<PAGE> 1
Exhibit 99
CHECKFREE MANAGEMENT CORPORATION
UNAUDITED CONDENSED BALANCE SHEETS
JUNE 30, DECEMBER 31,
1999 1999
-------- ------------
(IN THOUSANDS, EXCEPT
SHARE DATA)
ASSETS
Current assets:
Cash................................................. $ 291 $ 3
Related party note receivable, current portion....... 1,970 2,740
-------- --------
Total current assets.............................. 2,261 2,743
Related party note receivable, less current portion.... 27,798 26,139
-------- --------
Total............................................. $ 30,059 $ 28,882
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Claims payable....................................... $ 318 $ 59
Accrued liabilities.................................. -- 527
Deposit for future claims liability.................. 1,970 2,740
-------- --------
Total current liabilities......................... 2,288 3,326
Deposit for future claims liability,
less current portion................................. 27,430 25,202
Redeemable Preferred Stock:
Class C, 350 authorized shares, $100 par value;
350 shares issued and outstanding.................. 36 39
Class D, 750 authorized shares, $100 par value;
750 shares issued and outstanding.................. 78 80
-------- --------
Total redeemable preferred stock.................. 114 119
Stockholders' equity:
Preferred stock - Class B, 600 authorized shares;
$100 par value; 600 shares issued, no amounts
outstanding........................................
Common stock - Class A, 1,900 authorized shares,
$100 par value; 1,900 shares issued and
outstanding........................................ 190 190
Retained earnings.................................... 37 45
-------- --------
Total stockholders' equity........................ 227 235
-------- --------
Total............................................. $ 30,059 $ 28,882
======== ========
See notes to Interim Unaudited Condensed Financial Statements
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CHECKFREE MANAGEMENT CORPORATION
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
DECEMBER 8, 1998 DECEMBER 8, 1998
(DATE OF INCEPTION) (DATE OF INCEPTION)
TO THREE MONTHS TO SIX MONTHS
DECEMBER 31, ENDED DECEMBER 31, ENDED
1998 DECEMBER 31, 1999 1998 DECEMBER 31, 1999
------------------- ------------------ ------------------- -----------------
(IN THOUSANDS)
Revenues:
Interest income from related party.... $ -- $ 622 $ -- $ 1,253
Other interest income................. 37 4 37 8
------------------- ------------------ ------------------- -----------------
Total revenues................. 37 626 37 1,261
Expenses:
Interest expense on deposit for future
claims liability.................... -- 564 -- 1,136
General and administrative............ -- 58 -- 117
------------------- ------------------ ------------------- -----------------
Total expenses -- 622 -- 1,253
------------------- ------------------ ------------------- -----------------
Income before income tax................ 37 4 37 8
Income tax expense...................... -- -- -- --
------------------- ------------------ ------------------- -----------------
Net income.............................. 37 4 37 8
Dividends on redeemable preferred
stock................................. -- 2 -- 4
------------------- ------------------ ------------------- -----------------
Net income applicable to common
shareholders.......................... $ 37 $ 2 $ 37 $ 4
=================== ================== =================== =================
</TABLE>
See Notes to Interim Unaudited Condensed Financial Statements
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CHECKFREE MANAGEMENT CORPORATION
UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
DECEMBER 8, 1998
(DATE OF INCEPTION)
TO SIX MONTHS
DECEMBER 31, ENDED DECEMBER 31,
1998 1999
------------------ ------------------
(IN THOUSANDS)
<S> <C> <C>
Cash flows from operating activities:
Net income........................... $ 37 $ 8
------------------ ------------------
Net cash provided by operating
activities....................... 37 8
Cash flows from investing activities:
Loan to related party................ (30,512) --
Principal payments on related party
loan............................... -- 892
------------------ ------------------
Net cash provided by (used
in) investing activities......... (30,512) 892
Cash flows from financing activities:
Proceeds from assumption of health
plan liabilities................... 30,472 --
Payments made on health plan
liabilities........................ -- (1,548)
Advance from related party........... -- 360
Proceeds from issuance of stock...... 300 --
------------------ ------------------
Net cash provided by (used
in) financing activities......... 30,772 (1,188)
------------------ ------------------
Net increase (decrease) in cash........ 297 (288)
Cash:
Beginning of period.................. -- 291
------------------ ------------------
End of period........................ $ 297 $ 3
================== ==================
Supplemental disclosure of cash flow
information:
Interest paid........................ $ -- $ 1,136
================== ==================
Dividends accrued on redeemable
preferred stock...................... $ -- $ 4
================== ==================
</TABLE>
See notes to Interim Unaudited Condensed Financial Statements
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CHECKFREE MANAGEMENT CORPORATION
NOTES TO INTERIM UNAUDITED CONDENSED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED DECEMBER 31, 1999
1. INTRODUCTION
CheckFree Management Corporation ("CheckFree Management") was formed
from a plan of recapitalization of RCM Systems, Inc., a wholly owned
subsidiary of CheckFree Holdings Corporation ("CheckFree Holdings"),
on December 8, 1998. CheckFree Management was formed as a medical
claims management subsidiary in order to appropriately minimize,
control, and manage the medical claims liabilities of CheckFree
Holdings and its subsidiaries.
As of September 30, 1999, CheckFree Holdings and its subsidiaries owned
approximately 63% of CheckFree Management. On November 19, 1999,
CheckFree Corporation, a wholly owned subsidiary of CheckFree Holdings,
purchased all outstanding shares of Class D Preferred Stock. Subsequent
to this purchase, CheckFree Holdings and its subsidiaries own 89% of
the Company.
The accompanying condensed consolidated financial statements and notes
thereto have been prepared in accordance with the rules and regulations
of the Securities and Exchange Commission for Form 10-Q and include all
of the information and disclosures required by generally accepted
accounting principles for interim financial reporting. The results of
operations for the six months ended December 31, 1999 are not
necessarily indicative of the results for the full year.
These financial statements should be read in conjunction with the
financial statements, accounting policies and financial notes thereto
of CheckFree Management included within CheckFree Holdings Corporation
and Subsidiaries Annual Report filed with the Securities and Exchange
Commission on Form 10-K/A. In the opinion of management, the
accompanying condensed consolidated unaudited financial statements
reflect all adjustments (consisting only of normal recurring
adjustments) which are necessary for a fair representation of
financial results for the interim periods presented.
2. RECENT ACCOUNTING PRONOUNCEMENTS
In June 1998 the Financial Accounting Standards Board issued SFAS 133,
"Accounting for Derivative Instruments and Hedging Activities," which
will require that all derivative financial instruments be recognized as
either assets or liabilities in the balance sheet. SFAS 133 will be
effective for the Company's first quarter of fiscal 2001. The Company's
current investment policy does not allow for the use of hedging
instruments. In anticipation of the adoption of SFAS 133, the Company
is currently reviewing all outstanding contracts for evidence of
embedded derivative. Based on the procedures undertaken through this
point, management does not believe that adoption of SFAS 133 will have
a material impact on its results of operations.
