0001157523-15-003496.txt : 20151203 0001157523-15-003496.hdr.sgml : 20151203 20151028152045 ACCESSION NUMBER: 0001157523-15-003496 CONFORMED SUBMISSION TYPE: CORRESP PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20151028 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CHEMED CORP CENTRAL INDEX KEY: 0000019584 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-HOME HEALTH CARE SERVICES [8082] IRS NUMBER: 310791746 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: CORRESP BUSINESS ADDRESS: STREET 1: 2600 CHEMED CTR STREET 2: 255 E FIFTH ST CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: (513)762-6900 MAIL ADDRESS: STREET 1: 2600 CHEMED CTR STREET 2: 255 E FIFTH STREET CITY: CINCINNATI STATE: OH ZIP: 45202 FORMER COMPANY: FORMER CONFORMED NAME: ROTO-ROOTER INC DATE OF NAME CHANGE: 20030613 FORMER COMPANY: FORMER CONFORMED NAME: CHEMED CORP DATE OF NAME CHANGE: 19920703 CORRESP 1 filename1.htm a51211708.htm
October 28, 2015
 
Tia L. Jenkins
Senior Assistant Chief Accountant
United States Securities and Exchange Commission
Division of Corporate Finance
Office of Beverages, Apparel and Mining
100 F Street, N.E.
Washington, D.C. 20549
 
 
Re:     Chemed Corporation
            Form 10-K for the Year Ended December 31, 2014
            Filed February 27, 2015
            File No. 001-08351
 
Dear Ms. Jenkins:

On behalf of Chemed Corporation (“Chemed” or the “Company”), this letter is sent in response to your office’s comment letter dated October 21, 2015.

Form 10-K for the Year ended December 31, 2014
Notes to Consolidated Financial Statements
Summary of Significant Accounting Policies, page 49
Goodwill and Intangible Assets, page 50

1.  Please expand your disclosure in future filings to include a rollforward of goodwill for each of your segments, and in total, as required by FASB ASC 350-20-5-1.

In response to this comment, we confirm that we will include in future filings a rollforward of goodwill for each of our segments, and in total, as required by FASB ASC 350-20-5-1.  The rollforward in Note 2 - Summary of Significant Accounting Policies, Goodwill and Intangible Assets of our consolidated financial statements for the year-ended December 31, 2014 would appear as follows:

          The table below shows a rollforward of Goodwill, as follows:
 
 
   
VITAS
    
Roto-
Rooter
    
Total
  
Balance at December 31, 2012
   $ 327,926     $ 137,906     $ 465,832  
Business combinations
     524       688       1,212  
Foreign currency adjustments
     -       (173)       (173)  
Balance at December 31, 2013
   $ 328,450     $ 138,421     $ 466,871  
Business combinations
     -       198       198  
Foreign currency adjustments
     -       (198)       (198)  
Program closing
     (149)       -        (149)  
Balance at December 31, 2014
   $ 328,301     $ 138,421     $ 466,722  
 
 
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Stock-Based Compensation Plans, page 55

2.  Please reconcile the total compensation cost of stock-based compensation plans disclosed in note 4 to the related amounts included in your consolidated statement of cash flows for the years ended December 31, 2014, 2013 and 2012.
 
In response to this comment, the reconciliation of total compensation cost of stock-based compensation plans disclosed in note 4 to the related amounts included in our consolidated statement of cash flows for the years ended December 31, 2014, 2013 and 2012, is as follows:

   
Years Ended December 31,
  
Consolidated Statement of Cash Flows Caption
  
2014
    
2013
    
2012
  
   Stock options expense
   $ 4,802     $ 6,042     $ 8,130  
   Non-cash portion of long-term incentive compensation
     2,569       1,301       360  
   Stock awards included in change in other liabilities
     481       480       480  
   Stock award amortization included in depreciation and amortization
     2,471       3,045       3,004  
        Total compensation cost of stock-based compensation plans - Note 4
   $ 10,323     $ 10,868     $ 11,974  

Historically, we have reported a portion of non-cash stock compensation expense related to certain restricted stock awards in the caption “Amortization” in our Consolidated Statement of Income.  This classification was disclosed in paragraph 3 of Note 4 of the 2014 Form 10-K.  Previously, for each annual and interim period, we evaluated this presentation under “SEC Staff Accounting Bulletin: No. 99 – Materiality” and concluded that the impact of this classification is immaterial to our interim or annual consolidated financial statements, as applicable.  In making this historical determination, we evaluated quantitative and qualitative factors such as the fact that this presentation is classification only within our Consolidated Statement of Income, does not impact; income from operations, income before income taxes, net income, earnings per share, net cash provided by operating activities or our Consolidated Statement Balance Sheet, and does not impact our debt covenants or management incentive compensation.

However, beginning with the Form 10-K for the year ended December 31, 2015, we intend to:

·
present the components of stock compensation expense, shown in the table above, as separate line-items within our Consolidated Statement of Cash Flows as non-cash adjustments to reconcile net income to net cash provided by operations;
 
·
record a classification adjustment, for all periods presented in our Consolidated Statement of Income to include, restricted stock award expense in selling general and administrative expense; and

·
include the following disclosure in Note 1 to the Consolidated Financial Statements:
 
 
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Classification Adjustments
We recorded classification adjustments of $2.5 million, $3.0 million and $3.0 million to decrease amortization and increase selling, general and administrative expenses in our Consolidated Statement of Income for 2014, 2013 and 2012, respectively, related to non-cash restricted stock award compensation expense.  This classification adjustment does not impact income from operations, income before income taxes, net income, earnings per share, net cash provided by operating activities or our Consolidated Statement Balance Sheet.  We believe the impact of the classification adjustments are immaterial to our consolidated financial statements for the current and prior periods.

The Company acknowledges the following:
 
·
the Company is responsible for the adequacy and accuracy of the disclosure in the filing;
 
·
staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and
 
·
the Company may not assert staff comments as a defense in any proceedings initiated by the Commission or any person under the Federal securities laws of the United States.
 
 
  Very truly yours,
   
  CHEMED CORPORATION
   
   
 
BY:   /s/ Arthur V. Tucker, Jr.
   
 
         Arthur V. Tucker, Jr.
   
           Vice President and Controller
   
 
 
 
 
 
Cc:  Audit Committee of the Board of Directors
 
PricewaterhouseCoopers LLP
 

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