11-K 1 e11-k.txt LIFEPOINT HOSPITALS, INC. 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 11-K (Mark one) [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED) For the fiscal year ended December 31, 1999 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED) For the transition period from _________ to _________ Commission file number 0-29818 A. Full title of the plan and the address of the plan, if different from that of the issuer named below: LifePoint Hospitals, Inc. Retirement Plan B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: LifePoint Hospitals, Inc. 103 Powell Court, Suite 200 Brentwood, TN 37027 2 LifePoint Hospitals, Inc. Retirement Plan Audited Financial Statements and Supplemental Schedules For the period from May 11, 1999 (date of inception) to December 31, 1999 CONTENTS
Report of Independent Auditors.................................................1 Audited Financial Statements Statement of Net Assets Available for Benefits.................................2 Statement of Changes in Net Assets Available for Benefits......................3 Notes to Financial Statements..................................................4 Supplemental Schedules Schedule of Assets Held for Investment Purposes at End of Year................12 Schedule of Reportable Transactions...........................................13
3 Report of Independent Auditors The Plan Sponsor LifePoint Hospitals, Inc. Retirement Plan We have audited the accompanying statement of net assets available for benefits of LifePoint Hospitals, Inc. Retirement Plan as of December 31, 1999, and the related statement of changes in net assets available for benefits for the period May 11, 1999 (date of inception) to December 31, 1999. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 1999, and the changes in its net assets available for benefits for the period May 11, 1999 (date of inception) to December 31, 1999, in conformity with accounting principles generally accepted in the United States. Our audit was performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedules of assets held for investment purposes at end of year as of December 31, 1999, and reportable transactions for the period May 11, 1999 (date of inception) to December 31, 1999 are presented for purposes of additional analysis and are not a required part of the financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. These supplemental schedules are the responsibility of the Plan's management. The supplemental schedules have been subjected to the auditing procedures applied in our audit of the financial statements and, in our opinion, are fairly stated in all material respects in relation to the financial statements taken as a whole. /s/ Ernst & Young LLP Nashville, Tennessee June 22, 2000 1 4 LifePoint Hospitals, Inc. Retirement Plan Statement of Net Assets Available for Benefits December 31, 1999
Participants' ESOP Shares Accounts Fund (Allocated) (Unallocated) Total ---------------------------------------------------------------- ASSETS Investments, at fair value $ 136,541,540 $ 32,311,783 $ 168,853,323 Employer contributions receivable -- 2,527,314 2,527,314 ---------------------------------------------------------------- 136,541,540 34,839,097 171,380,637 LIABILITIES Cash overdraft 33,839 -- 33,839 Accrued interest payable to LifePoint Hospitals, Inc. -- 1,438,050 1,438,050 Note payable to LifePoint Hospitals, Inc. -- 32,162,266 32,162,266 Excess contributions payable 150,661 -- 150,661 ---------------------------------------------------------------- 184,500 33,600,316 33,784,816 ---------------------------------------------------------------- Net assets available for benefits $ 136,357,040 $ 1,238,781 $ 137,595,821 ================================================================
See accompanying notes 2 5 LifePoint Hospitals, Inc. Retirement Plan Statement of Changes in Net Assets Available for Benefits Period from May 11, 1999 (date of inception) to December 31, 1999
Participants' ESOP Shares Accounts Fund (Allocated) (Unallocated) Total ---------------------------------------------------------------- ADDITIONS Net appreciation in fair value of investments $ 17,211,437 $ 838,440 $ 18,049,877 Interest and dividend income 243,823 -- 243,823 Employer contributions 688,923 2,527,314 3,216,237 Participants' contributions 3,039,907 -- 3,039,907 ---------------------------------------------------------------- Total additions 21,184,090 3,365,754 24,549,844 DEDUCTIONS Benefits paid 5,221,568 -- 5,221,568 Interest expense -- 1,438,050 1,438,050 Administrative expenses 185,556 -- 185,556 ---------------------------------------------------------------- Total deductions 5,407,124 1,438,050 6,845,174 Allocation of ESOP shares to Plan 688,923 (688,923) -- Transfers from HCA - The Healthcare Company-sponsored plans 119,891,151 -- 119,891,151 ---------------------------------------------------------------- Net increase in net assets available for benefits 136,357,040 1,238,781 137,595,821 Net assets available for benefits at beginning of period -- -- -- ---------------------------------------------------------------- Net assets available for benefits at end of period $136,357,040 $ 1,238,781 $137,595,821 ================================================================
See accompanying notes. 3 6 LifePoint Hospitals, Inc. Retirement Plan Notes to Financial Statements December 31, 1999 1. DESCRIPTION OF THE PLAN The following description of LifePoint Hospitals, Inc. Retirement Plan (the "Plan") provides only general information. Participants should refer to the Plan agreement for a more complete description of the Plan's provisions. GENERAL The Plan is a defined contribution plan covering all employees of LifePoint Hospitals, Inc. (the "Company") who have completed two full months of service and are age 21 or older. The Plan was effective May 11, 1999. On May 11, 1999, HCA-The Healthcare Company (previously Columbia/HCA Healthcare Corporation) ("HCA") created two tax-free spin-off companies, the Company and Triad Hospitals, Inc. Effective with the spin-off, the investment accounts of employees of the newly formed Company were transferred to the Plan. All employees of the Company at May 11, 1999 were eligible to participate in the Plan except employees covered under a collective bargaining agreement. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). The Plan is also an "employee stock ownership plan" (ESOP) within the meaning of Section 4975(e)(7) of the Internal Revenue Code of 1986, as amended (the "Code"). As an ESOP, the Plan generates certain favorable federal income tax consequences to the Company and the beneficiaries of the Plan. CONTRIBUTIONS Participants may elect to contribute a fixed percentage or a dollar amount of a participant's pre-tax compensation ("Salary Deferral Contribution") and voluntary after-tax amounts ("Employee Voluntary Contributions"). The total of Salary Deferral Contributions elected by a participant cannot exceed 15% of the participant's compensation for a plan year. The total of Employee Voluntary Contributions elected by a participant cannot exceed 10% of the participant's compensation for the plan year. In addition, the Company makes a matching contribution of Company stock in an amount equal to 50% of the amount the participant has elected as a Salary Deferral Contribution for that payroll period ("Salary Deferral Matching Contribution Allocation") and an amount equal to 18% of the amount the participant has elected as an Employee Voluntary Contribution for that payroll period ("Employee Voluntary Matching Contribution Allocation"). The Salary Deferral Matching Contribution Allocation for any participant is limited to 1.5% of a participant's compensation for the plan year. 4 7 LifePoint Hospitals, Inc. Retirement Plan Notes to Financial Statements (continued) 1. DESCRIPTION OF THE PLAN (CONTINUED) CONTRIBUTIONS (CONTINUED) In any plan year the Company may contribute to participants' accounts cash or Company stock as determined by the Company's Board of Directors ("ESOP Contributions"). In addition, discretionary Company profit sharing contributions may be made upon a vote of the Board of Directors ("Profit Sharing Contributions"). To be eligible for an allocation of the ESOP Contributions and Profit Sharing Contributions, a participant must meet the following requirements: (i) Participant is age 21 or older on the last day of the plan year, (ii) Participant completed one year of service during the plan year, and (iii) Participant is an employee as of the last day of the plan year. An additional contribution by the Company in an amount determined by the Company to assure that the Plan satisfies certain tests under the Code may be allocated solely to the accounts of participants who are considered non-highly compensated employees and have elected to make Salary Deferral Contributions for the Plan year ("Unilateral Employer Contributions"). Contributions are subject to certain limitations under the Code. PARTICIPANT ACCOUNTS Each participant's account is credited with the participant's contribution, the Company's contribution of shares of the Company's common stock released by the trustee from the suspense account and Plan earnings. Allocations are based on participant earnings or account balances, as defined in the Plan agreement. The benefit to which a participant is entitled is the benefit that can be provided from the participant's vested account. PAYMENT OF BENEFITS Upon retirement, disability or death, the total vested value of a participant's account is distributed to the participant or the beneficiary in cash unless the participant or the beneficiary elects certain other forms of distribution available under the Plan. A participant's contributions may also be withdrawn for certain hardship situations. 5 8 LifePoint Hospitals, Inc. Retirement Plan Notes to Financial Statements (continued) 1. DESCRIPTION OF THE PLAN (CONTINUED) PARTICIPANT LOANS Participants may borrow from their fund accounts a minimum of $1,000 up to a maximum equal to the lesser of $50,000 or one-half of the participant's vested account balance. Loan terms range from 1-5 years or up to 10 years for the purchase of a primary residence. The loans are secured by the balance in the participant's account and bear interest at a rate commensurate with local prevailing rates as determined by the plan administrator. Interest rates ranged from 7.75% to 8.50% for 1999. Principal and interest are paid ratably through payroll deductions. VESTING AND FORFEITURES Participants are immediately 100% vested in their Salary Deferral Contributions, Employee Voluntary Contributions, Employee Voluntary Matching Contribution Allocations, Unilateral Employer Contributions, rollover contributions plus investment earnings arising from these contributions. Salary Deferral Matching Contribution Allocations, ESOP Contributions, Profit Sharing Contributions and certain accounts transferred from HCA-sponsored benefit plans are subject to a vesting schedule based on the number of years of a participant's complete service as follows:
YEARS OF SERVICE VESTED PERCENTAGE -------------------------------- ---------------------- Less than 3 years 0% 3 years but less than 4 20% 4 years but less than 5 40% 5 years but less than 6 60% 6 years but less than 7 80% 7 years or more 100%
Participants' interest in their accounts become 100% vested and nonforfeitable without regard to their credited years of service if they are employed by the Company on or after age 65, attain age 55 and have completed 10 years of service, incur a total and permanent disability or die while employed by the Company. If a participant who is not fully vested terminated employment with the Company, the participant is entitled to the vested portion of his/her account. The nonvested portion is forfeited and is used to reduce future Company contributions, pay administrative expenses of the Plan or is reallocated to participants of the Plan, if forfeitures from ESOP accounts occur. 6 9 LifePoint Hospitals, Inc. Retirement Plan Notes to Financial Statements (continued) 1. DESCRIPTION OF THE PLAN (CONTINUED) PLAN TERMINATION Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to provisions of ERISA. In the event of Plan termination, participants will receive the vested and non-vested portions of their accounts. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING The financial statements of the Plan are prepared on the accrual basis of accounting. USE OF ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates that affect amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. INVESTMENT VALUATION AND INCOME RECOGNITION The Plan's investments are held and transactions are executed by U.S. Trust Company, N.A., (the "ESOP Trustee"), for the ESOP portion of the Plan and by Northern Trust Company (the "Trustee") for the non-ESOP portion of the Plan. Investments in collective trust funds and equity securities are stated at fair value by the ESOP Trustee and the Trustee and are based on quoted prices in an active market. Securities traded on a national securities exchange are valued at the last reported sales price on the last business day of the Plan year. Participant loans are valued at fair value, which is approximated by cost. Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. ADMINISTRATIVE EXPENSES Administrative expenses, including legal and participant accounting, and all expenses directly relating to the investments are charged to and paid by the Plan unless paid by the Company. 7 10 LifePoint Hospitals, Inc. Retirement Plan Notes to Financial Statements (continued) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) BENEFIT PAYMENTS Benefits are recorded when paid. 3. INVESTMENTS From the period May 11, 1999 (date of inception) to December 31, 1999, the Plan's investments (including investments purchased, sold as well as held during the year) appreciated in fair value as determined by quoted market prices as follows: Common Stock $ 8,996,043 Shares of Registered Investment Companies 9,053,834 ----------- $18,049,877 ===========
The fair value of individual investments that represent 5% or more of the Plan's net assets at December 31, 1999 are as follows: HCA - The Healthcare Company Common Stock $41,017,714 Northern Trust Company Stock Index Fund 36,466,230 LifePoint Hospitals, Inc. Common Stock* 34,172,818 Northern Trust Company Stable Value Asset Fund 25,864,004 Northern Trust Company Small Company Index Fund 14,846,168 Northern Trust Company International Equity Index Fund 8,067,250
*Includes non-participant directed investments 8 11 LifePoint Hospitals, Inc. Retirement Plan Notes to Financial Statements (continued) 4. NOTE PAYABLE TO LIFEPOINT HOSPITALS, INC. On June 9, 1999, the Plan purchased 2,796,719 shares of the Company's common stock from the Company at $11.50 per share for an aggregate purchase price of approximately $32,162,000. The Plan funded the stock purchase through the issuance of a note payable to the Company (the "ESOP Note") equal to the purchase price. The ESOP Note is secured by a pledge of the unallocated stock held by the trust. Terms of the ESOP Note call for repayment in ten annual payments of $4,636,517, which includes interest on the outstanding principal balance at an annual rate of 8%. The purchased shares are held by the ESOP Trustee in a suspense account and a portion of these shares are allocated on a quarterly and annual basis. Through December 31, 1999, 61,300 shares have been allocated to participant accounts. The price paid for the purchase of the Company's common stock was acknowledged to be no greater than the prevailing price of the Company's common stock quoted on NASDAQ at June 9, 1999. The Company makes contributions in cash to the Plan, which when aggregated with the Plan's dividends and interest earnings, equal the amount necessary to enable the Plan to make regularly scheduled payments of principal and interest due on the ESOP Note. Based on this determination, and subject to limitations contained in the Code, the Company is entitled to claim an income tax deduction for contributions to the Plan for the year to which such contributions relate. The participants and beneficiaries of the Plan are not subject to income tax with respect to contributions made on their behalf until they receive distributions from the Plan. The scheduled amortization of the ESOP Note for the next five years and thereafter is as follows: 2000 $ 5,517,880 2001 2,504,966 2002 2,705,363 2003 2,921,792 2004 3,155,535 Thereafter 15,356,730 =============== $ 32,162,266 ===============
9 12 LifePoint Hospitals, Inc. Retirement Plan Notes to Financial Statements (continued) 5. NONPARTICIPANT-DIRECTED INVESTMENT Information about net assets and the significant components of the changes in net assets relating to the nonparticipant-directed investment in LifePoint Hospitals, Inc. common stock is as follows:
DECEMBER 31, 1999 Allocated Unallocated Total ---------------------------------------------------------- Number of shares 61,300 2,735,419 2,796,719 ========================================================== Fair value $724,461 $32,311,783 $33,036,244 ==========================================================
MAY 11, 1999 - DECEMBER 31, 1999 ----------------- ESOP shares purchased through the issuance of the ESOP Note $32,162,266 Unrealized appreciation in fair value 873,978 ----------- $33,036,244 ===========
6. INCOME TAX STATUS The Plan has received a determination letter from the Internal Revenue Service dated August 4, 1999, stating that the Plan is qualified under Section 401(a) of the Code and, therefore, the related trust is exempt from taxation. The Plan has been amended since receiving the determination letter. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The Company believes the Plan is being operated in compliance with the applicable requirements of the Code and therefore, believes that the Plan is qualified and the related trust is tax exempt. 10 13 LifePoint Hospitals, Inc. Retirement Plan Notes to Financial Statements (continued) 7. PARTY-IN-INTEREST TRANSACTIONS Transactions with parties-in-interest include the issuance of the ESOP Note payable to the Company for the purchase of the Company's common stock and contributions received by the Plan from the Company to fund principal and interest payments on the ESOP Note. Certain Plan investments are shares of trust funds managed by the Trustee and therefore, such transactions qualify as party-in-interest. Party-in-Interest transactions also include purchases and sales of assets through the Trustee. 11 14 LifePoint Hospitals, Inc. Retirement Plan EIN: 62-1762163 Plan No.: 001 Schedule H Line 4i Schedule of Assets Held for Investment Purposes at End of Year December 31, 1999
(c)DESCRIPTION OF INVESTMENT INCLUDING MATURITY DATE, (b)IDENTITY OF ISSUE, BORROWER RATE OF INTEREST, COLLATERAL, PAR OR (e)CURRENT (a) OR SIMILAR PARTY MATURITY VALUE (d)COST VALUE ------------------------------------------------------------------------------------------------------------------- * Northern Trust Company Stable Value Asset Fund # $ 25,864,004 * Northern Trust Company Aggregate Bond Index Fund # 4,214,957 * Northern Trust Company Stock Index Fund # 36,466,230 * Northern Trust Company Small Company Index Fund # 14,846,168 * Northern Trust Company International Equity Index Fund # 8,067,250 * Northern Trust Company Short Term Investment Fund # 259,617 * LifePoint Hospitals, Inc. Common Stock $33,988,282 34,172,818 HCA - The Healthcare Company Common Stock # 41,017,714 Triad Hospitals, Inc. Common Stock # 1,030,013 Participant Loans Interest rate ranges from 7.75% to 8.5% # 2,914,552 ---------------- $ 168,853,323 ================
*Indicates a party-in-interest to the Plan. #Not necessary as this is participant-directed. 12 15 LifePoint Hospitals, Inc. Retirement Plan EIN: 62-1762163 Plan No.: 001 Schedule H, Line 4j - Schedule of Reportable Transactions Period from May 11, 1999 to December 31, 1999
(h) CURRENT (b) DESCRIPTION OF ASSET VALUE OF INCLUDING INTEREST AND ASSET ON (a) IDENTITY OF PARTY MATURITY IN A CASE (c) PURCHASE (d) SELLING (g) COST OF TRANSACTION (i) NET INVOLVED OF A LOAN PRICE PRICE ASSET DATE GAIN --------------------------------------------------------------------------------------------------------------------- Category (i)--Individual transaction in excess of 5% of plan assets LifePoint Hospitals, Inc. Common Stock $32,162,266 $- $32,162,266 $32,162,266 $--
There were no category (ii), (iii) or (iv) reportable transactions during 1999. Columns (e) and (f) are not included as they are not applicable. 13 16 SIGNATURES The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. LifePoint Hospitals, Inc. Retirement Plan Date: June 28, 2000 /s/ Kenneth C. Donahey ------------------------------------- Kenneth C. Donahey Senior Vice President & Chief Financial Officer 14 17 EXHIBIT INDEX
Exhibit Description ------- ----------- 23. Independent Auditors' Consent
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