-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UpTqs3EeMXuuEq30jMMQ/MJsrIqqBLxZB6o68XmFbkGTI937VIekG7ysDgh79r5v cujzEY3wHkKSkZG9FrOfzQ== 0001047469-98-025644.txt : 19980630 0001047469-98-025644.hdr.sgml : 19980630 ACCESSION NUMBER: 0001047469-98-025644 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980629 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: HBO & CO CENTRAL INDEX KEY: 0000310377 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373] IRS NUMBER: 370986839 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 000-09900 FILM NUMBER: 98655666 BUSINESS ADDRESS: STREET 1: 301 PERIMETER CTR N CITY: ATLANTA STATE: GA ZIP: 30346 BUSINESS PHONE: 7703936000 MAIL ADDRESS: STREET 1: 301 PERIMETER CTR N CITY: ATLANTA STATE: GA ZIP: 30346 11-K 1 FORM 11-K 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 (FEE REQUIRED) For the fiscal year ended December 31, 1997 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 33-39034 A. Full title of the plan and address of the plan, if different from that of the issuer named below: HBO & COMPANY PROFIT SHARING AND SAVINGS PLAN B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: HBO & Company 301 Perimeter Center North Atlanta, Georgia 30346 (770) 393-6000 SNYDER, CAMP, STEWART & CO., LLP CERTIFIED PUBLIC ACCOUNTANTS 3850 HOLCOMB BRIDGE ROAD SUITE 210 NORCROSS, GEORGIA 30092 Independent Auditors' Report ---------------------------- Administrative Committee HBO & Company Profit Sharing and Savings Plan We have audited the accompanying statements of net assets available for benefits of HBO & Company Profit Sharing and Savings Plan as of December 31, 1997 and 1996, and the related statements of changes in net assets available for benefits for the years then ended. 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 audits. We conducted our audits in accordance with generally accepted auditing standards. 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 audits provide 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 HBO & Company Profit Sharing and Savings Plan at December 31, 1997 and 1996, and the changes in net assets available for benefits for the years then ended, in conformity with generally accepted accounting principles. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Securities and Exchange Commission and the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedules have been subjected to the auditing procedures applied in our audit of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ SNYDER, CAMP, STEWART & CO., LLP SNYDER, CAMP, STEWART & CO., LLP Atlanta, Georgia May 27, 1998 HBO & COMPANY PROFIT SHARING AND SAVINGS PLAN Statements of Net Assets Available for Benefits December 31, 1997 and 1996
1997 1996 ---- ---- Assets: Investments, at fair value: HBO & Company Common Stock Fund $ 60,874,776 $ 37,178,326 Fidelity Magellan Fund 32,119,878 23,326,930 Fidelity Growth and Income Fund 34,011,540 22,435,878 Fidelity Retirement Money Market Fund 7,894,849 6,630,055 Fidelity Asset Manager 5,573,548 4,065,764 Fidelity Managed Income Fund 2,182,337 1,714,963 Fidelity Intermediate Bond Fund 2,507,457 1,744,475 Fidelity International Growth and Income Fund 2,418,736 1,545,592 Fidelity Blue Chip Growth Fund 9,852,141 5,440,319 Fidelity Equity Income II Fund 6,884,663 3,723,426 ----------- ----------- Total investments 164,319,925 107,805,728 Contributions receivable from employer 461,898 331,097 Contributions receivable from participants 1,047,924 802,439 Loans receivable from participants 2,622,581 1,937,362 Accrued investment income 25,365 12,523 ------------ ----------- Total assets 168,477,693 110,889,149 Liabilities - - ------------ ----------- Net assets available for benefits $168,477,693 $110,889,149 ------------ ----------- ------------ -----------
See accompanying notes to financial statements. HBO & COMPANY PROFIT SHARING AND SAVINGS PLAN Statements of Changes in Net Assets Available for Benefits For the Years Ended December 31, 1997 and 1996
1997 1996 ---- ---- Additions to net assets attributed to: Investment income $ 6,030,961 $ 6,348,812 Unrealized appreciation (depreciation) in fair value of investments 29,863,816 9,395,315 Realized gain (loss) on sale of investments 5,923,294 4,043,165 ------------- ------------- Net increase from investment activities 41,818,071 19,787,292 Contributions: Employer 5,800,893 4,009,263 Participants 18,054,177 16,639,795 Interest income on loans to participants 185,273 70,910 -------------- -------------- Total additions 65,858,414 40,507,260 Deductions from net assets attributed to: Benefits paid directly to participants (8,251,092) (7,282,613) Administrative fees (18,778) (75) -------------- -------------- Net increase 57,588,544 33,224,572 Net assets available for benefits: Beginning of year 110,889,149 77,664,577 -------------- -------------- End of year $168,477,693 $110,889,149 -------------- -------------- -------------- --------------
See accompanying notes to financial statements. HBO & COMPANY PROFIT SHARING AND SAVINGS PLAN Notes to Financial Statements December 31, 1997 and 1996 (1) DESCRIPTION OF PLAN The following description of HBO & Company Profit Sharing and Savings Plan (the "Plan") provides only general information. The Plan document should be referred to for a more complete description of the Plan's provisions. The Plan is a defined contribution plan which covers all employees of HBO & Company and HBO & Company of Georgia (jointly referred to herein as the "Company") who have completed six months of service (12 months for pre-1995 plan years) and have attained age 21 as of a Plan entry date. The Plan's entry dates are January 1, April 1, July 1, and October 1. Each eligible employee can elect to defer a percentage of pretax compensation, as defined, of from one to a maximum of fifteen percent and may contribute such amounts to the Plan. Such deferral elections must be made in whole percentages. If necessary, the salary deferral contributions allowed by a participant will be reduced by the Plan's Administrative Committee (see note 3) so that such contributions do not cause the Plan to be discriminatory or exceed the limitations of the Internal Revenue Code. The Company also may contribute to the Plan at the election of the Board of Directors through matching contributions and/or discretionary contributions. Each participant's share of Company discretionary contributions is related to the participant's compensation, as defined. Company contributions may not exceed the maximum allowable as a deduction as defined by the Internal Revenue Code. During 1997 and 1996, the Company contributed $.75 for each $1 contributed by employees; however, this Company matching contribution was only applicable for employee contributions of up to 4% of pretax compensation. No Company discretionary contributions were authorized for the years ended December 31, 1997 and 1996. Participants are 100% vested in their pretax compensation contributions and earnings thereon at all times. Company matching and discretionary contributions credited to a participant's account and earnings thereon vest on a graded basis. A participant becomes 20% vested in his/her Company account after one year of service and an additional 20% becomes vested in each of the following four years until a participant fully vests after five years of service (effective January 1, 1995). Prior to January 1, 1995, a participant became 20% vested in his/her Company account after three years of service and an additional 20% vested in each of the following four years until a participant fully vested after seven years of service. Further, a participant is automatically 100% vested without regard to years of service in the event of termination due to death, disability, or attainment of age 65. Allocation of Plan earnings/losses is based on a participant's account balance in the respective fund. (Continued) HBO & COMPANY PROFIT SHARING AND SAVINGS PLAN Notes to Financial Statements, Continued December 31, 1997 and 1996 (1) DESCRIPTION OF PLAN, CONTINUED Forfeitures of terminated participants' nonvested accounts are allocated among the remaining participants in the Plan at the end of the Plan year as if the forfeitures are additional matching contributions, as designated by the Administrative Committee. At December 31, 1997, forfeited nonvested accounts amounted to $230,353. These accounts may be used to reduce future employer contributions. Participants have the option to direct the investment of their accounts between ten investment funds: the Fidelity Retirement Money Market Fund, the Fidelity Managed Income Fund, the Fidelity Intermediate Bond Fund, the Fidelity Growth and Income Fund, the Fidelity Magellan Fund, the Fidelity Asset Manager Fund, the Fidelity International Growth and Income Fund, the Fidelity Blue Chip Growth Fund, the Fidelity Equity Income II Fund and HBO & Company Common Stock Fund. Participants may borrow from their fund accounts a minimum of $1,000 up to a maximum equal to the lesser of $50,000 or 50% of their vested account balance. Loan terms range up to 5 years, except that loan terms for the purchase of a primary residence are at the discretion of the Administrative Committee. The loans are secured by the balance in the participant's account and bear interest at a rate determined by the Administrative Committee. Principal and interest is paid ratably through monthly payroll deductions. Upon termination, participants under age 65 with account balances totaling more than $3,500 may elect to (1) delay the distribution of his/her accounts or (2) receive his/her vested benefits generally in a lump sum distribution. The full value of benefits (regardless of amount) are payable upon normal or postponed retirement or to beneficiaries upon death of the participant. Participants with balances totaling less than $3,500 or on total or permanent disability receive a lump sum distribution of his/her vested benefits. Under a provision of the Plan, the Company, through actions of its Board of Directors, reserves the right to terminate the Plan. If the Plan is terminated, each participant shall become fully vested as of the termination date. (2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting records of the Plan are maintained on the accrual basis. HBO & Company Common Stock and investment funds held for investment by the Plan are stated at quoted market values from independent published sources. Loans receivable from participants are stated at cost which approximates fair value. The change in the difference between current value and the cost of the investments is reflected in the statement of changes in net assets available for benefits as unrealized appreciation (depreciation) in fair value of investments. (Continued) HBO & COMPANY PROFIT SHARING AND SAVINGS PLAN Notes to Financial Statements, Continued December 31, 1997 and 1996 (2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED Realized gain (loss) on sale of investments is the difference between the proceeds received and the average cost of investments sold. Benefits are recorded when paid. The preparation of financial statements in conformity with generally accepted accounting principles requires the Plan administrator to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results may differ from those estimates. (3) ADMINISTRATION The Company's Employee Benefits Administrative Committee (the "Administrative Committee") is the Plan administrator. Fidelity is the Trustee, with custodial responsibility for the Plan's assets. The Plan is liable for all administrative expenses not paid by the Company. At the direction of the Administrative Committee, the Plan's administrative expenses for 1997 and 1996 were paid by the Company. (4) INCOME TAX STATUS The Plan is intended to be qualified under the Internal Revenue Code (the "IRC"). A favorable ruling was obtained from the IRS as to the tax exempt status of the Plan in May, 1997. (5) TRANSACTIONS WITH PARTIES-IN-INTEREST During the year ended December 31, 1997, the Plan purchased 780,292 shares of the Common Stock of HBO & Company, the Plan sponsor, for $8,980,274, and sold 138,013 shares of the Common Stock of HBO & Company for $8,449,660 in accordance with the terms of the Plan. During the year ended December 31, 1996, the Plan purchased 433,718 shares of the Common Stock of HBO & Company, the Plan sponsor, for $10,216,175, and sold 73,613 shares of the Common Stock of HBO & Company for $5,067,732 in accordance with the terms of the Plan. (Continued) HBO & COMPANY PROFIT SHARING AND SAVINGS PLAN Notes to Financial Statements, Continued December 31, 1997 and 1996 (6) RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500 The following is a reconciliation of net assets available for benefits per the financial statements at December 31, 1997 and 1996 to Form 5500:
1997 1996 ---- ---- Net assets available for benefits per the financial statements $168,477,693 $110,889,149 Amounts allocated to withdrawing participants - (37,143) ------------ ------------- Net assets available for benefits per the Form 5500 $168,477,693 $110,852,006 ------------ ------------- ------------ -------------
The following is a reconciliation of benefits paid to participants per the financial statements for the year ended December 31, 1997 to Form 5500:
Benefits paid to participants per the financial statements $ 8,251,092 Add: Amounts allocated to withdrawing participants at December 31, 1997 - Less: Amounts allocated to withdrawing participants at December 31, 1996 $ (37,143) ------------ Benefits paid to participants per Form 5500 $ 8,213,949 ------------ ------------
Amounts allocated to withdrawing participants are recorded on the Form 5500 for benefit claims that have been processed and approved for payment prior to December 31, but not yet paid as of that date. (7) INVESTMENT FUNDS The Plan provides for separate investment funds for participants as described in note 1 to the financial statements. The following pages summarize the net assets available for benefits and the changes in net assets available for benefits for each fund for the years ended December 31, 1997 and 1996. HBO & COMPANY PROFIT SHARING AND SAVINGS PLAN Net Assets Available for Benefits by Investment Program
HBO & Fidelity Fidelity Fidelity Fidelity Company Fidelity Growth & Retirement Asset Managed Common Magellan Income Money Mkt Manager Income December 31, 1997 Stock Fund Fund Fund Fund Fund ----------------- ----- ---- ---- ---- ---- ---- Assets: Investments at fair value $60,874,776 $32,119,878 $34,011,540 $7,894,849 $5,573,548 $2,182,337 Contributions receivable from employer company 99,573 86,445 98,263 26,053 19,715 9,414 Contributions receivable from participants 198,607 192,927 245,976 52,396 47,235 21,187 Loans receivable from participants 159,570 572,707 780,128 597,244 246,510 100,566 Accrued investment income 25,365 - - - - - ----------- ----------- ----------- ---------- ---------- ---------- Total assets 61,357,891 32,971,957 35,135,907 8,570,542 5,887,008 2,313,504 ----------- ----------- ----------- ---------- ---------- ---------- Liabilities - - - - - - ----------- ----------- ----------- ---------- ---------- ---------- Net assets available for benefits $61,357,891 $32,971,957 $35,135,907 $8,570,542 $5,887,008 $2,313,504 ----------- ----------- ----------- ---------- ---------- ---------- ----------- ----------- ----------- ---------- ---------- ----------
Fidelity Fidelity Int'l Fidelity Fidelity Intermediate Growth Blue Chip Equity Bond & Income Growth Income II December 31, 1997 Fund Fund Fund Fund Total ----------------- ----- ---- ---- ---- ----- Assets: Investments at fair value $2,507,457 $2,418,736 $9,852,141 $6,884,663 $164,319,925 Contributions receivable from employer company 11,416 18,768 54,478 37,773 461,898 Contributions receivable from participants 29,812 39,702 130,822 89,260 1,047,924 Loans receivable from participants 95,503 679 61,168 8,506 2,622,581 Accrued investment income - - - - 25,365 ---------- ---------- ---------- ---------- ------------ Total assets 2,644,188 2,477,885 10,098,609 7,020,202 168,477,693 ---------- ---------- ---------- ---------- ------------ Liabilities - - - - - ---------- ---------- ---------- ---------- ------------ Net assets available for benefits $2,644,188 $2,477,885 $10,098,609 $7,020,202 $168,477,693 ---------- ---------- ---------- ---------- ------------ ---------- ---------- ---------- ---------- ------------
HBO & Fidelity Fidelity Fidelity Fidelity Company Fidelity Growth & Retirement Asset Managed Common Magellan Income Money Mkt Manager Income December 31, 1996 Stock Fund Fund Fund Fund Fund ----------------- ----- ---- ---- ---- ---- ---- Assets: Investments at fair value $37,178,326 $23,326,930 $22,435,878 $6,630,055 $4,065,764 $1,714,963 Contributions receivable from employer company 78,415 68,507 70,083 20,020 16,249 7,510 Contributions receivable from participants 163,155 158,589 185,218 47,354 46,348 17,037 Loans receivable from participants 252,247 407,180 375,431 550,217 190,808 84,842 Accrued investment income 12,523 - - - - - ---------- ---------- ---------- ---------- ---------- ---------- Total assets 37,684,666 23,961,206 23,066,610 7,247,646 4,319,169 1,824,352 ---------- ---------- ---------- ---------- ---------- ---------- Liabilities - - - - - - ---------- ---------- ----------- ---------- ---------- ---------- Net assets available for benefits $37,684,666 $23,961,206 $23,066,610 $7,247,646 $4,319,169 $1,824,352 ---------- ---------- ----------- ---------- ---------- ---------- ---------- ---------- ----------- ---------- ---------- ----------
Fidelity Fidelity Int'l Fidelity Fidelity Intermediate Growth Blue Chip Equity Bond & Income Growth Income II December 31, 1996 Fund Fund Fund Fund Total ----------------- ----- ---- ---- ---- ----- Assets: Investments at fair value $1,744,475 $1,545,592 $5,440,319 $3,723,426 $107,805,728 Contributions receivable from employer company 7,502 9,718 30,963 22,130 331,097 Contributions receivable from participants 23,686 23,146 75,695 62,211 802,439 Loans receivable from participants 83,991 (848) (9,528) 3,022 1,937,362 Accrued investment income - - - - 12,523 ---------- ---------- --------- --------- ------------ Total assets 1,859,654 1,577,608 5,537,449 3,810,789 110,889,149 ---------- ---------- --------- --------- ------------ Liabilities -- -- -- -- -- ---------- ---------- --------- ---------- ------------ Net assets available for benefits $1,859,654 $1,577,608 $5,537,449 $3,810,789 $110,889,149 ---------- ---------- ---------- ---------- ------------ ---------- ---------- ---------- ---------- ------------
HBO & COMPANY PROFIT SHARING AND SAVINGS PLAN Changes in Net Assets Available for Benefits by Investment Program For the Year Ended December 31, 1997
HBO & Fidelity Fidelity Fidelity Fidelity Company Fidelity Growth & Retirement Asset Managed Common Magellan Income Money Mkt Manager Income Stock Fund Fund Fund Fund Fund ----- ---- ---- ---- ---- ---- Additions to net assets attributed to: Investment income $ 74,474 $ 2,014,711 $ 1,517,739 $ 393,012 $ 476,161 $ 123,686 Unrealized appreciation (depreciation) in fair value of investments 19,095,278 3,921,248 4,922,587 - 375,918 - Realized gain (loss) on sale of investments 4,083,091 440,334 944,504 - 91,381 - ----------- ----------- ----------- ---------- ---------- ---------- Net increase from investment activities 23,252,843 6,376,293 7,384,830 393,012 943,460 123,686 Contributions: Employer 1,284,216 1,169,345 1,300,979 146,783 277,969 126,223 Participants 3,226,750 3,310,968 4,056,772 1,186,532 888,432 353,540 Interest income on loans to participants 52,447 40,000 35,884 11,275 8,881 5,764 ----------- ----------- ----------- ---------- ---------- ---------- Total additions 27,816,256 10,896,606 12,778,465 1,737,602 2,118,742 609,213 Deductions from net assets attributed to: Benefits expense (1,837,481) (1,419,222) (2,004,556) (961,136) (482,324) (118,830) Administrative expense (3,028) (3,450) (5,775) (2,175) (1,425) (375) Interfund transfers (2,302,522) (463,183) 1,301,163 548,605 (67,154) (856) ----------- ----------- ----------- ---------- ---------- ---------- Net increase 23,673,225 9,010,751 12,069,297 1,322,896 1,567,839 489,152 Net assets available for benefits: Beginning of year 37,684,666 23,961,206 23,066,610 7,247,646 4,319,169 1,824,352 ----------- ----------- ----------- ---------- ---------- ---------- End of year $61,357,891 $32,971,957 $35,135,907 $8,570,542 $5,887,008 $2,313,504 ----------- ----------- ----------- ---------- ---------- ---------- ----------- ----------- ----------- ---------- ---------- ----------
Fidelity Fidelity Int'l Fidelity Fidelity Intermediate Growth Blue Chip Equity Bond & Income Growth Income II Fund Fund Fund Fund Total ----- ---- ---- --- ------ Additions to net assets attributed to: Investment income $ 137,428 $ 141,226 $ 461,173 $ 691,351 $ 6,030,961 Unrealized appreciation (depreciation) in fair value of investments 26,729 (57,275) 1,124,404 454,927 29,863,816 Realized gain (loss) on sale of investments (2,686) 40,864 191,142 134,664 5,923,294 ---------- ---------- ----------- ----------- ------------- Net increase from investment activities 161,471 124,815 1,776,719 1,280,942 41,818,071 Contributions: Employer 151,079 215,476 664,495 464,328 5,800,893 Participants 506,630 698,766 2,315,581 1,510,206 18,054,177 Interest income on loans to participants 4,393 2,899 15,119 8,611 185,273 ---------- ---------- ----------- ----------- ------------- Total additions 823,573 1,041,956 4,771,914 3,264,087 65,858,414 Deductions from net assets attributed to: Benefits expense (163,019) (267,447) (591,898) (405,179) (8,251,092) Administrative expense (975) (150) (675) (750) (18,778) Interfund transfers 124,955 125,918 381,819 351,255 - ---------- ---------- ----------- ----------- ------------- Net increase 784,534 900,277 4,561,160 3,209,413 57,588,544 Net assets available for benefits: Beginning of year 1,859,654 1,577,608 5,537,449 3,810,789 110,889,149 ---------- ---------- ----------- ----------- ------------- End of year $2,644,188 $2,477,885 $10,098,609 $7,020,202 $168,477,693 ---------- ---------- ----------- ----------- ------------- ---------- ---------- ----------- ----------- -------------
HBO & COMPANY PROFIT SHARING AND SAVINGS PLAN Changes in Net Assets Available for Benefits by Investment Program For the Year Ended December 31, 1996
HBO & Fidelity Fidelity Fidelity Fidelity Company Fidelity Growth & Retirement Asset Managed Common Magellan Income Money Mkt Manager Income Stock Fund Fund Fund Fund Fund ----- ---- ---- ---- ---- ---- Additions to net assets attributed to: Investment income $ 66,609 $ 3,771,860 $ 1,059,501 $ 335,819 $ 309,190 $ 88,638 Unrealized appreciation (depreciation) in fair 8,607,960 (1,562,119) 1,835,419 - 34,814 - value of investments Realized gain (loss) on sale of investments 3,035,321 281,560 606,782 - 84,485 - ----------- ----------- ----------- ---------- ---------- ---------- Net increase from investment activities 11,709,890 2,491,301 3,501,702 335,819 428,489 88,638 Contributions: Employer 927,855 1,075,583 857,839 92,490 240,557 104,062 Participants 3,142,699 3,997,950 3,334,740 1,077,317 1,000,904 482,826 Interest income on loans to participants 11,497 13,422 15,267 13,135 3,719 2,192 ----------- ----------- ----------- ---------- ---------- ---------- Total additions 15,791,941 7,578,256 7,709,548 1,518,761 1,673,669 677,718 Deductions from net assets attributed to: Benefits expense (2,243,845) (1,687,036) (1,528,871) (626,512) (334,009) (177,363) Administrative expense - (75) - - - - Interfund transfers 3,433,342 (4,846,890) 462,708 (494,209) (399,680) (128,731) ----------- ----------- ----------- ---------- ---------- ---------- Net increase 16,981,438 1,044,255 6,643,385 398,040 939,980 371,624 Net assets available for benefits: Beginning of year 20,703,228 22,916,951 16,423,225 6,849,606 3,379,189 1,452,728 ----------- ----------- ----------- ---------- ---------- ---------- End of year $37,684,666 $23,961,206 $23,066,610 $7,247,646 $4,319,169 $1,824,352 ----------- ----------- ----------- ---------- ---------- ---------- ----------- ----------- ----------- ---------- ---------- ----------
Fidelity Fidelity Int'l Fidelity Fidelity Intermediate Growth Blue Chip Equity Bond & Income Growth Income II Fund Fund Fund Fund Total ----- ---- ---- --- ------ Additions to net assets attributed to: Investment income $ 109,760 $ 51,435 $ 335,802 $ 220,198 $ 6,348,812 Unrealized appreciation (depreciation) in fair (41,248) 81,145 278,578 160,766 9,395,315 value of investments Realized gain (loss) on sale of investments (6,275) 2,911 (818) 39,199 4,043,165 ---------- ---------- ----------- ----------- ------------- Net increase from investment activities 62,237 135,491 613,562 420,163 19,787,292 Contributions: Employer 126,431 80,249 308,749 195,448 4,009,263 Participants 550,702 410,458 1,627,283 1,014,916 16,639,795 Interest income on loans to participants 1,925 1,533 5,689 2,531 70,910 ---------- ---------- ----------- ----------- ------------- Total additions 741,295 627,731 2,555,283 1,633,058 40,507,260 Deductions from net assets attributed to: Benefits expense (142,124) (54,485) (253,820) (234,548) (7,282,613) Administrative expense - - - - (75) Interfund transfers (177,753) 493,336 582,811 1,075,066 - ---------- ---------- ----------- ----------- ------------- Net increase 421,418 1,066,582 2,884,274 2,473,576 33,224,572 Net assets available for benefits: Beginning of year 1,438,236 511,026 2,653,175 1,337,213 77,664,577 ---------- ---------- ----------- ----------- ------------- End of year $1,859,654 $1,577,608 $ 5,537,449 $ 3,810,789 $ 110,889,149 ---------- ---------- ----------- ----------- ------------- ---------- ---------- ----------- ----------- -------------
HBO & COMPANY PROFIT SHARING AND SAVINGS PLAN Notes to Financial Statements, Continued December 31, 1997 and 1996 (8) INVESTMENTS During 1997 and 1996 the Plan's investments (including investments bought and sold as well as held during the year) appreciated (depreciated) in fair value as follows:
Net Appreciation (Depreciation) Fair Value in Fair Value at End During Year of Year ----------- ------- Year ended December 31, 1997: Fair value as determined by quoted market price: HBO & Company Common Stock Fund $23,178,369 $ 60,874,776 Fidelity Magellan Fund 4,361,582 32,119,878 Fidelity Growth and Income Fund 5,867,091 34,011,540 Fidelity Retirement Money Market Fund - 7,894,849 Fidelity Asset Manager Fund 467,299 5,573,548 Fidelity Managed Income Fund - 2,182,337 Fidelity Intermediate Bond Fund 24,043 2,507,457 Fidelity International Growth and Income Fund (16,411) 2,418,736 Fidelity Blue Chip Growth Fund 1,315,546 9,852,141 Fidelity Equity Income II Fund 589,591 6,884,663 ------------ ------------ $35,787,110 $164,319,925 ------------ ------------ ------------ ------------
The current value of the HBO & Company Common Stock Fund, Fidelity Magellan Fund, Fidelity Growth and Income Fund and Fidelity Blue Chip Growth Fund held for investment at December 31, 1997 was $60,874,776, $32,119,878, $34,011,540, and $9,852,141, respectively, each of which represents an investment greater than 5% of the Plan's net assets.
Year ended December 31, 1996: Fair value as determined by quoted market price: HBO & Company Common Stock Fund $11,643,281 $ 37,178,326 Fidelity Magellan Fund (1,280,559) 23,326,930 Fidelity Growth and Income Fund 2,442,201 22,435,878 Fidelity Retirement Money Market Fund - 6,630,055 Fidelity Asset Manager Fund 119,299 4,065,764 Fidelity Managed Income Fund - 1,714,963 Fidelity Intermediate Bond Fund (47,523) 1,744,475 Fidelity International Growth and Income Fund 84,056 1,545,592 Fidelity Blue Chip Growth Fund 277,760 5,440,319 Fidelity Equity Income II Fund 199,965 3,723,426 ------------ ------------- $13,438,480 $107,805,728 ------------ ------------- ------------ -------------
(Continued) HBO & COMPANY PROFIT SHARING AND SAVINGS PLAN Notes to Financial Statements, Continued December 31, 1997 and 1996 (8) INVESTMENTS, CONTINUED The current value of the HBO & Company Common Stock Fund, Fidelity Magellan Fund, Fidelity Growth and Income Fund, Fidelity Retirement Money Market Fund and Fidelity Blue Chip Growth Fund held for investment at December 31, 1996 was $37,178,326, $23,326,930, $22,435,878, $6,630,055 and $5,440,319, respectively, each of which represents an investment greater than 5% of the Plan's net assets. The realized gain on the sale of investments during the years ended December 31, 1997 and 1996 was determined as follows:
1997 1996 ---- ---- Aggregate proceeds $ 27,104,707 $ 23,607,827 Aggregate cost (21,181,413) (19,564,662) ----------- ----------- Realized gain $ 5,923,294 $ 4,043,165 ----------- ----------- ----------- -----------
During 1997 and 1996, the balance of unrealized appreciation (depreciation) in the fair value of investments changed as follows:
Balance, December 31, 1995 $ 20,530,805 Current unrealized appreciation of investments, net of realized gains (losses) 9,395,315 ----------- Balance, December 31, 1996 $ 29,926,120 Current unrealized appreciation of investments, net of realized gains (losses) 29,863,816 ----------- Balance, December 31, 1997 $ 59,789,936 ----------- -----------
SUPPLEMENTARY INFORMATION HBO & COMPANY PROFIT SHARING AND SAVINGS PLAN FEI # 37-0986839 - Plan #001 Item 27a - Schedule of Assets Held for Investment Purposes DECEMBER 31, 1997
(a) IDENTITY OF (e) CURRENT PARTY INVOLVED (b) IDENTITY OF ISSUE (c) DESCRIPTION (d) COST VALUE -------------- ----------------- ----------- ---- ----- FIDELITY INVESTMENTS SHARES - -------------------- ------ Fidelity Magellan Fund 337,146 $ 25,683,731 $ 32,119,878 Fidelity Growth & Income Fund 892,691 24,543,314 34,011,540 Fidelity Retirement Money Market Fund 7,894,849 7,894,849 7,894,849 Fidelity Asset Manager Fund 303,736 4,960,130 5,573,548 Fidelity Managed Income Fund 2,182,337 2,182,337 2,182,337 Fidelity Intermediate Bond Fund 246,554 2,503,124 2,507,457 Fidelity International Growth & Income Fund 122,778 2,395,236 2,418,736 Fidelity Blue Chip Growth Fund 249,674 8,547,688 9,852,141 Fidelity Equity Income II Fund 254,893 6,234,715 6,884,663 ------------- ------------- 84,945,124 103,445,149 COMPANY STOCK FUND SHARES - ------------------ ------ * HBO & Company Common Stock 1,268,225 19,584,864 60,874,776 INTEREST -------- PARTICIPANT LOANS Participant Loans 6-13% - 2,622,581 ----------- ------------- Total investments held $104,529,988 $ 166,942,506 ----------- ------------- ----------- ------------- DECEMBER 31, 1996 (a) IDENTITY OF (e) CURRENT PARTY INVOLVED (b) IDENTITY OF ISSUE (c) DESCRIPTION (d) COST VALUE -------------- ----------------- ----------- ---- ----- FIDELITY INVESTMENTS SHARES - -------------------- ------ Fidelity Magellan Fund 289,237 $ 20,812,030 $ 23,326,930 Fidelity Growth & Income Fund 730,097 17,890,239 22,435,878 Fidelity Retirement Money Market Fund 6,630,055 6,630,055 6,630,055 Fidelity Asset Manager Fund 246,859 3,828,264 4,065,764 Fidelity Managed Income Fund 1,714,963 1,714,963 1,714,963 Fidelity Intermediate Bond Fund 173,063 1,766,871 1,744,475 Fidelity International Growth & Income Fund 79,058 1,464,818 1,545,592 Fidelity Blue Chip Growth Fund 166,422 5,260,270 5,440,319 Fidelity Equity Income II Fund 156,776 3,528,406 3,723,426 ------------ ----------- 62,895,916 70,627,402 COMPANY STOCK FUND SHARES - ------------------ ------ * HBO & Company Common Stock 626,161 14,983,691 37,178,326 INTEREST -------- PARTICIPANT LOANS Participant Loans 6-10% - 1,937,362 - ----------------- ----------- ----------- Total investments held $77,879,607 $109,743,090 ----------- ----------- ----------- -----------
* Party in interest. HBO & COMPANY PROFIT SHARING AND SAVINGS PLAN FEI # 37-0986839 - Plan #001 Item 27d - Schedule of Reportable Transactions Transactions or Series of Transactions in Excess of Five Percent of the Current Value of Plan Assets
Number of (a) Identity of (b) Description Number of Shares or (c) Purchase (d) Selling Party Involved of Assets Transactions Units Price Price -------------- ---------- ------------ --------- -------- ------- Category (iii) - A series of transactions in excess of 5% of plan assets: December 31, 1997 HBO & Company Common Stock Purchases 136 780,292 $ 8,980,274 Sales 109 138,013 $ 8,449,660 Fidelity Magellan Purchases 209 86,379 7,849,019 Sales 178 38,470 3,417,652 Fidelity Growth & Income Fund Purchases 223 315,512 11,165,320 Sales 174 152,918 5,456,748 Fidelity Retirement Money Mkt Fund Purchases 198 4,512,275 4,512,275 Sales 171 3,268,259 3,268,259 Fidelity Blue Chip Growth Fund Purchases 194 126,275 4,699,054 Sales 138 43,022 1,602,778
(h) Current Value (g) Cost of Assets On (i) Net (a) Identity of (b) Description of Transaction Gain Party Involved of Assets Assets Date (Loss) -------------- ------ ---- ------ Category (iii) - A series of transactions in excess of 5% of plan assets: December 31, 1997 HBO & Company Common Stock Purchases $ 8,980,274 $ 8,980,274 Sales 4,366,569 8,449,660 $ 4,083,091 Fidelity Magellan Purchases 7,849,019 7,849,019 Sales 2,977,319 3,417,652 440,333 Fidelity Growth & Income Fund Purchases 11,165,320 11,165,320 Sales 4,512,244 5,456,748 944,504 Fidelity Retirement Money Mkt Fund Purchases 4,512,275 4,512,275 Sales 3,268,259 3,268,259 - Fidelity Blue Chip Growth Fund Purchases 4,699,054 4,699,054 Sales 1,411,636 1,602,778 191,142
Number of (a) Identity of (b) Description Number of Shares or (c) Purchase (d) Selling Party Involved of Assets Transactions Units Price Price -------------- ---------- ------------ --------- -------- ------- December 31, 1996 HBO & Company Common Stock Purchases 117 433,718 $ 10,216,175 Sales 84 73,613 $ 5,067,732 Fidelity Magellan Purchases 217 126,174 9,873,435 Sales 179 96,596 7,591,360 Fidelity Growth & Income Fund Purchases 216 270,435 7,790,872 Sales 157 130,199 3,752,932 Fidelity Retirement Money Mkt Fund Purchases 183 2,866,332 2,866,332 Sales 147 2,280,845 2,280,845 Fidelity Blue Chip Growth Fund Purchases 180 111,501 3,495,527 Sales 101 28,393 896,530
(h) Current Value (g) Cost of Assets On (i) Net (a) Identity of (b) Description of Transaction Gain Party Involved of Assets Assets Date (Loss) -------------- ------ ---- ------ December 31, 1996 HBO & Company Common Stock Purchases $10,216,175 $10,216,175 Sales 2,032,411 5,067,732 $ 3,035,321 Fidelity Magellan Purchases 9,873,435 9,873,435 Sales 7,309,800 7,591,360 281,560 Fidelity Growth & Income Fund Purchases 7,790,872 7,790,872 Sales 3,146,151 3,752,932 606,781 Fidelity Retirement Money Mkt Fund Purchases 2,866,332 2,866,332 Sales 2,280,845 2,280,845 - Fidelity Blue Chip Growth Fund Purchases 3,495,527 3,495,527 Sales 897,348 896,530 (818)
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. HBO & COMPANY PROFIT SHARING AND SAVINGS PLAN By: /s/ Jay P. Gilbertson ------------------------ Jay P. Gilbertson By: /s/ Michael L. Kappel ------------------------ Michael L. Kappel By: /s/ E. Christine Rumsey ------------------------ E. Christine Rumsey DATE: June 29, 1998 (Each Member of the Committee appointed under and pursuant to the HBO & Company Profit Sharing and Savings Plan) EX-23 2 EXHIBIT 23 SNYDER, CAMP, STEWART & CO., LLP CERTIFIED PUBLIC ACCOUNTANTS 3850 HOLCOMB BRIDGE ROAD SUITE 210 NORCROSS, GEORGIA 30092 Exhibit 23 CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 33-39034) pertaining to the HBO & Company Profit Sharing and Savings Plan of our report dated May 27, 1998, with respect to the financial statements and schedules of the HBO & Company Profit Sharing and Savings Plan included in this Annual Report (Form 11-K) for the year ended December 31, 1997. /s/ SNYDER, CAMP, STEWART & CO., LLP -------------------------------------- SNYDER, CAMP, STEWART & CO., LLP Atlanta, Georgia June 24, 1998 -----END PRIVACY-ENHANCED MESSAGE-----