SEC Filings

ENVISION HEALTHCARE CORP filed this Form 10-Q on 11/03/2017
Entire Document
Item 2.   Management’s Discussion and Analysis of Financial Condition and Results of Operations - (continued)

Dividends accrued and cumulated from the date of issuance and, to the extent lawful and declared by our Board, was paid on each January 1, April 1, July 1 and October 1 in cash or, at our election (subject to certain limitations), by delivery of any combination of cash and shares of common stock. During the nine months ended September 30, 2017, and prior to the mandatory conversion date of July 3, 2017, holders elected to convert 518,879 of our Company Preferred Stock to 941,294 shares of common stock. On the mandatory conversion date, the remaining 1,206,121 shares outstanding of Company Preferred Stock automatically converted to 2,188,024 shares of common stock. During the nine months ended September 30, 2017, our Board declared two dividends, each totaling $1.3125 per share in cash, or $2.3 million, to the holders of Company Preferred Stock. Following mandatory conversion date, no shares of our Company Preferred Stock were outstanding and all rights of the holders of our Preferred Stock, including dividend rights, terminated.

Pursuant to the Merger, we issued 62,582,161 shares of common stock to the former stockholders of EHH, which represented the conversion of all outstanding common stock of EHH as of December 1, 2016 pursuant to the terms of the of the Merger.
As of September 30, 2017, we had total indebtedness, including capital leases, of $6.42 billion, including $3.97 billion of term loans that mature in 2023 (Term Loan B - 2023), $1.10 billion of 5.625% senior unsecured notes due 2022 (5.625% 2022 Notes), $750.0 million of 5.125% senior unsecured notes due 2022 (5.125% 2022 Notes), $550.0 million of 6.25% senior unsecured notes due 2024 (6.25% 2024 Notes) and approximately $58.6 million of other long-term indebtedness. As of September 30, 2017, there were no borrowings under our ABL Facility.

Term Loan B - 2023

As a result of the Merger, on December 1, 2016, we incurred term loan borrowings in an aggregate principal amount of $3.50 billion that mature on December 1, 2023 by assuming the term loan borrowings made in connection with the Merger through a wholly owned finance subsidiary of EHH immediately prior to the consummation of the Merger. Under the terms of the Term Loan Facility, the Term Loan B - 2023 bears interest at a rate equal to (i) LIBOR, plus 3.00% per annum, or (ii) the alternate base rate as defined in the credit agreement. At September 30, 2017, we had approximately $0.9 million in accrued interest associated with the Term Loan B - 2023.

On June 23, 2017, we 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 our 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 our Term Loan B.

On August 7, 2017, we executed a definitive agreement to sell our medical transportation business for $2.40 billion in cash to an entity controlled by funds affiliated with KKR Co. L.P. Upon completion of the divestiture, under the terms of the Term Loan Facility, we are required to utilize the net proceeds to pay down the outstanding principal on the Term Loan B - 2023 unless the proceeds can be used to acquire the assets or capital stock of businesses similar to ours within 365 days from the sale.

ABL Facility

On December 1, 2016, in connection with the Merger, we assumed EHH’s asset-based revolving credit facility providing for revolving borrowings of up to $850.0 million, subject to borrowing base availability. In addition, subject to certain terms and conditions, we are entitled to request additional revolving credit commitments or term loans under the ABL Facility, which share in the borrowing base, up to an amount such that the aggregate amount of ABL commitments does not exceed $1.35 billion. The final maturity date of the ABL Facility is December 1, 2021.

The revolving credit loans under the ABL Facility bear interest initially at a rate equal to (i) LIBOR plus an applicable margin, which shall be determined based on the average daily excess availability, or (ii) the alternate base rate, which will be the highest of the prime rate established by the administrative agent from time to time, 0.50% in excess of the greater of (A) the overnight federal funds rate or (B) the composite overnight federal funds and overnight LIBOR rate, the one-month LIBOR rate (adjusted for maximum reserves) plus 1.0% per annum, plus, in each case, an applicable margin, which shall be determined based on the average daily excess availability.

As of September 30, 2017, the maximum available under the ABL Facility was $850.0 million. As of September 30, 2017, letters of credit outstanding, which impact the available credit under the ABL Facility, were $185.4 million. Our borrowing capacity, after giving effect to the letters of credit, was $664.6 million as of September 30, 2017. These letters of credit primarily secure the obligations under our captive insurance program. At September 30, 2017, we had not drawn on the ABL.