13. Tax Receivable Agreements

Upon the consummation of the Merger, we assumed obligations related to certain tax receivable agreements (collectively, the “tax receivable agreements”) entered into by the Joint Venture with its current and former owners. Depending on whether the respective tax receivable agreements were assumed as part of the Merger or became effective after the Merger, the liabilities related to the tax receivable agreements are subject to differing accounting models as explained below.

2009 - 2011 Tax Receivable Agreements

Under the 2009 - 2011 Tax Receivable Agreements assumed in connection with the Merger, we are obligated to make payments to certain former stockholders equal to 85% of the applicable cash savings that the Joint Venture expects to realize as a result of tax attributes arising from certain previous transactions. As a result of the covered change of control with respect to the tax receivable agreements that occurred in connection with the creation of the Joint Venture, payments we make under the 2009 - 2011 Tax Receivable Agreements are required to be calculated using certain valuation assumptions, including that we will have sufficient taxable income to use the applicable tax attributes and that certain of such tax attributes will be used on a pro rata basis from the date of the creation of the Joint Venture (or in certain cases from the date of certain previous transactions) through the expiration of the applicable tax attribute. The 2009 - 2011 Tax Receivable Agreements were measured at their fair value as part of the Merger and are recognized at their initial fair value plus recognized accretion to date on the consolidated balance sheet.

2017 Tax Receivable Agreement

The 2017 Tax Receivable Agreement generally provides for the payment by Change Healthcare Performance, Inc., a subsidiary of the Company, to affiliates of The Blackstone Group, L.P. (“Blackstone”) and Hellman & Friedman LLC (“Hellman & Friedman”) of 85% of the net cash tax savings realized (or, in certain circumstances, deemed to be realized) in periods ending on or after the creation of the Joint Venture as a result of certain net operating losses and certain other tax attributes of Change Healthcare Performance, Inc. as of the date of the creation of the Joint Venture. The 2017 Tax Receivable Agreement was measured at its fair value as part of the Merger and is recognized at its initial fair value plus recognized accretion to date on the consolidated balance sheet.

Based on facts and circumstances at June 30, 2020, estimated aggregate payments due under these tax receivable agreements in future fiscal years are to be as follows:


	2009 - 2011 Tax Receivable Agreements		2017 Tax Receivable Agreement		Total
Remainder of 2021	$	—	$	—	$	—
2022		20,113		2,281		22,394
2023		20,084		47,384		67,468
2024		19,358		26,551		45,909
2025		17,917		8,441		26,358
Thereafter		102,941		29,479		132,420
Gross expected payments		180,413		114,136		294,549
Less: Amounts representing discount		(53,572)		(57,713)		(111,285)
Total tax receivable agreement obligations due to related parties		126,841		56,423		183,264
Less: Current portion due (included in due to related parties, net)		(20,113)		(2,281)		(22,394)
Tax receivable agreement long-term obligations due to related parties	$	106,728	$	54,142	$	160,870

McKesson Tax Receivable Agreement

In connection with the closing of the Transactions, we along with the Joint Venture, the subsidiaries of McKesson that serve as members of the Joint Venture (“McK Members”), and McKesson entered into a tax receivable agreement (the “McKesson Tax Receivable Agreement”). The McKesson Tax Receivable Agreement generally requires payment to affiliates of McKesson of 85% of certain cash tax savings realized (or, in certain circumstances, deemed to be realized) in periods ending on or after the date on which McKesson ceases to own at least 20% of the Joint Venture as a result of (i) certain amortizable tax basis in assets transferred to the Joint Venture at the Contribution Agreement Closing and (ii) imputed interest deductions and certain other tax attributes arising from payments under the McKesson Tax Receivable Agreement. Following the McKesson exit and based on anticipated amortization allocations, we recorded an obligation for the McKesson Tax Receivable estimated payments, which represents a loss contingency under ASC 450 and is included in the other long-term liabilities on the consolidated balance sheet. Future changes in this value will be reflected within pretax income or loss.

Based on facts and circumstances at June 30, 2020, we estimate the aggregate payments due under the McKesson Tax Receivable Agreement in future fiscal years to be as follows:


	McKesson Tax Receivable Agreement
Remainder of 2021	$	—
2022		128
2023		18,306
2024		19,905
2025		23,150
Thereafter		103,144
Gross expected payments		164,633
Less: Amounts representing discount		—
Total tax receivable agreement obligation		164,633
Less: Current portion due (included in accrued expenses)		(128)
Tax receivable agreement long-term obligation	$	164,505

The timing and/or amount of aggregate payments due may vary based on a number of factors, including the amount of net operating losses and income tax rates.