EX-99.3 5 d735178dex993.htm EX-99.3 EX-99.3

Exhibit 99.3

AMEDISYS, INC. AND SUBSIDIARIES

Contents

 

Unaudited Pro Forma Consolidated and Combined Financial Statements

     1  

Unaudited Pro Forma Consolidated and Combined Balance Sheet

     2  

Unaudited Pro Forma Consolidated and Combined Statement of Operations

     3  

Notes to the Unaudited Pro Forma Consolidated and Combined Financial Statements

     4-9  


Unaudited Pro Forma Consolidated and Combined Financial Statements

On February 1, 2019, Amedisys, Inc. (the “Company”) and Amedisys Hospice, L.L.C., a wholly-owned subsidiary of the Company (“Amedisys Hospice”), acquired all of the issued and outstanding equity interests in Compassionate Care Hospice Group, Inc. and its subsidiaries (collectively, “CCH”) pursuant to a Stock Purchase Agreement (the “Stock Purchase Agreement”) entered into on October 9, 2018 among the Company and Amedisys Hospice and Milton Heching and the Heching 2012 Exempt Irrevocable Trust, as Sellers, (the “CCH Acquisition”).

The unaudited pro forma consolidated and combined balance sheet as of December 31, 2018 has been prepared as if the CCH Acquisition had occurred on such date and combines Amedisys, Inc.’s audited historical balance sheet as of December 31, 2018 with CCH’s unaudited consolidated and combined balance sheet as of September 30, 2018. The unaudited pro forma consolidated and combined statement of operations for the year ended December 31, 2018 has been prepared as if the CCH Acquisition had occurred on January 1, 2018 and combines Amedisys, Inc.’s historical results for the year ended December 31, 2018 with CCH’s historical results for the twelve-months ended September 30, 2018.

The historical consolidated financial information of Amedisys, Inc. and CCH have been adjusted in the unaudited pro forma consolidated and combined financial statements to give effect to pro forma events that are (i) directly attributable to the CCH Acquisition, (ii) factually supportable, and (iii) with respect to the statement of operations, expected to have a continuing impact on the combined results. The unaudited pro forma consolidated and combined financial information should be read in conjunction with the accompanying notes thereto. In addition, the unaudited pro forma consolidated and combined financial information was based on and should be read in conjuntion with the following:

 

   

The historical audited consolidated financial statements as of and for the year ended December 31, 2018 and the related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of Amedisys, Inc. included in its Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 28, 2019;

 

   

The historical audited consolidated and combined financial statements of Compassionate Care Hospice Group, Inc. and Subsidiaries and Affiliates as of and for the years ended December 31, 2017 and 2016 included as Exhibit 99.1 to this Current Report on Form 8-K/A; and

 

   

The historical unaudited condensed consolidated and combined financial statements of Compassionate Care Hospice Group, Inc. and Subsidiaries and Affiliates as of September 30, 2018 and for the nine-month periods ended September 30, 2018 and 2017 included as Exhibit 99.2 to this Current Report on Form 8-K/A.

The historical audited and unaudited financial statements included in Exhibits 99.1 and 99.2 include Compassionate Care Hospice Group, Inc., its wholly-owned subsidiaries and affiliates, which are listed in Note 2 to the historical financial statements. One of the affiliates, Compassionate Care Hospice of New York, LLC (“CCH NY”), was not acquired by the Company. The unaudited pro forma consolidated and combined financial statements include adjustments to remove CCH NY from the historical financial statements.

The unaudited pro forma consolidated and combined financial statements are provided for information purposes only and are not intended to represent or be indicative of what the actual combined results of operations or the combined financial position of Amedisys, Inc. would have been had the CCH Acquisition been completed as of the dates presented. In addition, the unaudited consolidated and combined financial information does not purport to project the future financial position or operating results of Amedisys, Inc. nor does it reflect any operational efficiencies that may have been achieved if the acquisition had occurred on January 1, 2018 or December 31, 2018.

The unaudited pro forma consolidated and combined financial statements have been prepared using the acquisition method of accounting which requires, among other things, that the assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date. We believe the fair values assigned to the assets acquired and the liabilities assumed, as reflected in the pro forma financial statements, are based on reasonable assumptions; however, all components of the purchase price allocation are considered preliminary and are subject to change as the Company finalizes the valuations of the assets acquired and liabilities assumed.

 

1


AMEDISYS, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONSOLIDATED AND COMBINED BALANCE SHEET

(Amounts in thousands)

 

     As of December 31, 2018  
     Amedisys,
Inc.
    CCH
including
CCH NY
(Note 2)
    CCH NY (a)     Pro Forma
Adjustments
    Combined
Pro Forma
 
ASSETS           

Current assets:

          

Cash and cash equivalents

   $ 20,229     $ 13,675     $ —       $ (12,176 )(b)    $ 21,728  

Patient accounts receivable

     188,972       35,650       (1,300     —         223,322  

Prepaid expenses

     7,568       767       (10     —         8,325  

Other current assets

     7,349       233       (16     —         7,566  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total current assets

     224,118       50,325       (1,326     (12,176     260,941  

Property and equipment, net

     29,449       224       —         —         29,673  

Goodwill

     329,480       350       —         302,845  (c)      632,675  

Intangible assets, net

     44,132       —         —         18,785  (d)      62,917  

Deferred income taxes

     35,794       —         —         —         35,794  

Other assets

     54,145       —         —         —         54,145  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total assets

   $ 717,118     $ 50,899     $ (1,326   $ 309,454     $ 1,076,145  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
LIABILITIES AND EQUITY           

Current liabilities:

          

Accounts payable

   $ 28,531     $ 10,556     $ (499   $ —       $ 38,588  

Payroll and employee benefits

     92,858       5,159       (226     5,369  (e)      103,160  

Accrued expenses

     99,475       10,977       (1,674     320  (f)      109,098  

Current portion of long-term obligations

     1,612       —         —         —         1,612  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total current liabilities

     222,476       26,692       (2,399     5,689       252,458  

Deferred income taxes

     —         171       —         (171 )(g)      —    

Long-term obligations, less current portion

     5,775       —         —         329,153  (h)      334,928  

Other long-term obligations

     6,234       —         —         —         6,234  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities

     234,485       26,863       (2,399     334,671       593,620  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Equity:

          

Preferred stock

     —         —         —         —         —    

Common stock

     36       1       —         (1 )(i)      36  

Additional paid-in capital

     603,666       —         —         —         603,666  

Treasury stock, at cost

     (241,685     —         —         —         (241,685

Accumulated other comprehensive income

     15       —         —         —         15  

Retained earnings

     119,550       25,855       2,492       (28,455 )(i)      119,442  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Amedisys, Inc. stockholders’ equity

     481,582       25,856       2,492       (28,456     481,474  

Noncontrolling interests

     1,051       (1,820     (1,419     3,239  (i)      1,051  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total equity

     482,633       24,036       1,073       (25,217     482,525  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities and equity

   $ 717,118     $ 50,899     $ (1,326   $ 309,454     $ 1,076,145  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

See accompanying notes to the unaudited pro forma consolidated and combined financial statements.

 

2


AMEDISYS, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONSOLIDATED AND COMBINED STATEMENT OF OPERATIONS

(Amounts in thousands, except per share data)

 

     For the Year Ended December 31, 2018  
     Amedisys,
Inc.
    CCH
including
CCH NY

(Note 2)
    CCH NY (a)     Pro Forma
Adjustments
    Combined
Pro Forma
 

Net service revenue

   $ 1,662,578     $ 207,318     $ (9,355   $ (8,066 )(b)    $ 1,852,475  

Cost of service, excluding depreciation and amortization

     992,863       117,792       (5,218     —         1,105,437  

General and administrative expenses:

          

Salaries and benefits

     316,522       34,781       (1,610     —         349,693  

Non-cash compensation

     17,887       —         —         —         17,887  

Other

     166,897       27,769       (1,367     (9,002 )(c)      184,297  

Depreciation and amortization

     13,261       72       —         5,033 (d)      18,366  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses

     1,507,430       180,414       (8,195     (3,969     1,675,680  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     155,148       26,904       (1,160     (4,097     176,795  

Other income (expense):

          

Interest income

     278       69       —         —         347  

Interest expense

     (7,370     (192     60       (13,369 )(e)      (20,871

Equity in earnings from equity method investments

     7,692       —         —         —         7,692  

Miscellaneous, net

     3,240       —         —         —         3,240  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total other income (expense), net

     3,840       (123     60       (13,369     (9,592
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     158,988       26,781       (1,100     (17,466     167,203  

Income tax expense

     (38,859     (824     —         (1,312 )(f)      (40,995
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

     120,129       25,957       (1,100     (18,778     126,208  

Net income attributable to noncontrolling interests

     (783     (1,233     1,100       133 (g)      (783
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) attributable to Amedisys, Inc.

   $ 119,346     $ 24,724     $ —       $ (18,645   $ 125,425  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Basic earnings per common share:

          

Net income attributable to Amedisys, Inc. common stockholders

   $ 3.64           $ 3.82  

Weighted average shares outstanding

     32,791             32,791  

Diluted earnings per common share:

          

Net income attributable to Amedisys, Inc. common stockholders

   $ 3.55           $ 3.73  

Weighted average shares outstanding

     33,609             33,609  

See accompanying notes to the unaudited pro forma consolidated and combined financial statements.

 

3


AMEDISYS, INC. AND SUBSIDIARIES

NOTES TO THE UNAUDITED PRO FORMA CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

 

1. Description of Transaction

On February 1, 2019, Amedisys, Inc. (the “Company”) and Amedisys Hospice, L.L.C., a wholly-owned subsidiary of the Company (“Amedisys Hospice”), completed the acquisition of all of the issued and outstanding equity interests in Compassionate Care Hospice Group, Inc. and its subsidiaries (collectively “CCH”) pursuant to a Stock Purchase Agreement (the “Stock Purchase Agreement”) entered into on October 9, 2018 among the Company and Amedisys Hospice and Milton Heching and the Heching 2012 Exempt Irrevocable Trust, as Sellers, for a base purchase price of $340 million (which purchase price was subject to customary purchase price adjustments based on the amount of cash of the acquired companies as of the closing as well as certain tax payments owed by CCH) (the “CCH Acquisition”). A portion of the purchase price was paid by the issuance of a one business day promissory note, which the Company paid off in full on February 4, 2019 pursuant to the proceeds from the Term Loan Facility advanced under the Company’s Amended Credit Agreement.

2. Basis of Presentation

The unaudited pro forma consolidated and combined balance sheet as of December 31, 2018 and the unaudited pro forma consolidated and combined statement of operations for the year ended December 31, 2018 are based on the historical financial statements of the Company after giving effect to the Company’s acquisition of CCH and the assumptions and adjustments described in the notes herein. The unaudited pro forma consolidated and combined balance sheet as of December 31, 2018 is presented as if the acquisition occurred on December 31, 2018 and combines Amedisys, Inc.’s audited historical balance sheet as of December 31, 2018 with CCH’s unaudited consolidated and combined balance sheet as of September 30, 2018. The unaudited pro forma consolidated and combined statement of operations for the year ended December 31, 2018 is presented as if the acquisition occurred on January 1, 2018 and combines Amedisys, Inc.’s historical results for the year ended December 31, 2018 with CCH’s historical results for the twelve-months ended September 30, 2018.

The unaudited pro forma consolidated and combined financial statements are not intended to represent or be indicative of the results of operations or financial position of the Company that would have been reported had the acquisition been completed as of the dates presented, and should not be taken as representative of the future results of operations or financial position of the Company. The unaudited pro forma consolidated and combined financial statements, including the notes thereto, do not reflect any potential operating synergies that the Company may achieve with respect to the combined companies. The unaudited pro forma consolidated and combined financial statements and notes thereto should be read in conjunction with the historical financial statements of the Company included in the Annual Report on Form 10-K for the year ended December 31, 2018, filed with the Securities and Exchange Commission (“SEC”) on February 28, 2019, and in conjunction with the historical financial statements of CCH as presented in Exhibits 99.1 and 99.2 of this Form 8-K/A.

The historical audited and unaudited financial statements of CCH include Compassionate Care Hospice Group, Inc., its wholly-owned subsidiaries and affiliates, which are listed in Note 2 to the historical financial statements. One of the affiliates, Compassionate Care Hospice of New York, LLC (“CCH NY”), was not acquired by the Company. The unaudited pro forma consolidated and combined financial statements include adjustments to remove CCH NY from the historical financial statements.

The tax rate used for the CCH pro forma financial information is the Company’s statutory tax rate of 26.0%, which will likely vary from the actual effective tax rate in periods subsequent to completion of the pro forma events.

The unaudited pro forma consolidated and combined financial statements have been prepared using the acquisition method of accounting which requires, among other things, that the assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date. We believe the fair values assigned to the assets acquired and the liabilities assumed, as reflected in the pro forma financial statements, are based on reasonable assumptions; however, all components of the purchase price allocation are considered preliminary and are subject to change as the Company finalizes the valuations of the assets acquired and liabilities assumed.

 

4


AMEDISYS, INC. AND SUBSIDIARIES

NOTES TO THE UNAUDITED PRO FORMA CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

 

3. Accounting Policies

Based on the Company’s review of CCH’s significant accounting policies, the following pro forma adjustments are necessary to conform CCH’s accounting policies to the Company’s accounting policies.

On January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) and ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date (collectively, “ASC 606”) on a full retrospective basis. The pro forma financial statements assume that CCH also adopted ASC 606 on January 1, 2018, on a full retrospective basis.

In addition, certain balances from CCH’s historical financial statements were reclassified to conform to the Company’s financial statement presentation. The reclassifications reflected within the “CCH including CCH NY” column of the unaudited pro forma consolidated and combined balance sheet are as follows:

 

   

The “prepaid expenses and other current assets” line item in CCH’s historical balance sheet was split into two separate line items, “prepaid expenses” and “other current assets,” in the unaudited pro forma consolidated and combined balance sheet. The amounts reclassified are as follows:

 

     Amount (in thousands)  

CCH Historical Financial Statements:

  

Prepaid expenses and other current assets

   $ 1,000  

CCH Pro Forma Financial Statements:

  

Prepaid expenses

   $ 767  

Other current assets

     233  
  

 

 

 

Total

   $ 1,000  
  

 

 

 

 

   

The “accounts payable and accrued expenses” line item in CCH’s historical balance sheet was split into two separate line items, “accounts payable” and “accrued expenses,” in the unaudited pro forma consolidated and combined balance sheet. The amounts reclassified are as follows:

 

     Amount (in thousands)  

CCH Historical Financial Statements:

  

Accounts payable and accrued expenses

   $ 11,954  

CCH Pro Forma Financial Statements:

  

Accounts payable

   $ 10,556  

Accrued expenses

     1,398  
  

 

 

 

Total

   $ 11,954  
  

 

 

 

 

   

The “self-insured liability” and “accrued salaries, benefits and other payroll liabilities” line items in CCH’s historical balance sheet were combined and included in the “payroll and employee benefits” line item in the unaudited pro forma consolidated and combined balance sheet. The amounts reclassified are as follows:

 

     Amount (in thousands)  

CCH Historical Financial Statements:

  

Self-insured liability

   $ 768  

Accrued salaries, benefits and other payroll liabilities

     4,391  
  

 

 

 

Total

   $ 5,159  
  

 

 

 

CCH Pro Forma Financial Statements:

  

Payroll and employee benefits

   $ 5,159  

 

5


AMEDISYS, INC. AND SUBSIDIARIES

NOTES TO THE UNAUDITED PRO FORMA CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

 

   

The “income tax payable” and “due to third-party payors” line items in CCH’s historical balance sheet were included in the “accrued expenses” line item in the unaudited pro forma consolidated and combined balance sheet. The amounts reclassified are as follows:

 

     Amount (in thousands)  

CCH Historical Financial Statements:

  

Income tax payable

   $ 182  

Due to third-party payors

     9,397  
  

 

 

 

Total

   $ 9,579  
  

 

 

 

CCH Pro Forma Financial Statements:

  

Accrued expenses

   $ 9,579  

The reclassifications reflected within the “CCH including CCH NY” column of the unaudited pro forma consolidated and combined statement of operations are as follows:

 

   

The “general and administrative” line item in CCH’s historical consolidated and combined statement of income includes medical insurance and workers compensation insurance expenses as well as other general and administrative expenses.

 

   

Expenses related to CCH’s self-insured medical insurance plan as well as CCH’s workers’ compensation insurance plan have been reclassified to either “cost of service, excluding depreciation and amortization” or “general and administrative expenses: salaries and benefits” in the unaudited pro forma consolidated and combined statement of operations based on the classification of the employee that the expenses relate to.

 

   

The remaining expenses have been reclassified to “general and administrative expenses: other” in the unaudited pro forma consolidated and combined statement of operations.

The amounts reclassified are as follows:

 

     Amount (in thousands)  

CCH Historical Financial Statements:

  

General and administrative expenses

   $ 24,362  

CCH Pro Forma Financial Statements:

  

Cost of service, excluding depreciation and amortization

   $ 4,720  

General and administrative expenses: salaries and benefits

     1,876  

General and administrative expenses: other

     17,766  
  

 

 

 

Total

   $ 24,362  
  

 

 

 

 

   

The “salaries and wages” line item in CCH’s historical consolidated and combined statement of income includes salaries and wages for all employees, as well as medical director fees. These amounts have been reclassified to either “cost of service, excluding depreciation and amortization,” “general and administrative expenses: salaries and benefits” or “general and administrative expenses: other” in the unaudited pro forma consolidated and combined statement of operations based on the classification of the employee that the expenses relate to. The amounts reclassified are as follows:

 

     Amount (in thousands)  

CCH Historical Financial Statements:

  

Salaries and wages

   $ 121,973  

CCH Pro Forma Financial Statements:

  

Cost of service, excluding depreciation and amortization

   $ 82,504  

General and administrative expenses: salaries and benefits

     32,905  

General and administrative expenses: other

     6,564  
  

 

 

 

Total

   $ 121,973  
  

 

 

 

 

6


AMEDISYS, INC. AND SUBSIDIARIES

NOTES TO THE UNAUDITED PRO FORMA CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

 

   

The “supplies and other expenses” line item in CCH’s historical consolidated and combined statement of income has been reclassified to “cost of service, excluding depreciation and amortization” in the unaudited pro forma consolidated and combined statement of operations. The amounts reclassified are as follows:

 

     Amount (in thousands)  

CCH Historical Financial Statements:

  

Supplies and other expenses

   $ 30,568  

CCH Pro Forma Financial Statements:

  

Cost of service, excluding depreciation and amortization

   $ 30,568  

 

   

The “rent expense” line item in CCH’s historical consolidated and combined statement of income has been reclassified to “general and administrative expenses: other” in the unaudited pro forma consolidated and combined statement of operations. The amounts reclassified are as follows:

 

     Amount (in thousands)  

CCH Historical Financial Statements:

  

Rent expense

   $ 3,439  

CCH Pro Forma Financial Statements:

  

General and administrative expenses: other

   $ 3,439  

At this time, the Company is not aware of any other differences that would have a material impact on the pro forma financial statements.

4. Preliminary Purchase Price Allocation

The Company’s acquisition of CCH was accounted for using the acquisition method of accounting which requires, among other things, that the assets acquired and liabilities assumed be recognized at their fair value as of the acquisition date. The initial purchase consideration paid to acquire CCH was $334.5 million or $327.9 million, net of cash acquired.

The Company is in the process of finalizing its valuation of the assets acquired and liabilities assumed. Based on the Company’s preliminary valuation, the total estimated consideration net of cash acquired of $327.9 million has been allocated to assets acquired and liabilities assumed as of the acquisition date as follows:

 

     Amount (in thousands)  

Current assets

   $ 35,324  

Property and equipment, net

     224  

Intangible assets

     18,785  
  

 

 

 

Total assets acquired

     54,333  
  

 

 

 

Current liabilities

     (29,662
  

 

 

 

Total liabilities assumed

     (29,662
  

 

 

 

Net identifiable assets acquired

     24,671  

Goodwill

     303,195  
  

 

 

 

Total consideration transferred

   $ 327,866  
  

 

 

 

5. Pro Forma Adjustments—Balance Sheet

The following pro forma adjustments are included in the unaudited pro forma consolidated and combined balance sheet:

(a) To eliminate assets and liabilities of CCH NY, which was not acquired in the acquisition.

 

7


AMEDISYS, INC. AND SUBSIDIARIES

NOTES TO THE UNAUDITED PRO FORMA CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

 

(b) To reflect the cash inflows and outflows as a result of the CCH Acquisition, as follows:

 

     Amount (in thousands)  

Proceeds from borrowings under Amended Credit Agreement

   $ 330,000  

Cash paid to seller/deposited into escrow account at closing

     (333,503

Cash in excess of $6.7 million retained by seller

     (7,008

Payment of transaction costs on behalf of seller

     (1,030

Payment of financing fees

     (527

Payment of Amedisys transaction costs

     (108
  

 

 

 

Adjustment to cash and cash equivalents

   $ (12,176
  

 

 

 

(c) To reflect changes in goodwill that would have been recognized if the acquisition occurred on December 31, 2018 as follows:

 

     Amount (in thousands)  

Eliminate the historical goodwill of CCH

   $ (350

Record estimated excess of purchase price over net assets acquired

     303,195  
  

 

 

 

Adjustment to goodwill

   $ 302,845  
  

 

 

 

(d) To record the estimated fair value of the intangible assets acquired, which include Medicare licenses, certificates of need, non-compete agreements and trade names. The non-compete agreements and trade names will be amortized over a weighted average period of 2.3 and 2.0 years, respectively.

(e) To record the accrual of retention and change-in-control bonus payments.

(f) To record the accrual of deferred financing fees that were not paid as of closing.

(g) To eliminate the historical deferred tax liability of CCH.

(h) To reflect changes in long-term obligations, less current portion, as follows:

 

     Amount (in thousands)  

Borrowings under Amended Credit Agreement to fund acquisition

   $ 330,000  

Deferred financing fees associated with additional borrowings

     (847
  

 

 

 

Adjustment to long-term obligations, less current portion

   $ 329,153  
  

 

 

 

(i) To eliminate the historical equity of CCH and to adjust for transaction costs totaling approximately $108,000.

6. Pro Forma Adjustments—Statement of Operations

The following pro forma adjustments are included in the unaudited pro forma consolidated and combined statement of operations:

(a) To eliminate revenue and expenses of CCH NY, which was not acquired in the acquisition.

(b) To record changes in net service revenue as a result of changes in accounting policy due to the adoption of ASC 606 on January 1, 2018.

(c) To reflect changes in general and administrative expenses—other as follows:

 

     Amount (in thousands)  

Adoption of ASC 606 on January 1, 2018

   $ (8,066

Elimination of non-recurring transaction costs related to the acquisition

     (936
  

 

 

 

Adjustment to general and administrative expenses—other

   $ (9,002
  

 

 

 

 

8


AMEDISYS, INC. AND SUBSIDIARIES

NOTES TO THE UNAUDITED PRO FORMA CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

 

(d) To record estimated amortization expense associated with the acquired intangible assets.

(e) To reflect changes in interest expense as follows:

 

     Amount (in thousands)  

Estimated interest expense associated with additional Amedisys borrowings

   $ (13,200

Amortization of deferred financing fees associated with additional Amedisys borrowings

     (169
  

 

 

 

Adjustment to interest expense

   $ (13,369
  

 

 

 

Estimated interest expense associated with the additional Amedisys, Inc. borrowings was computed using an interest rate of 4.02%, which represents the interest rate in effect at December 31, 2018.

(f) To record changes in income tax expense as follows:

 

     Amount (in thousands)  

Adjustment to record the income tax effect of pro forma adjustments based on the Company’s statutory rate of 26%

   $ 4,541  

Adjustment to record the income tax expense of CCH excluding NY at the Company’s statutory rate of 26%

     (5,853
  

 

 

 

Adjustment to income tax expense

   $ (1,312
  

 

 

 

(g) To eliminate the historical noncontrolling interests of CCH.

 

9