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CST: 18/09/2019 19:56:45   

Amedisys Reports Fourth Quarter and Year End 2018 Financial Results Issues 2019 Guidance

203 Days ago

BATON ROUGE, La., Feb. 27, 2019 (GLOBE NEWSWIRE) -- Amedisys, Inc. (NASDAQ: AMED) today reported its financial results for the three month period and year ended December 31, 2018.

Three Month Periods Ended December 31, 2018 and 2017

  • Net service revenue increased $36.4 million to $434.4 million compared to $398.0 million in 2017 (1).
  • Net income attributable to Amedisys, Inc. of $27.5 million compared to net loss attributable to Amedisys, Inc. of $3.8 million in 2017.
  • Net income attributable to Amedisys, Inc. per diluted share of $0.84 per diluted share compared to net loss attributable to Amedisys, Inc. of $0.11 in 2017.

Adjusted Quarterly Results*

  • Adjusted EBITDA of $43.9 million compared to $37.1 million in 2017.
  • Adjusted net service revenue of $434.4 million compared to $398.0 million in 2017.
  • Adjusted net income attributable to Amedisys, Inc. of $29.8 million compared to $19.4 million in 2017.
  • Adjusted net income attributable to Amedisys, Inc. per diluted share of $0.91 compared to $0.56 in 2017.

Years Ended December 31, 2018 and 2017

  • Net service revenue increased $151.3 million to $1,662.6 million compared to $1,511.3 million in 2017 (1).
  • Net income attributable to Amedisys, Inc. of $119.3 million compared to $30.3 million in 2017.
  • Net income attributable to Amedisys, Inc. per diluted share of $3.55 per diluted share compared to $0.88 in 2017.

Adjusted Year End Results*

  • Adjusted EBITDA of $180.6 million compared to $142.2 million in 2017.
  • Adjusted net service revenue of $1,664.3 million compared to $1,517.8 million in 2017.
  • Adjusted net income attributable to Amedisys, Inc. of $122.1 million compared to $75.9 million in 2017.
  • Adjusted net income attributable to Amedisys, Inc. per diluted share of $3.63 compared to $2.21 in 2017.

*  See pages 12 and 13 for the definition and reconciliations of non-GAAP financial measures to GAAP measures.
(1) Subsequent to our adoption of Accounting Standards Updates 2014-09 and 2015-14 on January 1, 2018, using the full retrospective method, amounts previously classified as provision for doubtful accounts are now classified as price concessions in determining the transaction price of our net service revenue.

Paul B. Kusserow, President and Chief Executive Officer stated, “Our fourth quarter results are a fitting cap to what has been by all accounts an incredible year for Amedisys. In 2018, we treated approximately 400,000 patients making more than 10 million visits across our three lines of business while continuing to execute and make excellent progress on our strategic pillars of clinical distinction, becoming the employer of choice, operational efficiency and growth. Providing our clinically distinct care to as many patients wherever they call home is, and will always be, our first priority and to that point, our home health and hospice quality measures continue to be at or near the top of the industry. After a year of rebuilding, our home health segment returned to growth and exceeded margin expectations. Hospice continued its stellar performance with another strong quarter and year of ADC growth and we continued to grow our personal care platform, completing two acquisitions during the year. Finally, thanks to our team of over 21,000 employees for continuing to do all that you do to drive such impressive results and provide such incredible care.”

2019 Guidance

  • Net service revenue is anticipated to be in the range of $1.94 billion to $1.98 billion.
  • Adjusted EBITDA is anticipated to be in the range of $205 million to $210 million.
  • Adjusted diluted earnings per share is anticipated to be in the range of $3.98 to $4.09 based on an estimated 33.1 million shares outstanding.

This guidance excludes the effects of any future acquisitions, if any are made.

We urge caution in considering the current trends and 2019 guidance disclosed in this press release. The home health and hospice industry is highly competitive and subject to intensive regulations, and trends are subject to numerous factors, risks, and uncertainties, some of which are referenced in the cautionary language below and others that are described more fully in our reports filed with the Securities and Exchange Commission (“SEC”) including our Annual Report on Form 10-K for the fiscal year ended December 31, 2018, and subsequent Quarterly Reports on Form 10-Q, and current reports on Form 8-K which can be found on the SEC’s internet website, http://www.sec.gov, and our internet website, http://www.amedisys.com.

Earnings Call and Webcast Information

Amedisys will host a conference call on Thursday, February 28, 2019, at 10:00 a.m. ET to discuss its fourth quarter and year end results. To participate on the conference call, please call before 10:00 a.m. ET to either (877) 524-8416 (Toll-Free) or (412) 902-1028 (Toll). A replay of the conference call will be available through March 28, 2019 by dialing (877) 660-6853 (Toll-Free) or (201) 612-7415 (Toll) and entering conference ID #13687280.

A live webcast of the call will be accessible through our website on our Investor Relations section at the following web address: http://investors.amedisys.com.

Non-GAAP Financial Measures

This press release includes reconciliations of the most comparable financial measures calculated and presented in accordance with accounting principles generally accepted in the U.S. (“GAAP”) to non-GAAP financial measures. The non-GAAP financial measures as defined under SEC rules are as follows: (1) adjusted EBITDA, defined as net income (loss) attributable to Amedisys, Inc. before provision for income taxes, net interest expense and depreciation and amortization, excluding certain items; (2) adjusted net service revenue, defined as net service revenue excluding certain items; (3) adjusted net income attributable to Amedisys, Inc., defined as net income (loss) attributable to Amedisys, Inc. excluding certain items; and (4) adjusted net income attributable to Amedisys, Inc. per diluted share, defined as net income (loss) attributable to Amedisys, Inc. common stockholders per diluted share excluding certain items. Management believes that these non-GAAP financial measures, when reviewed in conjunction with GAAP financial measures, are useful gauges of our current performance and are also included in internal management reporting. These non-GAAP financial measures should be considered in addition to, and not more meaningful than or as an alternative to the GAAP financial measures presented in this earnings release and the company’s financial statements. Non-GAAP measures as presented herein may not be comparable to similarly titled measures reported by other companies since not all companies calculate these non-GAAP measures consistently.

Additional information

Amedisys, Inc. (the “Company”) is a leading healthcare at home Company delivering personalized home health, hospice and personal care. Amedisys is focused on delivering the care that is best for our patients, whether that is home-based personal care; recovery and rehabilitation after an operation or injury; care focused on empowering them to manage a chronic disease; or hospice care at the end of life. More than 3,000 hospitals and 65,000 physicians nationwide have chosen Amedisys as a partner in post-acute care. Founded in 1982, headquartered in Baton Rouge, LA with an executive office in Nashville, TN, Amedisys is a publicly held company. With more than 21,000 employees, in 472 care centers within 38 states and the District of Columbia, Amedisys is dedicated to delivering the highest quality of care to the doorsteps of more than 376,000 patients and clients in need every year. For more information about the Company, please visit: www.amedisys.com.

We use our website as a channel of distribution for important company information. Important information, including press releases, investor presentations and financial information regarding our company, is routinely posted on and accessible on the Investor Relations subpage of our website, which is accessible by clicking on the tab labeled “Investors” on our website home page. Visitors to our website can also register to receive automatic e-mail and other notifications alerting them when new information is made available on the Investor Relations subpage of our website.

Forward-Looking Statements

When included in this press release, words like “believes,” “belief,” “expects,” “plans,” “anticipates,” “intends,” “projects,” “estimates,” “may,” “might,” “would,” “should” and similar expressions are intended to identify forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve a variety of risks and uncertainties that could cause actual results to differ materially from those described therein. These risks and uncertainties include, but are not limited to the following: changes in Medicare and other medical payment levels, our ability to open care centers, acquire additional care centers and integrate and operate these care centers effectively, changes in or our failure to comply with existing federal and state laws or regulations or the inability to comply with new government regulations on a timely basis, competition in the healthcare industry, changes in the case mix of patients and payment methodologies, changes in estimates and judgments associated with critical accounting policies, our ability to maintain or establish new patient referral sources, our ability to consistently provide high-quality care, our ability to attract and retain qualified personnel, changes in payments and covered services by federal and state governments, future cost containment initiatives undertaken by third-party payors, our access to financing, our ability to meet debt service requirements and comply with covenants in debt agreements, business disruptions due to natural disasters or acts of terrorism, our ability to integrate, manage and keep our information systems secure, our ability to comply with requirements stipulated in our corporate integrity agreement, our ability to realize the anticipated benefits of the acquisition of Compassionate Care Hospice, and changes in law or developments with respect to any litigation relating to the Company, including various other matters, many of which are beyond our control.

Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on any forward-looking statement as a prediction of future events. We expressly disclaim any obligation or undertaking and we do not intend to release publicly any updates or changes in our expectations concerning the forward-looking statements or any changes in events, conditions or circumstances upon which any forward-looking statement may be based, except as required by law.

Contact: Investor Contact: Media Contact:
  Amedisys, Inc. Amedisys, Inc.
  Nick Muscato Kendra Kimmons
  Vice President, Strategic Finance Vice President, Marketing & Communications
  (855) 259-2046 (225) 299-3720
  IR@amedisys.com kendra.kimmons@amedisys.com


AMEDISYS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share data)

  For the Three-Month
Period Ended December 31
    For the Year Ended
December 31
     
     
    2018       2017       2018       2017  
                               
  (Unaudited)    
Net service revenue $ 434,378     $ 397,961     $ 1,662,578     $ 1,511,272  
Cost of service, excluding depreciation and amortization   262,251       239,238       992,863       903,377  
General and administrative expenses:        
Salaries and benefits   84,309       79,406       316,522       305,938  
Non-cash compensation   5,234       4,507       17,887       16,295  
Other   42,778       39,757       166,897       159,980  
Depreciation and amortization   3,379       3,984       13,261       17,123  
Asset impairment charge         1,323             1,323  
Securities Class Action Lawsuit settlement, net                     28,712  
Operating expenses   397,951       368,215       1,507,430       1,432,748  
Operating income   36,427       29,746       155,148       78,524  
Other income (expense):        
Interest income   15       54       278       158  
Interest expense   (1,536 )     (1,431 )     (7,370 )     (5,031 )
Equity in earnings from equity method investments   1,231       232       7,692       3,381  
Miscellaneous, net   458       487       3,240       3,769  
Total other income (expense), net   168       (658 )     3,840       2,277  
Income before income taxes   36,595       29,088       158,988       80,801  
Income tax expense   (8,875 )     (32,794 )     (38,859 )     (50,118 )
Net income (loss)   27,720       (3,706 )     120,129       30,683  
Net income attributable to noncontrolling interests   (259 )     (142 )     (783 )     (382 )
Net income (loss) attributable to Amedisys, Inc. $ 27,461     $ (3,848 )   $ 119,346     $ 30,301  
                               
Basic earnings per common share:        
Net income (loss) attributable to Amedisys, Inc. common stockholders $ 0.86     $ (0.11 )   $ 3.64     $ 0.90  
Weighted average shares outstanding   31,916       33,898       32,791       33,704  
Diluted earnings per common share:        
Net income (loss) attributable to Amedisys, Inc. common stockholders $ 0.84     $ (0.11 )   $ 3.55     $ 0.88  
Weighted average shares outstanding   32,805       33,898       33,609       34,304  
                               

AMEDISYS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share data)

  As of December 31,
    2018       2017  
ASSETS    
Current assets:    
Cash and cash equivalents $ 20,229     $ 86,363  
Patient accounts receivable   188,972       201,196  
Prepaid expenses   7,568       7,329  
Other current assets   7,349       16,268  
Total current assets   224,118       311,156  
Property and equipment, net of accumulated depreciation of $95,472 and $146,814   29,449       31,122  
Goodwill   329,480       319,949  
Intangible assets, net of accumulated amortization of $33,050 and $30,610   44,132       46,061  
Deferred income taxes   35,794       56,064  
Other assets   54,145       49,130  
Total assets $ 717,118     $ 813,482  
               
     
LIABILITIES AND EQUITY    
Current liabilities:    
Accounts payable $ 28,531     $ 25,384  
Payroll and employee benefits   92,858       89,936  
Accrued expenses   99,475       89,104  
Current portion of long-term obligations   1,612       10,638  
Total current liabilities   222,476       215,062  
Long-term obligations, less current portion   5,775       78,203  
Other long-term obligations   6,234       3,791  
Total liabilities   234,485       297,056  
               
Equity:    
Preferred stock, $0.001 par value, 5,000,000 shares authorized; none issued or outstanding          
Common stock, $0.001 par value, 60,000,000 shares authorized; 36,252,280 and 35,747,134 shares issued; and 31,973,505 and 33,964,767 shares outstanding   36       35  
Additional paid-in capital   603,666       568,780  
Treasury stock at cost 4,278,775 and 1,782,367 shares of common stock   (241,685 )     (53,713 )
Accumulated other comprehensive income   15       15  
Retained earnings   119,550       204  
Total Amedisys, Inc. stockholders’ equity   481,582       515,321  
Noncontrolling interests   1,051       1,105  
Total equity   482,633       516,426  
Total liabilities and equity $ 717,118     $ 813,482  
               
     

AMEDISYS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS AND DAYS REVENUE OUTSTANDING
(Amounts in thousands, except statistical information)

  For the Three-Month
Period Ended December 31
    For the Year
Ended December 31

     
    2018       2017       2018       2017  
                               
  (Unaudited)    
Cash Flows from Operating Activities:        
Net income (loss) $ 27,720     $ (3,706 )   $ 120,129     $ 30,683  
Adjustments to reconcile net income (loss) to net cash provided by operating activities:        
Depreciation and amortization   3,379       3,984       13,261       17,123  
Non-cash compensation   5,234       4,507       17,887       16,295  
401(k) employer match   2,042       2,207       8,976       8,754  
(Gain) loss on disposal of property and equipment   (24 )     22       714        
Deferred income taxes   5,355       34,950       20,271       52,178  
Equity in earnings from equity method investments   (1,231 )     (232 )     (7,692 )     (3,381 )
Amortization of deferred debt issuance costs/debt discount   201       180       797       735  
Return on equity investment   1,785       665       6,158       5,321  
Asset impairment charge         1,323             1,323  
Changes in operating assets and liabilities, net of impact of acquisitions:        
Patient accounts receivable   6,058       (23,826 )     12,224       (34,672 )
Other current assets   8,711       956       8,679       (4,940 )
Other assets   2,221       (547 )     2,947       (12,749 )
Accounts payable   3,835       2,587       3,165       (2,843 )
Accrued expenses   (1,234 )     9,259       13,524       31,843  
Other long-term obligations   (19 )     (140 )     2,443       61  
                               
Net cash provided by operating activities   64,033       32,189       223,483       105,731  
                               
Cash Flows from Investing Activities:        
Proceeds from sale of deferred compensation plan assets   152             715       622  
Proceeds from the sale of property and equipment   3       131       54       249  
Purchases of property and equipment   (874 )     (1,633 )     (6,558 )     (10,707 )
Investments in equity method investees   (3,667 )     (40 )     (7,144 )     (476 )
Acquisitions of businesses, net of cash acquired   (5,186 )     (9,587 )     (9,260 )     (33,715 )
                               
Net cash used in investing activities   (9,572 )     (11,129 )     (22,193 )     (44,027 )
                               
         
Cash Flows from Financing Activities:        
Proceeds from issuance of stock upon exercise of stock options   3,204       340       5,953       4,554  
Proceeds from issuance of stock to employee stock purchase plan   642       584       2,429       2,382  
Shares withheld upon stock vesting   (1,149 )     (485 )     (6,570 )     (6,939 )
Non-controlling interest distribution   (560 )           (1,090 )     (216 )
Proceeds from borrowings under revolving line of credit   10,500             138,000        
Repayments of borrowings under revolving line of credit   (60,500 )           (130,500 )      
Principal payments of long-term obligations   (379 )     (1,250 )     (91,450 )     (5,319 )
Debt issuance costs               (2,433 )      
Purchase of company stock               (181,402 )      
Repurchase of noncontrolling interest               (361 )      
Net cash used in financing activities   (48,242 )     (811 )     (267,424 )     (5,538 )
Net increase (decrease) in cash and cash equivalents   6,219       20,249       (66,134 )     56,166  
Cash and cash equivalents at beginning of period   14,010       66,114       86,363       30,197  
                               
Cash and cash equivalents at end of period $ 20,229     $ 86,363     $ 20,229     $ 86,363  
                               
Supplemental Disclosures of Cash Flow Information:        
Cash paid for interest $ 533     $ 509     $ 3,522     $ 2,697  
                               
Cash paid for income taxes, net of refunds received $ 3,261     $     $ 14,278     $ 315  
                               
Supplemental Disclosures of Non-Cash Financing Activities:        
Note payable issued for software licenses $     $     $ 418     $  
                               
Capital leases $ 929     $     $ 2,936     $  
                               
Days revenue outstanding (1)   38.0       44.0       38.0       44.0  
                               

(1) Our calculation of days revenue outstanding at December 31, 2018 and 2017 is derived by dividing our ending patient accounts receivable by our average daily patient revenue for the three month periods ended December 31, 2018 and 2017, respectively.

AMEDISYS, INC. AND SUBSIDIARIES
SEGMENT INFORMATION
(Amounts in millions, except statistical information)
(Unaudited)

Segment Information - Home Health

  For the Three-
Month Period
Ended December 31,
    2018       2017  
Financial Information  (in millions):    
Medicare $ 211.5     $ 205.0  
Non-Medicare   92.5       76.9  
               
Net service revenue   304.0       281.9  
Cost of service   189.4       174.9  
               
Gross margin   114.6       107.0  
Asset impairment charge         1.3  
Other operating expenses   72.2       71.3  
               
Operating income $ 42.4     $ 34.4  
               
Same Store Growth (1):    
Medicare revenue   3 %     2 %
Non-Medicare revenue   20 %     24 %
Total admissions   6 %     3 %
Total volume (2)   6 %     7 %
Total Episodic admissions (3)   5 %     2 %
Total Episodic volume (4)   5 %     5 %
Key Statistical Data - Total (5):    
Medicare:    
Admissions   47,864       46,421  
Recertifications   28,555       27,896  
               
Total volume   76,419       74,317  
Completed episodes   75,497       73,037  
Visits   1,328,025       1,273,435  
Average revenue per completed episode (6) $ 2,891     $ 2,858  
Visits per completed episode (7)   17.7       17.6  
Non-Medicare:    
Admissions   30,092       27,421  
Recertifications   14,874       12,415  
               
Total volume   44,966       39,836  
Visits   722,677       619,745  
Total (5):    
Visiting Clinician Cost per Visit $ 84.27     $ 83.88  
Clinical Manager Cost per Visit   8.09       8.49  
               
Total Cost per Visit $ 92.36     $ 92.37  
Visits   2,050,702       1,893,180  


  For the Year
Ended December 31,
    2018       2017  
Financial Information  (in millions):    
Medicare $ 830.8     $ 793.3  
Non-Medicare   343.7       290.6  
Net service revenue   1,174.5       1,083.9  
Cost of service   722.1       670.9  
Gross margin   452.4       413.0  
Asset impairment charge         1.3  
Other operating expenses   279.8       281.9  
Operating income $ 172.6     $ 129.8  
               
Same Store Growth (1):    
Medicare revenue   6 %     (4 %)
Non-Medicare revenue   18 %     17 %
Total admissions   5 %     2 %
Total volume (2)   7 %     4 %
Total Episodic admissions (3)   4 %     1 %
Total Episodic volume (4)   5 %     3 %
Key Statistical Data - Total (5):    
Medicare:    
Admissions   190,748       190,132  
Recertifications   112,773       106,774  
Total volume   303,521       296,906  
Completed episodes   296,223       290,227  
Visits   5,261,315       5,067,436  
Average revenue per completed episode (6) $ 2,854     $ 2,823  
Visits per completed episode (7)   17.6       17.3  
Non-Medicare:    
Admissions   118,577       107,665  
               
Recertifications   55,736       46,364  
Total volume   174,313       154,029  
Visits   2,772,339       2,347,363  
Total (5):    
Visiting Clinician Cost per Visit $ 81.88     $ 82.04  
Clinical Manager Cost per Visit   8.01       8.44  
Total Cost per Visit $ 89.89     $ 90.48  
Visits   8,033,654       7,414,799  

(1)      Same store information represents the percent increase (decrease) in our Medicare, Non-Medicare, Total and Episodic revenue, admissions or volume for the period as a percent of the Medicare, Non-Medicare, Total and Episodic revenue, admissions or volume of the prior period.
(2)      Total volume includes all admissions and recertifications.
(3)      Total Episodic admissions includes admissions for Medicare and Non-Medicare payors that bill on a 60-day episode of care basis.
(4)      Total Episodic volume includes admissions and recertifications for Medicare and Non-Medicare payors that bill on a 60-day episode of care basis.
(5)      Total includes acquisitions.
(6)      Average Medicare revenue per completed episode is the average Medicare revenue earned for each Medicare completed episode of care.
(7)      Medicare visits per completed episode are the home health Medicare visits on completed episodes divided by the home health Medicare episodes completed during the period.

Segment Information - Hospice

  For the Three-
Month Period

Ended December 31,
    2018       2017  
Financial Information  (in millions):    
Medicare $ 103.5     $ 92.7  
Non-Medicare   5.3       5.2  
Net service revenue   108.8       97.9  
Cost of service   56.8       50.6  
Gross margin   52.0       47.3  
Other operating expenses   23.2       20.8  
Operating income $ 28.8     $ 26.5  
               
Same Store Growth (1):    
Medicare revenue   11 %     14 %
Non-Medicare revenue   5 %     131 %
Hospice admissions   12 %     8 %
Average daily census   9 %     12 %
Key Statistical Data - Total (2):    
Hospice admissions   7,152       6,371  
Average daily census   7,809       7,162  
Revenue per day, net $ 151.46     $ 148.62  
Cost of service per day $ 79.02     $ 76.81  
Average discharge length of stay   103       96  


  For the Year
Ended December 31,
    2018       2017  
Financial Information  (in millions):    
Medicare $ 390.2     $ 350.7  
Non-Medicare   20.7       17.1  
Net service revenue   410.9       367.8  
Cost of service   212.0       187.5  
Gross margin   198.9       180.3  
Other operating expenses   85.7       77.5  
Operating income $ 113.2     $ 102.8  
               
Same Store Growth (1):    
Medicare revenue   11 %     17 %
Non-Medicare revenue   21 %     20 %
Hospice admissions   8 %     11 %
Average daily census   11 %     15 %
Key Statistical Data - Total (2):    
Hospice admissions   27,596       25,381  
Average daily census   7,588       6,820  
Revenue per day, net $ 148.36     $ 147.75  
Cost of service per day $ 76.53     $ 75.31  
Average discharge length of stay   100       93  

(1)      Same store information represents the percent increase (decrease) in our Medicare and Non-Medicare revenue, Hospice admissions or average daily census for the period as a percent of the Medicare and Non-Medicare revenue, Hospice admissions or average daily census of the prior period.
(2)      Total includes acquisitions.

Segment Information - Personal Care

  For the Three-
Month Period
Ended December 31,
  2018   2017
Financial Information  (in millions):    
Medicare $   $
Non-Medicare   21.6     18.1
           
     
Net service revenue   21.6     18.1
Cost of service   16.1     13.7
     
Gross margin   5.5     4.4
Other operating expenses   3.4     3.1
     
Operating income $ 2.1   $ 1.3
     
Key Statistical Data:    
Billable hours   890,696     782,140
Clients served   13,054     12,646
Shifts   406,119     365,360
Revenue per hour $ 24.24   $ 23.07
Revenue per shift $ 53.16   $ 49.39
Hours per shift   2.2     2.1
   
  For the Year
Ended December 31,
  2018   2017
Financial Information (in  millions):    
Medicare $   $
Non-Medicare   77.2     59.6
     
Net service revenue   77.2     59.6
Cost of service   58.8     45.0
     
Gross margin   18.4     14.6
Other operating expenses   13.1     9.7
     
Operating income $ 5.3   $ 4.9
     
Key Statistical Data:    
Billable hours   3,248,304     2,604,794
Clients served   17,981     16,774
Shifts   1,468,541     1,195,511
Revenue per hour $ 23.75   $ 22.86
Revenue per shift $ 52.54   $ 49.80
Hours per shift   2.2     2.2
           

Segment Information - Corporate

  For the Three-
Month Period
Ended December 31,
  2018   2017
Financial Information  (in millions):    
Other operating expenses $ 35.0   $ 29.6
Depreciation and amortization   1.9     2.9
           
Total operating expenses $ 36.9   $ 32.5
           
   
  For the Year
Ended December 31,
  2018   2017
Financial Information (in  millions):    
Other operating expenses $ 127.6   $ 117.8
Depreciation and amortization   8.4     12.5
           
Total operating expenses before Securities Class Action Lawsuit settlement, net   136.0     130.3
Securities Class Action Lawsuit settlement, net       28.7
Total operating expenses $ 136.0   $ 159.0
     

AMEDISYS, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP MEASURES
(Amounts in thousands)
(Unaudited)

Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”):

  For the Three-
Month Period

Ended December 31,
    For the Year Ended
December 31,
    2018       2017       2018       2017  
Net income (loss) attributable to Amedisys, Inc. $ 27,461     $ (3,848 )   $ 119,346     $ 30,301  
Add:        
Income tax expense   8,875       32,794       38,859       50,118  
Interest expense, net   1,521       1,377       7,092       4,873  
Depreciation and amortization   3,379       3,984       13,261       17,123  
Certain items (1)   3,124       24,414       3,739       61,429  
Interest component of certain items (1)   (451 )     (168 )     (1,731 )     (263 )
Tax component of certain items (1)         (21,424 )           ( 21,424 )
Adjusted EBITDA (2) (6) $ 43,909     $ 37,129     $ 180,566     $ 142,157  
                               
         

Adjusted Net Service Revenue Reconciliation:

  For the Three-
Month Period
Ended December 31,
    For the Year Ended
December 31,
  2018   2017     2018   2017
Net service revenue $ 434,378   $ 397,961   $ 1,662,578   $ 1,511,272
Add:        
Certain items (1)           1,687     6,506
                       
Adjusted net service revenue (3) (6) $ 434,378   $ 397,961   $ 1,664,265   $ 1,517,778
                       
         

Adjusted Net Income Attributable to Amedisys, Inc Reconciliation:

  For the Three-
Month Period
Ended December 31,
   
For the Year Ended
December 31,

    2018      2017        2018      2017 
                         
Net income (loss) attributable to Amedisys, Inc. $ 27,461   $ (3,848 )   $ 119,346   $ 30,301
Add:        
Certain items (1)   2,312     23,233       2,767     45,627
Adjusted net income attributable to Amedisys, Inc. (4) (6) $ 29,773   $ 19,385     $ 122,113   $ 75,928
         

Adjusted Net Income Attributable to Amedisys, Inc. per Diluted Share:

  For the Three-
Month Period
Ended December 31,
    For the Year Ended
December 31,
    2018     2017       2018     2017
Net income (loss) attributable to Amedisys, Inc. common stockholders per diluted share $ 0.84   $ (0.11 )   $ 3.55   $ 0.88
Add:        
Certain items (1)   0.07     0.67       0.08     1.33
Adjusted net income attributable to Amedisys, Inc. common stockholders per diluted share (5) (6) $ 0.91   $ 0.56     $ 3.63   $ 2.21
         

(1)      The following details the certain items for the three month periods and years ended December 31, 2018 and 2017:

Certain Items:

  For the Three-Month Period
Ended December 31, 2018
  For the Year Ended
December 31, 2018

  (Income) Expense   (Income) Expense
Certain Items Impacting Net Service  Revenue:    
Florida self-audit (pre-acquisition) $     $ 1,687  
Certain Items Impacting Operating Expenses:    
Acquisition costs   1,025       2,757  
Legal fees - non-routine   56       1,465  
Indemnity receivable adjustment   2,143       2,143  
Certain Items Impacting Total Other Income (Expense):    
Legal settlements         (1,437 )
Miscellaneous, other (income) expense, net   (100 )     (2,876 )
Total $ 3,124     $ 3,739  
Net of tax $ 2,312     $ 2,767  
Diluted EPS $ 0.07     $ 0.08  
               
     


  For the Three-Month Period
Ended December 31, 2017
 
For the Year Ended
December 31, 2017

  (Income) Expense   (Income) Expense
Certain Items Impacting Net Service  Revenue:    
Florida ZPIC audit $   $ 6,506  
Certain Items Impacting Operating Expenses:    
Acquisition costs   48     1,025  
Legal fees - non-routine   358     1,768  
Securities Class Action Lawsuit settlement, net       28,712  
Restructuring activity   648     2,318  
Data center relocation       940  
Asset impairment   1,323     1,323  
Certain Items Impacting Total Other Income (Expense):    
Legal settlements       (2,014 )
Miscellaneous, other (income) expense, net   613     (573 )
Certain Items Impacting Income Tax Expense:    
Remeasurement of deferred tax assets and liabilities   21,424     21,424  
Total $ 24,414   $ 61,429  
Net of tax $ 23,233   $ 45,627  
Diluted EPS $ 0.67   $ 1.33  
     

(2)      Adjusted EBITDA is defined as net income (loss) attributable to Amedisys, Inc. before provision for income taxes, net interest expense and depreciation and amortization, excluding certain items as described in footnote 1.
(3)      Adjusted net service revenue is defined as net service revenue plus certain items as described in footnote 1.
(4)      Adjusted net income attributable to Amedisys, Inc. is defined as net income (loss) attributable to Amedisys, Inc. calculated in accordance with GAAP excluding certain items as described in footnote 1.
(5)      Adjusted net income attributable to Amedisys, Inc. common stockholders per diluted share is defined as diluted income (loss) per share calculated in accordance with GAAP excluding the earnings per share effect of certain items as described in
footnote 1.
(6)      Adjusted EBITDA, adjusted net service revenue, adjusted net income attributable to Amedisys, Inc. and adjusted net income attributable to Amedisys, Inc. common stockholders per diluted share should not be considered as an alternative to, or more meaningful than, income before income taxes or other measures calculated in accordance with GAAP. These calculations may not be comparable to a similarly titled measure reported by other companies, since not all companies calculate these non-GAAP financial measures in the same manner.

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