##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the Quarterly Period Ended March 31, 2010
 Commission File Number 000-22217
 AMSURG CORP.
 (Exact Name of
Registrant as Specified in its Charter)
 Tennessee
    
    62-1493316(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)20 Burton Hills BoulevardNashville, TN
    
    37215(Address of principal executive offices)
    
    (Zip code)
 (615) 665-1283  (Registrants Telephone Number, Including Area Code)
  þ o
  o o
  Large accelerated filer
þ   
    Accelerated filer
o
    Non-accelerated filer o
    Smaller reporting company o(Do not check if a smaller reporting company)
  o þ




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##### 



Table of Contents to Form 10-Q for the Three Months Ended March 31, 2010
 Part IItem 1. Financial Statements
    
    
    1Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    15Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    21Item 4. Controls and Procedures
    
    
    22Part IIItem 1. Legal Proceedings
    
    
    23Item 1A. Risk Factors
    
    
    23Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    23Item 3. Defaults Upon Senior Securities
    
    
    23Item 4. Other Information
    
    
    23Item 5. Exhibits
    
    
    23Signature
    
    
    24EX-31.1EX-31.2EX-32.1
  i




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##### Table of Contents



Part I
 
 Item 1. Financial Statements
 AmSurg Corp.
Consolidated Balance Sheets
March 31, 2010 (unaudited) and December 31, 2009
(Dollars in thousands)
 March 31,
    
    December 31,2010
    
    2009AssetsCurrent assets:Cash and cash equivalents
    
    $
    33,172
    
    
    $
    29,377Accounts receivable, net of allowance of $12,905 and $12,375, respectively
    
    
    68,768
    
    
    
    66,886Supplies inventory
    
    
    9,090
    
    
    
    8,745Deferred income taxes
    
    
    2,582
    
    
    
    2,324Prepaid and other current assets
    
    
    14,261
    
    
    
    15,408Current assets held for sale
    
    
    26
    
    
    
    34Total current assets
    
    
    127,899
    
    
    
    122,774Long-term receivables and other assets
    
    
    
    
    
    
    56Property and equipment, net
    
    
    111,056
    
    
    
    112,084Goodwill, net
    
    
    851,952
    
    
    
    813,876Intangible assets, net
    
    
    9,695
    
    
    
    9,797Long-term assets held for sale
    
    
    166
    
    
    
    170Total assets
    
    $
    1,100,768
    
    
    $
    1,058,757Liabilities and EquityCurrent liabilities:Current portion of long-term debt
    
    $
    5,475
    
    
    $
    5,657Accounts payable
    
    
    13,208
    
    
    
    14,821Accrued salaries and benefits
    
    
    15,758
    
    
    
    18,156Other accrued liabilities
    
    
    2,554
    
    
    
    3,208Current income taxes payable
    
    
    4,428
    
    
    
    402Current liabilities held for sale
    
    
    31
    
    
    
    37Total current liabilities
    
    
    41,454
    
    
    
    42,281Long-term debt
    
    
    300,461
    
    
    
    289,041Deferred income taxes
    
    
    75,784
    
    
    
    71,665Other long-term liabilities
    
    
    22,147
    
    
    
    22,036Commitments and contingenciesNoncontrolling interests  redeemable
    
    
    135,655
    
    
    
    123,363Preferred stock, no par value, 5,000,000 shares authorized, no shares issued or outstanding
    
    
    
    
    
    
    Equity:Common stock, no par value, 70,000,000 shares authorized, 30,908,862 and 30,674,525
shares outstanding, respectively
    
    
    165,972
    
    
    
    163,729Retained earnings
    
    
    355,933
    
    
    
    343,236Accumulated other comprehensive loss, net of income taxes
    
    
    (1,610
    )
    
    
    (1,849
    )Total AmSurg Corp. equity
    
    
    520,295
    
    
    
    505,116Noncontrolling interests  non-redeemable
    
    
    4,972
    
    
    
    5,255Total equity
    
    
    525,267
    
    
    
    510,371Total liabilities and equity
    
    $
    1,100,768
    
    
    $
    1,058,757
  1




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##### Table of Contents



Item 1.
Financial Statements  (continued)
 AmSurg Corp.
Consolidated Statements of Earnings

(unaudited)

Three Months Ended March 31, 2010 and 2009
(In thousands, except earnings per share
 Three Months EndedMarch 31,2010
    
    2009Revenues
    
    $
    172,522
    
    
    $
    163,424Operating expenses:Salaries and benefits
    
    
    51,854
    
    
    
    48,992Supply cost
    
    
    23,037
    
    
    
    19,866Other operating expenses
    
    
    37,574
    
    
    
    34,039Depreciation and amortization
    
    
    5,797
    
    
    
    5,647Total operating expenses
    
    
    118,262
    
    
    
    108,544Operating income
    
    
    54,260
    
    
    
    54,880Interest expense
    
    
    1,871
    
    
    
    2,027Earnings from continuing operations before income taxes
    
    
    52,389
    
    
    
    52,853Income tax expense
    
    
    8,724
    
    
    
    8,546Net earnings from continuing operations
    
    
    43,665
    
    
    
    44,307Discontinued operations:(Loss) earnings from operations of discontinued interests in surgery centers, net of
income tax
    
    
    (153
    )
    
    
    8Net earnings
    
    
    43,512
    
    
    
    44,315Less net earnings attributable to noncontrolling interests:Net earnings from continuing operations
    
    
    30,818
    
    
    
    31,694Net (loss) earnings from discontinued operations
    
    
    (3
    )
    
    
    5Total net earnings attributable to noncontrolling interests
    
    
    30,815
    
    
    
    31,699Net earnings attributable to AmSurg Corp. common shareholders
    
    $
    12,697
    
    
    $
    12,616Amounts attributable to AmSurg Corp. common shareholders:Earnings from continuing operations, net of income tax
    
    $
    12,847
    
    
    $
    12,613Discontinued operations, net of income tax
    
    
    (150
    )
    
    
    3Net earnings attributable to AmSurg Corp. common shareholders
    
    $
    12,697
    
    
    $
    12,616Earnings per share-basic:Net earnings from continuing operations attributable to AmSurg Corp. common
shareholders
    
    $
    0.43
    
    
    $
    0.40Net loss from discontinued operations attributable to AmSurg Corp. common shareholders
    
    
    (0.01
    )
    
    
    Net earnings attributable to AmSurg Corp. common shareholders
    
    $
    0.42
    
    
    $
    0.40Earnings per share-diluted:Net earnings from continuing operations attributable to AmSurg Corp. common
shareholders
    
    $
    0.42
    
    
    $
    0.40Net loss from discontinued operations attributable to AmSurg Corp. common shareholders
    
    
    (0.01
    )
    
    
    Net earnings attributable to AmSurg Corp. common shareholders
    
    $
    0.41
    
    
    $
    0.40Weighted average number of shares and share equivalents outstanding:Basic
    
    
    30,212
    
    
    
    31,244Diluted
    
    
    30,716
    
    
    
    31,406
  2




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##### Table of Contents



Item 1.
Financial Statements  (continued)
 AmSurg Corp.
Consolidated Statements of Comprehensive Income

(unaudited)

Three Months Ended March 31, 2010 and 2009
(In thousands
 Three Months EndedMarch 31,2010
    
    2009Net earnings
    
    $
    43,512
    
    
    $
    44,315Other comprehensive income, net of income tax:Unrealized gain on interest rate swap, net of income tax
    
    
    239
    
    
    
    159Comprehensive income, net of income tax
    
    
    43,751
    
    
    
    44,474Less comprehensive income attributable to noncontrolling interests
    
    
    30,815
    
    
    
    31,699Comprehensive income attributable to AmSurg Corp. common shareholders
    
    $
    12,936
    
    
    $
    12,775
  3




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##### Table of Contents



Item 1.
Financial Statements  (continued)
 AmSurg Corp.
Consolidated Statements of Changes in Equity

(unaudited)

Three Months Ended March 31, 2010 and 2009
(In thousands
 AmSurg Corp. ShareholdersNon-Non-
    
    
    
    
    
    ControllingAccumulated
    
    controlling
    
    
    
    
    
    Interests Other
    
    Interests 
    
    Total
    
    RedeemableCommon Stock
    
    Retained
    
    Comprehensive
    
    Non-
    
    Equity
    
    (Temporary
    
    NetShares
    
    Amount
    
    Earnings
    
    Loss
    
    redeemable
    
    (Permanent)
    
    Equity)
    
    EarningsBalance at
December 31, 2009
    
    
    30,674
    
    
    $
    163,729
    
    
    $
    343,236
    
    
    $
    (1,849
    )
    
    $
    5,255
    
    
    $
    510,371
    
    
    $
    123,363Issuance of restricted
common stock
    
    
    216
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Stock options exercised
    
    
    19
    
    
    
    296
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    296
    
    
    
    Share-based compensation
    
    
    
    
    
    
    1,231
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,231
    
    
    
    Tax benefit related to
exercise of stock options
    
    
    
    
    
    
    46
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    46
    
    
    
    Net earnings
    
    
    
    
    
    
    
    
    
    
    12,697
    
    
    
    
    
    
    
    990
    
    
    
    13,687
    
    
    
    29,825
    
    
    $
    43,512Distributions to
noncontrolling interests,
net of capital
contributions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,273
    )
    
    
    (1,273
    )
    
    
    (28,956
    )Purchase of noncontrolling
interest
    
    
    
    
    
    
    674
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    674
    
    
    
    Sale of noncontrolling
interest
    
    
    
    
    
    
    (4
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4
    )
    
    
    Acquisitions and other
transactions impacting
noncontrolling interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,423Gain on interest rate swap,
net of income tax
expense of $154
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    239
    
    
    
    
    
    
    
    239
    
    
    
    Balance at March 31, 2010
    
    
    30,909
    
    
    $
    165,972
    
    
    $
    355,933
    
    
    $
    (1,610
    )
    
    $
    4,972
    
    
    $
    525,267
    
    
    $
    135,655Balance at
January 1, 2009
    
    
    31,342
    
    
    $
    172,192
    
    
    $
    291,088
    
    
    $
    (2,851
    )
    
    $
    2,877
    
    
    $
    463,306
    
    
    $
    63,202Issuance of restricted
common stock
    
    
    152
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Cancellation of restricted
common stock
    
    
    (7
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Stock repurchased
    
    
    (831
    )
    
    
    (12,587
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12,587
    )
    
    
    Share-based compensation
    
    
    
    
    
    
    1,074
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,074
    
    
    
    Net earnings
    
    
    
    
    
    
    
    
    
    
    12,616
    
    
    
    
    
    
    
    1,035
    
    
    
    13,651
    
    
    
    30,664
    
    
    $
    44,315Distributions to
noncontrolling interests,
net of capital
contributions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (748
    )
    
    
    (748
    )
    
    
    (29,197
    )Acquisitions and other
transactions impacting
noncontrolling interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,728Gain on interest rate swap,
net of income tax
expense of $102
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    159
    
    
    
    
    
    
    
    159
    
    
    
    Balance at March 31, 2009
    
    
    30,656
    
    
    $
    160,679
    
    
    $
    303,704
    
    
    $
    (2,692
    )
    
    $
    3,164
    
    
    $
    464,855
    
    
    $
    74,397
  4




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##### Table of Contents



Item 1.
Financial Statements  (continued)
 AmSurg Corp.
Consolidated Statements of Cash Flows

(unaudited)

Three Months Ended March 31, 2010 and 2009
(In thousands
 Three Months EndedMarch 31,2010
    
    2009Cash flows from operating activities:Net earnings
    
    $
    43,512
    
    
    $
    44,315Adjustments to reconcile net earnings to net cash flows provided by
operating activities:Depreciation and amortization
    
    
    5,797
    
    
    
    5,647Share-based compensation
    
    
    1,231
    
    
    
    1,074Excess tax benefit from share-based compensation
    
    
    (46
    )
    
    
    Deferred income taxes
    
    
    3,706
    
    
    
    3,734Increase (decrease) in cash and cash equivalents, net of effects of
acquisitions and dispositions, due to changes in:Accounts receivable, net
    
    
    (966
    )
    
    
    (4,568
    )Supplies inventory
    
    
    18
    
    
    
    225Prepaid and other current assets
    
    
    1,135
    
    
    
    2,652Accounts payable
    
    
    (1,653
    )
    
    
    764Accrued expenses and other liabilities
    
    
    1,523
    
    
    
    5,289Other, net
    
    
    67
    
    
    
    180Net cash flows provided by operating activities
    
    
    54,324
    
    
    
    59,312Cash flows from investing activities:Acquisition of interests in surgery centers and related transactions
    
    
    (27,675
    )
    
    
    (16,326
    )Acquisition of property and equipment
    
    
    (3,510
    )
    
    
    (7,420
    )Repayment of notes receivable
    
    
    
    
    
    
    1,522Net cash flows used in investing activities
    
    
    (31,185
    )
    
    
    (22,224
    )Cash flows from financing activities:Proceeds from long-term borrowings
    
    
    36,621
    
    
    
    25,950Repayment on long-term borrowings
    
    
    (25,913
    )
    
    
    (20,663
    )Distributions to noncontrolling interests
    
    
    (30,229
    )
    
    
    (29,945
    )Proceeds from issuance of common stock upon exercise of stock options
    
    
    296
    
    
    
    Repurchase of common stock
    
    
    
    
    
    
    (12,587
    )Capital contributions and ownership transactions by noncontrolling interests
    
    
    (140
    )
    
    
    Excess tax benefit from share-based compensation
    
    
    46
    
    
    
    Financing cost incurred
    
    
    (25
    )
    
    
    (2
    )Net cash flows used in financing activities
    
    
    (19,344
    )
    
    
    (37,247
    )Net increase (decrease) in cash and cash equivalents
    
    
    3,795
    
    
    
    (159
    )Cash and cash equivalents, beginning of period
    
    
    29,377
    
    
    
    31,548Cash and cash equivalents, end of period
    
    $
    33,172
    
    
    $
    31,389
  5




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##### Table of Contents



Item 1.
Financial Statements  (continued)
 AmSurg Corp.
Notes to the Unaudited Consolidated Financial Statements
 (1) Basis of Presentation
        6




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##### Table of Contents



Item 1.
Financial Statements  (continued)
 AmSurg Corp.
Notes to the Unaudited Consolidated Financial Statements  (continued)
 (2) Use of Estimates
   (3) Revenue Recognition
   (4) Acquisitions and Dispositions
    Accounts receivable
    
    
    $916Supplies inventory, prepaid and other current assets
    
    
    343Property and equipment
    
    
    1,140Accounts payable
    
    
    (406
    )Other accrued liabilities
    
    
    (2
    )Long-term debt
    
    
    (90
    )Goodwill (approximately $26,577 deductible for tax purposes)
    
    
    38,026Total fair value
    
    
    39,927Less: Fair value attributable to noncontrolling interests
    
    
    12,252Acquisition date fair value of total consideration transferred
    
    
    $27,675
 7




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##### Table of Contents



Item 1.
Financial Statements  (continued)
 AmSurg Corp.
Notes to the Unaudited Consolidated Financial Statements  (continued)
    Three MonthsEndedMarch 31, 2010Revenues
    
    
    $1,250Net earnings
    
    
    490Less: Net earnings attributable to noncontrolling interests
    
    
    230Net earnings attributable to AmSurg Corp. common shareholders
    
    
    $260
  Three Months EndedMarch 31,2010
    
    2009Revenues
    
    $
    174,337
    
    
    $
    177,440Net earnings
    
    
    43,915
    
    
    
    48,635Amounts attributable to AmSurg Corp. common shareholders:Net earnings from continuing operations
    
    
    13,012
    
    
    
    14,310Net earnings
    
    
    12,862
    
    
    
    14,313Net earnings from continuing operations per common share:Basic
    
    $
    0.43
    
    
    $
    0.46Diluted
    
    $
    0.42
    
    
    $
    0.46Net earnings:Basic
    
    $
    0.43
    
    
    $
    0.46Diluted
    
    $
    0.42
    
    
    $
    0.46Weighted average number of shares and share equivalents:Basic
    
    
    30,212
    
    
    
    31,244Diluted
    
    
    30,716
    
    
    
    31,406
  Three Months EndedMarch 31,2010
    
    2009Revenues
    
    $
    293
    
    
    $
    451(Loss) earnings before income taxes
    
    
    (7
    )
    
    
    11Net (loss) earnings
    
    
    (153
    )
    
    
    8
 8




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##### Table of Contents



Item 1.
Financial Statements  (continued)
 AmSurg Corp.
Notes to the Unaudited Consolidated Financial Statements  (continued)
 (5) Goodwill and Intangible Assets
  Three Months EndedMarch 31,2010
    
    2009Balance, beginning of period
    
    $
    813,876
    
    
    $
    661,693Purchase price allocations
    
    
    38,076
    
    
    
    25,740Balance, end of period
    
    $
    851,952
    
    
    $
    687,433
  March 31, 2010
    
    December 31, 2009Gross
    
    
    
    
    
    
    
    
    
    GrossCarrying
    
    Accumulated
    
    
    
    
    
    Carrying
    
    AccumulatedAmount
    
    Amortization
    
    Net
    
    Amount
    
    Amortization
    
    NetDeferred financing cost
    
    $
    2,805
    
    
    $
    (2,387
    )
    
    $
    418
    
    
    $
    2,780
    
    
    $
    (2,310
    )
    
    $
    470Customer and restrictive covenant
agreements
    
    
    3,180
    
    
    
    (1,668
    )
    
    
    1,512
    
    
    
    3,180
    
    
    
    (1,618
    )
    
    
    1,562Total amortizable intangible assets
    
    $
    5,985
    
    
    $
    (4,055
    )
    
    $
    1,930
    
    
    $
    5,960
    
    
    $
    (3,928
    )
    
    $
    2,032
   (6) Long-term Debt
  March 31,
    
    December 31,2010
    
    2009Revolving credit agreement
    
    $
    288,500
    
    
    $
    276,300Other debt
    
    
    13,415
    
    
    
    14,250Capitalized lease arrangements
    
    
    4,021
    
    
    
    4,148305,936
    
    
    
    294,698Less current portion
    
    
    5,475
    
    
    
    5,657Long-term debt
    
    $
    300,461
    
    
    $
    289,041
  9




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##### Table of Contents



Item 1.
Financial Statements  (continued)
 AmSurg Corp.
Notes to the Unaudited Consolidated Financial Statements  (continued)
  (7) Derivative Instruments
 Derivatives and Hedging
  Asset Derivatives
    
    Liability DerivativesMarch 31, 2010
    
    December 31, 2009
    
    March 31, 2010
    
    December 31, 2009Balance
    
    
    
    Balance
    
    
    
    Balance
    
    
    
    BalanceSheet
    
    Fair
    
    Sheet
    
    Fair
    
    Sheet
    
    Fair
    
    Sheet
    
    FairLocation
    
    Value
    
    Location
    
    Value
    
    Location
    
    Value
    
    Location
    
    ValueDerivatives
designated as
hedging
instruments
    
    Other
assets,
net
    
    $ 
    
    Other
assets,
net
    
    $ 
    
    Other

long-term

liabilities
    
    $2,647
    
    Other

long-term

liabilities
    
    $3,095
 (8) Fair Value Measurements
   Level 1:
    
    Quoted prices in active markets for identical assets or liabilities.Level 2:
    
    Inputs other than quoted prices included in Level 1 that are observable for the
asset or liability through corroboration with market data at the measurement date.Level 3:
    
    Unobservable inputs that reflect managements best estimate of what market
participants would use in pricing the asset or liability at the measurement date.
 10




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##### Table of Contents



Item 1.
Financial Statements  (continued)
 AmSurg Corp.
Notes to the Unaudited Consolidated Financial Statements  (continued)
  Fair Value Measurements atReporting Date Using:March 31,2010
    
    Level 1
    
    Level 2
    
    Level 3Assets:Supplemental executive
retirement savings plan
investments
    
    $
    4,763
    
    
    $
    
    
    
    $
    4,763
    
    
    $
    Liabilities:Interest rate swap agreement
    
    $
    2,647
    
    
    $
    
    
    
    $
    2,647
    
    
    $
    
   (9) Shareholders Equity
 a. Common Stock
  b. Stock Incentive Plans
   11




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##### Table of Contents



Item 1.
Financial Statements  (continued)
 AmSurg Corp.
Notes to the Unaudited Consolidated Financial Statements  (continued)
  Three Months EndedMarch 31,2010
    
    2009Share-based compensation expense
    
    $
    1,231
    
    
    $
    1,074Fair value of shares vested
    
    
    2,336
    
    
    
    4,016Cash received from option exercises
    
    
    296
    
    
    
    Tax benefit from option exercises
    
    
    46
    
    
    
    
    WeightedNumber
    
    Averageof
    
    GrantShares
    
    PriceNon-vested shares at December 31, 2009
    
    
    466,387
    
    
    $
    22.29Shares granted
    
    
    215,692
    
    
    
    21.99Shares vested
    
    
    
    
    
    
    Shares forfeited
    
    
    (105
    )
    
    
    24.75Non-vested shares at March 31, 2010
    
    
    681,974
    
    
    $
    22.19
  WeightedAverageWeighted
    
    RemainingNumber
    
    Average
    
    Contractualof
    
    Exercise
    
    TermShares
    
    Price
    
    (in years)Outstanding at December 31, 2009
    
    
    3,151,052
    
    
    $
    22.22
    
    
    
    5.0Options granted
    
    
    
    
    
    
    Options exercised with total intrinsic value of $118,000
    
    
    (18,750
    )
    
    
    15.78Options terminated
    
    
    
    
    
    
    Outstanding at March 31, 2010 with aggregate intrinsic value of $3,711,000
    
    
    3,132,302
    
    
    $
    22.26
    
    
    
    4.8Vested or expected to vest at March 31, 2010 with aggregate intrinsic value
of $3,710,264
    
    
    3,038,333
    
    
    $
    22.21
    
    
    
    4.7Exercisable at March 31, 2010 with aggregate intrinsic value of $3,707,000
    
    
    2,621,797
    
    
    $
    22.00
    
    
    
    4.3
  12




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##### Table of Contents



Item 1.
Financial Statements  (continued)
 AmSurg Corp.
Notes to the Unaudited Consolidated Financial Statements  (continued)
 c. Earnings per Share
  PerEarnings
    
    Shares
    
    Share(Numerator)
    
    (Denominator)
    
    AmountFor the three months ended March 31, 2010:Net earnings from continuing operations attributable to AmSurg
Corp. per common share (basic)
    
    $
    12,847
    
    
    
    30,212
    
    
    $
    0.43Effect of dilutive securities options and non-vested shares
    
    
    
    
    
    
    504Net earnings from continuing operations attributable to
AmSurg Corp. per common share (diluted)
    
    $
    12,847
    
    
    
    30,716
    
    
    $
    0.42Net earnings attributable to AmSurg Corp. per common share (basic)
    
    $
    12,697
    
    
    
    30,212
    
    
    $
    0.42Effect of dilutive securities options and non-vested shares
    
    
    
    
    
    
    504Net earnings attributable to AmSurg Corp. per common share
(diluted)
    
    $
    12,697
    
    
    
    30,716
    
    
    $
    0.41For the three months ended March 31, 2009:Net earnings from continuing operations attributable to AmSurg
Corp. per common share (basic)
    
    $
    12,613
    
    
    
    31,244
    
    
    $
    0.40Effect of dilutive securities options and non-vested shares
    
    
    
    
    
    
    162Net earnings from continuing operations attributable to
AmSurg Corp. per common share (diluted)
    
    $
    12,613
    
    
    
    31,406
    
    
    $
    0.40Net earnings attributable to AmSurg Corp. per common share (basic)
    
    $
    12,616
    
    
    
    31,244
    
    
    $
    0.40Effect of dilutive securities options and non-vested shares
    
    
    
    
    
    
    162Net earnings attributable to AmSurg Corp. per common
share (diluted)
    
    $
    12,616
    
    
    
    31,406
    
    
    $
    0.40
 (10) Income Taxes
    13




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##### Table of Contents



Item 1.
Financial Statements  (continued)
 AmSurg Corp.
Notes to the Unaudited Consolidated Financial Statements  (continued)
 (11) Commitments and Contingencies
    (12) Recent Accounting Pronouncements
  (13) Supplemental Cash Flow Information
  Three Months EndedMarch 31,2010
    
    2009Cash paid during the period for:Interest
    
    $
    1,792
    
    
    $
    2,111Income taxes, net of refunds
    
    
    841
    
    
    
    168Non-cash investing and financing activities:Decrease in accounts payable associated with acquisition of
property and equipment
    
    
    (397
    )
    
    
    (2,840
    )Capital lease obligations incurred to acquire equipment
    
    
    396
    
    
    
    26Effect of acquisitions:Assets acquired, net of cash and adjustments
    
    
    40,820
    
    
    
    26,208Liabilities assumed and noncontrolling interests
    
    
    13,145
    
    
    
    9,882Payment for assets acquired
    
    $
    27,675
    
    
    $
    16,326
 (14) Subsequent Events
  14




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Forward-Looking Statements
   
    
    adverse impacts on our business associated with current and future economic conditions;
    
    our inability to renew or replace our revolving credit agreement when it terminates;
    
    the risk that payments from third-party payors, including government healthcare
programs, may decrease or not increase as our costs increase;
    
    adverse developments affecting the medical practices of our physician partners;
    
    our ability to maintain favorable relations with our physician partners;
    
    our ability to acquire and develop additional surgery centers on favorable terms;
    
    our ability to grow revenues by increasing procedure volume while maintaining operating
margins and profitability at our existing centers;
    
    our ability to manage the growth in our business;
    
    our ability to obtain sufficient capital resources to complete acquisitions and develop
new surgery centers;
    
    our ability to compete for physician partners, managed care contracts, patients and
strategic relationships;
    
    adverse weather and other factors beyond our control that may affect our surgery
centers;
    
    our failure to comply with applicable laws and regulations;
    
    the risk of changes in legislation, regulations or regulatory interpretations that may
negatively affect us;
    
    the risk of becoming subject to federal and state investigation;
    
    the risk of regulatory changes that may obligate us to buy out the ownership interests
of physicians who are minority owners of our surgery centers;
    
    potential liabilities associated with our status as a general partner of limited
partnerships;
    
    liabilities for claims brought against our facilities;
    
    our legal responsibility to minority owners of our surgery centers, which may conflict
with our interests and prevent us from acting solely in our best interests;
    
    potential write-off of all or a portion of intangible assets; and
    
    potential liabilities relating to the tax deductibility of goodwill.
 15




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations  (continued)
 Overview
  Three Months EndedMarch 31,2010
    
    2009Procedures
    
    
    308,306
    
    
    
    303,026Continuing centers in operation, end of period
    
    
    203
    
    
    
    191Average number of continuing centers in operation, during period
    
    
    202
    
    
    
    191New centers added during period
    
    
    1
    
    
    
    3Centers under development, end of period
    
    
    1
    
    
    
    3Centers held for sale, end of period
    
    
    1
    
    
    
    1Centers under letter of intent, end of period
    
    
    4
    
    
    
    1
   Sources of Revenues
    
    
    ASCs are paid based upon a percentage of the payments to hospital outpatient departments
pursuant to the hospital outpatient prospective payment system;
    
    a scheduled phase in of the revised rates over four years, beginning January 1, 2008;
and
    
    planned annual increases in the ASC rates beginning in 2010 based on the consumer price
index, or CPI.
  16




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations  (continued)
         17




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations  (continued)
 Critical Accounting Policies
  Results of Operations
       18




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations  (continued)
  Three Months EndedMarch 31,2010
    
    2009Revenues
    
    
    100.0
    %
    
    
    100.0
    %Operating expenses:Salaries and benefits
    
    
    30.0
    
    
    
    30.0Supply cost
    
    
    13.4
    
    
    
    12.1Other operating expenses
    
    
    21.7
    
    
    
    20.8Depreciation and amortization
    
    
    3.4
    
    
    
    3.5Total operating expenses
    
    
    68.5
    
    
    
    66.4Operating income
    
    
    31.5
    
    
    
    33.6Interest expense
    
    
    1.1
    
    
    
    1.3Earnings from continuing operations before income taxes
    
    
    30.4
    
    
    
    32.3Income tax expense
    
    
    5.1
    
    
    
    5.2Net earnings from continuing operations, net of income tax
    
    
    25.3
    
    
    
    27.1Discontinued operations
    
    
    
    
    
    
    Net earnings
    
    
    25.3
    
    
    
    27.1Less net earnings attributable to noncontrolling interests:Net earnings from continuing operations
    
    
    17.9
    
    
    
    19.4Net earnings from discontinued operations
    
    
    
    
    
    
    Total net earnings attributable to noncontrolling interests
    
    
    17.9
    
    
    
    19.4Net earnings attributable to AmSurg Corp. common shareholders
    
    
    7.4
    %
    
    
    7.7
    %Amounts attributable to AmSurg Corp. common shareholders:Earnings from continuing operations, net of income tax
    
    
    7.4
    %
    
    
    7.7
    %Discontinued operations, net of income tax
    
    
    
    
    
    
    Net earnings attributable to AmSurg Corp. common shareholders
    
    
    7.4
    %
    
    
    7.7
    %
  
    
    centers acquired or opened in 2009, which contributed $10.9 million of additional
revenues due to having a full period of operations in 2010; and
    
    center acquired in 2010, which generated $1.3 million in revenues.
  19




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations  (continued)
   
    
    centers acquired or opened during 2009, which resulted in an increase of $2.2 million in
other operating expenses;
    
    an increase of $920,000 in other operating expenses at our 2010 same-center group
resulting primarily from general inflationary cost increases; and
    
    center acquired during 2010, which resulted in an increase of $90,000 in other operating
expenses.
       Liquidity and Capital Resources
  20




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations  (continued)
   
    
    $27.7 million for acquisitions of interests in ASCs and related transactions;
    
    $3.9 million for new or replacement property at existing centers, including $400,000 in
new capital leases; and
    
    $40,000 for centers under development.
       Recent Accounting Pronouncements
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
  21




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Item 3.
Quantitative and Qualitative Disclosures About Market Risk  (continued)
   
 Item 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Control Over Financial Reporting
  22




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Part II
 
 Item 1 Legal Proceedings
  
 Item 1A Risk Factors
  We depend on payments from third-party payors, including government healthcare programs.
If these payments decrease or do not increase as our costs increase, our operating margins
and profitability would be adversely affected.
   
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 3. Defaults Upon Senior Securities
  
 Item 4. Other Information
  
 Item 5. Exhibits
  31.1
    
    Certification of President and Chief Executive Officer pursuant to Rule 13a-14(a)31.2
    
    Certification of Executive Vice President and Chief Financial Officer pursuant to
Rule 13a-14(a)32.1
    
    Section 1350 Certification
 23




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Signature
  AMSURG CORP.Date: May 7, 2010
    By:
    /s/ Claire M. GulmiClaire M. GulmiExecutive Vice President and
Chief Financial Officer

(Principal Financial and Duly Authorized Officer) 24