-----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, LilY/1Gs/BvG4q02GsFJGltQcOJ6PgV1LknGsh7UhshNADP28zNopJ5v7mxeJEGT Sc8Y8Ku4eo408MmQrvDvuA== 0000930661-98-000384.txt : 19980220 0000930661-98-000384.hdr.sgml : 19980220 ACCESSION NUMBER: 0000930661-98-000384 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980213 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19980219 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: COLUMBIA HCA HEALTHCARE CORP/ CENTRAL INDEX KEY: 0000860730 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-GENERAL MEDICAL & SURGICAL HOSPITALS, NEC [8062] IRS NUMBER: 752497104 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 033-64105 FILM NUMBER: 98545854 BUSINESS ADDRESS: STREET 1: ONE PARK PLZ CITY: NASHVILLE STATE: TN ZIP: 37203 BUSINESS PHONE: 6153279551 FORMER COMPANY: FORMER CONFORMED NAME: COLUMBIA HEALTHCARE CORP DATE OF NAME CHANGE: 19930830 FORMER COMPANY: FORMER CONFORMED NAME: COLUMBIA HOSPITAL CORP DATE OF NAME CHANGE: 19930328 8-K 1 FORM 8-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------------------------------- FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report February 13, 1998 (Date of Earliest Event Reported) COLUMBIA/HCA HEALTHCARE CORPORATION (Exact name of Registrant as specified in its Charter) DELAWARE (State of Incorporation) 001-11239 75-2497104 (Commission (I.R.S. Employer File Number) Identification No.) One Park Plaza, Nashville, Tennessee 37203 (Address of principal executive offices) (Zip Code) (615) 344-9551 (Registrant's telephone number, including area code) ITEM 5. OTHER EVENTS On February 13, 1998, Columbia/HCA Healthcare Corporation (the "Company") announced final results for the fourth quarter and twelve months ended December 31, 1997. Consistent with a previous release, the Company announced weaker than expected financial results and significant restructuring and certain other charges in the fourth quarter. A copy of the earnings release dated February 13, 1998 is attached as Exhibit 20 and incorporated herein by reference. Separately, on February 6, 1998, Moody's Investors Service downgraded the senior debt ratings of the Company to Ba2 from Baa2 and lowered the long term debt ratings of certain of the Company's subsidiaries. Moody's also lowered the Company's commercial paper rating to Not-Prime from Prime-3. On February 9, 1998, Standard & Poor's affirmed its ratings of BBB (senior debt), BBB- (subordinated debt) and A-3 (commercial paper) on the Company and affiliated companies. On February 10, 1998, Fitch Investors Service downgraded the Company's senior debt to BBB- from BBB+ and lowered the rating on the Company's commercial paper programs to F3 from F2. ITEM 7. EXHIBIT Exhibit 20 Copy of press release dated February 13, 1998 relating to fourth quarter and 1997 results. SIGNATURE Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized. COLUMBIA/HCA HEALTHCARE CORPORATION /s/ JOHN M. FRANCK II - ----------------------------------------- John M. Franck II Corporate Secretary DATED: February 19, 1998 EX-20 2 PRESS RELEASE DATED 2/13/98 EXHIBIT 20 COLUMBIA/HCA NEWS Healthcare Corporation FOR IMMEDIATE RELEASE INVESTOR CONTACT: MEDIA CONTACT: Mark Kimbrough 615/344-2688 Jeff Prescott 615/344-5708 COLUMBIA/HCA REPORTS FOURTH QUARTER AND 1997 RESULTS In Line with February 6, 1998 Pre-Announcement NASHVILLE,TN., FEBRUARY 13, 1998 --- Columbia/HCA Healthcare Corporation, (NYSE:COL) today announced final results for the fourth quarter and twelve months ended December 31, 1997. On February 6, 1998, the Company announced that it anticipated reporting weaker than expected financial results in the fourth quarter and that it anticipated recording significant restructuring and certain other charges in the fourth quarter. The Company recorded after-tax charges during the fourth quarter of $732 million of impairment charges related to assets being closed or divested, $55 million of costs associated with ongoing government investigations and severance cost and $56 million of charges related to a change in accounting principles. Approximately $443 million of the asset impairment charges relates to anticipated sales of the Company's home health operations and certain business units acquired from Value Health in 1997. The change in accounting policy relates to the Company's method of accounting for start-up costs and resulted in a write-off of the costs capitalized as of January 1, 1997. Revenues from continuing operations for the fourth quarter ended December 31, 1997 totaled $4.4 billion compared to $4.8 billion in the fourth quarter of 1996. Before income or loss from discontinued operations and restructuring and asset impairment charges, net loss from continuing operations totaled $404 million, or $0.63 per diluted share for the fourth quarter of 1997 compared to income of $398 million, or $0.58 per diluted share in the fourth quarter of 1996. After income or loss from discontinued operations and restructuring and asset impairment charges, net loss for the fourth quarter totaled $1.293 billion or $2.01 per diluted share versus net income of $414 million or $0.61 per diluted share from the same period last year. 1 Revenues from continuing operations for the twelve months ended December 31, 1997 totaled $18.82 billion compared with $18.79 billion for 1996. Before income from discontinued operations and restructuring and asset impairment charges, income from continuing operations totaled $565 million or $0.85 per diluted share compared to $1.5 billion or $2.15 per diluted share in 1996. After income or loss from discontinued operations and restructuring and asset impairment charges, net loss totaled $305 million or $0.46 per diluted share in 1997 compared to net income of $1.5 billion or $2.22 per diluted share in 1996. During the fourth quarter, the Company experienced a 9% (approximately $440 million) decline in revenues from prior year. The decline was attributable to several factors, including divestitures of facilities (approximately $90 million); recording 1997 Medicare cost reports and delays experienced in obtaining settlements of cost reports filed in prior years (approximately $140 million) and decreases in Medicare rates of reimbursement mandated by the Balanced Budget Act of 1997 which became effective October 1, 1997 (approximately $50 million). Also contributing to the decline were continued increases in discounts from managed care payers and changes in estimates of reserves for discounts from managed care payers and contractual allowances from government payers. During the quarter, managed care as a percent of total admissions increased to 37% compared to 33% during the fourth quarter of 1996. Also during the quarter, costs incurred were higher than anticipated primarily due to increases in salaries, wages and benefits, other operating expenses and bad debt expense. During the quarter, same facility admissions increased by 0.6 percent, adjusted admissions, which reflect both inpatient and outpatient volumes, increased by 2.1 percent. Patient satisfaction levels rose slightly in the fourth quarter for the first time in two years. For the year, same facility admissions increased by 1.7% and adjusted admissions increased by 3.5%. At December 31, 1997, the Company's balance sheet reflected total debt of approximately $9.4 billion, stockholders equity of $7.3 billion and total assets of $22.0 billion. Capital expenditures in 1997 totaled $1.4 billion, excluding costs associated with assets classified as discontinued operations of approximately $1.1 billion and other acquisitions of approximately $411 million. "Our new leadership team has continued to focus on creating positive changes in Columbia/HCA's operations, corporate culture and organization. We have put in place an organization focused on local community based healthcare, developed a new ethics and compliance program and streamlined our management structure to enhance our commitment to providing quality patient care," stated Thomas F. Frist, Jr. M.D., Chairman and Chief Executive Officer. "Regarding the investigation, we are having an ongoing dialogue with the government. It is not appropriate to comment on these discussions." 2 Jack O. Bovender, President and Chief Operating Officer, said, "While we realize that 1998 will continue to present challenges, we expect the Company to experience significant benefits from the internal reorganization and restructuring plan which became effective January 1, 1998. We are confident that we have taken significant steps forward in our efforts to reposition the Company for 1998 and future years." Columbia/HCA's annual stockholders meeting will be held on May 14, 1998 in Nashville, Tennessee, for shareholders of record as of March 23, 1998. # # # All references to "Company or Columbia/HCA" as used throughout this document refer to Columbia/HCA Healthcare Corporation and its affiliates. Certain of the above information is forward-looking and as such, only reflects the company's best assessment at this time. Investors are cautioned that forward-looking statements involve risks and uncertainty, that actual results may differ materially from such statements, and that investors should not place undue reliance on such statements. For a discussion of factors that may affect actual results, investors should refer to the Company's filings with the Securities and Exchange Commission. 3 COLUMBIA/HCA HEALTHCARE CORPORATION CONSOLIDATED OPERATING RESULTS SUMMARY (Dollars in millions, except per share amounts)
FOR THE TWELVE MONTHS FOURTH QUARTER ENDED DECEMBER 31, -------------------- -------------------- 1997 1996 1997 1996 -------- -------- -------- -------- Revenues ...................................................................... $ 4,374 $ 4,817 $ 18,819 $ 18,786 Operating income (a) .......................................................... $ (175) $ 1,125 $ 2,851 $ 4,214 Net income (loss): Income (loss) from continuing operations excluding the write-down of long-lived assets and restructuring and investigation related costs .. $ (404) $ 398 $ 565 $ 1,461 Write-down of long-lived assets (net of tax) ............................. (290) - (290) - Restructuring and investigation related costs (net of tax) .............. (55) - (93) - Discontinued operations: Income (loss) from operations of discontinued businesses (net of tax) (45) 16 12 44 Estimated loss on disposal of discontinued businesses (net of tax) .. (443) - (443) - Cumulative effect of accounting change (net of tax) ...................... (56) - (56) - -------------------- -------------------- Net income (loss) ........................................................ $ (1,293) $ 414 $ (305) $ 1,505 ==================== ==================== Basic earnings (loss) per share: Income (loss) from continuing operations excluding the write-down of long-lived assets and restructuring and investigation related costs .. $ (0.63) $ 0.58 $ 0.86 $ 2.17 Write-down of long-lived assets (net of tax) ............................. (0.45) - (0.44) - Restructuring and investigation related costs (net of tax) ............... (0.08) - (0.14) - Discontinued operations: Income (loss) from operations of discontinued businesses (net of tax) (0.07) 0.03 0.02 0.07 Estimated loss on disposal of discontinued businesses (net of tax) .. (0.69) - (0.67) - Cumulative effect of accounting change (net of tax) ...................... (0.09) - (0.09) - -------------------- -------------------- Net income (loss) ........................................................ $ (2.01) $ 0.61 $ (0.46) $ 2.24 ==================== ==================== Shares used in computing basic earnings per share (000) ....................... 644,508 671,330 657,931 670,774 Diluted earnings (loss) per share: Income (loss) from continuing operations excluding the write-down of long-lived assets and restructuring and investigation related costs .. $ (0.63) $ 0.58 $ 0.85 $ 2.15 Write-down of long-lived assets (net of tax) ............................. (0.45) - (0.44) - Restructuring and investigation related costs (net of tax) ............... (0.08) - (0.14) - Discontinued operations: Income (loss) from operations of discontinued businesses (net of tax) (0.07) 0.03 0.02 0.07 Estimated loss on disposal of discontinued businesses (net of tax) .. (0.69) - (0.67) - Cumulative effect of accounting change (net of tax) ...................... (0.09) - (0.08) - -------------------- ------------- ------ Net income (loss) ........................................................ $ (2.01) $ 0.61 $ (0.46) $ 2.22 ==================== ==================== Shares used in computing diluted earnings per share (000) ..................... 644,508 678,102 663,090 677,886
=============== (a) Income from continuing operations before depreciation and amortization, interest expense, write-down of long-lived assets, restructuring and investigation related costs, minority interests and income taxes. Certain prior year amounts have been reclassified to conform to current year presentation. 4 COLUMBIA/HCA HEALTHCARE CORPORATION CONSOLIDATED STATEMENT OF OPERATIONS FOR THE FOURTH QUARTERS AND YEARS ENDED DECEMBER 31, 1997 AND 1996 ($ IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
FOURTH QUARTER YEAR ---------------------- ---------------------- 1997 1996 1997 1996 --------- --------- --------- --------- Revenues ........................................................ $ 4,374 $ 4,817 $ 18,819 $ 18,786 --------- --------- --------- --------- Salaries and benefits ........................................... 2,010 1,793 7,631 7,205 Supplies ........................................................ 712 663 2,722 2,655 Other operating expenses ........................................ 1,335 951 4,263 3,689 Provision for doubtful accounts ................................. 444 331 1,420 1,196 Equity in earnings of affiliates ................................ 48 (46) (68) (173) --------- --------- --------- --------- 4,549 3,692 15,968 14,572 --------- --------- --------- --------- EBDITA ...................................................... (175) 1,125 2,851 4,214 Depreciation and amortization ................................... 315 301 1,238 1,143 Interest expense ................................................ 132 117 493 488 Write-down of long-lived assets ................................. 442 - 442 - Restructuring and investigation related costs ................... 76 - 140 - --------- --------- --------- --------- Income (loss) from continuing operations before minority interests and income taxes ........................ (1,140) 707 538 2,583 Minority interests in earnings of consolidated entities ......... 25 39 150 141 --------- --------- --------- --------- Income (loss) from continuing operations before income taxes .... (1,165) 668 388 2,442 Provision for income taxes (benefits) ........................... (416) 270 206 981 --------- --------- --------- --------- Income (loss) from continuing operations ........................ (749) 398 182 1,461 Discontinued operations: Income (loss) from operations of discontinued businesses ... (45) 16 12 44 Estimated loss on disposal of discontinued businesses ...... (443) - (443) - Cumulative effect of accounting change .......................... (56) - (56) - --------- --------- --------- --------- Net income (loss) ........................................... $ (1,293) $ 414 $ (305) $ 1,505 ========= ========= ========= ========= Basic earnings (loss) per share: Income (loss) from continuing operations excluding the write-down of long-lived assets and restructuring and investigation related costs ........................ $ (0.63) $ 0.58 $ 0.86 $ 2.17 Write-down of long-lived assets ............................. (0.45) $ - (0.44) $ - Restructuring and investigation related costs ............... (0.08) - (0.14) - Discontinued operations: Income (loss) from operations of discontinued businesses (0.07) 0.03 0.02 0.07 Estimated loss on disposal of discontinued businesses .. (0.69) - (0.67) - Cumulative effect of accounting change ...................... (0.09) - (0.09) - --------- --------- --------- --------- Net income (loss) ........................................... $ (2.01) $ 0.61 $ (0.46) $ 2.24 ========= ========= ========= ========= Shares used in computing basic earnings per share (000) ......... 644,508 671,330 657,931 670,774 Diluted earnings (loss) per share: Income (loss) from continuing operations excluding the write-down of long-lived assets and restructuring and investigation related costs ........................ $ (0.63) $ 0.58 $ 0.85 $ 2.15 Write-down of long-lived assets ............................. (0.45) $ - (0.44) $ - Restructuring and investigation related costs ............... (0.08) - (0.14) - Discontinued operations: Income (loss) from operations of discontinued businesses (0.07) 0.03 0.02 0.07 Estimated loss on disposal of discontinued businesses .. (0.69) - (0.67) - Cumulative effect of accounting change ...................... (0.09) - (0.08) - --------- --------- --------- --------- Net income (loss) ........................................... $ (2.01) $ 0.61 $ (0.46) $ 2.22 ========= ========= ========= ========= Shares used in computing diluted earnings per share (000) ....... 644,508 678,102 663,090 677,886
Certain prior year amounts have been reclassified to conform to current year presentation. 5 COLUMBIA/HCA HEALTHCARE CORPORATION OPERATING STATISTICS FOR THE FOURTH QUARTERS AND YEARS ENDED DECEMBER 31, 1997 AND 1996
FOURTH QUARTER YEAR ------------------------ ------------------------ 1997 1996 1997 1996 ---- ---- ---- ---- CONSOLIDATED HOSPITALS: - ----------------------- Number of Hospitals 309 319 309 319 Weighted Average Licensed Beds 60,983 62,385 61,096 62,708 Licensed Beds at End of Period 60,643 61,931 60,643 61,931 Admissions 479,000 479,100 1,915,100 1,895,400 Adjusted Admissions 728,600 718,500 2,901,400 2,826,000 Patient Days 2,337,800 2,432,200 9,492,300 9,712,900 Adjusted Patient Days 3,556,100 3,648,300 14,380,800 14,482,000 Emergency Room Visits 1,398,500 1,348,300 5,535,200 5,351,200 Outpatient Revenues as a Percentage of Patient Revenues 37.3% 36.4% 37.0% 36.0% Surgery Cases 484,700 493,400 1,976,900 1,945,500 Average Length of Stay 4.9 5.1 5.0 5.1 Occupancy 41.7% 42.4% 42.6% 42.3% Adjusted Occupancy 63.5% 63.6% 64.5% 63.1% Revenues (millions) $ 4,374 $ 4,817 $ 18,819 $ 18,786 Revenues Per Adjusted Patient Day $ 1,230 $ 1,321 $ 1,309 $ 1,297 Revenues Per Adjusted Admission $ 6,004 $ 6,705 $ 6,486 $ 6,648 NUMBER OF CONSOLIDATED AND NON-CONSOLIDATED - ------------------------------------------- (50/50 EQUITY JOINT VENTURES) HOSPITALS: - ---------------------------------------- Consolidated 309 319 Non-Consolidated (50/50 Equity Joint Ventures) 27 22 ----------- ----------- Total Number of Hospitals 336 341 =========== ===========
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