Amedisys (AMED)

Results of Operations

During 2009, we completed the acquisition of 20 home health and hospice agencies compared to 145 home health and hospice agencies in 2008 and opened 48 home health and hospice agencies in 2009 compared to 40 home health and hospice agencies in 2008. As a result of these acquisition and start-up activities, our operating results may not be comparable for the years presented.

When we refer to “base business,” we mean home health and hospice agencies that we have operated for at least the last twelve months; when we refer to “acquisitions,” we mean home health and hospice agencies that we acquired within the last twelve months; and when we refer to “start-ups,” we mean any home health or hospice agency opened by us in the last twelve months. Once an agency has been in operation for a twelve month period, the results for that particular agency are included as part of our base business from that date forward (for example, revenue from the agencies acquired in March 2008, in the TLC acquisition are recorded in our base business commencing in April 2009). When we refer to episodic-based revenue, admissions, recertifications or completed episodes, we mean home health revenue, admissions, recertifications or completed episodes of care for those payors that pay on an episodic-basis, which includes Medicare and other insurance carriers including Medicare Advantage programs.

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Index to Financial Statements

Results of Operations

Our operating results are not comparable for the years presented, primarily as a result of our acquisition and start-up agencies.

When we refer to “base business”, we mean home health and hospice agencies that we have operated for at least the last twelve months; when we refer to “acquisitions”, we mean home health and hospice agencies that we acquired within the last twelve months; and when we refer to “start-ups”, we mean any home health or hospice agency opened by us in the last twelve months. Once an agency has been in operation for a twelve month period, the results for that particular agency are included as part of our base business from that date forward. When we refer to episodic-based revenue, admissions, recertifications or completed episodes, we mean revenue, admissions, recertifications or completed episodes of care for those payors that pay on an episodic-basis, which includes Medicare and other insurance carriers including Medicare Advantage programs.

RESULTS OF OPERATIONS

Our operating results may not be comparable for the three and nine-month periods ended September 30, 2008 as compared to the three and nine-month periods ended September 30, 2007, primarily as a result of our acquisitions and start-up agencies. In addition, the recent turmoil related to both the credit and equity markets may have an impact on our ability to continue to follow our strategy of growing through both acquisition and start-up activity if we are not able to obtain the necessary financing. When we refer to base business, we mean home health and hospice agencies that we have operated for at least the last twelve months; when we refer to acquisitions, we mean home health and hospice agencies that we acquired within the last twelve months; and when we refer to start-ups, we mean any new location opened by us in the last twelve months. Once an agency location has been in operation for a twelve month period, the results for that particular agency are included as part of our base business from that date forward. When we refer to episodic-based revenue, admissions or recertifications, we mean revenue, admissions or recertifications of payors that reimburse on an episodic-basis, which includes Medicare and other insurance carriers as well as Medicare Advantage programs.

As indicated in the risk factors incorporated by reference or set forth herein, reductions to Medicare rates and/or changes in Medicare reimbursement methodology could have a material adverse impact on our results of operations.

RESULTS OF OPERATIONS

Our operating results may not be comparable for the three and six-month periods ended June 30, 2008 as compared to the three and six-month periods ended June 30, 2007, primarily as a result of our acquisitions and start-up agencies. When we refer to base business, we mean home health and hospice agencies that we have operated for at least the last twelve months; when we refer to acquisitions, we mean home health and hospice agencies that we acquired within the last twelve months; and when we refer to start-ups, we mean any new location opened by us in the last twelve months. Once an agency location has been in operation for a twelve month period, the results for that particular agency are included as part of our base business from that date forward. When we refer to our internal episodic-based revenue growth or internal episodic-based admission growth, we mean the percentage increase in our total episodic-based revenue or admissions of our base and start-up agencies in the current period, as compared to our total episodic-based revenue or admissions from the prior period, respectively. When we refer to episodic-based revenue or admissions, we mean revenue or admissions of payors that reimburse on an episodic-basis, which include Medicare and other insurance carriers, including Medicare Advantage programs.

As indicated in the risk factors incorporated or set forth herein, reductions to Medicare rates and/or changes in Medicare reimbursement methodology could have a material adverse impact on our results of operations.

RESULTS OF OPERATIONS

Our operating results may not be comparable for the three-month period ended March 31, 2008 as compared to the three-month period ended March 31, 2007, primarily as a result of our acquisitions and start-up agencies. When we refer to base business, we mean home health and hospice agencies that we have operated for at least the last twelve months; when we refer to acquisitions, we mean home health and hospice agencies that we acquired within the last twelve months; and when we refer to start-ups, we mean any new location opened by us in the last twelve months. Once an agency location has been in operation for a twelve month period, the results for that particular agency are included as part of our base business from that date forward. When we refer to our internal growth rate, we mean our internal growth rate as calculated by the percentage increase in our total episodic-based admissions of our base and start-up agencies in the current period, as compared to admissions of our total episodic-based admissions from the prior period. When we refer to our internal revenue growth, we mean our internal revenue growth as calculated by the percentage increase in our total episodic-based revenue of our base and start-up agencies in the current period, as compared to revenue of our total episodic-based revenue from the prior period. When we refer to episodic-based admissions, we mean admissions of payors that reimburse on an episodic-basis, which include Medicare and other insurance carriers, including Medicare Advantage programs.

As indicated in the risk factors incorporated or set forth herein, reductions to Medicare rates and/or changes in Medicare reimbursement methodology could have a material adverse impact on our results of operations.

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Results of Operations

Reductions to Medicare rates and/or changes in Medicare reimbursement methodology could have an adverse impact on our results of operations. See Part I, Item 1A. Risk Factors for more details.

Results of Operations

The following table sets forth, for the periods indicated, certain items included in our Consolidated Income Statement as a percentage of our net service revenue:

Results of Operations

The following table sets forth, for the periods indicated, certain items included in the Company’s Consolidated Statements of Operations as a percentage of our net service revenue:

Results of Operations

The following table sets forth, for the periods indicated, certain items included in the Company’s Consolidated Statements of Operations as a percentage of our net service revenue: