AmSurg Reports Third-Quarter Results

NASHVILLE, Tenn.--(BUSINESS WIRE)--

Christopher A. Holden, President and Chief Executive Officer of AmSurg Corp. AMSG, today announced financial results for the third quarter ended September 30, 2014. The Company's results for the quarter included (see page 6 for a reconciliation of all GAAP and non-GAAP financial results):

• Net revenues of $503.2 million, an increase of 91.3% from the third quarter of 2013;
• Net loss from continuing operations attributable to AmSurg of $12.1 million; adjusted net earnings of $34.6 million, up 92.4%;
• Net loss per share from continuing operations attributable to AmSurg of $0.23; adjusted net earnings per diluted share of $0.69, up 23.2% on higher diluted shares outstanding; and
• Growth of 110.4% in adjusted EBITDA to $95.9 million.

Mr. Holden commented, “We are pleased with AmSurg's performance for the third quarter, which produced better than expected financial results. In addition, the work to integrate the acquisition of Sheridan, which was completed July 16, 2014, has gone very well. The combination of Sheridan's leadership position in outsourced physician services with AmSurg's leadership in ambulatory services has been well-received in our markets and has generated a strong pipeline of cross-selling opportunities. In addition, we continue to have robust pipelines of potential acquisitions across our markets, and we are well-positioned financially to fund our growth strategies. We believe AmSurg represents an innovative and differentiated platform of services and expertise that is highly aligned with the transformation of the healthcare delivery system, including the industry-wide drive to improve quality and lower the costs of care and the development of integrated care systems as the market shifts to value-based payment arrangements.”

Ambulatory Services

Net revenues for Ambulatory Services increased 5.4% for the third quarter, to $277.3 million from $263.0 million for the third quarter of 2013. Same-center revenue grew 1.7% for the third quarter compared with the third quarter last year and has increased 0.6% for the first nine months of 2014. Adjusted EBITDA increased 5.1% to $47.9 million for the third quarter of 2014 from $45.6 million for the prior-year quarter, with adjusted EBITDA margin consistent for each quarter at 17.3%.

During the third quarter, the Ambulatory Services segment added four new ambulatory surgery centers through acquisition, including three centers acquired as part of the Sheridan transaction, two of which are consolidated and one of which is unconsolidated. The fourth acquired center is also unconsolidated. In addition, there were four center dispositions for the third quarter, which resulted in 243 centers in operation at the end of the quarter. Ambulatory Services also had eight centers under letter of intent at the end of the quarter, one of which has since been acquired, and one center under development that is expected to open in 2015.

Physician Services

Net revenues for Physician Services were $225.9 million for the third quarter of 2014, and adjusted EBITDA was $48.0 million, or 21.3% of net revenues. These figures include results from the date of the Sheridan acquisition on July 16, 2014 through the end of the third quarter. For comparison purposes, and inclusive of 15 days of pre-acquisition activity, Physician Services produced an increase in net revenues of 15.8% for the full three months ended September 30, 2014 compared with the third quarter of 2013. This increase was comprised of 3.7% growth in same contract revenues, 0.9% growth in new contract revenues and 11.2% growth in acquisition revenues. Organic growth in net revenues totaled 5.5% for the full third quarter of 2014 and 7.3% for the first nine months of the year. Contributing to organic growth for the quarter, same contract revenues increased 5.1% and new contract revenues increased 0.4%. Same contract revenue growth was comprised of a 2.4% increase in patient encounters and a 2.7% increase in net revenue per patient encounter.

Yesterday, the Physician Services segment completed the acquisition of Desert Neonatology Associates, which provides neonatology services for Banner Health facilities within greater Phoenix, Arizona. This practice has a staff of six physicians and 30 neonatal nurse practitioners and represents Physician Services' initial entry into the Phoenix market. In addition, a second acquisition has been completed since the end of the third quarter of a three-physician maternal fetal medicine practice located in southern Florida.

Liquidity

At the end of the third quarter of 2014, AmSurg had cash and cash equivalents of $194.1 million and availability of $300.0 million under its revolving credit facility. Net cash flows from operations, excluding distributions to noncontrolling interests and transaction-related costs of $38.4 million, were $113.4 million for the third quarter and $175.6 million for the first nine months of 2014. The Company's ratio of total debt at the end of the quarter to trailing 12 months EBITDA as calculated under the Company's credit agreement was 5.4.

Guidance

Based on the Company's results for the third quarter and year to date, as well as its outlook for the remainder of 2014, AmSurg today is revising its financial and operating guidance for 2014 and establishing guidance for the fourth quarter of the year. The Company's guidance for adjusted net earnings per diluted share from continuing operations attributable to common shareholders (“Adjusted EPS”) excludes transaction and severance costs related to acquisitions, acquisition-related amortization expense, gains or losses on deconsolidations and share-based compensation expense. The Company's guidance is as follows:

• Revenues in a range of $1.60 billion to $1.61 billion;
• Same-center revenue increase of 1% for Ambulatory Services, 6% to 8% organic revenue growth in Physician Services;
• Net cash flow provided by operating activities, less distributions to noncontrolling interests, in a range of $235 million to $245 million, excluding transaction costs;
• Adjusted EPS in a range of $2.66 to $2.71; and
• For the fourth quarter of 2014, Adjusted EPS in a range of $0.70 to $0.73.

The information contained in the preceding paragraphs, including information regarding the Company's financial results for future periods, is forward-looking information. Forward-looking information involves known and unknown risks and uncertainties as described below. There can be no assurance that AmSurg will attain the financial targets set forth in this press release. The Company's actual results and performance could differ materially from those expressed or implied by the forward-looking information contained in this press release.

For the fourth quarter and full year of 2014, non-GAAP adjusted net earnings per diluted share from continuing operations exclude transaction and severance costs related to the acquisition of Sheridan, acquisition-related amortization expense, gains and losses on deconsolidation and share-based compensation expense, net of the tax impact thereon, the exact amount of which are not currently determinable but may be significant. For that reason, the Company is unable to provide fourth quarter and full-year GAAP net earnings guidance.

Changes to Executive Management

Mr. Holden also today announced changes to the Company's executive management as part of the integration of Sheridan. Phillip A. Clendenin, formerly the Executive Vice President – Operations of AmSurg, has been named President – Ambulatory Services. Robert Coward, formerly President of Sheridan, has been named President – Physician Services and Chief Development Officer for the Company. In addition, the Company announced that David L. Manning, Executive Vice President and Chief Development Officer of the Company, will be leaving the Company effective December 31, 2014.

Mr. Holden remarked, “David Manning, with his positive endorsement and support for the timing of his succession plan, will complete his extraordinary career at AmSurg at the end of the year. David has been a leader and the driving force in the success of AmSurg since his co-founding of the Company. We are grateful for all of David's contributions to AmSurg during his many years of service to the Company.

“I also congratulate Phillip and Bob on their new responsibilities. Phillip has a long and successful background in healthcare, including as Senior Vice President of Corporate Services, Senior Vice President – Operations and Executive Vice President – Operations of AmSurg. We recently welcomed Bob to AmSurg as a result of the acquisition of Sheridan, where he has served as President since 2010. Prior to becoming President, Bob served Sheridan as Chief Financial Officer and as Senior Vice President of Operations or Chief Operating Officer since 2000. We look forward to the continuing contributions of these leaders in their new positions.”

Conference Call

AmSurg Corp. will hold a conference call to discuss this release today, November 4, 2014, at 5:00 p.m. Eastern time. Investors will have the opportunity to listen to the conference call over the Internet by going to www.amsurg.com and clicking “Investors” at least 15 minutes early to register, download, and install any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available at these sites shortly after the call and continue for 30 days.

Safe Harbor

This press release contains forward-looking statements. These statements, which have been included in reliance on the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, involve risks and uncertainties. Investors are hereby cautioned that these statements may be affected by important factors, including, but not limited to, the following risks: the risk that payments from third-party payors, including government healthcare programs, may decrease or not increase as costs increase; the potential loss of collections and revenue if the Company is unable to timely enroll providers in the Medicare and Medicaid programs; the Company's ability to acquire and develop additional surgery centers and its ability to acquire or develop additional relationships with providers for outsourced physician services on favorable terms; the Company's ability to compete for physician partners, managed care contracts, patients and strategic relationships; adverse developments affecting the medical practices of the Company's physician partners and affiliated practices; the Company's ability to maintain favorable relations with its physician partners, affiliated practices and clients; the Company's ability to grow revenues by increasing procedure volume while maintaining operating margins and profitability within its existing centers and outsourced physician services operations; the Company's ability to manage the growth in its business, successfully integrate and operate acquired businesses and achieve expected benefits from acquisitions; the Company's ability to obtain sufficient capital resources to complete acquisitions and develop new surgery centers or operations related to its outsourced physician services; the Company's ability to generate sufficient cash to service all of its indebtedness; adverse weather and other factors beyond the Company's control that may affect its surgery centers or operations of its outsourced physician services; the Company's failure to comply with applicable laws and regulations; the Company's failure to effectively and timely transition to the ICD-10 coding system; the risk of changes in legislation, regulations or regulatory interpretations that may negatively affect the Company; the risk of becoming subject to federal and state investigation; the risk from an unpredictable impact of the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010; the risk of regulatory changes that may obligate the Company to buy out interests of physicians who are minority owners of its surgery centers; the risk that non-competition agreements in place with the Company's physicians or other clinical employees may not be enforceable; the risk of payment delays, forfeiture of payment or civil and criminal penalties related to failing to satisfy any notification and reapplication requirements for any acquired companies to maintain licensure, certification and other authorities to operate after an acquisition; potential liabilities associated with the Company's status as a general partner of limited partnerships; liabilities for claims brought against the Company; the risk that the Company's reserves established with respect to its losses covered under its insurance programs are not adequate; the Company's legal responsibility to minority owners of its surgery centers, which may conflict with its interests and prevent the Company from acting solely in its best interests; potential write-offs of the impaired portion of intangible assets; and potential liabilities relating to the tax deductibility of goodwill; and other risk factors described in AmSurg's Annual Report on Form 10-K for the fiscal year ended December 31, 2013 and other filings with the Securities and Exchange Commission. Consequently, actual results, performance or developments may differ materially from the forward-looking statements included above. AmSurg disclaims any intent or obligation to update these forward-looking statements.

About AmSurg

AmSurg Corp. operates an Ambulatory Services business that acquires, develops and operates ambulatory surgery centers in partnership with physician practice groups throughout the U.S. AmSurg also operates a Physician Services business that provides outsourced physician services in multiple specialties to hospitals, ASCs and other healthcare facilities, primarily in the areas of anesthesiology, children's services, emergency medicine and radiology. Through these businesses as of September 30, 2014, AmSurg owns and operates 243 ASCs in 34 states and provides physician services in 25 states, employing more than 2,600 physicians and other healthcare professionals.

AMSURG CORP.
Unaudited Selected Consolidated Financial and Operating Data
(In thousands, except earnings per share)
		Three Months Ended September 30,								Nine Months Ended September 30,
Statement of Operations Data:		2014				2013				2014				2013
Revenues		$	556,426			$	263,035			$	1,096,066			$	780,714
Provision for uncollectibles		(53,193		)		—				(53,193		)		—
Net revenue		503,233				263,035				1,042,873				780,714
Operating expenses:
Salaries and benefits		240,585				83,416				407,247				243,587
Supply cost		42,241				37,360				121,392				112,329
Other operating expenses		81,532				55,023				192,011				159,291
Transaction costs		25,102				110				28,681				285
Depreciation and amortization		20,866				8,239				37,620				24,152
Total operating expenses		410,326				184,148				786,951				539,644
Gain on deconsolidation		—				—				3,411				2,237
Equity in earnings of unconsolidated affiliates		2,158				1,095				3,461				2,193
Operating income		95,065				79,982				262,794				245,500
Interest expense, net		39,055				7,293				52,909				22,346
Debt extinguishment costs		16,887				—				16,887				—
Earnings from continuing operations before income taxes		39,123				72,689				192,998				223,154
Income tax expense		18				11,161				25,872				35,715
Net earnings from continuing operations		39,105				61,528				167,126				187,439
Net earnings (loss) from discontinued operations		(1,682		)		739				(1,417		)		2,937
Net earnings		37,423				62,267				165,709				190,376
Net earnings attributable to noncontrolling interests		47,257				45,496				139,387				137,231
Net earnings (loss) attributable to AmSurg Corp. shareholders		(9,834		)		16,771				26,322				53,145
Preferred stock dividends		(2,239		)		—				(2,239		)		—
Net earnings (loss) attributable to AmSurg Corp. common shareholders		$	(12,073	)		$	16,771			$	24,083			$	53,145
Amounts attributable to AmSurg Corp. common shareholders:
Earnings (loss) from continuing operations, net of income tax		$	(10,704	)		$	16,659			$	25,569			$	52,192
Discontinued operations, net of income tax		(1,369		)		112				(1,486		)		953
Net earnings (loss) attributable to AmSurg Corp. common shareholders		$	(12,073	)		$	16,771			$	24,083			$	53,145
Basic earnings (loss) per share attributable to AmSurg Corp. common shareholders:
Net earnings (loss) from continuing operations		$	(0.23	)		$	0.53			$	0.70			$	1.67
Net earnings (loss) from discontinued operations		(0.03		)		—				(0.04		)		0.03
Net earnings (loss)		$	(0.26	)		$	0.53			$	0.66			$	1.70
Diluted earnings (loss) per share attributable to AmSurg Corp. common shareholders:
Net earnings (loss) from continuing operations		$	(0.23	)		$	0.52			$	0.69			$	1.64
Net earnings (loss) from discontinued operations		(0.03		)		—				(0.04		)		0.03
Net earnings (loss)		$	(0.26	)		$	0.52			$	0.65			$	1.67
Weighted average number of shares and share equivalents outstanding:
Basic		46,320				31,376				36,620				31,267
Diluted		46,320				31,991				37,026				31,912

AMSURG CORP.
Unaudited Selected Consolidated Financial and Operating Data, continued
(In thousands, except earnings per share)
		Three Months Ended September 30,								Nine Months Ended September 30,
		2014				2013				2014				2013
Reconciliation of net earnings to Adjusted net earnings (1):
Net earnings (loss) attributable to AmSurg Corp. shareholders		$	(9,834	)		$	16,771			$	26,322			$	53,145
(Earnings) loss from discontinued operations		1,868				(600		)		2,067				(2,014		)
Amortization of purchased intangibles		9,969				—				9,969				—
Share-based compensation		2,424				2,104				7,388				6,070
Gain on deconsolidation		—				—				(3,411		)		(2,237		)
Transaction costs		25,102				110				28,681				285
Debt extinguishment costs		16,887				—				16,887				—
Deferred financing write-off		12,763				—				12,763				—
Total pre-tax adjustments		69,013				1,614				74,344				2,104
Tax effect		24,571				400				26,039				591
Total adjustments, net		44,442				1,214				48,305				1,513
Adjusted net earnings		$	34,608			$	17,985			$	74,627			$	54,658
Basic shares outstanding		46,320				31,376				36,620				31,267
Effect of dilutive securities options and non-vested shares		3,904				615				1,572				645
Diluted shares outstanding, if converted		50,224				31,991				38,192				31,912
Adjusted earnings per share		$	0.69			$	0.56			$	1.95			$	1.71
Reconciliation of net earnings to Adjusted EBITDA (2):
Net earnings (loss) attributable to AmSurg Corp. shareholders		$	(9,834	)		$	16,771			$	26,322			$	53,145
(Earnings) loss from discontinued operations		1,369				(112		)		1,486				(953		)
Interest expense, net		39,055				7,293				52,909				22,346
Income tax expense		18				11,161				25,872				35,715
Depreciation and amortization		20,866				8,239				37,620				24,152
EBITDA		51,474				43,352				144,209				134,405
Adjustments:
Share-based compensation		2,424				2,104				7,388				6,070
Transaction costs		25,102				110				28,681				285
Gain on deconsolidation		—				—				(3,411		)		(2,237		)
Debt extinguishment costs		16,887				—				16,887				—
Total adjustments		44,413				2,214				49,545				4,118
Adjusted EBITDA		$	95,887			$	45,566			$	193,754			$	138,523
Segment Information:
Ambulatory Services Adjusted EBITDA		$	47,871			$	45,566			$	145,738			$	138,523
Physician Services Adjusted EBITDA		48,016				—				48,016				—
Adjusted EBITDA		$	95,887			$	45,566			$	193,754			$	138,523
Net Revenue by Segment:
Ambulatory Services		$	277,302			$	263,035			$	816,942			$	780,714
Physician Services		225,931				—				225,931				—
Total net revenue		$	503,233			$	263,035			$	1,042,873			$	780,714
See footnotes on page 12

AMSURG CORP.
Unaudited Selected Consolidated Financial and Operating Data, continued
(Dollars in thousands)
		Three Months Ended September 30,								Nine Months Ended September 30,
Operating Data- Ambulatory Services:		2014				2013				2014				2013
Continuing centers in operation at end of period (consolidated)		234				233				234				233
Continuing centers in operation at end of period (unconsolidated)		9				3				9				3
Average number of continuing centers in operation (consolidated)		234				234				232				231
New centers added during the period		4				2				6				4
Centers discontinued during the period		4				1				5				1
Centers under development/not opened at end of period		1				—				1				—
Centers under letter of intent at end of period		8				5				8				5
Average revenue per consolidated center		$	1,187			$	1,135			$	3,450			$	3,387
Same center revenues increase		1.7		%		2.4		%		0.6		%		0.1		%
Procedures performed during the period at consolidated centers		411,244				399,537				1,214,602				1,192,112
Income tax expense attributable to noncontrolling interests		$	196			$	197			$	540			$	565
Operating Data- Physician Services:										Three Months Ended September 30, 2014				Nine Months Ended September 30, 2014
Same contract revenue growth										5.1		%		4.8		%
New contract revenue growth										0.4		%		2.5		%
Total organic revenue growth										5.5		%		7.3		%

AMSURG CORP.
Unaudited Selected Consolidated Financial and Operating Data, continued
(In thousands)
		September 30,			December 31,
Balance Sheet Data:		2014			2013
Assets
Current assets:
Cash and cash equivalents		$	194,081		$	50,840
Restricted cash and marketable securities		30,251			—
Accounts receivable, net of allowance of $83,541 and $27,862, respectively		229,250			105,072
Supplies inventory		19,060			18,414
Prepaid and other current assets		128,319			36,699
Total current assets		600,961			211,025
Property and equipment, net		175,896			163,690
Investments in unconsolidated affiliates		73,126			15,526
Goodwill		3,303,818			1,758,970
Intangible assets, net		1,261,952			27,867
Other assets		5,604			866
Total assets		$	5,421,357		$	2,177,944
Liabilities and Equity
Current liabilities:
Current portion of long-term debt		$	18,368		$	20,844
Accounts payable		24,453			27,501
Accrued salaries and benefits		133,050			32,294
Accrued interest		18,717			1,885
Other accrued liabilities		59,204			7,346
Total current liabilities		253,792			89,870
Long-term debt		2,230,314			583,298
Deferred income taxes		611,098			176,020
Other long-term liabilities		92,066			25,503
Commitments and contingencies
Noncontrolling interests – redeemable		176,516			177,697
Equity:
Mandatory convertible preferred stock, no par value, 5,000 shares authorized, 1,725 and 0 shares issued and outstanding, respectively		166,647			—
Common stock, no par value, 70,000 shares authorized, 48,123 and 32,353 shares outstanding, respectively		885,622			185,873
Retained earnings		602,407			578,324
Total AmSurg Corp. equity		1,654,676			764,197
Noncontrolling interests – non-redeemable		402,895			361,359
Total equity		2,057,571			1,125,556
Total liabilities and equity		$	5,421,357		$	2,177,944

AMSURG CORP.
Unaudited Selected Consolidated Financial and Operating Data, continued
(In thousands)
		Three Months Ended September 30,								Nine Months Ended September 30,
Statement of Cash Flow Data:		2014				2013				2014				2013
Cash flows from operating activities:
Net earnings		$	37,423			$	62,267			$	165,709			$	190,376
Adjustments to reconcile net earnings to net cash flows provided by operating activities:
Depreciation and amortization		20,866				8,239				37,620				24,152
Amortization of deferred loan costs		14,649				—				15,645				1,459
Provision for uncollectibles		58,944				5,565				69,715				16,382
Net loss on sale of long-lived assets		1,857				84				2,468				84
Gain on deconsolidation		—				—				(3,411		)		(2,237		)
Share-based compensation		2,424				2,104				7,388				6,070
Excess tax benefit from share-based compensation		(198		)		(680		)		(2,288		)		(1,890		)
Deferred income taxes		13,516				10,506				31,388				29,835
Equity in earnings of unconsolidated affiliates		(2,158		)		(1,095		)		(3,461		)		(2,193		)
Debt extinguishment costs		4,536				—				4,536				—
Increases (decreases) in cash and cash equivalents, net of acquisitions and dispositions:
Accounts receivable		(49,008		)		(1,783		)		(65,758		)		(17,821		)
Prepaid, supplies and other current assets		(22,104		)		1,056				(24,346		)		(1,339		)
Accounts payable		(7,610		)		(472		)		(10,007		)		(2,823		)
Accrued expenses and other liabilities		47,599				8,975				48,368				6,820
Other, net		1,734				1,617				2,485				2,058
Net cash flows provided by operating activities		122,470				96,383				276,051				248,933
Cash flows from investing activities:
Acquisitions and related expenses		(2,114,211		)		(41,109		)		(2,138,648		)		(59,455		)
Acquisition of property and equipment		(8,098		)		(8,239		)		(23,109		)		(20,711		)
Proceeds from sale of interests in surgery centers		2,877				151				4,969				151
Purchases of marketable securities		(3,486		)		—				(3,486		)		—
Other		4,527				52				2,082				107
Net cash flows used in investing activities		(2,118,391		)		(49,145		)		(2,158,192		)		(79,908		)
Cash flows from financing activities:
Proceeds from long-term borrowings		1,972,153				58,513				2,046,399				129,435
Repayment on long-term borrowings		(300,717		)		(55,454		)		(403,043		)		(151,676		)
Distributions to noncontrolling interests		(47,433		)		(45,555		)		(139,443		)		(137,081		)
Proceeds from preferred stock offering		172,500				—				172,500				—
Cash dividends for preferred shares		(2,239		)		—				(2,239		)		—
Proceeds from common stock offering		439,875				—				439,875				—
Proceeds from issuance of common stock upon exercise of stock options		504				9,561				2,150				23,289
Repurchase of common stock		(33		)		(9,317		)		(2,890		)		(35,481		)
Excess tax benefit from share-based compensation		198				680				2,288				1,890
Payments of equity issuance costs		(24,366		)		—				(24,366		)		—
Financing cost incurred		(65,673		)		(111		)		(65,673		)		(1,257		)
Other		322				25				(176		)		961
Net cash flows provided by (used in) financing activities		2,145,091				(41,658		)		2,025,382				(169,920		)
Net increase (decrease) in cash and cash equivalents		149,170				5,580				143,241				(895		)
Cash and cash equivalents, beginning of period		44,911				39,923				50,840				46,398
Cash and cash equivalents, end of period		$	194,081			$	45,503			$	194,081			$	45,503

AMSURG CORP.
Unaudited Selected Consolidated Financial and Operating Data, continued
(In thousands, except earnings per share)
Presented below is certain statement of earnings and operating data for 2014, which have been restated in order to present additional discontinued operations.
		Three Months Ended
		March, 31				June 30,
Statement of Earnings Data:		2014				2014
Revenues		$	260,470			$	279,170
Operating expenses:
Salaries and benefits		82,379				84,283
Supply cost		38,046				41,105
Other operating expenses		54,411				56,068
Transaction costs		—				3,579
Depreciation and amortization		8,289				8,465
Total operating expenses		183,125				193,500
Gain on deconsolidation		2,045				1,366
Equity in earnings of unconsolidated affiliates		764				539
Operating income		80,154				87,575
Interest expense, net		6,961				6,893
Earnings from continuing operations before income taxes		73,193				80,682
Income tax expense		13,016				12,838
Net earnings from continuing operations		60,177				67,844
Net earnings (loss) from discontinued operations		(63		)		328
Net earnings		60,114				68,172
Net earnings attributable to noncontrolling interests		42,919				49,211
Net earnings attributable to AmSurg Corp. common shareholders		$	17,195			$	18,961
Amounts attributable to AmSurg Corp. common shareholders:
Earnings from continuing operations, net of income tax		$	17,442			$	18,831
Discontinued operations, net of income tax		(247		)		130
Net earnings attributable to AmSurg Corp. common shareholders		$	17,195			$	18,961
Basic earnings (loss) per share attributable to AmSurg Corp. common shareholders:
Net earnings from continuing operations		$	0.55			$	0.59
Net earnings (loss) from discontinued operations		(0.01		)		—
Net earnings		$	0.54			$	0.60
Diluted earnings (loss) per share attributable to AmSurg Corp. common shareholders:
Net earnings from continuing operations		$	0.54			$	0.58
Net earnings (loss) from discontinued operations		(0.01		)		—
Net earnings		$	0.54			$	0.59
Weighted average number of shares and share equivalents outstanding:
Basic		31,716				31,825
Diluted		32,120				32,233

AMSURG CORP.
Unaudited Selected Consolidated Financial and Operating Data, continued
(In thousands, except earnings per share)
Presented below is certain statement of earnings and operating data for 2013, which have been restated in order to present additional discontinued operations.
		For the Three Months Ended																For the
		March 31,				June 30,				Sept. 30,				Dec. 31,				Year Ended
Statement of Earnings Data:		2013				2013				2013				2013				Dec. 31, 2013
Revenues		$	254,280			$	263,399			$	263,035			$	279,942			$	1,060,656
Operating expenses:
Salaries and benefits		80,044				80,127				83,416				84,885				328,472
Supply cost		36,580				38,389				37,360				41,679				154,008
Other operating expenses		51,570				52,698				55,023				58,278				217,569
Transaction costs		35				140				110				15				300
Depreciation and amortization		7,899				8,014				8,239				8,361				32,513
Total operating expenses		176,128				179,368				184,148				193,218				732,862
Gain on deconsolidation		2,237				—				—				—				2,237
Equity in earnings of unconsolidated affiliates		402				696				1,095				958				3,151
Operating income		80,791				84,727				79,982				87,682				333,182
Interest expense, net		7,542				7,511				7,293				7,185				29,531
Earnings from continuing operations before income taxes		73,249				77,216				72,689				80,497				303,651
Income tax expense		12,038				12,516				11,161				13,042				48,757
Net earnings from continuing operations		61,211				64,700				61,528				67,455				254,894
Net earnings from discontinued operations		1,061				1,137				739				3,713				6,650
Net earnings		62,272				65,837				62,267				71,168				261,544
Net earnings attributable to noncontrolling interests		44,461				47,274				45,496				51,610				188,841
Net earnings attributable to AmSurg Corp. common shareholders		$	17,811			$	18,563			$	16,771			$	19,558			$	72,703
Amounts attributable to AmSurg Corp. common shareholders:
Earnings from continuing operations, net of income tax		$	17,404			$	18,129			$	16,659			$	18,972			$	71,164
Discontinued operations, net of income tax		407				434				112				586				1,539
Net earnings attributable to AmSurg Corp. common shareholders		$	17,811			$	18,563			$	16,771			$	19,558			$	72,703
Basic earnings per share attributable to AmSurg Corp. common shareholders:
Net earnings from continuing operations		$	0.56			$	0.58			$	0.53			$	0.60			$	2.27
Net earnings from discontinued operations		0.01				0.01				—				0.02				0.05
Net earnings		$	0.57			$	0.59			$	0.53			$	0.62			$	2.32
Diluted earnings per share attributable to AmSurg Corp. common shareholders:
Net earnings from continuing operations		$	0.55			$	0.57			$	0.52			$	0.59			$	2.23
Net earnings from discontinued operations		0.01				0.01				—				0.02				0.05
Net earnings		$	0.56			$	0.58			$	0.52			$	0.61			$	2.28
Weighted average number of shares and share equivalents outstanding:
Basic		31,217				31,208				31,376				31,549				31,338
Diluted		31,881				31,862				31,991				32,082				31,954

	AMSURG CORP.
	Footnotes to Reconciliations of Non-GAAP Measures to GAAP Measures
(1)	We believe the calculation of adjusted net earnings from continuing operations per diluted share attributable to AmSurg Corp. common shareholders provides a better measure of our ongoing performance and provides better comparability to prior periods because it excludes the gains or loss from deconsolidations, which are non-cash in nature, acquisition costs, including associated debt extinguishment costs and deferred financing write-off, and acquisition-related amortization expense (the majority of which relate to the Sheridan Transaction and which are of a nature and significance not generally associated with our historical individual center acquisition activity) and share-based compensation expense. Adjusted net earnings from continuing operations per diluted share attributable to AmSurg Corp. common shareholders should not be considered as a measure of financial performance under accounting principles generally accepted in the United States, and the item excluded from it is a significant component in understanding and assessing financial performance. Because adjusted net earnings from continuing operations per diluted share attributable to AmSurg Corp. common shareholders is not a measurement determined in accordance with accounting principles generally accepted in the United States and is thus susceptible to varying calculations, it may not be comparable as presented to other similarly titled measures of other companies. For purposes of calculating adjusted earnings per share, the Company utilizes the if-converted method to determine the number of diluted shares outstanding. In periods where utilizing the if-converted method is anti-dilutive, the mandatory convertible preferred stock will not be included in the calculation of diluted shares outstanding.
(2)	We define Adjusted EBITDA of AmSurg as earnings before interest, income taxes, depreciation, amortization, share-based compensation, acquisition costs and gains or losses on deconsolidations and discontinued operations. Adjusted EBITDA should not be considered a measure of financial performance under generally accepted accounting principles. Items excluded from Adjusted EBITDA are significant components in understanding and assessing financial performance. Adjusted EBITDA is an analytical indicator used by management and the health care industry to evaluate company performance, allocate resources and measure leverage and debt service capacity. Adjusted EBITDA should not be considered in isolation or as an alternative to net income, cash flows generated by operations, investing or financing activities, or other financial statement data presented in the consolidated financial statements as indicators of financial performance or liquidity. Because Adjusted EBITDA is not a measurement determined in accordance with generally accepted accounting principles and is thus susceptible to varying calculations, Adjusted EBITDA as presented may not be comparable to other similarly titled measures of other companies. Net earnings from continuing operations attributable to AmSurg Corp. common shareholders is the financial measure calculated and presented in accordance with generally accepted accounting principles that is most comparable to Adjusted EBITDA as defined.