XML 29 R46.htm IDEA: XBRL DOCUMENT v2.4.0.8
SUBSEQUENT EVENTS - Unaudited Pro Forma Consolidated Balance Sheet (Details) (USD $)
Sep. 30, 2013
Jun. 30, 2013
Assets    
Cash and cash equivalents $ 1 $ 1
Other assets 126,776 0
Total assets 126,777 1
Stockholders' equity:    
Series A Preferred stock, par value $0.01, 400,000 shares authorized; no shares issued and outstanding 0 0
Additional paid-in capital 325,066 0
Retained earnings (198,290) 0
Pro Forma Consolidated Balance Sheet Parenthetical    
Preferred stock, par value $ 0.01 $ 0.01
Preferred stock, shares authorized 50,000,000 50,000,000
Preferred stock, shares issued 0 0
Preferred stock, shares outstanding 0 0
PHSI
   
Assets    
Cash and cash equivalents 75,351,000  
Marketable securities 57,500,000  
Accounts receivable, net 61,968,000  
Inventories - finished goods 13,029,000  
Prepaid expenses and other current assets 34,576,000  
Due from related party 788,000  
Deferred tax assets 7,691,000  
Total current assets 250,903,000  
Investments 10,773,000  
Property and equipment, net 119,538,000  
Restricted cash 5,000,000  
Deferred tax assets 13,328,000  
Goodwill 84,626,000  
Intangible assets, net 9,262,000  
Other assets 28,410,000  
Total assets 521,840,000  
Liabilities, redeemable limited partners' capital and stockholders' equity    
Accounts payable 16,899,000  
Accrued expenses 25,486,000  
Revenue share obligations 5,085,000  
Accrued compensation and benefits 22,374,000  
Deferred revenue 17,492,000  
Current portion of notes payable 7,438,000  
Current portion of lines of credit 60,000,000  
Payable pursuant to tax receivable agreement 0  
Income tax payable 0  
Other current liabilities 2,402,000  
Total current liabilities 157,176,000  
Notes payable, less current portion 20,293,000  
Lines of credit, less current portion 11,508,000  
Payable pursuant to tax receivable agreement, less current portion 0  
Deferred compensation plan obligations 27,653,000  
Deferred rent 15,841,000  
Other long-term liabilities 5,387,000  
Total liabilities 237,858,000  
Redeemable limited partners' capital 207,066,000  
Stockholders' equity:    
Common stock 56,000  
Additional paid-in capital 28,503,000  
Retained earnings 50,321,000  
Noncontrolling interest (1,964,000)  
Accumulated other comprehensive income 0  
Total stockholders' equity 76,916,000  
Total liabilities, redeemable limited partners' capital and stockholders' equity 521,840,000  
Pro Forma Consolidated Balance Sheet Parenthetical    
Common stock, par value $ 0.01  
Common stock, shares authorized 12,250,000  
Common stock, shares issued 5,626,784  
Common stock, shares outstanding 5,626,784  
Common stock, shares subscribed 0  
Pro Forma Adjustments
   
Assets    
Cash and cash equivalents 277,814,000 [1]  
Marketable securities 0  
Accounts receivable, net 0  
Inventories - finished goods 0  
Prepaid expenses and other current assets (5,555,000) [2]  
Due from related party 0  
Deferred tax assets 0  
Total current assets 272,259,000  
Investments 0  
Property and equipment, net 0  
Restricted cash 0  
Deferred tax assets 294,950,000 [3]  
Goodwill 0  
Intangible assets, net 0  
Other assets 0  
Total assets 567,209,000  
Liabilities, redeemable limited partners' capital and stockholders' equity    
Accounts payable 0  
Accrued expenses 0  
Revenue share obligations 0  
Accrued compensation and benefits 0  
Deferred revenue 0  
Current portion of notes payable 0  
Current portion of lines of credit 0  
Payable pursuant to tax receivable agreement 10,142,000 [3]  
Income tax payable 8,425,000 [4]  
Other current liabilities 0  
Total current liabilities 18,567,000  
Notes payable, less current portion 0  
Lines of credit, less current portion 0  
Payable pursuant to tax receivable agreement, less current portion 194,651,000 [3]  
Deferred compensation plan obligations 0  
Deferred rent 0  
Other long-term liabilities 0  
Total liabilities 213,218,000  
Redeemable limited partners' capital 212,595,000 [5]  
Stockholders' equity:    
Common stock (56,000) [6]  
Additional paid-in capital 149,748,000 [7]  
Retained earnings (8,623,000) [4]  
Noncontrolling interest 0  
Accumulated other comprehensive income 3,000 [5]  
Total stockholders' equity 141,396,000  
Total liabilities, redeemable limited partners' capital and stockholders' equity 567,209,000  
Premier Inc., Pro Forma
   
Assets    
Cash and cash equivalents 353,165,000  
Marketable securities 57,500,000  
Accounts receivable, net 61,968,000  
Inventories - finished goods 13,029,000  
Prepaid expenses and other current assets 29,021,000  
Due from related party 788,000  
Deferred tax assets 7,691,000  
Total current assets 523,162,000  
Investments 10,773,000  
Property and equipment, net 119,538,000  
Restricted cash 5,000,000  
Deferred tax assets 308,278,000  
Goodwill 84,626,000  
Intangible assets, net 9,262,000  
Other assets 28,410,000  
Total assets 1,089,049,000  
Liabilities, redeemable limited partners' capital and stockholders' equity    
Accounts payable 16,899,000  
Accrued expenses 25,486,000  
Revenue share obligations 5,085,000  
Accrued compensation and benefits 22,374,000  
Deferred revenue 17,492,000  
Current portion of notes payable 7,438,000  
Current portion of lines of credit 60,000,000  
Payable pursuant to tax receivable agreement 10,142,000  
Income tax payable 8,425,000  
Other current liabilities 2,402,000  
Total current liabilities 175,743,000  
Notes payable, less current portion 20,293,000  
Lines of credit, less current portion 11,508,000  
Payable pursuant to tax receivable agreement, less current portion 194,651,000  
Deferred compensation plan obligations 27,653,000  
Deferred rent 15,841,000  
Other long-term liabilities 5,387,000  
Total liabilities 451,076,000  
Redeemable limited partners' capital 419,661,000  
Stockholders' equity:    
Common stock 0  
Additional paid-in capital 178,251,000  
Retained earnings 41,698,000  
Noncontrolling interest (1,964,000)  
Accumulated other comprehensive income 3,000  
Total stockholders' equity 218,312,000  
Total liabilities, redeemable limited partners' capital and stockholders' equity 1,089,049,000  
Pro Forma Consolidated Balance Sheet Parenthetical    
Common stock, par value $ 0.01  
Common stock, shares authorized 12,250,000  
Common stock, shares issued 0  
Common stock, shares outstanding 0  
Common stock, shares subscribed 0  
Series A Preferred Stock | PHSI
   
Stockholders' equity:    
Series A Preferred stock, par value $0.01, 400,000 shares authorized; no shares issued and outstanding 0  
Pro Forma Consolidated Balance Sheet Parenthetical    
Preferred stock, par value $ 0.01  
Preferred stock, shares authorized 400,000  
Preferred stock, shares issued 0  
Preferred stock, shares outstanding 0  
Series A Preferred Stock | Pro Forma Adjustments
   
Stockholders' equity:    
Series A Preferred stock, par value $0.01, 400,000 shares authorized; no shares issued and outstanding 0  
Series A Preferred Stock | Premier Inc., Pro Forma
   
Stockholders' equity:    
Series A Preferred stock, par value $0.01, 400,000 shares authorized; no shares issued and outstanding 0  
Pro Forma Consolidated Balance Sheet Parenthetical    
Preferred stock, par value $ 0.01  
Preferred stock, shares authorized 400,000  
Preferred stock, shares issued 0  
Preferred stock, shares outstanding 0  
Class A Common Stock
   
Stockholders' equity:    
Common stock 1 1
Pro Forma Consolidated Balance Sheet Parenthetical    
Common stock, par value $ 0.01 $ 0.01
Common stock, shares authorized 500,000,000 500,000,000
Common stock, shares issued 100 100
Common stock, shares outstanding 100 100
Class A Common Stock | PHSI
   
Stockholders' equity:    
Common stock 0  
Class A Common Stock | Pro Forma Adjustments
   
Stockholders' equity:    
Common stock 324,000 [6]  
Class A Common Stock | Premier Inc., Pro Forma
   
Stockholders' equity:    
Common stock 324,000  
Pro Forma Consolidated Balance Sheet Parenthetical    
Common stock, par value $ 0.01  
Common stock, shares authorized 500,000,000  
Common stock, shares issued 32,374,751  
Common stock, shares outstanding 32,374,751  
Class B Common Stock
   
Stockholders' equity:    
Common stock 0 0
Pro Forma Consolidated Balance Sheet Parenthetical    
Common stock, par value $ 0.000001 $ 0.000001
Common stock, shares authorized 600,000,000 600,000,000
Common stock, shares issued 0 0
Common stock, shares outstanding 0 0
Class B Common Stock | PHSI
   
Stockholders' equity:    
Common stock 0  
Class B Common Stock | Pro Forma Adjustments
   
Stockholders' equity:    
Common stock 0 [6]  
Class B Common Stock | Premier Inc., Pro Forma
   
Stockholders' equity:    
Common stock $ 0  
Pro Forma Consolidated Balance Sheet Parenthetical    
Common stock, par value $ 0.000001  
Common stock, shares authorized 600,000,000  
Common stock, shares issued 112,607,832  
Common stock, shares outstanding 112,607,832  
[1] Reflects net effect on cash and cash equivalents of the receipt of gross proceeds from the IPO of $874.1 million (with an IPO price of $27.00 per share of Class A common stock) and the purchase of units from the member owners described above. (In thousands) Actual cash as reported $75,351Pro forma adjustments Gross proceeds from the IPO874,118 Underwriting discounts, commissions and other expenses(52,447) Purchases of Class B common units from the member owners(543,857) 277,814Pro forma cash balance $353,165
[2] Reflects the reduction of prepaid expenses related to the IPO, with an offset to the proceeds of the IPO in additional paid-in capital.
[3] Premier LP intends to have in effect an election under Section 754 of the Internal Revenue Code of 1986, as amended, or the Code, and comparable elections under state and local tax law, such that the initial sale of Class B common units by PHSI and the member owners will result in adjustments to the tax basis of the assets of Premier LP. These increases in tax basis are expected to increase (for tax purposes) the depreciation and amortization deductions by Premier LP, and therefore, to reduce the amount of income tax that Premier, Inc. would otherwise be required to pay in the future. In connection with the Reorganization and IPO, Premier, Inc. has entered into a tax receivable agreement with the member owners which became effective upon the completion of the Reorganization and IPO, pursuant to which Premier, Inc. agrees to pay to the member owners, generally over a 15-year period (under current law), 85% of the amount of cash savings, if any, in U.S. federal, foreign, state and local and franchise income tax that Premier, Inc. actually realizes (or is deemed to realize, in the case of payments required to be made upon certain occurrences under such tax receivable agreement) as a result of the increases in tax basis resulting from the sale or exchange of Class B common units by the member owners. The unaudited pro forma consolidated financial statements reflect adjustments (shown in the pro forma adjustments column above) to give effect to the Section 754 election and the tax receivable agreement based on the following assumptions: •The unaudited pro forma consolidated financial statements include adjustments to reflect the expected increase in deferred tax assets representing the income tax effects of the increases in the tax basis as a result of Premier LP's election under Section 754 of the Code in connection with the initial sale of Class B common units described above. This adjustment is calculated based on an estimated effective income tax rate for Premier, Inc. of 39%, which includes a provision for U.S. federal income taxes and assumes (i) Premier, Inc.'s estimated statutory rates apportioned to each state and local tax jurisdiction, (ii) that there are no material changes in the relevant tax law, and (iii) that Premier, Inc. earns sufficient taxable income in each year to realize the full tax benefit of the amortization of its assets. •Premier, Inc. will determine the adjustments in connection with the Section 754 election by first calculating the excess of each selling member owner's and PHSI's assumed selling price over such person's share of Premier LP's tax basis in its assets attributable to the Class B common units being sold to Premier, Inc. Premier, Inc. will then allocate the aggregate excess among Premier LP's assets following applicable tax regulations governing adjustments that result from the Section 754 election. Premier, Inc. will determine each selling member owner's share of the tax basis in Premier LP's assets attributable to the Class B common units sold to Premier, Inc. by multiplying the member owner's tax capital account balance as of the date of sale as maintained in Premier LP's books and records by a fraction, the numerator of which is the number of Class B common units sold to us, and the denominator of which is the number of Class B common units held by the selling member owner immediately prior to the sale. For purposes of the calculation, the assumed selling price per Class B common unit will equal the price paid per share of the Class A common stock by the underwriters to Premier, Inc. in the IPO. The adjustments are expected to increase Premier LP's basis in its assets (for tax purposes), and Premier, Inc. will calculate the amount of any depreciation, amortization and other deductions to which it will be entitled as a result of these adjustments. Premier, Inc. will then calculate Premier, Inc.'s tax liability with and without the deductions attributable to these adjustments, assuming that Premier, Inc. earns sufficient taxable income in each year to realize the full benefit of the deductions. Premier, Inc. will compute the estimated tax benefit attributable to the election as the excess of Premier, Inc.'s tax liability as so computed without the deductions over Premier, Inc.'s tax liability as so computed with the deductions. Additionally, the tax receivable agreement payments may give rise to adjustments that result in Premier LP becoming entitled to additional deductions, and the calculation of Premier, Inc.'s liability under the tax receivable agreement would take these adjustments and additional resulting deductions into account. •Premier LP's election under Section 754 of the Code is at the discretion of Premier LP and is not subject to review or approval by the IRS or other tax authorities. The computation of the adjustments resulting from the Section 754 election and Premier, Inc.'s tax liability is subject to audit by the IRS and other tax authorities in the same manner as all other items reported on income tax returns. •The unaudited pro forma consolidated financial statements include cumulative adjustments of $204.8 million, of which $10.1 million is expected to be paid in the next 12 months, and is reflected as a current liability with the remaining balance classified as a long-term liability, to reflect a liability equal to 85% of the estimated realizable tax benefit resulting from the estimated increase in tax basis due to Premier LP's Section 754 election in connection with the initial sale by the member owners, of the Class B common units described above as an increase to payable pursuant to the tax receivable agreement. •The unaudited pro forma consolidated financial statements include adjustments to reflect deferred tax assets for the change in the allocation of Premier LP's income from 1% of operating income and 5% of investment income to PHSI prior to the Reorganization to approximately 22% of Premier LP's income to Premier, Inc. (indirectly through Premier GP), measured by the difference in the tax basis of Premier, Inc.'s investment in Premier LP as compared to its GAAP carrying value. The adjustments related to Premier LP's Section 754 election described above are a component of Premier, Inc.'s tax basis in Premier LP. Pursuant to the terms of the exchange agreement, the member owners and new limited partners admitted to Premier LP following the completion of the IPO may subsequently exchange Class B common units in Premier LP for shares of Premier, Inc.'s Class A common stock, cash or a combination of both. Any subsequent exchanges of Class B common units for shares of Premier, Inc.'s Class A common stock pursuant to the exchange agreement may result in increases in the tax basis of the tangible and intangible assets of Premier LP (85% of the realized tax benefits from which will be due to the limited partners and recorded as an additional payable pursuant to the tax receivable agreement) that otherwise would not have been available. These subsequent exchanges have not been reflected in the unaudited pro forma consolidated financial statements.
[4] Reflects income taxes payable due as a result of the purchase of Class B common units from PHSI.
[5] Reflects the increase in the noncontrolling interest held by the limited partners in Premier L.P. resulting from the net proceeds from the IPO used to purchase Class A common units from Premier LP of $247.7 million and Class B common units from PHSI of $21.7 million, net of taxes of $8.4 million, and the contribution of the common stock of PHSI in connection with the Reorganization of $76.9 million. This is offset by an adjustment of $133.7 million to reflect the approximately 78% controlling interest held by the limited partners of Premier LP subsequent to the Reorganization and IPO, which is reflected in redeemable limited partners' capital on the unaudited pro forma consolidated balance sheets. Immediately following the effective date of the LP Agreement, all of Premier LP's limited partners that approved the Reorganization received Class B common units and capital account balances in Premier LP equal to their percentage interests and capital account balances in Premier LP immediately preceding the Reorganization. Premier, Inc. used a portion of the net proceeds from the IPO to purchase (i) Class A common units, (ii) Class B common units from PHSI and (iii) Class B common units from the member owners, resulting in a reduction in the noncontrolling interest attributable to the limited partners from 99% to approximately 78%.
[6] Reflects (i) the exchange of the existing PHSI shares of common stock, common stock subscribed and related subscriptions receivable for Class B common units, (ii) the issuance of Class B common stock in connection with the Reorganization and (iii) the issuance of Class A common stock in connection with the IPO.
[7] Reflects the impact of the adjustments in notes (1), (2), (3), (5) and (6) above to additional paid-in capital: •an increase of $90.0 million due to an increase in deferred tax assets described in note (3) of $294.8 million offset by an increase in payables pursuant to the tax receivable agreement of $204.8 million; •an increase of $821.7 million from the net proceeds from the IPO less the par value of the shares of Class A common stock sold in the IPO of $0.3 million and less prepaid offering expenses of $5.6 million; and •a decrease of $756.4 million to reflect the difference between the consideration paid to acquire the Class A and B common units and the adjustment to the carrying value of the noncontrolling interest described in note (5) above. In addition, Premier, Inc. recorded stock-based compensation expense for the three months ended September 30, 2013 of $0.3 million. The total adjustment to additional paid-in capital is an increase of $149.7 million.