SEC Filings

10-Q
ENVISION HEALTHCARE CORP filed this Form 10-Q on 08/08/2017
Entire Document
 
Item 1. Financial Statements - (continued)

(9) Other Accrued Liabilities

The following table presents a summary of items comprising other accrued liabilities in the accompanying consolidated balance sheets as of June 30, 2017 and December 31, 2016 (in millions):
 
June 30,
 
December 31,
 
2017
 
2016
Insurance reserves
$
76.1

 
$
78.2

Refunds payable
34.3

 
33.6

Deferred revenue
12.8

 
9.4

Other
292.9

 
132.0

Total other accrued liabilities
$
416.1

 
$
253.2


(10) Long-term Debt

Long-term debt at June 30, 2017 and December 31, 2016 consisted of the following (in millions):
 
June 30,
 
December 31,
 
2017
 
2016
ABL Facility
$

 
$

Term Loan B - 2023
3,976.3

 
3,495.0

Senior Unsecured Notes due 2022 (5.625%)
1,100.0

 
1,100.0

Senior Unsecured Notes due 2022 (5.125%)
750.0

 
750.0

Senior Unsecured Notes due 2024 (6.250%)
550.0

 
550.0

Other debt due through 2025
25.8

 
20.9

Capitalized lease arrangements due through 2031
32.8

 
31.9

 
6,434.9

 
5,947.8

Less current portion
53.0

 
46.6

Less net deferred financing costs
105.5

 
111.0

Long-term debt
$
6,276.4

 
$
5,790.2


The fair value of fixed rate long-term debt, with a carrying value of $2.46 billion, was $2.57 billion at June 30, 2017. The fair value of variable rate long-term debt approximates its carrying value of $3.98 billion at June 30, 2017. With the exception of the Company’s senior unsecured notes, the fair value of fixed rate debt (Level 2) is determined based on an estimation of discounted future cash flows of the debt at rates currently quoted or offered to the Company for similar debt instruments of comparable maturities by its lenders. The fair value of the Company’s senior unsecured notes (Level 1) is determined based on quoted prices in an active market.

On June 23, 2017, the Company incurred incremental term loan borrowings in an aggregate principal amount of $500 million, maturing on December 1, 2023. The incremental amounts were borrowed pursuant to the Increase Supplement, dated as of June 23, 2017, which supplements the Company’s existing Amended and Restated Credit Agreement, dated as of December 1, 2016. The incremental borrowings bear interest at the same rate and have the same terms as the Company’s Term Loan B.

(11) Insurance Reserves

Insurance reserves are established for professional and general liability claims utilizing policies with both fully-insured and self-insured components. This includes the use of an off-shore captive insurance program through wholly owned subsidiaries for certain professional (medical malpractice) and general liability programs. In those instances where the Company has obtained third-party insurance coverage, the Company normally retains liability for the first $1 million to $3 million of the loss. Insurance reserves cover known claims and incidents within the level of Company retention that may result in the assertion of additional claims, as well as claims from unknown incidents that may be asserted arising from activities through June 30, 2017.

The Company establishes reserves for claims based upon an assessment of claims reported and claims incurred but not reported. The reserves are established based on consultation with third-party independent actuaries using actuarial principles and assumptions that

22