Press Releases

Unedited news and product information from vendors.

Emdeon Reports Fourth Quarter and Full Year 2010 Results
Mar 08, 2011 (03:03 PM EST)


NASHVILLE, Tenn., March 8, 2011 /PRNewswire/ --

  • Revenue of $275.7 million, increased 15.5% over fourth quarter 2009
  • Adjusted EBITDA of $74.1 million, increased 18.4% over fourth quarter 2009
  • Transaction growth during 2010 was 9.4% despite industry-wide healthcare utilization declines
  • Completion of Chamberlin Edmonds acquisition in fourth quarter of 2010 broadens revenue cycle management offering with leading technology-enabled government program eligibility and enrollment services  
  • Expanded clinical information exchange capabilities to deliver real-time patient information at the point of care

Emdeon Inc. (NYSE: EM), a leading provider of healthcare revenue and payment cycle management and clinical information exchange solutions, today announced financial results for the fourth quarter ended December 31, 2010, as summarized below:

(In millions, except per share amts)

4Q 10

4Q 09

% Change


FY 10

FY 09

% Change

Revenue

$              275.7

$              238.6

15.5%


$           1,002.2

$              918.4

9.1%

Net Income

$                15.0

$                  4.7

219.1%


$                33.2

$                14.0

137.1%

Earnings per share (diluted)

$                0.11

$                0.03

266.7%


$                0.21

$                0.12

75.0%

Non-GAAP Adjusted EBITDA

$                74.1

$                62.6

18.4%


$              268.1

$              240.3

11.6%

Non-GAAP Adjusted EPS

$                0.25

$                0.20

25.0%


$                0.92

$                0.87

5.7%

Non-GAAP fully diluted shares

                122.6

                121.0

1.3%


                122.3

                112.6

8.6%



"We are pleased with our financial results in the fourth quarter.  Our revenue cycle management and payment services solutions continued to lead our growth with solid performance.  Despite a challenging healthcare utilization environment, we continued to gain share and signed 12 new sole source payer agreements in the fourth quarter alone," said George Lazenby, Emdeon's chief executive officer.  "In addition to our operating performance, we also closed our acquisition of Chamberlin Edmonds (CEA).  This acquisition continued our strategy of expanding into technology-based services that leverage our existing healthcare information network, products and data in the area of revenue cycle management."

Lazenby continued, "Emdeon was successful in advancing many of our strategic growth initiatives during 2010.  In addition to CEA, we closed strategic acquisitions to complete our provider-based ePayment suite, expand our revenue cycle management denial and recovery services and extend our payer solutions to include strategic consulting.  We also continued our momentum in the government sector through a new relationship with Noridian, which has already served to improve the visibility of our solutions in this growing area.  And finally, we expanded our position in the emerging area of clinical information exchange with our national lab hub and electronic prescription network, and by entering into an exclusive relationship with LabCorp to provide a low-cost EHR Lite solution for physician practices nationwide to assist them in qualifying for HITECH stimulus dollars."  

Commenting on 2011, Lazenby added, "We are confident the investments we have made position us solidly for future growth, especially in the areas of revenue cycle management, payment integrity, payment automation and clinical information exchange.  We remain focused on our strategy of layering value-added products and technology-enabled services on top of our leading health information network to drive efficiency in healthcare."

Fourth quarter revenue was $275.7 million, an increase of 15.5%, compared to $238.6 million for the same period in 2009.  GAAP operating income for the fourth quarter of 2010 was $28.1 million compared to $26.5 million for the same period in 2009, an increase of 6.0%, primarily due to margin from revenue growth offset partially by higher depreciation and amortization.  Fourth quarter Adjusted EBITDA grew 18.4% to $74.1 million, or 26.9% of revenue, from Adjusted EBITDA of $62.6 million, or 26.2% of revenue, in the comparable period in 2009.  

GAAP net income (before noncontrolling interest) for the fourth quarter of 2010 was $15.0 million compared to GAAP net income of $4.7 million for the same period in 2009.  GAAP net income per diluted share for the fourth quarter of 2010 was $0.11 compared to $0.03 for the same period in 2009.  Adjusted Net Income per fully diluted share for the fourth quarter of 2010 was $0.25, using a weighted average fully diluted share count of 122.6 million, compared to $0.20, using a weighted average fully diluted share count of 121.0 million, for the same period in 2009.

For the year ended December 31, 2010, revenue was $1,002.2 million, an increase of 9.1%, compared to $918.4 million for 2009. GAAP operating income for 2010 was $117.5 million compared to $101.0 million for the prior year, an increase of 16.3%.  Adjusted EBITDA grew 11.6% to $268.1 million, or 26.8% of revenue, from Adjusted EBITDA of $240.3 million, or 26.2% of revenue, in 2009.  

GAAP net income (before noncontrolling interest) for 2010 was $33.2 million compared to GAAP net income of $14.0 million in 2009. GAAP net income per diluted share for 2010 was $0.21 compared to $0.12 in the prior year.  Adjusted Net Income per fully diluted share for 2010 was $0.92, using a weighted average fully diluted share count of 122.3 million, compared to $0.87, using a weighted average fully diluted share count of 112.6 million, for 2009.

A reconciliation of Emdeon's financial results determined in accordance with U.S. Generally Accepted Accounting Principles (GAAP) to certain non-GAAP financial measures has been provided in the financial statement tables included in this release to supplement its unaudited condensed consolidated financial statements presented on a GAAP basis.  An explanation of these non-GAAP measures is also included below under the heading "Explanation of Non-GAAP Financial Measures."

Financial Outlook

Emdeon currently anticipates its annual revenue, Adjusted EBITDA and Adjusted Net Income per fully diluted share for 2011 to be as follows:

  • 2011 revenue to be between $1.105 to $1.135 billion  
  • 2011 Adjusted EBITDA to be between $300 to $310 million
  • 2011 Adjusted Net Income per fully diluted share to be between $1.00 to $1.06, using a weighted average share count of 124.0 million

Notice of Conference Call and Webcast

Emdeon will conduct a conference call/webcast for investors and institutional analysts on Tuesday, March 8, 2011 at 5:00 pm Eastern Time/4:00 pm Central Time to discuss Emdeon's financial results.  

To access Emdeon's live conference call and webcast, dial 800-299-7928 (617-614-3926 for international calls) using conference code 13253625 or visit the Investors section of Emdeon's website:  www.emdeon.com.  Please go to the website at least 15 minutes prior to the event to register, download and install any necessary audio/video software to access the webcast.  For those unable to listen to the live broadcast, a conference call replay will be available for one week following the conference call by calling 888-286-8010 (617-801-6888 for international calls) using conference code 43366927.  A webcast replay will also be archived on Emdeon's website for at least 30 days following the conference call.

About Emdeon

Emdeon is a leading provider of revenue and payment cycle management and clinical information exchange solutions, connecting payers, providers and patients in the U.S. healthcare system. Emdeon's product and service offerings integrate and automate key business and administrative functions of its payer and provider customers throughout the patient encounter. Through the use of Emdeon's comprehensive suite of products and services, which are designed to easily integrate with existing technology infrastructures, customers are able to improve efficiency, reduce costs, increase cash flow and more efficiently manage the complex revenue and payment cycle and clinical information exchange processes. For more information, visit www.emdeon.com.

Forward-Looking Statements

Statements made in this press release that express Emdeon's or management's intentions, plans, beliefs, expectations or predictions of future events are forward-looking statements, which Emdeon intends to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.  These statements often include words such as "may," "will," "should," "believe," "expect," "anticipate," "intend," "plan," "estimate" or similar expressions. Forward-looking statements may include information concerning Emdeon's possible or assumed future results of operations, including descriptions of Emdeon's revenues, profitability, outlook and overall business strategy.  You should not place undue reliance on these statements because they are subject to numerous uncertainties and factors relating to Emdeon's operations and business environment, all of which are difficult to predict and many of which are beyond Emdeon's control.  Although Emdeon believes that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect Emdeon's actual financial results or results of operations and could cause actual results to differ materially from those in the forward-looking statements, including but not limited to:  effects of competition, including competition from entities that are customers for certain of Emdeon's products and services; Emdeon's ability to maintain relationships with its customers and channel partners; Emdeon's ability to effectively cross-sell its products and services to existing customers and to continue to generate revenue and maintain profitability by developing or acquiring and successfully deploying new or updated products and services; pricing pressures on Emdeon's products and services; the anticipated benefits from acquisitions not being fully realized or not being realized within the expected time frames; and general economic, business or regulatory conditions affecting the healthcare information technology and services industries; as well as the other risks discussed in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections and elsewhere in Emdeon's Annual Report on Form 10-K for the year ended December 31, 2009, as well as Emdeon's periodic and other reports, filed with the Securities and Exchange Commission.

You should keep in mind that any forward-looking statement made by Emdeon herein, or elsewhere, speaks only as of the date on which made. Emdeon expressly disclaims any intent, obligation or undertaking to update or revise any forward-looking statements made herein to reflect any change in Emdeon's expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based.

Emdeon Inc.

Condensed Consolidated Statements of Operations

(unaudited and amounts in thousands, except share and per share amounts)








For the Three Months


For the Year


Ended December 31,


Ended December 31,


2010

2009


2010

2009





Revenue

$             275,661

$             238,560


$          1,002,152

$             918,448

Costs and expenses:






Cost of operations (exclusive of depreciation and amortization below)

169,246

144,788


612,594

562,867

Development and engineering

9,670

9,503


35,515

33,928

Sales, marketing, general and administrative

30,683

28,555


111,948

113,701

Depreciation and amortization

37,667

28,270


124,721

105,321

(Gain) loss on abandonment of leased properties

304

933


(105)

1,675

Operating income

28,091

26,511


117,479

100,956

Interest income

(2)

-


(14)

(75)

Interest expense

13,284

17,921


61,031

70,246

Other

(5,144)

(519)


(9,284)

(519)

Income before income tax provision

19,953

9,109


65,746

31,304

Income tax provision

4,931

4,416


32,579

17,301

Net income

15,022

4,693


33,167

14,003

Net income attributable to noncontrolling interest

5,331

1,552


13,621

4,422

Net income attributable to Emdeon Inc.

$                 9,691

$                 3,141


$               19,546

$                 9,581

Net income per share Class A common stock:






Basic

$                   0.11

$                   0.03


$                   0.22

$                   0.12

Diluted

$                   0.11

$                   0.03


$                   0.21

$                   0.12

Weighted average common shares outstanding:






Basic

90,362,054

90,322,841


90,100,070

82,459,169

Diluted

91,104,919

90,443,828


90,832,631

82,525,002



Emdeon Inc.

Condensed Consolidated Balance Sheets

(unaudited and amounts in thousands, except share amounts)






December 31,


December 31,


2010


2009

Assets




Current assets:




Cash and cash equivalents

$               99,188


$             211,999

Accounts receivable, net of allowance for doubtful accounts of $5,394 and $4,433 at December 31, 2010 and 2009, respectively

174,191


150,009

Deferred income tax assets

4,911


4,924

Prepaid expenses and other current assets

25,020


16,632

Total current assets

303,310


383,564

Property and equipment, net

231,307


152,091

Goodwill

908,310


703,027

Intangible assets, net

1,035,886


989,280

Other assets, net

9,750


1,451

Total assets

$          2,488,563


$          2,229,413

Liabilities and equity




Current liabilities:




Accounts payable

$                 4,732


$                 9,910

Accrued expenses

112,245


72,493

Deferred revenues

12,130


11,140

Current portion of long-term debt

12,494


9,972

Total current liabilities

141,601


103,515

Long-term debt, excluding current portion

933,749


830,710

Deferred income tax liabilities

197,355


145,914

Tax receivable agreement obligations to related parties

138,533


142,044

Other long-term liabilities

22,037


27,361

Commitments and contingencies




Equity:




Preferred stock (par value, $0.00001), 25,000,000 shares authorized and 0 shares issued and outstanding

-


-

Class A common stock (par value, $0.00001),  400,000,000 shares authorized and 91,064,486 and 90,423,941
    shares outstanding at December 31, 2010 and 2009, respectively

1


1

Class B common stock, exchangeable (par value, $0.00001), 52,000,000 shares authorized and 24,689,142 and
    24,752,955 shares outstanding at December 31, 2010 and 2009, respectively

-


-

Additional paid-in capital

738,888


730,941

Contingent consideration

1,955


-

Accumulated other comprehensive loss

(2,569)


(11,198)

Retained earnings

53,250


33,704

Emdeon Inc. equity

791,525


753,448

Noncontrolling interest

263,763


226,421

Total equity

1,055,288


979,869

Total liabilities and equity

$          2,488,563


$          2,229,413



Emdeon Inc.

Condensed Consolidated Statements of Cash Flows

(unaudited and amounts in thousands)









Year Ended December 31,


2010


2009

Operating activities




Net income

$               33,167


$               14,003

Adjustments to reconcile net income to net cash provided by operating activities:




Depreciation and amortization

124,721


105,321

Equity-based compensation expense

17,721


25,415

Deferred income tax expense (benefit)

12,236


(1,248)

Amortization of debt discount and issuance costs

12,911


11,947

Amortization of discontinued cash flow hedge from other comprehensive loss

5,800


7,970

Change in fair value of interest rate swap (not subject to hedge accounting)

(3,908)


-

(Gain) loss on abandonment of leased properties

(105)


1,675

Change in contingent consideration

(9,284)


-

Other

524


(502)

Changes in operating assets and liabilities:




Accounts receivable

(2,429)


(2,571)

Prepaid expenses and other

(12,552)


4,945

Accounts payable

(7,499)


4,731

Accrued expenses, deferred revenue and other liabilities

451


(9,234)

Tax receivable agreement obligations to related parties

95


299

Net cash provided by operating activities

171,849


162,751

Investing activities




Purchases of property and equipment

(79,988)


(48,292)

Payments for acquisitions, net of cash acquired

(251,464)


(76,250)

Other

(3,000)


1,300

Net cash used in investing activities

(334,452)


(123,242)

Financing activities




Proceeds from issuance of stock

306


147,964

Repurchase of Class A common stock

-


(1,586)

Repurchase of Units of EBS Master LLC

-


(5,373)

Proceeds from incremental term loan

97,982


-

Debt principal and sublicense obligation payments

(11,423)


(29,203)

Repayment of assumed debt obligations

(35,254)


(200)

Payments on revolver

-


(10,000)

Capital contributions from stockholders

-


203

Other

(1,819)


(793)

Net cash provided by financing activities

49,792


101,012

Net (decrease) increase in cash and cash equivalents

(112,811)


140,521

Cash and cash equivalents at beginning of period

211,999


71,478

Cash and cash equivalents at end of period

$               99,188


$             211,999



Emdeon Inc.

Segment Information

(unaudited and amounts in thousands)

















For the Three Months Ended December 31, 2010



For the Three Months Ended December 31, 2009






Corporate &







Corporate &




Payer

Provider

Pharmacy

Eliminations

Consolidated



Payer

Provider

Pharmacy

Eliminations

Consolidated

Revenue from external customers














Claims management


$           49,149

$                   -

$                     -

$                          -

$                      49,149



$           47,165

$                   -

$                    -

$                         -

$                        47,165

Payment services


62,483

-

-

-

62,483



55,552

-

-

-

55,552

Patient statements


-

64,307

-

-

64,307



-

67,086

-

-

67,086

Revenue cycle management


-

70,164

-

-

70,164



-

40,287

-

-

40,287

Dental


-

7,595

-

-

7,595



-

7,823

-

-

7,823

Pharmacy services


-

-

21,963

-

21,963



-

-

20,647

-

20,647

Inter-segment revenue


1,189

161

-

(1,350)

-



468

110

-

(578)

-

Net revenue


112,821

142,227

21,963

(1,350)

275,661



103,185

115,306

20,647

(578)

238,560

Costs and expenses:














Cost of operations


74,819

87,467

8,278

(1,318)

169,246



65,379

73,236

6,721

(548)

144,788

Development and engineering


3,189

4,470

2,011

-

9,670



3,505

4,011

1,987

-

9,503

Sales, marketing, general and administrative


6,681

9,662

1,450

12,890

30,683



5,342

7,643

2,608

12,962

28,555

Loss on abandonment


-

304

-

-

304



-

45

-

888

933

Segment contribution (1)


$           28,132

$            40,324

$             10,224

$                (12,922)

65,758



$           28,959

$           30,371

$              9,331

$                (13,880)

54,781

Depreciation and amortization






37,667







28,270

Interest income






(2)







-

Interest expense






13,284







17,921

Other income, net






(5,144)







(519)

Income before income tax provision






$                      19,953







$                          9,109

































For the Year Ended December 31, 2010



For the Year Ended December 31, 2009






Corporate &







Corporate &




Payer

Provider

Pharmacy

Eliminations

Consolidated



Payer

Provider

Pharmacy

Eliminations

Consolidated

Revenue from external customers














Claims management


$         194,239

$                   -

$                     -

$                          -

$                    194,239



$         184,605

$                   -

$                    -

$                         -

$                      184,605

Payment services


234,176

-

-

-

234,176



211,985

-

-

-

211,985

Patient statements


-

262,521

-

-

262,521



-

274,390

-

-

274,390

Revenue cycle management


-

198,019

-

-

198,019



-

155,112

-

-

155,112

Dental


-

31,403

-

-

31,403



-

31,513

-

-

31,513

Pharmacy services


-

-

81,794

-

81,794



-

-

60,843

-

60,843

Inter-segment revenue


3,501

402

-

(3,903)

-



902

1,498

-

(2,400)

-

Net revenue


431,916

492,345

81,794

(3,903)

1,002,152



397,492

462,513

60,843

(2,400)

918,448

Costs and expenses:














Cost of operations


283,050

303,252

30,067

(3,775)

612,594



253,473

294,700

16,668

(1,974)

562,867

Development and engineering


12,127

16,078

7,310

-

35,515



12,677

15,294

5,957

-

33,928

Sales, marketing, general and administrative


26,700

30,711

5,970

48,567

111,948



25,803

31,978

8,047

47,873

113,701

(Gain) Loss on abandonment


66

477

-

(648)

(105)



-

45

-

1,630

1,675

Segment contribution (1)


$         109,973

$          141,827

$             38,447

$                (48,047)

242,200



$         105,539

$         120,496

$            30,171

$                (49,929)

206,277

Depreciation and amortization






124,721







105,321

Interest income






(14)







(75)

Interest expense






61,031







70,246

Other income, net






(9,284)







(519)

Income before income tax provision






$                      65,746







$                        31,304





























(1) Segment contribution has been reduced by equity-based compensation expense of $5,030, $3,916, $17,721, and $25,415 for the three months ended December 31, 2010 and 2009 and for the years ended December 31, 2010 and 2009, respectively. Segment contribution without such equity-based compensation expense would have been $70,788, $58,697, $259,921 and $231,692 for the three months ended December 31, 2010 and 2009 and for the years ended December 31, 2010 and 2009, respectively.



Explanation of Non-GAAP Financial Measures

Emdeon's management believes that, in order to properly understand Emdeon's short-term and long-term financial trends, investors may wish to consider the impact of certain non-cash or non-operating items, when used as a supplement to financial performance measures prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP).  These items result from facts and circumstances that vary in frequency and/or impact continuing operations.  In addition, management uses results of operations before such excluded items to evaluate the operational performance of Emdeon as a basis for strategic planning and, in the case of Adjusted EBITDA, as a performance evaluation metric in determining achievement of certain executive and management incentive compensation programs.  Investors should consider these non-GAAP measures in addition to, and not as a substitute for, financial performance measures prepared in accordance with GAAP.  In addition to the description provided below, reconciliations of GAAP to non-GAAP results are provided in the financial statement tables included in this release.

In this release, Emdeon defines Adjusted EBITDA as EBITDA (which is defined as net income before income tax provision (benefit), net interest expense and depreciation and amortization), plus certain other non-cash or non-operating items (collectively, "EBITDA Adjustments").

In this release, Emdeon defines Adjusted Net Income as the sum of (i) GAAP net income, (ii) EBITDA Adjustments, (iii) non-cash interest expense and (iv) depreciation and amortization expense resulting from adjustments of assets to fair value in connection with acquisition accounting, less income taxes computed based on a normalized income tax rate.  Emdeon defines Adjusted Net Income per fully diluted share as the quotient of Adjusted Net Income and weighted average shares outstanding, assuming all potentially dilutive securities (except for contingently issuable shares subject to performance conditions) are fully dilutive and outstanding shares from their date of grant or issuance.

To properly evaluate Emdeon's business, Emdeon encourages investors to review the GAAP financial information included in this release, and not rely on any single financial measure to evaluate Emdeon's business.  Emdeon also strongly encourages investors to review the reconciliation of GAAP net income and GAAP net income per diluted share to the applicable non-GAAP measures of Adjusted EBITDA, Adjusted Net Income and Adjusted Net Income per fully diluted share.  These non-GAAP measures, as Emdeon defines them, may not be similar to non-GAAP measures used by other companies.

Management uses Adjusted EBITDA and Adjusted Net Income per fully diluted share to facilitate a comparison of Emdeon's operating performance on a consistent basis from period to period that, when viewed in combination with Emdeon's GAAP results, management believes provides a more complete understanding of factors and trends affecting Emdeon's business than GAAP measures alone. Management believes these non-GAAP measures assist Emdeon's board of directors, management, lenders and investors in comparing Emdeon's operating performance on a consistent basis because they remove where applicable, the impact of Emdeon's capital structure, asset base, acquisition accounting, non-cash charges and non-operating items from Emdeon's operations.

Emdeon also presents Adjusted EBITDA and Adjusted Net Income per fully diluted share on a forward-looking basis as part of its Financial Outlook for 2011.  Emdeon is unable to present a quantitative reconciliation of these forward-looking non-GAAP financial measures to the most directly comparable forward-looking GAAP financial measures because management cannot predict, with sufficient reliability, contingent payments relating to past and possible future acquisitions, changes in the fair value of Emdeon's interest rate swap agreement and the effect on income taxes of these and other items attributable to Emdeon's capital structure, all of which are difficult to estimate and primarily dependent on future events.  

Emdeon Inc.

Reconciliation of GAAP Net Income to Adjusted EBITDA

(unaudited and amounts in thousands)






For the Three Months


For the Year



Ended December 31,


Ended December 31,



2010

2009


2010

2009








Net income


$            15,022

$              4,693


$            33,167

$            14,003

Interest expense, net


13,282

17,921


61,017

70,171

Income tax provision


4,931

4,416


32,579

17,301

Depreciation and amortization


37,667

28,270


124,721

105,321

EBITDA


70,902

55,300


251,484

206,796








Equity-based compensation


5,030

3,916


17,721

25,415

Acquisition method adjustments


49

209


254

1,398

IPO-related transaction costs


-

-


-

1,513

Facilities consolidation costs


1,796

1,964


3,347

2,541

Tax receivable agreements change in estimate


413

299


95

299

Acquisition and divestiture related costs, net


1,079

911


4,521

2,321

Contingent consideration adjustments


(5,144)

-


(9,284)

-

EBITDA Adjustments


3,223

7,299


16,654

33,487








Adjusted EBITDA


$            74,125

$            62,599


$          268,138

$          240,283



Emdeon Inc.

Reconciliation of GAAP Net Income to Adjusted Net Income

(unaudited and amounts in thousands)




For the Three Months


For the Year


Ended December 31,


Ended December 31,


2010

2009


2010

2009







Net income

$        15,022

$          4,693


$        33,167

$        14,003

Income tax provision

4,931

4,416


32,579

17,301

EBITDA Adjustments

3,223

7,299


16,654

33,487

Non-cash interest expense

1,619

5,108


16,367

19,918

Depreciation and amortization resulting from acquisition method adjustments

26,749

19,458


86,208

76,444

Adjusted net income before income taxes

51,544

40,974


184,975

161,153

Normalized income tax provision

20,360

16,185


73,065

63,655







Adjusted Net Income

$        31,184

$        24,789


$      111,910

$        97,498



Emdeon Inc.

Reconciliation of GAAP Net Income Per Diluted Share of Class A Common Stock to

Adjusted Net Income Per Fully Diluted Share(1)

(unaudited)




For the Three Months


For the Year


Ended December 31,


Ended December 31,


2010

2009


2010

2009

Net income per diluted share of Class A common stock

$            0.11

$            0.03


$            0.21

$            0.12

Impact of assuming full dilution of all outstanding equity instruments for the period

0.01

0.00


0.06

0.01

Adjustments on a per share basis:






Income tax provision

0.04

0.04


0.27

0.15

EBITDA Adjustments

0.03

0.06


0.14

0.30

Non-cash interest expense

0.01

0.04


0.13

0.18

Depreciation and amortization resulting from acquisition method adjustments

0.22

0.16


0.71

0.68







Adjusted net income before income taxes

0.42

0.33


1.52

1.44

Normalized income tax provision

0.17

0.13


0.60

0.57

Adjusted Net Income per fully diluted share

$            0.25

$            0.20


$            0.92

$            0.87








(1) The calculation of Adjusted Net Income per fully diluted share assumes the following equity-based instruments were fully converted into Class A common stock on their date of issuance:





(shares in thousands)*


For the Three Months


For the Year


Ended December 31,


Ended December 31,

Weighted average of:

2010

2009


2010

2009

Class A shares outstanding

90,747

90,323


90,622

82,459

Class B shares outstanding

24,689

24,753


24,698

25,039

Restricted stock units outstanding

657

639


683

859

Options to purchase Class A shares outstanding

6,495

5,247


6,262

4,254

Shares assumed in Adjusted Net Income per fully diluted share calculation

122,588

120,962


122,265

112,611







* Note: Above shares include all potential securities as dilutive and outstanding except for shares issued and equity awards in connection with 2010 acquisitions and not contemplated in the shares denominator utilized in the 2010 annual Adjusted Net Income per fully diluted share financial outlook range.



SOURCE Emdeon Inc.