Q1 adjusted EPS view excludes 14c per diluted share of estimated amortization expense, 9c per diluted share of estimated stock-based compensation expense and 3c per diluted share of transformation related expenses. Additionally, for the Q1, MEDNAX expects that Adjusted EBITDA will be between $108M-$118M, compared to the prior-year period Adjusted EBITDA of $133.6M. Q1 MEDNAX has one fewer weekday compared to the previous Q1, which is expected to impact Adjusted EBITDA unfavorably by approximately $4M. In addition, Q1 Adjusted EBITDA includes approximately $5M in contribution from the previously mentioned anesthesiology contract that was not renewed subsequent to that period. Factors include the incurrence of a disproportionate share of the annual expenses associated with Social Security payroll taxes and 401 match. In 2018, the Company’s total expenses related to these items were approximately $167 million, of which $67M, or 40% was incurred in the Q1. Consequently, MEDNAX’s Adjusted EBITDA and EPS for the Q1 of FY18 reflected expenses related to these items that were approximately $25M, or 21c, higher than if they were incurred ratably throughout the year. The Company’s outlook for the first quarter of 2019 reflects a similar impact due to the seasonality of these expense items.
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