UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): October 8, 1999
Commission file number 001-12055
PARACELSUS HEALTHCARE CORPORATION
(Exact name of registrant as specified in its charter)
CALIFORNIA 95-3565943
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
515 W. GREENS ROAD, SUITE 500, HOUSTON, TEXAS
(Address of principal executive offices)
77067 (281) 774-5100
(Zip Code) (Registrant's telephone number,
including area code)
2
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
Pursuant to a recapitalization agreement completed on October 8, 1999,
Paracelsus Healthcare Corporation (the "Company") sold 93.9% of the outstanding
common stock of a wholly owned subsidiary ("HoldCo") to JJL Healthcare, LLC, an
affiliate of the private equity firm of Joseph Littlejohn & Levy, Inc., for
$280.0 million in cash, inclusive of working capital. The Company retained
6.1% of the outstanding common stock of HoldCo, which owned substantially all
of the assets of five hospitals, with 640 licensed beds, and related facilities
located in Salt Lake City, Utah. Subsequent to the closing of the
recapitalization agreement, IASIS Healthcare Corporation, a Tennessee
corporation, was merged with and into a wholly owned subsidiary of HoldCo, with
the HoldCo subsidiary as the surviving entity. Following the Merger, HoldCo
changed its name to IASIS Healthcare Corporation.
The recapitalization agreement was arrived at through an arms length
negotiation. Net cash proceeds were used to eliminate all indebtedness then
outstanding under the Company's senior credit facilities totaling $223.5
million and to reduce $12.8 million in borrowings under the commercial paper
financing program. The Company also eliminated $7.8 million in annual
operating lease payments related to one of the Utah Facilities. The Company
expects to record a gain, subject to the final settlement of working capital,
of approximately $82.0 million ($30.4 million after-tax) on the transaction and
an extraordinary charge of approximately $4.0 million ($2.4 million after-tax)
from the write-off of deferred financing costs due to early extinguishment of
debt under the senior credit facilities.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
In addition to reflecting the Utah Facilities transaction, the pro forma
financial information required by Item 7(b) also reflects the Company's sale of
(i)Paracelsus Senatobia Community, Inc. ("Senatobia") on September 30, 1999
(ii) all of the assets of four skilled nursing facilities (collectively, the
"Convalescent Hospitals") on July 2, 1999, (iii) Paracelsus Bledsoe County
General Hospital, Inc.("Bledsoe") on April 15, 1999, (iv) Chico Community
Hospital and Chico Community Rehabilitation Hospital (collectively "Chico")
on June 30, 1998 and (v) the eight hospitals located in metropolitan Los
Angeles ("LA Metro") on September 30, 1998 and (vi) the acquisition of the
remaining 50 % partnership interest in a general partnership operating as
Dakota Heartland Health System ("DHHS") on July 1, 1998, each of which were
previously reported in the Company's Current Report on Form 8-K for the
respective dates indicated above.
(b) Unaudited Pro Forma Financial Information (attached following the
signature page):
Unaudited Pro Forma Condensed Combining Statement of Operations -
For the six months ended June 30, 1999
Unaudited Pro Forma Condensed Combining Statement of Operations -
For the year ended December 31, 1998
Unaudited Pro Forma Condensed Combining Balance Sheet - June 30, 1999
Notes to Unaudited Pro Forma Condensed Combining Financial Statements
(c) Exhibits
10.26 Recapitalization Agreement, dated August 16, 1999, by and among
Paracelsus Healthcare Corporation, PHC/CHC Holdings, Inc., as parents, and
PHC/Psychiatric Healthcare Corporation, PHC-Salt Lake City, Inc., Paracelsus
Pioneer Valley Hospital, Inc., Pioneer Valley Health Plan, Inc., PHC-Jordan
Valley, Inc., Paracelsus PHC Regional Medical Center, Inc., Paracelsus Davis
Hospital, Inc., PHC Utah, Inc., and Clinicare of Utah, Inc., as sellers, and
JLL Hospital, LLC, as buyer.
3
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Paracelsus Healthcare Corporation
(Registrant)
Dated: October 25, 1999 By:/S/ LAWRENCE A. HUMPHREY
-------------------------------
Lawrence A. Humphrey
Executive Vice President
& Chief Financial Officer
4
ITEM 7(b)
PARACELSUS HEALTHCARE CORPORATION
UNAUDITED PRO FORMA CONDENSED COMBINING FINANCIAL STATEMENTS
The following table presents the Unaudited Pro Forma Condensed Combining
Financial Statements as of and for the six months ended June 30, 1999 and the
year ended December 31, 1998 to illustrate the effect of the Utah Facilities
transaction on October 8, 1999 and the sale of Senatobia effective September
30, 1999, the Convalescent Hospitals effective June 30, 1999, Bledsoe effective
on March 31, 1999, LA Metro on September 30, 1998 and Chico on June 30, 1998
and the acquisition of DHHS on July 1, 1998. The Unaudited Pro Forma Condensed
Combining Statements of Operations assume the above transactions occurred at
the beginning of each period presented. The Pro Forma Condensed Combining
Balance Sheet assumes the Utah transaction and the sale of Senatobia occurred
on June 30, 1999.
Pursuant to a recapitalization agreement completed on October 8, 1999, in
exchange for 93.9% ownership interest in its wholly owned subsidiary HoldCo,
which owned substantially all of the Utah Facilities' assets, the Company
received $280.0 million in cash and retained 6.1% of HoldCo's outstanding
common stock. The proceeds were used to eliminate all indebtedness then
outstanding under the Company's senior credit facilities totaling $223.5
million and to reduce $12.8 million in borrowings under the commercial paper
financing program. The Company also eliminated $7.8 million in annual
operating lease payments related to one of the Utah Facilities. The Company
expects to record a gain, subject to the final settlement of working capital,
of approximately $82.0 million ($30.4 million after-tax) on the transaction and
an extraordinary charge of approximately $4.0 million ($2.4 million after-tax)
from the write-off of deferred financing costs due to early extinguishment of
debt under the senior credit facilities.
Effective September 30, 1999, the Company completed the sale of the stock of
Senatobia for approximately $4.7 million, including net working capital. The
sales price was paid by a combination of cash and second lien promissory notes,
and the assumption by the buyer of approximately $3.0 million in capital lease
obligations and of certain lease guaranty payments. Certain of the notes are
subject to final working capital adjustments and to discounts under certain
circumstances. The Company expects to record a gain of approximately $2.3
million ($1.3 million net of tax) on the sale of Senatobia.
Effective June 30, 1999, the Company sold substantially all of the assets of
the Convalescent Hospitals. The sales price of approximately $6.9 million,
which excluded working capital, was paid by a combination of cash and a second
lien promissory note, which is subject to prepayment discounts. Additionally,
the buyer also assumed an operating lease at one of the facilities. Proceeds
from the sale, net of related transaction costs, were used to reduce
outstanding indebtedness under the senior credit facilities. The Company
recorded a gain of approximately $1.3 million ($774,000 net of tax) on the sale
of the Convalescent Hospitals.
Effective March 31, 1999, the Company completed the sale of the stock of
Bledsoe for approximately $2.2 million, which included net working capital and
was paid by a combination of cash and secured promissory notes. The Company
recorded no material gain or loss on the sale.
On September 30, 1998, the Company completed the sale of the eight LA Metro
hospitals for approximately $33.7 million, which included net working capital
and was paid by a combination of $16.5 million in cash, $13.7 million in
secured promissory notes and the assumption by the buyer of approximately $3.2
million in debt. Proceeds from the sale, net of related transaction costs,
were used to reduced indebtedness under the senior credit facilities and
borrowings under the Company's commercial paper financing program. The Company
recorded a loss of $3.7 million from the final settlement of working capital
and from discounts on the prepayment of promissory notes.
5
Effective July 1, 1998, the Company acquired the remaining 50% interest in DHHS
from its partner for $64.5 million, thereby giving the Company 100% ownership.
The purchase price was financed from borrowings under the Company's senior
credit facilities.
On June 30, 1998, the Company sold the assets of Chico for $25.0 million in
cash plus working capital and the termination of an operating lease. Net
proceeds from the sale were used to reduce $24.6 million in indebtedness under
the credit facilities and $3.1 million in borrowings under the commercial paper
financing program. The Company recorded a gain of $7.1 million ($4.2 million
after tax) on the Chico sale.
These Unaudited Pro Forma Condensed Combining Financial Statements do not
purport to present the financial position or results of operations of the
Company had the above transactions occurred on the dates specified, nor are
they necessarily indicative of results of operations that may be expected in
the future. The Unaudited Pro Forma Condensed Combining Financial Statements
are qualified in their entirety by reference to, and should be read in
conjunction with, the unaudited consolidated financial statements as of and for
the six months ended June 30, 1999, included in the Company's Quarterly Report
on Form 10-Q and the audited consolidated financial statements for the year
ended December 31, 1998, included in the Company's Annual Report on Form 10-K.
6
PARACELSUS HEALTHCARE CORPORATION UNAUDITED PRO FORMA CONDENSED
COMBINING STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1999
(Dollars in thousands, except per share data)
Bledsoe/
Convalescent Pro Forma
Hospitals/ Bledsoe/ Utah
Paracelsus Senatobia Convalescent Facilities
Healthcare Pro Forma Hospitals/ Pro Forma Pro Forma
Corporation Adjustments Rf Senatobia Adjustments Rf Paracelsus
----------- ----------- -- ----------- ----------- -- ----------
(1)
Net revenue $ 294,211 $ (10,368) (2) $ 283,843 $ (94,817) (3) $ 189,026
Costs and expenses:
Salaries and
benefits 117,100 (5,973) (2) 111,127 (32,161) (3) 78,966
Other operating
expense 115,024 (3,990) (2) 111,034 (38,383) (3) 72,651
Provision for
bad debts 21,485 (877) (2) 20,608 (6,759) (3) 13,849
Interest 26,183 (194) (2)(4) 25,989 (8,154) (3)(4) 17,835
Depreciation &
amortization 19,785 (187) (2) 19,598 (6,249) (3) 13,349
Unusual items 7,668 7,668 7,668
Loss on sale of
facilities 2,387 (2,387) (2) (7)
--------- -------- --------- ------- -------
Total costs &
expenses 309,632 (13,608) 296,024 (91,706) 204,318
--------- -------- --------- ------- -------
Loss before
minority interest
and income taxes (15,421) 3,240 (12,181) (3,111) (15,292)
Minority interest 121 121 (65) (3) 56
--------- -------- --------- -------- -------
Loss before
income taxes (15,300) 3,240 (12,060) (3,176) (15,236)
Provision for
income taxes (6,105) 1,329 (5) (4,776) (1,620) (5) (6,396)
--------- -------- --------- -------- -------
Loss from continuing
operations $ (9,195) $ 1,911 $ (7,284) $ (1,556) $ (8,840)
========= ======== ========= ======== ========
Loss per share
- - basic and
assuming
dilution $ (0.17) $ (0.13) $ (0.16)
========= ========= =========
Weighted average
number of common
and common
equivalent
shares 55,118 55,118 55,118
========= ========= ==========
See notes to Unaudited Pro Forma Condensed Combining Financial Statements.
7
PARACELSUS HEALTHCARE CORPORATION UNAUDITED PRO FORMA CONDENSED
COMBINING STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
(Dollars in thousands, except per share data)
Chico/ Pro Forma
Paracelsus DHHS LA Metro DHHS/
Healthcare Pro Forma Pro Forma Chico/
Corporation Adjustments Rf Adjustments Rf LA Metro
----------- ----------- -- ----------- -- --------------
(1)
Net revenue $ 664,058 $ $ (76,873) (7) $ 587,185
Costs and expenses:
Salaries and
benefits 276,200 (33,889) (7) 242,311
Other operating
expense 265,735 (37,808) (7) 227,927
Provision for
bad debts 42,659 (2,270) (7) 40,389
Interest 51,859 2,983 (6) (1,990) (7)(4) 52,852
Depreciation &
amortization 38,330 486 (6) (758) (7) 38,058
Impairment charges 1,417 1,417
Unusual items (6,637) (233) (7) (6,870)
(Gain)loss on sale of
facilities (6,825) 7,100 (7) 275
--------- ------- --------- -------
Total costs &
expenses 662,738 3,469 (69,848) 596,359
--------- ------- --------- -------
Income (loss) before
minority interest
and income taxes 1,320 (3,469) (7,025) (9,174)
Minority interest (3,180) 4,141 (6) (961) (7)
--------- ------- --------- -------
Loss before
income taxes (1,860) 672 (7,986) (9,174)
Provision for
income taxes 693 275 (5) (3,274) (5) (2,306)
--------- ------- --------- -------
Loss from continuing
operations $ (2,553) $ 397 $ (4,712) $ (6,868)
========= ========= ========= =========
Loss per share
- - basic and
assuming
dilution $ (0.05) $ (0.12)
========== =========
Weighted average
number of common
and common
equivalent
shares 55,108 55,108
========= ==========
See notes to Unaudited Pro Forma Condensed Combining Financial Statements.
8
PARACELSUS HEALTHCARE CORPORATION UNAUDITED PRO FORMA CONDENSED
COMBINING STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
(Dollars in thousands, except per share data)
Bledsoe/
Convalescent Pro Forma
Pro Forma Hospitals/ Bledsoe Utah
DHHS/ Senatobia Convalescent/ Facilities
Chico/ Pro Forma Hospitals/ Pro Forma Pro Forma
LA Metro Adjustments Rf Senatobia Adjustments Rf Paracelsus
----------- ----------- ---- ----------- ------------- -- ----------
(1)
Net revenue $ 587,185 $ (25,840) (2) $ 561,345 $ (184,151) (3) $ 377,194
Costs and expenses:
Salaries and
benefits 242,311 (17,118) (2) 225,193 (65,799) (3) 159,394
Other operating
expense 227,927 (9,479) (2) 218,448 (74,289) (3) 144,159
Provision for
bad debts 40,389 (1,658) (2) 38,731 (11,757) (3) 26,974
Interest 52,852 (468) (2)(4) 52,384 (16,570) (3)(4) 35,814
Depreciation &
amortization 38,058 (550) (2) 37,508 (11,770) (3) 25,738
Impairment charges 1,417 (1,104) (2) 313 313
Unusual items (6,870) (6,870) 7,500 (3) 630
Loss on sale
of facilities 275 275 275
--------- ------- --------- ------- --------
Total costs &
expenses 596,359 (30,377) 565,982 (172,685) 393,297
--------- ------- --------- ------- --------
Loss before minority
interest and
income taxes (9,174) 4,537 (4,637) (11,466) (16,103)
Minority interest
--------- ------- --------- ------- --------
Loss before
income taxes (9,174) 4,537 (4,637) (11,466) (16,103)
Provision for
income taxes (2,306) 1,861 (5) (445) (5,338) (5) (5,783)
--------- ------- --------- ------- --------
Loss from continuing
operations $ (6,868) $ 2,676 $ (4,192) $ (6,128) $ (10,320)
========= ========= ========= ========= =========
Loss per share
- - basic and
assuming
dilution $ (0.12) $ (0.08) $ (0.19)
========= ======== =========
Weighted average
number of common
and common
equivalent
shares 55,108 55,108 55,108
========= ======== =========
See notes to Unaudited Pro Forma Condensed Combining Financial Statements.
9
PARACELSUS HEALTHCARE CORPORATION UNAUDITED PRO FORMA CONDENSED COMBINING
BALANCE SHEET
JUNE 30, 1999
(Dollars in thousands)
Utah
Paracelsus Senatobia Facilities
Healthcare Pro Forma Pro Forma Pro Forma
Corporation Adjustments Rf Adjustments Rf Paracelsus
----------- ----------- -- ----------- -- ----------
ASSETS: (1)
Current assets:
Cash and cash equivalents $ 12,364 $ (234) (8) $ 55,554 (9)(a) $ 67,684
Restricted cash 1,111 11,550 (9)(a) 12,661
Accounts receivable, net 60,182 (1,803) (8) (22,723) (9) 35,656
Deferred income taxes 10,757 (1,809) (9)(c)(d) 8,948
Other 39,842 183 (8) (6,871) (9) 33,154
-------- --------- -------- ----------
Total current assets 124,256 (1,854) 35,701 158,103
-------- --------- -------- ----------
Property and equipment, net 360,291 (324) (8) (133,934) (9) 226,033
Goodwill 134,751 (45,577) (9)(b) 89,174
Other assets 84,444 (721) (8) (44,430) (9)(c)(d) 39,293
-------- --------- -------- ----------
Total assets $703,742 $ (2,899) $(188,240) $ 512,603
======== ========= ======== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable $ 47,124 $ (392) (8) $ (14,353) (9) $ 32,379
Accrued liabilities
and other 52,392 (739) (8) 1,544 (9)(d) 53,197
Current maturities
of long-term debt 4,379 (145) (8) (3,743) (9)(a) 491
-------- --------- -------- ----------
Total current liabilities 103,895 (1,276) (16,552) 86,067
-------- --------- -------- ----------
Long term debt 537,759 (2,964) (8) (198,217) (9)(a) 336,578
Other long-term liabilities 36,942 (1,536) (9) 35,406
Stockholders' equity
Common stock 222,977 222,977
Additional paid-in capital 390 390
Accumulated deficit (198,221) 1,341 (8) 28,065 (9)(c)(d) (168,815)
-------- --------- -------- ----------
Total stockholders'
equity 25,146 1,341 28,065 54,552
-------- --------- -------- ----------
Total liabilities
& stockholders' equity $703,742 $ (2,899) $ (188,240) $ 512,603
======== ========= ========= ==========
See notes to Unaudited Pro Forma Condensed Combining Financial Statements.
10
PARACELSUS HEALTHCARE CORPORATION
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINING FINANCIAL STATEMENTS
Note
Reference Explanations
- ----------- -------------------------------------------------------------------
(1) The statements of operations and balance sheet for Paracelsus
Healthcare Corporation as of and for the six months ended June 30,
1999 are summarized from its June 30, 1999 Quarterly Report on
Form 10-Q. The statement of operations for the year ended December
31, 1998 is summarized from the 1998 Annual Report on Form 10-K.
(2) To remove the historical results of operations of Bledsoe, the
Convalescent Hospitals and Senatobia(including an impairment
charge of $1.1 million relating to the write-down of certain
assets in the fourth quarter of 1998 and the gain on sale of the
Convalescent Hospitals). Pro forma adjustments to net revenue
included interest income of $283,000 and $685,000 on the
promissory notes received in connection with the sale of these
facilities for the six months ended June 30, 1999 and the year
ended December 31, 1998, respectively.
(3) To remove the Utah Facilities' historical results of operations
for the six months ended June 30, 1999 and the year ended
December 31, 1998, including the removal of an unusual gain of
$7.5 million related to the settlement in 1998 of a capitation
contract. See (4) and (9) below regarding other pro forma
adjustments.
(2) To record a reduction in interest expense from the pro forma
decrease in indebtedness under the senior credit facilities and
the commercial paper financing program.
With respect to the Utah Facilities transaction, the Unaudited Pro
Forma Condensed Combining Statements of Operations assume the net
proceeds were used to eliminate all indebtedness outstanding under
the senior credit facilities and to reduce $12.8 million in
borrowings under the commercial paper financing program. The pro
forma reduction in interest expense under the senior credit
facilities included the net pro forma interest adjustments related
to prior acquisition and dispositions. The average interest rate
in effect under the senior credit facility was 8.4% and 9.0% for
the six months ended June 30, 1999 and for the year ended December
31, 1998, respectively. The average interest rate in effect under
the commercial paper program was 5.9% and 6.7% for the six months
ended June 30, 1999 and for the year ended December 31, 1998,
respectively.
With respect to the sale of the Convalescent Hospitals, the
Unaudited Pro Forma Condensed Combining Statements of Operations
assume $2.0 million in net sales proceeds were used to reduce
amounts outstanding under the senior credit facilities. The
average interest rate in effect under the senior credit facilities
was 8.4% for the six months ended June 30, 1999 and 9.0% for the
year ended December 31, 1998.
With respect to the Chico sale effective June 30, 1998, the
Unaudited Pro Forma Condensed Combining Statement of Operations
assumes $24.6 million in net sales proceeds were used to reduce
amounts outstanding under the senior credit facilities and
$3.1 million in net sales proceeds were used to reduce amounts
outstanding under the commercial paper financing program. The
average interest rate in effect under the credit facility was 9.2%
for the six months ended June 30, 1998. The average interest rate
in effect under the commercial paper program was 6.7% for the six
months ended June 30, 1998.
11
PARACELSUS HEALTHCARE CORPORATION
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINING FINANCIAL STATEMENTS
Note
Reference Explanations
- ----------- -------------------------------------------------------------------
(3) With respect to sale of LA Metro effective September 30, 1998, the
Unaudited Pro Forma Condensed Combining Statement of Operations
assumes $4.2 million in net sales proceeds were used to reduce
amounts outstanding under the senior credit facilities and a $9.3
million in net sales proceeds were used to reduce borrowings under
the commercial paper financing program. The average interest rate
in effect under the senior credit facilities was 9.1% for the nine
months ended September 30, 1998. The average interest rate in
effect under the commercial paper program was 6.7% for the nine
months ended September 30, 1998.
(4) To record the pro forma provision for income taxes after taking
into effect the sale of the Utah Facilities, Senatobia, the
Convalescent Hospitals, Bledsoe, LA Metro and Chico and the
consolidation of DHHS pursuant to the Company's acquisition of
DHHS. The income tax provision on the pro forma adjustments was
calculated using the statutory tax rate of 41.0%. The pro forma
income tax provision related to the Utah facilities differed from
the statutory rate due to nondeductible goodwill amortization at
to these facilities.
(5) In connection with the acquisition of DHHS, pro forma adjustments
to the historical results of operations include (a) an increase in
interest expense from borrowings of $65.0 million to finance the
acquisition, (b) the removal of minority interest for the six
months ended June 30, 1998 prior to the change in control and (c)
an increase in depreciation and amortization expense for the step
up in basis for the depreciable assets of DHHS and the increase in
goodwill in connection with the allocated purchase price.
(7) To remove Chico's historical results of operations and the gain on
sale of the Chico facilities and to remove LA Metro's historical
results of operations (including an unusual charge of $233,000).
Pro forma adjustments to net revenue for the year ended December
31, 1998 included interest income of $1.4 million on the
promissory notes received in connection with the LA Metro sale.
Additionally, other pro forma adjustments to historical results of
operations for the six months ended June 30, 1999 included the
removal of a $3.7 million loss from the final working capital
settlement and prepayment discounts on promissory notes related
to the LA Metro sale.
(8) To remove Senatobia's assets and liabilities as of June 30, 1999,
and to record the promissory notes, net of certain discounts,
received in connection with the sale. The Company expects to
record a gain of approximately $2.3 million ($1.3 million after
tax) on the transaction.
(6) To remove assets sold and liabilities assumed as of June 30, 1999,
in connection with the Utah Facilities transaction. Pro forma
adjustments to the historical Unaudited Condensed Combining
Balance Sheet as of June 30, 1999 also included the following:
(a) An increase of $55.6 million and $11.5 million in cash and
restricted cash, respectively, from the use of the proceeds of
$280.0 million to eliminate all indebtedness under the senior
credit facilities as of June 30, 1999, of $200.2 million, to
reduce borrowings under the commercial paper program by $12.8
million and to provide collateral of $11.5 million on certain
outstanding letters of credit.
12
PARACELSUS HEALTHCARE CORPORATION
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINING FINANCIAL STATEMENTS
Note
Reference Explanations
- ----------- -------------------------------------------------------------------
(9) (b) A reduction of goodwill associated with the Company's 1996
acquisition of the Utah Facilities.
(c) A reduction to long-term assets, including intangible assets
capitalized in connection with the Company's 1996 acquisition of
the Utah facilities. Pro forma adjustments also included (i) the
recording of deferred taxes related to the estimated gain on the
Utah Facilities transaction as calculated below, (ii) the write-
off of $4.0 million ($2.4 million net of tax) in deferred
financing costs from the early extinguishment of debt under the
senior credit facilities and (iii) the recording of approximately
$10.9 million related to the Company's 6.1% interest in HoldCo on
a historical cost basis.
(d) The estimated net gain on the Utah Facilities transaction as
calculated below:
Cash proceeds $280,025
Assets sold & liabilities assumed:
Net working capital (19,451)
Property and equipment and other assets (137,164)
Goodwill (45,577)
Liabilities assumed 3,344
---------
(198,848)
Minority interest in HoldCo 10,926
---------
Net assets sold (187,922)
Transaction costs (6,900)
Other adjustments (3,205)*
---------
Pre-tax gain 81,998 81,998
Nondeductible goodwill 43,734
---------
Taxable gain 125,732
---------
Deferred taxes (statutory rate of 41%) (51,550)
---------
Gain, net of tax $ 30,448
=========
* Other adjustments primarily reflected capital expenditures from
June 30, 1999 to the effective date of transaction, October 8,
1999.