-----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, Fh2HgDBVlspA3cvl4jC4pKAd8+ySEN/7djs6hF5sH5tU52/moD8c2lpIy7ilz0XA L+I2e3ETsqP7dpqC4az3dg== 0000950144-00-002404.txt : 20000217 0000950144-00-002404.hdr.sgml : 20000217 ACCESSION NUMBER: 0000950144-00-002404 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000214 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20000216 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: 001-11239 FILM NUMBER: 546791 BUSINESS ADDRESS: STREET 1: ONE PARK PLZ CITY: NASHVILLE STATE: TN ZIP: 37203 BUSINESS PHONE: 6153449551 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 COLUMBIA/HCA HEALTHCARE CORPORATION 1 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 14, 2000 (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) 2 ITEM 5. OTHER EVENTS On February 14, 2000, Columbia/HCA Healthcare Corporation (the "Company") announced operating results for the year and fourth quarter ended December 31, 1999. ITEM 7. EXHIBIT Exhibit 20 Copy of press release dated February 14, 2000 relating to fourth 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: February 16, 2000 EX-20 2 PRESS RELEASE 1 EXHIBIT 20 COLUMBIA/HCA Healthcare Corporation NEWS ================================================================================ FOR IMMEDIATE RELEASE INVESTOR CONTACT MEDIA CONTACT Mark Kimbrough: 615-344-2688 Jeff Prescott: 615-344-5708 COLUMBIA/HCA REPORTS 1999 RESULTS EPS FROM CONTINUING OPERATIONS OF $1.30 IN 1999 VS $.91 IN 1998 EXCLUDING NON-RECURRING ITEMS SAME-FACILITY NET REVENUES INCREASE 7.2% IN FOURTH QUARTER NASHVILLE, TENN., FEBRUARY 14, 2000 - Columbia/HCA Healthcare Corporation (NYSE: COL) today announced operating results for the year and fourth quarter ended December 31, 1999. "The past year has seen this organization capitalize on our strengths by putting into place solid operational strategies and focusing on our local hospitals," stated Thomas F. Frist, Jr., M.D., Chairman and Chief Executive Officer of Columbia/HCA. "Through a realignment that brings decision making and leadership back to our communities, we have begun to realize our shared culture, a common vision of caring, compassion and quality care." For the year ended December 31, 1999, revenues from continuing operations totaled $16.7 billion compared with $18.7 billion for 1998. This decline reflects the sale or spin-off to shareholders of approximately 85 hospitals and more than 20 ambulatory surgery centers since December 31, 1998. Net income from continuing operations, excluding gains on sales of facilities, impairment of long-lived assets and restructuring of operations and investigation related costs, totaled $767 million or $1.30 per diluted share in 1999 compared to $590 million or $0.91 per diluted share for 1998. Net income totaled $657 million or $1.11 per diluted share for 1999 versus net income of $379 million or $0.59 per diluted share for 1998. 1 2 Excluding acquisition related goodwill charges, net income from continuing operations (excluding gains on sales of facilities, impairment of long-lived assets, restructuring of operations and investigation related costs) was $850 million or $1.45 per diluted share in 1999 compared to $682 million or $1.05 per diluted share for 1998, a 38 percent increase from the prior year. During 1999, the Company sold 24 hospitals, 4 surgery centers and certain other non-core assets resulting in a pretax gain of $297 million ($164 million net of tax), or $0.28 per diluted share. The Company also recorded asset impairment charges of approximately $220 million ($194 million net of tax), or $0.33 per diluted share during 1999. Cash proceeds from asset sales during 1999 totaled approximately $945 million before tax. For the fourth quarter ended December 31, 1999, revenues from continuing operations totaled $3.9 billion compared to $4.4 billion in the fourth quarter of 1998. Net income from continuing operations, excluding gains on sales of facilities, impairment of long-lived assets and restructuring of operations and investigation related costs, totaled $159 million or $0.28 per diluted share for the fourth quarter of 1999 compared to net income of $27 million or $0.04 per diluted share during the fourth quarter of 1998. Net income for the fourth quarter of 1999 totaled $91 million or $0.16 per diluted share compared to a net loss of ($42) million or ($0.06) per diluted share in the fourth quarter of 1998. During the fourth quarter of 1999, the Company sold 6 hospitals and certain other non-core assets for approximately $79 million, resulting in a pretax gain of $40 million ($13 million net of tax), or $0.02 per diluted share. Asset impairment charges were recorded during the fourth quarter of 1999 resulting in a charge of $60 million ($63 million net of tax), or $0.11 per diluted share. For the year 1999, same facility admissions at the Company's hospitals increased by 2.7 percent while same facility revenues increased 5.3 percent. During the fourth quarter of 1999, same facility admissions increased by 3.9 percent and same facility revenues increased 7.2 percent. 2 3 As of December 31, 1999, the Company operated 207 hospitals and 83 ambulatory surgery centers (including 12 hospitals and 3 ASCs owned through equity joint ventures), compared to 305 hospitals and 107 ambulatory surgery centers (including 24 hospitals and 5 ASCs owned through equity joint ventures) as of December 31, 1998. At December 31, 1999, the Company's balance sheet reflected total debt of approximately $6.4 billion, stockholders equity of $5.6 billion and total assets of $16.9 billion. Capital expenditures for 1999 totaled $1.3 billion. The Company's total debt-to-capital ratio was 50 percent at year end 1999 compared to 51 percent at September 30, 1999 and 45 percent at December 31, 1998. On May 11, 1999, the Company completed the tax-free spin-offs to Columbia/HCA shareholders of LifePoint Hospitals, Inc. (NASD: LPNT) and Triad Hospitals, Inc. (NASD: TRIH). Columbia/HCA received approximately $900 million from the spin-off of the 57 hospitals. During 1999, the Company repurchased 81 million shares of its common stock at a total cost of approximately $2 billion. In addition, the Company's $1 billion share repurchase program, authorized in November 1999, was completed in February 2000. Approximately 34.4 million shares have been purchased at an average cost of approximately $29 per share. The majority of these shares were purchased by certain financial organizations through a series of forward purchase contracts. In accordance with the terms of the forward purchase contracts, the shares purchased remain issued and outstanding until the forward purchase contracts are settled by the Company. Several factors continued to affect the Company's financial results during the fourth quarter and full year 1999. These factors include - reduced Medicare reimbursement mandated by the Balanced Budget Act of 1997 and changes in Medicare outlier payments which reduced Medicare payments to the Company's healthcare facilities by approximately $18 million during the fourth quarter of 1999 and approximately $124 million for the year 1999; and increased supply expense due to the increasing costs of new technology and pharmaceuticals. 3 4 The Company estimates that its Medicare reimbursement in 2000 will be reduced by approximately $40-$45 million from the previous year due to continuing provisions of the Balanced Budget Act of 1997 and changes in Medicare outlier payments. * * * This press release contains forward-looking statements based on current management expectations. Numerous risks, uncertainties and other factors including: (i) the outcome of the known and unknown governmental investigations and litigation involving the Company's business practices, (ii) possible changes in the Medicare program that may further limit reimbursements to health care providers and insurers, (iii) the complexity of integrated computer systems and the success and expense of the remediation efforts of the Company and relevant third parties in achieving Year 2000 readiness, and (iv) the ability to enter into managed care provider arrangements on acceptable terms, and those detailed from time-to-time in the Company's filings with the Securities and Exchange Commission, 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. All references to "Company" and "Columbia/HCA" as used throughout this document refer to Columbia/HCA Healthcare Corporation and its affiliates. 4 5 COLUMBIA/HCA HEALTHCARE CORPORATION CONSOLIDATED OPERATING RESULTS SUMMARY (Dollars in millions, except per share amounts)
FOR THE TWELVE MONTHS FOURTH QUARTER ENDED DECEMBER 31, --------------------- --------------------- 1999 1998 1999 1998 --------- --------- --------- --------- Revenues ........................................................................ $ 3,942 $ 4,420 $ 16,657 $ 18,681 EBITDA (a) ...................................................................... $ 649 $ 489 $ 2,888 $ 2,868 Net income (loss): Income from continuing operations, excluding gains on sales of facilities, impairment of long-lived assets and restructuring of operations and investigation related costs .......................................... $ 159 $ 27 $ 767 $ 590 Gains on sales of facilities (net of tax) ................................ 13 123 164 365 Impairment of long-lived assets (net of tax) ............................. (63) (152) (194) (349) Restructuring of operations and investigation related costs (net of tax) (18) (21) (80) (74) Discontinued operations: Loss from operations of discontinued businesses (net of tax) ......... -- (19) -- (80) Loss on disposal of discontinued businesses (net of tax) ............. -- -- -- (73) --------------------- --------------------- Net income (loss) ........................................................ $ 91 ($ 42) $ 657 $ 379 ===================== ===================== Diluted earnings (loss) 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 .......................................... $ 0.28 $ 0.04 $ 1.30 $ 0.91 Gains on sales of facilities ............................................. 0.02 0.19 0.28 0.56 Impairment of long-lived assets .......................................... (0.11) (0.23) (0.33) (0.54) Restructuring of operations and investigation related costs .............. (0.03) (0.04) (0.14) (0.11) Discontinued operations: Loss from operations of discontinued businesses ...................... -- (0.02) -- (0.12) Loss on disposal of discontinued businesses .......................... -- -- -- (0.11) Net income (loss) ........................................................ $ 0.16 ($ 0.06) $ 1.11 $ 0.59 ===================== ===================== Shares used in computing diluted earnings per share (000) ....................... 568,589 644,387 591,029 646,649
- ------------------------------------- (a) EBITDA is defined as 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. 5 6 COLUMBIA/HCA HEALTHCARE CORPORATION CONSOLIDATED INCOME STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 (DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
1999 1998 ----------------------- --------------------- AMOUNT RATIO AMOUNT RATIO Revenues ............................................................ $ 16,657 100.0% $ 18,681 100.0% Salaries and benefits ............................................... 6,749 40.5 7,811 41.8 Supplies ............................................................ 2,645 15.9 2,901 15.5 Other operating expenses ............................................ 3,196 19.2 3,771 20.2 Provision for doubtful accounts ..................................... 1,269 7.6 1,442 7.7 Equity in earnings of affiliates .................................... (90) (0.5) (112) (0.6) ----------------------- --------------------- 13,769 82.7 15,813 84.6 ----------------------- --------------------- EBITDA .......................................................... 2,888 17.3 2,868 15.4 Depreciation and amortization ....................................... 1,094 6.6 1,247 6.7 Interest expense .................................................... 471 2.8 561 3.0 Gains on sales of facilities ........................................ (297) (1.8) (744) (4.0) Impairment of long-lived assets ..................................... 220 1.3 542 2.9 Restructuring of operations and investigation related costs ......... 116 0.7 111 0.6 ----------------------- --------------------- Income from continuing operations before minority interests and income taxes ................................................ 1,284 7.7 1,151 6.2 Minority interests in earnings of consolidated entities ............. 57 0.3 70 0.4 ----------------------- --------------------- Income from continuing operations before income taxes ............... 1,227 7.4 1,081 5.8 Provision for income taxes .......................................... 570 3.5 549 3.0 ----------------------- --------------------- Income from continuing operations ................................... 657 3.9 532 2.8 Discontinued operations: Loss from operations of discontinued businesses (net of tax benefit) ...................................... -- -- (80) (0.4) Loss on disposal of discontinued businesses (net of tax benefit) ...................................... -- -- (73) (0.4) ----------------------- --------------------- Net income ...................................................... $ 657 3.9 $ 379 2.0 ======================= ====================== 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 $ 1.30 $ 0.91 Gains on sales of facilities .................................... 0.28 0.56 Impairment of long-lived assets ................................. (0.33) (0.54) Restructuring of operations and investigation related costs ..... (0.14) (0.11) Discontinued operations: Loss from operations of discontinued businesses ........... -- (0.12) Loss on disposal of discontinued businesses ............... -- (0.11) ----------------------- --------------------- Net income ..................................................... $ 1.11 $ 0.59 ======================= ====================== Shares used in computing diluted earnings per share (000) ........... 591,029 646,649
6 7 COLUMBIA/HCA HEALTHCARE CORPORATION CONSOLIDATED INCOME STATEMENTS FOURTH QUARTER (DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
1999 1998 ---------------------- -------------------- AMOUNT RATIO Amount Ratio ------ ----- ------ ----- Revenues ............................................................ $ 3,942 100.0% $ 4,420 100.0% Salaries and benefits ............................................... 1,630 41.3 1,900 43.0 Supplies ............................................................ 651 16.5 706 16.0 Other operating expenses ............................................ 745 18.9 956 21.6 Provision for doubtful accounts ..................................... 284 7.2 390 8.8 Equity in earnings of affiliates .................................... (17) (0.4) (21) (0.5) ---------------------- -------------------- 3,293 83.5 3,931 88.9 ---------------------- -------------------- EBITDA .......................................................... 649 16.5 489 11.1 Depreciation and amortization ....................................... 258 6.6 315 7.2 Interest expense .................................................... 120 3.0 121 2.7 Gains on sales of facilities ........................................ (40) (1.0) (207) (4.7) Impairment of long-lived assets ..................................... 60 1.5 208 4.7 Restructuring of operations and investigation related costs ......... 32 0.8 21 0.5 ---------------------- -------------------- Income from continuing operations before minority interests and income taxes ................................................ 219 5.6 31 0.7 Minority interests in earnings of consolidated entities ............. 16 0.5 16 0.4 ---------------------- -------------------- Income from continuing operations before income taxes ............... 203 5.1 15 0.3 Provision for income taxes .......................................... 112 2.8 38 0.9 ---------------------- -------------------- Income (loss) from continuing operations ............................ 91 2.3 (23) (0.6) Loss from operations of discontinued businesses (net of tax benefit) ............................................ -- -- (19) (0.4) Net income (loss) ............................................... $ 91 2.3 $ (42) (1.0) ====================== ==================== Diluted earnings (loss) 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 $ 0.28 $ 0.04 Gains on sales of facilities .................................... 0.02 0.19 Impairment of long-lived assets ................................. (0.11) (0.23) Restructuring of operations and investigation related costs ..... (0.03) (0.04) Loss from operations of discontinued businesses ................. (0.02) ---------------------- -------------------- Net income (loss) .............................................. $ 0.16 $ (0.06) ====================== ==================== Shares used in computing diluted earnings per share (000) ........... 568,589 644,387
7 8 COLUMBIA/HCA HEALTHCARE CORPORATION CONSOLIDATED BALANCE SHEETS (DOLLARS IN MILLIONS)
DECEMBER 31, SEPTEMBER 30, DECEMBER 31, 1999 1999 1998 --------- --------- --------- ASSETS Current assets: Cash and cash equivalents ...................... $ 190 $ 124 $ 297 Accounts receivable, net ....................... 1,873 1,834 2,096 Other .......................................... 1,534 1,557 1,470 --------- --------- --------- Total current assets ...................... 3,597 3,515 3,863 Property and equipment, at cost ..................... 14,084 13,955 15,644 Accumulated depreciation ............................ (5,594) (5,650) (6,195) --------- --------- --------- 8,490 8,305 9,449 Investments of insurance subsidiary ................. 1,457 1,545 1,614 Investments in and advances to affiliates ........... 654 617 1,275 Intangible assets, net of accumulated amortization .. 2,319 2,481 2,910 Other ............................................... 368 164 318 --------- --------- --------- $ 16,885 $ 16,627 $ 19,429 ========= ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable ............................... $ 657 $ 608 $ 784 Other current liabilities ...................... 1,515 1,531 1,707 Long-term debt due within one year ............. 1,160 1,010 1,068 --------- --------- --------- Total current liabilities ................. 3,332 3,149 3,559 Long-term debt ...................................... 5,284 5,522 5,685 Professional liability risks, deferred taxes and other liabilities .............................. 1,889 1,679 1,839 Minority interests in equity of consolidated entities 763 768 765 Stockholders' equity ................................ 5,617 5,509 7,581 --------- --------- --------- $ 16,885 $ 16,627 $ 19,429 ========= ========= ========= Current ratio ....................................... 1.08 1.12 1.09 Ratio of debt to debt plus common and minority equity 50.2% 51.0% 44.7% Shares outstanding (thousands) ...................... 564,273 563,282 642,578
8 9 COLUMBIA/HCA HEALTHCARE CORPORATION OPERATING STATISTICS
FOR THE TWELVE MONTHS FOURTH QUARTER ENDED DECEMBER 31, -------------------------- ---------------------------- 1999 1998 1999 1998 ---------- ---------- ----------- ----------- CONSOLIDATED HOSPITALS: Number of Hospitals .............. 195 281 195 281 Weighted Average Licensed Beds ... 42,850 55,594 46,291 59,104 Licensed Beds at End of Period ... 42,484 53,693 42,484 53,693 Admissions ....................... 381,700 448,500 1,625,400 1,891,800 Same Facility % Change ...... 3.9% 2.7% Equivalent Admissions ............ 567,000 680,400 2,425,100 2,875,600 Same Facility % Change 3.1% 2.5% Revenue per Equivalent Admission . $ 6,953 $ 6,497 $ 6,869 $ 6,496 Same Facility % Change ...... 4.0% 2.7% Patient Days ..................... 1,875,400 2,201,800 8,030,800 9,387,300 Equivalent Patient Days .......... 2,785,900 3,339,400 11,982,000 14,268,600 Emergency Room Visits ............ 1,114,800 1,310,900 4,765,900 5,539,000 Outpatient Revenues as a Percentage of Patient Revenues 38.5% 40.2% 38.8% 38.9% Surgery Cases .................... 324,100 396,900 1,372,600 1,695,200 Average Length of Stay ........... 4.9 4.9 4.9 5.0 Occupancy ........................ 47.6% 43.0% 47.5% 43.5% Equivalent Occupancy ............. 70.7% 65.2% 70.9% 66.1% NUMBER OF CONSOLIDATED AND NON-CONSOLIDATED (EQUITY JOINT VENTURES) HOSPITALS: Consolidated ..................... 195 281 195 281 Non-Consolidated (Equity Joint Ventures) .............. 12 24 12 24 ---------- ---------- ----------- ----------- Total Number of Hospitals ........ 207 305 207 305 ========== ========== =========== ===========
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