EX-99.1 2 a6625432ex99_1.htm EXHIBIT 99.1 a6625432ex99_1.htm
Exhibit 99.1

 
Introduction to Non-GAAP Financial Schedules

When reading the following schedules, please note that:
(i) “Acquisition-affected” results include the activity of Broadlane assuming the acquisition occurred on January 1, 2009 (the Broadlane acquisition was consummated on November 16,  2010).
(ii) “Recast” results assume the DSS operating unit was part of the Spend and Clinical Resource Management Segment in 2009 and 2010 (DSS was part of the Revenue Cycle Management Segment in 2009 and 2010).
 
Please refer to “Use of Non-GAAP Financial Measures” following the financial schedules for more information on non-GAAP measures.
 

 
 
 
 
 

 
 
Consolidated Non-GAAP Acquisition-Affected Income Statement (UNAUDITED)
2009 - 2010 by Quarter
                     
                       
 
2009
 
2010
($ in thousands)
1Q'09
2Q'09
3Q'09
4Q'09
FY'09
 
1Q'10
2Q'10
3Q'10
4Q'10
FY'10
                       
Gross Admin Fees
83,415
83,580
83,464
91,180
341,639
 
88,180
89,521
91,101
95,596
364,398
Other
63,705
70,644
68,632
79,871
282,852
 
78,745
81,595
82,133
80,037
322,510
Gross Fees
147,120
154,224
152,096
171,051
624,491
 
166,925
171,116
173,234
175,633
686,908
Less: Rev Share Incen & Rev Alow
-28,147
-28,689
-28,328
-30,523
-115,687
 
-31,013
-32,192
-33,039
-33,263
-129,507
Total Net Revenue
118,974
125,535
123,768
140,528
508,805
 
135,912
138,924
140,195
142,370
557,401
Quarter/Annual Net Revenue Growth Rate
 
5.5%
-1.4%
13.5%
   
-3.3%
2.2%
0.9%
1.6%
9.6%
Revenue Share Incentive % of Total Gross Fees
19.1%
18.6%
18.6%
17.8%
18.5%
 
18.6%
18.8%
19.1%
18.9%
18.9%
                       
Cost of Revenue
33,294
34,313
38,992
37,379
143,978
 
40,779
42,593
42,581
43,369
169,322
Gross Margin
85,680
91,222
84,776
103,149
364,827
 
95,133
96,331
97,614
99,001
388,079
Gross Margin %
72.0%
72.7%
68.5%
73.4%
71.7%
 
70.0%
69.3%
69.6%
69.5%
69.6%
                       
Product Development
9,418
8,483
7,062
7,306
32,269
 
8,768
7,926
7,699
6,872
31,265
Selling & Marketing
12,351
17,128
11,884
10,856
52,219
 
12,925
17,855
10,477
12,416
53,673
General & Administrative
33,463
34,643
30,482
42,895
141,483
 
39,593
37,148
37,482
36,194
150,417
Acquisition & Integration Expenses
0
0
0
0
0
 
0
1,869
936
26,846
29,651
Depreciation
4,168
4,151
4,377
5,624
18,320
 
5,549
5,765
6,586
6,558
24,458
Amortization of Intangibles
22,460
22,449
22,467
22,432
89,808
 
20,537
20,479
20,049
21,046
82,111
Impairment of Intangible Assets
0
0
0
0
0
 
0
0
0
46,423
46,423
Total Operating Expenses
81,860
86,854
76,272
89,113
334,099
 
87,372
91,042
83,229
156,355
417,998
                       
Operating Margin
3,820
4,368
8,504
14,036
30,728
 
7,761
5,289
14,385
-57,354
-29,919
Operating Margin %
3.2%
3.5%
6.9%
10.0%
6.0%
 
5.7%
3.8%
10.3%
-40.3%
-5.4%
                       
Interest Expense
18,492
18,432
18,087
17,237
72,248
 
18,007
17,106
16,520
16,946
68,579
Other Income Expense / (Income)
-357
125
-228
-12
-472
 
-282
-93
-71
-355
-801
Pretax Net Income
-14,315
-14,189
-9,355
-3,189
-41,048
 
-9,964
-11,724
-2,064
-73,945
-97,697
Pretax Margin %
-12.0%
-11.3%
-7.6%
-2.3%
-8.1%
 
-7.3%
-8.4%
-1.5%
-51.9%
-17.5%
                       
Income Taxes
-5,193
-5,115
-3,512
-444
-14,264
 
-3,099
-4,201
-388
-23,054
-30,742
Net Income / (Loss)
-9,122
-9,074
-5,843
-2,745
-26,784
 
-6,865
-7,523
-1,676
-50,891
-66,955
                       
Add:  Depreciation
4,168
4,151
4,377
5,624
18,320
 
5,549
5,765
6,586
6,558
24,458
Add:  Depreciation (incl in COR)
603
617
616
590
2,426
 
722
719
726
726
2,893
Add:  Amort of Deal-Related Intangibles
22,460
22,449
22,467
22,432
89,808
 
20,537
20,479
20,049
21,046
82,111
Add:  Amort of Deal-Related Intangibles (incl in COR)
185
185
185
185
740
 
185
185
139
139
648
Add:  Interest Expense/ (Income)
18,430
18,427
18,082
17,231
72,170
 
17,988
17,070
16,472
16,963
68,493
Add:  Income Taxes
-5,193
-5,115
-3,512
-444
-14,264
 
-3,099
-4,201
-388
-23,054
-30,742
EBITDA
31,531
31,640
36,372
42,873
142,416
 
35,017
32,494
41,908
-28,513
80,906
EBITDA Margin %
26.5%
25.2%
29.4%
30.5%
28.0%
 
25.8%
23.4%
29.9%
-20.0%
14.5%
                       
Add:  Impairment of Intangible Assets
0
0
0
0
0
 
0
0
0
46,423
46,423
Add:  Equity-based Compensation
4,386
4,894
4,090
3,891
17,261
 
3,682
3,264
2,244
2,881
12,071
Add:  Rental income for Cap Bldg Lease
-110
-109
-110
-110
-439
 
-110
-109
-110
-110
-439
Add:  Acquisition & Integration Expenses
0
0
0
0
0
 
0
1,869
936
26,846
29,651
Add:  Purchase Accounting Adjustment
615
391
82
1,936
3,024
 
-74
26
140
20
112
Adjusted EBITDA
36,422
36,816
40,434
48,590
162,262
 
38,515
37,544
45,118
47,547
168,724
Adjusted EBITDA Margin %
30.6%
29.3%
32.7%
34.6%
31.9%
 
28.3%
27.0%
32.2%
33.4%
30.3%
Quarter/Annual Adj EBITDA Growth Rate
 
1.1%
9.8%
20.2%
   
-20.7%
-2.5%
20.2%
5.4%
4.0%
 
 
 

 
 
Revenue Cycle Management Segment Non-GAAP Acquisition-Affected and Recast Income Statement (UNAUDITED)
2009 - 2010 by Quarter
                     
                       
 
2009
 
2010
($ in thousands)
1Q'09
2Q'09
3Q'09
4Q'09
FY'09
 
1Q'10
2Q'10
3Q'10
4Q'10
FY'10
                       
Gross Admin Fees
0
0
0
0
0
 
0
0
0
0
0
Other
40,374
43,688
45,061
49,598
178,721
 
51,902
52,503
55,920
53,403
213,727
Gross Fees
40,374
43,688
45,061
49,598
178,721
 
51,902
52,503
55,920
53,403
213,727
Less: Rev Share Incen & Rev Alow
0
0
0
0
0
 
0
0
0
0
0
Total Net Revenue
40,374
43,688
45,061
49,598
178,721
 
51,902
52,503
55,920
53,403
213,727
Quarter/Annual Net Revenue Growth Rate
                   
19.6%
Revenue Share Incentive % of Total Gross Fees
0.0%
0.0%
0.0%
0.0%
0.0%
 
0.0%
0.0%
0.0%
0.0%
0.0%
                       
Cost of Revenue
11,774
11,700
15,070
12,171
50,714
 
15,027
15,337
15,445
15,667
61,477
Gross Margin
28,600
31,988
29,992
37,427
128,007
 
36,874
37,166
40,474
37,736
152,250
Gross Margin %
70.8%
73.2%
66.6%
75.5%
71.6%
 
71.0%
70.8%
72.4%
70.7%
71.2%
                       
Product Development
4,723
4,301
3,132
2,811
14,967
 
3,995
3,608
3,676
3,674
14,954
Selling & Marketing
3,838
4,720
3,434
2,660
14,651
 
3,746
4,943
3,647
3,643
15,980
General & Administrative
11,344
12,040
8,491
15,743
47,620
 
14,624
12,388
14,976
16,876
58,864
Acquisition & Integration Expenses
0
0
0
0
0
 
0
0
0
0
0
Depreciation
1,418
1,469
1,556
2,551
6,993
 
2,473
2,649
2,905
3,213
11,241
Amortization of Intangibles
5,867
5,867
5,867
5,867
23,469
 
5,312
5,234
4,778
4,778
20,102
Impairment of Intangible Assets
0
0
0
0
0
 
0
0
0
249
249
Total Operating Expenses
27,190
28,398
22,480
29,632
107,700
 
30,151
28,823
29,983
32,432
121,389
                       
Operating Margin
1,410
3,590
7,511
7,795
20,307
 
6,723
8,342
10,492
5,304
30,861
Operating Margin %
3.5%
8.2%
16.7%
15.7%
11.4%
 
13.0%
15.9%
18.8%
9.9%
14.4%
                       
Interest Expense
1
0
0
0
1
 
0
0
0
1
1
Other Income Expense / (Income)
-32
6
-19
-2
-47
 
-14
-19
68
-180
-144
Pretax Net Income
1,441
3,585
7,531
7,798
20,354
 
6,737
8,361
10,424
5,482
31,004
Pretax Margin %
3.6%
8.2%
16.7%
15.7%
11.4%
 
13.0%
15.9%
18.6%
10.3%
14.5%
                       
Income Taxes
576
1,372
2,864
3,154
7,967
 
2,718
3,282
4,178
-15,210
-5,032
Net Income / (Loss)
865
2,212
4,666
4,644
12,387
 
4,019
5,079
6,246
20,692
36,036
                       
Add:  Depreciation
1,418
1,469
1,556
2,551
6,993
 
2,473
2,649
2,905
3,213
11,241
Add:  Depreciation (incl in COR)
0
1
0
0
0
 
0
0
0
0
-1
Add:  Amort of Deal-Related Intangibles
5,867
5,867
5,867
5,867
23,469
 
5,312
5,234
4,778
4,778
20,102
Add:  Amort of Deal-Related Intangibles (incl in COR)
46
46
46
46
183
 
46
46
0
0
91
Add:  Interest Expense/ (Income)
-6
-2
0
-1
-9
 
-14
-15
-15
-15
-59
Add:  Income Taxes
576
1,372
2,864
3,154
7,967
 
2,718
3,282
4,178
-15,210
-5,032
EBITDA
8,766
10,965
14,999
16,261
50,990
 
14,555
16,275
18,092
13,457
62,379
EBITDA Margin %
21.7%
25.1%
33.3%
32.8%
28.5%
 
28.0%
31.0%
32.4%
25.2%
29.2%
                       
Add:  Impairment of Intangible Assets
0
0
0
0
0
 
0
0
0
249
249
Add:  Equity-based Compensation
1,531
1,384
1,287
885
5,086
 
890
667
897
807
3,261
Add:  Rental income for Cap Bldg Lease
0
0
0
0
0
 
0
0
0
0
0
Add:  Acquisition & Integration Expenses
0
0
0
0
0
 
0
0
0
0
0
Add:  Purchase Accounting Adjustment
182
15
0
-227
-30
 
0
0
0
0
0
Adjusted EBITDA
10,478
12,363
16,286
16,919
56,046
 
15,445
16,942
18,988
14,514
65,889
Adjusted EBITDA Margin %
26.0%
28.3%
36.1%
34.1%
31.4%
 
29.8%
32.3%
34.0%
27.2%
30.8%
Quarter/Annual Adj EBITDA Growth Rate
 
18.0%
31.7%
3.9%
   
-8.7%
9.7%
12.1%
-23.6%
17.6%
 
 
 

 
 
Spend and Clinical Resource Management Segment Non-GAAP Acquisition-Affected and Recast Income Statement (UNAUDITED)
2009 - 2010 by Quarter
                     
                       
 
2009
 
2010
($ in thousands)
1Q'09
2Q'09
3Q'09
4Q'09
FY'09
 
1Q'10
2Q'10
3Q'10
4Q'10
FY'10
                       
Gross Admin Fees
83,415
83,580
83,464
91,180
341,639
 
88,180
89,521
91,100
95,596
364,397
Other
23,331
26,956
23,571
30,273
104,131
 
26,843
29,092
26,213
26,634
108,783
Gross Fees
106,746
110,536
107,035
121,453
445,770
 
115,023
118,613
117,313
122,230
473,180
Less: Rev Share Incen & Rev Alow
-28,147
-28,689
-28,328
-30,523
-115,687
 
-31,013
-32,192
-33,039
-33,263
-129,507
Total Net Revenue
78,599
81,847
78,707
90,930
330,083
 
84,010
86,421
84,274
88,967
343,673
Quarter/Annual Net Revenue Growth Rate
                   
4.1%
Revenue Share Incentive % of Total Gross Fees
26.4%
26.0%
26.5%
25.1%
26.0%
 
27.0%
27.1%
28.2%
27.2%
27.4%
                       
Cost of Revenue
21,520
22,613
23,922
25,207
93,263
 
25,752
27,256
27,136
27,702
107,845
Gross Margin
57,079
59,234
54,784
65,723
236,820
 
58,259
59,165
57,139
61,265
235,828
Gross Margin %
72.6%
72.4%
69.6%
72.3%
71.7%
 
69.3%
68.5%
67.8%
68.9%
68.6%
                       
Product Development
4,695
4,182
3,930
4,495
17,302
 
4,773
4,318
4,023
3,198
16,311
Selling & Marketing
8,189
11,914
8,228
8,000
36,332
 
8,965
12,723
6,738
8,670
37,095
General & Administrative
15,607
16,052
15,505
20,276
67,438
 
16,906
16,942
15,566
12,149
61,563
Acquisition & Integration Expenses
0
0
0
0
0
 
0
0
0
18,443
18,443
Depreciation
2,279
2,162
2,247
2,410
9,099
 
2,253
2,237
2,397
2,547
9,433
Amortization of Intangibles
16,593
16,582
16,600
16,565
66,339
 
15,225
15,245
15,271
16,268
62,009
Impairment of Intangible Assets
0
0
0
0
0
 
0
0
0
45,776
45,776
Total Operating Expenses
47,363
50,891
46,510
51,746
196,510
 
48,121
51,464
43,994
107,052
250,631
                       
Operating Margin
9,716
8,343
8,275
13,977
40,310
 
10,138
7,702
13,144
-45,787
-14,803
Operating Margin %
12.4%
10.2%
10.5%
15.4%
12.2%
 
12.1%
8.9%
15.6%
-51.5%
-4.3%
                       
Interest Expense
0
0
0
0
0
 
0
0
0
18
18
Other Income Expense / (Income)
-197
233
-63
89
62
 
-158
52
-17
-53
-177
Pretax Net Income
9,913
8,109
8,337
13,887
40,248
 
10,296
7,650
13,161
-45,751
-14,644
Pretax Margin %
12.6%
9.9%
10.6%
15.3%
12.2%
 
12.3%
8.9%
15.6%
-51.4%
-4.3%
                       
Income Taxes
4,206
3,275
3,114
6,260
16,854
 
4,735
3,235
5,040
3,080
16,090
Net Income / (Loss)
5,708
4,835
5,224
7,627
23,394
 
5,561
4,415
8,121
-48,831
-30,734
                       
Add:  Depreciation
2,279
2,162
2,247
2,410
9,099
 
2,253
2,237
2,397
2,547
9,433
Add:  Depreciation (incl in COR)
603
616
616
590
2,426
 
722
719
726
726
2,894
Add:  Amort of Deal-Related Intangibles
16,593
16,582
16,600
16,565
66,339
 
15,225
15,245
15,271
16,268
62,009
Add:  Amort of Deal-Related Intangibles (incl in COR)
139
139
139
139
557
 
139
139
139
139
557
Add:  Interest Expense/ (Income)
-51
-1
-1
-4
-57
 
-3
-22
-32
51
-6
Add:  Income Taxes
4,206
3,275
3,114
6,260
16,854
 
4,735
3,235
5,040
3,080
16,090
EBITDA
29,476
27,608
27,939
33,587
118,611
 
28,631
25,968
31,662
-26,019
60,242
EBITDA Margin %
37.5%
33.7%
35.5%
36.9%
35.9%
 
34.1%
30.0%
37.6%
-29.2%
17.5%
                       
Add:  Impairment of Intangible Assets
0
0
0
0
0
 
0
0
0
45,776
45,776
Add:  Equity-based Compensation
1,283
1,621
1,254
1,477
5,636
 
1,141
1,255
572
841
3,809
Add:  Rental income for Cap Bldg Lease
0
0
0
0
0
 
0
0
0
0
0
Add:  Acquisition & Integration Expenses
0
0
0
0
0
 
0
0
0
18,443
18,443
Add:  Purchase Accounting Adjustment
433
376
82
2,163
3,054
 
-74
26
140
20
112
Adjusted EBITDA
31,193
29,606
29,275
37,227
127,301
 
29,698
27,249
32,375
39,060
128,382
Adjusted EBITDA Margin %
39.7%
36.2%
37.2%
40.9%
38.6%
 
35.4%
31.5%
38.4%
43.9%
37.4%
Quarter/Annual Adj EBITDA Growth Rate
 
-5.1%
-1.1%
27.2%
   
-20.2%
-8.2%
18.8%
20.7%
0.8%
 
 
 

 
 
Corporate Segment Non-GAAP Acquisition-Affected Income Statement (UNAUDITED)
2009 - 2010 by Quarter
                     
                       
 
2009
 
2010
($ in thousands)
1Q'09
2Q'09
3Q'09
4Q'09
FY'09
 
1Q'10
2Q'10
3Q'10
4Q'10
FY'10
                       
Gross Admin Fees
0
0
0
0
0
 
0
0
0
0
0
Other
0
0
0
0
0
 
0
0
0
0
0
Gross Fees
0
0
0
0
0
 
0
0
0
0
0
Less: Rev Share Incen & Rev Alow
0
0
0
0
0
 
0
0
0
0
0
Total Net Revenue
0
0
0
0
0
 
0
0
0
0
0
Quarter/Annual Net Revenue Growth Rate
                   
#DIV/0!
Revenue Share Incentive % of Total Gross Fees
0.0%
0.0%
0.0%
0.0%
0.0%
 
0.0%
0.0%
0.0%
0.0%
0.0%
                       
Cost of Revenue
0
0
0
1
1
 
0
0
0
0
0
Gross Margin
0
0
0
-1
-1
 
0
0
0
0
0
Gross Margin %
0.0%
0.0%
0.0%
0.0%
0.0%
 
0.0%
0.0%
0.0%
0.0%
0.0%
                       
Product Development
0
0
0
0
0
 
0
0
0
0
0
Selling & Marketing
324
494
222
196
1,236
 
214
189
92
103
598
General & Administrative
6,512
6,551
6,486
6,876
26,425
 
8,063
7,818
6,940
7,169
29,990
Acquisition & Integration Expenses
0
0
0
0
0
 
0
1,869
936
8,403
11,208
Depreciation
471
520
574
663
2,228
 
823
879
1,284
798
3,784
Amortization of Intangibles
0
0
0
0
0
 
0
0
0
0
0
Impairment of Intangible Assets
0
0
0
0
0
 
0
0
0
398
398
Total Operating Expenses
7,307
7,565
7,282
7,735
29,889
 
9,100
10,755
9,252
16,871
45,978
                       
Operating Margin
-7,307
-7,565
-7,282
-7,736
-29,890
 
-9,100
-10,755
-9,252
-16,871
-45,978
Operating Margin %
0.0%
0.0%
0.0%
0.0%
0.0%
 
0.0%
0.0%
0.0%
0.0%
0.0%
                       
Interest Expense
18,491
18,432
18,087
17,237
72,247
 
18,007
17,106
16,520
16,927
68,560
Other Income Expense / (Income)
-128
-114
-146
-99
-487
 
-110
-126
-122
-122
-480
Pretax Net Income
-25,670
-25,883
-25,223
-24,874
-101,650
 
-26,997
-27,735
-25,650
-33,676
-114,058
Pretax Margin %
0.0%
0.0%
0.0%
0.0%
0.0%
 
0.0%
0.0%
0.0%
0.0%
0.0%
                       
Income Taxes
-9,975
-9,762
-9,490
-9,858
-39,085
 
-10,552
-10,718
-9,606
-10,924
-41,800
Net Income / (Loss)
-15,695
-16,121
-15,733
-15,016
-62,565
 
-16,445
-17,017
-16,044
-22,752
-72,258
                       
Add:  Depreciation
471
520
574
663
2,228
 
823
879
1,284
798
3,784
Add:  Depreciation (incl in COR)
0
0
0
0
0
 
0
0
0
0
0
Add:  Amort of Deal-Related Intangibles
0
0
0
0
0
 
0
0
0
0
0
Add:  Amort of Deal-Related Intangibles (incl in COR)
0
0
0
0
0
 
0
0
0
0
0
Add:  Interest Expense/ (Income)
18,487
18,430
18,083
17,236
72,236
 
18,005
17,107
16,519
16,927
68,558
Add:  Income Taxes
-9,975
-9,762
-9,490
-9,858
-39,085
 
-10,552
-10,718
-9,606
-10,924
-41,800
EBITDA
-6,712
-6,933
-6,566
-6,975
-27,186
 
-8,169
-9,749
-7,847
-15,951
-41,716
EBITDA Margin %
0.0%
0.0%
0.0%
0.0%
0.0%
 
0.0%
0.0%
0.0%
0.0%
0.0%
                       
Add:  Impairment of Intangible Assets
0
0
0
0
0
 
0
0
0
398
398
Add:  Equity-based Compensation
1,572
1,889
1,549
1,529
6,539
 
1,651
1,342
775
1,233
5,001
Add:  Rental income for Cap Bldg Lease
-110
-109
-110
-110
-439
 
-110
-109
-110
-110
-439
Add:  Acquisition & Integration Expenses
0
0
0
0
0
 
0
1,869
936
8,403
11,208
Add:  Purchase Accounting Adjustment
0
0
0
0
0
 
0
0
0
0
0
Adjusted EBITDA
-5,250
-5,153
-5,127
-5,556
-21,086
 
-6,628
-6,647
-6,246
-6,027
-25,548
Adjusted EBITDA Margin %
0.0%
0.0%
0.0%
0.0%
0.0%
 
0.0%
0.0%
0.0%
0.0%
0.0%
Quarter/Annual Adj EBITDA Growth Rate
 
-1.8%
-0.5%
8.4%
   
19.3%
0.3%
-6.0%
-3.5%
21.2%
 
 
 

 
 
Use of Non-GAAP Financial Measures
 
In order to provide investors with greater insight, promote transparency and allow for a more comprehensive understanding of the information used by management and the board of directors in their financial and operational decision-making, the Company supplements its consolidated financial statements presented on a GAAP basis with the following non-GAAP financial information:  gross fees; gross administrative fees; revenue share obligation; EBITDA; adjusted EBITDA; adjusted EBITDA margin; acquisition-affected net revenue; acquisition-affected EBITDA; acquisition-affected adjusted EBITDA and acquisition-affected adjusted EBITDA margin.
 
These non-GAAP financial measures may have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of the Company’s results as reported under GAAP. The Company compensates for such limitations by relying primarily on the Company’s GAAP results and using non-GAAP financial measures only supplementally. Where possible, the Company provides reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures.  Investors are encouraged to carefully review those reconciliations.  In addition, because these non-GAAP measures are not measures of financial performance under GAAP and are susceptible to varying calculations, these measures, as defined by the Company, may differ from and may not be comparable to similarly titled measures used by other companies.
 
Gross fees include gross administrative fees the Company receives pursuant to its vendor contracts and all other fees the Company receives from customers. The Company's revenue share obligation represents the portion of the gross administrative fees the Company is contractually obligated to share with certain of its GPO customers. Net administrative fees (a GAAP measure) are the Company's gross administrative fees net of its revenue share obligation. Total net revenue (a GAAP measure) reflects the Company's gross fees net of its revenue share obligation. These non-GAAP measures assist management and the board of directors and may be helpful to investors in analyzing the Company's growth in its Spend and Clinical Resource Management segment given that administrative fees constitute a material portion of the Company's revenue and are paid to the Company by approximately 1,150 suppliers and other vendors contracted by its GPO, and that the Company's revenue share obligation constitutes a significant outlay to certain of its GPO customers.
 
The Company defines: EBITDA as net income (loss) before net interest expense, income tax expense (benefit), depreciation and amortization; and adjusted EBITDA as net income (loss) before net interest expense, income tax expense (benefit), depreciation and amortization and other non-recurring, non-cash or non-operating items. EBITDA and adjusted EBITDA are used by the Company to facilitate a comparison of its operating performance on a consistent basis from period to period and provides for a more complete understanding of factors and trends affecting our business. These measures assist management and the board of directors and may be useful to investors in comparing the Company's operating performance consistently over time as it removes the impact of its capital structure (primarily interest charges and amortization of debt issuance costs), asset base (primarily depreciation and amortization) and items outside the control of the management team (taxes), as well as other non-cash (purchase accounting adjustments and imputed rental income) and non-recurring items, from the Company’s operational results. Adjusted EBITDA also removes the impact of non-cash share-based compensation expense and certain acquisition-related charges. EBITDA and adjusted EBITDA are not measures of liquidity under GAAP, or otherwise, and are not alternatives to cash flow from continuing operating activities.
 
Acquisition-affected results include the activity of Broadlane prior to the Company’s actual ownership. The Broadlane acquisition was consummated on November 16, 2010. These results assume the acquisition of Broadlane occurred on January 1, 2009. Acquisition-affected measures (e.g. acquisition-affected net revenue; acquisition-affected EBITDA; acquisition-affected adjusted EBITDA; acquisition-affected adjusted EBITDA margin) are used by management and the board of directors to better understand the extent of growth of the Spend and Clinical Resource Management segment. Given the significant impact that this transaction had on the Company during the fiscal year ended December 31, 2010, the Company believes such acquisition-affected measures may be useful and meaningful to investors in their analysis of such growth. Non-GAAP acquisition-affected measures are for illustrative and informational purposes only and are not intended to represent or be indicative of what the Company's results of operations would have been if this transaction had occurred at the beginning of 2009. These measures also should not be considered representative of the Company's future results of operations.