ENVISION HEALTHCARE CORP – 10-Q – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements and Factors That May Affect Results

    Certain statements and information herein may be deemed to be "forward-looking statements" within the meaning of the Federal Private Securities Litigation Reform Act of 1995. Forward-looking statements may include, but are not limited to, statements relating to our objectives, plans and strategies, and all statements (other than statements of historical facts) that address activities, events or developments that we intend, expect, project, believe or anticipate will or may occur in the future. Any forward-looking statements herein are made as of the date this Quarterly Report on Form 10-Q is filed with the Securities and Exchange Commission (the "SEC"), and EVHC undertakes no duty to update or revise any such statements. Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties. Important factors that could cause actual results, developments and business decisions to differ materially from forward-looking statements are described in EVHC's filings with the SEC from time to time, including in the section entitled "Risk Factors" in Part II, Item 1A. Risk Factors in this Quarterly Report on form 10-Q. Among the factors that could cause future results to differ materially from those provided in this Quarterly Report on Form 10-Q are: decreases in our revenue and profit margin under our fee-for-service contracts due to changes in volume, payor mix and third party reimbursement rates, including from political discord in the federal budgeting process; the loss of existing contracts; failure to accurately assess costs under new contracts; difficulties in our ability to recruit and retain qualified physicians and other healthcare professionals, and enforce our non-compete agreements with our physicians; failure to implement some or all of our business strategies, including our efforts to grow our Evolution Health business and cross-sell our services; lawsuits for which we are not fully reserved; the adequacy of our insurance coverage and insurance reserves; our ability to successfully integrate strategic acquisitions; the high level of competition in the markets we serve; the cost of capital expenditures to maintain and upgrade our vehicle fleet and medical equipment; the loss of one or more members of our senior management team; our ability to maintain or implement complex information systems; disruptions in disaster recovery systems or management continuity planning; our ability to adequately protect our intellectual property and other proprietary rights or to defend against intellectual property infringement claims; challenges by tax authorities on our treatment of certain physicians as independent contractors; the impact of labor union representation; the impact of fluctuations in results due to our national contract with the Federal Emergency Management Agency ("FEMA"); potential penalties or changes to our operations if we fail to comply with extensive and complex government regulation of our industry; the impact of changes in the healthcare industry, including changes due to healthcare reform; our ability to timely enroll our providers in the Medicare program; our ability to restructure our operations to comply with future changes in government regulation; the outcome of government investigations of certain of our business practices; our ability to comply with the terms of our settlement agreements with the government; our ability to generate cash flow to service our substantial debt obligations; the significant influence of the CD&R Affiliates over us; the factors discussed in "Risk Factors"; and risks related to other factors discussed in the Quarterly Report on Form 10-Q.    Words such as "anticipates," "believes," "continues," "estimates," "expects," "goal," "objectives," "intends," "may," "opportunity," "plans," "potential," "near-term," "long-term," "projections," "assumptions," "projects," "guidance," "forecasts," "outlook," "target," "trends," "should," "could," "would," "will" and similar expressions are intended to identify such forward-looking statements. We qualify any forward-looking statements entirely by these cautionary factors.    All references to "we", "our", "us", or "EVHC", refer to Envision Healthcare Corporation and its subsidiaries. Our business is conducted primarily through two operating subsidiaries, EmCare and AMR.    

This Quarterly Report on Form 10-Q should be read in conjunction with EVHC's consolidated financial statements and notes thereto included in our Annual Report on Form 10-K filed with the SEC on March 12, 2013.

   Healthcare Reform    As currently enacted, the Patient Protection and Affordable Care Act (the "PPACA"), changes how health care services are delivered and reimbursed, and increases access to health insurance benefits to the uninsured and underinsured population in the United States. On June 28, 2012, the U.S. Supreme Court upheld the constitutionality of the individual mandate provisions of the PPACA, but struck down the provisions that would have allowed the Department of Health and Human Services ("HHS") to penalize states that do not implement Medicaid expansion provisions through the loss of existing federal Medicaid funding. 

It

 is unclear how many states will decline to implement the Medicaid expansion. While the PPACA will increase the likelihood that more people in the U.S. will have access to health insurance benefits, we cannot quantify or predict with any certainty the likely impact of the PPACA on our business model, financial condition or results of operations.                                           24  --------------------------------------------------------------------------------

   Table of Contents    Company Overview   

In June 2013, Emergency Medical Services Corporation's name was changed to Envision Healthcare Corporation and CDRT Holding Corporation's name was changed to Envision Healthcare Holdings, Inc.

    We are a leading provider of physician-led, outsourced medical services in the United States with more than 20,000 affiliated clinicians. We market our services on a stand-alone, multi-service and integrated basis, primarily under our EmCare and AMR brands. EmCare is a leading provider of integrated facility-based physician services, including emergency, anesthesiology, hospitalist/ inpatient care, radiology, tele-radiology and surgery. EmCare also offers physician-led care management solutions outside the hospital. AMR is a leading provider and manager of community-based medical transportation services, including emergency ''911'', non-emergency, managed transportation, fixed-wing ambulance and disaster response.    

On May 25, 2011, the Company merged with affiliates of CD&R, and became a wholly-owned subsidiary of Envision Healthcare Intermediate Corporation, in turn a wholly-owned subsidiary of Holding.

    EVHC applied business combination accounting to the opening balance sheet and results of operations on May 25, 2011 as the Merger occurred at the close of business on May 24, 2011. Initial adjustments to allocate the acquisition consideration to fixed assets and identifiable intangible assets were recorded in the third and fourth quarters of 2011 based on a valuation report from a third-party valuation firm. The Company finalized its business combination accounting during the first quarter of 2012 with adjustments related to goodwill allocations between segments.   

Key Factors and Measures We Use to Evaluate Our Business

The key factors and measures we use to evaluate our business focus on the number of patients we treat and transport and the costs we incur to provide the necessary care and transportation for each of our patients.

    We evaluate our revenue net of provisions for contractual payor discounts and provisions for uncompensated care. Medicaid, Medicare and certain other payors receive discounts from our standard charges, which we refer to as contractual discounts. In addition, individuals we treat and transport may be personally responsible for a deductible or co-pay under their third party payor coverage, and most of our contracts require us to treat and transport patients who have no insurance or other third party payor coverage. Due to the uncertainty regarding collectability of charges associated with services we provide to these patients, which we refer to as uncompensated care, our net revenue recognition is based on expected cash collections. Our net revenue represents gross billings after provisions for contractual discounts and estimated uncompensated care. Provisions for contractual discounts and uncompensated care have increased historically primarily as a result of increases in gross billing rates without corresponding increases in payor reimbursement.    The following table summarizes our approximate payor mix as a percentage of both net revenue and total transports and patient encounters for the three and six months ended June 30, 2013 and 2012. In determining the net revenue payor mix, we use cash collections in the period as an approximation of net revenue recorded.  As illustrated below, commercial insurance and managed care has consistently represented our largest payor group based on net revenue. Separately, given the emergency nature of many of our services, self-pay (primarily uninsured patients) has represented approximately 17%-20% of our total patient volume, but only 4%-5% of our total cash collections.  EmCare's ED volume is 20% self-pay and AMR's ambulance volume is 19% self-pay.  The decrease in self-pay as a percentage of total revenue is due to additional EmCare service lines with lower self-pay, including our Evolution Health business.                            Percentage of Cash Collections (Net Revenue)              Percentage of Total Volume                          Quarter ended              Six months ended         Quarter ended        Six months ended                             June 30,                    June 30,                June 30,              June 30,                        2013          2012          2013          2012       2013       2012       2013        2012 Medicare                  22.6 %        20.5 %        23.1 %        20.7 %    26.2 %     25.8 %     26.3 %      26.0 % Medicaid                   5.0           5.0           5.1           5.0      10.5       11.0       10.4        11.0 Commercial insurance and managed care              52.0          53.0          52.0          52.2      46.1       45.0       46.1        45.0 Self-pay                   4.4           5.0           4.4           5.0      17.2       18.2       17.2        18.0 Fees/other                 5.5           6.2           5.4           6.9         -          -          -           - Subsidies                 10.5          10.3          10.0          10.2         -          -          -           - Total                    100.0 %       100.0 %       100.0 %       100.0 %   100.0 %    100.0 %    100.0 %     100.0 %    

In addition to continually monitoring our payor mix, we also analyze certain measures in each of our business segments.

                                       25  --------------------------------------------------------------------------------

   Table of Contents    EmCare    Of EmCare's net revenue for the six months ended June 30, 2013, approximately 73% was derived from our hospital contracts for ED staffing, 11% from contracts related to anesthesiology services, 5% from our hospitalist/inpatient services, 5% from our post-acute care services, 3% from our radiology/tele-radiology services, 1% from our surgery services, and 2% from other hospital management services. Approximately 84% of EmCare's net revenue was generated from billings to third party payors and patients for patient encounters and approximately 16% was generated from billings to hospitals and affiliated physician groups for professional services. EmCare's key net revenue measures are:    †             Patient encounters. We utilize patient encounters to evaluate net revenue and as the basis by which we measure certain costs of the business. We segregate patient encounters into four main categories - ED visits, hospitalist encounters, radiology reads, and anesthesiology cases - due to the differences in reimbursement rates for and associated costs of providing the various services. As a result of these differences, in certain analyses we weight our patient encounter numbers according to category in an effort to better measure net revenue and costs.  In calculating "weighted patient encounters", each radiology read and anesthesiology case is not counted as a full patient encounter as we apply a discount factor to reflect differences in reimbursement rates for and associated costs of providing such services.    †             Number of contracts. This reflects the number of 

contractual

 relationships we have for outsourced ED staffing, anesthesiology, hospitalist/inpatient, radiology, tele-radiology, surgery and other hospital management services. We analyze the change in our number of contracts from period to period based on ''net new contracts'', which is the difference between total new contracts and contracts that have terminated.    †             Revenue per patient encounter. This reflects the expected 

net

 revenue for each patient encounter based on gross billings less all estimated provisions for contractual discounts and uncompensated care. Net revenue per patient encounter also includes net revenue from billings to third party payors and hospitals.    The change from period to period in the number of patient encounters under our ''same store'' contracts is influenced by general community conditions as well as hospital-specific elements, many of which are beyond our direct control. The general community conditions include:    

(i) the timing, location and severity of influenza, allergens and other annually recurring viruses and

    (ii) severe weather that affects a region's health status and/or infrastructure. Hospital-specific elements include the timing and extent of facility renovations, hospital staffing issues and regulations that affect patient flow through the hospital.   

The costs incurred in our EmCare business segment consist primarily of compensation and benefits for physicians and other professional providers, professional liability costs, and contract and other support costs. EmCare's key cost measures include:

    †             Provider compensation per hour of coverage. Provider 

compensation

 per hour of coverage includes all compensation and benefit costs for all professional providers, including physicians, physician assistants and nurse practitioners, during each patient encounter. Providers include all full-time, part-time and independently contracted providers. Analyzing provider compensation per hour of coverage enables us to monitor our most significant cost in performing services under our contracts.    †             Professional liability costs. These costs include provisions for estimated losses for actual claims, and claims likely to be incurred in the period, based on our past loss experience and actuarial analysis provided by a third party, as well as actual direct costs, including investigation and defense costs, claims payments, and other costs related to provider professional liability.    

EmCare's business is not as capital intensive as AMR's and EmCare's depreciation expense relates primarily to charges for usage of computer hardware and software, and other technologies. Amortization expense relates primarily to intangibles recorded for customer relationships.

   AMR    Approximately 88% of AMR's net revenue for the six months ended June 30, 2013 was transport revenue derived from the treatment and transportation of patients, including fixed wing medical transportation services, based on billings to third party payors,                                           26 

--------------------------------------------------------------------------------

Table of Contents

    healthcare facilities and patients. The balance of AMR's net revenue is derived from direct billings to communities and government agencies for the provision of training, dispatch center and other services. AMR's measures for net revenue include:    †             Transports. We utilize transport data, including the number and types of transports, to evaluate net revenue and as the basis by which we measure certain costs of the business. We segregate transports into two main categories - ambulance transports (including emergency, as well as non-emergency, critical care and other interfacility transports) and wheelchair transports - due to the differences in reimbursement rates for and associated costs of providing ambulance and wheelchair transports. As a result of these differences, in certain analyses we weight our transport numbers according to category in an effort to better measure net revenue and costs.  In calculating "weighted transports", each wheelchair transport is not counted as a full transport, as we apply a discount factor to reflect differences in reimbursement rates for and associated costs of providing such services.    †             Net revenue per transport. Net revenue per transport reflects the expected net revenue for each transport based on gross billings less provisions for contractual discounts and estimated uncompensated care. In order to better understand the trends across service lines and in our transport rates, we analyze our net revenue per transport based on weighted transports to reflect the differences in our transportation mix.    The change from period to period in the number of transports and net revenue per transport is influenced by changes in transports in existing markets from both new and existing facilities we serve for non-emergency transports, and the effects of general community conditions for emergency transports. The general community conditions may include (i) the timing, location and severity of influenza, allergens and other annually recurring viruses, (ii) severe weather that affects a region's health status and/or infrastructure and (iii) community-specific demographic changes.    

The costs we incur in our AMR business segment consist primarily of compensation and benefits for ambulance crews and support personnel, direct and indirect operating costs to provide transportation services, and costs related to accident and insurance claims. AMR's key cost measures include:

    †          Unit hours and cost per unit hour. Our measurement of a unit hour is based on a fully staffed ambulance or wheelchair van for one operating hour. We use unit hours and cost per unit hour to measure compensation-related costs and the efficiency of our deployed resources. We monitor unit hours and cost per unit hour on a combined basis, as well as on a segregated basis between ambulance and wheelchair transports.    †          Operating costs per transport. Operating costs per transport is comprised of certain direct operating costs, including vehicle operating costs, medical supplies and other transport-related costs, but excluding compensation-related costs. Monitoring operating costs per transport allows us to better evaluate cost trends and operating practices of our regional and local management teams.    †          Accident and insurance claims. We monitor the number and magnitude of all accident and insurance claims in order to measure the effectiveness of our risk management programs. Depending on the type of claim (workers compensation, auto, general or professional liability), we monitor our performance by utilizing various bases of measurement, such as net revenue, miles driven, number of vehicles operated, compensation dollars, and number of transports.    

We have focused our risk mitigation efforts on employee training for proper patient handling techniques, development of clinical and medical equipment protocols, driving safety, implementation of equipment to reduce lifting injuries and other risk mitigation processes.

    AMR's business requires various investments in long-term assets and depreciation expense relates primarily to charges for usage of these assets, including vehicles, computer hardware and software, medical equipment, and other technologies. Amortization expense relates primarily to intangibles recorded for customer relationships.   

Factors Affecting Operating Results

   Changes in Net New Contracts    Our operating results are affected directly by the number of net new contracts we have in a period, reflecting the effects of both new contracts and contract expirations. We regularly bid for new contracts, frequently in a formal competitive bidding process that often requires written responses to a Request for Proposal ("RFP") and, in any fiscal period, certain of our contracts will expire. We may elect not to seek extension or renewal of a contract if we determine that we cannot do so on favorable terms. With respect to                                           27  --------------------------------------------------------------------------------

Table of Contents

    expiring contracts we would like to renew, we may be required to seek renewal through an RFP, and we may not be successful in retaining any such contracts, or retaining them on terms that are as favorable as present terms.    Inflation and Fuel Costs    Certain of our expenses, such as wages and benefits, insurance, fuel and equipment repair and maintenance costs, are subject to normal inflationary pressures. Fuel expense represented 13.0% and 13.2% of AMR's operating expenses for the three months ended June 30, 2013 and 2012, respectively, and 13.1% and 12.2% for the six months ended June 30, 2013 and 2012, respectively. Although we have generally been able to offset inflationary cost increases through increased operating efficiencies and successful negotiation of fees and subsidies, we can provide no assurance that we will be able to offset any future inflationary cost increases through similar efficiencies and fee changes.    Medicare Fee Schedule Changes    Medicare law requires the Centers for Medicare and Medicaid Services ("CMS") to adjust the Medicare Physician Fee Schedule ("Physician Fee Schedule") payment rates annually based on a formula which includes an application of the Sustainable Growth Rate (SGR) that was adopted in the Balanced Budget Act of 1997 ("BBA"). This formula has yielded negative updates every year beginning in 2002, although CMS was able to take administrative steps to avoid a reduction in 2003 and Congress took a series of legislative actions to prevent reductions each year from 2004 through 2012. Absent further legislative action by Congress, the reduced MPFS would go into effect on January 1, 2014.    On August 2, 2011, the Budget Control Act of 2011 (Public Law 112-25) (the "Budget Control Act") was enacted. Under the Budget Control Act, a Joint Select Committee on Deficit Reduction (the "Joint Committee") was established to develop recommendations to reduce the deficit, over 10 years, by 1.2 to 1.5 trillion dollars, and was required to report its recommendations to Congress by November 23, 2011. Under the Budget Control Act, Congress was then required to consider the Joint Committee's recommendations by December 23, 2011. If the Joint Committee failed to refer agreed upon legislation to Congress or did not meet the required savings threshold set out in the Budget Control Act, a sequestration process would be put into effect, government-wide, to reduce Federal outlays by the proposed amount. Because the Joint Committee failed to report the requisite recommendations for deficit reduction, the sequestration process was set to automatically start, impacting Medicare and certain other government programs beginning in January 2013. Congress passed the American Taxpayer Relief Act, signed into law on January 2, 2013, delaying the start of sequestration until March 1, 2013. In order to provide its contractors and providers sufficient lead time to implement the cuts in Medicare, CMS delayed implementation of Medicare cuts until April 1, 2013. As there has been no further Congressional action with respect to the sequestration, reimbursements were cut by 2% for Medicare providers, including physicians and ambulance providers starting April 1, 2013.    Critical Accounting Policies    For a discussion of accounting policies that we consider critical to our business operations and the understanding of our results of operations that affect the more significant judgments and estimates used in the preparation of our unaudited condensed consolidated financial statements, please refer to Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies" contained in our annual report on Form 10-K for the year ended December 31, 2012 and incorporated by reference herein. As of June 30, 2013, there were no significant changes in our critical accounting policies or estimation procedures.    Revenue Recognition    Revenue is recognized at the time of service and is recorded net of provisions for contractual discounts and estimated uncompensated care. We estimate our provision for contractual discounts and uncompensated care based on payor reimbursement schedules, historical collections and write-off experience and other economic data. As a result of the estimates used in recording the provisions and the nature of healthcare collections, which may involve lengthy delays, there is a reasonable possibility that recorded estimates will change materially in the short-term.    The majority of the patients we treat are for the provision of emergency care in the pre-hospital and hospital settings. Due to federal government regulations governing the provision of such care, we are obligated to provide emergency care regardless of the patient's ability to pay or whether or not the patient has insurance or other third-party coverage for the costs of the services rendered. While we attempt to obtain all relevant billing information at the time the patient is within our care, there are numerous patient encounters where such information is not available. In such cases, our billing operations will initially classify these patients as self-pay, with the applicable estimated allowance for uncompensated care, while they pursue collection of the account. Over the course of                                           28 

--------------------------------------------------------------------------------

Table of Contents

    the first 30 to 60 days after we have treated these self-pay patients, our billing staff may identify the appropriate insurance or other third-party payor and re-assign the account from a self-pay payor classification to the appropriate payor. Depending on the final payor determination, the allowances for uncompensated care and contractual discounts will be adjusted accordingly. For accounts that remain classified as self-pay, our billing protocols and systems will generate bills and notifications generally for 90 to 120 days. If no collection or additional information is received from the patient, the account is written-off and sent to a collection agency. Our revenue recognition models, which are reviewed and updated on a monthly basis, consider these events in determining the collectability of our accounts receivable.    The changes in the provisions for contractual discounts and uncompensated care are primarily a result of changes in our gross fee-for-service rate schedules and gross accounts receivable balances. These gross fee schedules, including any changes to existing fee schedules, are generally negotiated with various contracting entities, including municipalities and facilities. Fee schedule increases are billed for all revenue sources and to all payors under that specific contract; however, reimbursement in the case of certain state and federal payors, including Medicare and Medicaid, will not change as a result of the change in gross fee schedules. In certain cases, this results in a higher level of contractual and uncompensated care provisions and allowances, requiring a higher percentage of contractual discount and uncompensated care provisions compared to gross charges.   

In addition, management analyzes the ultimate collectability of revenue and accounts receivable after certain stages of the collection cycle using a look-back analysis to determine the amount of receivables subsequently collected. Adjustments related to this analysis are recorded as a reduction or increase to net revenue each month, and were less than 0.5% of net revenue during each of the three and six month periods ending June 30, 2013 and 2012.

    The evaluation of these factors, as well as the interpretation of governmental regulations and private insurance contract provisions, involves complex, subjective judgments. As a result of the inherent complexity of these calculations, our actual revenues and net income, and our accounts receivable, could vary significantly from the amounts reported.    Results of Operations   

Quarter and Six Months Ended June 30, 2013 Compared to the Quarter and Six Months Ended June 30, 2012

The following tables present a comparison of financial data from our unaudited consolidated statements of operations for the three and six months ended June 30, 2013 and 2012 for EVHC and our two operating segments.

   Non-GAAP Measures    Adjusted EBITDA. Adjusted EBITDA is defined as net income attributable to EVHC before equity in earnings of unconsolidated subsidiary, income tax expense, interest and other income (expense), loss on early debt extinguishment, realized gain on investments, interest expense, equity-based compensation, related party management fees, restructuring charges, depreciation and amortization expense, and net income attributable to noncontrolling interest. Adjusted EBITDA is commonly used by management and investors as a performance measure and liquidity indicator. Adjusted EBITDA is not considered a measure of financial performance under U.S. generally accepted accounting principles, or GAAP, and the items excluded from Adjusted EBITDA are significant components in understanding and assessing our financial performance. Adjusted EBITDA should not be considered in isolation or as an alternative to such GAAP measures as net income, cash flows provided by or used in operating, investing or financing activities or other financial statement data presented in our financial statements as an indicator of financial performance or liquidity. Since Adjusted EBITDA is not a measure determined in accordance with GAAP and is susceptible to varying calculations, Adjusted EBITDA, as presented, may not be comparable to other similarly titled measures of other companies. The tables set forth a reconciliation of Adjusted EBITDA to net income and cash flows provided by operating activities.                                           29  --------------------------------------------------------------------------------

Table of Contents

    Unaudited Consolidated Results of Operations and as a Percentage of Net Revenue                               (dollars in thousands)                                        EVHC                                   Quarter ended June 30,                           Six months ended June 30,                                  % of net               % of net                  % of net                   % of net                        2013      revenue      2012      revenue        2013       revenue         2012       revenue Net revenue         $  899,255      100.0 % $ 801,098      100.0 %  $ 1,787,579      100.0 %  $  1,607,392      100.0 % Compensation and benefits               643,960       71.6     562,838       70.3      1,285,749       71.9       1,128,703       70.2 Operating expenses               102,288       11.4      96,807       12.1        202,671       11.3         204,388       12.7 Insurance expense       25,840        2.9      27,555        3.4         51,673        2.9          52,445        3.3 Selling, general and administrative expenses                23,789        2.6      20,136        2.5         45,787        2.6          39,129        2.4 Equity-based compensation expense                 (1,062 )     (0.1 )    (1,062 )     (0.1 )       (2,124 )     (0.1 )        (2,124 )     (0.1 ) Related party management fees         (1,250 )     (0.1 )    (1,250 )     (0.2 )       (2,500 )     (0.1 )        (2,500 )     (0.2 ) Interest income from restricted assets         (266 )     (0.0 )      (258 )     (0.0 )         (632 )     (0.0 )          (545 )     (0.0 ) Adjusted EBITDA     $  105,956       11.8 % $  96,332       12.0 %  $   206,955       11.6 %  $    187,896       11.7 % Equity-based compensation expense                 (1,062 )     (0.1 )    (1,062 )     (0.1 )       (2,124 )     (0.1 )        (2,124 )     (0.1 ) Related party management fees         (1,250 )     (0.1 )    (1,250 )     (0.2 )       (2,500 )     (0.1 )        (2,500 )     (0.2 ) Depreciation and amortization expense                (34,622 )     (3.9 )   (30,762 )     (3.8 )      (69,377 )     (3.9 )       (61,252 )     (3.8 ) Restructuring charges                 (3,032 )     (0.3 )    (2,744 )     (0.3 )       (3,669 )     (0.2 )        (8,723 )     (0.5 ) Interest expense       (38,538 )     (4.3 )   (41,514 )     (5.2 )      (78,828 )     (4.4 )       (84,966 )     (5.3 ) Realized gain on investments             105        0.0          63        0.0            118        0.0             361        0.0 Interest and other income (expense)          (249 )      0.0         241        0.0        (12,970 )     (0.7 )           403        0.0 Loss on early debt extinguishment               -        0.0      (5,172 )     (0.6 )         (122 )     (0.0 )        (5,172 )     (0.3 ) Income tax expense                (10,832 )     (1.2 )    (6,266 )     (0.8 )      (17,966 )     (1.0 )       (10,504 )     (0.7 ) Equity in earnings of unconsolidated subsidiary                  87        0.0         105        0.0            162        0.0             214        0.0 Net income attributable to noncontrolling interest                     -        0.0        (130 )     (0.0 )            -        0.0               -          - Net income attributable to EVHC                $   16,563        1.8 % $   7,841        1.0 %  $   

19,679        1.1 %  $     13,633        0.8 %                                            30 

--------------------------------------------------------------------------------

Table of Contents