UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2011

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     .

COMMISSION FILE NUMBER: 333-117362

IASIS HEALTHCARE LLC

(Exact name of registrant as specified in its charter)

DELAWARE		20-1150104
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)
DOVER CENTRE
117 SEABOARD LANE, BUILDING E
FRANKLIN, TENNESSEE		37067
(Address of principal executive offices)		(Zip Code)

(615) 844-2747
(Registrant’s telephone number, including area code)

Not Applicable
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES þ NO o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES o NO o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o		Accelerated filer o		Non-accelerated filer þ		Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES o NO þ

As of May 16, 2011, 100% of the registrant’s common interests outstanding (all of which are privately owned and are not traded on any public market) were owned by IASIS Healthcare Corporation, its sole member.

 

 

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION			1
Item 1. Financial Statements			1
Condensed Consolidated Balance Sheets — March 31, 2011(Unaudited) and September 30, 2010			1
Condensed Consolidated Statements of Operations (Unaudited) — Quarters and Six Months Ended March 31, 2011 and 2010			2
Condensed Consolidated Statement of Equity (Unaudited) — Six Months Ended March 31, 2011			3
Condensed Consolidated Statements of Cash Flows (Unaudited) — Six Months Ended March 31, 2011 and 2010			4
Notes to Condensed Consolidated Financial Statements (Unaudited)			5
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			27
Item 3. Quantitative and Qualitative Disclosures about Market Risk			44
Item 4. Controls and Procedures			44
PART II. OTHER INFORMATION			45
Item 1. Legal Proceedings			45
Item 1A. Risk Factors			46
Item 6. Exhibits			46
Exhibit 4.1
Exhibit 4.2
Exhibit 4.3
Exhibit 10.1
Exhibit 31.1
Exhibit 31.2

PART I.
FINANCIAL INFORMATION

Item 1.		Financial Statements

IASIS HEALTHCARE LLC

		March 31,				September 30,
		2011				2010
		(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents		$	178,616			$	144,511
Accounts receivable, less allowance for doubtful accounts of $138,815 and $125,406 at March 31, 2011 and September 30, 2010, respectively			251,147				209,173
Inventories			59,050				53,842
Deferred income taxes			29,289				15,881
Prepaid expenses and other current assets			60,831				65,340
Total current assets			578,933				488,747
Property and equipment, net			1,002,090				985,291
Goodwill			801,275				718,243
Other intangible assets, net			34,067				27,000
Deposit for acquisition			7,000				97,891
Other assets, net			33,899				36,022
Total assets		$	2,457,264			$	2,353,194
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable		$	89,583			$	78,931
Salaries and benefits payable			43,181				38,110
Accrued interest payable			12,477				12,536
Medical claims payable			106,950				111,373
Other accrued expenses and other current liabilities			124,508				106,614
Current portion of long-term debt and capital lease obligations			7,675				6,691
Total current liabilities			384,374				354,255
Long-term debt and capital lease obligations			1,047,852				1,044,887
Deferred income taxes			109,623				109,272
Other long-term liabilities			71,043				60,162
Non-controlling interests with redemption rights			89,265				72,112
Equity:
Member’s equity			745,275				702,135
Non-controlling interests			9,832				10,371
Total equity			755,107				712,506
Total liabilities and equity		$	2,457,264			$	2,353,194

See accompanying notes.

IASIS HEALTHCARE LLC

		Quarter Ended								Six Months Ended
		March 31,								March 31,
		2011				2010				2011				2010
Net revenue:
Acute care revenue		$	488,449			$	437,574			$	959,588			$	862,234
Premium revenue			189,960				186,948				392,152				391,245
Total net revenue			678,409				624,522				1,351,740				1,253,479
Costs and expenses:
Salaries and benefits (includes stock-based compensation of $538, $2,128, $1,034 and $2,249, respectively)			196,036				174,171				385,949				344,653
Supplies			77,924				68,425				154,360				133,834
Medical claims			157,416				160,094				328,750				338,661
Other operating expenses			103,350				88,683				200,476				173,275
Provision for bad debts			54,801				45,536				114,415				93,485
Rentals and leases			11,289				10,145				22,455				20,420
Interest expense, net			16,510				16,622				33,387				33,354
Depreciation and amortization			24,584				24,025				48,630				47,902
Management fees			1,250				1,250				2,500				2,500
Total costs and expenses			643,160				588,951				1,290,922				1,188,084
Earnings from continuing operations before gain (loss) on disposal of assets and income taxes			35,249				35,571				60,818				65,395
Gain (loss) on disposal of assets, net			540				(161	)			885				(57	)
Earnings from continuing operations before income taxes			35,789				35,410				61,703				65,338
Income tax expense			13,500				13,270				22,689				23,861
Net earnings from continuing operations			22,289				22,140				39,014				41,477
Earnings (loss) from discontinued operations, net of income taxes			(2,846	)			(25	)			(6,054	)			21
Net earnings			19,443				22,115				32,960				41,498
Net earnings attributable to non-controlling interests			(2,417	)			(2,033	)			(4,188	)			(4,061	)
Net earnings attributable to IASIS Healthcare LLC		$	17,026			$	20,082			$	28,772			$	37,437

See accompanying notes.

IASIS HEALTHCARE LLC

		Non-controlling
		Interests with									Non-
		Redemption					Member’s				controlling
		Rights					Equity				Interests				Total Equity
Balance at September 30, 2010		$	72,112				$	702,135			$	10,371			$	712,506
Net earnings			4,134					28,772				54				28,826
Distributions to non-controlling interests			(5,603	)				—				(86	)			(86	)
Repurchase of non-controlling interests			(118	)				—				(507	)			(507	)
Acquisition related adjustments to redemption value of non-controlling interests with redemption rights			25,936					—				—				—
Stock-based compensation			—					1,034				—				1,034
Other comprehensive income			—					1,698				—				1,698
Contribution from parent company related to tax benefit from Holdings Senior PIK Loans interest			—					4,440				—				4,440
Adjustment to redemption value of non-controlling interests with redemption rights			(7,196	)				7,196				—				7,196
Balance at March 31, 2011		$	89,265				$	745,275			$	9,832			$	755,107

See accompanying notes.

		Six Months Ended
		March 31,
		2011				2010
Cash flows from operating activities
Net earnings		$	32,960			$	41,498
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization			48,630				47,902
Amortization of loan costs			1,636				1,564
Stock-based compensation			1,034				2,249
Deferred income taxes			2,278				19,589
Income tax benefit from stock-based compensation			—				(1,770	)
Income tax benefit from parent company interest			4,440				3,275
Loss (gain) on disposal of assets, net			(885	)			57
Loss (earnings) from discontinued operations, net			6,054				(21	)
Changes in operating assets and liabilities, net of the effect of acquisitions and dispositions:
Accounts receivable, net			(23,461	)			1,578
Inventories, prepaid expenses and other current assets			4,461				(6,165	)
Accounts payable, other accrued expenses and other accrued liabilities			20,562				7,010
Net cash provided by operating activities — continuing operations			97,709				116,766
Net cash used in operating activities — discontinued operations			(231	)			(199	)
Net cash provided by operating activities			97,478				116,567
Cash flows from investing activities
Purchases of property and equipment, net			(42,234	)			(30,187	)
Payments for acquisitions			(12,804	)			—
Proceeds from sale of assets			150				36
Change in other assets, net			1,639				1,013
Net cash used in investing activities			(53,249	)			(29,138	)
Cash flows from financing activities
Payment of debt and capital lease obligations			(3,810	)			(5,138	)
Distribution to parent company in connection with the repurchase of equity, net			—				(124,962	)
Distributions to non-controlling interests			(5,689	)			(5,277	)
Costs paid for the repurchase of non-controlling interests, net			(625	)			(69	)
Net cash used in financing activities			(10,124	)			(135,446	)
Change in cash and cash equivalents			34,105				(48,017	)
Cash and cash equivalents at beginning of period			144,511				206,528
Cash and cash equivalents at end of period		$	178,616			$	158,511
Supplemental disclosure of cash flow information
Cash paid for interest		$	31,846			$	31,837
Cash paid (received) for income taxes, net		$	(241	)		$	6,188
Supplemental disclosure of non-cash investing and financing activities
Capital lease obligations resulting from acquisitions		$	1,896			$	—

See accompanying notes.

IASIS HEALTHCARE LLC

1. ORGANIZATION AND BASIS OF PRESENTATION

The unaudited condensed consolidated financial statements as of and for the quarters and six months ended March 31, 2011 and 2010, reflect the financial position, results of operations and cash flows of IASIS Healthcare LLC (“IASIS” or the “Company”). The Company’s sole member and parent company is IASIS Healthcare Corporation (“Holdings” or “IAS”).

IASIS owns and operates medium-sized acute care hospitals in high-growth urban and suburban markets. At March 31, 2011, the Company owned or leased 17 acute care hospital facilities and one behavioral health hospital facility, with a total of 3,570 licensed beds, located in seven regions:

•

Salt Lake City, Utah;

•

Phoenix, Arizona;

•

Tampa-St. Petersburg, Florida;

•

four cities in Texas, including San Antonio;

•

Las Vegas, Nevada;

•

West Monroe, Louisiana; and

•

Woodland Park, Colorado.

The Company also owns and operates Health Choice Arizona, Inc. (“Health Choice” or the “Plan”), a Medicaid and Medicare managed health plan in Phoenix, Arizona.

The unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial reporting and in accordance with Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. The condensed consolidated balance sheet of the Company at September 30, 2010, has been derived from the audited consolidated financial statements at that date, but does not include all of the information and footnotes required by GAAP for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2010.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all material adjustments (consisting of normal recurring items) necessary for a fair presentation of results for the interim periods presented. The results of operations for any interim period are not necessarily indicative of results for the full year.

Principles of Consolidation

The unaudited condensed consolidated financial statements include all subsidiaries and entities under common control of the Company. Control is generally defined by the Company as ownership of a majority of the voting interest of an entity. In addition, control is demonstrated in most instances when the Company is the sole general partner in a limited partnership. Significant intercompany transactions have been eliminated.

Use of Estimates

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the accompanying unaudited condensed consolidated financial statements and footnotes. Actual results could differ from those estimates.

IASIS HEALTHCARE LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Reclassifications

Certain prior year amounts have been reclassified to conform to the current year presentation. These reclassifications have no impact on the Company’s total assets or total liabilities and equity.

General and Administrative

The majority of the Company’s expenses are “cost of revenue” items. Costs that could be classified as “general and administrative” by the Company would include the IASIS corporate office costs, which were $10.8 million and $10.3 million for the quarters ended March 31, 2011 and 2010, respectively, and $20.8 million and $19.3 million for the six months ended March 31, 2011 and 2010, respectively.

Subsequent Events Consideration

The Company has evaluated its financial statements and disclosures for the impact of subsequent events up to the date of filing its quarterly report on Form 10-Q with the Securities and Exchange Commission.

2. LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS

Long-term debt and capital lease obligations consist of the following (in thousands):

		March 31,				September 30,
		2011				2010
Senior secured credit facilities		$	567,315			$	570,260
Senior subordinated notes			475,000				475,000
Capital leases and other obligations			13,212				6,318
			1,055,527				1,051,578
Less current maturities			7,675				6,691
		$	1,047,852			$	1,044,887

Senior Secured Credit Facilities

The $854.0 million senior secured credit facilities include: (i) a senior secured term loan of $439.0 million; (ii) a senior secured delayed draw term loan of $150.0 million; (iii) a senior secured revolving credit facility of $225.0 million, which includes a $100.0 million sub-limit for letters of credit; and (iv) a senior secured synthetic letter of credit facility of $40.0 million. All facilities mature on March 15, 2014, except for the revolving credit facility, which matures on April 27, 2013. The term loans bear interest at an annual rate of LIBOR plus 2.00% or, at the Company’s option, the administrative agent’s base rate plus 1.00%. The revolving loans bear interest at an annual rate of LIBOR plus an applicable margin ranging from 1.25% to 1.75% or, at the Company’s option, the administrative agent’s base rate plus an applicable margin ranging from 0.25% to 0.75%, such rate in each case depending on the Company’s senior secured leverage ratio. A commitment fee ranging from 0.375% to 0.50% per annum is charged on the undrawn portion of the senior secured revolving credit facility and is payable in arrears.

Principal under the senior secured term loan is due in equal quarterly installments in an aggregate annual amount equal to 1.0% of the original principal amount ($439.0 million) during the first six years thereof, with the balance payable in four equal installments beginning April 2013. Principal under the senior secured delayed draw term loan is due in equal quarterly installments in an aggregate annual amount equal to 1.0% of the original principal amount ($150.0 million) until March 31, 2013, with the balance payable in four equal installments during the final year of the loan. The senior secured credit facilities are also subject to mandatory prepayment under specific circumstances, including a portion of excess cash flow, a portion of the net proceeds from an initial public offering, asset sales, debt issuances and specified casualty events, each subject to various exceptions.

The senior secured credit facilities are (i) secured by a first mortgage and lien on the real property and related personal and intellectual property of the Company and pledges of equity interests in the entities that own such properties and (ii) guaranteed by certain of the Company’s subsidiaries. In addition, the senior secured credit facilities contain certain covenants which, among other things, limit the incurrence of additional indebtedness, investments, dividends, transactions with affiliates, asset sales, acquisitions, mergers and consolidations, liens and encumbrances and other matters customarily restricted in such agreements.

IASIS HEALTHCARE LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

At March 31, 2011, amounts outstanding under the Company’s senior secured credit facilities consisted of a $421.4 million term loan and a $145.9 million delayed draw term loan. In addition, the Company had $39.9 million and $44.7 million in letters of credit outstanding under the synthetic letter of credit facility and the revolving credit facility, respectively. The weighted average interest rate of outstanding borrowings under the senior secured credit facilities was 3.2% and 3.3% for the quarter and six months ended March 31, 2011, respectively.

See Note 12 for subsequent event discussion regarding the Company’s refinancing transaction.

8 ³/₄% Senior Subordinated Notes

The Company, together with its wholly owned subsidiary, IASIS Capital Corporation (“IASIS Capital”), a holding company with no assets or operations, as issuers, have outstanding $475.0 million aggregate principal amount of 8 ³/₄% senior subordinated notes due 2014 (the “8 ³/₄% notes”). The 8 ³/₄% notes are general unsecured senior subordinated obligations and are subordinated in right of payment to all existing and future senior debt of the Company. The Company’s existing domestic subsidiaries, other than certain non-guarantor subsidiaries, which include Health Choice and the Company’s non-wholly owned subsidiaries, are guarantors of the 8 ³/₄% notes. The 8 ³/₄% notes are effectively subordinated to all of the issuers’ and the guarantors’ secured debt to the extent of the value of the assets securing the debt and are structurally subordinated to all liabilities and commitments (including trade payables and capital lease obligations) of the Company’s subsidiaries that are not guarantors of the 8 ³/₄% notes.

See Note 12 for subsequent event discussion regarding the Company’s refinancing transaction.

Holdings Senior Paid-in-Kind Loans

IAS has outstanding unsecured Senior Paid-in-Kind (“PIK”) Loans, which were used to repurchase certain preferred equity from its stockholders in fiscal 2007. The Holdings Senior PIK Loans mature June 15, 2014, and bear interest at an annual rate equal to LIBOR plus 5.25%. At March 31, 2011, the outstanding balance of the Holdings Senior PIK Loans was $400.9 million, which includes $100.9 million of interest that has accrued to the principal of these loans since the date of issuance. In June 2012, the Holdings Senior PIK Loans, which rank behind the Company’s existing debt, will convert to cash-pay, at which time all accrued interest becomes payable.

See Note 12 for subsequent event discussion regarding the Company’s refinancing transaction.

3. INTEREST RATE SWAPS

Effective March 2, 2009, the Company executed interest rate swap agreements with Citibank, N.A. and Wachovia Bank, N.A., as counterparties, with notional amounts totaling $425.0 million, of which $225.0 million expired on February 28, 2011. As of March 31, 2011, two interest rate swap agreements remained in effect, with each agreement having notional amounts of $100.0 million and expiring on February 29, 2012. The Company entered into its interest rate swap arrangements to mitigate the floating interest rate risk on a portion of its outstanding variable rate debt. Under the remaining agreements, the Company is required to make monthly fixed rate payments to the counterparties, as calculated on the applicable notional amounts, at an annual fixed rate of 2.0%. The counterparties are obligated to make monthly floating rate payments to the Company based on the one-month LIBOR rate for the same referenced notional amount.

The Company accounts for its interest rate swaps in accordance with the provisions of Financial Accounting Standards Board (“FASB”) authoritative guidance regarding accounting for derivative instruments and hedging activities, which also includes enhanced disclosure requirements. In accordance with these provisions, the Company has designated its interest rate swaps as a cash flow hedge instrument. The Company assesses the effectiveness of this cash flow hedge on a quarterly basis, with any ineffectiveness being measured using the hypothetical derivative method. The Company completed an assessment of its cash flow hedge instrument during the quarters and six months ended March 31, 2011 and 2010, and determined its hedging instruments to be highly effective in all periods. Accordingly, no gain or loss resulting from hedging ineffectiveness is reflected in the Company’s accompanying unaudited condensed consolidated statements of operations.

The Company applies the provisions of FASB authoritative guidance regarding fair value measurements, which provides a single definition of fair value, establishes a framework for measuring fair value, and expands disclosures concerning fair value measurements. The Company applies these provisions to the valuation and disclosure of its interest rates swaps. This authoritative guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: (i) Level 1, which is defined as quoted prices in active markets that can be accessed at the measurement date; (ii) Level 2, which is defined as inputs other than quoted prices in active markets that are observable, either directly or indirectly; and (iii) Level 3, which is defined as unobservable inputs resulting from the existence of little or no market data, therefore potentially requiring an entity to develop its own assumptions.

IASIS HEALTHCARE LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The Company determines the fair value of its interest rate swaps in a manner consistent with that used by market participants in pricing hedging instruments, which includes using a discounted cash flow analysis based upon the terms of the agreements, the impact of the one-month forward LIBOR curve and an evaluation of credit risk. Given the use of observable market assumptions and the consideration of credit risk, the Company has categorized the valuation of its interest rate swaps as Level 2.

The fair value of the Company’s interest rate swaps at March 31, 2011 and September 30, 2010, reflect liability balances of $3.0 million and $5.7 million, respectively, and are included in other long-term liabilities in the accompanying unaudited condensed consolidated balance sheets. The fair value of the Company’s interest rate swaps reflects a liability because the effect of the forward LIBOR curve on future interest payments results in less interest due to the Company under the variable rate component included in the interest rate swap agreements, as compared to the amount due the Company’s counterparties under the fixed interest rate component. Any change in the fair value of the Company’s interest rate swaps, net of income taxes, is included in other comprehensive loss as a component of member’s equity in the accompanying unaudited condensed consolidated balance sheets.

4. ACQUISITIONS

Effective October 1, 2010, the Company acquired Brim Holdings, Inc. (“Brim”) in a cash-for-stock transaction valued at $95.0 million, subject to changes in net working capital. Brim operates Wadley Regional Medical Center, a 370-licensed bed acute care hospital facility located in Texarkana, Texas, and Pikes Peak Regional Hospital, a 15-licensed bed critical access acute care hospital facility, in Woodland Park, Colorado, through operating lease agreements with separate parties. The Brim acquisition was accounted for as a business combination, which requires the Company to allocate the purchase price of these facilities to assets acquired or liabilities assumed based on their fair values. The excess of the purchase price allocation over those fair values is recorded as goodwill. The Company’s third-party valuation of acquired assets has been finalized, and the appropriate fair values have been reflected in the accompanying unaudited condensed consolidated balance sheet.

See Note 12 for subsequent event discussion regarding the Company’s recent acquisition of St. Joseph Medical Center in Houston, Texas.

5. GOODWILL

The following table presents the changes in the carrying amount of goodwill (in thousands):

		Acute				Health
		Care				Choice				Total
Balance at September 30, 2010		$	712,486			$	5,757			$	718,243
Brim acquisition			77,762				—				77,762
Other acquisitions			5,270				—				5,270
Balance at March 31, 2011		$	795,518			$	5,757			$	801,275

For the six months ended March 31, 2011, goodwill increased by $83.0 million as a result of the purchase of Brim and other entities. See Note 4 for more details regarding the fair value assessment of acquired assets and liabilities.

IASIS HEALTHCARE LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

6. COMPREHENSIVE INCOME

Comprehensive income consists of two components: net earnings and other comprehensive income. Other comprehensive income refers to revenues, expenses, gains and losses that under the FASB authoritative guidance related to accounting for comprehensive income are recorded as elements of equity, but are excluded from net earnings. The following table presents the components of comprehensive income, net of income taxes (in thousands):

		Quarter Ended								Six Months Ended
		March 31,								March 31,
		2011				2010				2011				2010
Net earnings		$	19,443			$	22,115			$	32,960			$	41,498
Change in fair value of interest rate swaps			1,148				(1,439	)			2,708				(1,148	)
Change in income tax benefit (expense)			(433	)			539				(1,010	)			428
Comprehensive income		$	20,158			$	21,215			$	34,658			$	40,778

The components of accumulated other comprehensive loss, net of income taxes, are as follows (in thousands):

		March 31,				September 30,
		2011				2010
Fair value of interest rate swaps		$	(2,999	)		$	(5,707	)
Income tax benefit			1,118				2,128
Accumulated other comprehensive loss		$	(1,881	)		$	(3,579	)

7. DISTRIBUTION TO PARENT

During fiscal 2010, the Company distributed $125.0 million, net of a $1.8 million income tax benefit, to IAS to fund the repurchase of certain shares of its outstanding preferred stock and cancel certain vested rollover options to purchase its common stock. The holder of the IAS preferred stock is represented by an investor group led by TPG, JLL Partners and Trimaran Fund Management. The repurchase of preferred stock, which included accrued and outstanding dividends, and the cancellation of rollover options, were funded by the Company’s excess cash on hand. The cancellation of the rollover options, which were associated with the Company’s 2004 recapitalization, resulted in the Company recognizing $2.0 million in stock-based compensation during the quarter ended March 31, 2010.

See Note 12 for subsequent event discussion regarding the Company’s distribution to IAS in connection with its refinancing transaction.

8. COMMITMENTS AND CONTINGENCIES

Net Revenue

The calculation of appropriate payments from the Medicare and Medicaid programs, as well as terms governing agreements with other third-party payors, is complex and subject to interpretation. Final determination of amounts earned under the Medicare and Medicaid programs often occurs subsequent to the year in which services are rendered because of audits by the programs, rights of appeal and the application of numerous technical provisions. In the opinion of management, adequate provision has been made for adjustments that may result from such routine audits and appeals.

Professional, General and Workers’ Compensation Liability Risks

The Company is subject to claims and legal actions in the ordinary course of business, including but not limited to claims relating to patient treatment and personal injuries. To cover these types of claims, the Company maintains professional and general liability insurance in excess of self-insured retentions through a commercial insurance carrier in amounts that the Company believes to be sufficient for its operations, although, potentially, some claims may exceed the scope of coverage in effect. Plaintiffs in these matters may request punitive or other damages that may not be covered by insurance. The Company is currently not a party to any such proceedings that, in the Company’s opinion, would have a material adverse effect on the Company’s business, financial condition or results of operations. The Company expenses an estimate of the costs it expects to incur under the self-insured retention exposure for professional and general liability claims using historical claims data, demographic factors, severity factors, current incident logs and other actuarial analysis. At March 31, 2011 and September 30, 2010, the Company’s professional and general liability accrual for asserted and unasserted claims totaled $50.3 million and $41.6 million, respectively. The semi-annual valuations from the Company’s independent actuary for professional and general liability losses resulted in a change in related estimates for prior periods which increased insurance expense by $948,000 during the quarter and six months ended March 31, 2011, compared to a decrease of $1.9 million during the same prior year periods.

IASIS HEALTHCARE LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The Company is subject to claims and legal actions in the ordinary course of business relative to workers’ compensation matters. To cover these types of claims, the Company maintains workers’ compensation insurance coverage with a self-insured retention. The Company accrues the costs of workers’ compensation claims based upon estimates derived from its claims experience. The semi-annual valuations from the Company’s independent actuary for workers’ compensation losses resulted in a change in related estimates for prior periods which increased benefits expense by $1.2 million during the quarter and six months ended March 31, 2011, compared to an increase of $801,000 during the same prior year periods.

Health Choice

Health Choice has entered into capitated contracts whereby the Plan provides managed healthcare services in exchange for fixed periodic and supplemental payments from the Arizona Health Care Cost Containment System (“AHCCCS”) and the Centers for Medicare & Medicaid Services (“CMS”). These services are provided regardless of the actual costs incurred to provide these services. The Company receives reinsurance and other supplemental payments from AHCCCS to cover certain costs of healthcare services that exceed certain thresholds. The Company believes that current capitated payments received, together with reinsurance and other supplemental payments, are sufficient to pay for the services Health Choice is obligated to deliver. As of March 31, 2011, the Company has provided a performance guaranty in the form of letters of credit totaling $48.3 million for the benefit of AHCCCS to support Health Choice’s obligations under its contract to provide and pay for the healthcare services. The amount of the performance guaranty is generally based, in part, upon the membership in the Plan and the related capitation revenue paid to Health Choice.

Acquisitions

The Company has acquired and in the future may choose to acquire businesses with prior operating histories. Such businesses may have unknown or contingent liabilities, including liabilities for failure to comply with healthcare laws and regulations, such as billing and reimbursement, fraud and abuse and similar anti-referral laws. Although the Company has procedures designed to conform business practices to its policies following the completion of any acquisition, there can be no assurance that the Company will not become liable for previous activities of prior owners that may later be asserted to be improper by private plaintiffs or government agencies. Although the Company generally seeks to obtain indemnification from prospective sellers covering such matters, there can be no assurance that any such matter will be covered by indemnification, or if covered, that such indemnification will be adequate to cover potential losses and fines.

Other

On March 31, 2008, the United States District Court for the District of Arizona (“District Court”) dismissed with prejudice the qui tam complaint against IAS, our parent company. The qui tam action sought monetary damages and civil penalties under the federal False Claims Act (“FCA”) and included allegations that certain business practices related to physician relationships and the medical necessity of certain procedures resulted in the submission of claims for reimbursement in violation of the FCA. The case dates back to March 2005 and became the subject of a subpoena by the Office of Inspector General in September 2005. In August 2007, the case was unsealed and the U.S. Department of Justice (“DOJ”) declined to intervene. The District Court dismissed the case from the bench at the conclusion of oral arguments on IAS’ motion to dismiss. On April 21, 2008, the District Court issued a written order dismissing the case with prejudice and entering formal judgment for IAS and denying as moot IAS’ motions related to the relator’s misappropriation of information subject to a claim of attorney-client privilege by IAS. Both parties appealed. On August 12, 2010, United States Court of Appeals for the Ninth Circuit reversed the District Court’s dismissal of the qui tam complaint and the District Court’s denial of IAS’ motions concerning the relator’s misappropriation of documents and ordered that the qui tam relator be allowed leave to file a Third Amended Complaint and for the District Court to consider IAS’ motions concerning the relator’s misappropriation of documents. The District Court ordered the qui tam relator to file his Third Amended Complaint by November 22, 2010, and set a

IASIS HEALTHCARE LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

schedule for the filing of motions related to the relator’s misappropriation of documents. On October 20, 2010, the qui tam relator filed a motion to transfer this action to the United States District Court for the Eastern District of Texas. On November 22, 2010, the relator filed his Third Amended Complaint. On January 3, 2011, IAS filed its renewed motion for sanctions concerning the relator’s misappropriation of documents and, on January 14, 2011, IAS filed its motion to dismiss the relator’s Third Amended Complaint. On May 4, 2011, the District Court in Arizona heard oral arguments on all pending motions, including IAS’ motion to dismiss and renewed motions for sanctions and the relator’s motion to transfer the action to the United States District Court for the Eastern District of Texas. The District Court dismissed relator’s motion to transfer and took all other motions under advisement at the conclusion of oral argument. While the District Court is expected to rule quickly, IAS anticipates that it could take 90 days or more for the District Court to issue its final opinion on IAS’ motion to dismiss and renewed motion for sanctions. If the qui tam action were to be resolved in a manner unfavorable to IAS, it could have a material adverse effect on the Company’s business, financial condition and results of operations, including exclusion from the Medicare and Medicaid programs. In addition, the Company may incur material fees, costs and expenses in connection with defending the qui tam action.

The Company’s facilities obtain clinical and administrative services from a variety of vendors. One vendor, a medical practice that furnished cardiac catheterization services under contractual arrangements at Mesa General Hospital and St. Luke’s Medical Center through March 31, 2008 and May 31, 2008, respectively, has asserted that, because of deferred fee adjustments that it claims are due under these arrangements, it is owed additional amounts for services rendered since April 1, 2006 at both facilities. The Company and the vendor were unable to reach an agreement with respect to the amount of the fee adjustment, if any, that was contractually required, nor with respect to an appropriate methodology for determining such amount. On September 30, 2008, the vendor filed a state court complaint for an aggregate adjustment in excess of the amount accrued by the Company, in addition to certain tort claims. On March 20, 2009, the Company filed a Motion to Dismiss and in the alternative to Compel Arbitration. On July 27, 2009, the court granted the Company’s Motion to Compel Arbitration on the grounds that the issues are to be determined by binding arbitration. On December 24, 2010, after conducting the arbitration hearing, the arbitration panel issued its decision rejecting the fees sought by the vendor, but did not adopt the fees proposed by the Company. The arbitration panel required both parties to agree upon a settlement amount, based on the arbitration panel’s approved methodology, by January 21, 2011. The Company has reviewed the methodology required by decision in binding arbitration and has determined that it will result in a payment to the vendor of approximately $15.2 million, which includes $5.8 million in pre-judgement interest and legal fees. Of the additional liability resulting from the arbitration panel’s decision, $9.3 million ($6.1 million, net of income taxes) is included in discontinued operations, related to the closure of Mesa General Hospital, for the six months ended March 31, 2011. The arbitration panel has not rendered a decision with respect to any of the vendor’s tort claims, which are expected to be addressed in separate proceedings. The Company will continue to defend its interests in connection with this arbitration proceeding, but expresses no opinion as to the outcome of matters not yet decided by the arbitration panel.

In November 2010, the DOJ sent a letter to IAS requesting a 12-month tolling agreement in connection with an investigation into Medicare claims submitted by our hospitals in connection with the implantation of implantable cardioverter defibrillators (“ICDs”) during the period 2003 to the present. At that time, neither the precise number of procedures, number of claims nor the hospitals involved were identified by the DOJ. The Company understands that the government is conducting a national initiative with respect to ICD procedures involving a number of healthcare providers and is seeking information in order to determine if ICD implantation procedures were performed in accordance with Medicare coverage requirements. On January 11, 2011, IAS entered into the tolling agreement with the DOJ and, subsequently, the DOJ has provided IAS with a list of 194 procedures involving ICDs at 14 hospitals which are the subject of further medical necessity review by the DOJ. The Company is cooperating fully with the government and, to date, the DOJ has not asserted any claim against the Company’s hospitals.

9. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In August 2010, the FASB issued Accounting Standards Update (“ASU”) No. 2010-23, “Health Care Entities” (Topic 954): Measuring Charity Care for Disclosure. Due to the lack of comparability existing as a result of the use of either revenue or cost as the basis for disclosure of charity care, this ASU standardizes cost as the basis for charity care disclosures and specifies the elements of cost to be used in charity care disclosures. ASU 2010-23 is effective for the Company’s fiscal year beginning October 1, 2011, and is not expected to significantly impact the Company’s financial statement disclosures.

IASIS HEALTHCARE LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Also in August 2010, the FASB issued ASU No. 2010-24, “Health Care Entities” (Topic 954): Presentation of Insurance Claims and Related Insurance Recoveries. This ASU eliminates the practice of netting claim liabilities with expected related insurance recoveries for balance sheet presentation. Claim liabilities are to be determined with no regard for recoveries and presented gross. Expected recoveries are presented separately. ASU 2010-24 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2010. ASU 2010-24 is effective for the Company’s fiscal year beginning October 1, 2011, and is not expected to significantly impact the Company’s financial position, results of operations or cash flows.

In October 2010, the FASB issued ASU No. 2010-26, “Financial Services —Insurance” (Topic 944): Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts. ASU 2010-26 provides guidance on accounting for deferred policy acquisition costs of internal replacements of insurance and investment contracts. The amendments in this ASU specify that certain costs incurred in the successful acquisition of new and renewal contracts should be capitalized. Those costs include incremental direct costs of contract acquisition that result directly from and are essential to the contract transaction(s) and would not have been incurred by the insurance entity had the contract transaction(s) not occurred. ASU 2010-26 is effective for the Company’s fiscal year beginning October 1, 2012, with early adoption permitted, and is not expected to significantly impact the Company’s financial position, results of operations or cash flows.

In December 2010, the FASB issued ASU No. 2010-28, “Intangibles—Goodwill and Other” (Topic 350): When to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or Negative Carrying Amounts. ASU 2010-28 requires Step 2 of the impairment test be performed in circumstances where the carrying amount of a reporting unit is zero or negative and there are qualitative factors that indicate it is more likely than not that a goodwill impairment exists. The ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2010. ASU 2010-28 is effective for the Company’s fiscal year beginning October 1, 2011, and is not expected to significantly impact the Company’s financial position, results of operations or cash flows.

In December 2010, the FASB issued ASU No. 2010-29, “Business Combinations” (Topic 805): Disclosure of Supplementary Pro Forma Information for Business Combinations. ASU 2010-29 clarifies that, if a reporting entity presents comparative financial statements, the pro forma revenue and earnings of the combined entity should be reported as though the business combinations that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period. The ASU is effective prospectively for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010. ASU No. 2010-29 is effective for the Company’s fiscal year beginning October 1, 2011, with early adoption permitted, and is an accounting principle which clarifies disclosure requirements, and is not expected to significantly impact the Company’s financial statement disclosures.

IASIS HEALTHCARE LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

10. SEGMENT AND GEOGRAPHIC INFORMATION

The Company’s acute care hospitals and related healthcare businesses are similar in their activities and the economic environments in which they operate (i.e. urban and suburban markets). Accordingly, the Company’s reportable operating segments consist of (1) acute care hospitals and related healthcare businesses, collectively “Acute Care”, and (2) Health Choice. The following is a financial summary by business segment for the periods indicated (in thousands):

		For the Quarter Ended March 31, 2011
		Acute Care				Health Choice				Eliminations				Consolidated
Acute care revenue		$	488,449			$	—			$	—			$	488,449
Premium revenue			—				189,960				—				189,960
Revenue between segments			2,807				—				(2,807	)			—
Net revenue			491,256				189,960				(2,807	)			678,409
Salaries and benefits (excludes stock-based compensation)			190,325				5,173				—				195,498
Supplies			77,872				52				—				77,924
Medical claims			—				160,223				(2,807	)			157,416
Other operating expenses			96,425				6,925				—				103,350
Provision for bad debts			54,801				—				—				54,801
Rentals and leases			10,891				398				—				11,289
Adjusted EBITDA (1)			60,942				17,189				—				78,131
Interest expense, net			16,510				—				—				16,510
Depreciation and amortization			23,697				887				—				24,584
Stock-based compensation			538				—				—				538
Management fees			1,250				—				—				1,250
Earnings from continuing operations before gain on disposal of assets and income taxes			18,947				16,302				—				35,249
Gain on disposal of assets, net			540				—				—				540
Earnings from continuing operations before income taxes		$	19,487			$	16,302			$	—			$	35,789

		For the Quarter Ended March 31, 2010
		Acute Care				Health Choice				Eliminations				Consolidated
Acute care revenue		$	437,574			$	—			$	—			$	437,574
Premium revenue			—				186,948				—				186,948
Revenue between segments			3,336				—				(3,336	)			—
Net revenue			440,910				186,948				(3,336	)			624,522
Salaries and benefits (excludes stock-based compensation)			167,096				4,947				—				172,043
Supplies			68,375				50				—				68,425
Medical claims			—				163,430				(3,336	)			160,094
Other operating expenses			82,604				6,079				—				88,683
Provision for bad debts			45,536				—				—				45,536
Rentals and leases			9,780				365				—				10,145
Adjusted EBITDA (1)			67,519				12,077				—				79,596
Interest expense, net			16,622				—				—				16,622
Depreciation and amortization			23,137				888				—				24,025
Stock-based compensation			2,128				—				—				2,128
Management fees			1,250				—				—				1,250
Earnings from continuing operations before loss on disposal of assets and income taxes			24,382				11,189				—				35,571
Loss on disposal of assets, net			(161	)			—				—				(161	)
Earnings from continuing operations before income taxes		$	24,221			$	11,189			$	—			$	35,410

IASIS HEALTHCARE LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

		For the Six Months Ended March 31, 2011
		Acute Care				Health Choice				Eliminations				Consolidated
Acute care revenue		$	959,588			$	—			$	—			$	959,588
Premium revenue			—				392,152				—				392,152
Revenue between segments			5,467				—				(5,467	)			—
Net revenue			965,055				392,152				(5,467	)			1,351,740
Salaries and benefits (excludes stock-based compensation)			374,719				10,196				—				384,915
Supplies			154,264				96				—				154,360
Medical claims			—				334,217				(5,467	)			328,750
Other operating expenses			187,255				13,221				—				200,476
Provision for bad debts			114,415				—				—				114,415
Rentals and leases			21,613				842				—				22,455
Adjusted EBITDA (1)			112,789				33,580				—				146,369
Interest expense, net			33,387				—				—				33,387
Depreciation and amortization			46,848				1,782				—				48,630
Stock-based compensation			1,034				—				—				1,034
Management fees			2,500				—				—				2,500
Earnings from continuing operations before gain on disposal of assets and income taxes			29,020				31,798				—				60,818
Gain on disposal of assets, net			885				—				—				885
Earnings from continuing operations before income taxes		$	29,905			$	31,798			$	—			$	61,703
Segment assets		$	2,114,294			$	342,970							$	2,457,264
Capital expenditures		$	42,187			$	47							$	42,234
Goodwill		$	795,518			$	5,757							$	801,275

		For the Six Months Ended March 31, 2010
		Acute Care				Health Choice				Eliminations				Consolidated
Acute care revenue		$	862,234			$	—			$	—			$	862,234
Premium revenue			—				391,245				—				391,245
Revenue between segments			6,012				—				(6,012	)			—
Net revenue			868,246				391,245				(6,012	)			1,253,479
Salaries and benefits (excludes stock-based compensation)			332,865				9,539				—				342,404
Supplies			133,737				97				—				133,834
Medical claims			—				344,673				(6,012	)			338,661
Other operating expenses			160,929				12,346				—				173,275
Provision for bad debts			93,485				—				—				93,485
Rentals and leases			19,684				736				—				20,420
Adjusted EBITDA (1)			127,546				23,854				—				151,400
Interest expense, net			33,354				—				—				33,354
Depreciation and amortization			46,125				1,777				—				47,902
Stock-based compensation			2,249				—				—				2,249
Management fees			2,500				—				—				2,500
Earnings from continuing operations before loss on disposal of assets and income taxes			43,318				22,077				—				65,395
Loss on disposal of assets, net			(57	)			—				—				(57	)
Earnings from continuing operations before income taxes		$	43,261			$	22,077			$	—			$	65,338
Segment assets		$	1,991,583			$	286,775							$	2,278,358
Capital expenditures		$	30,073			$	114							$	30,187
Goodwill		$	712,163			$	5,757							$	717,920

IASIS HEALTHCARE LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

11. SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION

The 8 ³/₄% notes described in Note 2 are fully and unconditionally guaranteed on a joint and several basis by all of the Company’s existing domestic subsidiaries, other than non-guarantor subsidiaries which include Health Choice and the Company’s non-wholly owned subsidiaries.

Effective October 1, 2010, the operations and net assets of Wadley Regional Medical Center, acquired as part of the Brim acquisition, are included in the subsidiary non-guarantor information in the following summarized unaudited condensed consolidating financial statements.

Summarized condensed consolidating balance sheets at March 31, 2011 and September 30, 2010, condensed consolidating statements of operations for the quarters and six months ended March 31, 2011 and 2010, and condensed consolidating statements of cash flows for the six months ended March 31, 2011 and 2010, for the Company, segregating the parent company issuer, the subsidiary guarantors, the subsidiary non-guarantors and eliminations, are found below. Prior year amounts have been reclassified to conform to the current year presentation.

IASIS HEALTHCARE LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

IASIS Healthcare LLC
Condensed Consolidating Balance Sheet (unaudited)
March 31, 2011
(in thousands)

						Subsidiary				Subsidiary								Condensed
		Parent Issuer				Guarantors				Non-Guarantors				Eliminations				Consolidated
Assets
Current assets:
Cash and cash equivalents		$	—			$	175,063			$	3,553			$	—			$	178,616
Accounts receivable, net			—				101,203				149,944				—				251,147
Inventories			—				23,319				35,731				—				59,050
Deferred income taxes			29,289				—				—				—				29,289
Prepaid expenses and other current assets			—				26,524				34,307				—				60,831
Total current assets			29,289				326,109				223,535				—				578,933
Property and equipment, net			—				346,988				655,102				—				1,002,090
Intercompany			—				(299,762	)			299,762				—				—
Net investment in and advances to subsidiaries			1,862,317				—				—				(1,862,317	)			—
Goodwill			7,701				64,258				729,316				—				801,275
Other intangible assets, net			—				8,567				25,500				—				34,067
Deposit for acquisition			—				7,000				—				—				7,000
Other assets, net			10,383				15,346				8,170				—				33,899
Total assets		$	1,909,690			$	468,506			$	1,941,385			$	(1,862,317	)		$	2,457,264
Liabilities and Equity
Current liabilities:
Accounts payable		$	—			$	31,814			$	57,769			$	—			$	89,583
Salaries and benefits payable			—				22,237				20,944				—				43,181
Accrued interest payable			12,477				(3,234	)			3,234				—				12,477
Medical claims payable			—				—				106,950				—				106,950
Other accrued expenses and other current liabilities			—				50,173				74,335				—				124,508
Current portion of long-term debt and capital lease obligations			5,890				1,785				21,400				(21,400	)			7,675
Total current liabilities			18,367				102,775				284,632				(21,400	)			384,374
Long-term debt and capital lease obligations			1,036,425				11,427				547,519				(547,519	)			1,047,852
Deferred income taxes			109,623				—				—				—				109,623
Other long-term liabilities			—				70,415				628				—				71,043
Total liabilities			1,164,415				184,617				832,779				(568,919	)			1,612,892
Non-controlling interests with redemption rights			—				89,265				—				—				89,265
Equity:
Member’s equity			745,275				184,792				1,108,606				(1,293,398	)			745,275
Non-controlling interests			—				9,832				—				—				9,832
Total equity			745,275				194,624				1,108,606				(1,293,398	)			755,107
Total liabilities and equity		$	1,909,690			$	468,506			$	1,941,385			$	(1,862,317	)		$	2,457,264

IASIS HEALTHCARE LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

IASIS Healthcare LLC
Condensed Consolidating Balance Sheet
September 30, 2010
(in thousands)

						Subsidiary				Subsidiary								Condensed
		Parent Issuer				Guarantors				Non-Guarantors				Eliminations				Consolidated
Assets
Current assets:
Cash and cash equivalents		$	—			$	143,599			$	912			$	—			$	144,511
Accounts receivable, net			—				81,649				127,524				—				209,173
Inventories			—				22,793				31,049				—				53,842
Deferred income taxes			15,881				—				—				—				15,881
Prepaid expenses and other current assets			—				23,577				41,763				—				65,340
Total current assets			15,881				271,618				201,248				—				488,747
Property and equipment, net			—				351,265				634,026				—				985,291
Intercompany			—				(297,257	)			297,257				—				—
Net investment in and advances to subsidiaries			1,823,973				—				—				(1,823,973	)			—
Goodwill			17,331				65,504				635,408				—				718,243
Other intangible assets, net			—				—				27,000				—				27,000
Deposit for acquisition			—				97,891				—				—				97,891
Other assets, net			12,018				17,967				6,037				—				36,022
Total assets		$	1,869,203			$	506,988			$	1,800,976			$	(1,823,973	)		$	2,353,194
Liabilities and Equity
Current liabilities:
Accounts payable		$	—			$	32,400			$	46,531			$	—			$	78,931
Salaries and benefits payable			—				19,916				18,194				—				38,110
Accrued interest payable			12,536				(3,237	)			3,237				—				12,536
Medical claims payable			—				—				111,373				—				111,373
Other accrued expenses and other current liabilities			—				32,326				74,288				—				106,614
Current portion of long-term debt and capital lease obligations			5,890				801				20,570				(20,570	)			6,691
Total current liabilities			18,426				82,206				274,193				(20,570	)			354,255
Long-term debt and capital lease obligations			1,039,370				5,517				547,170				(547,170	)			1,044,887
Deferred income taxes			109,272				—				—				—				109,272
Other long-term liabilities			—				59,527				635				—				60,162
Total liabilities			1,167,068				147,250				821,998				(567,740	)			1,568,576
Non-controlling interests with redemption rights			—				72,112				—				—				72,112
Equity:
Member’s equity			702,135				277,255				978,978				(1,256,233	)			702,135
Non-controlling interests			—				10,371				—				—				10,371
Total equity			702,135				287,626				978,978				(1,256,233	)			712,506
Total liabilities and equity		$	1,869,203			$	506,988			$	1,800,976			$	(1,823,973	)		$	2,353,194