SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Quarterly Report Under Section 13 or 15 (d) of the Securities Exchange Act of 1934 For the Quarterly Period Ended ~~June~~September 30, 2010


	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number: 1-8351

(Exact name of registrant as specified in its charter)

Delaware	31-0791746
(State or other jurisdiction of incorporation or organization) ~~organization)~~	(IRS Employer Identification No.)

2600 Chemed Center, 255 E. Fifth Street, Cincinnati, Ohio		45202
(Address of principal executive offices)		(Zip code)

(513) 762-6900

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Class		Amount		Date

Capital Stock $1 Par Value	~~22,787,983~~	22,792,430 Shares	~~June~~	September 30, 2010

Properties and equipment, at cost, less accumulated depreciation of $127,848

Identifiable intangible assets less accumulated amortization of $27,101

Capital stock - authorized 80,000,000 shares $1 par; issued 30,207,002 shares

(2009 - 29,890,628 shares)

CHEMED CORPORATION AND SUBSIDIARY COMPANIES

Notes to Unaudited Financial Statements

1. Basis of Presentation

As used herein, the terms "We," "Company" and "Chemed" refer to Chemed Corporation or Chemed Corporation and its consolidated subsidiaries.

We have prepared the accompanying unaudited consolidated financial statements of Chemed in accordance with Rule 10-01 of SEC Regulation S-X. Consequently, we have omitted certain disclosures required under generally accepted accounting principles in the United States (“GAAP”) for complete financial statements. The December 31, 2009 balance sheet data were derived from audited financial statements but do not include all disclosures required by GAAP. However, in our opinion, the financial statements presented herein contain all adjustments, consisting only of normal recurring adjustments, necessary to present fairly our financial position, results of operations and cash flows. These financial statements are prepared on the same basis as and should be read in conjunction with the Consolidated Financial Statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2009.

2. Revenue Recognition

Both the VITAS segment and the Roto-Rooter segment recognize service revenues and sales when the earnings process has been completed. Generally, this occurs when services are provided or products are delivered. VITAS recognizes revenue at the estimated realizable amount due from third-party payers. Medicare payments are subject to certain limitations, as described below.

As of ~~June~~September 30, 2010, VITAS has approximately ~~$7.6~~$5.6 million in unbilled revenue included in accounts receivable (December 31, 2009 - $9.9 million). The unbilled revenue at VITAS relates to hospice programs currently undergoing focused medical reviews (“FMR”). During FMR, surveyors working on behalf of the U.S. Federal government review certain patient files for compliance with Medicare regulations. During the time the patient file is under review, we are unable to bill for care provided to those patients. We make appropriate provisions to reduce our accounts receivable balance for potential denials of patient service revenue due to FMR activity.

We actively monitor each of our hospice programs, by provider number, as to their specific admission, discharge rate and median length of stay data in an attempt to determine whether they are likely to exceed the annual per-beneficiary Medicare cap (“Medicare cap”). Should we determine that revenues for a program are likely to exceed the Medicare cap based on projected trends, we attempt to institute corrective action to influence the patient mix or to increase patient admissions. However, should we project our corrective action will not prevent that program from exceeding its Medicare cap, we estimate the amount of revenue recognized during the period that will require repayment to the Federal government under the Medicare cap and record the amount as a reduction to patient revenue. The Medicare cap measurement period is from September 29 through September 28 of the following year for admissions and from November 1 through October 31 of the following year for revenue. During the three-month ~~periods~~period ended ~~June~~September 30, 2010 ~~and 2009,~~ we ~~reversed $35,000 and $505,000, respectively of~~recorded $117,000 for one small program’s projected Medicare cap liability ~~recorded during previous quarters due to improved admission trends.~~for the 2010 measurement period. For the ~~six~~nine month period ended ~~June~~September 30, 2010, we reversed ~~$1.8~~$1.7 million, net in Medicare cap liability for amounts recorded in the fourth quarter of 2009 for two programs’ projected ~~liability for the~~ 2010 measurement ~~period.~~period liability. For the ~~six~~three-month period ended September 30, 2009, we recorded $43,000 in Medicare cap liability related to a retroactive billing for 2006. For the nine month period ended ~~June~~September 30, 2009, we reversed $235,000 for the 2009 measurement ~~period.~~period offset by $43,000 in Medicare cap liability related to a retroactive billing for 2006.

The U.S. government revises hospice reimbursement rates on an annual basis using the Hospice Wage Index (HWI) and the Consumer Price Index plus a phase out of the Budget Neutrality Adjustment Factor (BNAF). The HWI is geographically adjusted to reflect local differences in wages. The BNAF is a portion of inflation calculated in prior years that is being ~~eliminated or~~ phased out over a seven year period. In August 2008, the U.S. government announced a 25% reduction in the BNAF for its fiscal 2009 (October 2008 through September 2009) pursuant to a three year phase-out of the BNAF. The February 2009 American Recovery and Reinvestment Act mandated a one year delay in the BNAF phase-out. In August 2009, the Centers for Medicare and ~~Medi caid~~Medicaid Services (CMS) revised the phase-out schedule of the BNAF. CMS reduced the price increase in hospice reimbursement by 10% of the BNAF effective October 1, 2009. The remaining 90% of the BNAF will be phased out over the next ~~six~~nine years by revising the October 1 reimbursement adjustment by 15% of the original BNAF inflation factor. Based upon this revised schedule, 100% of the BNAF will be eliminated on October 1, 2015. As a result, included in the ~~six~~nine months ended ~~June~~September 30, 2009 results, is $1.95 million of revenue for the retroactive price increase related to services provided by VITAS in the fourth quarter of 2008.

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3. Segments

Service revenues and sales and after-tax earnings by business segment are as follows (in thousands):

		Three months ended						Six months ended							Three months ended						Nine months ended
		June 30,						June 30,							September 30,						September 30,
		2010			2009			2010			2009				2010			2009			2010			2009
Service Revenues and Sales	Service Revenues and Sales													Service Revenues and Sales
VITAS		$	226,638		$	211,303		$	449,578		$	419,720			$	233,964		$	217,067		$	683,542		$	636,787
Roto-Rooter			88,357			83,952			174,230			170,473				86,487			79,727			260,717			250,200
	Total	$	314,995		$	295,255		$	623,808		$	590,193
Total														Total	$	320,451		$	296,794		$	944,259		$	886,987

After-tax Earnings	After-tax Earnings													After-tax Earnings
VITAS		$	18,281		$	17,122		$	36,719		$	34,292			$	19,803		$	18,148		$	56,523		$	52,442
Roto-Rooter			8,860			8,798			16,673			17,027				7,747			7,935			24,420			24,962
	Total		27,141			25,920			53,392			51,319
Total														Total		27,550			26,083			80,943			77,404
Corporate			(8,286	)		(8,670	)		(15,179	)		(14,730	)			(6,562	)		(6,873	)		(21,742	)		(21,605	)
	Net income	$	18,855		$	17,250		$	38,213		$	36,589
Net income														Net income	$	20,988		$	19,210		$	59,201		$	55,799

We report corporate administrative expenses and unallocated investing and financing income and expense not directly related to either segment as “Corporate”. Historically, we have recorded stock award amortization as a corporate expense. In the first quarter of 2010, our chief decision maker determined that this was an on-going expense and should be reported within the appropriate business segment. Accordingly, stock award amortization has been reclassified to the corresponding business segment for all periods presented.

4. Earnings per Share

Earnings per share are computed using the weighted average number of shares of capital stock outstanding. Earnings and diluted earnings per share for 2010 and 2009 are computed as follows (in thousands, except per share data):

For the Three Months Ended September 30,	Net Income		Shares		Earnings per Share
2010
Earnings	$	20,988		22,597	$	0.93
Dilutive stock options		-		304
Nonvested stock awards		-		95
Diluted earnings	$	20,988		22,996	$	0.91

2009
Earnings	$	19,210		22,461	$	0.86
Dilutive stock options		-		227
Nonvested stock awards		-		56
Diluted earnings	$	19,210		22,744	$	0.84

For the Three Months Ended
June 30,
Net Income Shares
Earnings per
Share

2010
Earnings $ 18,855 22,644 $ 0.83
Dilutive stock options - 348
Nonvested stock awards - 88
Diluted earnings $ 18,855 23,080 $ 0.82

2009
Earnings $ 17,250 22,417 $ 0.77
Dilutive stock options - 214
Nonvested stock awards - 41
Diluted earnings $ 17,250 22,672 $ 0.76

For the Six Months Ended June 30,	Net Income		Shares		Earnings per Share
For the Nine Months Ended September 30,							Net Income		Shares		Earnings per Share
2010
Earnings	$	38,213		22,608	$	1.69	$	59,201		22,604	$	2.62
Dilutive stock options		-		319				-		314
Nonvested stock awards		-		85				-		88
Diluted earnings	$	38,213		23,012	$	1.66	$	59,201		23,006	$	2.57

2009
Earnings	$	36,589		22,406	$	1.63	$	55,799		22,425	$	2.49
Dilutive stock options		-		216				-		212
Nonvested stock awards		-		38				-		42
Diluted earnings	$	36,589		22,660	$	1.61	$	55,799		22,679	$	2.46

For the three and ~~six-month~~nine-month periods ended ~~June~~September 30, 2010, ~~976,000~~990,000 and ~~991,000~~986,000 stock options, respectively were excluded from the computation of diluted earnings per share as their exercise prices were greater than the average market price for most of the period. For the three and ~~six-month~~nine-month periods ended ~~June~~September 30, 2009, ~~1.8~~1.3 million and 1.7 million stock options were excluded from the computation of diluted earnings per share.

Diluted earnings per share may be impacted in future periods as the result of the issuance of our 1.875% Senior Convertible Notes (the “Notes”) and related purchased call options and sold warrants. Per FASB’s authoritative guidance on the effect of contingently convertible instruments on diluted earnings per share and convertible bonds with an issuer option to settle for cash upon conversion, we will not include any shares related to the Notes in our calculation of diluted earnings per share until our average stock price for a quarter exceeds the current conversion price. We would then include in our diluted earnings per share calculation those shares issuable using the treasury stock method. The amount of shares issuable is based upon the amount by which the average stock price for the quarter exceeds the conversion price. The purchased call option does not impact the calculation of diluted earnings per share as it is always anti-dilutive. The sold warrants become dilutive when our average stock price for a quarter exceeds the strike price of the warrant.

The following table provides examples of how changes in our stock price impact the number of shares that would be included in our diluted earnings per share calculation. It also shows the impact on the number of shares issuable upon conversion of the Notes and settlement of the purchased call options and sold warrants:

a)	Represents the number of incremental shares that must be included in the calculation of fully diluted shares under U.S. GAAP.

b)	Represents the number of incremental shares to be issued by the Company upon conversion of the 1.875% Convertible Notes, assuming concurrent settlement of the note hedges and warrants.

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5. Long-Term Debt

We are in compliance with all debt covenants as of ~~June~~September 30, 2010. We have issued ~~$28.3~~$28.2 million in standby letters of credit as of ~~June~~September 30, 2010 for insurance purposes. Issued letters of credit reduce our available credit under the revolving credit agreement. As of ~~June~~September 30, 2010, we have approximately ~~$146.7~~$146.8 million of unused lines of credit available and eligible to be drawn down under our revolving credit facility, excluding the $100 million expansion feature.

In May 2008, the FASB issued authoritative guidance for accounting for convertible debt instruments that may be settled in cash upon conversion including partial cash settlement. This guidance requires all convertible debentures classified as Instruments B or C to separately account for the debt and equity pieces of the instrument. Convertible debentures classified as Instruments B may be settled in either stock or cash equivalent to the conversion value and convertible debentures classified as Instruments C must settle the accreted value of the obligation in cash and may satisfy the excess conversion value in either cash or stock. At inception of the convertible instrument, cash flows related to the convertible instrument are to be discounted using a market rate of interest. We adopt ed the provisions of the guidance on January 1, 2009 and applied the guidance retrospectively. Upon adoption, the Notes had a discount of approximately $55.1 million.

The following amounts are included in our consolidated balance sheet related to the Notes:

	June 30, 2010			December 31, 2009			September 30, 2010			December 31, 2009
Principal amount of convertible debentures	$	186,956		$	186,956		$	186,956		$	186,956
Unamortized debt discount		(31,348	)		(34,829	)		(29,564	)		(34,829	)
Carrying amount of convertible debentures	$	155,608		$	152,127		$	157,392		$	152,127
Additional paid in capital (net of tax)	$	31,310		$	31,310		$	31,310		$	31,310

The following amounts comprise interest expense included in our consolidated income statement (in thousands):

The unamortized debt discount will be amortized using the effective interest method over the remaining life of the Notes. The effective rate on the Notes after adoption of the standard is approximately 6.875%.

6. Other Operating Expenses

7. Other Income -- Net

Other income -- net comprises the following (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,						Three Months Ended September 30,						Nine Months Ended September 30,
	2010			2009			2010			2009			2010			2009			2010			2009
Market value gains/(losses) on assets held in
Market value gains on assets held in
deferred compensation trust	$	(83	)	$	3,199		$	105		$	1,585		$	243		$	1,789		$	348		$	3,374
Gain on settlement of company-owned life insurance		-			-			-			1,211			-			-			-			1,211
Loss on disposal of property and equipment		(58	)		(78	)		(152	)		(54	)		(141	)		(159	)		(293	)		(213	)
Interest income		150			207			225			289			109			86			334			375
Other - net		1			30			18			51			11			17			29			68
Total other income	$	10		$	3,358		$	196		$	3,082		$	222		$	1,733		$	418		$	4,815

8. Stock-Based Compensation Plans

On May 17, 2010 the stockholders approved the adoption of the Company’s 2010 Stock Incentive Plan. The Stock Incentive Plan authorizes the issuance or transfer of a maximum of 1,750,000 shares of capital stock pursuant to stock incentives granted to key employees of the Company. Stock incentives granted under the Stock Plan may be in the form of options to purchase capital stock or in the form of capital stock awards.

In April 2010, we met the stock price target of our Long-Term Incentive Plan. The stock price hurdle of $54.00 was achieved during 30 trading days out of a 60 day trading day period. On April 16, 2010, the Compensation/Incentive Committee of the Board of Directors (“CIC”) approved a stock grant of 27,900 shares and the related allocation to participants. The pretax cost of the stock grant was $1.8 million.

On February 18, 2010, the CIC approved a grant of 47,896 shares of restricted stock to certain key employees. The restricted shares cliff vest four years from the date of issuance. The cumulative compensation expense related to the restricted stock award is $2.5 million and will be recognized ratably over the four-year vesting period. We assumed no forfeitures in determining the cumulative compensation expense of the grant.

On February 18, 2010, the CIC approved a grant of 515,100 stock options to certain employees. The stock options vest ratably over three years from the date of issuance. The cumulative compensation expense related to the stock option grant is $7.8 million and will be recognized over the three-year vesting period. We used the Black-Scholes option valuation method to determine the cumulative compensation expense of the grant.

9. Independent Contractor Operations

The Roto-Rooter segment sublicenses with sixty-one independent contractors to operate certain plumbing repair and drain cleaning businesses in lesser-populated areas of the United States and Canada. We had notes receivable from our independent contractors as of ~~June~~September 30, 2010 totaling $1.2 million (December 31, 2009 -$1.3 million). In most cases these loans are fully or partially secured by equipment owned by the contractor. The interest rates on the loans range from zero to 8% per annum and the remaining terms of the loans range from two months to 5 years at ~~June~~September 30, 2010. During the three months ended ~~June~~September 30, 2010, we recorded revenues of ~~$5.6~~$5.5 million (2009 - ~~$5.4~~$5.3 million) and pretax profits of ~~$2.7 million~~$2.5 milli on (2009 - $2.4 million) from our independent contractors. During the ~~six~~nine months ended ~~June~~September 30, 2010, we recorded revenues of ~~$11.2~~$16.7 million (2009 - ~~$10.7~~$16.0 million) and pretax profits of ~~$5.1~~$7.6 million (2009 - ~~$4.7~~$7.1 million) from our independent contractors.

10. Pension and Retirement Plans

All of the Company’s plans that provide retirement and similar benefits are defined contribution plans. Expenses for the Company’s pension and profit-sharing plans, excess benefit plans and other similar plans were ~~$2.2~~$2.3 million and ~~$5.6~~$4.3 million for the three months ended ~~June~~September 30, 2010 and 2009, respectively. Expenses for the Company’s pension and profit-sharing plans, excess benefit plans and other similar plans were ~~$4.7~~$7.0 million and ~~$7.0~~$11.3 million for the ~~six~~nine months ended ~~June~~September 30, 2010 and 2009, respectively.

11. Legal and Regulatory Matters

Litigation

On March 1, 2010 Anthony Morangelli and Frank Ercole filed a class action lawsuit in federal district court for the Eastern District of New York seeking unpaid minimum wages and overtime service technician compensation from Roto-Rooter and Chemed. They also seek payment of penalties, interest and plaintiffs’ attorney fees. We contest these allegations. In ~~June~~September 2010, the Court conditionally certified a nationwide class of service technicians, excluding those who signed dispute resolution agreements in which they agreed to arbitrate claims arising out of their employment. There has been no final determination of the merits of collective treatment of the case. The lawsuit is in its early stage ~~and~~an d we are unable to estimate ~~o ur~~our potential liability, if any, with respect to these allegations.

VITAS is party to a class action lawsuit filed in the Superior Court of California, Los Angeles County, in September 2006 by Bernadette Santos, Keith Knoche and Joyce White. This case alleges failure to pay overtime and failure to provide meal and rest periods to a purported class of California admissions nurses, chaplains and sales representatives. The case seeks payment of penalties, interest and Plaintiffs’ attorney fees. VITAS contests these allegations. In December 2009, the trial court denied Plaintiffs’ motion for class certification. The lawsuit is in its early stages and we are unable to estimate our potential liability, if any, with respect to these allegations.

Regardless of outcome, defense of litigation adversely affects us through defense costs, diversion of our time and related publicity. In the normal course of business, we are a party to various claims and legal proceedings. We record a reserve for these matters when an adverse outcome is probable and the amount of the potential liability is reasonably estimable.

Regulatory Matters

In April 2005, the Office of Inspector General (“OIG”) for the Department of Health and Human Services served VITAS with civil subpoenas relating to VITAS’ alleged failure to appropriately bill Medicare and Medicaid for hospice services. As part of this investigation, the OIG selected medical records for 320 past and current patients from VITAS’ three largest programs for review. It also sought policies and procedures dating back to 1998 covering admissions, certifications, recertifications and discharges. During the third quarter of 2005 and again in May 2006, the OIG requested additional information from us. The Court dismissed a related qui tam complaint filed in U.S. District Court for the Southern District of Flori da with prejudice in July 2007. The plaintiffs appealed this dismissal, which the Court of Appeals affirmed. The government continues to investigate the complaint’s allegations. In March 2009, we received a letter from the government reiterating the basis of their investigation.

In May 2009, VITAS received an administrative subpoena from the U.S. Department of Justice requesting VITAS deliver to the OIG documents, patient records, and policy and procedure manuals for headquarters and its Texas programs concerning hospice services provided for the period January 1, 2003 to the date of the letter. In August 2009, the OIG selected medical records for 59 past and current patients from a Texas program for review. In February 2010, VITAS received a companion civil investigative demand (“CID”) from the state of Texas Attorney General’s Office, seeking related documents. In September 2010, it received a second CID and a second administrative subpoena seeking related documents. Based on the early stage of the ~~investigation~~inve stigation and the limited information we have at this time, we cannot predict the outcome of this investigation. We believe that we are in material compliance with Medicare and Medicaid rules and regulations applicable to hospice providers.

The costs to comply with either of these investigations were not material for any period presented. We are unable to predict the outcome of these matters or the impact, if any, that the investigation may have on our business, results of operations, liquidity or capital resources. Regardless of outcome, responding to the subpoenas can adversely affect us through defense costs, diversion of our time and related publicity.

12. Related Party Agreement

VITAS has pharmacy services agreements ("Agreements") with Omnicare, Inc. and its subsidiaries (“OCR”) whereby OCR provides specified pharmacy services for VITAS and its hospice patients in geographical areas served by both VITAS and OCR. The Agreements renew automatically for one-year terms. Either party may cancel the Agreements at the end of any term by giving 90 days prior written notice. VITAS made purchases from OCR of ~~$8.9~~$9.0 million and ~~$8.2~~$8.5 million for the three months ended ~~June~~September 30, 2010 and 2009, respectively. VITAS made purchases from OCR of ~~$17.5~~$26.5 million and ~~$16.1~~$24.6 million for the ~~six~~nine months ended ~~June~~September 30, 2010 and 2009, respectively.

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Mr. Joel F. Gemunder retired as President and ~~Chief Executive Officer~~CEO of OCR during the third quarter of 2010 and is a director of the Company. Ms. Andrea Lindell ~~are directors~~is a director of both OCR and the Company. Mr. Kevin J. McNamara, President, Chief Executive Officer and a director of the Company, is a director emeritus of OCR. We believe that the terms of the Agreements are no less favorable to VITAS than we could negotiate with an unrelated party.

13. Cash Overdrafts Payable

Included in accounts payable at ~~June~~September 30, 2010 is cash overdrafts payable of ~~$10.4~~$11.5 million (December 31, 2009 - $11.7 million).

14. Financial Instruments

We adopted the provisions of the FASB’s authoritative guidance on fair value measurements. This statement defines a hierarchy which prioritizes the inputs in fair value measurements. Level 1 measurements are measurements using quoted prices in active markets for identical assets or liabilities. Level 2 measurements use significant other observable inputs. Level 3 measurements are measurements using significant unobservable inputs which require a company to develop its own assumptions. In recording the fair value of assets and liabilities, companies must use the most reliable measurement available.

The following shows the carrying value, fair value and the hierarchy for our financial instruments as of ~~June~~September 30, 2010 (in thousands):

			Fair Value Measure								Fair Value Measure
	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Mutual fund investments of deferred compensation plans held in trust	$	26,282	$	26,282	$	-	$	-	$	26,022	$	26,022	$	-	$	-
Long-term debt		155,608		172,701		-		-		157,392		181,114		-		-

For cash and cash equivalents, accounts receivable and accounts payable, the carrying amount is a reasonable estimate of fair value because of the liquidity and short-term nature of these instruments.

15. Capital Stock Transactions

On April 26, 2007, our Board of Directors authorized a $150 million stock repurchase program. On May 19, 2008, our Board of Directors authorized an additional $56 million to the April 2007 stock repurchase program. For the quarter ended ~~June~~September 30, 2010, ~~we repurchased 114,900~~there were no shares ~~at a weighted average cost per share of $54.99 under the April 2007 program.~~repurchased. For the ~~six~~nine months ended ~~June~~September 30, 2010, we repurchased 146,275 shares at a weighted average cost per share of $53.32. For the quarter and ~~six~~nine months ended ~~June~~September 30, 2009 ~~there was~~we repurchased no ~~stock repurchased.~~stock.

16.  Guarantor Subsidiaries
Our 1.875% Notes are fully and unconditionally guaranteed on an unsecured, jointly and severally liable basis by certain of our 100% owned subsidiaries. The following unaudited, condensed, consolidating financial data presents the composition of the parent company (Chemed), the guarantor subsidiaries and the non-guarantor subsidiaries as of June 30, 2010 and December 31, 2009 for the balance sheet, the three and six months ended June 30, 2010 and June 30, 2009 for the income statement and the six months ended June 30, 2010 and June 30, 2009 for the statement of cash flows (dollars in thousands):

June 30, 2010
Guarantor Non-Guarantor Consolidating
Parent Subsidiaries Subsidiaries Adjustments Consolidated
ASSETS
Cash and cash equivalents $ 105,276 $ (1,238 ) $ 5,042 $ - $ 109,080
Accounts receivable, less allowances 560 100,754 422 - 101,736
Intercompany receivables - 149,823 - (149,823 ) -
Inventories - 7,272 706 - 7,978
Current deferred income taxes (962 ) 15,312 103 - 14,453
Prepaid income taxes 3,424 (2,939 ) (134 ) - 351
Prepaid expenses 1,047 9,326 50 - 10,423
     Total current assets 109,345 278,310 6,189 (149,823 ) 244,021
Investments of deferred compensation plans - - 26,282 - 26,282
Properties and equipment, at cost, less accumulated depreciation 12,987 63,209 2,241 - 78,437
Identifiable intangible assets less accumulated amortization - 56,620 - - 56,620
Goodwill - 445,644 4,461 - 450,105
Other assets 6,373 2,384 1,741 - 10,498
Investments in subsidiaries 677,384 17,356 - (694,740 ) -
          Total assets $ 806,089 $ 863,523 $ 40,914 $ (844,563 ) $ 865,963
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ (970 ) $ 49,646 $ 455 $ - $ 49,131
Intercompany payables 143,947 - 5,876 (149,823 ) -
Income taxes (969 ) 6,199 (447 ) - 4,783
Accrued insurance 677 34,052 - - 34,729
Accrued compensation 2,063 39,026 524 - 41,613
Other current liabilities 1,215 10,346 108 - 11,669
      Total current liabilities 145,963 139,269 6,516 (149,823 ) 141,925
Deferred income taxes (11,417 ) 43,452 (7,682 ) - 24,353
Long-term debt 155,608 - - - 155,608
Deferred compensation liabilities - - 25,374 - 25,374
Other liabilities 2,968 2,327 441 - 5,736
Stockholders' equity 512,967 678,475 16,265 (694,740 ) 512,967
     Total liabilities and stockholders' equity $ 806,089 $ 863,523 $ 40,914 $ (844,563 ) $ 865,963

December 31, 2009 Guarantor Non-Guarantor Consolidating
Parent Subsidiaries Subsidiaries Adjustments Consolidated
ASSETS
Cash and cash equivalents $ 109,331 $ (1,221 ) $ 4,306 $ - $ 112,416
Accounts receivable, less allowances 618 52,303 540 - 53,461
Intercompany receivables - 149,888 - (149,888 ) -
Inventories - 7,009 534 - 7,543
Current deferred income taxes (378 ) 14,048 31 - 13,701
Prepaid expenses (2,457 ) 13,706 (112 ) - 11,137
     Total current assets 107,114 235,733 5,299 (149,888 ) 198,258
Investments of deferred compensation plans - - 24,158 - 24,158
Properties and equipment, at cost, less accumulated depreciation 10,309 62,912 2,137 - 75,358
Identifiable intangible assets less accumulated amortization - 57,920 - - 57,920
Goodwill - 445,662 4,380 - 450,042
Other assets 11,190 2,232 312 - 13,734
Investments in subsidiaries 643,572 15,523 - (659,095 ) -
          Total assets $ 772,185 $ 819,982 $ 36,286 $ (808,983 ) $ 819,470
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ (2,411 ) $ 54,084 $ 398 $ - $ 52,071
Intercompany payables 147,744 - 2,144 (149,888 ) -
Income taxes (2,145 ) 2,159 49 - 63
Accrued insurance 1,231 33,930 - - 35,161
Accrued compensation 4,235 30,020 407 - 34,662
Other current liabilities 1,643 11,367 1,117 - 14,127
      Total current liabilities 150,297 131,560 4,115 (149,888 ) 136,084
Deferred income taxes (10,549 ) 43,183 (6,710 ) - 25,924
Long-term debt 152,127 - - - 152,127
Deferred compensation liabilities - - 23,637 - 23,637
Other liabilities 3,148 1,388 - - 4,536
Stockholders' equity 477,162 643,851 15,244 (659,095 ) 477,162
     Total liabilities and stockholders' equity $ 772,185 $ 819,982 $ 36,286 $ (808,983 ) $ 819,470

16. Guarantor Subsidiaries

Our 1.875% Notes are fully and unconditionally guaranteed on an unsecured, jointly and severally liable basis by certain of our 100% owned subsidiaries. The following unaudited, condensed, consolidating financial data presents the composition of the parent company (Chemed), the guarantor subsidiaries and the non-guarantor subsidiaries as of September 30, 2010 and December 31, 2009 for the balance sheet, the three and nine months ended September 30, 2010 and September 30, 2009 for the income statement and the nine months ended September 30, 2010 and September 30, 2009 for the statement of cash flows (dollars in thousands):

September 30, 2010				Guarantor			Non-Guarantor			Consolidating
	Parent			Subsidiaries			Subsidiaries			Adjustments			Consolidated
ASSETS
Cash and cash equivalents	$	131,776		$	314		$	5,367		$	-		$	137,457
Accounts receivable, less allowances		913			104,115			658			-			105,686
Intercompany receivables		-			175,204			-			(175,204	)		-
Inventories		-			7,301			650			-			7,951
Current deferred income taxes		(1,164	)		15,680			134			-			14,650
Prepaid income taxes		4,109			(3,490	)		(282	)		-			337
Prepaid expenses		946			8,811			168			-			9,925
Total current assets		136,580			307,935			6,695			(175,204	)		276,006
Investments of deferred compensation plans		-			-			26,022			-			26,022
Properties and equipment, at cost, less accumulated depreciation		12,747			63,983			2,252			-			78,982
Identifiable intangible assets less accumulated amortization		-			56,097			-			-			56,097
Goodwill		-			445,639			4,456			-			450,095
Other assets		6,204			2,729			2,257			-			11,190
Investments in subsidiaries		696,578			18,261			-			(714,839	)		-
Total assets	$	852,109		$	894,644		$	41,682		$	(890,043	)	$	898,392
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable	$	(1,725	)	$	53,857		$	420		$	-		$	52,552
Intercompany payables		169,942			-			5,262			(175,204	)		-
Income taxes		(4,848	)		8,791			632			-			4,575
Accrued insurance		666			33,654			-			-			34,320
Accrued compensation		3,064			41,632			487			-			45,183
Other current liabilities		3,084			12,433			120			-			15,637
Total current liabilities		170,183			150,367			6,921			(175,204	)		152,267
Deferred income taxes		(11,958	)		43,473			(8,470	)		-			23,045
Long-term debt		157,392			-			-			-			157,392
Deferred compensation liabilities		-			-			25,508			-			25,508
Other liabilities		2,936			3,212			476			-			6,624
Stockholders' equity		533,556			697,592			17,247			(714,839	)		533,556
Total liabilities and stockholders' equity	$	852,109		$	894,644		$	41,682		$	(890,043	)	$	898,392




December 31, 2009				Guarantor			Non-Guarantor			Consolidating
	Parent			Subsidiaries			Subsidiaries			Adjustments			Consolidated
ASSETS
Cash and cash equivalents	$	109,331		$	(1,221	)	$	4,306		$	-		$	112,416
Accounts receivable, less allowances		618			52,303			540			-			53,461
Intercompany receivables		-			149,888			-			(149,888	)		-
Inventories		-			7,009			534			-			7,543
Current deferred income taxes		(378	)		14,048			31			-			13,701
Prepaid expenses		(2,457	)		13,706			(112	)		-			11,137
Total current assets		107,114			235,733			5,299			(149,888	)		198,258
Investments of deferred compensation plans		-			-			24,158			-			24,158
Properties and equipment, at cost, less accumulated depreciation		10,309			62,912			2,137			-			75,358
Identifiable intangible assets less accumulated amortization		-			57,920			-			-			57,920
Goodwill		-			445,662			4,380			-			450,042
Other assets		11,190			2,232			312			-			13,734
Investments in subsidiaries		643,572			15,523			-			(659,095	)		-
Total assets	$	772,185		$	819,982		$	36,286		$	(808,983	)	$	819,470
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable	$	(2,411	)	$	54,084		$	398		$	-		$	52,071
Intercompany payables		147,744			-			2,144			(149,888	)		-
Income taxes		(2,145	)		2,159			49			-			63
Accrued insurance		1,231			33,930			-			-			35,161
Accrued compensation		4,235			30,020			407			-			34,662
Other current liabilities		1,643			11,367			1,117			-			14,127
Total current liabilities		150,297			131,560			4,115			(149,888	)		136,084
Deferred income taxes		(10,549	)		43,183			(6,710	)		-			25,924
Long-term debt		152,127			-			-			-			152,127
Deferred compensation liabilities		-			-			23,637			-			23,637
Other liabilities		3,148			1,388			-			-			4,536
Stockholders' equity		477,162			643,851			15,244			(659,095	)		477,162
Total liabilities and stockholders' equity	$	772,185		$	819,982		$	36,286		$	(808,983	)	$	819,470

-13-

For the three months ended June 30, 2010 Guarantor Non-Guarantor Consolidating
Parent Subsidiaries Subsidiaries Adjustments Consolidated
Continuing Operations
Service revenues and sales $ - $ 308,825 $ 6,170 $ - $ 314,995
Cost of services provided and goods sold - 220,455 3,247 - 223,702
Selling, general and administrative expenses 6,508 42,302 1,146 - 49,956
Depreciation 244 5,749 201 - 6,194
Amortization 366 921 - - 1,287
      Total costs and expenses 7,118 269,427 4,594 - 281,139
      Income/ (loss) from operations (7,118 ) 39,398 1,576 - 33,856
Interest expense (2,888 ) (111 ) - - (2,999 )
Other (expense)/income - net 3,670 (3,562 ) (98 ) - 10
      Income/ (loss) before income taxes (6,336 ) 35,725 1,478 - 30,867
Income tax (provision)/ benefit 2,150 (13,567 ) (595 ) - (12,012 )
Equity in net income of subsidiaries 23,041 994 - (24,035 ) -
Net income $ 18,855 $ 23,152 $ 883 $ (24,035 ) $ 18,855

For the three months ended June 30, 2009 Guarantor Non-Guarantor Consolidating
Parent Subsidiaries Subsidiaries Adjustments Consolidated
Continuing Operations
Service revenues and sales $ - $ 289,382 $ 5,873 $ - $ 295,255
Cost of services provided and goods sold - 204,416 2,921 - 207,337
Selling, general and administrative expenses 5,783 39,586 4,211 - 49,580
Depreciation 148 5,016 174 - 5,338
Amortization 315 1,303 - - 1,618
Other operating expenses 3,444 - - - 3,444
      Total costs and expenses 9,690 250,321 7,306 - 267,317
      Income/ (loss) from operations (9,690 ) 39,061 (1,433 ) - 27,938
Interest expense (2,757 ) (385 ) - - (3,142 )
Other income - net 106 38 3,214 - 3,358
      Income/ (loss) before income taxes (12,341 ) 38,714 1,781 - 28,154
Income tax (provision)/ benefit 4,148 (14,766 ) (286 ) - (10,904 )
Equity in net income of subsidiaries 25,443 1,295 - (26,738 ) -
Net income $ 17,250 $ 25,243 $ 1,495 $ (26,738 ) $ 17,250

For the six months ended June 30, 2010 Guarantor Non-Guarantor Consolidating
Parent Subsidiaries Subsidiaries Adjustments Consolidated
Continuing Operations
Service revenues and sales $ - $ 611,827 $ 11,981 $ - $ 623,808
Cost of services provided and goods sold - 436,655 6,184 - 442,839
Selling, general and administrative expenses 12,206 83,619 2,669 - 98,494
Depreciation 380 10,882 401 - 11,663
Amortization 696 1,815 - - 2,511
      Total costs and expenses 13,282 532,971 9,254 - 555,507
      Income/ (loss) from operations (13,282 ) 78,856 2,727 - 68,301
Interest expense (5,739 ) (212 ) - - (5,951 )
Other (expense)/income - net 7,291 (7,199 ) 104 - 196
      Income/ (loss) before income taxes (11,730 ) 71,445 2,831 - 62,546
Income tax (provision)/ benefit 3,894 (27,106 ) (1,121 ) - (24,333 )
Equity in net income of subsidiaries 46,049 1,820 - (47,869 ) -
Net income $ 38,213 $ 46,159 $ 1,710 $ (47,869 ) $ 38,213

For the six months ended June 30, 2009 Guarantor Non-Guarantor Consolidating
Parent Subsidiaries Subsidiaries Adjustments Consolidated
Continuing Operations
Service revenues and sales $ - $ 578,521 $ 11,672 $ - $ 590,193
Cost of services provided and goods sold - 408,445 5,905 - 414,350
Selling, general and administrative expenses 11,268 79,978 4,127 - 95,373
Depreciation 299 10,023 341 - 10,663
Amortization 590 2,564 - - 3,154
Other operating expenses 3,989 - - - 3,989
      Total costs and expenses 16,146 501,010 10,373 - 527,529
      Income/ (loss) from operations (16,146 ) 77,511 1,299 - 62,664
Interest (expense)/income (5,527 ) (465 ) 6 - (5,986 )
Other (expense)/income - net 490 (239 ) 2,831 - 3,082
      Income/ (loss) before income taxes (21,183 ) 76,807 4,136 - 59,760
Income tax (provision)/ benefit 7,418 (29,216 ) (1,373 ) - (23,171 )
Equity in net income of subsidiaries 50,354 2,900 - (53,254 ) -
Net income $ 36,589 $ 50,491 $ 2,763 $ (53,254 ) $ 36,589

For the three months ended September 30, 2010				Guarantor			Non-Guarantor			Consolidating
	Parent			Subsidiaries			Subsidiaries			Adjustments			Consolidated
Continuing Operations
Service revenues and sales	$	-		$	313,787		$	6,664		$	-		$	320,451
Cost of services provided and goods sold (excluding depreciation)		-			224,316			3,599			-			227,915
Selling, general and administrative expenses		5,134			41,648			1,418			-			48,200
Depreciation		241			5,945			199			-			6,385
Amortization		370			826			-			-			1,196
Total costs and expenses		5,745			272,735			5,216			-			283,696
Income/ (loss) from operations		(5,745	)		41,052			1,448			-			36,755
Interest expense		(2,893	)		(102	)		-			-			(2,995	)
Other (expense)/income - net		3,889			(3,902	)		235			-			222
Income/ (loss) before income taxes		(4,749	)		37,048			1,683			-			33,982
Income tax (provision)/ benefit		1,498			(13,859	)		(633	)		-			(12,994	)
Equity in net income of subsidiaries		24,239			1,005			-			(25,244	)		-
Net income	$	20,988		$	24,194		$	1,050		$	(25,244	)	$	20,988

For the three months ended September 30, 2009				Guarantor			Non-Guarantor			Consolidating
	Parent			Subsidiaries			Subsidiaries			Adjustments			Consolidated
Continuing Operations
Service revenues and sales	$	-		$	291,121		$	5,673		$	-		$	296,794
Cost of services provided and goods sold (excluding depreciation)		-			205,940			2,948			-			208,888
Selling, general and administrative expenses		5,568			39,721			2,859			-			48,148
Depreciation		166			5,016			179			-			5,361
Amortization		315			1,296			-			-			1,611
Total costs and expenses		6,049			251,973			5,986			-			264,008
Income/ (loss) from operations		(6,049	)		39,148			(313	)		-			32,786
Interest expense		(2,759	)		(94	)		-			-			(2,853	)
Other income - net		1,188			(1,271	)		1,816			-			1,733
Income/ (loss) before income taxes		(7,620	)		37,783			1,503			-			31,666
Income tax (provision)/ benefit		2,452			(14,317	)		(591	)		-			(12,456	)
Equity in net income of subsidiaries		24,378			903			-			(25,281	)		-
Net income	$	19,210		$	24,369		$	912		$	(25,281	)	$	19,210

For the nine months ended September 30, 2010				Guarantor			Non-Guarantor			Consolidating
	Parent			Subsidiaries			Subsidiaries			Adjustments			Consolidated
Continuing Operations
Service revenues and sales	$	-		$	925,614		$	18,645		$	-		$	944,259
Cost of services provided and goods sold (excluding depreciation)		-			660,971			9,783			-			670,754
Selling, general and administrative expenses		17,340			125,267			4,087			-			146,694
Depreciation		621			16,827			600			-			18,048
Amortization		1,066			2,641			-			-			3,707
Total costs and expenses		19,027			805,706			14,470			-			839,203
Income/ (loss) from operations		(19,027	)		119,908			4,175			-			105,056
Interest expense		(8,632	)		(314	)		-			-			(8,946	)
Other (expense)/income - net		11,180			(11,101	)		339			-			418
Income/ (loss) before income taxes		(16,479	)		108,493			4,514			-			96,528
Income tax (provision)/ benefit		5,392			(40,965	)		(1,754	)		-			(37,327	)
Equity in net income of subsidiaries		70,288			2,825			-			(73,113	)		-
Net income	$	59,201		$	70,353		$	2,760		$	(73,113	)	$	59,201

For the nine months ended September 30, 2009				Guarantor			Non-Guarantor			Consolidating
	Parent			Subsidiaries			Subsidiaries			Adjustments			Consolidated
Continuing Operations
Service revenues and sales	$	-		$	869,642		$	17,345		$	-		$	886,987
Cost of services provided and goods sold (excluding depreciation)		-			614,385			8,853			-			623,238
Selling, general and administrative expenses		16,836			119,699			6,986			-			143,521
Depreciation		465			15,039			520			-			16,024
Amortization		905			3,860			-			-			4,765
Other operating expenses		3,989			-			-			-			3,989
Total costs and expenses		22,195			752,983			16,359			-			791,537
Income/ (loss) from operations		(22,195	)		116,659			986			-			95,450
Interest (expense)/income		(8,286	)		(559	)		6			-			(8,839	)
Other (expense)/income - net		1,678			(1,510	)		4,647			-			4,815
Income/ (loss) before income taxes		(28,803	)		114,590			5,639			-			91,426
Income tax (provision)/ benefit		9,870			(43,533	)		(1,964	)		-			(35,627	)
Equity in net income of subsidiaries		74,732			3,803			-			(78,535	)		-
Net income	$	55,799		$	74,860		$	3,675		$	(78,535	)	$	55,799

-14-

For the six months ended June 30, 2010 Guarantor Non-Guarantor
Parent Subsidiaries Subsidiaries Consolidated
Cash Flow from Operating Activities:

Net cash provided/(used) by operating activities $ (3,737 ) $ 24,585 $ (571 ) $ 20,277
Cash Flow from Investing Activities:

  Capital expenditures (10 ) (11,454 ) (478 ) (11,942 )
  Business combinations, net of cash acquired - 83 6 89
  Proceeds from sale of property and equipment - (30 ) - (30 )
  Other uses - net (89 ) (171 ) (26 ) (286 )
       Net cash used by investing activities (99 ) (11,572 ) (498 ) (12,169 )
Cash Flow from Financing Activities:

  Change in cash overdrafts payable 1,338 (2,652 ) - (1,314 )
  Change in intercompany accounts 9,830 (11,478 ) 1,648 -
  Dividends paid to shareholders (5,481 ) - - (5,481 )
  Purchases of treasury stock (10,083 ) - (42 ) (10,125 )
  Proceeds from exercise of stock options 3,475 - - 3,475
  Realized excess tax benefit on share based compensation 702 1,100 - 1,802
  Other sources - net - - 199 199
       Net cash provided/ (used) by financing activities (219 ) (13,030 ) 1,805 (11,444 )
Net increase/(decrease) in cash and cash equivalents (4,055 ) (17 ) 736 (3,336 )
Cash and cash equivalents at beginning of year 109,331 (1,221 ) 4,306 112,416
Cash and cash equivalents at end of period $ 105,276 $ (1,238 ) $ 5,042 $ 109,080

For the six months ended June 30, 2009 Guarantor Non-Guarantor
Parent Subsidiaries Subsidiaries Consolidated
Cash Flow from Operating Activities:

Net cash provided/(used) by operating activities $ (7,802 ) $ 49,192 $ 1,730 $ 43,120
Cash Flow from Investing Activities:

  Capital expenditures (13 ) (7,912 ) (211 ) (8,136 )
  Business combinations, net of cash acquired - (1,859 ) - (1,859 )
  Proceeds from sale of property and equipment 1,280 216 - 1,496
  Other uses - net (365 ) (110 ) - (475 )
       Net cash provided/(used) by investing activities 902 (9,665 ) (211 ) (8,974 )
Cash Flow from Financing Activities:

  Change in cash overdrafts payable 1,242 (2,023 ) - (781 )
  Change in intercompany accounts 39,429 (37,625 ) (1,804 ) -
  Dividends paid to shareholders (2,711 ) - - (2,711 )
  Purchases of treasury stock (526 ) - - (526 )
  Proceeds from exercise of stock options 68 - - 68
  Realized excess tax benefit on share based compensation 313 - - 313
  Repayment of long-term debt (17,700 ) (99 ) - (17,799 )
  Other sources/(uses) - net (93 ) 148 239 294
       Net cash provided/ (used) by financing activities 20,022 (39,599 ) (1,565 ) (21,142 )
Net increase/(decrease) in cash and cash equivalents 13,122 (72 ) (46 ) 13,004
Cash and cash equivalents at beginning of year 65 202 3,361 3,628
Cash and cash equivalents at end of period $ 13,187 $ 130 $ 3,315 $ 16,632

For the nine months ended September 30, 2010				Guarantor			Non-Guarantor
	Parent			Subsidiaries			Subsidiaries			Consolidated
Cash Flow from Operating Activities:
Net cash provided/(used) by operating activities	$	(4,364	)	$	61,703		$	651		$	57,990
Cash Flow from Investing Activities:
Capital expenditures		(14	)		(18,399	)		(694	)		(19,107	)
Business combinations, net of cash acquired		-			(30	)		-			(30	)
Proceeds from sale of property and equipment		-			176			6			182
Other uses - net		(116	)		(489	)		(25	)		(630	)
Net cash used by investing activities		(130	)		(18,742	)		(713	)		(19,585	)
Cash Flow from Financing Activities:
Change in cash overdrafts payable		508			(692	)		-			(184	)
Change in intercompany accounts		40,895			(41,841	)		946			-
Dividends paid to shareholders		(8,682	)		-			-			(8,682	)
Purchases of treasury stock		(10,129	)		-			(11	)		(10,140	)
Proceeds from exercise of stock options		3,632			-			-			3,632
Realized excess tax benefit on share based compensation		716			1,107			-			1,823
Other sources - net		(1	)		-			188			187
Net cash provided/ (used) by financing activities		26,939			(41,426	)		1,123			(13,364	)
Net increase/(decrease) in cash and cash equivalents		22,445			1,535			1,061			25,041
Cash and cash equivalents at beginning of year		109,331			(1,221	)		4,306			112,416
Cash and cash equivalents at end of period	$	131,776		$	314		$	5,367		$	137,457

For the nine months ended September 30, 2009				Guarantor			Non-Guarantor
	Parent			Subsidiaries			Subsidiaries			Consolidated
Cash Flow from Operating Activities:
Net cash provided/(used) by operating activities	$	(2,579	)	$	77,254		$	5,872		$	80,547
Cash Flow from Investing Activities:
Capital expenditures		(44	)		(14,007	)		(420	)		(14,471	)
Business combinations, net of cash acquired		-			(1,859	)		-			(1,859	)
Proceeds from sale of property and equipment		1,286			233			-			1,519
Other uses - net		(458	)		(676	)		184			(950	)
Net cash provided/(used) by investing activities		784			(16,309	)		(236	)		(15,761	)
Cash Flow from Financing Activities:
Change in cash overdrafts payable		(602	)		1,545			-			943
Change in intercompany accounts		69,635			(64,031	)		(5,604	)		-
Dividends paid to shareholders		(5,429	)		-			-			(5,429	)
Purchases of treasury stock		(1,684	)		-			-			(1,684	)
Proceeds from exercise of stock options		486			-			-			486
Realized excess tax benefit on share based compensation		1,519			-			-			1,519
Repayment of long-term debt		(22,700	)		(99	)		-			(22,799	)
Other sources/(uses) - net		(84	)		262			419			597
Net cash provided/ (used) by financing activities		41,141			(62,323	)		(5,185	)		(26,367	)
Net increase/(decrease) in cash and cash equivalents		39,346			(1,378	)		451			38,419
Cash and cash equivalents at beginning of year		65			202			3,361			3,628
Cash and cash equivalents at end of period	$	39,411		$	(1,176	)	$	3,812		$	42,047

-15-

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Executive Summary

We operate through our two wholly owned subsidiaries, VITAS Healthcare Corporation and Roto-Rooter Group, Inc. VITAS focuses on hospice care that helps make terminally ill patients’ final days as comfortable as possible. Through its teams of doctors, nurses, home health aides, social workers, clergy and volunteers, VITAS provides direct medical services to patients, as well as spiritual and emotional counseling to both patients and their families. Roto-Rooter’s services are focused on providing plumbing and drain cleaning services to both residential and commercial customers. Through its network of company-owned branches, independent contractors and franchisees, Roto-Rooter offers plumbing and drain cleaning service to over 90% of the U.S. population.

The following is a summary of the key operating results for the three and ~~six~~nine months ended ~~June~~September 30, 2010 and 2009 (in thousands except per share amounts):

	Three Months Ended June 30,						Six Months Ended June 30,						Three Months Ended September 30,						Nine Months Ended September 30,
	2010			2009			2010			2009			2010			2009			2010			2009
Service revenues and sales	$	314,995		$	295,255		$	623,808		$	590,193		$	320,451		$	296,794		$	944,259		$	886,987
Net income	$	18,855		$	17,250		$	38,213		$	36,589		$	20,988		$	19,210		$	59,201		$	55,799
Diluted EPS	$	0.82		$	0.76		$	1.66		$	1.61		$	0.91		$	0.84		$	2.57		$	2.46
Adjusted EBITDA*	$	44,887		$	43,650		$	87,957		$	85,874		$	46,280		$	43,496		$	134,237		$	129,370
Adjusted EBITDA as a % of revenue		14.3	%		14.8	%		14.1	%		14.6	%		14.4	%		14.7	%		14.2	%		14.6	%

*See pages 27 - 28 for reconciliation to GAAP measures.

For the three months ended ~~June~~September 30, 2010, the increase in consolidated service revenues and sales was driven by a 7.8% increase at VITAS while Roto-Rooter revenues increased by 8.5%. The increase in service revenues at VITAS was a result of increased average daily census (“ADC”) of 6.1%, driven by an increase in admissions of 5.4%, combined with Medicare price increases of approximately 1.3%. Roto-Rooter was driven by an approximate 9.3% price and mix shift increase offset by a 0.4% decrease in job count. Consolidated net income increased 9.3% mainly as a result of the increase in revenues. Diluted EPS increased as the result of increased earnings. Adjusted earnings before interest, taxes, depreciation and amortization (“ EBITDA”) for the third quarter of 2010 increased 6.4% from the third quarter of 2009 mainly as a result of increased earnings.

For the nine months ended September 30, 2010, the increase in consolidated service revenues and sales was driven by a 7.3% increase at VITAS ~~while Roto-Rooter revenues increased by 5.2%.~~and a 4.2% increase at Roto-Rooter. The increase in service revenues at VITAS was a result of increased average daily census (“ADC”) of 5.6%, driven by an increase in admissions of ~~4.2%~~4.8%, combined with Medicare price increases of approximately 1.3%. Roto-Rooter was driven by an approximate ~~6.0%~~7.3% price and mix shift increase offset by a ~~0.7%~~2.9% decrease in job count. Consolidated net income increased 9.3% mainly as a result of the increase in revenues and lower corporate expenses due to the 2009 costs associated with the contested proxy solicitation. Diluted EPS increased as the result of increased earnin gs. Adjusted earnings before interest, taxes, depreciation and amortization (“EBITDA”) increased 2.8% from the second quarter of 2009 to the second quarter of 2010.

For the six months ended June 30, 2010, the increase in consolidated service revenues and sales was driven by a 7.1% increase at VITAS and a 2.2% increase at Roto-Rooter. The increase in service revenues at VITAS was a result of increased average daily census (“ADC”) of 5.3%, driven by an increase in admissions of 4.5%, combined with Medicare price increases of approximately 1.3%. Roto-Rooter was driven by an approximate 6.3% price and mix shift increase offset by a 4.0% decrease in job count. Consolidated net income increased 4.4%6.1% over prior year. Diluted EPS increased as a result of increased earnings. Adjusted ~~earnings before interest, taxes, depreciation and amortization (“EBITDA”) increased 2.4%~~EBITDA for the ~~six~~nine month ~~pe riod~~period ended ~~June~~September 30, 2010 increased 3.8% when compared to the same period in ~~2009.~~2009 m ainly as a result of increased earnings.

EBITDA and Adjusted EBITDA are not measures derived in accordance with GAAP and exclude components that are important to understanding our financial performance. We use Adjusted EBITDA as a measure of earnings for our LTIP awards. We provide EBITDA and Adjusted EBITDA to help readers evaluate our operating results, compare our operating performance with that of similar companies that have different capital structures and help evaluate our ability to meet future debt service, capital expenditure and working capital requirements. Our EBITDA and Adjusted EBITDA should not be considered in isolation or as a substitute for comparable measures presented in accordance with GAAP. A reconciliation of our net income to our Adjusted EBITDA is presented on pages 27 - 28.

VITAS expects to achieve full-year 2010 revenue growth, prior to Medicare cap and BNAF, of ~~6.0%~~7.5% to ~~7.0%~~8.2%. Admissions are estimated to increase ~~3.0%~~4.0% to ~~4.0%~~5.0%. Adjusted EBITDA margin prior to Medicare cap is estimated to be ~~15.0%~~15.3% to ~~15.5%~~15.6%. Roto-Rooter expects full-year 2010 revenue growth of ~~4.0%~~4.5% to ~~4.5%~~5.5%. The revenue estimate is a result of increased pricing of 3.0%, a favorable mix shift to higher revenue jobs, offset by a job count decline estimated at 2.0% to ~~4.0%~~3.0%. Adjusted EBITDA margin for 2010 is estimated to be in the range of 17.5% to 18.0%. We anticipate that our operating income and cash flows will be sufficient to operate our businesses and meet any commitments for the foreseeable future.

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Financial Condition

Liquidity and Capital Resources

Material changes in the balance sheet accounts from December 31, 2009 to ~~June~~September 30, 2010 include the following:

•

●

A ~~$48.3~~$52.2 million increase in accounts receivable primarily at VITAS, related to timing of Medicare payments and refund of overpayments from prior years. The balance at September 30, 2010 is comparable with the balance at September 30, 2009.

•

●

A ~~$4.7~~$4.5 million increase in income taxes payable, related to timing of payments.

●

A $10.5 million increase in accrued compensation due primarily to the timing of payroll disbursements in the current period versus prior year end.

Net cash provided by operating activities decreased ~~$22.8~~$22.6 million due primarily to the increase in accounts receivable, partially offset by athe increase in net income and decrease in accounts payable and other current liabilities. Management continually evaluates cash utilization alternatives, including share repurchase, debt repurchase, acquisitions and increased dividends to determine the most beneficial use of available capital resources.

We have issued ~~$28.3~~$28.2 million in standby letters of credit as of ~~June~~September 30, 2010, for insurance purposes. Issued letters of credit reduce our available credit under the revolving credit agreement. As of ~~June~~September 30, 2010, we have approximately ~~$146.7~~$146.8 million of unused lines of credit available and eligible to be drawn down under our revolving credit facility, excluding the $100 million expansion feature. Management believes its liquidity and sources of capital are satisfactory for the Company’s needs in the foreseeable future.

Commitments and Contingencies

Collectively, the terms of our credit agreements require us to meet various financial covenants, to be tested quarterly. In connection therewith, we are in compliance with all financial and other debt covenants as of ~~June~~September 30, 2010 and anticipate remaining in compliance throughout 2010.

On March 1, 2010 Anthony Morangelli and Frank Ercole filed a class action lawsuit in federal district court for the Eastern District of New York seeking unpaid minimum wages and overtime service technician compensation from Roto-Rooter and Chemed. They also seek payment of penalties, interest and Plaintiffs’ attorney fees. We contest these allegations. In June 2010, the Court conditionally certified a nationwide class of service technicians, excluding those who signed dispute resolution agreements in which they agreed to arbitrate claims arising out of their employment. There has been no final determination of the merits of collective treatment of the case. The lawsuit is in its early stage and we are unable to estimate ou r potential liability, if any with respect to these allegations.

VITAS is party to a class action lawsuit filed in the Superior Court of California, Los Angeles County, in September 2006 by Bernadette Santos, Keith Knoche and Joyce White. This case alleges failure to pay overtime and failure to provide meal and rest periods to a purported class of California admissions nurses, chaplains and sales representatives. The case seeks payment of penalties, interest and Plaintiffs’ attorney fees. VITAS contests these allegations. In December 2009, the trial court denied Plantiffs’ motion for class certification. The lawsuit is in its early stages and we are unable to estimate our potential liability, if any, with respect to these allegations.

In April 2005, the Office of Inspector General (“OIG”) for the Department of Health and Human Services served VITAS with civil subpoenas relating to VITAS’ alleged failure to appropriately bill Medicare and Medicaid for hospice services. As part of this investigation, the OIG selected medical records for 320 past and current patients from VITAS’ three largest programs for review. It also sought policies and procedures dating back to 1998 covering admissions, certifications, recertifications and discharges. During the third quarter of 2005 and again in May 2006, the OIG requested additional information from us. The Court dismissed a related qui tam complaint filed in U.S. District Court for the Southern District of Florid a with prejudice in July 2007. The plaintiffs appealed this dismissal, which the Court of Appeals affirmed. The government continues to investigate the complaint’s allegations. In March 2009, we received a letter from the government reiterating the basis of their investigation.

In May 2009, VITAS received an administrative subpoena from the U.S. Department of Justice requesting VITAS deliver to the OIG documents, patient records, and policy and procedure manuals for headquarters and its Texas programs concerning hospice services provided for the period January 1, 2003 to the date of the letter. In August 2009, the OIG selected medical records for 59 past and current patients from a Texas program for review. In February 2010, VITAS received a companion civil investigative demand (“CID”) from the state of Texas Attorney General’s office, seeking related documents. In September 2010, it received a second CID and a second administrative subpoena seeking related documents. Based on the early stage of the investigation and the limited information we have at this time, we cannot predict the outcome of this investigation. We believe that we are in ~~materia l~~material compliance with Medicare and Medicaid rules and regulations applicable to hospice providers.

-17-

We are unable to predict the outcome of these matters or the impact, if any, that the investigation may have on our business, results of operations, liquidity or capital resources. Regardless of outcome, responding to the subpoenas can adversely affect us through defense costs, diversion of our time and related publicity.

Results of Operations

Three months ended ~~June~~September 30, 2010 versus 2009 - Consolidated Results

Our service revenues and sales for the ~~second~~third quarter of 2010 increased ~~6.7%~~8.0% versus services and sales revenues for the ~~second~~third quarter of 2009. Of this increase, ~~$15.3~~$16.9 million was attributable to VITAS and ~~$4.4~~$6.8 million was attributable to Roto-Rooter. The following chart shows the components of those changes (dollar amounts in thousands):

			Increase/(Decrease)						Increase/(Decrease)
			Amount			Percent			Amount			Percent
VITAS
	Routine homecare			11,506			7.6	%
	Continuous care			1,977			5.6	%
	General inpatient			2,322			9.8	%
	Medicare cap			(470	)		-93.1	%
Routine homecare									$	12,227			7.8	%
Continuous care										2,838			7.9	%
General inpatient										1,906			7.9	%
Medicare cap										(74	)		-172.1	%
Roto-Rooter	Roto-Rooter
	Plumbing			4,039			10.6	%
	Drain cleaning			(245	)		-0.7	%
	Other			611			5.1	%
		Total	$	19,740			6.7	%
Plumbing										6,026			16.7	%
Drain cleaning										185			0.6	%
Other										549			4.6	%
Total									$	23,657			8.0	%

The increase in VITAS’ revenues for the ~~second~~third quarter of 2010 versus the ~~second~~third quarter of 2009 was a result of increased ADC of ~~5.6%~~6.1% driven by an increase in admissions of ~~4.2%~~5.4%, combined with Medicare reimbursement rate increases of approximately 1.3%. The ADC increase was driven by a ~~5.5%~~6.1% increase in routine homecare, an increase of ~~9.9%~~5.2% in general inpatient and a ~~3.0%~~6.0% increase in continuous care. In excess of 90% of VITAS’ service revenues for the period were from Medicare and Medicaid.

The increase in plumbing revenues for the ~~second~~third quarter of 2010 versus 2009 is attributable to a ~~6.4%~~13.5% increase in the average price per job and a ~~4.5%~~3.2% increase in the number of jobs performed. The increase in the plumbing price per job was a combination of increased pricing and favorable job mix shift to more expensive jobs such as excavation. Our excavation job count increased by ~~18.2%~~14.6% compared to 2009. On average, the price per job for our excavation jobs is approximately 5.5 times greater than the price per job of other plumbing jobs. Drain cleaning revenues for the ~~second~~third quarter of 2010 versus 2009 reflect a ~~3.2% decline~~3.0% increase in ~~the number of jobs, while~~ the average price per jobs, while the job ~~increased 2.5%~~count decreased 2.3%. The increase in other revenues is ~~attributable~~attribu table to an increase in our independent contractor operations and an increase in product sales.

The consolidated gross margin was ~~29.0%~~28.9% in the ~~second~~third quarter of 2010 as compared with ~~29.8%~~29.6% in the ~~second~~third quarter of 2009. On a segment basis, VITAS’ gross margin was ~~22.7%~~23.1% in the ~~second~~third quarter of 2010 and ~~23.3%~~23.4% in the ~~second~~third quarter of 2009. The decrease in VITAS’ gross margin is attributable to higher labor costs for admissions and Medicare compliance personnel and the opening of inpatient units which carry significant one time start-up costs as capacity begins to ramp-up. The Roto-Rooter segment’s gross margin was ~~45.2%~~44.6% for the ~~second~~third quarter of 2010 as compared with ~~46.2%~~46.4% for the ~~second~~third quarter of 2009. The decrease in Roto-Rooter’s gross margin was attributable to continued mix shift to excavation which has higher ~~revenue~~reven ue per job but a slightly lower gross margin percentage per ~~job as well as an~~job. An unfavorable adjustment to ~~casualty insurance.~~medical insurance also contributed to the margin decline.

Selling, general and administrative expenses ("(“SG~~&A"~~&A”) for the ~~second~~third quarter of 2010 and 2009 comprise (in thousands):

2010 2009
SG&A expenses before long-term incentive
compensation and the impact of market gains and
losses of deferred compensation plans 48,240 46,381
Long-term incentive compensation 1,799 -
Impact of market value gains/(losses) on liabilities
held in deferred compensation trusts (83 ) 3,199
Total SG&A expenses $ 49,956 $ 49,580

	Three Months Ended September 30,
	2010		2009
SG&A expenses before the impact of market gains
of deferred compensation plans	$	47,957	$	46,359
Impact of market value gains on liabilities
held in deferred compensation trusts		243		1,789
Total SG&A expenses	$	48,200	$	48,148

Normal salary increases and revenue related expense increases between periods ~~account~~accounts for the ~~change~~3.4% increase in SG&A expenses before the impact of market gains of deferred compensation plans from $46.4 million in the ~~second~~third quarter of 2009 to ~~$48.2~~$48.0 million in the ~~second~~third quarter of 2010.

Depreciation expense increased ~~$856,000~~$1.0 million to ~~$6.2~~$6.4 million in the ~~second~~third quarter of 2010 due to the installation of patient capture software at our VITAS ~~segment.~~segment in the second quarter of 2010.

Other income for the ~~second~~third quarter of 2010 and 2009 comprise (in thousands):

							Three Months Ended September 30,
	2010			2009			2010			2009
Interest income		150			207		$	109		$	86
Market value gains/(losses) on assets held in deferred
Market value gains on assets held in deferred
compensation trusts		(83	)		3,199			243			1,789
Loss on disposal of property and equipment		(58	)		(78	)		(141	)		(159	)
Other		1			30			11			17
Total other income	$	10		$	3,358		$	222		$	1,733

Our effective income tax rate ~~of 38.9%~~decreased to 38.2% in the ~~second~~third quarter of 2010 ~~was essentially flat~~from 39.3% when compared with the ~~second~~third quarter of 2009. This decrease relates primarily to a $236,000 tax adjustment required upon expiration of certain statutes.

Net income for both periods included the following after-tax items/adjustments that ~~increased/ (reduced)~~reduced after-tax earnings (in thousands):

Three months ended ~~June~~September 30, 2010 versus 2009 - Segment Results

The change in after-tax earnings for the ~~second~~third quarter of 2010 versus the ~~second~~third quarter of 2009 is due to (dollars in thousands):

	Increase/(Decrease)					Increase/(Decrease)
	Amount		Percent			Amount			Percent
VITAS	$	1,159		6.8	%	$	1,655			9.1	%
Roto-Rooter		62		0.7	%		(188	)		-2.4	%
Corporate		384		4.4	%		311			4.5	%
	$	1,605		9.3	%	$	1,778			9.3	%

~~Six~~Nine months ended ~~June~~September 30, 2010 versus 2009 - Consolidated Results

Our service revenues and sales for the first ~~six~~nine months of 2010 increased ~~5.7%~~6.5% versus services and sales revenues for the first ~~six~~nine months of 2009. Of this increase, ~~$29.8~~$46.8 million was attributable to VITAS and ~~$3.8~~$10.5 million was attributable to Roto-Rooter. The following chart shows the components of those changes (dollars in thousands):

The increase in VITAS’ revenues for the first ~~six~~nine months of 2010 versus the first ~~six~~nine months of 2009 was a result of increased ADC of ~~5.3%~~5.6% driven by an increase in admissions of ~~4.5%~~4.8%, combined with Medicare reimbursement rate increases of approximately 1.3%. The ADC increase was driven by a ~~5.3%~~5.6% increase in routine homecare, an increase of ~~7.6%~~6.7% in general inpatient and a ~~4.8%~~5.3% increase in continuous care. In excess of 90% of VITAS’ service revenues for the period were from Medicare and Medicaid.

The increase in plumbing revenues for the first ~~six~~nine months of 2010 versus 2009 is attributable to a ~~7.8%~~9.7% increase in the average price per job and a ~~0.5% decrease~~0.8% increase in the number of jobs performed. The increase in the plumbing price per job was a combination of increased pricing and favorable job mix shift to more expensive jobs such as excavation. Our excavation job count increased by ~~15.5%~~15.2% compared to 2009. On average, the price per job for our excavation jobs is approximately 5.5 times greater than the price per job of other plumbing jobs. Drain cleaning revenues for the first ~~six~~nine months of 2010 versus 2009 reflect a ~~5.7% decline~~2.8% increase in the price per job offset by a 4.7% decrease in the number of ~~jobs, while the average price per job increased 2.7%.~~jobs. The increase in other revenues is attributable to an increase in our independent contractor operations and an increase in product sales.

The consolidated gross margin was 29.0% in the first ~~six~~nine months of 2010 as compared with ~~29.8%~~29.7% in the first ~~six~~nine months of 2009. On a segment basis, VITAS’ gross margin was ~~22.7%~~22.9% in the first ~~six~~nine months of 2010 and ~~23.3%~~23.4% in the first ~~six~~nine months of 2009. The decrease in VITAS’ gross margin is attributable to higher labor costs for admissions and Medicare compliance personnel and the opening of inpatient units which carry significant one time start-up costs as capacity begins to ramp-up. The Roto-Rooter segment’s gross margin was ~~45.2%~~45.0% for the first ~~six~~nine months of 2010 as compared with ~~45.7%~~45.9% for the first ~~six~~nine months of 2009. The decrease in Roto-Rooter’s gross margin is attributable to continued mix shift to excavation which has higher revenue per job but slightly lower gross margin percentage per job.

Selling, general and administrative expenses ("(“SG~~&A"~~&A”) for the ~~six~~first nine months of 2010 and ~~2009~~ comprise (in thousands):

	Nine Months Ended September 30,
	2010		2009
SG&A expenses before long-term incentive
compensation and the impact of market gains
of deferred compensation plans	$	144,547	$	140,147
Long-term incentive compensation		1,799		-
Impact of market value gains on liabilities
held in deferred compensation trusts		348		3,374
Total SG&A expenses	$	146,694	$	143,521

2010 2009
SG&A expenses before long-term incentive
compensation and the impact of market gains and
losses of deferred compensation plans $ 96,590 $ 93,788
Long-term incentive compensation 1,799 -
Impact of market value gains/(losses) on liabilities
held in deferred compensation trusts 105 1,585
Total SG&A expenses $ 98,494 $ 95,373

Normal salary increases and revenue related expense increases between periods account for the ~~change~~3.1% increase in SG&A expenses before long-term incentive compensation and the impact of market gains of deferred compensation plans from ~~$93.8~~$140.1 million for the first ~~six~~nine months of 2009 to ~~$96.6~~$144.5 million offor the first ~~six~~nine months of 2010.

Depreciation expense increased ~~$1.0~~$2.0 million in the first ~~six~~nine months of 2010 to ~~$11.7~~$18.0 million due to the installation of patient capture software at our VITAS ~~segment.~~segment in the second quarter of 2010.

Other income for the first ~~six~~nine months of 2010 and 2009 comprise (in thousands):

2010 2009
Interest income 225 289
Market value gains/(losses) on assets held in deferred
compensation trusts 105 1,585
Loss on disposal of property and equipment (152 ) (54 )
Non-taxable income from certain investments held
deferred compensation trusts - 1,211
Other 18 51
Total other income $ 196 $ 3,082

	Nine Months Ended September 30,
	2010			2009
Interest income	$	334		$	375
Market value gains on assets held in deferred
compensation trusts		348			3,374
Loss on disposal of property and equipment		(293	)		(213	)
Non-taxable income from certain investments held
deferred compensation trusts		-			1,211
Other		29			68
Total other income	$	418		$	4,815

Our effective income tax rate of ~~38.9%~~38.7% in the first ~~six~~nine months of 2010 ~~was essentially flat with~~decreased from 39.0% in the first ~~six~~nine months of 2009.

Net income for both periods included the following after-tax items/adjustments that increased/(reduced) after-tax earnings (in thousands):

~~Six~~Nine months ended ~~June~~September 30, 2010 versus 2009 - Segment Results

The change in after-tax earnings for the first ~~six~~nine months of 2010 versus the first ~~six~~nine months of 2009 is due to (dollars in thousands):

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENT OF INCOME
FOR THE THREE MONTHS ENDED JUNE 30, 2010
(in thousands)(unaudited)

2010 (a)
VITAS

Roto-Rooter

Corporate

Chemed
Consolidated

Service revenues and sales $ 226,638 $ 88,357 $ - $ 314,995
Cost of services provided and goods sold 175,257 48,445 - 223,702
Selling, general and administrative expenses 18,404 24,192 7,360 49,956
Depreciation 4,103 1,950 141 6,194
Amortization 788 132 367 1,287
Total costs and expenses 198,552 74,719 7,868 281,139
Income/(loss) from operations 28,086 13,638 (7,868 ) 33,856
Interest expense (48 ) (64 ) (2,887 ) (2,999 )
Intercompany interest income/(expense) 1,350 773 (2,123 ) -
Other income/(expense)—net 45 14 (49 ) 10
Income/(loss) before income taxes 29,433 14,361 (12,927 ) 30,867
Income taxes (11,152 ) (5,501 ) 4,641 (12,012 )
Net income/(loss) $ 18,281 $ 8,860 $ (8,286 ) $ 18,855

~~(a) The following amounts are included in net income (in thousands):~~

VITAS Roto-Rooter Corporate
Chemed
Consolidated

Pretax benefit/(cost):
Stock option expense $ - $ - $ (2,346 ) $ (2,346 )
Long-term incentive compensation - - (1,799 ) (1,799 )
Noncash impact of accounting for convertible debt - - (1,688 ) (1,688 )
Expenses of class action lawsuit - (105 ) - (105 )
Expenses incurred in connection with the Office of Inspector
General investigation (118 ) - - (118 )
Total $ (118 ) $ (105 ) $ (5,833 ) $ (6,056 )

CHEMED CORPORATION AND SUBSIDIARY COMPANIES														CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENT OF INCOME														CONSOLIDATING STATEMENT OF INCOME
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2010														FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2010
(in thousands)(unaudited)														(in thousands)(unaudited)
		VITAS			Roto-Rooter			Corporate			Consolidated
After-tax benefit/(cost):
																								Chemed
															VITAS			Roto-Rooter			Corporate			Consolidated
2010 (a)														2010 (a)
Service revenues and sales														Service revenues and sales	$	233,964		$	86,487		$	-		$	320,451
Cost of services provided and goods sold														Cost of services provided and goods sold		179,997			47,918			-			227,915
Selling, general and administrative expenses														Selling, general and administrative expenses		18,370			24,573			5,257			48,200
Depreciation														Depreciation		4,321			1,925			139			6,385
Amortization														Amortization		694			133			369			1,196
Total costs and expenses														Total costs and expenses		203,382			74,549			5,765			283,696
Income/(loss) from operations														Income/(loss) from operations		30,582			11,938			(5,765	)		36,755
Interest expense														Interest expense		(48	)		(55	)		(2,892	)		(2,995	)
Intercompany interest income/(expense)														Intercompany interest income/(expense)		1,139			651			(1,790	)		-
Other income/(expense)—net														Other income/(expense)—net		(92	)		11			303			222
Income/(loss) before income taxes														Income/(loss) before income taxes		31,581			12,545			(10,144	)		33,982
Income taxes														Income taxes		(11,778	)		(4,798	)		3,582			(12,994	)
Net income/(loss)														Net income/(loss)	$	19,803		$	7,747		$	(6,562	)	$	20,988


(a) The following amounts are included in net income (in thousands):														(a) The following amounts are included in net income (in thousands):


																									Chemed
																VITAS			Roto-Rooter			Corporate			Consolidated
Pretax benefit/(cost):														Pretax benefit/(cost):
Stock option expense		$	-		$	-		$	(1,484	)	$	(1,484	)	Stock option expense	$	-		$	-		$	(1,968	)	$	(1,968	)
Long-term incentive compensation			-			-			(1,124	)		(1,124	)
Noncash impact of accounting for convertible debt			-			-			(1,068	)		(1,068	)	Noncash impact of accounting for convertible debt		-			-			(1,721	)		(1,721	)
Expenses of class action lawsuit			-			(63	)		-			(63	)	Expenses of class action lawsuit		-			(322	)		-			(322	)
Expenses incurred in connection with the Office of Inspector	Expenses incurred in connection with the Office of Inspector													Expenses incurred in connection with the Office of Inspector
General investigation			(74	)		-			-			(74	)	General investigation		(112	)		-			-			(112	)
Total		$	(74	)	$	(63	)	$	(3,676	)	$	(3,813	)	Total	$	(112	)	$	(322	)	$	(3,689	)	$	(4,123	)




																								Chemed
															VITAS			Roto-Rooter			Corporate			Consolidated
After-tax benefit/(cost):														After-tax benefit/(cost):
Stock option expense														Stock option expense	$	-		$	-		$	(1,244	)	$	(1,244	)
Noncash impact of accounting for convertible debt														Noncash impact of accounting for convertible debt		-			-			(1,088	)		(1,088	)
Expenses of class action lawsuit														Expenses of class action lawsuit		-			(194	)		-			(194	)
Expenses incurred in connection with the Office of Inspector														Expenses incurred in connection with the Office of Inspector
General investigation														General investigation		(69	)		-			-			(69	)
Total														Total	$	(69	)	$	(194	)	$	(2,332	)	$	(2,595	)

~~CHEMED CORPORATION AND SUBSIDIARY COMPANIES~~

~~CONSOLIDATING STATEMENT OF INCOME~~

~~FOR THE THREE MONTHS ENDED JUNE 30, 2009~~

~~(in thousands)(unaudited)~~

Chemed
VITAS Roto-Rooter Corporate Consolidated
2009 (a)
Service revenues and sales $ 211,303 $ 83,952 $ - $ 295,255
Cost of services provided and goods sold 162,175 45,162 - 207,337
Selling, general and administrative expenses 17,877 22,844 8,859 49,580
Depreciation 3,256 2,035 47 5,338
Amortization 1,187 117 314 1,618
Other operating expenses - - 3,444 3,444
Total costs and expenses 184,495 70,158 12,664 267,317
Income/(loss) from operations 26,808 13,794 (12,664 ) 27,938
Interest expense (326 ) (59 ) (2,757 ) (3,142 )
Intercompany interest income/(expense) 1,023 581 (1,604 ) -
Other income-net 123 6 3,229 3,358
Income/(loss) before income taxes 27,628 14,322 (13,796 ) 28,154
Income taxes (10,506 ) (5,524 ) 5,126 (10,904 )
Net income/(loss) $ 17,122 $ 8,798 $ (8,670 ) $ 17,250

~~(a) The following amounts are included in net income (in thousands):~~

CHEMED CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATING STATEMENT OF INCOME
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2009
(in thousands)(unaudited)

										Chemed
	VITAS			Roto-Rooter			Corporate			Consolidated
2009 (a)
Service revenues and sales	$	217,067		$	79,727		$	-		$	296,794
Cost of services provided and goods sold		166,183			42,705			-			208,888
Selling, general and administrative expenses		18,227			22,740			7,181			48,148
Depreciation		3,292			2,005			64			5,361
Amortization		1,179			117			315			1,611
Total costs and expenses		188,881			67,567			7,560			264,008
Income/(loss) from operations		28,186			12,160			(7,560	)		32,786
Interest expense		(51	)		(43	)		(2,759	)		(2,853	)
Intercompany interest income/(expense)		1,178			684			(1,862	)		-
Other income/(expense)-net		(86	)		15			1,804			1,733
Income/(loss) before income taxes		29,227			12,816			(10,377	)		31,666
Income taxes		(11,079	)		(4,881	)		3,504			(12,456	)
Net income/(loss)	$	18,148		$	7,935		$	(6,873	)	$	19,210


(a) The following amounts are included in net income (in thousands):
										Chemed
	VITAS			Roto-Rooter			Corporate			Consolidated
Pretax benefit/(cost):
Stock option expense	$	-		$	-		$	(2,214	)	$	(2,214	)
Noncash impact of accounting for convertible debt		-			-			(1,591	)		(1,591	)
Expenses incurred in connection with the Office of Inspector
General investigation		(343	)		-			-			(343	)
Total	$	(343	)	$	-		$	(3,805	)	$	(4,148	)


										Chemed
	VITAS			Roto-Rooter			Corporate			Consolidated
After-tax benefit/(cost):
Stock option expense	$	-		$	-		$	(1,401	)	$	(1,401	)
Noncash impact of accounting for convertible debt		-			-			(1,006	)		(1,006	)
Expenses incurred in connection with the Office of Inspector
General investigation		(213	)		-			-			(213	)
Total	$	(213	)	$	-		$	(2,407	)	$	(2,620	)

VITAS Roto-Rooter Corporate
Chemed
Consolidated

Pretax benefit/(cost):
Stock option expense $ - $ - $ (2,443 ) $ (2,443 )
Noncash impact of accounting for convertible debt - - (1,561 ) (1,561 )
Expenses associated with contested proxy solicitation - - (3,444 ) (3,444 )
Expenses incurred in connection with the Office of Inspector
General investigation (86 ) - - (86 )
Total $ (86 ) $ - $ (7,448 ) $ (7,534 )

VITAS Roto-Rooter Corporate Consolidated
After-tax benefit/(cost):
Stock option expense $ - $ - $ (1,544 ) $ (1,544 )
Noncash impact of accounting for convertible debt - - (987 ) (987 )
Income tax impact of nondeductible losses on investments
held in deferred compensation trusts - - 20 20
Expenses associated with contested proxy solicitation - - (2,180 ) (2,180 )
Expenses incurred in connection with the Office of Inspector
General investigation (53 ) - - (53 )
Total $ (53 ) $ - $ (4,691 ) $ (4,744 )

-24-

~~CHEMED CORPORATION AND SUBSIDIARY COMPANIES~~

~~CONSOLIDATING STATEMENT OF INCOME~~

~~FOR THE SIX MONTHS ENDED JUNE 30, 2010~~

~~(in thousands)(unaudited)~~

Chemed
VITAS Roto-Rooter Corporate Consolidated
2010 (a)
Service revenues and sales $ 449,578 $ 174,230 $ - $ 623,808
Cost of services provided and goods sold 347,350 95,489 - 442,839
Selling, general and administrative expenses 36,550 48,950 12,994 98,494
Depreciation 7,587 3,901 175 11,663
Amortization 1,559 255 697 2,511
Total costs and expenses 393,046 148,595 13,866 555,507
Income/(loss) from operations 56,532 25,635 (13,866 ) 68,301
Interest expense (80 ) (132 ) (5,739 ) (5,951 )
Intercompany interest income/(expense) 2,639 1,475 (4,114 ) -
Other income/(expense)—net 6 24 166 196
Income/(loss) before income taxes 59,097 27,002 (23,553 ) 62,546
Income taxes (22,378 ) (10,329 ) 8,374 (24,333 )
Net income/(loss) $ 36,719 $ 16,673 $ (15,179 ) $ 38,213

~~(a) The following amounts are included in net income (in thousands):~~

VITAS Roto-Rooter Corporate Consolidated
After-tax benefit/(cost):
Stock option expense $ - $ - $ (2,782 ) $ (2,782 )
Long-term incentive compensation - - (1,124 ) (1,124 )
Noncash impact of accounting for convertible debt - - (2,115 ) (2,115 )
Expenses of class action lawsuit - (63 ) - (63 )
Expenses incurred in connection with the Office of Inspector
General investigation (173 ) - - (173 )
Total $ (173 ) $ (63 ) $ (6,021 ) $ (6,257 )

-25-

CHEMED CORPORATION AND SUBSIDIARY COMPANIES

CONSOLIDATING STATEMENT OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009

(in thousands)(unaudited)


										Chemed
	VITAS			Roto-Rooter			Corporate			Consolidated
2009 (a)
Service revenues and sales	$	636,787		$	250,200		$	-		$	886,987
Cost of services provided and goods sold		487,990			135,248			-			623,238
Selling, general and administrative expenses		53,650			69,959			19,912			143,521
Depreciation		9,767			6,094			163			16,024
Amortization		3,537			323			905			4,765
Other operating expenses		-			-			3,989			3,989
Total costs and expenses		554,944			211,624			24,969			791,537
Income/(loss) from operations		81,843			38,576			(24,969	)		95,450
Interest expense		(415	)		(138	)		(8,286	)		(8,839	)
Intercompany interest income/(expense)		3,091			1,801			(4,892	)		-
Other income-net		35			137			4,643			4,815
Income/(loss) before income taxes		84,554			40,376			(33,504	)		91,426
Income taxes		(32,112	)		(15,414	)		11,899			(35,627	)
Net income/(loss)	$	52,442		$	24,962		$	(21,605	)	$	55,799


(a) The following amounts are included in net income (in thousands):
										Chemed
	VITAS			Roto-Rooter			Corporate			Consolidated
Pretax benefit/(cost):
Stock option expense	$	-		$	-		$	(6,699	)	$	(6,699	)
Noncash impact of accounting for convertible debt		-			-			(4,682	)		(4,682	)
Non-taxable income on certain investments held in deferred
compensation trusts		-			-			1,211			1,211
Expenses associated with contested proxy solicitation		-			-			(3,989	)		(3,989	)
Expenses incurred in connection with the Office of Inspector
General investigation		(442	)		-			-			(442	)
Total	$	(442	)	$	-		$	(14,159	)	$	(14,601	)


										Chemed
	VITAS			Roto-Rooter			Corporate			Consolidated
After-tax benefit/(cost):
Stock option expense	$	-		$	-		$	(4,237	)	$	(4,237	)
Noncash impact of accounting for convertible debt		-			-			(2,961	)		(2,961	)
Non-taxable income on certain investments held in deferred
compensation trusts		-			-			1,211			1,211
Income tax impact of nondeductible losses on investments
held in deferred compensation trusts		-			-			(455	)		(455	)
Expenses associated with contested proxy solicitation		-			-			(2,525	)		(2,525	)
Expenses incurred in connection with the Office of Inspector
General investigation		(274	)		-			-			(274	)
Total	$	(274	)	$	-		$	(8,967	)	$	(9,241	)

~~CHEMED CORPORATION AND SUBSIDIARY COMPANIES~~

~~CONSOLIDATING STATEMENT OF INCOME~~

~~FOR THE SIX MONTHS ENDED JUNE 30, 2009~~

~~(in thousands)(unaudited)~~

VITAS Roto-Rooter Corporate
Chemed
Consolidated

2009 (a)
Service revenues and sales $ 419,720 $ 170,473 $ - $ 590,193
Cost of services provided and goods sold 321,807 92,543 - 414,350
Selling, general and administrative expenses 35,423 47,219 12,731 95,373
Depreciation 6,475 4,089 99 10,663
Amortization 2,358 206 590 3,154
Other operating expenses - - 3,989 3,989
Total costs and expenses 366,063 144,057 17,409 527,529
Income/(loss) from operations 53,657 26,416 (17,409 ) 62,664
Interest expense (365 ) (94 ) (5,527 ) (5,986 )
Intercompany interest income/(expense) 1,913 1,117 (3,030 ) -
Other income-net 120 122 2,840 3,082
Income/(loss) before income taxes 55,325 27,561 (23,126 ) 59,760
Income taxes (21,033 ) (10,534 ) 8,396 (23,171 )
Net income/(loss) $ 34,292 $ 17,027 $ (14,730 ) $ 36,589

~~(a) The following amounts are included in net income (in thousands):~~

VITAS Roto-Rooter Corporate
Chemed
Consolidated

Pretax benefit/(cost):
Stock option expense $ - $ - $ (4,485 ) $ (4,485 )
Noncash impact of accounting for convertible debt - - (3,091 ) (3,091 )
Non-taxable income on certain investments held in deferred
compensation trusts - - 1,211 1,211
Expenses associated with contested proxy solicitation - - (3,989 ) (3,989 )
Expenses incurred in connection with the Office of Inspector
General investigation (99 ) - - (99 )
Total $ (99 ) $ - $ (10,354 ) $ (10,453 )

VITAS Roto-Rooter Corporate Consolidated
After-tax benefit/(cost):
Stock option expense $ - $ - $ (2,836 ) $ (2,836 )
Noncash impact of accounting for convertible debt - - (1,955 ) (1,955 )
Non-taxable income on certain investments held in deferred
compensation trusts - - 1,211 1,211
Income tax impact of nondeductible losses on investments
held in deferred compensation trusts - - (455 ) (455 )
Expenses associated with contested proxy solicitation - - (2,525 ) (2,525 )
Expenses incurred in connection with the Office of Inspector
General investigation (61 ) - - (61 )
Total $ (61 ) $ - $ (6,560 ) $ (6,621 )

-26-

~~Consolidating Summary and Reconciliation of Adjusted EBITDA~~

Chemed
For the three months ended June 30, 2009 VITAS Roto-Rooter Corporate Consolidated

Net income/(loss) $ 17,122 $ 8,798 $ (8,670 ) $ 17,250
Add/(deduct):
Interest expense 326 59 2,757 3,142
Income taxes 10,506 5,524 (5,126 ) 10,904
Depreciation 3,256 2,035 47 5,338
Amortization 1,187 117 314 1,618
EBITDA 32,397 16,533 (10,678 ) 38,252
Add/(deduct):
Expenses associated with contested proxy solicitation - - 3,444 3,444
Legal expenses of OIG investigation 86 - - 86
Stock option expense - - 2,443 2,443
Advertising cost adjustment - (368 ) - (368 )
Interest income (149 ) (18 ) (40 ) (207 )
Intercompany interest income/(expense) (1,023 ) (581 ) 1,604 -
Adjusted EBITDA $ 31,311 $ 15,566 $ (3,227 ) $ 43,650

~~Consolidating Summary and Reconciliation of Adjusted EBITDA~~

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 Regarding Forward-Looking Information

Certain statements contained in this report are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. The words “believe”, “expect”, “hope”, “anticipate”, “plan” and similar expressions identify forward-looking statements, which speak only as of the date the statement was made. These forward-looking statements are based on current expectations and assumptions and involve various known and unknown risks, uncertainties, contingencies and other factors, which could cause Chemed’s actual results to differ from those expressed in such forward-looking statements. Variances in any or all of the risks, uncertainties, contingencies, and other factors from our assumptions could cause actual results to differ materially from these forward-looking statements and trends. In addition, our ability to deal with the unknown outcomes of these events, many of which are beyond our control, may affect the reliability of projections and other financial matters. Investors are cautioned that such forward-looking statements are subject to inherent risk and there are no assurances that the matters contained in such statements will be achieved. Chemed does not undertake and specifically disclaims any obligation to publicly update or revise any forward-looking statements, whether as a result of a new information, future events or otherwise.

Our primary market risk exposure relates to interest rate risk exposure through variable interest rate borrowings. At ~~June~~September 30, 2010, we had no variable rate debt outstanding. At ~~June~~September 30, 2010, the fair value of the Notes approximates ~~$172.7~~$181.1 million which have a face value of $187.0 million.

We carried out an evaluation, under the supervision of our President and Chief Executive Officer and with the participation of the Executive Vice President and Chief Financial Officer and the Vice President and Controller, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, the President and Chief Executive Officer, Executive Vice President and Chief Financial Officer and Vice President and Controller have concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report. There has been no change in our internal control over financial reporting that occurred during the quarter covered by this repor t that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

			Weighted		Cumulative Shares		Dollar Amount				Weighted
	Total Number		Average		Repurchased		Remaining		Total Number		Average		Cumulative Shares		Dollar Amount
	of Shares		Price Paid Per		Under		Under		of Shares		Price Paid Per		Repurchased Under		Remaining Under
	Repurchased		Share		the Program		The Program		Repurchased		Share		the Program		The Program

April 2007 Program
January 1 through January 31, 2010		31,375	$	47.17		1,736,972	$	51,718,696		31,375	$	47.17		1,736,972	$	51,718,696
February 1 through February 29, 2010		-	$	-		1,736,972	$	51,718,696		-	$	-		1,736,972	$	51,718,696
March 1 through March 31, 2010		-	$	-		1,736,972	$	51,718,696		-	$	-		1,736,972	$	51,718,696

First Quarter Total - April 2007 Program		31,375	$	47.17						31,375	$	47.17

April 1 through April 30, 2010		-	$	-		1,736,972	$	51,718,696		-	$	-		1,736,972	$	51,718,696
May 1 through May 31, 2010		38,492	$	53.70		1,775,464	$	49,651,677		38,492	$	53.70		1,775,464	$	49,651,677
June 1 through June 30, 2010		76,408	$	55.65		1,851,872	$	45,399,865		76,408	$	55.65		1,851,872	$	45,399,865
Second Quarter Total - April 2007 Program										114,900	$	54.99

Second Quarter Total - April 2007 Program		114,900	$	54.99
July 1 through July 31, 2010										-	$	-		1,851,872	$	45,399,865
August 1 through August 31, 2010										-	$	-		1,851,872	$	45,399,865
September 1 through September 30, 2010										-	$	-		1,851,872	$	45,399,865
Third Quarter Total - April 2007 Program										-	$	-

On April 26, 2007, our Board of Directors authorized a $150 million share repurchase plan with no expiration date.

On May 20, 2008 our Board of Directors authorized an additional $56 million under the April 2007 Program.

~~Removed and reserved~~

Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		Page No.
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements
Unaudited Consolidated Balance Sheet -
September 30, 2010 and December 31, 2009		3

Unaudited Consolidated Statement of Income -
Three and nine months ended September 30, 2010 and 2009		4

~~Item 1. Financial Statements~~Unaudited Consolidated Statement of Cash Flows -
Nine months ended September 30, 2010 and 2009		5

Notes to Unaudited ~~Consolidated Balance Sheet -~~Financial Statements ~~June 30, 2010 and December 31, 2009~~		3	6

~~Unaudited Consolidated Statement of Income -~~ ~~Three and six months ended June 30, 2010 and 2009~~		4

~~Unaudited Consolidated Statement of Cash Flows -~~ ~~Six months ended June 30, 2010 and 2009~~	5

~~Notes to Unaudited Financial Statements~~	6

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	16

Item 3. Quantitative and Qualitative Disclosures about Market Risk		30

Item 4. Controls and Procedures		30

PART II. OTHER INFORMATION
Item 1. Legal Proceedings		30

Item 1A. Risk Factors		30

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		31

Item 3. Defaults Upon Senior Securities		31

Item 4. ~~Submission of Matters to a Vote of Security Holders~~Removed and Reserved		31

Item 5. Other Information		31

Item 6. Exhibits		3132
EX – 31.1
EX – 31.2
EX – 31.3
EX – 32.1
EX – 32.2
EX – 32.3
EX – 101.INS
EX – 101.SCH
EX – 101.CAL
EX – 101.LAB
EX – 101.PRE

		Shares									Incremental
		Underlying				Total Treasury		Shares Due			Shares Issued/				Shares				Total Treasury		Shares Due			Incremental
		1.875%				Method		to the Company			Received by the				Underlying 1.875%				Method		to the Company			Shares Issued/
Share	Share	Convertible		Warrant		Incremental		under Notes			Company upon			Share	Convertible		Warrant		Incremental		under Notes			(Received) by the Company
Price	Price	Notes		Shares		Shares (a)		Hedges			Conversion (b)			Price	Notes		Shares		Shares (a)		Hedges			upon Conversion (b)
$	80.73		11,398		-		11,398		(12,194	)		(796	)	80.73		15,037		-		15,037		(16,087	)		(1,050	)
$	90.73		266,091		-		266,091		(284,657	)		(18,566	)	90.73		270,280		-		270,280		(289,138	)		(18,858	)
$	100.73		470,215		-		470,215		(503,022	)		(32,807	)	100.73		474,844		-		474,844		(507,974	)		(33,130	)
$	110.73		637,470		118,682		756,152		(681,947	)		74,205		110.73		642,460		119,123		761,583		(687,285	)		74,298
$	120.73		777,018		314,621		1,091,639		(831,231	)		260,408		120.73		782,309		315,790		1,098,099		(836,891	)		261,208
$	130.73		895,216		480,584		1,375,800		(957,676	)		418,124		130.73		900,763		482,369		1,383,132		(963,610	)		419,522

PART I. FINANCIAL INFORMATION	PART I. FINANCIAL INFORMATION							PART I. FINANCIAL INFORMATION
Item 1. Financial Statements	Item 1. Financial Statements							Item 1. Financial Statements
CHEMED CORPORATION AND SUBSIDIARY COMPANIES	CHEMED CORPORATION AND SUBSIDIARY COMPANIES							CHEMED CORPORATION AND SUBSIDIARY COMPANIES
UNAUDITED CONSOLIDATED BALANCE SHEET	UNAUDITED CONSOLIDATED BALANCE SHEET							UNAUDITED CONSOLIDATED BALANCE SHEET
(in thousands, except share and per share data)	(in thousands, except share and per share data)							(in thousands, except share and per share data)


		June 30,			December 31,			September 30,				December 31,
		2010			2009			2010				2009
ASSETS
Current assets
Cash and cash equivalents		$	109,080		$	112,416			$	137,457		$	112,416
Accounts receivable less allowances of $13,808 (2009 - $12,595)			101,736			53,461
Accounts receivable less allowances of $13,815 (2009 - $12,595)										105,686			53,461
Inventories			7,978			7,543				7,951			7,543
Current deferred income taxes			14,453			13,701				14,650			13,701
Prepaid income taxes			351			749				337			749
Prepaid expenses			10,423			10,388				9,925			10,388
Total current assets			244,021			198,258				276,006			198,258
Investments of deferred compensation plans			26,282			24,158				26,022			24,158
Properties and equipment, at cost, less accumulated depreciation of $123,209 (2009 - $115,181)			78,437			75,358
Identifiable intangible assets less accumulated amortization of $26,582 (2009 - $25,349)			56,620			57,920
Properties and equipment, at cost, less accumulated depreciation of $127,848 (2009 - $115,181)										78,982			75,358
Identifiable intangible assets less accumulated amortization of $27,101 (2009 - $25,349)										56,097			57,920
Goodwill			450,105			450,042				450,095			450,042
Other assets			10,498			13,734				11,190			13,734
Total Assets		$	865,963		$	819,470			$	898,392		$	819,470

LIABILITIES
Current liabilities
Accounts payable		$	49,131		$	52,071			$	52,552		$	52,071
Income taxes			4,783			63				4,575			63
Accrued insurance			34,729			35,161				34,320			35,161
Accrued compensation			41,613			34,662				45,183			34,662
Other current liabilities			11,669			14,127				15,637			14,127
Total current liabilities			141,925			136,084				152,267			136,084
Deferred income taxes			24,353			25,924				23,045			25,924
Long-term debt			155,608			152,127				157,392			152,127
Deferred compensation liabilities			25,374			23,637				25,508			23,637
Other liabilities			5,736			4,536				6,624			4,536
Total Liabilities			352,996			342,308				364,836			342,308

STOCKHOLDERS' EQUITY
Capital stock - authorized 80,000,000 shares $1 par; issued 30,202,452 shares (2009 - 29,890,628 shares)			30,202			29,891
Capital stock - authorized 80,000,000 shares $1 par; issued 30,207,002 shares (2009 - 29,890,628 shares)										30,207			29,891
Paid-in capital			351,672			335,890				354,473			335,890
Retained earnings			436,098			403,366				453,886			403,366
Treasury stock - 7,517,328 shares (2009 - 7,275,070 shares), at cost			(307,003	)		(293,941	)
Treasury stock - 7,515,127 shares (2009 - 7,275,070 shares), at cost										(306,977	)		(293,941	)
Deferred compensation payable in Company stock			1,998			1,956				1,967			1,956
Total Stockholders' Equity			512,967			477,162				533,556			477,162
Total Liabilities and Stockholders' Equity		$	865,963		$	819,470			$	898,392		$	819,470


See accompanying notes to unaudited financial statements.	See accompanying notes to unaudited financial statements.							See accompanying notes to unaudited financial statements.

For the Three Months Ended June 30,	Net Income		Shares		Earnings per Share
2010
Earnings	$	18,855		22,644	$	0.83
Dilutive stock options		-		348
Nonvested stock awards		-		88
Diluted earnings	$	18,855		23,080	$	0.82

2009
Earnings	$	17,250		22,417	$	0.77
Dilutive stock options		-		214
Nonvested stock awards		-		41
Diluted earnings	$	17,250		22,672	$	0.76

16. Guarantor Subsidiaries
Our 1.875% Notes are fully and unconditionally guaranteed on an unsecured, jointly and severally liable basis by certain of our 100% owned subsidiaries. The following unaudited, condensed, consolidating financial data presents the composition of the parent company (Chemed), the guarantor subsidiaries and the non-guarantor subsidiaries as of June 30, 2010 and December 31, 2009 for the balance sheet, the three and six months ended June 30, 2010 and June 30, 2009 for the income statement and the six months ended June 30, 2010 and June 30, 2009 for the statement of cash flows (dollars in thousands):

June 30, 2010				Guarantor			Non-Guarantor			Consolidating
	Parent			Subsidiaries			Subsidiaries			Adjustments			Consolidated
ASSETS
Cash and cash equivalents	$	105,276		$	(1,238	)	$	5,042		$	-		$	109,080
Accounts receivable, less allowances		560			100,754			422			-			101,736
Intercompany receivables		-			149,823			-			(149,823	)		-
Inventories		-			7,272			706			-			7,978
Current deferred income taxes		(962	)		15,312			103			-			14,453
Prepaid income taxes		3,424			(2,939	)		(134	)		-			351
Prepaid expenses		1,047			9,326			50			-			10,423
Total current assets		109,345			278,310			6,189			(149,823	)		244,021
Investments of deferred compensation plans		-			-			26,282			-			26,282
Properties and equipment, at cost, less accumulated depreciation		12,987			63,209			2,241			-			78,437
Identifiable intangible assets less accumulated amortization		-			56,620			-			-			56,620
Goodwill		-			445,644			4,461			-			450,105
Other assets		6,373			2,384			1,741			-			10,498
Investments in subsidiaries		677,384			17,356			-			(694,740	)		-
Total assets	$	806,089		$	863,523		$	40,914		$	(844,563	)	$	865,963
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable	$	(970	)	$	49,646		$	455		$	-		$	49,131
Intercompany payables		143,947			-			5,876			(149,823	)		-
Income taxes		(969	)		6,199			(447	)		-			4,783
Accrued insurance		677			34,052			-			-			34,729
Accrued compensation		2,063			39,026			524			-			41,613
Other current liabilities		1,215			10,346			108			-			11,669
Total current liabilities		145,963			139,269			6,516			(149,823	)		141,925
Deferred income taxes		(11,417	)		43,452			(7,682	)		-			24,353
Long-term debt		155,608			-			-			-			155,608
Deferred compensation liabilities		-			-			25,374			-			25,374
Other liabilities		2,968			2,327			441			-			5,736
Stockholders' equity		512,967			678,475			16,265			(694,740	)		512,967
Total liabilities and stockholders' equity	$	806,089		$	863,523		$	40,914		$	(844,563	)	$	865,963




December 31, 2009				Guarantor			Non-Guarantor			Consolidating
	Parent			Subsidiaries			Subsidiaries			Adjustments			Consolidated
ASSETS
Cash and cash equivalents	$	109,331		$	(1,221	)	$	4,306		$	-		$	112,416
Accounts receivable, less allowances		618			52,303			540			-			53,461
Intercompany receivables		-			149,888			-			(149,888	)		-
Inventories		-			7,009			534			-			7,543
Current deferred income taxes		(378	)		14,048			31			-			13,701
Prepaid expenses		(2,457	)		13,706			(112	)		-			11,137
Total current assets		107,114			235,733			5,299			(149,888	)		198,258
Investments of deferred compensation plans		-			-			24,158			-			24,158
Properties and equipment, at cost, less accumulated depreciation		10,309			62,912			2,137			-			75,358
Identifiable intangible assets less accumulated amortization		-			57,920			-			-			57,920
Goodwill		-			445,662			4,380			-			450,042
Other assets		11,190			2,232			312			-			13,734
Investments in subsidiaries		643,572			15,523			-			(659,095	)		-
Total assets	$	772,185		$	819,982		$	36,286		$	(808,983	)	$	819,470
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable	$	(2,411	)	$	54,084		$	398		$	-		$	52,071
Intercompany payables		147,744			-			2,144			(149,888	)		-
Income taxes		(2,145	)		2,159			49			-			63
Accrued insurance		1,231			33,930			-			-			35,161
Accrued compensation		4,235			30,020			407			-			34,662
Other current liabilities		1,643			11,367			1,117			-			14,127
Total current liabilities		150,297			131,560			4,115			(149,888	)		136,084
Deferred income taxes		(10,549	)		43,183			(6,710	)		-			25,924
Long-term debt		152,127			-			-			-			152,127
Deferred compensation liabilities		-			-			23,637			-			23,637
Other liabilities		3,148			1,388			-			-			4,536
Stockholders' equity		477,162			643,851			15,244			(659,095	)		477,162
Total liabilities and stockholders' equity	$	772,185		$	819,982		$	36,286		$	(808,983	)	$	819,470

For the six months ended June 30, 2010				Guarantor			Non-Guarantor
	Parent			Subsidiaries			Subsidiaries			Consolidated
Cash Flow from Operating Activities:
Net cash provided/(used) by operating activities	$	(3,737	)	$	24,585		$	(571	)	$	20,277
Cash Flow from Investing Activities:
Capital expenditures		(10	)		(11,454	)		(478	)		(11,942	)
Business combinations, net of cash acquired		-			83			6			89
Proceeds from sale of property and equipment		-			(30	)		-			(30	)
Other uses - net		(89	)		(171	)		(26	)		(286	)
Net cash used by investing activities		(99	)		(11,572	)		(498	)		(12,169	)
Cash Flow from Financing Activities:
Change in cash overdrafts payable		1,338			(2,652	)		-			(1,314	)
Change in intercompany accounts		9,830			(11,478	)		1,648			-
Dividends paid to shareholders		(5,481	)		-			-			(5,481	)
Purchases of treasury stock		(10,083	)		-			(42	)		(10,125	)
Proceeds from exercise of stock options		3,475			-			-			3,475
Realized excess tax benefit on share based compensation		702			1,100			-			1,802
Other sources - net		-			-			199			199
Net cash provided/ (used) by financing activities		(219	)		(13,030	)		1,805			(11,444	)
Net increase/(decrease) in cash and cash equivalents		(4,055	)		(17	)		736			(3,336	)
Cash and cash equivalents at beginning of year		109,331			(1,221	)		4,306			112,416
Cash and cash equivalents at end of period	$	105,276		$	(1,238	)	$	5,042		$	109,080

For the six months ended June 30, 2009				Guarantor			Non-Guarantor
	Parent			Subsidiaries			Subsidiaries			Consolidated
Cash Flow from Operating Activities:
Net cash provided/(used) by operating activities	$	(7,802	)	$	49,192		$	1,730		$	43,120
Cash Flow from Investing Activities:
Capital expenditures		(13	)		(7,912	)		(211	)		(8,136	)
Business combinations, net of cash acquired		-			(1,859	)		-			(1,859	)
Proceeds from sale of property and equipment		1,280			216			-			1,496
Other uses - net		(365	)		(110	)		-			(475	)
Net cash provided/(used) by investing activities		902			(9,665	)		(211	)		(8,974	)
Cash Flow from Financing Activities:
Change in cash overdrafts payable		1,242			(2,023	)		-			(781	)
Change in intercompany accounts		39,429			(37,625	)		(1,804	)		-
Dividends paid to shareholders		(2,711	)		-			-			(2,711	)
Purchases of treasury stock		(526	)		-			-			(526	)
Proceeds from exercise of stock options		68			-			-			68
Realized excess tax benefit on share based compensation		313			-			-			313
Repayment of long-term debt		(17,700	)		(99	)		-			(17,799	)
Other sources/(uses) - net		(93	)		148			239			294
Net cash provided/ (used) by financing activities		20,022			(39,599	)		(1,565	)		(21,142	)
Net increase/(decrease) in cash and cash equivalents		13,122			(72	)		(46	)		13,004
Cash and cash equivalents at beginning of year		65			202			3,361			3,628
Cash and cash equivalents at end of period	$	13,187		$	130		$	3,315		$	16,632

Consolidating Summary and Reconciliation of Adjusted EBITDA														Consolidating Summary and Reconciliation of Adjusted EBITDA

Chemed Corporation and Subsidiary Companies	Chemed Corporation and Subsidiary Companies
(in thousands)											Chemed													Chemed
For the three months ended June 30, 2010	VITAS				Roto-Rooter			Corporate			Consolidated
For the three months ended September 30, 2010															VITAS			Roto-Rooter			Corporate			Consolidated

Net income/(loss)		$	18,281		$	8,860		$	(8,286	)	$	18,855			$	19,803		$	7,747		$	(6,562	)	$	20,988
Add/(deduct):
Interest expense			48			64			2,887			2,999				48			55			2,892			2,995
Income taxes			11,152			5,501			(4,641	)		12,012				11,778			4,798			(3,582	)		12,994
Depreciation			4,103			1,950			141			6,194				4,321			1,925			139			6,385
Amortization			788			132			367			1,287				694			133			369			1,196
EBITDA			34,372			16,507			(9,532	)		41,347				36,644			14,658			(6,744	)		44,558
Add/(deduct):
Legal expenses of OIG investigation			118			-			-			118				112			-			-			112
Stock option expense			-			-			2,346			2,346				-			-			1,968			1,968
Advertising cost adjustment			-			(678	)		-			(678	)			-			(571	)		-			(571	)
Expenses of class action litigation			-			105			-			105				-			322			-			322
Long-term incentive compensation			-			-			1,799			1,799
Interest income			(90	)		(25	)		(35	)		(150	)			(37	)		(10	)		(62	)		(109	)
Intercompany interest income/(expense)			(1,350	)		(773	)		2,123			-				(1,139	)		(651	)		1,790			-
Adjusted EBITDA		$	33,050		$	15,136		$	(3,299	)	$	44,887			$	35,580		$	13,748		$	(3,048	)	$	46,280

																								Chemed
For the three months ended September 30, 2009															VITAS			Roto-Rooter			Corporate			Consolidated

Net income/(loss)															$	18,148		$	7,935		$	(6,873	)	$	19,210
Add/(deduct):
Interest expense																51			43			2,759			2,853
Income taxes																11,079			4,881			(3,504	)		12,456
Depreciation																3,292			2,005			64			5,361
Amortization																1,179			117			315			1,611
EBITDA																33,749			14,981			(7,239	)		41,491
Add/(deduct):
Legal expenses of OIG investigation																343			-			-			343
Stock option expense																-			-			2,214			2,214
Advertising cost adjustment																-			(466	)		-			(466	)
Interest income																(53	)		(9	)		(24	)		(86	)
Intercompany interest income/(expense)																(1,178	)		(684	)		1,862			-
Adjusted EBITDA															$	32,861		$	13,822		$	(3,187	)	$	43,496

											Chemed
For the three months ended June 30, 2009	VITAS				Roto-Rooter			Corporate			Consolidated

Net income/(loss)		$	17,122		$	8,798		$	(8,670	)	$	17,250
Add/(deduct):
Interest expense			326			59			2,757			3,142
Income taxes			10,506			5,524			(5,126	)		10,904
Depreciation			3,256			2,035			47			5,338
Amortization			1,187			117			314			1,618
EBITDA			32,397			16,533			(10,678	)		38,252
Add/(deduct):
Expenses associated with contested proxy solicitation			-			-			3,444			3,444
Legal expenses of OIG investigation			86			-			-			86
Stock option expense			-			-			2,443			2,443
Advertising cost adjustment			-			(368	)		-			(368	)
Interest income			(149	)		(18	)		(40	)		(207	)
Intercompany interest income/(expense)			(1,023	)		(581	)		1,604			-
Adjusted EBITDA		$	31,311		$	15,566		$	(3,227	)	$	43,650

CHEMED CORPORATION AND SUBSIDIARY COMPANIES															CHEMED CORPORATION AND SUBSIDIARY COMPANIES
OPERATING STATISTICS FOR VITAS SEGMENT															OPERATING STATISTICS FOR VITAS SEGMENT
(unaudited)															(unaudited)


	Three Months Ended June 30,							Six Months Ended June 30,								Three Months Ended September 30,								Nine Months Ended September 30,
OPERATING STATISTICS	2010			2009				2010			2009					2010				2009				2010			2009
Net revenue ($000)
Homecare	$	163,512			$	152,006		$	320,738			$	299,060			$	169,306			$	157,079			$	490,044		$	456,160
Inpatient		25,989				23,667			52,281				48,759				25,963				24,057				78,244			72,806
Continuous care		37,102				35,125			74,776				69,716				38,812				35,974				113,588			105,679
Total before Medicare cap allowance and 2008 BNAF	$	226,603			$	210,798		$	447,795			$	417,535			$	234,081			$	217,110			$	681,876		$	634,645
Estimated BNAF		-				-			-				1,950				-				-				-			1,950
Medicare cap allowance		35				505			1,783				235				(117	)			(43	)			1,666			192
Total	$	226,638			$	211,303		$	449,578			$	419,720			$	233,964			$	217,067			$	683,542		$	636,787
Net revenue as a percent of total
before Medicare cap allowance
Homecare		72.1	%			72.1	%		71.6	%			71.6	%			72.3		%		72.3		%		71.8	%		71.8	%
Inpatient		11.5				11.2			11.7				11.7				11.1				11.1				11.5			11.5
Continuous care		16.4				16.7			16.7				16.7				16.6				16.6				16.7			16.7
Total before Medicare cap allowance and 2008 BNAF		100.0				100.0			100.0				100.0				100.0				100.0				100.0			100.0
Estimated BNAF		-				-			-				0.5				-				-				-			0.3
Medicare cap allowance		-				0.2			0.4				-				(0.1	)			-				0.2			-
Total		100.0	%			100.2	%		100.4	%			100.5	%			99.9		%		100.0		%		100.2	%		100.3	%
Average daily census (days)
Homecare		8,345				7,668			8,229				7,573				8,586				7,835				8,350			7,661
Nursing home		3,223				3,292			3,193				3,277				3,250				3,316				3,212			3,291
Routine homecare		11,568				10,960			11,422				10,850				11,836				11,151				11,562			10,952
Inpatient		433				394			438				407				425				404				433			406
Continuous care		583				566			594				567				596				562				595			565
Total		12,584				11,920			12,454				11,824				12,857				12,117				12,590			11,923

Total Admissions		14,423				13,840			29,267				28,008				14,483				13,735				43,750			41,743
Total Discharges		14,132				13,740			28,685				27,605				14,076				13,441				42,767			41,064
Average length of stay (days)		77.4				73.4			76.6				75.0				78.2				78.0				77.1			75.0
Median length of stay (days)		14.0				14.0			14.0				14.0				15.0				14.0				14.0			14.0
ADC by major diagnosis
Neurological		32.8	%			32.8	%		32.8	%			32.7	%			33.4		%		33.1		%		33.2	%		33.0	%
Cancer		18.1				19.2			18.5				19.3				18.5				19.1				18.4			19.2
Cardio		12.0				12.1			11.9				12.2				11.9				12.2				11.9			12.2
Respiratory		6.5				6.6			6.6				6.6				6.5				6.2				6.6			6.5
Other		30.6				29.3			30.2				29.2				29.7				29.4				29.9			29.1
Total		100.0	%			100.0	%		100.0	%			100.0	%			100.0		%		100.0		%		100.0	%		100.0	%
Admissions by major diagnosis
Neurological		18.5	%			17.3	%		18.6	%			17.9	%			18.4		%		17.9		%		18.6	%		17.9	%
Cancer		33.8				35.4			33.8				34.9				35.8				36.8				34.6			35.6
Cardio		11.2				11.9			11.4				12.1				11.1				11.1				11.3			11.8
Respiratory		8.5				7.7			8.5				7.8				7.5				6.8				8.1			7.5
Other		28.0				27.7			27.7				27.3				27.2				27.4				27.4			27.2
Total		100.0	%			100.0	%		100.0	%			100.0	%			100.0		%		100.0		%		100.0	%		100.0	%
Direct patient care margins
Routine homecare		52.5	%			52.1	%		51.9	%			51.9	%			52.7		%		51.7		%		52.2	%		51.8	%
Inpatient		12.3				16.6			13.7				17.1				12.3				12.8				13.3			15.7
Continuous care		21.2				20.2			21.0				20.2				21.1				20.6				21.0			20.3
Homecare margin drivers (dollars per patient day)
Labor costs	$	52.52			$	51.83		$	53.21			$	52.32			$	51.97			$	52.56			$	52.79		$	52.40
Drug costs		7.67				7.71			7.72				7.68				7.89				7.59				7.78			7.65
Home medical equipment		6.66				6.82			6.80				6.75				6.54				7.03				6.71			6.85
Medical supplies		2.46				2.36			2.45				2.32				2.66				2.48				2.53			2.37
Inpatient margin drivers (dollars per patient day)
Labor costs	$	301.81			$	282.46		$	294.27			$	276.96			$	304.42			$	294.24			$	297.63		$	282.74
Continuous care margin drivers (dollars per patient day)
Labor costs	$	530.05			$	522.27		$	528.23			$	521.79			$	536.83			$	530.88			$	531.14		$	524.84
Bad debt expense as a percent of revenues		0.9	%			1.1	%		0.9	%			1.1	%			0.9		%		1.1		%		0.9	%		1.1	%
Accounts receivable --
Days of revenue outstanding- excluding unapplied Medicare payments		42.3				55.9		n.a.				n.a.					39.7				52.8			n.a.			n.a.
Days of revenue outstanding- including unapplied Medicare payments		34.1				36.7		n.a.				n.a.					34.9				37.0			n.a.			n.a.

Exhibit No.		Description


31.1		Certification by Kevin J. McNamara pursuant to Rule 13a-14(a)/15d-14(a) of the Exchange Act of 1934.

31.2		Certification by David P. Williams pursuant to Rule 13a-14(a)/15d-14(a) of the Exchange Act of 1934.

31.3		Certification by Arthur V. Tucker, Jr. pursuant to Rule 13a-14(a)/15d-14(a) of the Exchange Act of 1934.

32.1		Certification by Kevin J. McNamara pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification by David P. Williams pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.3		Certification by Arthur V. Tucker, Jr. pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema

101.CAL		XBRL Taxonomy Extension Calculation Linkbase

101.LAB		XBRL Taxonomy Extension Label Linkbase

101.PRE		XBRL Taxonomy Extension Presentation Linkbase

~~101.DEF~~		~~XBRL Taxonomy Extension Definition Document~~

		Chemed Corporation	~~Chemed Corporation~~
		(Registrant)	~~(Registrant)~~


Dated:	~~July 30,~~November 3, 2010	By:	Kevin J. McNamara

		Kevin J. McNamara

		(President and Chief Executive Officer)



Dated:	~~July 30,~~November 3, 2010	By:	David P. Williams

		David P. Williams

		(Executive Vice President and Chief Financial Officer)



Dated:	~~July 30,~~November 3, 2010	By:	Arthur V. Tucker, Jr.

		Arthur V. Tucker, Jr.

		(Vice President and Controller)