Attached files
| file | filename |
|---|---|
| EX-99.1 - EX-99.1 - Envision Healthcare Holdings, Inc. | a14-20095_1ex99d1.htm |
| EX-99.2 - EX-99.2 - Envision Healthcare Holdings, Inc. | a14-20095_1ex99d2.htm |
| EX-23.1 - EX-23.1 - Envision Healthcare Holdings, Inc. | a14-20095_1ex23d1.htm |
| 8-K/A - 8-K/A - Envision Healthcare Holdings, Inc. | a14-20095_18ka.htm |
Exhibit 99.3
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL DATA
On June 17, 2014, Envision Healthcare Holdings, Inc. (the “Company” or “Envision Healthcare”) acquired the stock of Phoenix Physicians, LLC and affiliates (“Phoenix Physicians”) for a total purchase price of $169.5 million paid in cash.
The following tables set forth certain unaudited pro forma condensed combined financial statements, including unaudited pro forma adjustments (collectively, the “Pro Forma Financial Data”), giving effect to the Company’s acquisition of Phoenix Physicians. The unaudited pro forma condensed combined balance sheet gives effect to the acquisition of Phoenix Physicians by the Company as of March 31, 2014. The unaudited pro forma condensed combined statements of operations give effect to the Phoenix Physicians acquisition as if the acquisition had been completed on January 1, 2013.
The Pro Forma Financial Data is based upon the historical financial statements of the Company and Phoenix Physicians and certain adjustments which the Company believes are reasonable to give effect to the Phoenix Physician acquisition. These adjustments are based upon currently available information and certain assumptions, and therefore the actual adjustments will likely differ from the pro forma adjustments. The Pro Forma Financial Data included herein was prepared using the acquisition method of accounting for the business combination. The fair value amounts assigned to the identifiable assets acquired and liabilities assumed are considered preliminary at this time. However, the Company believes that the preliminary determination of the fair value of acquired assets and assumed liabilities and other related assumptions utilized in preparing the Pro Forma Financial Data provide a reasonable basis for presenting the pro forma effects of the Phoenix Physician acquisition.
The unaudited pro forma condensed combined financial statements are for informational purposes only and do not purport to reflect the financial position or results of operations that would have occurred if the Phoenix Physicians acquisition had been consummated on January 1, 2013; nor does it purport to represent or be indicative of the financial position or results of operations of the Company for any future dates or periods.
Envision Healthcare Holdings, Inc.
Unaudited Pro Forma Condensed Combined Balance Sheet
As of March 31, 2014
(in thousands)
|
|
|
Historical |
|
|
|
|
| ||||||
|
|
|
Envision |
|
Phoenix |
|
Pro forma |
|
Pro forma |
| ||||
|
|
|
Healthcare |
|
Physicians |
|
Adjustments |
|
Combined |
| ||||
|
Assets |
|
|
|
|
|
|
|
|
| ||||
|
Current assets: |
|
|
|
|
|
|
|
|
| ||||
|
Cash and cash equivalents |
|
$ |
190,996 |
|
$ |
5,197 |
|
$ |
(169,450 |
)(a) |
$ |
26,743 |
|
|
Insurance collateral |
|
19,442 |
|
— |
|
17,422 |
(d) |
36,864 |
| ||||
|
Trade and other accounts receivable, net |
|
840,940 |
|
20,087 |
|
— |
|
861,027 |
| ||||
|
Parts and supplies inventory |
|
23,736 |
|
— |
|
— |
|
23,736 |
| ||||
|
Prepaids and other current assets |
|
26,661 |
|
296 |
|
— |
|
26,957 |
| ||||
|
Total current assets |
|
1,101,775 |
|
25,580 |
|
(152,028 |
) |
975,327 |
| ||||
|
Non-current assets: |
|
|
|
|
|
|
|
|
| ||||
|
Property, plant, and equipment, net |
|
190,935 |
|
98 |
|
— |
|
191,033 |
| ||||
|
Intangible assets, net |
|
516,530 |
|
— |
|
56,000 |
(a) |
572,530 |
| ||||
|
Insurance collateral |
|
1,127 |
|
— |
|
— |
|
1,127 |
| ||||
|
Goodwill |
|
2,444,156 |
|
— |
|
95,770 |
(a) |
2,539,926 |
| ||||
|
Other long-term assets |
|
60,007 |
|
92 |
|
— |
|
60,099 |
| ||||
|
Total assets |
|
$ |
4,314,530 |
|
$ |
25,770 |
|
$ |
(258 |
) |
$ |
4,340,042 |
|
|
Liabilities and Equity |
|
|
|
|
|
|
|
|
| ||||
|
Current liabilities: |
|
|
|
|
|
|
|
|
| ||||
|
Accounts payable |
|
$ |
51,301 |
|
$ |
1,559 |
|
$ |
— |
|
$ |
52,860 |
|
|
Accrued liabilities |
|
371,570 |
|
6,531 |
|
3,484 |
(d) |
381,585 |
| ||||
|
Current deferred tax liabilities |
|
35,639 |
|
— |
|
— |
|
35,639 |
| ||||
|
Current portion of long-term debt and capital lease obligations |
|
12,011 |
|
1,673 |
|
(1,673 |
)(a) |
12,011 |
| ||||
|
Total current liabilities |
|
470,521 |
|
9,763 |
|
1,811 |
|
482,095 |
| ||||
|
Long-term debt and capital lease obligations |
|
1,892,272 |
|
883 |
|
(883 |
)(a) |
1,892,272 |
| ||||
|
Long-term deferred tax liabilities |
|
151,225 |
|
— |
|
— |
|
151,225 |
| ||||
|
Insurance reserves |
|
151,792 |
|
— |
|
13,938 |
(d) |
165,730 |
| ||||
|
Other long-term liabilities |
|
16,721 |
|
— |
|
— |
|
16,721 |
| ||||
|
Total liabilities |
|
2,682,531 |
|
10,646 |
|
14,866 |
|
2,708,043 |
| ||||
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
| ||||
|
Equity: |
|
|
|
|
|
|
|
|
| ||||
|
Common stock |
|
1,804 |
|
— |
|
— |
|
1,804 |
| ||||
|
Preferred stock |
|
— |
|
— |
|
— |
|
— |
| ||||
|
Treasury stock, at cost |
|
(1,347 |
) |
— |
|
— |
|
(1,347 |
) | ||||
|
Additional paid-in capital |
|
1,577,521 |
|
— |
|
— |
|
1,577,521 |
| ||||
|
Retained earnings |
|
43,166 |
|
15,124 |
|
(15,124 |
)(a) |
43,166 |
| ||||
|
Accumulated other comprehensive income |
|
(1,125 |
) |
— |
|
— |
|
(1,125 |
) | ||||
|
Total Envision Healthcare Holdings, Inc. equity |
|
1,620,019 |
|
15,124 |
|
(15,124 |
) |
1,620,019 |
| ||||
|
Noncontrolling interest |
|
11,980 |
|
— |
|
— |
|
11,980 |
| ||||
|
Total equity |
|
1,631,999 |
|
15,124 |
|
(15,124 |
) |
1,631,999 |
| ||||
|
Total liabilities and equity |
|
$ |
4,314,530 |
|
$ |
25,770 |
|
$ |
(258 |
) |
$ |
4,340,042 |
|
See Notes to Unaudited Pro Forma Condensed Combined Financial Data.
Envision Healthcare Holdings, Inc.
Unaudited Pro Forma Condensed Combined Statement of Operations
For the three months ended March 31, 2014
(in thousands, except share and per share amounts)
|
|
|
Historical |
|
|
|
|
| ||||||
|
|
|
Envision |
|
Phoenix |
|
Pro forma |
|
Pro forma |
| ||||
|
|
|
Healthcare |
|
Physicians |
|
Adjustments |
|
Combined |
| ||||
|
Net revenue |
|
$ |
1,014,211 |
|
$ |
31,543 |
|
$ |
— |
|
$ |
1,045,754 |
|
|
Compensation and benefits |
|
743,661 |
|
24,658 |
|
— |
|
768,319 |
| ||||
|
Operating expenses |
|
114,635 |
|
2,205 |
|
— |
|
116,840 |
| ||||
|
Insurance expense |
|
30,981 |
|
946 |
|
— |
|
31,927 |
| ||||
|
Selling, general and administrative expenses |
|
19,375 |
|
763 |
|
— |
|
20,138 |
| ||||
|
Depreciation and amortization expense |
|
36,432 |
|
19 |
|
1,400 |
(b) |
37,851 |
| ||||
|
Restructuring charges |
|
809 |
|
— |
|
— |
|
809 |
| ||||
|
Income from operations |
|
68,318 |
|
2,952 |
|
(1,400 |
) |
69,870 |
| ||||
|
Interest income from restricted assets |
|
86 |
|
— |
|
— |
|
86 |
| ||||
|
Interest expense, net |
|
(30,049 |
) |
(29 |
) |
— |
|
(30,078 |
) | ||||
|
Realized gains (losses) on investments |
|
606 |
|
— |
|
— |
|
606 |
| ||||
|
Other income (expense), net |
|
(808 |
) |
— |
|
— |
|
(808 |
) | ||||
|
Loss on early debt extinguishment |
|
— |
|
— |
|
— |
|
— |
| ||||
|
Income (loss) before income taxes and equity in earnings of unconsolidated subsidiary |
|
38,153 |
|
2,923 |
|
(1,400 |
) |
39,676 |
| ||||
|
Income tax benefit (expense) |
|
(16,675 |
) |
— |
|
(583 |
)(c) |
(17,258 |
) | ||||
|
Income (loss) before equity in earnings of unconsolidated subsidiary |
|
21,478 |
|
2,923 |
|
(1,983 |
) |
22,418 |
| ||||
|
Equity in earnings of unconsolidated subsidiary |
|
47 |
|
— |
|
— |
|
47 |
| ||||
|
Net income (loss) |
|
21,525 |
|
2,923 |
|
(1,983 |
) |
22,465 |
| ||||
|
Less: Net loss attributable to noncontrolling interest |
|
3,300 |
|
— |
|
— |
|
3,300 |
| ||||
|
Net income (loss) attributable to Envision Healthcare Holdings, Inc. |
|
$ |
24,825 |
|
$ |
2,923 |
|
$ |
(1,983 |
) |
$ |
25,765 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Net income (loss) per share attributable to Envision Healthcare Holdings, Inc.: |
|
|
|
|
|
|
|
|
| ||||
|
Basic |
|
$ |
0.14 |
|
$ |
— |
|
$ |
— |
|
$ |
0.14 |
|
|
Diluted |
|
$ |
0.13 |
|
$ |
— |
|
$ |
— |
|
$ |
0.14 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Weighted-average common shares outstanding: |
|
|
|
|
|
|
|
|
| ||||
|
Basic |
|
180,782,025 |
|
— |
|
— |
|
180,782,025 |
| ||||
|
Diluted |
|
189,391,612 |
|
— |
|
— |
|
189,391,612 |
| ||||
See Notes to Unaudited Pro Forma Condensed Combined Financial Data.
Envision Healthcare Holdings, Inc.
Unaudited Pro Forma Condensed Combined Statement of Operations
For the year ended December 31, 2013
(in thousands, except share and per share amounts)
|
|
|
Historical |
|
|
|
|
| ||||||
|
|
|
Envision |
|
Phoenix |
|
Pro forma |
|
Pro forma |
| ||||
|
|
|
Healthcare |
|
Physicians |
|
Adjustments |
|
Combined |
| ||||
|
Net revenue |
|
$ |
3,728,312 |
|
$ |
117,655 |
|
$ |
— |
|
$ |
3,845,967 |
|
|
Compensation and benefits |
|
2,667,439 |
|
93,082 |
|
— |
|
2,760,521 |
| ||||
|
Operating expenses |
|
424,865 |
|
8,235 |
|
— |
|
433,100 |
| ||||
|
Insurance expense |
|
106,293 |
|
2,979 |
|
— |
|
109,272 |
| ||||
|
Selling, general and administrative expenses |
|
106,659 |
|
3,039 |
|
— |
|
109,698 |
| ||||
|
Depreciation and amortization expense |
|
140,632 |
|
83 |
|
5,600 |
(b) |
146,315 |
| ||||
|
Restructuring charges |
|
5,669 |
|
— |
|
— |
|
5,669 |
| ||||
|
Income from operations |
|
276,755 |
|
10,237 |
|
(5,600 |
) |
281,392 |
| ||||
|
Interest income from restricted assets |
|
792 |
|
— |
|
— |
|
792 |
| ||||
|
Interest expense, net |
|
(186,701 |
) |
(197 |
) |
— |
|
(186,898 |
) | ||||
|
Realized gains (losses) on investments |
|
471 |
|
— |
|
— |
|
471 |
| ||||
|
Other income (expense), net |
|
(12,760 |
) |
(57 |
) |
— |
|
(12,817 |
) | ||||
|
Loss on early debt extinguishment |
|
(68,379 |
) |
— |
|
— |
|
(68,379 |
) | ||||
|
Income (loss) before income taxes and equity in earnings of unconsolidated subsidiary |
|
10,178 |
|
9,983 |
|
(5,600 |
) |
14,561 |
| ||||
|
Income tax benefit (expense) |
|
994 |
|
— |
|
(1,679 |
)(c) |
(685 |
) | ||||
|
Income before equity in earnings of unconsolidated subsidiary |
|
11,172 |
|
9,983 |
|
(7,279 |
) |
13,876 |
| ||||
|
Equity in earnings of unconsolidated subsidiary |
|
323 |
|
— |
|
— |
|
323 |
| ||||
|
Net income (loss) |
|
11,495 |
|
9,983 |
|
(7,279 |
) |
14,199 |
| ||||
|
Less: Net income attributable to noncontrolling interest |
|
(5,500 |
) |
— |
|
— |
|
(5,500 |
) | ||||
|
Net income (loss) attributable to Envision Healthcare Holdings, Inc. |
|
$ |
5,995 |
|
$ |
9,983 |
|
$ |
(7,279 |
) |
$ |
8,699 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Net income (loss) per share attributable to Envision Healthcare Holdings, Inc.: |
|
|
|
|
|
|
|
|
| ||||
|
Basic |
|
$ |
0.04 |
|
$ |
— |
|
$ |
— |
|
$ |
0.06 |
|
|
Diluted |
|
$ |
0.04 |
|
$ |
— |
|
$ |
— |
|
$ |
0.06 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Weighted-average common shares outstanding: |
|
|
|
|
|
|
|
|
| ||||
|
Basic |
|
150,156,216 |
|
— |
|
— |
|
150,156,216 |
| ||||
|
Diluted |
|
156,962,385 |
|
— |
|
— |
|
156,962,385 |
| ||||
See Notes to Unaudited Pro Forma Condensed Combined Financial Data.
Envision Healthcare Holdings, Inc.
Notes to Unaudited Pro Forma Condensed Combined Financial Data
(a) Represents pro forma adjustments necessary to reflect the Phoenix Physicians acquisition, including cash consideration paid of $169.5 million.
(b) Represents the incremental amortization expense of $1.4 million and $5.6 million for the three months ended March 31, 2014 and for the year ended December 31, 2013, respectively, as a result of the allocation of purchase price to certain amortizable assets, specifically contract values, with useful lives of 10 years.
The purchase price allocation for this acquisition is considered preliminary and may change upon completion of the determination of the fair value of assets acquired and liabilities assumed. The following table summarizes the initial purchase price allocation, as of June17, 2014, the date of acquisition (in thousands):
|
Assets: |
|
|
| |
|
Cash |
|
$ |
7,052 |
|
|
Accounts receivable |
|
16,748 |
| |
|
Prepaid and other current assets |
|
359 |
| |
|
Property, plant, and equipment |
|
92 |
| |
|
Acquired intangible assets |
|
56,000 |
| |
|
Goodwill |
|
96,811 |
| |
|
Total assets |
|
177,062 |
| |
|
Liabilities: |
|
|
| |
|
Accounts payable |
|
1,073 |
| |
|
Accrued liabilities |
|
6,539 |
| |
|
Total liabilities |
|
7,612 |
| |
|
Total purchase price |
|
$ |
169,450 |
|
(c) Represents the tax effect of both the historical results of Phoenix Physicians and the pro forma adjustments using the Company’s blended federal and state statutory tax rates.
(d) Represents the acquired malpractice claims liability of $17.4 million based on actuarial assumptions.