MultiPlan Corp

Previous wording

The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and accompanying notes thereto contained elsewhere in this Quarterly Report and together with the information included in the Company’s 2023 Annual Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties; the results described below are not necessarily indicative of the results to be expected in any future periods.

Current wording

The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and accompanying notes thereto contained elsewhere in this Quarterly Report and together with the information included in the Company’s 2023 Annual Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties; the results described below are not necessarily indicative of the results to be expected in any future periods. References to common stock, warrants to purchase common stock, options to purchase common stock, restricted stock units, share date, per share data and conversion rates with respect to convertible notes and related information have been retroactively adjusted to reflect the effect of the Reverse Stock Split for all periods presented.

Previous wording

MultiPlan is a market leading provider of data analytics and technology-enabled solutions designed to bring affordability, efficiency, and fairness to the U.S. healthcare industry. Through our proprietary data and technology platform, we provide out-of-network cost management, payment and revenue integrity, data and decision science, business-to-business healthcare payments and other services to the payors of healthcare, which are primarily health insurers and their administrative-services-only platforms, self-insured employers, federal and state government-sponsored health plans (collectively "Payors") and other health plan sponsors (typically through their health plan administrators), and, indirectly, the plan members who are the consumers of healthcare services.

Current wording

MultiPlan is a leading provider of data-driven cost management solutions that deliver transparency and promote fairness, quality and affordability to the U.S. healthcare industry. Through our proprietary data and technology platform, we provide out-of-network cost management, payment and revenue integrity, data and decision science, business-to-business healthcare payments and other services to the payors of healthcare, which are primarily health insurers and their administrative-services-only platforms, self-insured employers, federal and state government-sponsored health plans (collectively "Payors") and other health plan sponsors (typically through their health plan administrators), and, indirectly, the plan members who are the consumers of healthcare services.

Previous wording

Although the end beneficiary of our services are employers and other plan sponsors and their health plan members, our direct customers are typically Payors, including ASOs and third-party administrators ("TPAs"), who go to market with our services to those end customers. We offer these Payors a single interface to our services, which are used in combination or individually to reduce the medical cost burden on their health plan customers, by lowering the per-unit cost of medical services incurred, managing the utilization of medical services, and increasing the likelihood that the services are reimbursed without error and accepted by the provider. We are a technology-enabled service provider and transaction processor and do not deliver health-care services, provide or manage healthcare services, provide care or care management, or adjudicate or pay claims.

Current wording

Although the end beneficiary of our services are employers and other plan sponsors and their health plan members, our direct customers are typically Payors, including Payors providing administrative services only, third-party administrators ("TPAs"), who go to market with our services to those end customers. We offer these Payors a single interface to our services, which are used in combination or individually to reduce the medical cost burden on their health plan customers, by lowering the per-unit cost of medical services incurred, managing the utilization of medical services, and increasing the likelihood that the services are reimbursed without error and accepted by the provider. We are a technology-enabled service provider and transaction processor and do not deliver health-care services, provide or manage healthcare services, provide care or care management, or adjudicate or pay claims.

Previous wording

The Company, through its operating subsidiary, MultiPlan, Inc., offers its solutions nationally through a range of service lines, which include:

Current wording

The Company, primarily through its operating subsidiary, MultiPlan, Inc., offers its solutions nationally through a range of service lines, which include:

Previous wording

•Additionally, in 2023 the Company entered into a partnership agreement with ECHO Health, Inc. ("ECHO"), which through a joint marketing and services agreement adds payment processing of healthcare provider claims as well as payments made to other service providers.

Current wording

•Additionally, in 2023 the Company entered into a partnership agreement with ECHO Health, Inc., which through a joint marketing and services agreement adds payment processing of healthcare provider claims as well as payments made to other service providers.

Previous wording

We believe our solutions provide a strong value proposition to Payors, their health plan customers and healthcare consumers, as well as to providers. Overall, our service offerings aim to reduce healthcare costs in a manner that is orderly, efficient, and fair to all parties. In addition, because in most instances the fee for our services is linked to the savings we identify, our revenue model is aligned with the interests of our customers. For the six months ended June 30, 2024 and June 30, 2023 and year ended December 31, 2023, our comprehensive services identified approximately $11.9 billion, $11.2 billion, and $22.9 billion in potential medical cost savings, respectively.

Current wording

We believe our solutions provide a strong value proposition to Payors, their health plan customers and healthcare consumers, as well as to providers. Overall, our service offerings aim to reduce healthcare costs in a manner that is orderly, efficient, and fair to all parties. In addition, because in most instances the fee for our services is linked to the savings we identify, our revenue model is aligned with the interests of our customers. For the nine months ended September 30, 2024 and September 30, 2023 and year ended December 31, 2023, our comprehensive services identified approximately $18.3 billion, $17.0 billion, and $22.9 billion in potential medical cost savings, respectively.

Previous wording

Material differences between MultiPlan Corporation and MPH for the three and six months ended June 30, 2024 and June 30, 2023 include differences in interest expense, change in fair value of Private Placement Warrants and Unvested Founder Shares, gain on extinguishment of debt, and stock-based compensation.

Current wording

Material differences between MultiPlan Corporation and MPH for the three and nine months ended September 30, 2024 and September 30, 2023 include differences in interest expense, income taxes, change in fair value of Private Placement Warrants and Unvested Founder Shares, gain on extinguishment of debt, and stock-based compensation.

Previous wording

For the three and six months ended June 30, 2024, interest expense for MultiPlan Corporation was higher than MPH by $19.3 million and $39.6 million, respectively, due to interest expense incurred by MultiPlan Corporation on the Senior Convertible PIK Notes. For the three and six months ended June 30, 2023, interest expense for MultiPlan Corporation was higher than MPH by $20.6 million and $41.2 million, respectively, due to interest expense incurred by MultiPlan Corporation on the Senior Convertible PIK Notes.

Current wording

For the three and nine months ended September 30, 2024, interest expense for MultiPlan Corporation was higher than MPH by $19.9 million and $59.6 million, respectively, due to interest expense incurred by MultiPlan Corporation on the Senior Convertible PIK Notes. For the three and nine months ended September 30, 2023, interest expense for MultiPlan Corporation was higher than MPH by $20.1 million and $61.2 million, respectively, due to interest expense incurred by MultiPlan Corporation on the Senior Convertible PIK Notes.

Previous wording

In the three and six months ended June 30, 2024, EBITDA expenses for MultiPlan Corporation were lower than MPH by $0.7 million and $1.3 million, respectively, primarily due to insurance premiums paid to our captive insurance company, net of related captive insurance company costs, which are eliminated in the consolidated financial reporting of MultiPlan Corporation. In the three and six months ended June 30, 2023, EBITDA expenses for MultiPlan Corporation were lower than MPH by $1.0 million and $1.9 million, respectively, primarily due to insurance premiums paid to our captive insurance company, net of related captive insurance company costs, which are eliminated in the consolidated financial reporting of MultiPlan Corporation.

Current wording

In the three and nine months ended September 30, 2024, EBITDA expenses for MultiPlan Corporation were lower than MPH by $0.6 million and $1.9 million, respectively, primarily due to insurance premiums paid to our captive insurance company, net of related captive insurance company costs, which are eliminated in the consolidated financial reporting of MultiPlan Corporation. In the three and nine months ended September 30, 2023, EBITDA expenses for MultiPlan Corporation were lower than MPH by $1.0 million and $3.0 million, respectively, primarily due to insurance premiums paid to our captive insurance company, net of related captive insurance company costs, which are eliminated in the consolidated financial reporting of MultiPlan Corporation.

Previous wording

In first quarter 2024, there was a cyberattack on a critical piece of the U.S. healthcare infrastructure from a data security breach that disrupted claims flows upstream from our services. While it is difficult to precisely quantify the claims impact, we believe this delayed the receipt of certain medical claims and contributed to lower medical claims volumes in first and second quarter of 2024.

Current wording

In first quarter 2024, there was a cyberattack on a critical piece of the U.S. healthcare infrastructure from a data security breach that disrupted claims flows upstream from our services. We believe this delayed the receipt of certain medical claims and contributed to lower medical claims volumes in first, second, and third quarter of 2024.

Previous wording

The results of operations and financial condition of BST have been included in the Company's consolidated results from the date of acquisition. Acquired expenses from the acquisition of BST are included in costs of services and general and administrative expenses for the three and six months ended June 30, 2024.

Current wording

The results of operations and financial condition of BST have been included in the Company's consolidated results from the date of acquisition. Acquired expenses from the acquisition of BST are included in costs of services and general and administrative expenses for the three and nine months ended September 30, 2024.

Previous wording

Revenues decreased by $4.5 million, or 1.9%, for the three months ended June 30, 2024, as compared to the three months ended June 30, 2023. This decrease in revenues was due to the decrease in Network-Based Services revenues of $11.4 million and the decrease in Payment and Revenue Integrity Services Revenues of $1.5 million, offset by the increase in Analytics-Based Services revenues of $8.5 million during this time period.

Current wording

Revenues decreased by $12.3 million, or 5.1%, for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. This decrease in revenues was due to the decrease in Network-Based Services revenues of $10.7 million, the decrease in Analytics-Based Services revenues of $0.7 million, and the decrease in Payment and Revenue Integrity Services Revenues of $0.9 million during this time period.

Previous wording

Revenues decreased by $6.6 million, or 1.4%, for the six months ended June 30, 2024, as compared to the six months ended June 30, 2023. This decrease in revenues was due to the decrease in Network-Based Services revenues of $22.5 million and the decrease in Payment and Revenue Integrity Services revenues of $0.3 million, offset by the increase in Analytics-Based Services revenues of $16.1 million during this time period, as explained below.

Current wording

Revenues decreased by $18.9 million, or 2.6%, for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. This decrease in revenues was due to the decrease in Network-Based Services revenues of $33.1 million and the decrease in Payment and Revenue Integrity Services revenues of $1.2 million, offset by the increase in Analytics-Based Services revenues of $15.4 million during this time period, as explained below.

Previous wording

Network-Based Services revenues decreased $22.5 million, or 19.6%, in the six months ended June 30, 2024, as compared to the six months ended June 30, 2023. Approximately $9 million of the decrease was primarily related to customer and program attrition, and approximately $13 million of the reduction was from substitution of Analytics-Based Services in lieu of Network-Based Services and lower medical savings on PSAV claims received from customers. Medical savings were impacted by reduced claims volumes from a cyberattack at a major claims clearinghouse, which disrupted claims flows across the healthcare industry and ultimately downstream to our platform. These lower volumes contributed to the decrease in Network-Based Services PSAV revenues of $19.4 million and the decrease in PEPM network revenues of $3.9 million, offset by the increase in other network revenues of $0.8 million.

Current wording

Network-Based Services revenues decreased $10.7 million, or 18.8%, in the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. Approximately $4.1 million of the decrease was primarily related to customer and program attrition, and approximately $6.6 million of the reduction was from lower medical savings on PSAV claims received from customers and substitution of Analytics-Based Services in lieu of Network-Based Services. These factors contributed to the decrease in Network-Based Services PSAV revenues of $7.6 million, the decrease in PEPM network revenues of $2.0 million, and the decrease in other network revenues of $1.1 million.

Previous wording

Network-Based Services revenues decreased $11.4 million, or 20.0%, in the three months ended June 30, 2024, as compared to the three months ended June 30, 2023. Approximately $3 million of the decrease was primarily related to customer and program attrition, and approximately $8 million of the reduction was from substitution of Analytics-Based Services in lieu of Network-Based Services and lower medical savings on PSAV claims received from customers. Medical savings were impacted by reduced claims volumes from a cyberattack at a major claims clearinghouse, which disrupted claims flows across the healthcare industry and ultimately downstream to our platform. These lower volumes contributed to the decrease in Network-Based Services PSAV revenues of $9.6 million and the decrease in PEPM network revenues of $2.1 million, offset by the increase in other network revenues of $0.3 million.

Current wording

Network-Based Services revenues decreased $33.1 million, or 19.4%, in the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. Approximately $12.3 million of the decrease was primarily related to customer and program attrition, and approximately $20.8 million of the reduction was from lower medical savings on PSAV claims received from customers and substitution of Analytics-Based Services in lieu of Network-Based Services. Medical savings were impacted by reduced claims volumes from a cyberattack at a major claims clearinghouse, which disrupted claims flows across the healthcare industry and ultimately downstream to our platform. These factors contributed to the decrease in Network-Based Services PSAV revenues of $26.9 million and the decrease in PEPM network revenues of $5.9 million and the decrease in other network revenues of $0.3 million.

Previous wording

Analytics-Based Services revenues increased $16.1 million, or 5.3%, for the six months ended June 30, 2024, as compared to the six months ended June 30, 2023. This increase in revenues was primarily due to the increase in Analytics-Based Services PSAV revenues of $6.6 million as a result of increases in medical savings on PSAV claims and the increase in PEPM and other revenues of $9.5 million, including an increase in acquired revenues of $5.6 million from the acquisition of BST.

Current wording

Analytics-Based Services revenues increased $15.4 million, or 3.3%, for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. This increase in revenues was primarily due to the increase in Analytics-Based Services PSAV revenues of $5.6 million as a result of increases in medical savings on PSAV claims, and the increase in PEPM and other revenues of $9.8 million, including an increase in acquired revenues of $5.9 million from the acquisition of BST.

Previous wording

Payment and Revenue Integrity Services revenues decreased by $1.5 million, or 5.3%, for the three months ended June 30, 2024, as compared to the three months ended June 30, 2023. This decrease was primarily in our pre-payment lines of business, offset by increases in our post-payment and revenue integrity lines of business. The decrease in Payment and Revenue Integrity Services was primarily in our PSAV revenues which declined by $1.6 million.

Current wording

Payment and Revenue Integrity Services revenues decreased by $0.9 million, or 3.4%, for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023. This decrease was primarily in our pre-payment lines of business, offset by increases in our post-payment and revenue integrity lines of business. The decrease in Payment and Revenue Integrity Services was primarily in our PSAV revenues which declined by $0.9 million.

Previous wording

Payment and Revenue Integrity Services revenues decreased by $0.3 million, or 0.5%, for the six months ended June 30, 2024, as compared to the six months ended June 30, 2023. This decrease was primarily in our pre-payment lines of business, offset by increases in our post-payment and revenue integrity lines of business. The decrease in Payment and Revenue Integrity Services was primarily in our PSAV revenues which declined by $0.3 million.

Current wording

Payment and Revenue Integrity Services revenues decreased by $1.2 million, or 1.4%, for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023. This decrease was primarily in our pre-payment lines of business, offset by increases in our post-payment and revenue integrity lines of business. The decrease in Payment and Revenue Integrity Services was primarily in our PSAV revenues which declined by $1.2 million.

Previous wording

The decrease in general and administrative expenses of $1.8 million, or 2.5%, for the six months ended June 30, 2024, as compared to the six months ended June 30, 2023 was primarily due to the decrease in transaction costs of $7.8 million, decrease in insurance of $1.0 million, and $17.8 million increased capitalized software development, partially offset by the increase in personnel expenses of $17.5 million, professional fees of $4.0 million, equipment lease and maintenance of $2.0 million and net increases in other expenses of $1.3 million. The increase in personnel expenses related to increases in employee headcount, year-over-year increases in compensation, and related fringe benefits, and contract labor, including increases in stock-based compensation of $2.9 million. BST contributed $1.4 million and $2.4 million to total general and administrative expenses in the three and six months ended June 30, 2024, respectively, as compared to $1.5 million for the three and six months ended June 30, 2023.

Current wording

The increase in personnel expenses of $18.8 million primarily related to year-over-year increases in employee headcount, compensation, and related fringe benefits, including increases in BST personnel expenses of $3.5 million.

Previous wording

The increases in depreciation expenses of $2.9 million, or 15.4%, and $5.7 million, or 15.3%, for the three and six months ended June 30, 2024, respectively, as compared to the three and six months ended June 30, 2023, were due to purchases of property and equipment, including internally generated capitalized software, partially offset by assets that were written-off or became fully depreciated in the period.

Current wording

The increases in depreciation expenses of $3.0 million, or 15.2%, and $8.7 million, or 15.3%, for the three and nine months ended September 30, 2024, respectively, as compared to the three and nine months ended September 30, 2023, were due to purchases of property and equipment, including internally generated capitalized software, partially offset by assets that were written-off or became fully depreciated in the period.

Previous wording

The increases in amortization of intangible assets for thethree and six months ended June 30, 2024 as compared to thethree and six months ended June 30, 2023 were primarily due to the acquisition of BST and the intangibles acquired in the transaction.

Current wording

The increase in amortization of intangible assets for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023 was primarily due to the acquisition of BST and the intangibles acquired in the transaction.

Previous wording

For thethree and six months ended June 30, 2024, in connection with quantitative impairment testing performed on our goodwill and indefinite-lived intangibles, we recorded a loss on impairment of goodwill of $553.7 million and $1,070.1 million, respectively. A $2.7 million loss on impairment of trade names was recorded for the three months ended March 31, 2024 and no impairment was recorded for the three months ended June 30, 2024. The loss on impairment of goodwill and intangible assets was primarily due to the use of lower projected cash flows, lower EBITDA multiples and the use of a higher discount rate in response to the estimation uncertainty of our cash flow projections.

Current wording

For the three and nine months ended September 30, 2024, in connection with quantitative impairment testing performed on our goodwill and indefinite-lived intangibles, we recorded a loss on impairment of goodwill and indefinite-lived intangibles of $361.6 million and $1,434.4 million, respectively. The loss on impairment of goodwill and intangible assets was primarily due to the use of lower projected cash flows and lower EBITDA multiples.

Previous wording

The decrease in interest expense of $1.3 million and $2.6 million, for the three and six months ended June 30, 2024, respectively, as compared to the three and six months ended June 30, 2023 were primarily due to reductions in interest expense due to the swap rate agreements reducing our total interest on the Term Loan B for the three and six months ended June 30, 2024, and to a lower debt balance primarily due to the repurchase and cancellation of our 5.750% Notes in 2023 and Senior Convertible PIK Notes in 2023 and 2024. Our annualized weighted average cash interest rate decreased by 0.09% across our total debt in the six months ended June 30, 2024 as compared to the six months ended June 30, 2023.

Current wording

The decrease in interest expense of $2.5 million and $5.1 million, for the three and nine months ended September 30, 2024, respectively, as compared to the three and nine months ended September 30, 2023 were primarily due to reductions in interest expense due to the swap rate agreements reducing our total interest on the Term Loan B for the three and nine months ended September 30, 2024, and to a lower debt balances primarily due to the repurchase and cancellation of our 5.750% Notes in 2023 and Senior Convertible PIK Notes in 2023 and 2024. Our annualized weighted average cash interest rate decreased by 0.18% across our total debt in the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023.

Previous wording

As of June 30, 2024, our long-term debt was $4,510.8 million and included (i) a $1,275.3 million Term Loan B, excluding the current portion of Term Loan B of $13.3 million, (ii) $1,050.0 million of 5.50% Senior Secured Notes, (iii) $979.8 million of 5.750% Notes, (iv) $1,253.9 million of Senior Convertible PIK Notes, and net of (v) a discount on Term Loan B of $8.4 million, (vi) a discount on Senior Convertible PIK Notes of $16.3 million, and (vii) debt issue costs of $23.6 million.

Current wording

As of September 30, 2024, our long-term debt was $4,510.2 million and included (i) a $1,272.0 million Term Loan B, excluding the current portion of Term Loan B of $13.3 million, (ii) $1,050.0 million of 5.50% Senior Secured Notes, (iii) $979.8 million of 5.750% Notes, (iv) $1,253.9 million of Senior Convertible PIK Notes, and net of (v) a discount on Term Loan B of $7.9 million, (vi) a discount on Senior Convertible PIK Notes of $15.2 million, and (vii) debt issue costs of $22.5 million.

Previous wording

As of June 30, 2024 and June 30, 2023, our total debt had an annualized weighted average cash interest rate of 6.82% and 6.91%, respectively. As of December 31, 2023, our total debt had a weighted average cash interest rate of 6.83%.

Current wording

As of September 30, 2024 and September 30, 2023, our total debt had an annualized weighted average cash interest rate of 6.79% and 6.97%, respectively. As of December 31, 2023, our total debt had a weighted average cash interest rate of 6.83%.

Previous wording

The decreases in interest income of$1.8 million and $4.1 million for thethree and six months ended June 30, 2024, respectively as compared to thethree and six months ended June 30, 2023 were primarily due to less interest earned on interest bearing bank accounts resulting from lower average invested cash and cash equivalents balances.

Current wording

The decreases in interest income of$0.3 million and $4.4 million for thethree and nine months ended September 30, 2024, respectively, as compared to thethree and nine months ended September 30, 2023 were primarily due to less interest earned on interest bearing bank accounts resulting from lower average invested cash and cash equivalents balances.

Previous wording

During the six months ended June 30, 2024, the Company repurchased and cancelled $21.1 million of the Senior Convertible PIK Notes, resulting in the recognition of a gain on debt extinguishment of $5.9 million, representing the difference between the reacquisition price of the debt and the net carrying amount of the extinguished debt.

Current wording

During the nine months ended September 30, 2024, the Company repurchased and cancelled $21.1 million of the Senior Convertible PIK Notes, resulting in the recognition of a gain on debt extinguishment of $5.9 million, representing the difference between the reacquisition price of the debt and the net carrying amount of the extinguished debt.

Previous wording

The Company re-measures the fair value of the Private Placement Warrants and Unvested Founder Shares at each reporting period. From December 31, 2023 to June 30, 2024, the fair value of the Private Placement Warrants decreased by$0.1 million and the fair value of the Unvested Founder Shares decreased by$0.3 million. The decrease was primarily due to the decrease in the stock price of the Company's Class A common stock and the passage of time over that period.

Current wording

The Company re-measures the fair value of the Private Placement Warrants and Unvested Founder Shares at each reporting period. From December 31, 2023 to September 30, 2024, the fair value of the Private Placement Warrants decreased by$0.2 million and the fair value of the Unvested Founder Shares decreased by$0.3 million. The decrease was primarily due to the decrease in the stock price of the Company's Class A common stock and the passage of time over that period.

Previous wording

Net loss before income taxes for the three months ended June 30, 2024 of $604.2 million generated a benefit for income taxes of $27.5 million. Net loss before income taxes for the three months ended June 30, 2023 of $46.2 million generated a benefit for income taxes of $9.8 million.

Current wording

Net loss before income taxes for the three months ended September 30, 2024 of $418.7 million generated a benefit for income taxes of $27.2 million. Net loss before income taxes for the three months ended September 30, 2023 of $31.0 million generated a benefit for income taxes of $6.9 million.

Previous wording

Net loss before income taxes for the six months ended June 30, 2024 of $1,165.9 million generated a benefit for income taxes of $49.5 million. Net loss before income taxes for the six months ended June 30, 2023 of $44.3 million generated a benefit for income taxes of $8.1 million.

Current wording

Net loss before income taxes for the nine months ended September 30, 2024 of $1,584.6 million generated a benefit for income taxes of $76.7 million. Net loss before income taxes for the nine months ended September 30, 2023 of $75.3 million generated a benefit for income taxes of $15.0 million.

Previous wording

The effective tax rate for the six months ended June 30, 2024 differed from the statutory rate primarily due to stock compensation expense, limitations on executive compensation, non-deductible goodwill impairment, and state taxes. The effective tax rate for the six months ended June 30, 2023 differed from the statutory rate primarily due to stock-based compensation expense, non-deductible mark-to-market liability, non-deductible transaction costs due to the BST acquisition and state tax expense.

Current wording

The effective tax rate for the nine months ended September 30, 2024 differed from the statutory rate primarily due to stock compensation expense, limitations on executive compensation, non-deductible goodwill impairment, and state taxes. The effective tax rate for the nine months ended September 30, 2023 differed from the statutory rate primarily due to stock-based compensation expense, non-deductible mark-to-market liability, non-deductible transaction costs due to the BST acquisition and state tax expense.

Previous wording

As of June 30, 2024, we had cash and cash equivalents of$59.2 million, which includes restricted cash of$10.4 million. We have $442.1 million of loan availability under the revolving credit facility. As of June 30, 2024, we had four letters of credit totaling $7.9 million of utilization against the revolving credit facility. Three letters of credit are used to satisfy real estate lease agreements for three of our offices in lieu of security deposits in the amount of $1.8 million as of June 30, 2024 and December 31, 2023. The Company also has an irrevocable letter of credit to satisfy the obligations of a subsidiary in the amount of $6.1 million as of June 30, 2024 and December 31, 2023.

Current wording

As of September 30, 2024, we had cash and cash equivalents of$97.2 million, which includes restricted cash of$10.6 million. As of September 30, 2024, we had $442.1 million of loan availability under the revolving credit facility. As of September 30, 2024, we had four letters of credit totaling $7.9 million of utilization against the revolving credit facility. Three letters of credit are used to satisfy real estate lease agreements for three of our offices in lieu of security deposits in the amount of $1.8 million as of September 30, 2024 and December 31, 2023. The Company also has an irrevocable letter of credit to satisfy the obligations of a subsidiary in the amount of $6.1 million as of September 30, 2024 and December 31, 2023.

Previous wording

On February 27, 2023, the Board approved a share repurchase program authorizing the Company to repurchase up to $100.0 million of its Class A common stock from time to time in open market transactions. The repurchase program was effective immediately and expires on December 31, 2024. As of June 30, 2024, the Company has repurchased its Class A common stock as part of this program using cash on hand for an aggregate amount of $25.6 million including commissions, of which $10.4 million was spent during the six months ended June 30, 2024.

Current wording

On February 27, 2023, the Board approved a share repurchase program authorizing the Company to repurchase up to $100.0 million of its Class A common stock from time to time in open market transactions. The repurchase program was effective immediately and expires on December 31, 2024. As of September 30, 2024, the Company has repurchased its Class A common stock as part of this program using cash on hand for an aggregate amount of $25.6 million including commissions, of which $10.4 million was spent during the nine months ended September 30, 2024.

Previous wording

Our primary sources of liquidity are internally generated funds combined with our borrowing capacity under our revolving credit facility. We believe these sources will provide sufficient liquidity for us to meet our working capital and capital expenditure and other cash requirements for the next twelve months and for the long term. We may from time to time at our sole discretion, purchase, redeem, or retire our long-term debt, through tender offers, in privately negotiated or open market transactions or otherwise. We plan to finance our capital expenditures with cash from operations. Furthermore, our future liquidity and future ability to fund capital expenditures, working capital, and debt requirements are also dependent upon our future financial performance, which is subject to many economic, commercial, financial, and other factors that are beyond our control, including the ability of financial institutions to meet their lending obligations to us. If those factors significantly change, our business may not be able to generate sufficient cash flow from operations or future borrowings may not be available to meet our liquidity needs. We anticipate that to the extent we require additional liquidity as a result of these factors or in order to execute our strategy, it would be financed either by borrowings under our senior secured credit facilities, by other indebtedness, additional equity financings, or a combination of the foregoing. We may be unable to obtain any such additional financing on reasonable terms or at all.

Current wording

Our primary sources of liquidity are internally generated funds combined with our borrowing capacity under our revolving credit facility. We believe these sources will provide sufficient liquidity for us to meet our working capital and capital expenditure and other cash requirements for the next twelve months and a least through the current maturities of our debt starting in 2027. We may from time to time at our sole discretion, purchase, redeem, or retire our long-term debt, through tender offers, in privately negotiated or open market transactions or otherwise. We plan to finance our capital expenditures with cash from operations. Furthermore, our future liquidity and future ability to fund capital expenditures, working capital, and debt requirements are also dependent upon our future financial performance, which is subject to many economic, commercial, financial, and other factors that are beyond our control, including the ability of financial institutions to meet their lending obligations to us. If those factors significantly change, our business may not be able to generate sufficient cash flow from operations or future borrowings may not be available to meet our liquidity needs. We anticipate that to the extent we require additional liquidity as a result of these factors or in order to execute our strategy, it would be financed either by borrowings under our senior secured credit facilities, by other indebtedness, additional equity financings, or a combination of the foregoing. We may be unable to obtain any such additional financing on reasonable terms or at all.

Previous wording

Cash flows from operating activities decreased by $3.7 million, or 5.2%, primarily due to lower earnings once adjusted for non-cash items, and less unfavorable changes in working capital. Changes in our working capital requirements reflect the increase in accrued taxes, partially offset by an increase in our trade receivables and other assets.

Current wording

Cash flows from operating activities decreased by $3.0 million, or 2.1%, primarily due to lower earnings once adjusted for non-cash items, partially offset by favorable changes in working capital. Changes in our working capital requirements reflect the increase in accrued taxes and the decrease in the current value of our cash flow derivatives, partially offset by an increase in our trade receivables and other assets.

Previous wording

Net cash used in investing activities decreased $140.4 million, or 71.5%, as compared to the prior-year period, primarily due to the acquisition of BST during the prior-year period.

Current wording

Net cash used in investing activities decreased $130.8 million, or 59.9%, as compared to the prior-year period, primarily due to the acquisition of BST during the prior-year period.

Previous wording

Net cash used in financing activities decreased $85.7 million, or 71.3%, as compared to the prior-year period, primarily due to lower repurchases of debt instruments by $85.1 million.

Current wording

Net cash used in financing activities decreased $120.8 million, or 76.2%, as compared to the prior-year period, primarily due to lower repurchases of debt instruments by $120.1 million.

Previous wording

Interest on Term Loan B and Revolver B is calculated, at MPH's option, as (a) Term SOFR (or, with respect to the term loan facility only, 0.50%, if higher), plus the applicable SOFR adjustment, plus the applicable margin, or (b) the highest rate of (1) the prime rate, (2) the federal funds effective rate, plus 0.50%, (3) the Term SOFR for an interest period of one month, plus the applicable SOFR adjustment, plus 1.00% and (4) 0.50% for Term Loan B and 1.00% for Revolver B, in each case, plus an applicable margin of 4.25% for Term Loan B and between 3.50% and 4.00% for Revolver B, depending on MPH's first lien debt to consolidated EBITDA ratio. The interest rate in effect for Term Loan B was 9.86% as of June 30, 2024.

Current wording

Interest on Term Loan B and Revolver B is calculated, at MPH's option, as (a) Term SOFR (or, with respect to the term loan facility only, 0.50%, if higher), plus the applicable SOFR adjustment, plus the applicable margin, or (b) the highest rate of (1) the prime rate, (2) the federal funds effective rate, plus 0.50%, (3) the Term SOFR for an interest period of one month, plus the applicable SOFR adjustment, plus 1.00% and (4) 0.50% for Term Loan B and 1.00% for Revolver B, in each case, plus an applicable margin of 4.25% for Term Loan B and between 3.50% and 4.00% for Revolver B, depending on MPH's first lien debt to consolidated EBITDA ratio. The interest rate in effect for Term Loan B was 9.57% as of September 30, 2024.

Previous wording

The Company is exposed to interest rate risk on its floating rate debt. On September 12, 2023, the Company entered into interest rate swap agreements with a total notional value of $800.0 million to effectively convert a portion of its floating rate debt to a fixed-rate basis of 4.59% as a weighted-average across the three swaps. The interest rate swap agreements are effective August 31, 2023 and mature on August 31, 2026. The Company entered into these agreements to eliminate or reduce the volatility of the cash flows in interest payments associated with the Company's floating rate debt, thus reducing the impact of interest rate changes on future interest payment cash flows. The Company's interest rate swaps are highly effective at offsetting the changes in cash outflows and therefore designated as cash flow hedging instruments. The blended rate for Term Loan B factoring in the effect of the interest rate swap agreements was 9.52% as of June 30, 2024 and 9.53% as of December 31, 2023.

Current wording

The Company is exposed to interest rate risk on its floating rate debt. On September 12, 2023, the Company entered into interest rate swap agreements with a total notional value of $800.0 million to effectively convert a portion of its floating rate debt to a fixed-rate basis of 4.59% as a weighted-average across the three swaps. The interest rate swap agreements are effective August 31, 2023 and mature on August 31, 2026. The Company entered into these agreements to eliminate or reduce the volatility of the cash flows in interest payments associated with the Company's floating rate debt, thus reducing the impact of interest rate changes on future interest payment cash flows. The Company's interest rate swaps are highly effective at offsetting the changes in cash outflows and therefore designated as cash flow hedging instruments. The blended rate for Term

Previous wording

The Senior Convertible PIK Notes are convertible into shares of Class A common stock based on a $13.00 conversion price, subject to customary anti-dilution adjustments. The interest rate on the Senior Convertible PIK Notes is fixed at 6% in cash and 7% in kind, and is payable semi-annually on April 15 and October 15 of each year.

Current wording

The Senior Convertible PIK Notes are convertible into shares of Class A common stock based on a $520.00 conversion price, subject to customary anti-dilution adjustments. The interest rate on the Senior Convertible PIK Notes is fixed at 6% in cash and 7% in kind, and is payable semi-annually on April 15 and October 15 of each year.