<PAGE>
FILED PURSUANT TO RULE 424(B)(3) AND RULE 424(C)
REGISTRATION NO. 333-84743
- --------------------------------------------------------------------------------
PROSPECTUS SUPPLEMENT NO. 4
To Prospectus Dated October 26, 1999
- --------------------------------------------------------------------------------
Triad Hospitals Holdings, Inc.
___________________
This prospectus supplement relates to the offer to exchange the 11%
Series B Senior Subordinated Notes due 2009 of Triad Hospitals Holdings, Inc.
(the "Company") which have been registered under the Securities Act for any and
all outstanding 11% Senior Subordinated Notes due 2009.
The following information supplements, and must be read in connection
with, the information contained in the Prospectus dated October 26, 1999 as
supplemented by Prospectus Supplement No. 1 dated November 16, 1999, Prospectus
Supplement No. 2 dated November 23, 1999 and Prospectus Supplement No. 3 dated
April 5, 2000 of the Company (the "Prospectus"). This Prospectus Supplement
must be delivered with a copy of the Prospectus. All capitalized terms used but
not defined herein have the meanings ascribed to them in the Prospectus.
The attached Quarterly Report on Form 10-Q filed by the Company with
the Securities and Exchange Commission for the fiscal quarter ended March 31,
2000 supplements the information provided in the Prospectus.
___________________
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities or passed
upon the adequacy or accuracy of the prospectus or this prospectus supplement.
Any representation to the contrary is a criminal offense.
The date of this prospectus supplement is May 18, 2000.
<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____ to _____
Commission file number 0-29816
Triad Hospitals, Inc.
(Exact name of registrant as specified in its charter)
Delaware 75-2816101
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
13455 Noel Road, Suite 2000
Dallas, Texas 75240
(Address of principal executive offices) (Zip Code)
(972) 789-2700
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO____
-----
Commission file number 333-84743
Triad Hospitals Holdings, Inc.
(Exact name of registrant as specified in its charter)
Delaware 51-0389776
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
13455 Noel Road, Suite 2000
Dallas, Texas 75240
(Address of principal executive offices) (Zip Code)
(972) 789-2700
(Registrant's telephone number, including area code)
Not Applicable
(Former name or address, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO____
-----
Indicate the number of shares outstanding of each of the issuer's classes
of common stock of the latest practical date.
As of April 30, 2000, the number of shares of common stock of Triad Hospitals,
Inc. outstanding was 34,019,988, and all of the shares of common stock of Triad
Hospitals Holdings, Inc. were owned by Triad Hospitals, Inc.
<PAGE>
Part I: Financial Information
Item 1: Financial Statements
TRIAD HOSPITALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the periods ended March 31, 2000 and 1999
Unaudited
(Dollars in millions, except per share amounts)
<TABLE>
<CAPTION>
For the three
months ended
------------
2000 1999
----- ----
<S> <C> <C>
Revenues......................................................................... $ 311.6 $ 367.6
Salaries and benefits............................................................ 126.4 156.9
Supplies......................................................................... 46.9 54.1
Other operating expenses......................................................... 63.5 81.7
Provision for doubtful accounts.................................................. 24.6 34.5
Depreciation..................................................................... 19.1 25.4
Amortization..................................................................... 1.7 2.6
Interest expense allocated from Columbia/HCA..................................... -- 17.7
Interest expense, net............................................................ 14.9 0.5
ESOP expense..................................................................... 1.2 --
Management fees allocated from Columbia/HCA...................................... -- 6.8
Gain on sale of assets........................................................... (4.2) --
Impairment of long-lived assets.................................................. 0.9 33.9
----------- -----------
Total operating expenses......................................................... 295.0 414.1
----------- -----------
Income (loss) before minority interests, equity in earnings and income tax
(provision) benefit.......................................................... 16.6 (46.5)
Minority interests in earnings of consolidated entities.......................... (2.3) (2.2)
Equity in earnings of affiliates................................................. 0.4 0.4
----------- -----------
Income (loss) before income tax (provision) benefit.............................. 14.7 (48.3)
Income tax (provision) benefit................................................... (6.7) 12.4
----------- -----------
Net income (loss)................................................................ $ 8.0 $ (35.9)
=========== ===========
Income (loss) per common share:
Basic........................................................................ $ 0.26 $ (1.20)
=========== ===========
Diluted...................................................................... $ 0.25 $ (1.20)
=========== ===========
Weighted average shares used in income (loss) per share calculations
Basic........................................................................ 31,339,859 29,898,688
Diluted...................................................................... 32,585,732 29,898,688
</TABLE>
See notes to the condensed consolidated financial statements.
2
<PAGE>
TRIAD HOSPITALS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
Unaudited
(Dollars in millions)
<TABLE>
<CAPTION>
March 31, December 31,
ASSETS 2000 1999
---- ----
Current assets
--------------
<S> <C> <C>
Cash and cash equivalents..................................................... $ 96.7 $ 70.9
Accounts receivable, less allowance for doubtful accounts
of $144.8 at March 31, 2000 and $156.7 at December 31, 1999................. 136.3 150.6
Inventories................................................................... 32.2 32.5
Deferred income taxes......................................................... 43.6 46.5
Other......................................................................... 54.4 52.9
-------- --------
Total current assets.......................................................... 363.2 353.4
Property and equipment, at cost:
Land.......................................................................... 63.4 63.4
Buildings..................................................................... 488.9 485.8
Equipment..................................................................... 627.3 626.5
Construction in progress...................................................... 49.2 44.8
-------- --------
1,228.8 1,220.5
Accumulated depreciation...................................................... (532.6) (520.8)
-------- --------
696.2 699.7
Intangible assets, net of accumulated amortization............................ 173.3 175.9
Investment in and advances to affiliates................................... 76.0 103.0
Other......................................................................... 8.9 9.1
-------- --------
Total assets.................................................................. $1,317.6 $1,341.1
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
-------------------
Accounts payable.............................................................. $ 49.5 $ 57.7
Accrued salaries.............................................................. 28.8 32.1
Current portion of long-term debt............................................. 15.8 18.3
Other current liabilities..................................................... 36.4 57.7
-------- --------
Total current liabilities..................................................... 130.5 165.8
Long-term debt................................................................ 534.2 537.1
Deferred taxes and other liabilities.......................................... 36.5 31.3
Minority interests in equity of consolidated entities......................... 47.8 47.0
Stockholders' equity
--------------------
Common stock $.01 par value; 90,000,000 shares authorized; 34,010,851
shares outstanding at March 31, 2000....................................... 0.3 0.3
Additional paid-in capital.................................................... 653.6 653.4
Unearned ESOP compensation and stockholder notes receivable................... (39.6) (40.1)
Accumulated deficit........................................................... (45.7) (53.7)
-------- --------
Total stockholders' equity.................................................... 568.6 559.9
-------- --------
Total liabilities and stockholders' equity.................................... $1,317.6 $1,341.1
======== ========
</TABLE>
See notes to condensed consolidated financial statements.
3
<PAGE>
TRIAD HOSPITALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the periods ended March 31, 2000 and 1999
Unaudited
(Dollars in millions)
<TABLE>
<CAPTION>
For the three
months ended
------------
2000 1999
---- ----
<S> <C> <C>
Cash flows from operating activities
Net income (loss)................................................................ $ 8.0 $(35.9)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities.................................................
Provision for doubtful accounts................................................ 24.6 34.5
ESOP expense................................................................... 1.2 --
Minority interests............................................................. 2.3 2.2
Equity in earnings of affiliates............................................... (0.4) (0.4)
Depreciation and amortization.................................................. 20.8 28.0
Deferred income taxes.......................................................... 6.7 (12.4)
Impairment of long-lived assets................................................ 0.9 33.9
Gain on sale of assets......................................................... (4.2) --
Increase (decrease) in cash from operating assets and liabilities
Accounts receivable.......................................................... (12.6) (25.6)
Inventories and other assets................................................. (1.2) 9.3
Accounts payable and other current liabilities............................... (33.4) 1.2
Other........................................................................ 0.2 --
------ ------
Net cash provided by operating activities...................................... 12.9 34.8
Cash flows from investing activities
Purchases of property and equipment............................................ (15.2) (19.8)
Proceeds received on sale of assets............................................ 4.0 --
Investment in and advances to affiliates....................................... 27.8 (0.7)
Other.......................................................................... 2.6 3.1
------ ------
Net cash provided by (used in) investing activities.............................. 19.2 (17.4)
Cash flows from financing activities
Payments of long-term debt..................................................... (5.5) (6.1)
Distributions to minority partners............................................. (1.5) (10.7)
Proceeds from issuance of common stock......................................... 0.7 --
Decrease in intercompany balances with Columbia/HCA, net....................... -- (0.6)
------ ------
Net cash used in financing activities........................................... (6.3) (17.4)
------ ------
Change in cash and cash equivalents.............................................. 25.8 --
Cash and cash equivalents at beginning of period................................. 70.9 --
------ ------
Cash and cash equivalents at end of period....................................... $ 96.7 $ --
====== ======
Interest payments................................................................ $ 6.2 $ 18.3
Income tax payments.............................................................. $ -- $ --
</TABLE>
See notes to the condensed consolidated financial statements.
4
<PAGE>
TRIAD HOSPITALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Unaudited
NOTE 1--BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Article
10 of Regulation S-X. Accordingly, they do not include all of the information
and notes required by generally accepted accounting principles for complete
financial statements of Triad Hospitals, Inc. ("Triad"). In the opinion of
management, all adjustments consisting only of normal recurring adjustments
necessary for a fair presentation have been included. Interim results are not
necessarily indicative of the results that may be expected for the year. The
condensed consolidated financial statements should be read in conjunction with
the consolidated financial statements and notes thereto for the year ended
December 31, 1999 included in Triad's Form 10-K.
The balance sheet at December 31, 1999 has been derived from the audited
financial statements at that date but does not include all of the information
and notes required by generally accepted accounting principles for complete
financial statements.
Certain prior amounts have been reclassified to conform to the current
presentation.
NOTE 2--COMPANY OPERATIONS
As of January 1, 2000, Triad owned or operated 30 hospitals (including one
facility that is leased from others, two facilities that are leased to others
and an investment in two hospitals that are accounted for using the equity
method), 14 free-standing ambulatory surgery centers (including two investments
in ambulatory surgery centers that are accounted for using the equity method)
and related health care entities. Two of these hospitals were designated as held
for sale and Triad expects to complete the sales of these facilities by December
31, 2000.
On February 11, 2000, Triad closed its acute care hospital in Roseburg,
Oregon, which was designated as held for sale. As of March 31, 2000, the
carrying value of this facility was $7.4 million. For the three months ended
March 31, 2000 and 1999, this facility had net revenues of $1.8 million and $6.2
million, respectively and pre-tax losses before impairment charges and income
tax benefit of $3.2 million and $0.6 million, respectively.
Triad received a loan payment from one of its hospital joint ventures of
$37.0 million on February 28, 2000.
On March 31, 2000, Triad sold its limited partnership interest in a
rehabilitation hospital located in Tucson, Arizona for $4.0 million. A gain of
$4.2 million was recognized on the sale.
NOTE 3 - IMPAIRMENT OF LONG-LIVED ASSETS
During the quarter ended March 31, 2000, Triad entered into negotiations to
cancel one of its physician management contracts. Accordingly, the carrying
value of the long-lived assets related to this entity of approximately $1.0
million was reduced to fair value, based on estimated disposal value, resulting
in a non-cash charge of $0.9 million. For the three months ended March 31, 2000
and 1999, this entity contributed revenues of $0.9 million and $1.1 million and
losses before impairment charges and income taxes of $0.8 million and $0.7
million, respectively.
In the quarter ended March 31, 1999, the carrying value of the long-lived
assets related to certain facilities that were sold during 1999 (3 hospital
facilities), of approximately $50.6 million, were reduced to fair value, based
on estimates of selling values, for a total non-cash charge of $30.8 million.
For the quarter ended March 31, 1999, these three facilities had net revenues of
approximately $25.0 million and incurred losses from continuing operations
before income tax benefit and the asset impairment charge of approximately $3.8
million.
During the quarter ended March 31, 1999, Triad recorded further impairment
losses of $3.1 million related to one hospital facility where the recorded asset
values were not deemed to be fully recoverable based upon the operating results,
trends and projected future cash flows. These assets will continue to be used
and are now recorded at estimated fair value, based upon discounted, estimated
future cash flows.
5
<PAGE>
TRIAD HOSPITALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Unaudited
NOTE 3 - IMPAIRMENT OF LONG-LIVED ASSETS (continued)
The impairment charges for the three months ended March 31, 2000 and 1999,
totaling $0.9 million and $33.9 million, respectively, did not have a
significant impact on Triad's cash flows and are not expected to significantly
impact cash flows for future periods.
NOTE 4--LONG-TERM DEBT
Triad's senior subordinated notes are guaranteed by all operating
subsidiaries of Triad (the "Subsidiary Guarantors"). The guarantee obligations
of the Subsidiary Guarantors are full, unconditional and joint and several. The
aggregate assets, liabilities, equity and earnings of the Subsidiary Guarantors
are substantially equivalent to the total assets, liabilities, equity and
earnings of the Company and its subsidiaries on a consolidated basis. Separate
financial statements of the Subsidiary Guarantors are not included in the
accompanying financial statements because management of Triad has determined
that separate financial statements would not be material to investors.
Triad does not wholly own certain Subsidiary Guarantors, although all
assets, liabilities, equity and earnings of these entities fully and
unconditionally joint and severally guarantee the senior subordinated notes. The
ownership percentages of Triad and its subsidiaries in these Triad-controlled
entities range from 51% to 95%.
Separate financial statements of the non-wholly owned Subsidiary Guarantors
have not been presented because management has determined that they would not be
material to investors. However, summarized combined financial information for
the non-wholly owned Subsidiary Guarantors are as follows:
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
---- ----
<S> <C> <C>
Summarized Balance Sheets
- -------------------------
Current assets................................................................ $ 9.2 $ 8.9
Non-current assets............................................................ 52.4 50.8
----- -----
Total assets.................................................................. $61.6 $59.7
===== =====
Current liabilities........................................................... $ 3.8 $ 3.0
Non-current liabilities....................................................... -- --
Equity........................................................................ 57.8 56.7
----- -----
Total liabilities and equity.................................................. $61.6 $59.7
===== =====
</TABLE>
<TABLE>
<CAPTION>
For the three months ended
--------------------------
March 31, March 31,
2000 1999
---- ----
<S> <C> <C>
Summarized Statements of Income
- -------------------------------
Revenues...................................................................... $15.1 $14.3
Net income.................................................................... $ 4.2 $ 4.6
</TABLE>
Non-current assets shown above include intercompany receivables of $24.6
million and $22.4 million as of March 31, 2000 and December 31, 1999,
respectively.
NOTE 5--STOCK BENEFIT PLANS
On February 18, 2000, Triad granted 1,009,000 stock options under the 1999
Long-Term Incentive Plan with an exercise price equal to the market price on the
date of the grant. On April 28, 2000, Triad granted 900,056 stock options under
the 1999 Long-Term Incentive Plan with an exercise price of $17.07, which was
the market price of the common stock on the effective date of grant, contingent
on shareholder approval of an amendment to the 1999 Long-Term Incentive Plan
increasing the numbers of shares available to 6,500,000. All options granted are
exercisable over a four-year period and expire 10 years from the date of the
grant.
6
<PAGE>
TRIAD HOSPITALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Unaudited
NOTE 6--INCOME (LOSS) PER SHARE
Income (loss) per common share is based on the weighted average number of
shares outstanding adjusted for the shares issued to Triad's Employee Stock
Ownership Plan ("ESOP"). The weighted average number of shares outstanding for
the three months ended March 31, 1999 assumes the shares issued at the spin-off
from Columbia/HCA of Triad on May 11, 1999 (the "Spin-off") were outstanding at
the beginning of 1999. Diluted weighted average shares outstanding is calculated
by adjusting basic weighted average shares outstanding by all potentially
dilutive stock options. Weighted average shares for the three months ended March
31, 2000 and 1999 are as follows:
<TABLE>
<CAPTION>
For the three For the three
months ended months ended
March 31, March 31,
2000 1999
---- ----
<S> <C> <C>
Weighted average shares exclusive of ESOP.............................. 31,302,359 28,898,688
Average of ESOP shares committed to be released........................ 37,500 --
---------- ----------
Basic weighted average shares outstanding.............................. 31,339,859 28,898,688
Effect of dilutive securities - employee stock options................. 1,245,873 --
---------- ----------
Diluted weighted average shares outstanding............................ 32,585,732 28,898,688
========== ==========
</TABLE>
NOTE 7 - SEGMENT AND GEOGRAPHIC INFORMATION
The distribution of Triad's revenues and EBITDA (which is used by
management for operating performance review, see (a)) are summarized in the
following table (dollars in millions):
<TABLE>
<CAPTION>
For the three months
ended March 31,
2000 1999
---- ----
<S> <C> <C>
Revenues:
East Division............................................................. $123.8 $109.4
West Division............................................................. 75.3 72.1
Central Division.......................................................... 85.7 75.5
Ambulatory Surgery Centers................................................ 12.9 12.0
Sold and Held for Sale.................................................... 8.4 93.7
Corporate and other....................................................... 5.5 4.9
------ ------
$311.6 $367.6
====== ======
EBITDA (a):
East Division............................................................. $22.1 $21.2
West Division............................................................. 13.2 12.5
Central Division.......................................................... 15.7 6.2
Ambulatory Surgery Centers................................................ 4.2 3.8
Sold and Held for Sale.................................................... (3.2) 5.9
Corporate and other....................................................... (1.4) (8.9)
----- -----
$50.6 $40.7
===== =====
</TABLE>
(a) EBITDA is defined as net income (loss) before depreciation, amortization,
interest expense, ESOP expense, gain on sale of assets, management fees,
impairment of long-lived assets, minority interest, and income taxes. EBITDA is
commonly used as an analytical indicator within the health care industry, and
also serves as a measure of leverage capacity and debt service ability. EBITDA
should not be considered as a measure of financial performance under generally
accepted accounting principles, and the items excluded from EBITDA should not be
considered in isolation or as an alternative to net income, cash flows generated
by operating, investing or financing activities or
7
<PAGE>
TRIAD HOSPITALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Unaudited
NOTE 7 - SEGMENT AND GEOGRAPHIC INFORMATION (continued)
financial statement data presented in the condensed consolidated financial
statements as an indicator of financial performance or liquidity. Because EBITDA
is not a measurement determined in accordance with generally accepted accounting
principles and is thus susceptible to varying calculations, EBITDA as presented
may not be comparable to other similarly titled measures of other companies.
NOTE 8--CONTINGENCIES
Columbia/HCA Investigations
Columbia/HCA is currently the subject of several federal investigations
into certain of its business practices, as well as governmental investigations
by various states. Columbia/HCA is cooperating in these investigations and
understands that it is a target in these investigations. Given the breadth of
the ongoing investigations, Columbia/HCA expects additional subpoenas and other
investigative and prosecutorial activity to occur in these and other
jurisdictions in the future. Columbia/HCA is a defendant in several qui tam
actions brought by private parties on behalf of the United States of America,
which have been unsealed and served on Columbia/HCA. The actions allege, in
general, that Columbia/HCA and certain subsidiaries and/or affiliated
partnerships violated the False Claims Act for improper claims submitted to the
government for reimbursement. The lawsuits seek damages of three times the
amount of all Medicare or Medicaid claims (involving false claims) presented by
the defendants to the federal government, civil penalties of not less than
$5,000 nor more than $10,000 for each such Medicare or Medicaid claim,
attorneys' fees and costs. To Triad's knowledge, the government has intervened
in at least seven qui tam actions against Columbia/HCA. Columbia/HCA is aware of
additional qui tam actions that remain under seal and believes that there are
other sealed qui tam cases of which it is unaware. On May 5, 2000, Triad was
advised that one of such qui tam actions which had recently been unsealed,
United States of America (ex.rel.Lanni) v. Curative Health Services. et. al.
(98 Civ. 2501, S.D.N.Y. August 24, 1999), listed three of its hospitals as among
the various named defendants. This qui tam action alleges various violations
arising out of relationships between Curative Health Services and the other
defendants. Two of the three Triad hospitals included as defendants ended their
relationship with Curative Health Services prior to the Spin-off, while the
third hospital maintains an ongoing relationship with Curative.
Columbia/HCA is a defendant in a number of other suits, which allege, in
general, improper and fraudulent billing, overcharging, coding and physician
referrals, as well as other violations of law. Certain of the suits have been
conditionally certified as class actions.
It is too early to predict the effect of outcome of any of the ongoing
investigations or qui tam and other actions, or whether any additional
investigations or litigations will be commenced. If Columbia/HCA is found to
have violated federal or state laws relating to Medicare, Medicaid or similar
programs, Columbia/HCA could be subject to substantial monetary fines, civil and
criminal penalties, and exclusion from participation in the Medicare and
Medicaid programs. Similarly, the amounts claimed in the qui tam and other
actions may be substantial, and Columbia/HCA could be subject to substantial
costs resulting from an adverse outcome of one or more of such actions.
In connection with the Spin-off, Columbia/HCA has agreed to indemnify Triad
in respect of any losses which it may incur as a result of the proceedings
described above. If any of such indemnified matters were successfully asserted
against Triad, or any of its facilities, and Columbia/HCA failed to meet its
indemnification obligations then such losses could have a material adverse
effect on the business, financial position, results of operations or prospects
of Triad. Columbia/HCA will not indemnify Triad for losses relating to any acts,
practices and omissions engaged in by Triad after the date of the Spin-off,
whether or not Triad is indemnified for similar acts, practices and omissions
occurring prior to the date of the Spin-off.
General Liability Claims
Triad is, from time to time, subject to claims and suits arising in the ordinary
course of business, including claims for damages for personal injuries, breach
of management contract or for wrongful restriction of an interference with
physician's staff privileges. In certain of these actions, claimants have asked
for punitive or other damages against Triad that may not be covered by
insurance. Triad is currently not a party to any such proceeding which, in
8
<PAGE>
TRIAD HOSPITALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Unaudited
NOTE 8--CONTINGENCIES (continued)
management's opinion, would have a material adverse effect on Triad's business,
financial condition or results of operations.
It is management's opinion that the ultimate resolution of these pending
claims and legal proceedings will not have a material adverse effect on Triad's
results of operations, financial position or cash flows.
9
<PAGE>
Part I: Financial Information
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
OVERVIEW
Triad owns and operates the health care service business which comprised
the Pacific Group of Columbia/HCA until the Spin-off. The Spin-off, which
occurred on May 11, 1999, marked the beginning of Triad's operations as an
independent, publicly traded company.
During 1999, Triad sold ten hospitals and two ambulatory surgery centers
and opened one new hospital, which is accounted for using the equity method. On
February 11, 2000, Triad ceased operations of one hospital. Triad sold its
partnership interest in a rehabilitation hospital on March 31, 2000.
The Spin-off, the sales of ten facilities and its partnership interest,
cessation of operations of one facility and the opening of one joint venture
facility significantly affects the comparability of the results of operations
for the three months ending March 31, 2000 to the three months ending March 31,
1999.
Information regarding Columbia/HCA included in this Report on Form 10-Q is
derived from reports and other information filed by Columbia/HCA with the
Securities and Exchange Commission.
FORWARD LOOKING STATEMENTS
This "Management's Discussion and Analysis of Financial Condition and
Results of Operations" contains disclosures which are "forward-looking
statements." Forward-looking statements include all statements that do not
relate solely to historical or current facts, and can be identified by the use
of words such as "may", "believe", "will", "expect", "project", "estimate",
"anticipate", "plan" or "continue". These forward-looking statements are based
on the current plans and expectations of Triad and are subject to a number of
uncertainties and risks that could significantly affect current plans and
expectations and the future financial condition and results of Triad. These
factors include, but are not limited to, (i) the highly competitive nature of
the health care business, (ii) the efforts of insurers, employers and others to
contain health care costs, (iii) possible changes in the Medicare and Medicaid
programs that may further limit reimbursements to health care providers and
insurers, (iv) changes in Federal, state or local regulations affecting the
health care industry, (v) the possible enactment of Federal or state health care
reform, (vi) the ability to attract and retain qualified management and
personnel, including physicians, (vii) claims and legal actions relating to
professional liabilities and other matters, (viii) fluctuations in the market
value of Triad's common stock, (ix) the departure of key executive officers from
Triad, (x) changes in accounting practices, (xi) changes in general economic
conditions, (xii) future divestitures which may result in additional charges,
(xiii) the ability to enter into managed care provider arrangements on
acceptable terms, (xiv) the availability and terms of capital to fund the
expansion of Triad's business, (xv) changes in business strategy or development
plans, (xvi) timeliness of reimbursement payments received under government
programs and (xvii) other risk factors. As a consequence, current plans
anticipated actions and future financial condition and results may differ from
those expressed in any forward-looking statements made by or on behalf of Triad.
Investors are cautioned not to unduly rely on such forward-looking statements
when evaluating the information presented in this "Management's Discussion and
Analysis of Financial Condition and Results of Operations."
RESULTS OF OPERATIONS
Revenue/Volume Trends
Triad's revenues continue to be affected by an increasing proportion of
revenue being derived from fixed payment, higher discount sources, including
Medicare, Medicaid and managed care plans. In addition, insurance companies,
government programs (other than Medicare) and employers purchasing health care
services for their employees are also negotiating discounted amounts that they
will pay health care providers rather than paying standard prices. Triad expects
patient volumes from Medicare and Medicaid to continue to increase due to the
general aging of the population and expansion of state Medicaid programs.
However, under the Federal Balanced Budget Act of 1997 (the "Balanced Budget
Act"), Triad's reimbursement from Medicare and Medicaid programs was reduced in
2000 and 1999 and will be further reduced with the phasing in of reductions in
reimbursement levels. Certain of the reductions from the Balanced Budget Act
will be mitigated by the Balanced Budget Refinement Act of 1999. The Balanced
Budget Act has accelerated a shift, by certain Medicare beneficiaries, from
traditional Medicare coverage to medical coverage that is provided under managed
care plans. Triad generally receives lower payments per patient under managed
care plans than under traditional indemnity insurance plans. With an increasing
10
<PAGE>
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (continued)
proportion of services being reimbursed based upon fixed payment amounts (where
the payment is based upon the diagnosis, regardless of the cost incurred or
level of service provided), revenues, earnings and cash flows are being reduced.
Patient revenues related to Medicare and Medicaid patients were 36.7% and 46.2%
of total patient revenues for the three months ended March 31, 2000 and 1999,
respectively. Patient revenues related to managed care plan patients were 34.4%
and 29.1% of total patient revenues for the three months ended March 31, 2000
and 1999, respectively. Patient revenues from capitation arrangements (prepaid
health service agreements) are less than 1% of net patient revenues.
As discussed previously, Triad sold ten hospitals during 1999 and ceased
operations of one hospital on February 11, 2000. These hospitals had revenues of
$1.3 million and $78.4 million for the three months ended March 31, 2000 and
1999, respectively and losses before gain on sales of assets, impairment charges
and income taxes of $2.7 million and $21.8 million, respectively.
Triad's revenues also continue to be affected by the trend toward certain
services being performed more frequently on an outpatient basis. Growth in
outpatient services is expected to continue in the health care industry as
procedures performed on an inpatient basis are converted to outpatient
procedures through continuing advances in pharmaceutical and medical
technologies. The redirection of certain procedures to an outpatient basis is
also influenced by pressures from payers to perform certain procedures as
outpatient care rather than inpatient care. Outpatient revenues were 51.0% and
45.5% of patient revenues for the three months ended March 31, 2000 and 1999,
respectively.
Reductions in the rate of increase in Medicare and Medicaid reimbursement,
increasing percentages of patient volume being related to patients participating
in managed care plans and continuing trends toward more services being performed
on an outpatient basis are expected to present ongoing challenges. The
challenges presented by these trends are magnified by Triad's inability to
control these trends and the associated risks. To maintain and improve its
operating margins in future periods, Triad must increase patient volumes while
controlling the costs of providing services. If Triad is not able to achieve
reductions in the cost of providing services through increased operational
efficiencies, and the trend toward declining reimbursements and payments
continues, results of operations and cash flows will deteriorate.
Management believes that the proper response to these challenges includes
the delivery of a broad range of quality health care services to physicians and
patients with operating decisions being primarily made by the local management
teams and local physicians.
In connection with the Spin-off, Columbia/HCA agreed to indemnify Triad for
any payments which it is required to make in respect of Medicare, Medicaid and
Blue Cross cost reports relating to periods ending on or prior to the date of
the Spin-off, and Triad agreed to indemnify Columbia/HCA for and pay to
Columbia/HCA any payments received by it relating to such cost reports. Triad
will be responsible for the filing of these cost reports and any terminating
cost reports. Triad has recorded a receivable from Columbia/HCA relating to the
indemnification of $29.6 million as of March 31, 2000.
11
<PAGE>
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
Operating Results Summary
The following is a summary of operating results for the three months ended March
31, 2000 and 1999 (dollars in millions, except per share amounts and ratios):
<TABLE>
<CAPTION>
For the three months ended
--------------------------
2000 1999
---- ----
Amount Percentage Amount Percentage
------ ---------- ------ ----------
<S> <C> <C> <C> <C>
Revenues................................................. $311.6 100.0 $367.6 100.0
Salaries and benefits.................................... 126.4 40.6 156.9 42.7
Supplies................................................. 46.9 15.1 54.1 14.7
Other operating expenses................................. 63.5 20.4 81.7 22.2
Provision for doubtful accounts.......................... 24.6 7.9 34.5 9.4
Depreciation and amortization............................ 20.8 6.7 28.0 7.6
Interest expense allocated from Columbia/HCA............. -- -- 17.7 4.8
Interest expense......................................... 14.9 4.8 0.5 0.1
ESOP expense............................................. 1.2 0.4 -- --
Management fees allocated from Columbia/HCA.............. -- -- 6.8 1.8
Gain on sale of assets................................... (4.2) (1.3) -- --
Impairment of long-lived assets.......................... 0.9 0.3 33.9 9.2
------ ----- ------ -----
295.0 94.7 414.1 112.6
------ ----- ------ -----
Income (loss) before minority interests, equity in
earnings and income tax (provision) benefit............ 16.6 5.3 (46.5) (12.6)
Minority interests in earnings of consolidated entities.. (2.3) (0.7) (2.2) (0.6)
Equity in earnings of affiliates......................... 0.4 0.1 0.4 0.1
------ ----- ------ -----
Income (loss) before income tax (provision) benefit...... 14.7 4.7 (48.3) (13.1)
Income tax (provision) benefit........................... (6.7) (2.1) 12.4 3.4
------ ----- ------ -----
Net income (loss)........................................ $ 8.0 2.6 $(35.9) (9.8)
====== ===== ====== =====
Income (loss) per common share
Basic.................................................. $ 0.26 $ (1.20)
Diluted................................................ $ 0.25 $ (1.20)
EBITDA (a)............................................... $ 50.6 $ 40.8
Number of hospitals at end of period (b)
Owned and managed...................................... 25 36
Joint ventures......................................... 2 1
Leased to others....................................... 2 2
-------- --------
Total.................................................. 29 39
Ongoing operations: (c)
Licensed beds at end of period (d)....................... 3,610 3,566
Available beds at end of period (e)...................... 3,177 3,123
Admissions (f)
Owned and managed...................................... 33,581 33,255
Joint ventures......................................... 2,681 1,525
-------- --------
Total.................................................. 36,262 34,780
Adjusted admissions (g).................................. 56,080 54,557
Outpatient visits........................................ 330,641 322,877
Surgeries................................................ 51,667 47,822
Average length of stay (h)............................... 4.5 4.6
Outpatient revenue percentage............................ 51.0% 49.8%
Inpatient revenue per admission.......................... $ 4,365 $ 4,236
Outpatient revenue per outpatient visit.................. $ 462 $ 433
Patient revenue per adjusted admission................... $ 5,336 $ 5,145
</TABLE>
(a) EBITDA is defined as net income (loss) before depreciation and amortization,
interest expense, ESOP expense, gain on sale of assets, management fees,
impairment of long-lived assets, minority interests in earnings of
consolidated entities, and income taxes. EBITDA is commonly used as an
analytical indicator within the health care industry, and also serves as a
measure of leverage capacity and debt service ability. EBITDA should not be
considered as a measure of financial performance under generally accepted
accounting principles, and the items excluded from EBITDA are significant
components in understanding and assessing financial performance. EBITDA
should not be considered in isolation or as an alternative to net income
(loss), cash flows generated by operating, investing or financing activities
or other financial statement data presented in the condensed consolidated
financial statements as an indicator of financial performance or liquidity.
Because EBITDA is not a measurement determined in accordance with generally
accepted accounting principles and is thus susceptible
12
<PAGE>
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
to varying calculations, EBITDA as presented may not be comparable to other
similarly titled measures of other companies.
(b) This table does not include any operating statistics, except for
admissions, for the joint ventures and facilities leased to others.
(c) Ongoing operations exclude facilities that were sold or closed.
(d) Licensed beds are those beds for which a facility has been granted approval
to operate from the applicable state licensing agency.
(e) Available beds are those beds a facility actually has in use.
(f) Represents the total number of patients admitted (in the facility for a
period in excess of 23 hours) to Triad's facilities and is used by
management and certain investors as a general measure of inpatient volume.
(g) Adjusted admissions is used by management and certain investors as a
general measure of combined inpatient and outpatient volume. Adjusted
admissions are computed by multiplying admissions (inpatient volume) by the
sum of gross inpatient revenue and gross outpatient revenue and then
dividing the resulting amount by gross inpatient revenue. The adjusted
admissions computation "equates" outpatient revenue to the volume measure
(admissions) used to measure inpatient volume resulting in a general
measure of combined inpatient and outpatient volume.
(h) Represents the average number of days an admitted patient stays in Triad's
hospitals. Average length of stay has declined due to the continuing
pressures from managed care and other payers to restrict admissions and
reduce the number of days that are covered by the payers for certain
procedures, and by technological and pharmaceutical improvements.
Three Months Ended March 31, 2000 and 1999
Income before income taxes increased to $14.7 million in the three
months ended March 31, 2000 from a loss of $48.3 million in the three months
ended March 31, 1999. The increase in pretax income was attributable to a $4.2
million gain on sale of a joint venture interest during the three months ended
March 31, 2000 and impairment charges of $33.9 million in the three months ended
March 31, 1999. Additional factors contributing to the increase were decreases
in losses of $19.1 million in the facilities that were divested and $6.7 million
improvement in the operations of the facilities that comprise ongoing
operations.
Revenues decreased 15.2% to $311.6 million in the three months ended March
31, 2000 compared to $367.6 million in the three months ended March 31, 1999.
Revenues declined primarily as a result of the facilities that were sold or
closed. In the three months ended March 31, 1999, these facilities had revenues
of $78.4 million. This decrease was partially offset by increases of $21.1
million for the facilities that comprise ongoing operations. For the three
months ended March 31, 2000 compared to the three months ended March 31, 1999,
admissions for the ongoing operations increased 1.0%, adjusted admissions
increased 2.8%, and revenues per adjusted admissions from ongoing operations
increased 4.3%. This was due primarily to a 2.4% increase in outpatient visits,
rate increases for outpatient procedures, and increased acuity in inpatient
procedures.
Salaries and benefits, as a percentage of revenues, decreased to 40.6% in
the three months ended March 31, 2000 from 42.7% in the three months ended March
31, 1999. For the three months ended March 31, 2000 and 1999, salaries and
benefits for the facilities sold or closed were $2.4 million and $40.5 million,
respectively. These salaries and benefits during the three months ended March
31, 2000 were primarily related to severance costs associated with the closure
of one facility in February 2000. Salaries and benefits for ongoing operations
decreased 0.3% as a percentage of revenue in the three months ended March 31,
2000 compared to the three months ended March 31, 1999. This decrease was
primarily attributable to a $2.8 million favorable adjustment relating to
Triad's retirement plan contributions. The decrease was partially offset by an
increase in costs per full time equivalent and the addition of corporate staff
after the Spin-off.
Supply costs increased as a percentage of revenues to 15.1% in the three
months ended March 31, 2000 from 14.7% in the three months ended March 31, 1999.
For the three months ended March 31, 1999, supplies for the facilities sold or
closed were $12.5 million. Supplies for ongoing operations increased 0.7% as a
percentage of revenue in the three months ended March 31, 2000 compared to the
three months ended March 31, 1999. This increase was attributable to higher
patient acuity and increase in prices.
Other operating expenses (primarily consisting of contract services,
professional fees, repairs and maintenance, rents and leases, utilities,
insurance and non-income taxes), decreased as a percentage of revenues to 20.4%
in the three months ended March 31, 2000 compared to 22.2% in the three months
ended March 31, 1999. For the three months ended March 31, 1999, other operating
expenses for the facilities sold or closed were $20.2
13
<PAGE>
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
million. Other operating expenses for ongoing operations decreased 1.3% as a
percentage of revenue in the three months ended March 31, 2000 compared to the
three months ended March 31, 1999. This decrease was due primarily to the
increase in revenues.
Provision for doubtful accounts, as a percentage of revenues, decreased to
7.9% in the three months ended March 31, 2000 compared to 9.4% in the three
months ended March 31, 1999. For the three months ended March 31, 1999,
provision for doubtful accounts for the facilities sold or closed was $10.6
million. Provision for doubtful accounts for ongoing operations decreased 0.4%
as a percentage of revenue in the three months ended March 31, 2000 compared to
the three months ended March 31, 1999. This was due primarily to improved
collections on accounts as a result of an increased focus by management after
the Spin-off.
Depreciation and amortization decreased as a percentage of revenues to 6.7%
in the three months ended March 31, 2000 from 7.6% in the three months ended
March 31, 1999, primarily due to $6.9 million in 1999 depreciation for the
facilities sold or closed.
Interest expense allocated from Columbia/HCA, which was represented by
interest incurred on the net intercompany balance with Columbia/HCA, was $17.7
million in the three months ended March 31, 1999. The intercompany balances were
eliminated at the Spin-off.
Interest expense, which is offset by $1.1 million of interest income,
increased to $14.9 million in the three months ended March 31, 2000 from $0.5
million in the three months ended March 31, 1999 due to the assumption of
additional debt from Columbia/HCA in the Spin-off.
Management fees allocated from Columbia/HCA were $6.8 million during the
three months ended March 31, 1999. No management fees were allocated during the
three months ended March 31, 2000 due to the Spin-off from Columbia/HCA.
Gain on sale of assets were $4.2 million during the three months ended
March 31, 2000 due to the sale of Triad's partnership interest in a
rehabilitation hospital during the quarter.
Impairments on long-lived assets were $0.9 million and $33.9 million during
the three months ended March 31, 2000 and 1999, respectively. The impairments
during 2000 were due to the carrying value of the long-lived assets related to
one physician management contract was reduced to fair value, based on estimated
disposal value. The impairments during 1999 were due to reductions of the book
value of certain facilities that Triad divested during 1999 to fair value, based
on estimates of selling values.
Minority interests, which are primarily related to one ambulatory surgery
center joint venture in Arizona, as a percentage of revenues remained relatively
unchanged in the three months ended March 31, 2000 compared to the three months
ended March 31, 1999.
Equity in earnings of affiliates remained unchanged for the three months
ended March 31, 2000 and 1999, respectively.
LIQUIDITY AND CAPITAL RESOURCES
Cash provided by operating activities was $12.9 million in the three months
ended March 31, 2000 compared to $34.8 million in the three months ended March
31, 1999. The decrease was due to a decrease in accounts payable and other
current liabilities and an increase in inventories and other assets. This was
offset by a smaller increase in accounts receivable in the three months ended
March 31, 2000 than in the three months ended March 31, 1999.
Cash provided by investing activities was $19.2 million in the three months
ended March 31, 2000 compared to cash used of $17.4 million in the three months
ended March 31, 1999. This was due to a $37.0 million loan repayment from one of
its hospital joint ventures during the three months ended March 31, 2000. Also,
Triad received $4.0 million in proceeds on the sale of its partnership interest
in a rehabilitation hospital during the three months ended March 31, 2000. Triad
expects to expend approximately $90 million ($65 million for expansion) in
capital expenditures for the remainder of 2000.
14
<PAGE>
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (continued)
Cash used in financing activities decreased to $6.3 million in the three
months ended March 31, 2000 compared to $17.4 million in the three months ending
March 31, 1999. This decrease was due to decreases in distributions to minority
partners.
Triad received a loan repayment from one of its hospital joint ventures of
$37.0 million on February 28, 2000.
On March 31, 2000 Triad sold its limited partnership interest in a
rehabilitation hospital located in Tucson, Arizona for $4.0 million. A gain of
$4.2 million was recognized on the sale.
Triad has a $125.0 million line of credit which bears interest at LIBOR
plus 2.75%. No amounts were outstanding under the revolving credit facility at
March 31, 2000.
In January 1999, Triad entered into a fifteen year lease with an
unaffiliated party for the operations of two acute care hospitals and three
ambulatory surgery centers, with lease payments of approximately $17.0 million
per year. The lessee has an option to purchase the facilities exercisable
annually beginning in January 2001 for approximately $130.0 million in January
2001. The lessee has notified Triad that it does not intend to exercise its
option in January 2001, although it may do so in the future.
On April 28, 2000, Triad purchased 28.7 acres of land for $2.5 million in
Las Cruces, New Mexico for future development.
At March 31, 2000, Triad had working capital of $232.7 million. Management
expects that operations and working capital facilities will provide sufficient
liquidity for the remainder of fiscal 2000.
CONTINGENCIES
Columbia/HCA is currently the subject of several federal investigations into
certain of its business practices, as well as governmental investigations by
various states. Management understands that Columbia/HCA is cooperating in these
investigations and that Columbia/HCA believes, through written notice and other
means, that it is a target in these investigations. Given the breadth of the
ongoing investigations, management understands that Columbia/HCA expects
additional subpoenas and other investigative and prosecutorial activity to occur
in these and other jurisdictions in the future.
Management believes that the ongoing governmental investigations and related
media coverage may have had a negative effect on Columbia/HCA's results of
operations, which includes Triad for the periods prior to the Spin-off which are
presented herein. The extent to which Triad may or may not continue in the
future to be affected by the ongoing investigations of Columbia/HCA, the
initiation of additional investigations, if any, and the related media coverage
cannot be predicted.
Pursuant to the distribution agreement entered into by and among Columbia/HCA
and Triad in connection with the Spin-off, Columbia/HCA has agreed to indemnify
Triad in respect of any losses which it may incur arising from the governmental
investigations described above and from stockholder actions and other legal
proceedings related to the governmental investigations which are currently
pending against Columbia/HCA.
Columbia/HCA has also agreed to indemnify Triad in respect of any losses
which it may incur as a result of proceedings which may be commenced by
government authorities or by private parties in the future that arise from acts,
practices or omissions engaged in prior to the Spin-off and related to the
proceedings described above. Columbia/HCA has also agreed that, in the event
that any hospital owned by Triad is permanently excluded from participation in
the Medicare and Medicaid programs as a result of the proceedings described
above, then Columbia/HCA will make a cash payment to Triad in an amount, if
positive, equal to five times the excluded hospital's 1998 income from
continuing operations before depreciation and amortization, interest expense,
management fees, impairment of long-lived assets, minority interests and income
taxes, as set forth on a schedule to the distribution agreement, less the net
proceeds of the sale or other disposition of the excluded hospital. Triad has
agreed that, in connection with the pending governmental investigations
described above, it will participate with Columbia/HCA in negotiating one or
more compliance agreements setting forth each of their agreements to comply with
applicable laws and regulations. If any of such indemnified matters were
successfully asserted against Triad, or any of its facilities, and Columbia/HCA
failed to meet its indemnification obligations, then such losses could have a
15
<PAGE>
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (continued)
material adverse effect on the business, financial position, results of
operations or prospects of Triad. Columbia/HCA will not indemnify Triad for
losses relating to any acts, practices and omissions engaged in by Triad after
the Spin-off, whether or not Triad is indemnified for similar acts, practices
and omissions occurring prior to the Spin-off.
Triad is subject to claims and suits arising in the ordinary course of
business, including claims for personal injuries or wrongful restriction of, or
interference with, physicians' staff privileges. In certain of these actions the
claimants may seek punitive damages against Triad, which are usually not covered
by insurance. It is management's opinion that the ultimate resolution of these
pending claims and legal proceedings will not have a material adverse effect on
Triad's results of operations or financial position.
HEALTH CARE REFORM
In recent years, an increasing number of legislative proposals have been
introduced or proposed to Congress and in some state legislatures that would
significantly affect health care systems in Triad's markets. The cost of certain
proposals would be funded, in significant part, by reduction in payments by
government programs, including Medicare and Medicaid, to health care providers
(similar to the reductions incurred as part of the Balanced Budget Act as
previously discussed). While Triad is unable to predict whether any proposals
for health care reform will be adopted, there can be no assurance that proposals
adverse to the business of Triad will not be adopted.
Item 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Triad is exposed to market risk related to changes in interest rates. No
derivatives are currently used to alter the interest rate characteristics of
Triad's debt instruments.
With respect to Triad's interest-bearing liabilities, approximately $226.5
million of long-term debt at March 31, 2000 is subject to variable rates of
interest, while the remaining balance in long-term debt of $323.5 million at
March 31, 2000 is subject to fixed rates of interest. The estimated fair value
of Triad's total long-term debt was $559.1 million at March 31, 2000. The
estimates of fair value are based upon the quoted market prices for the same or
similar issues of long-term debt with the same maturities. Based on a
hypothetical 1% increase in interest rates, the potential annualized losses in
future pretax earnings would be approximately $2.3 million. The impact of such a
change in interest rates on the carrying value of long-term debt would not be
significant. The estimated changes to interest expense and the fair value of
long-term debt are determined considering the impact of hypothetical interest
rates on Triad's borrowing cost and long-term debt balances. These analyses do
not consider the effects, if any, of the potential changes in Triad's credit
ratings or the overall level of economic activity. Further, in the event of a
change of significant magnitude, management would expect to take actions
intended to further mitigate its exposure to such change.
16
<PAGE>
Part II: Other Information
Item 6: Exhibits and Reports on Form 8-K.
(a) List of Exhibits:
Exhibit Number Description
- -------------- -----------
3.1 Certificate of Incorporation of Triad. Incorporated by
reference from Triad Hospitals' Quarterly Report on Form 10-
Q for the quarter ended March 31, 1999.
3.2 By-Laws of Triad. Incorporated by reference from Triad
Hospitals' Quarterly Report on Form 10-Q for the quarter
ended March 31, 1999.
3.3 Certificate of Incorporation of Triad Holdings. Incorporated
by reference from Triad Hospitals' Annual Report on Form 10-
K for the year ended December 31, 1999.
3.4 By-Laws of Triad Holdings. Incorporated by reference from
Triad Hospitals' Annual Report on Form 10-K for the year
ended December 31, 1999.
27.1 Financial Data Schedule for Triad (for Commission use only).
27.2 Financial Data Schedule for Triad Holdings (for Commission
use only).
(b) Reports on Form 8-K filed during the quarter ended March 31, 2000:
None
17
<PAGE>
SIGNATURES
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 thereunto duly authorized.
Triad Hospitals, Inc.
Date: March 12, 2000 By: /s/ BURKE W. WHITMAN
----------------------
Burke W. Whitman
Executive Vice President,
Chief Financial Officer and Treasurer
(Principal Financial Officer)
SIGNATURES
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 thereunto duly authorized.
Triad Hospitals Holdings, Inc.
Date: March 12, 2000 By: /s/ BURKE W. WHITMAN
----------------------
Burke W. Whitman
Executive Vice President,
Chief Financial Officer and Treasurer
(Principal Financial Officer)
18
<PAGE>
INDEX TO EXHIBITS
Exhibit Number Description
- -------------- -----------
3.1 Certificate of Incorporation of Triad. Incorporated by
reference from Triad Hospitals' Quarterly Report on Form 10-
Q for the quarter ended March 31, 1999.
3.2 By-Laws of Triad. Incorporated by reference from Triad
Hospitals' Quarterly Report on Form 10-Q for the quarter
ended March 31, 1999.
3.3 Certificate of Incorporation of Triad Holdings. Incorporated
by reference from Triad Hospitals' Annual Report on Form 10-
K for the year ended December 31, 1999.
3.4 By-Laws of Triad Holdings. Incorporated by reference from
Triad Hospitals' Annual Report on Form 10-K for the year
ended December 31, 1999.
27.1 Financial Data Schedule for Triad (for Commission use only).
27.2 Financial Data Schedule for Triad Holdings (for Commission
use only).
19
