Free Appendix - District Court of Delaware - Delaware

Case 1:04-cv-01565-SLR

Document 125-6

Filed 04/17/2007

Page 1 of 30

ITEM
The

SELECTED
following

FINANCIAL

DATA
data should

selected notes

consolidated

be

read

in

Statements

and
are
in

conjunction

with

the

related

and

Item

Managements

companys
and

Consolidated Results of

Discussion

and

Financial

Amounts

Analysis

of Financial

Condition

thousands

except

per share data

Operations

INCOME
Net Cost revcnuc

STATEMENT

DATA
464.820 521.196

______
445112 309693
118.376

of

scvicr

408878
123.164 Operating Selling Provision expenses general
for

502830 129779

112.318

154583

and estimated

admjnstrtivc UnCollectblc

expenses accounts

90.329

96.809

83.337

86457 14983 13586

9773 10221

28310
10.784 5.831

97981 27327 15259

AJnortizationofgooJwjlI Restructuring Losses on cost

14845 11139

recovery

expense assets

impairments

of Iong4ivcd

322
8323

3900

P1ovisionforincomcomIitjgaionIl2
Totaloperatingexprnses

9100

Operatingincomelos5fromCOfltjflubtgi...iots Other income expenses
Interest Intereat income

_jo
4834

105.421

79
171545 2236

--

27875 168442

38516
655

12955

13859
1.486

991

expenseS

1086

26788
18649
.-

Gainsonsalesnfbusincsscs4 TerrninaIionfe5
Other income

29763
--

32734
1071

75026
26744 15182

78767
--

expense
from

net operations taxes before minority debt 694

Income

loss

continuing

___

266

________

2114

reorganization interests and

expenses extraordinary

income gain

on

troubled

restructuring Reorganization expenses from net operalions and before

66.884
________--

Income income

loss
taxes

__._iL
cxtzaordinaz-y

17.888

142198

89026

Continuing
interests

minority

gainontrouWcddebtre..cturing Incometaxexpcnsebcoelit interests Minority in net income of consolidated
joist ventures

7.570 230

66884

17.888 2300

142.198

89026

7550 7283

I39g
7.698

Income

loss

from gain

37
continuing operations debt before

475

____J2

extraordinary Discontinued from

on

troubled

restaucturjus.g

._32i
-.

Operations operations disposal operations
--

_J87
28.411 .....Ji74i ._._.Iog

jj35
2.105

_________ .....82726

Loss
Total

from

discontinard

_.l

108
.-

2.288

fj
_____

2.2885

Extraordinary net

gain tax

on

troubled of

debt

restzuauring

of income income

expense

$400 ________

Net

loss
Per Share

Earnings

Lots

.LLL1
0.17 0.01
reatnicturing

_______

L2.L2
0.44

Basic Incomelossfromcootinuingoptjons
Loss from discontinued gain operations troubled debt share

$QJ.4 ______
1.99 0.06

Extraordinary

on
per

Net income
Diluted

loss

common

L...J

._

1.39 0.93

2.68

0.04 _______

______
_______ _____

Income
Loss

loss

from

continuing

operations

from

discontinued gain

operations troubled debt share restmctujng

Extraordinary

on
per

Net

income Qoss

BALANCE
Woddng
Total

common

SHEET

DATA
..._

$_
27259

0.17 0.01

1.39 0.93

0.44
--

2.34

1.99 0.06

L232
6633 71045 402751 302662

LL
203

0.04

$23 _____
lO89
11620
515252 150428 125026 15375

Cashandc.ashequiv.Je
caitital

deficit

assets debt net

97144
345376
24

66261 421029 242162 92857

132529
543795 266641

Long-term

ofcuucnt

maturities

Stocldsolderaequitydeficj

76978 Earnhsgs Standards

21699

21842

per

common
Earnings

share

amounts The

No

prior

to

1997 data

have prior

been

restated

128

Per Share

to

comply
restated
to

with

Statement with

of the

Financial

financial

102000

Accounting

has

been

conform

2000

ptsentation

23

JSP 01822

A691

Case 1:04-cv-01565-SLR

Document 125-6

Filed 04/17/2007

Page 2 of 30

In

2000

management
reserve

re-evaluated
reversal Plait

the

reserves

necessary $0.3

lo

complete
In

its

restructuring
initiated

imtiatives

and

as

result

recognized plans

net the as

restructuring

of approximately and the Field
resulted

million

1999

Coram
and

two company-wide
$5.8 of

Corain

restrutawing
to

Restructure charges
that

Reorganization
in the in

Plan
of
result to

charged
facilities

approximately

million

Operations

restructuring determined substantially

These
original

plans reserve

closure 1994 See as Note

certain

and

reduction
the

personnel

In

1998

it

was
was

the

established

of the
the

Four

Way

Merger

Coram
Financial

Consolidation Statements

Plan

complete

and

the

reserve

was

reversed

companys

Consolidated

The

$156.8

million from the

income purchase $25.9

from of

litigation

settlement

recorded infusion

in

1997
in

relates

to

the

settlement provision
for

of

lawsuit

against

Caremark
in

resulting

the

Caremark of cash

home
and

business charges

1995
to

The
an

litigation settle

settlements

1996
class

includes actions

approximately and

million
litigations

noit-cash

related

agreement

to

certain stockholder

certain derivative

On December
of debt

28 2000

the

Debtors
interest

announced
for

the Bankruptcy
in

Courts Corarn L.P
Series Inc

approval Series Foothill Notes

of

their

request

to

and

exchange Stock
agreed

sufficient

amount 29

related accrued Partners

equity Sachs

the

form

of

Cumulative Capital the

Preferred

2000

Cerberus

LP
to

On December
to

Goldman

Credit
interest

Partners

and

Corporation

exchange such

$11.6

million of accrued Financial

aggregate

unpaid charged

accrued

contractual up
in to

on

the

and

Series See

Notes however
to

interest

was

exchanged

expense decrease

and

including expense

the date

of the

exchange
result

Note

the of

Statements through of

The

companys
interest

Consolidated

1999

interest

was

partially

the

of the forbearance

from November
in

15

1999

April

20 2000 the
an
in

date of the resolution of certain
the interest rate

litigation

with

Aetna

offset

by
in

an

increase

the

amount
decreased
its

the debt
significantly

and

principal

increase 1998

in

charged

on
of the

the Series

notes former

beginning senior
credit

April
facility

1999
and

Interest

and

expense of

1999

due

to

repayment

companys

restructuring

subordinated

debt

Effective million

Juty

31 2000
$0.4

the

company
to

completed

the

sale of

its

CPS

business

and

recorded
to

gain

on

sale

of

In addition

approicimately

$18.3

pursuant million

contingent recognized

consideration as incremental In 1998 and

arrangement proceeds during

related

one ended

of the

companys

operating

subsidiariec Note
to the

approximately

was

the year
its

December
business
to

31 2000
Integrated

See

companys Inc
and

Consolidated recorded gains

Financial

Statements of $0.7

1997
million

Coram

sold

lithotripsy

Health

Services

on

sales

million and

$26.7

respectively

In

1997

the
to

company

received

$21.0

million from Services Inc

the

termination have
fee

of

pursuant $15.2

which

Integrated

Health the $21.0

would

acquired
less related

merger agreement Corani As result
costs

with the

Integrated

Health

Services other income

Inc
of

company

recorded

million

representing

million tennination

In

2000

the

company These

recognized include offet

$8.3

million

in

net

reorganization to professional accumulated See

expenses fees

related

to

the

Debtors to success paying

Chapter and

11

bankruptcy and

proceedings United

expenses fees

but are not limited
interest Il

expenses
to

related

retention plans

States Trustee expenditures

by

earned

on

cash

due
to

the Debtors

not

their

and

pre-petition Statements

liabilities

other

during

the Chapter

proceedings

Note

the

companys

Consolidated

Financial

In connection

with

the exchange recognized

of the

Series

Notes gain

and

certain accrued troubled debt

interest

for

Coram Inc

Series $107.8

Cumulative million

Preferred
net

Stock
See

the

company
1110 the

an

extraordinary

on

restructuring

Note

of approximately

of

tax

companys

Consolidated

Financial

Statements

Under
the

the United

States

Bankruptcy
their

Code
as

certain claims

against

the

Debtors

in

existence

prior
total to

to

the fmlmg

date are $159.1 and are

stayed

while
at

Debtors

continue

operations in the the

debtors-in-possession Balance

These
Sheets as

claims
liabilities

which
subject

approximately

million

December
current

31 2000
See

are

reflected to

Consolidated

compromise

deemed

to

be

liabilities

Note

companys

Consolidated

Financial

Statements

At December
classified

31

2000

the

companys
to

Series

Notes See
to

and

Series
to

13

Notes

which

aggregate

approximately Financial were

$153.3

million

are

as

liabilities

subject debt

compromise
gives
at effect

Notes

and

the debt

companys

Consolidated transactions

Statements million

The
$0.3

current million

maturities of long-term $150.2 million and

which
million

certain previous

restructuring

$0.4

$198.0

December

31 1999

1998

1997 and

1996

respectively

24

jsp 01823

A692

Case 1:04-cv-01565-SLR

Document 125-6

Filed 04/17/2007

Page 3 of 30

ITEM

MANAGEMENTS
OPERATIONS

DISCUSSION

AND ANALYSIS

OF FINANCIAL

CONDITION

AND RESULTS

OF

This Litigation

Annual

Report Act

on Form
of by and

10-K and

contains

certain

forward-looking
to

statements
is

as
the

such

tenil

is

defined

in

the

Private of

Securities

Reform

information

relating

Coram
to

that

based

on

beliefs

of

the

management
actual

Coram
of

as

well vary

as

assumptions from

made
the

information

currently

available

the

management
due
in to

of

Corain The companys
factors later in

results

may

materially proceedings

forward-looking and
certain the

statements other

made

in

this

report

important
detail

such
this

as Item

the

outcome under and
the

bankruptcy

of the Debtors used
identify in this

factors

which

are described

greater

caption

Risk

Factors
are

When
to

report

words estimate
statements information and

project

believe
reflect risks

anticipate
the current

intend
views of
that

expect management

similar expressions respect
results to to

intended based

forward-looking available
in

Such
are

statements subject
to

with
actual

fbture
differ

events

on

currently

and

uncertainties

could risks
the to

cause see date
reflect

materially cautioned not
afler

from those
not
to

contemplated undue

such

forward-looking forward-looking any

statements

For

discussion

of such only

Risk

Factors

Readers

are does

place

reliance
to

on

these

statements
to

which

speak

as of

hereof events

Management

undertake the date

any

obligation
to

publicly

release

revisions

these events

forward-looking

statements

or circwnslances

hereof or

reflect

the occurrence

of unanticipated

The companys
operations bankruptcy
realization

consolidated of
assets

financial

statements of

have
liabilities

been
in

prepared the

on

going course

concern

basis

which

contemplates as
result

continuity of

of

and

liquidation
relating assets

ordinary

of

business

However

the Debtors
losses

filings

and
such
11

circumstances of

thereto

including of

the

companys
is

leveraged
to

financial

structure

and
the

cumulative pendency

from

operations Chapter other

realization

and

liquidation
the

liabilities sell

subject

significant

uncertainty

During
liquidate

of

the
for Ii

Debtors amounts

bankruptcy those
reflected

proceedings
in the the assets

company

may

or otherwise

dispose

of assets and plan of

or
filed

settle in

liabilities

than

consolidated amounts or concern
to

financial in

statements the might

Further

reorganization

the Chapter
effect to

proceedings adjustments

could of

materially

change value as
the

reported
that

consolidated be necessary

financial as

statements

which
of

do

not give of

any

the carrying
to

of

liabilities is

consequence things

plan of

reorganization of

The

companys
future

ability

continue

going
ability

dependent the

upon
terms of of

among
the the

other

confirmation agreements

plan the Act
to

reorganization
to

profitable with

operations the

comply
and

with

companys Omnibus
and/or

financing Budget

ability

remain

in

compliance

physician and
the

ownership
to

referral sufficient

provisions cash from

Reconciliation arrangements

of meet

1993

known

as

Stark

II

commonly

ability

generate

operations

financing

obligations

Background
outside the

During

2000
infusion

Coram
therapy

and

its

subsidiaries

were

engaged

primarily health specialty

in two products

principal

lines

of business medical

alternate

site

hospital

including

non-intravenous

home
and

such

as

durable

equipment July

and

respiratory

therapy

seivices sold
its

and

ii pharmacy
benefit

benefit

management and
the

mail-order

pharmacy

services

Effective
to

31

2000

the

company
Inc and

pharmacy

management
Inc collectively Other

specialty

mail-order

pharmacy were

services
effectively

business

Curascript group

Pharmacy
that

Cusascript

PBM

Services

Buyers
offered

The

Buyers

management-led

was

financed

by

GTCR

lolder

Rauner
trials

L.L.C

services

by

Comm

include

centralized

management

administration

and

clinical

support

for

clinical

research

Also
Bankruptcy bankruptcy with the

Corams
Court
petition

R-Net
for the against
liquidation

subsidiaries
District

are

being

liquidated These

through

proceedings originated court All
in

that

are

currently

pending the

in filing

the

United

States

of

Delaware

proceedings Inc
in

August
the

1999

following have

of

an
in

involuntary connection

Coram
of

Resource

Network

such

of

R-Net members
only

locations of
the

been

closed

pending Directors

R-Net-

Additionally ended

Coram

employees

who were
and and currently

Resource

Network

Subsidiaries appointed

Board of by
the

resigned Court

during

the year

December
to

31 2000
manage

the Chief

Restructuring

Officer See

the Bankruptcy

remains

on

the

Board

of Directors

operate

the

liquidation

of the R.Net

business

Note

tO

companys

Consolidated

Financial

Statements

Reorganization

On

August

2000
the

CHC
filing

and of

CI
-the

filed

voluntary

petitions 11

under

Chapter the

11 of the United have been
is to

States

Bankruptcy

Code

the Bankruptcy
possession subject need

Code
to to

Following

voluntary

Chapter of
tire

petitions

Debtors

operating debtor
in in

as debtors-inthe proceeding with

the jurisdiction seekthe and
relief referral

of the Bankruptcy afforded

Court None

companys
in

other
to
its

subsidiaries requirement scheduled variety

The Debtors
the physician

by the Bankruptcy of Stark
II after

Code was due December
advice

part

remain

compliance maturity
in

ownership

provisions

31 2000
and

and

the

May 27.2001
of sources

of

the

Series therewith the only

Senior the viable

Subordinated

Unsecured

Notes The
of the

Debtors

sought

counsel

from
that

and

connection were

Independent alternatives

Committee

Board

of Directors

unanimously

concluded

the bankruptcy

and

restructuring

25

JSP 01824

A693

Case 1:04-cv-01565-SLR

Document 125-6

Filed 04/17/2007

Page 4 of 30

On
business

August

2000
and

the Bankruptcy

Court

approved

thc

Debtors of

motions trade

for

payment
utilities

of

all

employee
in

certain benefits
for

wages
the

and

salaries

and of
the for

other pre and

employee
post-petition

obligations expenses

ii payment
iii
details the

critical to

vendors

and

insurance

both

ordinazy

course
to

access of

debtor-in-possession

tinancing

arrangement of
all to

see

Note accounts

companys
normal
residential

Consolidated

Financial
In

Statements

for

the executed Court

agreement
approved
leases

and

iv

use

business
real

company
reject locations

bank

operations property

September

2000
associated

l3ankniptcy subteases

the

Debtors

motion

leases

and

four unexpired in

non 25 non

any

The

rejected

include

underutilized

Pennsylvania 2001
the

ii Denver
Court
to

Allentown on
January of

Colorado
approved

iii

Philadelphia
to

Pennsylvania the period motions

and
of time by

iv
in

Whippany which
the

New
Debtors have

Jersey can

Additionally
reject

Bankruptcy
real

motion

extend other

residential

property

May

unexpired and others

leases

2001

Certain

filed

the

Debtors

been

granted

are

pending

presently

In bonuses

September
payable

2000
to

and

October key or

2000

the

Bankruptcy bonuses and

Court

approved
to

payments
be paid
in

of

up

to

approximately installments
that

$2.6
the

million
later the

for the

retention date of

certain

employees December
approved

The

werescheduled

two
to to

equal events

emergence bankruptcy
and

from
the

of

bankruptcy Bankruptcy

31 2000
early

ii December
of
the

31 2001
made upon on

Due

have

delayed within

emergence
retention

from program

Court

payment

first

installment

most

individuals

the

such

payments

aggregating

approximately

S0.7

million
for

were

March

15
of

2001
plan

The
of

installments

remaining

portion by the

of

the

first

of approximately
the

$0.5

million are scheduled scheduled
to

payment

approval

Court and

reorganization

second

Bankruptcy

installment

remains

be

paid

on December

31 2001
in

The
order
filing

Debtors the the

are currently

paying

the

post-petition their

claims
to

of pay

their their

vendors

of of

the ordinary
in

course

of

business

and

are

Bankruptcy Chapter
that to Il will

Court
cases

pursuant though imposes

to

an the an

causing constituted

subsidiaries
uiider

own

debts

the ordinary instruments under such

course the

of business Bankruptcy from

Even Code

defaults the

the

companys
other

principal

debt

automatic action

stay

generally such

preclude

creditors

and
prior

interested

parties

arrangements

in response

taking

remedial

any

resulting

default

without

BankruptcyCourt

approval

On September 11 2000
other things
to

the Resource separate engaged agreement

Network

Subsidiaries proceedings
related to

filed

motion

in

the Debtors
into

Chapter

have the

the

two

proceedings

seeking

among Network
the for

bankruptcy
in

substantively
this

consolidated consolidation
to

one

Subsidiaries
parties

proceeding

The

Resource

and

Debtors

discovery
in

substantive

motion

and

in

connection Financial

reached

settlement

therewith Statements

November

2000

See

Note

13

the

companys

Consolidated

further details

Alt of

the

R-Net were

locations

have of

effectively

been

closed

in

connection

with

employees

who
and

the pending of Directors

liquidation resigned Court

of

R-t4et
the the

members
only

Additionally year Board

Coram

the

Resoume

Network

Subsidiaries appointed

Board by
the

31 2000
manage

during on

ended

December
to

currently
the

the Chief

Restructuring

Officer

and

Bankruptcy

remains

of Directors

operate

liquidation

of the R-Net

business

On
joint

the

same day

as the

Chapter with the

II

eases

were

filed

the Debtors
Joint

filed

their

joint plan

of reorganization

the
restated

Joint

disclosure

Plan and

their Joint

statement or about Plan of the

Bankruptcy

Court The
the Restated by the
Joint

Plan

was
the

Plan and on
Restated Joint conversion

subsequently
First

amended

and

the Restated
with Plan Notes respect provided

October approved

10
for

2000

Plan

and

Amended
other Senior Series of

Disclosure the

Statement
Joint

the for

was
all

distribution

Bankruptcy the

Court

Among
the
rate

things

Restated

of the

Cl

obligations

represented

by

companys

Series Notes
te

Subordinated

Unsecured
into

Notes
note
in

and

the
interest

Series only in the of
alt

Series

Senior

Subordinated million
full

Unsecured
that

Convertible bear
interest

Notes
per debts

the

principal

amount
the

of180
in

four-year
all the

would

the

9%

annmu
of

and
iii

reorganized secured

CI ii
priority

of

the

equity
in full

payment
against

of

all

secured the

priority

and

general

unsecured unsecured

and

claims under
to

Cl
of

CRC iv
Notes
Joint

payment

impairment Series

CHCs
Restated filed
entity

of certain general

debts

obligations

the Series
the

CHC
of
the after

including equity the

among
interests

others of

and

the

Notes
be

and
dissolved

the complete as soon as

elimination practicable under

Furthermore

CHC
of the as

pursuant and

Restated of

Plan

CHC
no

would
be

effective

Joint Plan existing be

the

stock of

the

stockholders

CHC would no CRC would receive
of the

date
Joint

longer

publicly
for their

traded shares

Therefore and
all

the Debtors equity

Restated of CE as

Plan
surviving

value

of

would

owned

the outstanding

the

by

the holders

companys

Series

Notes

and

Series

Notes

Representatives

of

the

company
and Series

negotiated Notes

the

principal

aspects
Facility

of

the

Joint to

Plan
filing

with

representatives
Joint

of

lie

holders

of

the

companys

Series

Notes

and

Senior

Credit

prior

the

of such

Plan

26

jSp 01825

A694

Case 1:04-cv-01565-SLR

Document 125-6

Filed 04/17/2007

Page 5 of 30

On
persons
the

or about holding of

October impaired types
to

20 2000
claims of claims the

tIle

Restated are
entitled

Joint to

Plan

and

First

Amended
under equity vote
the

Disclosure Restated

Statement Plan

were

distributed did

for

vote

that

among
to

distribution including tabulated

Joint

The

Debtors of such
in Joint

not send and
the

ballots interested

holders are

oilier

and plan

interested in

parties

holders of the
at

howcver
unsecured

the holders creditors the

parties

deemed Plan

claims of was

reject

any

event held

The

was

favor Plan the

Restated by the

Joint

confirmation

hearing

was

companys
approved have the

on December
the Bankruptcy Court

21 20X
Court
to

which

time the

Restated during the

Bankruptcy
right

Court
to
file

On December
or plans
to

not

28

2000
the

extended

period

which

Debtors Court has

exclusive
the

plan period

before

Bankruptcy of

March

28

2001
to

Debtors

Additionally

Bankruptcy

extended the

exclusive Court

solicit

acceptances of such

any

filed

plan

or plans

May 28

2001

Management

Bankruptcy

for additional

petitioned

extensions

exclusivity

periods

Iii

order

for

the

company
million of Notes

to the in

remain Series

compliant Notes
for

with

the

requirements $11

of

Stark

11

on

December
bul unpaid

29

2000

CL on

approximately Notes

$97.7 the Series

exchanged Series
11 to

and

approxiniately of

million of Cumulative

accrued Preferred an

and

interett

the and

exchange

905
for net

shares

Ct

Series This

Stock

companys

see

Notes gain on

the debt the

Consolidated

Financial

Statements million
to

further of

details
at

transaction

generated the

extraordinary stockholders
13 to

troubled exceeded

restructuring

of approximately
LI

107.8

tax and
with the

December company

31 2000

minimum
Financial

companys
See Note

Stark

equity

requirement
for

necessary

comply
regarding

public

exemption

the

Statements

companys

Consolidated

further discussion

Stark

On
with
the

or about Bankruptcy

February Court

2001
seeking

the

Official

Committee of
to

the Equity
directly to

Security against

Holders Cl-ICs

the Equity
Executive

Committee
Officer financing
that

tiled

motion

permission

bring

lawsuit party February

Chief

CHCs Board
Credit motion
Facility

former agreement

member

of Directors

and

of

Cerberus

Partners

L.P

the

companys

debtor-in-possession Court ruled

and

Senior

Securities productive

Exchange
at that

Agreement
time
further

On

26 2001
was

would

the Bankruptcy denied without

not be Financial

the Equity Note 13
to

Committees
the

and

accordingly

the motion

prejudice

See

Consolidated

Statements

for

companys

details

On
Debtors

the

same

day

the

Bankruptcy advisors
to

Court
the

approved Goldin

the

Debtors provide other

motion

and

appointed

Goldin

Associates services

L.L.C
designed

independent

Goldin
to assist

as the
its

restructuring in concluding to the

Debtors

will

consulting things the

and
scope

advisory

support

their

bankruptcy

proceedings of Plan the

Among
of the
fair

of 3oldins

services

include
its

findings

Independent of the the

Committee
Joint

Board

reporting assessment course
report court

Directors

the tndependent

appropriateness calculated required testimony
to

Restated Debtors

Committee
respecting

including an

of of

the

and

advising
to

Independent and
satisfactory

Committee

appropriate written before the

action

bring

bankruptcy

proceedings

conclusion being available

ii preparing
to

as

by

the

Independent

Committee

and/or

may

be

the Bankruptcy

Court and iii
the Debtors and

3oldin

was

also appointed

appear

and

as an

arbiter

between

provide

the Equity

Committee

Based Bankruptcy or be

upon

3oldins

findings and
if the

recommendations
exclusivity Debtors
will

the Debtors periods
file

may

develop by with

and one
the

submit or

new

Court However
holders of claims or

joint plan

of reorganization
it

to that

the one

Debtors
in the

ate terminated plan or plans
certain

more

interested

more

parties

is

possible

interests

Bankruptcy creditors by

Court Any and
the of equity

new

approved

for distribution

plan or plans of
the are

must and The
of

by

the Bankruptcy Court
to

Court

voted

upon
after

by

impaired

holders

Debtors

approved Bankruptcy
creditors

by

the Court

Bankruptcy

become
of

effective

certain

findings the

required

Bankruptcy the can plan be by

Code an

made
class

may

confirm
if certain will

plan

reorganization of the or

notwithstanding

non-acceptance

impaired

or equity

holders

conditions

Bankruptcy the terms

Code

are satisfied plan

No

assurances

of or

whether

the Debtors

given

regarding

tie timing

submit

new

plan

what

of such

may be

Under
continue
as

the
their

Bankruptcy operations

Code

certain

claims

against

the

Debtors are

in

existence
in

prior the

to

the

filing

date

ace

stayed

while

the

Debtors Sheet date of

as debtors-in-possession Additional

These
Chapter
11

claims claims

reflected

December
continue

31 2000
to arise

Consolidated subsequent
to

Balance the
filing

liabilities

subject the

to

compromise

have

arisen

resulting

from
claims
in

and may

rejection

of executory

contracts disputed

including

certain leases

and from by
the

the determination rejections Claims for

allowed Court stayed such

by

the

for contingencies with

and

Bankruptcy with
the

Court Bankruptcy
also to

other

amounts

Parties affected

accordance

may

file

claims

the provisions of such on
tire

of the have

Btmkruptcy the
right to

Code
petition

and

applicable

rules

secured
relief

although creditors

the holders
to

by from

the Debtors the automatic sought

assets

are

claims

the Bankruptcy Additionally
to

Court

foreclose to

stay
relief

permit the the

property
against

securing
their

their in

claims order

certain pursuit of

claimants
their

have

Bankruptcy Debtors

Court insurance

remove

from
or

the

stay

actions

continue

claims

carriers

against

the Debtors

27

JSP 01826

A695

Case 1:04-cv-01565-SLR

Document 125-6

Filed 04/17/2007

Page 6 of 30

The Debtors
the

holders

of

Corarn

Inc.s

Series
rn

Cumulative

Preferred of
their

Stock

continue

to

maintain

an

unsecured

creditors the debt

position within
to

the

bankruptcy

proceedings holders

the aggregate
in

amount

liquidation proceedings

preference
will

NOtwithstanding no
less

aforementioned

priority

the

equity

exchange
to

Debtors

bankruptcy

be

than

it

was

exchange

unmediately

prior

said

Schedules by the

were

filed

with

the Bankruptcy records

Court

setting

forth

the

assets

and by

liabilities the

of the Debtors and
will

as of the
filed to

Debtors
and

filing

date

as

shown
being Time

accounting resolved once

Differences

between and
to the

amounts

shown
terms

Debtors

claims be
subject

investigated

The

by the

creditors

are

ultimate
wilt

amount
be

settlement vote by the

New

for such

liabilities

New
by

Joint

Plan

Joint

Plan

developed

subject

Debtors

impaired

creditors

and

Court

as described

above

confinnalion

the

Bankruptcy

Business locus on the

Strategy growth
in

The
net

major revenue and

strategic

alternatives

and

initiatives

currently
tIme

being

implemented division
initiatives

by

Corarn

include of

from

renewed iii
the

core

therapies

provided provided of

by by

infusion

continued consolidation believes

investment

into

development collections and

of services

CT

therapy

ii

liquidation

iv

R-Net

cost reduction

plan
in

cash

vi

including Debtors

reimbursement

site

submission

new

plan

of reorganization

by

the

that success sources

the foregoing can be no

Combined
relationships

will

improve
that

Corams
any other

management
with
to

financial
strategic

prospects

and
will

and on

improve be

and

stabilize

referral

There

payers

assurance

alternatives

consummated

commercially

acceptable

terms

or will be available

Coram

In

December and on
the the

1999
clinical

Coram

announced
business core

that

it

was
by

repositioning
its

its

business

to

focus

on

its

core

business
its efforts

alternate

site

infusion
is

research of
its

operated

subsidiary such as

Cr1
nutrition has

therapy to focus blood

Accordingly
anti-infective

Corams

prinuiy

business

strategy

delivery
for

infusion

therapies

therapies managers

IVIG
with

clotting

therapies

persons

with
at

hemophilia

To
Corains

that

end

Comm
in

and

coagulant sales

and

established

and

product has

clinical

resources

aimed
cost

dedicated programs and

expanding services
is

growth

these

areas

Comm
provides

marketing

also

reduction efficiencies practices nursing

and

implemented

focused review of

control of

of

on

the

and

operating
the

expenses way
tIme

assessment

Coram
maintain

of poorly

performing care and

branches
is

branch
to
its

management

also
level

reviewing of
patient

to

Comms

company and

nwsing

implementing the
actual

changes

high

satisfaction

effective

clinical

results

while

visits

reducing

number

of

Management
collection managerial
to

throughout continued
into

the

company

is

continuing

to

concentrate

on

reimbursement and

by

methods
resources

emphasizing of

improved the

billing

and

cash

assessment

of systems

support
In

for reimbursement

concentration announced Centers
to that

certain reimbursement

companys
its

expertise

and

locations several

December

2000 Coram
Service

improve

efficiency and improved achieve believes
in the

and

as part of

overall

continuing sites were

efforts

performance

Patient
to

Financial

consolidated

reimbursement
fewer sites

being
to

related

reimbursement

positions standardize timely cash long-term 2001
in

were

be

eliminated

By

consolidating enhance

implement

training

more

management
related to

easily

best

expects

demonstrated

Medicare and
or

practices does

more

specialization
this

consistent
that

payers such

as

and
the

collections they
will

Management
better
thini

not expect

payers

but

change

to

affect

Comms
is

instead

in

patients
to

receive
in

more

consistent of the

service year period

The

transition

expected taken not

be

accomplished actions offering assurances
to

stages the
for

beginning
potential

April
shortfall to

and

ending

the

quarter

same

Management
including regional

has but

certain

mitigate

cash the

collections

during
until

the

upcoming
of

transition their

limited

incentives can be

personnel
that that

stay

with

to

company

the

completion Financial

corresponding Centers
will

consolidation

given

the consolidation the consolidation
in

No
of the not
this

of the
will

companys
successful or

Patient

Service timely

third quarter experience Item under

of

2001

be completed or that the
in

by

the

end

be

in enhancing
time transition

reimbursement

significant

shortfall

ash

company
detail

will in

collections

during

after

the caption

Risk

period

which

is

described

Factors

greater

Factors operating

Affecting

Recent

Operating
in

Results and

The

following impact

list

summarizes
in

the

and

major

events

or

factors

financial

condition

impacting

2000

which may

Comms

Coram

the future

maintaining
interest for

compliance equity
in

with the

the of

provisions

of Stark Series

by

in part

exchanging Preferred Stock

sufficient in

amount
to

of

debt
its

and

related

form

Coram

accrued equity

Inc

Cumulative

above

order

increase

the required

stockholders

levels

ii

the fees

Debtors

Chapter

11

bankruptcy

filings

and

their

related

reorganization

expenses

including

but

not

limited

to

professional

28

JSP 01827

A696

Case 1:04-cv-01565-SLR

Document 125-6

Filed 04/17/2007

Page 7 of 30

ni

continued described

refinement in Note
tn

and
the

completion

of

the

Caremark
Financial

Business

Consolidation

Plan

and

the

Corarn

Restructure

Plan

as

companys

Consolidated

Statements

iv

the

sale

of

the

CPS

business

to

Curascript

Pharmacy

Inc

and

Curascript

PI3M

Services

Inc

on

July

31

2000

the

Chapter

II

bankruptcy

filings

involving

the

Resource

Network

Subsidiaries

and

their

anticipated

liquidation

through

such

proceedings

vi

resolution

of

certain

litigation

between

Aetna

and

the

company

which

was

settled

amicably

amongst

the

2000

parties

on

April

20

vii

an
Joint for

increased ventures those

focus and

on
the

the

companys

durable

medical
that

equipment elapse

and

respiratory the date
that

services services

business are

including and

non-consolidated
the

signilicant

number

of days

between

rendered

reimbursement

services

viii

ongoing indemnity providers categories

pricing

pressure
to

in

the

companys
care
forth

infusion

business

as

result

of

an

unfavorable

shift

in

insurers

payer

mix from among

private infusion
certain

managed
table sets

organizations
the

and

other

contracted of the

payers

and

intense

The of

competition
net

following
for

approximate

percentages

companys

infusion therapy

revenue

from

payers

the three

years

ended

December

31 2000
For
the

Year

Ended

Decenber 2000 Managed
contracted Medicare Private and case organizations and oTher t999

3t
1998

payers Medicaid programs and other

23%
18%
-..

58% 22% 20%
Jft%

5%
24% 25%

indemnity

insurance payers

non-contacted Totals

39%
the scope or

ix

re
facilities

increased

competition offices

from

hospitals and
services

physicians similar
to to

that

have

sought by

to

increase the

of
that

services have

and

they entered

offer into

through

their

including

those they

offered have

company

with

risk-sharing variety of

third-party

payers the

pursuant

which by

been and

delegated

control over

the provision

of

wide

healthcare

services

including

services

offered

the

company

increased
clinical

costs staffing

associated product costs
for

with

providing
on-call

certain

infusion

therapy

services

offered

by

Coram
and

including with an such

increased therapies
in

costs

fr

delivery
certain

personnel blood

and

oilier

volume
that

related costs are
in

associated supply

combined number
of

with

increased

blood

and

derivative

products

short

increase

the

patients

receiving

such

therapies

Results

of

Operations

Tear

Ended

December

31 2000 Compared
As
discussed

to

Tear

Ended

December

31

1999

Discontinued

Operations

in

Note

to

the

companys

Consolidated

Financial

Nets
had
the

Statements the

the

results

as part of discontinued

company Network

considers Subsidiaries 1999 excludes

operations discussion of

however Corams

for the year

ended

December and
results

31 2000
of

Resource during

no

operations

The

following
for

finaiEial condition

discontinued

operations

2000

and

operations

R-Net

Net Revenue
is

Net
to
in

revenue decrease

decreased
in

$56.4 net revenue

million or of

10.8%

to

$464.8

million

in

2000 from
result

primarily

due

CPS

$521.2

million

in

1999 The
business with

decrease July

appioxintatØly
to

$252

million as of
its

of the sale of the Services

2000
corporate

decrease
initiatives

CPS

on

infusion net
to

31
and

revenue

due

in

part

the tennination

National

Ancillary

focus

on

Agreement

Aetna

core therapies

Gross gross

Profit

Gross

profit in

increased

$10.8 gross

million
profit

to

$123.2 gross

million or margin
certain

margin

of

gross

margin

of

26.5%
are

in

2000

from

21.6%

$112.3
to

million or favorable

The
high

and

product/therapy

mix

increased
profit

margin

CT

pereentage cost reduction

increases programs

primarily

due
in

more

business

and

implemented

December

1999

The

components

of gross

are as follows

in

millions

29

JSP 01828

A697

Case 1:04-cv-01565-SLR

Document 125-6

Filed 04/17/2007

Page 8 of 30

For

the

YCILr

Ended

cps CVI
tuit1sin
proiji

Decem2L
2000
113.5
g.i

1999 99.9 11.3

___.i
5.J237

____JJ

ioul -oss

Selling $96.8

General
in

and

Administrative decrease
in
is

SG4
primarily 1999

Expenses
due
to

SGA
sale to

decreased

$6.5

million or

6.7%
In

to

$90.3

mitlion
certain

in cost

2000

from

million

1999

The

the

of

CPS

effective expense

July

31 2000
in

addition

programs

were
increase

reduction decrease

implemented
in

December

contributing
tn certain

the favorable plans the

decrease

2000

Offsetting of

he

2000
note

was an

inccntive

compensation

due
impacted

bonus
for

implemented

in

2000

In

1999

the recovery

receivable

of approximately

51.8

million favorably

expenses

year

Provision revenue increased
in

for Estimated

Uncollectible
to

Accounts 5.4%
of

The

provision

for estimated
in

uncollectible percentage
to

accounts
is

is

$9.8

million or
to the

2.1%

2000

of net

compared
efforts

$28.3

million or

of net revenue

1999

The

decrease

due

primanlv the

collection as

companys
provision due other

and

certain recoveries of 52.5 or payers
to

amounts
certain filed for

previously receivables protection of lie

deemed
that

be
in

uncollectibte
relation to the

In

1999

was
from

companys

higher other

result

of charges providers
that

million
that

for

arose

R-Net

business

receivables laws

healthcare
1.2

have

under

applicable accounts

bankruptcy receivable

charges

ofSl

or receivership

and

million

related

an overall

deterioration

companys

aging

Restructuring restructuring restructuring operations as plans plans

Cost

Recovery
as result

Expense
recognized

During

2000

management
reversal

re-evaluated million
In

the

reserves

and
the

necessary
initiated

to

complete

its

Comm
charges

net restructuring

of $0.3

1999

Comm

two

company-wide
$5.8 million
to

Restructure See Note

Plan
to

and
the

the

Field

Reorganization

Plan and

charged
for

approximately
further

restructuring

companys

Consolidated

Financial

Statements

details

Loss

on Impairment
million
for

of

Long-LivedAssets ended

Coram

recognized

impainnents respectively
to

of

goodwill See Note
losses

and
to

other
the

and

long-lived

assets

of 58.3

million

$9.1

the years

December
impairment

31

2000

and
relate

1999

companys

Consolidated

Financial
that

Statements resulted

for further details the

These

losses

principally

operating of

of certain infusion business
certain

branches

following

termination

of agreements

with

Aetna

the discontinuance

R-Net and

other

operating

factors

Operating

Income
in

Loss
costs
in

Coram

had

operating
is

income
to

of

$4.8

million during
in

2000
protit

1999
lower

The

compared
from core

to

loss

of

$38.5
cost

increase

million during efforts

operating

income

due

primarily
in

the

increase

gross

therapies

reduction

net restructuring

2000

and

reduction

the provision

for estimated

uncollectible

accounts

Interest primarily

Expense
to

Interest

expense of

decreased
interest

$3.0

million

to

$26.8

million

in

2000 which
Credit See

from

$29.8
in

million lower

in

1999

The

decrease
rate result

is

due

the forbearance

on

the Series

and

Senes on on
the

Notes Senior

resulted
Facility

etrective

interest

book

for

purposes

in

2000 and

ii the
from

reduced
the

outstanding of the

borrowings business

and and

the Series
to

Notes

as

of

the application Financial

of the proceeds
for further

sale

CPS

July

31 2000

Notes

the

companys

Consolidated

Statements

details

Gains on
primarily operating

Sales the gain

of

Businesses
sale

During

2000
business

the

company
the
receipt

recorded of

gains

on

sales

of

businesses

of

$18.6
to

of

on

of the

CPS

million consisting of
the

and

contingent

earn-out
for

payment

relating

one

companys

subsidiaries

See

Note

tojhe

companys

Consolidated

Financial

Statements

further details

Other

Income
is in

Expense Net
due
to

In

2000
of

the

company

recognized receivable of

$3.0

million

in

other

The
$1.0 the

income compared
$2.0
for

to

$0.7

million

in

1999

increase million 1997

primarily
life

recovemy

non-operating by
the

of approximately $0.7

million

and

the

receipt

of approximately
related 11 to

insurance

proceeds

offset

recognition
to

million reserve

an escrow
filed for

deposit protection

receivable under

sale of the States

companys

lithotritpsy

business

Integrated

Health

Services

Inc which

the United

Bankruptcy

Code

Chapter

of

during

2000

Reorganization Chapter

Expenses

Net

In

2000
These

the

company

recognized

$8.3

million limited

in

net

reorganization fees
to

11 bankruptcy

expenses expenses the Debtors

related related

to to

the Debtors success
their

proceedings
States

expenses fees
offset

include by

but are not earned
ii

to

professional cash Note
to

and pre

retention plans petition
liabilities

and

United and other

Tnistee

interest

on

accumulated See

due
the

not

paying

expenditures

dwing

the

Chapter

proceedings

companys

Consolidated

Financial

Statements

30

JSP01829

A698

Case 1:04-cv-01565-SLR

Document 125-6

Filed 04/17/2007

Page 9 of 30

Income
statutory

Tax Expense income tax rate

Sec and

Note the

to

tIre

companys
effective

oursolidated

hurancial

Statements

for

discussion

of

thc

cariajuce

between

the

couurpaurvs

income

tax

rate

Minority decreased
certain

Interests million

in to

Net

income of
million ventures

Consolidated

Joint $1.5

Ventures
in

Minority

interests

in

net

income
primarily venture

of consolidated due
in to

joint

ventures of

$0.9 majority

$0.6

in

2000
the

from

million of
the

1999

The

reduction of

was
joint

reduced

profitability

owned

joint

and

acquisition

remaining

interest

December

1999

which was

previously

owned

51%

by

the

company

Loss

from

Discontinued Subsidiaries date of

Operations

During
reclassified

December

1999

as of

result this

of

the

bankruptcy
to

proceedings operations 1999
further

pending
for all

against periods

the prior

ResourceNetwork
to the

Coram

the operating

losses for

division

discontinued

measurement
such

November
date See

12
Note

1999
to

The

$28.4

million

the year

ended

December
Statements

31
for

represents details

operating

losses

through

measurement

the

companys

Consolidated

Financial

Loss including

on

Disposal estimated

of

Discontinued through
related for

Operations
final to

During of

1999
the

Coram

recorded

charges

in

the aggregate severance

amount
lease

of

$17.6

million
asset

losses

disposition bankruptcy and other

Resource

Network of R-Nets
net

Subsidiaries operations certain

obligations of $0.7 cost

impainnents includes reductions and

and

legal

costs

the

and

wind-down
costs

The

2000

net

charge
facility

million reserve of with legal the

additional resulting
fees

reserves

litigation

wind-down

of

insurance
to

recoveries
in the

from

the Debtors
to

bankruptcy complete

proceedings Chapter See

reserve
Il

adjustments

due

changes and

estimated million

amounts

professional
for

necessary substantive

R-Nets
matter

bankruptcy
to

proceedings

$0.5

settlement
for

Debtors details

certain

consolidation

Note

the

companys

Consolidated

Financial

Statements

further

Extraordinary
related interest

Gain for equity

on
in

Troubled the form million

Debt of

Restructuring Inc Series

With

approval Cumulative See

from

the

Bankruptcy Stock

Court
as

the

Debtors

exchanged
an

debt

and

Corain

Preferred Note
to

and

result

recognized

extraordinary Statements for

gain of approximately
further

$107.8

net

of $0.4

million of taxes

the

companys

ConsolidatedFinancial

details

Year

Ended December

31

1999

Compared

to

Year

Ended

December

31

1998

Discontinued Nets
results

Operations

As

discussed

in

Note Had

to

the

companys
been

Consolidated
in

Financial

Statements
the

the

company
would

considers have been

as
to

part of discontinued

operations

R-Net

included

continuing

operations

following

contributed

the

companys

operations

in millions
For

the

Year

Ended

December31 t999 Nctrevcnue
Gross 74.4 profit

1998
61.6 13.6

loss

Operating

loss

9.0 28.4

0.1

The

following
for

discussion

of

Corams

financial

condition

and

results

of operations

during

1999

and

1998

excludes

the

discontinued

operations

R-Net

Net revenue an

Revenue
increase increase

Net
can

revenue

increased
attributed patient

$76.1
to

million an

or

17.1%
in

from

$445.1 therapy

million

in

1998

to

$521.2 million
the

million
resulting

in

1999

The

net

be primarily

increase increase

infusion

business $38.8

of $36.1

principally

from
resulted

8.9%

in net revenue

per

and
sales

ii an
efforts

of approximately

million

from

CPS

division

which

front

expansion

of

services

and

improved

Gross gross gross

Profit of

Gross

profit in

decreased

$6.1 gross and

million

from

$118.4 decrease

million

or due

gross
to

margin
to

of

26.6%
cost

in

1998

to

$112.3
partially

million or
offset

margin margin

21.6%

1999
in

The

margin

percent

was

shift

higher

therapies

by

improvement

the

CPS

CT

divisions

The components

of gross

profit

are as follows

in

millions

For

the

Year

Ended

December31 1999
Infusion 99.9 11.3
1.1

1998 114.4 3.9 0.1

CPS CTI
Total gross
profit

hull

L114

31

JSP 01830

A699

Case 1:04-cv-01565-SLR

Document 125-6

Filed 04/17/2007

Page 10 of 30

Selling $96.8 related

General
in

andAdministrative

CSG4
$5.5
in costs

Expenses was

SGA
to

increased
the

$13.5 of

million or the
offset

16.2

from

$833

million

in

million
to

1999

Of
in

998

tu

this

increase

million the

related

expansion
partially

CPS by

division
the

The

remaining of note

increase receivable

was
of

an

increase $1.8

personnel

normal

course

of business
in

recovery

approximately

million which

favorably

impacted

expenses

1999

Provision net
result

for Estimated
in

Uncollectible
to

Accounts
million or
certain filed

The
3.3

provision of
that net

for

estimated
in

uncollectible
In to

accounts the

was

$28.3

million or 5.4

of as other of

revenue of

1999 of

compared
$2.5

$14.8
for

revenue arose
in

998

1999

companys
business

provision receivables laws and

was
due other

higher from

charges

million
that

receivables
for

relation

the

R-Net

healthcace $11.2

providers
that

or payers
to

have

protection of the

under

applicable accounts

bankruptcy receivable

or receivership

charges

million

related

an overall

deterioration

companys

aging

Restructuring

Cost

Recovery
Plan and

Expense
Corain
the

During

1999 Plan
In

Coram 1998

recorded
it

charges

of $5.8
that

million
original

for

estimated

costs

related in

to

the

Field Reorganization
result

Restructure

was

determined

the

reserve and

established remaining

1994 reserve

as of

of

the

Four $3.9

Way
million

Merger was

Coram
See Note

Consolidation
to

Plan was

substantially

complete

the

approximately

reversed

the

companys

Consolidated

Financial

Statements

Loss million This

on
for

Impairment the year
loss

of

Long-Lived

Assets

Comm
See
losses

recognized
to

an

impairment

on

goodwill

and

other

long-lived
for

assets further the

of

$9.1

ended

December

31
to

1999

Note

the

companys

Consolidated business branches

Financial
that

Statements

details

impairment

related primarily

operating

of and

certain infusion

resulted

following

termination

of agreements

with

Aetna

the discontinuance

of R-Net

certain other

operating

factors

Operating

Income
is

Loss
due

Coram

had
to in

an

operating
in

loss

of

$38.5 profit

million during
the

1999

compared

to

income

of $13.0
in

1998

The

decrease accounts

primarily

the decrease
restructuring

gross

increase

in

SGA

million during the provision
for

expenses
other

the increase

uncollectible

the increase

costs

and

the impairment

of goodwill

and

long-lived

assets

interest primarily
facilities

Expense
to

Interest

expense

decreased

by

$2.9

million

to

$29.8
the

million

in

1999

from

$32.7

million in of
the

1998

The

decrease
credit in

is

due

$14.9 by

million expense increase of $3.0 under
the

reduction million Series

resulting

from
to

completion of $44
as

of

the restructuring

companys
an and

former increase increase

offset

an

attributable

draws
Senior

million
result

on
of

the

senior
interest

credit

principal
interest

amounts
rate

facility

the

outstanding Series

and

Series

Notes

P1K

payments

an

in the

on

the

Notes

Gains therein

on was

Sales

of

Businesses
in

In

1998
with
further

the the

company
sale

recorded

gains

on

the

sales

of businesses partnership

totaling

$1.0

million to
the

Included

$0.7

million

connection for

of

the

companys

remaining

lithotripsy

See

Note

companys

Consolidated

Financial

Statements

details

Income
statutory

Tax Expense
tax
rate

See and

Note the

to

the

companys
effective

Consolidated

Financial

Statements

for

discussion

of

the variance

between

the

income

companys

income

tax rate

Loss Resource
to

from

Discontinued Subsidiaries date of

Operations

During
reclassified

December

1999

as of

result this in

of

the

bankruptcy
to

proceedings operations

pending
fOr
all

Network measurement

Comm

against periods the
to

the

the operating

losses

division the
loss

discontinued

prior year the

the

November
represents

12

1999

The

$28.3

million such

increase

from and

discontinued such increase

operations
is

during

endedDecember
termination of
the

31

1999

operating See

tosses

through
to

measurement
Consolidated

date

principally

due

Aetna

Master

Agreement

Note

the

companys

Financial

Statements

for further details

Loss including

on

Disposal

of

Discontinued through related for

Operations
final to

During of

1999
the

Comm

recorded

charges

in the

aggregate severance See

amount
lease

of

$17.6

million asset

estimated and

losses legal

disposition
the

Resource

Network
of

Subsidiaries

obligations
to

impairments Consolidated

costs

bankruptcy details

and

wind-down

R-Nets

operations

Note

the

companys

Financial

Statements

further

32

JSP 01831

A700

Case 1:04-cv-01565-SLR

Document 125-6

Filed 04/17/2007

Page 11 of 30

Quarterly

Results

unatadited

The
quarters

following

summajizes are
in

selected

quarterly financial per share data

information

with

respect

to the

Amounts

companys

operalions

for the

last

eight

fiscal

thousands

except

20000uarterEnded Dec.31
tlet

ep4

19990 30 Mar.31 134796 130655 34141 Dee
31

30

Jun

Iftrllnded

revenue 96.934

Sept

30

Jun.30 129571

Mar.31 12434g 71Q 27628

Cost Gross

of

102.866

130224
96.069

sci-v.ce

6935
27669

134338 108638 25700

15667 27199

132939 132370 30569

profit

10H50
28421

3415
25.053

Operating Selling Provision Accounts

expenses general and administrative uncollccsible expenses 19.111

22109

23456

for estimated

30718

23538

23612

18.941

375
of goodwill

3357 2562

3548 2530

3.243 2.578

Amortization

6.431

3.690

2557

4141 2716
--

4048 2732 950

Restructunngcostrecovesyexpmsse
Losses on Total Opetating Operations Other impairments operating of long-lived expenses from continuing assets

322
_29.894

2625 4881

2111

income loss

_L
195

--

tj3j

_jL7
4864 159

9JO0
63755

29
630 216

--

_______-26.671

income

2225
expenses 502

829

3024

38055
140

2048
244

957

lntercsljncome
Interest

13$

expense
in

6475
of UnConsOlidated joint 61 193

Rquity

net

income

6866
322 18456

55

6771
III
--

6676
259

7570
348
.-

8110

7524

6559

Venturts

Gainsonsalcuofbijsjnesu
Gains and Other

losses on equipment income loss
net from

dispositions
net

of

.-

property

126
operations income-taxes gain on

82
13 33

25
II

60
119

115

110
40

52
199

Income
before minority

47

continuing expenses

reorganization
interests

and

extraordinary

troubled

debt

rcasruclunng expenses from net operations
interests

5.674
J6.459

Reorganization

Income
before

lou

c1j
9404
75

11209

3433
.-

1408

45178

6.909

9398

5399

continuing minority on troubled

_____

income

taxes gain

and

extraordinary restructuring

debt

12.133
-in

Income
Minority

tax expense interests
joint

3433
75

1408
104

45178
65

6.909
125

9.398
175

5399
75

net

income

Iss

of 105 129

Consolidated

ventures continuing gain on operations troubled
dclii

Income
before

356

Ions

from

19

287

176

579

428

cxtranniinaay

restructuring Discontinued Operations

_flL __i9

JiA
---

_LQ
1870 17.618

7.210

jj152
27841
f27.R4
--

__L02
5517

lncomtIoufmmoperations IncomcIossfromdisposal
Totaldiscontinuedopes-aiiop.s Extraordinvy restructuring Net

A2
324
debt ....JQ1.772
--

gam
net

on

troubled

98 98
_________

7957
7.957

..t3383

15748

5.517

of tax

income

Eamings Basic

loss. Loss Per

Share

Li.L
0.25
0.05 debt 0.18 0.01

L1
_____
0.12
0.11

Incoenelossfrotnooetinuingopci..Jjonu

0.08
--

Inconselossomdenntinuedoperations
Extrawdinary rcstrucluring gain on troubled

0.03 0.07

0.91 0.32

0.1$ 0.16

0.21 0.56

Net

________ percommon
share

incomeIoss

Diluted

LQJ9
0187 0.01

________

$.LUi
_________

L..L9I

LWP1
0.21 0.56
--

Incometossfromeontisjingopenuiona Incomelossfrctssucotstiixiedop.stme
Extracedinajy reslnsclurjng Net income gain on troubled debt
....

0.25
005

0.03

0.03 0.07

0.91 0.32
.-

015
0.16

0.12
0.11

loss

per

common

share

LJ
2.11

.-

iQ.I
based

L.JQJQ

L.....LhI

LL
charges

L1Q22
See
Note 15
to the

The companys

quarterly

results

have Financial

historically

varied

upon

unusual

and

infrequently

Consolidated

occurring

Statements

33

JSP

01832

A701

Case 1:04-cv-01565-SLR

Document 125-6

Filed 04/17/2007

Page 12 of 30

Liquidity

and

Capital

Resources

Bankruptcy on
August

Proceedings

The

Debtors the

filed

voluntary

petitions

for as

relief

under

Chapter

11

of the United
to the

States

2000
of
lie the

As

Bankruptcy of
11

Code

of such

date other

Debtors

are operating
is

debtors-in-possession proceeding 362 of the Although Bankruptcy from

subject the
tiling

jurisdiction the

the

Court None
defaults generally

Bankruptcy constitutes
that will

companys companys
creditors

subsidiaries debt
interested

debtor

in

the

of

under

Chapter an

cases

principal

ilistnmnlentS parties In the

Section under such

Code
taking

imposes

automatic
in

preclude

and

stay to

other Court

arrangements

remedial contracts provisions

action

default without affected applicable

response

any

such

prior Bankruptcy
rejections

approval with

addition Bankruptcy

the Debtors Court
in

may

reject

executory with the

and
of

by

the

unexpired the

leases

Parties

may
to

file

claims

accordance

Bankruptcy

Code

and

rules

See

Note

the

companys

Consolidated

Financial

Statements

Schedules by the

were

tiled

with

the Bankruptcy records

Court

setting

forth

the

assets

and by

liabilities

of the

Debtors claims
will

as of
filed

Debtors and

the

filing

date as are

shown
being of

accounting resolved
is

Differences

between and the
it

amounts
settlement
is

shown
terms
to

the such

Debtors

and

investigated reorganization
liabilities

The
to

by

creditors
to

ultimate

amount

for

liabilities

be

which
to

subject

the

new amount

yet

be

plan

developed
at

Therefore

not to

possible the

fully

or completely
11

estimate and the

the liquidation uncertainty

of the the

subject

compromise
settlement

December
for

31 2000
liabilities

due

Debtors

Chapter

cases

ultimate

amount

and

terms

surrounding

such

Credit

Facilities million the

On August 20 1998
for

the

company
capital of
the

entered

into

the Senior and other

Credit Facility corporate
that

which

up

to

$60.0

provided terms not

for

the

availability

of also

acquisitions of
letters

working
of
credit

letters to

of credit million

purposes
credit to

The

of

the

provided

for

issuance and
to

agreement below

up

$25.0

provided reduced the

available

would
$2.7
to

fall

September
respectively Debtors

21

2000

January reduce the

29
fees

zero

On
the the

2001
related

company
to

permanently

the

commitment was
not be

million

and

$2.1

in order

million
to

commitments 2001

on which
the Senior

company

able and

borrow

against

due

bankruptcy

proceedings

Effective
the

February lenders had

Credit

agreement
totaling

As

of

December
In

Facility

lenders
credit

the
for

31 2000
Minnesota by
Wells

company
benefit

terminated of the

$2
Wells of

outstanding of the

irrevocable Credit

letters

of

issued

the

million Fargo

connection

with

the termination

company
of credit cash

Senior such

Facility of

the

through deposits

Bank

NA Wells Fargo
Fargo

company
are
fully

established secured by

new
interest

letters

and

new

letters

credit

the

company

held

bearing

The
Cerbenis access

Debtors Partners

entered

into

secured
to

debtor-in-possession Credit Facility

DEP
as base

financing

agreement

with agreement

Madeleine provides with

L.P up
to

L.L.C
that the

an

affiliate

of

party

the Senior

of August

30 2000
the

The
for use

the

Debtors of

could
their

as

necessary

$40

million depending

upon

borrowing

availability

in connection Court approved

businesses Note under
to

and
the

the businesses

of

their

subsidiaries Financial

On September 12 2000
for

operations

Bankruptcy

the

companys
financing

DIP agrentent
had been

See

Consolidated

Statements
at

further

details

the

DIP

Through
base

April

2001

no

borrowings
million

made
to

agreement

however

such

date

the

borrowing

was

limitations

of the

DIP

approximately

$35.5

pursuant

the

financing

agreement

On December
simultaneously Corporation aggregate Notes 11
to

29

2000

the

Securities the

Exchange
and

Agreement was amended
Partners

executed collectively

among
the

Debtors

Cerberus
to

Amendment L.P Goldman Sachs
the Holders agreed

No
Credit
to

and

an

Exchange L.P
and

Agreement was
Foothill $97.7 Capital million Series

Partners

Holders
Series as of

Pursuant Notes

such $11.6

arrangements million

principal the Series

amount
Notes

exchange

approximately
interest

of the

and

of aggregate of

and
the

unpaid Inc

accrued

contractual Cumulative

on

the

December

29 2000
Statements

for
for

905

shares

Coram
of the

Series the preferred Notes
rate

Preferred Following

Stock the

see Note
the

companys
retain of the

Consolidated $61.2

Financial

further

details

regarding

stock
$92.1

Holders

exchange

approximately Series adjusted

million aggregate
to

puncipal

amount
the per

Series

and

amount
Notes

Notes
to

million aggregate Notes

principaL

Pursuant

Amendnient
the

No
to

annum
Series

interest

on

both

the

has April than

been

9.0% Moreover
have the both been

Series

and

the Series of

Series

Notes and
June

Notes
to

and
less

2008
the

original

scheduled

maturity

dates with
as

May 2001
fair

respectively value
to In

modified principal

30 2001
Standards

Due

the

Holders

receipt

of consideration qualified

value debt

face

of

exchanged
of

and

acciued

interest

the

exchange Accounting

transactians by Debtors

troubled
for

restructuring

pursuant

Statement connection

Financial

Accounting the

Debt tax

No
an

15

and

Creditors $107.8

Troubled net of

Restructurings
in
its

therewith of

company

recognized

extraordinary

gain

of approximately

Consolidated

Statements

Income

million

General
--

The

companys

consolidated

financial

statements liquidation
relating

have

been
in

continuity the

of

prepared

on

going course

concern

basis

which

operations bankruptcy

realization
filings

contemplates as
result

of assets

and

of

liabilities

the ordinary the
liabilities

of business leveraged
to

Debtors

and
such

However
financial

of

circumslces
realization

thereto

including of

cumulative

companys
is

structure

and

losses

from

operations

of

assets

and

liquidation

subject

significant

uncertainty

During

34

JSP 01833

A702

Case 1:04-cv-01565-SLR

Document 125-6

Filed 04/17/2007

Page 13 of 30

the settle filed

pendency
liabilities in

of

the
for

Debtors amounts
II

Chapter other

II

bankruptcy those

proceedings
iii

the

company

may

sell

or othrwisc

dispose

of any

assets

and of

liquidate

or

than

reflected

the consolidated the of
to

financial reported
in that

statements the

FwTher

plan

reorganizatiOn which of

the

Chapter
to

proceedings adjustments

could of
the

materially carrying

change value

amounts
or

consolidated be
is

financial

statements consequence

do
any

not

give

effect

any

assets

liabiliiics

might

necessary

as

proposed confirmation

plan of

of

reorganization plan
ability

The

companys
future

ability

continue

as the

going
ability to

concern coniply

dependent
the

upon
of

among

other

things

of reorghnization
to

profitable

operations the
the

with
referral

terms

he companys
of the

financing Budget financing

agreements
Reconciliation arrangements

the

remain

in

compliance as

with

physician
ability to

ownership generate

and

provisions from

Omnibus
and/or

Act
to

of

1993

known

Stark

11

and

suflicient

cash

operations

meet

obligations

Cash
to

and Cash
at

Equivalents

Cash 1999

and

cash

equivalents

increased

$20.7

million

to

$27.3

million

at

December

31

2000

compared

$6.6

million

December

31

Net
$9.5

cash

provided of net

by cash

operating used
in

activities

was

approximately
for the

$42.6 year

million

for

the year

ended

December The
significant

31

2000

compared

to

million cash

operating

activities

ended

December

31
Ended

1999

components

of the

operating

flows

are as follows

in

millions Years December31
1999

2000
Continuing operations after non-cash charges and before 22.547 assets and
liabilities

gainsonsatesofbusinesses

1661
36828
3t36
26.203

Changes
Accounts Prepaid

in

operating receivable

net

3490
invcntortcs
liabilities

exponses and other

and

othea-

assets accrued
interest

Cuneni

including

8275 12418

Cash

basis resti-uuring used

costs items
net

Cash

by

reorganization other

3505 1381
919
42.563

2375
--

Miscellaneous Totals

$$
2.057

The

increase

in

the

cash to

provided

by

continuing cos

operations

after

non-cash implemented

charges
in

and

before

gains

on

sales

of

businesses
in

is

principally therapy
profit

attributable

managements
higher gross

reduction
to

programs

December

1999

ii
of

favorable

change
resources

core

mix which
generation

provided

nsargin

the

company

and

iii

more

efficient

utilization

company

toward

The and

net change

in

cash of

provided

by

or

used

in

in

the to

accounts be

receivable

activity

relates

to

increased continued
effective

collection build-up July

efforts in

in

2000

certain

recoveries

amounts

previously the -CPS net

deemed
revenue

uncollectibte
to

ii

the the
is

absence

of business of

the

accounts iii an

receivable overall

balances

accompanying

growth

due

disposition of

CPS

31 2000

and
to

decline the core

in the infusion therapy

therapy

revenue

of approximately

7.4% which

indicative

managements

initiative

favorably

change

mix
was
$37.8 million the year

Net
investing

cash

provided

by

investing million

activities in

for

ended

December
cash

31
$0.3

2000 by

as

compared

to

cash
is

used

for

activities

of $7.3 of

the year

ended
sale

December
of the

31

1999

For

2000
of

provided

investing

activities

primarily payment

due

to

cash

proceeds

$41

million

from

the

CPS

business

and

the

receipt of property
.and

million contingent
to