<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report: January 24, 1997
MedPartners, Inc.
-----------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
<TABLE>
<S> <C> <C>
Delaware 0-27276 63-1151076
------------------ --------- ------------
(State or Other (Commission (I.R.S. Employer
Jurisdiction of Incorporation File Number) Identification No.)
or Organization)
3000 Galleria Tower, Suite 1000
Birmingham, Alabama 35244
---------------------------- -------------
(Address of Principal (Zip Code)
Executive Offices)
Registrant's Telephone Number, (205) 733-8996
Including Area Code:
</TABLE>
<PAGE> 2
ITEM 5. OTHER EVENTS
On January 20, 1997, MedPartners, Inc., a Delaware corporation (the
"Company"), and InPhyNet Medical Management Inc., a Delaware corporation
("InPhyNet"), executed and delivered an Agreement and Plan of Merger pursuant
to which InPhyNet will be merged with and into a wholly owned subsidiary of the
Company. The transaction will be accounted for as a pooling of interests. The
transaction is conditioned on the approval of InPhyNet's Stockholders and the
satisfaction of other conditions that are normal in transactions of this kind.
While the above-described transaction has not been consummated, this
Current Report on Form 8-K is being filed by the Company to file certain pro
forma financial statements of the combined companies, in order that such pro
forma financial statements will be publicly available.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Business To Be Acquired. The required audited
consolidated financial statements of the business to be acquired,
InPhynet, for the fiscal year ended December 31, 1995 that have
been filed under Item 8 of InPhyNet's Annual Report on Form 10-K for
the fiscal year ended December 31, 1995, and hereby incorporated
herein by reference.
(b) Pro Forma Financial Information.
The required pro forma financial information listed on the Index to
Financial Statements included in this Current Report on Form 8-K, is herewith
filed.
(c) Exhibits
99(1) Form of press release issued by the Company
in connection with the above-described transaction.
- 2 -
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: January 24, 1997
MedPartners, Inc.
By /s/ Harold O. Knight, Jr.
----------------------------------
Harold O. Knight, Jr.
Executive Vice President
and Chief Financial Officer
<PAGE> 4
PRO FORMA CONDENSED FINANCIAL INFORMATION
MEDPARTNERS, INC.
SELECTED PRO FORMA FINANCIAL INFORMATION (UNAUDITED)
The following selected pro forma financial information and explanatory notes
are presented to reflect the effect to the merger (the "Merger") of InPhyNet
with and into a subsidiary of MedPartners as a pooling of interests. All of the
following selected pro forma financial information should be read in conjunction
with the historical Financial Statements of MedPartners and InPhyNet and the
related notes thereto appearing in the periodic reports filed with the
Securities and Exchange Commission (the "SEC") by each company. The pro forma
financial information is presented for informational purposes only and is not
necessarily indicative of the results that actually would have occurred had the
merger been consummated on the date indicated or that may be obtained in the
future.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31 SEPTEMBER 30
-------------------------------------------------------------------
1993 1994 1995 1995 1996
-------------------------------------------------------------------
STATEMENT OF OPERATIONS DATA: (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
Net revenue $1,980,967 $2,863,699 $3,858,750 $2,817,143 $3,787,426
Operating expenses
Affiliated physician services 363,204 521,010 773,814 567,128 810,691
Outside referral expenses 98,040 135,525 198,296 142,716 289,148
Clinic expenses 356,678 502,951 765,928 547,872 823,567
Non-clinic goods and services 884,014 1,365,203 1,688,075 1,244,861 1,483,676
General and administrative expenses 140,022 166,067 169,247 127,309 125,537
Depreciation and amortization 27,095 43,368 61,341 44,649 65,727
Net interest expense 7,538 15,864 19,049 14,960 18,432
Merger expenses - - 69,064 7,024 297,698
Loss on investments - - 86,600 - -
Other, net (1,574) (143) (192) (426) (410)
------------------------------------------------------------------
Net operating expenses 1,877,017 2,749,845 3,831,222 2,696,091 3,914,066
------------------------------------------------------------------
Income (loss) before pro forma income
taxes and discontinued operations 103,950 113,854 27,528 121,052 (126,640)
Pro forma income tax expense (benefit) 48,353 50,419 (7,054) 46,200 (23,973)
Cumulative effect of change in method of
accounting for income taxes 298 - - - -
------------------------------------------------------------------
Income from continuing operations 55,299 63,435 34,582 74,852 (102,667)
Loss (income) from discontinued operations (30,808) (25,902) 136,528 145,322 66,799
------------------------------------------------------------------
Pro forma net income (loss) $ 86,107 $ 89,337 $ (101,946) $ (70,470) $ (169,466)
==================================================================
Pro forma net income (loss) per share(1) $ 0.65 $ 0.62 $ (0.65) $ (0.46) $ (0.99)
==================================================================
Number of shares used in pro forma net
income (loss) per share calculations(1)(2) 132,182 144,063 155,705 154,860 170,939
==================================================================
SEPTEMBER 30
1996
------------
(In thousands)
BALANCE SHEET DATA:
Cash and cash equivalents $ 84,862
Working capital (deficit) 101,638
Total assets 2,193,800
Long-term debt, less current portion 606,154
Total stockholders' equity 728,041
</TABLE>
- -------------------------------------
(1) Pro forma net income (loss) per share is computed by dividing net income
(loss) by the number of common equivalent shares outstanding during the
periods in accordance with the applicable rules of the SEC. All stock
options and warrants issued have been considered as outstanding common
share equivalents for all the periods presented, even if anti-dilutive,
under the treasury stock method. Shares of MedPartners Common Stock
issued in February 1995 upon conversion of the then outstanding
MedPartners Convertible Preferred Stock are assumed to be common share
equivalents for all periods presented.
(2) Number of shares used in pro forma net income (loss) per share gives
effect to the merger by using the fixed exchange ratio of 1.311 shares of
MedPartners Common Stock to each share the InPhyNet Common Stock
outstanding.
<PAGE> 5
MEDPARTNERS, INC.
PRO FORMA CONDENSED COMBINED BALANCE SHEET (UNAUDITED)
SEPTEMBER 30, 1996
(In thousands)
<TABLE>
<CAPTION>
Historical
-------------------------- Pro Forma Pro Forma
MedPartners InPhyNet Adjustments Combined
=====================================================
ASSETS (A)
<S> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents $ 79,011 $ 5,851 $ - $ 84,862
Accounts receivable less allowance for bad debts 543,097 79,470 - 622,567
Inventory 100,288 419 - 100,707
Prepaid expenses and other current assets 69,269 8,126 - 77,395
Income tax receivable 31,763 3,416 - 35,179
----------------------------------------------------
Total current assets 823,428 97,282 - 920,710
Property and equipment 545,124 10,941 - 556,065
Intangible assets, net 485,753 36,141 - 521,894
Deferred tax assets 97,593 - 19,000 (B) 116,593
Other Assets 75,647 2,891 - 78,538
----------------------------------------------------
Total assets $2,027,545 $147,255 $ 19,000 $2,193,800
====================================================
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities
Accounts payable $ 229,132 $ 28,001 $ 50,000 (B)$ 307,133
Accrued medical claims payable 86,632 - - 86,632
Other accrued expenses and liabilities 360,852 21,664 - 382,516
Current portion of long-term debt 42,367 424 - 42,791
----------------------------------------------------
Total current liabilities 718,983 50,089 50,000 619,072
Long-term debt, net of current portion 605,689 465 - 606,154
Other-long-term liabilities 39,988 545 - 40,533
Stockholders' equity:
Common stock 158 158 (137) (C) 179
Additional paid-in capital 732,379 65,886 137 (C) 798,402
Shares held in trust (150,200) - - (150,200)
Notes receivable from shareholders (1,744) - - (1,744)
Unrealized loss on marketable equity securities (34) - - (34)
Accumulated earnings (deficit) 82,326 30,112 (31,000) (B) 81,438
Treasury stock, at cost - - - -
----------------------------------------------------
Total stockholders' equity 622,885 96,156 (31,000) 728,041
----------------------------------------------------
Total liabilities and stockholders' equity $2,027,545 $147,255 $ 19,000 $2,193,800
====================================================
</TABLE>
<PAGE> 6
MEDPARTNERS, INC
PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS (UNAUDITED)
Nine months ended September 30, 1996
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Historical Pro Pro
------------------------ Forma Forma
MedPartners InPhyNet Adjustments Combined
=========================================================
(A)
<S> <C> <C> <C> <C>
Net revenue $ 3,495,717 $ 291,709 $ - $ 3,787,426
Operating expenses:
Affiliated physician services 695,872 114,819 - 810,691
Outside referral expenses 228,070 61,078 - 289,148
Clinic expenses 753,404 70,163 823,567
Non-clinic goods and services 1,483,676 - - 1,483,676
General and administrative expenses 103,647 21,890 125,537
Depreciation and amortization 62,381 3,346 - 65,727
Net interest expense 17,868 564 18,432
Merger expenses 297,448 250 - 297,698
Loss on investments - - - -
Other, net (410) - - (410)
---------------------------------------------------------
Net operating expenses 3,641,956 272,110 - 3,914,066
---------------------------------------------------------
Income (loss) before pro forma income
taxes and discontinued operations (146,239) 19,599 - (126,640)
Pro forma income tax expense (benefit) (31,715) 7,742 - (23,973)
---------------------------------------------------------
Income from continuing operations (114,524) 11,857 - (102,667)
Loss (income) from discontinued operations 66,799 - - 66,799
---------------------------------------------------------
Pro forma net income (loss) $ (181,323) $ 11,857 $ - $ (169,466)
=========================================================
Pro forma net income (loss) per share $ (1.21) $ 0.74 $ (0.99)
========================= ===========
Number of shares used in pro forma net
income (loss) per share calculations 149,928 16,027 4,984 (D) 170,939
=========================================================
</TABLE>
<PAGE> 7
MEDPARTNERS, INC
PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS (UNAUDITED)
Nine months ended September 30, 1995
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Historical Pro Pro
------------------------ Forma Forma
MedPartners InPhyNet Adjustments Combined
=========================================================
(A)
<S> <C> <C> <C> <C>
Net revenue $ 2,576,145 $ 240,998 $ - $ 2,817,143
Operating expenses:
Affiliated physician services 460,811 106,317 - 567,128
Outside referral expenses 106,485 36,231 - 142,716
Clinic expenses 487,243 60,629 547,872
Non-clinic goods and services 1,244,861 - - 1,244,861
General and administrative expenses 109,237 18,072 - 127,309
Depreciation and amortization 42,052 2,597 - 44,649
Net interest expense 13,794 1,166 - 14,960
Merger expenses 4,524 2,500 - 7,024
Loss on investments - - - -
Other, net (426) - - (426)
---------------------------------------------------------
Net operating expenses 2,468,579 227,512 - 2,696,091
---------------------------------------------------------
Income (loss) before pro forma income
taxes and discontinued operations 107,566 13,486 - 121,052
Pro forma income tax expense (benefit) 39,914 6,286 - 46,200
---------------------------------------------------------
Income from continuing operations 67,652 7,200 - 74,852
Loss (income) from discontinued operations 145,322 - - 145,322
---------------------------------------------------------
Pro forma net income (loss) $ (77,670) $ 7,200 $ - $ (70,470)
=========================================================
Pro forma net income (loss) per share $ (0.57) $ 0.48 $ (0.46)
========================= ===========
Number of shares used in pro forma net
income (loss) per share calculations 135,316 14,908 4,636 (D) 154,860
=========================================================
</TABLE>
<PAGE> 8
MEDPARTNERS, INC
PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS (UNAUDITED)
YEAR ENDED DECEMBER 31, 1995
(IN THOUSANSDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Historical Pro Pro
-------------------------- Forma Forma
MedPartners InPhyNet Adjustments Combined
=========================================================
(A)
<S> <C> <C> <C> <C>
Net revenue $ 3,533,410 $ 325,340 $ -- $ 3,858,750
Operating expenses:
Affiliated physician services 631,407 142,407 -- 773,814
Outside medical expenses 149,185 49,111 -- 198,296
Clinic expenses 684,262 81,666 -- 765,928
Non-clinic goods and services 1,688,075 -- -- 1,688,075
General and administrative expenses 144,866 24,381 -- 169,247
Depreciation and amortization 57,652 3,689 -- 61,341
Net interest expense 17,556 1,493 -- 19,049
Merger expenses 66,564 2,500 -- 69,064
Loss on Investment 86,600 -- -- 86,600
Other, net (192) -- -- (192)
---------------------------------------------------------
Net operating expenses 3,525,975 305,247 -- 3,831,222
---------------------------------------------------------
Income (loss) before pro forma income
taxes and discontinued operations 7,435 20,093 -- 27,528
Pro forma income tax expense (benefit) (15,859) 8,805 -- (7,054)
---------------------------------------------------------
Income from continuing operations 23,294 11,288 -- 34,582
Loss (income) from discontinued operations 136,528 -- -- 136,528
---------------------------------------------------------
Pro forma net income (loss) $ (113,234) $ 11,288 -- $ (101,946)
=========================================================
Pro forma net income (loss) per share $ (0.83) $ 0.75 $ (0.65)
========================== ===========
Number of shares used in pro forma net
income(loss) per share calculations 135,990 15,038 4,677(D) 155,705
=========================================================
</TABLE>
<PAGE> 9
MEDPARTNERS, INC.
PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS (UNAUDITED)
Year Ended December 31, 1994
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Historical Pro Pro
------------------------- Forma Forma
MedPartners InPhyNet Adjustments Combined
---------------------------------------------------------
<S> <C> <C> <C> <C>
Net revenue $ 2,593,329 $ 270,370 $ -- $ 2,863,699
Operating Expenses:
Affiliated physician services 412,075 108,935 -- 521,010
Outside referral expenses 102,496 33,029 -- 135,525
Clinic expenses 413,969 88,982 -- 502,951
Non-clinic goods and services 1,365,203 -- -- 1,365,203
General and administrative expenses 145,937 20,130 -- 166,067
Depreciation and amortization 40,816 2,552 -- 43,368
Net interest expense 14,885 979 -- 15,864
Merger expenses -- -- -- --
Loss on investments -- -- -- --
Other, net (143) -- -- (143)
---------------------------------------------------------
Net operating expenses $ 2,495,238 254,607 -- 2,749,845
---------------------------------------------------------
Income (loss) before pro forma income
taxes and discontinued operations 98,091 15,763 -- 113,854
Pro forma income tax expense (benefit) 44,022 6,397 -- 50,419
---------------------------------------------------------
Income from continuing operations 54,069 9,366 -- 63,435
Loss (income) from discontinued operations (25,902) -- -- (25,902)
---------------------------------------------------------
Pro forma net income (loss) $ 79,971 $ 9,366 $ -- $ 89,337
=========================================================
Pro forma net income (loss) per share $ 0.63 $ 0.74 $ 0.62
============================= ===========
Number of shares used in pro forma net
income (loss) per share calculations 127,409 12,703 3,951(D) 144,063
=========================================================
</TABLE>
<PAGE> 10
MEDPARTNERS, INC
PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS (UNAUDITED)
YEAR ENDED DECEMBER 31, 1993
(IN THOUSANSDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Historical Pro Pro
-------------------------- Forma Forma
MedPartners InPhyNet Adjustments Combined
=========================================================
(A)
<S> <C> <C> <C> <C>
Net revenue $ 1,756,762 $ 224,205 $ -- $ 1,980,967
Operating expenses:
Affiliated physician services 272,128 91,076 -- 363,204
Outside referral expenses 70,427 27,613 -- 98,040
Clinic expenses 284,509 74,169 -- 358,678
Non-clinic goods and services 884,014 -- -- 884,014
General corporate expenses 123,468 16,554 -- 140,022
Depreciation and amortization 25,464 1,631 -- 27,095
Net interest expense 7,021 517 -- 7,538
Merger expenses -- -- -- --
Loss on Investment -- -- -- --
Other, net (1,574) -- -- (1,574)
---------------------------------------------------------
Net operating expenses 1,665,457 211,560 -- 1,877,017
---------------------------------------------------------
Income (loss) before pro forma income
taxes and discontinued operations 91,305 12,645 -- 103,950
Pro forma income tax expense (benefit) 43,126 5,227 -- 48,353
---------------------------------------------------------
Cumulative effect of change in method of
accounting for income taxes 298 -- -- 298
---------------------------------------------------------
Income from continuing operations 47,881 7,418 -- 55,299
Loss (income) from discontinued operations (30,808) -- -- (30,808)
---------------------------------------------------------
Pro forma net income (loss) $ 78,689 $ 7,418 $ -- $ 86,107
=========================================================
Pro forma net income (loss) per share $ 0.66 $ 0.76 $ (0.65)
========================== ===========
Number of shares used in pro forma net
income(loss) per share calculations 119,380 9,765 3,037(D) 132,182
=========================================================
</TABLE>
<PAGE> 11
NOTES TO PRO FORMA CONDENSED FINANCIAL INFORMATION
The proposed merger (The "Merger") of InPhyNet with and into a subsidiary of
MedPartners is intended to be accounted for as a pooling-of-interests.
The pro forma combined statements of operations assumed that the Merger was
consummated at the beginning of the earliest period presented. The pro forma
condensed combined balance sheet assumes that the transactions were consummated
on September 30, 1996.
The pro forma financial information contains no adjustments to conform the
accounting policies of the companies because any such adjustments have been
determined to be immaterial.
The following adjustments are necessary to reflect the merger:
A. These historical amounts for MedPartners for the years ended
December 31, 1995, 1994 and 1993 do not agree with the Form 10K
filed with the SEC because the amounts have been restated to reflect
the mergers with PPSI and Caremark which were accounted for as
poolings-of-interests.
B. The pro forma combined statements of operations do not reflect
nonrecurring cost and charges resulting directly from the
proposed merger. These costs and charges are estimated as follows:
<TABLE>
<CAPTION>
Deferred Property Total
Tax and Accounts Accumulated Merger
Asset Equipment Payable LTD Earnings Charge
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
InPhyNet $ 19,000 $ - $ 50,000 $ - $ (31,000) $ 50,000
</TABLE>
C. To reflect the exchange of approximately 21,011,000 shares of
MedPartners common stock for the capital stock of InPhyNet.
D. To adjust pro forma amounts based on historical share amounts,
converting each outstanding share of InPhyNet's capital stock into
MedPartners common stock based on the fixed exchange ratio of 1.311.
<PAGE> 1
EXHIBIT 99.1
MEDPARTNERS(TM)
- --------------------------------------------------------------------------------
NEWS RELEASE
FOR IMMEDIATE RELEASE
Contacts
MEDPARTNERS
Larry R. House MEDPARTNERS INVESTOR RELATIONS
Chairman of the Board, President, CEO Randy Pittman - 205-733-8996
205-733-8996 Tamra Sweeney - 847-559-4635
Hal Knight MEDPARTNERS MEDIA RELATIONS
CFO, Executive Vice President Pam Huff - 205-733-8996
205-733-8996
INPHYNET INPHYNET INVESTOR RELATIONS
Clifford Findeiss, MD Margaret Pearson
Chairman of the Board, President, CEO 1-800-424-3672 ext 7120
1-800-424-3672
George W. McCleary, Jr.
CFO, Executive Vice President
1-800-424-3672
MEDPARTNERS, INC. ANNOUNCES ACQUISITION OF
INPHYNET MEDICAL MANAGEMENT INC.
BIRMINGHAM, AL AND FORT LAUDERDALE, FL - JANUARY 21, 1997 - MEDPARTNERS, INC.
(NYSE: MDM) and INPHYNET MEDICAL MANAGEMENT INC. (NASDAQ: IMMI) announce they
have agreed to merge in a transaction valued at $491 million. MedPartners is
the largest physician practice management company in the nation and operates
the country's largest independent prescription benefits management service.
The combined company, with $5.2 billion in revenues, based on third quarter
annualized results, will create the largest provider of full time
hospital-based physician services. MedPartners' Team Health division and
InPhyNet's hospital-based physician services together generate approximately
$500 million in annualized revenues. This merger also significantly enhances
MedPartners position in the Florida market.
Under the terms of the agreement, which has been approved by the Boards of
Directors of both companies, each InPhyNet share will be converted at a fixed
ratio of 1.311 shares of MedPartners common stock, which, based on MedPartners
closing price of $21.875 on January 20th implies a value of $28.68 per share of
InPhyNet. The transaction is expected to close near the end of the first
quarter 1997 and is subject to regulatory approval and approval by InPhyNet
stockholders. The transaction will be tax-free to the stockholders of InPhyNet
and accounted for as a pooling of interests.
MedPartners will combine InPhyNet's hospital-based business with that of Team
Health. Clifford Findeiss, MD, InPhyNet's Chairman of the Board, President and
CEO, will become President of the Institutional Services Division for
MedPartners with responsibility for all hospital and government physician
contracting, inclusive of emergency and radiology operations. Lynn Massingale,
MD, President
<PAGE> 2
of Team Health will assume responsibility for all hospital-based businesses in
the combined entity. InPhyNet's 43 group physicians, all of whom are in south
Florida, and its IPA operations with 385 physicians in Florida and Ohio, will
become part of MedPartners Eastern Operations, under the direction of division
President, John Gannon.
Larry R. House, Chairman of the Board, President and CEO of MedPartners, says,
"The strategic visions of the two companies are identical. Both companies
envisioned the transition from fee-for-service to prepaid healthcare. This
transaction is evidence of MedPartners' continuing commitment as the leader in
the integration of high quality physicians including group, IPA and
institutional physician services. With the addition of InPhyNet's 116,000
globally capitated lives, we will now provide prepaid care to over 1.7 million
enrollees." Mr. House adds, "This transaction also moves MedPartners to the
forefront in hospital-based physician services and ultimately strengthens all
areas of physician services."
Dr. Findeiss sees the merger as an opportunity to create the nation's largest
group of physicians committed to excellence in emergency medicine and
radiology. "In its 20 year history, InPhyNet has brought together an
impressive group of physicians who provide these services to hospitals. Team
Health can lay claim to the same accomplishment. Under the direction of
MedPartners, the combination of these physicians and the services they can
provide will now be unmatched in the industry." Dr. Findeiss adds,
"MedPartners' nationally recognized expertise in managed care, especially in
its western operations, provides additional resources from which to continue
the growth of global capitation in the East through HMOs and government
contract services."
Dr. Massingale calls the combination of the companies a "perfect fit." He
says, "I am delighted that MedPartners and InPhyNet are able to bring together
some of the best people and institutions in the country. As a result of this
merger, we will have hospital-based physicians in 28 states, and, that
positions us extremely well for expansion into new and existing markets. Our
shared commitment allows us to work together to offer greater service to
hospitals and to physicians within our group."
InPhyNet Medical Management Inc. is based in Ft. Lauderdale, FL. The company,
in 1996, provided physician practice management services at 188 service sites
in 26 states with hospital-based services and capitated networks. InPhyNet has
over 20 years experience in managing primary care physicians for a variety of
clients, including hospitals, health maintenance organizations and government
institutions.
MedPartners, Inc. is the nation's largest physician practice management
company. Its corporate headquarters is located in Birmingham, Alabama. The
company develops, consolidates and manages healthcare delivery systems.
Through the company's network of affiliated group and IPA physicians,
MedPartners provides primary and specialty healthcare services to prepaid
managed care enrollees and fee-for-service patients. The company operates
physician practices in 25 states. Its prescription benefit management division
provides services to more than 15 million people in all 50 states.
MedPartners, Inc. is affiliated with 8,810 physicians, including 2,590 in
group practices, 5,261 through IPA relationships and 959 hospital-based
physicians.
Smith Barney Inc. and Morgan Stanley & Co. Inc. acted as financial advisors to
MedPartners and InPhyNet, respectively.
<PAGE> 3
FINANCIAL AND STATISTICAL INFORMATION
COMBINED FINANCIAL INFORMATION
<TABLE>
<CAPTION>
30 Annualized 1996
------------------
Revenues (in millions) MDM IMMI Combined
--------------------------------
<S> <C> <C> <C> <C>
Physician Services $2,501.5 $453.4 $2,954.9 57.0%
Pharmaceutical Services 1,754.5 -- 1,754.5 33.9%
Specialty Services 472.0 -- 472.0 9.1%
-------- ------ -------- -----
TOTAL $4,728.1 $453.4 $5,181.4 100.0%
</TABLE>
STATISTICAL INFORMATION
<TABLE>
<CAPTION>
Physicians MDM IMMI Combined
--------- -------- ---------
<S> <C> <C> <C>
Group 2,590 43 2,633
IPA 5,261 385 5,646
Hospital-based 959 1,450 2,409
--------- ------- ---------
Total 8,810 1,878 10,688
Prepaid Lives
Professional only 1,025,763 -- 1,025,763
Global 603,892 116,372 720,264
--------- ------- ---------
Total 1,629,655 116,372 1,746,027
Prepaid Lives - Type
Commercial 1,334,971 34,071 1,369,042
Senior 116,854 20,244 137,098
Other 177,830 62,057 239,887
--------- ------- ---------
Total 1,629,655 116,372 1,746,027
Hospital Contracts 142 131 273
Correctional Contracts -- 40 40
Total States 25 26 36
</TABLE>
Editor's Note: This news release, management photos and other information on
MedPartners is available on the World Wide Web at http:/www.medpartners.com.
Additional information on InPhyNet is available at http:/www.noonanrusso.com.
###
