  The Court granted the parties’ joint motion to place this case on the its stay calendar, pending resolution of the 2013 Action.

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 net costs incurred related to U.S. v. Vitas and related regulatory matters were $748,000 and $1.0 million for the periods ending March 31, 2014 and 2013, respectively.

In November 2013, two shareholder derivative lawsuits were filed against the Company’s current and former directors, as well as certain of its officers, both of which are covered by the Company’s commercial insurance.  On November 6, 2013, KBC Asset Management NV filed suit in the United States Distrct Court for the District of Delaware, KBC Asset Management NV, derivatively on behalf of Chemed Corp. v. McNamara, et al., No. 13 Civ. 1854 (LPS) (D. Del.).  It sued Kevin McNamara, Joel Gemunder, Patrick Grace, Thomas Hutton, Walter Krebs, Andrea Lindell, Thomas Rice, Donald Saunders, Arthur Tucker, Jr., George Walsh III, Frank Wood, Timothy O’Toole, David Williams and Ernest Mrozek, together with the Company as nominal defendant.  Plaintiff alleges that since at least 2004, Chemed, through VITAS, has submitted or caused the submission of false claims to Medicare.  The suit alleges a claim for breach of fiduciary duty against the individual defendants, and seeks (a) a declaration that the individual defendants breached their fiduciary duties to the Company; (b) an order requiring those defendants to pay compensatory damages, restitution and exemplary damages, in unspecified amounts, to the Company; (c) an order directing the Company to implement new policies and procedures; and (d) costs and disbursements incurred in bringing the action, including attorneys’ fees.

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On November 14, 2013, Mildred A. North filed suit in the United States District Court for the Southern District of Ohio, North, derivatively on behalf of Chemed Corp. v. Kevin McNamara, el al., No. 13 Civ. 833 (MDB) (S.D. Ohio).  She sued Kevin McNamara, David Williams, Timothy O’Toole, Joel Gemunder, Patrick Grace, Walter Krebs, Andrea Lindell, Thomas Rice, Donald Saunders, George Walsh III, Frank Wood and Thomas Hutton, together with the Company as nominal defendant.  Plaintiff alleges that, between February 2010 and the present, the individual defendants breached their fiduciary duties as officers and directors of Chemed by, among other things, (a) allegedly causing VITAS to submit improper and ineligible claims to Medicare and Medicaid; and (b) allegedly misrepresenting the state of Chemed’s internal controls.  The suit alleges claims for breach of fiduciary duty, abuse of control and gross mismanagement against the individual defendants.  The complaint also alleges unjust enrichment and insider trading against Messrs. McNamara, Williams and O’Toole.  Plaintiff seeks (a) a declaration that the individual defendants breached their fiduciary duties to the Company; (b) an order requiring those defendants to pay compensatory damages, restitution and exemplary damages, in unspecified amounts, to the Company; (c) an order directing the Company to implement new policies and procedures; and (d) costs and disbursements incurred in bringing the action, including attorneys’ fees.

On December 20, 2013, Plaintiff in the North action filed a motion before the Judicial Panel on Multidistrict Litigation seeking centralized treatment of her action and the KBC action in the U.S. District Court for the Southern District of Ohio.  Defendants in both cases, as well as Plaintiff KBC, opposed that motion, consistent with Chemed’s By-law 8.07, which requires all derivative suits brought in Chemed’s name to proceed in federal or state court in Delaware.  The MDL Panel denied the motion on April 2, 2014.  On January 29, 2014 Defendants filed motions to transfer North to Delaware under 28 U.S.C § 1404 and to stay the case until after resolution of that motion and the MDL motion.

The Company intends to defend vigorously against the allegations in each of the above lawsuits.  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.

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 $8.8 million and $9.6 million for the three months ended March 31, 2014 and 2013, respectively.  Purchases from OCR represent approximately 90% of all pharmacy services used by VITAS.

12.   Cash Overdrafts and Cash Equivalents

Included in accounts payable at March 31, 2014 is cash overdrafts payable of $1.2 million (December 31, 2013 - $806,000).

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 $20.0 million in cash equivalents as of March 31, 2014.  There was $23.1 million in cash equivalents as of December 31, 2013.  The weighted average rate of return for our cash equivalents was 0.09% for March 31, 2014 and 0.08% for December 31, 2013.

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.

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The following shows the carrying value, fair value and the hierarchy for our financial instruments as of March 31, 2014 (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	$	45,498	$	45,732	$	-	$	-
Long-term debt		185,825		209,157		-		-

The following shows the carrying value, fair value and the hierarchy for our financial instruments as of December 31, 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	$	42,465	$	42,465	$	-	$	-
Long-term debt		183,564		193,032		-		-

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.

14.   Capital Stock Repurchase Plan Transactions

We repurchased the following capital stock for the three months ended March 31, 2014 and 2013:

	Three months ended March 31,
	2014			2013
Shares repurchased			382,934			-
Weighted average price per share		$	86.13		$	-

In February 2014, the Board of Directors authorized an additional $100 million for stock repurchase under Chemed’s existing share repurchase program. We currently have $88.8 million of authorization remaining under this share repurchase plan.

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15.   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 March 31, 2014 and December 31, 2013 for the balance sheet, the three months ended March 31, 2014 and December 31, 2013 for the income statement and the three months ended March 31, 2014 and March 31, 2013 for the statement of cash flows  (dollars in thousands):

March 31, 2014			Guarantor			Non-Guarantor		Consolidating
	Parent		Subsidiaries			Subsidiaries		Adjustments			Consolidated
ASSETS
Cash and cash equivalents	$	41,808	$	(11,336	)	$	9,007	$	-		$	39,479
Accounts receivable, including intercompany		1,231		517,646			1,256		(403,981	)		116,152
Inventories		-		6,148			528		-			6,676
Current deferred income taxes		-		14,720			264		(1,215	)		13,769
Prepaid income taxes		9,155		-			7		(5,756	)		3,406
Prepaid expenses		6,612		11,958			360		-			18,930
Total current assets		58,806		539,136			11,422		(410,952	)		198,412
Investments of deferred compensation plans		-		-			45,732		-			45,732
Properties and equipment, at cost less accumulated depreciation		9,963		81,033			2,579		-			93,575
Identifiable intangible assets less accumulated amortization		-		56,276			-		-			56,276
Goodwill		-		462,687			4,274		-			466,961
Other assets		12,745		1,877			17,141		(24,099	)		7,664
Investments in subsidiaries		964,753		28,007			-		(992,760	)		-
Total assets	$	1,046,267	$	1,169,016		$	81,148	$	(1,427,811	)	$	868,620
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable, including intercompany	$	398,529	$	39,213		$	4,838	$	(403,981	)	$	38,599
Current portion of long-term debt		185,825		-			-		-			185,825
Income taxes		-		7,663			2,060		(5,756	)		3,967
Accrued insurance		1,433		37,958			-		-			39,391
Accrued compensation		1,086		36,807			340		-			38,233
Accrued legal		6,043		1,111			-		-			7,154
Other current liabilities		4,288		21,429			180		(1,215	)		24,682
Total current liabilities		597,204		144,181			7,418		(410,952	)		337,851
Deferred income taxes		-		52,331			-		(24,099	)		28,232
Deferred compensation liabilities		-		-			45,498		-			45,498
Other liabilities		3,130		6,879			1,097		-			11,106
Stockholders' equity		445,933		965,625			27,135		(992,760	)		445,933
Total liabilities and stockholders' equity	$	1,046,267	$	1,169,016		$	81,148	$	(1,427,811	)	$	868,620
December 31, 2013			Guarantor			Non-Guarantor		Consolidating
	Parent		Subsidiaries			Subsidiaries		Adjustments			Consolidated
ASSETS
Cash and cash equivalents	$	84,005	$	(8,777	)	$	9,190	$	-		$	84,418
Accounts receivable, including intercompany		925		509,580			1,000		(419,735	)		91,770
Inventories		-		6,246			457		-			6,703
Current deferred income taxes		-		21,307			126		(1,176	)		20,257
Prepaid income taxes		3,710		1,176			349		(1,545	)		3,690
Prepaid expenses		6,925		10,682			211		-			17,818
Total current assets		95,565		540,214			11,333		(422,456	)		224,656
Investments of deferred compensation plans		-		-			42,465		-			42,465
Properties and equipment, at cost less accumulated depreciation		10,184		80,144			2,627		-			92,955
Identifiable intangible assets less accumulated amortization		-		56,556			-		-			56,556
Goodwill		-		462,489			4,382		-			466,871
Other assets		17,782		1,775			15,888		(25,247	)		10,198
Investments in subsidiaries		945,450		27,564			-		(973,014	)		-
Total assets	$	1,068,981	$	1,168,742		$	76,695	$	(1,420,717	)	$	893,701
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable, including intercompany	$	417,593	$	39,424		$	4,476	$	(419,735	)	$	41,758
Current portion of long-term debt		183,564		-			-		-			183,564
Income taxes		1,106		210			340		(1,545	)		111
Accrued insurance		784		41,075			-		-			41,859
Accrued compensation		5,047		42,905			371		-			48,323
Accrued legal		6,031		17,179			-		-			23,210
Other current liabilities		2,739		22,219			1,379		(1,176	)		25,161
Total current liabilities		616,864		163,012			6,566		(422,456	)		363,986
Deferred income taxes		-		52,548			-		(25,247	)		27,301
Deferred compensation liabilities		-		-			42,348		-			42,348
Other liabilities		3,227		6,914			1,035		-			11,176
Stockholders' equity		448,890		946,268			26,746		(973,014	)		448,890
Total liabilities and stockholders' equity	$	1,068,981	$	1,168,742		$	76,695	$	(1,420,717	)	$	893,701

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For the three months ended March 31, 2014				Guarantor			Non-Guarantor			Consolidating
	Parent			Subsidiaries			Subsidiaries			Adjustments			Consolidated
Continuing Operations
Service revenues and sales	$	-		$	349,890		$	8,410		$	-		$	358,300
Cost of services provided and goods sold		-			253,052			4,767			-			257,819
Selling, general and administrative expenses		5,710			47,005			2,956			-			55,671
Depreciation		241			6,671			237			-			7,149
Amortization		445			564			-			-			1,009
Total costs and expenses		6,396			307,292			7,960			-			321,648
Income/ (loss) from operations		(6,396	)		42,598			450			-			36,652
Interest expense		(3,663	)		(152	)		-			-			(3,815	)
Other (expense)/income - net		3,672			(4,014	)		1,158			-			816
Income/ (loss) before income taxes		(6,387	)		38,432			1,608			-			33,653
Income tax (provision)/ benefit		2,137			(14,613	)		(603	)		-			(13,079	)
Equity in net income of subsidiaries		24,824			1,028			-			(25,852	)		-
Net income	$	20,574		$	24,847		$	1,005		$	(25,852	)	$	20,574
For the three months ended March 31, 2013				Guarantor			Non-Guarantor			Consolidating
	Parent			Subsidiaries			Subsidiaries			Adjustments			Consolidated
Continuing Operations
Service revenues and sales	$	-		$	359,056		$	7,585		$	-		$	366,641
Cost of services provided and goods sold		-			259,977			4,330			-			264,307
Selling, general and administrative expenses		5,872			46,572			3,116			-			55,560
Depreciation		240			6,325			230			-			6,795
Amortization		482			645			-			-			1,127
Total costs and expenses		6,594			313,519			7,676			-			327,789
Income/ (loss) from operations		(6,594	)		45,537			(91	)		-			38,852
Interest expense		(3,975	)		(105	)		(14	)		-			(4,094	)
Other (expense)/income - net		4,273			(4,035	)		1,468			-			1,706
Income/ (loss) before income taxes		(6,296	)		41,397			1,363			-			36,464
Income tax (provision)/ benefit		2,133			(15,817	)		(502	)		-			(14,186	)
Equity in net income of subsidiaries		26,441			910			-			(27,351	)		-
Net income	$	22,278		$	26,490		$	861		$	(27,351	)	$	22,278

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For the three months ended March 31 2014				Guarantor			Non-Guarantor
	Parent			Subsidiaries			Subsidiaries			Consolidated
Cash Flow from Operating Activities:
Net cash provided by operating activities	$	(6,773	)	$	(5,370	)	$	297		$	(11,846	)
Cash Flow from Investing Activities:
Capital expenditures		(20	)		(7,897	)		(214	)		(8,131	)
Business combinations, net of cash acquired		-			(250	)		-			(250	)
Other sources/(uses) - net		(58	)		62			25			29
Net cash used by investing activities		(78	)		(8,085	)		(189	)		(8,352	)
Cash Flow from Financing Activities:
Increase /(decrease) in cash overdrafts payable		323			46			-			369
Change in intercompany accounts		(11,080	)		10,850			230			-
Dividends paid		(3,303	)		-			-			(3,303	)
Debt issuance costs		-			-			-			-
Capital stock surrendered to pay taxes on stock-based compensation		(2,916	)		-			-			(2,916	)
Purchases of treasury stock		(32,982	)		-			-			(32,982	)
Proceeds from exercise of stock options		13,193			-			-			13,193
Excess tax benefit on share-based compensation		1,399			-			-			1,399
Other sources/(uses) - net		20			-			(521	)		(501	)
Net cash provided/(used) by financing activities		(35,346	)		10,896			(291	)		(24,741	)
Net increase/(decrease) in cash and cash equivalents		(42,197	)		(2,559	)		(183	)		(44,939	)
Cash and cash equivalents at beginning of year		84,005			(8,777	)		9,190			84,418
Cash and cash equivalents at end of period	$	41,808		$	(11,336	)	$	9,007		$	39,479
For the three months ended March 31, 2013				Guarantor			Non-Guarantor
	Parent			Subsidiaries			Subsidiaries			Consolidated
Cash Flow from Operating Activities:
Net cash provided by operating activities	$	(4,511	)	$	12,302		$	350		$	8,141
Cash Flow from Investing Activities:
Capital expenditures		(10	)		(5,278	)		(118	)		(5,406	)
Other sources/(uses) - net		(16	)		71			23			78
Net cash provided/(used) by investing activities		(26	)		(5,207	)		(95	)		(5,328	)
Cash Flow from Financing Activities:
Increase/(decrease) in cash overdrafts payable		(554	)		(2,611	)		-			(3,165	)
Change in intercompany accounts		6,731			(6,570	)		(161	)		-
Dividends paid		(3,367	)		-			-			(3,367	)
Debt issuance		(1,107	)		-			-			(1,107	)
Capital stock surrendered to pay taxes on stock-based compensation		(3,389	)		-			-			(3,389	)
Purchases of treasury stock		-			-			-			-
Proceeds from exercise of stock options		10,168			-			-			10,168
Excess tax benefit on share-based compensation		1,891			-			-			1,891
Other sources/(uses) - net		(4	)		-			(415	)		(419	)
Net cash provided/(used) by financing activities		10,369			(9,181	)		(576	)		612
Net increase in cash and cash equivalents		5,832			(2,086	)		(321	)		3,425
Cash and cash equivalents at beginning of year		56,342			4,674			8,515			69,531
Cash and cash equivalents at end of period	$	62,174		$	2,588		$	8,194		$	72,956

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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 March 31,
	2014			2013
Service revenues and sales	$	358,300		$	366,641
Net income	$	20,574		$	22,278
Diluted EPS	$	1.12		$	1.17
Adjusted net income	$	23,713		$	26,140
Adjusted diluted EPS	$	1.32		$	1.38
Adjusted EBITDA	$	47,672		$	51,296
Adjusted EBITDA as a % of revenue		13.3	%		14.0	%

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 Diluted EPS 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 25-26.

For the three months ended March 31, 2014, the decrease in consolidated service revenues and sales was driven by a 2.7% increase at Roto-Rooter and a 4.0% decrease at VITAS.  The increase in service revenues at Roto-Rooter was driven by a 4.8% increase in price and mix shift offset by a 2.4% decrease in job count. The remaining difference relates to increases in contractor revenue.  The decrease in service revenues at VITAS was a result of Medicare reimbursement rates increasing 1.4%, offset by a 2.0% decrease as a result of sequestration, decreased ADC of 0.8%, and geographical and level of care mix shift.  Consolidated net income decreased 7.6% as a result of the lower revenue at VITAS and higher health insurance costs at Vitas as well as increased advertising expense at Roto-Rooter.  Diluted EPS decreased 4.3% as a result of the decrease in net income offset by a lower number of shares outstanding.  Adjusted EBITDA as a percent of revenue decreased 0.7% mainly as a result of lower revenue at VITAS. See page 27 for additional VITAS operating metrics.

On April 1, 2013, Medicare reduced hospice reimbursement rates 2.0%.  Effective October 1, 2013, Medicare increased the average hospice rate approximately 1.4% This effectively reduced Medicare hospice reimbursement 0.6% in the first quarter of 2014 when compared to the prior year quarter.  VITAS expects its full-year 2014 revenue growth, prior to Medicare cap, to be in the range of 1.0% to 3.0%.  Admissions in 2014 are estimated to increase 3.0% to 4.0%.  Adjusted EBITDA margin, prior to Medicare cap, is estimated to be 14.5% to 15.0%.  Medicare cap is estimated to be $5.0 million in 2014. Roto-Rooter expects full-year 2014 revenue growth of 3.0% to 4.0%.  The revenue estimate is a result of increased job pricing of approximately 2.0%. Adjusted EBITDA margin for 2014 is estimated in the range of 19.0% to 20.0%.  We anticipate that our operating income and cash flows will be sufficient to operate our businesses and meet any commitments for the foreseeable future.

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Financial Condition

Liquidity and Capital Resources

Material changes in the balance sheet accounts from December 31, 2013 to March 31, 2014 include the following:

•   A $24.4 million increase in accounts receivable related to the timing of Medicare receipts.

•   A $6.5 million decrease in current deferred income taxes mainly related to the payment of litigation settlements.

•   A $10.1 million decrease in accrued compensation related to the payment of incentive compensation in the first quarter.

•   A $16.1 million decrease in accrued legal due to the payment of litigation settlements.

Net cash provided by operating activities decreased $20.0 million primarily as a result of the decrease in accounts payable and other current liabilities offset by the increase in accounts receivable.  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 $35.0 million in standby letters of credit as of March 31, 2014, for insurance purposes.  Issued letters of credit reduce our available credit under the revolving credit agreement.  As of March 31, 2014, we have approximately $315.0 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 March 31, 2014 and anticipate remaining in compliance throughout 2014.

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 material lawsuits and investigations of which the Company is currently aware.  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.

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 opposed this motion.  On September 16, 2013, Plaintiffs executed a Settlement Term Sheet with Defendants, reaching an agreement in principle to settle this case subject to Court approval.  On February 6, 2014, Plaintiffs, on behalf of a putative class of purchasers of Chemed Capital Stock between February 15, 2010 and May 2, 2013, inclusive, executed a stipulation of settlement with defendants, agreeing 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 settlement class (“Settlement”).  The Settlement of $6.0 million has been recorded as an accrual and offsetting prepaid in the accompanying Consolidated Balance Sheet. This Settlement received preliminary Court approval on March 27, 2014 and is scheduled for a final hearing on July 19, 2014.  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.

- 18 -

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., No. 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 partially intervened in Gonzales.  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 federal 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.  The Spottiswood relator filed an action under the Illinois False Claims Act, The State of Illinois ex rel. Laura Spottiswood v. Chemed Corporation, et al., No. 14 L 2786 in the Circuit Court of Cook County, Illinois on March 6, 2014.  The Court granted the parties’ joint motion to place this case on the its stay calendar, pending resolution of the 2013 Action.

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.

- 19 -

The net costs incurred related to U.S. v. Vitas and related regulatory matters were $748,000 and $1.0 million for the periods ending March 31, 2014 and 2013, respectively.

In November 2013, two shareholder derivative lawsuits were filed against the Company’s current and former directors, as well as certain of its officers, both of which are covered by the Company’s commercial insurance.  On November 6, 2013, KBC Asset Management NV filed suit in the United States Distrct Court for the District of Delaware, KBC Asset Management NV, derivatively on behalf of Chemed Corp. v. McNamara, et al., No. 13 Civ. 1854 (LPS) (D. Del.).  It sued Kevin McNamara, Joel Gemunder, Patrick Grace, Thomas Hutton, Walter Krebs, Andrea Lindell, Thomas Rice, Donald Saunders, Arthur Tucker, Jr., George Walsh III, Frank Wood, Timothy O’Toole, David Williams and Ernest Mrozek, together with the Company as nominal defendant.  Plaintiff alleges that since at least 2004, Chemed, through VITAS, has submitted or caused the submission of false claims to Medicare.  The suit alleges a claim for breach of fiduciary duty against the individual defendants, and seeks (a) a declaration that the individual defendants breached their fiduciary duties to the Company; (b) an order requiring those defendants to pay compensatory damages, restitution and exemplary damages, in unspecified amounts, to the Company; (c) an order directing the Company to implement new policies and procedures; and (d) costs and disbursements incurred in bringing the action, including attorneys’ fees.

On November 14, 2013, Mildred A. North filed suit in the United States District Court for the Southern District of Ohio, North, derivatively on behalf of Chemed Corp. v. Kevin McNamara, el al., No. 13 Civ. 833 (MDB) (S.D. Ohio).  She sued Kevin McNamara, David Williams, Timothy O’Toole, Joel Gemunder, Patrick Grace, Walter Krebs, Andrea Lindell, Thomas Rice, Donald Saunders, George Walsh III, Frank Wood and Thomas Hutton, together with the Company as nominal defendant.  Plaintiff alleges that, between February 2010 and the present, the individual defendants breached their fiduciary duties as officers and directors of Chemed by, among other things, (a) allegedly causing VITAS to submit improper and ineligible claims to Medicare and Medicaid; and (b) allegedly misrepresenting the state of Chemed’s internal controls.  The suit alleges claims for breach of fiduciary duty, abuse of control and gross mismanagement against the individual defendants.  The complaint also alleges unjust enrichment and insider trading against Messrs. McNamara, Williams and O’Toole.  Plaintiff seeks (a) a declaration that the individual defendants breached their fiduciary duties to the Company; (b) an order requiring those defendants to pay compensatory damages, restitution and exemplary damages, in unspecified amounts, to the Company; (c) an order directing the Company to implement new policies and procedures; and (d) costs and disbursements incurred in bringing the action, including attorneys’ fees.

On December 20, 2013, Plaintiff in the North action filed a motion before the Judicial Panel on Multidistrict Litigation seeking centralized treatment of her action and the KBC action in the U.S. District Court for the Southern District of Ohio.  Defendants in both cases, as well as Plaintiff KBC, opposed that motion, consistent with Chemed’s By-law 8.07, which requires all derivative suits brought in Chemed’s name to proceed in federal or state court in Delaware.  The MDL Panel denied the motion on April 2, 2014.  On January 29, 2014 Defendants filed motions to transfer North to Delaware under 28 U.S.C § 1404 and to stay the case until after resolution of that motion and the MDL motion.

The Company intends to defend vigorously against the allegations in each of the above lawsuits.  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.

- 20 -

Results of Operations

Three months ended March 31, 2014 versus  2013 - Consolidated Results

Our service revenues and sales for the first quarter of 2014 decreased 2.3% versus services and sales revenues for the first quarter of 2013.  Of this decrease, $10.9 million was attributable to VITAS offset by a $2.6 million increase at Roto-Rooter.  The following chart shows the components of those changes (in thousands):

	Increase/(Decrease)
	Amount			Percent
VITAS
Routine homecare	$	(1,263	)		(0.6	)
Continuous care		(7,150	)		(15.8	)
General inpatient		(2,475	)		(8.7	)
Medicare cap		(26	)		(3.0	)
Roto-Rooter
Plumbing		3,796			8.8
Drain cleaning		(1,367	)		(3.6	)
Contractor operations		813			9.9
Other		(669	)		(11.1	)
Total	$	(8,341	)		(2.3	)

The decrease in VITAS’ revenues for the first quarter of 2014 versus the first quarter of 2013 was a combination of Medicare reimbursement rates increasing approximately 1.4%, offset by a 2.0% decline due to sequestration, an ADC decrease of 0.8%, and geographical and level of care mix shift.  In the first quarter of 2014, VITAS recorded a positive revenue adjustment of $847,000 related to eliminating the Medicare cap billing limitation recorded in the fourth quarter of 2013 for one program and partially eliminating the Medicare cap billing limitation in another program.  This compares with $873,000 Medicare cap liability recorded in the first quarter of 2013.  The ADC decrease was driven by a 0.2% increase in routine homecare, a decrease of 15.4% in continuous care and a decrease of 6.6% 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 quarter of 2014 versus 2013 is attributable to a 9.0% increase in job count offset by a 0.2% decrease in price and mix shift.  Drain cleaning revenues for the first quarter of 2014 versus 2013 reflect a 7.9% decrease in the number of jobs performed offset by a 4.3% increase in price and mix shift.  Contractor operations revenue increased 9.9% for the first quarter of 2014.  Other Roto-Rooter revenue decreased 11.1%.

The consolidated gross margin was 28.0% in the first quarter of 2014 as compared with 27.9% in the first quarter of 2013.  On a segment basis, VITAS’ gross margin was 21.1% in the first quarter of 2014 and 21.4% in the first quarter of 2013.  The Roto-Rooter segment’s gross margin was 46.4% for the first quarter of 2014 as compared with 46.3% for the first quarter of 2013.

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

	Three months ended March 31,
	2014		2013
SG&A expenses before the impact of market gains of deferred compensation plans,
long-term incentive compensation, and OIG investigation expenses	$	53,388	$	52,437
Long-term incentive compensation		373		612
Expenses related to OIG investigation		748		1,039
Impact of market value gains on liabilities held in deferred compensation
trusts		1,162		1,472
Total SG&A expenses	$	55,671	$	55,560

SG&A expenses before long-term incentive compensation, expenses related to OIG investigation and the impact of market gains of deferred compensation plans for the first quarter of 2014 were up 1.8% when compared to the first quarter of 2013 mainly as a result of normal salary increases.

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Other income - net comprise (in thousands):

	Three months ended March 31,
	2014			2013
Market value gains on assets held in deferred
compensation trusts	$	1,162		$	1,472
Loss on disposal of property and equipment		(278	)		(78	)
Interest income - net		(50	)		303
Other		(18	)		9
Total other income - net	$	816		$	1,706

Our effective income tax rate was 38.9% in the first quarter of 2014 which is flat when compared to the first quarter of 2013.

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

	Three months ended March 31,
	2014			2013
VITAS
Expenses related to OIG investigation	$	(464	)	$	(644	)
Expenses related to litigation settlements		(70	)		-
Acquisition expenses		(1	)		-
Roto-Rooter
Expenses related to litigation settlements		(117	)		(86	)
Expenses of severance arrangements		-			(184	)
Corporate
Noncash impact of change in accounting for convertible debt		(1,429	)		(1,323	)
Stock option expense		(822	)		(943	)
Long-term incentive compensation		(236	)		(387	)
Loss on extinguishment of debt		-			(294	)
Expenses related to securities litigation		-			(1	)
Total	$	(3,139	)	$	(3,862	)

Three months ended March 31, 2014 versus 2013 - Segment Results

The change in after-tax earnings for the first quarter of 2014 versus the first quarter of 2013 is due to (in thousands):

	Increase/(Decrease)
	Amount			Percent
VITAS	$	(1,983	)		(9.8	)
Roto-Rooter		409			4.2
Corporate		(130	)		(1.7	)
	$	(1,704	)		(7.6	)

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CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENT OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 2014
(in thousands)(unaudited)
											Chemed
	VITAS				Roto-Rooter			Corporate				Consolidated
2014 (a)
Service revenues and sales		$	260,412		$	97,888		$	-			$	358,300
Cost of services provided and goods sold			205,392			52,427			-				257,819
Selling, general and administrative expenses			21,714			27,181			6,776				55,671
Depreciation			4,614			2,399			136				7,149
Amortization			419			145			445				1,009
Total costs and expenses			232,139			82,152			7,357				321,648
Income/(loss) from operations			28,273			15,736			(7,357	)			36,652
Interest expense			(56	)		(97	)		(3,662	)			(3,815	)
Intercompany interest income/(expense)			1,344			649			(1,993	)			-
Other income/(expense)—net			(293	)		(59	)		1,168				816
Income/(expense) before income taxes			29,268			16,229			(11,844	)			33,653
Income taxes			(11,109	)		(6,196	)		4,226				(13,079	)
Net income/(loss)		$	18,159		$	10,033		$	(7,618	)		$	20,574
(a) The following amounts are included in net income (in thousands):
											Chemed
		VITAS			Roto-Rooter			Corporate				Consolidated
Pretax benefit/(cost):
Stock option expense		$	-		$	-		$	(1,309	)		$	(1,309	)
Noncash impact of accounting for convertible debt			-			-			(2,259	)			(2,259	)
Long-term incentive compensation			-			-			(373	)			(373	)
Expenses related to litigation settlements			(113	)		(193	)		-				(306	)
Acquisition expenses			(1	)		-			-				(1	)
Expenses related to OIG investigation			(748	)		-			-				(748	)
Total		$	(862	)	$	(193	)	$	(3,941	)		$	(4,996	)
											Chemed
		VITAS			Roto-Rooter			Corporate				Consolidated
After-tax benefit/(cost):
Stock option expense		$	-		$	-		$	(822	)		$	(822	)
Noncash impact of accounting for convertible debt			-			-			(1,429	)			(1,429	)
Long-term incentive compensation			-			-			(236	)			(236	)
Expenses related to litigation settlements			(70	)		(117	)		-				(187	)
Acquisition expenses			(1	)		-			-				(1	)
Expenses related to OIG investigation			(464	)		-			-				(464	)
Total		$	(535	)	$	(117	)	$	(2,487	)		$	(3,139	)

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CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENT OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 2013
(in thousands)(unaudited)
										Chemed
	VITAS			Roto-Rooter			Corporate				Consolidated
2013 (a)
Service revenues and sales	$	271,326		$	95,315		$	-			$	366,641
Cost of services provided and goods sold		213,160			51,147			-				264,307
Selling, general and administrative expenses		21,604			26,662			7,294				55,560
Depreciation		4,514			2,147			134				6,795
Amortization		491			154			482				1,127
Total costs and expenses		239,769			80,110			7,910				327,789
Income/(loss) from operations		31,557			15,205			(7,910	)			38,852
Interest expense		(46	)		(59	)		(3,989	)			(4,094	)
Intercompany interest income/(expense)		843			428			(1,271	)			-
Other income/(expense)—net		221			(1	)		1,486				1,706
Income/(expense) before income taxes		32,575			15,573			(11,684	)			36,464
Income taxes		(12,433	)		(5,949	)		4,196				(14,186	)
Net income/(loss)	$	20,142		$	9,624		$	(7,488	)		$	22,278
(a) The following amounts are included in net income (in thousands):
										Chemed
		VITAS		Roto-Rooter			Corporate				Consolidated
Pretax benefit/(cost):
Stock option expense	$	-		$	-		$	(1,491	)		$	(1,491	)
Noncash impact of accounting for convertible debt		-			-			(2,091	)			(2,091	)
Long-term incentive compensation		-			-			(612	)			(612	)
Expenses of severance arrangements		-			(302	)		-				(302	)
Loss on extinguishment of debt		-			-			(465	)			(465	)
Expenses related to litigation settlement		-			(141	)		-				(141	)
Expenses related to securities litigation		-			-			(2	)			(2	)
Acquisition expenses		(1	)		-			-				(1	)
Expenses of OIG investigation		(1,039	)		-			-				(1,039	)
Total	$	(1,040	)	$	(443	)	$	(4,661	)		$	(6,144	)
										Chemed
	VITAS			Roto-Rooter			Corporate				Consolidated
After-tax benefit/(cost):
Stock option expense	$	-		$	-		$	(943	)		$	(943	)
Noncash impact of accounting for convertible debt		-			-			(1,323	)			(1,323	)
Long-term incentive compensation		-			-			(387	)			(387	)
Expenses of severance arrangements		-			(184	)		-				(184	)
Loss on extinguishment of debt		-			-			(294	)			(294	)
Expenses related to litigation settlements		-			(86	)		-				(86	)
Expenses related to securities litigation		-			-			(1	)			(1	)
Expenses of OIG investigation		(644	)		-			-				(644	)
Total	$	(644	)	$	(270	)	$	(2,948	)		$	(3,862	)

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Consolidating Summary and Reconciliation of Adjusted EBITDA
Chemed Corporation and Subsidiary Companies
(in thousands)													Chemed
For the three months ended March 31, 2014	VITAS				Roto-Rooter				Corporate				Consolidated
Net income/(loss)		$	18,159			$	10,033			$	(7,618	)		$	20,574
Add/(deduct):
Interest expense			56				97				3,662				3,815
Income taxes			11,109				6,196				(4,226	)			13,079
Depreciation			4,614				2,399				136				7,149
Amortization			419				145				445				1,009
EBITDA			34,357				18,870				(7,601	)			45,626
Add/(deduct):
Intercompany interest expense/(income)			(1,344	)			(649	)			1,993				-
Interest income			64				(8	)			(6	)			50
Expenses related to OIG investigation			748				-				-				748
Acquisition expenses			1				-				-				1
Expenses related to litigation settlements			113				193				-				306
Advertising cost adjustment			-				(741	)			-				(741	)
Stock option expense			-				-				1,309				1,309
Long-term incentive compensation			-				-				373				373
Adjusted EBITDA		$	33,939			$	17,665			$	(3,932	)		$	47,672
													Chemed
For the three months ended March 31, 2013	VITAS				Roto-Rooter				Corporate				Consolidated
Net income/(loss)		$	20,142			$	9,624			$	(7,488	)		$	22,278
Add/(deduct):
Interest expense			46				59				3,989				4,094
Income taxes			12,433				5,949				(4,196	)			14,186
Depreciation			4,514				2,147				134				6,795
Amortization			491				154				482				1,127
EBITDA			37,626				17,933				(7,079	)			48,480
Add/(deduct):
Intercompany interest expense/(income)			(843	)			(428	)			1,271				-
Interest income			(246	)			(42	)			(15	)			(303	)
Expenses related to OIG investigation			1,039				-				-				1,039
Acquisition expenses			1				-				-				1
Expenses of severance arrangements			-				302				-				302
Advertising cost adjustment			-				(469	)			-				(469	)
Expenses related to litigation settlements			-				141				-				141
Long-term incentive compensation			-				-				612				612
Stock option expense			-				-				1,491				1,491
Expenses related to securities litigation			-				-				2				2
Adjusted EBITDA		$	37,577			$	17,437			$	(3,718	)		$	51,296

- 25 -

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
RECONCILIATION OF ADJUSTED NET INCOME
(in thousands, except per share data)(unaudited)
	Three Months Ended March 31,
	2014		2013
Net income as reported	$	20,574	$	22,278
Add/(deduct) after-tax cost of:
Additional interest expense resulting from the change in accounting
for the conversion feature of the convertible notes		1,429		1,323
Stock option expense		822		943
Expenses of OIG investigation		464		644
Long-term incentive compensation		236		387
Expenses related to litigation settlements		187		86
Acquisition expenses		1		-
Loss on extinguishment of debt		-		294
Expenses of severance arrangements		-		184
Expenses related to securities litigation		-		1
Adjusted net income	$	23,713	$	26,140
Diluted Earnings Per Share As Reported
Net income	$	1.12	$	1.17
Average number of shares outstanding		18,305		19,000
Adjusted Diluted Earnings Per Share
Adjusted net income	$	1.32	$	1.38
Adjusted average number of shares outstanding*		18,019		19,000
* Adjusted diluted average shares outstanding exludes the estimated dilutive impact of the Convertible Notes (285,000 share for the first quarter of 2014) as this impact will be offset entirely by the Convertible Note Hedges when such conversion occurs in the second quarter of 2014.

- 26 -

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
OPERATING STATISTICS FOR VITAS SEGMENT
(unaudited)
	Three Months Ended March 31,
OPERATING STATISTICS	2014			2013
Net revenue ($000)
Homecare	$	195,397		$	196,660
Inpatient		25,993			28,468
Continuous care		38,175			45,325
Total before Medicare cap allowance	$	259,565		$	270,453
Medicare cap allowance		847			873
Total	$	260,412		$	271,326
Net revenue as a percent of total
before Medicare cap allowance
Homecare		75.3	%		72.7	%
Inpatient		10.0			10.5
Continuous care		14.7			16.8
Total before Medicare cap allowance		100.0			100.0
Medicare cap allowance		0.3			0.3
Total		100.3	%		100.3	%
Average daily census (days)
Homecare		10,476			10,354
Nursing home		2,828			2,929
Routine homecare		13,304			13,283
Inpatient		437			468
Continuous care		576			681
Total		14,317			14,432
Total Admissions		16,353			17,137
Total Discharges		16,002			16,843
Average length of stay (days)		81.1			77.4
Median length of stay (days)		14.0			13.0
ADC by major diagnosis
Neurological		39.2	%		33.2	%
Cancer		17.3			16.9
Cardio		14.7			11.2
Respiratory		3.3			6.9
Other		25.5			31.8
Total		100.0	%		100.0	%
Admissions by major diagnosis
Neurological		21.8			19.2	%
Cancer		32.4			30.8
Cardio		13.8			11.6
Respiratory		9.9			9.6
Other		22.1			28.8
Total		100.0	%		100.0	%
Direct patient care margins
Routine homecare		52.8	%		51.9	%
Inpatient		4.2			10.9
Continuous care		16.6			17.7
Homecare margin drivers (dollars per patient day)
Labor costs	$	55.44		$	57.18
Drug costs		7.24			7.57
Home medical equipment		6.61			6.85
Medical supplies		3.22			2.92
Inpatient margin drivers (dollars per patient day)
Labor costs	$	349.71		$	320.67
Continuous care margin drivers (dollars per patient day)
Labor costs	$	593.77		$	587.73
Bad debt expense as a percent of revenues		1.0	%		0.8	%
Accounts receivable --
Days of revenue outstanding- excluding unapplied Medicare payments		42.7			39.0
Days of revenue outstanding- including unapplied Medicare payments		33.8			29.6

- 27 -

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 March 31, 2014, we had no variable rate debt outstanding.  At March 31, 2014, the fair value of the Notes approximates $209.2 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.

- 28 -

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 three months of 2014:

	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, 2014		-	$	-		4,891,885	$	21,828,041
February 1 through February 28, 2014		132,934		82.50		5,024,819		110,860,736
March 1 through March 31, 2014		250,000		88.06		5,274,819	$	88,845,624
First Quarter Total		382,934	$	86.13
On February 21, 2014, 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

- 29 -

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:	May 2, 2014	By:	/s/ Kevin J. McNamara
			Kevin J. McNamara
			(President and Chief Executive Officer)
Dated:	May 2, 2014	By:	/s/ David P. Williams
			David P. Williams
			(Executive Vice President and Chief Financial Officer)
Dated:	May 2, 2014	By:	/s/ Arthur V. Tucker, Jr.
			Arthur V. Tucker, Jr.
			(Vice President and Controller)

- 30 -

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:	May 2, 2014	/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:	May 2, 2014	/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:	May 2, 2014	/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 March 31, 2014 (“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:	May 2, 2014	/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 March 31, 2014 (“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:	May 2, 2014	/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 March 31, 2014 (“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:	May 2, 2014	/s/ Arthur V. Tucker, Jr.
		Arthur V. Tucker, Jr.
		(Vice President and  Controller)

E-6

XML

Long-Term Debt (Debt Amounts Included In Consolidated Balance Sheet) (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Long-Term Debt [Abstract]
Principal amount of convertible debentures	$ 186,956	$ 186,956
Unamortized debt discount	(1,131)	(3,392)
Carrying amount of convertible debentures	185,825	183,564
Additional paid in capital (net of tax)	$ 31,310	$ 31,310

XML

Guarantor Subsidiaries (Schedule Of Guarantor Subsidiaries - Statement Of Cash Flows) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Condensed Cash Flow Statements, Captions [Line Items]
Net cash provided by operating activities	$ (11,846)	$ 8,141
Capital expenditures	(8,131)	(5,406)
Business combinations, net of cash acquired	(250)
Other sources/(uses) - net	29	78
Net cash used by investing activities	(8,352)	(5,328)
Increase/(decrease) in cash overdrafts payable	369	(3,165)
Dividends paid	(3,303)	(3,367)
Debt issuance costs		(1,107)
Capital stock surrendered to pay taxes on stock-based compensation	(2,916)	(3,389)
Purchases of treasury stock	(32,982)
Proceeds from exercise of stock options	13,193	10,168
Excess tax benefit on share-based compensation	1,399	1,891
Other sources/(uses) - net	(501)	(419)
Net cash provided/(used) by financing activities	(24,741)	612
Net increase/(decrease) in cash and cash equivalents	(44,939)	3,425
Cash and cash equivalents at beginning of year	84,418	69,531
Cash and cash equivalents at end of period	39,479	72,956
Parent [Member]
Condensed Cash Flow Statements, Captions [Line Items]
Net cash provided by operating activities	(6,773)	(4,511)
Capital expenditures	(20)	(10)
Other sources/(uses) - net	(58)	(16)
Net cash used by investing activities	(78)	(26)
Increase/(decrease) in cash overdrafts payable	323	(554)
Change in intercompany accounts	(11,080)	6,731
Dividends paid	(3,303)	(3,367)
Debt issuance costs		(1,107)
Capital stock surrendered to pay taxes on stock-based compensation	(2,916)	(3,389)
Purchases of treasury stock	(32,982)
Proceeds from exercise of stock options	13,193	10,168
Excess tax benefit on share-based compensation	1,399	1,891
Other sources/(uses) - net	20	(4)
Net cash provided/(used) by financing activities	(35,346)	10,369
Net increase/(decrease) in cash and cash equivalents	(42,197)	5,832
Cash and cash equivalents at beginning of year	84,005	56,342
Cash and cash equivalents at end of period	41,808	62,174
Guarantor Subsidiaries [Member]
Condensed Cash Flow Statements, Captions [Line Items]
Net cash provided by operating activities	(5,370)	12,302
Capital expenditures	(7,897)	(5,278)
Business combinations, net of cash acquired	(250)
Other sources/(uses) - net	62	71
Net cash used by investing activities	(8,085)	(5,207)
Increase/(decrease) in cash overdrafts payable	46	(2,611)
Change in intercompany accounts	10,850	(6,570)
Net cash provided/(used) by financing activities	10,896	(9,181)
Net increase/(decrease) in cash and cash equivalents	(2,559)	(2,086)
Cash and cash equivalents at beginning of year	(8,777)	4,674
Cash and cash equivalents at end of period	(11,336)	2,588
Non-Guarantor Subsidiaries [Member]
Condensed Cash Flow Statements, Captions [Line Items]
Net cash provided by operating activities	297	350
Capital expenditures	(214)	(118)
Other sources/(uses) - net	25	23
Net cash used by investing activities	(189)	(95)
Change in intercompany accounts	230	(161)
Other sources/(uses) - net	(521)	(415)
Net cash provided/(used) by financing activities	(291)	(576)
Net increase/(decrease) in cash and cash equivalents	(183)	(321)
Cash and cash equivalents at beginning of year	9,190	8,515
Cash and cash equivalents at end of period	$ 9,007	$ 8,194

XML

Cash Overdrafts And Cash Equivalents (Details) (USD $)	3 Months Ended	12 Months Ended
	Mar. 31, 2014	Dec. 31, 2013
Cash Overdrafts And Cash Equivalents [Abstract]
Cash overdrafts included in accounts payable	$ 1,200,000	$ 806,000
Cash equivalents	$ 20,000,000	$ 23,100,000
Cash equivalents weighted average rate of return	0.09%	0.08%

XML

Legal And Regulatory Matters (Details) (USD $)	12 Months Ended	3 Months Ended
	Dec. 31, 2013 Chemed Corp. Securities Litigation [Member]	Mar. 31, 2014 U.S. v. VITAS [Member]	Mar. 31, 2013 U.S. v. VITAS [Member]
Loss Contingencies [Line Items]
Loss contingency, damages awarded	$ 6,000,000
Number of Patients		117
Current and former employees		10
Legal Fees		$ 748,000	$ 1,000,000

XML

Revenue Recognition (Schedule Of Cost Of Charity Care) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Revenue Recognition [Abstract]
Charity care cost	$ 1,699	$ 1,929

XML

Other Income - Net (Tables)

3 Months Ended

Mar. 31, 2014

Other Income - Net [Abstract]

Schedule Of Other Income - Net

	Three months ended March 31,
	2014		2013
Market value gains on assets held in deferred
compensation trust	$	1,162	$	1,472
Loss on disposal of property and equipment		(278)		(78)
Interest income - net		(50)		303
Other - net		(18)		9
Total other income - net	$	816	$	1,706

XML

Capital Stock Repurchase Plan Transactions (Details) (USD $) In Millions, except Share data, unless otherwise specified	1 Months Ended	3 Months Ended
	Feb. 28, 2013	Mar. 31, 2014
Capital Stock Repurchase Plan Transactions [Abstract]
Stock repurchase program, amount authorized	$ 100
Shares repurchased		382,934
Weighted average price per share		$ 86.13
Stock Repurchase Program, Remaining Authorized Repurchase Amount		$ 88.8

XML

Stock-Based Compensation Plans (Narrative) (Details) (USD $) In Millions, except Share data, unless otherwise specified	0 Months Ended	3 Months Ended
	Feb. 21, 2014	Mar. 31, 2014
Performance Based TSR [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock awards granted	10,340
Shares vesting period, years		3 years
Cumulative compensation expense		$ 1.2
Performance Based EPS [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock awards granted	14,061
Shares vesting period, years		3 years
Cumulative compensation expense		$ 1.2

XML

Long-Term Debt (Narrative) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014
Debt Instrument [Line Items]
Revolving credit facility period, years	5 years
Revolving credit facility, borrowing capacity	$ 350
Line of credit expansion feature	150
Revolving credit facility, interest rate description	floating interest rate that is currently LIBOR plus 125 basis points
Standby letters of credit issued	35.0
Unused lines of credit	$ 315.0
Effective rate on Notes	6.875%
LIBOR [Member]
Debt Instrument [Line Items]
Line of credit facility, basis points above LIBOR	1.25%

XML

Guarantor Subsidiaries (Schedule Of Guarantor Subsidiaries - Balance Sheet) (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013	Mar. 31, 2013	Dec. 31, 2012
Condensed Balance Sheet Statements, Captions [Line Items]
Cash and cash equivalents	$ 39,479	$ 84,418	$ 72,956	$ 69,531
Accounts receivable, including intercompany	116,152	91,770
Inventories	6,676	6,703
Current deferred income taxes	13,769	20,257
Prepaid income taxes	3,406	3,690
Prepaid expenses	18,930	17,818
Total current assets	198,412	224,656
Investments of deferred compensation plans	45,732	42,465
Properties and equipment, at cost, less accumulated depreciation	93,575	92,955
Identifiable intangible assets less accumulated amortization	56,276	56,556
Goodwill	466,961	466,871
Other assets	7,664	10,198
Total assets	868,620	893,701
Accounts payable, including intercompany	38,599	41,758
Current portion of long-term debt	185,825	183,564
Income taxes	3,967	111
Accrued insurance	39,391	41,859
Accrued compensation	38,233	48,323
Accrued legal	7,154	23,210
Other current liabilities	24,682	25,161
Total current liabilities	337,851	363,986
Deferred income taxes	28,232	27,301
Deferred compensation liabilities	45,498	42,348
Other liabilities	11,106	11,176
Stockholders' equity	445,933	448,890
Total liabilities and stockholders' equity	868,620	893,701
Parent [Member]
Condensed Balance Sheet Statements, Captions [Line Items]
Cash and cash equivalents	41,808	84,005	62,174	56,342
Accounts receivable, including intercompany	1,231	925
Prepaid income taxes	9,155	3,710
Prepaid expenses	6,612	6,925
Total current assets	58,806	95,565
Properties and equipment, at cost, less accumulated depreciation	9,963	10,184
Other assets	12,745	17,782
Investments in subsidiaries	964,753	945,450
Total assets	1,046,267	1,068,981
Accounts payable, including intercompany	398,529	417,593
Current portion of long-term debt	185,825	183,564
Income taxes		1,106
Accrued insurance	1,433	784
Accrued compensation	1,086	5,047
Accrued legal	6,043	6,031
Other current liabilities	4,288	2,739
Total current liabilities	597,204	616,864
Other liabilities	3,130	3,227
Stockholders' equity	445,933	448,890
Total liabilities and stockholders' equity	1,046,267	1,068,981
Guarantor Subsidiaries [Member]
Condensed Balance Sheet Statements, Captions [Line Items]
Cash and cash equivalents	(11,336)	(8,777)	2,588	4,674
Accounts receivable, including intercompany	517,646	509,580
Inventories	6,148	6,246
Current deferred income taxes	14,720	21,307
Prepaid income taxes		1,176
Prepaid expenses	11,958	10,682
Total current assets	539,136	540,214
Properties and equipment, at cost, less accumulated depreciation	81,033	80,144
Identifiable intangible assets less accumulated amortization	56,276	56,556
Goodwill	462,687	462,489
Other assets	1,877	1,775
Investments in subsidiaries	28,007	27,564
Total assets	1,169,016	1,168,742
Accounts payable, including intercompany	39,213	39,424
Income taxes	7,663	210
Accrued insurance	37,958	41,075
Accrued compensation	36,807	42,905
Accrued legal	1,111	17,179
Other current liabilities	21,429	22,219
Total current liabilities	144,181	163,012
Deferred income taxes	52,331	52,548
Other liabilities	6,879	6,914
Stockholders' equity	965,625	946,268
Total liabilities and stockholders' equity	1,169,016	1,168,742
Non-Guarantor Subsidiaries [Member]
Condensed Balance Sheet Statements, Captions [Line Items]
Cash and cash equivalents	9,007	9,190	8,194	8,515
Accounts receivable, including intercompany	1,256	1,000
Inventories	528	457
Current deferred income taxes	264	126
Prepaid income taxes	7	349
Prepaid expenses	360	211
Total current assets	11,422	11,333
Investments of deferred compensation plans	45,732	42,465
Properties and equipment, at cost, less accumulated depreciation	2,579	2,627
Goodwill	4,274	4,382
Other assets	17,141	15,888
Total assets	81,148	76,695
Accounts payable, including intercompany	4,838	4,476
Income taxes	2,060	340
Accrued compensation	340	371
Other current liabilities	180	1,379
Total current liabilities	7,418	6,566
Deferred compensation liabilities	45,498	42,348
Other liabilities	1,097	1,035
Stockholders' equity	27,135	26,746
Total liabilities and stockholders' equity	81,148	76,695
Consolidating Adjustments [Member]
Condensed Balance Sheet Statements, Captions [Line Items]
Accounts receivable, including intercompany	(403,981)	(419,735)
Current deferred income taxes	(1,215)	(1,176)
Prepaid income taxes	(5,756)	(1,545)
Total current assets	(410,952)	(422,456)
Other assets	(24,099)	(25,247)
Investments in subsidiaries	(992,760)	(973,014)
Total assets	(1,427,811)	(1,420,717)
Accounts payable, including intercompany	(403,981)	(419,735)
Income taxes	(5,756)	(1,545)
Other current liabilities	(1,215)	(1,176)
Total current liabilities	(410,952)	(422,456)
Deferred income taxes	(24,099)	(25,247)
Stockholders' equity	(992,760)	(973,014)
Total liabilities and stockholders' equity	$ (1,427,811)	$ (1,420,717)

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Concentration Of Risk (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
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	$ 8.8	$ 9.6
Percentage of concentration risk services represent from vendor	90.00%	90.00%

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Earnings Per Share

3 Months Ended

Mar. 31, 2014

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 March 31,		Income		Shares	Earnings per Share
2014
	Earnings	$	20,574	17,510	$	1.17
	Dilutive stock options		-	362
	Nonvested stock awards		-	148
	Conversion of Notes		-	285
	Diluted earnings	$	20,574	18,305	$	1.12
2013
	Earnings	$	22,278	18,522	$	1.20
	Dilutive stock options		-	371
	Nonvested stock awards		-	107
	Diluted earnings	$	22,278	19,000	$	1.17

For the three-month period ended March 31, 2014, 329,000 stock options were excluded from the computation of diluted earnings per share because they would have been anti-dilutive. For the three-month period ended March 31, 2013, 11,000  stock options were excluded from the computation of diluted earnings per share.

Diluted earnings per share was impacted as the result of our 1.875% Senior Convertible Notes (the “Notes”).  Beginning March 1, 2014, the Notes can be converted into our Capital Stock in accordance with the terms of the Notes.  At March 31, 2014, our share price exceeded the Convertible Note price.  Using the treasury method, the diluted share count was 285,000 shares higher assuming 100% of the Notes are presumed for net share settlement.  The purchased call option is anticipated to offset any shares issued at the maturity of the Notes.  Under generally accepted accounting principles the purchased call option does not impact the calculation of diluted earnings per share as it is always anti-dilutive.  There is no economic dilution anticipated upon conversion as a result of our purchased call options.

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Independent Contractor Operations (Narrative) (Details) (USD $) In Millions, unless otherwise specified				3 Months Ended
	Mar. 31, 2014	Dec. 31, 2013	Mar. 31, 2014 Settlements of Roto-Rooter segment [Member] item	Mar. 31, 2014 Maximum [Member]	Mar. 31, 2014 Minimum [Member]
Independent Contractor Operations [Line Items]
Independent contractors with sublicenses			68
Notes receivable from independent contractors	$ 1.5	$ 1.5
Interest rates on loans				8.00%	0.00%
Terms of the loans to independent contractors, years				5 years	2 months

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Capital Stock Repurchase Plan Transactions (Tables)

3 Months Ended

Mar. 31, 2014

Capital Stock Repurchase Plan Transactions [Abstract]

Schedule Of Capital Stock Repurchases

	Three months ended March 31,
	2014		2013
Shares repurchased		382,934		-
Weighted average price per share	$	86.13	$	-

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Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2014

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          

March 31, 2014 (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	$	45,498	$	45,732	$	-	$	-
Long-term debt		185,825		209,157		-		-

The following shows the carrying value, fair value and the hierarchy for our financial instruments as of      December 31, 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	$	42,465	$	42,465	$	-	$	-
Long-term debt		183,564		193,032		-		-

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Independent Contractor Operations (Schedule Of Independent Contractors) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Independent Contractor Operations [Abstract]
Revenues	$ 9,023	$ 8,210
Pretax profits	$ 5,159	$ 4,258

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Guarantor Subsidiaries (Tables)

3 Months Ended

Mar. 31, 2014

Guarantor Subsidiaries [Abstract]

Schedule Of Guarantor Subsidiaries - Balance Sheet

March 31, 2014		Guarantor	Non-Guarantor	Consolidating
	Parent	Subsidiaries	Subsidiaries	Adjustments	Consolidated
ASSETS
Cash and cash equivalents	$                     41,808	$                   (11,336)	$                       9,007	$                               -	$                     39,479
Accounts receivable, including intercompany	1,231	517,646	1,256	(403,981)	116,152
Inventories	-	6,148	528	-	6,676
Current deferred income taxes	-	14,720	264	(1,215)	13,769
Prepaid income taxes	9,155	-	7	(5,756)	3,406
Prepaid expenses	6,612	11,958	360	-	18,930
Total current assets	58,806	539,136	11,422	(410,952)	198,412
Investments of deferred compensation plans	-	-	45,732	-	45,732
Properties and equipment, at cost less accumulated depreciation	9,963	81,033	2,579	-	93,575
Identifiable intangible assets less accumulated amortization	-	56,276	-	-	56,276
Goodwill	-	462,687	4,274	-	466,961
Other assets	12,745	1,877	17,141	(24,099)	7,664
Investments in subsidiaries	964,753	28,007	-	(992,760)	-
Total assets	$                1,046,267	$                1,169,016	$                     81,148	$              (1,427,811)	$                   868,620
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable, including intercompany	$                   398,529	$                     39,213	$                       4,838	$                 (403,981)	$                     38,599
Current portion of long-term debt	185,825	-	-	-	185,825
Income taxes	-	7,663	2,060	(5,756)	3,967
Accrued insurance	1,433	37,958	-	-	39,391
Accrued compensation	1,086	36,807	340	-	38,233
Accrued legal	6,043	1,111	-	-	7,154
Other current liabilities	4,288	21,429	180	(1,215)	24,682
Total current liabilities	597,204	144,181	7,418	(410,952)	337,851
Deferred income taxes	-	52,331	-	(24,099)	28,232
Deferred compensation liabilities	-	-	45,498	-	45,498
Other liabilities	3,130	6,879	1,097	-	11,106
Stockholders' equity	445,933	965,625	27,135	(992,760)	445,933
Total liabilities and stockholders' equity	$                1,046,267	$                1,169,016	$                     81,148	$              (1,427,811)	$                   868,620
December 31, 2013		Guarantor	Non-Guarantor	Consolidating
	Parent	Subsidiaries	Subsidiaries	Adjustments	Consolidated
ASSETS
Cash and cash equivalents	$                     84,005	$                     (8,777)	$                       9,190	$                               -	$                     84,418
Accounts receivable, including intercompany	925	509,580	1,000	(419,735)	91,770
Inventories	-	6,246	457	-	6,703
Current deferred income taxes	-	21,307	126	(1,176)	20,257
Prepaid income taxes	3,710	1,176	349	(1,545)	3,690
Prepaid expenses	6,925	10,682	211	-	17,818
Total current assets	95,565	540,214	11,333	(422,456)	224,656
Investments of deferred compensation plans	-	-	42,465	-	42,465
Properties and equipment, at cost less accumulated depreciation	10,184	80,144	2,627	-	92,955
Identifiable intangible assets less accumulated amortization	-	56,556	-	-	56,556
Goodwill	-	462,489	4,382	-	466,871
Other assets	17,782	1,775	15,888	(25,247)	10,198
Investments in subsidiaries	945,450	27,564	-	(973,014)	-
Total assets	$                1,068,981	$                1,168,742	$                     76,695	$              (1,420,717)	$                   893,701
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable, including intercompany	$                   417,593	$                     39,424	$                       4,476	$                 (419,735)	$                     41,758
Current portion of long-term debt	183,564	-	-	-	183,564
Income taxes	1,106	210	340	(1,545)	111
Accrued insurance	784	41,075	-	-	41,859
Accrued compensation	5,047	42,905	371	-	48,323
Accrued legal	6,031	17,179	-	-	23,210
Other current liabilities	2,739	22,219	1,379	(1,176)	25,161
Total current liabilities	616,864	163,012	6,566	(422,456)	363,986
Deferred income taxes	-	52,548	-	(25,247)	27,301
Deferred compensation liabilities	-	-	42,348	-	42,348
Other liabilities	3,227	6,914	1,035	-	11,176
Stockholders' equity	448,890	946,268	26,746	(973,014)	448,890
Total liabilities and stockholders' equity	$                1,068,981	$                1,168,742	$                     76,695	$              (1,420,717)	$                   893,701

Schedule Of Guarantor Subsidiaries - Income Statement

For the three months ended March 31, 2014		Guarantor	Non-Guarantor	Consolidating
	Parent	Subsidiaries	Subsidiaries	Adjustments	Consolidated
Continuing Operations
Service revenues and sales	$              -	$         349,890	$               8,410	$                   -	$         358,300
Cost of services provided and goods sold	-	253,052	4,767	-	257,819
Selling, general and administrative expenses	5,710	47,005	2,956	-	55,671
Depreciation	241	6,671	237	-	7,149
Amortization	445	564	-	-	1,009
Total costs and expenses	6,396	307,292	7,960	-	321,648
Income/ (loss) from operations	(6,396)	42,598	450	-	36,652
Interest expense	(3,663)	(152)	-	-	(3,815)
Other (expense)/income - net	3,672	(4,014)	1,158	-	816
Income/ (loss) before income taxes	(6,387)	38,432	1,608	-	33,653
Income tax (provision)/ benefit	2,137	(14,613)	(603)	-	(13,079)
Equity in net income of subsidiaries	24,824	1,028	-	(25,852)	-
Net income	$    20,574	$           24,847	$               1,005	$        (25,852)	$           20,574
For the three months ended March 31, 2013		Guarantor	Non-Guarantor	Consolidating
	Parent	Subsidiaries	Subsidiaries	Adjustments	Consolidated
Continuing Operations
Service revenues and sales	$              -	$         359,056	$               7,585	$                   -	$         366,641
Cost of services provided and goods sold	-	259,977	4,330	-	264,307
Selling, general and administrative expenses	5,872	46,572	3,116	-	55,560
Depreciation	240	6,325	230	-	6,795
Amortization	482	645	-	-	1,127
Total costs and expenses	6,594	313,519	7,676	-	327,789
Income/ (loss) from operations	(6,594)	45,537	(91)	-	38,852
Interest expense	(3,975)	(105)	(14)	-	(4,094)
Other (expense)/income - net	4,273	(4,035)	1,468	-	1,706
Income/ (loss) before income taxes	(6,296)	41,397	1,363	-	36,464
Income tax (provision)/ benefit	2,133	(15,817)	(502)	-	(14,186)
Equity in net income of subsidiaries	26,441	910	-	(27,351)	-
Net income	$    22,278	$           26,490	$                  861	$        (27,351)	$           22,278

Schedule Of Guarantor Subsidiaries - Statement Of Cash Flows

For the three months ended March 31 2014		Guarantor	Non-Guarantor
	Parent	Subsidiaries	Subsidiaries	Consolidated
Cash Flow from Operating Activities:
Net cash provided by operating activities	$               (6,773)	$               (5,370)	$                    297	$             (11,846)
Cash Flow from Investing Activities:
Capital expenditures	(20)	(7,897)	(214)	(8,131)
Business combinations, net of cash acquired	-	(250)	-	(250)
Other sources/(uses) - net	(58)	62	25	29
Net cash used by investing activities	(78)	(8,085)	(189)	(8,352)
Cash Flow from Financing Activities:
Increase /(decrease) in cash overdrafts payable	323	46	-	369
Change in intercompany accounts	(11,080)	10,850	230	-
Dividends paid	(3,303)	-	-	(3,303)
Debt issuance costs	-	-	-	-
Capital stock surrendered to pay taxes on stock-based compensation	(2,916)	-	-	(2,916)
Purchases of treasury stock	(32,982)	-	-	(32,982)
Proceeds from exercise of stock options	13,193	-	-	13,193
Excess tax benefit on share-based compensation	1,399	-	-	1,399
Other sources/(uses) - net	20	-	(521)	(501)
Net cash provided/(used) by financing activities	(35,346)	10,896	(291)	(24,741)
Net increase/(decrease) in cash and cash equivalents	(42,197)	(2,559)	(183)	(44,939)
Cash and cash equivalents at beginning of year	84,005	(8,777)	9,190	84,418
Cash and cash equivalents at end of period	$               41,808	$             (11,336)	$                 9,007	$               39,479
For the three months ended March 31, 2013		Guarantor	Non-Guarantor
	Parent	Subsidiaries	Subsidiaries	Consolidated
Cash Flow from Operating Activities:
Net cash provided by operating activities	$               (4,511)	$               12,302	$                    350	$                 8,141
Cash Flow from Investing Activities:
Capital expenditures	(10)	(5,278)	(118)	(5,406)
Other sources/(uses) - net	(16)	71	23	78
Net cash provided/(used) by investing activities	(26)	(5,207)	(95)	(5,328)
Cash Flow from Financing Activities:
Increase/(decrease) in cash overdrafts payable	(554)	(2,611)	-	(3,165)
Change in intercompany accounts	6,731	(6,570)	(161)	-
Dividends paid	(3,367)	-	-	(3,367)
Debt issuance	(1,107)	-	-	(1,107)
Capital stock surrendered to pay taxes on stock-based compensation	(3,389)	-	-	(3,389)
Purchases of treasury stock	-	-	-	-
Proceeds from exercise of stock options	10,168	-	-	10,168
Excess tax benefit on share-based compensation	1,891	-	-	1,891
Other sources/(uses) - net	(4)	-	(415)	(419)
Net cash provided/(used) by financing activities	10,369	(9,181)	(576)	612
Net increase in cash and cash equivalents	5,832	(2,086)	(321)	3,425
Cash and cash equivalents at beginning of year	56,342	4,674	8,515	69,531
Cash and cash equivalents at end of period	$               62,174	$                 2,588	$                 8,194	$               72,956

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Revenue Recognition (Narrative) (Details) (USD $)	3 Months Ended
	Mar. 31, 2014
Revenue Recognition [Abstract]
Increase (decrease) in Medicare cap liability	$ (847,000)

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Segments

3 Months Ended

Mar. 31, 2014

Segments [Abstract]

Segments

3.   Segments

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

	Three months ended March 31,
	2014		2013
Service Revenues and Sales
VITAS	$	260,412	$	271,326
Roto-Rooter		97,888		95,315
Total	$	358,300	$	366,641
After-tax Earnings
VITAS	$	18,159	$	20,142
Roto-Rooter		10,033		9,624
Total		28,192		29,766
Corporate		(7,618)		(7,488)
Net income	$	20,574	$	22,278

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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Revenue Recognition (Schedule Of Medicare Cap Liability Activity) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Revenue Recognition [Abstract]
Beginning Balance January 1,	$ 8,260	$ 1,261
2014 measurement period	(847)
2013 measurement period		(873)
Ending Balance March 31,	$ 7,413	$ 388

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Long-Term Debt (Interest Expense Included In Consolidated Income Statement) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Long-Term Debt [Abstract]
Cash interest expense	$ 1,217	$ 1,200
Non-cash amortization of debt discount	2,261	2,114
Amortization and write-off of debt costs	337	780
Total interest expense	$ 3,815	$ 4,094

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Guarantor Subsidiaries (Schedule Of Guarantor Subsidiaries - Income Statement) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Condensed Income Statements, Captions [Line Items]
Service revenues and sales	$ 358,300	$ 366,641
Cost of services provided and goods sold	257,819	264,307
Selling, general and administrative expenses	55,671	55,560
Depreciation	7,149	6,795
Amortization	1,009	1,127
Total costs and expenses	321,648	327,789
Income/ (loss) from operations	36,652	38,852
Interest expense	(3,815)	(4,094)
Other (expense)/income - net	816	1,706
Income/ (loss) before income taxes	33,653	36,464
Income tax (provision)/ benefit	(13,079)	(14,186)
Net income	20,574	22,278
Consolidating Adjustments [Member]
Condensed Income Statements, Captions [Line Items]
Equity in net income of subsidiaries	(25,852)	(27,351)
Net income	(25,852)	(27,351)
Guarantor Subsidiaries [Member]
Condensed Income Statements, Captions [Line Items]
Service revenues and sales	349,890	359,056
Cost of services provided and goods sold	253,052	259,977
Selling, general and administrative expenses	47,005	46,572
Depreciation	6,671	6,325
Amortization	564	645
Total costs and expenses	307,292	313,519
Income/ (loss) from operations	42,598	45,537
Interest expense	(152)	(105)
Other (expense)/income - net	(4,014)	(4,035)
Income/ (loss) before income taxes	38,432	41,397
Income tax (provision)/ benefit	(14,613)	(15,817)
Equity in net income of subsidiaries	1,028	910
Net income	24,847	26,490
Non-Guarantor Subsidiaries [Member]
Condensed Income Statements, Captions [Line Items]
Service revenues and sales	8,410	7,585
Cost of services provided and goods sold	4,767	4,330
Selling, general and administrative expenses	2,956	3,116
Depreciation	237	230
Total costs and expenses	7,960	7,676
Income/ (loss) from operations	450	(91)
Interest expense		(14)
Other (expense)/income - net	1,158	1,468
Income/ (loss) before income taxes	1,608	1,363
Income tax (provision)/ benefit	(603)	(502)
Net income	1,005	861
Parent [Member]
Condensed Income Statements, Captions [Line Items]
Selling, general and administrative expenses	5,710	5,872
Depreciation	241	240
Amortization	445	482
Total costs and expenses	6,396	6,594
Income/ (loss) from operations	(6,396)	(6,594)
Interest expense	(3,663)	(3,975)
Other (expense)/income - net	3,672	4,273
Income/ (loss) before income taxes	(6,387)	(6,296)
Income tax (provision)/ benefit	2,137	2,133
Equity in net income of subsidiaries	24,824	26,441
Net income	$ 20,574	$ 22,278

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Consolidated Balance Sheet (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Current assets
Cash and cash equivalents	$ 39,479	$ 84,418
Accounts receivable less allowances of $13,824 (2013 - $12,590)	116,152	91,770
Inventories	6,676	6,703
Current deferred income taxes	13,769	20,257
Prepaid income taxes	3,406	3,690
Prepaid expenses	18,930	17,818
Total current assets	198,412	224,656
Investments of deferred compensation plans	45,732	42,465
Properties and equipment, at cost, less accumulated depreciation of $185,056 (2013 - $180,550)	93,575	92,955
Identifiable intangible assets less accumulated amortization of $32,380 (2013 - $32,055)	56,276	56,556
Goodwill	466,961	466,871
Other assets	7,664	10,198
Total Assets	868,620	893,701
Current liabilities
Accounts payable	38,599	41,758
Current portion of long-term debt	185,825	183,564
Income taxes	3,967	111
Accrued insurance	39,391	41,859
Accrued compensation	38,233	48,323
Accrued legal	7,154	23,210
Other current liabilities	24,682	25,161
Total current liabilities	337,851	363,986
Deferred income taxes	28,232	27,301
Deferred compensation liabilities	45,498	42,348
Other liabilities	11,106	11,176
Total Liabilities	422,687	444,811
Commitments and contingencies
STOCKHOLDERS' EQUITY
Capital stock - authorized 80,000,000 shares $1 par; issued 32,621,360 shares (2013 - 32,245,226 shares)	32,621	32,245
Paid-in capital	504,883	481,011
Retained earnings	703,385	686,114
Treasury stock - 15,180,456 shares (2013 - 14,660,427)	(797,141)	(752,634)
Deferred compensation payable in Company stock	2,185	2,154
Total Stockholders' Equity	445,933	448,890
Total Liabilities and Stockholders' Equity	$ 868,620	$ 893,701

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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
	Mar. 31, 2014	Mar. 31, 2013
Retirement Plans [Abstract]
Defined contribution plans	$ 3,897	$ 4,296

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Basis Of Presentation

3 Months Ended

Mar. 31, 2014

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. The                December 31, 2013 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 audited Consolidated Financial Statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2013. 

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Earnings Per Share (Narrative) (Details)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Earnings Per Share [Abstract]
Stock options excluded from computation of earnings per share	329,000	11,000
Percent Of Senior Convertible Notes	1.875%
Conversion of Notes, Shares	285,000

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Segments (Tables)

3 Months Ended

Mar. 31, 2014

Segments [Abstract]

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

	Three months ended March 31,
	2014		2013
Service Revenues and Sales
VITAS	$	260,412	$	271,326
Roto-Rooter		97,888		95,315
Total	$	358,300	$	366,641
After-tax Earnings
VITAS	$	18,159	$	20,142
Roto-Rooter		10,033		9,624
Total		28,192		29,766
Corporate		(7,618)		(7,488)
Net income	$	20,574	$	22,278

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Earnings Per Share (Schedule Of Computation Of Earnings Per Share) (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Earnings Per Share [Abstract]
Earnings, Income	$ 20,574	$ 22,278
Diluted earnings, Income	$ 20,574	$ 22,278
Earnings per Share	$ 1.17	$ 1.20
Earnings per Share, Diluted	$ 1.12	$ 1.17
Net Income, Earnings, Shares	17,510	18,522
Dilutive stock options, Shares	362	371
Nonvested stock awards, Shares	148	107
Conversion of Notes, Shares	285
Net Income, Diluted Earnings, Shares	18,305	19,000

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Long-Term Debt (Tables)

3 Months Ended

Mar. 31, 2014

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

	March 31, 2014		December 31, 2013
Principal amount of convertible debentures	$	186,956	$	186,956
Unamortized debt discount		(1,131)		(3,392)
Carrying amount of convertible debentures	$	185,825	$	183,564
Additional paid in capital (net of tax)	$	31,310	$	31,310

Interest Expense Included In Consolidated Income Statement

	Three months ended March 31,
	2014		2013
Cash interest expense	$	1,217	$	1,200
Non-cash amortization of debt discount		2,261		2,114
Amortization and write-off of debt costs		337		780
Total interest expense	$	3,815	$	4,094

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Revenue Recognition

3 Months Ended

Mar. 31, 2014

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.

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 month period ended March 31, 2014, we reversed Medicare cap liability of $847,000for amounts recorded in the fourth quarter of 2013 for two programs’ projected 2014 measurement period liability.  We reversed these amounts as improving admissions trends in these programs indicate that the liability had been eliminated for one program and partially eliminated for the other program. 

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

	March 31,
	2014		2013
Beginning balance January 1,	$	8,260	$	1,261
2014 measurement period		(847)		-
2013 measurement period		-		(873)
Ending balance March 31,	$	7,413	$	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 March 31,
2014			2013
$	1,699	$	1,929

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Consolidated Balance Sheet (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Consolidated Balance Sheet [Abstract]
Accounts receivable, allowances	$ 13,824	$ 12,590
Properties and equipment, accumulated depreciation	185,056	180,550
Identifiable intangible assets, accumulated amortization	$ 32,380	$ 32,055
Capital stock - authorized	80,000,000	80,000,000
Capital stock - par value	$ 1	$ 1
Capital stock - issued	32,621,360	32,245,226
Treasury stock	15,180,456	14,660,427

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Cash Overdrafts And Cash Equivalents

3 Months Ended

Mar. 31, 2014

Cash Overdrafts And Cash Equivalents [Abstract]

Cash Overdrafts And Cash Equivalents

12.  Cash Overdrafts and Cash Equivalents

Included in accounts payable at March 31, 2014 is cash overdrafts payable of $1.2 million (December 31, 2013 - $806,000).

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 $20.0 million in cash equivalents as of March 31, 2014.  There was $23.1 million in cash equivalents as of December 31, 2013.  The weighted average rate of return for our cash equivalents was 0.09% for March  31, 2014 and 0.08% for December 31, 2013.

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Document And Entity Information	3 Months Ended
	Mar. 31, 2014
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2014
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2014
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	17,539,101

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Financial Instruments

3 Months Ended

Mar. 31, 2014

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          

March 31, 2014 (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	$	45,498	$	45,732	$	-	$	-
Long-term debt		185,825		209,157		-		-

The following shows the carrying value, fair value and the hierarchy for our financial instruments as of      December 31, 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	$	42,465	$	42,465	$	-	$	-
Long-term debt		183,564		193,032		-		-

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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Consolidated Statement Of Income (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Consolidated Statement Of Income [Abstract]
Service revenues and sales	$ 358,300	$ 366,641
Cost of services provided and goods sold (excluding depreciation)	257,819	264,307
Selling, general and administrative expenses	55,671	55,560
Depreciation	7,149	6,795
Amortization	1,009	1,127
Total costs and expenses	321,648	327,789
Income from operations	36,652	38,852
Interest expense	(3,815)	(4,094)
Other income - net	816	1,706
Income before income taxes	33,653	36,464
Income taxes	(13,079)	(14,186)
Net income	$ 20,574	$ 22,278
Earnings Per Share
Net income	$ 1.17	$ 1.20
Average number of shares outstanding	17,510	18,522
Diluted Earnings Per Share
Net income	$ 1.12	$ 1.17
Average number of shares outstanding	18,305	19,000
Cash Dividends Per Share	$ 0.20	$ 0.18

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Stock-Based Compensation Plans

3 Months Ended

Mar. 31, 2014

Stock-Based Compensation Plans [Abstract]

Stock-Based Compensation Plans

7.   Stock-Based Compensation Plans

On February 21, 2014, the Compensation/Incentive Committee of the Board of Directors (“CIC”) granted 10,340 Performance Stock Units (“PSUs”) contingent upon the achievement of certain total shareholders return (“TSR”) targets as compared to the TSR of a group of peer companies for the three-year period ending December 31, 2016, the date at which such awards may vest.  The cumulative compensation cost of the TSR-based PSUs award to be recorded over the three year service period is $1.2 million.

On February 21, 2014, the CIC also granted 14,061 PSUs contingent upon the achievement of certain earnings per share (“EPS”) targets for the three-year period ending December 31, 2016.  At the end of each reporting period, the Company estimates the number of shares that it believes will ultimately be earned and records that expense over the service period of the award.  We currently estimate the cumulative compensation cost of the EPS-based PSUs to be recorded over the three year service period is $1.2 million.

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Other Income - Net

3 Months Ended

Mar. 31, 2014

Other Income - Net [Abstract]

Other Income - Net

6.   Other Income – Net

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

	Three months ended March 31,
	2014		2013
Market value gains on assets held in deferred
compensation trust	$	1,162	$	1,472
Loss on disposal of property and equipment		(278)		(78)
Interest income - net		(50)		303
Other - net		(18)		9
Total other income - net	$	816	$	1,706

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Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2014

Earnings Per Share [Abstract]

Schedule Of Computation Of Earnings Per Share

			Net Income
For the Three Months Ended March 31,		Income		Shares	Earnings per Share
2014
	Earnings	$	20,574	17,510	$	1.17
	Dilutive stock options		-	362
	Nonvested stock awards		-	148
	Conversion of Notes		-	285
	Diluted earnings	$	20,574	18,305	$	1.12
2013
	Earnings	$	22,278	18,522	$	1.20
	Dilutive stock options		-	371
	Nonvested stock awards		-	107
	Diluted earnings	$	22,278	19,000	$	1.17

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Capital Stock Repurchase Plan Transactions

3 Months Ended

Mar. 31, 2014

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 months ended March 31, 2014 and 2013:  

	Three months ended March 31,
	2014		2013
Shares repurchased		382,934		-
Weighted average price per share	$	86.13	$	-

In February 2014, the Board of Directors authorized an additional $100 million for stock repurchase under Chemed’s existing share repurchase program. We currently have $88.8  million of authorization remaining under this share repurchase plan.

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Legal And Regulatory Matters

3 Months Ended

Mar. 31, 2014

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 material lawsuits and investigations of which the Company is currently aware.  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

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 opposed this motion.  On September 16, 2013, Plaintiffs executed a Settlement Term Sheet with Defendants, reaching an agreement in principle to settle this case subject to Court approval.  On February 6, 2014, Plaintiffs, on behalf of a putative class of purchasers of Chemed Capital Stock between February 15, 2010 and May 2, 2013, inclusive, executed a stipulation of settlement with defendants, agreeing 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 settlement class (“Settlement”).  The Settlement of $6.0 million has been recorded as an accrual and offsetting prepaid in the accompanying Consolidated Balance Sheet. This Settlement received preliminary Court approval on March 27, 2014 and is scheduled for a final hearing on July 19, 2014.  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., No. 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 partially intervened in Gonzales.  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 federal 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.  The Spottiswood relator filed an action under the Illinois False Claims Act, The State of Illinois ex rel. Laura Spottiswood v. Chemed Corporation, et al., No. 14 L 2786 in the Circuit Court of Cook County, Illinois on March 6, 2014.  The Court granted the parties’ joint motion to place this case on the its stay calendar, pending resolution of the 2013 Action.

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 net costs incurred related to U.S. v. Vitas and related regulatory matters were $748,000 and $1.0 million for the periods ending March 31, 2014 and 2013, respectively.

In November 2013, two shareholder derivative lawsuits were filed against the Company’s current and former directors, as well as certain of its officers, both of which are covered by the Company’s commercial insurance.  On November 6, 2013, KBC Asset Management NV filed suit in the United States Distrct Court for the District of Delaware, KBC Asset Management NV, derivatively on behalf of Chemed Corp. v. McNamara, et al., No. 13 Civ. 1854 (LPS) (D. Del.).  It sued Kevin McNamara, Joel Gemunder, Patrick Grace, Thomas Hutton, Walter Krebs, Andrea Lindell, Thomas Rice, Donald Saunders, Arthur Tucker, Jr., George Walsh III, Frank Wood, Timothy O’Toole, David Williams and Ernest Mrozek, together with the Company as nominal defendant.  Plaintiff alleges that since at least 2004, Chemed, through VITAS, has submitted or caused the submission of false claims to Medicare.  The suit alleges a claim for breach of fiduciary duty against the individual defendants, and seeks (a) a declaration that the individual defendants breached their fiduciary duties to the Company; (b) an order requiring those defendants to pay compensatory damages, restitution and exemplary damages, in unspecified amounts, to the Company; (c) an order directing the Company to implement new policies and procedures; and (d) costs and disbursements incurred in bringing the action, including attorneys’ fees. 

On November 14, 2013, Mildred A. North filed suit in the United States District Court for the Southern District of Ohio, North, derivatively on behalf of Chemed Corp. v. Kevin McNamara, el al., No. 13 Civ. 833 (MDB) (S.D. Ohio).  She sued Kevin McNamara, David Williams, Timothy O’Toole, Joel Gemunder, Patrick Grace, Walter Krebs, Andrea Lindell, Thomas Rice, Donald Saunders, George Walsh III, Frank Wood and Thomas Hutton, together with the Company as nominal defendant.  Plaintiff alleges that, between February 2010 and the present, the individual defendants breached their fiduciary duties as officers and directors of Chemed by, among other things, (a) allegedly causing VITAS to submit improper and ineligible claims to Medicare and Medicaid; and (b) allegedly misrepresenting the state of Chemed’s internal controls.  The suit alleges claims for breach of fiduciary duty, abuse of control and gross mismanagement against the individual defendants.  The complaint also alleges unjust enrichment and insider trading against Messrs. McNamara, Williams and O’Toole.  Plaintiff seeks (a) a declaration that the individual defendants breached their fiduciary duties to the Company; (b) an order requiring those defendants to pay compensatory damages, restitution and exemplary damages, in unspecified amounts, to the Company; (c) an order directing the Company to implement new policies and procedures; and (d) costs and disbursements incurred in bringing the action, including attorneys’ fees. 

On December 20, 2013, Plaintiff in the North action filed a motion before the Judicial Panel on Multidistrict Litigation seeking centralized treatment of her action and the KBC action in the U.S. District Court for the Southern District of Ohio.  Defendants in both cases, as well as Plaintiff KBC, opposed that motion, consistent with Chemed’s By-law 8.07, which requires all derivative suits brought in Chemed’s name to proceed in federal or state court in Delaware.  The MDL Panel denied the motion on April 2, 2014.  On January 29, 2014 Defendants filed motions to transfer North to Delaware under 28 U.S.C § 1404 and to stay the case until after resolution of that motion and the MDL motion.

The Company intends to defend vigorously against the allegations in each of the above lawsuits.  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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Independent Contractor Operations

3 Months Ended

Mar. 31, 2014

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 March 31, 2014 totaling $1.5 million (December 31, 2013 - $1.5 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 March31, 2014.  We recorded the following from our independent contractors (in thousands):

	Three months ended March 31,
	2014		2013
Revenues	$	9,023	$	8,210
Pretax profits		5,159		4,258

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Retirement Plans

3 Months Ended

Mar. 31, 2014

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 March 31,
2014		2013
$	3,897	$	4,296

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Concentration Of Risk

3 Months Ended

Mar. 31, 2014

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 $8.8 million and $9.6 million for the three months ended March 31, 2014 and 2013, respectively.  Purchases from OCR represent approximately90% of all pharmacy services used by VITAS.

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Segments (Service Revenues And Sales And After-Tax Earnings By Business Segment) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Segment Reporting Information [Line Items]
Total service revenues and sales	$ 358,300	$ 366,641
Net income	20,574	22,278
Operating Segments [Member]
Segment Reporting Information [Line Items]
Total service revenues and sales	358,300	366,641
Net income	28,192	29,766
Corporate Segment [Member]
Segment Reporting Information [Line Items]
Net income	(7,618)	(7,488)
Segment VITAS [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Total service revenues and sales	260,412	271,326
Net income	18,159	20,142
Segment Roto-Rooter [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Total service revenues and sales	97,888	95,315
Net income	$ 10,033	$ 9,624

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Guarantor Subsidiaries (Narrative) (Details)	3 Months Ended
	Mar. 31, 2014
Guarantor Subsidiaries [Abstract]
Percent of Senior Convertible Notes	1.875%
Percent of owned subsidiaries	100.00%

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Revenue Recognition (Tables)

3 Months Ended

Mar. 31, 2014

Revenue Recognition [Abstract]

Schedule Of Medicare Cap Liability Activity

	March 31,
	2014		2013
Beginning balance January 1,	$	8,260	$	1,261
2014 measurement period		(847)		-
2013 measurement period		-		(873)
Ending balance March 31,	$	7,413	$	388

Schedule Of Cost Of Charity Care

Three months ended March 31,
2014			2013
$	1,699	$	1,929

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Independent Contractor Operations (Tables)

3 Months Ended

Mar. 31, 2014

Independent Contractor Operations [Abstract]

Schedule Of Independent Contractors

	Three months ended March 31,
	2014		2013
Revenues	$	9,023	$	8,210
Pretax profits		5,159		4,258

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Financial Instruments (Carrying Value, Fair Value And Hierarchy Of Financial Instruments) (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Carrying Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Mutual fund investments of deferred compensation plans held in trust	$ 45,498	$ 42,465
Long-term debt	185,825	183,564
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	45,732	42,465
Long-term debt	$ 209,157	$ 193,032

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Other Income - Net (Schedule Of Other Income - Net) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Other Income - Net [Abstract]
Market value gains on assets held in deferred compensation trust	$ 1,162	$ 1,472
Loss on disposal of property and equipment	(278)	(78)
Interest income - net	(50)	303
Other - net	(18)	9
Total other income - net	$ 816	$ 1,706

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Consolidated Statement Of Cash Flows (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Cash Flows from Operating Activities
Net income	$ 20,574	$ 22,278
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	8,158	7,922
Deferred income taxes	6,841	(681)
Provision for uncollectible accounts receivable	3,304	2,967
Amortization of discount on convertible notes	2,261	2,114
Stock option expense	1,309	1,491
Amortization of debt issuance costs	337	780
Noncash portion of long-term incentive compensation	373	612
Changes in operating assets and liabilities, excluding amounts acquired in business combinations:
Increase in accounts receivable	(27,700)	(36,706)
Decrease in inventories	27	499
Increase in prepaid expenses	(1,112)	(1,092)
Decrease in accounts payable and other current liabilities	(32,561)	(698)
Increase in income taxes	5,322	10,139
Increase in other assets	(1,069)	(3,071)
Increase in other liabilities	3,080	3,282
Excess tax benefit on share-based compensation	(1,399)	(1,891)
Other sources	409	196
Net cash provided/(used) by operating activities	(11,846)	8,141
Cash Flows from Investing Activities
Capital expenditures	(8,131)	(5,406)
Business combinations, net of cash acquired	(250)
Other sources	29	78
Net cash used by investing activities	(8,352)	(5,328)
Cash Flows from Financing Activities
Purchases of treasury stock	(32,982)
Dividends paid	(3,303)	(3,367)
Capital stock surrendered to pay taxes on stock-based compensation	(2,916)	(3,389)
Proceeds from exercise of stock options	13,193	10,168
Excess tax benefit on share-based compensation	1,399	1,891
Increase/(decrease) in cash overdrafts payable	369	(3,165)
Debt issuance costs		(1,107)
Other uses	(501)	(419)
Net cash provided/(used) by financing activities	(24,741)	612
Increase/(Decrease) in Cash and Cash Equivalents	(44,939)	3,425
Cash and cash equivalents at beginning of year	84,418	69,531
Cash and cash equivalents at end of period	$ 39,479	$ 72,956

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Long-Term Debt

3 Months Ended

Mar. 31, 2014

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 March 31, 2014.  We have issued $35.0 million in standby letters of credit as of March 31, 2014 for insurance purposes.  Issued letters of credit reduce our available credit under the 2013 Credit Agreement.  As of March 31, 2014, we have approximately $315.0 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:

	March 31, 2014		December 31, 2013
Principal amount of convertible debentures	$	186,956	$	186,956
Unamortized debt discount		(1,131)		(3,392)
Carrying amount of convertible debentures	$	185,825	$	183,564
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 March 31,
	2014		2013
Cash interest expense	$	1,217	$	1,200
Non-cash amortization of debt discount		2,261		2,114
Amortization and write-off of debt costs		337		780
Total interest expense	$	3,815	$	4,094

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 March 31, 2014.

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Retirement Plans (Tables)

3 Months Ended

Mar. 31, 2014

Retirement Plans [Abstract]

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

Three months ended March 31,
2014		2013
$	3,897	$	4,296

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Long-Term Debt (Financial Debt Covenants) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014
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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Guarantor Subsidiaries

3 Months Ended

Mar. 31, 2014

Guarantor Subsidiaries [Abstract]

Guarantor Subsidiaries

15.  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 March 31, 2014 and December 31, 2013 for the balance sheet, the three months ended March 31, 2014 and December 31, 2013 for the income statement and the three months ended March 31, 2014 and March 31, 2013 for the statement of cash flows  (dollars in thousands):

March 31, 2014		Guarantor	Non-Guarantor	Consolidating
	Parent	Subsidiaries	Subsidiaries	Adjustments	Consolidated
ASSETS
Cash and cash equivalents	$                     41,808	$                   (11,336)	$                       9,007	$                               -	$                     39,479
Accounts receivable, including intercompany	1,231	517,646	1,256	(403,981)	116,152
Inventories	-	6,148	528	-	6,676
Current deferred income taxes	-	14,720	264	(1,215)	13,769
Prepaid income taxes	9,155	-	7	(5,756)	3,406
Prepaid expenses	6,612	11,958	360	-	18,930
Total current assets	58,806	539,136	11,422	(410,952)	198,412
Investments of deferred compensation plans	-	-	45,732	-	45,732
Properties and equipment, at cost less accumulated depreciation	9,963	81,033	2,579	-	93,575
Identifiable intangible assets less accumulated amortization	-	56,276	-	-	56,276
Goodwill	-	462,687	4,274	-	466,961
Other assets	12,745	1,877	17,141	(24,099)	7,664
Investments in subsidiaries	964,753	28,007	-	(992,760)	-
Total assets	$                1,046,267	$                1,169,016	$                     81,148	$              (1,427,811)	$                   868,620
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable, including intercompany	$                   398,529	$                     39,213	$                       4,838	$                 (403,981)	$                     38,599
Current portion of long-term debt	185,825	-	-	-	185,825
Income taxes	-	7,663	2,060	(5,756)	3,967
Accrued insurance	1,433	37,958	-	-	39,391
Accrued compensation	1,086	36,807	340	-	38,233
Accrued legal	6,043	1,111	-	-	7,154
Other current liabilities	4,288	21,429	180	(1,215)	24,682
Total current liabilities	597,204	144,181	7,418	(410,952)	337,851
Deferred income taxes	-	52,331	-	(24,099)	28,232
Deferred compensation liabilities	-	-	45,498	-	45,498
Other liabilities	3,130	6,879	1,097	-	11,106
Stockholders' equity	445,933	965,625	27,135	(992,760)	445,933
Total liabilities and stockholders' equity	$                1,046,267	$                1,169,016	$                     81,148	$              (1,427,811)	$                   868,620
December 31, 2013		Guarantor	Non-Guarantor	Consolidating
	Parent	Subsidiaries	Subsidiaries	Adjustments	Consolidated
ASSETS
Cash and cash equivalents	$                     84,005	$                     (8,777)	$                       9,190	$                               -	$                     84,418
Accounts receivable, including intercompany	925	509,580	1,000	(419,735)	91,770
Inventories	-	6,246	457	-	6,703
Current deferred income taxes	-	21,307	126	(1,176)	20,257
Prepaid income taxes	3,710	1,176	349	(1,545)	3,690
Prepaid expenses	6,925	10,682	211	-	17,818
Total current assets	95,565	540,214	11,333	(422,456)	224,656
Investments of deferred compensation plans	-	-	42,465	-	42,465
Properties and equipment, at cost less accumulated depreciation	10,184	80,144	2,627	-	92,955
Identifiable intangible assets less accumulated amortization	-	56,556	-	-	56,556
Goodwill	-	462,489	4,382	-	466,871
Other assets	17,782	1,775	15,888	(25,247)	10,198
Investments in subsidiaries	945,450	27,564	-	(973,014)	-
Total assets	$                1,068,981	$                1,168,742	$                     76,695	$              (1,420,717)	$                   893,701
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable, including intercompany	$                   417,593	$                     39,424	$                       4,476	$                 (419,735)	$                     41,758
Current portion of long-term debt	183,564	-	-	-	183,564
Income taxes	1,106	210	340	(1,545)	111
Accrued insurance	784	41,075	-	-	41,859
Accrued compensation	5,047	42,905	371	-	48,323
Accrued legal	6,031	17,179	-	-	23,210
Other current liabilities	2,739	22,219	1,379	(1,176)	25,161
Total current liabilities	616,864	163,012	6,566	(422,456)	363,986
Deferred income taxes	-	52,548	-	(25,247)	27,301
Deferred compensation liabilities	-	-	42,348	-	42,348
Other liabilities	3,227	6,914	1,035	-	11,176
Stockholders' equity	448,890	946,268	26,746	(973,014)	448,890
Total liabilities and stockholders' equity	$                1,068,981	$                1,168,742	$                     76,695	$              (1,420,717)	$                   893,701

For the three months ended March 31, 2014		Guarantor	Non-Guarantor	Consolidating
	Parent	Subsidiaries	Subsidiaries	Adjustments	Consolidated
Continuing Operations
Service revenues and sales	$              -	$         349,890	$               8,410	$                   -	$         358,300
Cost of services provided and goods sold	-	253,052	4,767	-	257,819
Selling, general and administrative expenses	5,710	47,005	2,956	-	55,671
Depreciation	241	6,671	237	-	7,149
Amortization	445	564	-	-	1,009
Total costs and expenses	6,396	307,292	7,960	-	321,648
Income/ (loss) from operations	(6,396)	42,598	450	-	36,652
Interest expense	(3,663)	(152)	-	-	(3,815)
Other (expense)/income - net	3,672	(4,014)	1,158	-	816
Income/ (loss) before income taxes	(6,387)	38,432	1,608	-	33,653
Income tax (provision)/ benefit	2,137	(14,613)	(603)	-	(13,079)
Equity in net income of subsidiaries	24,824	1,028	-	(25,852)	-
Net income	$    20,574	$           24,847	$               1,005	$        (25,852)	$           20,574
For the three months ended March 31, 2013		Guarantor	Non-Guarantor	Consolidating
	Parent	Subsidiaries	Subsidiaries	Adjustments	Consolidated
Continuing Operations
Service revenues and sales	$              -	$         359,056	$               7,585	$                   -	$         366,641
Cost of services provided and goods sold	-	259,977	4,330	-	264,307
Selling, general and administrative expenses	5,872	46,572	3,116	-	55,560
Depreciation	240	6,325	230	-	6,795
Amortization	482	645	-	-	1,127
Total costs and expenses	6,594	313,519	7,676	-	327,789
Income/ (loss) from operations	(6,594)	45,537	(91)	-	38,852
Interest expense	(3,975)	(105)	(14)	-	(4,094)
Other (expense)/income - net	4,273	(4,035)	1,468	-	1,706
Income/ (loss) before income taxes	(6,296)	41,397	1,363	-	36,464
Income tax (provision)/ benefit	2,133	(15,817)	(502)	-	(14,186)
Equity in net income of subsidiaries	26,441	910	-	(27,351)	-
Net income	$    22,278	$           26,490	$                  861	$        (27,351)	$           22,278

For the three months ended March 31 2014		Guarantor	Non-Guarantor
	Parent	Subsidiaries	Subsidiaries	Consolidated
Cash Flow from Operating Activities:
Net cash provided by operating activities	$               (6,773)	$               (5,370)	$                    297	$             (11,846)
Cash Flow from Investing Activities:
Capital expenditures	(20)	(7,897)	(214)	(8,131)
Business combinations, net of cash acquired	-	(250)	-	(250)
Other sources/(uses) - net	(58)	62	25	29
Net cash used by investing activities	(78)	(8,085)	(189)	(8,352)
Cash Flow from Financing Activities:
Increase /(decrease) in cash overdrafts payable	323	46	-	369
Change in intercompany accounts	(11,080)	10,850	230	-
Dividends paid	(3,303)	-	-	(3,303)
Debt issuance costs	-	-	-	-
Capital stock surrendered to pay taxes on stock-based compensation	(2,916)	-	-	(2,916)
Purchases of treasury stock	(32,982)	-	-	(32,982)
Proceeds from exercise of stock options	13,193	-	-	13,193
Excess tax benefit on share-based compensation	1,399	-	-	1,399
Other sources/(uses) - net	20	-	(521)	(501)
Net cash provided/(used) by financing activities	(35,346)	10,896	(291)	(24,741)
Net increase/(decrease) in cash and cash equivalents	(42,197)	(2,559)	(183)	(44,939)
Cash and cash equivalents at beginning of year	84,005	(8,777)	9,190	84,418
Cash and cash equivalents at end of period	$               41,808	$             (11,336)	$                 9,007	$               39,479
For the three months ended March 31, 2013		Guarantor	Non-Guarantor
	Parent	Subsidiaries	Subsidiaries	Consolidated
Cash Flow from Operating Activities:
Net cash provided by operating activities	$               (4,511)	$               12,302	$                    350	$                 8,141
Cash Flow from Investing Activities:
Capital expenditures	(10)	(5,278)	(118)	(5,406)
Other sources/(uses) - net	(16)	71	23	78
Net cash provided/(used) by investing activities	(26)	(5,207)	(95)	(5,328)
Cash Flow from Financing Activities:
Increase/(decrease) in cash overdrafts payable	(554)	(2,611)	-	(3,165)
Change in intercompany accounts	6,731	(6,570)	(161)	-
Dividends paid	(3,367)	-	-	(3,367)
Debt issuance	(1,107)	-	-	(1,107)
Capital stock surrendered to pay taxes on stock-based compensation	(3,389)	-	-	(3,389)
Purchases of treasury stock	-	-	-	-
Proceeds from exercise of stock options	10,168	-	-	10,168
Excess tax benefit on share-based compensation	1,891	-	-	1,891
Other sources/(uses) - net	(4)	-	(415)	(419)
Net cash provided/(used) by financing activities	10,369	(9,181)	(576)	612
Net increase in cash and cash equivalents	5,832	(2,086)	(321)	3,425
Cash and cash equivalents at beginning of year	56,342	4,674	8,515	69,531
Cash and cash equivalents at end of period	$               62,174	$                 2,588	$                 8,194	$               72,956