Form 8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): August 4, 2021

 

 

Change Healthcare Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

 

Delaware   001-38961   82-2152098

(State or Other Jurisdiction

of Incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

424 Church Street, Suite 1400

Nashville, Tennessee 37219

(Address of Principal Executive Offices) (Zip Code)

(615) 932-3000

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange

on which registered

Common Stock, par value $0.001 per share   CHNG   The Nasdaq Stock Market LLC
6.00% Tangible Equity Units   CHNGU   The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 


Item 2.02

Results of Operations and Financial Condition.

On August 4, 2021, Change Healthcare Inc. issued a press release announcing financial results for the first fiscal quarter of fiscal year 2022 ended June 30, 2021. The press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Pursuant to General Instruction B.2 of Current Report on Form 8-K, the information in Item 2.02 of this Current Report on Form 8-K, including the press release attached hereto as Exhibit 99.1, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. Furthermore, such information shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document.

 

Item 9.01

Financial Statements and Exhibits.

(d) Exhibits.

 

Exhibit
No.

  

Description

99.1    Press Release of Change Healthcare Inc. dated August 4, 2021.


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

CHANGE HEALTHCARE INC.

By:

 

/s/ Loretta A. Cecil

 

Name: Loretta A. Cecil

 

Title: Executive Vice President, General Counsel

Date: August 4, 2021

EX-99.1

Exhibit 99.1

Change Healthcare Inc. Reports First Quarter Fiscal 2022 Financial Results

Nashville, Tenn., Aug. 4, 2021 – Change Healthcare Inc. (Nasdaq: CHNG) (the “Company” or “Change Healthcare”), a leading healthcare technology company, today reported financial results for the first quarter of fiscal year 2022 ended June 30, 2021.

“The solid performance in the first quarter, combined with the momentum in our sales pipeline, establishes a strong foundation for growth as we move through fiscal 2022,” said Neil de Crescenzo, president and chief executive officer. “We will continue to make investments throughout the year to advance innovation and optimize our cost structure, enabling us to deliver better experiences and outcomes for our customers, partners and consumers.”

Fiscal 2022 First Quarter Highlights:

Financial Summary

 

   

Total revenue of $867.9 million, including solutions revenue of $816.6 million

 

   

Net loss of $3.6 million, resulting in net loss of $0.01 per diluted share

 

   

Adjusted net income of $133.0 million, resulting in adjusted net income of $0.41 per diluted share

 

   

Adjusted EBITDA of $282.7 million

Recent Business Highlights

 

   

Announced an expansion of the self-service resources the Company offers developers to use application programming interfaces (APIs) at scale to bring new healthcare innovations to market

Impact of McKesson Exit on Comparability of Results

On March 10, 2020, Change Healthcare Inc. acquired the interest in Change Healthcare LLC (“the Joint Venture”) previously held by McKesson. The transaction resulted in Change Healthcare Inc. acquiring control of the Joint Venture, which was accounted for as a business combination resulting in fair value adjustments to various assets and liabilities, including deferred revenue, goodwill, and intangible assets.

Financial Results for First Quarter of Fiscal 2022

 

   

Solutions revenue was $816.6 million, compared to $648.4 million for first quarter of fiscal 2021. Solutions revenue includes the impact of fair value adjustments to deferred revenue resulting from the McKesson exit, which reduced revenue recognized by $4.5 million and $55.0 million in the first quarter of fiscal 2022 and 2021, respectively. Total revenue, which includes postage revenue, was $867.9 million compared to $694.2 million in the same period of the prior year. Solutions revenue for the current period reflects the $6.5 million net favorable impact of acquisitions and divestitures, including the negative $15.3 million impact during the quarter from the divestitures of the Connected Analytics and Capacity Management businesses which closed in fiscal year 2021. Solutions revenue in the current period was positively impacted by volume recovery from COVID-19 related volume declines in the prior period and new sales.

 

   

Net loss was $3.6 million, resulting in net loss of $0.01 per diluted share, compared with net loss of $58.7 million and $0.18 per diluted share, respectively, for the first quarter of fiscal 2021.

 

   

Adjusted net income was $133.0 million, resulting in adjusted net income of $0.41 per diluted share, compared with adjusted net income of $81.2 million and $0.25 per diluted share, respectively, for the first quarter of fiscal 2021. Net loss per diluted share and adjusted net income per diluted share for the current period is based on 323 million shares compared to 320 million shares in the prior year period.

 

1


   

Adjusted EBITDA was $282.7 million, compared with $196.9 million for the first quarter of fiscal 2021. The results in the current quarter reflect optimization of our cost structure.

Cash Flow and Balance Sheet Highlights

Net cash provided by operating activities was $110.1 million and free cash flow was $44.1 million, in each case, for the three months ended June 30, 2021. For the three months ended June 30, 2020, net cash provided by operating activities and free cash flow was $169.1 million and $102.3 million, respectively, which included the positive impact of deferring approximately $36.1 million of interest and payroll tax payments during the period.

Net cash provided by operating activities and free cash flow each are affected by pass-thru funds we receive from certain pharmaceutical industry participants in advance of our obligation to remit these funds to participating retail pharmacies. Such pass-thru funds on hand increased by $7.3 million in the three months ended June 30, 2021, increasing free cash flow for the period by that amount, and decreased by $13.7 million for the three months ended June 30, 2020.

The Company ended the quarter with approximately $109.1 million of cash and cash equivalents, and approximately $4,758.4 million of total debt. Subsequent to the end of the quarter, the Company repaid $30.0 million on its Term Loan Facility.

Proposed Merger with OptumInsight

On January 5, 2021, OptumInsight, a diversified health services company and part of UnitedHealth Group, and Change Healthcare agreed to combine (the “Merger”). Under the terms of the merger agreement, UnitedHealth Group, through a wholly-owned subsidiary, will acquire all of the outstanding shares of Change Healthcare common stock for $25.75 per share in cash. The Boards of Directors of both UnitedHealth Group and Change Healthcare have unanimously approved the terms of the Merger. At a special meeting held April 13, 2021, Change Healthcare stockholders voted to approve the Merger. Of the approximately 222 million shares voted, 99.9% voted in favor of the adoption of the merger agreement. The closing of the Merger is subject to applicable regulatory approval and other customary closing conditions.

Guidance

Due to the proposed transaction with OptumInsight, we will no longer be providing financial guidance.

Webcast Information

Change Healthcare will host a conference call on Thursday, August 5, 2021, at 8:00 a.m. ET. Due to the previously announced transaction with OptumInsight, the Company will not be taking questions during the conference call.

Investors and other interested parties are invited to listen to the conference call via the Company’s website at https://ir.changehealthcare.com/. The webcast will be available for on-demand listening at the aforementioned URL until August 5, 2022.

About Change Healthcare

Change Healthcare (Nasdaq: CHNG) is a leading healthcare technology company, focused on insights, innovation, and accelerating the transformation of the U.S. healthcare system through the power of the Change Healthcare platform. We provide data and analytics-driven solutions to improve clinical, financial, administrative, and patient engagement outcomes in the U.S. healthcare system. Learn more at changehealthcare.com.

 

2


CHNG-IR

Contacts

Evan Smith, CFA

Investor Relations

404-338-2225

Evan.Smith@changehealthcare.com

Katherine Wojtecki

External Communications

630-624-9142

Katherine.Wojtecki@changehealthcare.com

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations and businesses of Change Healthcare. Some of these statements can be identified by terms and phrases such as “anticipate,” “believe,” “intend,” “estimate,” “expect,” “continue,” “could,” “should,” “may,” “plan,” “project,” “predict” and similar expressions. Change Healthcare cautions readers of this press release that such “forward looking statements,” including without limitation, those relating to the timing of the proposed merger and Change Healthcare’s future business prospects, revenue, working capital, liquidity, capital needs, interest costs and income, wherever they occur in this press release or in other statements attributable to Change Healthcare, are necessarily estimates reflecting the judgment of Change Healthcare’s senior management and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the “forward looking statements.”

Factors that could cause Change Healthcare’s actual results to differ materially from those expressed or implied in such forward-looking statements include, but are not limited to, the inability to complete the proposed merger due to the failure to satisfy conditions to completion of the proposed merger, including that a governmental entity may prohibit, delay or refuse to grant approval for the consummation of the transaction; risks related to disruption of management’s attention from Change Healthcare’s ongoing business operations due to the transaction; the effect of the announcement of the proposed merger on Change Healthcare’s relationships with its customers, operating results and business generally; the risk that the proposed merger will not be consummated in a timely manner; exceeding the expected costs of the merger; the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement; macroeconomic and industry trends and adverse developments in the debt, consumer credit and financial services markets; uncertainty and risks related to the impact of the COVID-19 pandemic (including the rise of COVID-19 variant strains such as the Delta variant) on the national and global economy, Change Healthcare’s business, suppliers, customers, and employees; Change Healthcare’s ability to retain or renew existing customers and attract new customers; Change Healthcare’s ability to connect a large number of payers and providers; Change Healthcare’s ability to provide competitive services and prices while maintaining its margins; further consolidation in end-customer markets; Change Healthcare’s ability to effectively manage costs; Change Healthcare’s ability to effectively develop and maintain relationships with channel partners; Change Healthcare’s ability to timely develop new services and the market’s willingness to adopt new services; Change Healthcare’s ability to deliver services timely without interruption; a decline in transaction volume in the U.S. healthcare industry; Change Healthcare’s ability to maintain access to its data sources; Change Healthcare’s ability to maintain the security and integrity of its data; Change Healthcare’s reliance on key management personnel; Change Healthcare’s ability to manage and expand its operations and keep up with rapidly changing technologies; the ability of outside service providers and key vendors to fulfill their obligations to Change Healthcare; risks related to international operations; Change Healthcare’s ability to protect and enforce its intellectual property, trade secrets and other forms of unpatented intellectual property; Change Healthcare’s ability to defend its intellectual property from infringement claims by third parties; government regulation and changes in the regulatory environment; changes in local, state, federal and international laws and regulations, including related to taxation; economic and political instability in the U.S. and international markets where Change Healthcare operates; litigation or regulatory proceedings; losses against which Change Healthcare does not insure; Change Healthcare’s ability to make acquisitions and integrate the operations of acquired businesses; Change Healthcare’s ability to make timely payments of principal and interest on its indebtedness; Change Healthcare’s ability to satisfy covenants in the agreements governing its indebtedness; Change Healthcare’s ability to maintain liquidity; our adoption of new, or amendments to existing, accounting standards, and other risks. For a more detailed discussion of these factors, see the information under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Change Healthcare’s most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on May 27, 2021 as such factors may be updated from time to time in our periodic filings with the SEC.

 

3


Change Healthcare’s forward-looking statements speak only as of the date of this press release or as of the date they are made. Change Healthcare disclaims any intent or obligation to update any “forward looking statement” made in this press release to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time.

Non-GAAP Financial Measures

In the Company’s earnings releases, prepared remarks, conference calls, slide presentations and webcasts, there may be use or discussion of non-GAAP financial measures. We believe such measures provide supplemental information to investors with regards to our operating performance and assist investors’ ability to compare our financial results to those of other companies in the same industry. The GAAP financial measure most directly comparable to each non-GAAP financial measure used or discussed, and a reconciliation of the differences between the comparable GAAP financial measure and each non-GAAP financial measure are included in this press release after the consolidated financial statements. These non-GAAP financial measures are calculated and presented on the basis of methodologies other than in accordance with GAAP. These non-GAAP financial measures should be considered only as supplemental to, and not as superior to, financial measures prepared in accordance with GAAP and may be defined and calculated differently by others in the same industry.

 

4


Consolidated Statements of Operations

(unaudited and amounts in thousands, except share and per share amounts)

 

     Three Months Ended June 30,  
     2021     2020  

Revenue:

    

Solutions revenue

   $ 816,648     $ 648,412  

Postage revenue

     51,208       45,772  
  

 

 

   

 

 

 

Total revenue

     867,856       694,184  

Operating expenses:

    

Cost of operations (exclusive of depreciation and amortization below)

     352,063       318,542  

Research and development

     71,240       55,734  

Sales, marketing, general and administrative

     177,955       165,474  

Customer postage

     51,208       45,772  

Depreciation and amortization

     168,211       138,541  

Accretion and changes in estimate with related parties, net

     3,037       5,895  

Gain on sale of businesses

     —         (28,095
  

 

 

   

 

 

 

Total operating expenses

     823,714       701,863  
  

 

 

   

 

 

 

Operating income (loss)

     44,142       (7,679

Non-operating (income) and expense

    

Interest expense, net

     59,386       62,667  

Other, net

     (3,189     1,809  
  

 

 

   

 

 

 

Total non-operating (income) and expense

     56,197       64,476  
  

 

 

   

 

 

 

Income (loss) before income tax provision (benefit)

     (12,055     (72,155

Income tax provision (benefit)

     (8,450     (13,461
  

 

 

   

 

 

 

Net income (loss)

   $ (3,605   $ (58,694
  

 

 

   

 

 

 

Net income (loss) per common share:

    

Basic and diluted

   $ (0.01   $ (0.18

Weighted average common shares outstanding:

    

Basic and diluted

     322,546,171       320,052,943  

 

5


Consolidated Balance Sheets

(unaudited and amounts in thousands, except share and per share amounts)

 

     June 30, 2021     March 31, 2021  

Assets

    

Current assets:

    

Cash and cash equivalents

   $ 109,104     $ 113,101  

Accounts receivable, net

     744,482       732,614  

Contract assets, net

     134,100       132,856  

Prepaid expenses and other current assets

     147,835       140,258  
  

 

 

   

 

 

 

Total current assets

     1,135,521       1,118,829  

Property and equipment, net

     162,784       174,370  

Operating lease right-of-use assets, net

     86,292       93,412  

Goodwill

     4,112,222       4,108,792  

Intangible assets, net

     4,064,439       4,187,072  

Other noncurrent assets, net

     470,593       430,141  
  

 

 

   

 

 

 

Total assets

   $ 10,031,851     $ 10,112,616  
  

 

 

   

 

 

 

Liabilities

    

Current liabilities:

    

Accounts payable

   $ 92,644     $ 57,449  

Accrued expenses

     453,367       484,293  

Deferred revenue

     403,536       436,666  

Due to related parties, net

     11,392       10,766  

Current portion of long-term debt

     23,099       27,339  

Current portion of operating lease liabilities

     29,423       30,608  
  

 

 

   

 

 

 

Total current liabilities

     1,013,461       1,047,121  

Long-term debt, excluding current portion

     4,735,332       4,734,775  

Long-term operating lease liabilities

     68,346       75,396  

Deferred income tax liabilities

     596,327       605,291  

Tax receivable agreement obligations to related parties

     94,737       103,151  

Tax receivable agreement obligations

     195,201       229,082  

Other long-term liabilities

     64,594       65,572  
  

 

 

   

 

 

 

Total liabilities

     6,767,998       6,860,388  

Commitments and contingencies

    

Stockholders’ Equity

    

Common Stock (par value, $0.001), 9,000,000,000 and 9,000,000,000 shares authorized and 310,677,936 and 306,796,076 shares issued and outstanding at June 30, 2021 and March 31, 2021, respectively

     311       307  

Preferred stock (par value, $0.001), 900,000,000 shares authorized and no shares issued and outstanding at both June 30, 2021 and March 31, 2021

     —         —    

Additional paid-in capital

     4,294,927       4,283,391  

Accumulated other comprehensive income (loss)

     14,911       11,221  

Accumulated deficit

     (1,046,296     (1,042,691
  

 

 

   

 

 

 

Total stockholders’ equity

     3,263,853       3,252,228  
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 10,031,851     $ 10,112,616  
  

 

 

   

 

 

 

 

6


Consolidated Statements of Cash Flows

(unaudited and amounts in thousands)

 

     Three Months Ended June 30,  
     2021     2020  

Cash flows from operating activities:

    

Net income (loss)

   $ (3,605   $ (58,694

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

    

Depreciation and amortization

     168,211       138,541  

Amortization of capitalized software developed for sale

     717       78  

Accretion and changes in estimate, net

     4,732       5,895  

Equity compensation

     26,166       9,583  

Deferred income tax expense (benefit)

     (8,989     (13,845

Amortization of debt discount and issuance costs

     7,910       8,047  

Non-cash lease expense

     7,007       7,402  

Gain on sale of businesses

     —         (28,095

Other, net

     249       4,766  

Changes in operating assets and liabilities:

    

Accounts receivable, net

     (11,773     113,470  

Contract assets, net

     (3,090     10,013  

Prepaid expenses and other assets

     (25,029     (24,632

Accounts payable

     34,722       (19,244

Accrued expenses and other liabilities

     (53,649     (4,852

Deferred revenue

     (33,472     20,667  
  

 

 

   

 

 

 

Net cash provided by (used in) operating activities

     110,107       169,100  
  

 

 

   

 

 

 

Cash flows from investing activities:

    

Capitalized expenditures

     (66,006     (66,770

Acquisitions, net of cash acquired

     —         (398,651

Proceeds from sale of businesses

     —         28,553  

Other, net

     (1,000     1,039  
  

 

 

   

 

 

 

Net cash provided by (used in) investing activities

     (67,006     (435,829
  

 

 

   

 

 

 

Cash flows from financing activities:

    

Payments under tax receivable agreements

     (21,537     (20,691

Receipts (payments) on derivative instruments

     (7,364     (7,364

Employee tax withholding on vesting of equity compensation awards

     (13,015     —    

Payments on deferred financing obligations

     (6,796     (5,788

Payment of senior amortizing notes

     (3,965     (4,028

Proceeds from exercise of equity awards

     5,225       2,143  

Payments on Revolving Facility

     —         (250,000

Proceeds from issuance of Senior Notes

     —         325,000  

Other, net

     (116     (5,543
  

 

 

   

 

 

 

Net cash provided by (used in) financing activities

     (47,568     33,729  
  

 

 

   

 

 

 

Effect of exchange rate changes on cash and cash equivalents

     470       946  
  

 

 

   

 

 

 

Net increase (decrease) in cash and cash equivalents

     (3,997     (232,054
  

 

 

   

 

 

 

Cash and cash equivalents at beginning of period

     113,101       410,405  
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 109,104     $ 178,351  
  

 

 

   

 

 

 

 

7


Reconciliation of Net Income (Loss) to Adjusted EBITDA

(unaudited and amounts in thousands)

 

     Three Months Ended June 30,  
     2021     2020  

Net income (loss)

   $ (3,605   $ (58,694

Income tax provision (benefit)

     (8,450     (13,461
  

 

 

   

 

 

 

Income (loss) before income tax provision (benefit)

     (12,055     (72,155

Amortization of capitalized software developed for sale

     717       78  

Depreciation and amortization

     168,211       138,541  

Interest expense, net

     59,386       62,667  

Equity compensation

     26,166       9,583  

Acquisition accounting adjustments

     (559     48,540  

Acquisition and divestiture-related costs

     6,394       5,120  

Integration and related costs

     11,368       10,358  

Strategic initiatives, duplicative and transition costs

     9,928       5,080  

Severance costs

     4,720       4,704  

Accretion and changes in estimate, net

     4,732       5,895  

Impairment of long-lived assets and other

     1,612       6,313  

Gain on sale of business

     —         (28,095

Contingent consideration

     —         (2,450

Other non-routine, net

     2,108       2,677  
  

 

 

   

 

 

 

Adjusted EBITDA

   $ 282,728     $ 196,856  
  

 

 

   

 

 

 

 

8


Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss)

(unaudited and amounts in thousands, except share and per share amounts)

 

     Three Months Ended June 30,  
     2021     2020  

Net income (loss)

   $ (3,605   $ (58,694

Amortization expense resulting from acquisition method adjustments

     124,314       113,024  

EBITDA adjustments

     66,469       67,725  

Tax effect of EBITDA adjustments and amortization expense

     (54,222     (40,860
  

 

 

   

 

 

 

Adjusted net income (loss)

   $ 132,956     $ 81,195  
  

 

 

   

 

 

 

Adjusted net income (loss) per diluted share

   $ 0.41     $ 0.25  
  

 

 

   

 

 

 

 

9


Segment Results

(unaudited and amounts in thousands)

 

     Three Months Ended June 30,  
     2021     2020  

Segment revenue

    

Software and Analytics

   $ 420,317     $ 391,589  

Network Solutions

     209,461       142,826  

Technology-Enabled Services

     225,521       187,706  

Postage and Eliminations (1)

     17,018       27,063  

Purchase Accounting Adjustment (2)

     (4,461     (55,000
  

 

 

   

 

 

 

Net revenue

   $  867,856     $  694,184  
  

 

 

   

 

 

 

Segment adjusted EBITDA

    

Software and Analytics

   $ 160,365     $ 143,932  

Network Solutions

     109,488       70,503  

Technology-Enabled Services

     12,875       (17,579

Postage and Eliminations

     —         —    
  

 

 

   

 

 

 

Total adjusted EBITDA

   $ 282,728     $ 196,856  
  

 

 

   

 

 

 

 

(1)

Revenue for Postage and Eliminations includes postage revenue of $51.2 million for the three months ended June 30, 2021 and $45.8 million for the three months ended June 30, 2020.

(2)

Amount reflects the impact to deferred revenue resulting from the McKesson exit which reduced revenue recognized during the three months ended June 30, 2021 and June 30, 2020.

 

10


Reconciliation of Cash Provided by (Used in) Operating Activities to Free Cash Flow and Adjusted Free Cash Flow

(unaudited and amounts in thousands)

 

     Three Months Ended June 30,  
     2021     2020  

Cash provided by (used in) operating activities (1)

   $ 110,107     $ 169,100  

Capital expenditures

     (66,006     (66,770
  

 

 

   

 

 

 

Free cash flow

     44,101       102,330  

Adjustments to free cash flow (2):

    

Integration and related costs

     11,368       10,358  

Strategic initiatives, duplicative and transition costs

     9,928       5,080  

Severance costs

     4,720       4,704  

Integration and strategic capital expenditures

     6,395       4,081  
  

 

 

   

 

 

 

Adjusted free cash flow

   $ 76,512     $ 126,553  
  

 

 

   

 

 

 

 

(1)

Includes cash provided by pass-thru funds of $7.3 million for the three months ended June 30, 2021 and cash used by pass-thru funds of $13.7 million for the three months ended June 30, 2020.

(2)

All operating costs and integration and strategic capital expenditures are presented on an as-incurred basis.

 

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