AMSG Amsurg Corp.

Provides 2016 Financial Guidance

AmSurg Corp. (NASDAQ: AMSG) today announced financial results for the fourth quarter and year ended December 31, 2015. The Company’s results for the quarter included:

• Growth of 21% in net revenues to $704.3 million from $581.8 million for the fourth quarter of 2014;
• Net earnings from continuing operations attributable to AmSurg common shareholders of $64.3 million and adjusted net earnings of $56.7 million, up 43% compared with the fourth quarter of 2014;
• Net earnings per diluted share from continuing operations attributable to AmSurg common shareholders of $1.26 and a 39% increase in adjusted net earnings per diluted share to $1.07; and
• Adjusted EBITDA of $137.4 million, an increase of 24% compared with the fourth quarter of 2014.

See page 6 for a reconciliation of all GAAP and non-GAAP financial results.

For fiscal 2015, net revenues were $2.57 billion, a 58% increase from $1.62 billion for fiscal 2014. Net earnings from continuing operations attributable to AmSurg common shareholders were $154.9 million for 2015, and adjusted net earnings increased 68% to $191.3 million from $114.2 million for 2014. Net earnings per diluted share from continuing operations attributable to AmSurg common shareholders were $3.18 for 2015, and adjusted net earnings per diluted share increased 35% to $3.71. For 2015, weighted average diluted shares outstanding, if dilutive securities, options and non-vested shares were converted, increased 24% from 2014, primarily related to the equity issued to complete the acquisition of Sheridan Healthcare in July 2014. Adjusted EBITDA for 2015 was $492.3 million.

“AmSurg had an exceptional year for 2015, the first full year following our transformative acquisition of Sheridan Healthcare in July 2014,” said Christopher A. Holden, President and Chief Executive Officer of AmSurg. “We exceeded every element of our 2015 financial guidance that was provided in our 2014 fourth-quarter news release.

“Our strong organic growth was evident in the 6.0% same-center revenue growth of Ambulatory Services for 2015 and the 9.9% same contact growth of Physician Services. As expected, the combination of AmSurg and Sheridan has indeed proven catalytic to our acquisition growth strategy, as we deployed $963 million in capital for acquisitions during 2015, completed 16 transactions, expanded our platform into the large, attractive markets of Phoenix and Atlanta and created significant growth momentum for 2016. Our strong cash flow, combined with our December equity offering, enabled us to execute on this large acquisition pipeline, significantly reducing our leverage ratio to 4.1.

“Our outstanding financial and operating performance and strong profitable growth continued in the fourth quarter of 2015. We drove organic growth for the quarter through a 6.9% increase in same-center revenues for Ambulatory Services and an 8.3% increase in same contract revenue for Physician Services. This growth reflects increased volume and improved reimbursement for the quarter for both divisions.

“During the fourth quarter, Ambulatory Services purchased two ambulatory surgery centers (ASCs) and entered into three joint ventures with new health system partners. As a result of our joint venture activity, we contributed six of our existing centers and obtained an interest in two additional ASCs that were contributed by our new partners. As previously announced, Physician Services completed three acquisitions in the fourth quarter, including the acquisition of Valley Anesthesia in Phoenix, Arizona; Premier Emergency Medical Specialists, also in Phoenix; and Northside Anesthesiology Consultants in Atlanta, Georgia.”

Ambulatory Services

Net revenues for Ambulatory Services grew 10% to $326.2 million for the fourth quarter of 2015 from $295.7 million for the fourth quarter of 2014. Same-center revenue rose 6.9% for fourth quarter of 2015 compared with the fourth quarter of 2014, comprised of a 2.2% increase in procedures and a 4.7% increase in net revenue per procedure. Adjusted EBITDA was $63.3 million for the fourth quarter of 2015, a 22% increase from $51.9 million for the fourth quarter of 2014, and adjusted EBITDA margin increased 180 basis points to 19.4% from 17.6%.

At the end of the quarter, Ambulatory Services operated 257 ASCs and one surgical hospital. Ambulatory Services had five ASCs under letter of intent at the end of the fourth quarter and one center under development, which is expected to open in late 2016.

Physician Services

For the fourth quarter of 2015, net revenues for Physician Services increased 32% to $378.1 million from $286.1 million for the fourth quarter of 2014. Adjusted EBITDA increased 25% to $74.1 million for the quarter compared with $59.1 million for the fourth quarter of 2014, and adjusted EBITDA margin was 19.6% compared with 20.7%.

Comparable-quarter increase in Physician Services revenues was comprised of growth of 6.2% in same-contract revenues, 1.7% in net new contract revenues and 24.3% in acquisition revenues. Same-contract growth in net revenues totaled 8.3% for the fourth quarter of 2015, which included a 6.6% increase in patient encounters and a 1.7% increase in net revenue per patient encounter.

Physician Services continues to evaluate additional acquisition opportunities in its robust pipeline of potential transactions.

Liquidity

At the end of 2015, AmSurg had cash and cash equivalents of $106.7 million and availability under its $500 million revolving credit facility of $325 million. Net cash flows from operations, less distributions to noncontrolling interests, were $54.0 million for quarter and $323.1 million for full-year 2015. Although 2015 capital expenditures for maintenance and acquisitions were more than $1 billion, the Company’s ratio of total debt at the end of 2015 to trailing 12 months EBITDA as calculated under the Company’s credit agreement was 4.1 compared with 5.3 at the end of 2014.

Guidance

AmSurg today established its financial and operating guidance for 2016 and for the first quarter of the year. The Company’s guidance is as follows:

• Revenues in a range of $3.09 billion to $3.13 billion;
• A same-center revenue increase of 3.0% to 5.0% for Ambulatory Services and same-contract revenue growth of 4.0% to 6.0% in Physician Services;
• Adjusted EBITDA of $590 million to $600 million;
• Adjusted EPS in a range of $4.26 to $4.34; and
• For the first quarter of 2016, adjusted EPS in a range of $0.77 to $0.80, which includes the seasonally higher salary-related expenses historically experienced in Physician Services.

Non-GAAP Adjusted EBITDA guidance for the full year of 2016 excludes interest expense, income taxes, depreciation, amortization, share-based compensation, transaction costs, changes in contingent purchase price consideration, gain or loss on deconsolidations and discontinued operations. Non-GAAP Adjusted EPS guidance for the first quarter and full year of 2016 exclude acquisition-related transaction costs, acquisition-related amortization expense, gains and losses on future deconsolidation transactions and share-based compensation expense, net of the tax impact thereon. The exact amount of such exclusions are not currently determinable but may be significant and may vary significantly from period to period (see page 6 for a reconciliation of all GAAP and non-GAAP financial results).

Conference Call

AmSurg Corp. will hold a conference call to discuss this release Wednesday, February 24, 2016, 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, including the Company’s financial and operating guidance for the first quarter and full year of 2016. 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: we may face challenges managing our Physician Services Division as a new business and may not realize anticipated benefits; we may become subject to investigations by federal and state entities and unpredictable impacts of the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010; we may not be able to successfully maintain effective internal controls over financial reporting; we may not be able to implement our business strategy, manage the growth in our business, and integrate acquired businesses; our substantial indebtedness and restrictions in our debt instruments could adversely affect our business or our ability to implement our growth strategy, or limit our ability to react to changes in the economy or our industry; we may not generate sufficient cash to service our indebtedness, including any future indebtedness; regulatory changes may obligate us to buy out interests of physicians who are minority owners of our surgery centers; we may not be able to successfully maintain our information systems and processes, implement new systems and processes, and maintain the security of those systems and processes; we may fail to effectively and timely transition to the ICD-10 coding system; we may be subject to litigation and investigations and liability claims for damages and other expenses not covered by insurance; we may be required to write-off a portion of our intangible assets; payments from third-party payors, including government healthcare programs, may decrease or not increase as our costs increase; there may be adverse developments affecting the medical practices of our physician partners; we may not be able to maintain favorable relations with our physician partners; we may not be able to grow our ambulatory services revenue by increasing procedure volume while maintaining operating margins and profitability at our existing surgery centers; we may not be able to compete for physician partners, managed care contracts, patients and strategic relationships; adverse weather and other factors beyond our control may affect our business; our legal responsibility to minority owners of our surgery centers may conflict with our interests and prevent us from acting solely in our best interests; we may be adversely impacted by changes in patient volume and patient mix; several client relationships generate a significant portion of our physician services revenues; our physician services contracts may be cancelled or not renewed or we may not be able to enter into additional contracts under terms acceptable to us; reimbursement rates, revenue and profit margin under our fee-for-service physician services payor contracts may decrease; we may not be able to timely or accurately bill for services; laws and regulations that regulate payments for medical services made by government healthcare programs could cause our revenues to decrease; we may not be able to enroll our physician services providers in the Medicare and Medicaid programs on a timely basis; our strategic partnerships with healthcare providers may not be successful; our segments of the market for medical services have a high level of competition; we may not be able to successfully recruit and retain physicians, nurses and other clinical providers; we may not be able to accurately assess the costs we will incur under new contracts; our margins may be negatively impacted by cross-selling to existing clients or selling bundled services to new clients; we may not be able to enforce non-compete agreements with our physicians and other clinical employees in some jurisdictions; there may be unfavorable changes in regulatory, economic and other conditions in the states where we operate; legislative or regulatory action may make our captive insurance company arrangement less feasible or otherwise reduce our profitability; our reserves with respect to our losses covered under our insurance programs may not be sufficient; and the other risk factors are described in AmSurg’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014, as updated by 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’s Ambulatory Services Division acquires, develops and operates ambulatory surgery centers in partnership with physicians throughout the U.S. AmSurg’s Physician Services Division, Sheridan, provides outsourced physician services in multiple specialties to hospitals, ASCs and other healthcare facilities throughout the U.S., primarily in the areas of anesthesiology, children’s services, emergency medicine and radiology. Through these businesses as of December 31, 2015, AmSurg owned and operated 257 ASCs and one surgical hospital in 34 states and the District of Columbia and provided physician services to more than 450 healthcare facilities in 29 states. AmSurg has partnerships with, or employs, over 5,000 physicians and other healthcare professionals in 38 states and the District of Columbia.

  AMSURG CORP. Unaudited Selected Consolidated Financial and Operating Data (In thousands, except earnings per share)     Three Months Ended

December 31,

Year Ended

December 31,

Statement of Earnings Data:

2015   2014 2015   2014 Revenues $ 774,309 $ 645,619 $ 2,832,958 $ 1,738,950 Provision for uncollectibles (70,047 ) (63,808 ) (266,074 ) (117,001 ) Net revenue 704,262 581,811 2,566,884 1,621,949 Operating expenses: Salaries and benefits 364,285 288,037 1,314,392 694,576 Supply cost 50,210 43,732 184,222 164,296 Other operating expenses 103,370 93,685 397,794 284,928 Transaction costs 2,764 5,209 8,324 33,890 Depreciation and amortization 26,957   22,811   97,493   60,344   Total operating expenses 547,586 453,474 2,002,225 1,238,034 Net gain on deconsolidations 30,840 — 36,694 3,411 Equity in earnings of unconsolidated affiliates 4,577   3,577   16,152   7,038   Operating income 192,093 131,914 617,505 394,364 Interest expense, net 30,915 30,379 121,586 83,285 Debt extinguishment costs —   —   —   16,887   Earnings from continuing operations before income taxes 161,178 101,535 495,919 294,192 Income tax expense 36,830   22,301   113,790   48,103   Net earnings from continuing operations 124,348 79,234 382,129 246,089 Net loss from discontinued operations (1,013 ) (150 ) (1,013 ) (1,296 ) Net earnings 123,335 79,084 381,116 244,793 Less net earnings attributable to noncontrolling interests 57,762   51,705   218,169   191,092   Net earnings attributable to AmSurg Corp. shareholders 65,573 27,379 162,947 53,701 Preferred stock dividends (2,264 ) (2,264 ) (9,056 ) (4,503 )

Net earnings attributable to AmSurg Corp. common shareholders

$ 63,309   $ 25,115   $ 153,891   $ 49,198     Amounts attributable to AmSurg Corp. common shareholders: Earnings from continuing operations, net of income tax $ 64,310 $ 25,311 $ 154,892 $ 50,777 Loss from discontinued operations, net of income tax (1,001 ) (196 ) (1,001 ) (1,579 )

Net earnings attributable to AmSurg Corp. common shareholders

$ 63,309   $ 25,115   $ 153,891   $ 49,198   Basic earnings (loss) per share attributable to AmSurg Corp. common shareholders: Net earnings from continuing operations $ 1.31 $ 0.53 $ 3.22 $ 1.29 Net loss from discontinued operations (0.02 ) —   (0.02 ) (0.04 ) Net earnings $ 1.28   $ 0.53   $ 3.20   $ 1.25   Diluted earnings (loss) per share attributable to AmSurg Corp. common shareholders: Net earnings from continuing operations $ 1.26 $ 0.53 $ 3.18 $ 1.28 Net loss from discontinued operations (0.02 ) —   (0.02 ) (0.04 ) Net earnings $ 1.24   $ 0.53   $ 3.16   $ 1.24   Weighted average number of shares and share equivalents outstanding: Basic 49,277 47,384 48,058 39,311 Diluted 52,888 47,828 51,612 39,625     AMSURG CORP. Unaudited Selected Consolidated Financial and Operating Data, continued (In thousands, except earnings per share)          

Three Months Ended

December 31,

Year Ended

December 31,

2015       2014 2015       2014 Reconciliation of net earnings to Adjusted net earnings (1): Net earnings attributable to AmSurg Corp. shareholders $ 65,573 $ 27,379 $ 162,947 $ 53,701 Loss from discontinued operations 1,695 327 1,695 2,220 Amortization of purchased intangibles 15,173 12,179 52,766 22,148 Share-based compensation 3,690 2,716 15,009 10,104 Transaction costs 2,764 5,209 8,324 33,890 Net gain on deconsolidations (30,840 ) — (36,694 ) (3,411 ) Net change in fair value of contingent consideration 466 — 8,804 — Debt extinguishment costs — — — 16,887 Deferred financing write-off —   —   —   12,763   Total pre-tax adjustments (7,052 ) 20,431 49,904 94,601 Tax effect (including impact of certain discrete items) 1,852   8,172   21,521   34,140   Total adjustments, net (8,904 ) 12,259   28,383   60,461   Adjusted net earnings $ 56,669   $ 39,638   $ 191,330   $ 114,162     Basic shares outstanding 49,277 47,384 48,058 39,311 Effect of dilutive securities, options and non-vested shares 3,611   3,891   3,554   2,152   Diluted shares outstanding, if converted 52,888   51,275   51,612   41,463     Adjusted earnings per share $ 1.07   $ 0.77   $ 3.71   $ 2.75     Reconciliation of net earnings to Adjusted EBITDA (2): Net earnings attributable to AmSurg Corp. shareholders $ 65,573 $ 27,379 $ 162,947 $ 53,701 Loss from discontinued operations 1,001 196 1,001 1,579 Interest expense, net 30,915 30,379 121,586 83,285 Income tax expense 36,830 22,301 113,790 48,103 Depreciation and amortization 26,957   22,811   97,493   60,344   EBITDA 161,276 103,066 496,817 247,012 Adjustments: Share-based compensation 3,690 2,716 15,009 10,104 Transaction costs 2,764 5,209 8,324 33,890 Net gain on deconsolidations (30,840 ) — (36,694 ) (3,411 ) Net change in fair value of contingent consideration 466 — 8,804 — Debt extinguishment costs —   —   —   16,887   Total adjustments (23,920 ) 7,925   (4,557 ) 57,470   Adjusted EBITDA $ 137,356   $ 110,991   $ 492,260   $ 304,482     Segment Information: Ambulatory Services Adjusted EBITDA $ 63,264 $ 51,902 $ 226,229 $ 197,377 Physician Services Adjusted EBITDA 74,092   59,089   266,031   107,105   Adjusted EBITDA $ 137,356   $ 110,991   $ 492,260   $ 304,482     Net Revenue by Segment: Ambulatory Services $ 326,166 $ 295,728 $ 1,230,050 $ 1,109,935 Physician Services 378,096   286,083   1,336,834   512,014   Total net revenue $ 704,262   $ 581,811   $ 2,566,884   $ 1,621,949    

See footnotes on page 10

    AMSURG CORP. Unaudited Selected Consolidated Financial and Operating Data, continued (Dollars in thousands)  

Operating Data- Ambulatory Services:

            Three Months Ended

December 31,

Year Ended

December 31,

2015 2014 2015 2014 Procedures performed during the period at consolidated centers 448,721 434,285 1,729,262 1,645,350 Centers in operation at end of period (consolidated) 236 237 236 237 Centers in operation at end of period (unconsolidated) 21 9 21 9 Average number of continuing centers in operation (consolidated) 239 235 238 233 New centers added during the period 5 4 11 10 Centers discontinued during the period — 1 — 6 Centers under development at end of period 1 2 1 2 Centers under letter of intent at end of period 5 5 5 5 Average revenue per consolidated center $ 1,363 $ 1,258 $ 5,174 $ 4,755 Same center revenues increase (consolidated) 6.9 % 1.1 % 6.0 % 0.7 % Surgical hospitals in operation at end of period (unconsolidated) 1 — 1 —    

Operating Data- Physician Services:

Three Months Ended

December 31,

Year Ended

December 31,

2015 2015 Contribution to Net Revenue Growth: Same contract 6.2 % 7.5 % New contract 1.7 2.0 Acquired contract and other 24.3   14.9   Total net revenue growth 32.2 % 24.4 %   Same contract revenue growth 8.3 % 9.9 %     AMSURG CORP. Unaudited Selected Consolidated Financial and Operating Data, continued (In thousands)     December 31,   December 31,

Balance Sheet Data:

2015 2014 Assets Current assets: Cash and cash equivalents $ 106,660 $ 208,079 Restricted cash and marketable securities 13,506 10,219 Accounts receivable, net of allowance of $167,411 and $113,357, respectively 337,330 233,053 Supplies inventory 21,406 19,974 Prepaid and other current assets 75,771   92,900 Total current assets 554,673 564,225 Property and equipment, net 189,168 180,448 Investments in unconsolidated affiliates 169,170 75,475 Goodwill 3,970,210 3,381,149 Intangible assets, net 1,641,811 1,273,879 Other assets 21,450   25,886 Total assets $ 6,546,482   $ 5,501,062 Liabilities and Equity Current liabilities: Current portion of long-term debt $ 20,377 $ 18,826 Accounts payable 32,561 29,585 Accrued salaries and benefits 202,537 140,044 Accrued interest 30,480 29,644 Other accrued liabilities 119,237   67,986 Total current liabilities 405,192 286,085 Long-term debt 2,405,130 2,232,186 Deferred income taxes 699,498 611,018 Other long-term liabilities 96,183 89,443 Commitments and contingencies Noncontrolling interests – redeemable 175,732 184,099 Equity: Preferred stock, no par value, 5,000 shares authorized, 1,725 shares issued and outstanding 166,632 166,632 Common stock, no par value, 120,000 and 70,000 shares authorized, respectively, 54,294 and 48,113 shares issued and outstanding, respectively 1,345,418 885,393 Retained earnings 781,413   627,522 Total AmSurg Corp. equity 2,293,463 1,679,547 Noncontrolling interests – non-redeemable 471,284   418,684 Total equity 2,764,747   2,098,231 Total liabilities and equity $ 6,546,482   $ 5,501,062     AMSURG CORP. Unaudited Selected Consolidated Financial and Operating Data, continued (In thousands)    

Three Months Ended

December 31,

  Year Ended

December 31,

Statement of Cash Flow Data:

2015   2014 2015   2014 Cash flows from operating activities: Net earnings $ 123,335 $ 79,084 $ 381,116 $ 244,793

Adjustments to reconcile net earnings to net cash flows provided by operating activities:

Depreciation and amortization 26,957 22,811 97,493 60,344 Amortization of deferred loan costs 2,124 2,070 8,362 17,715 Provision for uncollectibles 74,881 69,559 287,427 139,274 Net (gain) loss on sale of long-lived assets (12 ) 375 (12 ) 2,843 Net gain on deconsolidations (30,840 ) — (36,694 ) (3,411 ) Share-based compensation 3,690 2,716 15,009 10,104 Excess tax benefit from share-based compensation (222 ) (889 ) (4,001 ) (3,177 ) Deferred income taxes 11,728 (608 ) 19,037 30,780 Equity in earnings of unconsolidated affiliates (4,577 ) (3,577 ) (16,152 ) (7,038 ) Debt extinguishment costs — — — 4,536 Net change in fair value of contingent consideration 466 — 8,804 — Increases (decreases) in cash and cash equivalents, net of acquisitions and dispositions: Accounts receivable (93,769 ) (71,905 ) (326,234 ) (137,663 ) Supplies inventory 191 (274 ) (342 ) (206 ) Prepaid and other current assets (10,599 ) 15,323 25,880 (9,091 ) Accounts payable 815 1,567 3,131 (8,440 ) Accrued expenses and other liabilities 1,840 17,807 66,600 66,175 Other, net 4,749   2,261   8,535   4,833   Net cash flows provided by operating activities 110,757 136,320 537,959 412,371 Cash flows from investing activities: Acquisitions and related expenses (729,199 ) (45,410 ) (962,689 ) (2,184,058 ) Acquisition of property and equipment (13,299 ) (17,108 ) (60,305 ) (40,217 ) Proceeds from sale of interests in surgery centers 7,114 2,100 7,114 7,069 Purchases of marketable securities (2,241 ) (2,988 ) (3,984 ) (6,474 ) Maturities of marketable securities — 3,486 4,233 3,486 Other 2,780   (7,023 ) (1,194 ) (4,941 ) Net cash flows used in investing activities (734,845 ) (66,943 ) (1,016,825 ) (2,225,135 ) Cash flows from financing activities: Proceeds from long-term borrowings and revolving credit facility 549,936 2,559 560,133 2,048,958 Repayment on long-term borrowings and revolving credit facility (376,849 ) (5,432 ) (392,586 ) (408,475 ) Distributions to noncontrolling interests (56,755 ) (50,654 ) (214,899 ) (190,097 ) Proceeds from preferred stock offering — — — 172,500 Proceeds from common stock offering 466,777 — 466,777 439,875 Proceeds from issuance of common stock upon exercise of stock options 228 480 2,584 2,630 Repurchase of common stock — (1,725 ) (3,684 ) (4,615 ) Payments of equity issuance costs (19,058 ) (128 ) (19,058 ) (24,494 ) Financing costs incurred (817 ) (138 ) (1,111 ) (65,811 ) Other (20,136 ) (341 ) (20,709 ) (468 ) Net cash flows provided by (used in) financing activities 543,326   (55,379 ) 377,447   1,970,003   Net increase (decrease) in cash and cash equivalents (80,762 ) 13,998 (101,419 ) 157,239 Cash and cash equivalents, beginning of period 187,422   194,081   208,079   50,840   Cash and cash equivalents, end of period $ 106,660   $ 208,079   $ 106,660   $ 208,079      

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 discontinued operations, the gains or loss from deconsolidations, which are non-cash in nature, transaction costs, including associated debt extinguishment costs and deferred financing write-off, and acquisition-related amortization expense, changes in contingent purchase price consideration 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 items 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, we utilize 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 expense, net, income taxes, depreciation, amortization, share-based compensation, transaction costs, changes in contingent purchase price consideration, gain or loss 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 from 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.

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