Exhibit 99.3
C O N D E N S E D C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S ( U N A U D I T E D )
Steward Health Care System LLC
Years Ended December 31, 2018 and 2017
Steward Health Care System LLC
Consolidated Balance Sheets
December 31 | ||||||||
2018 | 2017 | |||||||
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(Amounts in Thousands) | ||||||||
Assets | ||||||||
Cash and cash equivalents | $ | 74,258 | $ | 69,088 | ||||
Patient accounts receivable, less allowance for doubtful accounts of $424,396 and $135,535 in 2018 and 2017, respectively | 669,094 | 686,748 | ||||||
Other accounts receivable | 266,811 | 203,132 | ||||||
Income tax receivable | – | 63,230 | ||||||
Estimated settlements with third-party payors | 10,853 | 8,865 | ||||||
Inventories | 119,407 | 126,027 | ||||||
Prepaid expenses | 48,735 | 61,204 | ||||||
Other current assets | 19,294 | 18,922 | ||||||
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Total current assets | 1,208,452 | 1,237,216 | ||||||
Property and equipment – net | 1,339,786 | 2,655,647 | ||||||
Other assets | 119,289 | 198,060 | ||||||
Goodwill and other intangible assets | 548,044 | 567,253 | ||||||
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Total assets | $ | 3,215,571 | $ | 4,658,176 | ||||
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Liabilities and members’ deficit | ||||||||
Current liabilities: | ||||||||
Current portion of long-term debt | $ | 17,875 | $ | 79,853 | ||||
Accounts payable and accrued expenses | 805,544 | 690,196 | ||||||
Accrued compensation and benefits | 239,900 | 222,635 | ||||||
Medical claims | 155,476 | 163,458 | ||||||
Estimated settlements with third-party payors | 20,221 | 16,620 | ||||||
Current portion of deferred gain | 57,639 | 6,536 | ||||||
Current portion of sale-leaseback financing obligation | 10,891 | 67,579 | ||||||
Other current liabilities | 135,016 | 105,298 | ||||||
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Total current liabilities | 1,442,562 | 1,352,175 | ||||||
Long-term debt – net of current portion and debt issuance costs | 1,335,434 | 1,907,157 | ||||||
Professional liability costs | 163,923 | 138,253 | ||||||
Deferred tax liabilities | 479 | 13,204 | ||||||
Deferred gain – net of current portion | 645,665 | 39,769 | ||||||
Sale-leaseback financing obligation - net of current portion | 182,622 | 1,552,311 | ||||||
Other liabilities | 654,444 | 560,088 | ||||||
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Total liabilities | 4,425,129 | 5,562,957 | ||||||
Non-controlling interests with redemption rights | 87,835 | 85,125 | ||||||
Members’ deficit | (1,324,117 | ) | (1,017,634 | ) | ||||
Non-controlling interests -non-redeemable | 26,724 | 27,728 | ||||||
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Total deficit | (1,297,393 | ) | (989,906 | ) | ||||
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Total liabilities and members’ deficit | $ | 3,215,571 | $ | 4,658,176 | ||||
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Steward Health Care System LLC
Consolidated Statements of Operations
Year Ended December 31 | ||||||||
2018 | 2017 | |||||||
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(Amounts in Thousands) | ||||||||
Net patient service revenue | $ | 5,434,043 | $ | 3,327,312 | ||||
Less provision for bad debts | (580,378 | ) | (284,765 | ) | ||||
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Net patient service revenue, less provision for bad debts | 4,853,665 | 3,042,547 | ||||||
Premium revenue | 1,449,638 | 465,651 | ||||||
Other revenue | 322,886 | 197,443 | ||||||
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Total revenues | 6,626,189 | 3,705,641 | ||||||
Expenses: | ||||||||
Salaries, wages, and fringe benefits | 2,744,635 | 1,780,182 | ||||||
Supplies and other expenses | 2,628,183 | 1,561,051 | ||||||
Medical claims expense | 1,151,875 | 363,978 | ||||||
Depreciation and amortization | 230,802 | 154,772 | ||||||
Interest | 169,777 | 108,604 | ||||||
Transaction expenses | – | 49,792 | ||||||
Gain on sale-leaseback transaction, net | (3,931 | ) | – | |||||
Gain on sale of assets and business | (31,274 | ) | – | |||||
Reorganization expenses | 5,308 | 8,859 | ||||||
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Total expenses | 6,895,375 | 4,027,238 | ||||||
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Loss from operations | (269,186 | ) | (321,597 | ) | ||||
Othernon-operating income, net | (403 | ) | (2,223 | ) | ||||
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Loss before income taxes | (268,783 | ) | (319,374 | ) | ||||
Income tax expense (benefit) | 10,764 | (112,193 | ) | |||||
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Net loss | (279,547 | ) | (207,181 | ) | ||||
Net loss (earnings) attributable tonon-controlling interests | 8,443 | (248 | ) | |||||
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Net loss attributable to Steward Health Care System LLC | $ | (271,104 | ) | $ | (207,429 | ) | ||
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Steward Health Care System LLC
Consolidated Statements of Comprehensive Loss
Year Ended December 31 | ||||||||
2018 | 2017 | |||||||
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(Amounts in Thousands) | ||||||||
Net loss | $ | (279,547) | $ | (207,181) | ||||
Other comprehensive loss: | ||||||||
Unrealized loss on available-for-sale securities | (5,950) | – | ||||||
Pension liability adjustment | (1,392) | (2,065) | ||||||
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Other comprehensive loss before income taxes | (7,342) | (2,065) | ||||||
Income tax expense | – | – | ||||||
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Total other comprehensive loss, net of tax | (7,342) | (2,065) | ||||||
Net loss (earnings) attributable to non-controlling interests | 8,443 | (248) | ||||||
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Comprehensive loss attributable to Steward Health Care System LLC | $ | (278,446) | $ | (209,494) | ||||
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Steward Health Care System LLC
Consolidated Statements of Changes in Members’ Deficit
Members’ Deficit | ||||||||||||||||
Accumulated Deficit | Accumulated Other Comprehensive Loss | Non- controlling | Total Deficit | |||||||||||||
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(Amounts in Thousands) | ||||||||||||||||
BALANCE, JANUARY 1, 2017 | $ | (908,524 | ) | $ | (1,707 | ) | $ | - | $ | (910,231 | ) | |||||
Net (loss) income | (207,429 | ) | - | 1,189 | (206,240 | ) | ||||||||||
Pension liability adjustment | - | (2,065 | ) | - | (2,065 | ) | ||||||||||
Non-controlling interests acquired | - | - | 26,539 | 26,539 | ||||||||||||
Issuance of convertible preferred interests | 100,000 | - | - | 100,000 | ||||||||||||
Distributions | (89 | ) | - | - | (89 | ) | ||||||||||
Equity-based compensation expense | 2,180 | - | - | 2,180 | ||||||||||||
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BALANCE, DECEMBER 31, 2017 | $ | (1,013,862 | ) | $ | (3,772 | ) | $ | 27,728 | $ | (989,906 | ) | |||||
Net (loss) income | (271,104 | ) | - | 3,196 | (267,908 | ) | ||||||||||
Pension liability adjustment | - | (1,392 | ) | - | (1,392 | ) | ||||||||||
Unrealized loss onavailable-for-sale securities | - | (5,950 | ) | - | (5,950 | ) | ||||||||||
Repurchase of equity | (5,275 | ) | - | - | (5,275 | ) | ||||||||||
Distributions | - | - | (4,200 | ) | (4,200 | ) | ||||||||||
Adjustment to redemption value of non-controlling interests with redemption rights | (24,942 | ) | - | - | (24,942 | ) | ||||||||||
Equity-based compensation expense | 2,180 | - | - | 2,180 | ||||||||||||
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BALANCE, DECEMBER 31, 2018 | $ | (1,313,003 | ) | $ | (11,114 | ) | $ | 26,724 | $ | (1,297,393 | ) | |||||
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Steward Health Care System LLC
Consolidated Statements of Cash Flows
Year Ended December 31 | ||||||||
2018 | 2017 | |||||||
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Operating Activities | (Amounts in Thousands) | |||||||
Net loss | $ | (279,547 | ) | $ | (207,181 | ) | ||
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||||||||
Depreciation and amortization | 230,802 | 154,772 | ||||||
Provision for bad debts | 580,378 | 284,765 | ||||||
Equity-based compensation expense | 2,180 | 2,180 | ||||||
Deferred tax, net | (29,589 | ) | (244,051 | ) | ||||
Non-cash interest expense | 7,963 | 2,342 | ||||||
Amortization of deferred gains | (15,093 | ) | (6,214 | ) | ||||
Gain on sale-leaseback transaction, net | (3,931 | ) | – | |||||
Gain on sale of assets and business | (31,274 | ) | (1,953 | ) | ||||
Other | – | (6,682 | ) | |||||
Increase (decrease) in cash resulting from a change in: | ||||||||
Patient accounts receivable | (563,349 | ) | (315,064 | ) | ||||
Establishment of accounts receivable of recent acquisitions | – | (128,634 | ) | |||||
Other assets | 73,516 | (50,816 | ) | |||||
Accounts payable, accrued expenses, and other liabilities | 267,598 | 494,372 | ||||||
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Net cash provided by (used in) operating activities | 239,654 | (22,164 | ) | |||||
Investing Activities | ||||||||
Purchase of property and equipment | (200,895 | ) | (83,403 | ) | ||||
Proceeds from sale of assets and business | 57,851 | – | ||||||
Purchase ofavailable-for-sale securities | (7,500 | ) | – | |||||
Cost of acquisitions, net of cash acquired | (1,082 | ) | (440,623 | ) | ||||
Increase in noncurrent other assets | (4,413 | ) | (51,209 | ) | ||||
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Net cash used in investing activities | (156,039 | ) | (575,235 | ) | ||||
Financing Activities | ||||||||
Payment of debt issuance costs | – | (16,598 | ) | |||||
Proceeds from issuance of debt | 38,648 | 15,000 | ||||||
Proceeds under revolving credit facility | 30,000 | 650,000 | ||||||
Payments under revolving credit facility | (80,000 | ) | (35,000 | ) | ||||
Repayments of debt and capital lease obligations | (87,448 | ) | (65,994 | ) | ||||
Distributions | (12,320 | ) | (89 | ) | ||||
Proceeds from preferred equity issuance | – | 100,000 | ||||||
Net proceeds from sale-leaseback transaction | 42,823 | – | ||||||
Repurchases of equity interests | (5,275 | ) | – | |||||
Cash paid for the repurchase ofnon-controlling interests | (2,348 | ) | – | |||||
Other | (2,525 | ) | (745 | ) | ||||
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Net cash (used in) provided by financing activities | (78,445 | ) | 646,574 | |||||
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Net increase in cash and cash equivalents | 5,170 | 49,175 | ||||||
Cash and cash equivalents at beginning of year | 69,088 | 19,913 | ||||||
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Cash and cash equivalents at end of year | $ | 74,258 | $ | 69,088 | ||||
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Steward Health Care System LLC
Consolidated Statements of Cash Flows (continued)
2018 | 2017 | |||||||
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Supplemental disclosure of cash flow information | (Amounts in Thousands) | |||||||
Cash paid for interest | $ | 168,025 | $ | 95,640 | ||||
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Net cash paid for income taxes | $ | – | $ | 58,561 | ||||
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Supplemental schedule ofnon-cash investing and financing activity | ||||||||
Purchase of property and equipment financed by capital leases | $ | 11,399 | $ | 37,735 | ||||
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Reduction of financing obligations resulting from qualifying for sale-leaseback accounting | $ | 2,016,881 | $ | – | ||||
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Non-cash financing to fund acquisitions | $ | – | $ | 1,711,300 | ||||
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