Exhibit 99.4
UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
The tables below set forth the unaudited pro forma combined financial information for Team Health Holdings, Inc. (“Team Health”) giving effect to the net proceeds from our senior notes offering, together with borrowings under our senior secured credit facilities and cash on hand at IPC Healthcare, Inc. (“IPC”), to pay the cash purchase price for the Acquisition of IPC, refinance certain of our indebtedness and indebtedness of IPC, pay-related transaction costs, and finance ongoing working capital and other general corporate purposes (collectively, the “Transactions”) and the other acquisitions described below.
With respect to the financing transactions, the unaudited pro forma combined financial information is based on the assumption that Team Health will incur $1,315.0 million of term loans under the New Tranche B Facility and issue $545.0 million of notes in connection with the Transactions.
The unaudited pro forma combined balance sheet as of September 30, 2015 reflects the Transactions as if each occurred on September 30, 2015. The unaudited pro forma combined statements of operations reflects the Transactions and the other acquisitions described below as if each occurred on January 1, 2014.
The unaudited pro forma combined statement of operations for the year ended December 31, 2014 combines the audited consolidated statement of operations of Team Health for the year ended December 31, 2014, the unaudited consolidated statement of operations for Team Health’s completed 2014 and 2015 (through September 30, 2015) acquisitions for the period from January 1, 2014 to the closing of such acquisitions (or, if earlier, December 31, 2014), the audited consolidated statement of operations of IPC for the year ended December 31, 2014, and the unaudited consolidated statement of operations for IPC’s completed 2014 and 2015 (through September 30, 2015) acquisitions for the period from January 1, 2014 to the closing of such acquisitions (or, if earlier, December 31, 2014) and applies pro forma adjustments as described herein.
The unaudited pro forma combined statement of operations for the nine months ended September 30, 2015 combines the unaudited consolidated statement of operations of Team Health for the nine months ended September 30, 2015, the unaudited consolidated statement of operations for Team Health’s completed 2015 (through September 30, 2015) acquisitions for the period from January 1, 2015 to the closing of such acquisitions, the unaudited consolidated statement of operations of IPC for the nine months ended September 30, 2015, and the unaudited consolidated statement of operations of IPC’s completed 2015 (through September 30, 2015) acquisitions for the period from January 1, 2015 to the closing of such acquisitions and applies pro forma adjustments as described herein.
The unaudited pro forma combined statement of operations for the nine months ended September 30, 2014 combines the unaudited consolidated statement of operations of Team Health for the nine months ended September 30, 2014, the unaudited consolidated statement of operations for Team Health’s completed 2014 and 2015 (through September 30, 2015) acquisitions for the period from January 1, 2014 to the closing of such acquisitions (or, if earlier, September 30, 2014), the unaudited consolidated statement of operations of IPC for the nine months ended September 30, 2014, and the unaudited consolidated statement of operations for IPC’s completed 2014 and 2015 (through September 30, 2015) acquisitions for the period from January 1, 2014 to the closing of such acquisitions (or, if earlier, September 30, 2014) and applies pro forma adjustments as described herein.
The unaudited pro forma combined financial information has been prepared using the acquisition method of accounting for business combinations under GAAP. The adjustments necessary to fairly present the unaudited pro forma combined financial information have been made based on available information and in the opinion of management are reasonable. Assumptions underlying the pro forma adjustments are described in the accompanying notes, which should be read in conjunction with this unaudited pro forma combined financial information. The pro forma adjustments related to the IPC Acquisition are preliminary and revisions to the fair value of assets acquired and liabilities assumed may have a significant impact on the pro forma adjustments. A final valuation of assets acquired and liabilities assumed has not been completed and the completion of fair value determinations may result in changes in the values assigned to property and equipment and other assets (including intangibles) acquired and liabilities assumed.
1
The financial information that was utilized in developing the unaudited consolidated statement of operations for Team Health’s and IPC’s completed acquisitions was developed using each acquiree’s most appropriate historical financial information obtained as a part of the due diligence procedures during the acquisition process. All historical financial information was obtained from each acquiree’s internal financial reporting team and not necessarily subject to attestation by an independent auditor.
The unaudited pro forma combined financial information reflects the application of pro forma adjustments that are (1) directly attributable to the Transactions and the other acquisitions described above, (2) factually supportable and (3) expected to have a continuing impact on Team Health’s consolidated financial results. The unaudited pro forma combined financial information does not reflect any cost savings or synergies or associated costs to achieve such savings or synergies, utilization of IPC (or other acquired company) net operating loss carryforwards or other restructuring that may result from the Transactions and other acquisitions.
The unaudited pro forma combined financial information is for illustrative purposes only and does not purport to represent what our financial position or results of operations actually would have been had the events noted above in fact occurred on the assumed dates or to project our financial position or results of operations for any future date or future period.
2
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
As of September 30, 2015
(In thousands)
Team Health Historical | IPC Historical | IPC Acquisition Adjustments | Financing Adjustments | Pro Forma Combined | ||||||||||||||||
ASSETS | ||||||||||||||||||||
Current assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 18,194 | $ | 1,975 | $ | (1,975 | )(a) | $ | 30,093 | |||||||||||
11,899 | (a) | |||||||||||||||||||
Accounts receivable, net | 577,291 | 128,923 | 706,214 | |||||||||||||||||
Prepaid expenses and other current assets | 56,902 | 12,737 | 6,000 | (a) | (221 | )(b) | 75,418 | |||||||||||||
Receivables under insured programs | 19,514 | 12,691 | 32,205 | |||||||||||||||||
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Total current assets | 671,901 | 156,326 | 15,924 | (221 | ) | 843,930 | ||||||||||||||
Insurance subsidiaries’ and other investments | 97,492 | — | 97,492 | |||||||||||||||||
Receivables under insured programs | 72,959 | 23,564 | 96,523 | |||||||||||||||||
Deferred income taxes | 39,694 | — | 39,694 | |||||||||||||||||
Property and equipment, net | 74,939 | 9,608 | 84,547 | |||||||||||||||||
Other intangibles, net | 326,959 | 5,145 | 332,104 | |||||||||||||||||
Goodwill | 800,583 | 492,407 | 1,087,892 | (c) | 2,380,882 | |||||||||||||||
Other | 59,652 | — | 35,349 | (b) | 95,001 | |||||||||||||||
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$ | 2,144,179 | $ | 687,050 | $ | 1,103,816 | $ | 35,128 | $ | 3,970,173 | |||||||||||
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LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||
Accounts payable | $ | 48,886 | $ | 16,053 | $ | 64,939 | ||||||||||||||
Accrued compensation and physician payable | 283,288 | 37,082 | 320,370 | |||||||||||||||||
Other accrued liabilities | 127,331 | 38,910 | (76 | )(a) | 166,165 | |||||||||||||||
Income tax payable | 20,650 | — | 20,650 | |||||||||||||||||
Current maturities of long-term debt | 200,000 | 130,000 | (130,000 | )(b) | 43,150 | |||||||||||||||
(170,000 | )(a) | |||||||||||||||||||
13,150 | (b) | |||||||||||||||||||
Deferred income taxes | 31,511 | 584 | 32,095 | |||||||||||||||||
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Total current liabilities | 711,666 | 222,629 | — | 286,926 | 647,369 | |||||||||||||||
Long-term debt, less current maturities | 555,000 | — | 1,832,199 | (b) | 2,387,199 | |||||||||||||||
Other non-current liabilities | 308,105 | 67,092 | 375,197 | |||||||||||||||||
Shareholders’ equity: | ||||||||||||||||||||
Common stock | 725 | 17 | (17 | )(c) | 725 | |||||||||||||||
Additional paid-in capital | 750,089 | 192,501 | (192,501 | )(c) | 750,089 | |||||||||||||||
Retained Earnings (deficit) | (185,099 | ) | 204,811 | (204,811 | )(c) | (194,099 | ) | |||||||||||||
(9,000 | )(a) | |||||||||||||||||||
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Team Health shareholders’ equity | 565,715 | 397,329 | (406,329 | ) | — | 556,715 | ||||||||||||||
Noncontrolling interests | 3,693 | — | 3,693 | |||||||||||||||||
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Total shareholders’ equity including noncontrolling interests | 569,408 | 397,329 | (406,329 | ) | — | 560,408 | ||||||||||||||
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$ | 2,144,179 | $ | 687,050 | $ | (406,329 | ) | $ | 1,545,273 | $ | 3,970,173 | ||||||||||
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See accompanying notes to unaudited pro forma financial information.
3
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
For the Year Ended December 31, 2014
(In thousands, except share data)
Team Health Historical | Completed Team Health Acquisitions Pro Forma Adjustments (d)(f) | Team Health Pro Forma | IPC Historical | Completed IPC Acquisitions Pro Forma Adjustments (g)(i) | IPC Pro Forma | IPC Acquisition Adjustments | Financing Adjustments | Pro Forma Combined | ||||||||||||||||||||||||||||
Net revenue before provision for uncollectibles | $ | 4,800,883 | $ | 779,227 | $ | 5,580,110 | $ | 710,836 | $ | 127,168 | $ | 838,004 | $ | 6,418,114 | ||||||||||||||||||||||
Provision for uncollectibles | 1,981,240 | 321,573 | 2,302,813 | 16,851 | 3,015 | 19,866 | 2,322,679 | |||||||||||||||||||||||||||||
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Net revenue | 2,819,643 | 457,654 | 3,277,297 | 693,985 | 124,153 | 818,138 | — | — | 4,095,435 | |||||||||||||||||||||||||||
Cost of services rendered | ||||||||||||||||||||||||||||||||||||
Professional service expenses | 2,179,837 | 381,912 | 2,561,749 | 490,573 | 92,842 | 583,415 | 3,145,164 | |||||||||||||||||||||||||||||
Professional liability costs | 97,609 | 10,547 | 108,156 | 16,632 | 2,975 | 19,607 | 127,763 | |||||||||||||||||||||||||||||
General and administrative expenses (includes contingent purchase and other acquisition compensation expense) | 281,054 | 27,462 | 308,516 | 116,410 | 15,519 | 131,929 | 440,445 | |||||||||||||||||||||||||||||
Other (income) expenses, net | (4,588 | ) | 23 | (4,565 | ) | (5 | ) | (5 | ) | (4,570 | ) | |||||||||||||||||||||||||
Transaction costs | 7,179 | 7,179 | — | — | (28 | )(l) | 7,151 | |||||||||||||||||||||||||||||
Depreciation | 20,886 | 129 | 21,015 | 3,844 | 3,844 | 24,859 | ||||||||||||||||||||||||||||||
Amortization | 55,647 | 129 | 55,776 | 1,537 | 1,537 | 57,313 | ||||||||||||||||||||||||||||||
Interest expense, net | 15,050 | 1,071 | 16,121 | 1,328 | 1,328 | (1,328 | )(b) | 123,629 | ||||||||||||||||||||||||||||
107,508 | (b) | |||||||||||||||||||||||||||||||||||
Loss on refinancing of debt | 3,648 | 3,648 | — | — | 3,648 | |||||||||||||||||||||||||||||||
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Earnings before income taxes | 163,321 | 36,381 | 199,702 | 63,666 | 12,817 | 76,483 | 28 | (106,180 | ) | 170,033 | ||||||||||||||||||||||||||
Provision for income taxes | 65,232 | 14,516 | 79,748 | 24,646 | 4,960 | 29,606 | 11 | (k) | (42,426 | )(k) | 66,939 | |||||||||||||||||||||||||
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Net earnings | 98,089 | 21,865 | 119,954 | 39,020 | 7,857 | 46,877 | 17 | (63,754 | ) | 103,094 | ||||||||||||||||||||||||||
Net earnings (loss) attributable to noncontrolling interests | 351 | 351 | — | — | 351 | |||||||||||||||||||||||||||||||
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Net earnings attributable to Team Health Holdings, Inc. | $ | 97,738 | $ | 21,865 | $ | 119,603 | $ | 39,020 | $ | 7,857 | $ | 46,877 | $ | 17 | $ | (63,754 | ) | $ | 102,743 | |||||||||||||||||
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Net earnings per share of Team Health Holdings, Inc. | ||||||||||||||||||||||||||||||||||||
Basic | $ | 1.39 | $ | 1.70 | $ | 1.46 | ||||||||||||||||||||||||||||||
Diluted | $ | 1.35 | $ | 1.66 | $ | 1.41 | ||||||||||||||||||||||||||||||
Weighted average shares outstanding | ||||||||||||||||||||||||||||||||||||
Basic | 70,400 | 70,400 | 70,400 | |||||||||||||||||||||||||||||||||
Diluted | 72,164 | 72,164 | 474 | (j) | 72,638 |
See accompanying notes to unaudited pro forma financial information.
4
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
For the Nine Months Ended September 30, 2015
(In thousands, except share data)
Team Health Historical | Completed Team Health Acquisitions Pro Forma Adjustments (f) | Team Health Pro Forma | IPC Historical | Completed IPC Acquisitions Pro Forma Adjustments (i) | IPC Pro Forma | IPC Acquisition Adjustments | Financing Adjustments | Pro Forma Combined | ||||||||||||||||||||||||||||
Net revenue before provision for uncollectibles | $ | 4,390,682 | $ | 49,442 | $ | 4,440,124 | $ | 563,165 | $ | 40,284 | $ | 603,449 | $ | 5,043,573 | ||||||||||||||||||||||
Provision for uncollectibles | 1,773,062 | 19,966 | 1,793,028 | 13,581 | 955 | 14,536 | 1,807,564 | |||||||||||||||||||||||||||||
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Net revenue | 2,617,620 | 29,476 | 2,647,096 | 549,584 | 39,329 | 588,913 | — | — | 3,236,009 | |||||||||||||||||||||||||||
Cost of services rendered | ||||||||||||||||||||||||||||||||||||
Professional service expenses | 2,058,876 | 25,374 | 2,084,250 | 396,037 | 29,733 | 425,770 | 2,510,020 | |||||||||||||||||||||||||||||
Professional liability costs | 81,371 | 706 | 82,077 | 12,081 | 943 | 13,024 | 95,101 | |||||||||||||||||||||||||||||
General and administrative expenses (includes contingent purchase and other acquisition compensation expense) | 219,214 | 1,076 | 220,290 | 105,767 | 4,916 | 110,683 | 330,973 | |||||||||||||||||||||||||||||
Other (income) expenses, net | (182 | ) | (182 | ) | (2 | ) | (2 | ) | (184 | ) | ||||||||||||||||||||||||||
Transaction costs | 7,170 | 7,170 | — | (5,265 | )(l) | 1,905 | ||||||||||||||||||||||||||||||
Depreciation | 17,423 | 17,423 | 3,524 | 3,524 | 20,947 | |||||||||||||||||||||||||||||||
Amortization | 62,085 | 62,085 | 996 | 996 | 63,081 | |||||||||||||||||||||||||||||||
Interest expense, net | 14,132 | 14,132 | 936 | 936 | (936 | )(b) | 94,609 | |||||||||||||||||||||||||||||
— | — | 80,477 | (b) | |||||||||||||||||||||||||||||||||
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Earnings before income taxes | 157,531 | 2,320 | 159,851 | 30,245 | 3,737 | 33,982 | 5,265 | (79,541 | ) | 119,557 | ||||||||||||||||||||||||||
Provision for income taxes | 65,178 | 961 | 66,139 | 11,493 | 1,420 | 12,913 | 2,001 | (k) | (39,942 | )(k) | 48,111 | |||||||||||||||||||||||||
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Net earnings | 92,353 | 1,359 | 93,712 | 18,752 | 2,317 | 21,609 | 3,264 | (46,600 | ) | 71,446 | ||||||||||||||||||||||||||
Net earnings (loss) attributable to noncontrolling interests | (78 | ) | (78 | ) | — | — | (78 | ) | ||||||||||||||||||||||||||||
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Net earnings attributable to Team Health Holdings, Inc. | $ | 92,431 | $ | 1,359 | $ | 93,790 | $ | 18,752 | $ | 2,317 | $ | 21,609 | $ | 3,264 | $ | (46,600 | ) | $ | 71,524 | |||||||||||||||||
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Net earnings per share of Team Health Holdings, Inc. | ||||||||||||||||||||||||||||||||||||
Basic | $ | 1.29 | $ | 1.30 | $ | 0.99 | ||||||||||||||||||||||||||||||
Diluted | $ | 1.26 | $ | 1.28 | $ | 0.97 | ||||||||||||||||||||||||||||||
Weighted average shares outstanding | ||||||||||||||||||||||||||||||||||||
Basic | 71,900 | 71,900 | 71,900 | |||||||||||||||||||||||||||||||||
Diluted | 73,351 | 73,351 | 556 | (j) | 73,907 |
See accompanying notes to unaudited pro forma financial information.
5
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
For the Nine Months Ended September 30, 2014
(In thousands, except share data)
Team Health Historical | Completed Team Health Acquisitions Pro Forma Adjustments (e)(f) | Team Health Pro Forma | IPC Historical | Completed IPC Acquisitions Pro Forma Adjustments (h)(i) | IPC Pro Forma | IPC Acquisition Adjustments | Financing Adjustments | Pro Forma Combined | ||||||||||||||||||||||||||||
Net revenue before provision for uncollectibles | $ | 3,493,892 | $ | 402,932 | $ | 3,896,824 | $ | 527,951 | $ | 86,411 | $ | 614,362 | $ | 4,511,186 | ||||||||||||||||||||||
Provision for uncollectibles | 1,464,931 | 168,943 | 1,633,874 | 13,200 | 2,048 | 15,248 | 1,649,122 | |||||||||||||||||||||||||||||
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Net revenue | 2,028,961 | 233,989 | 2,262,950 | 514,751 | 84,363 | 599,114 | — | — | 2,862,064 | |||||||||||||||||||||||||||
Cost of services rendered | ||||||||||||||||||||||||||||||||||||
Professional service expenses | 1,557,696 | 194,904 | 1,752,600 | 363,599 | 63,276 | 426,875 | 2,179,475 | |||||||||||||||||||||||||||||
Professional liability costs | 73,482 | 5,111 | 78,593 | 12,912 | 2,022 | 14,934 | 93,527 | |||||||||||||||||||||||||||||
General and administrative expenses (includes contingent purchase and other acquisition compensation expense) | 195,842 | 7,164 | 203,006 | 85,387 | 10,545 | 95,932 | 298,938 | |||||||||||||||||||||||||||||
Other (income) expenses, net | (3,457 | ) | 968 | (2,489 | ) | (4 | ) | (4 | ) | (2,493 | ) | |||||||||||||||||||||||||
Transaction costs | 5,734 | 5,734 | — | — | — | (l) | 5,734 | |||||||||||||||||||||||||||||
Depreciation | 15,315 | 129 | 15,444 | 2,816 | 2,816 | 18,260 | ||||||||||||||||||||||||||||||
Amortization | 35,203 | 129 | 35,332 | 1,190 | 1,190 | 36,522 | ||||||||||||||||||||||||||||||
Interest expense, net | 10,758 | 1,071 | 11,829 | 1,057 | 1,057 | (1,057 | )(b) | 92,566 | ||||||||||||||||||||||||||||
— | — | — | 80,737 | (b) | ||||||||||||||||||||||||||||||||
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Earnings before income taxes | 138,388 | 24,513 | 162,901 | 47,794 | 8,520 | 56,314 | — | (79,680 | ) | 139,535 | ||||||||||||||||||||||||||
Provision for income taxes | 56,542 | 10,026 | 66,568 | 18,304 | 3,263 | 21,567 | — | (k) | (32,582 | )(k) | 55,553 | |||||||||||||||||||||||||
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Net earnings | 81,846 | 14,487 | 96,333 | 29,490 | 5,257 | 34,747 | — | (47,098 | ) | 83,982 | ||||||||||||||||||||||||||
Net earnings (loss) attributable to noncontrolling interests | 212 | 212 | — | — | 212 | |||||||||||||||||||||||||||||||
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Net earnings attributable to Team Health Holdings, Inc. | $ | 81,634 | $ | 14,487 | $ | 96,121 | $ | 29,490 | $ | 5,257 | $ | 34,747 | $ | — | $ | (47,098 | ) | $ | 83,770 | |||||||||||||||||
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Net earnings per share of Team Health Holdings, Inc. | ||||||||||||||||||||||||||||||||||||
Basic | $ | 1.16 | $ | 1.37 | $ | 1.19 | ||||||||||||||||||||||||||||||
Diluted | $ | 1.13 | $ | 1.34 | $ | 1.16 | ||||||||||||||||||||||||||||||
Weighted average shares outstanding | ||||||||||||||||||||||||||||||||||||
Basic | 70,209 | 70,209 | 70,209 | |||||||||||||||||||||||||||||||||
Diluted | 71,955 | 71,955 | 469 | (j) | 72,424 |
See accompanying notes to unaudited pro forma financial information.
6
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
(In thousands)
(a) | Reflects the incurrence of $1,315.0 million of term loans under the New Tranche B Facility and proceeds from the notes of approximately $545.0 million to fund the IPC Acquisition, repay certain amounts of Team Health’s and IPC’s existing debt, and fund debt issuance and other Transaction costs. A detailed estimate of the sources and uses of cash associated with the IPC Acquisition are as follows. |
Sources: | ||||
IPC cash | $ | 1,975 | (i) | |
New Tranche B Facility | 1,315,000 | |||
Notes | 545,000 | |||
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Total Sources | $ | 1,861,975 | ||
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Uses: | ||||
IPC Acquisition consideration | $ | 1,485,000 | ||
Repay IPC debt and accrued interest | 130,076 | (ii) | ||
Repay Team Health’s Revolving Credit Facility | 170,000 | |||
Fees and expenses | 65,000 | (iii) | ||
Cash to balance sheet | 11,899 | (i) | ||
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Total Uses | $ | 1,861,975 | ||
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(i) | Represents net cash impact of the Transactions. |
(ii) | Includes $76 of accrued interest. |
(iii) | Represents the estimated financing and other fees and expenses in connection with the Transactions. |
Fees and expenses | $ | 65,000 | ||
Deferred fees and expenses | 50,000 | |||
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Non-deferred fees and expenses | $ | 15,000 | ||
Tax impact | 6,000 | |||
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After-tax non-deferred fees and expenses | $ | 9,000 | ||
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(b) | Represents the New Tranche B Facility and the notes and repayment of existing IPC debt and the elimination of related deferred financing costs. |
New Tranche B Facility and the notes | $ | 1,860,000 | ||
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| |||
Estimated total deferred financing costs for the notes | 14,651 | |||
Current Portion | 13,150 | |||
|
| |||
Long Term Portion | $ | 1,832,199 | ||
Estimated total deferred financing costs for New Tranche B Facility | $ | 35,349 | ||
Repayment of IPC debt | $ | 130,000 | ||
Elimination of IPC deferred financing costs | $ | 221 |
Removal of IPC’s total interest expense for year ended December 31, 2014 | $ | 1,328 | ||
Removal of IPC’s total interest expense for nine months ended September 30, 2015 | $ | 936 | ||
Removal of IPC’s total interest expense for nine months ended September 30, 2014 | $ | 1,057 | ||
Total interest and amortization of deferred financing costs expense for the New Tranche B Facility and the notes for the year ended December 31, 2014 | $ | 107,508 | ||
Total interest and amortization of deferred financing costs expense for the New Tranche B Facility and the notes for the nine months ended September 30, 2015 | $ | 80,477 | ||
Total interest and amortization of deferred financing costs expense for the New Tranche B Facility and the notes for the nine months ended September 30, 2014 | $ | 80,737 |
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If the weighted average interest rate of 5.48% of the New Tranche B Facility and the notes changed 0.25%, the total interest and amortization of deferred financing costs expense would be as follows:
+0.25% | -0.25% | |||||||
|
|
|
| |||||
Total interest and amortization of deferred financing costs expense for the New Tranche B Facility and the notes for the year ended December 31, 2014 | $ | 112,098 | $ | 102,918 | ||||
Total interest and amortization of deferred financing costs expense for the New Tranche B Facility and the notes for the nine months ended September 30, 2015 | $ | 83,909 | $ | 77,045 | ||||
Total interest and amortization of deferred financing costs expense for the New Tranche B Facility and the notes for the nine months ended September 30, 2014 | $ | 84,185 | $ | 77,289 |
(c) | Represents adjustments based on preliminary estimates of fair value and the adjustment to goodwill derived from the difference in the estimated total consideration to be transferred by Team Health and the estimated fair value of assets acquired and liabilities assumed by Team Health. The estimated consideration is based on the cash paid by Team Health and the assumption of IPC’s net debt. Final consideration will be determined at the closing of the IPC Acquisition based on the number of shares of IPC common stock and other equity awards outstanding at such time. |
The final amounts allocated to assets acquired and liabilities assumed in the IPC Acquisition could differ materially from the preliminary amounts presented herein. A decrease in the fair value of assets acquired or an increase in the fair value of liabilities assumed in the IPC Acquisition from those preliminary valuations presented herein would result in a dollar-for-dollar corresponding increase in the amount of goodwill that will result from the IPC Acquisition.
Estimated cash consideration | $ | 1,485,000 | ||
Assumption of debt, net of cash received | 128,025 | |||
|
| |||
$ | 1,613,025 | |||
|
| |||
Accounts receivable | 128,923 | |||
Prepaid expenses and other current assets | 12,516 | |||
Receivables under insured programs—current | 12,691 | |||
Receivables under insured programs—noncurrent | 23,564 | |||
Property and equipment | 9,608 | |||
Intangible assets | 5,145 | |||
Accounts payable—current | (16,053 | ) | ||
Accrued compensation and physician payable—current | (37,082 | ) | ||
Other accrued liabilities—current | (38,910 | ) | ||
Deferred income taxes—current | (584 | ) | ||
Other long term liabilities—noncurrent | (67,092 | ) | ||
|
| |||
Fair value of assets acquired and liabilities assumed | $ | 32,726 | ||
|
| |||
Estimated goodwill | 1,580,299 | |||
Less: historical goodwill | $ | 492,407 | ||
|
| |||
Goodwill adjustment | $ | 1,087,892 | ||
|
| |||
Common Stock | $ | 17 | (i) | |
Additional Paid-in-Capital | $ | 192,501 | (i) | |
Retained Earnings | $ | 204,811 | (i) |
(i) | The common stock, additional paid-in-capital, and retained earnings of IPC will be adjusted to zero upon the closing of the IPC Acquisition. |
(d) | The amounts in this column represent pro forma adjustments for Team Health’s 15 completed acquisitions in 2014 for the period from January 1, 2014 to their closing dates. None of the acquisitions were individually material. |
(e) | The amounts in this column represent pro forma adjustments for Team Health’s 11 completed 2014 acquisitions through September 30, 2014 for the period from January 1, 2014 to their closing dates. None of the acquisitions were individually material. |
(f) | The amounts in this column represent pro forma adjustments for Team Health’s six completed acquisitions in 2015 through September 30, 2015 for the period from January 1, 2015 to their closing dates or, if included in prior year, for the period from January 1, 2014 to September 30, 2014 or December 31, 2014, as appropriate. None of the acquisitions were individually material. |
(g) | The amounts in this column represent pro forma adjustments for IPC’s 22 completed acquisitions in 2014 for the period from January 1, 2014 to their closing dates. None of the acquisitions were individually material. |
(h) | The amounts in this column represent pro forma adjustments for IPC’s 15 completed 2014 acquisitions through September 30, 2014 for the period from January 1, 2014 to their closing dates. None of the acquisitions were individually material. |
(i) | The amounts in this column represent pro forma adjustments for IPC’s 20 completed acquisitions in 2015 through September 30, 2015 for the period from January 1, 2015 to their closing dates or, if included in prior year, for the period from January 1, 2014 to September 30, 2014 or December 31, 2014, as appropriate. None of the acquisitions were individually material. |
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(j) | Reflects additional diluted shares added to the weighted average shares outstanding calculation to factor in the effect of IPC’s diluted shares related to outstanding options. |
(k) | Reflects adjustments to income taxes to reflect the impact of the above pro forma adjustments applying combined U.S. federal and state statutory tax rates. |
(l) | Reflects the removal of IPC’s acquisition-related expenses, related to the IPC Acquisition, included in IPC’s historical statements of operations. |
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