Part I [Item 1. Business](index=12&type=section&id=Item%201.%20Business) MultiPlan offers data analytics and technology solutions for U.S. healthcare payors, specializing in cost management and payment integrity - MultiPlan provides data analytics and technology solutions to the U.S. healthcare industry, focusing on cost management, payment integrity, and data science for healthcare payors[25](index=25&type=chunk) - The company's growth strategy involves transforming into a product-centric organization, enhancing core services, expanding its Value-Driven Health Plans (VDHP) platform, and developing its Data & Decision Science services to monetize in-network claims and penetrate government markets[40](index=40&type=chunk) Total Addressable Market (TAM) by Service Area | Service Area | Estimated TAM | | :--- | :--- | | Out-of-Network Cost Management & Payment Integrity | $6 - $8 billion | | In-Network Payment & Revenue Integrity | $4 - $5 billion | | Payor Risk Analytics | $6 billion | | Healthcare B2B Payments | $10 billion | | Network Transparency & Analytic Services | $1 - $2 billion | Customer Revenue Concentration (FY2021-2023) | Year | Customer 1 | Customer 2 | Customer 3 | | :--- | :--- | :--- | :--- | | **2023** | 25% | 22% | 8% | | **2022** | 32% | 20% | 10% | | **2021** | 34% | 19% | 10% | [Item 1A. Risk Factors](index=28&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including customer dependency, execution challenges, intense competition, technological and cybersecurity threats, regulatory changes, substantial indebtedness, and stock price volatility - The company is highly dependent on a core group of customers, with its three largest customers accounting for **25%**, **22%**, and **8%** of revenues in 2023. The loss or reduced business from any of these customers could materially impact financial results[135](index=135&type=chunk) - The business is subject to extensive and evolving federal and state healthcare regulations, including HIPAA, the No Surprises Act, and mental health parity laws. Changes in these laws or failure to comply could adversely affect operations and lead to penalties[220](index=220&type=chunk)[222](index=222&type=chunk) - The company's substantial level of indebtedness (**$4.6 billion** as of Dec 31, 2023) and associated debt covenants may limit operational flexibility, restrict the ability to raise additional capital, and require a significant portion of cash flow for debt service[246](index=246&type=chunk)[247](index=247&type=chunk) - Cybersecurity incidents, including data breaches of protected health information, pose a significant risk. A breach could lead to liability, regulatory fines, reputational damage, and loss of customers[184](index=184&type=chunk)[185](index=185&type=chunk) [Item 1B. Unresolved Staff Comments](index=56&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - None[282](index=282&type=chunk) [Item 1C. Cybersecurity](index=56&type=section&id=Item%201C.%20Cybersecurity) MultiPlan maintains a comprehensive cybersecurity program, overseen by the Board's Risk Committee, with no material incidents reported to date - Cybersecurity risk is a key area within the company's Enterprise Risk Management (ERM) program, with oversight provided by the Board's Risk Committee[284](index=284&type=chunk) - The company's cybersecurity controls are aligned with SOC 1, SOC 2, and HITRUST frameworks, and maturity is measured against the NIST Cybersecurity Framework (CSF)[290](index=290&type=chunk) - The Board's Risk Committee is chaired by Richard A. Clarke, an internationally recognized cybersecurity expert, and receives cybersecurity briefings from the CISO at least quarterly[295](index=295&type=chunk)[296](index=296&type=chunk) - To date, the company has not experienced a cybersecurity threat or incident that has materially affected its business strategies, results of operations, or financial condition[292](index=292&type=chunk) [Item 2. Properties](index=58&type=section&id=Item%202.%20Properties) The company leases all its properties, including its New York headquarters and co-located data centers in Texas and Illinois - All company properties are leased, with the corporate headquarters located in New York, New York[303](index=303&type=chunk) - The primary data center is located in Texas, and the redundant data center is in Illinois, both hosted by third-party providers[303](index=303&type=chunk) [Item 3. Legal Proceedings](index=58&type=section&id=Item%203.%20Legal%20Proceedings) The company resolved significant litigation in 2023, including a $33.75 million settlement for stockholder litigation and a $300,000 payment for a class action - The 'In Re MultiPlan Corp. Stockholders Litigation' was fully resolved in 2023 via a settlement agreement where the company and its insurers paid **$33.75 million**[305](index=305&type=chunk)[308](index=308&type=chunk)[309](index=309&type=chunk) - A separate class action, 'Sarkar v. White', concerning annual meeting record dates was voluntarily dismissed and resolved with the company agreeing to pay **$300,000** in attorneys' fees to the plaintiff's counsel[311](index=311&type=chunk)[313](index=313&type=chunk) [Item 4. Mine Safety Disclosures](index=59&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[314](index=314&type=chunk) Part II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=59&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) MultiPlan's Class A common stock trades on the NYSE, with no cash dividends paid, and a $100 million share repurchase program initiated in 2023 - The company's Class A common stock trades on the NYSE under the symbol '**MPLN**'. The Public Warrants trade over the counter under '**MPLNW**'[314](index=314&type=chunk) - The company has not paid any cash dividends on its Class A common stock to date and does not plan to in the foreseeable future[316](index=316&type=chunk) - A **$100 million** share repurchase program was approved in February 2023 and extended through December 31, 2024. As of December 31, 2023, the company had repurchased **$15.2 million** in shares, leaving **$84.8 million** authorized[319](index=319&type=chunk) [Item 6. [Reserved]](index=61&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=62&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) For FY2023, MultiPlan reported a 10.9% revenue decrease to $961.5 million, a net loss of $91.7 million (improved from 2022), and Adjusted EBITDA of $618.0 million Key Financial Results (2023 vs. 2022) (in millions) | Metric | 2023 | 2022 | Change (%) | | :--- | :--- | :--- | :--- | | **Total Revenues** | $961.5 | $1,079.7 | (10.9)% | | **Operating Income (Loss)** | $162.0 | $(362.7) | 144.7% | | **Net Loss** | $(91.7) | $(572.9) | 84.0% | | **Adjusted EBITDA** | $618.0 | $768.7 | (19.6)% | Revenue by Service Line (2023 vs. 2022) (in millions) | Service Line | 2023 | 2022 | Change (%) | | :--- | :--- | :--- | :--- | | **Network-Based Services** | $223.4 | $245.3 | (8.9)% | | **Analytics-Based Services** | $625.8 | $713.7 | (12.3)% | | **Payment and Revenue Integrity** | $112.4 | $120.7 | (6.9)% | - The decrease in 2023 revenues was primarily driven by contractual rate changes with customers in Analytics-Based Services (**$99.9 million** decrease) and Network-Based Services (**$24.8 million** decrease)[375](index=375&type=chunk)[376](index=376&type=chunk) - The significant improvement in net loss for 2023 compared to 2022 is mainly attributable to the absence of the **$662.2 million** goodwill and intangible asset impairment charge that was recorded in 2022[373](index=373&type=chunk) - In 2023, the company repurchased and cancelled **$184.0 million** of its 5.750% Notes and **$25.0 million** of its Senior Convertible PIK Notes, resulting in a total gain on debt extinguishment of **$54.0 million**[368](index=368&type=chunk)[389](index=389&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=80&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate fluctuations on variable-rate debt, mitigated by $800 million in interest rate swap agreements - The company's main market risk is from interest rate changes on its variable-rate senior secured credit facilities[450](index=450&type=chunk)[453](index=453&type=chunk) - In 2023, the company entered into three interest rate swap agreements with a total notional value of **$800 million** to mitigate interest rate volatility[454](index=454&type=chunk) - A **100-basis point (1%)** increase or decrease in variable interest rates on the unhedged portion of Term Loan B would result in a **$5.0 million** increase or decrease in annual interest expense[453](index=453&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=82&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) PricewaterhouseCoopers LLP issued an unqualified opinion on the financial statements, highlighting critical audit matters related to revenue estimation and goodwill impairment - The independent auditor, PricewaterhouseCoopers LLP, issued an unqualified opinion on the consolidated financial statements and the effectiveness of internal control over financial reporting as of December 31, 2023[459](index=459&type=chunk) - Critical Audit Matters highlighted by the auditor include the estimation of variable consideration for Percentage of Savings (PSAV) revenue and the annual goodwill impairment assessment[465](index=465&type=chunk)[466](index=466&type=chunk)[469](index=469&type=chunk) Consolidated Balance Sheet Summary (in thousands) | Account | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Total Current Assets | $193,593 | $446,737 | | **Total Assets** | **$6,964,687** | **$7,371,104** | | Total Current Liabilities | $166,739 | $175,844 | | Long-Term Debt | $4,532,733 | $4,741,856 | | **Total Liabilities** | **$5,255,563** | **$5,580,562** | | **Total Shareholders' Equity** | **$1,709,124** | **$1,790,542** | Consolidated Income Statement Summary (in thousands) | Account | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | **Total Revenues** | $961,524 | $1,079,716 | $1,117,602 | | **Operating Income (Loss)** | $161,982 | $(362,732) | $386,120 | | **Net (Loss) Income** | $(91,697) | $(572,912) | $102,080 | [Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosures](index=122&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosures) This item is not applicable - Not applicable[706](index=706&type=chunk) [Item 9A. Controls and Procedures](index=122&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2023, with no material changes in Q4 2023 - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2023[708](index=708&type=chunk) - Based on an evaluation using the COSO framework, management concluded that the company's internal control over financial reporting was effective as of December 31, 2023[711](index=711&type=chunk) - No changes in internal control over financial reporting occurred during the fourth quarter of 2023 that have materially affected, or are reasonably likely to materially affect, these controls[712](index=712&type=chunk) [Item 9B. Other Information](index=123&type=section&id=Item%209B.%20Other%20Information) The company reported no Rule 10b5-1 trading plan adoptions or terminations in Q4 2023 and announced a CEO transition effective March 1, 2024 - On March 1, 2024, Travis Dalton will become the Company's President and Chief Executive Officer, succeeding Dale White[713](index=713&type=chunk)[715](index=715&type=chunk) [Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=123&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to the company - Not applicable[714](index=714&type=chunk) Part III [Item 10. Directors, Executive Officers and Corporate Governance](index=123&type=section&id=Item%2010.%20Directors,%20Executive%20Officers%20and%20Corporate%20Governance) This section details executive officers and directors, notes the upcoming CEO transition, and incorporates further information by reference from the 2024 Proxy Statement - The company announced a CEO succession plan where Travis Dalton will succeed Dale White as President and CEO, effective March 1, 2024. Dale White will become Executive Chair of the Board[715](index=715&type=chunk)[716](index=716&type=chunk) - Detailed information for this item is incorporated by reference from the forthcoming 2024 Proxy Statement[718](index=718&type=chunk) [Item 11. Executive Compensation](index=124&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the company's 2024 Proxy Statement - Information is incorporated by reference from the 2024 Proxy Statement[719](index=719&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owner and Management and Related Stockholder Matters](index=124&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owner%20and%20Management%20and%20Related%20Stockholder%20Matters) Information regarding security ownership is incorporated by reference from the company's 2024 Proxy Statement - Information is incorporated by reference from the 2024 Proxy Statement[720](index=720&type=chunk) [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=124&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions,%20and%20Director%20Independence) Information regarding related party transactions and director independence is incorporated by reference from the company's 2024 Proxy Statement - Information is incorporated by reference from the 2024 Proxy Statement[721](index=721&type=chunk) [Item 14. Principal Accounting Fees and Services](index=124&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information regarding principal accounting fees and services is incorporated by reference from the company's 2024 Proxy Statement - Information is incorporated by reference from the 2024 Proxy Statement[722](index=722&type=chunk) Part IV [Item 15. Exhibits, Financial Statement Schedules](index=125&type=section&id=Item%2015.%20Exhibits,%20Financial%20Statement%20Schedules) This section lists exhibits filed with or incorporated by reference into the Form 10-K, including governance documents and certifications [Item 16. Form 10-K Summary](index=127&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company has not provided a summary for its Form 10-K - None[727](index=727&type=chunk)

Revenue Performance - Q4 2023 revenues were $244.1 million, a 1.3% increase from Q4 2022 revenues of $241.1 million[5] - Full year 2023 revenues totaled $961.5 million, a decrease of 10.9% compared to $1,079.7 million in 2022[5] - MultiPlan's revenues for 2023 were $961,524 thousand, a decrease of 10.9% from $1,079,716 thousand in 2022[27] - Full year 2024 revenue guidance is set between $1,000 million and $1,030 million, with Adjusted EBITDA guidance of $630 million to $650 million[4] Net Loss and Financial Improvement - The net loss for Q4 2023 was $31.4 million, significantly improved from a net loss of $650.1 million in Q4 2022[5] - The company reported a net loss of $91,697 thousand in 2023, compared to a net loss of $572,912 thousand in 2022, indicating an improvement in financial performance[27] - Net loss for 2023 was $91,697, compared to a loss of $572,912 in 2022, indicating a significant improvement[34] EBITDA and Cash Flow - Adjusted EBITDA for Q4 2023 was $156.8 million, compared to $161.5 million in Q4 2022[5] - Adjusted EBITDA for 2023 was $161,982 thousand, a significant recovery from an operating loss of $362,732 thousand in 2022[27] - EBITDA for 2023 reached $640,215, a substantial increase from $150,103 in 2022[34] - Net cash provided by operating activities for 2023 was $171,720 thousand, a decrease from $372,364 thousand in 2022[30] - Net cash provided by operating activities decreased to $171,720 in 2023 from $372,364 in 2022, indicating lower operational cash flow[36] Medical Cost Savings - The company identified potential medical cost savings of approximately $5.9 billion in Q4 2023, up 2.3% from Q3 2023 and up 9.4% from Q4 2022[4] - Full year 2023 identified potential medical savings reached $22.9 billion, compared to $22.3 billion in 2022[5] Debt Management - The company repurchased and repaid $222 million of debt during 2023, including $25 million in Q4[3] - Long-term debt was reduced to $4,532,733 thousand in 2023 from $4,741,856 thousand in 2022, reflecting a focus on debt management[25] Cash and Assets - The company ended Q4 2023 with $71.5 million of unrestricted cash and cash equivalents[5] - Cash and cash equivalents at the end of 2023 were $71,547 thousand, down from $334,046 thousand at the end of 2022[25] - Total current assets decreased to $193,593 thousand in 2023 from $446,737 thousand in 2022, primarily due to a reduction in cash and cash equivalents[25] - The company’s total assets decreased to $6,964,687 thousand in 2023 from $7,371,104 thousand in 2022[25] Capital Expenditures and Investments - The company made significant investments in property and equipment, totaling $108,852 thousand in 2023, compared to $89,735 thousand in 2022[30] - Net cash used in investing activities rose to $249,792 in 2023, compared to $104,446 in 2022, reflecting increased capital expenditures[36] Efficiency and Cost Management - The Adjusted cash conversion ratio, which measures how much of Adjusted EBITDA is converted into Unlevered Free Cash Flow, is a key performance indicator for the company[23] - Adjusted Cash Conversion Ratio fell to 62% in 2023, compared to 74% in 2022, suggesting a decline in cash conversion efficiency[36] - Integration expenses decreased to $3,358 in 2023 from $4,055 in 2022, showing improved integration efficiency[34] - Stock-based compensation increased to $18,018 in 2023 from $15,083 in 2022, indicating higher employee compensation costs[34] Interest and Expenses - Interest expense increased to $333,208 in 2023 from $303,401 in 2022, highlighting rising borrowing costs[34] - Free Cash Flow decreased to $62,868 in 2023 from $282,629 in 2022, reflecting a decline in cash generation[36] - Unlevered Free Cash Flow for 2023 was $386,264, down from $572,395 in 2022, indicating reduced operational efficiency[36]

Part I [Financial Statements](index=10&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for MultiPlan Corporation as of September 30, 2023, and for the three and nine-month periods then ended, including balance sheets, statements of income, shareholders' equity, and cash flows, along with accompanying notes detailing significant accounting policies and events such as the acquisition of BST [Unaudited Condensed Consolidated Balance Sheets](index=10&type=page&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) The balance sheet as of September 30, 2023, shows total assets of $7.06 billion, a decrease from $7.37 billion at year-end 2022, primarily due to a reduction in cash and cash equivalents, while total liabilities also decreased to $5.31 billion from $5.58 billion, mainly from a reduction in long-term debt, and goodwill increased to $3.83 billion following the BST acquisition Condensed Consolidated Balance Sheet Data (in thousands) | Account | September 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $101,320 | $334,046 | | Goodwill | $3,829,002 | $3,705,199 | | Total assets | $7,057,819 | $7,371,104 | | **Liabilities & Equity** | | | | Long-term debt | $4,557,978 | $4,741,856 | | Total liabilities | $5,308,231 | $5,580,562 | | Total shareholders' equity | $1,749,588 | $1,790,542 | [Unaudited Condensed Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income](index=11&type=page&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20%28Loss%29%20Income%20and%20Comprehensive%20%28Loss%29%20Income) The company reported a net loss of $24.1 million for Q3 2023, a significant reversal from a net income of $19.7 million in Q3 2022, with the nine-month net loss at $60.3 million compared to a net income of $77.2 million in the prior year, driven by lower revenues and higher interest expense, partially offset by a gain on debt extinguishment Income Statement Highlights (in thousands, except per share data) | Metric | Q3 2023 | Q3 2022 | Nine Months 2023 | Nine Months 2022 | | :--- | :--- | :--- | :--- | :--- | | Revenues | $242,804 | $250,453 | $717,389 | $838,627 | | Operating income | $39,519 | $36,399 | $121,170 | $250,803 | | Net (loss) income | $(24,145) | $19,736 | $(60,306) | $77,226 | | Net (loss) income per share - Diluted | $(0.04) | $0.03 | $(0.09) | $0.12 | [Unaudited Condensed Consolidated Statements of Shareholders' Equity](index=12&type=page&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Shareholders%27%20Equity) Shareholders' equity decreased from $1.79 billion at the start of 2023 to $1.75 billion by September 30, 2023, primarily driven by a net loss of $60.3 million and stock repurchases totaling $13.1 million, partially offset by stock-based compensation and stock consideration issued for the BST acquisition - For the nine months ended September 30, 2023, key changes to shareholders' equity included a **net loss of $60.3 million**, **$13.4 million in stock-based compensation**, and the **repurchase of common stock for $13.1 million**[28](index=28&type=chunk) - Stock consideration of **$19.2 million** was paid for the BST acquisition, which involved issuing **21,588,652 shares of Class A common stock**[28](index=28&type=chunk)[48](index=48&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=15&type=page&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended September 30, 2023, net cash from operating activities was $144.0 million, a significant decrease from $344.7 million in the prior-year period, while investing activities used $218.4 million, largely for the BST acquisition ($140.9 million), and financing activities used $158.5 million, mainly for the repurchase of notes ($135.0 million) and treasury stock ($13.1 million), resulting in a net decrease in cash of $232.9 million Cash Flow Summary (in thousands) | Activity | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $144,018 | $344,675 | | Net cash used in investing activities | $(218,449) | $(78,920) | | Net cash used in financing activities | $(158,514) | $(12,314) | | **Net (decrease) increase in cash** | **$(232,945)** | **$253,441** | [Notes to Unaudited Condensed Consolidated Financial Statements](index=17&type=page&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The notes provide detailed explanations for the financial statements, highlighting key events such as the acquisition of Benefits Science LLC (BST) on May 8, 2023, for $160.1 million, resulting in $123.8 million of goodwill, the entry into $800 million of interest rate swaps to hedge floating-rate debt, the repurchase of $184.0 million of its 5.750% Notes (recognizing a $46.9 million gain), and the initiation of a $100 million share repurchase program, spending $13.1 million to date - On May 8, 2023, the Company acquired 100% of Benefits Science LLC (BST) for **$160.1 million**, consisting of **$140.9 million in cash** and **$19.2 million in stock**, adding **$123.8 million to goodwill**[48](index=48&type=chunk)[51](index=51&type=chunk)[53](index=53&type=chunk) - During the nine months ended September 30, 2023, the Company purchased and cancelled **$184.0 million of its 5.750% Notes**, resulting in a recognized **gain on extinguishment of $46.9 million**[63](index=63&type=chunk)[65](index=65&type=chunk) - In September 2023, the Company entered into interest rate swap agreements with a total notional value of **$800 million** to convert a portion of its floating-rate debt to a fixed-rate basis[58](index=58&type=chunk) - On February 27, 2023, the Board approved a **$100 million share repurchase program**, and as of September 30, 2023, the Company has spent **$13.1 million** to repurchase its Class A common stock[88](index=88&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses a 14.5% year-over-year revenue decrease for the nine-month period ended September 30, 2023, attributing it to lower revenues across all service lines, particularly a 16.5% drop in Analytics-Based Services due to contractual rate changes, while the company acquired BST to enhance its data analytics capabilities, and despite revenue pressure, Q3 2023 operating income increased due to significantly lower G&A expenses, with the company actively managing its capital structure through debt repurchases and a share buyback program [Company Overview](index=28&type=page&id=Company%20Overview) MultiPlan is a data analytics and technology solutions provider for the U.S. healthcare industry, focusing on reducing medical costs and improving payment accuracy for payors, offering three categories of services: Analytics-Based, Network-Based, and Payment and Revenue Integrity, and serving as an intermediary for payors, employers, plan members, and providers, identifying approximately $17.0 billion in potential medical cost savings in the first nine months of 2023 - The company's services are categorized into **Analytics-Based Services**, **Network-Based Services**, and **Payment and Revenue Integrity Services**[101](index=101&type=chunk) - For the nine months ended September 30, 2023, the company's services identified approximately **$17.0 billion in potential medical cost savings**[102](index=102&type=chunk) [Results of Operations](index=35&type=page&id=Results%20of%20Operations) For the nine months ended September 30, 2023, total revenues decreased 14.5% to $717.4 million from $838.6 million in the prior-year period, driven by a 16.5% drop in Analytics-Based Services revenue and a 10.3% fall in Network-Based Services revenue, primarily due to contractual rate changes with customers, while costs of services increased by 16.5%, and G&A expenses fell 17.6% due to lower transaction costs, leading to a 51.7% decrease in operating income for the nine-month period Revenues by Service (in thousands) | Service | Nine Months 2023 | Nine Months 2022 | Change % | | :--- | :--- | :--- | :--- | | Network-Based Services | $171,171 | $190,903 | (10.3)% | | Analytics-Based Services | $462,275 | $553,334 | (16.5)% | | Payment and Revenue Integrity | $83,943 | $94,390 | (11.1)% | | **Total Revenues** | **$717,389** | **$838,627** | **(14.5)%** | - The decrease in Analytics-Based Services revenues for the nine months was primarily due to **contractual rate changes with customers**, contributing to a **$98.1 million decrease in PSAV revenues** for that segment[140](index=140&type=chunk) - General and administrative expenses for the nine months decreased by **$23.1 million (17.6%)**, mainly due to a **$23.3 million reduction in transaction-related expenses** compared to the prior year[147](index=147&type=chunk) [Non-GAAP Financial Measures](index=32&type=page&id=Non-GAAP%20Financial%20Measures) The company uses EBITDA, Adjusted EBITDA, and Adjusted EPS as key non-GAAP metrics to evaluate performance, with Adjusted EBITDA for the nine months ended September 30, 2023, at $461.2 million, down from $607.2 million in the prior-year period, and Adjusted EPS for the same period at $0.18, a significant decrease from $0.39 in 2022, as these measures exclude items like amortization, stock-based compensation, and transaction expenses to provide a view of core business performance Non-GAAP Reconciliation Highlights (in thousands, except per share data) | Metric | Nine Months 2023 | Nine Months 2022 | | :--- | :--- | :--- | | Net (loss) income | $(60,306) | $77,226 | | Adjusted EBITDA | $461,202 | $607,214 | | Adjusted net income | $116,662 | $248,343 | | Adjusted EPS | $0.18 | $0.39 | [Liquidity and Capital Resources](index=39&type=page&id=Liquidity%20and%20Capital%20Resources) As of September 30, 2023, the company had $107.6 million in cash and cash equivalents and $442.1 million available under its revolving credit facility, with key uses of cash during the first nine months of 2023 including $140.9 million for the BST acquisition, $135.0 million for debt repurchases, and $13.1 million for share repurchases, and the company believes its current liquidity is sufficient for the next twelve months, with total long-term debt standing at $4.56 billion - As of September 30, 2023, the company had **cash and cash equivalents of $107.6 million** and **$442.1 million of availability** under its revolving credit facility[160](index=160&type=chunk) - Significant cash outflows in the first nine months of 2023 included the **acquisition of BST ($140.9M)**, **repurchase of 5.750% Notes ($135.0M)**, and **purchase of treasury stock ($13.1M)**[162](index=162&type=chunk)[170](index=170&type=chunk)[171](index=171&type=chunk) - The company was in compliance with all debt covenants as of September 30, 2023, with a **consolidated first lien debt to consolidated EBITDA ratio of 3.63 times**[184](index=184&type=chunk)[185](index=185&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=43&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company states there have been no material changes in its market risks since the disclosures in its 2022 Annual Report, with the primary market risk exposure relating to interest rate fluctuations on its variable-rate debt, which it has partially hedged with interest rate swaps - As of September 30, 2023, there were **no material changes in the market risks** described in the company's 2022 Annual Report[197](index=197&type=chunk) [Controls and Procedures](index=43&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective at a reasonable assurance level as of September 30, 2023, with no material changes to the internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, these controls - Management concluded that as of September 30, 2023, **disclosure controls and procedures were effective** to provide reasonable assurance that required information is recorded, processed, and reported in a timely manner[199](index=199&type=chunk) - There has been **no change in internal control over financial reporting** during the nine months ended September 30, 2023, that has materially affected, or is reasonably likely to materially affect, the Company's internal control[200](index=200&type=chunk) Part II - Other Information [Legal Proceedings](index=45&type=section&id=Item%201.%20Legal%20Proceedings) The company reports that the previously disclosed Delaware Stockholder Litigation related to its de-SPAC transaction has been fully resolved, with a settlement of $33.75 million, paid by the company and its insurers, approved by the court on February 28, 2023, and becoming final, and other ongoing legal matters are not expected to have a material adverse effect on the company's financial condition or results of operations - The Delaware Stockholder Litigation was fully resolved following a **court-approved settlement of $33.75 million**, which was paid by the company and its insurers[206](index=206&type=chunk)[207](index=207&type=chunk) [Risk Factors](index=45&type=page&id=Item%201A.%20Risk%20Factors) The company states there have been no material changes to the risk factors that were previously disclosed in Item 1A of the Company's 2022 Annual Report - There have been **no material changes** during the nine months ended September 30, 2023 to the risk factors previously disclosed in the Company's 2022 Annual Report[209](index=209&type=chunk) [Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities](index=45&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%2C%20Use%20of%20Proceeds%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company did not repurchase any shares of its Class A common stock during the third quarter of 2023, and subsequent to the quarter, on November 8, 2023, the Board extended the existing $100 million share repurchase program through December 31, 2024, with $13.1 million repurchased to date under the program, leaving $86.9 million authorized for future repurchases - The Company did not repurchase shares of its Class A common stock during the three months ended September 30, 2023[210](index=210&type=chunk) - On November 8, 2023, the Board extended the Company's current **$100 million share repurchase program** through December 31, 2024, with **$86.9 million remaining** under the authorization[215](index=215&type=chunk) [Exhibits](index=48&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, which include the certifications by the Principal Executive Officer and Principal Financial Officer as required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002, and the Inline XBRL financial data files - The exhibits filed with the report include **CEO and CFO certifications** pursuant to Sarbanes-Oxley Act Rules and **financial statements formatted in Inline XBRL**[218](index=218&type=chunk)

Third Quarter 2023 Results: • Adjusted EBITDA1 of $152.3 million, and Adjusted EBITDA2 margin of 62.7% During the third quarter, we: • Achieved critical milestones in the execution of our Growth Plan, including: • Launched our price transparency solutions, including PlanOptixTM Search in July and PlanOptixTM Intelligence in October • Signed our first customer to our new B2B healthcare payments service through our partnership with ECHO Health 1 See reconciliation of non-GAAP measures included in Appendix 2Ad ...

[Glossary](index=4&type=section&id=Glossary) [Part I. Financial Information](index=11&type=section&id=Part%20I.%20Financial%20Information) [Item 1. Financial Statements](index=11&type=section&id=Item%201.%20Financial%20Statements) This section presents unaudited condensed consolidated financial statements, summarizing financial position, performance, and cash movements [Unaudited Condensed Consolidated Balance Sheets](index=11&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased from **$7.37 billion** to **$7.14 billion**, primarily due to reduced cash; liabilities also decreased Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2023 | December 31, 2022 | Change ($) | Change (%) | | :-------------------------------- | :------------ | :---------------- | :--------- | :--------- | | Total assets | $7,136,390 | $7,371,104 | $(234,714) | (3.18)% | | Cash and cash equivalents | $89,757 | $334,046 | $(244,289) | (73.14)% | | Goodwill | $3,829,356 | $3,705,199 | $124,157 | 3.35% | | Total liabilities | $5,367,870 | $5,580,562 | $(212,692) | (3.81)% | | Long-term debt | $4,603,583 | $4,741,856 | $(138,273) | (2.92)% | | Total shareholders' equity | $1,768,520 | $1,790,542 | $(22,022) | (1.23)% | [Unaudited Condensed Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income](index=12&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Income%20and%20Comprehensive%20Income) Net loss of **$36.16 million** for six months ended June 30, 2023, reversed prior year net income, driven by lower revenues and higher interest Condensed Consolidated Statements of (Loss) Income Highlights (in thousands, except per share data) | Metric | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | Change ($) | Change (%) | | :----------------------------------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | Revenues | $474,585 | $588,174 | $(113,589) | (19.31)% | | Operating income | $81,651 | $214,404 | $(132,753) | (61.92)% | | Interest expense | $165,903 | $144,141 | $21,762 | 15.10% | | Gain on extinguishment of debt | $(36,778) | $0 | $(36,778) | NM | | Net (loss) income | $(36,161) | $57,490 | $(93,651) | (162.9)% | | Net (loss) income per share – Basic | $(0.06) | $0.09 | $(0.15) | (166.67)% | [Unaudited Condensed Consolidated Statements of Shareholders' Equity](index=13&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Equity) Shareholders' equity decreased from **$1,790.54 million** to **$1,768.52 million**, primarily due to net loss and share repurchases Shareholders' Equity Changes (Six Months Ended June 30, 2023, in thousands) | Metric | Amount | | :----------------------------------- | :------- | | Balance at beginning of period | $1,790,542 | | 2020 Omnibus Incentive Plan | $8,522 | | Tax withholding related to vesting | $(457) | | Stock consideration for BST acquisition | $19,214 | | Repurchase of common stock | $(13,140) | | Net loss | $(36,161) | | Balance at end of period | $1,768,520 | [Unaudited Condensed Consolidated Statements of Cash Flows](index=15&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow decreased to **$71.9 million**, investing and financing activities used more cash, resulting in a **$244.7 million** net cash decrease Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Activity | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | Change ($) | Change (%) | | :----------------------------------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | Net cash provided by operating activities | $71,900 | $235,639 | $(163,739) | (69.49)% | | Net cash used in investing activities | $(196,389) | $(58,110) | $(138,279) | 237.96% | | Net cash used in financing activities | $(120,176) | $(8,821) | $(111,355) | 1262.35% | | Net (decrease) increase in cash, cash equivalents and restricted cash | $(244,665) | $168,708 | $(413,373) | (245.02)% | - Cash used for BST Acquisition (net of cash acquired) was **$141.3 million** for the six months ended June 30, 2023[28](index=28&type=chunk)[159](index=159&type=chunk) - Cash used for repurchase of 5.750% Notes was **$100.0 million** for the six months ended June 30, 2023[28](index=28&type=chunk)[160](index=160&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=17&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The notes provide detailed explanations and disclosures for the condensed consolidated financial statements, covering general information, policies, and transactions [1. General Information and Basis of Accounting](index=17&type=section&id=1.%20General%20Information%20and%20Basis%20of%20Accounting) MultiPlan provides data analytics and technology solutions to reduce U.S. healthcare costs and improve billing accuracy, operating as a single segment - MultiPlan provides data analytics and technology-enabled solutions to reduce medical costs and improve billing/payment accuracy in the U.S. healthcare industry[31](index=31&type=chunk) - The company manages its operations as a single segment, with all revenues and long-lived assets attributable to operations in the United States[35](index=35&type=chunk)[36](index=36&type=chunk) - The company adopted ASU 2020-04, 2021-01, and 2022-06 (Reference Rate Reform) and transitioned from LIBOR to Term SOFR effective July 1, 2023, with no material impact on financial statements[42](index=42&type=chunk) [2. Business Combinations](index=19&type=section&id=2.%20Business%20Combinations) MultiPlan acquired Benefits Science LLC (BST) for **$160.5 million** (net of cash) on May 8, 2023, enhancing data analytics and adding goodwill - Acquired 100% of Benefits Science LLC (BST) on May 8, 2023, for **$160.5 million** (net of acquired cash)[44](index=44&type=chunk) - Consideration included **$141.3 million** in cash and **$19.2 million** in Company Class A common stock[44](index=44&type=chunk) BST Acquisition Purchase Price Allocation (in thousands) | Item | Amount | | :-------------------------- | :------- | | Total consideration | $161,181 | | Goodwill | $124,157 | | Other intangibles, net | $35,700 | - Transaction costs of **$6.8 million** were expensed for the three and six months ended June 30, 2023[51](index=51&type=chunk) [3. Long-Term Debt](index=21&type=section&id=3.%20Long-Term%20Debt) Total long-term debt, net, decreased to **$4.60 billion** from **$4.74 billion**, primarily due to 5.750% Notes repurchases, yielding a **$36.8 million** gain Long-Term Debt Summary (in thousands) | Debt Type | June 30, 2023 | December 31, 2022 | | :-------------------------------- | :------------ | :---------------- | | Term Loan B | $1,301,813 | $1,308,438 | | 5.50% Senior Secured Notes | $1,050,000 | $1,050,000 | | 5.750% Notes | $1,025,958 | $1,163,793 | | Senior Convertible PIK Notes | $1,300,000 | $1,300,000 | | Long-term debt, net | $4,603,583 | $4,741,856 | - During the six months ended June 30, 2023, the Company purchased and cancelled **$137.8 million** of the 5.750% Notes, recognizing a gain on extinguishment of **$36.8 million**[56](index=56&type=chunk) - The interest rate in effect for Term Loan B was **9.73%** as of June 30, 2023, an increase from **5.82%** as of June 30, 2022[56](index=56&type=chunk)[163](index=163&type=chunk) - The Company was in compliance with all debt covenants as of June 30, 2023, and December 31, 2022[58](index=58&type=chunk) [4. Private Placement Warrants and Unvested Founder Shares](index=22&type=section&id=4.%20Private%20Placement%20Warrants%20and%20Unvested%20Founder%20Shares) Fair value of Private Placement Warrants and Unvested Founder Shares increased to **$4.84 million**, resulting in a **$2.39 million** loss from stock price rise Fair Value of Private Placement Warrants and Unvested Founder Shares (in thousands) | Item | June 30, 2023 | December 31, 2022 | | :----------------------------------- | :------------ | :---------------- | | Private Placement Warrants | $1,859 | $953 | | Unvested Founder Shares | $2,977 | $1,489 | | **Total** | **$4,836** | **$2,442** | - Loss on change in fair value of Private Placement Warrants and Unvested Founder Shares was **$2.39 million** for the six months ended June 30, 2023, primarily due to an increase in the Company's Class A common stock price[61](index=61&type=chunk) [5. Fair Value Measurements](index=22&type=section&id=5.%20Fair%20Value%20Measurements) The company uses a three-tier fair value hierarchy for financial instruments, with cash and long-term debt as Level 1, and warrants/founder shares as Level 3 - Fair value measurements are categorized into Level 1 (quoted prices in active markets), Level 2 (observable inputs), and Level 3 (unobservable inputs)[63](index=63&type=chunk) - Cash and cash equivalents (money market funds) are valued based on Level 1 measurements[66](index=66&type=chunk) - Long-term debt fair value is estimated using Level 1 quoted prices in active markets[66](index=66&type=chunk) - Private Placement Warrants and Unvested Founder Shares are recurring Level 3 measurements, valued using an option pricing simulation[67](index=67&type=chunk) - No impairment charges for goodwill and long-lived assets for the six months ended June 30, 2023 (compared to **$662.2 million** in fiscal year 2022)[68](index=68&type=chunk) [6. Commitments and Contingencies](index=23&type=section&id=6.%20Commitments%20and%20Contingencies) MultiPlan has **$1.8 million** in letters of credit and settled the Delaware Stockholder Litigation for **$33.75 million**, resolving the class action - The Company has **$1.8 million** in irrevocable letters of credit outstanding as of June 30, 2023, for real estate lease agreements[70](index=70&type=chunk) - The Delaware Stockholder Litigation, a class action lawsuit, was settled for **$33.75 million**, paid by the Company and its insurers[75](index=75&type=chunk) - The settlement for the Delaware Stockholder Litigation was approved by the Delaware Court of Chancery on February 28, 2023, resolving the litigation[76](index=76&type=chunk) [7. Shareholder's Equity](index=24&type=section&id=7.%20Shareholder's%20Equity) The Board approved a **$100 million** share repurchase program, with **$13.1 million** of Class A common stock repurchased by June 30, 2023 - The Board approved a share repurchase program on February 27, 2023, authorizing up to **$100 million** of Class A common stock repurchases through December 31, 2023[78](index=78&type=chunk) - As of June 30, 2023, the Company repurchased **$13.1 million** of its Class A common stock under this program[78](index=78&type=chunk) - **21,588,652** shares of Class A common stock were issued on May 8, 2023, as stock consideration for the BST acquisition[79](index=79&type=chunk) [8. Basic and Diluted (Loss) Earnings Per Share](index=25&type=section&id=8.%20Basic%20and%20Diluted%20(Loss)%20Earnings%20Per%20Share) Basic and diluted net loss per share were **$(0.06)** for six months ended June 30, 2023, a decrease from **$0.09** in the prior year Basic and Diluted (Loss) Earnings Per Share (Six Months Ended June 30) | Metric | 2023 | 2022 | | :----------------------------------- | :----- | :----- | | Net (loss) income per share – basic | $(0.06) | $0.09 | | Net (loss) income per share – diluted | $(0.06) | $0.09 | - For the three and six months ended June 30, 2023, potentially dilutive securities were excluded from the calculation of diluted net loss per share as their effect would have been anti-dilutive[82](index=82&type=chunk) [9. Related Party Transactions](index=25&type=section&id=9.%20Related%20Party%20Transactions) Related party expenses for six months ended June 30, 2023, were **$155,000**, primarily for software licenses and services from Hellman & Friedman LLC-controlled companies Related Party Expenses (in thousands) | Period | 2023 | 2022 | | :----------------------------------- | :----- | :----- | | Three Months Ended June 30 | $92 | $0 | | Six Months Ended June 30 | $155 | $0 | - Expenses are associated with a software license from Abacus Insights, Inc., customer service software, and captive management services from companies controlled by Hellman & Friedman LLC[83](index=83&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on financial condition and results, including revenue, expense, liquidity, and non-GAAP measures [Cautionary Note Regarding Forward-looking Statements](index=26&type=section&id=Cautionary%20Note%20Regarding%20Forward-looking%20Statements) Forward-looking statements are subject to risks and uncertainties, and actual results may differ materially from current expectations - The report includes forward-looking statements about the Company's financial position, business strategy, and future operations[87](index=87&type=chunk) - These statements are subject to risks and uncertainties, including loss of customers, trends in the U.S. healthcare system, competition, pricing pressure, and regulatory changes[88](index=88&type=chunk)[89](index=89&type=chunk) - The Company does not undertake any obligation to update or revise forward-looking statements, except as required by applicable securities laws[89](index=89&type=chunk) [Company Overview](index=27&type=section&id=Company%20Overview) MultiPlan is a leading U.S. healthcare provider of data analytics and technology solutions, identifying **$11.2 billion** in potential medical cost savings - MultiPlan is a leading provider of data analytics and technology-enabled solutions for the U.S. healthcare industry, focused on reducing medical costs and improving payment accuracy[90](index=90&type=chunk) - Services are offered in three categories: Network-Based Services, Analytics-Based Services, and Payment and Revenue Integrity Services[92](index=92&type=chunk) - For the six months ended June 30, 2023, comprehensive services identified approximately **$11.2 billion** in potential medical cost savings[93](index=93&type=chunk) [Factors Affecting Our Results of Operations](index=28&type=section&id=Factors%20Affecting%20Our%20Results%20of%20Operations) BST acquisition's impact was not material; medical charges processed increased by **6.8%** to **$82.8 billion**, while potential savings decreased by **1.8%** to **$11.2 billion** - The BST acquisition on May 8, 2023, added enhanced data and analytics capabilities, but its impact on revenues and net earnings was not material through June 30, 2023[95](index=95&type=chunk)[96](index=96&type=chunk) Medical Charges Processed and Potential Savings (in billions) | Metric | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | Change (%) | | :----------------------------------- | :----------------------------- | :----------------------------- | :--------- | | Total Medical charges processed | $82.8 | $77.5 | 6.8% | | Total Potential medical cost savings | $11.2 | $11.4 | (1.8)% | | Potential savings as a % of charges | 13.6% | 14.8% | (1.2) pp | [Components of Results of Operations](index=30&type=section&id=Components%20of%20Results%20of%20Operations) This section defines key components of MultiPlan's financial results, including revenues, costs, expenses, depreciation, amortization, interest, and tax - Revenues are generated from Network-Based Services, Analytics-Based Services, and Payment and Revenue Integrity Services, primarily compensated through PSAV or PEPM rates[102](index=102&type=chunk) - Costs of services include personnel expenses and access and bill review fees[103](index=103&type=chunk) - Amortization of intangible assets includes customer relationships, provider network, technology, and trademarks from acquisitions[106](index=106&type=chunk) - Gain on extinguishment of debt is recognized for the difference between the reacquisition price and the net carrying amount of extinguished debt[109](index=109&type=chunk) [Non-GAAP Financial Measures](index=31&type=section&id=Non-GAAP%20Financial%20Measures) MultiPlan uses non-GAAP measures like EBITDA, Adjusted EBITDA, and Adjusted EPS to assess performance, excluding non-indicative items for core business insights - The Company uses EBITDA, Adjusted EBITDA, and Adjusted EPS as non-GAAP financial measures to evaluate performance[112](index=112&type=chunk) - Adjusted EBITDA is used for debt covenant compliance and excludes items not indicative of core business, such as transaction-related expenses and changes in fair value of warrants[114](index=114&type=chunk) Reconciliation of Net (Loss) Income to EBITDA and Adjusted EBITDA (in thousands) | (in thousands) | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :---------------------------------------------------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Net income (loss) | $(36,370) | $13,512 | $(36,161) | $57,490 | | **EBITDA** | **$139,133** | **$195,357** | **$324,898** | **$427,326** | | **Adjusted EBITDA** | **$152,682** | **$209,634** | **$308,941** | **$435,040** | Reconciliation of Net (Loss) Income to Adjusted EPS (in thousands, except per share amounts) | (in thousands, except share and per share amounts) | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :---------------------------------------------------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Net (loss) income | $(36,370) | $13,512 | $(36,161) | $57,490 | | **Adjusted net income** | **$38,577** | **$89,717** | **$80,910** | **$189,797** | | Weighted average shares outstanding – Basic | 643,339,328 | 639,001,506 | 640,996,659 | 638,750,938 | | **Adjusted EPS** | **$0.06** | **$0.14** | **$0.13** | **$0.30** | [Factors Affecting the Comparability of our Results of Operations](index=34&type=section&id=Factors%20Affecting%20the%20Comparability%20of%20our%20Results%20of%20Operations) BST acquisition, debt repurchases, and variable interest rates on Term Loan B impacted comparability, with a **$36.8 million** gain on debt extinguishment - The BST acquisition on May 8, 2023, resulted in **$6.8 million** in expensed transaction costs and acquired expenses[120](index=120&type=chunk) - Repurchase and cancellation of **$137.8 million** of 5.750% Notes generated a **$36.8 million** gain on debt extinguishment for the six months ended June 30, 2023[121](index=121&type=chunk) - The annualized weighted average cash interest rate on total debt increased by **1.11%** for the six months ended June 30, 2023, compared to the prior year, due to the variable interest rate on Term Loan B[123](index=123&type=chunk) [Results of Operations for the Three and Six Months Ended June 30, 2023 and 2022](index=36&type=section&id=Results%20of%20Operations%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030,%202023%20and%202022) Total revenues decreased by **19.3%** to **$474.6 million**, operating income fell by **61.9%** to **$81.7 million**, and net loss was **$36.2 million**, reversing prior year income Revenue Performance by Service Line (in thousands) | Service Line | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | Change ($) | Change (%) | | :----------------------------------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | Network-Based Services | $114,343 | $132,044 | $(17,701) | (13.4)% | | Analytics-Based Services | $303,861 | $389,412 | $(85,551) | (22.0)% | | Payment and Revenue Integrity Services | $56,381 | $66,718 | $(10,337) | (15.5)% | | **Total Revenues** | **$474,585** | **$588,174** | **$(113,589)** | **(19.3)%** | - Operating income decreased by **$132.75 million** (**61.9%**) to **$81.65 million** for the six months ended June 30, 2023[124](index=124&type=chunk) - Net (loss) income shifted from a **$57.49 million** income in 2022 to a **$36.16 million** loss in 2023[124](index=124&type=chunk) - Costs of services increased by **$16.81 million** (**17.3%**) for the six months ended June 30, 2023, primarily due to higher personnel expenses and acquired BST costs[135](index=135&type=chunk) - Interest expense increased by **$21.76 million** (**15.1%**) for the six months ended June 30, 2023, mainly due to higher LIBOR rates on Term Loan B[142](index=142&type=chunk) [Liquidity and Capital Resources](index=41&type=section&id=Liquidity%20and%20Capital%20Resources) MultiPlan had **$95.9 million** in cash and **$448.2 million** available under its revolving credit facility, deemed sufficient for the next twelve months, despite significant cash outflows - As of June 30, 2023, cash and cash equivalents (including restricted cash) totaled **$95.9 million**[150](index=150&type=chunk) - The Company had **$448.2 million** of loan availability under its revolving credit facility as of June 30, 2023[150](index=150&type=chunk) - The Company believes its primary sources of liquidity (internally generated funds and revolving credit facility) will be sufficient for the next twelve months[153](index=153&type=chunk) - Cash consideration of **$141.3 million** was paid for the BST acquisition[152](index=152&type=chunk) - The Company repurchased **$13.1 million** of Class A common stock under its share repurchase program[151](index=151&type=chunk) [Cash Flow Summary](index=41&type=section&id=Cash%20Flow%20Summary) Operating cash flows decreased to **$71.9 million**, investing activities used **$196.4 million** (BST acquisition), and financing activities used **$120.2 million** (debt/share repurchases) Net Cash Flows by Activity (in thousands) | Activity | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :----------------------------------- | :----------------------------- | :----------------------------- | | Operating activities | $71,900 | $235,639 | | Investing activities | $(196,389) | $(58,110) | | Financing activities | $(120,176) | $(8,821) | [Cash Flows from Operating Activities](index=42&type=section&id=Cash%20Flows%20from%20Operating%20Activities) Cash from operating activities decreased by **$163.7 million** to **$71.9 million**, primarily due to lower net income and negative changes in net working capital - Cash flows from operating activities decreased by **$163.7 million** (**69.5%**) to **$71.9 million** for the six months ended June 30, 2023[155](index=155&type=chunk) - The decrease was primarily due to a **$93.7 million** decrease in net income, **$57.9 million** in negative changes in net working capital, and **$12.2 million** decrease in non-cash items[155](index=155&type=chunk) - Working capital changes included increases in prepaid taxes (**$15.8 million**) and decreases in accrued legal contingencies (**$21.5 million**) and accrued compensation (**$6.8 million**)[157](index=157&type=chunk) [Cash Flows from Investing Activities](index=42&type=section&id=Cash%20Flows%20from%20Investing%20Activities) Net cash used in investing activities increased to **$196.4 million**, primarily driven by **$141.3 million** for the BST acquisition and **$55.1 million** for capital expenditures - Net cash used in investing activities was **$196.4 million** for the six months ended June 30, 2023[159](index=159&type=chunk) - Key uses included **$141.3 million** for the BST acquisition (net of cash acquired) and **$55.1 million** for purchases of property and equipment and capitalization of software development[159](index=159&type=chunk) [Cash Flows from Financing Activities](index=42&type=section&id=Cash%20Flows%20from%20Financing%20Activities) Cash used in financing activities increased to **$120.2 million**, mainly due to **$100.0 million** for 5.750% Notes repurchases and **$13.1 million** for treasury stock purchases - Cash flows used in financing activities were **$120.2 million** for the six months ended June 30, 2023[160](index=160&type=chunk) - Primary uses included **$100.0 million** for the repurchase of 5.750% Notes and **$13.1 million** for the purchase of treasury stock[160](index=160&type=chunk) [Term Loans and Revolvers](index=42&type=section&id=Term%20Loans%20and%20Revolvers) Senior secured credit facilities include a **$1,325.0 million** Term Loan B and a **$450.0 million** Revolver B; Term Loan B interest rate increased to **9.73%** - Senior secured credit facilities consist of a **$1,325.0 million** Term Loan B (maturing Sep 1, 2028) and a **$450.0 million** Revolver B (maturing Aug 24, 2026)[162](index=162&type=chunk)[164](index=164&type=chunk) - The interest rate for Term Loan B was **9.73%** as of June 30, 2023, up from **5.82%** as of June 30, 2022[163](index=163&type=chunk) - The Company transitioned from LIBOR to Term SOFR effective July 1, 2023[164](index=164&type=chunk) [Senior Notes](index=43&type=section&id=Senior%20Notes) MultiPlan has **$1,300.0 million** in Senior Convertible PIK Notes and **$1,050.0 million** in 5.50% Senior Secured Notes; **$137.8 million** of 5.750% Notes were repurchased - Outstanding Senior Convertible PIK Notes total **$1,300.0 million**, with a **6.00%**/**7.00%** interest rate and a **$13.00** conversion price, due October 15, 2027[166](index=166&type=chunk)[167](index=167&type=chunk) - Outstanding 5.50% Senior Secured Notes total **$1,050.0 million**, with a **5.50%** interest rate, due September 1, 2028[169](index=169&type=chunk) - During the six months ended June 30, 2023, the Company repurchased and cancelled **$137.8 million** of the 5.750% Notes, resulting in a **$36.8 million** gain on debt extinguishment[170](index=170&type=chunk) [Debt Covenants and Events of Default](index=43&type=section&id=Debt%20Covenants%20and%20Events%20of%20Default) The company is subject to debt covenants, including a maximum first lien secured leverage ratio of 6.75 to 1.00, and was in compliance as of June 30, 2023 - The Company is subject to affirmative and negative debt covenants that limit its ability to incur additional indebtedness, pay dividends, make investments, and sell assets[171](index=171&type=chunk) - The revolving credit facility requires maintaining a maximum first lien secured leverage ratio of **6.75 to 1.00** if utilization exceeds **35%** of total commitments[174](index=174&type=chunk) - As of June 30, 2023, the Company was in compliance with all debt covenants, with a consolidated first lien debt to consolidated EBITDA ratio of **3.54 times**[174](index=174&type=chunk) [Guarantees and Security](index=45&type=section&id=Guarantees%20and%20Security) All obligations under senior secured credit facilities and 5.50% Senior Secured Notes are guaranteed by MPH Acquisition Corp. 1 and its U.S. subsidiaries, secured by a first priority lien - All obligations under senior secured credit facilities and 5.50% Senior Secured Notes are unconditionally guaranteed by MPH Acquisition Corp. 1 and its wholly-owned U.S. subsidiaries[177](index=177&type=chunk) - These obligations are secured by a first priority lien on substantially all tangible and intangible property of MPH and subsidiary guarantors, and a pledge of their subsidiaries' capital stock[177](index=177&type=chunk) [Critical Accounting Policies](index=45&type=section&id=Critical%20Accounting%20Policies) Significant estimates are made for revenue recognition, long-lived assets, goodwill, warrants, stock-based compensation, and income taxes, with no material changes reported - Significant estimates and assumptions are made for revenue recognition, recoverability of long-lived assets, goodwill, valuation of Private Placement Warrants and Unvested Founder Shares, stock-based compensation, and income taxes[34](index=34&type=chunk)[178](index=178&type=chunk) - No material changes to critical accounting policies and estimates were reported as of June 30, 2023, compared to the 2022 Annual Report[179](index=179&type=chunk) [Customer Concentration](index=45&type=section&id=Customer%20Concentration) MultiPlan faces significant customer concentration risk, with three customers accounting for **32%**, **20%**, and **10%** of 2022 revenues; loss of any could materially impact results - Three customers individually accounted for **32%**, **20%**, and **10%** of revenues for the year ended December 31, 2022[180](index=180&type=chunk) - The loss of business from one or more of these larger customers could have a material adverse effect on the Company's results of operations[180](index=180&type=chunk) [Recent Accounting Pronouncements](index=45&type=section&id=Recent%20Accounting%20Pronouncements) Refer to Note 1 for details on recent accounting pronouncements, including the adoption of ASU 2020-04, 2021-01, and 2022-06 (Reference Rate Reform) - Refer to Note 1 for additional information on recent accounting pronouncements[181](index=181&type=chunk) - The Company adopted ASU 2020-04, 2021-01, and 2022-06 (Reference Rate Reform) and transitioned from LIBOR to Term SOFR effective July 1, 2023, with no material impact on financial statements[42](index=42&type=chunk) [Quantitative and Qualitative Disclosure About Market Risk](index=45&type=section&id=Quantitative%20and%20Qualitative%20Disclosure%20About%20Market%20Risk) No material changes to market risks previously disclosed in Item 7A of the 2022 Annual Report were reported as of June 30, 2023 - Refer to Item 7A of the 2022 Annual Report for quantitative and qualitative disclosures about market risk[185](index=185&type=chunk) - As of June 30, 2023, there were no material changes in the market risks described in the 2022 Annual Report[185](index=185&type=chunk) [Internal Controls Over Financial Reporting](index=45&type=section&id=Internal%20Controls%20Over%20Financial%20Reporting) Refer to Item 4 for further information on the company's internal controls over financial reporting - Refer to Item 4 for further information on the Company's internal controls over financial reporting[184](index=184&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=47&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes to market risks previously disclosed in Item 7A of the company's 2022 Annual Report were reported as of June 30, 2023 - No material changes in the market risks described in the 2022 Annual Report as of June 30, 2023[185](index=185&type=chunk) [Item 4. Controls and Procedures](index=47&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of June 30, 2023, with no material changes in internal control over financial reporting - Management concluded that disclosure controls and procedures were effective at a reasonable assurance level as of June 30, 2023[187](index=187&type=chunk) - There has been no material change in internal control over financial reporting during the six months ended June 30, 2023[188](index=188&type=chunk) - Management recognizes the inherent limitations of control systems, which provide reasonable, not absolute, assurance[189](index=189&type=chunk) [Part II - Other Information](index=48&type=section&id=Part%20II%20-%20Other%20Information) [Item 1. Legal Proceedings](index=48&type=section&id=Item%201.%20Legal%20Proceedings) MultiPlan is a defendant in various lawsuits and regulatory investigations, none expected to materially affect financial condition or results of operations - The Company is a defendant in various lawsuits and regulatory investigations, which are not expected to have a material adverse effect on its financial condition or results of operations[191](index=191&type=chunk) - The Delaware Stockholder Litigation, a class action lawsuit, was settled for **$33.75 million**, paid by the Company and its insurers[194](index=194&type=chunk) - The settlement was approved by the Delaware Court of Chancery on February 28, 2023, resolving the litigation[195](index=195&type=chunk) [Item 1A. Risk Factors](index=48&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors previously disclosed in Item 1A. "Risk Factors" of the company's 2022 Annual Report were reported - No material changes to the risk factors previously disclosed in Item 1A. "Risk Factors" in the Company's 2022 Annual Report during the six months ended June 30, 2023[197](index=197&type=chunk) [Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities](index=49&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities,%20Use%20of%20Proceeds,%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company repurchased **7,123,459** shares of Class A common stock for **$1.04** per share during Q2 2023 under a **$100 million** repurchase program Issuer Purchases of Equity Securities (Three Months Ended June 30, 2023) | Period | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares that May Yet Be Purchased | | :------------------- | :------------------------------- | :--------------------------- | :----------------------------------------------------------------- | :--------------------------------------------------------- | | April 1 - 30, 2023 | 2,371,867 | $1.05 | 2,371,867 | $91,784 | | May 1 - 31, 2023 | 4,751,592 | $1.04 | 4,751,592 | $86,860 | | June 1 - 30, 2023 | — | — | — | — | | **Total** | **7,123,459** | **$1.04** | **7,123,459** | **—** | - The share repurchase program, approved on February 27, 2023, authorizes repurchases of up to **$100 million** of Class A common stock through December 31, 2023[200](index=200&type=chunk) [Item 6. Exhibits](index=50&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including the Unit Purchase Agreement for BST acquisition, Credit Agreement Amendment, and officer certifications - Key exhibits include the Unit Purchase Agreement for the BST acquisition, Amendment Agreement No. 1 to the Credit Agreement, certifications of Principal Executive and Financial Officers, and Inline XBRL financial information[202](index=202&type=chunk) [Signature](index=51&type=section&id=Signature)

MultiPlan Corporation (NYSE:MPLN) Q2 2023 Earnings Conference Call August 2, 2023 10:00 AM ET Company Participants Luke Montgomery - Senior Vice President, Finance and Investor Relations Dale White - Chief Executive Officer Jim Head - Chief Financial Officer Conference Call Participants Joshua Raskin - Nephron Research LLC Daniel Grosslight - Citigroup Rishi Parekh - JPMorgan Operator Hello, everyone, and welcome to the MultiPlan Corporation Second Quarter 2023 Earnings Conference Call. My name is Nadia, an ...

1 Forward-Looking Statements Non-GAAP Measures • EBITDA and Adjusted EBITDA do not reflect interest expense, or the cash requirements necessary to service interest or principal payments on our debt; • Although depreciation and amortization are non-cash charges, the tangible assets being depreciated will often have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements. 2023 Q2 Second Quarter 2023 Results: • Operating cash flow of $7.7 million ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (MARK ONE) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended March 31, 2023 o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-39228 MULTIPLAN CORPORATION (Exact Name of Registrant as Specified in Its Charter) Delaware 84-3536151 (State or other ju ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (MARK ONE) x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 o For the transition period from to Commission file number: 001-39228 MULTIPLAN CORPORATION (Exact Name of Registrant as Specified in Its Charter) (State or other jurisdiction of in ...

MultiPlan Corporation (NYSE:MPLN) Q4 2022 Results Conference Call February 28, 2023 8:00 AM ET Company Participants Shawna Gasik - AVP of Investor Relations Dale White - President, CEO and Director Jim Head - CFO and Executive VP Conference Call Participants Marco Criscuolo - Nephron Steven Valiquette - Barclays Daniel Grosslight - Citigroup Rishi Parekh - JPMorgan Chase Operator Ladies and gentlemen, welcome to MultiPlan Corporation Fourth Quarter 2022 Earnings Conference Call. My name is Glenn, and I'll b ...