<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from ___________ to ___________
Commission file number 33-39034
A. Full title of the plan and address of the plan, if different from
that of the issuer named below:
HBO & COMPANY PROFIT SHARING AND SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan and
the address of its principal executive office:
HBO & Company
301 Perimeter Center North
Atlanta, Georgia 30346
(770) 393-6000
<PAGE>
SNYDER, CAMP, STEWART & CO., LLP
CERTIFIED PUBLIC ACCOUNTANTS
3850 HOLCOMB BRIDGE ROAD
SUITE 210
NORCROSS, GEORGIA 30092
Independent Auditors' Report
----------------------------
Administrative Committee
HBO & Company Profit Sharing and Savings Plan
We have audited the accompanying statements of net assets available for
benefits of HBO & Company Profit Sharing and Savings Plan as of December 31,
1997 and 1996, and the related statements of changes in net assets available
for benefits for the years then ended. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of HBO & Company
Profit Sharing and Savings Plan at December 31, 1997 and 1996, and the
changes in net assets available for benefits for the years then ended, in
conformity with generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules are
presented for the purpose of additional analysis and are not a required part
of the basic financial statements but are supplementary information required
by the Securities and Exchange Commission and the Department of Labor's Rules
and Regulations for Reporting and Disclosure under the Employee Retirement
Income Security Act of 1974. The supplemental schedules have been subjected
to the auditing procedures applied in our audit of the basic financial
statements and, in our opinion, are fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
/s/ SNYDER, CAMP, STEWART & CO., LLP
SNYDER, CAMP, STEWART & CO., LLP
Atlanta, Georgia
May 27, 1998
<PAGE>
HBO & COMPANY PROFIT SHARING AND SAVINGS PLAN
Statements of Net Assets Available for Benefits
December 31, 1997 and 1996
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Assets:
Investments, at fair value:
HBO & Company Common Stock Fund $ 60,874,776 $ 37,178,326
Fidelity Magellan Fund 32,119,878 23,326,930
Fidelity Growth and Income Fund 34,011,540 22,435,878
Fidelity Retirement Money Market Fund 7,894,849 6,630,055
Fidelity Asset Manager 5,573,548 4,065,764
Fidelity Managed Income Fund 2,182,337 1,714,963
Fidelity Intermediate Bond Fund 2,507,457 1,744,475
Fidelity International Growth and Income Fund 2,418,736 1,545,592
Fidelity Blue Chip Growth Fund 9,852,141 5,440,319
Fidelity Equity Income II Fund 6,884,663 3,723,426
----------- -----------
Total investments 164,319,925 107,805,728
Contributions receivable from employer 461,898 331,097
Contributions receivable from participants 1,047,924 802,439
Loans receivable from participants 2,622,581 1,937,362
Accrued investment income 25,365 12,523
------------ -----------
Total assets 168,477,693 110,889,149
Liabilities - -
------------ -----------
Net assets available for benefits $168,477,693 $110,889,149
------------ -----------
------------ -----------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
HBO & COMPANY PROFIT SHARING AND SAVINGS PLAN
Statements of Changes in Net Assets Available for Benefits
For the Years Ended December 31, 1997 and 1996
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Additions to net assets attributed to:
Investment income $ 6,030,961 $ 6,348,812
Unrealized appreciation (depreciation) in fair
value of investments 29,863,816 9,395,315
Realized gain (loss) on sale of investments 5,923,294 4,043,165
------------- -------------
Net increase from investment activities 41,818,071 19,787,292
Contributions:
Employer 5,800,893 4,009,263
Participants 18,054,177 16,639,795
Interest income on loans to participants 185,273 70,910
-------------- --------------
Total additions 65,858,414 40,507,260
Deductions from net assets attributed to:
Benefits paid directly to participants (8,251,092) (7,282,613)
Administrative fees (18,778) (75)
-------------- --------------
Net increase 57,588,544 33,224,572
Net assets available for benefits:
Beginning of year 110,889,149 77,664,577
-------------- --------------
End of year $168,477,693 $110,889,149
-------------- --------------
-------------- --------------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
HBO & COMPANY PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements
December 31, 1997 and 1996
(1) DESCRIPTION OF PLAN
The following description of HBO & Company Profit Sharing and Savings
Plan (the "Plan") provides only general information. The Plan document
should be referred to for a more complete description of the Plan's
provisions.
The Plan is a defined contribution plan which covers all employees of
HBO & Company and HBO & Company of Georgia (jointly referred to herein
as the "Company") who have completed six months of service (12 months
for pre-1995 plan years) and have attained age 21 as of a Plan entry
date. The Plan's entry dates are January 1, April 1, July 1, and
October 1.
Each eligible employee can elect to defer a percentage of pretax
compensation, as defined, of from one to a maximum of fifteen percent
and may contribute such amounts to the Plan. Such deferral elections
must be made in whole percentages. If necessary, the salary deferral
contributions allowed by a participant will be reduced by the Plan's
Administrative Committee (see note 3) so that such contributions do
not cause the Plan to be discriminatory or exceed the limitations of
the Internal Revenue Code.
The Company also may contribute to the Plan at the election of the
Board of Directors through matching contributions and/or discretionary
contributions. Each participant's share of Company discretionary
contributions is related to the participant's compensation, as
defined. Company contributions may not exceed the maximum allowable as
a deduction as defined by the Internal Revenue Code. During 1997 and
1996, the Company contributed $.75 for each $1 contributed by
employees; however, this Company matching contribution was only
applicable for employee contributions of up to 4% of pretax
compensation. No Company discretionary contributions were authorized
for the years ended December 31, 1997 and 1996.
Participants are 100% vested in their pretax compensation
contributions and earnings thereon at all times. Company matching and
discretionary contributions credited to a participant's account and
earnings thereon vest on a graded basis. A participant becomes 20%
vested in his/her Company account after one year of service and an
additional 20% becomes vested in each of the following four years
until a participant fully vests after five years of service (effective
January 1, 1995). Prior to January 1, 1995, a participant became 20%
vested in his/her Company account after three years of service and an
additional 20% vested in each of the following four years until a
participant fully vested after seven years of service. Further, a
participant is automatically 100% vested without regard to years of
service in the event of termination due to death, disability, or
attainment of age 65. Allocation of Plan earnings/losses is based on a
participant's account balance in the respective fund.
(Continued)
<PAGE>
HBO & COMPANY PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
December 31, 1997 and 1996
(1) DESCRIPTION OF PLAN, CONTINUED
Forfeitures of terminated participants' nonvested accounts are
allocated among the remaining participants in the Plan at the end of
the Plan year as if the forfeitures are additional matching
contributions, as designated by the Administrative Committee. At
December 31, 1997, forfeited nonvested accounts amounted to $230,353.
These accounts may be used to reduce future employer contributions.
Participants have the option to direct the investment of their
accounts between ten investment funds: the Fidelity Retirement Money
Market Fund, the Fidelity Managed Income Fund, the Fidelity
Intermediate Bond Fund, the Fidelity Growth and Income Fund, the
Fidelity Magellan Fund, the Fidelity Asset Manager Fund, the Fidelity
International Growth and Income Fund, the Fidelity Blue Chip Growth
Fund, the Fidelity Equity Income II Fund and HBO & Company Common
Stock Fund.
Participants may borrow from their fund accounts a minimum of $1,000
up to a maximum equal to the lesser of $50,000 or 50% of their vested
account balance. Loan terms range up to 5 years, except that loan
terms for the purchase of a primary residence are at the discretion of
the Administrative Committee. The loans are secured by the balance in
the participant's account and bear interest at a rate determined by
the Administrative Committee. Principal and interest is paid ratably
through monthly payroll deductions.
Upon termination, participants under age 65 with account balances
totaling more than $3,500 may elect to (1) delay the distribution of
his/her accounts or (2) receive his/her vested benefits generally in a
lump sum distribution. The full value of benefits (regardless of
amount) are payable upon normal or postponed retirement or to
beneficiaries upon death of the participant. Participants with
balances totaling less than $3,500 or on total or permanent disability
receive a lump sum distribution of his/her vested benefits.
Under a provision of the Plan, the Company, through actions of its
Board of Directors, reserves the right to terminate the Plan. If the
Plan is terminated, each participant shall become fully vested as of
the termination date.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting records of the Plan are maintained on the accrual basis.
HBO & Company Common Stock and investment funds held for investment by
the Plan are stated at quoted market values from independent published
sources. Loans receivable from participants are stated at cost which
approximates fair value.
The change in the difference between current value and the cost of the
investments is reflected in the statement of changes in net assets
available for benefits as unrealized appreciation (depreciation) in
fair value of investments.
(Continued)
<PAGE>
HBO & COMPANY PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
December 31, 1997 and 1996
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
Realized gain (loss) on sale of investments is the difference between
the proceeds received and the average cost of investments sold.
Benefits are recorded when paid.
The preparation of financial statements in conformity with generally
accepted accounting principles requires the Plan administrator to make
estimates and assumptions that affect certain reported amounts and
disclosures. Accordingly, actual results may differ from those
estimates.
(3) ADMINISTRATION
The Company's Employee Benefits Administrative Committee (the
"Administrative Committee") is the Plan administrator. Fidelity is the
Trustee, with custodial responsibility for the Plan's assets. The Plan
is liable for all administrative expenses not paid by the Company. At
the direction of the Administrative Committee, the Plan's
administrative expenses for 1997 and 1996 were paid by the Company.
(4) INCOME TAX STATUS
The Plan is intended to be qualified under the Internal Revenue Code
(the "IRC"). A favorable ruling was obtained from the IRS as to the
tax exempt status of the Plan in May, 1997.
(5) TRANSACTIONS WITH PARTIES-IN-INTEREST
During the year ended December 31, 1997, the Plan purchased 780,292
shares of the Common Stock of HBO & Company, the Plan sponsor, for
$8,980,274, and sold 138,013 shares of the Common Stock of HBO &
Company for $8,449,660 in accordance with the terms of the Plan.
During the year ended December 31, 1996, the Plan purchased 433,718
shares of the Common Stock of HBO & Company, the Plan sponsor, for
$10,216,175, and sold 73,613 shares of the Common Stock of HBO &
Company for $5,067,732 in accordance with the terms of the Plan.
(Continued)
<PAGE>
HBO & COMPANY PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
December 31, 1997 and 1996
(6) RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for benefits
per the financial statements at December 31, 1997 and 1996 to Form 5500:
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Net assets available for benefits per the
financial statements $168,477,693 $110,889,149
Amounts allocated to withdrawing participants - (37,143)
------------ -------------
Net assets available for benefits per the
Form 5500 $168,477,693 $110,852,006
------------ -------------
------------ -------------
</TABLE>
The following is a reconciliation of benefits paid to participants per
the financial statements for the year ended December 31, 1997 to Form 5500:
<TABLE>
<CAPTION>
<S> <C>
Benefits paid to participants per the financial
statements $ 8,251,092
Add: Amounts allocated to withdrawing participants
at December 31, 1997 -
Less: Amounts allocated to withdrawing participants
at December 31, 1996 $ (37,143)
------------
Benefits paid to participants per Form 5500 $ 8,213,949
------------
------------
</TABLE>
Amounts allocated to withdrawing participants are recorded on the Form
5500 for benefit claims that have been processed and approved for
payment prior to December 31, but not yet paid as of that date.
(7) INVESTMENT FUNDS
The Plan provides for separate investment funds for participants as
described in note 1 to the financial statements. The following pages
summarize the net assets available for benefits and the changes in net
assets available for benefits for each fund for the years ended
December 31, 1997 and 1996.
<PAGE>
HBO & COMPANY PROFIT SHARING AND SAVINGS PLAN
Net Assets Available for Benefits by Investment Program
<TABLE>
<CAPTION>
HBO & Fidelity Fidelity Fidelity Fidelity
Company Fidelity Growth & Retirement Asset Managed
Common Magellan Income Money Mkt Manager Income
December 31, 1997 Stock Fund Fund Fund Fund Fund
----------------- ----- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Assets:
Investments at fair value $60,874,776 $32,119,878 $34,011,540 $7,894,849 $5,573,548 $2,182,337
Contributions receivable
from employer company 99,573 86,445 98,263 26,053 19,715 9,414
Contributions receivable
from participants 198,607 192,927 245,976 52,396 47,235 21,187
Loans receivable from
participants 159,570 572,707 780,128 597,244 246,510 100,566
Accrued investment income 25,365 - - - - -
----------- ----------- ----------- ---------- ---------- ----------
Total assets 61,357,891 32,971,957 35,135,907 8,570,542 5,887,008 2,313,504
----------- ----------- ----------- ---------- ---------- ----------
Liabilities - - - - - -
----------- ----------- ----------- ---------- ---------- ----------
Net assets available for
benefits $61,357,891 $32,971,957 $35,135,907 $8,570,542 $5,887,008 $2,313,504
----------- ----------- ----------- ---------- ---------- ----------
----------- ----------- ----------- ---------- ---------- ----------
</TABLE>
<TABLE>
<CAPTION>
Fidelity
Fidelity Int'l Fidelity Fidelity
Intermediate Growth Blue Chip Equity
Bond & Income Growth Income II
December 31, 1997 Fund Fund Fund Fund Total
----------------- ----- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C>
Assets:
Investments at fair value $2,507,457 $2,418,736 $9,852,141 $6,884,663 $164,319,925
Contributions receivable
from employer company 11,416 18,768 54,478 37,773 461,898
Contributions receivable
from participants 29,812 39,702 130,822 89,260 1,047,924
Loans receivable from
participants 95,503 679 61,168 8,506 2,622,581
Accrued investment income - - - - 25,365
---------- ---------- ---------- ---------- ------------
Total assets 2,644,188 2,477,885 10,098,609 7,020,202 168,477,693
---------- ---------- ---------- ---------- ------------
Liabilities - - - - -
---------- ---------- ---------- ---------- ------------
Net assets available for
benefits $2,644,188 $2,477,885 $10,098,609 $7,020,202 $168,477,693
---------- ---------- ---------- ---------- ------------
---------- ---------- ---------- ---------- ------------
</TABLE>
<TABLE>
<CAPTION>
HBO & Fidelity Fidelity Fidelity Fidelity
Company Fidelity Growth & Retirement Asset Managed
Common Magellan Income Money Mkt Manager Income
December 31, 1996 Stock Fund Fund Fund Fund Fund
----------------- ----- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Assets:
Investments at fair value $37,178,326 $23,326,930 $22,435,878 $6,630,055 $4,065,764 $1,714,963
Contributions receivable
from employer company 78,415 68,507 70,083 20,020 16,249 7,510
Contributions receivable
from participants 163,155 158,589 185,218 47,354 46,348 17,037
Loans receivable from
participants 252,247 407,180 375,431 550,217 190,808 84,842
Accrued investment income 12,523 - - - - -
---------- ---------- ---------- ---------- ---------- ----------
Total assets 37,684,666 23,961,206 23,066,610 7,247,646 4,319,169 1,824,352
---------- ---------- ---------- ---------- ---------- ----------
Liabilities - - - - - -
---------- ---------- ----------- ---------- ---------- ----------
Net assets available for
benefits $37,684,666 $23,961,206 $23,066,610 $7,247,646 $4,319,169 $1,824,352
---------- ---------- ----------- ---------- ---------- ----------
---------- ---------- ----------- ---------- ---------- ----------
</TABLE>
<TABLE>
<CAPTION>
Fidelity
Fidelity Int'l Fidelity Fidelity
Intermediate Growth Blue Chip Equity
Bond & Income Growth Income II
December 31, 1996 Fund Fund Fund Fund Total
----------------- ----- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C>
Assets:
Investments at fair value $1,744,475 $1,545,592 $5,440,319 $3,723,426 $107,805,728
Contributions receivable
from employer company 7,502 9,718 30,963 22,130 331,097
Contributions receivable
from participants 23,686 23,146 75,695 62,211 802,439
Loans receivable from
participants 83,991 (848) (9,528) 3,022 1,937,362
Accrued investment income - - - - 12,523
---------- ---------- --------- --------- ------------
Total assets 1,859,654 1,577,608 5,537,449 3,810,789 110,889,149
---------- ---------- --------- --------- ------------
Liabilities -- -- -- -- --
---------- ---------- --------- ---------- ------------
Net assets available for
benefits $1,859,654 $1,577,608 $5,537,449 $3,810,789 $110,889,149
---------- ---------- ---------- ---------- ------------
---------- ---------- ---------- ---------- ------------
</TABLE>
<PAGE>
HBO & COMPANY PROFIT SHARING AND SAVINGS PLAN
Changes in Net Assets Available for Benefits by Investment Program
For the Year Ended December 31, 1997
<TABLE>
<CAPTION>
HBO & Fidelity Fidelity Fidelity Fidelity
Company Fidelity Growth & Retirement Asset Managed
Common Magellan Income Money Mkt Manager Income
Stock Fund Fund Fund Fund Fund
----- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets
attributed to:
Investment income $ 74,474 $ 2,014,711 $ 1,517,739 $ 393,012 $ 476,161 $ 123,686
Unrealized appreciation
(depreciation) in fair
value of investments 19,095,278 3,921,248 4,922,587 - 375,918 -
Realized gain (loss) on
sale of investments 4,083,091 440,334 944,504 - 91,381 -
----------- ----------- ----------- ---------- ---------- ----------
Net increase from
investment activities 23,252,843 6,376,293 7,384,830 393,012 943,460 123,686
Contributions:
Employer 1,284,216 1,169,345 1,300,979 146,783 277,969 126,223
Participants 3,226,750 3,310,968 4,056,772 1,186,532 888,432 353,540
Interest income on loans
to participants 52,447 40,000 35,884 11,275 8,881 5,764
----------- ----------- ----------- ---------- ---------- ----------
Total additions 27,816,256 10,896,606 12,778,465 1,737,602 2,118,742 609,213
Deductions from net assets
attributed to:
Benefits expense (1,837,481) (1,419,222) (2,004,556) (961,136) (482,324) (118,830)
Administrative expense (3,028) (3,450) (5,775) (2,175) (1,425) (375)
Interfund transfers (2,302,522) (463,183) 1,301,163 548,605 (67,154) (856)
----------- ----------- ----------- ---------- ---------- ----------
Net increase 23,673,225 9,010,751 12,069,297 1,322,896 1,567,839 489,152
Net assets available for
benefits:
Beginning of year 37,684,666 23,961,206 23,066,610 7,247,646 4,319,169 1,824,352
----------- ----------- ----------- ---------- ---------- ----------
End of year $61,357,891 $32,971,957 $35,135,907 $8,570,542 $5,887,008 $2,313,504
----------- ----------- ----------- ---------- ---------- ----------
----------- ----------- ----------- ---------- ---------- ----------
</TABLE>
<TABLE>
<CAPTION>
Fidelity
Fidelity Int'l Fidelity Fidelity
Intermediate Growth Blue Chip Equity
Bond & Income Growth Income II
Fund Fund Fund Fund Total
----- ---- ---- --- ------
<S> <C> <C> <C> <C> <C>
Additions to net assets
attributed to:
Investment income $ 137,428 $ 141,226 $ 461,173 $ 691,351 $ 6,030,961
Unrealized appreciation
(depreciation) in fair
value of investments 26,729 (57,275) 1,124,404 454,927 29,863,816
Realized gain (loss) on
sale of investments (2,686) 40,864 191,142 134,664 5,923,294
---------- ---------- ----------- ----------- -------------
Net increase from
investment activities 161,471 124,815 1,776,719 1,280,942 41,818,071
Contributions:
Employer 151,079 215,476 664,495 464,328 5,800,893
Participants 506,630 698,766 2,315,581 1,510,206 18,054,177
Interest income on loans
to participants 4,393 2,899 15,119 8,611 185,273
---------- ---------- ----------- ----------- -------------
Total additions 823,573 1,041,956 4,771,914 3,264,087 65,858,414
Deductions from net assets
attributed to:
Benefits expense (163,019) (267,447) (591,898) (405,179) (8,251,092)
Administrative expense (975) (150) (675) (750) (18,778)
Interfund transfers 124,955 125,918 381,819 351,255 -
---------- ---------- ----------- ----------- -------------
Net increase 784,534 900,277 4,561,160 3,209,413 57,588,544
Net assets available for
benefits:
Beginning of year 1,859,654 1,577,608 5,537,449 3,810,789 110,889,149
---------- ---------- ----------- ----------- -------------
End of year $2,644,188 $2,477,885 $10,098,609 $7,020,202 $168,477,693
---------- ---------- ----------- ----------- -------------
---------- ---------- ----------- ----------- -------------
</TABLE>
<PAGE>
HBO & COMPANY PROFIT SHARING AND SAVINGS PLAN
Changes in Net Assets Available for Benefits by Investment Program
For the Year Ended December 31, 1996
<TABLE>
<CAPTION>
HBO & Fidelity Fidelity Fidelity Fidelity
Company Fidelity Growth & Retirement Asset Managed
Common Magellan Income Money Mkt Manager Income
Stock Fund Fund Fund Fund Fund
----- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets
attributed to:
Investment income $ 66,609 $ 3,771,860 $ 1,059,501 $ 335,819 $ 309,190 $ 88,638
Unrealized appreciation
(depreciation) in fair 8,607,960 (1,562,119) 1,835,419 - 34,814 -
value of investments
Realized gain (loss) on
sale of investments 3,035,321 281,560 606,782 - 84,485 -
----------- ----------- ----------- ---------- ---------- ----------
Net increase from investment
activities 11,709,890 2,491,301 3,501,702 335,819 428,489 88,638
Contributions:
Employer 927,855 1,075,583 857,839 92,490 240,557 104,062
Participants 3,142,699 3,997,950 3,334,740 1,077,317 1,000,904 482,826
Interest income on loans
to participants 11,497 13,422 15,267 13,135 3,719 2,192
----------- ----------- ----------- ---------- ---------- ----------
Total additions 15,791,941 7,578,256 7,709,548 1,518,761 1,673,669 677,718
Deductions from net assets
attributed to:
Benefits expense (2,243,845) (1,687,036) (1,528,871) (626,512) (334,009) (177,363)
Administrative expense - (75) - - - -
Interfund transfers 3,433,342 (4,846,890) 462,708 (494,209) (399,680) (128,731)
----------- ----------- ----------- ---------- ---------- ----------
Net increase 16,981,438 1,044,255 6,643,385 398,040 939,980 371,624
Net assets available for
benefits:
Beginning of year 20,703,228 22,916,951 16,423,225 6,849,606 3,379,189 1,452,728
----------- ----------- ----------- ---------- ---------- ----------
End of year $37,684,666 $23,961,206 $23,066,610 $7,247,646 $4,319,169 $1,824,352
----------- ----------- ----------- ---------- ---------- ----------
----------- ----------- ----------- ---------- ---------- ----------
</TABLE>
<TABLE>
<CAPTION>
Fidelity
Fidelity Int'l Fidelity Fidelity
Intermediate Growth Blue Chip Equity
Bond & Income Growth Income II
Fund Fund Fund Fund Total
----- ---- ---- --- ------
<S> <C> <C> <C> <C> <C>
Additions to net assets
attributed to:
Investment income $ 109,760 $ 51,435 $ 335,802 $ 220,198 $ 6,348,812
Unrealized appreciation
(depreciation) in fair (41,248) 81,145 278,578 160,766 9,395,315
value of investments
Realized gain (loss) on
sale of investments (6,275) 2,911 (818) 39,199 4,043,165
---------- ---------- ----------- ----------- -------------
Net increase from investment
activities 62,237 135,491 613,562 420,163 19,787,292
Contributions:
Employer 126,431 80,249 308,749 195,448 4,009,263
Participants 550,702 410,458 1,627,283 1,014,916 16,639,795
Interest income on loans
to participants 1,925 1,533 5,689 2,531 70,910
---------- ---------- ----------- ----------- -------------
Total additions 741,295 627,731 2,555,283 1,633,058 40,507,260
Deductions from net assets
attributed to:
Benefits expense (142,124) (54,485) (253,820) (234,548) (7,282,613)
Administrative expense - - - - (75)
Interfund transfers (177,753) 493,336 582,811 1,075,066 -
---------- ---------- ----------- ----------- -------------
Net increase 421,418 1,066,582 2,884,274 2,473,576 33,224,572
Net assets available for
benefits:
Beginning of year 1,438,236 511,026 2,653,175 1,337,213 77,664,577
---------- ---------- ----------- ----------- -------------
End of year $1,859,654 $1,577,608 $ 5,537,449 $ 3,810,789 $ 110,889,149
---------- ---------- ----------- ----------- -------------
---------- ---------- ----------- ----------- -------------
</TABLE>
<PAGE>
HBO & COMPANY PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
December 31, 1997 and 1996
(8) INVESTMENTS
During 1997 and 1996 the Plan's investments (including investments
bought and sold as well as held during the year) appreciated
(depreciated) in fair value as follows:
<TABLE>
<CAPTION>
Net
Appreciation
(Depreciation) Fair Value
in Fair Value at End
During Year of Year
----------- -------
<S> <C> <C>
Year ended December 31, 1997:
Fair value as determined by quoted market price:
HBO & Company Common Stock Fund $23,178,369 $ 60,874,776
Fidelity Magellan Fund 4,361,582 32,119,878
Fidelity Growth and Income Fund 5,867,091 34,011,540
Fidelity Retirement Money Market Fund - 7,894,849
Fidelity Asset Manager Fund 467,299 5,573,548
Fidelity Managed Income Fund - 2,182,337
Fidelity Intermediate Bond Fund 24,043 2,507,457
Fidelity International Growth and Income Fund (16,411) 2,418,736
Fidelity Blue Chip Growth Fund 1,315,546 9,852,141
Fidelity Equity Income II Fund 589,591 6,884,663
------------ ------------
$35,787,110 $164,319,925
------------ ------------
------------ ------------
</TABLE>
The current value of the HBO & Company Common Stock Fund, Fidelity
Magellan Fund, Fidelity Growth and Income Fund and Fidelity Blue Chip
Growth Fund held for investment at December 31, 1997 was $60,874,776,
$32,119,878, $34,011,540, and $9,852,141, respectively, each of which
represents an investment greater than 5% of the Plan's net assets.
<TABLE>
<CAPTION>
<S> <C> <C>
Year ended December 31, 1996:
Fair value as determined by quoted market price:
HBO & Company Common Stock Fund $11,643,281 $ 37,178,326
Fidelity Magellan Fund (1,280,559) 23,326,930
Fidelity Growth and Income Fund 2,442,201 22,435,878
Fidelity Retirement Money Market Fund - 6,630,055
Fidelity Asset Manager Fund 119,299 4,065,764
Fidelity Managed Income Fund - 1,714,963
Fidelity Intermediate Bond Fund (47,523) 1,744,475
Fidelity International Growth and Income Fund 84,056 1,545,592
Fidelity Blue Chip Growth Fund 277,760 5,440,319
Fidelity Equity Income II Fund 199,965 3,723,426
------------ -------------
$13,438,480 $107,805,728
------------ -------------
------------ -------------
</TABLE>
(Continued)
<PAGE>
HBO & COMPANY PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
December 31, 1997 and 1996
(8) INVESTMENTS, CONTINUED
The current value of the HBO & Company Common Stock Fund, Fidelity
Magellan Fund, Fidelity Growth and Income Fund, Fidelity Retirement
Money Market Fund and Fidelity Blue Chip Growth Fund held for
investment at December 31, 1996 was $37,178,326, $23,326,930,
$22,435,878, $6,630,055 and $5,440,319, respectively, each of which
represents an investment greater than 5% of the Plan's net assets.
The realized gain on the sale of investments during the years ended
December 31, 1997 and 1996 was determined as follows:
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Aggregate proceeds $ 27,104,707 $ 23,607,827
Aggregate cost (21,181,413) (19,564,662)
----------- -----------
Realized gain $ 5,923,294 $ 4,043,165
----------- -----------
----------- -----------
</TABLE>
During 1997 and 1996, the balance of unrealized appreciation
(depreciation) in the fair value of investments changed as follows:
<TABLE>
<CAPTION>
<S> <C>
Balance, December 31, 1995 $ 20,530,805
Current unrealized appreciation of investments,
net of realized gains (losses) 9,395,315
-----------
Balance, December 31, 1996 $ 29,926,120
Current unrealized appreciation of investments,
net of realized gains (losses) 29,863,816
-----------
Balance, December 31, 1997 $ 59,789,936
-----------
-----------
</TABLE>
<PAGE>
SUPPLEMENTARY INFORMATION
<PAGE>
HBO & COMPANY PROFIT SHARING AND SAVINGS PLAN
FEI # 37-0986839 - Plan #001
Item 27a - Schedule of Assets Held for Investment Purposes
DECEMBER 31, 1997
<TABLE>
<CAPTION>
(a) IDENTITY OF (e) CURRENT
PARTY INVOLVED (b) IDENTITY OF ISSUE (c) DESCRIPTION (d) COST VALUE
-------------- ----------------- ----------- ---- -----
<S> <C> <C> <C> <C>
FIDELITY INVESTMENTS SHARES
- -------------------- ------
Fidelity Magellan Fund 337,146 $ 25,683,731 $ 32,119,878
Fidelity Growth & Income Fund 892,691 24,543,314 34,011,540
Fidelity Retirement Money Market Fund 7,894,849 7,894,849 7,894,849
Fidelity Asset Manager Fund 303,736 4,960,130 5,573,548
Fidelity Managed Income Fund 2,182,337 2,182,337 2,182,337
Fidelity Intermediate Bond Fund 246,554 2,503,124 2,507,457
Fidelity International Growth & Income
Fund 122,778 2,395,236 2,418,736
Fidelity Blue Chip Growth Fund 249,674 8,547,688 9,852,141
Fidelity Equity Income II Fund 254,893 6,234,715 6,884,663
------------- -------------
84,945,124 103,445,149
COMPANY STOCK FUND SHARES
- ------------------ ------
* HBO & Company Common Stock 1,268,225 19,584,864 60,874,776
INTEREST
--------
PARTICIPANT LOANS Participant Loans 6-13% - 2,622,581
----------- -------------
Total investments held $104,529,988 $ 166,942,506
----------- -------------
----------- -------------
DECEMBER 31, 1996
(a) IDENTITY OF (e) CURRENT
PARTY INVOLVED (b) IDENTITY OF ISSUE (c) DESCRIPTION (d) COST VALUE
-------------- ----------------- ----------- ---- -----
FIDELITY INVESTMENTS SHARES
- -------------------- ------
Fidelity Magellan Fund 289,237 $ 20,812,030 $ 23,326,930
Fidelity Growth & Income Fund 730,097 17,890,239 22,435,878
Fidelity Retirement Money Market Fund 6,630,055 6,630,055 6,630,055
Fidelity Asset Manager Fund 246,859 3,828,264 4,065,764
Fidelity Managed Income Fund 1,714,963 1,714,963 1,714,963
Fidelity Intermediate Bond Fund 173,063 1,766,871 1,744,475
Fidelity International Growth & Income
Fund 79,058 1,464,818 1,545,592
Fidelity Blue Chip Growth Fund 166,422 5,260,270 5,440,319
Fidelity Equity Income II Fund 156,776 3,528,406 3,723,426
------------ -----------
62,895,916 70,627,402
COMPANY STOCK FUND SHARES
- ------------------ ------
* HBO & Company Common Stock 626,161 14,983,691 37,178,326
INTEREST
--------
PARTICIPANT LOANS Participant Loans 6-10% - 1,937,362
- ----------------- ----------- -----------
Total investments held $77,879,607 $109,743,090
----------- -----------
----------- -----------
</TABLE>
* Party in interest.
<PAGE>
HBO & COMPANY PROFIT SHARING AND SAVINGS PLAN
FEI # 37-0986839 - Plan #001
Item 27d - Schedule of Reportable Transactions
Transactions or Series of Transactions in Excess of Five Percent
of the Current Value of Plan Assets
<TABLE>
<CAPTION>
Number of
(a) Identity of (b) Description Number of Shares or (c) Purchase (d) Selling
Party Involved of Assets Transactions Units Price Price
-------------- ---------- ------------ --------- -------- -------
<S> <C> <C> <C> <C> <C>
Category (iii) - A series of transactions in excess of 5% of plan assets:
December 31, 1997
HBO & Company Common Stock
Purchases 136 780,292 $ 8,980,274
Sales 109 138,013 $ 8,449,660
Fidelity Magellan
Purchases 209 86,379 7,849,019
Sales 178 38,470 3,417,652
Fidelity Growth & Income Fund
Purchases 223 315,512 11,165,320
Sales 174 152,918 5,456,748
Fidelity Retirement Money Mkt Fund
Purchases 198 4,512,275 4,512,275
Sales 171 3,268,259 3,268,259
Fidelity Blue Chip Growth Fund
Purchases 194 126,275 4,699,054
Sales 138 43,022 1,602,778
</TABLE>
<TABLE>
<CAPTION>
(h) Current Value
(g) Cost of Assets On (i) Net
(a) Identity of (b) Description of Transaction Gain
Party Involved of Assets Assets Date (Loss)
-------------- ------ ---- ------
<S> <C> <C> <C> <C>
Category (iii) - A series of transactions in excess of 5% of plan assets:
December 31, 1997
HBO & Company Common Stock
Purchases $ 8,980,274 $ 8,980,274
Sales 4,366,569 8,449,660 $ 4,083,091
Fidelity Magellan
Purchases 7,849,019 7,849,019
Sales 2,977,319 3,417,652 440,333
Fidelity Growth & Income Fund
Purchases 11,165,320 11,165,320
Sales 4,512,244 5,456,748 944,504
Fidelity Retirement Money Mkt Fund
Purchases 4,512,275 4,512,275
Sales 3,268,259 3,268,259 -
Fidelity Blue Chip Growth Fund
Purchases 4,699,054 4,699,054
Sales 1,411,636 1,602,778 191,142
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Number of
(a) Identity of (b) Description Number of Shares or (c) Purchase (d) Selling
Party Involved of Assets Transactions Units Price Price
-------------- ---------- ------------ --------- -------- -------
<S> <C> <C> <C> <C> <C>
December 31, 1996
HBO & Company Common Stock
Purchases 117 433,718 $ 10,216,175
Sales 84 73,613 $ 5,067,732
Fidelity Magellan
Purchases 217 126,174 9,873,435
Sales 179 96,596 7,591,360
Fidelity Growth & Income Fund
Purchases 216 270,435 7,790,872
Sales 157 130,199 3,752,932
Fidelity Retirement Money Mkt Fund
Purchases 183 2,866,332 2,866,332
Sales 147 2,280,845 2,280,845
Fidelity Blue Chip Growth Fund
Purchases 180 111,501 3,495,527
Sales 101 28,393 896,530
</TABLE>
<TABLE>
<CAPTION>
(h) Current Value
(g) Cost of Assets On (i) Net
(a) Identity of (b) Description of Transaction Gain
Party Involved of Assets Assets Date (Loss)
-------------- ------ ---- ------
<S> <C> <C> <C> <C>
December 31, 1996
HBO & Company Common Stock
Purchases $10,216,175 $10,216,175
Sales 2,032,411 5,067,732 $ 3,035,321
Fidelity Magellan
Purchases 9,873,435 9,873,435
Sales 7,309,800 7,591,360 281,560
Fidelity Growth & Income Fund
Purchases 7,790,872 7,790,872
Sales 3,146,151 3,752,932 606,781
Fidelity Retirement Money Mkt Fund
Purchases 2,866,332 2,866,332
Sales 2,280,845 2,280,845 -
Fidelity Blue Chip Growth Fund
Purchases 3,495,527 3,495,527
Sales 897,348 896,530 (818)
</TABLE>
<PAGE>
SIGNATURES
----------
THE PLAN. Pursuant to the requirements of the Securities Exchange Act
of 1934, the trustees (or other persons who administer the employee benefit
plan) have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
HBO & COMPANY PROFIT SHARING
AND SAVINGS PLAN
By: /s/ Jay P. Gilbertson
------------------------
Jay P. Gilbertson
By: /s/ Michael L. Kappel
------------------------
Michael L. Kappel
By: /s/ E. Christine Rumsey
------------------------
E. Christine Rumsey
DATE: June 29, 1998 (Each Member of the Committee
appointed under and pursuant
to the HBO & Company Profit
Sharing and Savings Plan)
<PAGE>
SNYDER, CAMP, STEWART & CO., LLP
CERTIFIED PUBLIC ACCOUNTANTS
3850 HOLCOMB BRIDGE ROAD
SUITE 210
NORCROSS, GEORGIA 30092
Exhibit 23
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8 No. 33-39034) pertaining to the HBO & Company Profit Sharing and
Savings Plan of our report dated May 27, 1998, with respect to the financial
statements and schedules of the HBO & Company Profit Sharing and Savings Plan
included in this Annual Report (Form 11-K) for the year ended December 31,
1997.
/s/ SNYDER, CAMP, STEWART & CO., LLP
--------------------------------------
SNYDER, CAMP, STEWART & CO., LLP
Atlanta, Georgia
June 24, 1998
