<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
FORM 10-Q
(Mark One)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the quarterly period ended September 30, 1995
-----------------------------------------------
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 0-11531
--------------
U.S. Healthcare, Inc.
----------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Pennsylvania 23-2229683
- --------------------------------------------- --------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
980 Jolly Road, P.O. Box 1109, Blue Bell, Pa. 19422-0770
- ----------------------------------------------- --------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (215) 628-4800
--------------------------
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 (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
--- ---
As of October 27, 1995, there were 138,994,220 shares of Common Stock, $.005
par value, and 14,536,530 shares of Class B Stock, $.005 par value,
outstanding.
1
<PAGE> 2
U.S. HEALTHCARE, INC.
INDEX
<TABLE>
<CAPTION>
Page
No.
----
<S> <C>
Part I - Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets - September 30, 1995 and
December 31, 1994 3
Consolidated Statements of Income - Three and nine months
ended September 30, 1995 and 1994 4
Consolidated Statement of Shareholders' Equity -
Nine months ended September 30, 1995 5
Consolidated Statements of Cash Flows - Nine months
ended September 30, 1995 and 1994 6
Note to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8 - 12
Part II - Other Information
Item 1. Legal Proceedings 13
Item 6. Exhibits and Reports on Form 8-K 14
Index to Exhibits 16
Exhibit 11 - Computation of Net Income Per Common and
Common Equivalent Share - Three and nine months
ended September 30, 1995 and 1994 17
</TABLE>
2
<PAGE> 3
U.S. HEALTHCARE, INC.
CONSOLIDATED BALANCE SHEETS
(amounts in thousands except per share data)
<TABLE>
<CAPTION>
September 30 December 31
1995 1994
------------ -----------
(unaudited)
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 130,107 $ 123,814
Marketable securities 1,043,293 1,009,244
Receivables 148,146 103,465
Other 33,870 38,453
---------- ----------
Total current assets 1,355,416 1,274,976
Property and equipment, less accumulated
depreciation 133,009 127,562
Marketable securities 40,239 33,405
Other long-term assets 36,143 27,944
---------- ----------
Total assets $1,564,807 $1,463,887
========== ==========
Liabilities and Shareholders' Equity
Current liabilities:
Medical costs payable $ 465,664 $ 378,321
Unearned premiums 61,698 32,283
Accounts payable and accrued liabilities 86,045 84,747
Income taxes payable 32,397 46,525
---------- ----------
Total current liabilities 645,804 541,876
Long-term liabilities 19,704 16,338
---------- ----------
Total liabilities 665,508 558,214
---------- ----------
Shareholders' equity:
Common stock, $.005 par value - 275,000
shares authorized; 148,687 and 148,307
shares issued in 1995 and 1994 743 741
Class B stock, $.005 par value - 50,000
shares authorized; 14,537 shares issued
and outstanding in 1995 and 1994 73 73
Additional paid-in capital 166,182 157,275
Retained earnings 1,062,576 899,072
Net unrealized gains (losses) on marketable
securities, less applicable income taxes 2,315 (27,203)
Common stock held in treasury - at cost;
9,710 and 2,821 shares in 1995 and 1994 (311,767) (105,892)
Unearned portion of restricted common stock (20,823) (18,393)
Shareholders' equity ---------- ----------
899,299 905,673
---------- ----------
Total liabilities and shareholders' equity $1,564,807 $1,463,887
========== ==========
</TABLE>
See accompanying note.
3
<PAGE> 4
U.S. HEALTHCARE, INC.
CONSOLIDATED STATEMENTS OF INCOME
(amounts in thousands except per share data)
(unaudited)
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30 September 30
-------------------------- -----------------------------
1995 1994 1995 1994
-------- -------- ---------- ----------
<S> <C> <C> <C> <C>
Revenue:
Premiums $895,398 $728,526 $2,523,553 $2,128,760
Investment income, including
net realized gains and losses 18,464 17,874 64,429 45,189
Other, principally
administrative services fees 13,827 8,420 40,215 23,669
-------- -------- ---------- ----------
927,689 754,820 2,628,197 2,197,618
Expenses:
Medical costs 671,517 501,752 1,876,522 1,484,705
Administrative, marketing
and other operating costs 106,313 82,722 296,762 235,664
-------- -------- ---------- ----------
777,830 584,474 2,173,284 1,720,369
-------- -------- ---------- ----------
Income before income taxes 149,859 170,346 454,913 477,249
Provision for income taxes 57,696 68,985 175,142 193,281
-------- -------- ---------- ----------
Net income $ 92,163 $101,361 $ 279,771 $ 283,968
======== ======== ========== ==========
Net income per common and common equivalent
share - primary and fully diluted $.60 $.63 $1.77 $1.75
Weighted average number of common and common
equivalent shares outstanding:
Primary basis 154,101 160,873 157,802 161,866
Fully diluted basis 154,419 161,073 157,830 162,070
</TABLE>
See accompanying note.
4
<PAGE> 5
U.S. HEALTHCARE, INC.
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
Nine months ended September 30, 1995
(amounts in thousands except per share data)
(unaudited)
<TABLE>
<CAPTION>
Common stock Class B stock
-------------------- ------------------ Additional
Number Par Number Par paid-in Retained
of shares value of shares value capital earnings
--------- ----- --------- ----- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1994 . . . 148,307 $741 14,537 $73 $157,275 $ 899,072
Exercise of stock options and
related tax benefits . . . . . . 255 1 - - 4,136 -
Purchase of treasury shares . . . - - - - - -
Net unrealized gains on
marketable securities, less
applicable income taxes . . . . . - - - - - -
Restricted common stock awarded . 137 1 - - 5,257 -
Restricted common stock canceled . (12) - - - (486) -
Earned portion of restricted
common stock . . . . . . . . . . - - - - - -
Cash dividends paid:
$.750 per common share . . . . . - - - - - (106,455)
$.675 per Class B share . . . . . - - - - - (9,812)
Net income . . . . . . . . . . . . - - - - - 279,771
------- ---- ------ --- -------- ----------
Balance at September 30, 1995 . . . 148,687 $743 14,537 $73 $166,182 $1,062,576
======= ==== ====== === ======== ==========
</TABLE>
<TABLE>
<CAPTION>
Unearned portion
Common stock of restricted
Net unrealized held in treasury common stock
gains (losses) ------------------ -------------------
on marketable Number Number Shareholders'
securities of shares Cost of shares Amount equity
---------- --------- ------ --------- ------ --------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1994 . . . $(27,203) (2,821) $(105,892) (469) $(18,393) $905,673
Exercise of stock options and
related tax benefits . . . . . . - - - - - 4,137
Purchase of treasury shares . . . - (6,889) (205,875) - - (205,875)
Net unrealized gains on
marketable securities, less
applicable income taxes . . . . . 29,518 - - - - 29,518
Restricted common stock awarded . - - - (137) (5,258) -
Restricted common stock canceled . - - - 12 486 -
Earned portion of restricted
common stock . . . . . . . . . . - - - 69 2,342 2,342
Cash dividends paid:
$.750 per common share . . . . . - - - - - (106,455)
$.675 per Class B share . . . . . - - - - - (9,812)
Net income . . . . . . . . . . . . - - - - - 279,771
-------- ------ --------- ---- -------- --------
Balance at September 30, 1995 . . . $ 2,315 (9,710) $(311,767) (525) $(20,823) $899,299
======== ====== ========= ==== ======== ========
</TABLE>
See accompanying note.
5
<PAGE> 6
U.S. HEALTHCARE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in thousands)
(unaudited)
<TABLE>
<CAPTION>
Nine months ended
September 30
--------------------------
1995 1994
-------- --------
<S> <C> <C>
Operating Activities:
Net income $279,771 $ 283,968
Adjustments to reconcile net income to cash flow
from operating activities:
Depreciation and amortization 24,065 20,182
Net realized (gains) losses on sales of marketable securities (6,576) 2,476
Other non-cash charges, net 4,670 934
Changes in operating assets and liabilities:
Receivables (44,681) 15,978
Medical costs payable 87,343 (11,177)
Unearned premiums 29,415 15,873
Accounts payable and accrued liabilities 1,298 22,623
Income taxes (25,577) (9,868)
Other, net (521) (639)
-------- ----------
Cash flow from operating activities 349,207 340,350
-------- ----------
Investing Activities:
Purchase of marketable securities (811,120) (1,087,811)
Purchase of property and equipment, net (25,300) (18,392)
Proceeds from maturities or sales of marketable securities 825,362 986,996
Other (12,411) (5,224)
-------- ----------
Cash flow from investing activities (23,469) (124,431)
--------- -----------
Financing Activities:
Proceeds from exercise of stock options 2,697 3,709
Purchase of treasury shares (205,875) (99,896)
Cash dividends paid (116,267) (81,549)
-------- ----------
Cash flow from financing activities (319,445) (177,736)
-------- ----------
Increase in cash and cash equivalents 6,293 38,183
Cash and cash equivalents at beginning of period 123,814 96,339
-------- ----------
Cash and cash equivalents at end of period $130,107 $ 134,522
======== ==========
Supplemental disclosure of cash flow information:
Income taxes paid, net of state income tax refunds $199,575 $ 204,734
Supplemental disclosure of non-cash financing activities:
Income tax benefits related to exercise of stock options $ 1,440 $ 2,245
</TABLE>
See accompanying note.
6
<PAGE> 7
U.S. HEALTHCARE, INC.
NOTE TO CONSOLIDATED FINANCIAL STATEMENTS
1. The financial information for the three and nine month periods ended
September 30, 1995 and 1994 included herein is unaudited. Such
information includes all adjustments, consisting of adjustments of a
normal and recurring nature, which, in the opinion of management, are
necessary for a fair presentation of the Company's consolidated financial
position and the results of its operations and cash flows. Additionally,
such information should be read in conjunction with Management's
Discussion and Analysis of Financial Condition and Results of Operations
included on pages 8 through 12 and the Consolidated Financial Statements
and Notes to Consolidated Financial Statements incorporated by reference
to the Company's Annual Report on Form 10-K for the year ended December
31, 1994.
7
<PAGE> 8
Management's Discussion and Analysis of Financial
Condition and Results of Operations
General
Substantially all of the Company's revenue is generated from premiums received
for health care coverage provided to its members. These premiums represent
approximately 97% of the Company's total revenue for the three month periods
ended September 30, 1995 and 1994, and 96% and 97% of total revenue for the
nine month periods ended September 30, 1995 and 1994, respectively. The
Company's operating expenses are primarily medical costs consisting principally
of medical claims and capitation costs.
The Company's results of operations depend in large part on accurately
predicting and effectively managing medical costs and other operating expenses.
A variety of factors and risks, including competition, changes in health care
practices, changes in federal or state laws and regulations or the
interpretations thereof, inflation, provider contract changes, new
technologies, government imposed surcharges, taxes or assessments, reductions
in provider payments by governmental payors (including Medicare) (such
reductions may cause providers to seek higher payments from private payors),
major epidemics, disasters and numerous other factors affecting the delivery
and cost of health care, may in the future affect the Company's ability to
control its medical costs and other operating expenses. Governmental action
(including downward adjustments to premium rates requested by the Company,
which could result in adjusted rates lower than premium rates then in effect)
or business conditions (including intensification of competition and the other
factors described above) could result in premium revenues not increasing to
offset increases in medical costs and other operating expenses. Once set,
premiums are generally fixed for one year periods and, accordingly,
unanticipated costs during such periods cannot be recovered through higher
premiums. The expiration, suspension or termination of contracts to provide
health coverage for governmental entities or other significant customers would
also negatively impact the Company. Due to these factors and risks, no
assurance can be given with respect to the Company's premium levels or its
ability to control its medical costs.
Legislative and regulatory proposals have been made at the federal and state
government levels related to the health care system, including but not limited
to limitations on managed care organizations (including benefit mandates) and
reform of the Medicare and Medicaid programs. Such legislative or regulatory
action could have the effect of reducing the premiums paid to the Company by
governmental programs or increasing the Company's medical costs. Specifically,
pending federal legislation would reduce the premiums payable to the Company
under the Medicare program as compared to previously announced levels; other
pending legislation could have the result of reducing the premiums payable to
the Company under state Medicaid programs. The Company is unable to predict
the specific content of any legislation or regulation that may be enacted or
when any such legislation or regulation will be adopted. Therefore, the
Company cannot predict the effect of such legislation or regulation on the
Company's business.
8
<PAGE> 9
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Three months ended September 30, 1995 and 1994
Operations
Premiums and other revenue (principally administrative services fees) for the
quarter increased $172,279,000, or 23% compared to the third quarter of 1994.
Principal factors for the increase are a 20% growth in U.S. Healthcare-insured
health plan membership (334,000 members since September 30, 1994) and higher
weighted average premiums. Weighted average HMO premiums increased 2% to $149
per member per month, principally due to an increase in the proportion of total
membership in Medicare plans, which plans have higher premiums per member than
the Company's other HMO plans. The average premium for U.S. Healthcare-insured
non-Medicare HMO plans, which at September 30, 1995 had about 1,911,000
members, was $137 per member per month for the current quarter, compared to
$139 for the third quarter of 1994. Compared to the third quarter of 1994, the
average premium for the Medicare plans, which at September 30, 1995 had about
90,000 members, decreased 5% to $434 per member per month. On September 30,
1995, the Company also had about 9,000 members in U.S. Healthcare-insured
indemnity plans.
The following tables show premiums earned during the quarter and the increase
in premiums compared to the third quarter of 1994 by plan type and region
(amounts in thousands):
Premiums by plan type:
<TABLE>
<CAPTION>
Three months ended
September 30, 1995 Increase
-------------------- --------
<S> <C> <C>
Commercial plans $760,422 $ 94,274
Medicare plans 105,957 59,908
Medicaid and other plans 29,019 12,690
-------- --------
$895,398 $166,872
======== ========
</TABLE>
Premiums by region:
<TABLE>
<CAPTION>
Three months ended
September 30, 1995 Increase
---------------------- --------
<S> <C> <C>
Mid-Atlantic $470,925 $ 47,212
Northeastern 395,106 104,665
Southern 29,367 14,995
-------- --------
$895,398 $166,872
======== ========
</TABLE>
Investment income increased $590,000, or 3% over the third quarter of 1994,
principally due to earnings from higher average investment portfolio balances.
9
<PAGE> 10
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Three months ended September 30, 1995 and 1994
Other revenue (principally administrative services fees) increased $5,407,000,
or 64% over the third quarter of 1994, principally due to a 39% increase in
membership in employer-funded health plans. On September 30, 1995, the Company
had about 361,000 members in employer-funded health plans.
Medical costs increased $169,765,000, or 34% over the third quarter of 1994,
primarily due to a 20% growth in U.S. Healthcare-insured health plan
membership, plus higher costs per member. Compared to the third quarter of
1994, the weighted average medical cost per HMO member increased 11% to $111
per member per month. Factors for the per member increase include changes in
product mix, contractual changes in provider rates, higher specialist usage,
higher capitation rates and the enhancement of the Medicare program to include
a pharmacy benefit for most Medicare members.
Administrative, marketing and other operating costs increased $23,591,000, or
29% over the third quarter of 1994. Personnel costs contributed the largest
increase as a result of higher salaries, an increase in the number of employees
necessitated, in part, by higher business volume and changes in product mix and
increased marketing capability.
10
<PAGE> 11
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Nine months ended September 30, 1995 and 1994
Operations
Premiums and other revenue (principally administrative services fees) increased
$411,339,000, or 19% compared to the first nine months of 1994. Principal
factors for the increase are a 20% increase in U.S. Healthcare-insured health
plan membership and higher weighted average premiums. Weighted average HMO
premiums increased 2% to $148 per member per month, principally due to an
increase in the proportion of total membership in Medicare plans, which plans
have higher premiums per member than the Company's other HMO plans. The average
premium for U.S. Healthcare-insured non-Medicare HMO plans, which at September
30, 1995 had about 1,911,000 members was $137 per member per month for the
first nine months of 1995, compared to $138 for the first nine months of 1994.
The average premium for the Medicare plans, which at September 30, 1995 had
about 90,000 members, decreased 4% to $441 per member per month. On September
30, 1995, the Company also had about 9,000 members in U.S. Healthcare-insured
indemnity plans.
The following tables show premiums earned during the first nine months and the
increase in premiums compared to the first nine months of 1994 by plan type and
region (amounts in thousands):
Premiums by plan type:
<TABLE>
<CAPTION>
Nine months ended
September 30, 1995 Increase
---------------------- --------
<S> <C> <C>
Commercial plans $2,190,572 $230,772
Medicare plans 255,262 127,029
Medicaid and other plans 77,719 36,992
---------- --------
$2,523,553 $394,793
========== ========
</TABLE>
Premiums by region:
<TABLE>
<CAPTION>
Nine months ended
September 30, 1995 Increase
---------------------- --------
<S> <C> <C>
Mid-Atlantic $1,386,033 $148,501
Northeastern 1,067,747 217,037
Southern 69,773 29,255
---------- --------
$2,523,553 $394,793
========== ========
</TABLE>
Investment income increased $19,240,000, or 43% over the first nine months of
1994, due to gains on sales of marketable securities, an increase in the
average yield on investments and earnings from higher average investment
portfolio balances.
11
<PAGE> 12
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Nine months ended September 30, 1995 and 1994
Other revenue (principally administrative services fees) increased $16,546,000,
or 70% over the first nine months of 1994, principally due to a 39% increase in
membership in employer-funded health plans. On September 30, 1995, the Company
had about 361,000 members in employer-funded health plans.
Medical costs increased $391,817,000, or 26% over the first nine months of
1994, primarily due to a 20% increase in U.S. Healthcare-insured health plan
membership, plus higher costs per member. Compared to the first nine months of
1994, the weighted average medical cost per HMO member increased 9% to $110 per
member per month. Factors for the per member increase include changes in
product mix, contractual changes in provider rates, higher specialist usage,
higher capitation rates and the enhancement of the Medicare program to include
a pharmacy benefit for most Medicare members.
Administrative, marketing and other operating costs increased $61,098,000, or
26% over the first nine months of 1994. Personnel costs contributed the
largest increase as a result of higher salaries, an increase in the number of
employees necessitated, in part, by higher business volume and changes in
product mix and increased marketing capability.
Liquidity and capital resources
The Company's liquidity requirements have been met from cash flows generated by
operating activities. In the first nine months of 1995, net cash flows from
such activities were $349,207,000. The Company believes that its existing
financial resources are sufficient to meet its liquidity needs.
The Company is subject to federal and state regulations which require the
Company's subsidiaries to maintain certain levels of tangible net assets, as
defined, for use in their own operations. Some states also require prior
approval before funds are transferred to affiliates.
12
<PAGE> 13
Part II - Other Information
Item 1. Legal Proceedings
On October 12, 1993, the Company filed a petition with the New York State
Supreme Court seeking to stay and annul the Opinion and Decision of
Superintendent of Insurance of the State of New York dated September 30, 1993,
which would have reduced the premium rates for the Company's New York HMO for
the twelve month period beginning October 1, 1993 by a weighted average of 3.9%
from the rates in effect for the preceding twelve month period. On November 1,
1993, the Court held a hearing and ordered that a stay should be granted.
Accordingly, for New York HMO group contracts renewed or entered into during
the first quarter of 1994, the Company generally charged the premium rates in
effect during the third quarter of 1993. The Court entered a written Order and
Decision on July 8, 1994, implementing the November 1, 1993 oral decision on
the basis that the Superintendent violated the New York Insurance Law (by
reducing the Company's premium rates without giving the Company an opportunity
to oppose the reduction) and remanding the matter to the Superintendent for a
proper hearing. On August 4, 1994, the Superintendent filed a Notice of Appeal
with the Appellate Division; the appeal was dismissed on October 11, 1994. On
October 13, 1994, the Superintendent moved for permission to appeal to the
Appellate Division; this motion was denied on January 17, 1995. The
Superintendent did not appeal from the decisions of the Appellate Division.
The portion of the litigation related to rates for contracts entered into or
renewed on or after April 1, 1994 through September 30, 1994 was implicitly
mooted by the Superintendent's Opinion and Decision dated April 29, 1994
approving revised rates for such period, leaving only that portion of the
litigation related to rates for contracts entered into or renewed during the
first quarter of 1994 subject to a possible hearing. On August 15, 1995, the
Superintendent informed the Company that the Superintendent did not believe
such a hearing would serve a useful purpose and that the Superintendent would
agree to a stipulation dismissing the action. Such a stipulation is expected
to be executed and filed in the near future.
In July 1995, certain lawyers alleging to represent a sole corporate
shareholder filed a purported class action complaint in the United States
District Court for the Eastern District of Pennsylvania seeking unspecified
damages. The complaint alleges that the Company and two of its executive
officers, through certain misrepresentations and omissions about the Company,
violated federal securities laws and related common law. The Company has
denied the allegations and continues to defend this action vigorously.
The Company is involved in legal actions concerning benefit plan coverage
and other decisions by the Company, and alleged medical malpractice by
participating providers. If found liable in such actions, which are vigorously
defended on several grounds, the Company may bear financial responsibility.
The Company is also involved in certain other claims and legal actions arising
in the ordinary course of business. In the opinion of management, these claims
and legal actions will not have a material adverse effect on the Company's
consolidated financial position, results of operations or cash flows.
13
<PAGE> 14
Part II - Other Information
Items 2 through 5 are not applicable.
Item 6. Exhibits and Reports on Form 8-K
(a) 1. See Exhibit 11 on page 17.
2. Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K. No reports on Form 8-K were filed during
the quarter for which this report on Form 10-Q is being filed.
14
<PAGE> 15
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed by the undersigned
thereunto duly authorized.
U.S. HEALTHCARE, INC.
------------------------------------
Date: November 9, 1995 By: /s/ James H. Dickerson, Jr.
---------------------- ---------------------------------
James H. Dickerson, Jr.
Chief Financial Officer
15
<PAGE> 16
Index to Exhibits
<TABLE>
<CAPTION>
Page
Exhibit No. No.
- ----------- ----
<S> <C> <C>
11. Computation of Net Income Per Common and
Common Equivalent Share - Three and nine months
ended September 30, 1995 and 1994 17
27. Financial Data Schedule
</TABLE>
16
<PAGE> 1
Exhibit 11
U.S. HEALTHCARE, INC.
COMPUTATION OF NET INCOME PER COMMON AND COMMON EQUIVALENT SHARE
(amounts in thousands except per share data)
(unaudited)
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30 September 30
------------------------- ------------------------
1995 1994 1995 1994
--------- -------- --------- --------
<S> <C> <C> <C> <C>
Net income $ 92,163 $101,361 $279,771 $283,968
======== ======== ======== ========
Weighted average number of common shares:
Shares outstanding at beginning of period 139,363 144,727 145,486 146,718
Effect of exercise of stock options 18 40 159 189
Restricted stock awarded 32 41 73 260
Restricted stock canceled - - (12) -
Conversion of Class B stock to common stock - - - 4
Purchase of treasury shares (284) - (3,168) (1,437)
Weighted average number of common equivalent shares:
Additional equivalent shares issuable from
assumed exercise of stock options 435 1,012 727 1,079
Additional equivalent shares issuable from
conversion of Class B stock 14,537 15,053 14,537 15,053
------- ------- ------- -------
Weighted average number of common and common equivalent
shares outstanding - primary basis 154,101 160,873 157,802 161,866
Incremental additional equivalent shares issuable
from application of fully diluted computation 318 200 28 204
------- ------- ------- -------
Weighted average number of common and common equivalent
shares outstanding - fully diluted basis 154,419 161,073 157,830 162,070
======= ======= ======= =======
Net income per common and common equivalent
share - primary and fully diluted $.60 $.63 $1.77 $1.75
==== ==== ===== =====
</TABLE>
17
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
SEPTEMBER 30, 1995 FORM 10-Q OF U.S. HEALTHCARE, INC. AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 130,107
<SECURITIES> 1,043,293
<RECEIVABLES> 139,216
<ALLOWANCES> 15,001
<INVENTORY> 0
<CURRENT-ASSETS> 1,355,416
<PP&E> 219,432
<DEPRECIATION> 86,423
<TOTAL-ASSETS> 1,564,807
<CURRENT-LIABILITIES> 645,804
<BONDS> 0
<COMMON> 743
0
0
<OTHER-SE> 898,556
<TOTAL-LIABILITY-AND-EQUITY> 1,564,807
<SALES> 0
<TOTAL-REVENUES> 2,628,197
<CGS> 0
<TOTAL-COSTS> 2,173,284
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 454,913
<INCOME-TAX> 175,142
<INCOME-CONTINUING> 279,771
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 279,771
<EPS-PRIMARY> 1.77
<EPS-DILUTED> 1.77
</TABLE>
