10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒    Quarterly Report Under Section 13 or 15 (d) of the Securities Exchange Act of 1934 For the Quarterly Period Ended June 30, 2017

☐    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) 762-6690 (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 ☒ No ☐

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 ☒ No ☐

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	☒	Accelerated filer	☐	Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended the extended transition period for complying with a new or revised financial accounting standards provided pursuant to Section 13 (a) of the Exchange Act  ☐

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

Yes ☐ No ☒

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	15,991,878 Shares	June 30, 2017

- 1 -

CHEMED CORPORATION AND

SUBSIDIARY COMPANIES

Index

	Page No.
PART I.    FINANCIAL INFORMATION:
Item 1.  Financial Statements
Unaudited Consolidated Balance Sheets -
June 30, 2017 and December 31, 2016	3
Unaudited Consolidated Statements of Income -
Three and six months ended June 30, 2017 and 2016	4
Unaudited Consolidated Statements of Cash Flows -
Six months ended June 30, 2017 and 2016	5
Notes to Unaudited Consolidated Financial Statements	6
Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3.  Quantitative and Qualitative Disclosures about Market Risk	33
Item 4.  Controls and Procedures	33
PART II.   OTHER INFORMATION
Item 1.    Legal Proceedings	33
Item 1A. Risk Factors	33
Item 2.    Unregistered Sales of Equity Securities and Use of  Proceeds	34
Item 3.    Defaults Upon Senior Securities	34
Item 4.    Mine Safety Disclosures	34
Item 5.    Other Information	34
Item 6.    Exhibits	35
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

- 2 -

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
CHEMED CORPORATION AND SUBSIDIARY COMPANIES
UNAUDITED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
	June 30, 2017			December 31, 2016
ASSETS
Current assets
Cash and cash equivalents	$	13,753		$	15,310
Accounts receivable less allowances of $16,193 (2016 - $14,236)		117,906			132,021
Inventories		5,618			5,755
Prepaid income taxes		4,537			3,709
Prepaid expenses		14,678			13,105
Total current assets		156,492			169,900
Investments of deferred compensation plans		58,579			54,389
Properties and equipment, at cost, less accumulated depreciation of $222,332 (2016 - $211,290)		140,209			121,302
Identifiable intangible assets less accumulated amortization of $32,827 (2016 - $33,225)		54,737			55,065
Goodwill		472,897			472,366
Deferred income taxes		20,593			8
Other assets		6,767			7,029
Total Assets	$	910,274		$	880,059
LIABILITIES
Current liabilities
Accounts payable	$	49,154		$	39,586
Current portion of long-term debt		10,000			8,750
Income taxes		3,815			-
Accrued insurance		44,905			47,960
Accrued compensation		48,082			53,979
Accrued legal		92,502			1,805
Other current liabilities		20,142			19,752
Total current liabilities		268,600			171,832
Deferred income taxes		-			14,291
Long-term debt		115,000			100,000
Deferred compensation liabilities		57,811			54,288
Other liabilities		15,780			15,549
Total Liabilities		457,191			355,960
Commitments and contingencies (Note 11)
STOCKHOLDERS' EQUITY
Capital stock - authorized 80,000,000 shares $1 par; issued 34,470,426 shares (2016 - 34,270,104 shares)		34,470			34,270
Paid-in capital		661,553			639,703
Retained earnings		957,941			958,149
Treasury stock - 18,563,720 shares (2016 - 18,083,527)		(1,203,077	)		(1,110,536	)
Deferred compensation payable in Company stock		2,196			2,513
Total Stockholders' Equity		453,083			524,099
Total Liabilities and Stockholders' Equity	$	910,274		$	880,059
See accompanying notes to unaudited consolidated financial statements.

- 3 -

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
Service revenues and sales	$	415,059		$	390,409		$	820,923		$	780,798
Cost of services provided and goods sold (excluding depreciation)		285,852			276,255			570,992			554,690
Selling, general and administrative expenses		68,654			62,628			138,112			121,673
Depreciation		8,833			8,581			17,726			17,005
Amortization		32			91			78			183
Other operating expenses		90,636			4,491			91,509			4,491
Total costs and expenses		454,007			352,046			818,417			698,042
Income/(loss) from operations		(38,948	)		38,363			2,506			82,756
Interest expense		(1,121	)		(971	)		(2,116	)		(1,813	)
Other income/(expense) - net		1,653			3,217			4,116			293
Income/(loss) before income taxes		(38,416	)		40,609			4,506			81,236
Income taxes		16,760			(15,724	)		3,682			(31,511	)
Net income/(loss)	$	(21,656	)	$	24,885		$	8,188		$	49,725
Earnings/(Loss) Per Share
Net income/(loss)	$	(1.35	)	$	1.51		$	0.51		$	3.00
Average number of shares outstanding		16,010			16,443			16,114			16,583
Diluted Earnings/(Loss) Per Share
Net income/(loss)	$	(1.35	)	$	1.48		$	0.49		$	2.93
Average number of shares outstanding		16,010			16,831			16,758			16,999
Cash Dividends Per Share	$	0.26		$	0.24		$	0.52		$	0.48
See accompanying notes to unaudited consolidated financial statements.

- 4 -

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
	Six Months Ended June 30,
	2017			2016
Cash Flows from Operating Activities
Net income	$	8,188		$	49,725
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization		17,804			17,188
Provision for uncollectible accounts receivable		8,250			8,124
Stock option expense		6,055			4,840
Benefit for deferred income taxes		(34,876	)		(4,244	)
Potential litigation settlement		90,000			-
Noncash early retirement expense		-			1,747
Amortization of restricted stock awards		638			974
Noncash directors' compensation		766			541
Noncash long-term incentive compensation		1,783			196
Amortization of debt issuance costs		258			260
Changes in operating assets and liabilities:
Decrease/(increase) in accounts receivable		5,804			(839	)
Decrease in inventories		137			194
Increase in prepaid expenses		(1,573	)		(2,605	)
Decrease in accounts payable and other current liabilities		(6,931	)		(4,879	)
Increase in income taxes		2,982			3,109
Increase in other assets		(4,152	)		(3,636	)
Increase in other liabilities		3,754			4,145
Excess tax benefit on share-based compensation		-			(1,383	)
Other sources/(uses)		1,437			(9	)
Net cash provided by operating activities		100,324			73,448
Cash Flows from Investing Activities
Capital expenditures		(28,133	)		(19,983	)
Business combinations		(525	)		-
Other sources		87			214
Net cash used by investing activities		(28,571	)		(19,769	)
Cash Flows from Financing Activities
Proceeds from long-term debt		135,800			92,400
Payments on revolving line of credit		(115,800	)		(32,400	)
Purchases of treasury stock		(85,063	)		(94,337	)
Change in cash overdrafts payable		(1,090	)		(5,440	)
Proceeds from exercise of stock options		10,398			3,533
Capital stock surrendered to pay taxes on stock-based compensation		(5,716	)		(5,163	)
Dividends paid		(8,396	)		(8,039	)
Payments on other long-term debt		(3,750	)		(3,750	)
Excess tax benefit on share-based compensation		-			1,383
Other sources		307			881
Net cash used by financing activities		(73,310	)		(50,932	)
Increase/(Decrease) in Cash and Cash Equivalents		(1,557	)		2,747
Cash and cash equivalents at beginning of year		15,310			14,727
Cash and cash equivalents at end of period	$	13,753		$	17,474
See accompanying notes to unaudited consolidated financial statements.

- 5 -

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, 2016 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, 2016.

EARNINGS PER SHARE

In March 2016, the FASB issued Accounting Standards Update “ASU No. 2016-09 - Compensation – Stock Compensation” which is part of the FASB’s Simplification Initiative.  The object of this initiative is to identify, evaluate, and improve areas of GAAP. The areas of simplification in this initiative involve several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows.  The guidance was effective for fiscal years beginning after December 15, 2016.  We adopted the applicable provisions of ASU 2016-09 on a prospective basis.  The impact of this ASU on our financial statements for the quarter ended June 30, 2017 was to decrease our income tax expense by $2.6 million as the result of excess tax benefits on stock based compensation being recorded on the statements of income. This, combined with the required change in diluted share count, resulted in an increase to basic and diluted earnings per share of $0.17. The impact of this ASU on our financial statements for the six months ended June 30, 2017 was to decrease our income tax expense by $6.3 million as the result of excess tax benefits on stock based compensation being recorded on the statements of income. This, combined with the required change in diluted share count, resulted in an increase to basic earnings per share by $0.39 and an increase to diluted earnings per share by $0.38.

INCOME TAXES

    The effective tax rate for the three and six month periods ended June 30, 2017 was 43.6% (income tax benefit on pre-tax loss) and 81.7% (income tax benefit on pre-tax income), respectively. These rates differ from the US statutory tax rates primarily as the result of the adoption of ASU 2016-09 described above. The remaining difference relates to our normal, small permanent differences between book and tax income having a larger than normal impact on our effective rate due to a lower absolute dollar value of pretax income (loss). These permanent differences generally do not significantly impact our effective rate. However, as described fully in footnote 11, we recorded a charge during the quarter for potential litigation settlement of $90.0 million causing a decrease in pretax income (increase in pretax loss).

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 shipped.  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.

In 2013, the U.S. government implemented automatic budget reductions of 2.0% for all government payees, including hospice benefits paid under the Medicare program.  In 2015, CMS determined that the Medicare cap should be calculated “as if” sequestration did not occur.  As a result of this decision, VITAS has received notification from our third party intermediary that an additional $2.2 million is owed for Medicare cap in three programs arising during the 2013, 2014 and 2015 measurement periods.  The amounts were automatically deducted from our semi-monthly PIP payments.  We do not believe that CMS is authorized under the sequestration authority or the statutory methodology for establishing the Medicare cap to demand the $2.2 million under their “as if” methodology.  We have not recorded a reserve as of June 30, 2017 for $1.9 million of the potential exposure.  We have appealed CMS’s methodology change with the appropriate regulatory appeal board.

- 6 -

During the three and six months ended June 30, 2016, respectively, no Medicare cap was recorded.

During the three and six months ended June 30, 2017, respectively, we recorded $247,000 for two programs cap liability for the 2013, 2014 and 2015 measurement periods of the amount recorded, $105,000 relates to the sequestration issue described above.

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

	June 30,
	2017		2016
Beginning balance January 1,	$	235	$	1,165
Prior measurement periods		247		-
Payments		-		(618	)
Ending balance June 30,	$	482	$	547

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 cannot afford 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 June 30,						Six months ended June 30,
2017			2016			2017			2016
	$	1,761		$	1,715		$	3,698		$	3,521

3.   Segments

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

	Three months ended June 30,						Six months ended June 30,
	2017			2016			2017			2016
Service Revenues and Sales
VITAS	$	284,710		$	278,739		$	567,026		$	556,266
Roto-Rooter		130,349			111,670			253,897			224,532
Total	$	415,059		$	390,409		$	820,923		$	780,798
After-tax Income/(Loss)
VITAS	$	(32,254	)	$	18,550		$	(11,657	)	$	37,637
Roto-Rooter		17,058			13,341			31,682			26,359
Total		(15,196	)		31,891			20,025			63,996
Corporate		(6,460	)		(7,006	)		(11,837	)		(14,271	)
Net income	$	(21,656	)	$	24,885		$	8,188		$	49,725

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

- 7 -

4.  Earnings/(Loss) per Share

Earnings/(loss) per share (“EPS”/”LPS”) 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/(Loss)
For the Three Months Ended June 30,	Income/(Loss)			Shares		Earnings/(Loss) per Share
2017
Loss	$	(21,656	)		16,010	$	(1.35	)
Dilutive stock options		-			-
Nonvested stock awards		-			-
Diluted loss	$	(21,656	)		16,010	$	(1.35	)
2016
Earnings	$	24,885			16,443	$	1.51
Dilutive stock options		-			289
Nonvested stock awards		-			99
Diluted earnings	$	24,885			16,831	$	1.48

	Net Income
For the Six Months Ended June 30,	Income		Shares		Earnings per Share
2017
Earnings	$	8,188		16,114	$	0.51
Dilutive stock options		-		557
Nonvested stock awards		-		87
Diluted earnings	$	8,188		16,758	$	0.49
2016
Earnings	$	49,725		16,583	$	3.00
Dilutive stock options		-		297
Nonvested stock awards		-		119
Diluted earnings	$	49,725		16,999	$	2.93

For the three months ended June 30, 2017, all stock options and nonvested stock awards have been excluded in the calculation of dilutive earnings per share as they be would anti-dilutive due to the net loss for the period.

For the six month period ended June 30, 2017, there were no stock options excluded from the computation of diluted earnings per share because they would have been anti-dilutive.

 For the three and six month periods ended June 30, 2016, 418,000 stock options were excluded from the computation of diluted earnings per share because they would have been anti-dilutive.

5.   Long-Term Debt

On June 30, 2014, we replaced our existing credit agreement with the Third Amended and Restated Credit Agreement (“2014 Credit Agreement”).  Terms of the 2014 Credit Agreement consist of a five-year, $350 million revolving credit facility and a $100 million term loan.  The 2014 Credit Agreement has a floating interest rate that is generally LIBOR plus a tiered additional rate which varies based on our current leverage ratio.  The interest rate as of June 30, 2017 is LIBOR plus 113 basis points.

- 8 -

The debt outstanding as of June 30, 2017 consists of the following:

Revolver	$	45,000
Term loan		80,000
Total		125,000
Current portion of long-term debt		(10,000	)
Long-term debt	$	115,000

Scheduled principal payments of the term loan are as follows:

2017	$	5,000
2018		10,000
2019		65,000
	$	80,000

The 2014 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	< $50.0 million

We are in compliance with all debt covenants as of June 30, 2017. We have issued $36.1 million in standby letters of credit as of June 30, 2017 mainly for insurance purposes.  Issued letters of credit reduce our available credit under the 2014 Credit Agreement.  As of June 30, 2017, we have approximately $268.9 million of unused lines of credit available and eligible to be drawn down under our revolving credit facility.

6.   Other Operating Expenses

	Three months ended June 30,				Six months ended June 30,
	2017		2016		2017		2016
Potential litigation settlement	$	90,000	$	-	$	90,000	$	-
Program closure expense		636		-		1,509		-
Retirement expenses		-		4,491		-		4,491
Total other operating expenses	$	90,636	$	4,491	$	91,509	$	4,491

During the three and six months ended June 30, 2017, the Company recorded $90 million for a potential litigation settlement.  See footnote 11 for further discussion.

During the three and six months ended June 30, 2017, the Company recorded $636,000 and $1.5 million, respectively, related to the closure of three Alabama programs at VITAS.

During the three and six months ended June 30, 2016, the Company recorded early retirement related costs and accelerated stock-based compensation expense of approximately $4.5 million pretax and $2.8 million after-tax, related to the early retirement of VITAS’ former Chief Executive Officer.

- 9 -

7.   Other Income/(Expense) – Net

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

	Three months ended June 30,						Six months ended June 30,
	2017			2016			2017			2016
Market value adjustment on assets held in
deferred compensation trust	$	1,587		$	3,188		$	4,202		$	201
Loss on disposal of property and equipment		(98	)		(57	)		(334	)		(90	)
Interest income		161			85			245			182
Other - net		3			1			3			-
Total other income/(expense) - net	$	1,653		$	3,217		$	4,116		$	293

 8.   Stock-Based Compensation Plans

On February 17, 2017, the Compensation/Incentive Committee of the Board of Directors (“CIC”) granted 7,304 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, 2019, the date at which such awards vest.  The cumulative compensation cost of the TSR-based PSU award to be recorded over the three year service period is $1.7 million.

On February 17, 2017, the CIC also granted 7,304 PSUs contingent upon the achievement of certain earnings per share (“EPS”) targets for the three-year period ending December 31, 2019.  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 $1.3 million.

9.   Independent Contractor Operations

The Roto-Rooter segment sublicenses with 69 independent contractors to operate certain plumbing repair, excavation, water restoration and drain cleaning businesses in lesser-populated areas of the United States and Canada.  We had notes receivable from our independent contractors as of June 30, 2017 totaling $1.4 million (December 31, 2016 - $1.7 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 7% per annum and the remaining terms of the loans range from 2.5 months to 5.4 years at June 30, 2017.  We recorded the following from our independent contractors (in thousands):

	Three months ended June 30,				Six months ended June 30,
	2017		2016		2017		2016
Revenues	$	11,151	$	9,770	$	22,176	$	19,629
Pretax income		6,742		6,024		13,431		12,180

10.   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 retirement and profit-sharing plans, excess benefit plans and other similar plans are as follows (in thousands):

Three months ended June 30,						Six months ended June 30,
2017			2016			2017			2016
	$	4,551		$	5,861		$	10,709		$	6,387

- 10 -

11.  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. Other than as described below with respect to U.S. v. Vitas, 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 reasonably estimable.

Regulatory Matters and Litigation

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 qui tam lawsuits and 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.  The defendants filed a motion to dismiss on September 24, 2013.  On September 30, 2014, the Court denied the motion, except to the extent that claims were filed before July 24, 2002. On November 13, 2014, the government filed a Second Amended Complaint.  The Second 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.  VITAS filed its Answer to the Second Amended Complaint on August 11, 2015.  This case is in the discovery phase.  Based on recent case developments, including recent mediation discussions with the U.S. Department of Justice, we believe it probable that this matter will be settled, to include payments of $55.8 million after-tax ($90.0 million pretax) including attorneys’ fees.  A final settlement will require the parties to resolve several outstanding issues, and to draft and negotiate definitive documentation.  There can be no assurance that such a final definitive settlement will be reached on these, or other, terms.  For additional procedural history of this litigation, please refer to our prior quarterly and annual filings.  The costs incurred related to U.S. v. Vitas and related regulatory matters were $2.1 million and $1.2 million for the quarters ended June 30, 2017 and 2016, respectively.  For the six months ended June 30, 2017 and 2016, the net costs were $4.2 million and $3.5 million respectively.

Net income/(loss) for the three and six months ended June 30, 2017 includes the $55.8 million of after-tax expense ($90 million pre-tax) for the accrual of such potential litigation settlement.  As required by U.S. Generally Accepted Accounting Principles, the Company accrues for contingent loss claims in its financial statements when it is probable that a liability has been incurred and the amount can be reasonably estimated.

 The Company and certain current and former directors and officers are defendants in a case captioned In re Chemed Corp. Shareholder Derivative Litigation, No. 13 Civ. 1854 (LPS) (CJB) (D. Del.), which was consolidated on February 2, 2015.

On February 2, 2015, the Court appointed KBC Asset Management NV the sole lead plaintiff and its counsel, the sole lead and liaison counsel. On March 3, 2015, Lead Plaintiff KBC designated its Complaint as the operative complaint in the consolidated proceedings and defendants renewed a previously filed motion to dismiss those claims and allegations.  The consolidated Complaint named fourteen individual defendants, together with the Company as nominal defendant.  The Complaint alleges a claim for breach of fiduciary duty against the individual defendants for allegedly permitting the Company to submit false claims to the U.S. government.  The Complaint 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 May 12, 2016, the Court issued a Memorandum Order granting Chemed’s motion to dismiss, and  dismissing Lead Plaintiff KBC’s Complaint without prejudice to KBC’s opportunity to file within 30 days of the date of the Court’s Order (i.e., by June 13, 2016) an amended Complaint addressing the deficiencies in its duty of loyalty claim.  Lead Plaintiff KBC did not file an amended Complaint within the time specified by the Court.

- 11 -

However, on June 13, 2016, counsel for Chemed shareholder Michael Kvint filed a letter with the Court requesting a two-week extension to file a motion to substitute Mr. Kvint as lead plaintiff, in place of Lead Plaintiff KBC and to file an amended Complaint.  Alternatively, counsel for Mr. Kvint requested that any dismissal of the action be with prejudice to KBC only.  On June 14, 2016, Chemed filed a reply letter with the Court, reserving its rights to oppose any motion filed by Mr. Kvint and, if warranted, to oppose any other actions taken by Mr. Kvint to proceed with the action (including by filing an untimely amended Complaint).  On June 21, 2016, the Court entered an Oral Order providing Mr. Kvint until June 30, 2016 to file a Motion to Substitute and Motion for Leave to File an Amended Complaint.  On that date, Mr. Kvint filed, under seal, a Motion to Substitute Plaintiff and File Amended Complaint, and attached a Proposed Amended Complaint.    Mr. Kvint’s motion was fully briefed by the parties.  On April 25, 2017, Magistrate Judge Burke issued a Report and Recommendation recommending that the Court permit Mr. Kvint to intervene as Lead Plaintiff and grant leave to amend the complaint to replead the duty of loyalty claim only.  On May 16, 2017, Chief Judge Stark signed an Order adopting that Report and Recommendation.  Plaintiff Kvint filed a Corrected Amended Complaint on May 30, 2017.  On July 25, 2017, the Court entered an order permitting Defendants to file a Motion to Dismiss the Corrected Amended Complaint on or before August 14, 2017, with Plaintiff’s Answering Brief in opposition to the Motion to Dismiss to be filed on or before October 16, 2017, and Defendants’ Reply Brief in support of the Motion to Dismiss to be filed on or before November 13, 2017.  As the Company has previously disclosed, the legal fees and costs associated with defending against this lawsuit are presently being paid by insurance. For additional procedural history of this litigation, please refer to our prior quarterly and annual filings.

Jordan Seper, (“Seper”) a Registered Nurse at VITAS' Inland Empire program from May 12, 2014 to March 21, 2015, filed a lawsuit in San Francisco Superior Court on September 26, 2016.  She alleged VITAS Healthcare Corp of CA (“VITAS CA”) (1) failed to provide minimum wage for all hours worked; (2) failed to provide overtime for all hours worked; (3) failed to provide a second meal period; (4) failed to provide rest breaks; (5) failed to indemnify for necessary expenditures; (6) failed to timely pay wages due at time of separation; and (7) engaged in unfair business practices.  Seper seeks a state-wide class action of current and former non-exempt employees employed with VITAS in California within the four years preceding the filing of the lawsuit.  She seeks court determination that this action may be maintained as a class action for the entire California class and subclasses, designation as class representative, declaratory relief, injunctive relief, damages (including wages for regular or overtime hours allegedly worked but not paid, premium payments for missed meal or rest periods, and unreimbursed expenses), all applicable penalties associated with each claim, pre and post-judgment interest, and attorneys' fees and costs.  Seper served VITAS CA with the lawsuit,  Jordan A. Seper on behalf of herself and others similarly situated v. VITAS Healthcare Corporation of California, a Delaware corporation; VITAS Healthcare Corp of CA, a business entity unknown; and DOES 1 to 100, inclusive; Los Angeles Superior Court Case Number BC 642857 on October 13, 2016.

On November 14, 2016, the Parties filed a Stipulation to transfer the venue of the lawsuit from San Francisco to Los Angeles.  The Los Angeles Superior Court Complex Division accepted transfer of the case on December 6, 2016 and stayed the case.  On December 16, 2016, VITAS CA filed its Answer and served written discovery on Seper.

 Jiwan Chhina ("Chhina"), hired by VITAS as a Home Health Aide on February 5, 2002, is currently a Licensed Vocational Nurse for VITAS' San Diego program.  On September 27, 2016, Chhina filed a lawsuit in San Diego Superior Court, alleging (1) failure to pay minimum wage for all hours worked; (2) failure to provide overtime for all hours worked; (3) failure to pay wages for all hours at the regular rate; (4) failure to provide meal periods; (5) failure to provide rest breaks; (6) failure to provide complete and accurate wage statements; (7) failure to pay for all reimbursement expenses; (8) unfair business practices; and (9) violation of the California Private Attorneys General Act.  Chhina seeks to pursue these claims in the form of a state-wide class action of current and former non-exempt employees employed with VITAS in California within the four years preceding the filing of the lawsuit.  He seeks court determination that this action may be maintained as a class action for the entire California class and subclasses, designation as class representative, declaratory relief, injunctive relief, damages (including wages for regular or overtime hours allegedly worked but not paid, premium payments for missed meal or rest periods, and unreimbursed expenses), all applicable penalties associated with each claim, pre-judgment interest, and attorneys' fees and costs.  Chhina served VITAS CA with the lawsuit, Jiwann Chhina v. VITAS Health Services of California, Inc., a California corporation; VITAS Healthcare Corporation of California, a Delaware corporation; VITAS Healthcare Corporation of California, a Delaware corporation dba VITAS Healthcare, Inc.; and DOES 1 to 100, inclusive; San Diego Superior Court Case Number 37-2015-00033978-CU-OE-CTL on November 3, 2016.  On December 1, 2016, VITAS filed its Answer and served written discovery on Chhina.

The Court in Seper lifted the stay at the Initial Status Conference on May 11, 2017.  At the Conference, Seper’s counsel informed the Court that he was in contact with Jiwan Chhina’s counsel to consolidate the two cases.  The Court set a Further Status Conference for July 13, 2017 expressly to receive a status update on the consolidation efforts.  If the cases are consolidated and proceed under the jurisdiction of the Los Angeles Superior Court Complex Division,  the Chhina case in the San Diego Superior Court would then be dismissed.  The Parties have agreed to stay further discovery efforts pending the issue of consolidation of the two cases.  Counsel for Seper and counsel for Chhina are currently preparing a joint Amended Complaint.

The Company is not able to reasonably estimate the probability of loss or range of loss for either of these lawsuits at this time.

- 12 -

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, 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.

12.   Concentration of Risk

During the quarter VITAS had pharmacy services agreements with one service provider to provide specified pharmacy services for VITAS and its hospice patients.  VITAS made purchases from this provider of $8.2 and $17.0 million for the three and six months ended June 30, 2017, respectively. Vitas made purchases from two providers of $8.5 and $17.4 million for the three and six months ended June 30, 2016, respectively.  Purchases from these providers were approximately 90% of all pharmacy services used by VITAS during each quarter presented.

13.   Cash Overdrafts and Cash Equivalents

There are $7.5 million in cash overdrafts payable included in accounts payable at June 30, 2017 (December 31, 2016 - $8.6 million).

From time to time throughout the year, we invest excess cash in money market funds with major commercial banks. We closely monitor the creditworthiness of the institutions with which we invest our overnight funds.  We had $79,000 in cash equivalents as of June 30, 2017.  There was $72,000 in cash equivalents as of December 31, 2016.

Included in properties and equipment and accounts payable on the balance sheet at June 30, 2017 is $10.8 million of unpaid commitments related to the purchase of transportation equipment.  This amount will be paid in July 2017 and is not reflected in capital expenditures in the statement of cash flows.  Unpaid commitments to purchase properties and equipment for comparable periods is not material.

14.   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 June 30, 2017 (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		$	58,579		$	58,579		$	-		$	-
Total debt			125,000			-			125,000			-

The following shows the carrying value, fair value and the hierarchy for our financial instruments as of December 31, 2016 (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		$	54,389		$	54,389		$	-		$	-
Total debt			108,750			-			108,750			-

- 13 -

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.  As further described in Footnote 5, our outstanding long-term debt and current portion of long-term debt have floating interest rates that are reset at short-term intervals, generally 30 or 60 days.  The interest rate we pay also includes an additional amount based on our current leverage ratio.  As such, we believe our borrowings reflect significant nonperformance risks, mainly credit risk.  Based on these factors, we believe the fair value of our long-term debt and current portion of long-term debt approximate the carrying value.

15.   Capital Stock Repurchase Plan Transactions

We repurchased the following capital stock for the three and six months ended June 30, 2017 and 2016:

	Three months ended June 30,				Six months ended June 30,
	2017		2016		2017		2016
Total cost of repurchased shares (in thousands):	$	30,801	$	49,853	$	85,063	$	102,313
Shares repurchased		150,000		380,134		450,000		780,134
Weighted average price per share	$	205.34	$	131.15	$	189.03	$	131.15

In March 2017, the Board of Directors authorized an additional $100.0 million for stock repurchase under Chemed’s existing share repurchase program. We currently have $65.1 million of authorization remaining under this share repurchase plan.

16.   Recent Accounting Statements

In May 2014, the FASB issued Accounting Standards Update “ASU No. 2014-09 – Revenue from Contracts with Customers” which provides additional guidance to clarify the principles for recognizing revenue.  The standard and subsequent amendments are intended to develop a common revenue standard for removing inconsistencies and weaknesses, improve comparability, provide more useful information to users through improved disclosure requirements, and simplify the preparation of financial statements. This guidance and subsequent amendments are effective for fiscal years beginning after December 15, 2017.    We are in the process of analyzing various contractual arrangements with customers at each subsidiary.  We believe that it is likely, as a result of adopting the ASU that certain expenses currently included in bad debt expense will be shown as contractual allowances (i.e. net revenue).  We currently do not have an estimate of the magnitude of this potential impact.  We anticipate a modified retrospective adoption of the ASU.

In February 2016, the FASB issued Accounting Standards Update “ASU No. 2016-02 – Leases” which introduces a lessee model that brings most leases on to the balance sheets and updates lessor accounting  to align with changes in the lessee model and the revenue recognition standard.   The guidance is effective for fiscal years beginning after December 15, 2018.  We are currently evaluating the impact of this ASU on our financial statements, existing lease recognition policies and disclosures.

In August 2016, the FASB issued Accounting Standards Update “ASU No. 2016-15 – Cash Flow Classification” which amends guidance on the classification of certain cash receipts and payments in the statement of cash flows.  The primary purpose of ASU 2016-15 is to reduce diversity in practice related to eight specific cash flow issues.  The guidance in this ASU is effective for fiscal years beginning after December 15, 2017.    We have analyzed the impact of ASU 2016-15 on our statement of cash flows and do not expect it to have a material effect.

In January 2017, the FASB issued Accounting Standards Update “ASU No. 2017-4 – Intangibles – Goodwill and Other”.  To simplify the subsequent measurement of goodwill, the FASB eliminated Step 2 from the goodwill impairment test.  The guidance in the ASU is effective for the Company in fiscal years beginning after December 15, 2019.  Early adoption is permitted.  We anticipate adoption of this standard will have no impact on our consolidated financial statements.

- 14 -

17.   Goodwill

Shown below is movement in Goodwill (in thousands):

	Vitas		Roto-Rooter		Total
Balance at December 31, 2016	$	328,301	$	144,065	$	472,366
Business combinations		-		481		481
Foreign currency adjustments		-		50		50
Balance at June 30, 2017	$	328,301	$	144,596	$	472,897

- 15 -

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, drain cleaning, water restoration and other related 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 June 30,						Six months ended June 30,
		2017			2016			2017			2016
Service revenues and sales	$	415,059		$	390,409		$	820,923		$	$780,798
Net income/(loss)	$	(21,656	)	$	24,885		$	8,188		$	$49,725
Diluted EPS/(LPS)	$	(1.35	)	$	1.48		$	0.49		$	$2.93
Adjusted net income	$	35,907		$	30,228		$	66,402		$	$57,982
Adjusted diluted EPS	$	2.15		$	1.80		$	3.96		$	$3.41
Adjusted EBITDA	$	68,497		$	58,523		$	128,316		$	$113,003
Adjusted EBITDA as a % of revenue		16.5	%		15.0	%		15.6	%		14.5	%

Adjusted net income, adjusted diluted EPS, earnings before interest, taxes and depreciation and amortization (“EBITDA”), Adjusted EBITDA and Adjusted EBITDA as a % of revenue are not measures derived in accordance with GAAP.  We provide non-GAAP measures to help readers evaluate our operating results and to compare our operating performance with that of similar companies that have different capital structures.  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 is presented on pages 29-31.

Net income/(loss) for the three and six months ended June 30, 2017 includes $55.8 million ($3.49 per share) of after-tax expense ($90 million pre-tax) for the accrual of a potential litigation settlement related to the May 2, 2013 complaint filed against the Company by the U.S. Department of Justice.  As required by U.S. Generally Accepted Accounting Principles, the Company accrues for contingent loss claims in its financial statements when it is probable that a liability has been incurred and the amount can be reasonably estimated.  Based on recent case developments, including recent mediation discussions with the U.S. Department of Justice, the Company believes that it probable that this matter will be settled, and that such settlement will include settlement payments and relator attorney fees, by the Company of approximately the accrued amount.  However, the achievement of a final, definitive settlement will require the parties to resolve several outstanding issues (and draft and negotiate related definitive documentation), and there can be no assurance that such a final, definitive settlement will be reached and agreed on these or other terms.

For the three months ended June 30, 2017, the increase in consolidated service revenues and sales was driven by a 16.7% increase at Roto-Rooter and a 2.1% increase at VITAS.  The increase in service revenues at Roto-Rooter was driven by an increase in all major service lines, of Roto-Rooter’s total revenue increase 46.9% is related to water restoration.  The increase in service revenues at VITAS was primarily a result of Medicare reimbursement rates increasing 1.7%, a 2.8% increase in average daily census, offset by acuity mix shift which negatively impacted revenue 2.5% when compared to the prior year period.  Adjusted EBITDA as a percent of revenue increased 150 basis points when compared to the prior year quarter mainly as a result of the increase in adjusted net income.  See page 32 for additional VITAS operating metrics.

For the six months ended June 30, 2017, the increase in consolidated service revenues and sales was driven by a 13.1% increase at Roto-Rooter and a 1.9% increase at VITAS.  The increase in service revenues at Roto-Rooter was driven by an increase in all major service lines, of Roto-Rooter’s total revenue increase 49.0% was related to water restoration.  The increase in service revenues at VITAS was primarily a result of Medicare reimbursement rates increasing 1.7%, a 3.2% increase in average daily census, offset by acuity mix shift which negatively impacted revenue when compared to the prior year period.  Adjusted EBITDA as a percent of revenue increased 110 basis points when compared to the prior year quarter mainly as a result of the increase in adjusted net income.  See page 32 for additional VITAS operating metrics.

- 16 -

VITAS expects its full-year 2017 revenue growth, prior to Medicare cap, to be in the range of 2.0% to 3.0%.  Admissions and Average Daily Census in 2017 are estimated to expand approximately 3.0% to 5.0%.  Adjusted EBITDA margin, prior to Medicare cap, is estimated to be 15.0% to 15.5%.  This guidance includes $2.5 million for Medicare cap billing limitations. Roto-Rooter expects full-year 2017 revenue growth of 12.0% to 13.0%.  The revenue estimate is a based upon increased job pricing of approximately 2.0% and continued growth in water restoration services.  Adjusted EBITDA margin for 2017 is estimated in the range of 22.0% to 22.5%.  We anticipate that our operating income and cash flows will be sufficient to operate our businesses and meet any commitments for the foreseeable future.

Financial Condition

Liquidity and Capital Resources

Material changes in the balance sheet accounts from December 31, 2016 to June 30, 2017 include the following:

• A $14.1 million decrease in accounts receivable due mainly to timing of Medicare and Medicaid payments.

• An $18.9 million increase in properties plant and equipment mainly due to the purchase of transportation equipment during the quarter.

• A $20.6 million increase in deferred taxes associated with amounts recorded for a potential litigation settlement.

• A $9.6 million increase in accounts payable mainly due to transportation equipment accrued but not paid at June 30, 2017.

• A $5.9 million decrease in accrued compensation due to the payments of cash bonuses accrued in 2016.

• A $90.7 million increase in accrued legal due to a potential litigation settlement.

• A $16.3 million increase in long-term debt due to borrowings on our revolving line of credit.

Net cash provided by operating activities increased $26.9 million mainly as a result of a $14.3 million increase in net income excluding potential litigation settlement and a $6.6 million decrease in accounts receivable.  The potential litigation settlement recorded is non-cash at June 30, 2017 and does not impact net cash provided by operating activities.

Significant changes in our accounts receivable balances are typically driven mainly by the timing of payments received from the Federal government at our VITAS subsidiary.  We typically receive a payment in excess of $40.0 million from the Federal government from hospice services every other Friday.  The timing of period end will have a significant impact on the accounts receivable at VITAS.  These changes generally normalize over a two year period, as cash flow variations in one year are offset in the following year.

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 $36.1 million in standby letters of credit as of June 30, 2017, mainly for insurance purposes.  Issued letters of credit reduce our available credit under the revolving credit agreement.  As of June 30, 2017, we have approximately $268.9 million of unused lines of credit available and eligible to be drawn down under our revolving credit facility. 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 June 30, 2017 and anticipate remaining in compliance throughout the foreseeable future.

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.  Other than as described below with respect to U.S. v. Vitas, 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 reasonably estimable.

- 17 -

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 qui tam lawsuits and 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.  The defendants filed a motion to dismiss on September 24, 2013.  On September 30, 2014, the Court denied the motion, except to the extent that claims were filed before July 24, 2002. On November 13, 2014, the government filed a Second Amended Complaint.  The Second 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.  VITAS filed its Answer to the Second Amended Complaint on August 11, 2015.  This case is in the discovery phase.  Based on recent case developments, including recent mediation discussions with the U.S. Department of Justice, we believe it probable that this matter will be settled, to include payments of $55.8 million after-tax ($90.0 million pretax) including attorneys’ fees.  A final settlement will require the parties to resolve several outstanding issues, and to draft and negotiate definitive documentation.  There can be no assurance that such a final definitive settlement will be reached on these, or other, terms.  For additional procedural history of this litigation, please refer to our prior quarterly and annual filings.  The costs incurred related to U.S. v. Vitas and related regulatory matters were $2.1 million and $1.2 million for the quarters ended June 30, 2017 and 2016, respectively.  For the six months ended June 30, 2017 and 2016, the net costs were $4.2 million and $3.5 million respectively.

Net income/(loss) for the three and six months ended June 30, 2017 includes the $55.8 million of after-tax expense ($90 million pre-tax) for the accrual of such potential litigation settlement.  As required by U.S. Generally Accepted Accounting Principles, the Company accrues for contingent loss claims in its financial statements when it is probable that a liability has been incurred and the amount can be reasonably estimated.

The Company and certain current and former directors and officers are defendants in a case captioned In re Chemed Corp. Shareholder Derivative Litigation, No. 13 Civ. 1854 (LPS) (CJB) (D. Del.), which was consolidated on February 2, 2015.

On February 2, 2015, the Court appointed KBC Asset Management NV the sole lead plaintiff and its counsel, the sole lead and liaison counsel. On March 3, 2015, Lead Plaintiff KBC designated its Complaint as the operative complaint in the consolidated proceedings and defendants renewed a previously filed motion to dismiss those claims and allegations.  The consolidated Complaint named fourteen individual defendants, together with the Company as nominal defendant.  The Complaint alleges a claim for breach of fiduciary duty against the individual defendants for allegedly permitting the Company to submit false claims to the U.S. government.  The Complaint 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 May 12, 2016, the Court issued a Memorandum Order granting Chemed’s motion to dismiss, and  dismissing Lead Plaintiff KBC’s Complaint without prejudice to KBC’s opportunity to file within 30 days of the date of the Court’s Order (i.e., by June 13, 2016) an amended Complaint addressing the deficiencies in its duty of loyalty claim.  Lead Plaintiff KBC did not file an amended Complaint within the time specified by the Court.

However, on June 13, 2016, counsel for Chemed shareholder Michael Kvint filed a letter with the Court requesting a two-week extension to file a motion to substitute Mr. Kvint as lead plaintiff, in place of Lead Plaintiff KBC and to file an amended Complaint.  Alternatively, counsel for Mr. Kvint requested that any dismissal of the action be with prejudice to KBC only.  On June 14, 2016, Chemed filed a reply letter with the Court, reserving its rights to oppose any motion filed by Mr. Kvint and, if warranted, to oppose any other actions taken by Mr. Kvint to proceed with the action (including by filing an untimely amended Complaint).  On June 21, 2016, the Court entered an Oral Order providing Mr. Kvint until June 30, 2016 to file a Motion to Substitute and Motion for Leave to File an Amended Complaint.  On that date, Mr. Kvint filed, under seal, a Motion to Substitute Plaintiff and File Amended Complaint, and attached a Proposed Amended Complaint.    Mr. Kvint’s motion was fully briefed by the parties.  On April 25, 2017, Magistrate Judge Burke issued a Report and Recommendation recommending that the Court permit Mr. Kvint to intervene as Lead Plaintiff and grant leave to amend the complaint to replead the duty of loyalty claim only.  On May 16, 2017, Chief Judge Stark signed an Order adopting that Report and Recommendation.  Plaintiff Kvint filed a Corrected Amended Complaint on May 30, 2017.  On July 25, 2017, the Court entered an order permitting Defendants to file a Motion to Dismiss the Corrected Amended Complaint on or before August 14, 2017, with Plaintiff’s Answering Brief in opposition to the Motion to Dismiss to be filed on or before October 16, 2017, and Defendants’ Reply Brief in support of the Motion to Dismiss to be filed on or before November 13, 2017.  As the Company has previously disclosed, the legal fees and costs associated with defending against this lawsuit are presently being paid by insurance. For additional procedural history of this litigation, please refer to our prior quarterly and annual filings.

Jordan Seper, (“Seper”) a Registered Nurse at VITAS' Inland Empire program from May 12, 2014 to March 21, 2015, filed a lawsuit in San Francisco Superior Court on September 26, 2016.  She alleged VITAS Healthcare Corp of CA (“VITAS CA”) (1) failed to provide minimum wage for all hours worked; (2) failed to provide overtime for all hours worked; (3) failed to provide a second meal period; (4) failed to provide rest breaks; (5) failed to indemnify for necessary expenditures; (6) failed to timely pay wages due at time of separation; and (7) engaged in unfair business practices.  Seper seeks a state-wide class action of current and former non-exempt employees employed with VITAS in California within the four years preceding the filing of the lawsuit.  She seeks court determination that this action may be maintained as a class action for the entire California class and subclasses, designation as class representative, declaratory relief, injunctive relief, damages (including wages for regular or overtime hours allegedly worked but not paid, premium payments for missed meal or rest periods, and unreimbursed expenses), all applicable penalties associated with each claim, pre and post-judgment interest, and attorneys' fees and costs.  Seper served VITAS CA with the lawsuit,  Jordan A. Seper on behalf of herself and others similarly situated v. VITAS Healthcare Corporation of California, a Delaware corporation; VITAS Healthcare Corp of CA, a business entity unknown; and DOES 1 to 100, inclusive; Los Angeles Superior Court Case Number BC 642857 on October 13, 2016.

- 18 -

On November 14, 2016, the Parties filed a Stipulation to transfer the venue of the lawsuit from San Francisco to Los Angeles.  The Los Angeles Superior Court Complex Division accepted transfer of the case on December 6, 2016 and stayed the case.  On December 16, 2016, VITAS CA filed its Answer and served written discovery on Seper.

Jiwan Chhina ("Chhina"), hired by VITAS as a Home Health Aide on February 5, 2002, is currently a Licensed Vocational Nurse for VITAS' San Diego program.  On September 27, 2016, Chhina filed a lawsuit in San Diego Superior Court, alleging (1) failure to pay minimum wage for all hours worked; (2) failure to provide overtime for all hours worked; (3) failure to pay wages for all hours at the regular rate; (4) failure to provide meal periods; (5) failure to provide rest breaks; (6) failure to provide complete and accurate wage statements; (7) failure to pay for all reimbursement expenses; (8) unfair business practices; and (9) violation of the California Private Attorneys General Act.  Chhina seeks to pursue these claims in the form of a state-wide class action of current and former non-exempt employees employed with VITAS in California within the four years preceding the filing of the lawsuit.  He seeks court determination that this action may be maintained as a class action for the entire California class and subclasses, designation as class representative, declaratory relief, injunctive relief, damages (including wages for regular or overtime hours allegedly worked but not paid, premium payments for missed meal or rest periods, and unreimbursed expenses), all applicable penalties associated with each claim, pre-judgment interest, and attorneys' fees and costs.  Chhina served VITAS CA with the lawsuit, Jiwann Chhina v. VITAS Health Services of California, Inc., a California corporation; VITAS Healthcare Corporation of California, a Delaware corporation; VITAS Healthcare Corporation of California, a Delaware corporation dba VITAS Healthcare, Inc.; and DOES 1 to 100, inclusive; San Diego Superior Court Case Number 37-2015-00033978-CU-OE-CTL on November 3, 2016.  On December 1, 2016, VITAS filed its Answer and served written discovery on Chhina.

The Court in Seper lifted the stay at the Initial Status Conference on May 11, 2017.  At the Conference, Seper’s counsel informed the Court that he was in contact with Jiwan Chhina’s counsel to consolidate the two cases.  The Court set a Further Status Conference for July 13, 2017 expressly to receive a status update on the consolidation efforts.  If the cases are consolidated and proceed under the jurisdiction of the Los Angeles Superior Court Complex Division,  the Chhina case in the San Diego Superior Court would then be dismissed.  The Parties have agreed to stay further discovery efforts pending the issue of consolidation of the two cases.  Counsel for Seper and counsel for Chhina are currently preparing a joint Amended Complaint.

The Company is not able to reasonably estimate the probability of loss or range of loss for either of these lawsuits at this time.

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, 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.

- 19 -

Results of Operations

Three months ended June 30, 2017 versus 2016 - Consolidated Results

Our service revenues and sales for the second quarter of 2017 increased 6.3% versus services and sales revenues for the second quarter of 2016.  Of this increase, a $6.0 million increase was attributable to VITAS and $18.7 million increase was attributable to Roto-Rooter.  The following chart shows the components of those changes (in thousands):

	Increase/(Decrease)
	Amount			Percent
VITAS
Routine homecare	$	11,978			5.5
Continuous care		(3,271	)		(9.4	)
General inpatient		(2,489	)		(10.2	)
Medicare cap		(247	)		-
Roto-Rooter
Plumbing		6,469			13.3
Drain cleaning		1,599			4.4
Water restoration		8,763			72.1
Contractor operations		1,381			14.1
Other		467			9.5
Total	$	24,650			6.3

The increase in VITAS’ revenues for the second quarter of 2017 versus the second quarter of 2016 was comprised of an average net Medicare reimbursement rate increasing approximately 1.7%, a 2.8% increase in days of care offset by acuity mix shift which negatively impacted revenue 2.5% when compared to the prior year period.

Days of care during the quarter ended June 30 were as follows:

	Days of Care				Increase/(Decrease)
	2017		2016		Percent
Routine homecare		1,417,840		1,366,985		3.7
Continuous care		43,108		47,775		(9.8	)
General inpatient		31,251		36,833		(15.2	)
Total days of care		1,492,199		1,451,593		2.8

Over 90% of VITAS’ service revenues for the period were from Medicare and Medicaid.

The increase in plumbing revenues for the second quarter of 2017 versus 2016 is attributable to a 10.6% increase in price and service mix shift as well as a 2.7% increase in job count.  Drain cleaning revenues for the second quarter of 2017 versus 2016 reflect a 6.4% increase in price and service mix shift offset by a 2.0% decrease in job count.  Water restoration for the second quarter of 2017 versus 2016 increased 72.1% as a result of continued expansion of this service offering in all Roto-Rooter locations.  Contractor operations increased 14.1% mainly due to their expansion into water restoration.

The consolidated gross margin was 31.1% in the second quarter of 2017 as compared with 29.2% in the second quarter of 2016.  On a segment basis, VITAS’ gross margin was 22.8% in the second quarter of 2017 as compared with 21.5%, in the second quarter of 2016.  The increase in VITAS gross margin is the result of labor and ancillary cost management.  The Roto-Rooter segment’s gross margin was 49.3% for the second quarter of 2017 compared with 48.5% in the second quarter of 2016.  The increase in Roto-Rooter gross margin is the result mainly of higher revenues, particularly in water restoration, allowing more fixed costs to be covered.

- 20 -

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

	Three months ended June 30,
	2017		2016
SG&A expenses before market value adjustments of deferred compensation
plans, long-term incentive compensation, and OIG investigation expenses	$	64,018	$	57,771
Expenses related to OIG investigation		2,093		1,170
Impact of market value adjustments related to assets held in deferred
compensation trusts		1,587		3,188
Long-term incentive compensation		956		499
Total SG&A expenses	$	68,654	$	62,628

SG&A expenses before long-term incentive compensation, expenses related to OIG investigation and the impact of market value adjustments related to assets held in deferred compensation trusts for the second quarter of 2017 were up 10.8% when compared to the second quarter of 2016. This increase was mainly a result of the increase in variable expenses caused by increased revenue, particularly in the Roto-Rooter segment, increased advertising expense at Roto-Rooter and normal salary increases in 2017.

Other operating expenses were $90.6 million in the second quarter of 2017 due to $90.0 million related to a potential litigation settlement and $636,000 due to the closure of the programs in one state at Vitas. $4.5 million related to early retirement expenses were included in other operating expenses in the second quarter of 2016.

Other income/(expense) - net comprise (in thousands):

	Three months ended June 30,
	2017			2016
Market value adjustment on assets held in
deferred compensation trusts	$	1,587		$	3,188
Interest income		161			85
Loss on disposal of property and equipment		(98	)		(57	)
Other		3			1
Total other income/(expense) - net	$	1,653		$	3,217

Our effective income tax rate was 43.6% in the second quarter of 2017 (tax benefit) compared to 38.7% (tax expense) during the second quarter of 2016.  The change in the effective income tax rate is a result of the adoption of ASU No. 2016-09 – Compensation – Stock Compensation in 2017 which requires that the excess tax benefits from stock based compensation now be recorded in the income tax provision on the statements of income.

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

	Three months ended June 30,
	2017			2016
VITAS
Potential litigation settlement	$	(55,800	)	$	-
Expenses related to OIG investigation		(1,292	)		(722	)
Program closure expenses		(385	)		-
Medicare cap sequestration adjustment		(65	)		-
Early retirement expenses		-			(2,840	)
Roto-Rooter
Expenses related to litigation settlements		(129	)		(27	)
Corporate
Excess tax benefits on stock compensation		2,643			-
Stock option expense		(1,931	)		(1,440	)
Long-term incentive compensation		(604	)		(316	)
Expenses related to securities litigation		-			2
Total	$	(57,563	)	$	(5,343	)

- 21 -

Three months ended June 30, 2017 versus 2016 - Segment Results

The change in net income/(loss) for the second quarter of 2017 versus the second quarter of 2016 is due to (in thousands):

	Increase/(Decrease)
	Amount			Percent
VITAS	$	(50,804	)		(273.9	)
Roto-Rooter		3,717			27.9
Corporate		546			7.8
	$	(46,541	)		(187.0	)

VITAS’ net loss was the result of a $55.8 million (after-tax) potential litigation settlement.

Roto-Rooter’s net income was positively impacted in 2017 compared to 2016 primarily by an $8.8 million revenue increase in Roto-Rooter’s water restoration line of business, a $6.5 million increase in plumbing revenue and a $3.4 million increase in all other revenue types.  After-tax earnings as a percent of revenue at Roto-Rooter in the second quarter of 2017 was 13.1% as compared to 11.9% in the second quarter of 2016.

The improvement at Corporate is due mainly to the impact of the adoption of ASU 2016-09 which positively impacted the Company’s tax provision by approximately $2.6 million.

Results of Operations

Six months ended June 30, 2017 versus 2016 - Consolidated Results

Our service revenues and sales for the first six months of 2017 increased 5.1% versus services and sales revenues for the first six months of 2016.  Of this increase, a $10.8 million increase was attributable to VITAS and $29.4 million increase was attributable to Roto-Rooter.  The following chart shows the components of those changes (in thousands):

	Increase/(Decrease)
	Amount			Percent
VITAS
Routine homecare	$	22,665			5.2
Continuous care		(7,575	)		(10.5	)
General inpatient		(4,083	)		(8.2	)
Medicare cap		(247	)		-
Roto-Rooter
Plumbing		9,591			9.9
Drain cleaning		2,011			2.8
Water restoration		14,388			58.5
Contractor operations		2,548			13.0
Other		827			8.1
Total	$	40,125			5.1

The increase in VITAS’ revenues for the first six months of 2017 versus the first six months of 2016 was comprised of an average net Medicare reimbursement rate increasing approximately 1.7%, a 2.6% increase in days of care offset by acuity mix shift which negatively impacted revenue when compared to the prior year period.

Days of care during the six months ended June 30 were as follows:

	Days of Care				Increase/(Decrease)
	2017		2016		Percent
Routine homecare		2,798,388		2,702,152		3.6
Continuous care		88,525		98,745		(10.3	)
General inpatient		65,236		75,082		(13.1	)
Total days of care		2,952,149		2,875,979		2.6

- 22 -

Over 90% of VITAS’ service revenues for the period were from Medicare and Medicaid.

The increase in plumbing revenues for the first six months of 2017 versus 2016 is attributable to a 9.5% increase in price and service mix shift as well as a 0.4% increase in job count.  Drain cleaning revenues for the first six months of 2017 versus 2016 reflect a 6.4% increase in price and service mix shift offset by a 3.6% decrease in job count.  Water restoration for the first six months of 2017 versus 2016 increased 58.5% as a result of continued expansion of this service offering in all Roto-Rooter locations.  Contractor operations increased 13.0% mainly due to their expansion into water restoration.

The consolidated gross margin was 30.4% in the first six months of 2017 as compared with 29.0% in the first six months of 2016.  On a segment basis, VITAS’ gross margin was 22.1% in the first six months of 2017 as compared with 21.3%, in the first six months of 2016.  The increase in VITAS’ gross margin is the result of labor and ancillary cost management.  The Roto-Rooter segment’s gross margin was 49.0% for the first six months of 2017 compared with 48.0% in the first six months of 2016.  The increase in the Roto-Rooter gross margin is the result mainly of higher revenues, particularly in water restoration, allowing more fixed costs to be covered.

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

	Six months ended June 30,
	2017		2016
SG&A expenses before market value adjustments of deferred compensation
plans, long-term incentive compensation, and OIG investigation expenses	$	127,750	$	117,708
Expenses related to OIG investigation		4,243		3,506
Impact of market value adjustments related to assets held in deferred
compensation trusts		4,202		201
Long-term incentive compensation		1,917		258
Total SG&A expenses	$	138,112	$	121,673

SG&A expenses before long-term incentive compensation, expenses related to OIG investigation and the impact of market value adjustments related to assets held in deferred compensation trusts for the first six months of 2017 were up 8.5% when compared to the first six months of 2016. This increase was mainly a result of the increase in variable expenses caused by increased revenue, particularly in the in the Roto-Rooter segment, increased advertising expense at Roto-Rooter and normal salary increases in 2017.

Other operating expenses were $91.5 million during the first six months of 2017 related to a $90.0 million potential litigation settlement and $1.5 million related to the closure of the programs in one state at Vitas.  During the first six months of 2016, the Company recorded $4.5 million related to early retirement expenses.

Other income/(expense) - net comprise (in thousands):

	Six months ended June 30,
	2017			2016
Market value adjustment on assets held in
deferred compensation trusts	$	4,202		$	201
Loss on disposal of property and equipment		(334	)		(90	)
Interest income		245			182
Other		3			-
Total other income/(expense) - net	$	4,116		$	293

Our effective income tax rate was 81.7% in the first six months of 2017 compared to 38.8% during the first six months of 2016.  The change in the effective income tax rate is due to the adoption of ASU No. 2016-09 – Compensation – Stock Compensation which requires that the excess tax benefits from stock based compensation now be recorded in the income tax provision on the statements of income.

- 23 -

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

	Six Months Ended June 30,
	2017			2016
VITAS
Potential litigation settlement	$	(55,800	)	$	-
Expenses related to OIG investigation		(2,620	)		(2,165	)
Program closure expenses		(898	)		-
Medicare cap sequestration adjustment		(65	)		-
Early retirement expenses		-			(2,840	)
Roto-Rooter
Expenses related to litigation settlements		(129	)		(27	)
Corporate
Excess tax benefits on stock compensation		6,338			-
Stock option expense		(3,828	)		(3,061	)
Long-term incentive compensation		(1,212	)		(164	)
Total	$	(58,214	)	$	(8,257	)

Six months ended June 30, 2017 versus 2016 - Segment Results

The change in net income/(loss) for the first six months of 2017 versus the first six months of 2016 is due to (in thousands):

	Increase/(Decrease)
	Amount				Percent
VITAS		$	(49,294	)		(131.0	)
Roto-Rooter			5,323			20.2
Corporate			2,434			17.1
		$	(41,537	)		(83.5	)

VITAS’ 2017 net loss was the result of a $55.8 million (after-tax) potential ligation settlement.

Roto-Rooter’s net income was positively impacted in 2017 compared to 2016 primarily by a $14.4 million revenue increase in Roto-Rooter’s water restoration line of business, a $9.6 million increase in plumbing revenue and a $5.4 million increase in all other revenue types.  After-tax earnings as a percent of revenue at Roto-Rooter in 2017 were 12.5% as compared to 11.7% in 2016.

The improvement at Corporate is due mainly to the impact of the adoption of ASU 2016-09 which positively impacted the Company’s tax provision by approximately $6.3 million.

- 24 -

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENT OF INCOME
FOR THE THREE MONTHS ENDED JUNE 30, 2017
(in thousands)(unaudited)
										Chemed
	VITAS			Roto-Rooter			Corporate			Consolidated
2017 (a)
Service revenues and sales	$	284,710		$	130,349		$	-		$	415,059
Cost of services provided and goods sold		219,769			66,083			-			285,852
Selling, general and administrative expenses		24,531			33,763			10,360			68,654
Depreciation		4,741			4,070			22			8,833
Amortization		-			32			-			32
Other operating expenses		90,636			-			-			90,636
Total costs and expenses		339,677			103,948			10,382			454,007
Income/(loss) from operations		(54,967	)		26,401			(10,382	)		(38,948	)
Interest expense		(53	)		(87	)		(981	)		(1,121	)
Intercompany interest income/(expense)		2,826			1,346			(4,172	)		-
Other income/(expense)—net		71			(4	)		1,586			1,653
Income/(expense) before income taxes		(52,123	)		27,656			(13,949	)		(38,416	)
Income taxes		19,869			(10,598	)		7,489			16,760
Net income/(loss)	$	(32,254	)	$	17,058		$	(6,460	)	$	(21,656	)
(a) The following amounts are included in net income (in thousands):

										Chemed
	VITAS			Roto-Rooter			Corporate			Consolidated
Pretax benefit/(cost):
Potential litigation settlement	$	(90,000	)	$	-		$	-		$	(90,000	)
Medicare cap sequestration adjustment		(105	)		-			-			(105	)
Stock option expense		-			-			(3,054	)		(3,054	)
Long-term incentive compensation		-			-			(956	)		(956	)
Expenses related to litigation setlements		-			(213	)		-			(213	)
Program closure expenses		(636	)		-			-			(636	)
Expenses related to OIG investigation		(2,093	)		-			-			(2,093	)
Total	$	(92,834	)	$	(213	)	$	(4,010	)	$	(97,057	)
										Chemed
	VITAS			Roto-Rooter			Corporate			Consolidated
After-tax benefit/(cost):
Potential litigation settlement	$	(55,800	)	$	-		$	-		$	(55,800	)
Medicare cap sequestration adjustment		(65	)		-			-			(65	)
Stock option expense		-			-			(1,931	)		(1,931	)
Long-term incentive compensation		-			-			(604	)		(604	)
Expenses related to litigation setlements		-			(129	)		-			(129	)
Program closure expenses		(385	)		-			-			(385	)
Expenses related to OIG investigation		(1,292	)		-			-			(1,292	)
Excess tax benefits on stock compensation		-			-			2,643			2,643
Total	$	(57,542	)	$	(129	)	$	108		$	(57,563	)

- 25 -

CONSOLIDATING STATEMENT OF INCOME
FOR THE THREE MONTHS ENDED JUNE 30, 2016
(in thousands)(unaudited)
										Chemed
	VITAS			Roto-Rooter			Corporate			Consolidated
2016 (a)
Service revenues and sales	$	278,739		$	111,670		$	-		$	390,409
Cost of services provided and goods sold		218,694			57,561			-			276,255
Selling, general and administrative expenses		22,638			29,448			10,542			62,628
Depreciation		4,814			3,628			139			8,581
Amortization		14			77			-			91
Other operating expenses		4,491			-			-			4,491
Total costs and expenses		250,651			90,714			10,681			352,046
Income/(loss) from operations		28,088			20,956			(10,681	)		38,363
Interest expense		(59	)		(92	)		(820	)		(971	)
Intercompany interest income/(expense)		1,927			866			(2,793	)		-
Other income/(expense)—net		38			(12	)		3,191			3,217
Income/(expense) before income taxes		29,994			21,718			(11,103	)		40,609
Income taxes		(11,444	)		(8,377	)		4,097			(15,724	)
Net income/(loss)	$	18,550		$	13,341		$	(7,006	)	$	24,885
(a) The following amounts are included in net income (in thousands):
										Chemed
	VITAS			Roto-Rooter			Corporate			Consolidated
Pretax benefit/(cost):
Early retirement expenses	$	(4,491	)	$	-		$	-		$	(4,491	)
Stock option expense		-			-			(2,277	)		(2,277	)
Long-term incentive compensation		-			-			(499	)		(499	)
Expenses related to securities litigation		-			-			3			3
Expenses related to litigation settlements		-			(44	)		-			(44	)
Expenses related to OIG investigation		(1,170	)		-			-			(1,170	)
Total	$	(5,661	)	$	(44	)	$	(2,773	)	$	(8,478	)
										Chemed
	VITAS			Roto-Rooter			Corporate			Consolidated
After-tax benefit/(cost):
Early retirement expenses	$	(2,840	)	$	-		$	-		$	(2,840	)
Stock option expense		-			-			(1,440	)		(1,440	)
Long-term incentive compensation		-			-			(316	)		(316	)
Expenses related to securities litigation		-			-			2			2
Expenses related to litigation settlements		-			(27	)		-			(27	)
Expenses related to OIG investigation		(722	)		-			-			(722	)
Total	$	(3,562	)	$	(27	)	$	(1,754	)	$	(5,343	)

- 26 -

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENT OF INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 2017
(in thousands)(unaudited)
										Chemed
	VITAS			Roto-Rooter			Corporate			Consolidated
2017 (a)
Service revenues and sales	$	567,026		$	253,897		$	-		$	820,923
Cost of services provided and goods sold		441,446			129,546			-			570,992
Selling, general and administrative expenses		48,825			67,223			22,064			138,112
Depreciation		9,519			8,054			153			17,726
Amortization		14			64			-			78
Other operating expenses		91,509			-			-			91,509
Total costs and expenses		591,313			204,887			22,217			818,417
Income/(loss) from operations		(24,287	)		49,010			(22,217	)		2,506
Interest expense		(108	)		(185	)		(1,823	)		(2,116	)
Intercompany interest income/(expense)		5,528			2,656			(8,184	)		-
Other income/(expense)—net		(9	)		(77	)		4,202			4,116
Income/(expense) before income taxes		(18,876	)		51,404			(28,022	)		4,506
Income taxes		7,219			(19,722	)		16,185			3,682
Net income/(loss)	$	(11,657	)	$	31,682		$	(11,837	)	$	8,188
(a) The following amounts are included in net income (in thousands):
											Chemed
		VITAS			Roto-Rooter			Corporate			Consolidated
Pretax benefit/(cost):
Potential litigation settlement	$	(90,000	)	$	-		$	-		$	(90,000	)
Medicare cap sequestration adjustments		(105	)		-			-			(105	)
Stock option expense		-			-			(6,055	)		(6,055	)
Long-term incentive compensation		-			-			(1,917	)		(1,917	)
Expenses related to litigation settlements		-			(213	)		-			(213	)
Program closure expenses		(1,509	)		-			-			(1,509	)
Expenses related to OIG investigation		(4,243	)		-			-			(4,243	)
Total	$	(95,857	)	$	(213	)	$	(7,972	)	$	(104,042	)
After-tax benefit/(cost):											Chemed
		VITAS			Roto-Rooter			Corporate			Consolidated
Potential litigation settlement	$	(55,800	)	$	-		$	-		$	(55,800	)
Medicare cap sequestration adjustments		(65	)		-			-			(65	)
Stock option expense		-			-			(3,828	)		(3,828	)
Long-term incentive compensation		-			-			(1,212	)		(1,212	)
Expenses related to litigation settlements		-			(129	)		-			(129	)
Program closure expenses		(898	)		-			-			(898	)
Expenses related to OIG investigation		(2,620	)		-			-			(2,620	)
Excess tax benefits on stock compensation		-			-			6,338			6,338
Total	$	(59,383	)	$	(129	)	$	1,298		$	(58,214	)

- 27 -

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENT OF INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 2016
(in thousands)(unaudited)
											Chemed
		VITAS			Roto-Rooter			Corporate				Consolidated
2016 (a)
Service revenues and sales	$	556,266		$	224,532		$	-			$	780,798
Cost of services provided and goods sold		437,960			116,730			-				554,690
Selling, general and administrative expenses		47,422			59,255			14,996				121,673
Depreciation		9,595			7,129			281				17,005
Amortization		27			156			-				183
Other operating expenses		4,491			-			-				4,491
Total costs and expenses		499,495			183,270			15,277				698,042
Income/(loss) from operations		56,771			41,262			(15,277	)			82,756
Interest expense		(117	)		(186	)		(1,510	)			(1,813	)
Intercompany interest income/(expense)		4,030			1,813			(5,843	)			-
Other income/(expense)—net		78			12			203				293
Income/(expense) before income taxes		60,762			42,901			(22,427	)			81,236
Income taxes		(23,125	)		(16,542	)		8,156				(31,511	)
Net income/(loss)	$	37,637		$	26,359		$	(14,271	)		$	49,725
(a) The following amounts are included in net income (in thousands):
										Chemed
		VITAS			Roto-Rooter			Corporate				Consolidated
Pretax benefit/(cost):
Stock option expense	$	-		$	-		$	(4,840	)		$	(4,840	)
Long-term incentive compensation		-			-			(258	)			(258	)
Early retirement expenses		(4,491	)		-			-				(4,491	)
Expenses related to litigation settlements		-			(44	)		-				(44	)
Expenses related to OIG investigation		(3,506	)		-			-				(3,506	)
Total	$	(7,997	)	$	(44	)	$	(5,098	)		$	(13,139	)
										Chemed
		VITAS			Roto-Rooter			Corporate				Consolidated
After-tax benefit/(cost):
Stock option expense	$	-		$	-		$	(3,061	)		$	(3,061	)
Long-term incentive compensation		-			-			(164	)			(164	)
Early retirement expenses		(2,840	)		-			-				(2,840	)
Expenses related to litigation settlements		-			(27	)		-				(27	)
Expenses related to OIG investigation		(2,165	)		-			-				(2,165	)
Total	$	(5,005	)	$	(27	)	$	(3,225	)		$	(8,257	)

- 28 -

Unaudited Consolidating Summary and Reconciliation of Adjusted EBITDA
Chemed Corporation and Subsidiary Companies
(in thousands)										Chemed
For the three months ended June 30, 2017	VITAS			Roto-Rooter			Corporate			Consolidated
Net income/(loss)	$	(32,254	)	$	17,058		$	(6,460	)	$	(21,656	)
Add/(deduct):
Interest expense		53			87			981			1,121
Income taxes		(19,869	)		10,598			(7,489	)		(16,760	)
Depreciation		4,741			4,070			22			8,833
Amortization		-			32			-			32
EBITDA		(47,329	)		31,845			(12,946	)		(28,430	)
Add/(deduct):
Intercompany interest expense/(income)		(2,826	)		(1,346	)		4,172			-
Interest income		(149	)		(12	)		-			(161	)
Potential litigation settlement		90,000			-			-			90,000
Expenses related to OIG investigation		2,093			-			-			2,093
Program closure expenses		636			-			-			636
Medicare cap sequestration adjustment		105			-			-			105
Amortization of stock awards		71			66			166			303
Advertising cost adjustment		-			(272	)		-			(272	)
Expenses related to litigation settlements		-			213			-			213
Stock option expense		-			-			3,054			3,054
Long-term incentive compensation		-			-			956			956
Adjusted EBITDA	$	42,601		$	30,494		$	(4,598	)	$	68,497
											Chemed
For the three months ended June 30, 2016		VITAS			Roto-Rooter			Corporate			Consolidated
Net income/(loss)	$	18,550		$	13,341		$	(7,006	)	$	24,885
Add/(deduct):
Interest expense		59			92			820			971
Income taxes		11,444			8,377			(4,097	)		15,724
Depreciation		4,814			3,628			139			8,581
Amortization		14			77			-			91
EBITDA		34,881			25,515			(10,144	)		50,252
Add/(deduct):
Intercompany interest expense/(income)		(1,927	)		(866	)		2,793			-
Interest income		(69	)		(16	)		-			(85	)
Expenses related to OIG investigation		1,170			-			-			1,170
Amortization of stock awards		85			74			276			435
Early retirement expenses		4,491			-			-			4,491
Expenses related to litigation settlements		-			44			-			44
Expenses related to securities litigation		-			-			(3	)		(3	)
Advertising cost adjustment		-			(557	)		-			(557	)
Stock option expense		-			-			2,277			2,277
Long-term incentive compensation		-			-			499			499
Adjusted EBITDA	$	38,631		$	24,194		$	(4,302	)	$	58,523

- 29 -

Unaudited Consolidating Summary and Reconciliation of Adjusted EBITDA
Chemed Corporation and Subsidiary Companies
(in thousands)													Chemed
For the six months ended June 30, 2017	VITAS				Roto-Rooter				Corporate				Consolidated
Net income/(loss)		$	(11,657	)		$	31,682			$	(11,837	)		$	8,188
Add/(deduct):
Interest expense			108				185				1,823				2,116
Income taxes			(7,219	)			19,722				(16,185	)			(3,682	)
Depreciation			9,519				8,054				153				17,726
Amortization			14				64				-				78
EBITDA			(9,235	)			59,707				(26,046	)			24,426
Add/(deduct):
Intercompany interest expense/(income)			(5,528	)			(2,656	)			8,184				-
Interest income			(219	)			(26	)			-				(245	)
Potential litigation settlements			90,000				-				-				90,000
Medicare cap sequestration adjustment			105				-				-				105
Program closure expenses			1,509				-				-				1,509
Expenses related to OIG investigation			4,243				-				-				4,243
Stock award amortization			148				136				354				638
Advertising cost adjustment			-				(545	)			-				(545	)
Expenses related to litigation settlements			-				213				-				213
Stock option expense			-				-				6,055				6,055
Long-term incentive compensation			-				-				1,917				1,917
Adjusted EBITDA		$	81,023			$	56,829			$	(9,536	)		$	128,316
													Chemed
For the six months ended June 30, 2016	VITAS				Roto-Rooter				Corporate				Consolidated
Net income/(loss)		$	37,637			$	26,359			$	(14,271	)		$	49,725
Add/(deduct):
Interest expense			117				186				1,510				1,813
Income taxes			23,125				16,542				(8,156	)			31,511
Depreciation			9,595				7,129				281				17,005
Amortization			27				156				-				183
EBITDA			70,501				50,372				(20,636	)			100,237
Add/(deduct):
Intercompany interest expense/(income)			(4,030	)			(1,813	)			5,843				-
Interest income			(148	)			(34	)			-				(182	)
Expenses related to OIG investigation			3,506				-				-				3,506
Early retirement expenses			4,491				-				-				4,491
Advertising cost adjustment			-				(1,165	)			-				(1,165	)
Stock award amortization			216				155				603				974
Expenses related to litigation settlements			-				44				-				44
Long-term incentive compensation			-				-				258				258
Stock option expense			-				-				4,840				4,840
Adjusted EBITDA		$	74,536			$	47,559			$	(9,092	)		$	113,003

- 30 -

RECONCILIATION OF ADJUSTED NET INCOME
(in thousands, except per share data)(unaudited)
	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
Net income/(loss) as reported	$	(21,656	)	$	24,885		$	8,188		$	49,725
Add/(deduct) after-tax cost of:
Potential litigation settlement		55,800			-			55,800			-
Excess tax benefits on stock compensation		(2,643	)		-			(6,338	)		-
Stock option expense		1,931			1,440			3,828			3,061
Expenses of OIG investigation		1,292			722			2,620			2,165
Long-term incentive compensation		604			316			1,212			164
Program closure expenses		385			-			898			-
Expenses related to litigation settlements		129			27			129			27
Medicare cap sequestration adjustment		65			-			65			-
Early retirement expenses		-			2,840			-			2,840
Expenses related to securities settlements		-			(2	)		-			-
Adjusted net income	$	35,907		$	30,228		$	66,402		$	57,982
Diluted Earnings Per Share As Reported
Net income/(loss)	$	(1.35	)	$	1.48		$	0.49		$	2.93
Average number of shares outstanding		16,010			16,831			16,758			16,999
Adjusted Diluted Earnings Per Share
Adjusted net income	$	2.15		$	1.80		$	3.96		$	3.41
Adjusted average number of shares outstanding		16,702			16,831			16,758			16,999

- 31 -

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
OPERATING STATISTICS FOR VITAS SEGMENT
(unaudited)
	Three Months Ended June 30,						Six Months Ended June 30,
OPERATING STATISTICS	2017			2016			2017			2016
Net revenue ($000)
Homecare	$	231,258		$	219,280		$	456,794		$	434,129
Inpatient		22,000			24,489			45,923			50,006
Continuous care		31,699			34,970			64,556			72,131
Total before Medicare cap allowance	$	284,957		$	278,739		$	567,273		$	556,266
Medicare cap allowance		(247	)		-			(247	)		-
Total	$	284,710		$	278,739		$	567,026		$	556,266
Net revenue as a percent of total before Medicare cap allowances
Homecare		81.2	%		78.7	%		80.5	%		78.0	%
Inpatient		7.7			8.8			8.1			9.0
Continuous care		11.1			12.5			11.4			13.0
Total before Medicare cap allowance		100.0			100.0			100.0			100.0
Medicare cap allowance		(0.1	)		-			-			-
Total		99.9	%		100.0	%		100.0	%		100.0	%
Average daily census (days)
Homecare		12,446			12,007			12,368			11,844
Nursing home		3,135			3,015			3,093			3,003
Routine homecare		15,581			15,022			15,461			14,847
Inpatient		343			405			360			412
Continuous care		474			525			489			543
Total		16,398			15,952			16,310			15,802
Total Admissions		16,311			16,180			33,874			33,048
Total Discharges		16,124			15,960			33,344			32,707
Average length of stay (days)		85.2			84.2			87.1			83.9
Median length of stay (days)		16.0			16.0			16.0			16.0
ADC by major diagnosis
Cerebro		34.8	%		31.9	%		34.7	%		31.7	%
Neurological		19.5			21.3			19.6			21.7
Cardio		16.5			17.6			16.5			17.4
Cancer		14.9			15.2			15.0			15.3
Respiratory		7.9			7.8			7.9			7.8
Other		6.4			6.2			6.3			6.1
Total		100.0	%		100.0	%		100.0	%		100.0	%
Admissions by major diagnosis
Cerebro		21.4			20.5	%		21.7	%		20.7	%
Neurological		10.7			10.8			10.8			11.0
Cancer		31.5			31.6			30.4			31.1
Cardio		15.1			15.7			15.1			15.7
Respiratory		10.2			10.2			11.0			10.6
Other		11.1			11.2			11.0			10.9
Total		100.0	%		100.0	%		100.0	%		100.0	%
Direct patient care margins
Routine homecare		52.8	%		51.9	%		52.1	%		52.0	%
Inpatient		3.7			4.6			4.8			5.1
Continuous care		18.0			13.8			16.8			14.5
Homecare margin drivers (dollars per patient day)
Labor costs	$	56.55		$	56.29		$	57.58		$	56.50
Combined drug, HME and medical supplies		14.51			15.92			14.82			15.69
Inpatient margin drivers (dollars per patient day)
Labor costs	$	377.13		$	341.29		$	373.41		$	339.98
Continuous care margin drivers (dollars per patient day)
Labor costs	$	583.87		$	610.58		$	587.39		$	604.80
Bad debt expense as a percent of revenues		1.1	%		1.2	%		1.1	%		1.3	%
Accounts receivable -- Days of revenue outstanding- excluding unapplied Medicare payments		34.5			37.7		n.a.			n.a.
Accounts receivable -- Days of revenue outstanding- including unapplied Medicare payments		28.0			26.6		n.a.			n.a.

- 32 -

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

The Company's primary market risk exposure relates to interest rate risk exposure through its variable interest line of credit.  At June 30, 2017, the Company had $125.0 million of variable rate debt outstanding.  For each $10 million dollars borrowed under the credit facility, an increase or decrease of 100 basis points (1% point), increases or decreases the Company's annual interest expense by $100,000.

The Company continually evaluates this interest rate exposure and periodically weighs the cost versus the benefit of fixing the variable interest rates through a variety of hedging techniques.

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.

- 33 -

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 six months of 2017:

	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, 2017		-	$	-		7,315,718	$	50,173,009
February 1 through February 28, 2017		104,358		178.39		7,420,076		31,556,555
March 1 through March 31, 2017		195,642		182.20		7,615,718	$	95,910,768
First Quarter Total		300,000	$	180.87
April 1 through April 30, 2017		-	$	-		7,615,718	$	95,910,768
May 31 through May 31, 2017		150,000		205.34		7,765,718		65,109,586
June 1 through June 30, 2017		-		-		7,765,718	$	65,109,586
Second Quarter Total		150,000	$	205.34
On March 13, 2017 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.

- 34 -

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 Michael D. Witzeman 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 Michael D. Witzeman 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:	July 31, 2017	By:	/s/ Kevin J. McNamara
			Kevin J. McNamara
			(President and Chief Executive Officer)
Dated:	July 31, 2017	By:	/s/ David P. Williams
			David P. Williams
			(Executive Vice President and Chief Financial Officer)
Dated:	July 31, 2017	By:	/s/ Michael D. Witzeman
			Michael D. Witzeman
			(Vice President and Controller)

- 35 -

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:	July 31, 2017	/s/ Kevin J. McNamara
		Kevin J. McNamara
		(President and Chief
		Executive Officer)

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:	July 31, 2017	/s/ David P. Williams
		David P. Williams
		(Executive Vice President and Chief Financial Officer)

EX-31.3

EXHIBIT 31.3

CERTIFICATION PURSUANT TO RULES 13a-14(a)/15d-14(a) OF THE EXCHANGE ACT OF 1934

I, Michael D. Witzeman 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:	July 31, 2017	/s/ Michael D. Witzeman
		Michael D. Witzeman
		(Vice President and
		Controller)

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 June 30, 2017 ("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.

Dated:	July 31, 2017	/s/ Kevin J. McNamara
		Kevin J. McNamara
		(President and Chief
		Executive Officer)

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 June 30, 2017 ("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.

Dated:	July 31, 2017	/s/ David P. Williams
		David P. Williams
		(Executive Vice President and Chief Financial Officer)

EX-32.3

EXHIBIT 32.3

CERTIFICATION BY MICHAEL D. WITZEMAN

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 June 30, 2017 ("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.

Dated:	July 31, 2017	/s/ Michael D. Witzeman.
		Michael D. Witzeman
		(Vice President and Controller)

XML

Document And Entity Information	6 Months Ended
	Jun. 30, 2017 shares
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2017
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2017
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	15,991,878

XML

Unaudited Consolidated Balance Sheet - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Current assets
Cash and cash equivalents	$ 13,753	$ 15,310
Accounts receivable less allowances of $16,193 (2016 - $14,236)	117,906	132,021
Inventories	5,618	5,755
Prepaid income taxes	4,537	3,709
Prepaid expenses	14,678	13,105
Total current assets	156,492	169,900
Investments of deferred compensation plans	58,579	54,389
Properties and equipment, at cost, less accumulated depreciation of $222,332 (2016 - $211,290)	140,209	121,302
Identifiable intangible assets less accumulated amortization of $32,827 (2016 - $33,225)	54,737	55,065
Goodwill	472,897	472,366
Deferred income taxes	20,593	8
Other assets	6,767	7,029
Total Assets	910,274	880,059
Current liabilities
Accounts payable	49,154	39,586
Current portion of long-term debt	10,000	8,750
Income taxes	3,815
Accrued insurance	44,905	47,960
Accrued compensation	48,082	53,979
Accrued legal	92,502	1,805
Other current liabilities	20,142	19,752
Total current liabilities	268,600	171,832
Deferred income taxes		14,291
Long-term debt	115,000	100,000
Deferred compensation liabilities	57,811	54,288
Other liabilities	15,780	15,549
Total Liabilities	457,191	355,960
Commitments and contingencies (Note 11)
Stockholders' Equity
Capital stock - authorized 80,000,000 shares $1 par; issued 34,470,426 shares (2016 - 34,270,104 shares)	34,470	34,270
Paid-in capital	661,553	639,703
Retained earnings	957,941	958,149
Treasury stock - 18,563,720 shares (2016 - 18,083,527)	(1,203,077)	(1,110,536)
Deferred compensation payable in Company stock	2,196	2,513
Total Stockholders' Equity	453,083	524,099
Total Liabilities and Stockholders' Equity	$ 910,274	$ 880,059

XML

Unaudited Consolidated Balance Sheet (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Unaudited Consolidated Balance Sheet [Abstract]
Accounts receivable, allowances	$ 16,193	$ 14,236
Properties and equipment, accumulated depreciation	222,332	211,290
Identifiable intangible assets, accumulated amortization	$ 32,827	$ 33,225
Capital stock - authorized	80,000,000	80,000,000
Capital stock - par value	$ 1	$ 1
Capital stock - issued	34,470,426	34,270,104
Treasury stock	18,563,720	18,083,527

XML

Unaudited Consolidated Statement Of Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Unaudited Consolidated Statement Of Income [Abstract]
Service revenues and sales	$ 415,059	$ 390,409	$ 820,923	$ 780,798
Cost of services provided and goods sold (excluding depreciation)	285,852	276,255	570,992	554,690
Selling, general and administrative expenses	68,654	62,628	138,112	121,673
Depreciation	8,833	8,581	17,726	17,005
Amortization	32	91	78	183
Other operating expenses	90,636	4,491	91,509	4,491
Total costs and expenses	454,007	352,046	818,417	698,042
Income/(loss) from operations	(38,948)	38,363	2,506	82,756
Interest expense	(1,121)	(971)	(2,116)	(1,813)
Other income/(expense) - net	1,653	3,217	4,116	293
Income/(loss) before income taxes	(38,416)	40,609	4,506	81,236
Income taxes	16,760	(15,724)	3,682	(31,511)
Net income/(loss)	$ (21,656)	$ 24,885	$ 8,188	$ 49,725
Earnings/(Loss) Per Share
Net income/(loss)	$ (1.35)	$ 1.51	$ 0.51	$ 3.00
Average number of shares outstanding	16,010	16,443	16,114	16,583
Diluted Earnings/(Loss) Per Share
Net income/(loss)	$ (1.35)	$ 1.48	$ 0.49	$ 2.93
Average number of shares outstanding	16,010	16,831	16,758	16,999
Cash Dividends Per Share	$ 0.26	$ 0.24	$ 0.52	$ 0.48

XML

Unaudited Consolidated Statement Of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Cash Flows from Operating Activities
Net income	$ 8,188	$ 49,725
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	17,804	17,188
Provision for uncollectible accounts receivable	8,250	8,124
Stock option expense	6,055	4,840
Benefit for deferred income taxes	(34,876)	(4,244)
Potential litigation settlement	90,000
Noncash early retirement expense		1,747
Amortization of restricted stock awards	638	974
Noncash directors' compensation	766	541
Noncash long-term incentive compensation	1,783	196
Amortization of debt issuance costs	258	260
Changes in operating assets and liabilities:
Decrease/(increase) in accounts receivable	5,804	(839)
Decrease in inventories	137	194
Increase in prepaid expenses	(1,573)	(2,605)
Decrease in accounts payable and other current liabilities	(6,931)	(4,879)
Increase in income taxes	2,982	3,109
Increase in other assets	(4,152)	(3,636)
Increase in other liabilities	3,754	4,145
Excess tax benefit on share-based compensation		(1,383)
Other sources/(uses)	1,437	(9)
Net cash provided by operating activities	100,324	73,448
Cash Flows from Investing Activities
Capital expenditures	(28,133)	(19,983)
Business combinations	(525)
Other sources	87	214
Net cash used by investing activities	(28,571)	(19,769)
Cash Flows from Financing Activities
Proceeds from long-term debt	135,800	92,400
Payments on revolving line of credit	(115,800)	(32,400)
Purchases of treasury stock	(85,063)	(94,337)
Change in cash overdrafts payable	(1,090)	(5,440)
Proceeds from exercise of stock options	10,398	3,533
Capital stock surrendered to pay taxes on stock-based compensation	(5,716)	(5,163)
Dividends paid	(8,396)	(8,039)
Payments on other long-term debt	(3,750)	(3,750)
Excess tax benefit on share-based compensation		1,383
Other sources	307	881
Net cash used by financing activities	(73,310)	(50,932)
Increase/(Decrease) in Cash and Cash Equivalents	(1,557)	2,747
Cash and cash equivalents at beginning of year	15,310	14,727
Cash and cash equivalents at end of period	$ 13,753	$ 17,474

XML

Basis Of Presentation

6 Months Ended

Jun. 30, 2017

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, 2016 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, 2016. 

EARNINGS PER SHARE

In March 2016, the FASB issued Accounting Standards Update “ASU No. 2016-09 - Compensation – Stock Compensation” which is part of the FASB’s Simplification Initiative.  The object of this initiative is to identify, evaluate, and improve areas of GAAP. The areas of simplification in this initiative involve several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows.  The guidance was effective for fiscal years beginning after December 15, 2016.  We adopted the applicable provisions of ASU 2016-09 on a prospective basis.  The impact of this ASU on our financial statements for the quarter ended June  30, 2017 was to decrease our income tax expense by $2.6 million as the result of excess tax benefits on stockbased compensation being recorded on the statements of income. This, combined with the required change in diluted share count, resulted in an increase to basic and diluted earnings per share of $0.17. The impact of this ASU on our financial statements for the six months ended June  30, 2017 was to decrease our income tax expense by $6.3 million as the result of excess tax benefits on stockbased compensation being recorded on the statements of income. This, combined with the required change in diluted share count, resulted in an increase to basic earnings per share by $0.39 and an increase to diluted earnings per share by $0.38.

INCOME TAXES

The effective tax rate for the three and six month periods ended June 30, 2017 was 43.6% (income tax benefit on pre-tax loss) and 81.7% (income tax benefit on pre-tax income), respectively.  These rates differ from the US statutory tax rates primarily as the result of the adoption of ASU 2016-09 described above.  The remaining difference relates to our normal, small permanent differences between book and tax income having a larger than normal impact on our effective rate due to a lower absolute dollar value of pretax income (loss).  These permanent differences generally do not significantly impact our effective rate.  However, as described fully in footnote 11, we recorded a charge during the quarter for potential litigation settlement of $90 million causing a decrease in pretax income (increase in pretax loss).

XML

Revenue Recognition

6 Months Ended

Jun. 30, 2017

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 shipped.  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. 

In 2013, the U.S. government implemented automatic budget reductions of 2.0% for all government payees, including hospice benefits paid under the Medicare program.  In 2015, CMS determined that the Medicare cap should be calculated “as if” sequestration did not occur.  As a result of this decision, VITAS has received notification from our third party intermediary that an additional $2.2 million is owed for Medicare cap in three programs arising during the 2013, 2014 and 2015 measurement periods.  The amounts were automatically deducted from our semi-monthly PIP payments.  We do not believe that CMS is authorized under the sequestration authority or the statutory methodology for establishing the Medicare cap to demand the $2.2 million under their “as if” methodology.  We have not recorded a reserve as of June 30, 2017 for$1.9 million of the potential exposure.  We have appealed CMS’s methodology change with the appropriate regulatory appeal board.

During the three and six months ended June 30, 2016,  respectively, no Medicare cap was recorded.

During the three and six months ended June 30, 2017, respectively, we recorded $247,000 for two programs cap liability for the 2013, 2014 and 2015 measurement periods of the amount recorded, $105,000 relates to the sequestration issue described above.

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

	June 30,
	2017		2016
Beginning balance January 1,	$	235	$	1,165
Prior measurement periods		247		-
Payments		-		(618)
Ending balance June 30,	$	482	$	547

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 cannot afford 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 June 30,				Six months ended June 30,
2017			2016	2017		2016
$	1,761	$	1,715	$	3,698	$	3,521

XML

Segments

6 Months Ended

Jun. 30, 2017

Segments [Abstract]

Segments

3.   Segments

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

	Three months ended June 30,				Six months ended June 30,
	2017		2016		2017		2016
Service Revenues and Sales
VITAS	$	284,710	$	278,739	$	567,026	$	556,266
Roto-Rooter		130,349		111,670		253,897		224,532
Total	$	415,059	$	390,409	$	820,923	$	780,798
After-tax Income/(Loss)
VITAS	$	(32,254)	$	18,550	$	(11,657)	$	37,637
Roto-Rooter		17,058		13,341		31,682		26,359
Total		(15,196)		31,891		20,025		63,996
Corporate		(6,460)		(7,006)		(11,837)		(14,271)
Net income	$	(21,656)	$	24,885	$	8,188	$	49,725

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

XML

Earnings/(Loss) Per Share

6 Months Ended

Jun. 30, 2017

Earnings/(Loss) Per Share[Abstract]

Earnings/(Loss) Per Share

4.  Earnings/(Loss) per Share

Earnings/(loss) per share (“EPS”/”LPS”) 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/(Loss)
For the Three Months Ended June 30,		Income/(Loss)		Shares	Earnings/(Loss) per Share
2017
	Loss	$	(21,656)	16,010	$	(1.35)
	Dilutive stock options		-	-
	Nonvested stock awards		-	-
	Diluted loss	$	(21,656)	16,010	$	(1.35)
2016
	Earnings	$	24,885	16,443	$	1.51
	Dilutive stock options		-	289
	Nonvested stock awards		-	99
	Diluted earnings	$	24,885	16,831	$	1.48

			Net Income
For the Six Months Ended June 30,		Income		Shares	Earnings per Share
2017
	Earnings	$	8,188	16,114	$	0.51
	Dilutive stock options		-	557
	Nonvested stock awards		-	87
	Diluted earnings	$	8,188	16,758	$	0.49
2016
	Earnings	$	49,725	16,583	$	3.00
	Dilutive stock options		-	297
	Nonvested stock awards		-	119
	Diluted earnings	$	49,725	16,999	$	2.93

For the three months ended June 30, 2017, all stock options and nonvested stock awards have been excluded in the calculation of dilutive earnings per share as they be would anti-dilutive due to the net loss for the period.

For the six month period ended June 30,  2017, there were no stock options excluded from the computation of diluted earnings per share because they would have been anti-dilutive.

For the three and six month periods ended June 30,  2016, 418,000stock options were excluded from the computation of diluted earnings per share because they would have been anti-dilutive.

XML

Long-Term Debt

6 Months Ended

Jun. 30, 2017

Long-Term Debt [Abstract]

Long-Term Debt

5.   Long-Term Debt

On June 30, 2014, we replaced our existing credit agreement with the Third Amended and Restated Credit Agreement (“2014 Credit Agreement”).  Terms of the 2014 Credit Agreement consist of a five-year, $350 million revolving credit facility and a $100 million term loan.  The 2014 Credit Agreement has a floating interest rate that is generally LIBOR plus a tiered additional rate which varies based on our current leverage ratio.  The interest rate as of June 30, 2017 is LIBOR plus 113 basis points. 

The debt outstanding as of June 30, 2017 consists of the following:

Revolver	$	45,000
Term loan		80,000
Total		125,000
Current portion of long-term debt		(10,000)
Long-term debt	$	115,000

Scheduled principal payments of the term loan are as follows:

2017	$	5,000
2018		10,000
2019		65,000
	$	80,000

The 2014 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	<  $50.0 million

We are in compliance with all debt covenants as of June 30, 2017. We have issued $36.1 million in standby letters of credit as of June 30, 2017mainly for insurance purposes.  Issued letters of credit reduce our available credit under the 2014 Credit Agreement.  As of June 30, 2017, we have approximately $268.9 million of unused lines of credit available and eligible to be drawn down under our revolving credit facility.

XML

Other Operating Expenses

6 Months Ended

Jun. 30, 2017

Other Operating Expenses [Abstract]

Other Operating Expenses

6.   Other Operating Expenses

	Three months ended June 30,				Six months ended June 30,
	2017		2016		2017		2016
Potential litigation settlement	$	90,000	$	-	$	90,000	$	-
Program closure expense		636		-		1,509		-
Retirement expenses		-		4,491		-		4,491
Total other operating expenses	$	90,636	$	4,491	$	91,509	$	4,491

During the three and six months ended June 30, 2017, the Company recorded $90 millionfor a potential litigation settlement.  See footnote 11 for further discussion.

During the three and six months ended June 30, 2017, the Company recorded $636,000 and $1.5 million, respectively,related to the closure of three Alabama programs at VITAS. 

During the three and six months ended June 30, 2016, the Company recorded early retirement related costs and accelerated stock-based compensation expense of approximately $4.5 million pretax and $2.8 million after-tax, related to the early retirement of VITAS’ former Chief Executive Officer. 

XML

Other Income/(Expense) - Net

6 Months Ended

Jun. 30, 2017

Other Income/(Expense) - Net [Abstract]

Other Income/(Expense) - Net

7.   Other Income/(Expense) – Net

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

	Three months ended June 30,				Six months ended June 30,
	2017		2016		2017		2016
Market value adjustment on assets held in
deferred compensation trust	$	1,587	$	3,188	$	4,202	$	201
Loss on disposal of property and equipment		(98)		(57)		(334)		(90)
Interest income		161		85		245		182
Other - net		3		1		3		-
Total other income/(expense) - net	$	1,653	$	3,217	$	4,116	$	293

XML

Stock-Based Compensation Plans

6 Months Ended

Jun. 30, 2017

Stock-Based Compensation Plans [Abstract]

Stock-Based Compensation Plans

 8.   Stock-Based Compensation Plans

On February 17, 2017, the Compensation/Incentive Committee of the Board of Directors (“CIC”) granted 7,304 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, 2019, the date at which such awards vest.  The cumulative compensation cost of the TSR-based PSU award to be recorded over the three year service period is $1.7 million.

On February 17, 2017, the CIC also granted 7,304 PSUs contingent upon the achievement of certain earnings per share (“EPS”) targets for the three-year period ending December 31, 2019.  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 $1.3 million.  

XML

Independent Contractor Operations

6 Months Ended

Jun. 30, 2017

Independent Contractor Operations [Abstract]

Independent Contractor Operations

9.   Independent Contractor Operations

The Roto-Rooter segment sublicenses with 69 independent contractors to operate certain plumbing repair, excavation, water restoration and drain cleaning businesses in lesser-populated areas of the United States and Canada.  We had notes receivable from our independent contractors as of June30, 2017 totaling $1.4 million (December 31, 2016 - $1.7 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 7% per annum and the remaining terms of the loans range from 2.5 months to 5.4 years at June 30, 2017.  We recorded the following from our independent contractors (in thousands):

	Three months ended June 30,				Six months ended June 30,
	2017		2016		2017		2016
Revenues	$	11,151	$	9,770	$	22,176	$	19,629
Pretax income		6,742		6,024		13,431		12,180

XML

Retirement Plans

6 Months Ended

Jun. 30, 2017

Retirement Plans [Abstract]

Retirement Plans

10.   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 retirement and profit-sharing plans, excess benefit plans and other similar plans are as follows (in thousands):

Three months ended June 30,				Six months ended June 30,
2017		2016		2017		2016
$	4,551	$	5,861	$	10,709	$	6,387

XML

Legal And Regulatory Matters

6 Months Ended

Jun. 30, 2017

Legal And Regulatory Matters [Abstract]

Legal And Regulatory Matters

11.  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. Other than as described below with respect to U.S. v. Vitas, 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 reasonably estimable.

Regulatory Matters and Litigation

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 qui tam lawsuits and 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.  The defendants filed a motion to dismiss on September 24, 2013.  On September 30, 2014, the Court denied the motion, except to the extent that claims were filed before July 24, 2002. On November 13, 2014, the government filed a Second Amended Complaint.  The Second 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.  VITAS filed its Answer to the Second Amended Complaint on August 11, 2015.  This case is in the discovery phase.  Based on recent case developments, including recent mediation discussions with the U.S. Department of Justice, we believe it probable that this matter will be settled, to include payments of $55.8 million after-tax ($90.0 million pretax) including attorneys’ fees.  A final settlement will require the parties to resolve several outstanding issues, and to draft and negotiate definitive documentation.  There can be no assurance that such a final definitive settlement will be reached on these, or other, terms.  For additional procedural history of this litigation, please refer to our prior quarterly and annual filings.  The costs incurred related to U.S. v. Vitas and related regulatory matters were $2.1 million and $1.2 million for the quarters ended June 30, 2017 and 2016, respectively.  For the six months ended June 30, 2017 and 2016, the net costs were $4.2 million and $3.5 million respectively.

Net income/(loss) for the three and six months ended June 30, 2017 includes the $55.8 million of after-tax expense ($90 million pre-tax) for the accrual of such potential litigation settlement.  As required by U.S. Generally Accepted Accounting Principles, the Company accrues for contingent loss claims in its financial statements when it is probable that a liability has been incurred and the amount can be reasonably estimated.

The Company and certain current and former directors and officers are defendants in a case captioned In re Chemed Corp. Shareholder Derivative Litigation, No. 13 Civ. 1854 (LPS) (CJB) (D. Del.), which was consolidated on February 2, 2015.

On February 2, 2015, the Court appointed KBC Asset Management NV the sole lead plaintiff and its counsel, the sole lead and liaison counsel. On March 3, 2015, Lead Plaintiff KBC designated its Complaint as the operative complaint in the consolidated proceedings and defendants renewed a previously filed motion to dismiss those claims and allegations.  The consolidated Complaint named fourteen individual defendants, together with the Company as nominal defendant.  The Complaint alleges a claim for breach of fiduciary duty against the individual defendants for allegedly permitting the Company to submit false claims to the U.S. government.  The Complaint 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 May 12, 2016, the Court issued a Memorandum Order granting Chemed’s motion to dismiss, and  dismissing Lead Plaintiff KBC’s Complaint without prejudice to KBC’s opportunity to file within 30 days of the date of the Court’s Order (i.e., by June 13, 2016) an amended Complaint addressing the deficiencies in its duty of loyalty claim.  Lead Plaintiff KBC did not file an amended Complaint within the time specified by the Court.

However, on June 13, 2016, counsel for Chemed shareholder Michael Kvint filed a letter with the Court requesting a two-week extension to file a motion to substitute Mr. Kvint as lead plaintiff, in place of Lead Plaintiff KBC and to file an amended Complaint.  Alternatively, counsel for Mr. Kvint requested that any dismissal of the action be with prejudice to KBC only.  On June 14, 2016, Chemed filed a reply letter with the Court, reserving its rights to oppose any motion filed by Mr. Kvint and, if warranted, to oppose any other actions taken by Mr. Kvint to proceed with the action (including by filing an untimely amended Complaint).  On June 21, 2016, the Court entered an Oral Order providing Mr. Kvint until June 30, 2016 to file a Motion to Substitute and Motion for Leave to File an Amended Complaint.  On that date, Mr. Kvint filed, under seal, a Motion to Substitute Plaintiff and File Amended Complaint, and attached a Proposed Amended Complaint.    Mr. Kvint’s motion was fully briefed by the parties.  On April 25, 2017, Magistrate Judge Burke issued a Report and Recommendation recommending that the Court permit Mr. Kvint to intervene as Lead Plaintiff and grant leave to amend the complaint to replead the duty of loyalty claim only.  On May 16, 2017, Chief Judge Stark signed an Order adopting that Report and Recommendation.  Plaintiff Kvint filed a Corrected Amended Complaint on May 30, 2017.  On July 25, 2017, the Court entered an order permitting Defendants to file a Motion to Dismiss the Corrected Amended Complaint on or before August 14, 2017, with Plaintiff’s Answering Brief in opposition to the Motion to Dismiss to be filed on or before October 16, 2017, and Defendants’ Reply Brief in support of the Motion to Dismiss to be filed on or before November 13, 2017.  As the Company has previously disclosed, the legal fees and costs associated with defending against this lawsuit are presently being paid by insurance. For additional procedural history of this litigation, please refer to our prior quarterly and annual filings.

Jordan Seper, (“Seper”) a Registered Nurse at VITAS' Inland Empire program from May 12, 2014 to March 21, 2015, filed a lawsuit in San Francisco Superior Court on September 26, 2016.  She alleged VITAS Healthcare Corp of CA (“VITAS CA”) (1) failed to provide minimum wage for all hours worked; (2) failed to provide overtime for all hours worked; (3) failed to provide a second meal period; (4) failed to provide rest breaks; (5) failed to indemnify for necessary expenditures; (6) failed to timely pay wages due at time of separation; and (7) engaged in unfair business practices.  Seper seeks a state-wide class action of current and former non-exempt employees employed with VITAS in California within the four years preceding the filing of the lawsuit.  She seeks court determination that this action may be maintained as a class action for the entire California class and subclasses, designation as class representative, declaratory relief, injunctive relief, damages (including wages for regular or overtime hours allegedly worked but not paid, premium payments for missed meal or rest periods, and unreimbursed expenses), all applicable penalties associated with each claim, pre and post-judgment interest, and attorneys' fees and costs.  Seper served VITAS CA with the lawsuit,  Jordan A. Seper on behalf of herself and others similarly situated v. VITAS Healthcare Corporation of California, a Delaware corporation; VITAS Healthcare Corp of CA, a business entity unknown; and DOES 1 to 100, inclusive; Los Angeles Superior Court Case Number BC 642857 on October 13, 2016.

On November 14, 2016, the Parties filed a Stipulation to transfer the venue of the lawsuit from San Francisco to Los Angeles.  The Los Angeles Superior Court Complex Division accepted transfer of the case on December 6, 2016 and stayed the case.  On December 16, 2016, VITAS CA filed its Answer and served written discovery on Seper.

Jiwan Chhina ("Chhina"), hired by VITAS as a Home Health Aide on February 5, 2002, is currently a Licensed Vocational Nurse for VITAS' San Diego program.  On September 27, 2016, Chhina filed a lawsuit in San Diego Superior Court, alleging (1) failure to pay minimum wage for all hours worked; (2) failure to provide overtime for all hours worked; (3) failure to pay wages for all hours at the regular rate; (4) failure to provide meal periods; (5) failure to provide rest breaks; (6) failure to provide complete and accurate wage statements; (7) failure to pay for all reimbursement expenses; (8) unfair business practices; and (9) violation of the California Private Attorneys General Act.  Chhina seeks to pursue these claims in the form of a state-wide class action of current and former non-exempt employees employed with VITAS in California within the four years preceding the filing of the lawsuit.  He seeks court determination that this action may be maintained as a class action for the entire California class and subclasses, designation as class representative, declaratory relief, injunctive relief, damages (including wages for regular or overtime hours allegedly worked but not paid, premium payments for missed meal or rest periods, and unreimbursed expenses), all applicable penalties associated with each claim, pre-judgment interest, and attorneys' fees and costs.  Chhina served VITAS CA with the lawsuit, Jiwann Chhina v. VITAS Health Services of California, Inc., a California corporation; VITAS Healthcare Corporation of California, a Delaware corporation; VITAS Healthcare Corporation of California, a Delaware corporation dba VITAS Healthcare, Inc.; and DOES 1 to 100, inclusive; San Diego Superior Court Case Number 37-2015-00033978-CU-OE-CTL on November 3, 2016.  On December 1, 2016, VITAS filed its Answer and served written discovery on Chhina. 

The Court in Seper lifted the stay at the Initial Status Conference on May 11, 2017.  At the Conference, Seper’s counsel informed the Court that he was in contact with Jiwan Chhina’s counsel to consolidate the two cases.  The Court set a Further Status Conference for July 13, 2017 expressly to receive a status update on the consolidation efforts.  If the cases are consolidated and proceed under the jurisdiction of the Los Angeles Superior Court Complex Division,  the Chhina case in the San Diego Superior Court would then be dismissed.  The Parties have agreed to stay further discovery efforts pending the issue of consolidation of the two cases.  Counsel for Seper and counsel for Chhina are currently preparing a joint Amended Complaint.

The Company is not able to reasonably estimate the probability of loss or range of loss for either of these lawsuits at this time.

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, dealing with the various regulatory agencies and opposing parties can adversely affect us through defense costs, potential payments, diversion of management time, and related publicity.  Although the Company intends to defend them vigorously, there can be no assurance that those suits will not have a material adverse effect on the Company.

XML

Concentration Of Risk

6 Months Ended

Jun. 30, 2017

Concentration Of Risk [Abstract]

Concentration Of Risk

12.   Concentration of Risk

During the quarter VITAS had pharmacy services agreements withone service provider to provide specified pharmacy services for VITAS and its hospice patients.  VITAS made purchases from this provider of $8.2 and $17.0 million for the three and six months ended June 30, 2017, respectively. Vitas made purchases from two providers of $8.5 and $17.4 million for the three and six months ended June 30, 2016, respectively.  Purchases from these providers were approximately90% of all pharmacy services used by VITAS during each quarter presented.

XML

Cash Overdrafts And Cash Equivalents

6 Months Ended

Jun. 30, 2017

Cash Overdrafts And Cash Equivalents [Abstract]

Cash Overdrafts And Cash Equivalents

13.   Cash Overdrafts and Cash Equivalents

There are $7.5 million in cash overdrafts payable included in accounts payable at June 30, 2017(December 31, 2016 - $8.6 million).

From time to time throughout the year, we invest excess cash in money market funds with major commercial banks. We closely monitor the creditworthiness of the institutions with which we invest our overnight funds.  We had $79,000 in cash equivalents as of June 30, 2017.  There was $72,000 in cash equivalents as of December 31, 2016. 

Included in properties and equipment and accounts payable on the balance sheet at June 30, 2017 is $10.8 million of unpaid commitments related to the purchase of transportation equipment.  This amount will be paid in July 2017 and is not reflected in capital expenditures in the statement of cash flows.  Unpaid commitments to purchase properties and equipment for comparable periods is not material.

XML

Financial Instruments

6 Months Ended

Jun. 30, 2017

Financial Instruments [Abstract]

Financial Instruments

14.   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          

June 30, 2017 (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	$	58,579	$	58,579	$	-	$	-
Total debt		125,000		-		125,000		-

The following shows the carrying value, fair value and the hierarchy for our financial instruments as of December 31, 2016 (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	$	54,389	$	54,389	$	-	$	-
Total debt		108,750		-		108,750		-

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.  As further described in Footnote 5, our outstanding long-term debt and current portion of long-term debt have floating interest rates that are reset at short-term intervals, generally 30 or 60 days.  The interest rate we pay also includes an additional amount based on our current leverage ratio.  As such, we believe our borrowings reflect significant nonperformance risks, mainly credit risk.  Based on these factors, we believe the fair value of our long-term debt and current portion of long-term debt approximate the carrying value.

XML

Capital Stock Repurchase PlanTransactions

6 Months Ended

Jun. 30, 2017

Capital Stock Repurchase PlanTransactions [Abstract]

Capital Stock Repurchase Plan Transactions

15.   Capital Stock Repurchase Plan Transactions

We repurchased the following capital stock for the three and six months ended June 30, 2017 and 2016:  

	Three months ended June 30,				Six months ended June 30,
	2017		2016		2017		2016
Total cost of repurchased shares (in thousands):	$	30,801	$	49,853	$	85,063	$	102,313
Shares repurchased		150,000		380,134		450,000		780,134
Weighted average price per share	$	205.34	$	131.15	$	189.03	$	131.15

In March 2017, the Board of Directors authorized an additional $100.0 million for stock repurchase under Chemed’s existing share repurchase program. We currently have $65.1  million of authorization remaining under this share repurchase plan.

XML

Recent Accounting Statements

6 Months Ended

Jun. 30, 2017

Recent Accounting Statements [Abstract]

Recent Accounting Statements

16.   Recent Accounting Statements

In May 2014, the FASB issued Accounting Standards Update “ASU No. 2014-09 – Revenue from Contracts with Customers” which provides additional guidance to clarify the principles for recognizing revenue.  The standard and subsequent amendments are intended to develop a common revenue standard for removing inconsistencies and weaknesses, improve comparability, provide more useful information to users through improved disclosure requirements, and simplify the preparation of financial statements. This guidance and subsequent amendments are effective for fiscal years beginning after December 15, 2017.    We are in the process of analyzing various contractual arrangements with customers at each subsidiary.  We believe that it is likely, as a result of adopting the ASU that certain expenses currently included in bad debt expense will be shown as contractual allowances (i.e. net revenue).  We currently do not have an estimate of the magnitude of this potential impact.  We anticipate a modified retrospective adoption of the ASU.

In February 2016, the FASB issued Accounting Standards Update “ASU No. 2016-02 – Leases” which introduces a lessee model that brings most leases on to the balance sheets and updates lessor accounting  to align with changes in the lessee model and the revenue recognition standard.   The guidance is effective for fiscal years beginning after December 15, 2018.  We are currently evaluating the impact of this ASU on our financial statements, existing lease recognition policies and disclosures. 

In August 2016, the FASB issued Accounting Standards Update “ASU No. 2016-15 – Cash Flow Classification” which amends guidance on the classification of certain cash receipts and payments in the statement of cash flows.  The primary purpose of ASU 2016-15 is to reduce diversity in practice related to eight specific cash flow issues.  The guidance in this ASU is effective for fiscal years beginning after December 15, 2017.    We have analyzed the impact of ASU 2016-15 on our statement of cash flows and do not expect it to have a material effect.

In January 2017, the FASB issued Accounting Standards Update “ASU No. 2017-4 – Intangibles – Goodwill and Other”.  To simplify the subsequent measurement of goodwill, the FASB eliminated Step 2 from the goodwill impairment test.  The guidance in the ASU is effective for the Company in fiscal years beginning after December 15, 2019.  Early adoption is permitted.  We anticipate adoption of this standard will have no impact on our consolidated financial statements.

XML

Goodwill

6 Months Ended

Jun. 30, 2017

Goodwill [Abstract]

Goodwill

17.   Goodwill

Shown below is movement in Goodwill (in thousands):

	Vitas		Roto-Rooter		Total
Balance at December 31, 2016	$	328,301	$	144,065	$	472,366
Business combinations		-		481		481
Foreign currency adjustments		-		50		50
Balance at June 30, 2017	$	328,301	$	144,596	$	472,897

XML

Revenue Recognition (Tables)

6 Months Ended

Jun. 30, 2017

Revenue Recognition [Abstract]

Schedule Of Medicare Cap Liability Activity

	June 30,
	2017		2016
Beginning balance January 1,	$	235	$	1,165
Prior measurement periods		247		-
Payments		-		(618)
Ending balance June 30,	$	482	$	547

Schedule Of Cost Of Charity Care

Three months ended June 30,				Six months ended June 30,
2017			2016	2017		2016
$	1,761	$	1,715	$	3,698	$	3,521

XML

Segments (Tables)

6 Months Ended

Jun. 30, 2017

Segments [Abstract]

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

	Three months ended June 30,				Six months ended June 30,
	2017		2016		2017		2016
Service Revenues and Sales
VITAS	$	284,710	$	278,739	$	567,026	$	556,266
Roto-Rooter		130,349		111,670		253,897		224,532
Total	$	415,059	$	390,409	$	820,923	$	780,798
After-tax Income/(Loss)
VITAS	$	(32,254)	$	18,550	$	(11,657)	$	37,637
Roto-Rooter		17,058		13,341		31,682		26,359
Total		(15,196)		31,891		20,025		63,996
Corporate		(6,460)		(7,006)		(11,837)		(14,271)
Net income	$	(21,656)	$	24,885	$	8,188	$	49,725

XML

Earnings/(Loss) Per Share (Tables)

6 Months Ended

Jun. 30, 2017

Earnings/(Loss) Per Share[Abstract]

Schedule Of Computation Of Earnings Per Share

			Net Income/(Loss)
For the Three Months Ended June 30,		Income/(Loss)		Shares	Earnings/(Loss) per Share
2017
	Loss	$	(21,656)	16,010	$	(1.35)
	Dilutive stock options		-	-
	Nonvested stock awards		-	-
	Diluted loss	$	(21,656)	16,010	$	(1.35)
2016
	Earnings	$	24,885	16,443	$	1.51
	Dilutive stock options		-	289
	Nonvested stock awards		-	99
	Diluted earnings	$	24,885	16,831	$	1.48

			Net Income
For the Six Months Ended June 30,		Income		Shares	Earnings per Share
2017
	Earnings	$	8,188	16,114	$	0.51
	Dilutive stock options		-	557
	Nonvested stock awards		-	87
	Diluted earnings	$	8,188	16,758	$	0.49
2016
	Earnings	$	49,725	16,583	$	3.00
	Dilutive stock options		-	297
	Nonvested stock awards		-	119
	Diluted earnings	$	49,725	16,999	$	2.93

XML

Long-Term Debt (Tables)

6 Months Ended

Jun. 30, 2017

Long-Term Debt [Abstract]

Debt Outstanding

Revolver	$	45,000
Term loan		80,000
Total		125,000
Current portion of long-term debt		(10,000)
Long-term debt	$	115,000

Schedule of Principal Payments of the Term Loan

2017	$	5,000
2018		10,000
2019		65,000
	$	80,000

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	<  $50.0 million

XML

Other Operating Expenses (Tables)

6 Months Ended

Jun. 30, 2017

Other Operating Expenses [Abstract]

Schedule Of Other Operating Expenses

	Three months ended June 30,				Six months ended June 30,
	2017		2016		2017		2016
Potential litigation settlement	$	90,000	$	-	$	90,000	$	-
Program closure expense		636		-		1,509		-
Retirement expenses		-		4,491		-		4,491
Total other operating expenses	$	90,636	$	4,491	$	91,509	$	4,491

XML

Other Income/(Expense) - Net (Tables)

6 Months Ended

Jun. 30, 2017

Other Income/(Expense) - Net [Abstract]

Schedule Of Other Income/(Expense)- Net

	Three months ended June 30,				Six months ended June 30,
	2017		2016		2017		2016
Market value adjustment on assets held in
deferred compensation trust	$	1,587	$	3,188	$	4,202	$	201
Loss on disposal of property and equipment		(98)		(57)		(334)		(90)
Interest income		161		85		245		182
Other - net		3		1		3		-
Total other income/(expense) - net	$	1,653	$	3,217	$	4,116	$	293

XML

Independent Contractor Operations (Tables)

6 Months Ended

Jun. 30, 2017

Independent Contractor Operations [Abstract]

Schedule Of Independent Contractors

	Three months ended June 30,				Six months ended June 30,
	2017		2016		2017		2016
Revenues	$	11,151	$	9,770	$	22,176	$	19,629
Pretax income		6,742		6,024		13,431		12,180

XML

Retirement Plans (Tables)

6 Months Ended

Jun. 30, 2017

Retirement Plans [Abstract]

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

Three months ended June 30,				Six months ended June 30,
2017		2016		2017		2016
$	4,551	$	5,861	$	10,709	$	6,387

XML

Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2017

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          

June 30, 2017 (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	$	58,579	$	58,579	$	-	$	-
Total debt		125,000		-		125,000		-

The following shows the carrying value, fair value and the hierarchy for our financial instruments as of December 31, 2016 (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	$	54,389	$	54,389	$	-	$	-
Total debt		108,750		-		108,750		-

XML

Capital Stock Repurchase PlanTransactions (Tables)

6 Months Ended

Jun. 30, 2017

Capital Stock Repurchase PlanTransactions [Abstract]

Schedule Of Capital Stock Repurchases

	Three months ended June 30,				Six months ended June 30,
	2017		2016		2017		2016
Total cost of repurchased shares (in thousands):	$	30,801	$	49,853	$	85,063	$	102,313
Shares repurchased		150,000		380,134		450,000		780,134
Weighted average price per share	$	205.34	$	131.15	$	189.03	$	131.15

XML

Goodwill (Tables)

6 Months Ended

Jun. 30, 2017

Goodwill [Abstract]

Schedule of movement in Goodwill

	Vitas		Roto-Rooter		Total
Balance at December 31, 2016	$	328,301	$	144,065	$	472,366
Business combinations		-		481		481
Foreign currency adjustments		-		50		50
Balance at June 30, 2017	$	328,301	$	144,596	$	472,897

XML

Basis Of Presentation (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Decrease income taxes	$ (16,760)	$ 15,724	$ (3,682)	$ 31,511
Increase to basic earnings per share	$ (1.35)	$ 1.51	$ 0.51	$ 3.00
Increase to diluted earnings per share	$ (1.35)	$ 1.48	$ 0.49	$ 2.93
Potential litigation settlement			$ 90,000
ASU No. 2016-09 [Member]
Decrease income taxes	$ 2,600		$ 6,300
Effective tax rate	43.60%		81.70%
Increase to basic and diluted earnings per share	$ 0.17
Increase to basic earnings per share			$ 0.39
Increase to diluted earnings per share			$ 0.38

XML

Revenue Recognition (Narrative) (Details) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Revenue Recognition [line items]
Medicare cap		$ 0		$ 0
Percentage of automatic budget reductions							2.00%
Unbilled Revenue	$ 1,900,000		$ 1,900,000
Two Program Projected Measurement Period Liability [Member]
Revenue Recognition [line items]
Medicare cap	247,000		247,000
Additional amount owed for Medicare cap					$ 2,200,000	$ 2,200,000	$ 2,200,000
Sequestration [Member]
Revenue Recognition [line items]
Medicare cap	$ 105,000		$ 105,000

XML

Revenue Recognition (Schedule Of Medicare Cap Liability Activity) (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Revenue Recognition [Abstract]
Beginning Balance January 1,	$ 235	$ 1,165
Prior measurment periods	247
Payments		(618)
Ending Balance June 30,	$ 482	$ 547

XML

Revenue Recognition (Schedule Of Cost Of Charity Care) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Revenue Recognition [Abstract]
Charity care cost	$ 1,761	$ 1,715	$ 3,698	$ 3,521

XML

Segments (Service Revenues And Sales And After-Tax Earnings By Business Segment) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Segment Reporting Information [Line Items]
Total service revenues and sales	$ 415,059	$ 390,409	$ 820,923	$ 780,798
After-tax Income/(Loss)	(21,656)	24,885	8,188	49,725
Operating Segments [Member]
Segment Reporting Information [Line Items]
Total service revenues and sales	415,059	390,409	820,923	780,798
After-tax Income/(Loss)	(15,196)	31,891	20,025	63,996
Segment VITAS [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Total service revenues and sales	284,710	278,739	567,026	556,266
After-tax Income/(Loss)	(32,254)	18,550	(11,657)	37,637
Segment Roto-Rooter [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Total service revenues and sales	130,349	111,670	253,897	224,532
After-tax Income/(Loss)	17,058	13,341	31,682	26,359
Corporate Segment [Member]
Segment Reporting Information [Line Items]
After-tax Income/(Loss)	$ (6,460)	$ (7,006)	$ (11,837)	$ (14,271)

XML

Earnings/(Loss) Per Share (Narrative) (Details) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Earnings/(Loss) Per Share[Abstract]
Excluded stock options	0	418,000	0	418,000

XML

Earnings/(Loss) Per Share (Schedule Of Computation Of Earnings Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Earnings/(Loss) Per Share[Abstract]
Loss, Income/(Loss)	$ (21,656)	$ 24,885	$ 8,188	$ 49,725
Diluted loss, Income/(Loss)	$ (21,656)	$ 24,885	$ 8,188	$ 49,725
Earnings, Shares	16,010	16,443	16,114	16,583
Dilutive stock options, Shares		289	557	297
Nonvested stock awards, Shares		99	87	119
Diluted Loss, Shares	16,010	16,831	16,758	16,999
Net income/(Loss) per Share	$ (1.35)	$ 1.51	$ 0.51	$ 3.00
Earnings/(Loss) per Share, Diluted earnings/(loss)	$ (1.35)	$ 1.48	$ 0.49	$ 2.93

XML

Long-Term Debt (Narrative) (Details)	6 Months Ended
	Jun. 30, 2017 USD ($)
Debt Instrument [Line Items]
Standby letters of credit issued	$ 36,100,000
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Unused lines of credit	$ 268,900,000
2014 Credit Agreement [Member]
Debt Instrument [Line Items]
Revolving credit facility period, years	5 years
2014 Credit Agreement [Member] | LIBOR [Member]
Debt Instrument [Line Items]
Basis spread on variable interest rate	1.13%
2014 Credit Agreement [Member] | Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Face amount of debt	$ 350,000,000
2014 Credit Agreement [Member] | Term Notes [Member]
Debt Instrument [Line Items]
Face amount of debt	$ 100,000,000

XML

Long-Term Debt (Debt Outstanding) (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Debt Instrument [Line Items]
Total	$ 125,000
Current portion of long-term debt	(10,000)	$ (8,750)
Long-term debt	115,000	$ 100,000
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Total	45,000
Term Notes [Member]
Debt Instrument [Line Items]
Total	$ 80,000

XML

Long-Term Debt (Schedule of Principal Payments of the Term Loan) (Details) $ in Thousands	Jun. 30, 2017 USD ($)
Debt Instrument [Line Items]
Total	$ 125,000
Term Notes [Member]
Debt Instrument [Line Items]
2017	5,000
2018	10,000
2019	65,000
Total	$ 80,000

XML

Long-Term Debt (Financial Debt Covenants) (Details) $ in Millions	6 Months Ended
	Jun. 30, 2017 USD ($)
Debt Instrument [Line Items]
Annual Operating Lease Commitment, Requirement	$ 50.0
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
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

XML

Other Operating Expenses (Narrative) (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2017 USD ($)	Jun. 30, 2016 USD ($)	Jun. 30, 2017 USD ($) item	Jun. 30, 2016 USD ($)
Other Operating Expenses [Line Items]
Other operating expenses	$ 90,636,000	$ 4,491,000	$ 91,509,000	$ 4,491,000
Segment VITAS [Member]
Other Operating Expenses [Line Items]
Other operating expenses	636,000		$ 1,500,000
Number of programs closed | item			3
Segment VITAS [Member] | Chief Executive Officer [Member]
Other Operating Expenses [Line Items]
Other operating expenses		4,500,000		4,500,000
Other operating expense, after tax		$ 2,800,000		$ 2,800,000
Potential Litigation Settlement [Member]
Other Operating Expenses [Line Items]
Other operating expenses	$ 90,000,000		$ 90,000,000

XML

Other Operating Expenses (Schedule Of Other Operating Expenses) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Total other operating expenses	$ 90,636	$ 4,491	$ 91,509	$ 4,491
Potential Litigation Settlement [Member]
Total other operating expenses	90,000		90,000
Program Closure Expense [Member]
Total other operating expenses	$ 636		$ 1,509
Retirement Expense [Member]
Total other operating expenses		$ 4,491		$ 4,491

XML

Other Income/(Expense) - Net (Schedule Of Other Income/(Expense)- Net) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Other Income/(Expense) - Net [Abstract]
Market value adjustment on assets held in deferred compensation trust	$ 1,587	$ 3,188	$ 4,202	$ 201
Loss on disposal of property and equipment	(98)	(57)	(334)	(90)
Interest income	161	85	245	182
Other - net	3	1	3
Total other income/(expense) - net	$ 1,653	$ 3,217	$ 4,116	$ 293

XML

Stock-Based Compensation Plans (Narrative) (Details) - USD ($) $ in Millions		6 Months Ended
	Feb. 17, 2017	Jun. 30, 2017
Performance Based TSR [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted	7,304
Shares vesting period, years		3 years
Cumulative compensation expense	$ 1.7
Performance Based EPS [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted	7,304
Shares vesting period, years		3 years
Cumulative compensation expense	$ 1.3

XML

Independent Contractor Operations (Narrative) (Details) $ in Millions	6 Months Ended
	Jun. 30, 2017 USD ($) item	Dec. 31, 2016 USD ($)
Independent Contractor Operations [Line Items]
Notes receivable from independent contractors | $	$ 1.4	$ 1.7
Roto-Rooter segment [Member]
Independent Contractor Operations [Line Items]
Independent contractors with sublicenses | item	69
Maximum [Member]
Independent Contractor Operations [Line Items]
Interest rates on loans	7.00%
Terms of the loans to independent contractors, years	5 years 4 months 24 days
Minimum [Member]
Independent Contractor Operations [Line Items]
Interest rates on loans	0.00%
Terms of the loans to independent contractors, years	2 months 15 days

XML

Independent Contractor Operations (Schedule Of Independent Contractors) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Independent Contractor Operations [Abstract]
Revenues	$ 11,151	$ 9,770	$ 22,176	$ 19,629
Pretax profits	$ 6,742	$ 6,024	$ 13,431	$ 12,180

XML

Retirement Plans (Schedule Of Expenses For Retirement, Profit-Sharing Plans, Excess Benefit Plans And Other Similar Plans) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Retirement Plans [Abstract]
Defined contribution plans expense	$ 4,551	$ 5,861	$ 10,709	$ 6,387

XML

Legal And Regulatory Matters (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Loss Contingencies [Line Items]
Life expectancy period			6 months
Potential litigation settlement			$ 90,000
Period in which the opportunity to file amended compliant addressing the deficiencies in the claim			30 days
Extension period			14 days
Proceeding time period for law suite			4 years
U.S. v. VITAS [Member]
Loss Contingencies [Line Items]
Potential litigation settlement, after tax	$ 55,800		$ 55,800
Potential litigation settlement	90,000		90,000
Net costs incurred	$ 2,100	$ 1,200	$ 4,200	$ 3,500

XML

Concentration Of Risk (Narrative) (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017 USD ($)	Jun. 30, 2016 USD ($)	Jun. 30, 2017 USD ($) item	Jun. 30, 2016 USD ($) item	Dec. 31, 2016 USD ($)
Concentration Risk [Line Items]
Accounts payable	$ 49,154		$ 49,154		$ 39,586
Segment VITAS [Member]
Concentration Risk [Line Items]
Number of service providers | item			1	2
VITAS made purchases from Enclara	$ 8,200	$ 8,500	$ 17,000	$ 17,400
Sales Revenue [Member] | Segment VITAS [Member]
Concentration Risk [Line Items]
Percentage of concentration risk services represent from vendor	90.00%	90.00%	90.00%	90.00%

XML

Cash Overdrafts And Cash Equivalents (Narrative) (Details) - USD ($)	Jun. 30, 2017	Dec. 31, 2016
Cash Overdrafts And Cash Equivalents [Abstract]
Cash overdrafts included in accounts payable	$ 7,500,000	$ 8,600,000
Cash equivalents	79,000	$ 72,000
Unpaid Commitments	$ 10,800,000

XML

Financial Instruments (Carrying Value, Fair Value And Hierarchy Of Financial Instruments) (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2017	Dec. 31, 2016
Minimum [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Period in which the interest rate will reset	30 days
Maximum [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Period in which the interest rate will reset	60 days
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	$ 58,579	$ 54,389
Total debt	125,000	108,750
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	58,579	54,389
Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total debt	125,000	108,750
Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Mutual fund investments of deferred compensation plans held in trust
Total debt

XML

Capital Stock Repurchase Plan Transactions (Narrative) (Details) - USD ($) $ in Millions	Jun. 30, 2017	Mar. 31, 2017
Capital Stock Repurchase PlanTransactions [Abstract]
Stock repurchase program, amount authorized		$ 100.0
Stock Repurchase Program, Remaining Authorized Repurchase Amount	$ 65.1

XML

Capital Stock Repurchase Plan Transactions (Schedule Of Capital Stock Repurchases) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Capital Stock Repurchase PlanTransactions [Abstract]
Total cost of repurchased shares	$ 30,801	$ 49,853	$ 85,063	$ 102,313
Shares repurchased	150,000	380,134	450,000	780,134
Weighted average price per share	$ 205.34	$ 131.15	$ 189.03	$ 131.15

XML

Goodwill (Schedule of movement in Goodwill) (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2017 USD ($)
Goodwill [Line Items]
Beginning balance	$ 472,366
Business combinations	481
Foreign currency adjustments	50
Ending balance	472,897
Segment VITAS [Member]
Goodwill [Line Items]
Beginning balance	328,301
Business combinations
Foreign currency adjustments
Ending balance	328,301
Roto-Rooter segment [Member]
Goodwill [Line Items]
Beginning balance	144,065
Business combinations	481
Foreign currency adjustments	50
Ending balance	$ 144,596