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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT
Pursuant to Section 15(d) of the
Securities and Exchange Act of 1934
For the plan year ended December 31, 1994
Commission File Number: 0-13364
SURGICAL CARE AFFILIATES, INC.
401(k) RETIREMENT PLAN
SURGICAL CARE AFFILIATES, INC.
Suite 610, 102 Woodmont Boulevard
Nashville, Tennessee 37205
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SURGICAL CARE AFFILIATES, INC. 401(k) RETIREMENT PLAN
Financial Statements and Supplemental Schedules
for the Year Ended December 31, 1994 and
Independent Auditors' Report
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SURGICAL CARE AFFILIATES, INC. 401(k) RETIREMENT PLAN
TABLE OF CONTENTS
<TABLE>
<S> <C>
Page
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS AS OF AND FOR THE YEAR ENDED
DECEMBER 31, 1994:
Statement of Net Assets Available
for Benefits 3
Statement of Changes in Net Assets
Available for Benefits 4
Notes to Financial Statements 5-7
SUPPLEMENTAL SCHEDULES AS OF AND FOR THE YEAR
ENDED DECEMBER 31, 1994:
Item 27a - Schedule of Assets Held for
Investment Purposes 8
Item 27d - Schedule of Reportable Transactions 9
</TABLE>
Schedules other than the ones listed above have been omitted due to
the absence of the conditions under which they are required.
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INDEPENDENT AUDITORS' REPORT
To Surgical Care Affiliates, Inc. and Participants of the
Surgical Care Affiliates, Inc. 401(k) Retirement Plan
Nashville, Tennessee
We have audited the accompanying statement of net assets available
for benefits of the Surgical Care Affiliates, Inc. 401(k) Retirement Plan
as of December 31, 1994, and the related statement of changes in net
assets available for benefits for the year 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 audit.
We conducted our audit 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 audit provides a
reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Surgical Care
Affiliates, Inc. 401(k) Retirement Plan at December 31, 1994, and the
changes in net assets available for benefits for the year then ended, in
conformity with generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on
the basic financial statements taken as a whole. The supplemental
schedules of (1) assets held for investment purposes and
(2) reportable transactions 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 Department of Labor's
Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The Supplemental Information by
Fund in the statement of net assets available for benefits and the
statement of changes in net assets available for benefits is presented
for the purpose of additional analysis rather than to present the net
assets available for benefits and changes in net assets available for
benefits of each fund. The supplemental schedules and supplemental
information by fund have been subjected to the auditing procedures applied
in the audit of the basic financial statements and, in our opinion, are
fairly stated in all material respects when considered in relation to the
basic financial statements taken as a whole.
DELOITTE & TOUCHE LLP
Nashville, Tennessee
June 15, 1995
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SURGICAL CARE AFFILIATES, INC. 401(k) RETIREMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1994
<TABLE>
<CAPTION>
Supplemental Information by Fund
Surgical
Care Stable
Affiliates, Inc. Balanced Equity Asset
Stock Fund Fund Fund Fund Total
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments-at fair value:
(Notes 2 and 3)
Surgical Care Affiliates, Inc.
Common Shares $ 145,111 $ - $ - $ - $ 145,111
Commingled funds - 541,926 505,521 317,281 1,364,728
Temporary investments 5,279 62,294 41,695 24,615 133,883
------- ------- ------- ------- ---------
Total investments 150,390 604,220 547,216 341,896 1,643,722
Receivables:
Participant contributions
(Notes 1 and 2) 10,529 27,647 14,616 10,591 63,383
Interest and dividends 15 166 102 83 366
------- ------- ------- ------- ---------
Total Receivables 10,544 27,813 14,718 10,674 63,749
Cash (5,261) 19,530 17,542 11,235 43,046
------- ------- ------- ------- ---------
Total assets 155,673 651,563 579,476 363,805 1,750,517
PAYABLE TO PLAN PARTICIPANTS 105 17,553 20,941 11,235 49,834
------- ------- ------- ------- ---------
NET ASSETS AVAILABLE FOR BENEFITS $ 155,568 $ 634,010 $ 558,535 $ 352,570 $1,700,683
======= ======= ======= ======= =========
</TABLE>
See notes to financial statements.
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SURGICAL CARE AFFILIATES, INC. 401(k) RETIREMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 1994
<TABLE>
<CAPTION>
Supplementary Information by Fund
Surgical
Care Stable
Affiliates, Inc. Balanced Equity Asset
Stock Fund Fund Fund Fund Total
<S> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS ATTRIBUTABLE TO:
Net appreciation (depreciation) in fair
value of investments (Notes 2 and 3):
Surgical Care Affiliates, Inc. common shares $28,176 $ - $ - $ - $ 28,176
Commingled funds - (4,992) (13,502) 9,122 (9,372)
------- ------- ------- ------- -------
28,176 (4,992) (13,502) 9,122 18,804
Interest income (Notes 2 and 3) - - - 281 281
Dividend income (Notes 2 and 3) 757 2,294 3,558 - 6,609
------- ------- ------- ------- -------
757 2,294 3,558 281 6,890
------- ------- ------- ------- -------
Net Investment income (loss) 28,933 (2,698) (9,944) 9,403 25,694
Participant contributions (Note 1) 137,537 673,904 605,015 346,588 1,763,044
------- ------- ------- ------- -------
Total additions 166,470 671,206 595,071 355,991 1,788,738
PAYMENTS TO PARTICIPANTS (Notes 1 and 4) 1,836 17,553 21,214 47,452 88,055
TRANSFERS BETWEEN FUNDS (9,066) (19,643) (15,322) 44,031 -
------- ------- ------- ------- -------
NET INCREASE 155,568 634,010 558,535 352,570 1,700,683
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year - - - - -
------- ------- ------- ------- -------
End of year $155,568 $634,010 $558,535 $352,570 $1,700,683
======= ======= ======= ======= =======
</TABLE>
See notes to financial statements.
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SURGICAL CARE AFFILIATES, INC. 401(k) RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1994
1. DESCRIPTION OF PLAN
The following brief description of the Surgical Care Affiliates, Inc.
401(k) Retirement Plan (the "Plan") is provided for general information
purposes only. Participants should refer to the Plan document for
more complete information.
The Plan, effective January 1, 1994, is a defined contribution plan for
employees of Surgical Care Affiliates, Inc. (the "Company") and is
subject to the provisions of the Employee Retirement Income Security
Act of 1974 ("ERISA"). Plan membership is available to any employee of
the Company carried on its payroll register. Contributions to the Plan may
commence on the first day of the calendar quarter following the employee's
employment commencement date.
A participant may elect to have contributions ("Participant Contributions")
made by the Company on his behalf to the Plan at the rate of 1% to 15%,
inclusive, of base pay up to a maximum of $9,240 for 1994, in incremental
whole percentages. A participant may make rollover contributions directly
from certain other qualified plans or from certain qualified special
individual retirement accounts which a participant may have established
as a result of prior distributions from such qualified plans or accounts.
The Company may contribute to the Plan an amount not to exceed 100% of
each Participant's contribution up to a maximum of 6%. The Company made
no contributions to the Plan during the year ended December 31, 1994.
A participant may elect to have Participant Contributions and Company
contributions invested in investment funds managed by Third National Bank
("TNB"). Investment options include Surgical Care Affiliates, Inc. Stock
Fund, Balanced Fund, Equity Fund and Stable Asset Fund.
Participants are immediately 100% vested in all Participant Contributions.
A participant becomes vested in Company contributions based on the
following:
<TABLE>
<CAPTION>
Years of Credited % of
Employment Benefit Vested
<S> <C> <C>
Less than 3 0 %
3 20 %
4 40 %
5 60 %
6 80 %
7 or more 100 %
</TABLE>
Each participant's account is credited with Participant Contributions and
and Company Contributions. Each quarter the participant's account is credited
with a share of Plan earnings allocable in proportion to the value of the
account.
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Upon termination of employment prior to retirement, all participant
balances less than $3,500 are distributed in a lump-sum amount. Balances
above $3,500 may, at the participant's option, be distributed in a lump-sum
or held until retirement. As of December 31, 1994, net assets available for
benefits included benefits of $90,340 due to participants who have
withdrawn from the Plan.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The Plan's financial statements are prepared on an accrual basis of
accounting.
Investment Valuation and Income Recognition
Plan investments in Surgical Care Affiliates, Inc. common shares are valued
at the last reported sales price, as quoted on the New York Stock Exchange,
on December 31, 1994. Plan investments in investment funds are valued based
upon the fair value of the commingled funds, together with any uninvested
cash, accrued income or assets, and any dividends which have been declared
but remain unpaid as of the calculation date, less all transaction costs
such as brokerage commissions.
Payment of Benefits
Benefits are recorded when paid.
3. INVESTMENTS
The following investments represent five percent or more of net assets
available for benefits at December 31, 1994:
<TABLE>
<CAPTION>
Fair
Identity of Party Involved Description of Assets Cost Value
<S> <C> <C> <C>
Surgical Care Affiliates, Inc. Surgical Care Affiliates, Inc. Common Shares $119,142 $145,111
Third National Bank Suntrust Employee Benefit Stable Asset Fund 365,815 376,645
Third National Bank Suntrust Retirement Fixed Income Fund 117,356 117,093
Third National Bank Suntrust Retirement Short-Term Bond Fund 116,006 116,450
Third National Bank STI Classic Funds Sunbelt Equity Fund 264,720 260,086
Third National Bank STI Classic Funds Value Income Stock Fund 264,277 249,765
Third National Bank Suntrust Corporate Equity Fund 256,662 244,689
Third National Bank Suntrust Retirement Reserve Fund 133,883 133,883
-------- --------
$1,637,861 $1,643,722
======== ========
</TABLE>
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4. PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right
under the Plan to terminate the Plan subject to provisions of ERISA. In
the event of termination, Plan assets will be distributed, if possible, or
transferred for the benefit of participants in relation to their account
balances.
5. INTERNAL REVENUE SERVICE STATUS
On March 31, 1995, the Plan applied for a determination letter seeking
qualification under Section 401(a) of the Internal Revenue Code. The
Plan administrator believes the Plan is designed and is currently being
operated in compliance with the applicable requirements of the
Internal Revenue Code.
6. ADMINISTRATION OF THE PLAN
The Plan is administered by WF Corroon and TNB serves as trustee and
investment manager. Currently, the administrative fees are paid directly
by the Company.
7. RELATED PARTY TRANSACTIONS
Certain plan investments are shares of commingled funds managed by
TNB. TNB is the trustee as defined by the Plan and, therefore, these
transactions qualify as party-in-interest.
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SURGICAL CARE AFFILIATES, INC. 401(k) RETIREMENT PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1994
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E
Description of Investment, Including
Identity of Issue, Borrower, Maturity Date, Interest Rate, Current
Lessor or Similar Party Collateral, and Par or Maturity Value Cost Value
<S> <C> <C> <C> <C>
COMMON STOCK:
* Surgical Care Affiliates, Inc. Surgical Care Affiliates, Inc. Common Shares $ 119,142 $ 145,111
COMMINGLED FUNDS:
* Third National Bank Suntrust Employee Benefit Stable Asset Fund 365,815 376,645
* Third National Bank Suntrust Retirement Fixed Income Fund 117,356 117,093
* Third National Bank Suntrust Retirement Short-Term Bond Fund 116,006 116,450
* Third National Bank STI Classic Funds Sunbelt Equity Fund 264,720 260,086
* Third National Bank STI Classic Funds Value Income Stock Fund 264,277 249,765
* Third National Bank Suntrust Corporate Equity Fund 256,662 244,689
TEMPORARY INVESTMENTS:
* Third National Bank Suntrust Retirement Reserve Fund 133,883 133,883
-------- --------
TOTAL INVESTMENTS $ 1,637,861 $1,643,722
======== ========
</TABLE>
* Party-in-interest
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SURGICAL CARE AFFILIATES, INC. 401(k) RETIREMENT PLAN
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 1994
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column G Column H Column I
Current Value
Identity of Description of Asset on
Party of Purchase Selling Cost of Transaction Net Gain
Involved Asset Price Price Asset Date or (Loss)
A series of security transactions
representing one or more securities
of the same issue which in the
aggregate is in excess of 5% of
Plan asssts at the end of
the year:
<S> <C> <C> <C> <C> <C> <C>
Surgical Care
Affiliates, Inc. Surgical Care Affiliates,
Inc. Common Stock $ 141,253 $ - $ 141,253 $ 141,253 $ -
Third National
Bank Suntrust Retirement Fixed Income
Fund 117,356 - 117,356 117,356 -
Third National
Bank Suntrust Retirement Short-Term 116,006 - 116,006 116,006 -
Bond Fund
Third National
Bank STI Classic Funds Sunbelt Equity
Fund 267,239 - 267,239 267,239 -
Third National
Bank STI Classic Funds Value Income
Stock Fund 268,659 - 268,659 268,659 -
Third National
Bank Suntrust Corporate Equity Fund 261,368 - 261,368 261,368 -
Third National
Bank Suntrust Retirement Reserve Fund 1,753,656 - 1,753,656 1,753,656 -
- 1,619,773 1,619,773 1,619,773 -
Third National
Bank Suntrust Retirement Sunbelt Equity
Fund 110,038 - 110,038 110,038 -
- 109,094 110,038 109,094 (944)
</TABLE>
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees have duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
SURGICAL CARE AFFILIATES, INC.
401(k) RETIREMENT PLAN
June 29, 1995
By: /s/ Don Totty
Don Totty
Vice President of Trust
and Investment Management
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