-----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, BoZxP08AVE/+GsOHpOXQC+CgTsGuCb8kVTWEEmNZubjMvLnK6HTjohI8/f8xfrWO kGAaw0L2TzbavYM7Q2N+fw== 0000930661-98-002200.txt : 19981029 0000930661-98-002200.hdr.sgml : 19981029 ACCESSION NUMBER: 0000930661-98-002200 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19981027 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19981028 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: 98732362 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 October 27, 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 October 27, 1998, Columbia/HCA Healthcare Corporation (the "Company") announced operating results for the third quarter and nine months ended September 30, 1998. Revenues from continuing operations approximated $4.579 billion for the third quarter ended September 30, 1998, compared to $4.612 billion during the same quarter last year. Net income from continuing operations, before gains on sales of facilities, impairment of long-lived assets, restructuring and investigation related costs, totaled $131 million, or $.20 per diluted share for the third quarter of 1998, compared to $129 million, or $.20 per diluted share for the same period of 1997. Net income totaled $146 million, or $.22 per diluted share for the third quarter of 1998 compared to $97 million, or $.16 per diluted share in 1997. Revenues for the nine months ended September 30, 1998 totaled $14.3 billion, compared to $14.4 billion in the first nine months of 1997. Net income from continuing operations, before gains on sales of facilities, impairment of long-lived assets, restructuring and investigation related costs, totaled $563 million, or $.87 per diluted share in the first nine months of 1998 compared to $969 million, or $1.45 per diluted share for the nine months ended September 30, 1997. Net income totaled $421 million, or $.65 per diluted share in 1998, compared to $932 million, or $1.40 per diluted share in 1997. ITEM 7. EXHIBIT Exhibit 20 Copy of press release dated October 27, 1998 relating to third quarter earnings release. 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: October 28, 1998 EX-20 2 PRESS RELEASE EXHIBIT 20 [LETTERHEAD OF COLUMBIA/HCA APPEARS HERE] NEWS ================================================================================ FOR IMMEDIATE RELEASE INVESTOR CONTACT: MEDIA CONTACT: Mark Kimbrough 615-344-2688 Jeff Prescott 615-344-5708 COLUMBIA/HCA REPORTS THIRD QUARTER EARNINGS NET INCOME PER SHARE OF $.22 IN 1998 VS. $.16 IN 1997 EPS FROM CONTINUING OPERATIONS OF $.20 IN 1998 VS. $.20 IN 1997 EXCLUDING NON-RECURRING ITEMS NASHVILLE, TENN., OCTOBER 27, 1998---Columbia/HCA Healthcare Corporation (NYSE: COL) today announced operating results for the third quarter and nine months ended September 30, 1998. Revenues from continuing operations approximated $4.579 billion for the third quarter ended September 30, 1998, compared to $4.612 billion during the same quarter last year. Net income from continuing operations, before gains on sales of facilities, impairment of long-lived assets, restructuring and investigation related costs, totaled $131 million, or $.20 per diluted share for the third quarter of 1998, compared to $129 million, or $.20 per diluted share for the same period of 1997. Net income totaled $146 million, or $.22 per diluted share for the third quarter of 1998 compared to $97 million, or $.16 per diluted share in 1997. Revenues for the nine months ended September 30, 1998 totaled $14.3 billion, compared to $14.4 billion in the first nine months of 1997. Net income from continuing operations, before gains on sales of facilities, impairment of long-lived assets, restructuring and investigation related costs, totaled $563 million, or $.87 per diluted share in the first nine months of 1998 compared to $969 million, or $1.45 per diluted share for the nine months ended September 30, 1997. Net income totaled $421 million, or $.65 per diluted share in 1998, compared to $932 million, or $1.40 per diluted share in 1997. In August 1998, the Company commenced a $1 billion stock repurchase program, which is expected to be completed through a series of forward purchase contracts. Under this program, as of October 27, 1998, approximately 25 million shares of Columbia/HCA common stock have been purchased for approximately $568 million. Pursuant to the terms of the purchase contracts, the Company delays any cash payment for shares and such shares remain issued and outstanding until the contracts are settled. During the third quarter, the Company sold 17 hospitals, 34 surgery centers and certain other non-core assets for approximately $1.5 billion, resulting in a pretax gain of $537 million ($242 million net of tax), or $.38 per diluted share. Also, during the third quarter, as part of its strategic business plan, the Company decided to divest a group of its medical office buildings. The divestiture is expected to be completed through either sales or the transfer of the medical office buildings to a joint venture in which the Company anticipates maintaining a minority ownership interest. The Company expects to receive proceeds of approximately $300 million, upon completion. The recorded value for these medical office buildings, along with certain hospitals and other assets expected to be sold, was reduced to fair value, based upon estimates of sales values. This resulted in a non-cash, asset impairment charge of approximately $334 million, pre-tax ($197 million net of tax) or $.31 per diluted share, during the quarter. At September 30, 1998, the Company's balance sheet reflected total debt of approximately $6.8 billion, stockholders equity of approximately $7.7 billion and total assets of approximately $20.0 billion. Debt was reduced by approximately $1.5 billion during the third quarter of 1998. Total debt has been reduced by approximately $2.6 billion since the beginning of the year. The Company's debt-to-total capital ratio improved during the third quarter to approximately 45 percent, compared to 50 percent at June 30, 1998, and 54 percent at December 31, 1997. Excluding assets held for sale or to be spun to shareholders, same-facility admissions increased by 1.4 percent compared to the third quarter of 1997. In August 1998, the Company filed a ruling request with the Internal Revenue Service for tax-free spin-offs to stockholders of its America and Pacific groups of hospitals which are currently included in the Company's continuing operations. During the third quarter of 1998, the America Group had revenues of $121 million and earnings before management fees, depreciation, interest and taxes of $16.1 million. Same-facility admissions, for hospitals in the America group decreased by 1.2 percent compared to the third quarter of 1997. The Pacific group had revenues of $449 million and earnings before management fees, depreciation, interest and taxes of $39.1 million in the third quarter of 1998. Same-facility admissions for hospitals in the Pacific Group decreased 0.4 percent compared to the third quarter of 1997. Assets either sold during the quarter or identified as being held for sale during previous quarters (excluding the previously mentioned assets identified as impaired during the third quarter, had revenues of $348 million and earnings before depreciation, interest and taxes of $7.3 million in the third quarter of 1998. The assets sold and held for sale had a negative impact on the Company's reported revenues, earnings and admissions. Management anticipates that the assets held for sale will continue to have a negative impact on the Company's reported results until such time as these sales are completed. * * * This press release contains forward-looking statements based on current management expectations. Numerous factors exist which may cause results to differ materially from those anticipated in the forward-looking statements. Many of the factors that will determine the Company's future results are beyond the ability of the Company to control or predict. These statements are subject to risks and uncertainties and, therefore, actual results may differ materially. Readers should not place undue reliance on forward-looking statements, which reflect management's views only as of the date hereof. The Company undertakes no obligation to revise or update any forward-looking statements, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise. Readers should also carefully review the risk factors and uncertainties as detailed from time to time in the Company's filings with the Securities and Exchange Commission. 2 COLUMBIA/HCA HEALTHCARE CORPORATION CONSOLIDATED OPERATING RESULTS SUMMARY (Dollars in millions, except per share amounts)
FOR THE NINE MONTHS THIRD QUARTER ENDED SEPTEMBER 30, ------------------- ------------------- 1998 1997 1998 1997 -------- -------- -------- -------- Revenues.............................................................................. $4,579 $4,612 $14,261 $ 14,445 Operating income (a).................................................................. $682 $691 $ 2,379 $ 3,026 Net income: Income from continuing operations, gains on sales of facilities, impairment of long-lived assets and restructuring of operations and investigation related costs.................................................................. $131 $129 $563 $969 Gains on sales of facilities (net of tax)......................................... 242 - 242 - Impairment of long-lived assets (net of tax)...................................... (197) - (197) - Restructuring of operations and investigation related costs (net of tax).......... (13) (38) (53) (38) Discontinued operations: Income (loss) from operations of discontinued businesses (net of tax)......... (17) 6 (61) 57 Loss on disposal of discontinued businesses (net of tax)...................... - - (73) - Cumulative effect of accounting change (net of tax)............................... - - - (56) ------------------- ------------------- Net income........................................................................ $146 $97 $421 $932 =================== =================== Diluted earnings per share: Income from continuing operations, excluding gains on sales of facilities, impairment of long-lived assets and restructuring of operations and investigation related costs.................................................... $0.20 $0.20 $0.87 $1.45 Gains on sales of facilities...................................................... 0.38 - 0.38 - Impairment of long-lived assets................................................... (0.31) - (0.31) - Restructuring of operations and investigation related costs....................... (0.02) (0.05) (0.08) (0.06) Discontinued operations: Income (loss) from operations of discontinued businesses...................... (0.03) 0.01 (0.10) 0.09 Loss on disposal of discontinued businesses................................... - - (0.11) - Cumulative effect of accounting change............................................ - - - (0.08) ------------------- ------------------- Net income........................................................................ $0.22 $0.16 $0.65 $1.40 =================== =================== Shares used in computing diluted earnings per share (000)............................. 647,243 657,807 646,734 668,136
- ----------------------------------- (a) Income from continuing operations before depreciation and amortization, interest expense,/ gains on sales of facilities, impairment of long-lived assets, restructuring of operations and investigation related costs, minority interests and income taxes. Certain prior year amounts have been reclassified to conform to current year presentation. 3 COLUMBIA/HCA HEALTHCARE CORPORATION CONSOLIDATED STATEMENTS OF INCOME THIRD QUARTER (DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
1998 1997 ------------------ ------------------- AMOUNT RATIO Amount Ratio ------------------ ------------------- Revenues........................................................ $ 4,579 100.0 % $ 4,612 100.0 % Salaries and benefits........................................... 1,900 41.5 1,895 41.1 Supplies........................................................ 730 15.9 653 14.2 Other operating expenses........................................ 914 20.0 1,023 22.1 Provision for doubtful accounts................................. 369 8.1 369 8.0 Equity in earnings of affiliates................................ (16) (0.4) (19) (0.4) ------------------ ------------------- 3,897 85.1 3,921 85.0 ------------------ ------------------- EBDITA...................................................... 682 14.9 691 15.0 Depreciation and amortization................................... 312 6.7 319 6.9 Interest expense................................................ 142 3.1 125 2.7 Gains on sales of facilities.................................... (537) (11.7) - - Impairment of long-lived assets................................. 334 7.3 - - Restructuring of operations and investigation related costs..... 21 0.5 64 1.4 ------------------ ------------------- Income from continuing operations before minority interests and income taxes............................................. 410 9.0 183 4.0 Minority interests in earnings of consolidated entities......... 16 0.4 33 0.7 ------------------ ------------------- Income from continuing operations before income taxes........... 394 8.6 150 3.3 Provision for income taxes...................................... 231 5.0 59 1.3 ------------------ ------------------- Income from continuing operations............................... 163 3.6 91 2.0 Income (loss) from operations of discontinued businesses (net of tax)...................................... (17) (0.4) 6 0.1 ------------------ ------------------- Net income................................................... $ 146 3.2 $ 97 2.1 ================== =================== Diluted earnings per share: Income from continuing operations, excluding gains on sales of facilities, impairment of long-lived assets and restructuring of operations and investigation related costs............................................ $ 0.20 $ 0.20 Gains on sales of facilities................................. 0.38 - Impairment of long-lived assets.............................. (0.31) - Restructuring of operations and investigation related costs.. (0.02) (0.05) Income (loss) from operations of discontinued businesses..... (0.03) 0.01 ---------- ----------- Net income................................................ $ 0.22 $ 0.16 ========== =========== Shares used in computing diluted earnings per share (000)....... 647,243 657,807
Certain prior year amounts have been reclassified to conform to current year presentation. 4 COLUMBIA/HCA HEALTHCARE CORPORATION CONSOLIDATED STATEMENTS OF INCOME FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997 (DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
1998 1997 ------------------ ------------------- AMOUNT RATIO AMOUNT RATIO ------------------ ------------------- Revenues........................................................... $ 14,261 100.0 % $ 14,445 100.0 % Salaries and benefits.............................................. 5,911 41.4 5,621 38.9 Supplies........................................................... 2,195 15.4 2,010 13.9 Other operating expenses........................................... 2,815 19.7 2,928 20.2 Provision for doubtful accounts.................................... 1,052 7.4 976 6.8 Equity in earnings of affiliates................................... (91) (0.6) (116) (0.8) ------------------ ------------------- 11,882 83.3 11,419 79.0 ------------------ ------------------- EBDITA......................................................... 2,379 16.7 3,026 21.0 Depreciation and amortization...................................... 932 6.6 923 6.5 Interest expense................................................... 440 3.1 361 2.5 Gains on sales of facilities....................................... (537) (3.8) - - Impairment of long-lived assets.................................... 334 2.3 - - Restructuring of operations and investigation related costs........ 90 0.6 64 0.4 ------------------ ------------------- Income from continuing operations before minority interests and income taxes................................................ 1,120 7.9 1,678 11.6 Minority interests in earnings of consolidated entities............ 54 0.4 125 0.8 ------------------ ------------------- Income from continuing operations before income taxes.............. 1,066 7.5 1,553 10.8 Provision for income taxes......................................... 511 3.6 622 4.4 ------------------ ------------------- Income from continuing operations.................................. 555 3.9 931 6.4 Discontinued operations: Income (loss) from operations of discontinued businesses (net of tax)...................................... (61) (0.4) 57 0.4 Loss on disposal of discontinued businesses (net of tax)........ (73) (0.5) - - Cumulative effect of accounting change (net of tax)................ - - (56) (0.4) ------------------ ------------------- Net income...................................................... $ 421 3.0 $ 932 6.4 ================== =================== Diluted earnings per share: Income from continuing operations, excluding gains on sales of facilities, impaired of long-lived assets and restructuring of operations and investigation related costs....................................................... $ 0.87 $ 1.45 Gains on sales of facilities.................................... 0.38 - Impairment of long-lived assets................................. (0.31) - Restructuring of operations and investigation related costs..... (0.08) (0.06) Discontinued operations: Income (loss) from operations of discontinued businesses..... (0.10) 0.09 Loss on disposal of discontinued businesses.................. (0.11) - Cumulative effect of accounting change.......................... - (0.08) ---------- ----------- Net income................................................................. $ 0.65 $ 1.40 ========== =========== Shares used in computing diluted earnings per share (000)..................... 646,734 668,136
Certain prior year amounts have been reclassified to conform to current year presentation. 5 COLUMBIA/HCA HEALTHCARE CORPORATION CONSOLIDATED BALANCE SHEETS (DOLLARS IN MILLIONS)
SEPTEMBER 30, JUNE 30, DECEMBER 31, 1998 1998 1997 --------------- ---------- ------------ ASSETS Current assets: Cash and cash equivalents................................................ $175 $25 $110 Accounts receivable, net................................................. 2,357 2,427 2,522 Other.................................................................... 1,565 1,594 1,791 --------------- ---------- ------------ Total current assets............................................... 4,097 4,046 4,423 Property and equipment, at cost............................................... 16,006 16,814 16,254 Accumulated depreciation...................................................... (6,280) (6,442) (6,024) --------------- ---------- ------------ 9,726 10,372 10,230 Investments of insurance subsidiary........................................... 1,559 1,508 1,422 Investments in and advances to affiliates..................................... 1,155 1,371 1,329 Intangible assets, net of accumulated amortization............................ 3,044 3,405 3,521 Net assets of discontinued operations......................................... 77 141 841 Other......................................................................... 350 205 236 --------------- ---------- ------------ $20,008 $21,048 $22,002 =============== ========== ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable......................................................... $745 $727 $929 Other current liabilities................................................ 1,977 1,623 1,712 Long-term debt due within one year....................................... 1,471 2,669 132 --------------- ---------- ------------ Total current liabilities.......................................... 4,193 5,019 2,773 Long term debt................................................................ 5,371 5,693 9,276 Professional liability risks, deferred taxes and other liabilities....................................................... 1,910 1,926 1,867 Minority interests in equity of consolidated entities......................... 829 830 836 Stockholders' equity.......................................................... 7,705 7,580 7,250 --------------- ---------- ------------ $20,008 $21,048 $22,002 =============== ========== ============ Current ratio................................................................. 0.98 0.81 1.59 Ratio of debt to debt plus common and minority equity......................... 44.5% 49.9% 53.8%
6 COLUMBIA/HCA HEALTHCARE CORPORATION OPERATING STATISTICS FOR THE THIRD QUARTERS AND NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
FOR THE NINE MONTHS THIRD QUARTER ENDED SEPTEMBER 30, ---------------------- ------------------------ 1998 1997 1998 1997 ---------- --------- ----------- ---------- CONSOLIDATED HOSPITALS: - ---------------------- Number of Hospitals 294 314 294 314 Weighted Average Licensed Beds 59,396 60,981 60,286 61,134 Licensed Beds at End of Period 57,521 61,071 57,521 61,071 Admissions 458,800 461,700 1,440,800 1,436,100 Equivalent Admissions 703,800 711,300 2,191,500 2,172,800 Patient Days 2,260,700 2,239,600 7,170,800 7,154,500 Equivalent Patient Days 3,468,000 3,452,400 10,906,800 10,824,700 Emergency Room Visits 1,400,400 1,393,800 4,228,100 4,136,700 Outpatient Revenues as a Percentage of Patient 37.9% 38.1% 37.3% 36.9% Revenues Average Length of Stay 4.9 4.9 5.0 5.0 Occupancy 41.4% 39.9% 43.6% 42.9% Equivalent Occupancy 63.5% 61.4% 66.3% 64.9% NUMBER OF CONSOLIDATED AND NON-CONSOLIDATED - ------------------------------------------- (50/50 EQUITY JOINT VENTURES) HOSPITALS: - ------------------------------------------ Consolidated 294 314 Non-Consolidated (50/50 Equity Joint Ventures) 24 27 ------------ ------ Total Number of Hospitals 318 341 ============ ====== ================================================================================================================================= THIRD QUARTER 1998 GROUP RESULTS CORE ASSETS PACIFIC AMERICA ASSETS SOLD OR HELD FOR SALE REVENUES $3.7 Billion $449 Million $121 Million $348 Million .EBDITA $619 Million $39.1 Million $16.1 Million $7.3 Million % MARGIN 17% 9% 13% 2% SAME-FACILITY ADMISSIONS 1.4% -0.4% -1.2% *-5.5%
*Includes only those facilities held for sale @ 9/30/98; admissions for facilities sold and held for sale during the quarter decreased 22% .EBDITA -before management fees, depreciation, and amortization, interest expense, gains on sales of facilities, impairment of long-lived assets, restructuring of operations and investigation related costs, minority interests and income taxes Certain prior year amounts have been reclassified to conform to current year presentation. 7 -----END PRIVACY-ENHANCED MESSAGE-----