ìôBLRaQ5 ÷ ¤ ^µä[email protected]/CIK-0001577916/5d28a3fb-0f...press release reporting the financial results of the Company for the three and six months ended

UNITEDSTATESSECURITIESANDEXCHANGECOMMISSION

WASHINGTON,D.C.20549

FORM8-K

CURRENTREPORTPursuanttoSection13or15(d)

oftheSecuritiesExchangeActof1934

DateofReport(DateofEarliestEventReported):February5,2018

Premier,Inc.(ExactNameofRegistrantasSpecifiedinitsCharter)

Delaware 001-36092 35-2477140

(StateorOtherJurisdictionofIncorporation)

(CommissionFileNumber)

(IRSEmployerIdentificationNo.)

13034BallantyneCorporatePlaceCharlotte,NC28277

(AddressofPrincipalExecutiveOffices)(ZipCode)

(704)357-0022(Registrant’sTelephoneNumber,IncludingAreaCode)

NotApplicable(FormerNameorFormerAddress,ifChangedSinceLastReport)

ChecktheappropriateboxbelowiftheForm8-Kfilingisintendedtosimultaneouslysatisfythefilingobligationoftheregistrantunderanyofthefollowingprovisions:

☐ WrittencommunicationspursuanttoRule425undertheSecuritiesAct(17CFR230.425)

☐ SolicitingmaterialpursuanttoRule14a-12undertheExchangeAct(17CFR240.14a-12)

☐ Pre-commencementcommunicationspursuanttoRule14d-2(b)undertheExchangeAct(17CFR240.14d-2(b))

☐ Pre-commencementcommunicationspursuanttoRule13e-4(c)undertheExchangeAct(17CFR240.13e-4(c))

IndicatebycheckmarkwhethertheregistrantisanemerginggrowthcompanyasdefinedinRule405oftheSecuritiesActof1933(§230.405)orRule12b-2oftheSecuritiesExchangeActof1934(§240.12b-2).Emerginggrowthcompany☐

Ifanemerginggrowthcompany,indicatebycheckmarkiftheregistranthaselectednottousetheextendedtransitionperiodforcomplyingwithanyneworrevisedfinancialaccountingstandardsprovidedpursuanttoSection13(a)oftheExchangeAct.☐

Item2.02. ResultsofOperationsandFinancialCondition.

OnFebruary5,2018,Premier,Inc.(the“Company”)issuedapressreleasereportingthefinancialresultsoftheCompanyforthethreeandsixmonthsendedDecember31,2017.AcopyofthepressreleaseisattachedtothisreportasExhibit99.1andisincorporatedhereinbythisreference.

Asdiscussedinthepressrelease,theCompanyheldaconferencecallandwebcastonFebruary5,2018.SupplementalslidesreferencedduringtheconferencecallandwebcastwereavailableontheCompany’swebsiteforviewingbycallparticipants.AtranscriptofthecalltogetherwithsupplementalslidesreferencedduringtheconferencecallareattachedasExhibit99.2andExhibit99.3,respectively,tothisCurrentReportonForm8-K.

Item7.01. RegulationFDDisclosure.

Asnotedabove,theCompanyheldaconferencecallandwebcastonFebruary5,2018,todiscusstheCompany’soperatingresultsforthethreeandsixmonthsendedDecember31,2017.Acopyofthepressrelease,whichcontainsadditionalinformationregardinghowtoaccesstheconferencecallandwebcastandhowtolistentoarecordedplaybackofthecall,isattachedasExhibit99.1tothisCurrentReportonFrom8-K.AtranscriptofthecalltogetherwithsupplementalslidesreferencedduringtheconferencecallareattachedasExhibit99.2andExhibit99.3,respectively,tothisCurrentReportonForm8-Kandareincorporatedhereinbyreference.

****

TheinformationdiscussedunderItem2.02andItem7.01above,includingExhibit99.1,Exhibit99.2andExhibit99.3,shallnotbedeemed“filed”forpurposesofSection18oftheSecuritiesExchangeActof1934,asamended,orincorporatedbyreferenceinanyfilingbytheCompanyundertheSecuritiesActof1933,asamended,exceptasshallbeexpresslysetforthbyspecificreferenceinsuchafiling.

Item9.01. FinancialStatementsandExhibits.

(d)Exhibits.99.1 PressreleaseofPremier,Inc.,datedFebruary5,2018.

99.2 TranscriptofconferencecallofPremier,Inc.,datedFebruary5,2018.

99.3 Supplementalslidesreferencedduringthesecondquarter2018earningscallofPremier,Inc.

SIGNATURE

PursuanttotherequirementsoftheSecuritiesExchangeActof1934,theregistranthasdulycausedthisreporttobesignedonitsbehalfbytheundersignedhereuntodulyauthorized.

Premier,Inc.

By: /s/SusanD.DeVore Name: SusanD.DeVore Title: PresidentandChiefExecutiveOfficer

Date:February8,2018

Exhibit99.1

FORIMMEDIATERELEASE

PREMIERINC.REPORTSFISCAL2018SECOND-QUARTERRESULTS

CHARLOTTE,NC,Feb.5,2018–PremierInc.(NASDAQ:PINC)todayreportedfinancialresultsforthefiscal2018secondquarterendedDec.31,2017.

Q22018Highlights:

• Netrevenueincreased15%to$411.4millionfromthesameperiodlastyear;SupplyChainServicessegmentrevenuerose19%andPerformanceServicessegmentrevenueincreased1%fromthesameperiodlastyear.

• Duealmostentirelytoaone-timeremeasurementofdeferredtaxesresultingfromtheTaxCutsandJobsAct,whichincreasedincometaxexpenseto

$231.5millionfrom$37.4millionayearago,netincomedeclined92%to$19.8millionfromthesameperiodayearago.Dilutednetlosspersharetotaled$1.66pershare,comparedwithdilutednetincomeof$1.50pershareintheprioryear.

• Non-GAAPadjustedEBITDA*of$133.5millionincreased9%fromthesameperiodlastyear.

• Non-GAAPadjustedfullydistributednetincome*increased7%to$70.0million,representingnon-GAAPadjustedfullydistributedearningspershare*of$0.50,anincreaseof9%over$0.46persharefromayearago.

• Theguidancerangeforfiscal2018non-GAAPadjustedfullydistributedearningspershareisraisedto$2.24-$2.37persharetoreflecttheexpectedincreasefromtaxreformandthecompany’sstockrepurchaseprogram.

* Descriptions of non-GAAP financial measures are provided in “Use and Definition of Non-GAAP Financial Measures,” and reconciliations are provided in the

tables at the end of this release.

“Premierdeliveredasuccessfulfiscal2018secondquarter,”saidSusanDeVore,presidentandchiefexecutiveofficer.“Wemetorexceededmanagementexpectationsfortheoverallbusinessaswellasforthesegments.Onaconsolidatedbasis,year-over-yearnetrevenueincreased15%andnon-GAAPadjustedEBITDArose9%.SupplyChainServicessegmentrevenueincreased19%fromayearago,withlegacygrouppurchasingdelivering5%growthinnetadministrativefeesrevenue.Theproductsbusinessproduceddouble-digitrevenuegrowthacrossboththeintegratedpharmacyanddirectsourcingbusinesses.WecontinuetoexpectrevenuegrowthinthePerformanceServicessegmenttoincreasesequentiallyinthesecondhalfofthefiscalyear,specificallydrivenbyexpectedsalesofambulatoryqualitysolutionslinkedtoregulatoryreportingthatwilloccurinthethirdquarter,andaswerecognizerevenuefromperformance-basedadvisoryservicesengagements.

“Wearecontinuallylookingforwaystoimprovetheefficiencyofourbusinessesanddelivervaluetoourstockholders,”DeVorecontinued.“Duringthequarter,weannouncedandlauncheda$200million

Premier,Inc.FY’18Q2ResultsPage2of15stockrepurchaseprogram.Weexpectthisprogram,combinedwiththeanticipatedbenefitsfromfederaltaxreform,tomeaningfullyimpactfull-yearnon-GAAPadjustedfullydistributedearningspershare,andweareincreasingthisguidancerangeaccordingly.Weareaffirmingourotherguidanceranges,basedontheyear-to-dateperformanceandouroutlookfortheremainderoffiscal2018.

“Tofurtheroptimizeefficiencies,realizeongoingintegrationsynergies,andrealignresourcesforfuturegrowthareas,managementisimplementingcertainpersonneladjustments,includingamodestreductioninforce,thatweexpecttoproducepre-taxcostsavingsapproximating$13millionto$14milliononanannualrun-ratebasis,”DeVorecontinued.

“Lookingforward,webelievePremier’sintegratedsupplychain,technologyandanalyticscapabilitiesandwrap-aroundadvisoryservicescontinuetouniquelydifferentiateourhealthcareperformanceimprovementcompanyaswepartnerwithprovidersandsupplierstomanagetotalcosts,improvequalityandsafetyandnavigatethecontinuingevolutiontovalue-basedcare,”DeVoresaid.“WefurtherbelievethatourcomprehensiveapproachandmultiplebusinessdriversenablePremiertoachievesuccessfulgrowththroughchangingmarketplaceconditions,aswecontinuetodeliveracompellingvaluepropositiontoourmembersandseektobuildlong-termvalueforourstockholders.”

ResultsofOperationsfortheSecondQuarterofFiscal2018ConsolidatedSecond-QuarterFinancialHighlights ThreeMonthsEndedDecember31, SixMonthsEndedDecember31, (in thousands, except per share data) 2017 2016 %Change 2017 2016 %ChangeNetRevenue(a): SupplyChainServices:

Netadministrativefees $ 159,343 $129,071 23% $ 310,334 $255,047 22%Otherservicesandsupport 3,421 1,201 185% 5,570 2,846 96%

Services 162,764 130,272 25% 315,904 257,893 22%Products 162,101 142,378 14% 314,764 248,507 27%

TotalSupplyChainServices(a) 324,865 272,650 19% 630,668 506,400 25%PerformanceServices(a) 86,533 85,850 1% 171,294 165,372 4%

Total(a) $ 411,398 $358,500 15% $ 801,962 $671,772 19%

Netincome $ 19,769 $246,184 (92)% $ 80,385 $304,279 (74)%Netincomeattributabletostockholders $ 281,200 $400,275 (30)% $ 617,630 $470,577 31%Adjustednetincome(loss)(b) $(231,316) $211,688 (209)% $(181,251) $248,831 (173)%Weightedaveragesharesoutstanding:

Basic 55,209 49,445 12% 54,059 48,330 12%Diluted 139,237 141,308 (1)% 139,641 142,133 (2)%

Earningspershareattributabletostockholders: Basic $ 5.09 $ 8.10 (37)% $ 11.43 $ 9.74 17%Diluted(b) $ (1.66) $ 1.50 (211)% $ (1.30) $ 1.75 (174)%

NON-GAAPFINANCIALMEASURES:

AdjustedEBITDA(a)(c): SupplyChainServices $ 132,045 $119,022 11% $ 257,665 $236,326 9%PerformanceServices 27,929 28,603 (2)% 49,150 50,914 (3)%

TotalsegmentadjustedEBITDA 159,974 147,625 8% 306,815 287,240 7%Corporate (26,432) (25,616) (3)% (54,102) (54,458) 1%

Total(a) $ 133,542 $122,009 9% $ 252,713 $232,782 9%

Adjustedfullydistributednetincome(c) $ 69,982 $ 65,242 7% $ 131,695 $124,170 6%

Earningspershareonadjustedfullydistributednetincome-diluted(a)(c) $ 0.50 $ 0.46 9% $ 0.94 $ 0.87 8%

(a) Boldedmeasurescorrespondtocompanyguidance.(b) Earningspershareattributabletostockholdersexcludestheadjustmentofredeemablelimitedpartners’capitaltoredemptionamountandthenetincome

attributabletonon-controllinginterestinPremierLPifClassBcommonstockisdeterminedtobedilutive.Likewise,earningspershareattributabletostockholdersincludestheadjustmentofredeemablelimitedpartners’capitaltoredemptionamountandthenetincomeattributabletonon-controllinginterestinPremierLPifClassBcommonstockisdeterminedtobeantidilutive.

(c) SeeattachedsupplementalfinancialinformationforreconciliationofreportedGAAPresultstoNon-GAAPresults.

Premier,Inc.FY’18Q2ResultsPage3of15Forthefiscalsecond-quarterendedDec.31,2017,Premiergeneratednetrevenueof$411.4million,anincreaseof15%,fromnetrevenueof$358.5millionforthesameperiodayearago.

Duealmostentirelytoaone-timeremeasurementofdeferredtaxesresultingfromtheTaxCutsandJobsAct,netincomeforthefiscalsecond-quarterwas$19.8million,comparedwith$246.2millionforthesameperiodayearago.InaccordancewithGAAP,fiscal2018and2017second-quarternetincomeattributabletostockholdersincludednon-cashadjustmentsof$317.9millionand$335.3million,respectively,toreflectthechangeintheredemptionvalueoflimitedpartners’ClassBcommonunitownershipattheendofeachperiod.Thesenon-cashadjustmentsresultprimarilyfromchangesinthenumberofClassBcommonsharesoutstandingandthecompany’sstockpricebetweenperiodsanddonotreflectresultsofthecompany’sbusinessoperations.Afterthesenon-cashadjustments,thecompanyreportednetincomeattributabletostockholdersof$281.2million,comparedwith$400.3millionforthesameperiodayearago.Second-quarternetlossperdilutedshare,whichisbasedonnetincomeadjustedinaccordancewithGAAPforthetaxexpenserelatedtoPremierInc.retainingtheportionofnetincomeattributabletoincomefromnon-controllinginterestinPremierLP,was$1.66comparedwithdilutednetincomeof$1.50pershareforthesameperiodayearago.Second-quarternetlosspersharewasalsonegativelyimpactedbythesamefactorsthatimpactednetincome.See “Calculation of GAAPEarnings per Share” in the income statement section of this press release.

Fiscalsecond-quarternon-GAAPadjustedEBITDAof$133.5millionincreased9%from$122.0millionforthesameperiodtheprioryear.AdjustedEBITDAgrowthwasprimarilydrivenbygrowthinnetadministrativefeesrevenue,includingcontributionsrelatedtotheInnovatixandEssensaacquisition,netofthereductioninequityinnetincomeofunconsolidatedaffiliatesduetoacquiringtheremaining50%ofInnovatix,alongwithanincreaseinproductrevenue.Theseresultswerepartiallyoffsetbyincreasedcostofproductsandselling,generalandadministrativeexpensesresultingfromhighersalariesandbenefitsexpensesasaresultofacquisitionsandtosupportgrowth.

Non-GAAPadjustedfullydistributednetincomeforthefiscalsecond-quarterincreased7%to$70.0millionfrom$65.2millionforthesameperiodayearago.Adjustedfullydistributedearningspershareincreasedto$0.50from$0.46forthesameperiodayearago.Adjustedfullydistributedearningspershareisanon-GAAPfinancialmeasurethatrepresentsnetincome,adjustedfornon-recurringandnon-cashitems,attributabletoallstockholdersasifallClassBstockholdersexchangedtheirClassBcommonunitsandassociatedClassBcommonsharesforClassAcommonshares.

SegmentResults

Supply Chain Services

Forthefiscalsecond-quarterendedDec.31,2017,theSupplyChainServicessegmentgeneratednetrevenueof$324.9million,anincreaseof19%from$272.7millionayearago.Therevenueincreasewasdrivenbygrowthinthecompany’sgrouppurchasingorganization(GPO)andproductsbusinesses.GPOnetadministrativefeesrevenueof$159.3millionincreased$30.3million,or23%,fromayearago,primarilydrivenbycontributionsfromtheInnovatixandEssensabusinesses,whichwereacquiredinDecember2016.Legacyyear-over-yearnetadministrativefeerevenuegrowthinthesecondquarterwas5%,resultingfromasupplierrevenuerecoverysettlementandcontractpenetrationofexistingmembers.Productrevenuesof$162.1millionincreased14%from$142.4millionayearago,attributabletodouble-digitgrowthfromboththeintegratedpharmacyanddirectsourcingbusinesses.

Premier,Inc.FY’18Q2ResultsPage4of15SupplyChainServicessegmentadjustedEBITDAof$132.0millionforthefiscal2018second-quarterincreased11%from$119.0millionforthesameperiodayearago.Theincreaselargelyreflectsgrowthinnetadministrativefeesrevenue.Growthwaspartiallyoffsetbyincrementalsalariesandbenefitsassociatedwiththeprior-yearacquisitionofInnovatixandEssensa.Additionally,adjustedEBITDAfromtheprioryearincludeda$5.6millionnon-cashadjustmentforcashcollectionsnotrecognizedasrevenueonaGAAPbasisduetoapurchaseaccountingadjustment,andincluded$4.1millioninequityinnetincomeofInnovatix,asitwashistoricallyaccountedforasanunconsolidatedaffiliatethroughthedateofacquisition.

Performance Services

Forthefiscalsecond-quarterendedDec.31,2017,thePerformanceServicessegmentgeneratednetrevenueof$86.5million,a1%increasefrom$85.9millionforthesamequarterlastyear,primarilyduetogrowthinthecompany’sinformaticsandtechnologyservicesbusinessprimarilyrelatedtocostmanagementsolutionsaswellasgrowthinambulatoryqualitysolutions.

PerformanceServicessegmentadjustedEBITDAof$27.9millionforthefiscal2018second-quarterdecreased2%from$28.6millionforthesamequarterlastyear.Growthwasimpactedbyanincreaseincostofsales,primarilyrelatedtoanincreaseinstaffingandcoststosupportgrowthandperformance-basedengagementsandwasimpactedonacomparablebasisduetohigherrevenuerecognitionfromperformance-basedengagementsintheprioryear.

ResultsofOperationsfortheSixMonthsEndedDec.31,2017

ForthesixmonthsendedDec.31,2017,Premiergeneratednetrevenueof$802.0million,a19%increasefromnetrevenueof$671.8millionforthesameperiodayearago.

Duealmostentirelytoaone-timeremeasurementofdeferredtaxesresultingfromtheTaxCutsandJobsAct,netincomeforthesix-monthperiodtotaled$80.4million,comparedwith$304.3millionforthesameperiodayearago.Fiscal2018and2017six-monthnetincomeattributabletostockholdersrequirednon-cashadjustmentsof$638.3millionand$397.1million,respectively,toreflectchangesinredemptionvalueofthelimitedpartnersClassBcommonunitownershipattheendofeachperiod.Thesenon-cashadjustmentsresultprimarilyfromchangesinthenumberofClassBcommonsharesoutstandingandthecompany’sstockpricebetweenperiodsanddonotreflectresultsofthecompany’sbusinessoperations.Afterthesenon-cashadjustments,thecompanyreportednetincomeattributabletostockholdersof$617.6million,comparedwith$470.6millionayearago.Onadilutedper-sharebasis,whichisbasedonnetincomeadjustedinaccordancewithGAAPforthetaxexpenserelatedtoPremierInc.retainingtheportionofnetincomeattributabletoincomefromnon-controllinginterestinPremierLP,thenetlosswas$1.30comparedwithdilutednetincomeof$1.75forthesameperiodayearago.NetlosspershareforthesixmonthsendedDec.31,2017wasalsonegativelyimpactedbythesamefactorsthatimpactednetincome.See “Calculation of GAAP Earnings per Share” in the incomestatement section of this press release.

ForthesixmonthsendedDec.31,2017,non-GAAPadjustedEBITDAof$252.7millionincreased9%from$232.8millionforthesameperiodlastyear.Non-GAAPadjustedfullydistributednetincomeforthesixmonthsrose6%to$131.7millionfrom$124.2millionforthesameperiodayearago,whilenon-GAAPadjustedfullydistributedearningspershareincreasedto$0.94from$0.87.

Premier,Inc.FY’18Q2ResultsPage5of15SupplyChainServicessegmentnetrevenueforthefirstsixmonthsoffiscal2018increased25%to$630.7millionfrom$506.4millionayearearlier.SupplyChainServicessegmentadjustedEBITDAincreased9%to$257.7millionfrom$236.3millionfortheprioryear.

PerformanceServicessegmentnetrevenueforthesixmonthsoffiscal2018increased4%to$171.3millionfrom$165.4millionayearearlier.SegmentadjustedEBITDAdecreased3%to$49.2millionfrom$50.9million.

CashFlowsandLiquidity

Cashprovidedbyoperatingactivitieswas$206.5millionforthesix-monthperiodendedDec.31,2017,comparedwith$138.4millionforthesameperiodlastyear.Theincreaseincashflowfromoperationswasprimarilydrivenbyanincreaseinnetadministrativefeesaswellasdecreasedoutflowsrelatedtoworkingcapitalneeds.AtDec.31,2017,thecompany’scashandcashequivalentstotaled$163.0million,comparedwith$156.7millionatJune30,2017.AtDec.31,2017,thecompanyhadanoutstandingbalanceof$200.0milliononitsfive-year,$750millionrevolvingcreditfacility.

ThroughDec.31,2017,thecompanyrepurchasedapproximately2.6millionsharesofClassAcommonstockfor$74.7million,usingthetradingdate(approximately2.5millionsharesfor$71.0millionusingthesettlementdate).Therepurchasestookplaceunderthecompany’songoing$200.0millionstockrepurchaseprogramannouncedOct.31,2017,whichauthorizessharestoberepurchasedthroughJune30,2018.Assumingfullcompletionoftheprogrambytheendofthefiscalyear,thecompanyexpectsfiscal2018non-GAAPadjustedfullydistributedearningspersharetobepositivelyimpactedbyapproximately$0.03to$0.05pershare.

Non-GAAPfreecashflowforthesix-monthperiodendedDecember31,2017was$122.2million,comparedwith$59.4millionforthesameperiodayearago.Theincreaseinfreecashflowresultsfromthesamefactorsdrivingthegrowthincashflowfromoperations.(See free cash flow definition in “Use and Definitionof Non-GAAP Financial Measures,” and reconciliation to net cash provided by operating activities is provided in the tables section of this press release) .

Fiscal2018OutlookandGuidance

BasedonresultsforthesixmonthsendedDec.31,2017,management’scurrentexpectationsfortheremainderoffiscal2018andtherealizationofpreviouslydisclosedunderlyingassumptions,thecompanyreaffirmsitsfullfiscal-year2018guidancerangeforconsolidatednetrevenue,SupplyChainServicesandPerformanceServicessegmentrevenue,andnon-GAAPadjustedEBITDA.WithinSupplyChainServices,productsrevenueisexpectedtogrow14%to18%forthefullfiscalyear,comparedwiththepreviousassumptionof9%to13%.Theguidancerangefornon-GAAPadjustedfullydistributedearningspershareisbeingincreasedtoreflectexpectationsofthebeneficialimpactsofthefederalcorporateincometaxreformandthefullimplementationofthecompany’spreviouslyannounced$200millionstockrepurchaseprogram.Taxreformisexpectedtopositivelyimpactfiscal2018non-GAAPadjustedfullydistributedEPSbyapproximately$0.23,whilethesharerepurchaseisexpectedtoadd$0.03to$0.05.Asaresult,theguidancerangeforfiscal2018non-GAAPadjustedfullydistributedearningspershareisbeingincreasedto$2.24-$2.37.

Premier,Inc.FY’18Q2ResultsPage6of15

Fiscal2018FinancialGuidance(1)

Premier,Inc.adjustsfull-yearfiscal2018financialguidance,asfollows:

(inmillions,exceptpersharedata) Current*FY2018 %YoYIncrease

PreviousFY2017

NetRevenue: SupplyChainServicessegment $1,200.0-$1,266.0 9%-15% $1,200.0-$1,266.0PerformanceServicessegment $364.0-$382.0 3%-8% $364.0-$382.0

TotalNetRevenue $1,564.0-$1,648.0 8%-13% $1,564.0-$1,648.0

Non-GAAPadjustedEBITDA $532.0-$557.0 6%-11% $532.0-$557.0

Non-GAAPadjustedfullydistributedEPS $2.24-$2.37 19%-25% $1.98-$2.09

* GuidanceadjustmentsasofFeb5,2018,adds$0.26tolowendand$0.28tohighendofnon-GAAPadjustedfullydistributedEPSrangeforexpected$0.23

impactfromtaxreformand$0.03-$0.05impactfromsharerepurchaseprogram,assumingprogramiscompletedbyfiscalyearend.(1) Thecompanydoesnotmeaningfullyreconcileguidancefornon-GAAPadjustedEBITDAandnon-GAAPadjustedfullydistributedearningspersharetonet

incomeattributabletostockholdersorearningspershareattributabletostockholdersbecausethecompanycannotprovideguidanceformoresignificantreconcilingitemsbetweennetincomeattributabletostockholdersandadjustedEBITDAandbetweenearningspershareattributabletostockholdersandnon-GAAPadjustedfullydistributedearningspersharewithoutunreasonableeffort.Thisisduetotwoprimaryreasons:

• Reasonableguidancecannotbeprovidedforreconcilingtheadjustmentofredeemablelimitedpartners’capitaltoredemptionamount–historicallythelargestadjustmentinthereconciliationfromnon-GAAPtoGAAPamounts–duetothefactthattheincreaseordecreaseinthisitemisbasedonthechangeinthenumberofsharesofClassBstockoutstandingandchangeinstockpricebetweenquarters,whichthecompanycannotpredict,controlorreasonablyestimate.

• Reasonableguidancecannotbeprovidedforearningspershareattributabletostockholdersbecausetheongoingquarterlymember-ownerexchangeofClassBcommonstockandcorrespondingClassBunitsintosharesofClassAcommonstockimpactsthenumberofsharesofClassAcommonstockoutstandingeachquarter,whichthecompanycannotpredict,controlorreasonablyestimate.Memberownershavetheright,butnottheobligation,toexchangesharesonaquarterlybasis,andthecompanyhasthediscretiontosettleanyexchangedsharesforClassAcommonstock,cash,oracombinationthereof,neitherofwhichcanbepredicted,controlledorreasonablyestimatedatthistime.

RealignmentofResources

Aspartofthecompany’songoingintegrationsynergiesandeffortstorealignresourcesforfuturegrowthareas,managementisimplementingcertainpersonneladjustments,includingamodestworkforcereduction,thatareexpectedtoproducepre-taxcostsavingsapproximating$13.0millionto$14.0milliononanannualrun-ratebasis.Pre-taxcashrestructuringchargesofapproximately$5.2millionrelatedtotheworkforcereduction,whichisexpectedtobesubstantiallycompletedinFebruary2018,willbeexpensedinthecurrentquarterendingMarch31,2018.Thesepersonneladjustmentsimpactapproximately75positions,or3%oftotalemployees.

ConferenceCall

PremiermanagementwillhostaconferencecallandliveaudiowebcastonMonday,Feb.5,2018,at5:00p.m.ET,todiscussthecompany’sfinancialresults.TheconferencecallcanbeaccessedthroughalinkprovidedontheinvestorrelationspageonPremier’swebsiteatinvestors.premierinc.com.Thosewantingtoparticipatebyphonemaydosobydialing844.296.7719andprovidingtheoperatorwithconferenceIDnumber:5799398.Internationalcallersshoulddial574.990.1041andprovidethesamepasscode.Thecompanyencouragescallerstodialinatleastfiveminutesbeforethestartofthecalltoregister.ThearchivedwebcastwillbeaccessibleonPremier’sinvestorrelationspage.

Premier,Inc.FY’18Q2ResultsPage7of15AboutPremierInc.

PremierInc.(NASDAQ:PINC)isaleadinghealthcareimprovementcompany,unitinganallianceofapproximately3,900U.S.hospitalsandhealthsystemsandapproximately150,000otherprovidersandorganizationstotransformhealthcare.Withintegrateddataandanalytics,collaboratives,supplychainsolutions,andadvisoryandotherservices,Premierenablesbettercareandoutcomesatalowercost.Premierplaysacriticalroleintherapidlyevolvinghealthcareindustry,collaboratingwithmemberstoco-developlong-terminnovationsthatreinventandimprovethewaycareisdeliveredtopatientsnationwide.HeadquarteredinCharlotte,N.C.,PremierispassionateabouttransformingAmericanhealthcare.PleasevisitPremier’snewsandinvestorsitesonwww.premierinc.com;aswellasTwitter,Facebook,LinkedIn,YouTube,Instagram,FoursquareandPremier’sblogformoreinformationaboutthecompany.

UseandDefinitionofNon-GAAPFinancialMeasures

PremierusesEBITDA,adjustedEBITDA,segmentadjustedEBITDA,adjustedfullydistributednetincome,adjustedfullydistributedearningspershare,andfreecashflowtofacilitateacomparisonofthecompany’soperatingperformanceonaconsistentbasisfromperiodtoperiodandtoprovidemeasuresthat,whenviewedincombinationwithitsresultspreparedinaccordancewithGAAP,allowforamorecompleteunderstandingoffactorsandtrendsaffectingthecompany’sbusinessthanGAAPmeasuresalone.ThecompanybelievesadjustedEBITDAandsegmentadjustedEBITDAassistitsboardofdirectors,managementandinvestorsincomparingthecompany’soperatingperformanceonaconsistentbasisfromperiodtoperiodbyremovingtheimpactofthecompany’sassetbase(primarilydepreciationandamortization)anditemsoutsidethecontrolofmanagement(taxes),aswellasothernon-cash(impairmentofintangibleassetsandpurchaseaccountingadjustments)andnon-recurringitems,fromoperatingresults.Non-recurringitemsareincomeorexpensesorotheritemsthathavenotbeenearnedorincurredwithinthepriortwoyearsandarenotexpectedtorecurwithinthenexttwoyears.Suchitemsincludecertainstrategicandfinancialrestructuringexpenses.

Inaddition,adjustedfullydistributednetincomeandadjustedfullydistributedearningspershareeliminatethevariabilityofnon-controllinginterestasaresultofmemberownerexchangesofClassBcommonstockandcorrespondingClassBunitsintosharesofClassAcommonstock(whichexchangesareamemberowner’scumulativeright,butnotobligation,whichbeganonOctober31,2014,andoccureachquarterthereafter,andarelimitedtoone-seventhofthememberowner’sinitialallocationofClassBcommonunitsperyear)andotherpotentiallydilutiveequitytransactionswhichareoutsideofmanagement’scontrol.AdjustedfullydistributednetincomeisdefinedasnetincomeattributabletoPremier(i)excludingincometaxexpense,(ii)excludingtheimpactofadjustmentofredeemablelimitedpartners’capitaltoredemptionamount,(iii)excludingtheeffectofnon-recurringandnon-cashitems,(iv)assumingtheexchangeofalltheClassBcommonunitsforsharesofClassAcommonstock,whichresultsintheeliminationofnon-controllinginterestinPremierLP,and(v)reflectinganadjustmentforincometaxexpenseonnon-GAAPfullydistributednetincomebeforeincometaxesatthecompany’sestimatedeffectiveincometaxrate.Wedefineadjustedfullydistributedearningspershareasadjustedfullydistributednetincomedividedbydilutedweightedaverageshares.Thesemeasuresassistourboardofdirectors,managementandinvestorsincomparingournetincomeandearningspershareonaconsistentbasisfromperiodtoperiodbecausethesemeasuresremovenon-cashandnon-recurringitems,andeliminatethevariabilityofnon-controllinginterestthatresultsfrommemberownerexchangesofClassBcommonunitsintosharesofClassAcommonstock.

Premier,Inc.FY’18Q2ResultsPage8of15EBITDAisdefinedasnetincomebeforeinterestandinvestmentincome,net,incometaxexpense,depreciationandamortizationandamortizationofpurchasedintangibleassets.AdjustedEBITDAisdefinedasEBITDAbeforemergerandacquisitionrelatedexpensesandnon-recurring,non-cashornon-operatingitems,andincludingequityinnetincomeofunconsolidatedaffiliates.Non-recurringitemsincludecertainstrategicandfinancialrestructuringexpenses.Non-operatingitemsincludegainorlossonthedisposalofassets.SegmentadjustedEBITDAisdefinedasthesegment’snetrevenuelesscostofrevenueandoperatingexpensesdirectlyattributabletothesegment,excludingdepreciationandamortization,amortizationofpurchasedintangibleassets,mergerandacquisitionrelatedexpensesandnon-recurringornon-cashitems,andincludingequityinnetincomeofunconsolidatedaffiliates.Operatingexpensesdirectlyattributabletothesegmentincludeexpensesassociatedwithsalesandmarketing,generalandadministrativeandproductdevelopmentactivitiesspecifictotheoperationofeachsegment.GeneralandadministrativecorporateexpensesthatarenotspecifictoaparticularsegmentarenotincludedinthecalculationofsegmentadjustedEBITDA.AdjustedEBITDAisasupplementalfinancialmeasureusedbythecompanyandbyexternalusersofthecompany’sfinancialstatements.

ManagementconsidersadjustedEBITDAanindicatoroftheoperationalstrengthandperformanceofthecompany’sbusiness.AdjustedEBITDAallowsmanagementtoassessperformancewithoutregardtofinancingmethodsandcapitalstructureandwithouttheimpactofothermattersthatmanagementdoesnotconsiderindicativeoftheoperatingperformanceofthebusiness.SegmentadjustedEBITDAistheprimaryearningsmeasureusedbymanagementtoevaluatetheperformanceofthecompany’sbusinesssegments.

Freecashflowisdefinedasnetcashprovidedbyoperatingactivitieslessdistributionsandtaxreceivableagreementpaymentstolimitedpartnersandpurchasesofpropertyandequipment.Freecashflowdoesnotrepresentdiscretionarycashavailableforspendingasitexcludescertaincontractualobligationssuchasdebtrepayments.Managementbelievesfreecashflowisanimportantmeasurebecauseitrepresentsthecashthatthecompanygeneratesafterpaymentoftaxdistributionstolimitedpartnersandcapitalinvestmenttomaintainexistingproductsandservicesandongoingbusinessoperations,aswellasdevelopmentofnewandupgradedproductsandservicestosupportfuturegrowth.Freecashflowisimportantbecauseitallowsthecompanytoenhancestockholdervaluethroughacquisitions,partnerships,jointventures,investmentsinrelatedorcomplimentarybusinessesand/ordebtreduction.

Readersareurgedtoreviewthereconciliationofthesenon-GAAPfinancialmeasuresincludedattheendofthisrelease.Toproperlyandprudentlyevaluateourbusiness,readersareencouragedtoreviewthefinancialtablesincludedattheendofthisrelease.Readersshouldnotrelyonanysinglefinancialmeasuretoevaluatethecompany’sbusiness.Inaddition,thenon-GAAPfinancialmeasuresusedinthisreleasearesusceptibletovaryingcalculationsandmaydifferfrom,andmaythereforenotbecomparableto,similarlytitledmeasuresusedbyothercompanies.

Forward-LookingStatements

Statementsmadeinthisreleasethatarenotstatementsofhistoricalorcurrentfacts,suchasthoserelatedtoexpectedfinancialperformanceandgrowthtrendsinourSupplyChainandPerformanceServicesbusinesssegmentsandtheirrespectivebusinessunits,theimpactandlengthofthelowerutilizationandpatientvolumetrendsandregulatoryuncertaintyandourabilitytomanagethroughtheseissues,thesuccessofourcostreductionandsavingsmeasures,expectedfinancialcontributionsfromouracquiredbusinesses,thestatementsrelatedtofiscal2018outlookandguidanceandthe

Premier,Inc.FY’18Q2ResultsPage9of15assumptionsunderlyingsuchguidance,theexpectedcompletionandfinancialimpactofPremier’sClassAcommonstockrepurchaseprogram,andtheexpectedfinancialimpactofthefederalcorporateincometaxreform,are“forward-lookingstatements”withinthemeaningofthePrivateSecuritiesLitigationReformActof1995.Forward-lookingstatementsmayinvolveknownandunknownrisks,uncertaintiesandotherfactorsthatmaycausetheactualresults,performanceorachievementsofPremiertobemateriallydifferentfromhistoricalresultsorfromanyfutureresultsorprojectionsexpressedorimpliedbysuchforward-lookingstatements.Accordingly,readersshouldnotplaceunduerelianceonanyforwardlookingstatements.Inadditiontostatementsthatexplicitlydescribesuchrisksanduncertainties,readersareurgedtoconsiderstatementsintheconditionalorfuturetensesorthatincludetermssuchas“believes,”“belief,”“expects,”“estimates,”“intends,”“anticipates”or“plans”tobeuncertainandforward-looking.Forward-lookingstatementsmayincludecommentsastoPremier’sbeliefsandexpectationsastofutureeventsandtrendsaffectingitsbusinessandarenecessarilysubjecttouncertainties,manyofwhichareoutsidePremier’scontrol.MoreinformationonpotentialfactorsthatcouldaffectPremier’sfinancialresultsisincludedfromtimetotimeinthe“CautionaryNoteRegardingForward-LookingStatements,”“RiskFactors”and“Management’sDiscussionandAnalysisofFinancialConditionandResultsofOperations”sectionsofPremier’speriodicandcurrentfilingswiththeSEC,includingthosediscussedunderthe“RiskFactors”and“CautionaryNoteRegardingForward-LookingStatements”sectionofPremier’sForm10-KfortheyearendedJune30,2017,aswellastheForm10-QforthequarterendedDec.31,2017,expectedtobefiledwiththeSECshortlyafterthedateofthisrelease,andalsomadeavailableonPremier’swebsiteatinvestors.premierinc.com.Forward-lookingstatementsspeakonlyasofthedatetheyaremade,andPremierundertakesnoobligationtopubliclyupdateorreviseanyforward-lookingstatements,whetherasaresultofnewinformationorfutureeventsthatoccurafterthatdate,orotherwise.Contacts Investorcontact:JimStoreyVicePresident,[email protected]

Mediacontact:AmandaForsterVicePresident,[email protected]

(TablesFollow)


CondensedConsolidatedStatementsofIncome(Unaudited)

(Inthousands,exceptpersharedata)

ThreeMonthsEndedDecember31,

SixMonthsEndedDecember31,

2017 2016 2017 2016 Netrevenue:

Netadministrativefees $ 159,343 $ 129,071 $ 310,334 $ 255,047Otherservicesandsupport 89,953 87,051 176,864 168,218

Services 249,296 216,122 487,198 423,265Products 162,102 142,378 314,764 248,507

Netrevenue 411,398 358,500 801,962 671,772Costofrevenue:

Services 47,255 44,856 94,191 87,546Products 153,272 131,158 297,712 226,971

Costofrevenue 200,527 176,014 391,903 314,517

Grossprofit 210,871 182,486 410,059 357,255Otheroperatingincome:

Remeasurementoftaxreceivableagreementliabilities 177,174 — 177,174 5,722

Otheroperatingincome: 177,174 — 177,174 5,722

Operatingexpenses: Selling,generalandadministrative 108,620 95,927 222,941 193,887Researchanddevelopment 324 767 813 1,573Amortizationofpurchasedintangibleassets 13,817 11,151 27,715 20,360

Operatingexpenses 122,761 107,845 251,469 215,820

Operatingincome 265,284 74,641 335,764 147,157

RemeasurementgainattributabletoacquisitionofInnovatix,LLC — 204,833 — 204,833Equityinnetincomeofunconsolidatedaffiliates 1,257 5,127 5,509 14,706Interestandinvestmentloss,net (1,508) (857) (3,003) (1,009)Lossondisposaloflong-livedassets (400) — (1,720) (1,518)Otherincome(expense) (13,356) (131) (11,893) 875

Otherincome(expense),net (14,007) 208,972 (11,107) 217,887

Incomebeforeincometaxes 251,277 283,613 324,657 365,044Incometaxexpense 231,508 37,429 244,272 60,765

Netincome 19,769 246,184 80,385 304,279Netincomeattributabletonon-controllinginterestinPremierLP (56,485) (181,173) (101,095) (230,774)Adjustmentofredeemablelimitedpartners’capitaltoredemptionamount 317,916 335,264 638,340 397,072

Netincomeattributabletostockholders $ 281,200 $ 400,275 $ 617,630 $ 470,577

Calculation of GAAP Earnings (Loss) per Share

Numeratorforbasicearningspershare: Netincomeattributabletostockholders $ 281,200 $ 400,275 $ 617,630 $ 470,577

Numeratorfordilutedearnings(loss)pershare: Netincomeattributabletostockholders $ 281,200 $ 400,275 $ 617,630 $ 470,577Adjustmentofredeemablelimitedpartners’capitaltoredemptionamount (317,916) (335,264) (638,340) (397,072)Netincomeattributabletonon-controllinginterestinPremierLP 56,485 181,173 101,095 230,774

Netincome 19,769 246,184 80,385 304,279TaxeffectonPremier,Inc.netincome (251,085) (34,496) (261,636) (55,448)

Adjustednetincome(loss) $(231,316) $ 211,688 $(181,251) $ 248,831

Denominatorforbasicearningspershare: Weightedaverageshares 55,209 49,445 54,059 48,330

Denominatorfordilutedearnings(loss)pershare: Weightedaverageshares 55,209 49,445 54,059 48,330Effectofdilutivestockbasedawards 450 401 553 437ClassBsharesoutstanding 83,578 91,462 85,029 93,366

Weightedaveragesharesandassumedconversions 139,237 141,308 139,641 142,133

Basicearningspershare $ 5.09 $ 8.10 $ 11.43 $ 9.74Dilutedearnings(loss)pershare $ (1.66) $ 1.50 $ (1.30) $ 1.75


CondensedConsolidatedBalanceSheets(Unaudited)

(Inthousands,exceptsharedata) December31,2017 June30,2017Assets

Cashandcashequivalents $ 163,014 $ 156,735Accountsreceivable(netof$2,384and$1,812allowancefordoubtfulaccounts,respectively) 171,354 159,745Inventory 62,067 50,426Prepaidexpensesandothercurrentassets 24,021 35,164Duefromrelatedparties 381 6,742

Totalcurrentassets 420,837 408,812Propertyandequipment(netof$264,173and$236,460accumulateddepreciation,respectively) 190,815 187,365Intangibleassets(netof$125,903and$99,198accumulatedamortization,respectively) 349,847 377,962Goodwill 906,545 906,545Deferredincometaxassets 305,549 482,484Deferredcompensationplanassets 42,779 41,518Investmentsinunconsolidatedaffiliates 98,388 92,879Otherassets 5,403 10,271

Totalassets $ 2,320,163 $ 2,507,836

Liabilities,redeemablelimitedpartners’capitalandstockholders’deficit Accountspayable $ 49,626 $ 42,815Accruedexpenses 46,090 55,857Revenueshareobligations 74,651 72,078Limitedpartners’distributionpayable 20,396 24,951Accruedcompensationandbenefits 41,725 53,506Deferredrevenue 45,699 44,443Currentportionoftaxreceivableagreements 17,925 17,925Currentportionoflong-termdebt 201,139 227,993Otherliabilities 9,106 32,019

Totalcurrentliabilities 506,357 571,587Long-termdebt,lesscurrentportion 6,544 6,279Taxreceivableagreements,lesscurrentportion 229,291 321,796Deferredcompensationplanobligations 42,779 41,518Deferredtaxliabilities 30,942 48,227Otherliabilities 55,183 42,099

Totalliabilities 871,096 1,031,506

Redeemablelimitedpartners’capital 2,398,640 3,138,583Stockholders’deficit:

ClassAcommonstock,$0.01parvalue,500,000,000sharesauthorized;57,263,627sharesissuedand54,685,668sharesoutstandingatDecember31,2017and51,943,281sharesissuedandoutstandingatJune30,2017 573 519

ClassBcommonstock,$0.000001parvalue,600,000,000sharesauthorized;82,282,748and87,298,888sharesissuedandoutstandingatDecember31,2017andJune30,2017,respectively — —

Treasurystock,atcost;2,577,959shares (74,698) —Additionalpaid-in-capital — —Accumulateddeficit (875,448) (1,662,772)Accumulatedothercomprehensiveloss — —

Totalstockholders’deficit (949,573) (1,662,253)

Totalliabilities,redeemablelimitedpartners’capitalandstockholders’deficit $ 2,320,163 $ 2,507,836


CondensedConsolidatedStatementsofCashFlows(Unaudited)(Inthousands)

SixMonthsEndedDecember31, 2017 2016 Operatingactivities

Netincome $ 80,385 $ 304,279Adjustmentstoreconcilenetincometonetcashprovidedbyoperatingactivities:

Depreciationandamortization 61,532 48,576Equityinnetincomeofunconsolidatedaffiliates (5,509) (14,706)Deferredincometaxes 235,648 48,705Stock-basedcompensation 17,699 12,066Remeasurementoftaxreceivableagreementliabilities (177,174) (5,722)RemeasurementgainattributabletoacquisitionofInnovatix,LLC — (204,833)Lossondisposaloflong-livedassets 1,720 1,518Changesinoperatingassetsandliabilities:

Accountsreceivable,prepaidexpensesandothercurrentassets (467) (11,888)Otherassets 1,060 274Inventories (11,641) (31,832)Accountspayable,accruedexpenses,andothercurrentliabilities (20,238) (4,136)Long-termliabilities 1,287 (4,100)LossonFFFputandcallrights 15,607 174

Otheroperatingactivities 6,606 (11)

Netcashprovidedbyoperatingactivities 206,515 138,364

Investingactivities Purchasesofpropertyandequipment (38,622) (34,325)Proceedsfromsaleofmarketablesecurities — 48,013AcquisitionofInnovatix,LLCandEssensaVentures,LLC,netofcashacquired — (222,217)AcquisitionofAcroPharmaceuticals,netofcashacquired — (68,745)Investmentsinunconsolidatedaffiliates — (65,660)Distributionsreceivedonequityinvestmentsinunconsolidatedaffiliates — 6,550Otherinvestingactivities — 26

Netcashusedininvestingactivities (38,622) (336,358)

Financingactivities Paymentsmadeonnotespayable (6,858) (1,338)Proceedsfromcreditfacility 30,000 327,500Paymentsoncreditfacility (50,000) —Proceedsfromexerciseofstockoptionsunderequityincentiveplan 2,808 2,909ProceedsfromissuanceofClassAcommonstockunderstockpurchaseplan 1,388 1,256Repurchaseofvestedrestrictedunitsforemployeetax-withholding (5,743) (17,629)SettlementofexchangeofClassBunitsbymemberowners — (99,999)DistributionstolimitedpartnersofPremierLP (45,703) (44,630)RepurchaseofClassAcommonstock(heldastreasurystock) (70,844) —Earn-outliabilitypaymenttoGNYHAHoldings (16,662) —

Netcashprovidedby(usedin)financingactivities (161,614) 168,069

Netincrease(decrease)incashandcashequivalents 6,279 (29,925)Cashandcashequivalentsatbeginningofyear 156,735 248,817

Cashandcashequivalentsatendofperiod $ 163,014 $ 218,892


SupplementalFinancialInformationReconciliationofNetCashProvidedbyOperatingActivitiestoNon-GAAPFreeCashFlow

(Unaudited)(Inthousands)



2017 2016 2017 2016 Netcashprovidedbyoperatingactivities $131,482 $ 96,537 $206,515 $138,364Purchasesofpropertyandequipment (21,975) (17,359) (38,622) (34,325)DistributionstolimitedpartnersofPremierLP (20,752) (22,137) (45,703) (44,630)

Non-GAAPFreeCashFlow $ 88,755 $ 57,041 $122,190 $ 59,409


SupplementalFinancialInformationReconciliationofNetIncometoAdjustedEBITDA

ReconciliationofOperatingIncometoSegmentAdjustedEBITDAReconciliationofNetIncomeAttributabletoStockholderstoNon-GAAPAdjustedFullyDistributedNetIncome

(Unaudited)(Inthousands)



2017 2016 2017 2016 Netincome $ 19,769 $ 246,184 $ 80,385 $ 304,279

Interestandinvestmentloss,net 1,508 857 3,003 1,009Incometaxexpense 231,508 37,429 244,272 60,765Depreciationandamortization 17,310 14,198 33,817 28,216Amortizationofpurchasedintangibleassets 13,817 11,151 27,715 20,360

EBITDA 283,912 309,819 389,192 414,629Stock-basedcompensation 8,951 6,423 17,908 12,319Acquisitionrelatedexpenses 1,674 4,216 4,773 7,153Remeasurementoftaxreceivableagreementliabilities (177,174) — (177,174) (5,722)ERPimplementationexpenses 156 432 491 1,526Acquisitionrelatedadjustment-revenue 87 5,813 192 5,964RemeasurementgainattributabletoacquisitionofInnovatix,LLC — (204,833) — (204,833)Lossondisposaloflong-livedassets 400 — 1,720 1,518LossonFFFputandcallrights 15,587 — 15,607 —Otherexpense (51) 139 4 228

AdjustedEBITDA $ 133,542 $ 122,009 $ 252,713 $ 232,782

Incomebeforeincometaxes $ 251,277 $ 283,613 $ 324,657 $ 365,044RemeasurementgainattributabletoacquisitionofInnovatix,LLC — (204,833) — (204,833)Equityinnetincomeofunconsolidatedaffiliates (1,257) (5,127) (5,509) (14,706)Interestandinvestmentloss,net 1,508 857 3,003 1,009Lossondisposaloflong-livedassets 400 — 1,720 1,518Otherincome 13,356 131 11,893 (875)

Operatingincome 265,284 74,641 335,764 147,157Depreciationandamortization 17,310 14,198 33,817 28,216Amortizationofpurchasedintangibleassets 13,817 11,151 27,715 20,360Stock-basedcompensation 8,951 6,423 17,908 12,319Acquisitionrelatedexpenses 1,674 4,216 4,773 7,153Remeasurementoftaxreceivableagreementliabilities (177,174) — (177,174) (5,722)ERPimplementationexpenses 156 432 491 1,526Acquisitionrelatedadjustment-revenue 87 5,813 192 5,964Equityinnetincomeofunconsolidatedaffiliates 1,257 5,127 5,509 14,706Deferredcompensationplanincome 1,577 8 3,116 1,103Otherincome 603 — 602 —

AdjustedEBITDA $ 133,542 $ 122,009 $ 252,713 $ 232,782

SegmentAdjustedEBITDA: SupplyChainServices $ 132,045 $ 119,022 $ 257,665 $ 236,326PerformanceServices 27,929 28,603 49,150 50,914Corporate (26,432) (25,616) (54,102) (54,458)

AdjustedEBITDA $ 133,542 $ 122,009 $ 252,713 $ 232,782

Netincomeattributabletostockholders $ 281,200 $ 400,275 $ 617,630 $ 470,577Adjustmentofredeemablelimitedpartners’capitaltoredemptionamount (317,916) (335,264) (638,340) (397,072)Netincomeattributabletonon-controllinginterestinPremierLP 56,485 181,173 101,095 230,774Incometaxexpense 231,508 37,429 244,272 60,765Amortizationofpurchasedintangibleassets 13,817 11,151 27,715 20,360Stock-basedcompensation 8,951 6,423 17,908 12,319Acquisitionrelatedexpenses 1,674 4,216 4,773 7,153Remeasurementoftaxreceivableagreementliabilities (177,174) — (177,174) (5,722)ERPimplementationexpenses 156 432 491 1,526Acquisitionrelatedadjustment-revenue 87 5,813 192 5,964RemeasurementgainattributabletoacquisitionofInnovatix,LLC — (204,833) — (204,833)Lossondisposaloflong-livedassets 400 — 1,720 1,518LossonFFFputandcallrights 15,587 — 15,607 —Otherexpense (51) 139 4 228

Non-GAAPadjustedfullydistributedincomebeforeincometaxes 114,724 106,954 215,893 203,557Incometaxexpenseonfullydistributedincomebeforeincometaxes 44,742 41,712 84,198 79,387

Non-GAAPAdjustedFullyDistributedNetIncome $ 69,982 $ 65,242 $ 131,695 $ 124,170


SupplementalFinancialInformationReconciliationofGAAPEPStoNon-GAAPEPSonAdjustedFullyDistributedNetIncome

(Unaudited)(Inthousands,exceptpersharedata)



2017 2016 2017 2016 Netincomeattributabletostockholders $ 281,200 $ 400,275 $ 617,630 $ 470,577

Adjustmentofredeemablelimitedpartners’capitaltoredemptionamount (317,916) (335,264) (638,340) (397,072)Netincomeattributabletonon-controllinginterestinPremierLP 56,485 181,173 101,095 230,774Incometaxexpense 231,508 37,429 244,272 60,765Amortizationofpurchasedintangibleassets 13,817 11,151 27,715 20,360Stock-basedcompensation 8,951 6,423 17,908 12,319Acquisitionrelatedexpenses 1,674 4,216 4,773 7,153Remeasurementoftaxreceivableagreementliabilities (177,174) — (177,174) (5,722)ERPimplementationexpenses 156 432 491 1,526Acquisitionrelatedadjustment—revenue 87 5,813 192 5,964RemeasurementgainattributabletoacquisitionofInnovatix,LLC — (204,833) — (204,833)Lossondisposaloflong-livedassets 400 — 1,720 1,518LossonFFFputandcallrights 15,587 — 15,607 —Otherexpense (51) 139 4 228

Non-GAAPadjustedfullydistributedincomebeforeincometaxes 114,724 106,954 215,893 203,557Incometaxexpenseonfullydistributedincomebeforeincometaxes 44,742 41,712 84,198 79,387

Non-GAAPAdjustedFullyDistributedNetIncome $ 69,982 $ 65,242 $ 131,695 $ 124,170

WeightedAverage: Commonsharesusedforbasicanddilutedearnings(loss)pershare 55,209 49,445 54,059 48,330Potentiallydilutiveshares 450 401 553 437ConversionofClassBcommonunits 83,578 91,462 85,029 93,366

Weightedaveragefullydistributedsharesoutstanding-diluted 139,237 141,308 139,641 142,133

GAAPearnings(loss)pershare $ 5.09 $ 8.10 $ 11.43 $ 9.74Adjustmentofredeemablelimitedpartners’capitaltoredemptionamount (5.76) (6.79) (11.81) (8.22)Netincomeattributabletonon-controllinginterestinPremierLP 1.02 3.66 1.87 4.77Incometaxexpense 4.19 0.76 4.52 1.26Amortizationofpurchasedintangibleassets 0.25 0.23 0.51 0.42Stock-basedcompensation 0.16 0.13 0.33 0.25Acquisitionrelatedexpenses 0.03 0.09 0.09 0.15Remeasurementoftaxreceivableagreementliabilities (3.21) — (3.28) (0.12)ERPimplementationexpenses — 0.01 0.01 0.03Acquisitionrelatedadjustment—revenue — 0.12 — 0.12RemeasurementgainattributabletoacquisitionofInnovatix,LLC — (4.14) — (4.24)Lossondisposaloflong-livedassets 0.01 — 0.03 0.03LossonFFFputandcallrights 0.28 — 0.29 —Impactofcorporationtaxes (0.80) (0.84) (1.56) (1.63)Impactofdilutiveshares (0.76) (0.87) (1.49) (1.69)

Non-GAAPEPSonAdjustedFullyDistributedNetIncome $ 0.50 $ 0.46 $ 0.94 $ 0.87

###

Exhibit99.2

FISCAL2018SECONDQUARTERCONFERENCECALLTRANSCRIPT

February5,2018/05:00PMEST

On February 5, 2018, Premier, Inc. hosted a conference call to discuss financial results for the fiscal 2018 second quarter, ended December 31, 2017. Thefollowing transcript is an interpretation of the statements made on the call. The actual conference call may have differed slightly.

CORPORATEPARTICIPANTS

JamesR.StoreyPremier, Inc. – VP of IR

SusanD.DeVorePremier, Inc. – President, CEO & Director

MichaelJ.AlkirePremier, Inc. – COO

CraigS.McKassonPremier, Inc. – CFO and Senior VP

CONFERENCECALLPARTICIPANTS

DonaldHoughtonHookerKeyBanc Capital Markets Inc., Research Division – VP and Equity Research Analyst

ElizabethHammellAndersonEvercore ISI, Research Division – Associate

EricR.PercherNephron Research LLC – Research Analyst

EricWhiteColdwellRobert W. Baird & Co. Incorporated, Research Division – Senior Research Analyst

JamesJohnStocktonWells Fargo Securities, LLC, Research Division – Director & Senior Equity Research Analyst

LisaChristineGillJP Morgan Chase & Co, Research Division – Senior Publishing Analyst

MohanA.NaiduOppenheimer & Co. Inc., Research Division – MD and Senior Analyst

RichardCollamerCloseCanaccord Genuity Limited, Research Division – MD & Senior Analyst

SeanWilfredDodgeJefferies LLC, Research Division – Equity Analyst

SeanWilliamWielandPiper Jaffray Companies, Research Division – MD and Senior Research Analyst

StephanieJulyDavisCitigroup Inc, Research Division – VP & Senior Analyst

PRESENTATION

Operator

Goodday,ladiesandgentlemen,andwelcometothePremierFiscalYear2018SecondQuarterResultsConferenceCall.(OperatorInstructions)Iwouldnowliketointroduceyourhostfortoday’sconference,Mr.JimStorey,InvestorRelations.Sir,youmaybegin.

PREMIER,INC.Fiscal2018SecondQuarterConferenceCallTranscript

Page2of20JamesR.Storey-Premier,Inc.-VPofIR

Thankyou,Skyler,andwelcome,everyone,toPremier,Inc.’sFiscal2018SecondQuarterConferenceCall.OurspeakerstodayareSusanDeVore,PresidentandChiefExecutiveOfficer;MikeAlkire,ChiefOperatingOfficer;andCraigMcKasson,ChiefFinancialOfficer.Susan,MikeandCraigwillreviewthequarter’sperformance,provideanoperationsupdateanddiscussouroutlookfortheremainderoftheyear.

Beforewegetstarted,IwanttoremindeveryonethatcopiesofourearningsreleaseandthesupplementalslidesaccompanyingthisconferencecallareavailableintheInvestorRelationssectionofourwebsiteatinvestors.premierinc.com.

Management’sremarkstodaycontaincertainforward-lookingstatements,andactualresultscoulddiffermateriallyfromthosediscussedtoday.Theseforward-lookingstatementsspeakasoftoday,andweundertakenoobligationtoupdatethem.FactorsthatmightaffectfutureresultsarediscussedinourfilingswiththeSEC,includingourfiscal2017Form10-Kandourfiscal2018quarterlyreportonForm10-Q,whichweexpecttofilesoon.Weencourageyoutoreviewthesedetailedsafeharborandriskfactordisclosures.

Pleasealsonotethatwhereappropriate,wewillrefertonon-GAAPfinancialmeasurestoevaluateourbusiness.Reconciliationsofnon-GAAPfinancialmeasurestoGAAPfinancialmeasuresareincludedinourearningsrelease,intheappendixofthesupplementalslidesaccompanyingthispresentationandinourearningsreleaseForm8-K,whichweexpecttofurnishtotheSECsoon.

NowletmeturnthecallovertoSusanDeVore.

SusanD.DeVore-Premier,Inc.-President,CEO&Director

Thanks,Jim,andwelcome,everyone,toourfiscalsecondquarterconferencecall.I’llbegintodaywithanoverviewofoursecondquarterperformance.Ialsowanttospendsometimetalkingaboutourevolvinglong-termvisionandgo-forwardstrategy,whichwebelieveuniquelypositionsPremierasacontinuingleaderinhealthcaretransformation.Mikewillthenprovideanoperationalupdate,followedbyCraig,whowillwalkthroughthefinancialaspectsofthequarterandupdateyouonouroutlookfortheremainderofthefiscalyear.

I’mverypleasedtoreportthatPremiercontinuedtodeliverconsistentfinancialandstrategicgrowthacrossourbusinessesinthefiscalsecondquarter,partneringwithhealthsystemstoachievecontinuousimprovementintheareasofcost,quality,safetyandvalue-basedcare.Wemetorexceededmanagement’sfinancialandstrategicobjectivesforthequarter.Atamoremacrolevel,wearealsoencouragedbytherecentpatientutilizationtrends,andwebelievethattheappointmentofAlexAzarasthenewHHSSecretarywillreestablishthemomentumwithinCMStowardtheimplementationofvalue-basedpaymentanddeliverymodels.We’reexcitedabouttheuniqueverticalandhorizontalintegrationgoingonintheindustry,andwethinkwe’rewell-positionedtocapitalizeontheinfrastructure,technology,dataandimplementationneedsofthesecomplexorganizations.

Solet’slookatsomeofourspecificachievementsduringthequarter.Wedelivered19%year-over-yearrevenuegrowthinSupplyChainServiceswithnetadministrativefeesrevenueup23%,legacynetadministrativefeesrevenueincreasing5%,andproducts,up14%.PerformanceServicesrevenuegrewaccordingtoourexpectations.Wecontinuetoexpectsequentialrevenuegrowthinthebackhalfoftheyear,andwe’rediligentlymanagingthebusinesstoaddressthefuturechallengesofourhealthcaresystems.


Page3of20Wecontinuetomaintainastrongbalancesheetandminimalleverage,givingustheongoingflexibilitytobuildoracquirestrategicassetsinthemarketplacewhilesimultaneouslyreturningvaluetoourstockholders.

Withrespecttoreturningvaluetostockholders,weexecutedonour$200millionstockrepurchaseplanannouncedinOctober,andwecontinuetoimplementtheplaninthecurrentquarter.Wealsoexpectthestockrepurchaseprogramalongwithtaxreformtopositivelyimpactnon-GAAPadjustedfullydistributedearningspershare.Weareraisingfiscalfullyearguidanceforthisfinancialmeasureaccordinglywhilereaffirmingexistingguidancerangesforourotherfinancialmetrics.Andwecontinuetowininthemarketplace,fromintroducingnewsupplychaincapabilitiesinourGPOtoexpandingandwinningnewrelationships,toearningtopaccoladesfromKLAS,tooutperformingtheindustryinMedicareACOsharedsavingsandbundledpayments.Mikewilltouchmoreontheseandotherbusinessdevelopmentsinafewminutes.

Nowlookingatthelongerterm,IbelievePremierremainsuniquelydifferentiatedinourabilitytoleadthetransformationacrossourindustry,leveragingourdeepdataassets,innovativetechnologies,alignedmemberchannelandstrongsupplierrelationshipsaswecontinuetorefineourcapabilitiesandexpandourscale.

IbelievePremierstandsattheepicenteroftherapidchangeoccurringinourindustry,characterizedbymountingcostsandregulatorychallenges,byinnovativetechnologies,newmarketentrantsanduniquebusinesscombinations.Wethriveonchangeandweanticipateit.Andthat’swhatIwanttotalktoyouabouttoday.Themarketplaceforcesthataredrivingchangeandhowwe,atPremier,areleveragingthemtocapitalizeonfuturegrowthopportunities.Forpurposesoftoday’sdiscussion,I’vecondensedmanyforcesdownto3interrelatedtrends.

Firstisthecontinuingmovementtovalue-basedcare.Althoughournation’shealthcaretransformationwillalwaysbesubjecttoperiodicmarketandregulatoryuncertainties,webelievethelong-termjourneytovalue-baseddeliveryandpaymentwillcontinue.Thismeanspatientcareismigratingtonewanddifferentsettingsasprovidersseektoimprovequalityofcareandreducecost.Premierrecognizedandembracedthistrendyearsago.Ourcapitalallocationoverthepastfewyearsreflectsthis.It’swhyweacquiredInnovatixandEssensaandwecontinuetobuildandenhanceouralternatesiteGPObusiness.It’swhyweacquiredandintegratedCECitytobettercaptureclinicalandperformancecapabilitiesanddataassetsintheambulatorysetting.Theseacquisitions,alongwithothersthatwe’vecompletedaswellasongoinginternaldevelopment,havepositionedPremiertoservetheentireintegrateddeliverysystemwithend-to-endsolutions,addressingproviderandconsumerneedswherevertheyemergeacrossthehealthcarecontinuum.Ourdeepdataassetsandwrap-aroundadvisoryservicesalsoplayaveryimportantroleinhelpinghealthsystemstransitiontovalue-basedpaymentmodels.

Secondisthefactthattherapidgrowthofdigitaltransformationisoccurringatnearlyeverytouchpointofhealthcare,fromoptimizationofelectronichealthrecordstothegrowthofpredictiveanalytics,machinelearningandconsumer-focuseddemandforconnectivityandtransparency.Asaresult,deepanalyticcapabilitiesarecriticalprerequisitestoenablingcostmanagementandclinicalimprovementacrosstheentirehealthsystem.Allofthisispoweredbyaccesstolarge,detailedandcredibledataassets.LookingatPremierseveralyearsago,webuiltadataanalyticsplatform.It’svendor-agnosticandpayer-neutral.


Page4of20Wetakedisconnecteddatafromdisparatesourcesacrossourmemberhealthcareproviders,andwepullitintoaunifieddatasetthatcanbeusedtodriveactionablebusinessintelligence,pushingtheseinsightsbackouttoourmembersintheformofimprovementopportunities.Asthisdigitaltransformationtrendcontinuestoevolve,weseegrowingopportunitiestoconnectouranalyticsanddatasetstoworkflowcapabilitiesandemergingtechnologieslikeprecisionmedicine,blockchaintechnologyandmachinelearningtooptimizeperformanceacrosstheentirehealthsystem.

Andathirdforceimpactingourindustryisintegrationandconsolidationamongkeystakeholdersacrossourindustry:payers,employers,providers,distributors,manufacturers.They’reworkingtogethertoaddresshealthcarecostandqualityimprovement.WebelievePremiersitsinthenexusofthesestakeholdersandhastheabilitytoprovidethebestinfrastructuretodirectlyenablesustainablecostreductionandclinicalimprovementforthesecomplexorganizations.Sincegoingpublicover4yearsago,wehavefurtherbuiltourinfrastructureandcapabilitiestoenhanceoursupplychainassets,ourtechnologyassets,ourdataassetsandouradvisorycapabilities.

Lookingforward,IseetheopportunitytoaccelerateandexpandourleadershippositionbytransformingPremierintoanend-to-endsupplychainandclinicalperformancesolutionsprovider.Sowhatdoesthatmean?

InSupplyChainServices,beinganend-to-endprovidertranslatestoowningtotalsupplychainoutcomeswithourmembers,implementingourworkflowandanalyticscapabilities,ourstrategicsourcingstrategyandservices,andleveragingpartnerstoenhanceourfront-endelectronicprocurementandback-endlogisticsanddistributioncapabilities.

InPerformanceServices,weplantocombinecognitivecomputingcapabilities,detailedanalytics,advisoryservicesandcollaborativeswithconnectivitytoclinicalworkflow.WeexpectthistoenablePremiertoextendourcapabilitiesinenterpriseclinicalanalyticsandtransformationinitiativesacrosshealthcareproviders.Itwouldalsoprovideacomprehensiveplatformonwhichtobuildprecisionmedicineandappliedsciencesinitiatives,whichinturn,wecouldleveragetocreatemarketandcustomerexpansionopportunities.

SoaswelooktoenhancePremier’spositionasahealthcareperformanceimprovementleaderinthischangingmarketplace,wearealsoevaluatingouroptionsastheyrelatetocapitalallocationandouracquisition,partneringandbuildstrategies.AsIstatedatJPMorganlastmonth,we’replanningtodeploycapitalinsomedifferentwaysmovingforward.Intermsofenhancingourelectronicprocurementcapabilities,indeepeningourpartnershipsforlogisticsandfulfillment,inambulatorydataintegration,inresearchandappliedsciences,inpredictiveanalyticsandprecisionmedicine.

Ourstrategicpathforwardissupportedbyourflexiblebalancesheetandourstrongcashflow.Andoursolutionsremainfocusedonenablinghealthcareproviderstosucceedintheircontinuingjourneytohigherquality,morecost-effectivehealthcare.Thankssomuch.Nowhere’sMikeAlkire,ourChiefOperatingOfficer.


Page5of20MichaelJ.Alkire-Premier,Inc.-COO

Thankyou,Susan,andthankyouallforjoiningourcall.Today,Iwanttoreviewouroperationalperformanceaswecontinuetowardsourconsistentgoalofdeliveringhighlydifferentiatedvaluetohealthcareproviders,valuethatwebelievetranslatestolong-termgrowthforourstockholders.

AsSusanjustdiscussed,wecontinuetoenhanceandevolveourdiversifiedbusinessmodelthatspanssupplychainservices,integratedpharmacy,cloud-basedinformaticsproducts,integratedanalytics,advisoryservicesandperformanceimprovementcollaboratives.

InSupplyChainServices,forinstance,wearerollingoutanewnationalcommittedbuyingprogramdesignedtoprovidesignificantcostsavingstohighly-committedmemberswhoareabletocoordinatesupplychaindecisionsandmaintainstandardizationacrosstheirfacilities.Byintroducingthisconcentratedbuyingprogram,weareleveragingourcontractingplatformtoachievebest-in-marketpricingineverychosencategory,drivingdowncostsforourmostcommittedmemberswhiledeliveringadditionalvolumeandcontractpenetrationforcontractedsuppliers.Webelievetheincrementalvaluethatwillbedeliveredthroughthisprogramtohealthcareproviderswilldrivefuturerevenuegrowth,maintainretentionratesandenableadditionalrecruitingopportunities.WeexpectthisprogramtolaunchinApril.

We’realsocontinuingtogaintractionwithouracademichealthsystemstrategyandhaveinitiatedengagementswith2additionalacademichealthsystemssincewelastspokelastquarter.Wejustexpandedourrelationshipwitharegionalacademichealthsystem,along-termGPOpartnerthatislaunchingatotalcostmanagementinitiativesupportedbyPremier’sAdvisoryServices.Inaddition,werecentlyannouncedthatUniversityofLouisvilleHospital,anacademicteachingandresearchhospital,ispartneringwithPremiertodrivehigh-valuecaredeliveryusingacustomizedbundleofenterprise-wideperformanceimprovementandsupplychainservicesofferings.

Wenowareworkingwithmorethan60academichealthsystems,includingseveralthathavejoinedorexpandedtheirrelationshipwithPremierinthepastyear,andwearepleasedbytheactivepipelineofacademicscontinuingtoexpressinterestinjoining.

Amongourotherrecentsuccesses,weannouncedthatMedicareaccountablecareorganizations,supportedbyPremier’spopulationhealthcollaborative,outperformedtheirpeersby57%inachievingsharedsavingsduringthemostrecentmeasurementperiods.IfallMedicareACOsperformedatthesamelevelasourcollaborativemembers,weestimatethatMedicarecouldhavedoubledthesavingsachievedforitsACOprogramsto$4billionsince2012.

Separately,PremierwasjustnamedtheBestStrategy,GrowthandConsolidationConsultingorganizationbyKLASforthesecondstraightyearintheresearchfirm’s2018BestinKLASSoftware&Servicesreport.Inrecentyears,wehaveconsistentlybeenrecognizedbyKLASasatopperformerinmanyofitssurveysandreports.

Aswemoveforward,ourgrowthstrategyincludesongoingintegrationsynergiestomaximizeefficienciesandtoappropriatelyalignresourceswithourgrowthobjectives.Aspartofthisprocess,wehaveimplementedsomepersonneladjustments,includingamodestreductioninforcethatwewillexpecttobelargelycompletedbytheendofthemonth.Craigwilldiscussthefinancialimpactofthiseffortshortly.


Page6of20Beforeclosing,IwanttoreiteratethatweareencouragedbythenewHHSSecretary,whohasvoicedstrongsupportforvalue-basedpaymentprograms.WeexpectMr.AzartoworkcloselywiththeFDAtolowerthebarriers-to-entryforgeneric,biosimilarandotherdrugsaswellasadvanceotherpoliciestocreateamorecompetitivepharmaceuticalsmarket.

WealsoapplaudtherecentCMSdecisiontolaunchthenextgenerationofitsbundledpaymentprogram,whichincludes29inpatientand3outpatientprocedures.Underthisvoluntaryprogram,patientswillbeatriskforcostandqualityofcareoveranentire90-dayepisodeandcliniciansalsowillbeeligibletoqualifyfora5%Medicarepaymentbonus.Weareindiscussionswithcurrentandprospectivemembersandexpectmanyofthemtoapplyforthisprogram.

Premierhasworkedwithhundredsofprovidersonbundledpayments,andwe’vefoundthatthoseorganizationsworkwithPremierunderCMS’ComprehensiveCareforJointReplacementModelperformed35%betterthanallotherparticipatinghospitalsinachievingsharedsavings.

Letmeconcludebysayingthatwearecontinuingtoinvestinthefuturefromapositionoffinancialstabilityandstrength.OurhealthcareproviderslooktoPremiertodevelopanddeliverthecost,quality,safetyandvalue-basedcaresolutionsthatenabletheirsuccesstodayandinthefuture.

Thankyouforyourtimetoday.NowletmeturnthecallovertoCraigMcKasson,ourChiefFinancialOfficer.

CraigS.McKasson-Premier,Inc.-SeniorVP&CFO

Thanks,Mike.Nowlet’swalkthroughthequarter’sperformanceinmoredetail.FromaGAAPstandpoint,consolidatednetrevenueof$411.4millionincreased15%fromayearago.

SupplyChainServicesnetrevenueincreased19%to$324.9million.Netadministrativefeesrevenueincreased$30.3millionor23%to$159.3millionfromthesameperiodayearago,drivenbycontributionsfromtheInnovatixandEssensabusinessesandcontractpenetrationofourexistingmembers.

Legacyyear-over-yearnetadministrativefeerevenuegrowthinthesecondquarterwas5%,whichincludedarevenuerecoverysettlementfromasupplier.Ashistoricallydiscussed,ouradministrativefeesrevenueiseffectivelyrecognizedonacashbasisandissubjecttoperiodicvariabilitybasedonthetimingofcashreceipts,includingrevenuerecoveries,whicharearoutinepartofourGPO.Excludingthisrecoveryinthesecondquarter,therateofgrowthinourlegacyGPObusinesswasconsistentwiththefirstquarterandprimarilyresultsfromlowerpatientutilizationoverthesummermonthsthatwehavepreviouslydiscussed.

OurproductsbusinesswithinSupplyChainServicesgrewsecondquarterrevenue14%fromayearagoto$162.1million,withboththeintegratedpharmacyanddirectsourcingbusinessesachievingdouble-digitgrowth.TurningtoPerformanceServices,asexpected,secondquarterrevenueincreasedsequentiallyoverfirstquarterwhilereflectinggrowthof1%fromthesameperiodayearago.Weexperiencedgrowthinthecompany’sinformaticsandtechnologyservicesbusinessprimarilyrelatedtoourcostmanagementsolutions,andwealsosawgrowthinambulatoryqualitysolutions.


Page7of20Turningnowtoprofitability,duealmostentirelytotheone-timeremeasurementofdeferredtaxesresultingfromtheTaxCutsandJobsAct,GAAPnetincometotaled$19.8millioncomparedwith$246.2millionayearago.AfteraGAAP-requirednoncashadjustmentof$317.9milliontoreflectthedecreaseintheredemptionvalueoflimitedpartners’ClassBcommonunitownership,wereportedaGAAPlossof$1.66pershare.Consolidatednon-GAAPadjustedEBITDAof$133.5millionforthequarterrepresentsa9%increasefromayearago.

Fromasegmentperspective,the11%increaseinSupplyChainServicesnon-GAAPadjustedEBITDAprimarilyreflectsgrowthinnetadministrativefeesrevenue.GrowthwaspartiallyoffsetbyincreasedsalariesandbenefitsassociatedwiththeDecember2016acquisitionofInnovatixandEssensa.Additionally,prioryearnon-GAAPadjustedEBITDAincludeda$5.6millionnoncashadjustmentforcashcollectionsnotrecognizedasrevenueonaGAAPbasisduetoapurchaseaccountingadjustmentandincluded$4.1millioninequityinnetincomeofInnovatixasitwashistoricallyaccountedforasanunconsolidatedaffiliateupthroughthedateofacquisition.

InPerformanceServices,the2%decreaseinsegmentnon-GAAPadjustedEBITDAwasimpactedbyprioryearperformance-basedAdvisoryServicesrevenuerecognitionaswellasanincreaseincostofsalesprimarilyrelatedtoanincreaseinstaffingandcoststosupportgrowth.Corporatenon-GAAPadjustedEBITDAreflectsa3%expenseincreaseinthesecondquarter.

Secondquarternon-GAAPadjustedfullydistributednetincomeof$70millionincreased7%fromthesameperiodayearagoandnon-GAAPadjustedfullydistributedearningspersharetotaled$0.50,anincreaseof9%fromayearago.

Lookingatliquidity,cashflowfromoperationsforthe6-monthperiodwas$206.5millioncomparedwith$138.4millionlastyear.Theincreaseisprimarilydrivenbygrowthinnetincomeduelargelytoanincreaseinnetadministrativefeesrevenueaswellasdecreasedoutflowsrelatedtoworkingcapitalneeds.

Non-GAAPfreecashflowforthe6-monthperiodtotaled$122.2million,whichrepresentsapproximately48%ofnon-GAAPadjustedEBITDAfortheperiodandcompareswith$59.4millionayearago.Theincreaseisprimarilyrelatedtothesamefactorsdrivingthegrowthincashflowfromoperations.Wecurrentlyexpecttaxreformtopositivelyimpactfiscal2018non-GAAPfreecashflowbyapproximately$20millionorabout4%asapercentageoffiscal2018non-GAAPadjustedEBITDA.Fromabalancesheetperspective,ourcashandcashequivalentstotaled$163millionatDecember31,2017,comparedwith$156.7millionatJune30,2017,andwehadanoutstandingbalanceof$200milliononour5-year,$750millionrevolvingcreditfacilityatquarterend.

Throughtheendofthequarter,wepurchasedapproximately2.6millionsharesofClassAcommonstockfor$74.7millionatanaveragepriceof$28.96pershareunderourongoing$200millionstockrepurchaseprogram.Assumingfullcompletionoftheprogrambytheendofthefiscalyear,weestimateanincreaseof$0.03to$0.05innon-GAAPadjustedfullydistributedearningspershare.

Nowlet’sturninmoredetailtoourguidance.Today,weareincreasingourfiscal2018financialguidancerangefornon-GAAPadjustedfullydistributedearningspershareto$2.24to$2.37basedonthe$0.03to$0.05fromthestockrepurchaseprogramandtheexpectedtaxreformimpactofapproximately$0.23pershare.


Page8of20Asareminder,weguidetonon-GAAPadjustedfullydistributedearningspershareasaresultofourcorporatestructureandourquarterlymember-ownershareexchangeprocess.Thisnon-GAAPmeasureassumesthatallofthecompany’sClassAandClassBcommonsharesareheldbythepublicandincludedinthesharecountdetermination.Further,incometaxesarecalculatedasthoughtheentirecompanyisataxableCcorporation.Iwouldliketopointoutthatbecauseoftheimpactoftaxreform,beginningonJanuary1,2018,theeffectivecorporatetaxrateusedinournon-GAAPadjustedfullydistributedearningspersharecalculationwilldecreasefromarateof39%inthefirsthalfofthefiscalyeartoarateof25%inthesecondhalfofthefiscalyearandbeyond.Thiswillresultinablendedrateof32%forfiscal2018onafull-yearbasis.

Baseduponfirsthalfperformanceandourcurrentoutlookandassumptionsfortheremainderoftheyear,wearereaffirmingourpreviousguidancerangesforconsolidatednetrevenue,SupplyChainServicessegmentrevenue,PerformanceServicessegmentrevenueandnon-GAAPadjustedEBITDA.

Lookingatthecomponentsofconsolidatednetrevenue,ourcurrentexpectationisthatSupplyChainServicessegmentrevenuewillperformabovethemidpointoffullyearguidance.Additionally,basedonthefiscalfirsthalfperformanceandcurrentexpectationsforthesecondhalfoftheyear,weareraisingourassumptionforfiscalfullyearproductsrevenuegrowthto14%to18%fromthe9%to13%previously.

Wecurrentlyexpectadministrativefeesrevenuegrowthtostabilizeinthesecondhalfoftheyearandarereaffirmingourpreviousassumptionsforfiscalfullyearnetadministrativefeesrevenuegrowthat13%to17%foroverallnetadministrativefeesrevenueandatmid-single-digitgrowthforthelegacybusiness.Webaseouroutlookforstabilizationonthefollowing3factors.

First,inOctoberandNovember,webeganhearinganecdotalcommentaryfromourmembersthatpatientutilizationrateswereimprovingafterthesummerslowdown.Thiscommentaryhasintensifiedfromseveralmembersinrecentmonths.Second,ourongoingreviewofdischargedatashowsmoderatingutilizationtrendsinbothinpatientandoutpatientvolumesbetweentheperiodsaffectingourfirstandsecondquarters.Andthird,thenationcontinuestodealwithanunusuallyseverefluseasonthisyear,whichwebelieveispositivelyaffectinghealthcareadmissionsandutilization.Asareminder,sincewerecordadministrativefeesrevenueonacashbasis,ourrevenuesaregenerallyrecognizedonapproximatelya1-quarterlagtopatientutilizationtrendsduetotheinherentlaginreportingandreceiptofcashfromourcontractedsuppliers.

TurningtoourPerformanceServicessegment.Weexpectfullyearrevenuetobebelowthemidpointofguidancegiventhecurrentyearimpactofregulatoryuncertainty.Wedocontinuetoexpectrevenuetobemoreheavilyweightedinthethirdandfourthquartersprimarilyrelatedtoambulatoryregulatoryreportingandthetimingofperformance-basedAdvisoryServicesengagements.

Lookingatnon-GAAPadjustedEBITDA,wecurrentlyexpectfullyearperformancetowardthelowerendoftheguidancerangegiventhesoftpatientutilizationduringthesummermonthsandthecurrentyearimpactofregulatoryuncertainty.

WeexpectthepersonneladjustmentsthatMikehighlighted,includingthemodestreductioninforce,toproducepretaxcostsavingsapproximating$13millionto$14milliononanannualrunratebasis.Weexpecttoincurapretaxchargerelatedtothereductioninforceofapproximately$5.2million,whichwillbeexpensedinthecurrentquarterendingMarch31.Approximately75positionsor3%oftotal


Page9of20employees,areimpactedbythesepersonneladjustments,andthemajorityoftheaffectedpositionsareinourPerformanceServicessegmentandrelatetofurtherintegrationsynergiesandeffortstorealignresourcesforfuturegrowthareas.

Finally,Iwouldliketoprovideabriefupdateonourongoingquarterlyexchangeprocess.FollowingourmostrecentexchangeonJanuary31,ourcompanyiscurrentlyownedapproximately40%bythepublicand60%byourmemberhealthsystems.OnFebruary1,approximately1millionClassBunitswereexchangedonaone-for-onebasisforsharesofClassAcommonstock.OurnextquarterlyexchangeoccursonApril30.Withthat,letmeturnthecallbackovertoSusan.


Thanks,MikeandCraig.Beforeopeningthecalltoquestions,I’djustliketoreiteratethatIampleasedwiththeprogressthatwe’remakinginthismarketenvironment,andI’mveryexcitedaboutourfuturestrategyevolution.IremainconfidentaboutPremier’slonger-termopportunitiesasourmarketcontinuestogrowandevolve.Ibelievewehaveauniqueandpowerfulcombinationofsupplychain,clinicalimprovementandtechnologyanddataassets,which,whencombinedwithouradvisorycapabilities,ourstrongbalancesheetandalignedmemberchannel,canbeleveragedtodelivercompellingvaluefarintothefuture.Goodforthecompanyandgoodforallourstockholders.

Thankyouforyourtimetoday.Andoperator,couldyoupleaseopenthecallforquestions.

QUESTIONSANDANSWERS

Operator

(OperatorInstructions)OurfirstquestioncomesfromJamieStocktonwithWellsFargo.

JamesJohnStockton-WellsFargoSecurities,LLC,ResearchDivision-Director&SeniorEquityResearchAnalyst

Iguess,maybethefirstone.Mike,youmentionedthatyouguysaregoingtobekickingoffthisnewcommittedbuyingprogram.Couldyougiveusmaybesomerulesofthumbforthetypeofhealthsystemthatwouldfallintothatbucketversusmaybeonethatwouldnotwithinyourbase?

MichaelJ.Alkire-Premier,Inc.–COO

Sure.SoJamie,justletmereiterate.Thisprogramisintendedtodrivethehighestlevelofcommitmentinsavingsforourmembersthroughtheseaggregatedpurchases.Thetypesoforganizationsthatwillparticipatearethoseorganizationsthatcanstandardize,thattrulymanagetheirsupplychaincentrallyandareabletodrivehighlevelsofcommitment,which,obviously,ourmostsophisticatedhealthcaresystemscan.Wealsoaregoingtoexpectthemtohavethedatacapabilitiestosharewithustheirperformanceandtheirabilitytoactuallyhittherightcommitmentlevel.SowethinkahighpercentofourhealthcaresystemsareactuallygoingtobeabletoparticipategiventhatmanyofthemalreadyparticipateinourcurrentASCENDprogramanyways.


Page10of20JamesJohnStockton-WellsFargoSecurities,LLC,ResearchDivision-Director&SeniorEquityResearchAnalyst

Imean,isthegoalofthis—Imean,it’sobviouslyforthehealthsystem,justtohelpthembuymorethroughyourcontractsandgetlowersupplyspendingasaresultofit.ForPremier,shouldweseecontractcompliance,orwhateveryouwanttocallit,goupasaresultofthis?Imean,it’snotjusttakingpeoplethathavehighcompliancealreadyandmovingthemintothisprogram,butmaybegettingthemtoachieveinhigherlevels?

MichaelJ.Alkire-Premier,Inc.-COO

Yes.Soweexpecteveryoneinthisprogramtodrivehigherlevelsofpenetrationonthosecontracts.Sothey’regoingtobe,obviously,leveragingourcontractsmorethantheycurrentlydo.Jamie,wealsothinkthatwe’regoingtobeabletocreateamuchsignificantdifferentiationinthemarket,whichisgoingtoallowforustorecruitmoreeffectivelyagainstourcompetitors.

JamesJohnStockton-WellsFargoSecurities,LLC,ResearchDivision-Director&SeniorEquityResearchAnalyst

Okay,that’sgreat.Andthenmaybejustonemore.Craig,thebenefitthatyouguyssawwiththekindoflegacyGPObusinessthisquarter,recoupingsomerevenuefromasupplierthatmaybeyoudidn’totherwiseexpect.Canyoujustgiveusasenseforthetimingofwhenyoutheoreticallymissedoutonthatrevenuehistorically?


Sure,Jamie.SorevenuerecoveriesarearoutinepartofourGPOasIstatedinmypreparedremarks.We,generally,inanyfiscalyear,willhaveapproximately1%to1.5%ofouradministrativefeesatanygivenyearcomingfromrevenuerecoveries.Thoserecoveriestendtobeoftentimestheidentificationofasystemissueorsomething,wheretherewasunderreportedsalesandcancrossmultipleyears,actually,intermsofthetimingthatweget.Andsoit’sjustafunctionoftimingwithinafiscalyearwhenthosearrive,butourfullyearforecastwouldstillbeinlinewithwhatwetypicallyexpectforrevenuerecoveries.

Operator

ThenextquestioncomesfromLisaGillwithJPMorgan.

LisaChristineGill-JPMorganChase&Co,ResearchDivision-SeniorPublishingAnalyst

Susan,IjustwantedtostartwithacommentthatyouhadaroundthePerformanceServicesandtalkingaboutambulatoryqualitysolutionscominginQ3.Canyoujust—atthispoint,haveyouseenthosesalesstarttocomeinaswe’realmosthalfwaythroughQ3?Orisitstillyouranticipationthatyou’regoingtoseeitinQ3?


Sowe’realreadyseeingsomeofthesign-ups,ifyouwill,forthereportingthat’sgoingtohappenattheendofQ3.AndwedostillthinkthattheincreasethatwehaveseeninprioryearswillplayoutinQ3.


Page11of20CraigS.McKasson-Premier,Inc.-SeniorVP&CFO

Lisa,thisisCraig.Justquickly,I’lljustremindthatthewaytherevenuerecognitionworksonthatambulatoryqualityreportingisweactuallyrecognizetherevenueoncethereportsaresubmittedtoCMS,whichisattheendofthequarter.Sowhatwe’vebeentrackingistheregistrationsandthesubmissions,buttheactualrecognitionwilloccuratthepointthatthosehappenattheendofthequarter.

LisaChristineGill-JPMorganChase&Co,ResearchDivision-SeniorPublishingAnalyst

Okay,that’shelpful.Andthensecondly,Craig,aswethinkabouttheworkforcereductions,youtalkedabouttheseverancecosts.Butthe$13millionto$14million,dowethinkaboutthatasarunrategoingintonextyear?Andhowmuchofthatbenefitwillyouactuallyseeinfiscal’18?


Yes,it’sagreatquestion.SowhatIwouldtellyouis,givenwhereweareinourcurrentfiscalyear,theimpactofseveranceeffectivelyoffsetsthesavingsthatwewouldgetinthecurrentyear.Andthenthe$13millionto$14millionisanannualizedrunrate,soifyouthinkaboutthatforfiscal2019.

Operator

OurnextquestioncomesfromRichardClosewithCanaccordGenuity.

RichardCollamerClose-CanaccordGenuityLimited,ResearchDivision-MD&SeniorAnalyst

Susan,thanksforsharingyourvisionthere.Withrespecttothelongertermvision,youdidrattleoffsomeareasofinterest.CanyoudiveinalittlebitdeeperintothoseasitgoesacrosssupplychainandthePerformanceServices?


Yes.SoItalkedaboutitalittlebitatJPMorganaswell.ButourviewisthatwehavetremendouscorecapabilitiesinSupplyChainandPerformanceServices.We’veacquiredalotoftuck-inacquisitions.We’vebuiltoutalotofanalyticsandGPOandclinicalimprovementcapabilities.Ithinkonthesupplychainside,Richard,we’renowinterestedinconnectingwhatwehavetoadditionalfuturestatetechnologiesonthefrontendandthenconnectingitmoredeeplytosomeoftheback-endlogisticsanddistributionandfulfillmentsothatwecangotoourhealthcaresystems,andthey’reaskingforthis,andsay,“Youknowwhat?You’vegottotalsupplychaincostsofx.Wecanhelpyouwithfront-endelectronicprocurement,withmiddleoftheprocesssourcing,withback-enddistributionthroughpartnersandwecanownyourtotalsupplychainspendwithyou,andwecantakethosenumbersdownsignificantly.”Sothat’sourvisiononthesupplychainsideanditneedstobeconnectedtoERPandworkflow.

OnthePerformanceServicesside,it’sasimilarpointofview,whichis,wehavealotofanalytics,wehavealotofadvisorycapabilitiesincollaboration.We’dliketobringadditionalfuturestatetechnologies,machinelearning,cognitivecomputingandgettoanend-to-endconnectivityofthoseanalyticswithworkflow.Ourmembersareaskingfor,giventhesizeofourdatasets,formoreprecisionmedicinesupport,andwealsothinkthereareadditionalcustomerchannels.Sowewantedtostarttolayoutthatsomeofourcapitaldeploymentwillbealongthose2linesasitrelatestothesegments.


Page12of20RichardCollamerClose-CanaccordGenuityLimited,ResearchDivision-MD&SeniorAnalyst

Andjustafollow-uptothat.Intermsofthecapitaldeployment,doesthatcomemostlythroughinternaldevelopmentorM&A?Andthenanytimelineintermsoftheseinitiativesintermsofdrivingacceleratedrevenuegrowth?


Yes,soit’sacontinuousprocessforusanditincludesbothorganictechnologydevelopmentandotherdevelopmentonourownaswellasacquisitionsand,potentially,partnering.Andsowe—asalways,weareconstantlyevolvingandrefiningourstrategygoingforward,andwe’llcontinuetodothat.Thisisabig,boldstrategyonboththesupplychainsideandthePerformanceServicesside,Richard,soitwilltakesometimetoplayitselfout.

Operator

OurnextquestioncomesfromEricPercherwithNephronResearch.

EricR.Percher-NephronResearchLLC-ResearchAnalyst

Susan,I’dliketofollowupwhereyoujustended.Soyourcommentaryoverthelast30daysseemsnotable,andIwanttomakesureI’mgivingtherightweighttoit.Isthisinpartthatyouexpectthatwemayseeadifferenttypeofpartnershipaswellastheinternalcapitalallocation?Isthere—canyougiveusalittlebitmoreonwhatyou’repreparingfor?


Eric,alloptionsareonthetable.Soforus,thismeansreallytakingthecapabilitieswehaveandfiguringoutwhatweneedtoaddtoittoextend.Sothegoalistoownthesupplychainmetricwiththehealthsystemandtoowntheirclinicalimprovementandcostmetricswiththehealthsystemandbringrealscaleandintegrationtothoseactivities,whichareprettyfragmentedtoday.Imean,ourhealthsystemsaresaying,“I’vegotmultiplepartners,I’vegotmultipletools.Ineedanintegratedwayofsolvingthesebigchallenges,particularlyinthisenvironmentofcostpressure.”SoasIsaid,Ithinkit’llbeorganicdevelopment,itwillbeacquisitions,itwillbepotentialpartnershipsforustoreallybeabletogettothisend-to-endsetofsolutions.Andwethinkthiswillbedisruptiveaswethinkaboutourcompetitorsinthisspace.They’renotinthesamepositionwearetobeinsidethehealthcaresystemreallydrivingtheend-to-end.

EricR.Percher-NephronResearchLLC-ResearchAnalyst

Soyou’retakingonalotthere.Andthenletmeaddonemoretothat,whichisyourcommentaryaboutintegrationacrosstheindustry.Doesthatviewextendtopayersaswellanddoyouseearoletobeplayedaswellforthepayercommunityoranimpactfromconsolidationthatwe’reseeingwithinthepayercommunity?


Page13of20SusanD.DeVore-Premier,Inc.-President,CEO&Director

Yes,it’sagreatquestion.Andwhenwelookattheproviderconsolidationfirst,youseebigger,morecomplexorganizationsthatwethinkwillhaveevengreaterneedfortheseintegrated,standardized,unfragmentedsetofsolutionsbutalso,payersand,potentially,pharmaorsupplierswhowouldhavealotofinterestinthedatasetsandtheimprovementactivities.Becauseweseeinthemarketmoreandmorepartneringbetweenandamongprovidersandpayersanddistributorsandmanufacturers,andwethink,again,we’reinaprettyuniquepositionthathelpcapitalizeonthat.Soyes,itwouldbeapotentiallyadditionalcustomerbase,too.

Operator

OurnextquestioncomesfromStephanieDaviswithCiti.

StephanieJulyDavis-CitigroupInc,ResearchDivision-VP&SeniorAnalyst

CouldyouwalkusthroughtheputsandtakesofsecondhalfEBITDA,justgiventhesolidbeatsyear-to-date?Isthatprimarilyrestructuring-drivenoristhere—there’sanelementofconservatisminthenumbers?


Notrestructuringdriven.SoasIindicated,therestructuringimpactwilleffectivelynetitselfoutinfiscal‘18.SoaswelookatadjustedEBITDAcontributionsonthebackhalfoftheyearonaconsolidatedbasis,there’salittlebitofimprovementinthesecondhalfoftheyear,vis-à-visthefirsthalfoftheyeartogettooverallranges.Andsomeofthatcomesfromtheloweradministrativefeegrowththatwesawinthefirsthalf,andweexpect,asImentioned,forthattostabilizeinthesecondhalfoftheyear.Andgiventheprofitabilityoftheadministrativefeemodelinthatpartofourbusiness,that’llhelpdrivesomeoftheEBITDAinthesecondhalf.Secondarily,aswe’vetalkedaboutconsistently,thewaythatourPerformanceServicesbusinesswilloperatethisyeariswe’llhavesequentialimprovementinthebackhalfoftheyear.Theambulatoryregulatoryreportingthatwetalkedaboutisahighermarginbusiness.Sointhethirdquarter,wedoseethatpullthroughanimprovementinPerformanceServices.Andthenwehavesomeperformance-basedengagementsweanticipatetocontributeinthefourthquarterwhenwe’reabletorecognizesomeofthatrevenue,whichwillhelpdriveprofitabilityatthatpoint.

StephanieJulyDavis-CitigroupInc,ResearchDivision-VP&SeniorAnalyst

Allright,thatmakessense.Andonequickfollow-upontheperformanceside.Justgiventheincreasedtractionoverthepriorfewquartersininformaticsbusiness,couldyoujustgiveusanycolorwhat’sreallydrivingthat?


SothisisMikeAlkire.Sojustacoupleofusecasesthatareprettyprevalentinthemarketrightnow.Oneisservicelineanalytics.Soit’sreallypullingtogetherallofourclinicaldataandoursupplychaindataandourlabordatareallytohelpourhealthcaresystemsunderstandtheprofitabilityandtheclinicaloutcomesassociatedwitheachoftheirlinesofbusiness.Sothat’sprobablythe#1driver.Thesecondareaisthiswholefocusonhigh-valuecare,whichisreallyourhealthcaresystemshavinganinterestin


Page14of20standardizingcareacrosstheentirecontinuum.Nowthatwehavedatafromaqualitystandpointinthenonacute,wealsohaveitintheacute.They’relookingforustobringthoseassetstobeartoreallyhelpthemwithmanagingqualityacrossthecontinuum.Thefinalareaisenterpriseanalytics.Sothat’sanofferingthatwe’velaunchedprobablyacoupleofyearsago.Andwe’rereallyseeingalotofuptakeintermsofourhealthcaresystemsusingthattoimprovetheirmargins,standardizingcareandthendrivingthatlastprogramItalkedabout,whichwasstandardizingcareacrossthecontinuum.

Operator

AndournextquestioncomesfromSeanDodgewithJefferies.

SeanWilfredDodge-JefferiesLLC,ResearchDivision-EquityAnalyst

SomaybejuststayingonPerformanceServicesforamoment.Craig,canyougiveusasenseofhowmuchrevenueyou’vegotbuiltinoryou’reexpectinginthefourthquartercominginfromtheperformance-basedadvisoryengagements?Andmaybehelpusunderstandhowmuchadvancedvisibilityyouhaveintothoserevenue?Iknowthey’reinguidance.Isthatsomethingyoucanprettyclearlyseenoworarethosealittlebitriskier?


Imean,asyouwouldexpectinanadvisoryservicesbusiness,thereisalwayssomeportionofyourrevenuestreamoutinthefuturethat’snotgoingtobefixedanddeterminableasyou’removingthroughaconsultingtypeoperation.Butifyoulookatthebackhalfoftheyear,again,alotofvisibilitytothethirdquarterinformaticsbusinessandwhatwewouldanticipateandexpecttoseefromtheambulatoryreportingperiod,aswe’vediscussed,andthentherestofthatbusinessonthetechnologyside,giventheSaaSnatureofit,iseffectivelyknownatthispoint.Sohigh90%visibilityonthetechnologyside.FromanAdvisoryServicesstandpoint,whileIcan’tdisclosetheexactmagnitudeofperformance-basedengagements,manyofthoseareinflight,underway.Wehaveworkplansinplacewiththehealthcaresystemsthatwe’reworkingwithandknowwhenwewouldexpecttoachievethesavings.AndasI’vetalkedaboutinthepast,there’salwaysthepotentialforsomeslippageoraccelerationdependingonhowparticularengagementsaregoing.Butasweindicated,theoverallexpectationthatthesegmentwillperformbelowthemidpointoftheoriginallyestablishedguidancerangeiswhereweanticipatethatwillcomein.AndIthinkyou’llseesequentialandthenkindofnormalizedthird,fourthquarterperformanceoutofthatsegmentofthebusiness.

SeanWilfredDodge-JefferiesLLC,ResearchDivision-EquityAnalyst

Okay,fairenough.Andthenmaybe,Susan,goingbacktotheefficiencyinitiativesreallyquick,thereductionsinheadcount.ArethereanyparticularareasoftheorganizationthosearefocusedonorarethosespreadprettyevenlyacrossPremier?


Always,workforcereductionsareverydifficultandhard.Thisis3%oftheworkforce.Ithastodomostlywithlayersofmanagementasaresultofintegrationoftheacquisitionswe’vedoneoverthelastfewyears.Soit’sprimarilyinsomeoftheperformanceservicesareasanditrelatestoacquisitionsynergiesandrepositioningresourcestowherewethinkthegrowthiscominginthefuture.


Page15of20Operator

OurnextquestioncomesfromRossMukenwithEvercore.

ElizabethHammellAnderson-EvercoreISI,ResearchDivision-Associate

ThisisElizabethAndersoninforRoss.Iwaswondering,intermsofthelong-termforcesandmarketplacechangesthatyousuggestedearlierinthepresentation,howareyoureviewingAmazon’sannouncementlastweekasanopportunitytopotentiallyfitinwiththisornot?


SoIassumeyou’retalkingabouttheAmazon,JPMorgan,Berkshireannouncement?


Yes.


Yes,it’sinteresting.Wesupportandencouragetheactivityofemployerstoaggregatetheirhealthcareservicesbusiness.Inmanyways,Premierisanaggregatorandweworkwithothermemberswhoarealsoemployers,buttheyaredirectcontractingwithemployersbothregionallyandnationally.SoIwouldsayweencourageit.Andweactuallythinkbecausewehavesomuchdataandinformationontheprovidersegmentandwe’vebeenallaboutbuilding,testingandscalingnewmodelsforcaredelivery,wethinkit’sanetpositiveandwethinkit’sanopportunity.Andwethinktheremaybeotheremployerswhohaveaninterestingoingdirecttotheproviderdeliverysystemwiththekindsofinformation,datatechnologyandaggregationtoreallytrytodrivecostofcaredown.


Perfect,that’sreallyhelpful.AndcanyoujustgiveusaquickupdateonwhereyouareintermsoftheGPOrenewalsthatyouweretalkingaboutthroughlastfall?


Yes,wetalkedabouthavingrenewed,auto-renewedorrenewedorextended93%ofthosemember-ownercontracts.Wehaveahandfulthatwe’recontinuingtoworkthroughwithourmembers.Theydon’thavealotofurgencyaboutitbecausethesortofcontractdateisthiscomingSeptember30of2018.Sowejustcontinuetoworkwithallofthem.Andwestillexpectthevastmajorityofallofourmember-ownerstohaverenewedbythattimewegettothatdate.

Operator

OurnextquestioncomesfromMohanNaiduwithOppenheimer.


Page16of20MohanA.Naidu-Oppenheimer&Co.Inc.,ResearchDivision-MDandSeniorAnalyst

Susan,justalongthesamelines.WhatdoyouthinkingeneralaboutthedisruptionfromplayerssuchasIntermountain,Ascensiontryingtocreatethisnewgenericdrugcompany,orAmazonandJPMorgantryingtodothis?Whataretherealopportunitieshereforyouandhowarehealthsystemsreactingtoallofthese?


Yes,there’sjustalotofblurringoflinesgoingoninthehealthcaresystemgenerally.WhatIwouldsayis,Mohan,Ithinkwewereanticipatingthismanyyearsago.Weacquiredourowndirectsourcingcompany.We’realreadyprivatelabelingagenericdrugprogram.Wehavethecapabilitytofindotherwaystodealwithshortagesandpricingtransparency.AndsoalotofourmembersarealreadyleveragingthosecapabilitieswithinPremieranddon’tseetheneedtobuyorbuildtheirowngenericdrugcompany,forexample.SoIthinktherewillbefolkswhotestdifferentpartsofthemarket.Therealityoftheanalyticsyouneed,theaggregation,theprocesschange,thestandardizeddecision-making,we’vebeendoingalotofthosethingsandwillcontinuetodothose.AndIthinkifyoudrivethesavingsout,it’spartofwhyItalkedaboutowningthesupplychainoutcome,becauseanyoneofthosethingsinpiecesandpartsdon’tallowreallyforowningandchangingtheoveralltotalsupplychainoutcome,whichis,Ithink,whereeverybody’sgoingtohavetogettowiththetremendouscostpressurethey’refacing.


Mohan,thisisMikeAlkire.I’dliketojustaddacoupleofthings.Soweactuallythinkofthisasanopportunity.SoifyouthinkoftheAmazonandJPMorganopportunity,we’vegotthedata.We’vegotthetransparency.We’vegotthecollaborativestoactuallyhelppullemployerstogethertohelpthemifinfacttheyactuallywanttogodownthispathofdoingthisdirect-to-providersortofhealthcaredelivery.Sowethinkthere’sanopportunitythere.Andthenonthe—wheresomeofthehealthcaresystemsarecomingtogethertodothemanufacturingofgenerics,obviously,we’rereachingouttothoseorganizationsbecausewethinkwehavethetechnologyplatformtoaggregateallofthatsupply.Andwethink,giventheinvestmentswe’vemadewithourdirectsourcingasset,thatwecanactuallycontractmanufactureorprivatelabeldependingonwhat’sgoingtodrivethebestvaluetothem.

MohanA.Naidu-Oppenheimer&Co.Inc.,ResearchDivision-MDandSeniorAnalyst

That’sgreat.Maybeonequickoneonutilization.Craig,yousaidyou’reseeingimprovingutilization.Isthereenoughdataorstuffthatyou’reseeingrightnowthatcanhelpusdifferentiatewhetherthisisjustaconcentratedutilizationtowardstheendofthecalendaryearcomingfromthedeductibleplansoristhisjustageneralincreaseinutilizationoverall?


Yes.Iwouldtellyou,Mohan,it’sstillpreliminarytoreallybeabletoseethat.Ithinkwe’vetalkedinthepastthat,clearly,webelievethereissomeseasonalityasmorepeoplemovetoconsumer-directedplans.Andoverall,Iwouldthinkthatwe’reinanuncertainandpressuredenvironmentwherelongerterm,Idon’tthinkyou’regoingtoseehighutilization.Butrightnow,wehaveseenimprovementandmoderationandthinkthatbodeswellfortherestofourfiscalyear.


Page17of20SusanD.DeVore-Premier,Inc.-President,CEO&Director

Yes,oursense,Mohan,isthatutilizationisgoingtomovearoundthehealthcaresystemtothemostefficientsettingswiththehighestqualityoutcomes.Andsopatientsinthehospitalmightbesicker,otherpatientswillbeatothersitesofcare.Andaswesaidinthepreparedremarks,itreallyisbehindmakingsurewehavesupplychaincapabilities,analyticcapabilitiesinallsettingssothatasitmoves,we’reabletosupportthosehealthcaresystemsinwhateversettingitmovesto.

Operator

OurnextquestioncomesfromDonaldHookerwithKeyBanc.

DonaldHoughtonHooker-KeyBancCapitalMarketsInc.,ResearchDivision-VPandEquityResearchAnalyst

Kindoffollowingupontheearlierquestion.I’minterestedinthisnationalbuyingprogram.ButIguess,morebroadly,Iknowyouguyshavemadegreatprogresswithyourmembersgettingthemmorecompliantwithlow-costcontracts,supplycontractswithyourGPO.Howmuch—Imean,howdowethinkabouthowmuchmoreroomthereistorun?Itseemslikeyouguyshadmadegreatgainsthere.Istheresortofadiminishingreturnthere?Orhowfardoyouthinkwehavetogo?


Yes.Thanks,Don.ThisisCraig.I’llteeitupandthenSusanorMikecanaddanycolor.Butaswe’vetalkedabout,we’veroutinelydiscussedkindofpenetration,althoughwedon’tlookatanoverallpenetrationmetric.Weactuallytalkaboutbyserviceline.Andsotherearecertainservicelinesthatareveryhighlypenetratedwhenyouthinkaboutpharmacyor,forexample,ourfoodprogram.Butasyoumovedownintomorekindofstereotypicalmedicalsurgicalcategoriesorintothephysicianpreferencetypecategoriesorclinicianpreferencetypecategories,there’sstillalotofrunway.Thosearedowninthemoreofthe60stopotentially,inastrongercategory,70%penetration.Sothere’sstillalotofroomtodriveadditionalpenetrationthere.Andabigpartofthiscommittedbuyingprogramthatwe’relaunchingistoactuallyattackcategoriesinthatarenawhereyoucanactuallygettostandardization,asMikedescribed,andthereisanopportunitytoreallydrivestandardizationandcommitmenttogetbusinessforthesupplier,savingsforthememberandincrementalrevenuesforPremierlongerterm.


Yes,we’vebeenprettyintentionalaboutbuyinganalyticsassetsandthedirectsourcingcompaniessothatwiththisend-to-endstrategy,youcansolvethetotalsupplychainproblemwithGPOcontracts,withanalytics,withe-procurementofcapitalthroughananalyticstool,throughdirectsourcingsothatyouhavetheflexibilitytogotowhichevertoolorcapabilityisrequiredtogettothelowestsupplychaincost.

DonaldHoughtonHooker-KeyBancCapitalMarketsInc.,ResearchDivision-VPandEquityResearchAnalyst

Andthen—andmaybeaquickfollow-uponthesametopic.Nowthat,Iguess,we’regoingto—EssensaandInnovatixaregoingtocalendarizehere.Whatis—howdowethinkaboutkindofagrowthratefromthosebusinessesgoingforwardversusyourhistoricalin-patientsortofGPOservices?


Page18of20CraigS.McKasson-Premier,Inc.-SeniorVP&CFO

Yes,thisisCraig.Ithinkwhatwe’vetalkedabouthistoricallyintheGPOspaceiskindofmid-single-digitbeingtheregulargrowthratethathashistoricallybeencomprisedof,I’llsay,lowersingle-digitgrowthintheacutecarefootprintandalittlebithighergrowthinthenonacutecarefootprint.Ithinkyou’llcontinuetoseethatforminthatfashion.Butlongerterm,Iwouldexpectkindofmid-single-digitoverallgrowth.

Operator

OurnextquestioncomesfromSeanWielandwithPiperJaffray.

SeanWilliamWieland-PiperJaffrayCompanies,ResearchDivision-MDandSeniorResearchAnalyst

Sohowdoesthisremeasurementofthetaxreceivableagreementaffectthefuturepaymentstoyourmemberownersunderthatagreement?


Yes.Sothewaythetaxreceivableagreementsworkisthatatsuchtimethatweactuallyfileourtaxreturnandtakebenefitforataxdeductionasathen-enactedtaxrate,wepassthrough85%ofthattaxsavingstothemembers.Sotheshortanswertoyourquestionistheamountofthepaymentinthefuturetothehealthsystemsforthattaxreceivableagreementisreducedbecauseourtaxliabilityisreduced,andsothatincrementalcashflowwillgodownlongerterm.


SohowdoesthataffectthethinkingofyourmemberownersrelativetotherevenueshareobligationsandtheoveralleconomicmodelofdoingbusinesswithPremier?


Yes,soaswetalkedabout,Sean,Imean,thewayourmembersviewthisisatotalsupplychainrelationship,whichincludesadminfee,sharetaxdistribution,someofthemhaveequity,someofthemdon’t.Butthebiggestnumberofthepageisalwaysthesupplychainsavingstarget.SoIdon’tknowifyou’reatInvestorDayorhaveseenthechart,Ithinkweshoweditlastquarter,whereforeverymember,they’retalkingaboutwithustheROIthatthey’regetting.Soiftheyhavea$50millionsavingstargetandthey’regettingfeesharetaxdistribution,resourcesandthey’reusingtechnologyandpayingSaaSfees,whatisthatoverallROI?AndthatROIisusuallybetween5:1and15:1,andthat’showtheythinkaboutitwithus.There’sjustalotofpartsoftherelationshipthatarebiggernumberstothem.Thistaxdistributionthingisafairlysmallnumberforfiscalyear’18andthere’salargenumberofowners.


Page19of20SeanWilliamWieland-PiperJaffrayCompanies,ResearchDivision-MDandSeniorResearchAnalyst

Okay.Sothe$177million,thatis—howmanymoreyearsareleftinthetaxreceivableagreement?Howmanyyearswasthatfor?


Yes,sothewaythat—thisisCraig.Thewaythetaxreceivableagreementworks,Sean,isit’soverIRS’15-yearamortizationlife.Sothe$177millionisactuallyacumulationoverthefirst4yearsforthosememberownersthathaveexchangedequityatthetimeoftheIPOandsubsequenttothen.

Soitactuallyrunsoutforatleast15moreyearsatthispointintermsofthatremeasurement.Soasanexample,theamountthatweprovidedtoallofthememberownerslastyearattributabletothetaxreceivableagreementwasintherangeof$12millionto$13million.


Okay.Andthen—soatthisnewtaxrate,thatwouldbecomewhat?


Itwouldgodownbyabout36%.

Operator

AndournextquestioncomesfromEricColdwellwithBaird.

EricWhiteColdwell-RobertW.Baird&Co.Incorporated,ResearchDivision-SeniorResearchAnalyst

Idon’tthinkIcanfollowthatoneupandallofmyquestionshavebeenaskedandanswered.Soletmejustsaycongratsonanicequarterandupdate.

Operator

Andatthistime,I’mshowingnofurtherquestions.I’dliketoturnthecallbackovertoMs.SusanDeVoreforclosingremarks.


Okay.Thankssomuch,everybody,forspendingtimewithustoday.WelookforwardtotalkingwithyouagainonorbeforeourthirdquarterconferencecallinearlyMay.Sooperator,youcannowclosethecall.


Page20of20Operator

Ladiesandgentlemen,thankyouforyourparticipationintoday’sconference.Thisdoesconcludetheprogram,youmaynowdisconnect.Everyone,haveagreatday.

Second-QuarterFiscal2018FinancialResults&UpdateFebruary5,2018Exhibit99.3

Forward-lookingstatementsandnon-GAAPfinancialmeasuresForward-lookingStatements–Certainstatementsincludedinthispresentationthatarenothistoricalorcurrentfactsincluding,butnotlimitedto,thoserelatedtoourfinancialandbusinessoutlook,impactofevolvinghealthcareenvironment,strategyandgrowthdrivers,utilizationandpatientvolumetrends,revenuevisibility,anticipatedmemberrenewalsofGPOparticipationagreements,crossandupsellopportunities,acquisitionactivitiesandpipeline,revenueavailableundercontract,thefinancialimpactofsharerepurchases,taxreformandcostsavingsefforts,and2018financialguidanceandrelatedassumptionsare“forward-lookingstatements”withinthemeaningofthefederalsecuritieslaws.Forward-lookingstatementsmayinvolveknownandunknownrisks,uncertaintiesandotherfactorsthatmaycausetheactualresultsofPremiertobemateriallydifferentfromhistoricalresultsorfromanyfutureresultsorprojectionsexpressedorimpliedbysuchforward-lookingstatements.Accordingly,readersshouldnotplaceunduerelianceonanyforwardlookingstatements.Readersareurgedtoconsiderstatementsintheconditionalorfuturetensesorthatincludetermssuchas“believes,”“belief,”“expects,”“estimates,”“intends,”“anticipates”or“plans”tobeuncertainandforward-looking.Forward-lookingstatementsmayincludecommentsastoPremier’sbeliefsandexpectationsastofutureeventsandtrendsaffectingitsbusinessandarenecessarilysubjecttouncertainties,manyofwhichareoutsidePremier’scontrol.YoushouldcarefullyreadPremier’speriodicandcurrentfilingswiththeSECformoreinformationonpotentialrisksandotherfactorsthatcouldaffectPremier’sfinancialresults.Forward-lookingstatementsspeakonlyasofthedatetheyaremade.Premierundertakesnoobligationtopubliclyupdateorreviseanyforward-lookingstatements.Non-GAAPFinancialMeasures–Thispresentationincludescertain“non-GAAPfinancialmeasures”asdefinedinRegulationGundertheSecuritiesExchangeActof1934.Schedulesareattachedthatreconcilethenon-GAAPfinancialmeasuresincludedinthispresentationtothemostdirectlycomparablefinancialmeasurescalculatedandpresentedinaccordancewithGenerallyAcceptedAccountingPrinciplesintheUnitedStates.YoushouldcarefullyreadPremier’speriodicandcurrentfilingswiththeSECfordefinitionsandfurtherexplanationanddisclosureregardingouruseofnon-GAAPfinancialmeasuresandsuchfilingsshouldbereadinconjunctionwiththispresentation.

SusanDeVorePresidentandChiefExecutiveOfficerPremier,Inc.OverviewandBusinessUpdate

Second-quarterfiscal2018financialhighlights*Seenon-GAAPAdjustedEBITDA,non-GAAPAdjustedFullyDistributedEarningsPerShareandnon-GAAPFreeCashFlowreconciliationstoGAAPequivalentsinAppendix.Non-GAAPadjustedEBITDA*up9%to$133.5millionSupplyChainServicessegmentrevenueup19%to$324.9millionPerformanceServicessegmentrevenueup1%to$86.5millionNon-GAAPadjustedfullydistributedearningspershare*up9%to$0.50Cashflowfromoperationsof$206.5millionforsix-monthperiodNon-GAAPfreecashflow*of$122.2millionforsix-monthperiodRaisingfiscalfull-yearguidancefornon-GAAPadjustedfullydistributedearningspershareandreaffirmingexistingguidancerangesforotherfinancialmetricsConsolidatednetrevenueup15%to$411.4million;Afteraone-timeremeasurementofdeferredtaxbalances,GAAPnetincomeof$19.8million,GAAPEPSlossof$1.66*Seenon-GAAPAdjustedEBITDA,non-GAAPAdjustedFullyDistributedEarningsPerShareandnon-GAAPFreeCashFlowreconciliationstoGAAPequivalentsinAppendix.

MarketplaceforcesthataredrivingchangeVolumetoValueValuedominates,evenwithregulatoryshiftsInsurersandtherapeuticcompaniespushingmoresharedvalue-basedcontractsRealworldefficacyofeverysinglesolutionDouble-sidedriskassumptionDigitaltransformationisoccurringateverynodeofhealthcareOptimizationofEMRsGrowthofpredictiveanalyticsandmachinelearningPrecisionmedicineBlockchainWorkflowandconsumerexperienceDigitalizationVertical/HorizontalIntegrationStakeholdersareconsolidatingtodeliverbetterofferingsPayer/providerRetail/providerDistributor/manufacturerTechnologyconnectivityDecentralizationofcaredeliveryinsystemsVirtualcareRemotepatientmonitoringEnhancedclinicaldatasharingAlternativecaresettingssuchasretailDecentralizationofCareConsumerism/WellnessTheconsumerisdemandingmorefromtheirhealthcarePricetransparencyAlwaysconnectedwellnessAccessandmanagementoftheirhealthdata

PremiercontinuestoevolveitsstrategytoaddresschangingindustrydynamicsandproviderneedssupplychainservicesperformanceservicesOwnTotalSupplyChainCostWithMembersOwnTotalCostandClinicalPerformancewithMembersAnalytics/ComparativeEffectiveness/ResourceUtilizationComprehensiveE-enablementStrategicSourcing/PredictiveAggregationFulfillment/LogisticsPartnerClinicalandCostAnalyticsPerformanceImprovementServicesPopulationHealthManagementPrecisionMedicineConnectivityMasterDataManagementChangeManagement

MikeAlkireChiefOperatingOfficerPremier,Inc.OperationsReview

PremiercontinuestodemonstratevalueNewnationalcommittedbuyingprogramdesignedtoprovidesignificantcostsavingstohighly-committedmemberswhichareabletocoordinatesupplychaindecisionsandmaintainstandardizationacrosstheirfacilities.ContinuingtogaintractionwithourAcademicHealthSystemstrategyandhaveinitiatedengagementswithtwoadditionalacademichealthsystemssincelastquarter.

PremiercontinuestodemonstratevalueMedicareaccountablecareorganizationssupportedbyPremier’spopulationhealthcollaborativeoutperformedtheirpeersby57percentinachievingsharedsavingsduringthemostrecentmeasurementperiods.PremierwasnamedthebestStrategy,GrowthandConsolidationConsultingorganizationbyKLASforthesecondstraightyear,intheresearchfirm’s2018BestinKLAS,SoftwareandServicesreport.ProvidersworkingwithPremieronbundledpaymentprogramsunderCMS’sComprehensiveCareforJointReplacementModelperformed35%betterthanallotherparticipatinghospitalsinachievingsharedsavings.

CraigMcKassonChiefFinancialOfficerPremier,Inc.FinancialReview

Fiscal2018second-quarterconsolidatedandsegmenthighlightsConsolidatedNetrevenue(inmillions)SupplyChainServicesNetrevenue(inmillions)PerformanceServicesNetrevenue(inmillions)AdjustedEBITDA(inmillions)AdjustedEBITDA(inmillions)AdjustedEBITDA(inmillions)*Seenon-GAAPAdjustedEBITDAandnon-GAAPSegmentAdjustedEBITDAreconciliationstoGAAPequivalentsinAppendix.15%9%19%11%1%-2%GAAPNON-GAAP*

Fiscal2018second-quarterSupplyChainServicesrevenueSupplyChainServicesrevenueincreased19%Netadministrativefeesrevenueincreased23%IncludingcontributionfromInnovatixandEssensaProductsrevenueincreased14%Double-digitgrowthinbothdirectsourcingandintegratedpharmacybusinessesSupplyChainServicesNetrevenue(inmillions)19%$272.7$324.9

Fiscal2018second-quarterPerformanceServicesrevenuePerformanceServicesrevenueincreased1%GrowthincostmanagementtechnologysolutionsandambulatoryqualitysolutionsPerformanceServicesNetrevenue(inmillions)1%

Fiscal2018second-quarterGAAPnetincome-92%$1.50$(1.66)Earningspershareattributabletostockholders*–dilutedDuealmostentirelytoremeasurementofdeferredtaxbalancesasaresultoftaxreform,GAAPnetincomedecreased92%*AfterrequiredGAAPnon-cashadjustmentstoreflectthechangeinredemptionamountoflimitedpartners’ClassBcommonunitownershipattheendofeachperiod

Fiscal2018second-quarternon-GAAPadjustedEBITDA*Consolidatednon-GAAPadjustedEBITDAup9%*Seenon-GAAPAdjustedEBITDAandnon-GAAPSegmentAdjustedEBITDAreconciliationstoGAAPequivalentsinAppendix.$133.5$122.0

Fiscal2018second-quarternon-GAAPadjustedfullydistributednetincomeandearningspershare*Calculatesincometaxesat39%ofpre-taxincomeforsecondquarter(priortotaxreform),assumingtaxableCcorporatestructureCalculatesadjustedfullydistributedearningspershare,assumingallClassAandBcommonsharesareheldbythepublic9%$65.2million$70.0millionNon-GAAPadjustedfullydistributednetincome*Seenon-GAAPadjustedfullydistributednetincomeandnon-GAAPadjustedfullydistributedearningspersharereconciliationstoGAAPequivalentsinAppendix

CashflowandcapitalflexibilityatDecember31,2017CONSIDERABLECASHANDDEBTCAPACITYAVAILABLEAMPLECAPITALFLEXIBILITYFORFUTUREACQUISITIONSANDSTOCKHOLDERRETURNCashflowfromoperationsof$206.5millionandnon-GAAPfreecashflow*of$122.2millionforthesixmonthsendedDecember31,2017Cashandcashequivalentsof$163.0millionOutstandingborrowingsof$200.0millionon$750.0millionfive-yearunsecuredrevolvingcreditfacility*Seenon-GAAPFreeCashFlowreconciliationtoGAAPequivalentinAppendix.

Updatedfiscal2018guidance(1)Fiscal2018FinancialGuidance(inmillions,exceptpersharedata)FY2018%YoYIncreaseNetRevenue:SupplyChainServicessegment$1,200.0-$1,266.09%-15%PerformanceServicessegment$364.0-$382.03%-8%TotalNetRevenue$1,564.0-$1,648.08%-13%Non-GAAPadjustedEBITDA$532.0-$557.06%-11%Non-GAAPadjustedfullydistributedEPS$2.24-$2.3719%-25%(1)FortheyearendingJune30,2018.UpdatedFebruary5,2018.Seeaccompanyingpagefornotesandassumptionstoguidance.

GuidanceFootnotes:Thecompanydoesnotmeaningfullyreconcileguidancefornon-GAAPadjustedEBITDAandnon-GAAPadjustedfullydistributedearningspersharetonetincomeattributabletostockholdersorearningspershareattributabletostockholdersbecausethecompanycannotprovideguidanceformoresignificantreconcilingitemsbetweennetincomeattributabletostockholdersandadjustedEBITDAandbetweenearningspershareattributabletostockholdersandnon-GAAPadjustedfullydistributedearningspersharewithoutunreasonableeffort.Thisisduetotwoprimaryreasons:•Reasonableguidancecannotbeprovidedforreconcilingtheadjustmentofredeemablelimitedpartners’capitaltoredemptionamount–historicallythelargestadjustmentinthereconciliationfromnon-GAAPtoGAAPamounts–duetothefactthattheincreaseordecreaseinthisitemisbasedonthechangeinthenumberofsharesofClassBstockoutstandingandchangeinstockpricebetweenquarters,whichthecompanycannotpredict,controlorreasonablyestimate.•Reasonableguidancecannotbeprovidedforearningspershareattributabletostockholdersbecausetheongoingquarterlymember-ownerexchangeofClassBcommonstockandcorrespondingClassBunitsintosharesofClassAcommonstockimpactsthenumberofsharesofClassAcommonstockoutstandingeachquarter,whichthecompanycannotpredict,controlorreasonablyestimate.Memberownershavetheright,butnottheobligation,toexchangesharesonaquarterlybasis,andthecompanyhasthediscretiontosettleanyexchangedsharesforClassAcommonstock,cash,oracombinationthereof,neitherofwhichcanbepredicted,controlledorreasonablyestimatedatthistime.Fiscal2018annualguidancefootnotesandkeyassumptions(foryearendingJune30,2018)*KeyAssumptions*:SupplyChainServicesassumptions:Netadministrativefeerevenuegrowthof13%to17%Mid-singledigitgrowthinlegacygrouppurchasingbusinessaugmentedbycontributionsfromtheInnovatixandEssensabusinessesContinuedhighGPOretentionrates14-18%productsrevenuegrowthPerformanceServicesassumptions:ContinueddemandforintegratedofferingsofSaaS-basedsubscriptionandlicensedproducts,advisoryservicesandcollaborativesContinuedhighSaaSinstitutionalrenewalratesOtherassumptions:Estimatedrevenueavailableundercontractof$1.47billion,whichrepresentsapproximately89%to94%ofourconsolidatedrevenueguidancerangeNon-GAAPfreecashflowwillapproximate40%ormoreofnon-GAAPadjustedEBITDA;taxreformpositiveimpactonfiscal2018non-GAAPfreecashflowaspercentofnon-GAAPadjustedEBITDAexpectedtoapproximate4%Capitalexpendituresofapproximately$85millionto$90million,representing5%to6%ofconsolidatednetrevenueConsolidatednon-GAAPadjustedEBITDAmarginintherangeof33%to34%Adjustedfullydistributednetincomeandearningspersharecalculationstoreflectaneffectivetaxrateof39%inthefirsthalfofthefiscalyearandaneffectivetaxrateof25%inthesecondhalfofthefiscalyearasaresultoftheimpactoftheTaxCutsandJobsAct,resultinginablendedeffectivetaxrateof32%forfiscal2018onafullyearbasisTaxreformisexpectedtopositivelyimpactfiscal2018non-GAAPadjustedfullydistributedEPSbyapproximately$0.23,whilethesharerepurchaseisexpectedtoadd$0.03to$0.05*AsofFebruary5,2018

QuarterlyexchangeupdateOnJanuary31,2018,approximately1.0millionClassBunitswereexchangedforClassAcommonshareson1-for-1basis;equalnumberofClassBcommonsharesretired.NextquarterlyexchangewilloccuronApril30,2018.

Questions

Appendix

Fiscal2018andfiscal2017non-GAAPreconciliations






Documents

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