SEC Filings

10-Q
ENVISION HEALTHCARE CORP filed this Form 10-Q on 11/03/2017
Entire Document
 
Item 1. Financial Statements - (continued)

Purchase Price Allocations

Acquired assets and assumed liabilities include, but are not limited to, accounts receivable, fixed assets, intangible assets, deferred income taxes and insurance liabilities. The valuations are based on appraisal reports, discounted cash flow analyses, actuarial analyses or other appropriate valuation techniques to determine the fair value of the assets acquired or liabilities assumed. The preliminary estimated fair value assigned to goodwill is primarily attributable to synergies expected to arise after the Merger by enhancing the growth profile and diversity of the Company across the healthcare continuum. The Merger did not result in additional tax deductible goodwill. A majority of the deferred income taxes recognized as a component of the Company's purchase price allocation is a result of the difference between the book and tax basis of the intangible assets recognized. The amount allocated to the deferred income tax liability is subject to change as a result of the final allocation of purchase price to amortizable intangibles. The accounting for the Merger is currently preliminary. The Company continues to obtain information relative to the fair values of assets acquired, liabilities assumed and any noncontrolling interests in the transaction which could result in material changes to the amounts allocated below. The Company expects to finalize the purchase price allocation for EHH as soon as practical.

During the nine months ended September 30, 2017, adjustments were recorded to the purchase price allocation related to EHH as part of the Company’s continuing evaluation of the assets and liabilities existing at the date of acquisition. This resulted in a net increase to goodwill of approximately $151.8 million and corresponding changes to certain account classes from the preliminary allocation recorded at December 31, 2016 that are reflected in the table below. The Company is still in the process of reviewing all major classes of consideration and expects to use the full measurement period from the Merger date to complete the evaluation. The acquisition date fair value of the total consideration transferred and acquisition date fair value of each major class of consideration for the acquisition of EHH are as follows (in millions): 
Cash and cash equivalents
$
165.8

Insurance collateral
59.9

Accounts receivable
1,155.4

Supplies inventory
38.7

Prepaid and other current assets
119.3

Property and equipment
375.9

Goodwill
4,672.6

Intangible assets
3,030.8

Other long-term assets
103.1

Accounts payable
(63.7
)
Accrued salaries and benefits
(338.0
)
Accrued interest
(17.3
)
Other accrued liabilities
(333.3
)
Deferred income taxes
(968.0
)
Long term insurance reserves
(316.3
)
Other long-term liabilities
(62.8
)
Long-term debt
(3,063.1
)
Total fair value
4,559.0

Less: Fair value attributable to noncontrolling interests
115.6

Acquisition date fair value of total consideration transferred
$
4,443.4



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