(13) REDEEMABLE LIMITED PARTNERS' CAPITAL

Redeemable limited partners' capital represents the member owners' 60% ownership of Premier LP through their ownership of Class B common units at June 30, 2018. The member owners hold the majority of the votes of the Board of Directors and any redemption or transfer or choice of consideration cannot be assumed to be within the control of the Company. Therefore, redeemable limited partners' capital is recorded at the greater of the book value or redemption amount per the LP Agreement (see Note 1 - Organization and Basis of Presentation for more information), and is calculated as the fair value of all Class B common units as if immediately exchangeable into Class A common shares. For the years ended June 30, 2018, 2017 and 2016, the Company recorded adjustments to the fair value of redeemable limited partners' capital as an adjustment of redeemable limited partners' capital to redemption amount in the accompanying Consolidated Statements of Income in the amounts of $(157.6) million, $37.2 million and $(776.8) million, respectively.

Redeemable limited partners' capital is classified as temporary equity in the mezzanine section of the accompanying Consolidated Balance Sheets as, pursuant to the LP Agreement, withdrawal is at the option of each member owner and the conditions of the repurchase are not solely within the Company's control.

The table below provides a summary of the changes in the redeemable limited partners' capital from June 30, 2015 to June 30, 2018 (in thousands):



	Receivables From Limited Partners			Redeemable Limited Partners' Capital			Accumulated Other Comprehensive Income (Loss)			Total Redeemable Limited Partners' Capital
June 30, 2015	$	(11,633	)	$	4,091,473		$	(8	)	$	4,079,832
Distributions applied to receivables from limited partners	5,407			—			—			5,407
Redemption of limited partners	—			(4,281		)	—			(4,281		)
Net income attributable to non-controlling interest in Premier LP	—			193,547			—			193,547
Distributions to limited partners	—			(92,767		)	—			(92,767		)
Net unrealized loss on marketable securities	—			—			(77		)	(77		)
Exchange of Class B common units for Class A common stock by member owners	—			(267,681		)	—			(267,681		)
Adjustment of redeemable limited partners' capital to redemption amount	—			(776,750		)	—			(776,750		)
June 30, 2016	$	(6,226	)	$	3,143,541		$	(85	)	$	3,137,230
Distributions applied to receivables from limited partners	2,049			—			—			2,049



	Receivables From Limited Partners			Redeemable Limited Partners' Capital			Accumulated Other Comprehensive Income (Loss)		Total Redeemable Limited Partners' Capital
Redemption of limited partners	—			(416		)	—		(416		)
Net income attributable to non-controlling interest in Premier LP	—			336,052			—		336,052
Distributions to limited partners	—			(92,892		)	—		(92,892		)
Net realized loss on marketable securities	—			—			85		85
Exchange of Class B common units for Class A common stock by member owners	—			(157,371		)	—		(157,371		)
Exchange of Class B common units for cash by member owners	—			(123,330		)	—		(123,330		)
Adjustment of redeemable limited partners' capital to redemption amount	—			37,176			—		37,176
June 30, 2017	$	(4,177	)	$	3,142,760		$	—	$	3,138,583
Distributions applied to receivables from limited partners	1,972			—			—		1,972
Redemption of limited partners	—			(942		)	—		(942		)
Net income attributable to non-controlling interest in Premier LP	—			224,269			—		224,269
Distributions to limited partners	—			(69,770		)	—		(69,770		)
Exchange of Class B common units for Class A common stock by member owners	—			(216,121		)	—		(216,121		)
Adjustment of redeemable limited partners' capital to redemption amount	—			(157,581		)	—		(157,581		)
June 30, 2018	$	(2,205	)	$	2,922,615		$	—	$	2,920,410

Receivables from limited partners represent amounts due from limited partners for their required capital in Premier LP. These receivables are either interest bearing notes that were issued to new limited partners or non-interest bearing loans (contribution loans) provided to existing limited partners. These receivables are reflected as a reduction to redeemable limited partners' capital so that amounts due from limited partners for capital are not reflected as redeemable limited partnership capital until paid. No interest bearing notes receivable were executed by limited partners of Premier LP during the years ended June 30, 2018, 2017 and 2016.

During the year ended June 30, 2018, four limited partners withdrew from Premier LP. The limited partnership agreement provides for the redemption of former limited partner's Class B common units that are not eligible for exchange in the form of a five-year, unsecured, non-interest bearing term promissory note, a cash payment equal to the present value of the redemption amount, or other mutually agreed upon terms. Partnership interest obligations to former limited partners are reflected in notes payable in the accompanying Consolidated Balance Sheets. Under the Exchange Agreement, Class B common units that are eligible for exchange by withdrawing limited partners must be exchanged in the subsequent quarter's exchange process.

Premier LP's distribution policy requires cash distributions as long as taxable income is generated and cash is available to distribute on a quarterly basis prior to the 60^th day after the end of each calendar quarter. The Company makes quarterly distributions to its limited partners in the form of a legal partnership income distribution governed by the terms of the LP Agreement. These partner distributions are based on the limited partner's ownership in Premier LP and relative participation across Premier service offerings. While these distributions are based on relative participation across Premier service offerings, they are not based directly on revenue generated from an individual partner's participation as the distributions are based on the net income (loss) of the partnership which encompasses the operating expenses of the partnership as well as participation by non-owner members in Premier's service offerings. To the extent Premier LP incurred a net loss, the limited partners would not receive a quarterly distribution. As provided in the LP Agreement, the amount of actual cash distributed may be reduced by the amount of such distributions used by limited partners to offset contribution loans or other amounts payable to the Company.

Quarterly distributions made to limited partners during the current fiscal year are as follows (in thousands):



Date	Distribution ^(a)
August 24, 2017	$	24,951
November 22, 2017	$	20,752
February 22, 2018	$	20,396
May 24, 2018	$	13,157

(a)

Distributions are equal to Premier LP's total taxable income from the preceding fiscal quarter-to-date period for each respective distribution date multiplied by the Company's standalone effective combined federal, state and local income tax rate for each respective distribution date. Premier LP expects to make a $15.5 million quarterly distribution on or before August 23, 2018. The distribution is reflected in limited partners' distribution payable in the accompanying Consolidated Balance Sheets at June 30, 2018.

Pursuant to the Exchange Agreement (see Note 1 - Organization and Basis of Presentation for more information), each limited partner has the cumulative right to exchange up to one-seventh of its initial allocation of Class B common units for shares of Class A common stock, cash or a combination of both, the form of consideration to be at the discretion of the Company's independent Audit and Compliance Committee of the Board of Directors. During the year ended June 30, 2018, the Company recorded total reductions of $216.1 million to redeemable limited partners' capital to reflect the exchange of approximately 6.5 million Class B common units and surrender of associated shares of Class B common stock by member owners for a like number of shares of the Company's Class A common stock (see Note 15 - Earnings (Loss) Per Share for more information). Quarterly exchanges during the current fiscal year were as follows (in thousands, except Class B common units):



Date of Quarterly Exchange	Number of Class B Common Units Exchanged	Reduction in Redeemable Limited Partners' Capital
July 31, 2017	1,231,410	$	42,976
October 31, 2017	3,651,294	119,289
January 31, 2018	1,006,435	32,659
April 30, 2018	642,566	21,197
	6,531,705	$	216,121