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UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549Form 10-K
  (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal
    year ended December 31, 2010oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission file number
    001-34435
 EMDEON INC.
 (Exact Name of Registrant as
    Specified in its Charter)
  Delaware(State or Other Jurisdiction
    of
    Incorporation or Organization)

20-5799664(I.R.S. Employer
    Identification No.)3055 Lebanon Pike, Suite 1000
    Nashville, TN(Address of Principal
    Executive Offices)

37214(Zip Code)  (615) 932-3000
 (Registrants telephone
    number, including area code)
  Title of Each Class

Name of Each Exchange on Which RegisteredClass A common stock, $0.00001 par value

New York Stock Exchange   Securities registered pursuant to Section 12(g) of the
    Act:
 None
  o þ
  o þ
  þ o
  Regulation S-T o o
  Regulation S-K Form 10-K Form 10-K. þ
  Rule 12b-2
  Large accelerated
    filer o

Accelerated
    filer þ

Non-accelerated
    filer o(Do not check if a smaller
    reporting company)

Smaller reporting
    company o   Rule 12b-2 o þ
  one-for-one
  Class

Outstanding as of March 4, 2011Class A common stock, $0.00001 par value


91,064,486Class B common stock, $0.00001 par value


24,689,142   DOCUMENTS
    INCORPORATED BY REFERENCE




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##### 





Emdeon
    Inc.
  Table of
    Contents
   
 PagePART IItem 1.


Business


2Item 1A.


Risk Factors


18Item 1B.


Unresolved Staff Comments


39Item 2.


Properties


39Item 3.


Legal Proceedings


39Item 4.


Removed and Reserved


40PART IIItem 5.


Market For Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


40Item 6.


Selected Financial Data


42Item 7.


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


43Item 7A.


Quantitative and Qualitative Disclosures About
    Market Risk


67Item 8.


Financial Statements and Supplementary Data


68Item 9.


Changes in and Disagreements With Accountants on
    Accounting and Financial Disclosure


68Item 9A.


Controls and Procedures


68Item 9B.


Other Information


69PART IIIItem 10.


Directors, Executive Officers and Corporate
    Governance


70Item 11.


Executive Compensation


70Item 12.


Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


70Item 13.


Certain Relationships and Related Transactions,
    and Director Independence


70Item 14.


Principal Accountant Fees and Services


70PART IVItem 15.


Exhibits and Financial Statement Schedules


70Signatures


71EX-10.16EX-21.1EX-23.1EX-31.1EX-31.2EX-32.1EX-32.2




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FORWARD-LOOKING
    STATEMENTS
  Form 10-K
     1




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PART I  ITEM 1.
    BUSINESS  Overview
        Organizational
    Structure and Corporate History
      
    Prior to November 2006, the group of companies that comprised
    Emdeon Business Services, or EBS, was owned by HLTH Corporation,
    currently known as WebMD Health Corp., or WebMD. EBS 2




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Master LLC, or EBS Master, was formed by WebMD to act as a
    holding company for EBS. EBS Master, through its 100% owned
    subsidiary, Emdeon Business Services LLC, or EBS LLC, owns EBS.  
    In September 2006, we were formed by General Atlantic LLC, or
    General Atlantic, as a Delaware limited liability company for
    the purpose of making an investment in EBS Master. In November
    2006, we acquired a 52% interest in EBS Master from WebMD (the
    2006 Transaction). WebMD retained a 48% interest in
    EBS Master upon closing of the 2006 Transaction.
    In February 2008, WebMD sold its remaining 48% interest in EBS
    Master (the 2008 Transaction) to affiliates of
    General Atlantic and Hellman & Friedman LLC, or
    H&F. As a result, following the 2008 Transaction, EBS
    Master was owned by affiliates of General Atlantic, who we
    sometimes refer to herein as the General Atlantic
    Equityholders, and by affiliates of H&F, who we
    sometimes refer to herein as the H&F
    Equityholders. The General Atlantic Equityholders and
    H&F Equityholders are sometimes collectively referred to
    herein as the Principal Equityholders. Together, our
    Principal Equityholders currently control approximately 72% of
    the combined voting power of our Class A common stock and
    Class B common stock.
    In anticipation of our initial public offering, or IPO, we
    converted into a Delaware corporation, changed our name to
    Emdeon Inc. and completed a corporate restructuring
    (collectively, the reorganization transactions).
    In August 2009, we completed the IPO of our Class A common
    stock and began trading on the New York Stock Exchange, or NYSE,
    under the symbol EM.    
    In January 2010, we acquired FutureVision Investment Group,
    L.L.C., or FVTech, a provider of outsourced services
    specializing in electronic data conversion and information
    management solutions. This acquisition allowed us to
    electronically process virtually all patient and third party
    healthcare payments regardless of the format in which payments
    are submitted by combining FVTechs document conversion
    technology with our broad connectivity network and revenue cycle
    management solutions.
    In March 2010, we acquired Healthcare Technology Management
    Services, Inc., or HTMS, a management consulting company focused
    primarily on the healthcare payer market. This acquisition
    allowed us to assist payers in evaluating their existing
    technology strategies and systems in order to help our customers
    implement effective solutions by combining HTMS consulting
    services with our infrastructure, payer relationships and
    distribution network.
    In June 2010, we acquired Chapin Revenue Cycle Management, LLC,
    or Chapin, a technology-enabled provider of accounts receivable
    denial and recovery services. By leveraging Chapins
    contract management systems, this acquisition enhanced our
    ability to assist providers identify and prevent underpayments,
    appeal denials and resubmit claims in a timely manner to help
    ensure that providers collect appropriate payments for services
    rendered.
    In October 2010, we acquired Chamberlin Edmonds &
    Associates, Inc., or CEA, a technology-enabled provider of
    government program eligibility and enrollment services to
    uninsured and underinsured populations to assist our provider
    customers in lowering their incidence of uncompensated care and
    bad-debt expense and increasing overall cash flow.  Our
    Industry
  Payer
    and Provider Landscape
   3




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4




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The
    Revenue and Payment Cycle
      
    Pre-Care/Medical Treatment:  The provider
    verifies insurance benefits available to the patient, ensures
    treatment will adhere to medical necessity guidelines and
    confirms patient personal financial and demographic information.
    For certain uninsured or underinsured populations, providers
    also may assist their patients enroll in government, charity and
    community benefit programs for which they may be eligible.
    Furthermore, in order to receive reimbursement for the care they
    provide, providers are often required by payers to obtain
    pre-authorizations before patient procedures or in advance of
    referring patients to specialists for care. Co-pay and other
    self-pay amounts are also collected. The provider then treats
    the patient and documents procedures conducted and resources
    used.
    Claim Management/Adjudication:  The provider
    prepares and submits paper or electronic claims to a payer for
    services rendered directly or through a clearinghouse, such as
    ours. Before submission, claims are validated for payer-specific
    rules and corrected as necessary. The payer verifies accuracy,
    completeness and appropriateness of the claim and calculates
    payment based on the patients health plan design, out of
    pocket payments relative to established deductibles and the
    existing contract between the payer and provider.
    Payment Distribution:  The payer sends a
    payment and a payment explanation (i.e., remittance advice) to
    the provider and sends an explanation of benefits, or EOB, to
    the patient.
    Payment Posting/Denial Management:  The
    provider posts payments internally, reconciles payments with
    accounts receivable and submits any claims to secondary insurers
    if secondary coverage exists. The provider is responsible for
    evaluating denial/underpayment of a claim and re-submitting it
    to the payer if appropriate.
    Patient Billing and Payment:  The provider
    sends a bill to the patient for any remaining balance and posts
    payments received.  Recent
    Industry Trends
   5




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tm manual-to-electronic-based
 6




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Our
    Market Opportunity and Solutions
    
  Products
    and Services
   7




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Payer
    Products and Services
  Pre-Care
    and Claim Management
  paper-to-EDI
  Payment
    Distribution
    Consulting
    Services
  out-of-date
  Provider
    Products and Services
  Pre-Care/Medical
    Treatment
  out-of-pocket
     8




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Claim
    Management
    Payment
    Posting/Denial Management
      Patient
    Billing and Payment
  point-of-service
  Pharmacy
    Products and Services
  Prescription
    Benefits Administration (Payers)
    Claims
    Management and Adjudication (Providers)
   9




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Payment
    Posting and Denial Management (Providers)
    Customers
  and/or
  Payer
    Services
    Provider
    Services
    Pharmacy
    Services
    Marketing
    and Sales
  e-newsletters
   10




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Technology
    Competition
    
    healthcare transaction processing companies, including those
    providing EDI
    and/or
    internet-based services and those providing services through
    other means, such as paper and fax;
    healthcare information system vendors that support providers and
    their revenue and payment cycle management and clinical
    information exchanges processes, including physician and dental
    practice management system, hospital information system and
    electronic medical record system vendors;
    large information technology and healthcare consulting service
    providers;
    health insurance companies, pharmacy benefit management
    companies, hospital management companies and pharmacies that
    provide or are developing electronic transaction and payment
    distribution services for use by providers
    and/or by
    their members and customers;
    healthcare focused print and mail vendors; and
    financial institutions that have invested in healthcare data
    management assets.  and/or and/or
     11




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Regulation
    and Legislation
  Introduction
        HIPAA
    Administrative Simplification and ARRA Electronic Health Records
    Requirements
  General.
 12




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Transaction Standards.
       13




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NPI Standard.
    Health Plan Identifier.
  Electronic Health Records.
  Regulation
    of Healthcare Relationships and Payments
       14




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False
    Claims Laws and Other Fraud, Waste and Abuse
    Restrictions
         15




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Requirements
    Regarding the Confidentiality, Privacy and Security of Personal
    Information
  Data Protection and Breaches.
  HIPAA Privacy Standards and Security
    Standards.
   16




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Other Requirements.
  Banking
    and Financial Services Industry
    Intellectual
    Property
         17




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Employees
    Available
    Information
  Form 10-K, Form 10-Q, Form 8-K 1-800-SEC-
  Form 10-K, Form 10-Q, Form 8-K
  ITEM 1A.
    RISK
    FACTORS  Overview
    Risks
    Related to our Business
  We
    face significant competition for our products and
    services.
  and/or and/or
   18




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Some
    of our customers compete with us and some, instead of using a
    third party provider, perform internally some of the same
    services that we offer.
    If we
    are unable to retain our existing customers, our business,
    financial condition and results of operations could
    suffer.
  and/or
  If we
    are unable to connect to a large number of payers and providers,
    our product and service offerings would be limited and less
    desirable to our customers.
   19




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The
    failure to maintain our relationships with our channel partners
    or significant changes in the terms of the agreements we have
    with them may have an adverse effect on our ability to
    successfully market our products and services.
    Our
    business and future success may depend on our ability to
    cross-sell our products and services.
    We
    have faced and will continue to face increasing pressure to
    reduce our prices, which may reduce our margins, profitability
    and competitive position.
     20




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Our
    ability to generate revenue could suffer if we do not continue
    to update and improve our existing products and services and
    develop new ones.
    Our
    business will suffer if we fail to successfully integrate
    acquired businesses and technologies or to appropriately assess
    the risks in particular transactions.
    
    our ability to maintain relationships with the customers of the
    acquired business;
    our ability to cross-sell products and services to customers
    with which we have established relationships and those with
    which the acquired businesses have established relationships;
    our ability to retain or replace key personnel;
    potential conflicts in payer, provider, pharmacy, vendor or
    marketing relationships;
    our ability to coordinate organizations that are geographically
    diverse and may have different business cultures; and
    compliance with regulatory requirements.     21




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Achieving
    market acceptance of new or updated products and services is
    necessary in order for them to become profitable and will likely
    require significant efforts and expenditures.
    
    electronic billing, payment and remittance services for payers
    and providers that complement our existing paper-based patient
    billing and payment and payment distribution services;
    electronic prescriptions from healthcare providers to pharmacies
    and pharmacy benefit managers;
    our other pre- and post-adjudication services for payers and
    providers;
    payment integrity and fraud, waste and abuse services for payers
    and providers;
    government program eligibility and enrollment services for
    providers;
    accounts receivable management, denial management, appeals and
    collection improvement services for providers;
    healthcare and information technology consulting services for
    payers; and
    decision support, clinical information exchange or other
    business intelligence solutions.    A
    prolonged economic downturn could have a material adverse effect
    on our business, financial condition and results of
    operations.
    There
    are increased risks of performance problems during times when we
    are making significant changes to our products and services or
    to systems we use to provide services. In addition,
    implementation of our products and services and cost savings
    initiatives may cost more, may not provide the benefits
    expected, may take longer than anticipated or may increase the
    risk of performance problems.
   22




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Disruptions
    in service or damages to our data or other operation centers, or
    other software or systems failures, could adversely affect our
    business.
    denial-of-service
   23




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We may
    be liable to our customers and may lose customers if we provide
    poor service, if our products and services do not comply with
    our agreements or if our software products or transmission
    systems contain errors or experience failures.
          We
    have a substantial amount of indebtedness, which could affect
    our financial condition.
   24




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
    obtain necessary additional financing for working capital,
    capital expenditures or other purposes in the future;
    plan for, or react to, changes in our business and the
    industries in which we operate;
    make future acquisitions or pursue other business
    opportunities; and
    react in an extended economic downturn.    The
    credit markets may affect our ability to refinance our existing
    debt or obtain additional debt financing on acceptable
    terms.
  and/or
  The
    terms of our credit agreements may restrict our current and
    future operations, which would adversely affect our ability to
    respond to changes in our business and to manage our
    operations.
    
    incur additional debt;
    issue preferred stock;
    create liens;
    create or incur contingent obligations;
    engage in sales of assets or subsidiary stock;
    enter into sale-leaseback transactions;
    make investments and acquisitions;
    change our fiscal year or our lines of business;
    enter into hedging arrangements;
    make capital expenditures;
    pay dividends and make other restricted payments;
    enter into transactions with affiliates; and 25




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
    transfer all or substantially all of our assets or enter into
    merger or consolidation transactions.    Recent
    and future developments in the healthcare industry could
    adversely affect our business
       26




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
    government regulation or private initiatives that affect the
    manner in which providers interact with patients, payers or
    other healthcare industry constituents, including changes in
    pricing or means of delivery of healthcare products and services;
    reductions in governmental funding for healthcare, in addition
    to reductions required by PPACA; and
    adverse changes in business or economic conditions affecting
    payers, providers, pharmaceutical companies, medical device
    manufacturers or other healthcare industry constituents.    
    changes in the billing patterns of providers;
    changes in the design of health insurance plans;
    changes in the contracting methods payers use in their
    relationships with providers; and
    decreases in marketing expenditures by pharmaceutical companies
    or medical device manufacturers, as a result of governmental
    regulation or private initiatives that discourage or prohibit
    promotional activities by pharmaceutical or medical device
    companies.    Government
    regulation creates risks and challenges with respect to our
    compliance efforts and our business strategies.
   27




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
    Data Protection and Breaches.  In recent years,
    there have been a number of well-publicized data breaches
    involving the improper dissemination of personal information of
    individuals both within and outside of the healthcare industry.
    Many states have responded to these incidents by enacting laws
    requiring holders of personal information to maintain safeguards
    and to take certain actions in response to a data breach, such
    as providing prompt notification of the breach to affected
    individuals. In many cases, these laws are limited to electronic
    data, but states are increasingly enacting or considering
    stricter and broader requirements. Effective August 2009,
    Covered Entities must report breaches of unsecured protected
    health information to affected individuals without unreasonable
    delay but not to exceed 60 days of discovery of the breach
    by a Covered Entity or its agents. Notification must also be
    made to HHS and, in certain circumstances involving large
    breaches, to the media. Business Associates must report breaches
    of unsecured protected health information to Covered Entities
    within 60 days of discovery of the breach by the Business
    Associate or its agents. In addition, the FTC has prosecuted
    certain data breach cases as unfair and deceptive acts or
    practices under the Federal Trade Commission Act. Further, in
    October 2007, the FTC issued a final rule requiring creditors,
    which may include some of our customers, to implement identity
    theft prevention programs to detect, prevent and mitigate
    identity theft in connection with customer accounts. The
    enforcement date for this rule was postponed until
    December 31, 2010. Although Congress recently passed
    legislation that restricts the definition of
    creditor and exempts many health providers from
    complying with this rule, we may be required to apply additional
    resources to our existing process to assist our affected
    customers in complying with this rule. We have implemented and
    maintain physical, technical and administrative safeguards
    intended to protect all personal data and have processes in
    place to assist us in complying with all applicable laws and
    regulations regarding the protection of this data and properly
    responding to any security breaches or incidents; however, we
    cannot be sure that these safeguards are adequate to protect all
    personal data or assist us in complying with all applicable laws
    and regulations regarding the protection of personal data.
    HIPAA and Other Privacy and Security
    Requirements.  There are numerous federal and
    state laws and regulations related to the privacy and security
    of personal health information. In particular, regulations
    promulgated pursuant to HIPAA established privacy and security
    standards that limit the use and disclosure of individually
    identifiable health information and require the implementation
    of administrative, physical and technological safeguards to
    ensure the confidentiality, integrity and availability of
    individually identifiable health information in electronic form.
    Our operations as a healthcare clearinghouse are directly
    subject to the Privacy Standards and Security Standards. In
    addition, our payer and 28




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provider customers are also directly subject to the Privacy
    Standards and Security Standards and are required to enter into
    written agreements with us, known as business associate
    agreements, which require us to safeguard individually
    identifiable health information and restrict how we may use and
    disclose such information. Effective February 2010, ARRA
    extended the direct application of certain provisions of the
    Privacy Standards and Security Standards to us when we are
    functioning as a Business Associate of our payer or provider
    customers. In addition, in July 2010, HHS published a NPRM to
    modify the Privacy Standards, Security Standards and enforcement
    rules to align with the HITECH Acts statutory changes that
    would require substantially all of our Business Associate
    agreements to be re-contracted within eighteen months of the
    final rule. To date, final regulations have not been issued and
    HHS has said that final regulations are expected to be released
    in March or April of 2011. If the final regulations require
    re-contracting of our Business Associate agreements, then we
    will be required to apply additional resources to the
    re-contracting process and our affected customers in complying
    with this rule.    
    HIPAA Transaction and Identifier
    Standards.  HIPAA and its implementing regulations
    also mandate format, data content and provider identifier
    standards that must be used in certain electronic transactions,
    such as claims, payment advice and eligibility inquiries.
    Although our systems are fully capable of transmitting
    transactions that comply with these requirements, some payers
    and healthcare clearinghouses with which we conduct business
    interpret HIPAA transaction requirements differently than we do
    or may require us to use legacy formats or include legacy
    identifiers as they transition to full compliance. However,
    PPACA also requires HHS to establish operating rules to promote
    uniformity in the implementation of each standardized electronic
    transaction. Where payers or healthcare clearinghouses require
    conformity with their interpretations or require us to
    accommodate legacy transactions or identifiers as a condition of
    successful transactions, we seek to comply with their
    requirements, but may be subject to enforcement actions as a
    result. In addition, PPACA requires HHS to establish standards
    for additional electronic healthcare transactions including
    electronic funds transfer and health claims attachment
    transactions.    
    Anti-Kickback and Anti-Bribery Laws.  A number
    of federal and state laws govern patient referrals, financial
    relationships with physicians and other referral sources and
    inducements to providers and patients. For example, the federal
    Anti-Kickback Law prohibits any person or entity from offering,
    paying, soliciting or receiving, directly or indirectly,
    anything of value with the intent of generating referrals of
    patients covered by Medicare, Medicaid or other federal
    healthcare programs. Many states also have similar anti-kickback
    laws that are not necessarily limited to items or services for
    which 29




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payment is made by a federal healthcare program. Moreover, both
    federal and state laws forbid bribery and similar behavior. Any
    determination by a state or federal regulatory agency that any
    of our activities or those of our customers or vendors violate
    any of these laws could subject us to civil or criminal
    penalties, could require us to change or terminate some portions
    of our business, could require us to refund a portion of our
    service fees, could disqualify us from providing services to
    customers who are or do business with government programs and
    could have an adverse effect on our business. Even an
    unsuccessful challenge by regulatory authorities of our
    activities could result in adverse publicity and could require a
    costly response from us.  
    False or Fraudulent Claim Laws.  There are
    numerous federal and state laws that prohibit false or
    fraudulent claims. False or fraudulent claims include, but are
    not limited to, billing for services not rendered, failing to
    refund known overpayments, misrepresenting actual services
    rendered, improper coding and billing for medically unnecessary
    items or services. The FCA and some state false claims laws
    contain whistleblower provisions that allow private individuals
    to bring actions on behalf of the government alleging that the
    defendant has defrauded the government. Whistleblowers, the
    federal government and some courts have taken the position that
    entities that have violated other statutes, such as the federal
    anti-kickback law, have thereby submitted false claims under the
    FCA. We rely on our customers to provide us with accurate and
    complete information. Errors and the unintended consequences of
    data manipulations by us or our systems with respect to entry,
    formatting, preparation or transmission of claim information may
    be determined or alleged to be in violation of these laws and
    regulations or could adversely impact the compliance of our
    customers.
    Banking and Financial Services Industry
    Laws.  The banking and financial services industry
    is subject to numerous laws, regulations and industry standards,
    some of which may impact our operations and subject us, our
    vendors and our customers to liability as a result of the
    payment distribution products and services we offer. Although we
    do not act as a bank, we offer products and services that
    involve banks, or vendors who contract with banks and other
    regulated providers of financial services. As a result, we may
    be impacted by banking and financial services industry laws,
    regulations and industry standards, such as licensing
    requirements, solvency standards, requirements to maintain the
    privacy and security of nonpublic personal financial information
    and FDIC deposit insurance limits. Further, our products and
    services may impact the ability of our payer customers to comply
    with state prompt payment laws. These laws require payers to pay
    healthcare claims meeting the statutory or regulatory definition
    of a clean claim to be paid within a specified time
    frame.  Legislative
    changes may impede our ability to utilize our off-shore service
    capabilities.
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Failure
    by our customers to obtain proper permissions or provide us with
    accurate and appropriate data may result in claims against us or
    may limit or prevent our use of data which could harm our
    business.
    Certain
    of our products and services present the potential for
    embezzlement, identity theft or other similar illegal behavior
    by our employees or contractors with respect to third
    parties.
  and/or and/or
  Contractual
    relationships with customers that are governmental agencies or
    are funded by government programs may impose special burdens on
    us and provide special benefits to those
    customers.
    
    termination when appropriated funding for the current fiscal
    year is exhausted;
    termination for the governmental customers convenience,
    subject to a negotiated settlement for costs incurred and profit
    on work completed, along with the right to place contracts out
    for bid before the full contract term, as well as the right to
    make unilateral changes in contract requirements, subject to
    negotiated price adjustments;
    compliance and reporting requirements related to, among other
    things, agency specific policies and regulations, equal
    employment opportunity, affirmative action for veterans and
    workers with disabilities and accessibility for the disabled; 31




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
    broad audit rights; and
    specialized remedies for breach and default, including setoff
    rights, retroactive price adjustments and civil or criminal
    fraud penalties, as well as mandatory administrative dispute
    resolution procedures instead of state contract law remedies.  and/or conflict-of-interest
  The
    protection of our intellectual property requires substantial
    resources.
    Third
    parties may claim that we are infringing their intellectual
    property, and we could suffer significant litigation or
    licensing expenses or be prevented from selling products or
    services.
    A
    write-off of all or a part of our identifiable intangible assets
    or goodwill would adversely affect our operating results and
    reduce our net worth.
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Our
    success depends in part on our ability to identify, recruit and
    retain skilled management, including our executive officers, and
    technical personnel. If we fail to recruit and retain suitable
    candidates or if our relationship with our employees changes or
    deteriorates, there could be an adverse effect on our
    business.
  and/or
  Lengthy
    sales, installation and implementation cycles for some of our
    solutions may result in delays or an inability to generate
    revenues from these solutions.
    Risks
    Related to our Organization and Structure
  We are
    a holding company and our principal asset is our ownership of
    equity interests in EBS Master, and we are accordingly dependent
    upon distributions from EBS Master to pay dividends, if any,
    taxes and other expenses.
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and/or
  We
    have elected to be exempt from certain corporate governance
    requirements since we are a controlled company
    within the meaning of the NYSE rules and, as a result, our
    stockholders do not have the protections afforded by these
    corporate governance requirements.
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We are
    required to pay an affiliate of our Principal Equityholders and
    the EBS Equity Plan Members for certain tax benefits we may
    claim, and the amounts we may pay could be
    significant.
    step-up
  step-up
  step-up
     35




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##### Table of Contents



36




---



##### Table of Contents



Risks
    Related to Ownership of Our Class A Common Stock
  The
    market price of our Class A common stock may be volatile,
    and your investment in our Class A common stock could
    suffer a decline in value.
    
    our actual or anticipated operating performance and growth and
    the actual or anticipated operating performance and growth of
    our competitors;
    the overall performance of the equity markets;
    actions of our historical equity investors, including sales of
    common stock by our directors and executive officers;
    public response to press releases and other announcements by us
    and our competitors, including announcements of acquisitions,
    business developments and new products and services;
    changes to our senior management team;
    legal and regulatory changes;
    publication of research reports or news stories about us, our
    competitors or our industry or positive or negative
    recommendations or withdrawal of research coverage by securities
    analysts; and
    general economic, industry and market conditions, and in
    particular those conditions specific to the healthcare industry.    We do
    not intend to pay dividends in the foreseeable future, and,
    because we are a holding company, we may be unable to pay
    dividends.
   37




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##### Table of Contents



Provisions
    in our organizational documents may delay or prevent our
    acquisition by a third party.
    
    provisions relating to the number of directors on our board of
    directors and the appointment of directors upon an increase in
    the number of directors or vacancy on our board of directors;
    provisions requiring a 66 and
    2/3%
    stockholder vote for the amendment of certain provisions of our
    certificate of incorporation, such as provisions relating to the
    election of directors and the inability of stockholders to act
    by written consent or call a special meeting, and for the
    adoption, amendment and repeal of our by-laws;
    provisions barring stockholders from calling a special meeting
    of stockholders or requiring one to be called;
    elimination of the right of our stockholders to act by written
    consent; and
    provisions that set forth advance notice procedures for
    stockholders nominations of directors and proposals for
    consideration at meetings of stockholders.    Failure
    to establish and maintain effective internal controls over
    financial reporting could have an adverse effect on our
    business, operating results and stock price.
    We
    have and will continue to incur additional costs as a public
    company, and our management may be required to devote
    substantial time and attention to compliance
    initiatives.
   38




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##### Table of Contents



ITEM 1B.
    UNRESOLVED
    STAFF COMMENTS    ITEM 2.
    PROPERTIES              ITEM 3.
    LEGAL
    PROCEEDINGS   39




---



##### Table of Contents



ITEM 4.
    REMOVED
    AND RESERVED PART II  ITEM 5.
    MARKET
    FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
    AND ISSUER PURCHASES OF EQUITY SECURITIES  Market
    Information
    High


Low2010First Quarter

$
16.88


$
14.77Second Quarter


16.85



12.50Third Quarter


13.08



10.07Fourth Quarter


14.00



11.822009First Quarter

$
N/A


$
N/ASecond Quarter


N/A



N/AThird Quarter


18.00



15.21Fourth Quarter


16.20



14.56   one-for-one
  Holders
  ,
  Dividends
   40




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##### Table of Contents



Performance
    Graph
    Comparison
    of Cumulative Total Return
    Assumes Initial Investment of $100
    December 2010
  
  8/12/2009


9/30/2009


12/31/2009


3/31/2010


6/30/2010


9/30/2010


12/31/2010Emdeon Inc.



100.00




98.06




92.31




100.01




75.85




73.73




81.96S&P 500 Index  Total Returns



100.00




105.39




111.75




117.77




104.32




116.10




128.59NYSE Health Services Index



100.00




100.16




112.90




119.74




102.91




109.89




119.84    41




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##### Table of Contents



ITEM 6.
    SELECTED
    FINANCIAL DATA        BusinessEmdeon Inc.



Services(Successor)(1)(2)



(Predecessor)(1)Period from



Period fromNovember 16,



January 1, 2006Year Ended



Year Ended



Year Ended



Year Ended



2006 thru



thruDecember 31,



December 31,



December 31,



December 31,



December 31,



November 15,2010



2009



2008



2007



2006



2006(In thousands, except share and per share data)Statement of Operations Data:Revenues


$
1,002,152



$
918,448



$
853,599



$
808,537



$
87,903



$
663,186Costs and expenses:Cost of operations



612,594




562,867




541,563




514,918




56,628




425,108Development and engineering



35,515




33,928




28,625




28,198




2,782




21,782Sales, marketing, general and administrative



111,948




113,701




91,212




94,475




12,762




80,352Depreciation and amortization



124,721




105,321




97,864




62,811




7,127




30,440Loss on abandonment of leased properties



(105
)



1,675




3,081














Total costs and expenses



884,673




817,492




762,345




700,402




79,299




557,682Operating income



117,479




100,956




91,254




108,135




8,604




105,504Interest income



(14
)



(75
)



(963
)



(1,567
)



(139
)



(67
)Interest expense



61,031




70,246




71,717




74,325




10,113




25Other



(9,284
)



(519
)


















Income (loss) before income taxes



65,746




31,304




20,500




35,377




(1,370
)



105,546Income tax provision



32,579




17,301




8,567




18,101




1,014




42,004Net income (loss)



33,167




14,003




11,933




17,276




(2,384
)



63,542Net income attributable to noncontrolling interest



13,621




4,422




2,702














Net income (loss) attributable to Emdeon Inc.


$
19,546



$
9,581



$
9,231



$
17,276



$
(2,384
)


$
63,542Basic and diluted earnings (loss) per share to Class A
    common stockholdersBasic


$
0.22



$
0.12



$
0.12



$
0.33



$
(0.05
)


$
Diluted


$
0.21



$
0.12



$
0.12



$
0.17



$
(0.05
)


$
Weighted average number of shares used in computing earnings per
    share:Basic



90,100,070




82,459,169




74,775,039




52,000,000




52,000,000




Diluted



90,832,631




82,525,002




100,000,000




100,000,000




52,000,000




  42




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##### Table of Contents



Emdeon Inc.At


At


At


At


AtDecember 31,


December 31,


December 31,


December 31,


December 31,2010


2009


2008


2007


2006(In thousands)Balance Sheet Data:Cash and cash equivalents

$
99,188


$
211,999


$
71,478


$
33,687


$
30,513Total assets


2,488,563



2,229,413



2,000,279



1,357,229



1,372,853Total
    debt - (3)


946,243



840,682



825,230



871,934



907,349Tax receivable obligation to related parties


142,279



142,044











Total equity

$
1,055,288


$
979,869


$
878,153


$
300,969


$
292,657     (1)
    
    Our financial results prior to November 16, 2006 represent
    the financial results of the group of wholly-owned subsidiaries
    of WebMD that comprised EBS. On November 16, 2006, WebMD
    sold a 52% interest in EBS Master (which was formed as a holding
    company for our business in connection with that transaction) to
    an affiliate of General Atlantic. Accordingly, the financial
    information presented reflects the results of operation and
    financial condition of EBS before the November 16, 2006
    transaction (Predecessor) and of us after the November 16,
    2006 transaction (Successor).(2)
    
    As a result of our history of business combinations, our
    financial position and results of operations may not be
    comparable for each of the periods presented. See
    Business  Organizational Structure and
    Corporate History in Part I of this Annual Report.(3)
    
    Our debt at December 31, 2010, 2009 and 2008 is reflected
    net of unamortized debt discount of approximately
    $42.6 million, $53.3 million and $64.7 million,
    respectively, related to original loan fees and purchase
    accounting adjustments to discount the debt to fair value in
    conjunction with the 2008 Transaction. Total debt as of
    December 31, 2010 and 2009 includes an obligation of
    approximately $40.3 million and $37.6 million,
    respectively, related to our data sublicense obligation.  ITEM 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS    Overview
     43




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44




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##### Table of Contents



Our
    Revenues and Expenses
    and/or and/or
   45




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46




---



##### Table of Contents



Significant
    Items Affecting Comparability
    Acquisitions
    and Divestitures
    Date

Business

Description

Affected SegmentAcquisitions:September 2008

Patient statements business of GE Healthcare

Patient billing and payment solutions

ProviderJune 2009

The Sentinel Group

Payment integrity solutions

PayerJuly 2009

eRx Network, L.L.C. (eRx)

Electronic pharmacy solutions

PharmacyOctober 2009 and April 2010

Data Rights

Acquired certain additional rights to specified uses of data
    from WebMD

N/AJanuary 2010

FVTech

Electronic data conversion and management solutions

Provider; PayerMarch 2010

HTMS

Consulting solutions

PayerJune 2010

Chapin

Accounts receivable denial and recovery services

ProviderOctober 2010

CEA

Government program eligibility and enrollment services

ProviderDivestiture:October 2009

Control-o-Fax

Office supplies and print services

Provider    47




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##### Table of Contents



Efficiency
    Measures
  and/or
  Income
    Taxes
    Year Ended December 31,2010


2009


2008Statutory U.S. federal tax rate


35.00
%


35.00
%


35.00
%State income taxes (net of federal benefit)


2.78



8.75



3.57Meals and entertainment


0.63



0.39



0.52Other


(1.38
)


2.60



1.38Tax credits


(0.63
)


(1.14
)


Equity-based compensation


2.06



5.67



1.61Non-timing basis differences


12.49



33.57



(22.62
)Noncontrolling interest


(7.20
)


(5.17
)


(5.09
)Foreign loss not benefited


(0.34
)


3.29



5.85Return to provision adjustments


1.34



10.12



(4.28
)Change in valuation allowance


4.80



(37.81
)


25.85Effective income tax rate


49.55
%


55.27
%


41.79
%   Equity-based compensation 
  Non-timing basis differences
 48




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##### Table of Contents



Noncontrolling interest
  Return to provision adjustments
  Change in valuation allowance
  Stock-Based
    and Equity-Based Compensation Expense
      
    Change in the estimated fair value of liability
    awards.  All equity-based awards granted under the
    EBS Equity Plan and EBS Phantom Plan prior to the second quarter
    of 2009 were classified as liabilities due to certain repurchase
    features. As liabilities, we were required to adjust the
    equity-based awards to fair value at the end of each quarter.
    The fair value of these liabilities generally fluctuated with
    the value of the underlying EBS Units.
    Modification of equity-based awards.  In June
    2009, we modified the repurchase features of all Grant Units
    previously granted under the EBS Equity Plan. Following this
    modification, all Grant Units were reclassified as equity
    awards. Immediately prior to this reclassification, we adjusted
    the value of these Grant Units to their fair value. In addition
    to a change in estimate recognized at the modification date, 49




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##### Table of Contents



we also began to recognize compensation expense prospectively
    based on the increased fair value of these Grant Units at the
    modification date.  
    Conversion in connection with our IPO.  In
    connection with the IPO and reorganization transactions, the
    Phantom Units were converted into shares of our Class A
    common stock, restricted Class A common stock units and
    options to purchase shares of our Class A common stock
    under the 2009 Plan. As a result of the IPO and this conversion,
    in addition to a change in estimate recognized at the IPO date,
    we also began recognizing compensation expense prospectively
    based on the fair value of these Phantom Units at the IPO date.
    Additional 2009 Plan Grants.  On and since the
    IPO date, we have granted restricted Class A common stock
    units and options to purchase shares of our Class A common
    stock under the 2009 Plan to certain of our employees and
    directors, some of which contain performance conditions.  Interest
    Rate Swap
    Critical
    Accounting Estimates
    
    it requires assumptions to be made that were uncertain at the
    time the estimate was made; and
    changes in the estimate or different estimates that could have
    been made could have a material impact on our consolidated
    results of operations and financial condition.      Revenue
    Recognition
   50




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##### Table of Contents



Business
    Combinations
       51




---



##### Table of Contents



Goodwill
    and Intangible Assets
    Customer relationships


9 to 20 yearsTrade names


20 yearsData sublicense agreement


8 yearsNon-compete agreements


1 to 5 yearsBacklog


1 year           and/or
   52




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##### Table of Contents



Income
    Taxes
        Equity-Based
    Compensation
      2009 Equity Plan OptionsYear Ended


Year EndedDecember 31,


December 31,2010


2009Weighted average fair value

$
6.95


$
7.54Expected dividend yield






Expected volatility


43.10
%


47.00
%Risk-free interest rate


2.53
%


2.55
%Expected term (years)


6.3



6.3   Expected dividend yield
  Expected volatility
  Risk-free interest rate
 53




---



##### Table of Contents



Expected term
    Tax
    Receivable Agreements
     54




---



##### Table of Contents



Results
    of Operations
    Year Ended


Year Ended


Year EndedDecember 31, 2010


December 31, 2009


December 31, 2008% of





% of





% ofAmount


Revenue(1)


Amount


Revenue(1)


Amount


Revenue(1)Revenues
    (2)Payer Services

$
431,916



43.1
%

$
397,492



43.3
%

$
372,159



43.6
%Provider Services


492,345



49.1



462,513



50.4



444,845



52.1Pharmacy Services


81,794



8.2



60,843



6.6



39,067



4.6Eliminations


(3,903
)


(0.4
)


(2,400
)


(0.3
)


(2,472
)


(0.3
)Total revenues


1,002,152



100.0



918,448



100.0



853,599



100.0Costs of operationsPayer Services


283,050



65.5



253,473



63.8



242,950



65.3Provider Services


303,252



61.6



294,700



63.7



292,844



65.8Pharmacy Services


30,067



36.8



16,668



27.4



7,612



19.5Eliminations


(3,775
)






(1,974
)






(1,843
)Total costs of operations


612,594



61.1



562,867



61.3



541,563



63.4Development and engineeringPayer Services


12,127



2.8



12,677



3.2



10,472



2.8Provider Services


16,078



3.3



15,294



3.3



14,015



3.2Pharmacy Services


7,310



8.9



5,957



9.8



4,138



10.6Total development and engineering


35,515



3.5



33,928



3.7



28,625



3.4Sales, marketing, general and adminPayer Services


26,700



6.2



25,803



6.5



23,286



6.3Provider Services


30,711



6.2



31,978



6.9



30,475



6.9Pharmacy Services


5,970



7.3



8,047



13.2



3,864



9.9Eliminations


(128
)






(426
)






(624
)Total sales, marketing, general and admin excluding corporate


63,253



6.3



65,402



7.1



57,001



6.7Income from segment operations


290,790



29.0



256,251



27.9



226,410



26.5Corporate expense


48,590



4.8



49,974



5.4



37,292



4.4Depreciation and amortization


124,721



12.4



105,321



11.5



97,864



11.5Operating income


117,479



11.7



100,956



11.0



91,254



10.7Interest income


(14
)


(0.0
)


(75
)


(0.0
)


(963
)


(0.1
)Interest expense


61,031



6.1



70,246



7.6



71,717



8.4Other (gain) loss


(9,284
)


(0.9
)


(519
)


(0.1
)






Income before income tax provision


65,746



6.6



31,304



3.4



20,500



2.4Income tax provision


32,579



3.3



17,301



1.9



8,567



1.0Net income


33,167



3.3
%


14,003



1.5
%


11,933



1.4
%Net income attributable to noncontrolling interest


13,621







4,422







2,702Net income attributable to Emdeon Inc.

$
19,546






$
9,581






$
9,231     (1)
    
    All references to percentage of revenues for expense components
    refer to the percentage of revenues for such segment.(2)
    
    See
    Note 23-Segment
    Reporting to our consolidated financial statements
    included elsewhere in this Annual Report for further detail of
    our revenues within each reportable segment. 55




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##### Table of Contents



Year
    Ended December 31, 2010 Compared to Year Ended
    December 31, 2009
  Revenues
        December 31,


December 31,2010


2009


$ ChangeClaims management

$
194,239


$
184,605


$
9,634Payment services


234,176



211,985



22,191Intersegment revenue


3,501



902



2,599$
431,916


$
397,492


$
34,424         December 31,


December 31,2010


2009


$ ChangePatient statements

$
262,521


$
274,390


$
(11,869
)Revenue cycle management


198,019



155,112



42,907Dental


31,403



31,513



(110
)Intersegment revenue


402



1,498



(1,096
)$
492,345


$
462,513


$
29,832        56




---



##### Table of Contents



Cost
    of Operations
          Development
    and Engineering Expense
   57




---



##### Table of Contents



Sales,
    Marketing, General and Administrative Expense (Excluding
    Corporate Expense)
          Corporate
    Expense
    Depreciation
    and Amortization Expense
    Interest
    Expense
   58




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##### Table of Contents



Income
    Taxes
    Year
    Ended December 31, 2009 Compared to Year Ended
    December 31, 2008
  Revenues
      December 31,


December 31,2009


2008


$ ChangeClaims management

$
184,605


$
179,930


$
4,675Payment services


211,985



191,874



20,111Intersegment revenue


902



355



547$
397,492


$
372,159


$
25,333         December 31,


December 31,2009


2008


$ ChangePatient statements

$
274,390


$
266,233


$
8,157Revenue cycle management


155,112



144,904



10,208Dental


31,513



31,591



(78
)Intersegment revenue


1,498



2,117



(619
)$
462,513


$
444,845


$
17,668    59




---



##### Table of Contents



Cost
    of Operations
          Development
    and Engineering Expense
   60




---



##### Table of Contents



Sales,
    Marketing, General and Administrative Expense (Excluding
    Corporate Expense)
          Corporate
    Expense
    Depreciation
    and Amortization Expense
   61




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##### Table of Contents



Interest
    Income
    Interest
    Expense
      Income
    Taxes
    Liquidity
    and Capital Resources
  General
       62




---



##### Table of Contents



Cash
    Flows
  Operating
    Activities
    and/or
  Investing
    Activities
      Financing
    Activities
      Credit
    Facilities
   63




---



##### Table of Contents



64




---



##### Table of Contents



Covenants
               65




---



##### Table of Contents



Commitments
    and Contingencies
    Payments by PeriodTotal


2011


2012-2013


2014-2015


Thereafter(In thousands)Long-term Obligations

$
988,873


$
12,494


$
781,003


$
183,798


$
11,578Expected interest(a)


98,272



31,684



59,276



6,428



884Interest rate swap agreement(b)


10,738



10,738











Tax receivable agreement obligations to related parties(c)


142,279



3,746



24,405



28,025



86,103Operating lease obligations(d)


52,748



8,373



12,455



10,813



21,107Contingent consideration obligations(e)


16,298



1,306



14,992







Purchase obligations and other(f)


8,461



4,877



3,584







Total contractual obligations(g)

$
1,317,669


$
73,218


$
895,715


$
229,064


$
119,672     (a)
    
    Expected interest consists of both interest payable under our
    Credit Agreements and imputed interest payable under our data
    sublicense agreement. Interest related to our Credit Agreements
    is based on our interest rates in effect as of December 31,
    2010 and assumes that we make no optional or mandatory
    prepayments of principal prior to maturity of the Credit
    Agreements. Because the interest rates under our Credit
    Agreements are variable, actual payments may differ.(b)
    
    Under our interest rate swap agreement, we receive a three month
    LIBOR rate and pay a fixed rate of 4.944% on a specified
    notional amount. The above payments represent the present value
    of the net amounts we expect to pay in the respective periods
    based upon the three-month LIBOR yield curve in effect at
    December 31, 2010.(c)
    
    Represents amount due based on facts and circumstances existing
    as of December 31, 2010. The timing and/or amount of the
    aggregate payments due may vary based on a number of factors,
    including the amount and timing of the taxable income the
    Company generates in the future and the tax rate then
    applicable, the use of loss carryovers, future exchanges of EBS
    Units (and corresponding shares of Class B common stock)
    into Class A common stock and the portion of payments under
    the tax receivable agreements constituting imputed interest or
    amortizable basis.(d)
    
    Represents amounts due under existing operating leases related
    to our offices and other facilities.(e)
    
    Contingent consideration transferred in connection with certain
    2010 acquisitions included contingent obligations to make
    additional payments based on the achievement of certain future
    financial performance targets. Because the ultimate timing and
    amount of payments are dependent upon the outcome of future
    events, the timing and/or amount of these additional payments
    may vary from this estimate.(f)
    
    Represents contractual commitments under certain
    telecommunication and other supply contracts as well as other
    obligations. Where our purchase commitments are cumulative over
    a period of time, (i.e. no 66




---



##### Table of Contents



specified annual commitment), the table above assumes such
    commitments will be fulfilled on a ratable basis over the
    commitment period.(g)
    
    Total contractual obligations exclude liabilities for uncertain
    tax positions of $1,368 due to the high degree of uncertainty
    regarding the timing of future cash outflows, if any, to the
    taxing authorities.    Off-Balance
    Sheet Arrangements
    Recent
    Accounting Pronouncements
  Page F-1
  ITEM 7A.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK           67




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ITEM 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA  Page F-1
  ITEM 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE    ITEM 9A.
    CONTROLS
    AND PROCEDURES  Conclusion
    Regarding the Effectiveness of Disclosure Controls and
    Procedures
  Rules 13a-15(e) Rule 15d-15(e)
  Managements
    Report on Internal Control Over Financial Reporting
  Rules 13a-15(f) 15d-15(f)
  
    pertain to the maintenance of records that, in reasonable
    detail, accurately and fairly reflect the transactions and
    dispositions of the assets of the Company;
    provide reasonable assurance that transactions are recorded as
    necessary to permit preparation of financial statements in
    accordance with U.S. generally accepted accounting
    principles, and that receipts and expenditures of the Company
    are being made only in accordance with authorizations of
    management and directors of the Company; and
    provide reasonable assurance regarding prevention or timely
    detection of unauthorized acquisition, use or disposition of the
    Companys assets that could have a material effect on the
    financial statements.       68




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Page F-2
  Changes
    in Internal Control Over Financial Reporting
    ITEM 9B.
    OTHER
    INFORMATION      Award as a Percentage ofAmount of Award


Program Target BonusGeorge Lazenby, IV

$
91,679



30.6
%Chief Executive OfficerTracy L. Bahl

$
73,399



30.6
%Executive ChairmanBob A. Newport, Jr.

$
48,131



30.6
%Chief Financial OfficerJ. Philip Hardin

$
44,311



30.6
%Executive Vice President-Provider ServicesGregory T. Stevens

$
45,839



30.6
%Executive Vice President, General Counsel and Secreatary   Form 8-K,
 69




---



##### Table of Contents



PART III  ITEM 10.
    DIRECTORS,
    EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE    ITEM 11.
    EXECUTIVE
    COMPENSATION    ITEM 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS    ITEM 13.
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
    INDEPENDENCE    ITEM 14.
    PRINCIPAL
    ACCOUNTANT FEES AND SERVICES   PART IV  ITEM 15.
    EXHIBITS AND
    FINANCIAL STATEMENT SCHEDULES  List of Documents Filed
  Financial Statements
    Financial Statement Schedules
    Exhibits
    Exhibits
     70




---



##### Table of Contents



Index to
    Consolidated Financial Statements
  PageReport of Independent Registered Public
    Accounting Firm on Internal Control Over Financial Reporting


F-2Report of Independent Registered Public
    Accounting Firm on Financial Statements


F-3Consolidated Balance Sheets as of
    December 31, 2010 and 2009


F-4Consolidated Statements of Operations for the
    years ended December 31, 2010, 2009 and 2008


F-5Consolidated Statements of Equity for the years
    ended December 31, 2010, 2009 and 2008


F-6Consolidated Statements of Cash Flows for the
    years ended December 31, 2010, 2009 and 2008


F-7Notes to Consolidated Financial Statements


F-8Schedule I


S-1Schedule II


S-4  F-1




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON INTERNAL
    CONTROL OVER FINANCIAL REPORTING                       F-2




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
    ON FINANCIAL STATEMENTS                  F-3




---



##### Table of Contents



Emdeon
    Inc.
  Consolidated Balance Sheets
  December 31,


December 31,2010


2009(Amounts in thousands, except share and per share amounts)ASSETSCurrent assets:Cash and cash equivalents

$
99,188


$
211,999Accounts receivable, net of allowance for doubtful accounts of
    $5,394 and $4,433 at December 31, 2010 and
    December 31, 2009, respectively


174,191



150,009Deferred income tax assets


4,911



4,924Prepaid expenses and other current assets


25,020



16,632Total current assets


303,310



383,564Property and equipment, net


231,307



152,091Goodwill


908,310



703,027Intangible assets, net


1,035,886



989,280Other assets, net


9,750



1,451Total assets

$
2,488,563


$
2,229,413LIABILITIES AND EQUITYCurrent liabilities:Accounts payable

$
4,732


$
9,910Accrued expenses


112,245



72,493Deferred revenues


12,130



11,140Current portion of long-term debt


12,494



9,972Total current liabilities


141,601



103,515Long-term debt, excluding current portion


933,749



830,710Deferred income tax liabilities


197,355



145,914Tax receivable agreement obligations to related parties


138,533



142,044Other long-term liabilities


22,037



27,361Commitments and contingenciesEquity:Preferred stock (par value, $0.00001), 25,000,000 shares
    authorized and 0 shares issued and outstanding






Class A common stock (par value, $0.00001),
    400,000,000 shares authorized and 91,064,486 and
    90,423,941 shares outstanding at December 31, 2010 and
    December 31, 2009 respectively


1



1Class B common stock, exchangeable (par value, $0.00001),
    52,000,000 shares authorized and 24,689,142 and
    24,752,955 shares outstanding at December 31, 2010 and
    December 31, 2009, respectively






Additional paid-in capital


738,888



730,941Contingent consideration


1,955



Accumulated other comprehensive loss


(2,569
)


(11,198
)Retained earnings


53,250



33,704Emdeon Inc. equity


791,525



753,448Noncontrolling interest


263,763



226,421Total equity


1,055,288



979,869Total liabilities and equity

$
2,488,563


$
2,229,413    F-4




---



##### Table of Contents



Emdeon
    Inc.
  Consolidated Statements of
    Operations
  Year Ended December 31,2010


2009


2008(Amounts in thousands, except share and per share amounts)Revenue

$
1,002,152


$
918,448


$
853,599Costs and expenses:Cost of operations (exclusive of depreciation and amortization
    below)


612,594



562,867



541,563Development and engineering


35,515



33,928



28,625Sales, marketing, general and administrative


111,948



113,701



91,212Depreciation and amortization


124,721



105,321



97,864(Gain) loss on abandonment of leased properties


(105
)


1,675



3,081Operating income


117,479



100,956



91,254Interest income


(14
)


(75
)


(963
)Interest expense


61,031



70,246



71,717Other income, net


(9,284
)


(519
)


Income before income tax provision


65,746



31,304



20,500Income tax provision


32,579



17,301



8,567Net income


33,167



14,003



11,933Net income attributable to noncontrolling interest


13,621



4,422



2,702Net income attributable to Emdeon Inc.

$
19,546


$
9,581


$
9,231Net income per share Class A common stock:Basic

$
0.22


$
0.12


$
0.12Diluted

$
0.21


$
0.12


$
0.12Weighted average common shares outstanding:Basic


90,100,070



82,459,169



74,775,039Diluted


90,832,631



82,525,002



100,000,000    F-5




---



##### Table of Contents



Emdeon
    Inc.
  Consolidated
    Statements of Equity
  AccumulatedClass A


Class B


Additional








Other


Non-Common Stock


Common Stock


Paid-in


Contingent


Retained


Comprehensive


Controlling


TotalShares


Amount


Shares


Amount


Capital


Consideration


Earnings


Income (Loss)


Interest


Equity(Amounts in thousands, except share amounts)Balance at January 1, 2008


52,000,000


$
1



48,000,000


$



$
300,550


$



$
14,892


$
(14,474
)

$



$
300,969Capital contribution from affiliates of GeneralAtlantic LLC and Hellman and Friedman LLCfor the purchase of HLTH Corporations48% interest in EBS Master LLC onFebruary 8, 2008


25,413,610















578,409



















578,409Establish noncontrolling interest on February 8, 2008










22,586,390







(210,585
)










5,435



205,150



Eliminate HLTH Corporations 48% minorityinterest on February 8, 2008










(48,000,000
)






1,345



















1,345Capital contribution from stockholders


















1,300



















1,300Distribution to stockholders


















(317
)


















(317
)Comprehensive income (loss):Net income


























9,231







2,702



11,933Change in the fair value of interest rate swap,net of taxes






























(20,705
)


(3,240
)


(23,945
)Foreign currency translation adjustment






























(43
)


(13
)


(56
)Other comprehensive income amortization,net of taxes






























6,592



1,923



8,515Total comprehensive loss






































(3,553
)Balance at December 31, 2008


77,413,610


$
1



22,586,390


$



$
670,702


$



$
24,123


$
(23,195
)

$
206,522


$
878,153Capital contribution from stockholders


















203



















203Distribution to stockholders


















(434
)


















(434
)Reclassification of liability awardsto equity awards


















20,548















6,183



26,731Equity-based compensation expense


















5,784















1,531



7,315Purchase of eRx Network L.L.C.










1,850,000







3,504











318



19,707



23,529Issuance of Units of EBS Master to membersof management, net of taxes










2,537,325







(11,899
)










394



18,246



6,741Issuance of Class A common stock toemployees and directors, net of taxes


349,166















1,372











(18
)


(851
)


503Conversion of EBS Master Units held by eRxto shares of Class A common stock,net of taxes


1,850,000







(1,850,000
)






21,968











(376
)


(17,443
)


4,149Issuance of Class A shares in connection withIPO (includes costs paid in 2008)


10,725,000















144,915



















144,915Issuance of Units of EBS Master toEmdeon Inc., net of taxes


















13,706











(448
)


(21,025
)


(7,767
)Repurchase of Class A shares (to satisfytax withholding obligation)


(102,305
)














(1,780
)










4



190



(1,586
)Repurchase of units of EBS Master issued tomembers of management, net of taxes










(370,760
)






(1,107
)










(74
)


(3,500
)


(4,681
)Contribution of data sublicense intangibleto EBS Master


















(5,872
)














9,312



3,440Tax receivable agreements with related parties,net of taxes


















(131,433
)


















(131,433
)Issuance of Class A common stock uponvesting of Restricted Stock Units


188,470















764











(6
)


(368
)


390Comprehensive income:Net income


























9,581







4,422



14,003Change in the fair value ofinterest rate swap, net of taxes






























6,755



1,933



8,688Foreign currency translation adjustment






























17



8



25Other comprehensive income amortization,net of taxes






























5,431



1,554



6,985Total comprehensive income






































29,701Balance at December 31, 2009


90,423,941


$
1



24,752,955


$



$
730,941


$



$
33,704


$
(11,198
)

$
226,421


$
979,869Equity-based compensation expense


















14,093















3,628



17,721Exchange of units of EBS Master to Class Acommon stock, net of taxes


36,829







(36,829
)






425











(4
)


(339
)


82Cancellation of Class B common stock,net of taxes










(26,984
)






127











(2
)


(197
)


(72
)Issuance of Class A common stock uponvesting of Restricted Stock Units, net of taxes


213,534















636











(2
)


(472
)


162Issuance of Class A common stock inconnection with acquisitions, net of taxes


361,558















4,369



1,955







(7
)


720



7,037Tax receivable agreements with related parties,net of taxes


















(50
)


















(50
)Settlement of liability related to IPO


















100



















100Contribution of data sublicense intangible toEBS Master


















(856
)














1,358



502Capital contribution to EBS Master


















(10,777
)














17,092



6,315Transactions with noncontrolling interest


















(467
)










8



(362
)


(821
)Issuance of Class A common stock to ESPP


28,624















347















(65
)


282Comprehensive income:Net income


























19,546







13,621



33,167Changes in the fair value of interest rate swap,net of taxes






























4,591



1,250



5,841Foreign currency translation adjustment






























66



25



91Other comprehensive incomeamortization, net of taxes






























3,979



1,083



5,062Total comprehensive income






































44,161Balance at December 31, 2010


91,064,486


$
1



24,689,142


$



$
738,888


$
1,955


$
53,250


$
(2,569
)

$
263,763


$
1,055,288    F-6




---



##### Table of Contents



Emdeon
    Inc.
  Consolidated Statements of Cash
    Flows
  Year Ended December 31,2010


2009


2008(Amounts in thousands)Operating activitiesNet income

$
33,167


$
14,003


$
11,933Adjustments to reconcile net income to net cash provided by
    operating activities:Depreciation and amortization


124,721



105,321



97,864Equity-based compensation expense


17,721



25,415



4,145Deferred income tax expense (benefit)


12,236



(1,248
)


(4,140
)Amortization of debt discount and issuance costs


12,911



11,947



9,954Amortization of discontinued cash flow hedge from other
    comprehensive loss


5,800



7,970



9,745Change in fair value of interest rate swap (not subject to hedge
    accounting)


(3,908
)






(12,714
)(Gain) loss on abandonment of leased properties


(105
)


1,675



3,081Change in contingent consideration


(9,284
)






Other


524



(502
)


177Changes in operating assets and liabilities:Accounts receivable


(2,429
)


(2,571
)


(19,409
)Prepaid expenses and other


(12,552
)


4,945



(12,049
)Accounts payable


(7,499
)


4,731



(9,159
)Accrued expenses, deferred revenue, and other liabilities


451



(9,234
)


3,907Tax receivable agreement obligations to related parties


95



299



Net cash provided by operating activities


171,849



162,751



83,335Investing activitiesPurchases of property and equipment


(79,988
)


(48,292
)


(27,971
)Payments for acquisitions, net of cash acquired


(251,464
)


(76,250
)


(21,061
)Purchases of Emdeon Business Services, net of cash acquired










(306,260
)Other


(3,000
)


1,300



Net cash used in investing activities


(334,452
)


(123,242
)


(355,292
)Financing activitiesProceeds from issuance of stock


306



147,964



Repurchase of Class A common stock






(1,586
)


Repurchase of Units of EBS Master LLC






(5,373
)


Proceeds from incremental term loan


97,982







Debt principal and sublicense obligation payments


(11,423
)


(29,203
)


(7,550
)Repayment of assumed debt obligations


(35,254
)


(200
)


Proceeds from revolver










10,000Payments on revolver






(10,000
)


Capital contributions from stockholders






203



307,615Other


(1,819
)


(793
)


(317
)Net cash provided by financing activities


49,792



101,012



309,748Net (decrease) increase in cash and cash equivalents


(112,811
)


140,521



37,791Cash and cash equivalents at beginning of period


211,999



71,478



33,687Cash and cash equivalents at end of period

$
99,188


$
211,999


$
71,478Supplemental disclosures of cash flow informationCash paid for interest

$
42,955


$
49,649


$
64,752Cash paid during the period for income taxes

$
26,126


$
21,087


$
14,934Supplemental disclosures of noncash transactionsExecution of tax receivable agreements:Additional paid in capital

$



$
141,745


$
Tax receivable agreement obligations to related parties

$



$
141,745


$
Acquisition of certain data rights:Intangible assets

$
6,341


$
37,606


$
Current portion of long-term debt

$
608


$
3,078


$
Long-term debt

$
5,733


$
34,528


$
    F-7




---



##### Table of Contents



Emdeon
    Inc.
  Notes
    to Consolidated Financial Statements
 (In
    Thousands, Except Per Share, Unit and Per Unit
    Amounts)
  1.
    Nature of
    Business and Organization  Nature
    of Business
    Organization
    No. 88-16, Basis in Leveraged Buyout Transactions
      Reorganization
     F-8




---



##### Table of Contents



Emdeon
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
        2. Summary
    of Significant Accounting Policies
  Principles
    of Consolidation
    Reclassifications
    Noncontrolling
    Interest
    Accounting
    Estimates
   F-9




---



##### Table of Contents



Emdeon
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Business
    Combinations
      Cash
    and Cash Equivalents
    Allowance
    for Doubtful Accounts
    Inventory
  first-in,
  Software
    Development Costs
   F-10




---



##### Table of Contents



Emdeon
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Property
    and Equipment
    Computer equipment

3 - 5 yearsProduction equipment

5 - 7 yearsOffice equipment, furniture and fixtures

3 -  yearsSoftware

3 yearsTechnology

6 - 10 yearsLeasehold improvements

Shorter of useful life or lease term     Goodwill
    and Intangible Assets
    Customer relationships

9 - 20 yearsTradenames

20 yearsData sublicense agreement

8 yearsNon-compete agreements

1 - 5 yearsBacklog

1 year     Long-Lived
    Assets
    Other
    Assets
   F-11




---



##### Table of Contents



Emdeon
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Derivatives
    Equity-Based
    Compensation
        Revenue
    Recognition
         F-12




---



##### Table of Contents



Emdeon
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Income
    Taxes
        Net
    Income Per Share of Class A Common Stock
          Recent
    Accounting Pronouncements
   F-13




---



##### Table of Contents



Emdeon
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
      No. 2010-06,
  No. 2010-29,
  No. 2009-13,
 F-14




---



##### Table of Contents



Emdeon
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  3.
    Concentration
    of Credit Risk      4.
    Business
    Combinations  2008
    Acquisitions
  2008
    Transaction
  No. D-97, Push Down Accounting Application of
    Pushdown Basis of Accounting in Financial Statements
    of Subsidiaries Acquired by Purchase
    Patient
    Statements Acquisition
     F-15




---



##### Table of Contents



Emdeon
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Patient2008


StatementsTransaction


AcquisitionCurrent assets

$
88,074


$
2,358Property and equipment


60,705



408Other assets


266



Identifiable intangible assets:Customer contracts


571,732



11,730Tradename


81,888



Non-compete agreements


6,869



Goodwill


298,592



2,862Current liabilities


(46,690
)


(290
)Long-term debt


(356,587
)


Deferred tax liability


(113,213
)


Long-term liabilities


(13,227
)


Total transaction/purchase price

$
578,409


$
17,068Cash paid by H&F


(272,149
)


Cash paid by Emdeon Inc. & subsidiaries

$
306,260


$
17,068   2009
    Acquisitions
  Sentinel
    Group Acquisition
    eRx
    Acquisition
         F-16




---



##### Table of Contents



Emdeon
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    eRxAcquisitionCash

$
2,889Accounts receivable


4,045Other current assets


750Property and equipment


7,017Other assets


41Identifiable intangible assets:Customer contracts
    (20-year
    weighted average useful life)


28,130Tradename
    (20-year
    weighted average useful life)


9,660Non-compete agreements
    (5-year
    weighted average useful life)


320Goodwill


53,653Accounts payable


(1,304
)Accrued expenses


(4,281
)Current maturities of long-term debt


(200
)Net assets acquired


100,720Noncontrolling interest


(13
)Total consideration transferred

$
100,707Acquisition costs reflected within sales, marketing, general and
    administrative expenses

$
219   2010
    Acquisitions
  FVTech
    Acquisition
       F-17




---



##### Table of Contents



Emdeon
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    HTMS
    Acquisition
          Chapin
    Revenue Cycle Management, LLC
     F-18




---



##### Table of Contents



Emdeon
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
        CEA
    Acquisition
             F-19




---



##### Table of Contents



Emdeon
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    FVTech


HTMS


Chapin


CEACash

$
372


$
1,029


$
62


$
533Accounts receivable


1,736



3,270



1,322



14,412Prepaid expenses and other current assets


35







46



1,870Property and equipment


18,423







3,065



26,371Other assets


29







12



91Identifiable intangible assets:Tradename (2-5 year weighted average useful lives)


160



190



50



3,570Noncompetition agreements
    (5-year
    weighted average useful lives)






3,150



3,350



1,560Customer contracts (9-16 year weighted average useful lives)


560







4,640



77,710Backlog
    (1-year
    weighted average useful life)






1,630







16,820Goodwill


14,038



12,414



10,895



167,684Accounts payable


(338
)


(1,786
)


(146
)


(4,198
)Accrued expenses


(550
)


(1,050
)


(363
)


(13,744
)Current maturities of long-term debt






(104
)






(2,850
)Long-term debt














(32,300
)Deferred income tax liabilities














(46,198
)Other long-term liabilities


(307
)










(832
)Total consideration transferred

$
34,158


$
18,743


$
22,933


$
210,499Acquisition costs reflected within sales, marketing, general and
    administrative expenses in the year ended December 31, 2010

$
143


$
184


$
246


$
758   Other
    Information
    Pro Forma Year Ended December 31,2010


2009


2008Revenues

$
1,072,889


$
1,013,580


$
880,686Net income (loss) attributable to Emdeon Inc.

$
21,275


$
2,417


$
6,761    F-20




---



##### Table of Contents



Emdeon
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  5.
    Inventory    6.
    Property
    and Equipment    2010


2009Computer equipment

$
62,239


$
45,984Production equipment


27,216



18,032Office equipment, furniture and fixtures


18,975



9,438Software


87,727



54,340Technology


145,888



104,205Leasehold improvements


24,278



11,537Construction in process


23,963



26,339390,286



269,875Less accumulated depreciation


(158,979
)


(117,784
)Property and equipment, net

$
231,307


$
152,091     7.
    Goodwill
    and Intangible Assets    Payer


Provider


Pharmacy


TotalBalance at December 31, 2008

$
300,909


$
315,865


$
30,077


$
646,851Acquisitions


2,691







53,653



56,344Other


50



(218
)






(168
)Balance at December 31, 2009


303,650



315,647



83,730



703,027Acquisitions


18,451



186,580







205,031Other










252



252Balance at December 31, 2010

$
322,101


$
502,227


$
83,982


$
908,310  F-21




---



##### Table of Contents



Emdeon
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    GrossWeighted Average


Carrying


AccumulatedRemaining Life


Amount


Amortization


NetCustomer relationships


14.9


$
1,048,433


$
(176,634
)

$
871,799Trade names


15.1



121,518



(20,553
)


100,965Data sublicense agreement


7.1



49,600



(7,040
)


42,560Non-compete agreements


4.2



19,556



(11,981
)


7,575Backlog


0.7



18,450



(5,463
)


12,987Total





$
1,257,557


$
(221,671
)

$
1,035,886     2011

$
86,0092012


73,0042013


72,7922014


72,5192015


70,899Thereafter


660,663$
1,035,886   8.
    Debt
    Issuance Costs     F-22




---



##### Table of Contents



Emdeon
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  9.
    Accrued
    Expenses    2010


2009Customer deposits

$
26,840


$
26,357Accrued compensation


15,530



14,698Accrued interest rate swap agreement


10,738



Accrued insurance


2,003



2,040Accrued rebates


5,394



5,214Accrued outside services


7,698



3,526Accrued telecommunications


2,677



2,783Accrued income tax receivable agreement obligations to related
    parties


3,746



Accrued income, sales and other taxes


2,578



2,078Pass-through payments


9,218



544Accrued liabilities for purchases of property and equipment


6,497



3,057Other accrued liabilities


19,326



12,196$
112,245


$
72,493   10.
    Long-Term
    Debt    December 31,


December 31,2010


2009Credit Facilities $755 millionFirst Lien Term Loan facility, expiring on November 16,
    2013, bearing interest at a variable base rate (LIBOR) plus a
    spread rate (total rate 2.27% and 2.26%) and net of unamortized
    discount of $28,628 and $38,105 at December 31, 2010 and
    December 31, 2009, respectively (effective interest rate of
    3.92% at December 31, 2010)


650,172



648,245$170 million Second Lien Term Loan facility, expiring on
    May 16, 2014, bearing interest at a variable base rate
    (LIBOR) plus a spread rate (total rate 5.27% and 5.26%) and net
    of unamortized discount of $12,136 and $15,169 at
    December 31, 2010 and December 31, 2009, respectively
    (effective interest rate of 7.86% at December 31, 2010)


157,864



154,831$100 million Incremental Borrowing on First Lien Term Loan
    facility, expiring on November 16, 2013, bearing interest
    at a variable base rate (LIBOR), subject to a floor, plus a
    spread rate (total rate 4.5%) and net of unamortized discount of
    $1,866 at December 31, 2010 (effective interest rate of
    5.44% at December 31, 2010)


97,884



Obligation under data sublicense agreement


40,323



37,606Less current portion


(12,494
)


(9,972
)Long-term debt

$
933,749


$
830,710  F-23




---



##### Table of Contents



Emdeon
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
              Obligation
    Under Data Sublicense Agreement
     F-24




---



##### Table of Contents



Emdeon
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
      Years Ending December 31,2011

$
12,4942012


12,9622013


768,0412014


176,4502015


7,348Thereafter


11,578$
988,873   11.
    Interest
    Rate Swap      Fair Values of Derivative InstrumentsAsset (Liability) DerivativesBalance Sheet

December 31,


December 31,Location

2010


2009Derivatives designated as hedging instruments:Interest rate swap

Accrued expenses

$
(10,738
)

$
Interest rate swap

Other long-term
    liabilities

$



$
(21,337
)   Cash
    Flow Hedging Relationships
     F-25




---



##### Table of Contents



Emdeon
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
        Year Ended December 31,2010


2009


2008Derivatives in Cash Flow Hedging RelationshipsGain/(loss) related to effective portion of derivative
    recognized in other comprehensive loss

$
6,690


$
9,908


$
(27,381
)Gain/(loss) related to effective portion of derivative
    reclassified from accumulated other comprehensive loss to
    interest expense

$
(22,309
)

$
(27,736
)

$
(19,230
)Derivatives Not Designated as Hedging InstrumentsGain recognized in interest expense

$
3,908


$



$
12,714   12.
    Fair
    Value Measurements  Assets
    and Liabilities Measured at Fair Value on a Recurring
    Basis
    Quoted in Active





SignificantMarkets for


Significant Other


UnobservableBalance at


Identical Assets


Observable Inputs


InputsDescription

December 31, 2010


(Level 1)


(Level 2)


(Level 3)Interest Rate Swap

$
(10,738
)

$



$
(10,738
)

$
Contingent Consideration Obligations


(16,046
)










(16,046
)Total

$
(26,784
)

$



$
(10,738
)

$
(16,046
)      F-26




---



##### Table of Contents



Emdeon
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
          Fair
    Value Measurements Using Significant Unobservable Inputs
    (Level 3)
  Year Ended December 31,2010


2009


2008Balance at beginning of period

$



$




Issuances of contingent consideration


(25,330
)






Total changes included in other income (loss)


9,284







Balance at end of period

$
(16,046
)

$



$
   Assets
    and Liabilities Measured at Fair Value upon Initial
    Recognition
    CarryingAmount


Fair ValueCash and cash equivalents

$
99,188


$
99,188Accounts receivable

$
174,191


$
174,191Long-term debt (credit facilities)

$
905,920


$
943,355Cost method investment

$
3,000


$
3,600    F-27




---



##### Table of Contents



Emdeon
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  13.
    Lease
    Commitments      Years Ending December 31:2011

$
8,3732012


6,8002013


5,6552014


5,5112015


5,302Thereafter


21,107Total minimum lease payments

$
52,748     14.
    Legal
    Proceedings    15.
    Capital
    Stock  Common
    Stock
  one-for-one
  Preferred
    Stock
   F-28




---



##### Table of Contents



Emdeon
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Initial
    Public Offering
  Form S-1 No. 333-153451), Form S-1MEF No. 333-161270)
  Noncontrolling
    Interests
    Year Ended December 31,2010


2009


2008Net income attributable to Emdeon Inc.

$
19,546


$
9,581


$
9,231Transfers from the noncontrolling interest:Decrease in Emdeon Inc. paid-in capital for the transfer of
    34,226,087 EBS Units from HLTH to H&F










(210,585
)Increase in Emdeon Inc. paid-in capital for the issuance of
    1,850,000 EBS Units in connection with the acquisition of eRx






3,504



Decrease in Emdeon Inc. paid-in capital for the issuance of
    2,537,325 EBS Units to management






(11,899
)


Increase in Emdeon Inc. paid-in capital for the issuance of
    11,160,331 EBS Units






14,062



Increase in Emdeon Inc. paid-in capital related to exchange of
    EBS Units held by eRx selling stockholders for shares of Emdeon
    Inc. Class A common stock






21,968



Decrease in Emdeon Inc. paid-in capital for purchase of 370,760
    EBS Units from management






(1,107
)


Increase in Emdeon Inc. paid-in capital for issuance of 361,558
    EBS Units in connection with the acquisition of HTMS and Chapin


4,369







Increase in Emdeon Inc. paid-in capital for issuance of 213,534
    EBS Units in connection with vesting of restricted Class A
    common stock units of Emdeon Inc. under the 2009 Equity
    Incentive Plan.


636







Increase in Emdeon Inc. paid-in capital for exchange of EBS
    Units to Class A common stock of Emdeon Inc.


425







Increase in Emdeon Inc. paid-in capital for cancellation of
    26,984 EBS Units


127







Increase in Emdeon Inc. paid-in capital for the issuance of
    28,624 EBS Units in connection with the issuance of Class A
    common stock to Employee Stock Purchase Plan participants


347







Net transfers from noncontrolling interest


5,904



26,528



(210,585
)Change from net income attributable to Emdeon Inc. and transfers
    from noncontrolling interest

$
25,450


$
36,109


$
(201,354
)  F-29




---



##### Table of Contents



Emdeon
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  16.
    Equity-Based
    Compensation Plans  EBS
    LLC Equity Plans Prior to IPO
    EBS
    Equity Plan
         F-30




---



##### Table of Contents



Emdeon
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
      EBS
    Phantom Plan
        2009
    Plan and Management Awards Subsequent to IPO
     F-31




---



##### Table of Contents



Emdeon
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  EBS Units
    and Restricted Class A common stock units
  one-for-one
    Options
    to Purchase Shares of Class A common stock
      Performance
    Awards
    Executive Chairman:
     F-32




---



##### Table of Contents



Emdeon
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Other Management:
  Activity
    Summary
    RestrictedClass ACommonRestricted


Stock UnitsEBS Units with


Class A


withPerformance


Common


PerformanceEBS Units


Conditions


Stock Units


ConditionsUnvested at December 31, 2009


1,126,490



206,578



525,603



Granted










293,035



150,000Canceled


(26,984
)






(40,561
)


Vested


(480,199
)






(213,534
)


Unvested at December 31, 2010


619,307



206,578



564,543



150,000     Weighted AverageWeighted Average


Remaining


AggregateOptions


Exercise Price


Contractual Term


Intrinsic ValueService


Performance


Service


Performance


Service


Performance


Service


PerformanceOptions


Options


Options


Options


Options


Options


Options


OptionsOutstanding at January 1, 2010


4,608,944



643,422


$
15.50


$
15.50



9.6



9.6


$



$
Granted


1,967,200







15.14Expired


(11,146
)






15.50Forfeited


(197,874
)






15.33Outstanding at December 31, 2010


6,367,124



643,422


$
15.39


$
15.50



8.8



8.6


$
802,650


$
Expected to vest at December 31, 2010


4,838,203






$
15.37


$




8.9






$
755,311


$
Exercisable at December 31, 2010


1,393,725






$
15.50


$




8.6






$



$
  F-33




---



##### Table of Contents



Emdeon
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Black-Scholes
    Option Pricing Model Assumptions
    EBS EquityPlan GrantUnits withPerformance2009 Equity Plan Options

EBS Equity Plan Grant Units

ConditionsYear Ended

Year Ended

Year Ended

Year Ended

Year EndedDecember 31,

December 31,

December 31,

December 31,

December 31,2010

2009

2009

2008

2009Weighted average fair value

$
6.95


$
7.54


$
8.51


$
5.35


$
6.66Expected dividend yield


















Expected volatility


43.10
%


47.00
%


47.00
%


48.00
%


47.00
%Risk-free interest rate


2.53
%


2.55
%


2.50
%


1.60
%


2.30
%Expected term (years)


6.3



6.3



5.6



5.7



6.4   Expected dividend yield 
  Expected volatility
  Risk-free interest rate
  Expected term
  Employee
    Stock Purchase Plan
   F-34




---



##### Table of Contents



Emdeon
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Summary
    of Equity-Based Compensation Expense
    17.
    Retirement
    Plans    18.
    Income
    Taxes    Year Ended December 31,2010


2009


2008Current:Federal

$
18,166


$
14,998


$
10,801State


2,177



3,551



1,906Current income tax provision


20,343



18,549



12,707Deferred:Federal


12,927



(6,169
)


(2,317
)State


(691
)


4,921



(1,823
)Deferred income tax provision (benefit)


12,236



(1,248
)


(4,140
)Total income tax provision

$
32,579


$
17,301


$
8,567     Year Ended December 31,2010


2009


2008Statutory U.S. federal tax rate


35.00
%


35.00
%


35.00
%State income taxes (net of federal benefit)


2.78



8.75



3.57Meals and entertainment


0.63



0.39



0.52Other


(1.38
)


2.60



1.38Tax credits


(0.63
)


(1.14
)


Equity-based compensation


2.06



5.67



1.61Non-timing basis differences


12.49



33.57



(22.62
)Noncontrolling interest


(7.20
)


(5.17
)


(5.09
)Foreign loss not benefited


(0.34
)


3.29



5.85Return to provision adjustments


1.34



10.12



(4.28
)Change in valuation allowance


4.80



(37.81
)


25.85Effective income tax rate


49.55
%


55.27
%


41.79
%  F-35




---



##### Table of Contents



Emdeon
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
      2010


2009Deferred tax assets and (liabilities):Depreciation and amortization

$
(160,145
)

$
(120,929
)Investment in partnership


(81,914
)


(49,132
)Accounts receivable


1,245



856Fair value of interest rate swap


1,362



2,758Accruals and reserves


6,292



4,701Capital and net operating losses


50,854



28,166Debt discount and interest


(3,546
)


(4,818
)Equity-based compensation


6,181



2,425Valuation allowance


(26,313
)


(16,201
)Tax receivable agreement obligation to related parties


12,208



10,558Other


1,332



626Net deferred tax assets and (liabilities)


(192,444
)


(140,990
)Reported as:Current deferred tax assets

$
4,911


$
4,924Non-current deferred tax liabilities


(197,355
)


(145,914
)Net deferred tax assets and (liabilities)

$
(192,444
)

$
(140,990
)     Deferred income tax provision

$
(12,236
)Deferred taxes related to transactions with stockholders
    impacting additional paid in capital


7,595Change in deferred tax assets and (liabilities) recorded in
    other comprehensive income


(1,592
)Deferred tax liabilities assumed in business combinations


(45,070
)Other


(151
)Change in deferred tax assets and (liabilities)

$
(51,454
)  F-36




---



##### Table of Contents



Emdeon
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Year Ended December 31,2010


2009


2008Unrecognized benefit from prior years

$
1,272


$



$
Increases from current period tax positions


96



1,272



Ending unrecognized benefit

$
1,368


$
1,272


$
         19.
    Tax
    Receivable Agreement Obligation to Related Parties      and/or
 F-37




---



##### Table of Contents



Emdeon
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Years Ending December 31:2011

$
3,7462012


11,8872013


12,5182014


13,4952015


14,530Thereafter


86,103$
142,279   20.
    Net
    Income Per Share    Year Ended December 31,2010


2009


2008Basic net income per share:Numerator:Net income (loss) attributable to Emdeon Inc.

$
19,546


$
9,581


$
9,231Denominator:Weighted average common shares outstanding


90,100,070



82,459,169



74,775,039Basic net income per share

$
0.22


$
0.12


$
0.12Diluted net income per share:Numerator:Net income attributable to Emdeon Inc.









$
9,231Net loss excluding EBS Master

$
(30,164
)

$
(6,241
)Weighted average effect of dilutive securitiesAdd:Emdeon Inc. allocation of EBS Master net income


49,690



15,761Impact of exchange of Class B shares on income attributable
    to Emdeon Inc.










2,702$
19,526


$
9,520


$
11,933 F-38




---



##### Table of Contents



Emdeon
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Year Ended December 31,2010


2009


2008Denominator:Number of shares used in basic computation


90,100,070



82,459,169



74,775,039Weighted average effect of dilutive securitiesAdd:Exchange of Class B common stock for Class A common
    Stock










25,224,961Restricted Class A common stock units and other


98,485



65,833



Contingently issuable Class A common stock


634,076







90,832,631



82,525,002



100,000,000Diluted net income per share

$
0.21


$
0.12


$
0.12     Year Ended December 31,2010

2009

2008Class B common stock


23,493,174



23,017,774



Options to purchase Class A common stock


5,757,575



1,803,237



Restricted Class A common stock units


408,842







     21.
    Other
    Related Party Transactions      22.
    Loss on
    Abandonment of Leased Properties   F-39




---



##### Table of Contents



Emdeon
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Balance at January 1, 2008

$
Costs incurred


3,203Balance at December 31, 2008

$
3,203Costs incurred


1,675Costs paid or otherwise settled


(2,708
)Balance at December 31, 2009

$
2,170Costs incurred


(105
)Costs paid or otherwise settled


(1,570
)Balance at December 31, 2010

$
495     23.
    Segment
    Reporting    Payer
    Services Segment
    Provider
    Services Segment
    Pharmacy
    Services Segment
   F-40




---



##### Table of Contents



Emdeon
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Other
        For
    the Year Ended December 31, 2010
  Corporate &Payer


Provider


Pharmacy


Eliminations


ConsolidatedRevenue from external customersClaims management

$
194,239


$



$



$



$
194,239Payment services


234,176















234,176Patient statements






262,521











262,521Revenue cycle management






198,019











198,019Dental






31,403











31,403Pharmacy services










81,794







81,794Inter-segment revenues


3,501



402







(3,903
)


Net revenue


431,916



492,345



81,794



(3,903
)


1,002,152Costs and expenses:Cost of operations


283,050



303,252



30,067



(3,775
)


612,594Development and engineering


12,127



16,078



7,310







35,515Sales, marketing, general and administrative


26,700



30,711



5,970



48,567



111,948Gain on abandonment of leased properties


66



477







(648
)


(105
)Segment contribution

$
109,973


$
141,827


$
38,447


$
(48,047
)


242,200Depreciation and amortization


















124,721Interest income


















(14
)Interest expense


















61,031Other


















(9,284
)Income before income tax provision

















$
65,746  F-41




---



##### Table of Contents



Emdeon
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  For
    the Year Ended December 31, 2009
  Corporate &Payer


Provider


Pharmacy


Eliminations


ConsolidatedRevenue from external customersClaims management

$
184,605


$



$



$



$
184,605Payment services


211,985















211,985Patient statements






274,390











274,390Revenue cycle management






155,112











155,112Dental






31,513











31,513Pharmacy services










60,843







60,843Inter-segment revenue


902



1,498







(2,400
)


Net revenue


397,492



462,513



60,843



(2,400
)


918,448Costs and expenses:Cost of operations


253,473



294,700



16,668



(1,974
)


562,867Development and engineering


12,677



15,294



5,957







33,928Sales, marketing, general and administrative


25,803



31,978



8,047



47,873



113,701Loss on abandonment of leased properties






45







1,630



1,675Segment contribution

$
105,539


$
120,496


$
30,171


$
(49,929
)


206,277Depreciation and amortization


















105,321Interest income


















(75
)Interest expense


















70,246Other income


















(519
)Income before income tax provision

















$
31,304  F-42




---



##### Table of Contents



Emdeon
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  For
    the Year Ended December 31, 2008
  Corporate &Payer


Provider


Pharmacy


Eliminations


ConsolidatedRevenue from external customersClaims management

$
179,930


$



$



$



$
179,930Payment services


191,874















191,874Patient statements






266,233











266,233Revenue cycle management






144,904











144,904Dental






31,591











31,591Pharmacy services










39,067







39,067Inter-segment revenue


355



2,117







(2,472
)


Net revenue


372,159



444,845



39,067



(2,472
)


853,599Costs and expenses:Cost of operations


242,950



292,844



7,612



(1,843
)


541,563Development and engineering


10,472



14,015



4,138







28,625Sales, marketing, general and administrative


23,286



30,475



3,864



33,587



91,212Loss on abandonment of leased properties






513







2,568



3,081Segment contribution

$
95,451


$
106,998


$
23,453


$
(36,784
)


189,118Depreciation and amortization


















97,864Interest income


















(963
)Interest expense


















71,717Income before income tax provision

















$
20,500   24.
    Accumulated
    Other Comprehensive (Loss) Income    Foreign


Net Losses





AccumulatedCurrency


on Cash Flow


Discontinued


OtherTranslation


Hedging


Cash Flow


ComprehensiveAdjustment


Derivatives


Hedge


IncomeBalance at January 1, 2010

$
(32
)

$
(4,439
)

$
(6,727
)

$
(11,198
)Change associated with foreign currency translation


66











66Change associated with current period hedging






(7,736
)






(7,736
)Reclassification into earnings






12,317



3,982



16,299Discontinuation of hedging relationship






(142
)


142



Balance at December 31, 2010

$
34


$



$
(2,603
)

$
(2,569
)  F-43




---



##### Table of Contents



Emdeon
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  25.
    Quarterly
    Information    1st

2nd

3rd

4thQuarter

Quarter

Quarter

Quarter2010Revenue

$
237,279


$
243,289


$
245,923


$
275,661Gross profit (excluding depreciation and amortization)

$
93,293


$
94,845


$
95,005


$
106,415Depreciation and amortization

$
27,775


$
29,278


$
30,001


$
37,667Net income

$
4,263


$
7,255


$
6,627


$
15,022Net income attributable to Emdeon Inc.

$
1,889


$
4,229


$
3,737


$
9,691Earnings per shareBasic

$
0.02


$
0.05


$
0.04


$
0.11Diluted

$
0.02


$
0.05


$
0.04


$
0.112009Revenue

$
219,885


$
224,541


$
235,462


$
238,560Gross profit (excluding depreciation and amortization)

$
85,147


$
87,672


$
88,990


$
93,772Depreciation and amortization

$
25,098


$
25,286


$
26,667


$
28,270Net income (loss)

$
3,290


$
14,483


$
(8,463
)

$
4,693Net income (loss) attributable to Emdeon Inc.

$
1,218


$
12,439


$
(7,217
)

$
3,141Earnings per shareBasic

$
0.02


$
0.16


$
(0.09
)

$
0.03Diluted

$
0.02


$
0.14


$
(0.09
)

$
0.03    F-44




---



##### Table of Contents



Schedule I 
    Condensed Financial Information of Emdeon Inc. (Parent
    Only)
  Condensed
    Balance Sheets
  December 312010


2009(In thousands)ASSETSCurrent assets:Cash

$
39,980


$
131,741Other current assets


986



561Total current assets


40,966



132,302Property and equipment, net


9



11Investment in subsidiaries


961,270



819,889Other Assets


3,000



Total assets

$
1,005,245


$
952,202LIABILITIES AND EQUITYCurrent liabilities:Current portion of long-term debt

$
4,423


$
3,078Accrued expenses


4,549



995Due to affiliates


713



209Total current liabilities


9,685



4,282Long-term debt, excluding current portion


35,900



34,528Tax receivable obligations to related parties


138,533



142,044Deferred income tax liabilities


29,602



17,900Equity


791,525



753,448Total liabilities and equity

$
1,005,245


$
952,202  S-1




---



##### Table of Contents



Schedule I 
    Condensed Financial Information of Emdeon Inc. (Parent
    Only)
  Condensed
    Statements of Operations
  Year Ended December 31,2010


2009


2008(In thousands)Revenue

$



$



$
Costs and expenses:Sales, marketing, general and administrative


3,198



1,114



496Operating loss


(3,198
)


(1,114
)


(496
)Equity in earnings of consolidated subsidiaries


43,046



14,439



13,132Interest expense


3,089



715



(1
)Income before income tax provision


36,759



12,610



12,637Income tax provision


17,213



3,029



3,406Net income

$
19,546


$
9,581


$
9,231  S-2




---



##### Table of Contents



Schedule I 
    Condensed Financial Information of Emdeon Inc. (Parent Only)
  Condensed
    Statements of Cash Flows
  Year Ended December 31,2010


2009


2008(In thousands)Operating activities:Net income

$
19,546


$
9,581


$
9,231Adjustments to reconcile net income to net cashused in operating activities:Depreciation expense


2







Equity compensation expense


760



307



Deferred income taxes


17,213



3,029



3,406Equity in earnings of consolidated subsidiaries


(43,046
)


(14,439
)


(13,132
)Changes in operating assets and liabilities:Prepaid expenses and other assets


(425
)


(561
)


Accrued expenses and other liabilities


(92
)


745



Tax receivable obligations to related parties


95



299



Due to affiliates


504



97



112Net cash used in operating activities


(5,443
)


(942
)


(383
)Investing activities:Investment in subsidiary


(80,000
)






Other


(3,000
)






Purchases of property and equipment






(11
)


Net cash used in investing activity


(83,000
)


(11
)


Financing activities:Proceeds from issuance of Class A common stock


306



145,165



Repurchase of Class A common stock






(1,586
)


Repurchase of Units of EBS Master LLC






(5,373
)


Payment of data sublicense obligation


(3,624
)


(5,653
)


Proceeds from capital contribution






138



379Net cash (used in) provided by financing activity


(3,318
)


132,691



379Net (decrease) increase in cash


(91,761
)


131,738



(4
)Cash at beginning of period


131,741



3



7Cash at end of period

$
39,980


$
131,741


$
3  S-3




---



##### Table of Contents



Emdeon
    Inc.
  Schedule II 
    Valuation and Qualifying Accounts
  Balance at

Charged to

Charged toBeginning

Costs and

Other



Balance atDescription

of Year

Expenses

Accounts

Write-offs

End of Year(In thousands)Allowance for doubtful accountsYear ended December 31, 2010

$
4,433


$
2,243


$



$
(1,282
)

$
5,394Year ended December 31, 2009

$
4,576


$
2,314


$



$
(2,457
)

$
4,433Year ended December 31, 2008

$
3,626


$
1,867


$



$
(917
)

$
4,576  S-4




---



##### Table of Contents



SIGNATURES       By:
    /s/  George
    I. LazenbyName: George
    I. Lazenby
    Title:   Chief Executive Officer and Director    Signature

Title

Date/s/  George
    I. LazenbyGeorge
    I. Lazenby

Chief Executive Officer and Director (Principal Executive
    Officer)

March 10, 2011/s/  Bob
    A. Newport, Jr.Bob
    A. Newport, Jr.

Chief Financial Officer
    (Principal Financial and Accounting Officer)

March 10, 2011/s/  Tracy
    L. BahlTracy
    L. Bahl

Executive Chairman

March 10, 2011/s/  Mark
    F. DzialgaMark
    F. Dzialga

Director

March 10, 2011/s/  Jonathan
    C. KorngoldJonathan
    C. Korngold

Director

March 10, 2011/s/  Philip
    U. HammarskjoldPhilip
    U. Hammarskjold

Director

March 10, 2011/s/  Jim
    D. KeverJim
    D. Kever

Director

March 10, 2011/s/  Allen
    R. ThorpeAllen
    R. Thorpe

Director

March 10, 2011/s/  Dinyar
    S. DevitreDinyar
    S. Devitre

Director

March 10, 2011/s/  Philip
    M. PeadPhilip
    M. Pead

Director

March 10, 2011  71




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##### Table of Contents



Exhibit Index
  Exhibit No.2
.1

Amended and Restated Agreement and Plan of Merger, dated as of
    November 15, 2006, among Emdeon Corporation, EBS Holdco,
    Inc., EBS Master LLC, Emdeon Business Services LLC, Medifax-EDI
    Holding Company, EBS Acquisition LLC, GA EBS Merger LLC and EBS
    Merger Co. (included as Exhibit 2.1 to the Companys
    Registration Statement on
    Form S-1,
    as amended (File
    No. 333-153451),
    filed on July 9, 2009, and incorporated herein by
    reference).2
.2

Securities Purchase Agreement, dated as of February 8,
    2008, among HLTH Corporation, EBS Master LLC, the voting members
    of EBS Master LLC and the purchasers listed therein (included as
    Exhibit 2.2 to the Companys Registration Statement on
    Form S-1,
    as amended (File
    No. 333-153451),
    filed on July 9, 2009, and incorporated herein by
    reference).2
.3

Agreement and Plan of Merger, dated as of July 2, 2009, by
    and among EBS Master LLC, Envoy LLC, Emdeon Merger Sub LLC, eRx
    Network, L.L.C., and Longhorn Members Representative, LLC
    (included as Exhibit 2.3 to the Companys Registration
    Statement on
    Form S-1,
    as amended (File
    No. 333-153451),
    filed on July 28, 2009, and incorporated herein by
    reference).2
.4

Agreement and Plan of Merger dated as of September 3, 2010
    by and among Medifax-EDI Holding Company, Medifax Merger Sub
    Inc., Medifax CEA Merger Sub Inc., Chamberlin Edmonds Holdings,
    Inc., Chamberlin Edmonds & Associates, Inc., and CEA
    Rep, LLC (included as Exhibit 10.1 to the Companys
    Current Report on
    Form 8-K
    filed on September 8, 2010, and incorporated herein by
    reference).3
.1

Amended and Restated Certificate of Incorporation of Emdeon Inc.
    (included as Exhibit 3.1 to the Companys Current
    Report on
    Form 8-K,
    filed on August 17, 2009, and incorporated herein by
    reference).3
.2

Amended and Restated By-laws of Emdeon Inc. (included as
    Exhibit 3.2 to the Companys Current Report on
    Form 8-K,
    filed on August 17, 2009, and incorporated herein by
    reference).4
.1

Specimen Class A Common Stock Certificate (included as
    Exhibit 4.1 to the Companys Registration Statement on
    Form S-1,
    as amended (File
    No. 333-153451),
    filed on July 28, 2009, and incorporated herein by
    reference).4
.2

First Lien Credit Agreement, dated as of November 16, 2006,
    among GA EBS Merger, LLC, as borrower, Medifax-EDI Holding
    Company, as additional borrower, EBS Master LLC, as parent, the
    lenders party thereto, Citibank, N.A., as administrative agent,
    collateral agent, Swingline Lender and Issuing Bank, Citigroup
    Global Markets Inc. and Deutsche Bank Securities Inc., as joint
    lead arrangers, Deutsche Bank Trust Company Americas, as
    syndication agent and Bear Stearns Corporate Lending Inc., as
    documentation agent (included as Exhibit 4.2 to the
    Companys Registration Statement on
    Form S-1,
    as amended (File
    No. 333-153451),
    filed on July 28, 2009, and incorporated herein by
    reference).4
.3

Amendment No. 1 to First Lien Credit Agreement, dated as of
    March 9, 2007 among EBS Master LLC, Emdeon Business
    Services LLC, as borrower, Medifax-EDI Holding Company, Inc., as
    additional borrower, the lenders from time to time party
    thereto, Citibank, N.A., as administrative agent, collateral
    agent, Swingline Lender and Issuing Bank, Citigroup Global
    Markets Inc., as joint lead arranger and joint bookrunner,
    Deutsche Bank Securities, Inc., as joint lead arranger and joint
    bookrunner, Bear, Stearns & Co Inc., as joint lead
    arranger and joint bookrunner, Deutsche Bank Trust Company
    Americas, as syndication agent and Bear Stearns Corporate
    Lending Inc., as documentation agent (included as
    Exhibit 4.3 to the Companys Registration Statement on
    Form S-1,
    as amended (File
    No. 333-153451),
    filed on July 9, 2009, and incorporated herein by
    reference).4
.4

Amendment No. 2 to First Lien Credit Agreement, dated as of
    July 7, 2009, among GA EBS Merger, LLC, as borrower,
    Medifax-EDI Holding Company, as additional borrower, EBS Master
    LLC, the lenders party thereto, Citibank, N.A., as
    administrative agent, collateral agent, Swingline Lender and
    Issuing Bank (included as Exhibit 4.4 to the Companys
    Registration Statement on
    Form S-1,
    as amended (File
    No. 333-153451),
    filed on July 9, 2009, and incorporated herein by
    reference). 72




---



##### Table of Contents



Exhibit No.4
.5

Amendment No. 3 to First Lien Credit Agreement, dated as of
    October 1, 2010, among EBS Master LLC, Emdeon Business
    Services LLC, as borrower, Medifax-EDI Holding Company, as
    additional borrower, the lenders from time to time party
    thereto, and Citibank, N.A., as administrative agent, collateral
    agent, Swingline Lender and Issuing Bank (included as
    Exhibit 4.1 to the Companys Current Report on
    Form 8-K
    filed on October 4, 2010, and incorporated herein by
    reference).4
.6

Second Lien Credit Agreement, dated as of November 16,
    2006, by and among GA EBS Merger, LLC, as borrower, Medifax-EDI
    Holding Company, as additional borrower, EBS Master LLC, as
    parent, the lenders party thereto, Citibank, N.A., as
    administrative agent, collateral agent, Citigroup Global Markets
    Inc. and Deutsche Bank Securities Inc., as joint lead arrangers
    and, together with Bear, Stearns & Co. Inc., as joint
    bookrunners, Deutsche Bank Trust Company Americas, as
    syndication agent and Bear Stearns Corporate Lending Inc., as
    documentation agent (included as Exhibit 4.5 to the
    Companys Registration Statement on
    Form S-1,
    as amended (File
    No. 333-153451),
    filed on July 28, 2009, and incorporated herein by
    reference).4
.7

Amendment No. 1 to Second Lien Credit Agreement, dated as
    of July 7, 2009, among GA EBS Merger, LLC, as borrower,
    Medifax-EDI Holding Company, as additional borrower, EBS Master
    LLC, the lenders party thereto, Citibank, N.A., as
    administrative agent, collateral agent, Swingline Lender and
    Issuing Bank (included as Exhibit 4.6 to the Companys
    Registration Statement on
    Form S-1,
    as amended (File
    No. 333-153451),
    filed on July 9, 2009, and incorporated herein by
    reference).10
.1

Reorganization Agreement, dated as of August 4, 2009, by
    and among EBS Master LLC, Emdeon Inc. and the other parties
    named therein (included as Exhibit 10.1 to the
    Companys Current Report on
    Form 8-K,
    filed on August 17, 2009, and incorporated herein by
    reference).10
.2

Stockholders Agreement, dated as of August 5, 2009,
    by and among Emdeon Inc. and the stockholders named therein
    (included as Exhibit 10.2 to the Companys Current
    Report on
    Form 8-K,
    filed on August 17, 2009, and incorporated herein by
    reference).10
.3

Sixth Amended and Restated Limited Liability Company Agreement
    of EBS Master LLC, dated August 17, 2009 (included as
    Exhibit 10.3 to the Companys Current Report on
    Form 8-K,
    filed on August 17, 2009, and incorporated herein by
    reference).10
.4

Investor Tax Receivable Agreement by and among Emdeon Inc. and
    the other parties named therein (Exchanges), dated
    August 17, 2009 (included as Exhibit 10.4 to the
    Companys Current Report on
    Form 8-K,
    filed on August 17, 2009, and incorporated herein by
    reference).10
.5

Investor Tax Receivable Agreement by and among Emdeon Inc. and
    the other parties named therein (Reorganizations), dated
    August 17, 2009 (included as Exhibit 10.5 to the
    Companys Current Report on
    Form 8-K,
    filed on August 17, 2009, and incorporated herein by
    reference).10
.6

Management Tax Receivable Agreement by and among Emdeon Inc. and
    the persons named therein, dated August 17, 2009 (included
    as Exhibit 10.6 to the Companys Current Report on
    Form 8-K,
    filed on August 17, 2009, and incorporated herein by
    reference).10
.7

Agreement and Plan of Merger, dated as of August 5, 2009,
    by and among H&F Harrington, Inc., EBS Holdco II, LLC and
    Emdeon Inc. (included as Exhibit 10.7 to the Companys
    Current Report on
    Form 8-K,
    filed on August 17, 2009, and incorporated herein by
    reference).10
.8

Agreement and Plan of Merger, dated as of August 5, 2009,
    by and among EBS Acquisition II, LLC, EBS Holdco I, LLC and
    Emdeon Inc. (included as Exhibit 10.8 to the Companys
    Current Report on
    Form 8-K,
    filed on August 17, 2009, and incorporated herein by
    reference).10
.9

Unit Purchase Agreement, dated August 11, 2009, by and
    among Emdeon Inc. and the Sellers named therein (included as
    Exhibit 10.9 of the Exhibits to the Companys Current
    Report on
    Form 8-K,
    filed on August 17, 2009, and incorporated herein by
    reference).10
.10

Employment Agreement, dated March 29, 2007, among George I.
    Lazenby and Emdeon Business Services LLC (included as
    Exhibit 10.10 to the Companys Registration Statement
    on
    Form S-1,
    as amended (File
    No. 333-153451),
    filed on July 9, 2009, and incorporated herein by
    reference). 73




---



##### Table of Contents



Exhibit No.10
.11

Employment Agreement, effective as of May 26, 2009, between
    Tracy Bahl and Emdeon Business Services LLC (included as
    Exhibit 10.11 to the Companys Registration Statement
    on
    Form S-1,
    as amended (File
    No. 333-153451),
    filed on July 9, 2009, and incorporated herein by
    reference).10
.12

Employment Agreement, effective as of July 21, 2008,
    between Gregory T. Stevens and Emdeon Business Services LLC
    (included as Exhibit 10.12 to the Companys
    Registration Statement on
    Form S-1,
    as amended (File
    No. 333-153451),
    filed on July 9, 2009, and incorporated herein by
    reference).10
.13

Employment Agreement, dated July 21, 2009, among Bob A.
    Newport and Emdeon Business Services LLC (included as
    Exhibit 10.13 to the Companys Registration Statement
    on
    Form S-1,
    as amended (File
    No. 333-153451),
    filed on July 28, 2009, and incorporated herein by
    reference).10
.14

Employment Agreement, dated July 7, 2009, among J. Philip
    Hardin and Emdeon Business Services LLC (included as
    Exhibit 10.14 to the Companys Registration Statement
    on
    Form S-1,
    as amended (File
    No. 333-153451),
    filed on July 9, 2009, and incorporated herein by
    reference).10
.15

Employment Agreement, dated July 7, 2009, among Gary Stuart
    and Emdeon Business Services LLC (included as Exhibit 10.15
    to the Companys Registration Statement on
    Form S-1,
    as amended (File
    No. 333-153451),
    filed on July 9, 2009, and incorporated herein by
    reference).10
.16

Employment Agreement, dated July 2, 2009, between Mark Lyle
    and Emdeon Business Services LLC (filed herewith).10
.17

Emdeon Inc. 2009 Equity Incentive Plan (included as
    Exhibit 10.17 to the Companys Registration Statement
    on
    Form S-1,
    as amended (File
    No. 333-153451),
    filed on July 28, 2009, and incorporated herein by
    reference).10
.18

Sublease, dated December 31, 2000, among Willis North
    America Inc., as sublandlord, and Envoy Corporation, as
    subtenant (included as Exhibit 10.18 to the Companys
    Registration Statement on
    Form S-1,
    as amended (File
    No. 333-153451),
    filed on July 28, 2009, and incorporated herein by
    reference).10
.19

First Amendment to the Willis Building
    Sub-Lease,
    dated June 8, 2006, among Willis North America Inc. and
    Envoy Corporation (included as Exhibit 10.19 to the
    Companys Registration Statement on
    Form S-1,
    as amended (File
    No. 333-153451),
    filed on July 9, 2009, and incorporated herein by
    reference).10
.20

Donelson Corporate Centre Amended and Restated Office Lease
    Agreement, dated June 12, 2008, between Donelson Corporate
    Centre, Limited Partnership, as landlord, Envoy LLC, as tenant,
    and Emdeon Business Services LLC, as guarantor (included as
    Exhibit 10.20 to the Companys Registration Statement
    on
    Form S-1,
    as amended (File
    No. 333-153451),
    filed on July 28, 2009, and incorporated herein by
    reference).10
.21

Agreement of Lease, dated June 26, 2006, between
    Level 3 Communications, LLC, as landlord, and Envoy
    Corporation, as tenant (included as Exhibit 10.21 to the
    Companys Registration Statement on
    Form S-1,
    as amended (File
    No. 333-153451),
    filed on July 28, 2009, and incorporated herein by
    reference).10
.22

Lease Agreement, dated December 5, 1997, between BDM
    Properties, Kenneth A. MacLaren and Professional Office
    Services, Inc. (predecessor in interest to ExpressBill LLC)
    (included as Exhibit 10.22 to the Companys
    Registration Statement on
    Form S-1,
    as amended (File
    No. 333-153451),
    filed on July 9, 2009, and incorporated herein by
    reference).10
.23

Amended and Restated Lease Agreement, dated December 15,
    2009, between Solomon Airpark, LLC and Emdeon Business Services
    LLC, which was assigned by Emdeon Business Services LLC to Envoy
    LLC effective December 31, 2010 (filed as
    Exhibit 10.22 to the Companys Annual Report on
    Form 10-K,
    filed on March 18, 2010, and incorporated herein by
    reference).10
.24

Form of Common Stock Subscription and EBS Unit Vesting Agreement
    (included as Exhibit 10.24 to the Companys
    Registration Statement on
    Form S-1,
    as amended (File
    No. 333-153451),
    filed on July 28, 2009, and incorporated herein by
    reference).10
.25

Form of Emdeon Inc. Non-Qualified Stock Option Agreement
    (included as Exhibit 10.25 to the Companys
    Registration Statement on
    Form S-1,
    as amended (File
    No. 333-153451),
    filed on July 28, 2009, and incorporated herein by
    reference). 74




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##### Table of Contents



Exhibit No.10
.26

Form of Emdeon Inc. Restricted Share Unit Award Agreement (filed
    as Exhibit 10.25 to the Companys Annual Report on
    Form 10-K,
    filed on March 18, 2010, and incorporated herein by
    reference).10
.27

Emdeon Management Bonus Program (included as Exhibit 10.1
    to the Companys Current Report on
    Form 8-K,
    filed on March 12, 2010, and incorporated herein by
    reference).10
.28

Emdeon Inc. Employee Stock Purchase Plan, as amended (filed as
    Exhibit 99.1 to the Companys Registration Statement
    on
    Form S-8
    (File
    No. 333-167742),
    filed on June 24, 2010, and incorporated herein by
    reference).10
.29

Form of Indemnification Agreement (included as Exhibit 10.1
    to the Companys Registration Statement on
    Form S-1,
    as amended (File
    No. 333-153451),
    filed on July 28, 2009, and incorporated herein by
    reference).21
.1

Subsidiaries of the Registrant (filed herewith).23
.1

Consent of Independent Registered Public Accounting Firm (filed
    herewith).31
.1

Certification of Chief Executive Officer required by
    Rule 13a-14(a)/15d-14(a)
    under the Securities Exchange Act of 1934, as amended, as
    adopted pursuant to Section 302 of the Sarbanes-Oxley Act
    of 2002 (filed herewith).31
.2

Certification of Chief Financial Officer required by
    Rule 13a-14(a)/15d-14(a)
    under the Securities Exchange Act of 1934, as amended, as
    adopted pursuant to Section 302 of the Sarbanes-Oxley Act
    of 2002 (filed herewith).32
.1

Certification of Chief Executive Officer pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002 (furnished
    herewith).32
.2

Certification of Chief Financial Officer pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002 (furnished
    herewith).     
    
    Denotes a management contract or compensatory plan, contract or
    arrangement. 75