Chemed Reports Third-Quarter 2008 Results

Consolidated operating results:

-- Revenue increased 5.8% to $288 million

-- Diluted EPS of $.79

-- Diluted EPS, excluding stock options and certain tax items, of $.90

VITAS segment operating results:

-- Net Patient Revenue of $205 million, up 8.7%

-- Average Daily Census (ADC) of 12,033, up 4.4%

-- Admissions of 13,317, a decline of 0.9%

-- Average Length of Stay in the quarter of 74.1 days

-- Adjusted EBITDA of $31.1 million, an increase of 26.1%

-- Adjusted EBITDA margin of 15.2%

Roto-Rooter segment operating results:

-- Revenue of $83.4 million, a decline of 0.8%

-- Job count of 175,433, a decline of 11.6%

-- Adjusted EBITDA of $13.7 million, a decline of 12.1%

-- Adjusted EBITDA margin of 16.4%

VITAS

Net revenue for VITAS was $205 million in the third quarter of 2008, which is an increase of 8.7% over the prior-year period. This revenue growth was the result of increased ADC of 4.4% and a Medicare price increase of approximately 3.2%. The remaining difference is attributed to revenue mix and the impact of a modest Medicare Cap limitation in the prior year.

Average revenue per patient per day in the quarter was $185.13, which is 3.8% above the prior-year period. Routine home care reimbursement and high acuity care averaged $146.57 and $645.75, respectively, per patient per day in the third quarter of 2008. During the quarter, high acuity days-of-care was 7.7% of total days-of-care. Quarterly high acuity days-of-care averaged between 8.0% and 8.4% in 2007.

VITAS did not have any billing restrictions related to Medicare Cap for its third-quarter 2008 operating activity. As of September 30, 2008, VITAS has not accrued any Medicare billing restrictions for the 2008 or 2007 Cap years. Of VITAS' 36 unique Medicare provider numbers, 30 provider numbers, or 83%, have a Cap cushion greater than 20% for the 2008 Cap year, three provider numbers are between 10% and 20%, and three provider numbers have Cap cushion of less than 10%.

Gross margin in the third quarter of 2008 was 23.6%. This is 190 basis points above the third quarter of 2007, after eliminating the modest impact of Medicare Cap in 2007. This margin increase is a result of improved management in scheduled labor. VITAS continues to focus on more efficient scheduling of direct labor. This involves utilization of field-based labor management tools designed to meet and respond to hospice team staffing requirements.

Selling, general and administrative expense was $17.1 million in the third quarter of 2008, which is an increase of 9.3% over the prior-year quarter and a 5.7% increase on a year-to-date basis. Adjusted EBITDA totaled $31.1 million, an increase of 26.1% over the prior year and equates to an adjusted EBITDA margin of 15.2%.

Roto-Rooter

Roto-Rooter's plumbing and drain cleaning business generated sales of $83 million for the third quarter of 2008, 0.8% lower than the $84 million reported in the comparable prior-year quarter. Adjusted EBITDA in the third quarter of 2008 totaled $13.7 million, a decrease of 12.1% over the third quarter of 2007, and equated to an adjusted EBITDA margin of 16.4%.

Job count in the third quarter of 2008 declined 11.6% when compared to the prior-year period. Total residential jobs declined 12.0% and consisted of residential plumbing jobs decreasing 10.3% and residential drain cleaning jobs declining 12.9%, when compared to the third quarter of 2007. Residential jobs represent approximately 70% of total job count. Total commercial jobs declined 10.6% with commercial plumbing job count declining 9.6% and commercial drain cleaning decreasing 10.8%, over the prior-year quarter.

The third quarter of 2008 continues to indicate recessionary pressure impacting demand for certain discretionary plumbing and drain cleaning services. This is evidenced by a 13% decline in call volume in Roto-Rooter's centralized call centers. This decline has been substantially offset by increased pricing, favorable job mix shift to excavation work and increased conversion rates of calls to paid jobs.

There continues to be substantial disparity in demand for Roto-Rooter services within the United States. The South region has experienced a 16.9% year-to-date decline in commercial jobs while the Northeast Region had a modest 1.8% decline in commercial volume. Residential demand is also following a similar pattern in the South, with job count declining 12.0% while the remaining regions have experienced a job count decline ranging between 5% and 10%.

Management is in preliminary discussions, as well as final negotiations, to acquire a number of Roto-Rooter franchise territories. This significant increase in activity is attributed to the current state of the capital markets, the potential increase in tax rates and the recessionary difficulties our franchisees are experiencing. The timing or actual completion of these acquisitions cannot be predicted, however, management intends to be highly disciplined in terms of valuation and risk to ensure these acquisitions will be accretive to shareholders.

Chemed Consolidated Debt and Cash Flows

Chemed's long-term debt aggregated $217 million at September 30, 2008, $200 million of which carries an interest rate of 1.875% and is due in May 2014. The remaining debt consists of a bank term loan with a current interest rate of approximately 4.7%. Chemed's total debt divided by the trailing four quarters of Adjusted EBITDA reflects a debt leverage ratio of 1.35.

Chemed has a $175 million revolving credit facility that expires in May 2012. At September 30, 2008, this credit facility had approximately $148 million of undrawn borrowing capacity after deducting for $27 million of letters of credit issued under this facility to secure the Company's workers' compensation insurance. The credit facility carries a varying interest rate at prime or at LIBOR plus a borrowing spread which is currently 100 basis points. Letters of credit issued against the credit facility are charged the LIBOR borrowing spread.

Year-to-date net cash provided from operations aggregated $90 million. Capital expenditures for the first nine month of 2008 aggregated $13.1 million and compares favorably to Chemed's $20.7 million of depreciation and amortization.

Guidance for 2008

VITAS is estimated to generate full-year revenue growth, prior to Medicare Cap, of 8.0% to 8.5%. Admissions are estimated to increase 4% and full-year adjusted EBITDA margin, prior to Medicare Cap, is estimated to be 14.1% to 14.3%. This guidance assumes VITAS will receive a Medicare basket price increase of 2.6% effective October 1, 2008. Full calendar year 2008 Medicare contractual billing limitations are estimated at $1.25 million.

Roto-Rooter is estimated to generate full-year 2008 revenue totaling $340 million to $344 million. Adjusted EBITDA margin for 2008 is estimated in the range of 17.7% to 18.0%. This guidance does not include any Roto-Rooter franchise acquisitions that may be completed in the fourth quarter of 2008.

Chemed's effective tax rate has increased to 42.9% in the third quarter and is estimated at approximately 40.1% for the full-year 2008. This unusually high tax rate is a direct result of the interplay of severe volatility in the stock market as it relates to certain deferred compensation investments and required GAAP tax accounting. This stock market volatility does not have any material impact on Chemed's reported pretax earnings. Excluding the impact of taxes associated with this deferred compensation issue, Chemed's effective tax rate in the third quarter and for the full-year 2008, is estimated at 39%.

Based upon these factors and a full-year average diluted share count of 23.4 million shares, management estimates 2008 earnings per diluted share from continuing operations, excluding noncash expenses for stock options, the tax rate impact from deferred compensation investments and charges or credits not indicative of ongoing operations, will be in the range of $3.35 to $3.40.

Conference Call

Chemed will host a conference call and webcast at 10 a.m., ET, on Wednesday, October 22, 2008, to discuss the company's quarterly results and provide an update on its business. The dial-in number for the conference call is (866) 831-6243 for U.S. and Canadian participants and (617) 213-8855 for international participants. The participant passcode is 89856449. A live webcast of the call can be accessed on Chemed's website at www.chemed.com by clicking on Investor Relations Home.

A taped replay of the conference call will be available beginning approximately two hours after the call's conclusion. It can be accessed by dialing (888) 286-8010 for U.S. and Canadian callers and (617) 801-6888 for international callers and will be available for one week following the live call. The replay passcode is 56673754. An archived webcast will also be available at www.chemed.com.

Chemed Corporation operates in the healthcare field through its VITAS Healthcare Corporation subsidiary. VITAS provides daily hospice services to approximately 12,000 patients with severe, life-limiting illnesses. This type of care is focused on making the terminally ill patient's final days as comfortable and pain-free as possible.

Chemed operates in the residential and commercial plumbing and drain cleaning industry under the brand name Roto-Rooter. Roto-Rooter provides plumbing and drain service through company-owned branches, independent contractors and franchisees in the United States and Canada. Roto-Rooter also has licensed master franchisees in Indonesia, Singapore, Japan, and the Philippines.

This press release contains information about Chemed's EBITDA and adjusted EBITDA, which are not measures derived in accordance with generally accepted accounting principles and which exclude components that are important to understanding Chemed's financial performance. Chemed provides EBITDA and adjusted EBITDA to help investors and others evaluate its operating results, compare its operating performance with that of similar companies that have different capital structures and evaluate its ability to meet its future debt service, capital expenditures and working capital requirements. Chemed's EBITDA and adjusted EBITDA should not be considered in isolation or as a substitute for comparable measures calculated and presented in accordance with GAAP. A reconciliation of Chemed's net income to its adjusted EBITDA is presented in the tables following the text of this press release.

Forward-Looking Statements

Certain statements contained in this press release and the accompanying tables are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The words "believe," "expect," "hope," "anticipate," "plan" and similar expressions identify forward-looking statements, which speak only as of the date the statement was made. Chemed does not undertake and specifically disclaims any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These statements are based on current expectations and assumptions and involve various risks and uncertainties, which could cause Chemed's actual results to differ from those expressed in such forward-looking statements. These risks and uncertainties arise from, among other things, possible changes in regulations governing the hospice care or plumbing and drain cleaning industries; periodic changes in reimbursement levels and procedures under Medicare and Medicaid programs; difficulties predicting patient length of stay and estimating potential Medicare reimbursement obligations; challenges inherent in Chemed's growth strategy; the current shortage of qualified nurses, other healthcare professionals and licensed plumbing and drain cleaning technicians; Chemed's dependence on patient referral sources; and other factors detailed under the caption "Description of Business by Segment" or "Risk Factors" in Chemed's most recent report on form 10-Q or 10-K and its other filings with the Securities and Exchange Commission. You are cautioned not to place undue reliance on such forward-looking statements and there are no assurances that the matters contained in such statements will be achieved.

CHEMED CORPORATION AND SUBSIDIARY COMPANIES CONSOLIDATED STATEMENT OF INCOME (in thousands, except per share data)(unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2008 2007 2008 2007 Continuing Operations Service revenues and sales $ 288,312 $ 272,503 $ 856,736 $ 814,329 Cost of services provided and goods sold (aa) 202,446 192,882 609,397 569,845 Selling, general and administrative expenses (aa) 44,022 42,526 133,070 136,686 Depreciation 5,441 5,220 16,249 14,897 Amortization 1,494 1,292 4,433 3,901 Other operating expense/(income) (aa) - - - (1,138 ) Total costs and expenses 253,403 241,920 763,149 724,191 Income from operations 34,909 30,583 93,587 90,138 Interest expense (1,570 ) (2,515 ) (4,589 ) (9,657 ) Loss on extinguishment of debt (aa) - (83 ) - (13,798 ) Other income--net (1,908 ) 11 (2,211 ) 3,068 Income before income taxes 31,431 27,996 86,787 69,751 Income taxes (aa) (13,483 ) (11,080 ) (34,769 ) (27,181 ) Income from continuing operations 17,948 16,916 52,018 42,570 Discontinued Operations (bb) - 1,201 - 1,201 Net Income $ 17,948 $ 18,117 $ 52,018 $ 43,771 Earnings Per Share Income from continuing operations $ 0.80 $ 0.71 $ 2.23 $ 1.72 Net income $ 0.80 $ 0.76 $ 2.23 $ 1.77 Average number of shares outstanding 22,503 23,933 23,285 24,711 Diluted Earnings Per Share Income from continuing operations $ 0.79 $ 0.69 $ 2.20 $ 1.69 Net income $ 0.79 $ 0.74 $ 2.20 $ 1.73 Average number of shares outstanding 22,818 24,466 23,620 25,249 (aa) Amounts include the following significant credits/(charges) which may not be indicative of ongoing operations (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2008 2007 2008 2007 Cost of services provided and goods sold: Unreserved prior-year's insurance claim $ - $ - $ (597 ) $ - Selling, general and administrative expenses: Stock option expense (2,102 ) (1,592 ) (5,084 ) (3,074 ) Costs associated with OIG investigation (2 ) (48 ) (44 ) (188 ) Long-term incentive compensation - - - (7,067 ) Other - - - 467 Other operating expense/(income): Gain on sale of property - - - 1,138 Loss on extinguishment of debt - (83 ) - (13,798 ) Pretax impact on earnings (2,104 ) (1,723 ) (5,725 ) (22,522 ) Income tax benefit/(charge) on the above 769 630 2,112 8,268 Income tax impact of non-deductible market losses on investments of deferred compensation trusts (1,237 ) (123 ) (1,237 ) (123 ) Income tax credit related to prior years - - 322 - After-tax impact on earnings $ (2,572 ) $ (1,216 ) $ (4,528 ) $ (14,377 ) (bb) Discontinued operations represents accrual adjustments related to VITAS' Phoenix operations, discontinued in 2006.

CHEMED CORPORATION AND SUBSIDIARY COMPANIES CONSOLIDATED BALANCE SHEET (in thousands, except per share data)(unaudited) September 30, 2008 2007 (cc) Assets Current assets Cash and cash equivalents $ 6,804 $ 16,730 Accounts receivable less allowances 88,206 79,915 Inventories 7,494 6,824 Current deferred income taxes 15,500 20,344 Prepaid expenses and other current assets 7,702 6,983 Total current assets 125,706 130,796 Investments of deferred compensation plans held in trust 28,897 28,824 Notes receivable - 14,701 Properties and equipment, at cost less accumulated depreciation 70,970 73,285 Identifiable intangible assets less accumulated amortization 62,152 66,186 Goodwill 439,909 436,262 Other assets 16,042 16,382 Total Assets $ 743,676 $ 766,436 Liabilities Current liabilities Accounts payable $ 46,187 $ 44,586 Current portion of long-term debt 10,166 10,161 Income taxes 2,736 9,854 Accrued insurance 34,567 37,725 Accrued compensation 38,385 37,147 Other current liabilities 13,412 20,972 Total current liabilities 145,453 160,445 Deferred income taxes 4,849 3,370 Long-term debt 207,070 224,735 Deferred compensation liabilities 29,133 28,407 Other liabilities 6,123 5,818 Total Liabilities 392,628 422,775 Stockholders' Equity Capital stock 29,446 29,206 Paid-in capital 277,602 264,374 Retained earnings 326,002 259,578 Treasury stock, at cost (284,436 ) (211,959 ) Deferred compensation payable in Company stock 2,434 2,462 Total Stockholders' Equity 351,048 343,661 Total Liabilities and Stockholders' Equity $ 743,676 $ 766,436 Book Value Per Share $ 15.69 $ 14.36 (cc) Reclassified to conform to 2007 presentation.

CHEMED CORPORATION AND SUBSIDIARY COMPANIES UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS (in thousands) Nine Months Ended September 30, 2008 2007 (cc) Cash Flows from Operating Activities Net income $ 52,018 $ 43,771 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 20,682 18,798 Provision for uncollectible accounts receivable 7,101 6,025 Stock option expense 5,084 3,074 Provision for deferred income taxes (2,257 ) (1,388 ) Amortization of debt issuance costs 760 970 Discontinued operations - (1,201 ) Write off unamortized debt issuance costs - 7,235 Noncash long-term incentive compensation - 6,154 Changes in operating assets and liabilities, excluding amounts acquired in business combinations: Decrease in accounts receivable 5,846 4,796 Increase in inventories (851 ) (246 ) Decrease in prepaid expenses and other current assets 2,804 2,964 Decrease in accounts payable and other current liabilities (875 ) (9,873 ) Increase/(decrease) in income taxes (329 ) 11,825 Increase in other assets (547 ) (3,109 ) Increase in other liabilities 674 3,908 Excess tax benefit on share-based compensation (1,234 ) (2,506 ) Other sources/(uses) 654 (1,054 ) Net cash provided by operating activities 89,530 90,143 Cash Flows from Investing Activities Capital expenditures (13,103 ) (20,145 ) Net uses from disposals of discontinued operations 8,980 (6,121 ) Business combinations, net of cash acquired (1,578 ) (1,079 ) Proceeds from sales of property and equipment 200 3,072 Other uses (421 ) (1,415 ) Net cash used by investing activities (5,922 ) (25,688 ) Cash Flows from Financing Activities Purchases of treasury stock (69,136 ) (130,873 ) Repayment of long-term debt (7,595 ) (215,644 ) Dividends paid (4,352 ) (4,441 ) Increase in cash overdraft payable (1,913 ) 2,554 Excess tax benefit on share-based compensation 1,234 2,506 Issuance of capital stock 290 2,429 Proceeds from issuance of long-term debt - 300,000 Purchases of note hedges - (55,093 ) Proceeds from issuance of warrants - 27,614 Debt issuance costs - (6,887 ) Other sources (320 ) 836 Net cash used by financing activities (81,792 ) (76,999 ) Increase/(Decrease) in Cash and Cash Equivalents 1,816 (12,544 ) Cash and cash equivalents at beginning of year 4,988 29,274 Cash and cash equivalents at end of period $ 6,804 $ 16,730 (cc) Reclassified to conform to 2008 presentation.

CHEMED CORPORATION AND SUBSIDIARY COMPANIES CONSOLIDATING STATEMENT OF INCOME FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007 (in thousands)(unaudited) Chemed VITAS Roto-Rooter Corporate Consolidated 2008 Service revenues and sales $ 204,956 $ 83,356 $ - $ 288,312 Cost of services provided and goods sold 156,685 45,761 - 202,446 Selling, general and administrative expenses (a) 17,100 23,576 3,346 44,022 Depreciation 3,256 2,102 83 5,441 Amortization 996 11 487 1,494 Total costs and expenses 178,037 71,450 3,916 253,403 Income/(loss) from operations 26,919 11,906 (3,916 ) 34,909 Interest expense (35 ) (56 ) (1,479 ) (1,570 ) Intercompany interest income/(expense) 1,435 1,026 (2,461 ) - Other income--net (59 ) 45 (1,894 ) (1,908 ) Income/(loss) before income taxes 28,260 12,921 (9,750 ) 31,431 Income taxes (a) (10,699 ) (4,964 ) 2,180 (13,483 ) Net income/(loss) $ 17,561 $ 7,957 $ (7,570 ) $ 17,948 2007 (f) Service revenues and sales $ 188,474 $ 84,029 $ - $ 272,503 Cost of services provided and goods sold 148,225 44,657 - 192,882 Selling, general and administrative expenses (b) 15,651 23,272 3,603 42,526 Depreciation 3,063 2,080 77 5,220 Amortization 996 13 283 1,292 Total costs and expenses 167,935 70,022 3,963 241,920 Income/(loss) from operations 20,539 14,007 (3,963 ) 30,583 Interest expense (36 ) (317 ) (2,162 ) (2,515 ) Intercompany interest income/(expense) 1,909 1,337 (3,246 ) - Loss on extinguishment of debt (b) - - (83 ) (83 ) Other income--net (3 ) 226 (212 ) 11 Income/(loss) before income taxes 22,409 15,253 (9,666 ) 27,996 Income taxes (b) (8,488 ) (6,017 ) 3,425 (11,080 ) Income/(loss) from continuing operations 13,921 9,236 (6,241 ) 16,916 Discontinued operations, net of income taxes 1,201 - - 1,201 Net income/(loss) $ 15,122 $ 9,236 $ (6,241 ) $ 18,117 The "Footnotes to Financial Statements" are integral parts of this financial information. CHEMED CORPORATION AND SUBSIDIARY COMPANIES CONSOLIDATING STATEMENT OF INCOME FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007 (in thousands)(unaudited) Chemed VITAS Roto-Rooter Corporate Consolidated 2008 Service revenues and sales $ 602,589 $ 254,147 $ - $ 856,736 Cost of services provided and goods sold 471,018 138,379 - 609,397 Selling, general and administrative expenses (a) 50,520 70,710 11,840 133,070 Depreciation 9,769 6,249 231 16,249 Amortization 2,988 36 1,409 4,433 Total costs and expenses 534,295 215,374 13,480 763,149 Income/(loss) from operations 68,294 38,773 (13,480 ) 93,587 Interest expense (118 ) (216 ) (4,255 ) (4,589 ) Intercompany interest income/(expense) 3,862 2,832 (6,694 ) - Other income--net (48 ) 58 (2,221 ) (2,211 ) Income/(loss) before income taxes 71,990 41,447 (26,650 ) 86,787 Income taxes (a) (26,810 ) (16,002 ) 8,043 (34,769 ) Net income/(loss) $ 45,180 $ 25,445 $ (18,607 ) $ 52,018 2007 (f) Service revenues and sales $ 558,224 $ 256,105 $ - $ 814,329 Cost of services provided and goods sold 434,959 134,886 - 569,845 Selling, general and administrative expenses (b) 47,815 70,195 18,676 136,686 Depreciation 8,377 6,290 230 14,897 Amortization 2,988 41 872 3,901 Other operating expense/(income) (b) - - (1,138 ) (1,138 ) Total costs and expenses 494,139 211,412 18,640 724,191 Income/(loss) from operations 64,085 44,693 (18,640 ) 90,138 Interest expense (103 ) (496 ) (9,058 ) (9,657 ) Intercompany interest income/(expense) 5,352 3,676 (9,028 ) - Loss on extinguishment of debt (b) - - (13,798 ) (13,798 ) Other income--net (34 ) 344 2,758 3,068 Income/(loss) before income taxes 69,300 48,217 (47,766 ) 69,751 Income taxes (b) (26,238 ) (18,984 ) 18,041 (27,181 ) Income/(loss) from continuing operations 43,062 29,233 (29,725 ) 42,570 Discontinued operations, net of income taxes 1,201 - - 1,201 Net income/(loss) $ 44,263 $ 29,233 $ (29,725 ) $ 43,771 The "Footnotes to Financial Statements" are integral parts of this financial information.

CHEMED CORPORATION AND SUBSIDIARY COMPANIES CONSOLIDATING SUMMARY OF EBITDA FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007 (in thousands)(unaudited) Chemed VITAS Roto-Rooter Corporate Consolidated 2008 Net income/(loss) $ 17,561 $ 7,957 $ (7,570 ) $ 17,948 Add/(deduct): Interest expense 35 56 1,479 1,570 Income taxes 10,699 4,964 (2,180 ) 13,483 Depreciation 3,256 2,102 83 5,441 Amortization 996 11 487 1,494 EBITDA 32,547 15,090 (7,701 ) 39,936 Add/(deduct): Legal expenses of OIG investigation 2 - - 2 Stock option expense - - 2,102 2,102 Advertising cost adjustment (c) - (351 ) - (351 ) Interest income (58 ) (51 ) (50 ) (159 ) Intercompany interest income/(expense) (1,435 ) (1,026 ) 2,461 - Adjusted EBITDA $ 31,056 $ 13,662 $ (3,188 ) $ 41,530 2007 (f) Net income/(loss) $ 15,122 $ 9,236 $ (6,241 ) $ 18,117 Add/(deduct): Discontinued operations, net of income taxes (1,201 ) - - (1,201 ) Interest expense 36 317 2,162 2,515 Income taxes 8,488 6,017 (3,425 ) 11,080 Depreciation 3,063 2,080 77 5,220 Amortization 996 13 283 1,292 EBITDA 26,504 17,663 (7,144 ) 37,023 Add/(deduct): Legal expenses of OIG Investigation 48 - - 48 Stock option expense - - 1,592 1,592 Loss on extinguishment of debt - - 83 83 Advertising cost adjustment (c) - (535 ) - (535 ) Interest income (11 ) (247 ) (639 ) (897 ) Intercompany interest income/(expense) (1,909 ) (1,337 ) 3,246 - Adjusted EBITDA $ 24,632 $ 15,544 $ (2,862 ) $ 37,314 The "Footnotes to Financial Statements" are integral parts of this financial information. CHEMED CORPORATION AND SUBSIDIARY COMPANIES CONSOLIDATING SUMMARY OF EBITDA FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007 (in thousands)(unaudited) Chemed VITAS Roto-Rooter Corporate Consolidated 2008 Net income/(loss) $ 45,180 $ 25,445 $ (18,607 ) $ 52,018 Add/(deduct): Interest expense 118 216 4,255 4,589 Income taxes 26,810 16,002 (8,043 ) 34,769 Depreciation 9,769 6,249 231 16,249 Amortization 2,988 36 1,409 4,433 EBITDA 84,865 47,948 (20,755 ) 112,058 Add/(deduct): Unreserved insurance claim - 597 - 597 Legal expenses of OIG investigation 44 - - 44 Stock option expense - - 5,084 5,084 Advertising cost adjustment (c) - (1,176 ) - (1,176 ) Interest income (109 ) (91 ) (402 ) (602 ) Intercompany interest income/(expense) (3,862 ) (2,832 ) 6,694 - Adjusted EBITDA $ 80,938 $ 44,446 $ (9,379 ) $ 116,005 2007 (f) Net income/(loss) $ 44,263 $ 29,233 $ (29,725 ) $ 43,771 Add/(deduct): Discontinued operations, net of income taxes (1,201 ) - - (1,201 ) Interest expense 103 496 9,058 9,657 Income taxes 26,238 18,984 (18,041 ) 27,181 Depreciation 8,377 6,290 230 14,897 Amortization 2,988 41 872 3,901 EBITDA 80,768 55,044 (37,606 ) 98,206 Add/(deduct): Long-term incentive compensation - - 7,067 7,067 Gain on sale of property - - (1,138 ) (1,138 ) Legal expenses of OIG investigation 188 - - 188 Stock option expense - - 3,074 3,074 Loss on extinguishment of debt - - 13,798 13,798 Advertising cost adjustment (c) - (931 ) - (931 ) Interest income (90 ) (358 ) (2,160 ) (2,608 ) Intercompany interest income/(expense) (5,352 ) (3,676 ) 9,028 - Other - - (467 ) (467 ) Adjusted EBITDA $ 75,514 $ 50,079 $ (8,404 ) $ 117,189 The "Footnotes to Financial Statements" are integral parts of this financial information.

CHEMED CORPORATION AND SUBSIDIARY COMPANIES RECONCILIATION OF ADJUSTED NET INCOME FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007 (in thousands, except per share data)(unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2008 2007 2008 2007 Net income as reported $ 17,948 $ 18,117 $ 52,018 $ 43,771 Add/(deduct): Discontinued operations - (1,201 ) - (1,201 ) After-tax cost of long-term incentive compensation - - - 4,427 After-tax cost of legal expenses of OIG investigation 1 30 27 117 After-tax stock option expense 1,334 1,011 3,228 1,952 After-tax gain on sale of property - - - (724 ) After-tax other - - - (296 ) After-tax loss on extinguishment of debt - 52 - 8,778 Income tax impact of non-deductible market losses on investments of deferred compensation trusts 1,237 123 1,237 123 Income tax credit related to prior years - - (322 ) - After-tax unreserved insurance cost - - 358 - Adjusted net income $ 20,520 $ 18,132 $ 56,546 $ 56,947 Earnings Per Share As Reported Net income $ 0.80 $ 0.76 $ 2.23 $ 1.77 Average number of shares outstanding 22,503 23,933 23,285 24,711 Diluted Earnings Per Share As Reported Net income $ 0.79 $ 0.74 $ 2.20 $ 1.73 Average number of shares outstanding 22,818 24,466 23,620 25,249 Adjusted Earnings Per Share Net income $ 0.91 $ 0.76 $ 2.43 $ 2.30 Average number of shares outstanding 22,503 23,933 23,285 24,711 Adjusted Diluted Earnings Per Share Net income $ 0.90 $ 0.74 $ 2.39 $ 2.26 Average number of shares outstanding 22,818 24,466 23,620 25,249 The "Footnotes to Financial Statements" are integral parts of this financial information.

CHEMED CORPORATION AND SUBSIDIARY COMPANIES OPERATING STATISTICS FOR VITAS SEGMENT FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007 (unaudited) Three Months Ended Nine Months Ended September 30, September 30, OPERATING STATISTICS 2008 2007 2008 2007 Net revenue ($000) (d) Homecare $ 149,732 $ 137,406 $ 436,075 $ 403,748 Inpatient 24,155 22,861 74,497 69,068 Continuous care 31,069 28,921 92,017 85,650 Total before Medicare cap allowance 204,956 189,188 602,589 558,466 Medicare cap allowance - (714 ) - (242 ) Total $ 204,956 $ 188,474 $ 602,589 $ 558,224 Net revenue as a percent of total before Medicare cap allowance Homecare 73.0 % 72.6 % 72.4 % 72.3 % Inpatient 11.8 12.1 12.3 12.4 Continuous care 15.2 15.3 15.3 15.3 Total before Medicare cap allowance 100.0 100.0 100.0 100.0 Medicare cap allowance - (0.4 ) - - Total 100.0 % 99.6 % 100.0 % 100.0 % Average daily census ("ADC") (days) Homecare 7,534 7,039 7,346 6,914 Nursing home 3,570 3,567 3,562 3,572 Routine homecare 11,104 10,606 10,908 10,486 Inpatient 410 412 429 417 Continuous care 519 511 521 512 Total 12,033 11,529 11,858 11,415 Total Admissions 13,317 13,436 42,485 41,204 Total Discharges 13,279 13,403 41,992 40,823 Average length of stay (days) 74.1 76.7 72.9 76.7 Median length of stay (days) 15.0 14.0 14.0 13.0 ADC by major diagnosis Neurological 32.5 % 32.8 % 32.5 % 33.1 % Cancer 19.9 20.3 19.9 19.9 Cardio