Amsurg (AMSG) 8-K Other Events

Exhibit 99.1

Introductory Note

As previously announced, on July 16, 2014, AmSurg Corp., a Tennessee corporation (the “AmSurg”), completed its acquisition (the “Merger”) of Sunbeam Holdings, L.P. and its subsidiaries, pursuant to the Purchase Agreement and Plan of Merger (the “Merger Agreement”), dated May 29, 2014, as amended, by and between the Company, Arizona Merger Corporation, a Delaware corporation and direct wholly-owned subsidiary of the Company, Arizona II Merger Corporation, a Delaware corporation and direct wholly-owned subsidiary of the Company, Sunbeam GP Holdings, LLC, a Delaware limited liability company, solely for purposes of Article V and Section 2.8 and solely in its capacity as the sole holder of membership interests in the General Partner (“Seller”), Sunbeam GP LLC, a Delaware limited liability company and the general partner of the Partnership (the “General Partner”), Sunbeam Holdings, L.P., a Delaware limited partnership (the “Partnership”), Sunbeam Primary Holdings, Inc., a Delaware corporation and a wholly owned subsidiary of the Partnership, and HFCP VI Securityholders’ Rep LLC, a Delaware limited liability company, solely in its capacity as agent and attorney-in-fact for Seller and the unitholders of the Partnership (the “Unitholders”). The Partnership was an indirect parent company of Sheridan Healthcare, Inc. AmSurg paid the Seller and the Unitholders aggregate consideration of $2.35 billion, less proceeds used to retire certain Partnership indebtedness, adjusted for closing adjustments (the “Merger Consideration”). The Merger Consideration was funded through a combination of cash and our stock (the “Financing Transactions”). In addition, we paid an amount equal to Sheridan’s cash and cash equivalents on hand at the date of the Closing.

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The accompanying unaudited pro forma condensed combined statement of earnings (the “Statement”) for the year ended December 31, 2014 combine the historical consolidated statements of earnings of AmSurg and Sunbeam Holdings, L.P. and its subsidiaries, whose wholly-owned subsidiaries include Sunbeam Primary Holdings, Inc. and Sheridan Holdings, Inc. (collectively “Sheridan”). The Statement gives effect to the Merger as if it had been completed on January 1, 2014, the beginning of the earliest period presented.

The Statement also does not include any adjustment for recent acquisitions made by AmSurg or Sheridan. We anticipate that the Merger will result in significant annual synergies that would be unachievable without completing the Merger. No assurance can be made that we will be able to achieve these synergies and any such synergies have not been reflected in this Statement. The Statement does not include any material nonrecurring charges that might arise as a result of the Merger.

The accompanying Statement and related notes are being provided for illustrative purposes only and do not purport to represent what the actual consolidated results of operations or the consolidated balance sheet of AmSurg would have been had the Merger occurred on the dates assumed, nor are they necessarily indicative of AmSurg’s future consolidated results of operations or consolidated financial position. The Statement does not reflect synergies expected as a result of the Merger, nor do they reflect the full impact of acquisitions that occurred during the periods presented. The Statement is based upon currently available information and estimates and assumptions that AmSurg management believes are reasonable as of the date hereof. Any of the factors underlying these estimates and assumptions may change or prove to be materially different. The accompanying Statement has been developed from and should be read in conjunction with the audited annual and unaudited interim consolidated financial statements and related notes of AmSurg and Sheridan filed with the Securities and Exchange Commission.

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF EARNINGS

For the year ended December 31, 2014

(In thousands, except earnings per share)

	Historical AmSurg (1)			Historical Sheridan January 1 - July 15			Adjustments			Pro Forma Combined
Revenues	$	1,738,950		$	590,351		$	—		$	2,329,301
Provision for uncollectibles		(117,001	)		(28,039	)		—			(145,040	)
Net revenues		1,621,949			562,312			—			2,184,261
Operating expenses:
Salaries and benefits		694,576			400,991			—			1,095,567
Supply cost		164,296			—			3,192	(a)		167,488
Other operating expenses		284,928			106,709			(3,192	) (a)		386,628
								(1,817	) (a)
Transaction costs		33,890			1,677			—			35,567
Depreciation and amortization		60,344			21,778			14,112	(b)		96,234
Total operating expenses		1,238,034			531,155			12,295			1,781,484
Gain (loss) on deconsolidation		3,411			—			(1,817	) (a)		1,594
Equity in earnings of unconsolidated affiliates		7,038			1,885			—			8,923
Operating income		394,364			33,042			(14,112	)		413,294
Interest expense, net		83,285			41,458			(5,081	) (c)		119,662
Debt extinguishment costs		16,887			33,809			—			50,696
Other income, net	��	—			(42	)		—			(42	)
Earnings (loss) from continuing operations before income taxes		294,192			(42,183	)		(9,031	)		242,978
Income tax expense (benefit)		48,103			(16,357	)		(3,621	) (d)		28,125
Net earnings (loss) from continuing operations before noncontrolling interests		246,089			(25,826	)		(5,410	)		214,853
Less net earnings from continuing operations attributable to noncontrolling interests		190,809			1,700			—			192,509
Net earnings (loss) from continuing operations attributable to AmSurg Corp. shareholders		55,280			(27,526	)		(5,410	)		22,344
Preferred stock dividends		(4,503	)		—			(4,553	) (h)		(9,056	)
Net earnings (loss) from continuing operations attributable to AmSurg Corp. common shareholders	$	50,777		$	(27,526	)	$	(9,963	)	$	13,288
Earnings per share from continuing operations attributable to AmSurg Corp. common shareholders:
Basic	$	1.29								$	0.28	(f)
Diluted	$	1.28								$	0.28	(f)
Weighted average number of shares and share equivalents outstanding:
Basic		39,311						8,004	(g)		47,315
Diluted		39,625						8,004	(g)		47,629

(1) Historical AmSurg includes the results of Sheridan effective July 16, 2014.

The accompanying notes are an integral part of this unaudited pro forma condensed combined financial information.

Note 1. Description of the Transaction

On July 16, 2014, AmSurg completed the Merger Agreement with the Seller, the General Partner, the Partnership, Sunbeam Primary and HFCP VI Securityholders’ Rep LLC, a Delaware limited liability company, in its capacity as agent and attorney-in-fact for Seller and the Unitholders. The Partnership is an indirect parent company of Sheridan Healthcare, Inc.

In addition, AmSurg has entered into a new senior secured credit facility comprised of an $870 million term loan and a $300 million revolving credit facility and completed its private offering of $1.1 billion aggregate principal amount of 5.625% senior unsecured notes due 2022. The net proceeds from the term loan and the Notes offering, together with AmSurg’s recently completed registered public offerings of common stock and 5.25% Mandatory Convertible Preferred Stock, and cash on hand, were used to finance the cash consideration. Additionally, we issued approximately $272.0 million of our common stock, based upon the closing price of our common stock of $47.61 on July 16, 2014, to the Unitholders. The mandatory convertible preferred stock will pay dividends quarterly and will convert into shares of our common stock on the third anniversary of the date of its issuance.

Note 2. Basis of Pro Forma Presentation

This Statement has been derived from the historical condensed consolidated financial statements of AmSurg and Sheridan. Certain financial statement line items included in Sheridan’s historical presentation have been disaggregated or condensed to conform to corresponding financial statement line items included in our historical presentation. For this Statement, Sheridan’s other practice expenses and general and administrative expense line items have been combined into other operating expenses to conform to our presentation. Additionally, for this Statement, Sheridan’s net income (loss) from unconsolidated joint ventures line item has been moved to be included in operating income to conform to our presentation. The reclassification of these items had no impact on the historical earnings from continuing operations, total assets, total liabilities, or shareholders’ equity reported by AmSurg or Sheridan, respectively.

Note 3. Adjustments to Unaudited Pro Forma Condensed Combined Financial Information

Pro forma adjustments are necessary to reflect the Merger Consideration, to reflect financing transactions associated with the Merger, to reflect changes in depreciation and amortization expense resulting from the estimated fair value adjustments to tangible and intangible assets, to reflect other transactions directly related to the Merger, and to reflect the income tax effects related to the pro forma adjustments. There were no inter-company transactions between AmSurg and Sheridan. Certain pro forma adjustments were required to conform Sheridan’s accounting policies and presentation to our accounting policies and presentation.

The accompanying Statement has been prepared as if the Merger was completed on January 1, 2014 and reflect the following adjustments:

a) Adjusts the historical presentation of Sheridan’s financial statement to conform to our presentation.

b) To record additional amortization expense of identifiable intangible assets related to the estimated fair value of such identifiable intangible assets held by Sheridan at the time of the Merger. Intangible assets principally relate to customer relationships with hospitals and are expected to have a useful life of approximately three to 20 years.

c) To record estimated interest expense based upon the debt structure as follows (in thousands):

	Year ended December 31, 2014
Financing Transactions	$	95,625
Existing 2020 Notes		14,063
Deferred loan costs		8,324
Capitalized leases and other debt, net of interest income		1,650
Total estimated interest costs		119,662
Less: Historical interest expense, net
AmSurg		(83,285	)
Sheridan		(41,458	)
Net interest expense adjustment	$	(5,081	)

As of the date of this prospectus, the interest rate for the New Term Loan Facility is currently 3.750% and the interest rate for the New Revolving Credit Facility is 3.20% (which has not been drawn upon as part of this Statement). A fluctuation in our variable interest rates of 0.125% would have no impact on interest expense as calculated in the pro forma adjustment.

d) To record the income tax effects of the Statement adjustments using a combined statutory and federal rate of 40.1%.

e) To record the issuance of approximately 15.5 million shares of our common stock which resulted from our common stock offering completed on July 2, 2014 and as part of the Merger Consideration to the Unitholders as described in Note 1. We issued 9,775,000 common shares in our common stock offering, resulting in net proceeds of approximately $421.3 million. Additionally, in accordance with the Merger Agreement, we issued approximately 5.7 million common shares, having an approximate fair value of $272.0 million, to owners of Sheridan, as previously described in Note 1.

f) Basic net earnings attributable to AmSurg Corp. common stockholders, per common share, excludes dilution and is computed by dividing net earnings attributable to AmSurg Corp. common stockholders by the weighted-average number of common shares outstanding during the period. Diluted net earnings attributable to AmSurg common stockholders, per common share is computed by dividing net earnings attributable to AmSurg Corp. common stockholders by the weighted-average number of common shares outstanding during the period plus any potential dilutive common share equivalents, including shares issuable (1) upon the vesting of restricted stock awards as determined under the treasury stock method and (2) upon conversion of the Company’s 5.250% Mandatory Convertible Preferred Stock as determined under the if-converted method. For purposes of calculating diluted earnings per share, preferred stock dividends have been subtracted from both net earnings from continuing operations attributable to AmSurg Corp. and net earnings attributable to AmSurg Corp. common shareholders in periods in which utilizing the if-converted method would be anti-dilutive. For the year ended December 31, 2014, 1.8 million common share equivalents related to the Mandatory Convertible Preferred Stock were anti-dilutive and therefore are excluded from the dilutive weighted average number of shares outstanding.

g) To record the issuance of shares described in t/m (e) adjusted for the period in which these shares were outstanding during the year ended December 31, 2014.

h) To record dividends associated with the outstanding 1,725,000 preferred shares issued as described in Note 1.