Chemed : 2020 Q3 Investor Presentation

Results as of September 30, 2020

Safe Harbor and Regulation G Statement

This presentation contains information about Chemed's EBITDA, Adjusted EBITDA, EBIT, Adjusted EBIT, Adjusted Net Income and Adjusted Diluted EPS, which are not measures derived in accordance with GAAP and which exclude components that are important to understanding Chemed's financial performance. In reporting its operating results, Chemed provides EBITDA, Adjusted EBITDA, EBIT, Adjusted EBIT, Adjusted Net Income and Adjusted Diluted EPS measures to help investors and others evaluate the Company's operating results, compare its operating performance with that of similar companies that have different capital structures and evaluate its ability to meet its future debt service, capital expenditures and working capital requirements. Chemed's management similarly uses EBITDA, Adjusted EBITDA, EBIT, Adjusted EBIT, Adjusted Net Income and Adjusted Diluted EPS to assist it in evaluating the performance of the Company across fiscal periods and in assessing how its performance compares to its peer companies. These measures also help Chemed's management estimate the resources required to meet Chemed's future financial obligations and expenditures. Chemed's EBITDA, Adjusted EBITDA, EBIT, Adjusted EBIT, Adjusted Net Income and Adjusted Diluted EPS should not be considered in isolation or as a substitute for comparable measures calculated and presented in accordance with GAAP. We calculated Adjusted EBITDA margin by dividing Adjusted EBITDA by service revenues and sales. We calculated Adjusted EBIT margin by dividing Adjusted EBIT by service revenues and sales. Adjusted Diluted EPS is calculated by dividing Adjusted Net Income by the number of diluted average shares outstanding, and Diluted EPS is calculated by dividing Net Income by the number of diluted average shares outstanding. A reconciliation of Chemed's net income to its EBITDA, Adjusted EBITDA, EBIT, Adjusted EBIT and Adjusted Net Income is presented in appendix tables located in the back of this presentation.

Forward-Looking Statements

Certain statements contained in this presentation and the accompanying tables 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. Chemed does not undertake and specifically disclaims any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These statements are based on current expectations and assumptions and involve various risks and uncertainties, which could cause Chemed's actual results to differ from those expressed in such forward-looking statements. These risks and uncertainties arise from, among other things, possible changes in regulations governing the hospice care or plumbing and drain cleaning industries; periodic changes in reimbursement levels and procedures under Medicare and Medicaid programs; difficulties predicting patient length of stay and estimating potential Medicare reimbursement obligations; challenges inherent in Chemed's growth strategy; the current shortage of qualified nurses, other healthcare professionals and licensed plumbing and drain cleaning technicians; Chemed's dependence on patient referral sources; and other factors detailed under the caption "Description of Business by Segment" or "Risk Factors" in Chemed's most recent report on form 10-Q or 10-K and its other filings with the Securities and Exchange Commission. You are cautioned not to place undue reliance on such forward-looking statements and there are no assurances that the matters contained in such statements will be achieved.

2	Chemed Corporation

Cumulative Results Since the VITAS Acquisition

For the years ended December 31, 2003 through 2019

		(1)	(2)	(3)
				CAGR
		One		Three		Sixteen
		Year		Year		Year
	Chemed
(1)	Service revenues and sales	8.7%	7.1%	13.4%
(2)	Adj. net income	15.0%	23.8%	23.5%
(3)	Adj. diluted EPS from continuing operations	16.9%	24.4%	24.9%
	Roto-Rooter
(4)	Service revenues and sales	12.4%	13.2%	5.9%
(5)	Adj. net income	11.1%	27.7%	14.2%
	VITAS
(6)	Service revenues and sales	7.0%	4.5%	6.9%
(7)	Adj. net income	17.8%	22.0%	14.1%

3	(a) VITAS was acquired in February 2004	Chemed Corporation

	Chemed -			of Capital Stock
		ChemedPurchaseof Capital Stock
	For the Period	1, 2007 through September 30, 2020
	For the Period January 1, 2007, through September 30, 2020
					(1)			(2)			(3)	(4)
											Total		Free
					Shares						Returned to		Cash Flow
					Repurchased			Dividends			Shareholders		Generated (1)
(1)	Activity in 2007	$	127,881,453	$	5,888,000		$	133,769,453	72,944,000
(2)	Activity in 2008				67,125,500			5,543,000			72,668,500	85,989,000
(3)	Activity in 2009				741,726			8,157,000			8,898,726	139,336,000
(4)	Activity in 2010				104,054,995			11,881,000			115,935,995	60,373,000
(5)	Activity in 2011				143,875,353			12,538,000			156,413,353	144,751,000
(6)	Activity in 2012				60,529,057			13,026,000			73,555,057	96,516,000
(7)	Activity in 2013				92,911,155			14,148,000			107,059,155	121,523,000
(8)	Activity in 2014				110,019,257			14,255,000			124,274,257	66,708,000
(9)	Activity in 2015				59,323,141			15,605,000			74,928,141	127,365,000
(10)	Activity in 2016				102,312,635			16,440,000			118,752,635	95,621,000
(11)	Activity in 2017				94,639,666			17,371,000			112,010,666	98,195,000
(12)	Activity in 2018				158,883,849			18,661,000			177,544,849	234,266,000
(13)	Activity in 2019				92,630,812			19,788,000			112,418,812	301,249,000
(14)	Activity in 2020				122,198,449			15,639,000			137,837,449	402,412,000
(15)	Cumulative Activity
	2007 - 2020 (2)		$	1,337,127,048		$	188,940,000		$	1,526,067,048		$ 2,047,248,000

	(1)	Net cash provided by operating activities.
	(2)	14.5 million shares repurchased at an average cost of $94.17.
4

Chemed Corporation

Adj. EPS(1) and Stock Price(2) History

Adj. Diluted

EPS

Chemed has delivered strong and consistent EPS to

stockholders since 2003, 24.9% 16-year CAGR

Adj. Stock

Price

					Adj. Diluted EPS		Adj. Stock Price
	(1) Adjusted Diluted EPS (non GAAP); see Appendix at the back of this presentation
	for reconciliation from GAAP reported results to adjusted (non-GAAP) results.
5	(2) Adjusted for stock split.	Chemed Corporation

Chemed - Consolidated Summary of Operations

For the years ended December 31, 2003 through 2019

(in thousands, except per share data)

		(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)	(9)	(10)	(11)	(12)	(13)
															Average
															Annual
		2003	2009	2010	2011	2012	2013	2014	2015	2016	2017	2018	2019	Inc./(Dec.)
(1)	Service Revenues
	and Sales (a)	$ 260,776	$ 1,190,236	$ 1,280,545	$ 1,355,970	$ 1,430,043	$ 1,413,329	$ 1,456,282	$ 1,543,388	$ 1,576,881	$ 1,666,724	$ 1,782,648	$ 1,938,555	13.4%
(2)	EBITDA (c)	30,366	157,827	172,275	181,157	188,059	168,206	201,541	217,270	215,407	156,814	283,453	311,349	15.7%
(3)	Adj. EBITDA (c)	25,118	177,050	189,395	197,273	201,455	206,850	212,562	235,931	236,979	268,459	305,506	350,927	17.9%
(4)	Net Income (GAAP)	11,188	73,784	81,831	85,979	89,304	77,227	99,317	110,274	108,743	98,177	205,544	219,923	20.5%
(5)	Adj. Net Income (c)	7,894	89,289	95,961	100,030	102,317	104,372	107,731	121,667	121,487	141,054	200,374	230,473	23.5%
(6)	Diluted EPS (GAAP)	0.56	3.24	3.55	4.10	4.62	4.16	5.57	6.33	6.48	5.86	12.23	13.31	21.9%
(7)	Adj. Diluted EPS (c) (d)	0.40	3.93	4.17	4.78	5.29	5.62	6.07	6.98	7.24	8.43	11.93	13.95	24.9%
(8)	Diluted Average	19,908	22,742	23,031	20,945	19,339	18,585	17,738	17,422	16,789	16,742	16,803	16,527	(1.2%)
	Shares Outstanding

1. Continuing operations
2. Restated for the retrospective adoption of FASB Staff Position No. APB 14-1, "Accounting for Convertible Debt Instruments that May Be
   Settled in Cash upon Conversion (Including Partial Cash Settlement)," effective January 1, 2009
3. See footnote (d) below and the Appendix at the back of this presentation for reconciliation from GAAP reported results to adjusted (non- GAAP results
4. Adj. Diluted EPS is calculated by dividing Adj. Net Income by Diluted Average Shares Outstanding, and Diluted EPS is calculated by dividing Net Income by Diluted Average Shares Outstanding

6	Chemed Corporation

Chemed - Results from Continuing Operations

(in thousands, except per share data)

		(1)	(2)	(3)	(4)	(5)	(6)
		Full-Year Results		Nine Months Ended September 30,
						Fav/(Unfav)						Fav/(Unfav)
		2018		2019		% Growth		2019		2020		% Growth
(1)	Service Revenues and Sales	$1,782,648	$1,938,555	8.7%	$ 1,416,231	$ 1,546,294	9.2%
(2)	Adj. EBITDA (a)	305,506	350,927	14.9%	246,794	319,576	29.5%
(3)	Adj. EBITDA Margin (a)	17.1%	18.1%		1.0 pts.	17.4%	20.7%		3.3 pts.
(4)	Adj. Net Income (a)	200,374	230,473	15.0%	160,603	212,494	32.3%
(5)	Adj. Diluted EPS (a) (b)	11.93	13.95	16.9%	9.73	12.94	33.0%
(6)	Capital Expenditures	52,872	53,022	(0.3%)	39,753	42,670	(7.3%)

1. See footnote (b) below and the Appendix at the back of this presentation for reconciliation from GAAP reported results to adjusted (non-GAAP) results.
2. Adj. Diluted EPS is calculated by dividing Adj. Net Income by Diluted Average Shares Outstanding, and Diluted EPS is calculated by dividing Net Income by Diluted Average Shares Outstanding.

7	Chemed Corporation

Chemed Corporation Revenue

1. See Appendix at the back of this presentation for reconciliation of EBITDA and Adjusted EBITDA to Net Income

8	Chemed Corporation

Roto-Rooter Company Overview

10	(a) See Appendix at the back of this presentation for reconciliation of EBITDA and Adjusted EBITDA to Net Income

Chemed Corporation

Chemed Growth Strategy - Roto-Rooter

• Continue to increase efficiency
• Acquire franchisee territories at reasonable valuations
• • $75 - $100 million in franchise street sales in desirable markets
  • Purchase at 6-8 times Proforma Adjusted EBITDA
  • Minimal capital expenditure
• Focus on earnings and cash flow

Company-owned Territories

11	Chemed Corporation

Roto-Rooter - Gross Revenue Analysis ($000)

1. 2018 and 2019 reflect GAAP Revenue Recognition Accounting Standard. Prior years are not restated for the 2018 Revenue Recognition Accounting Standard.

12	Chemed Corporation

Roto-Rooter - Summary of Operations

For The Years Ended December 31, 2004 through 2019

(in thousands, except percentages)

		(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)	(9)	(10)	(11)	(12)	(13)
																							Average
																							Annual
		2004		2009	2010	2011		2012		2013		2014		2015		2016		2017		2018		2019	Inc./(Dec.)
(1)	Service Revenues	$ 276,611	$ 335,893	$ 354,735	$ 369,698	$ 363,006	$ 368,216	$ 392,077	$ 427,837	$ 453,564	$ 518,464	$ 585,086	$ 657,371	5.9%
	and Sales (a)
(2)	EBITDA (b)	38,314	61,780	59,369	64,948	58,751	56,398	79,221	91,911	100,946	123,194	146,896	159,325	10.0%
(3)	Adj. EBITDA (b)	42,355	59,862	58,516	64,176	58,232	70,936	75,110	87,614	96,312	116,670	140,544	155,759	9.1%
(4)	Adj. EBITDA Margin (b)	15.3%	17.8%	16.5%	17.4%	16.0%	19.3%	19.2%	20.5%	21.2%	22.5%	24.0%	23.7%	n.a.
(5)	Net Income (GAAP)	18,795	33,040	31,678	34,879	30,905	29,243	42,075	48,573	52,893	73,299	98,711	103,710	12.1%
(6)	Adj. Net Income (b)	21,044	33,574	32,960	36,260	32,276	39,845	42,093	48,680	52,921	65,667	99,114	110,092	11.7%

1. Continuing Operations
2. See Appendix at the back of this presentation for reconciliation from GAAP reported results to adjusted (non-GAAP) results

13	Chemed Corporation

Roto-Rooter - Results from Continuing Operations

($000)

		(1)	(2)			(3)	(4)	(5)	(6)
			Full-Year Results			Nine Months Ended September 30,
							Fav/(Unfav)						Fav/(Unfav)
		2018		2019			% Growth		2019		2020		% Growth
(1)	Service Revenues and Sales	$ 585,086	$ 657,371			12.4%	$ 474,952	$ 543,817	14.5%
(2)	Net Income (GAAP)	98,711	103,710			5.1%	76,302	84,966	11.4%
(3)	Adj. EBITDA (a)	140,544	155,759			10.8%	112,055	138,631	23.7%
(4)	Adj. EBITDA Margin (a)	24.0%	23.7%			(0.3) pts.	23.6%	25.5%		1.9 pts.
(5)	Adj. EBIT (a)	121,528	130,765			7.6%	95,759	113,171	18.2%
(6)	Adj. EBIT Margin (a)	20.8%	19.9%			(0.9) pts.	20.2%	20.8%		0.6 pts.
(7)	Capital Expenditures	26,915	26,814			0.4%	19,010	16,152	15.0%

1. Reconciliation from GAAP reported results to adjusted (non-GAAP) results is provided in the Appendix at the back of this presentation.

14	Chemed Corporation

Future of Roto-Rooter

• Continue to Consolidate Franchises
• • Purchase at reasonable multiples
  • Avoid over-paying for current acquisitions

Inflates expectations/demands of remaining franchisees

• Utilize Cash Flow for:
• • Purchase of franchises
  • Acquisition of hospices
  • Share buy-back, increased dividends
• Roto-RooterDivestiture Considerations:
• • If after-tax proceeds can be reinvested at higher return, risk adjusted
  • If Chemed's capital structure and cash flow without Roto-Rooter provide it significant flexibility to support continued growth of VITAS
  • If tax-freespin-off creates long-term stockholder value

15	Chemed Corporation

VITAS Healthcare Company Overview

• Largest provider of hospice services for patients with severe, life-limiting illnesses with approximately 7% of the U.S. market share
• Operates a comprehensive range of hospice services through 49 operating programs in 14 states and the District of Columbia
• Utilizes an approach for customized plans of care which is intended to maximize quality and enhance patient satisfaction
• Operating statistics:
• • Revenues: $337 million (Q3 2020)
  • Average daily census per established program: approximately 400 ADC, largest approximately 2,000 (Q3 2020)
  • Average length of stay: 97.1 (Q3 2020)
• Approximately 11,600 employees, including approximately 4,300 nurses (Q3 2020)

Revenue by Payer - 2019

Medicaid	Private - 4.0%
5.0%

91.0%

Medicare

Revenues - 2019

General				Continuous
8%	10%
Inpatient	Home
Care				Care

82%

Routine Home Care

17	Chemed Corporation

VITAS - Analysis of Revenue

Days of Care - 2019

1.9% 2.4%

95.7%

Revenue and Expenses - 2019

	75.0%		Field Patient
		Care
				Income
12.2%	7.4%	Taxes
3.8%
Net				Depreciation -
Central	Amortization
Income
Support	1.6%

18

Revenues - 2019

8% 10%

82%

Adjusted EBITDA - 2019

		Hospice Program
		Direct
		52.9%
	23.3%	6.9%
	16.9%
Hospice		Central
Program
	Support
Indirect
	EBITDA

Chemed Corporation

VITAS - Operations as a Percent of Revenue

78.2%

79.7%

77.3%

76.6%

77.9%

77.6%

78.2%

77.2%

77.6%

76.7%

(1)(1)

1. 2018 and 2019 include the impact of the new revenue recognition accounting standard. Prior periods are not restated for the 2018 revenue recognition accounting standard.

19	Chemed Corporation

VITAS - 49 Locations (as of September 30, 2020)

20	Chemed Corporation

VITAS 2019 Discharge Rate - Total

Population: 68,857 patients (MLOS 16)

Median

21	Chemed Corporation

VITAS 2019 Discharge Rate - Total

After 180 Days

Population: 9,934 patients

22	Chemed Corporation

VITAS Admissions by Diagnosis - 2019

23	Chemed Corporation

VITAS 2019 Discharge Rate - All Diagnosis

Population: 68,857

Days

24	Chemed Corporation

Analysis of VITAS Discharges 2004-2019

Total

Discharges

Total Live

Discharges

25	Chemed Corporation

VITAS Analysis of Gross Revenue By Level of Care

2003 through 2019

($000)

26	Chemed Corporation

VITAS Analysis of Average Daily Census (ADC)

2003 through 2019

11,477

10,030

7,428

14,383

13,406

11,980

14,584

18,846

17,742

15,992 16,550

15,385

27	Chemed Corporation

VITAS Analysis of Direct Gross Profit Contribution

Margin By Level of Care

2003 through 2019 (in millions)

28	Chemed Corporation

VITAS - Summary of Operations (a)

For The Years Ended December 31, 2004 through 2019

(in thousands, except percentages)

		(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)	(9)	(10)	(11)	(12)
														Average
														Annual
		2004	2010	2011	2012	2013	2014	2015	2016	2017	2018	2019	Inc./(Dec.)
(1)	Service Revenues
	and Sales	$ 531,136	$ 925,810	$ 986,272	$ 1,067,037	$ 1,045,113	$ 1,064,205	$ 1,115,551	$ 1,123,317	$ 1,148,260	$ 1,197,562	$ 1,281,184	6.0%
(2)	EBITDA (b)	65,685	146,652	147,243	158,251	142,770	158,719	169,768	156,172	92,899	199,568	224,757	8.5%
(3)	Adj. EBITDA (b)	64,553	143,656	144,944	156,289	151,156	155,449	167,498	159,393	172,401	188,764	216,880	8.4%
(4)	Adj. EBITDA
	Margin (b)	12.2%	15.5%	14.7%	14.6%	14.5%	14.6%	15.0%	14.2%	15.0%	15.8%	16.9%	n.a.
(5)	Net Income (GAAP)	33,052	79,796	80,358	86,577	76,144	86,186	93,346	84,961	57,645	138,846	155,822	10.9%
(6)	Adj. Net Income (b)	32,961	80,465	81,186	87,338	84,023	87,585	96,418	91,190	103,121	140,710	163,752	11.3%
(7)	Adj. Net Income as
	a percent of Sales	6.2%	8.7%	8.2%	8.2%	8.0%	8.2%	8.6%	8.1%	9.0%	11.7%	12.8%	n.a.

1. Assumes VITAS was purchased on January 1, 2004
2. See Appendix at the back of this presentation for reconciliation from GAAP reported results to adjusted (non-GAAP) results

29	Chemed Corporation

VITAS - Operating Results(a)

(in thousands, except percentages)

			(1)		(2)			(3)		(4)		(5)			(6)		(7)			(8)			(9)		(10)		(11)		(12)	(13)
																														Average
																														Annual
		2003 (b)	2004 (b)			2010		2011		2012			2013		2014			2015			2016		2017		2018		2019	Inc./(Dec.)
(1)	Net Service Revenue	$	441,017	$	531,136	$	925,810	$	986,272	$	1,067,037	$	1,045,113	$	1,064,205	$	1,115,551	$	1,123,317	$	1,148,260	$	1,197,562	$	1,281,184	6.9%
(2)	Cost of field patient care	$	345,189	$	415,341		$	709,094	$	766,732	$	831,321		$	813,600	$	825,739	$	862,587	$	878,092	$	886,062	$	929,306	$	982,056	6.8%
(3)	Gross profit	$	95,828	$	115,795	$	216,716	$	219,540	$	235,716	$	231,513	$	238,466	$	252,964	$	245,225	$	262,198	$	268,256	$	299,128	7.4%
(4)	Selling and G&A expenses	$	53,526	$	51,266	$	74,531	$	76,357	$	81,188	$	82,969	$	85,183	$	89,879	$	92,550	$	95,215	$	80,969	$	86,345	3.0%
(5)	Depreciation & amortization	$	9,285	$	10,149	$	18,124	$	17,821	$	18,349	$	19,534	$	19,049	$	19,547	$	19,090	$	18,630	$	19,700	$	20,055	4.9%
(6)	Other operating expense	$	-	$	-		$	-	$	-	$	-		$	10,500	$	-	$	-	$	4,491	$	85,614	$	1,130	$	6,546	n.a
(7)	Income from operations	$	33,017	$	54,380	$	124,061	$	125,362	$	136,179	$	118,510	$	134,234	$	143,538	$	129,094	$	62,739	$	166,457	$	186,182	11.4%
(8)	EBITDA	$	42,986	$	65,685	$	146,652	$	147,243	$	158,251	$	142,770	$	158,719	$	169,768	$	156,172	$	92,899	$	199,568	$	224,757	10.9%
(9)	Adjusted EBITDA	$	42,302	$	64,553	$	143,656	$	144,944	$	156,289	$	151,156	$	155,449	$	167,498	$	159,393	$	172,401	$	188,764	$	216,880	10.8%
	Percent of Sales
(10)	Net Service Revenue		100.0%		100.0%			100.0%		100.0%		100.0%			100.0%		100.0%			100.0%			100.0%		100.0%		100.0%		100.0%
(11)	Cost of field patient care		78.3%		78.2%			76.6%		77.7%		77.9%			77.8%		77.6%			77.3%			78.2%		77.2%		77.6%		76.7%
(12)	Gross profit		21.7%		21.8%			23.4%		22.3%		22.1%			22.2%		22.4%			22.7%			21.8%		22.8%		22.4%		23.3%
(13)	Selling and G&A expenses		12.1%		9.7%			8.1%		7.7%		7.6%			7.9%		8.0%			8.1%			8.2%		8.3%		6.8%		6.7%
(14)	Depreciation & amortization		2.1%		1.9%			2.0%		1.8%		1.7%			1.9%		1.8%			1.8%			1.7%		1.6%		1.6%		1.6%
(15)	Other operating expense		0.0%		0.0%			0.0%		0.0%		0.0%			1.0%		0.0%			0.0%			0.4%		7.5%		0.1%		0.5%
(16)	Income from operations		7.5%		10.2%			13.4%		12.7%		12.8%			11.3%		12.6%			12.9%			11.5%		5.5%		13.9%		14.5%
(17)	EBITDA		9.7%		12.4%			15.8%		14.9%		14.8%			13.7%		14.9%			15.2%			13.9%		8.1%		16.7%		17.5%
(18)	Adjusted EBITDA		9.6%		12.2%			15.5%		14.7%		14.6%			14.5%		14.6%			15.0%			14.2%		15.0%		15.8%		16.9%

1. Continuing operations
2. VITAS was acquired in February 2004. This schedule assumes VITAS was acquired January 1, 2003.

30	Chemed Corporation

VITAS - Results from Continuing Operations

($000)

			(1)			(2)		(3)			(4)			(5)	(6)
			Full-Year Results			Nine Months Ended September 30,
								Fav/(Unfav)								Fav/(Unfav)
			2018			2019		% Growth			2019			2020		% Growth
(1)	Service Revenues Before
	Medicare Cap	$	1,201,685	$	1,293,599		7.6%	$	949,194	$	1,006,655	6.1%
(2)	Medicare Cap		(4,123)			(12,415)		(201.1%)			(7,915)			(4,178)	47.2%
(3)	Net Service Revenues and Sales	$	1,197,562	$	1,281,184		7.0%	$	941,279	$	1,002,477	6.5%
(4)	Adj. Net Income (a)	$	140,710	$	163,752		16.4%	$	76,302	$	84,966	11.4%
(5)	Adj. EBITDA (a)		188,764			216,880		14.9%			150,911			196,719	30.4%
(6)	Adj. EBITDA Margin (a)		15.8%			16.9%		1.1 pts.			16.0%			19.6%		3.6 pts.
(7)	Capital Expenditures		25,829			25,208		2.4%			19,743			21,272	(7.7%)

1. Reconciliation from GAAP reported results to adjusted (Non-GAAP) results is provided in the Appendix at the back of this presentation.

31	Chemed Corporation

Future of VITAS

Short-term

• Continue organic growth
• Acquisitions
• • Fragmented industry
  • Dominated by "Mom & Pop" not-for-profits
  • Average operating margin in hospice is 4% - 8%*
• Access to reasonably priced capital critical to expansion

Long-term

◆Government reimbursement structure will drive VITAS' future

◆Consolidation

• Will "pure play" dominate industry?
• Will continuum of care dominate?
• • Self referral
  • Control of patient

Consolidation continues

Acquire other healthcare providers

Divest VITAS to diverse healthcare provider

	*Source - MedPac
32	Chemed Corporation

								VITAS - Operating Metrics	($000)
						(1)	(2)		(3)	(4)	(5)	(6)	(7)	(8)	(9)	(10)		(11)	(12)	(13)	(14)		(16)	(17)
								(15)
						2016 (d)				2017 (d)				2018					2019				2020
		Operating Metrics	Q3		Q4		Q1		Q2		Q3		Q4	Q1		Q2		Q3		Q4		Q1		Q2		Q3		Q4	Q1		Q2		Q3
(1)		Average Daily Census (ADC)	16,201	16,160		16,222	16,398	16,652	16,920	17,209	17,643	17,957	18,149		18,345	18,681	19,086	19,258	19,215	19,195	19,045
(2)		Admissions	16,157	15,889		17,563	16,311	16,000	16,575	18,279	16,858	16,403	16,579		17,758	17,491	17,131	17,479	18,603	16,822	17,943
(3)		Discharges	15,690	16,282		17,213	16,124	15,726	16,553	17,558	16,474	16,171	16,623		17,339	17,008	16,951	17,575	18,196	17,000	18,205
(4)		Average Length of Stay (ALOS)	87.7	91.4		88.7	85.2	89.5	91.4	87.9	89.0	90.0	92.6		91.3	91.1	92.6	95.2	90.7	90.9	97.1
		(Days):
(5)		Median Length of Stay (Days)	16	16		15	16	16	16	15	17	18	17		15	16	17	16	14	14	14
(6)		Total Revenue Before Medicare Cap	$283,093	$284,186		$282,316	$284,957	$288,951	$294,718	$290,195	$297,335	$303,714	$310,439	$310,181	$315,948	$323,065	$344,405	$340,416	$333,215	$333,025
		Reduction ($000)
(7)		Medicare Cap Reduction	($228)	$0		$0	($247)	$0	($2,435)	$1,818	($536)	($1,950)	($3,454)		($3,400)	($3,198)	($1,317)	($4,500)	($2,500)	($5,750)	$4,072
(8)		Revenue After Medicare Cap	$282,865	$284,186		$282,316	$284,710	$288,951	$292,283	$292,013	$296,799	$301,764	$306,985	$306,781	$312,750	$321,748	$339,905	$337,916	$327,465	$337,097
		Reduction ($000)
(9)		% Routine Home Care	79.6%	80.4%		79.9%	81.2%	81.9%	82.3%	81.5%	82.6%	83.2%	83.0%		82.0%	82.7%	83.2%	78.5%	78.1%	81.5%	82.0%
(10)	% InPatient	8.4%	8.3%		8.5%	7.7%	7.8%	7.5%	7.5%	6.6%	6.3%	6.6%		7.1%	7.1%	7.1%	8.8%	9.3%	7.6%	8.1%
(11)	% Continuous Care	12.0%	11.3%		11.6%	11.1%	10.3%	10.2%	10.4%	10.1%	9.8%	9.8%		10.2%	9.5%	8.9%	11.7%	11.7%	10.2%	9.0%
(12)	% Other	-	-		-	-	-	-	(1.2%)	(1.9%)	(1.1%)	(1.1%)		(1.2%)	0.7%	(1.4%)	(1.0%)	(1.3%)	(1.0%)	(1.2%)
(13)	% Medicare Cap	(0.1%)	0.0%		0.0%	(0.1%)	0.0%	(0.8%)	0.6%	(0.1%)	(0.6%)	(1.1%)		(0.9%)	(1.0%)	(0.4%)	(1.3%)	(0.7%)	(1.7%)	1.2%
		Direct Care Margins: (a)
(14)	Routine Home Care	51.4%	53.1%		51.3%	52.8%	52.4%	53.9%	52.1%	52.6%	53.0%	53.9%		52.7%	53.5%	53.4%	53.7%	51.9%	54.7%	55.8%
(15)	In Patient Care	-2.4%	1.2%		5.9%	3.7%	3.4%	8.5%	7.5%	4.2%	3.1%	3.9%		6.5%	7.4%	4.1%	20.6%	17.8%	1.8%	9.5%
(16)	Continuous Care	12.2%	15.8%		15.6%	18.0%	17.3%	16.8%	17.7%	17.3%	17.3%	18.4%		18.2%	17.9%	16.8%	38.9%	35.6%	35.2%	32.2%
(17)	Gross Profit (Direct and Indirect)	$58,455	$68,464		$60,638	$64,941	$66,832	$69,786	$64,757	$63,726	$68,758	$71,014		$67,038	$71,646	$74,197	$86,246	$78,487	$60,650	$90,461
		($000) (b) (c)
(18)	Gross Profit Margin (b) (c)	20.7%	24.1%		21.5%	22.8%	23.1%	23.9%	22.2%	21.5%	22.8%	23.1%		21.9%	22.9%	23.1%	25.4%	23.2%	18.5%	26.8%
(19)	Pro Forma Selling, General & Admin	$21,775	$23,354		$24,294	$24,531	$23,783	$22,607	$20,510	$20,702	$20,394	$19,363		$21,536	$21,682	$21,965	$21,162	$22,269	$21,072	$21,799
		Exp (c)
(20)	Pro Forma Adjusted EBITDA ($000)	$38,632	$46,225		$38,422	$42,601	$43,922	$47,456	$44,687	$43,110	$48,945	$52,024		$46,319	$51,616	$52,976	$65,970	$57,749	$66,717	$72,254
		(c)
(21)	Pro Forma Adjusted EBITDA Margin	13.7%	16.3%		13.6%	15.0%	15.2%	16.2%	15.3%	14.5%	16.2%	16.9%		15.1%	16.5%	16.5%	19.4%	17.1%	20.3%	21.4%
		(c)

1. Excludes any Medicare cap
2. Includes any Medicare cap
3. Excludes depreciation, amortization.
4. 2016 and 2017 are not restated for the 2018 GAAP Revenue Recognition Accounting Standard.
5. 1. Excludes any Medicare cap
   2. Includes any Medicare cap
   3. Excludes depreciation, amortization.
   4. 2016 and 2017 are not restated for the 2018 GAAP Revenue Recognition Accounting Standard.

33	Chemed Corporation

Appendix

EPS(1) and Stock Price(2) History

Diluted EPS

(GAAP)

Chemed has delivered strong and consistent EPS to

stockholders since 2003, 21.9% 16-year CAGR

Adj. Stock

Price

						Diluted EPS (GAAP)		Adj. Stock Price
	(1)	Diluted EPS from continuing operations (GAAP)		Chemed Corporation
35
(2)	Adjusted for stock splits

Medicare Hospice Spending (in billions)

36	Chemed Corporation

Growth in Hospice Programs

3,385 3,498 3,585

2,255

3,727 3,925

4,092 4,199

4,382

4,488 4,639

2000

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Source: MedPAC Report to the Congress - 2011 through 2020

37	Chemed Corporation

															CHEMED CORPORATION
											RECONCILIATION OF ADJUSTED EBITDA and ADJUSTED NET INCOME
									FOR THE YEARS ENDED DECEMBER 31, 2004 THROUGH 2019	(IN THOUSANDS)
									(1)		(2)		(3)		(4)		(5)		(6)		(7)		(8)		(9)		(10)		(11)		(12)		(13)		(14)		(15)		(16)
									2004		2005		2006		2007		2008		2009		2010		2011		2012		2013		2014		2015		2016		2017		2018		2019
						Reconciliation of Adjusted EBITDA
			(1)	Net income/(loss)	$	27,512	$	35,817	$	50,651	$	61,641	$	67,281	$	73,784	$	81,831	$	85,979	$	89,304	$	77,227	$	99,317	$	110,274	$	108,743	$	98,177	$	205,544	$	219,923
			(2)	Discontinued operations		(8,417)		411		7,071		(1,201)		1,088		253		-		-		-		-		-		-		-		-		-		-
			(3)	Interest expense		21,158		21,264		17,468		14,921		12,123		11,599		11,959		13,888		14,723		15,035		8,186		3,645		3,715		4,272		4,990		4,535
			(4)	Income taxes		13,736		18,428		32,562		37,721		47,035		46,583		52,000		54,577		56,515		46,602		63,437		69,852		68,311		18,740		34,056		41,686
			(5)	Depreciation		14,542		16,150		16,775		20,118		21,581		21,535		24,386		25,247		26,009		27,698		29,881		32,369		34,279		35,488		38,464		40,870
			(6)	Amortization		3,468		4,036		3,988		4,038		4,034		4,073		2,099		1,466		1,508		1,644		720		1,130		359		137		399		4,335
			(7)	EBITDA		71,999		96,106		128,515		137,238		153,142		157,827		172,275		181,157		188,059		168,206		201,541		217,270		215,407		156,814		283,453		311,349
							Add/(deduct)
			(8)	(Gains)/losses on investments		-		-		1,445		-		-		(1,211)		-		-		-		-		-		-		-		-		-		-
			(9)	Gain on sale of property		-		-		-		(1,138)		-		-		-		-		-		-		-		-		-		-		-		-
			(10)	Impairment loss on transportation equipment		-		-		-		-		2,699		-		-		-		-		-		-		-		-		-		-		-
			(11)	Interest income		(1,874)		(2,198)		(2,691)		(3,304)		(743)		(423)		(444)		(426)		(809)		(847)		29		(281)		(383)		(427)		(671)		(513)
			(12)	Equity in earnings of VITAS		4,105		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-
			(13)	Advertising cost adjustment		528		691		323		601		225		(540)		(679)		(1,240)		(1,573)		(1,166)		(1,462)		(1,317)		(1,333)		(1,371)		-		-
			(14)	Long-term incentive compensation		8,783		5,477		-		7,067		-		5,007		4,734		3,012		360		1,301		2,569		7,519		1,930		4,994		6,618		7,630
			(15)	Loss/(gain) on extinguishment of debt		3,330		3,971		430		13,798		(3,406)		-		-		-		-		-		-		-		-		-		-		-
			(16)	Legal expenses of OIG investigation		-		637		1,068		227		47		586		1,012		1,188		1,212		2,149		2,141		4,974		5,260		5,194		-		-
			(17)	Stock option expense		-		215		1,211		4,665		7,303		8,639		7,762		8,376		8,130		6,042		4,802		5,445		8,330		10,485		12,611		14,831
			(18)	Stock award expense		311		886		1,267		1,232		1,890		2,294		2,558		2,786		3,004		3,046		2,471		2,107		1,855		1,230		446		-
			(19)	Lawsuit settlement		3,135		17,350		272		1,927		-		882		1,853		2,299		1,016		27,646		120		5		1,194		84,689		796		6,000
			(20)	Debt registration expenses		1,191		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-
			(21)	VITAS transactions costs		442		(959)		-		-		-		-		-		-		-		-		-		-		-		-		-		-
			(22)	Prior-period insurance adjustments		-		(1,663)		-		-		597		-		-		-		-		-		-		-		-		-		-		-
			(23)	Expenses associated with contested proxy solicitation		-		-		-		-		-		3,989		-		-		-		-		-		-		-		-		-		-
			(24)	Acquisition Expenses		-		-		-		-		-		-		324		121		188		62		24		172		-		-		757		4,834
			(25)	Costs to Shut down HVAC operations		-		-		-		-		-		-		-		-		1,126		-		-		-		-		-		-		-
			(26)	Securities litigation		-		-		-		-		-		-		-		-		742		109		327		37		-		-		-		-
			(27)	Severance arrangements		-		-		-		-		-		-		-		-		-		302		-		-		-		-		-		-
			(28)	Early Retirement Expenses		-		-		-		-		-		-		-		-		-		-		-		-		4,491		-		-		-
			(29)	Medicare Cap Sequestration adjustment		-		-		-		-		-		-		-		-		-		-		-		-		228		447		1,496		3,982
			(30)	Other		-		-		(467)		(467)		-		-		-		-		-		-		-		-		-		-		-		548
			(31)	Loss on sale of transportation equipment		-		-		-		-		-		-		-		-		-		-		-		-		-		5,266		-		2,266
			(32)	Program closure expenses		-		-		-		-		-		-		-		-		-		-		-		-		-		1,138		-		-
			(33)	Adjusted EBITDA	$	91,950	$	120,513	$	131,373	$	161,846	$	161,754	$	177,050	$	189,395	$	197,273	$	201,455	$	206,850	$	212,562	$	235,931	$	236,979	$	268,459	$	305,506	$	350,927
						Reconciliation of Adjusted Net Income
			(34)	Net income/(loss)	$	27,512	$	35,817	$	50,651	$	61,641	$	67,281	$	73,784	$	81,831	$	85,979	$	89,304	$	77,227	$	99,317	$	110,274	$	108,743	$	98,177	$	205,544	$	219,923
							Add/(deduct):
			(35)	Discontinued operations		(8,417)		411		7,071		(1,201)		1,088		253		-		-		-		-		-		-		-		-		-		-
			(36)	(Gains)/losses on investments		-		-		918		-		-		-		-		-		-		-		-		-		-		-		-		-
			(37)	Gain on sale of property		-		-		-		(724)		-		-		-		-		-		-		-		-		-		-		-		-
			(38)	Impairment loss on transportation equipment		-		-		-		-		1,714		-		-		-		-		-		-		-		-		-		-		-
			(39)	Severance charges		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-
			(40)	Dividend income from VITAS		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-
			(41)	Equity in earnings of VITAS		4,105		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-
			(42)	Long-term incentive compensation		5,437		3,434		-		4,427		-		3,134		2,957		1,880		228		822		1,625		4,752		1,221		3,243		5,307		6,440
			(43)	Loss/(gain) on extinguishment of debt		2,030		2,523		273		8,778		(2,156)		-		-		-		-		294		-		-		-		-		-		-
			(44)	Legal expenses of OIG investigation		-		397		662		141		28		363		627		737		752		1,333		1,328		3,072		3,248		3,207		-		-
			(45)	Stock option expense		-		137		769		2,962		4,619		5,464		4,909		5,298		5,143		3,813		3,022		3,439		5,266		6,892		10,118		12,237
			(46)	Lawsuit settlement		1,897		10,757		169		1,168		-		534		1,126		1,397		617		16,926		74		3		28		52,504		594		4,476
			(47)	Prior period tax adjustments		(1,620)		(1,961)		(2,115)		-		(322)		-		-		-		-		(1,782)		-		-		-		-		-		-
			(48)	Debt registration expenses		727				-		-		-		-		-		-		-		-		-		-		-		-		-		-
			(49)	VITAS transactions costs		222		(959)		-		-		-		-		-		-		-		-		-		-		-		-		-		-
			(50)	Prior-period insurance adjustments		-		(1,014)		-		-		358		-		-		-		-		-		-		-		-		-		-		-
			(51)	Non-cash interest on convertible debt		-		-		-		2,335		3,228		3,988		4,313		4,664		5,041		5,448		2,143		-		-		-		-		-
			(52)	Income tax impact of non-taxable investments		-		-		-		46		3,062		(756)		-		-		-		-		-		-		-		-		-		-
			(53)	Expenses associated with contested proxy solicitation		-		-		-		-		-		2,525		-		-		-		-		-		-		-		-		-		-
			(54)	Acquisition Expenses		-		-		-		-		-		-		198		75		114		38		15		104		-		-		559		3,557
			(55)	Costs to Shut down HVAC operations		-		-		-		-		-		-		-		-		649		-		-		-		-		-		-		-
			(56)	Securities litigation		-		-		-		-		-		-		-		-		469		69		207		23		-		-		-		-
			(57)	Severance arrangements		-		-		-		-		-		-		-		-		-		184		-		-		-		-		-		-
			(58)	Early retirement expenses		-		-		-		-		-		-		-		-		-		-		-		-		2,840		-		-		-
			(59)	Medicare cap sequestration adjustment		-		-		-		-		-		-		-		-		-		-		-		-		141		276		1,114		2,965
			(60)	Other		-		-		(296)		(296)		-		-		-		-		-		-		-		-		-		-		-		406
			(61)	Excess tax benefits on stock compensation		-		-		-		-		-		-		-		-		-		-		-		-		-		(18,932)		(22,862)		(24,177)
			(62)	Impact of tax reform		-		-		-		-		-		-		-		-		-		-		-		-		-		(8,302)		-		-
				(63)	Loss on sale of transportation equipment		-		-		-		-		-		-		-		-		-		-		-		-		-		3,314		-		1,733
38		(64)	Program closure expenses		-		-		-		-		-		-		-		-		-		-		-		-		-		675		-		-
	(65)	Amortization of acquired and cancelled franchise agreements		-		-		-		-		-		-		-		-		-		-		-		-		-		-		-		2,913
				(66)	Adjusted net income	$	31,893	$	49,542	$	58,102	$	79,277	$	78,900	$	89,289	$	95,961	$	100,030	$	102,317	$	104,372	$	107,731	$	121,667	$	121,487	$	141,054	$	200,374	$	230,473

ROTO-ROOTER GROUP

RECONCILIATION OF ADJUSTED EBITDA and ADJUSTED NET INCOME

FOR THE YEARS ENDED DECEMBER 31, 2004 THROUGH 2019

(IN THOUSANDS)

			(1)		(2)		(3)		(4)		(5)		(6)		(7)		(8)		(9)		(10)		(11)			(12)		(13)		(14)		(15)	(16)
			2004		2005		2006		2007		2008		2009		2010		2011		2012		2013		2014			2015		2016		2017		2018	2019
Reconciliation of Adjusted EBITDA
(1)	Net income	$	18,795	$	27,626	$	32,454	$	38,971	$	33,427	$	33,040	$	31,678	$	34,879	$	30,905	$	29,243	$	42,075	$	48,573	$	52,893	$	73,299	$	98,711	$ 103,710
(2)	Interest expense		206		563		368		495		246		186		233		358		433		322		363			348		332		323		319	345
(3)	Income taxes		10,611		16,048		18,748		24,145		20,644		20,372		19,547		21,353		18,770		17,560		25,808			29,630		32,719		32,782		28,850	30,276
(4)	Depreciation		8,583		8,271		7,665		8,365		8,294		8,068		7,775		8,130		8,397		9,014		10,702			12,988		14,698		16,667		18,629	20,730
(5)	Amortization		119		90		13		(60)		50		114		136		228		246		259		273			372		304		123		387	4,264
(6)	EBITDA		38,314		52,598		59,248		71,916		62,661		61,780		59,369		64,948		58,751		56,398		79,221			91,911		100,946		123,194		146,896	159,325
	Add/(deduct)
(7)	Advertising cost adjustment		528		691		323		601		225		(540)		(679)		(1,240)		(1,573)		(1,166)		(1,462)			(1,317)		(1,333)		(1,371)		-	-
(8)	Long-term incentive compensation		1,558		-		-		-		-		-		-		-		-		-		-			-		-		-		-	-
(9)	Lawsuit settlement		3,135		-		-		1,927		-		882		1,853		2,299		1,016		17,146		7			5		45		213		-	-
(10)	Prior-period insurance adjustments		-		(1,663)		-		-		597		-		-		-		-		-		-			-		-		-		-	-
(11)	Interest income		(139)		(156)		(85)		(377)		(116)		(73)		(49)		(40)		(30)		(41)		(39)			(40)		(58)		(39)		(92)	(133)
(12)	Intercompany interest income		(1,041)		(2,236)		(3,997)		(4,993)		(3,708)		(2,514)		(2,612)		(2,136)		(1,617)		(2,055)		(2,892)			(3,385)		(3,595)		(5,596)		(6,908)	(8,152)
(13)	Acquisition expenses		-		-		-		-		-		-		256		(26)		173		4		23			172		-		-		548	4,664
(14)	Severance arrangements		-		-		-		-		-		-		-		-		-		302		-			-		-		-		-	-
(15)	Costs to shut down HVAC operations		-		-		-		-		-		-		-		-		1,126		-		-			-		-		-		-	-
(16)	Stock award amortization		-		-		59		114		263		327		378		371		386		348		252			268		307		269		100	-
(17)	Non cash ASC 842 expenses		-		-		-		-		-		-		-		-		-		-		-			-		-		-		-	55
(18)	Adjusted EBITDA	$	42,355	$	49,234	$	55,548	$	69,188	$	59,922	$	59,862	$	58,516	$	64,176	$	58,232	$	70,936	$	75,110	$	87,614	$	96,312	$	116,670	$	140,544	$ 155,759
Reconciliation of Adjusted Net Income
(19)	Net income	$	18,795	$	27,626	$	32,454	$	38,971	$	33,427	$	33,040	$	31,678	$	34,879	$	30,905	$	29,243	$	42,075	$	48,573	$	52,893	$	73,299	$	98,711	$ 103,710
	Add/(deduct):
(20)	Long-term incentive compensation		982		-		-		-		-		-		-		-		-		-		-			-		-		-		-	-
(21)	Lawsuit settlement		1,897		-		-		1,168		-		534		1,126		1,397		617		10,416		4			3		28		129		403	-
(22)	Prior-period insurance adjustments		-		(1,014)		-		-		358		-		-		-		-		-		-			-		-		-		-	-
(23)	Prior-period tax adjustments		(630)		(1,126)		(1,251)		-		-		-		-		-		-		-		-			-		-		-		-	-
(24)	Acquisition expenses		-		-		-		-		-		-		156		(16)		105		2		14			104		-		-		-	3,429
(25)	Severance arrangements		-		-		-		-		-		-		-		-		-		184		-			-		-		-		-	-
(26)	Costs to shut down HVAC operations		-		-		-		-		-		-		-		-		649		-		-			-		-		-		-	-
(27)	Impact of tax reform		-		-		-		-		-		-		-		-		-		-		-			-		-		(7,761)		-	-
(28)	Non cash ASC 842 expenses		-		-		-		-		-		-		-		-		-		-		-			-		-		-		-	40

1. Amortization of acquired and cancelled

	franchise agreements	-		-	-	-	-		-	-	-		-	-	-		-	-	-	-	2,913
(30)	Adjusted net income	$ 21,044	$	25,486	$ 31,203	$ 40,139	$ 33,785	$	33,574	$ 32,960	$ 36,260	$	32,276	$ 39,845	$ 42,093		$ 48,680	$ 52,921	$ 65,667	$ 99,114	$ 110,092

39	Chemed Corporation

VITAS HEALTHCARE GROUP

RECONCILIATION OF ADJUSTED EBITDA and ADJUSTED NET INCOME

FOR THE YEARS ENDED DECEMBER 31, 2004 THROUGH 2019 (a)

(IN THOUSANDS)

		(1)	(2)	(3)		(4)		(5)		(6)		(7)		(8)		(9)		(10)		(11)		(12)		(13)		(14)	(15)	(16)
		2004	2005	2006		2007		2008		2009		2010		2011		2012		2013		2014		2015		2016		2017	2018	2019
Reconciliation of Adjusted EBITDA
(1)	Net income	$ 33,052	$ 34,982	$ 43,546	$	61,034	$	64,304	$	71,696	$	79,796	$	80,358	$	86,577	$	76,144	$	86,186	$	93,346	$	84,961	$	57,645	$ 138,846	$ 155,822
(2)	Discontinued operations	(91)	(1,477)	4,872		(1,201)		-		-		-		-		-		-		-		-		-		-	-	-
(3)	Interest expense	128	153	191		146		155		374		131		229		233		182		207		200		211		188	175	169
(4)	Income taxes	22,447	20,097	28,705		35,722		38,458		43,637		48,601		48,835		53,092		46,910		53,278		56,675		51,910		16,436	40,847	48,711
(5)	Depreciation	6,192	7,557	8,753		11,446		13,000		13,269		16,161		16,583		17,087		18,149		18,601		18,789		19,035		18,616	19,688	19,984
(6)	Amortization	3,957	3,947	3,170		3,368		3,984		3,959		1,963		1,238		1,262		1,385		447		758		55		14		12		71
(7)	EBITDA	65,685	65,259	89,237		110,515		119,901		132,935		146,652		147,243		158,251		142,770		158,719		169,768		156,172		92,899	199,568	224,757
	Add/(deduct)
(8)	Legal expenses of OIG investigation	-	637	1,068		227		46		586		1,012		1,188		1,212		2,149		2,141		4,974		5,260		5,194	-	-
(9)	Lawsuit settlement	-	17,350	272		-		-		-		-		-		-		10,500		113		-		1,149		84,476	796	6,000
(10)	Interest income	(373)	(237)	(114)		(151)		(137)		(267)		(220)		(295)		(703)		(750)		78		(241)		(325)		(388)	(580)	(380)
(11)	Intercompany interest income	(759)	(2,554)	(5,329)		(7,254)		(5,199)		(4,314)		(4,632)		(3,998)		(3,180)		(4,288)		(6,189)		(7,499)		(7,969)		(11,656)	(12,832)	(18,135)
(12)	Acquisition expenses	-	-	-		-		-		-		68		147		15		58		1		-		-		-	209	-
(13)	Stock award amortization	-	-	746		616		667		745		776		659		694		717		586		496		387		291	107	-
(14)	Early retirement expense	-	-	-		-		-		-		-		-		-		-		-		-		4,491		-	-	-
(15)	Medicare cap sequestration adjustment	-	-	-		-		-		-		-		-		-		-		-		-		228		447	1,496	3,982
(16)	Program closure expenses	-	-	-		-		-		-		-		-		-		-		-		-		-		1,138	-	-
(17)	Non cash ASC 842 expenses	-	-	-		-		-		-		-		-		-		-		-		-		-		-		-		656
(18)	Adjusted EBITDA	$ 64,553	$ 80,455	$ 85,880	$	103,953	$	115,278	$	129,685	$	143,656	$	144,944	$	156,289	$	151,156	$	155,449	$	167,498	$	159,393	$	172,401	$ 188,764	$ 216,880
Reconciliation of Adjusted Net Income
(19)	Net income	$ 33,052	$ 34,982	$ 43,546	$	61,034	$	64,304	$	71,696	$	79,796	$	80,358	$	86,577	$	76,144	$	86,186	$	93,346	$	84,961	$	57,645	$ 138,846	$ 155,822
(20)	Add/(deduct):
(21)	Discontinued operations	(91)	(1,477)	4,872		(1,201)		-		-		-		-		-		-		-		-		-		-	-	-
(22)	Legal expenses of OIG investigation	-	397	662		141		28		363		627		737		752		1,333		1,328		3,072		3,248		3,207	-	-
(23)	Lawsuit settlement	-	10,757	169		-		-		-		-		-		-		6,510		70		-		-		52,375	594	4,476
(24)	Prior-period tax adjustments	-	-	-		-		(322)		-		-		-		-		-		-		-		-		-	-	-
(25)	Acquisition expenses	-	-	-		-		-		-		42		91		9		36		1		-		-		-	156	-
(26)	Early retirement expense	-	-	-		-		-		-		-		-		-		-		-		-		2,840		-	-	-
(27)	Medicare cap sequestration adjustment	-	-	-		-		-		-		-		-		-		-		-		-		141		276	1,114	2,965
(28)	Program closure expenses	-	-	-		-		-		-		-		-		-		-		-		-		-		675	-	-
(29)	Impact of tax reform	-	-	-		-		-		-		-		-		-		-		-		-		-		(11,057)	-	-
(30)	Non cash ASC 842 expenses	-	-	-		-		-		-		-		-		-		-		-		-		-		-		-		490
(31)	Adjusted net income	$ 32,961	$ 44,659	$ 49,249	$	59,974	$	64,010	$	72,059	$	80,465	$	81,186	$	87,338	$	84,023	$	87,585	$	96,418	$	91,190	$	103,121		$ 140,710		$ 163,753

(a) Assumes VITAS was purchased on January 1, 2004

40	Chemed Corporation

CHEMED CORPORATION

RECONCILIATION OF ADJUSTED EBITDA AND ADJUSTED NET INCOME FOR THE FIRST NINE MONTHS OF 2019 AND 2020

(IN THOUSANDS)

			2019	2020
	Reconciliation of Adjusted EBITDA
	(1)	Net income	$ 154,343	$ 205,714
	(2)	Interest expense	3,402	2,005
	(3)	Income taxes	27,671	44,435
	(4)	Depreciation	29,744	34,761
	(5)	Amortization	1,366		7,476
	(6)	EBITDA	216,526	294,391
		Add/(deduct)
	(7)	Interest income	(387)	(647)
	(8)	Litigation settlement	6,000	3,095
	(9)	Long-term incentive compensation	4,552	5,523
	(10)	Non cash ASC 842 expenses	548	-
	(11)	Stock option expense	10,729	13,296
	(12)	Acquisition expenses	3,497	-
	(13)	Direct costs related to COVID-19	-	35,483
	(14)	COVID-19 Medicare cap	-	-
	(15)	CARES Act grant	-	(32,184)
	(16)	Impairment loss on transportation equipment	2,266	-
	(17)	Medicare cap sequestration adjustment	3,063		619
	(18)	Adjusted EBITDA	$ 246,794	$ 319,576
	Reconciliation of Adjusted Net Income
	(19)	Net income	$ 154,343	$ 205,714
		Add/(deduct):
	(20)	Long-term incentive compensation	3,915	5,006
	(21)	Non cash ASC 842 expenses	406	-
	(22)	Stock option expense	8,804	11,369
	(23)	Excess tax benefit on stock compensation	(18,737)	(19,943)
	(24)	Litigation settlement	4,476	2,275
	(25)	Medicare cap sequestration adjustments	2,279	462
	(26)	Direct costs related to COVID-19	-	26,435
	(27)	COVID-19 Medicare cap	-	-
	(28)	CARES Act grant	-	(24,009)
	(29)	Impairment loss on transportation equipment	1,733	-
	(30)	Amortization of acquired and cancelled franchise agreements	811	5,185
	(31)	Acquisition expenses	2,573		-	Chemed Corporation
41
(32)	Adjusted net income	$ 160,603	$ 212,494

ROTO-ROOTER GROUP

RECONCILIATION OF ADJUSTED EBIT AND ADJUSTED EBITDA FOR THE FIRST NINE MONTHS OF 2019 AND 2020

(IN THOUSANDS)

			(1)			(2)
			2019			2020
Reconciliation of Adjusted EBIT and EBITDA
(1)	Net income	$	76,302	$	84,966
(2)	Interest expense		273			272
(3)	Income taxes		22,452			26,031
(4)	EBIT		99,027			111,269
	Add/(deduct)
(5)	Non cash ASC 842 expenses		55			-
(6)	Interest income		(91)			(68)
(7)	Intercompany interest income		(6,609)			(4,422)
(8)	Acquisition expenses		3,377			-
(9)	Litigation settlement		-			3,095
(10)	Direct costs related to COVID-19		-			3,299
(11)	Adjusted EBIT		95,759			113,173
(12)	Depreciation		14,983			18,035
(13)	Amortization		1,313			7,423
(14)	Adjusted EBITDA	$	112,055	$	138,631

42	Chemed Corporation

VITAS HEALTHCARE GROUP

RECONCILIATION OF ADJUSTED EBITDA

FOR THE FIRST NINE MONTHS OF 2019 AND 2020

(IN THOUSANDS)

		(1)			(2)
Reconciliation of Adjusted EBITDA	2019			2020
(1)	Net income	$ 106,400	$	147,262
(2)	Interest expense	150			137
(3)	Income taxes	33,636			47,055
(4)	Depreciation	14,644			16,622
(5)	Amortization	53			53
(6)	EBITDA	154,883			211,129
	Add/(deduct)
(7)	Litigation settlement	6,000			-
(8)	Interest income	(296)			(566)
(9)	Intercompany interest income	(13,395)			(14,463)
(10)	Medicare cap sequestration adjustment	3,063			619
(11)	Non cash ASC 842 expenses	656			-
(12)	Direct costs related to COVID-19	-			32,184
(13)	COVID-19 Medicare cap	-			-
(14)	CARES Act grant	-			(32,184)
(15)	Adjusted EBITDA	$ 150,911	$	196,719

43	Chemed Corporation

255 East 5th Street Suite 2600 Cincinnati, OH 45202

1. 762-6690Phone

1. 762-6919Fax www.chemed.com

Kevin J. McNamara

President and CEO

[e-mail]

David P. Williams

EVP and CFO

[e-mail]

Sherri L. Warner

Investor Relations

[e-mail]