17. Guarantor Subsidiaries

Our 1.875% Notes are fully and unconditionally guaranteed on an unsecured, jointly and severally liable basis by certain of our 100% owned subsidiaries. The following unaudited, condensed, consolidating financial data presents the composition of the parent company (Chemed), the guarantor subsidiaries and the non-guarantor subsidiaries as of September 30, 2011 and December 31, 2010 for the balance sheet, the three and nine months ended September 30, 2011 and September 30, 2010 for the income statement and the nine months ended September 30, 2011 and September 30, 2010 for the statement of cash flows (dollars in thousands):


September 30, 2011				Guarantor			Non-Guarantor			Consolidating
	Parent			Subsidiaries			Subsidiaries			Adjustments			Consolidated
ASSETS
Cash and cash equivalents	$	15,950		$	(1,449	)	$	6,841		$	-		$	21,342
Accounts receivable, less allowances		641			111,650			430			-			112,721
Intercompany receivables		-			214,413			-			(214,413	)		-
Inventories		-			8,137			751			-			8,888
Current deferred income taxes		(1,435	)		16,104			181			-			14,850
Prepaid income taxes		4,606			(3,432	)		(410	)		-			764
Prepaid expenses		671			9,181			179			-			10,031
Total current assets		20,433			354,604			7,972			(214,413	)		168,596
Investments of deferred compensation plans		-			-			31,339			-			31,339
Properties and equipment, at cost, less accumulated depreciation		11,825			69,197			2,462			-			83,484
Identifiable intangible assets less accumulated amortization		-			55,983			-			-			55,983
Goodwill		-			456,208			4,539			-			460,747
Other assets		7,957			4,352			2,598			-			14,907
Investments in subsidiaries		771,709			21,404			-			(793,113	)		-
Total assets	$	811,924		$	961,748		$	48,910		$	(1,007,526	)	$	815,056
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable	$	7,715		$	51,056		$	415		$	-		$	59,186
Intercompany payables		209,680			-			4,733			(214,413	)		-
Income taxes		6,800			1,575			(108	)		-			8,267
Accrued insurance		352			35,303			-			-			35,655
Accrued compensation		2,946			36,899			531			-			40,376
Other current liabilities		2,900			14,238			170			-			17,308
Total current liabilities		230,393			139,071			5,741			(214,413	)		160,792
Deferred income taxes		(12,629	)		45,661			(9,770	)		-			23,262
Long-term debt		164,841			-			-			-			164,841
Deferred compensation liabilities		-			-			30,267			-			30,267
Other liabilities		2,984			4,176			2,399			-			9,559
Stockholders' equity		426,335			772,840			20,273			(793,113	)		426,335
Total liabilities and stockholders' equity	$	811,924		$	961,748		$	48,910		$	(1,007,526	)	$	815,056


December 31, 2010				Guarantor			Non-Guarantor			Consolidating
	Parent			Subsidiaries			Subsidiaries			Adjustments			Consolidated
ASSETS
Cash and cash equivalents	$	45,324		$	(1,571	)	$	6,164		$	-		$	49,917
Accounts receivable, less allowances		802			111,716			481			-			112,999
Intercompany receivables		-			172,426			-			(172,426	)		-
Inventories		-			7,191			537			-			7,728
Current deferred income taxes		(688	)		15,666			120			-			15,098
Prepaid income taxes		2,787			(1,809	)		(208	)		-			770
Prepaid expenses		782			9,244			259			-			10,285
Total current assets		49,007			312,863			7,353			(172,426	)		196,797
Investments of deferred compensation plans		-			-			28,304			-			28,304
Properties and equipment, at cost, less accumulated depreciation		12,513			64,743			2,036			-			79,292
Identifiable intangible assets less accumulated amortization		-			56,410			-			-			56,410
Goodwill		-			453,864			4,479			-			458,343
Other assets		6,049			2,791			2,175			-			11,015
Investments in subsidiaries		716,815			18,696			-			(735,511	)		-
Total assets	$	784,384		$	909,367		$	44,347		$	(907,937	)	$	830,161
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable	$	4,924		$	50,457		$	448		$	-		$	55,829
Intercompany payables		167,067			-			5,359			(172,426	)		-
Income taxes		(7,190	)		8,745			(394	)		-			1,161
Accrued insurance		906			35,586			-			-			36,492
Accrued compensation		4,235			35,016			468			-			39,719
Other current liabilities		1,549			13,447			1,145			-			16,141
Total current liabilities		171,491			143,251			7,026			(172,426	)		149,342
Deferred income taxes		(11,356	)		45,168			(8,727	)		-			25,085
Long-term debt		159,208			-			-			-			159,208
Deferred compensation liabilities		-			-			27,851			-			27,851
Other liabilities		2,992			3,123			511			-			6,626
Stockholders' equity		462,049			717,825			17,686			(735,511	)		462,049
Total liabilities and stockholders' equity	$	784,384		$	909,367		$	44,347		$	(907,937	)	$	830,161


For the three months ended September 30, 2011				Guarantor			Non-Guarantor			Consolidating
	Parent			Subsidiaries			Subsidiaries			Adjustments			Consolidated
Continuing Operations
Service revenues and sales	$	-		$	334,937		$	6,502		$	-		$	341,439
Cost of services provided and goods sold		-			241,604			3,459			-			245,063
Selling, general and administrative expenses		5,678			42,595			(655	)		-			47,618
Depreciation		235			5,870			208			-			6,313
Amortization		467			667			-			-			1,134
Total costs and expenses		6,380			290,736			3,012			-			300,128
Income/ (loss) from operations		(6,380	)		44,201			3,490			-			41,311
Interest expense		(3,361	)		(194	)		-			-			(3,555	)
Other (expense)/income - net		4,379			(4,301	)		(2,013	)		-			(1,935	)
Income/ (loss) before income taxes		(5,362	)		39,706			1,477			-			35,821
Income tax (provision)/ benefit		1,677			(15,029	)		(582	)		-			(13,934	)
Equity in net income of subsidiaries		25,572			953			-			(26,525	)		-
Net income	$	21,887		$	25,630		$	895		$	(26,525	)	$	21,887


For the three months ended September 30, 2010				Guarantor			Non-Guarantor			Consolidating
	Parent			Subsidiaries			Subsidiaries			Adjustments			Consolidated
Continuing Operations
Service revenues and sales	$	-		$	313,787		$	6,664		$	-		$	320,451
Cost of services provided and goods sold		-			224,316			3,599			-			227,915
Selling, general and administrative expenses		5,134			41,648			1,418			-			48,200
Depreciation		241			5,945			199			-			6,385
Amortization		370			826			-			-			1,196
Total costs and expenses		5,745			272,735			5,216			-			283,696
Income/ (loss) from operations		(5,745	)		41,052			1,448			-			36,755
Interest expense		(2,893	)		(102	)		-			-			(2,995	)
Other (expense)/income - net		3,889			(3,902	)		235			-			222
Income/ (loss) before income taxes		(4,749	)		37,048			1,683			-			33,982
Income tax (provision)/ benefit		1,498			(13,859	)		(633	)		-			(12,994	)
Equity in net income of subsidiaries		24,239			1,005			-			(25,244	)		-
Net income	$	20,988		$	24,194		$	1,050		$	(25,244	)	$	20,988


For the nine months ended September 30, 2011				Guarantor			Non-Guarantor			Consolidating
	Parent			Subsidiaries			Subsidiaries			Adjustments			Consolidated
Continuing Operations
Service revenues and sales	$	-		$	985,500		$	20,217		$	-		$	1,005,717
Cost of services provided and goods sold		-			711,335			10,783			-			722,118
Selling, general and administrative expenses		17,936			130,617			5,143			-			153,696
Depreciation		711			17,651			597			-			18,959
Amortization		1,287			1,956			-			-			3,243
Total costs and expenses		19,934			861,559			16,523			-			898,016
Income/ (loss) from operations		(19,934	)		123,941			3,694			-			107,701
Interest expense		(9,814	)		(446	)		-			-			(10,260	)
Other (expense)/income - net		12,011			(11,918	)		788			-			881
Income/ (loss) before income taxes		(17,737	)		111,577			4,482			-			98,322
Income tax (provision)/ benefit		5,863			(42,164	)		(1,747	)		-			(38,048	)
Equity in net income of subsidiaries		72,148			2,861			-			(75,009	)		-
Net income	$	60,274		$	72,274		$	2,735		$	(75,009	)	$	60,274


For the nine months ended September 30, 2010				Guarantor			Non-Guarantor			Consolidating
	Parent			Subsidiaries			Subsidiaries			Adjustments			Consolidated
Continuing Operations
Service revenues and sales	$	-		$	925,614		$	18,645		$	-		$	944,259
Cost of services provided and goods sold		-			660,971			9,783			-			670,754
Selling, general and administrative expenses		17,340			125,267			4,087			-			146,694
Depreciation		621			16,827			600			-			18,048
Amortization		1,066			2,641			-			-			3,707
Total costs and expenses		19,027			805,706			14,470			-			839,203
Income/ (loss) from operations		(19,027	)		119,908			4,175			-			105,056
Interest expense		(8,632	)		(314	)		-			-			(8,946	)
Other (expense)/income - net		11,180			(11,101	)		339			-			418
Income/ (loss) before income taxes		(16,479	)		108,493			4,514			-			96,528
Income tax (provision)/ benefit		5,392			(40,965	)		(1,754	)		-			(37,327	)
Equity in net income of subsidiaries		70,288			2,825			-			(73,113	)		-
Net income	$	59,201		$	70,353		$	2,760		$	(73,113	)	$	59,201


For the nine months ended September 30, 2011				Guarantor			Non-Guarantor
	Parent			Subsidiaries			Subsidiaries			Consolidated
Cash Flow from Operating Activities:
Net cash provided by operating activities	$	21,558		$	83,903		$	2,475		$	107,936
Cash Flow from Investing Activities:
Capital expenditures		(23	)		(22,378	)		(1,058	)		(23,459	)
Business combinations, net of cash acquired		-			(3,689	)		-			(3,689	)
Other sources/(uses) - net		(150	)		(713	)		34			(829	)
Net cash used by investing activities		(173	)		(26,780	)		(1,024	)		(27,977	)
Cash Flow from Financing Activities:
Change in cash overdrafts payable		208			2,089			-			2,297
Change in intercompany accounts		60,028			(59,090	)		(938	)		-
Dividends paid to shareholders		(9,393	)		-			-			(9,393	)
Purchases of treasury stock		(110,221	)		-			(67	)		(110,288	)
Proceeds from exercise of stock options		7,979			-			-			7,979
Realized excess tax benefit on share based compensation		3,368			-			-			3,368
Debt issuance cost		(2,723	)		-			-			(2,723	)
Other sources/(uses) - net		(5	)		-			231			226
Net cash used by financing activities		(50,759	)		(57,001	)		(774	)		(108,534	)
Net increase/(decrease) in cash and cash equivalents		(29,374	)		122			677			(28,575	)
Cash and cash equivalents at beginning of year		45,324			(1,571	)		6,164			49,917
Cash and cash equivalents at end of period	$	15,950		$	(1,449	)	$	6,841		$	21,342


For the nine months ended September 30, 2010				Guarantor			Non-Guarantor
	Parent			Subsidiaries			Subsidiaries			Consolidated
Cash Flow from Operating Activities:
Net cash provided/(used) by operating activities	$	(4,364	)	$	61,703		$	651		$	57,990
Cash Flow from Investing Activities:
Capital expenditures		(14	)		(18,399	)		(694	)		(19,107	)
Business combinations, net of cash acquired		-			(30	)		-			(30	)
Other uses - net		(116	)		(313	)		(19	)		(448	)
Net cash used by investing activities		(130	)		(18,742	)		(713	)		(19,585	)
Cash Flow from Financing Activities:
Change in cash overdrafts payable		508			(692	)		-			(184	)
Change in intercompany accounts		40,895			(41,841	)		946			-
Dividends paid to shareholders		(8,682	)		-			-			(8,682	)
Purchases of treasury stock		(10,164	)		-			(11	)		(10,175	)
Proceeds from exercise of stock options		3,632			-			-			3,632
Realized excess tax benefit on share based compensation		716			1,107			-			1,823
Other sources - net		34			-			188			222
Net cash provided/(used) by financing activities		26,939			(41,426	)		1,123			(13,364	)
Net increase in cash and cash equivalents		22,445			1,535			1,061			25,041
Cash and cash equivalents at beginning of year		109,331			(1,221	)		4,306			112,416
Cash and cash equivalents at end of period	$	131,776		$	314		$	5,367		$	137,457