Supplemental Condensed Consolidating Financial Information

6 Months Ended

Mar. 31, 2012

Supplemental Condensed Consolidating Financial Information [Abstract]

SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION

11. SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION

The Senior Notes described in Note 3 are fully and unconditionally guaranteed on a joint and several basis by all of the Company’s existing domestic subsidiaries, other than non-guarantor subsidiaries, which include Health Choice and the Company’s non-wholly owned subsidiaries. The guarantees are subject to customary release provisions set forth in the Indenture for the Senior Notes.

Summarized unaudited condensed consolidating balance sheets at March 31, 2012 and September 30, 2011, unaudited condensed consolidating statements of operations for the quarters and six months ended March 31, 2012 and 2011, and unaudited condensed consolidated statements of cash flows for the six months ended March 31, 2012 and 2011, for the Company, segregating the parent company issuer, the subsidiary guarantors, the subsidiary non-guarantors and eliminations, are found below. Prior year amounts have been reclassified to conform to the current year presentation.

IASIS Healthcare LLC

Condensed Consolidating Balance Sheet (unaudited)

March 31, 2012

(in thousands)

	Parent Issuer		Subsidiary Guarantors			Subsidiary Non-Guarantors		Eliminations			Condensed Consolidated
Assets
Current assets
Cash and cash equivalents	$	—	$	75,592		$	6,069	$	—		$	81,661
Accounts receivable, net		—		131,424			223,950		—			355,374
Inventories		—		25,468			42,711		—			68,179
Deferred income taxes		33,763		—			—		—			33,763
Prepaid expenses and other current assets		—		26,080			43,438		—			69,518
Total current assets		33,763		258,564			316,168		—			608,495
Property and equipment, net		—		363,219			801,909		—			1,165,128
Intercompany		—		(220,397	)		220,397		—			—
Net investment in and advances to subsidiaries		2,064,954		—			—		(2,064,954	)		—
Goodwill		7,273		67,737			733,181		—			808,191
Other intangible assets, net		—		8,227			22,500		—			30,727
Other assets, net		35,057		27,482			12,834		—			75,373
Total assets	$	2,141,047	$	504,832		$	2,106,989	$	(2,064,954	)	$	2,687,914
Liabilities and Equity
Current liabilities
Accounts payable	$	—	$	28,299		$	66,460	$	—		$	94,759
Salaries and benefits payable		—		27,480			32,839		—			60,319
Accrued interest payable		28,051		(3,231	)		3,231		—			28,051
Medical claims payable		—		—			65,569		—			65,569
Other accrued expenses and other current liabilities		—		31,902			67,252		—			99,154
Current portion of long-term debt and capital lease obligations		10,250		3,537			24,952		(24,952	)		13,787
Total current liabilities		38,301		87,987			260,303		(24,952	)		361,639
Long-term debt and capital lease obligations		1,844,758		13,976			658,145		(658,145	)		1,858,734
Deferred income taxes		131,163		—			—		—			131,163
Other long-term liabilities		—		102,055			616		—			102,671
Total liabilities		2,014,222		204,018			919,064		(683,097	)		2,454,207
Non-controlling interests with redemption rights		—		97,132			—		—			97,132
Equity
Member’s equity		126,825		193,932			1,187,925		(1,381,857	)		126,825
Non-controlling interests		—		9,750			—		—			9,750
Total equity		126,825		203,682			1,187,925		(1,381,857	)		136,575
Total liabilities and equity	$	2,141,047	$	504,832		$	2,106,989	$	(2,064,954	)	$	2,687,914

IASIS Healthcare LLC

Condensed Consolidating Balance Sheet (unaudited)

September 30, 2011

(in thousands)

	Parent Issuer		Subsidiary Guarantors			Subsidiary Non-Guarantors		Eliminations			Condensed Consolidated
Assets
Current assets
Cash and cash equivalents	$	—	$	140,062		$	7,265	$	—		$	147,327
Accounts receivable, net		—		103,176			174,756		—			277,932
Inventories		—		25,001			43,329		—			68,330
Deferred income taxes		40,415		—			—		—			40,415
Prepaid expenses and other current assets		—		32,032			40,882		—			72,914
Total current assets		40,415		300,271			266,232		—			606,918
Property and equipment, net		—		359,503			808,417		—			1,167,920
Intercompany		—		(291,241	)		291,241		—			—
Net investment in and advances to subsidiaries		2,054,007		—			—		(2,054,007	)		—
Goodwill		6,760		70,321			731,570		—			808,651
Other intangible assets, net		—		8,779			24,000		—			32,779
Other assets, net		37,111		6,086			20,312		—			63,509
Total assets	$	2,138,293	$	453,719		$	2,141,772	$	(2,054,007	)	$	2,679,777
Liabilities and Equity
Current liabilities
Accounts payable	$	—	$	25,087		$	67,718	$	—		$	92,805
Salaries and benefits payable		—		29,790			28,589		—			58,379
Accrued interest payable		30,045		(3,234	)		3,234		—			30,045
Medical claims payable		—		—			85,723		—			85,723
Other accrued expenses and other current liabilities		—		29,114			71,716		—			100,830
Current portion of long-term debt and capital lease obligations		10,250		3,770			25,107		(25,107	)		14,020
Total current liabilities		40,295		84,527			282,087		(25,107	)		381,802
Long-term debt and capital lease obligations		1,848,980		15,769			667,969		(667,969	)		1,864,749
Deferred income taxes		131,018		—			—		—			131,018
Other long-term liabilities		—		77,818			623		—			78,441
Total liabilities		2,020,293		178,114			950,679		(693,076	)		2,456,010
Non-controlling interests with redemption rights		—		95,977			—		—			95,977
Equity
Member’s equity		118,000		169,838			1,191,093		(1,360,931	)		118,000
Non-controlling interests		—		9,790			—		—			9,790
Total equity		118,000		179,628			1,191,093		(1,360,931	)		127,790
Total liabilities and equity	$	2,138,293	$	453,719		$	2,141,772	$	(2,054,007	)	$	2,679,777

IASIS Healthcare LLC

Condensed Consolidating Statement of Operations

For the Quarter Ended March 31, 2012 (unaudited)

(in thousands)

	Parent Issuer			Subsidiary Guarantors			Subsidiary Non-Guarantors			Eliminations			Condensed Consolidated
Net revenue
Acute care revenue	$	—		$	211,523		$	378,938		$	(1,820	)	$	588,641
Less: Provision for bad debts		—			(34,749	)		(43,424	)		—			(78,173	)
Acute care revenue, net		—			176,774			335,514			(1,820	)		510,468
Premium revenue		—			—			137,168			—			137,168
Net revenue		—			176,774			472,682			(1,820	)		647,636
Costs and expenses
Salaries and benefits		—			102,512			131,580			—			234,092
Supplies		—			31,934			55,035			—			86,969
Medical claims		—			—			110,499			(1,820	)		108,679
Rentals and leases		—			4,981			7,295			—			12,276
Other operating expenses		—			33,092			87,184			—			120,276
Medicaid EHR incentive payments		—			(209	)		(1,800	)		—			(2,009	)
Interest expense, net		35,556			—			12,430			(12,430	)		35,556
Depreciation and amortization		—			11,059			17,917			—			28,976
Management fees		1,250			(8,030	)		8,030			—			1,250
Equity in earnings of affiliates		(43,066	)		—			—			43,066			—
Total costs and expenses		(6,260	)		175,339			428,170			28,816			626,065
Earnings (loss) from continuing operations before gain on disposal of assets and income taxes		6,260			1,435			44,512			(30,636	)		21,571
Gain on disposal of assets, net		—			434			4			—			438
Earnings (loss) from continuing operations before income taxes		6,260			1,869			44,516			(30,636	)		22,009
Income tax expense		7,309			—			1,896			—			9,205
Net earnings (loss) from continuing operations		(1,049	)		1,869			42,620			(30,636	)		12,804
Earnings (loss) from discontinued operations, net of income taxes		(224	)		587			—			—			363
Net earnings (loss)		(1,273	)		2,456			42,620			(30,636	)		13,167
Net earnings attributable to non-controlling interests		—			(2,010	)		—			—			(2,010	)
Net earnings (loss) attributable to IASIS Healthcare LLC	$	(1,273	)	$	446		$	42,620		$	(30,636	)	$	11,157

IASIS Healthcare LLC

Condensed Consolidating Statement of Operations

For the Quarter Ended March 31, 2011 (unaudited)

(in thousands)

	Parent Issuer			Subsidiary Guarantors			Subsidiary Non-Guarantors			Eliminations			Condensed Consolidated
Net revenue
Acute care revenue	$	—		$	189,095		$	302,739		$	(2,807	)	$	489,027
Less: Provisions for bad debts		—			(22,149	)		(32,652	)		—			(54,801	)
Acute care revenue, net		—			166,368			270,665			(2,807	)		434,226
Premium revenue		—			—			189,960			—			189,960
Net revenue		—			166,368			460,625			(2,807	)		624,186
Costs and expenses
Salaries and benefits		—			95,505			100,531			—			196,036
Supplies		—			31,533			46,391			—			77,924
Medical claims		—			—			160,223			(2,807	)		157,416
Rentals and leases		—			4,735			6,554			—			11,289
Other operating expenses		—			33,771			69,579			—			103,350
Interest expense, net		16,510			—			10,545			(10,545	)		16,510
Depreciation and amortization		—			9,951			14,633			—			24,584
Management fees		1,250			(6,406	)		6,406			—			1,250
Equity in earnings of affiliates		(36,030	)		—			—			36,030			—
Total costs and expenses		(18,270	)		169,089			414,862			22,678			588,359
Earnings (loss) from continuing operations before gain on disposal of assets and income taxes		18,270			(2,143	)		45,185			(25,485	)		35,827
Gain on disposal of assets, net		—			128			412			—			540
Earnings (loss) from continuing operations before income taxes		18,270			(2,015	)		45,597			(25,485	)		36,367
Income tax expense		13,500			—			—			—			13,500
Net earnings (loss) from continuing operations		4,770			(2,593	)		46,175			(25,485	)		22,867
Earnings (loss) from discontinued operations, net of income taxes		1,711			(4,558	)		1			—			(2,846	)
Net earnings (loss)		6,481			(6,573	)		45,598			(25,485	)		20,021
Net earnings attributable to non-controlling interests		—			(2,995	)		—			—			(2,995	)
Net earnings (loss) attributable to IASIS Healthcare LLC	$	6,481		$	(9,568	)	$	45,598		$	(25,485	)	$	17,026

IASIS Healthcare LLC

Condensed Consolidating Statement of Operations

For the Six Months Ended March 31, 2012 (unaudited)

(in thousands)

	Parent Issuer			Subsidiary Guarantors			Subsidiary Non-Guarantors			Eliminations			Condensed Consolidated
Net revenue
Acute care revenue	$	—		$	403,388		$	731,916		$	(3,449	)	$	1,131,855
Less: Provision for bad debts		—			(64,592	)		(83,860	)		—			(148,452	)
Acute care revenue, net		—			338,796			648,056			(3,449	)		983,403
Premium revenue		—			—			287,906			—			287,906
Net revenue		—			338,796			935,962			(3,449	)		1,271,309
Costs and expenses
Salaries and benefits		—			200,060			257,996			—			458,056
Supplies		—			62,341			108,798			—			171,139
Medical claims		—			—			236,373			(3,449	)		232,924
Rentals and leases		—			9,940			14,602			—			24,542
Other operating expenses		—			66,111			168,148			—			234,259
Medicaid EHR incentive payments		—			(1,927	)		(6,759	)		—			(8,686	)
Interest expense, net		70,496			—			24,408			(24,408	)		70,496
Depreciation and amortization		—			22,034			35,476			—			57,510
Management fees		2,500			(15,649	)		15,649			—			2,500
Equity in earnings of affiliates		(72,208	)		—			—			72,208			—
Total costs and expenses		788			342,910			854,691			44,351			1,242,740
Earnings (loss) from continuing operations before gain on disposal of assets and income taxes		(788	)		(4,114	)		81,271			(47,800	)		28,569
Gain on disposal of assets, net		—			671			7			—			678
Earnings (loss) from continuing operations before income taxes		(788	)		(3,443	)		81,278			(47,800	)		29,247
Income tax expense		10,914			—			1,896			—			12,810
Net earnings (loss) from continuing operations		(11,702	)		(3,443	)		79,382			(47,800	)		16,437
Earnings (loss) from discontinued operations, net of income taxes		(196	)		568			(57	)		—			315
Net earnings (loss)		(11,898	)		(2,875	)		79,325			(47,800	)		16,752
Net earnings attributable to non-controlling interests		—			(4,242	)		—			—			(4,242	)
Net earnings (loss) attributable to IASIS Healthcare LLC	$	(11,898	)	$	(7,117	)	$	79,325		$	(47,800	)	$	12,510

IASIS Healthcare LLC

Condensed Consolidating Statement of Operations

For the Six Months Ended March 31, 2011 (unaudited)

(in thousands)

	Parent Issuer			Subsidiary Guarantors			Subsidiary Non-Guarantors			Eliminations			Condensed Consolidated
Net revenue
Acute care revenue	$	—		$	372,803		$	593,379		$	(5,467	)	$	960,715
Less: Provisions for bad debts		—			(47,642	)		(66,773	)		—			(114,415	)
Acute care revenue, net		—			325,161			526,606			(5,467	)		846,300
Premium revenue		—			—			392,152			—			392,152
Net revenue		—			325,161			918,758			(5,467	)		1,238,452
Costs and expenses
Salaries and benefits		—			188,848			197,101			—			385,949
Supplies		—			62,300			92,060			—			154,360
Medical claims		—			—			334,217			(5,467	)		328,750
Rentals and leases		—			9,325			13,130			—			22,455
Other operating expenses		—			66,499			133,977			—			200,476
Interest expense, net		33,387			—			20,935			(20,935	)		33,387
Depreciation and amortization		—			19,947			28,683			—			48,630
Management fees		2,500			(12,587	)		12,587			—			2,500
Equity in earnings of affiliates		(62,819	)		—			—			62,819			—
Total costs and expenses		(26,932	)		334,332			832,690			36,417			1,176,507
Earnings (loss) from continuing operations before gain on disposal of assets and income taxes		26,932			(9,171	)		86,068			(41,884	)		61,945
Gain on disposal of assets, net		—			492			393			—			885
Earnings (loss) from continuing operations before income taxes		26,932			(8,679	)		86,461			(41,884	)		62,830
Income tax expense		22,689			—			—			—			22,689
Net earnings (loss) from continuing operations		4,243			(8,679	)		86,461			(41,884	)		40,141
Earnings (loss) from discontinued operations, net of income taxes		3,594			(9,589	)		(59	)		—			(6,054	)
Net earnings (loss)		7,837			(18,268	)		86,402			(41,884	)		34,087
Net earnings attributable to non-controlling interests		—			(5,315	)		—			—			(5,315	)
Net earnings (loss) attributable to IASIS Healthcare LLC	$	7,837		$	(23,583	)	$	86,402		$	(41,884	)	$	28,772

IASIS Healthcare LLC

Condensed Consolidating Statement of Cash Flows

For the Six Months Ended March 31, 2012 (unaudited)

(in thousands)

	Parent Issuer			Subsidiary Guarantors			Subsidiary Non-Guarantors			Eliminations			Condensed Consolidated
Cash flows from operating activities
Net earnings (loss)	$	(11,898	)	$	(2,875	)	$	79,325		$	(47,800	)	$	16,752
Adjustments to reconcile net earnings (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization		—			22,034			35,476			—			57,510
Amortization of loan costs		3,803			—			—			—			3,803
Stock-based compensation		1,942			—			—			—			1,942
Deferred income taxes		11,835			—			—			—			11,835
Income tax benefit from parent company interest		6			—			—			—			6
Fair value change in interest rate hedges		(1,410	)		—			—			—			(1,410	)
Amortization of other comprehensive loss		2,057			—			—			—			2,057
Gain on disposal of assets, net		—			(671	)		(7	)		—			(678	)
Loss (earnings) from discontinued operations, net		196			(568	)		57			—			(315	)
Equity in earnings of affiliates		(72,208	)		—			—			72,208			—
Changes in operating assets and liabilities, net of the effect of acquisitions and dispositions:
Accounts receivable, net		—			(27,724	)		(50,897	)		—			(78,621	)
Inventories, prepaid expenses and other current assets		—			3,888			(2,048	)		—			1,840
Accounts payable, other accrued expenses and other accrued liabilities		(1,994	)		19,330			(32,479	)		—			(15,143	)
Net cash provided by (used in) operating activities — continuing operations		(67,671	)		13,414			29,427			24,408			(422	)
Net cash used in operating activities — discontinued operations		(28	)		(186	)		—			—			(214	)
Net cash provided by (used in) operating activities		(67,699	)		13,228			29,427			24,408			(636	)
Cash flows from investing activities
Purchases of property and equipment, net		—			(25,776	)		(27,472	)		—			(53,248	)
Cash paid for acquisitions, net		—			13,140			(12,912	)		—			228
Proceeds from sale of assets		—			52			10			—			62
Change in other assets, net		—			503			1,039			—			1,542
Net cash used in investing activities		—			(12,081	)		(39,335	)		—			(51,416	)
Cash flows from financing activities
Payment of debt and capital lease obligations		(5,125	)		(199	)		(1,943	)		—			(7,267	)
Debt financing costs incurred		(998	)		—			—			—			(998	)
Distributions to non-controlling interests		—			(4,887	)		—			—			(4,887	)
Costs paid for the repurchase of non-controlling interest, net		—			(462	)		—			—			(462	)
Change in intercompany balances with affiliates, net		73,822			(60,069	)		10,655			(24,408	)		—
Net cash provided by (used in) financing activities		67,699			(65,617	)		8,712			(24,408	)		(13,614	)
Change in cash and cash equivalents		—			(64,470	)		(1,196	)		—			(65,666	)
Cash and cash equivalents at beginning of period		—			140,062			7,265			—			147,327
Cash and cash equivalents at end of period	$	—		$	75,592		$	6,069		$	—		$	81,661

IASIS Healthcare LLC

Condensed Consolidating Statement of Cash Flows

For the Six Months Ended March 31, 2011 (unaudited)

(in thousands)

	Parent Issuer			Subsidiary Guarantors			Subsidiary Non-Guarantors			Eliminations			Condensed Consolidated
Cash flows from operating activities
Net earnings (loss)	$	7,837		$	(18,268	)	$	86,402		$	(41,884	)	$	34,087
Adjustments to reconcile net earnings (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization		—			19,947			28,683			—			48,630
Amortization of loan costs		1,636			—			—			—			1,636
Stock-based compensation		1,034			—			—			—			1,034
Deferred income taxes		2,278			—			—			—			2,278
Income tax benefit from parent company interest		4,440			—			—			—			4,440
Gain on disposal of assets, net		—			(492	)		(393	)		—			(885	)
Loss (earnings) from discontinued operations, net		(3,594	)		9,589			59			—			6,054
Equity in earnings of affiliates		(62,819	)		—			—			62,819			—
Changes in operating assets and liabilities, net of the effect of acquisitions and dispositions:
Accounts receivable, net		—			(14,608	)		(8,853	)		—			(23,461	)
Inventories, prepaid expenses and other current assets		—			(7,168	)		11,629			—			4,461
Accounts payable, other accrued expenses and other accrued liabilities		(3,653	)		36,641			(13,553	)		—			19,435
Net cash provided by (used in) operating activities — continuing operations		(52,841	)		25,641			103,974			20,935			97,709
Net cash used in operating activities — discontinued operations		—			(231	)		—			—			(231	)
Net cash provided by (used in) operating activities		(52,841	)		25,410			103,974			20,935			97,478
Cash flows from investing activities
Purchases of property and equipment, net		—			(18,200	)		(24,034	)		—			(42,234	)
Cash paid for acquisitions, net		—			(11,432	)		(1,372	)		—			(12,804	)
Proceeds from sale of assets		—			12			138			—			150
Change in other assets, net		—			(5,910	)		7,549			—			1,639
Net cash used in investing activities		—			(35,530	)		(17,719	)		—			(53,249	)
Cash flows from financing activities
Payment of debt and capital lease obligations		(2,945	)		—			(865	)		—			(3,810	)
Distributions to non-controlling interests		—			(5,689	)		—			—			(5,689	)
Costs paid for repurchase of non-controlling interests, net		—			(625	)		—			—			(625	)
Change in intercompany balances with affiliates, net		55,786			47,898			(82,749	)		(20,935	)		—
Net cash provided by (used in) financing activities		52,841			41,584			(83,614	)		(20,935	)		(10,124	)
Change in cash and cash equivalents		—			31,464			2,641			—			34,105
Cash and cash equivalents at beginning of period		—			143,599			912			—			144,511
Cash and cash equivalents at end of period	$	—		$	175,063		$	3,553		$	—		$	178,616