AMSG Amsurg Corp.

Increases 2014 Earnings Guidance

Announces Changes to Executive Management Team

Christopher A. Holden, President and Chief Executive Officer of AmSurg Corp. (NASDAQ: 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.

AmSurg Corp.Claire M. Gulmi, 615-665-1283Executive Vice President and Chief Financial Officer