AVENDRA, LLC AND SUBSIDIARIES 
Consolidated Financial Statements 
December 31, 2016 and 2015 
(With Independent Auditors’ Report Thereon)
 KPMG LLP is a Delaware limited liability partnership and the U.S. member 
firm of the KPMG network of independent member firms affiliated with  
KPMG International Cooperative (“KPMG International”), a Swiss entity. 
KPMG LLP
 1676 International Drive
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Independent Auditors’ Report 
The Board of Managers 
Avendra, LLC: 
We have audited the accompanying consolidated financial statements of Avendra, LLC and its subsidiaries, 
which comprise the consolidated balance sheets as of December 31, 2016 and 2015, and the related 
consolidated statements of operations and comprehensive income, members’ deficit, and cash flows for the 
years then ended, and the related notes to the consolidated financial statements. 
Management’s Responsibility for the Financial Statements 
Management is responsible for the preparation and fair presentation of these consolidated financial statements 
in accordance with U.S. generally accepted accounting principles; this includes the design, implementation, and 
maintenance of internal control relevant to the preparation and fair presentation of consolidated financial 
statements that are free from material misstatement, whether due to fraud or error. 
Auditors’ Responsibility 
Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We 
conducted our audits in accordance with auditing standards generally accepted in the United States of America. 
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the 
consolidated financial statements are free from material misstatement.  
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the 
consolidated financial statements. The procedures selected depend on the auditors’ judgment, including the 
assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud 
or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s 
preparation and fair presentation of the consolidated financial statements in order to design audit procedures 
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness 
of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the 
appropriateness of accounting policies used and the reasonableness of significant accounting estimates made 
by management, as well as evaluating the overall presentation of the consolidated financial statements.  
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our 
audit opinion. 
Opinion 
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, 
the financial position of Avendra, LLC and its subsidiaries as of December 31, 2016 and 2015, and the results 
of their operations and their cash flows for the years then ended in accordance with U.S. generally accepted 
accounting principles. 
 
McLean, Virginia 
March 24, 2017
 AVENDRA, LLC AND SUBSIDIARIES
 Consolidated Balance Sheets
 December 31, 2016 and 2015
 Assets 2016 2015
 Current assets:
 Cash and cash equivalents $ 14,266,468      12,992,527      
Accounts receivable, net 58,120,417      58,250,648      
Restricted investments 1,050,954        1,760,492        
Prepaid expenses and other current assets 2,732,524        1,988,723        
Total current assets 76,170,363      74,992,390      
Restricted investments, net of current portion 22,627,766      20,159,581      
Property and equipment, net 6,902,637        8,189,672        
Goodwill and intangible assets, net 20,160,887      20,761,799      
Other assets 310,942           182,147           
Total assets $ 126,172,595    124,285,589    
Liabilities and Members’ Deficit
 Current liabilities:
 Note payable $ 6,861,111        4,750,000        
Accounts payable and accrued expenses 4,801,607        6,048,221        
Accrued compensation 8,673,606        8,231,503        
Due to customers 35,651,809      38,323,612      
Accrued incentive compensation 34,747,762      28,698,489      
Total current liabilities 90,735,895      86,051,825      
Note payable, net of current portion 17,416,667      23,750,000      
Other long-term liabilities 30,186,994      29,275,018      
Total liabilities 138,339,556    139,076,843    
Commitments and contingencies
 Members’ deficit (12,166,961)     (14,791,254)     
Total liabilities and members’ deficit $ 126,172,595    124,285,589    
See accompanying notes to consolidated financial statements.
  2
 AVENDRA, LLC AND SUBSIDIARIES
 Consolidated Statements of Operations and Comprehensive Income
 Years ended December 31, 2016 and 2015
 2016 2015
 Revenue $ 127,318,110    114,425,772    
Operating expenses:
 General and administrative 64,174,129      57,106,145      
Depreciation and amortization 2,859,780        1,346,655        
Total operating expenses 67,033,909      58,452,800      
Income from operations 60,284,201      55,972,972      
Other gain/(loss), net 937,709           (351,817)          
Income before income taxes 61,221,910      55,621,155      
Provision for income taxes 552,006           95,559             
Net income $ 60,669,904      55,525,596      
Comprehensive income:
 Net income $ 60,669,904      55,525,596      
Other comprehensive loss:
 Foreign currency translation adjustment (45,611)            (412,464)          
Comprehensive income $ 60,624,293      55,113,132      
See accompanying notes to consolidated financial statements.
  3
 AVENDRA, LLC AND SUBSIDIARIES
 Consolidated Statements of Members’ Deficit
 Years ended December 31, 2016 and 2015
 Accumulated
 other
 Members’ Accumulated comprehensive
 capital deficit Sub-total income (loss) Total
 Balance at December 31, 2014 $ 6,974,743        (25,564,810)     (18,590,067)     (255,927)          (18,845,994)     
Member distributions -                       (51,000,000)     (51,000,000)     -                       (51,000,000)     
Interest on loan due to AHI -                       (58,392)            (58,392)            -                       (58,392)            
Other comprehensive income (loss):
 Foreign currency translation adjustment -                       -                       -                       (412,464)          (412,464)          
Net income -                       55,525,596      55,525,596      -                       55,525,596      
Balance at December 31, 2015 6,974,743        (21,097,606)     (14,122,863)     (668,391)          (14,791,254)     
Member distributions (58,000,000)     (58,000,000)     (58,000,000)     
Other comprehensive loss:
 Foreign currency translation adjustment -                       (45,611)            (45,611)            
Net income 60,669,904      60,669,904      60,669,904      
Balance at December 31, 2016 $ 6,974,743        (18,427,702)     (11,452,959)     (714,002)          (12,166,961)     
See accompanying notes to consolidated financial statements.
  4
 AVENDRA, LLC AND SUBSIDIARIES
 Consolidated Statements of Cash Flows
 Years ended December 31, 2016 and 2015
 2016 2015
 Cash flows from operating activities:
 Net income $ 60,669,904      55,525,596      
Adjustments to reconcile net income to net cash provided by
 operating activities:
 Depreciation and amortization 2,859,780        1,346,655        
Other, net 48,549             19,086             
Adjustments to provision for doubtful accounts 44,359             140,871           
Unrealized (gain)/loss from investment in the deferred
 compensation plan (542,300)          1,532,263        
Changes in assets and liabilities:
 Accounts receivable 85,514             (10,130,582)     
Restricted investments, prepaid expenses and other
 assets (2,088,944)       (3,458,197)       
Accounts payable, accrued expenses, and accrued
 incentive compensation 5,199,510        (2,861,230)       
Other liabilities 911,976           3,285,400        
Due to customers (2,671,803)       6,191,123        
Net cash provided by operating activities 64,516,545      51,590,985      
Cash flows from investing activities:
 Purchase of short-term held-to-maturity investments -                       (2,501,625)       
Maturities of short-term held-to-maturity investments -                       12,003,500      
Investment in BuyEfficient, less cash acquired -                       (25,452,910)     
Purchase of property and equipment (1,020,382)       (919,331)          
Net cash used in investing activities (1,020,382)       (16,870,366)     
Cash flows from financing activities:
 Payment on note to AHI -                       (2,513,700)       
Note payable (4,222,222)       28,500,000      
Distributions to members (58,000,000)     (51,000,000)     
Net cash used in financing activities (62,222,222)     (25,013,700)     
Net increase in cash and cash equivalents 1,273,941        9,706,919        
Cash and cash equivalents at beginning of year 12,992,527      3,285,608        
Cash and cash equivalents at end of year $ 14,266,468      12,992,527      
Supplemental cash flow information:
 Income taxes paid $ 544,088           214,217           
Interest paid on loan to AHI -                       63,700             
See accompanying notes to consolidated financial statements.
  5
 AVENDRA, LLC AND SUBSIDIARIES 
Notes to Consolidated Financial Statements 
December 31, 2016 and 2015 
 
  
6 
(1) Summary of Significant Accounting Policies 
(a) Description of Business 
Avendra, LLC (Avendra or the Company) is a Delaware limited liability company under the terms of the 
Limited Liability Company Agreement of Avendra, LLC, as amended (the LLC Agreement). The 
Company is an independent hospitality procurement and supply chain organization that provides its 
customers with supply chain efficiencies and savings through aggregating purchasing volume, utilizing 
hospitality industry knowledge, and providing supply chain assurance services. The Company is 99.92% 
owned by a group of hotel and golf course management companies (the Founders) with the remaining 
0.08% owned by current and former employees (collectively with the Founders referred to as Members). 
Avendra provides procurement services primarily for the hospitality industry throughout North America, 
Latin America, and the Caribbean. A large portion of the Company’s business is conducted with the 
Founders and their managed hotels and clubs (the Founder Properties). The Company has contracts and 
agreements with distributors and manufacturers covering the procurement of a broad range of 
merchandise and services. The Company’s customers are provided access to the pricing negotiated with 
the suppliers as part of these contracts. 
Except for the Company’s Avendra Replenishment, LLC subsidiary (Avendra Replenishment), the 
majority of the purchasing activities resulting from the Company’s contracts are conducted directly 
between the Company’s customers and the suppliers under terms negotiated by Avendra with those 
suppliers. The Company is not a direct party to these purchasing transactions and the Company does not 
maintain or purchase inventory. 
Avendra Replenishment was established to serve as an intermediary between the Company’s customers 
and certain suppliers for the procurement of operating equipment. Typically, these transactions are 
replacement equipment orders for individual hotels. 
In 2015, Avendra acquired BuyEfficient, LLC (BuyEfficient), a procurement service and eCommerce 
solution provider serving the hospitality industry, from Sunstone Hotel Investors, Inc. The acquisition 
allows the Company’s customers to leverage the purchasing power and service offerings of Avendra and 
BuyEfficient’s eCommerce technology platform. 
(b) Formation of the Company and Limitation on Liability 
Pursuant to the terms of the LLC agreement, no member is personally liable for any debt, obligation, or 
liability of the Company. The LLC Agreement is perpetual in term, subject to the dissolution provisions 
provided in the LLC Agreement. The LLC Agreement provides certain preferences to the members in the 
event of dissolution, certain distributions of Company property, the incorporation of the Company, or an 
initial public offering, among other events. 
(c) Equity Transaction 
On November 30, 2010, Avendra Holdings, Inc. (AHI) redeemed its ownership in Avendra, LLC. AHI is 
owned by the Founders in proportions substantially equivalent to the Founders’ ownership in Avendra.
 AVENDRA, LLC AND SUBSIDIARIES 
Notes to Consolidated Financial Statements 
December 31, 2016 and 2015 
 
  
7 
The sale of AHI’s ownership interest, for a total aggregate redemption price of $12,250,000, was payable 
in five equal installments on each anniversary of the agreement date commencing November 30, 2011 
and ending November 30, 2015. In addition, interest on the principal amount accrued from the agreement 
date and was payable annually, in arrears, to AHI on each anniversary of the agreement date 
commencing November 30, 2011 at a fixed rate of 2.6% per annum. Due to the related party nature of 
the ownership of AHI and Avendra, the redemption amount and all interest associated with the note are 
reflected as a charge to equity. As of December 31, 2015, the note and interest were paid in full. In 2016, 
AHI’s Board of Directors and its Stockholders approved to dissolve AHI as the entity had not engaged in 
any meaningful business activity since the redemption. The Company filed a certificate of dissolution 
with the Delaware Secretary of State, satisfied any outstanding obligations, and distributed AHI’s 
remaining assets. 
(d) Principles of Consolidation 
The consolidated financial statements include the financial statements of Avendra, LLC and its three 
wholly owned subsidiaries, Avendra Canada, Inc., Avendra Replenishment, and BuyEfficient. All 
significant intercompany balances and transactions have been eliminated in consolidation. 
(e) Revenue Recognition 
The Company derives revenue from customers primarily in three forms: (1) service fees as a percentage 
of purchases made by the Company’s customers (Spend), with any supplier allowances in excess of 
negotiated fee amounts being returned to customers; or, (2) the retention of supplier allowances in lieu of 
a procurement fee, or (3) subsequent to the BuyEfficient acquisition, the Company derives an additional 
form of revenue from eCommerce fees as a percentage of customers’ Spend. 
The applicable form of revenue is delineated in the customer contracts. Revenue calculations are based 
on Spend. Revenue from service and eCommerce fees are recognized at the rate specified per customer 
contract in the period that Spend occurs. Revenue from allowances is recognized at the rate specified per 
product or service in each applicable supplier contract in the period that the associated Spend occurs. 
Spend information is based on reporting from suppliers. When Spend reports are not yet received, the 
Company estimates the Spend, allowances, and related revenue based on historical data or information 
provided by the supplier.   
The Company’s Avendra Replenishment subsidiary places orders on behalf of its customers, pays the 
supplier and assumes customer credit risk; however, the Company does not take title or possession of the 
related inventory, nor are any applicable product warranties the responsibility of Avendra. The Company 
applies a markup to the wholesale cost for each order and recognizes that markup as replenishment 
revenue when the related product is shipped to the customer from the vendor. Replenishment revenue is 
recognized net based on the mark-up. 
Certain suppliers prepay allowances in advance of completion of the related procurement process from 
which the allowances are derived. These prepayments are recorded as unearned allowances and 
recognized as revenue in the period in which the related purchases are made. The Company records these
 AVENDRA, LLC AND SUBSIDIARIES 
Notes to Consolidated Financial Statements 
December 31, 2016 and 2015 
 
  
8 
amounts as unearned allowances in due to customers and other long-term liabilities in the accompanying 
consolidated balance sheets. Unearned allowances were approximately $657,000 and $650,000 for the 
years ended December 31, 2016 and 2015, respectively. 
(f) Cash and Cash Equivalents and Short-Term Investments 
The Company considers short-term, highly liquid investments with original maturities of three months or 
less to be cash equivalents. 
The Company’s internal investment policy is to maintain a weighted average maturity of U.S. Treasuries 
and GSE’s (Government-Sponsored Entities) of not more than 7.5 months. These short-term investments 
are classified as held-to-maturity securities and are reflected as current assets on the balance sheet. The 
purchases and maturities of these investments are presented gross in cash flow from investing activities. 
As of December 31, 2016 and 2015, the Company did not have any short-term investments. 
(g) Accounts Receivable 
Allowances are recognized and billed at the rate specified per product or service in each applicable 
supplier contract. Accounts receivable primarily represent billed and unbilled allowances due. Billed 
receivables are recorded at the invoiced amount. The majority of unbilled receivables represent amounts 
that were earned, but not invoiced at year end. Accounts receivable include certain amounts billed on 
behalf of customers whose service fees are based on a percentage of Spend. These amounts are excluded 
from revenue and a corresponding amount is reflected as a component of the due to customers’ liability. 
Accounts receivable from BuyEfficient consist primarily of eCommerce fees billed to customers based 
on a percentage of Spend through supplier contracts. 
The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit 
losses in the Company’s existing accounts receivable. The Company determines the allowance based on 
historical and expected write-offs and based on customer and supplier specific circumstances. The 
Company reviews its allowance for doubtful accounts quarterly. Past due balances meeting certain 
criteria are reviewed individually for collectability. All other balances are reviewed on a pooled basis. 
Account balances are charged against the allowance after all means of collection have been exhausted 
and the potential for recovery is considered remote. The Company does not have any off-balance-sheet 
credit exposure related to its customers. 
The Company also records a rebate realization reserve, which is the Company’s best estimate of the 
amount of probable adjustments based upon differences in allowance calculations between the Company 
and the supplier in the Company’s existing accounts receivable. Due to inherent complexities in the data 
accumulation, billing, and subsequent reconciliation processes, this reserve account adjusts aggregate 
receivables to the best estimate of net realizable value.
 AVENDRA, LLC AND SUBSIDIARIES 
Notes to Consolidated Financial Statements 
December 31, 2016 and 2015 
 
  
9 
(h) Restricted Cash 
The Company records as restricted cash any cash that is restricted in its use by the Company’s executed 
contracts and is not immediately available for use. The Company did not have any restricted cash 
recorded on its balance sheet for the years ended December 31, 2016 and 2015. 
(i) Restricted Investments 
Total restricted investments were approximately $23,679,000 and $21,920,000 at December 31, 2016 
and 2015, respectively. The restricted investments represent deferred compensation associated with the 
Unit Appreciation Right (UAR) program related to the Company’s cash dividends, in addition to salary 
and bonus deferrals by highly compensated employees (see note 6(b) and 6(c)). 
These amounts are invested in a range of funds including money market, bond, and equity mutual funds 
based on the employees’ elections. These investments are considered trading securities and are 
marked-to-market each month based on the change in the funds’ quoted market value. Any realized or 
unrealized gain/loss and any interest income are recognized in other gains/(losses) with an offsetting 
entry to employee costs, on the Company’s consolidated statements of operations and comprehensive 
income. These amounts are also recorded in restricted investments with an offsetting entry to accrued 
incentive compensation and other long-term liabilities on the Company’s consolidated balance sheets. 
For the year ended December 31, 2016, the Company recorded a net gain of approximately $1,118,000 
and interest income of approximately $312,000, resulting in a net increase to employee cost of 
$1,430,000.  For the year ended December 31, 2015, the Company recorded a net loss of approximately 
$588,000 and interest income of approximately $313,000, resulting in a net decrease to employee costs 
of approximately $275,000. 
(j) Property and Equipment 
Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation 
and amortization are calculated using the straight-line method over the following useful lives: 
Furniture and fixtures 5 years
 Computer equipment 3–5 years
 Computer software 5 years
 Leasehold improvements Shorter of useful
 life or remaining
 lease term
  
(k) Goodwill 
The Company was formed in connection with the contribution of certain assets, which were recorded at 
fair value. As part of the transaction, the Company recorded goodwill representing the future economic 
benefits arising from other assets acquired in a business combination that were not individually identified 
and separately recognized. The Company also recorded goodwill as part of its acquisition of 
BuyEfficient (see notes (7) and (8)).
 AVENDRA, LLC AND SUBSIDIARIES 
Notes to Consolidated Financial Statements 
December 31, 2016 and 2015 
 
  
10 
The Company does not amortize goodwill; instead, it evaluates goodwill for impairment annually. In 
addition to the annual impairment evaluation, on an ongoing basis, the Company evaluates whether 
events or circumstances have occurred in the period subsequent to the annual impairment testing which 
indicate that it is more likely than not (i.e., more than 50%) an impairment loss has occurred. The 
Company has only one reporting unit; therefore, all goodwill is allocated to that one reporting unit. The 
Company performs its annual impairment testing as of December 31st by completing an assessment of 
qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit 
is less than its carrying value. As of December 31, 2016, there have been no events up to the completion 
of the analysis or subsequent to the analysis that would indicate that it is more likely than not that the fair 
value of the reporting unit is less than its carrying value. 
Total goodwill for the years ended December 31, 2016 and 2015 was $12,617,000 and $12,421,000, 
respectively, and is included in goodwill and intangible assets, net in the consolidated balance sheets.  
(l) Income Taxes 
The Company has elected limited liability company status and, as such, is not directly subject to 
U.S. federal and most state income taxes. Instead, the members are responsible for income taxes on their 
proportionate share of Avendra’s taxable income. Members are also entitled to a proportionate share of 
tax deductions and credits. Certain states do not recognize the limited liability company status, and 
accordingly, the Company is responsible for state income taxes in these states. Avendra Canada, Inc. is 
incorporated in Canada and is subject to taxes under Canadian tax regulations. 
The Company recognizes the effect of income tax positions only if those positions are more likely than 
not of being sustained. Recognized income tax positions are measured at the largest amount that is 
greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the 
period in which the change in judgment occurs. The Company records interest and penalties related to 
uncertain tax positions in the provision for income taxes on the consolidated statements of operations and 
comprehensive income. The Company has assessed its tax positions as of December 31, 2016 and 2015. 
As of December 31, 2016 and 2015, the total amount accrued for uncertain tax positions including 
interest and penalties is approximately $191,000 and $177,000, respectively, and is included in accounts 
payable and accrued expenses in the consolidated balance sheets. 
The provision for income taxes of approximately $552,000 and $95,600 for the years ended 
December 31, 2016 and 2015, respectively, relates primarily to those states which do not recognize the 
limited liability company status as well as amounts released for the Canadian deferred tax valuation 
allowance. There were no material deferred taxes as a result of these state income taxes; however, the 
Company has net operating loss carryforwards for Avendra Canada Inc. for the years ended 
December 31, 2016 and 2015, of approximately $227,000 and $930,000, respectively, in 
U.S. equivalents, which creates a deferred tax asset that expires on December 31, 2030. In the year 
ending  December 31, 2015, the Company reversed part of its valuation allowance and recorded a 
matching reduction to its provision for income taxes of $55,000 to reflect the belief that results of 
operations in the future would only generate taxable income to realize part of the deferred tax asset.  Due 
to increased revenue associated with a Member’s acquisition of a Canadian hotel chain, the Company
 AVENDRA, LLC AND SUBSIDIARIES 
Notes to Consolidated Financial Statements 
December 31, 2016 and 2015 
 
  
11 
believes that results of future operations will generate sufficient taxable income to realize the full 
deferred tax asset.  Accordingly, the Company reversed the remaining valuation allowance of $214,000 
at December 31, 2016 and recorded the offsetting estimated utilization of the net operating loss. 
(m) Equity-Based Compensation Plans 
The Company has a unit appreciation rights (UAR) plan (see note 6(b)). The Company has elected to 
continue to apply the intrinsic-value-based method of measuring periodic compensation expense related 
to the UAR plan. Compensation expense is measured by the amount of appreciation of the rights in 
excess of the base price as determined by the enterprise value of the Company at year end, as approved 
by the Board of Managers. 
(n) Use of Estimates 
The preparation of the Company’s consolidated financial statements in conformity with U.S. generally 
accepted accounting principles requires management to make estimates and assumptions that affect the 
reported amounts of assets and liabilities at the date of the financial statements and the reported amounts 
of revenues and expenses during the reporting period. 
The estimates involve judgment with respect to, among other things, various future factors, which are 
difficult to predict and are beyond the control of the Company. Significant estimates include the 
allowance for doubtful accounts, enterprise value from equity-based compensation under the UAR Plan, 
and the amount of certain allowances to be received from suppliers for purchases made during the year. 
Accordingly, actual amounts could differ from these estimates. 
(o) Impairment of Long-Lived Assets 
The Company did not have any impairment of long-lived assets during the years ended December 31, 
2016 and 2015. Long-lived assets, such as property and equipment are reviewed for impairment 
whenever events or changes in circumstances indicate that the carrying amounts of an asset may not be 
recoverable. 
(p) Fair Value of Financial Instruments 
Management believes that the carrying values of cash and cash equivalents, short-term investments, 
accounts receivable, accounts payable and accrued expenses, and other liabilities approximate fair values 
because of the short maturity of these financial instruments. In 2016 and 2015, Avendra entered into a 
credit agreement for a term loan for which the carrying value is reflected on the accompanying financial 
statements (see note (9)). 
(q) Foreign Currency Translation 
The functional currency of the Company’s Canadian subsidiary is the Canadian dollar. Accordingly, all 
assets and liabilities of the subsidiary are translated using exchange rates in effect at the end of the 
period, and revenue and costs are translated using average exchange rates for the period. The related 
translation adjustments are reported in accumulated other comprehensive income (loss), included in the
 AVENDRA, LLC AND SUBSIDIARIES 
Notes to Consolidated Financial Statements 
December 31, 2016 and 2015 
 
  
12 
consolidated statements of operations and comprehensive income and as a component of members’ 
deficit. 
Translation gains and losses arising from transactions denominated in a currency other than the 
functional currency of the entity involved are included in net income reported on the consolidated 
statements of operations and comprehensive income. 
(r) Recently Issued Accounting Standards 
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which requires 
an entity to recognize revenue to depict the transfer of promised goods or services to customers in an 
amount that reflects the consideration to which the entity expects to be entitled in exchange for those 
goods or service.  An entity also should disclose sufficient quantitative and qualitative information to 
enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue 
and cash flows arising from contracts with customers.  The new standard is effective for the Company on 
January 1, 2018.  The Company has not yet determined the effect of the new standard on its current 
policies for revenue recognition. 
In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which supersedes FASB ASC 
Topic 840, Leases, and makes other conforming amendments to U.S. GAAP.  ASU 2016-02 requires, 
among other changes to the lease accounting guidance, lessees to recognize most leases on-balance sheet 
via a right-of-use asset and lease liability, and additional qualitative and quantitative disclosures.  ASU 
2016-02 is effective for the Company for annual periods in fiscal years beginning after December 15, 
2018, permits early adoption, and mandates a modified retrospective transition method.  The Company is 
required to adopt ASU 2016-02 on January 1, 2019.  While the Company expects ASU 2016-02 to add 
significant right-of-use assets and lease liabilities to the consolidated balances sheets, it is evaluating 
other effects that the new standard will have on the consolidated financial statements and whether to 
early adopt. 
(2) Related Party Transactions 
The Founder Procurement Services Agreements (PSAs) are the contracts with each Founder that is a 
customer outlining the terms of the procurement and supply chain services provided to the Founders and 
their managed hotels and clubs. The initial PSAs became effective in 2001 and have been renewed for 
multiple terms most recently on December 31, 2014 for a 4-year term expiring December 31, 2018. 
The Company had $23,058,000 due to the Founders and $1,700,000 due from the Founders at December 31, 
2016. The Company had $24,446,000 due to the Founders and $2,100,000 due from the Founders at 
December 31, 2015. The due from amounts are included as a component of accounts receivable, net in the 
accompanying consolidated balance sheets. The due to amounts are included as a component of the due to 
customers’ liability in the accompanying consolidated balance sheets.
 AVENDRA, LLC AND SUBSIDIARIES 
Notes to Consolidated Financial Statements 
December 31, 2016 and 2015 
 
  
13 
(3) Accounts Receivable 
The components of accounts receivable, net at December 31, 2016 and 2015 were as follows: 
 
Management believes that all unbilled accounts receivable, net of the realization reserve, will be collected 
within one year. 
 
(4) Property and Equipment 
The components of property and equipment, net at December 31, 2016 and 2015 were as follows: 
        
2016 
 
2015 
Computer equipment $ 6,081,300  
 
6,070,786  
Computer software 
 
15,354,346  
 
14,885,513  
Leasehold improvements 
 
717,996  
 
676,398  
Furniture and fixtures 
 
1,111,769  
 
1,106,873  
     
Total 
 
23,265,411  
 
22,739,570  
Less accumulated depreciation and amortization 
 
(16,362,774) 
 
(14,549,898) 
       
$ 6,902,637  
 
8,189,672  
           (5) Leases 
The Company is obligated under several noncancelable operating leases, primarily for office space and 
equipment, with original terms from three to eight years. These leases generally contain renewal options for 
periods ranging from three to five years, and require the Company to pay certain operating costs such as 
maintenance and insurance. Rental expense for operating leases during the years ended December 31, 2016 
and 2015 was approximately $2,036,000 and $1,798,000, respectively. 
Effective December 2007, the Company renewed its headquarters lease for a 10-year term. The lease 
includes an improvement allowance of $1,048,950, which is reflected as a reduction to the total rent 
payments due under the lease and recognized on a straight-line basis over the term of the lease. In 2016, the 
Company entered into a new headquarters lease commencing on January 1, 2018 for a 97-month term. The 
lease is noncancelable and as such, is included in the future minimum lease payments, net of incentives. 
2016 2015
 Billed accounts receivable $ 12,614,557      14,009,799      
Unbilled accounts receivable 42,540,553      39,980,632      
Replenishment accounts receivable 3,575,221       4,912,890       
Less: allowance for doubtful accounts/realization reserve (609,913)         (652,673)         
$ 58,120,417      58,250,648
 AVENDRA, LLC AND SUBSIDIARIES 
Notes to Consolidated Financial Statements 
December 31, 2016 and 2015 
 
  
14 
Future minimum lease payments under noncancelable operating leases with initial or remaining lease terms 
in excess of one year as of December 31, 2016 are: 
 
(6) Employee Benefit Plans 
(a) Unit Appreciation Rights (UAR) Plan 
In 2004, the Company approved the “2004 UAR Plan” to provide for the annual issuance of UAR’s to 
senior-level employees. In 2007, the Company, as approved by Avendra’s Compensation Committee, 
modified the 2004 UAR Plan to compensate UAR holders for the impact on the Company’s valuation of 
the periodic cash distributions that are made to its Members. In 2012, the Company approved a new 
“2012 UAR Plan,” which modified the methodology for valuing future grants to be based on growth in 
the year-end enterprise valuation only. Therefore, the compensation for the impact of the periodic cash 
distributions will no longer apply to grants under the 2012 plan. The actual fair value of the Company, as 
determined by a third party equity sale transaction or market valuation, might differ significantly from 
management’s internal December 31, 2016 and 2015 estimate of enterprise valuation. 
In 2016, under the 2012 UAR Plan, the Company issued 636,541 UAR’s with a base price of $10.49 and 
an effective date of June 30, 2016 for vesting purposes. In 2015, under the 2012 UAR Plan, the Company 
issued 733,357 UAR’s with a base price of $9.04 and an effective date of June 30, 2015 for vesting 
purposes. The rights vest over four years from the respective effective date. The rights issued prior to 
2012, have an expiration date of 10 years after the grant date, and the rights issued in 2012 and thereafter 
have an expiration date of five years after the grant date. 
Compensation cost of approximately $13,073,000 and $13,994,000, respectively, has been recognized 
for outstanding UAR’s in the accompanying consolidated financial statements for the years ended 
December 31, 2016 and 2015. The compensation cost was based on an estimated fair value of the vested 
UAR’s, as determined by the Board of Managers, of the appreciation rights in excess of the base price of 
the right granted. As of December 31, 2016 and 2015, a short-term liability of approximately 
$34,748,000 and $28,698,000, and a long-term liability of approximately $5,531,000 and $6,653,000 
respectively, have been recognized for the UAR plan under accrued incentive compensation current 
liabilities and other long-term liabilities in the consolidated balance sheets. 
 
2017 $ 1,942,093   
2018 1,209,116   
2019 1,249,740   
2020 1,300,341   
2021 1,343,519   
Thereafter 5,960,433   
Total minimum lease payments $ 13,005,242
 AVENDRA, LLC AND SUBSIDIARIES 
Notes to Consolidated Financial Statements 
December 31, 2016 and 2015 
 
  
15 
UAR activity during the periods indicated is as follows:  
 
 
(b) Deferred Compensation Plan 
Effective December 16, 2003, the Company established a plan for the purpose of allowing highly 
compensated employees to defer certain compensation (Employee Contributions). The Company’s 
obligations to the participants are unsecured, and therefore, the participants are treated as general 
unsecured creditors. Participants are fully vested in the amounts in their respective deferred 
compensation accounts. Payments typically become payable upon separation from the Company in either 
a lump sum or equal installments over a 5-year period. The Deferred Compensation Plan (the Plan), 
Weighted
 Number of average
 2004 UAR Plan: options base price
 Balance, December 31, 2014 5,649,443    $ 3.78                 
Granted -             -                  
Forfeited/canceled -             -                  
xercised (1,573,761)   3.23                 
Balance, December 31, 2015 4,075,682    $ 4.00                 
Granted -             -                  
Forfeited/canceled -             -                  
Exercised (605,542)     2.90                 
Balance, December 31, 2016 3,470,140    $ 4.19                 
Weighted
 Number of average
 2012 UAR Plan: UAR's base price
 Balance, December 31, 2014 2,703,012    $ 7.12                 
733,357 9.04
 (3,996) 9.04
 (61 750  6 31
 5 3 623 7 55
 Granted 636,541      $10.49
 Forfeited/canceled -             -                  
Exercised -             -                  
Balance, December 31, 2016 4,007,164    $ 8.01
 AVENDRA, LLC AND SUBSIDIARIES 
Notes to Consolidated Financial Statements 
December 31, 2016 and 2015 
 
  
16 
under the 2004 UAR Plan, also provides UAR grantees with deferred compensation in respect to the cash 
distributions made to the Company’s Members (Employer Contributions). The 2004 UAR Plan provides 
a credit to UAR grantees for member cash distributions for outstanding grants issued prior to 2012. The 
UAR credit is determined by the amount of the cash distribution divided by the total units outstanding at 
the time of the distribution multiplied by the number of UAR’s outstanding. The cash contribution is 
made for vested UAR’s and is included in restricted investments on the Company’s consolidated 
financial statements. Upon separation from the Company, the vested amounts are payable to the UAR 
grantee within 90 days. 
In the Company’s consolidated financial statements, both the Employer and Employee Contributions to 
the Plan, as well as the related investment earnings, are recorded in assets as a restricted investment with 
an offsetting liability for the obligations to the Plan participants. For the years ended December 31, 2016 
and 2015, the restricted investment and the liability each totaled approximately $23,679,000 and 
$21,920,000, of which approximately $1,051,000 and $1,760,000, respectively, were recorded as 
short-term for 2016 and 2015. 
The Employee Contributions and the vested portion of the Employer Contributions from its 2004 UAR 
Plan are in participant-directed brokerage accounts, and consist of money market, bond, and equity 
funds. The quoted market value of bond and equity funds is the unit of account used by the Company to 
measure these investments. 
 
 
Markets for Other Significant
 identical observable unobservable
 December 31, assets inputs inputs
 2016 (Level 1) (Level 2) (Level 3)
 Financial assets investments:
 Fixed income and equities $ 23,678,720  23,678,720  —  —  
Total $ 23,678,720          23,678,720  —  —  
Markets for Other Significant
 identical observable unobservable
 December 31, assets inputs inputs
 2015 (Level 1) (Level 2) (Level 3)
 Financial assets investments:
 Fixed income and equities $ 21,920,072  21,920,072  —  —  
Total $ 21,920,072          21,920,072  —  —
 AVENDRA, LLC AND SUBSIDIARIES 
Notes to Consolidated Financial Statements 
December 31, 2016 and 2015 
 
  
17 
(c) 401(k) Plan 
The Company contributes to a 401(k) plan covering substantially all of its employees. Employer 
contributions are computed based on the employees’ qualifying compensation and totaled approximately 
$1,670,000 and $816,000 for the years ended December 31, 2016 and 2015, respectively. 
(d) Profit Sharing Program 
In 2015, the Company discontinued its Profit Sharing Incentive Program and replaced it with a 
401(k) employer match effective January 1, 2016. Consequently, the Company did not recognize any 
expense for the years ended December 31, 2016 and 2015. The Company has an accrued liability for 
amounts awarded under this plan prior to 2015, but not yet vested and paid. For the years ended 
December 31, 2016 and 2015, the accrued liability was approximately $1,601,000 and $2,649,000, 
respectively, and is included in accrued compensation for the related short-term liability and in other 
long-term liabilities for the related long-term liability in the consolidated balance sheets. For the years 
ended December 31, 2016 and 2015, the short-term liability was $774,000 and $991,000, and the 
long-term liability was $827,000 and $1,658,000, respectively. 
(7) Acquisition 
On September 30, 2015, the Company acquired 100% of the membership interests and voting rights in 
BuyEfficient. The results of BuyEfficient’s operations have been included in the consolidated financial 
statements since that date. BuyEfficient is a procurement services and eCommerce solutions provider 
servicing the hospitality industry. The combined entity provides new opportunities whereby customers will 
now be able to leverage the purchasing power and service offerings of Avendra and the eCommerce 
technology platform provided by BuyEfficient. The goodwill of $12,284,000 arising from the acquisition 
relates to the increased customer base and purchasing volume. The purchase price was $26,500,000 and was 
paid in cash.
 AVENDRA, LLC AND SUBSIDIARIES 
Notes to Consolidated Financial Statements 
December 31, 2016 and 2015 
 
  
18 
The following table summarizes the purchase price paid for BuyEfficient and the amounts of estimated fair 
value of assets assumed at the acquisition date. 
 
An adjustment was made in 2016 during the measurement period based on information obtained subsequent 
to the purchase price allocation which resulted in a reduction of $196,000 to the Property and equipment 
assets acquired. A corresponding entry was recorded to increase to Goodwill as noted in note (8) (b).  
The fair value of the acquired intangible assets of $8,540,000 as of September 30, 2015 is based on the final 
valuation report for those assets from a third party valuation expert. The acquired intangible assets of which 
are being amortized, have a weighted average useful life of 10 years. The intangible assets that make up that 
amount include customer relationships of $7,970,000 (10-year useful life) and the BuyEfficient trademark of 
$570,000 (indefinite useful life). 
As of
 Purchase Price: 9/30/2015
 Cash $ 26,500,000      
Less:  Net working capital adjustment (521,802)         
Net Purchase Price $ 25,978,198      
Acquisition related costs included in SG&A 634,413          
Recognized amounts of indentifiable assets acquired:
 Cash and cash equivalents $ 525,288          
Accounts receivable, net 1,333,725        
Prepaid expenses 47,863            
Other assets 1,100              
Accounts payable and accrued expenses (1,627,172)      
Accrued payroll and employee benefits (777,027)         
Other current liabilities (25,579)           
Property and equipment 576,000          
Int rnally Developed Software 5,100,000        
Intangible assets 8,540,000        
Total indentifiable net assets assumed 13,694,198      
Goodwill 12,284,000      
Total $ 25,978,198
 AVENDRA, LLC AND SUBSIDIARIES 
Notes to Consolidated Financial Statements 
December 31, 2016 and 2015 
 
  
19 
(8) Goodwill and Other Intangible Assets 
(a) Acquired Intangible Assets 
In 2016, three strategic BuyEfficient customer agreements were terminated, which created a triggering event 
requiring a recoverability test to determine if the carrying amount of the Customer Relationship asset was 
recoverable. The Company completed an analysis using updated financial projections and determined that 
the sum of the undiscounted net cash flows estimated to be received over the remaining life of the customer 
relationship asset significantly exceed the asset’s carrying value of $6,974,000 and therefore, the value of the 
asset has not been impaired. 
 
 
December 31, 2016
 Weighted
 average Gross Net
 amortization carrying Accumulated carrying
 period amount amortization amount
 Intangibl  ssets
 Amortizing intangible assets:
 Customer Relationships 10 yrs $ 7,970,000      (996,250)        6,973,750     
Indefinite-lived intangible assets:
 Trademark - 570,000        -               570,000       
Total intangible assets $ 8,540,000      (996,250)        7,543,750     
December 31, 2015
 Weighted
 average Gross Net
 amortization carrying Accumulated carrying
 period amount amortization amount
 Intangible assets
 Amortizing  :
 Customer Relationships 10 yrs $ 7,970,000      (199,250)        7,770,750     
Indefinite-lived intangible assets:
 Trademark - 570,000        -               570,000       
Total intangible assets $ 8,540,000      (199,250)        8,340,750
 AVENDRA, LLC AND SUBSIDIARIES 
Notes to Consolidated Financial Statements 
December 31, 2016 and 2015 
 
  
20 
Aggregate amortization expense for amortizing intangible assets was $797,000 and $199,250 for 
December 31, 2016 and 2015, respectively. Estimated annual amortization expense for the next five 
years is estimated to be $797,000. 
(b) Goodwill 
In 2015, the Company recorded $12,284,000 in goodwill as part of the BuyEfficient acquisition 
including $300,000 for the value of the assembled and trained workforce acquired as part of the 
transaction. In 2016, the Company did not record any additions to goodwill.  The Company recorded an 
adjustment of $196,000 to assets recorded as part of the purchase price allocation based on information 
obtained subsequent to the acquisition. A change to the amounts recorded for assets acquired, identifiable 
intangible assets, and liabilities assumed during the measurement period affects the amount of the 
purchase price allocated to goodwill. The Company has not recognized any goodwill impairments as of 
December 31, 2016 and 2015. 
 
(9) Long-term Debt 
Long-term debt at December 31, 2016 and 2015 consists of the following: 
 
In 2015, the Company entered into a five-year term loan for $28,500,000, bearing interest at LIBOR plus 
1.20%. The loan repayment terms include interest only for the first six months, followed by 54 consecutive 
monthly installments of $528,000 principal plus interest beginning on May 1, 2016. The loan is secured by 
substantially all of the Company’s material assets.  The Company will have annual maturities of its debt in 
years 2017 through 2019 of $6,861,000 and $3,694,000 in 2020. 
2016 2015
 Ba nce a  f January 1
 Gross goodwill $ 12,421,049   137,049       
Goodwill acquired during the year -              12,284,000   
Adjustment 196,088       -              
Impairment expense -              -              
Net Goodwill as of December 31 $ 12,617,137   12,421,049   
2016 2015
 Fiv -year term loan, interest at LIBOR plus 1.20%, interest only
 for first six months, with final payment due October 1, 2020, secured
 by Company's material assets $ 24,277,778    28,500,000    
Less: current installments (6,861,111)     (4,750,000)     
Long-term debt, excluding current installments $ 17,416,667    23,750,000
 AVENDRA, LLC AND SUBSIDIARIES 
Notes to Consolidated Financial Statements 
December 31, 2016 and 2015 
 
  
21 
The loan agreement contains covenants requiring the Company to maintain its assets and financial condition 
at levels and in accordance with standards acceptable to the bank, to provide financial reporting or notices of 
default, and to restrict changes in ownership control, additional indebtedness, and material investments in 
fixed assets, leases or guarantees. The Company was in compliance with the covenants at December 31, 2016 
and 2015. 
(10) Legal Proceedings 
The Company is involved in various claims and legal actions arising in the ordinary course of business. In 
the opinion of management, the ultimate disposition of these matters will not have a material adverse effect 
on the Company’s consolidated financial position, results of operations, or liquidity. 
(11) Business and Credit Concentrations 
The Company operates primarily in the hospitality industry, and accordingly, a change in the overall demand 
for hotel rooms will lead to a corresponding change in the procurement needs of hotels, which could directly 
impact the amount of revenue earned by the Company. Lack of demand for hotel rooms and other events 
affecting the hospitality industry may significantly impact the Company’s future revenue streams. 
Alternatively, increased demand for hotel rooms may significantly positively impact the Company’s future 
revenue streams. For the years ended December 31, 2016 and 2015, approximately 23.0% and 24.0%, 
respectively, of the Company’s revenue was attributable to three major customers. Any significant decrease 
or increase in the amount of Spend for these customers may significantly impact the Company’s future 
revenue streams. 
The Company contracts with several hundred suppliers and is generally not dependent upon any one supplier 
to provide products or services to its customers. However, a limited number of the Company’s suppliers 
provide services that would be difficult to replace in the short term, should those suppliers cease to do 
business with the Company or cease to operate. 
Financial instruments that potentially subject the Company to credit risk include accounts receivable and 
cash and cash equivalents. The Company extends credit to customers for purchases through Avendra 
Replenishment on an unsecured basis in the normal course of business, and to date has not experienced 
significant losses on accounts receivable. The Company’s cash deposits often exceed federally insured limits. 
The Company has not experienced any losses in its depository accounts and management believes that the 
Company is not exposed to any significant credit risks involving depository relationships. 
(12) Subsequent Events 
The Company has evaluated events subsequent to the balance sheet date through March 24, 2017, the date 
the financial statements were available to be issued, and determined there have not been any events that have 
occurred that would require adjustments to or disclosure in the consolidated financial statements.