<PAGE>
As Filed with the Securities and Exchange Commission on October 22, 1999
Registration No. 333-84743
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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Amendment No. 1
to
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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TRIAD HOSPITALS HOLDINGS, INC.
and the Guarantors identified in footnote (1) below
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
DELAWARE 6324 51-0389776
<S> <C> <C>
(State of or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
13455 Noel Road, 20th Floor
Dallas, Texas 75240
(972) 789-2700
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
Donald P. Fay, Esq.
Executive Vice President and General Counsel
13455 Noel Road, 20th Floor
Dallas, Texas 75240
(972) 789-2700
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
--------------
Copies to:
Morton A. Pierce, Esq.
Dewey Ballantine LLP
1301 Avenue of the Americas
New York, New York 10019
(212) 259-8000
--------------
Approximate date of commencement of proposed sale of the securities to the
public: As soon as practicable after this Registration Statement becomes
effective.
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If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.
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(1) The following domestic direct and indirect subsidiaries of Triad
Hospitals Holdings, Inc. are Guarantors of the Notes and are Co-Registrants,
each of which, unless otherwise indicated, is incorporated in the state of
Delaware and has the I.R.S. Employer Identification Number indicated: Alice
Hospital, LLC (62-1762534); Alice Surgeons, LLC (62-1762533); The Surgical
Hospital of Amarillo, Ltd. (75-2546711); APS Medical, LLC (62-1769684); Arizona
ASC Management, Inc., an Arizona corporation (62-1606155); Arizona Medco, LLC
(62-1769646); Beauco, LLC (62-1771881); Beaumont Regional, LLC (62-1762517);
Brazos Medco, LLC (62-1771852); Brazos Valley of Texas, L.P. (62-1766951);
Brazos Valley Surgical Center, LLC (62-1766953); Brownwood Hospital, L.P. (62-
1762521); Brownwood Medical Center, LLC (62-1762523); BVSC, LLC (62-1766949);
Carlsbad Medical Center, LLC (62-1762526); Claremore Physicians, LLC (62-
1772261); Claremore Regional Hospital, LLC (62-1757649); Clinico, LLC (62-
1771864); College Station Hospital, L.P. (62-1762360); College Station Medical
Center, LLC (62-1762359); College Station Merger, LLC (62-1771861); Coronado
Hospital, LLC (62-1762361); Coronado Medical, LLC (62-1769696); Crestwood
Healthcare, L.P., (62-1647983); Crestwood Hospital & Nursing Home, Inc., an
Alabama corporation (63-0478864); Crestwood Hospital Holdings, Inc., an Alabama
corporation (62-1113742); CSDS, LLC (75-2828352); CSMC,
<PAGE>
LLC (62-1762362); Dallas PHY Service, LLC (62-1769544); Dallas Physician
Practice, L.P. (62-1771848); Day Surgery, Inc., a Kansas corporation (48-
0813816); DeQueen Health Services, Inc., an Arkansas corporation (71-0691745);
DeQueen Regional Medical Center, LLC (62-1754933); Detar Hospital, LLC (62-
1754943); DFW Physerv, LLC (62-1771842); Doctors Medical Center, LLC (62-
1762365); Doctors of Laredo, LLC (62-1762366); Douglas Medical Center, LLC (62-
1762367); E.D. Clinics, LLC (62-1762068); El Dorado Medical Center, LLC, (62-
1754930); Eye Care Surgicare, Ltd., a Missouri limited partnership
(62-1615261); Eye Institute of Southern Arizona, LLC (62-1772259); Gallagher
Park Surgicenter, Ltd., a Texas limited partnership (62-1617436); GCMC, LLC
(62-1762372); GH Texas, LLC (62-1766932); GHC Hospitals, LLC (62-1757667); Gulf
Coast Hospital, L.P. (62-1762373); Gulf Coast Medical Center, LLC (62-1762374);
HDP DeQueen, LLC (62-1767903); HDP Woodland Heights, L.P. (62-1767909); HDP
Woodland Property, LLC (62-1767906); HDPWH, LLC (62-1767914); Healdsburg of
California, LLC (62-1762381); Hobbs Medco, LLC (62-1769641); Hobbs Physician
Practice, LLC (62-1762073); Hospital of Beaumont, LLC (62-1762384); HTI Tucson
Rehabilitation Inc., an Arizona corporation (86-0673716); Independence Regional
Health Center, LLC (62-1762415); Kansas City Surgicenter, Ltd., a Missouri
limited partnership (43-1511252); Kensingcare, LLC (62-1769731); Lake Area
Surgicare, LP, a Louisiana limited partnership (62-1658994); Laredo Hospital,
L.P. (62-1762417); Laredo Interest, LLC (75-2821748); Lea Regional Hospital,
LLC (62-1760149); Longview Medical Center, L.P. (62-1762420); Longview Merger,
LLC (62-1769639); LRH, LLC (62-1762421); LS Psychiatric LLC (75-2828353); MCI
Panhandle Surgical, L.P. (62-1766335); Medical Center at Terrell, LLC (62-
1760814); Medical Center of Brownwood, LLC (62-1762425); Medical Center of
Sherman, LLC (62-1757656); Medical Holdings, Inc., a Kansas corporation (62-
1755733); Medical Management, Inc., a Kansas corporation (48-0922165 ); Medical
Park Hospital, LLC (62-1762426); Medical Park MSO, LLC (62-1762078); Memorial
Hospital, LLC (62-1757915); Mid-Plains, LLC (62-1769743); Midwest Psychiatric
Center, Inc., a Missouri corporation (62-1218197); Mission Bay Memorial
Hospital, LLC (62-1757657); Missouri HealthServ, LLC (62-1769689); Navarro
Hospital, L.P. (62-1762428); Navarro Regional, LLC (62-1762429); Northwest
Hospital, LLC (62-1762430); NRH, LLC (62-1762431); Odessa, LLC (62-1771891);
Oregon Healthcorp, LLC (62-1769632); Osborn Ambulatory Surgical Group, Ltd., an
Arizona limited partnership (86-0611277); Overland Park Regional Medical
Center, LLC (62-1762432); Pacific East Division Office, L.P. (62-1772258);
Pacific Group ASC Division, Inc., an Arizona corporation (62-1763604); Pacific
Physicians Services, LLC (62-1763392); Pacific West Division Office, LLC (75-
2828365); Palm Drive Hospital, L.P. (62-1762433); Palm Drive Medical Center,
LLC (62-1762434); Pampa Hospital, L.P. (62-1762437); Pampa Medical Center, LLC
(62-1762440); PDMC, LLC (62-1762448); Pecos Valley of New Mexico, LLC (62-
1766959); Phoenix Amdeco, LLC (62-1766958); Phoenix Surgical, LLC (62-1769652);
Physicians and Surgeons Hospital of Alice, L.P. (62-1762451); Phys-Med, LLC
(62-1769748); Piney Woods Healthcare System, L.P. (62-1762559); Primary
Medical, LLC (62-1769733); Psychiatric Services of Paradise Valley, LLC (62-
1762459); Regional Hospital of Longview, LLC (62-1762464); SACMC, LLC (62-
1762472); Samaritan Surgicenters of Arizona, LLC, an Arizona limited liability
company (62-1606173); San Angelo Community Medical Center, LLC (62-1762473);
San Angelo Hospital, L.P. (62-1762476); San Angelo Medical, LLC (62-1769697);
San Diego Hospital, L.P. (62-1757914); San Leandro Hospital, L.P. (62-1762479);
San Leandro Medical Center, LLC (62-1762481); San Leandro, LLC (62-1761996);
SDH, LLC (62-1762482); SDH LP, LLC (75-2828354); Sebastopol, LLC (62-1761995);
Sherman Hospital, L.P. (62-1757916); Sherman Medical Center, LLC (62-1757918);
Silsbee Medical Center, LLC (62-1762486); Silsbee Texas, LLC (62-1769667); SLH,
LLC (62-1762489); South Alabama Managed Care Contracting, Inc., an Alabama
corporation (62-1652849); South Alabama Medical Management Services, Inc., an
Alabama corporation (62-1655072); South Alabama Physicians Service, Inc., an
Alabama corporation (62-1652851); South Arkansas Clinic, LLC (62-1766959);
Southern Texas Medical Center, LLC (62-1769737); Sprocket Medical Management,
Inc., a Texas corporation (62-1748895); Surgical Center of Amarillo, LLC, a
Texas limited liability company (62-1762539); Surgicare of Amarillo, Inc., a
Texas corporation (76-0123427); Surgicare of Independence, Inc., a Missouri
corporation (62-1615259); Surgicare of North Anaheim, Inc., a California
corporation (75-2384022); Surgicare of San Leandro, Inc., a California
corporation (61-1272726); Surgicare of Sherman, Inc., a Texas corporation (61-
1612059); Surgicare of Southeast Texas, Inc., a Texas corporation (75-2338759);
Surgicare of Victoria, Inc., a Texas corporation (74-2283161); Surgicare of
Victoria, Ltd., a Texas limited partnership (76-0098497); Surgicare Outpatient
Center of Lake Charles, Inc., a Louisiana corporation (72-0958812); Surgicenter
of Johnson County, Inc., a Kansas corporation (95-3978676); Surgicenter of
Johnson County, Ltd., a Kansas limited partnership (75-2262132); Surgicenters
of America, Inc., an Arizona corporation (86-0254331); Surgicenters of America,
L.P., an Arizona limited partnership (75-2528938); Terrell Hospital, L.P. (62-
1754939); Terrell Medical Center, LLC (62-1754941); Triad--Arizona, Inc., an
Arizona corporation (62-1687283); Triad--El Dorado, Inc., an Arkansas
corporation (62-1628508); Triad--South Tulsa Hospital Company, Inc., an
Oklahoma corporation (62-1678883); Triad Corporate Services, Limited
Partnership (62-1779580); Triad CSGP, LLC (62-1779579); Triad CSLP, LLC (62-
1779578); Triad Healthcare System of Phoenix, L.P. (62-1647982); Triad Holdings
II, LLC (62-1778735); Triad Holdings III, Inc. (75-2821745); Triad of Arizona
(L.P.), Inc., an Arizona corporation (61-1081190); Triad of Phoenix, Inc., an
Arizona corporation (62-1647980); Triad RC, Inc. (62-1761941); Triad Texas, LLC
(62-1766930); Triad--Medical Center at Terrell Subsidiary, LLC (62-1681607);
Triad--Medical Center of Sherman Subsidiary, LLC (62-1682195); Triad--Navarro
Regional Hospital Subsidiary, LLC (62-1681610); TROSCO, LLC (62-1778109);
Trufor Pharmacy, LLC (62-1769732); VFARC, LLC (75-2828355); VHC Holdings, LLC
(75-2828356); VHC Medical, LLC (62-1769671); Victoria Hospital, LLC (62-
1760818); Victoria of Texas, L.P. (62-1754940); VMF Medical, LLC (75-2828362);
VRMC Limited Partnership, a Texas limited partnership (74-2590301); Wagoner
Community Hospital, LLC (62-1757666); WAMC, LLC (62-1762544); West Anaheim
Medical Center, LLC (62-1762547); West Anaheim, LLC (62-1761999); Wharton
Medco, LLC (62-1769651); WHMC, LLC (Delaware) (62-1762551); Willamette Valley
Clinics, LLC (62-1766695); Willamette Valley Medical Center, LLC (62-1762552);
WM Medical, LLC (75-2828363); Women & Children's Hospital, LLC (62-1762556);
and Woodland Heights Medical Center, LLC (62-1762558).
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The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective time until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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<PAGE>
PROSPECTUS SUBJECT TO COMPLETION, DATED OCTOBER 22, 1999
Triad Hospitals Holdings, Inc.
[LOGO] Triad
HOSPITALS, INC.
Offer to Exchange
11% Series B Senior Subordinated Notes due 2009
which have been registered under the Securities Act
for any and all outstanding
11% Senior Subordinated Notes due 2009
$325,000,000 aggregate principal amount outstanding
Material Terms of the Exchange Offer
. Expires 5:00 p.m., New York . The exchange of notes should not be
City time, on , a taxable exchange for U.S. federal
1999, unless extended income tax purposes
. We will exchange your validly . We will not receive any proceeds
tendered unregistered notes from the exchange offer
for an equal principal amount
of registered notes with
substantially identical terms
. The terms of the notes to be issued
are substantially identical to the
outstanding notes, except for
certain transfer restrictions and
registration rights relating to the
outstanding notes
. Not subject to any condition
other than that the exchange
offer not violate applicable
law or any applicable
interpretation of the Staff of
the Securities and Exchange
Commission and certain other
customary conditions
. You may tender outstanding notes
only in denominations of $1,000 and
multiples of $1,000
. Affiliates of our company may not
. You may withdraw your tender participate in the exchange offer
of outstanding notes at any
time prior to the expiration
of the exchange offer
Please refer to "Risk Factors" beginning on page 13 of this document for
certain important information.
The information in this prospectus is not complete and may be changed. We
may not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an
offer to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of the notes to be issued in the
exchange offer or passed upon the adequacy or accuracy of this prospectus. Any
representation to the contrary is a criminal offense.
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Prospectus dated , 1999.
<PAGE>
PROSPECTUS SUMMARY
This summary highlights selected information appearing elsewhere in this
prospectus and may not contain all of the information that is important to you.
This prospectus includes the specific terms of the notes we are offering, as
well as information regarding our business, our spin-off from Columbia/HCA
Healthcare Corporation and detailed financial data. In this prospectus, the
word "Holdings" refers to Triad Hospitals Holdings, Inc., a direct, wholly-
owned subsidiary of Triad Hospitals, Inc. The terms "we," "us," "our," "our
company" and "Triad" refer to the business of Triad Hospitals, Inc., Holdings
and their subsidiaries as a combined entity, except where it is clear from the
context that such term means only Triad Hospitals, Inc. We encourage you to
read this prospectus in its entirety. Except as otherwise specified,
information regarding Columbia/HCA in this prospectus is derived from reports
and other information filed by Columbia/HCA with the Commission.
The Exchange Offer
On May 11, 1999, we assumed $325,000,000 aggregate principal amount of 11%
Senior Subordinated Notes due 2009 issued in a private offering. These notes
were sold to certain initial purchasers named in this prospectus. The notes are
guaranteed by our subsidiaries.
We and the guarantors entered into a registration rights agreement with the
initial purchasers in the private offering in which we agreed, among other
things, to deliver to you this prospectus and to complete the exchange offer on
or prior to December 17, 1999. You are entitled to exchange in the exchange
offer your notes for registered notes with substantially identical terms. If
the exchange offer is not completed on or prior to December 17, 1999,
additional interest will accrue on the notes at a rate of .25% over the stated
interest rate on the notes for the first 90 days immediately following such
date, and will increase by an additional .25% at the beginning of each
subsequent 90-day period up to a maximum of 1.0% in the aggregate, until the
exchange offer is completed. You should read the discussion under the headings
"Summary of Terms of the Exchange Notes" and "Description of the Notes" for
further information regarding the registered notes.
We believe that the notes issued in the exchange offer may be resold by you
without compliance with the registration and prospectus delivery requirements
of the Securities Act, subject to certain conditions. Following the exchange
offer, any notes held by you that are not exchanged in the exchange offer will
continue to be subject to the existing restrictions on transfer on the notes
and, except in certain circumstances, we will have no further obligation to you
to provide for registration under the Securities Act of transfers of
outstanding notes held by you. You should read the discussions under the
headings "Summary of the Exchange Offer" and "The Exchange Offer" for further
information regarding the exchange offer and the resale of notes.
1
<PAGE>
Summary of the Exchange Offer
Issuer...................... Triad Hospitals Holdings, Inc.
The Exchange Offer.......... We previously assumed $325 million aggregate
principal amount of 11% Senior Subordinated Notes
due 2009 issued in a private offering. These
securities were not registered under the
Securities Act. At the time we assumed the notes,
we entered into a registration rights agreement
in which we agreed to offer to exchange your
unregistered notes for new notes which have been
registered under the Securities Act. This
exchange offer is intended to satisfy that
obligation. We are offering to exchange $1,000
principal amount of registered notes for each
$1,000 principal amount of your unregistered
notes. After the exchange offer is completed, you
will no longer be entitled to any exchange or
registration rights with respect to your notes.
Under certain circumstances, certain holders of
outstanding notes may require us to file a shelf
registration statement under the Securities Act.
As of this date, there is $325.0 million
aggregate principal amount of notes outstanding.
Required Representation . . In order to participate in this exchange offer,
. . . . . . you will be required to make certain
representations to us in a letter of transmittal,
including that:
. any exchange notes will be acquired by you in
the ordinary course of your business;
. you have no arrangement with any person to
distribute the notes; and
. you are not an "affiliate" of our company.
Resale...................... We believe that the exchange notes issued in the
exchange offer may be freely traded by you
without compliance with the registration and
prospectus delivery provisions of the Securities
Act provided that:
. the exchange notes issued in the exchange
offer are being acquired in the ordinary
course of your business;
. you are not participating, do not intend to
participate and have no arrangement or
understanding with any person to participate
in the distribution of the notes issued to you
in the exchange offer; and
. you are not an "affiliate" of our company.
If our belief is inaccurate and you transfer any
note issued to you in the exchange offer without
delivering a prospectus meeting the requirements
of the Securities Act or without an exemption
from registration of your notes from such
2
<PAGE>
requirements, you may incur liability under the
Securities Act. We do not assume, or indemnify
you against, such liability.
Each broker-dealer that is issued exchange notes
in the exchange offer for its own account in
exchange for notes which were acquired by such
broker-dealer as a result of market-making or
other trading activities, must acknowledge that
it will deliver a prospectus meeting the
requirements of the Securities Act in connection
with any resale of the exchange notes issued in
the exchange offer. We have agreed in the
registration rights agreement that a broker-
dealer may use this prospectus for an offer to
resell, resale or other retransfer of the
exchange notes issued to it in the exchange
offer.
Expiration Date............. The exchange offer will expire at 5:00 p.m., New
York City time, on , 1999, unless extended,
in which case the term "expiration date" shall
mean the latest date and time to which we extend
the exchange offer.
Conditions to the Exchange The exchange offer is subject to certain
Offer....................... customary conditions, which may be waived by us.
The exchange offer is not conditioned upon any
minimum principal amount of notes being tendered.
Procedures for Tendering
Old Notes................... If you wish to tender your notes for exchange
pursuant to the exchange offer you must transmit
to Citibank, N.A., as exchange agent, on or
before the expiration date either
. a properly completed and duly executed
letter or transmittal, which accompanies
this prospectus, or a facsimile of the
letter of transmittal, together with your
notes and any other required documentation,
to the exchange agent at the address set
forth in this prospectus under the heading
"The Exchange Offer--Exchange Agent," and on
the front cover of the letter of
transmittal; or
. a computer generated message transmitted by
means of The Depository Trust Company's
Automated Tender Offer Program system and
received by the exchange agent and forming a
part of a confirmation of book entry
transfer in which you acknowledge and agree
to be bound by the terms of the letter of
transmittal.
If either of these procedures cannot be
satisfied on a timely basis, then you should
comply with the guaranteed delivery procedures
described below.
3
<PAGE>
By executing the letter of transmittal, each
holder of notes will make certain
representations to us described under "The
Exchange Offer--Procedures for Tendering."
Special Procedures for
Beneficial Owners........... If you are a beneficial owner whose notes are
registered in the name of a broker, dealer,
commercial bank, trust company or other nominee
and you wish to tender your notes in the exchange
offer, you should contact such registered holder
promptly and instruct such registered holder to
tender on your behalf. If you wish to tender on
your own behalf, you must, prior to completing
and executing the letter of transmittal and
delivering your notes, either make appropriate
arrangements to register ownership of the notes
in your name or obtain a properly completed bond
power from the registered holder.
The transfer of registered ownership may take
considerable time and may not be able to be
completed prior to the expiration date.
Guaranteed Delivery If you wish to tender your notes and time will
Procedures.................. not permit the documents required by the letter
of transmittal to reach the exchange agent prior
to the expiration date, or the procedure for
book-entry transfer cannot be completed on a
timely basis, you must tender your notes
according to the guaranteed delivery procedures
described under "The Exchange Offer--Guaranteed
Delivery Procedures."
Acceptance of Old Notes and
Delivery of Exchange Subject to the conditions described under "The
Notes....................... Exchange Offer--Conditions to the Exchange
Offer", we will accept for exchange any and all
notes which are validly tendered in the exchange
offer and not withdrawn, prior to 5:00 p.m., New
York City time, on the expiration date.
Withdrawal Rights........... You may withdraw the tender of your notes at any
time prior to 5:00 p.m., New York City time, on
the expiration date, subject to compliance with
the procedures for withdrawal described in this
prospectus under the heading "The Exchange
Offer--Withdrawal of Tenders."
Federal Income Tax
Considerations.............. For a discussion of the material federal income
tax considerations relating to the exchange of
notes for the exchange notes, see "Material
Federal Income Tax Considerations."
Exchange Agent.............. Citibank N.A., the trustee under the indenture
governing the notes, is serving as the exchange
agent. The address, telephone number and
facsimile number of the exchange
4
<PAGE>
agent are set forth in this prospectus under the
heading "The Exchange Offer--Exchange Agent."
Consequences of Failure to
Exchange Old Notes.......... If you do not exchange your notes for exchange
notes pursuant to the exchange offer, you will
continue to be subject to the restrictions on
transfer provided in the notes and in the
indenture governing the notes. In general, the
unregistered notes may not be offered or sold,
unless they are registered under the Securities
Act, except pursuant to an exemption from, or in
a transaction not subject to, the Securities Act
and applicable state securities laws. We do not
currently intend to register the notes under the
Securities Act.
5
<PAGE>
Summary of Terms of the Exchange Notes
This exchange offer relates to the exchange of up to $325,000,000 aggregate
principal amount of exchange notes for up to an equal principal amount of
unregistered outstanding notes. The form and terms of the exchange notes are
the same as the form and terms of the outstanding notes, except that the
exchange notes will be registered under the Securities Act, and therefore, the
exchange notes will not be subject to transfer restrictions or registration
rights, and the provisions of the registration rights agreement relating to an
increase in the stated interest rate on the outstanding notes under certain
circumstances will be eliminated. The exchange notes issued in the exchange
offer will evidence the same debt as the outstanding notes, which they replace,
and both the outstanding notes and the exchange notes are governed by the same
indenture.
Securities Offered..........
$325,000,000 aggregate principal amount of 11%
Series B Senior Subordinated Notes due 2009.
Interest Payment Dates...... May 15 and November 15, commencing on November
15, 1999.
Guarantees.................. Our subsidiaries have fully and unconditionally
guaranteed the notes on a senior subordinated
basis. Future subsidiaries also may be required
to guarantee the notes on a senior subordinated
basis. See "Description of the Notes--Note
Guarantees."
Ranking..................... The notes:
. are general unsecured obligations of our
company and are subordinated in right of
payment to all of our existing and future
senior debt, including indebtedness under the
new credit agreement;
. are effectively subordinated to all existing
and future obligations of our subsidiaries;
and
. rank equal in right of payment with any future
senior subordinated obligations of our company
and rank senior in right of payment to all
other subordinated obligations of our company.
Optional Redemption......... We may redeem the notes, in whole or in part, at
any time on or after May 15, 2004 at our option
at the redemption prices set forth herein under
the heading "Description of the Notes--Optional
Redemption," plus accrued and unpaid interest to
the redemption date.
Optional Redemption Upon
Certain Equity Offerings.... On or before May 15, 2002, we may redeem up to
35% of the notes with the net proceeds of certain
equity offerings at 111% of the principal amount
thereof, plus accrued interest, if at least 65%
of the aggregate principal amount of the
originally issued notes remain outstanding. See
"Description of the Notes--Optional Redemption."
6
<PAGE>
Certain Restrictions........ The indenture governing the notes contains
certain covenants that, among other things, limit
our ability and the ability of certain of our
subsidiaries to:
. incur additional indebtedness;
. sell assets;
. enter into certain transactions with
affiliates;
. make certain restricted payments such as
investments and dividends on or purchases of
our capital stock; or
. merge or consolidate with or transfer all or
substantially all of our assets to another
entity.
Change in Control...........
Upon a change in control of our company, we will
be required to offer to repurchase your notes at
a price equal to 101% of their principal amount,
plus accrued and unpaid interest to the date of
repurchase. Our ability to repurchase the notes
upon a change in control will be limited by the
terms of our debt agreements. In addition, we
cannot assure you that we will have the financial
resources to repurchase the notes. See
"Description of the Notes--Certain Covenants--
Purchase of Notes upon a Change in Control."
Form of Exchange Notes...... The exchange notes issued in the exchange offer
will be represented by one or more permanent
global certificates, in fully registered form,
deposited with a custodian for, and registered in
the name of a nominee of, The Depository Trust
Company, as depositary. You will not receive
notes in certificated form unless one of the
events set forth under "Book Entry; Delivery and
Form" occurs. Instead, beneficial interests in
the exchange notes will be shown on, and
transfers of these notes will be effected
through, records maintained in book-entry form by
The Depository Trust Company and its
participants.
Use of Proceeds............. We will not receive any net proceeds from the
exchange offer.
7
<PAGE>
About Our Company
Who We Are
We provide health care services through our hospitals and ambulatory surgery
centers located in small cities and selected high growth urban markets in the
Southern, Western and Southcentral United States. We succeeded to the business
of thePacific Group of Columbia/HCA, a division of Columbia/HCA, following the
distribution by Columbia/HCA of all outstanding shares of Triad common stock to
Columbia/HCA stockholders on May 11, 1999. We own and operate general, acute
care hospitals, a psychiatric hospital and ambulatory surgery centers. Our
facilities are located in the states of Alabama, Arizona, Arkansas, California,
Kansas, Louisiana, Missouri, New Mexico, Oklahoma, Oregon and Texas.
As of June 30, 1999, Triad's facilities included 38 general, acute care
hospitals, which includes one hospital where operations were ceased on May 31,
1999, one psychiatric hospital, and 17 ambulatory surgery centers, excluding
two surgery centers that are not consolidated for accounting purposes. Two
hospitals included among these facilities are operated through 50/50 joint
ventures that are not consolidated for financial reporting purposes. Triad also
completed a swap of one of its hospitals, Doctors Hospital of Laredo, for a
hospital located in Victoria, Texas on June 1, 1999.
Since June 30, 1999, Triad has sold hospitals in Amarillo, Texas, Anaheim,
California, Huntington Beach, California, Beaumont, Texas and Silsbee, Texas,
and its interest in a surgery center in North Anaheim, California. Triad
currently intends to sell an additional four general, acute care hospitals, its
one psychiatric hospital, and certain of the ambulatory surgery centers that it
operated as of June 30, 1999. A definitive purchase agreement has been signed
on one of the remaining hospitals, with an anticipated sale date in the fourth
quarter. Following the divestitures Triad expects its facilities to include 28
hospitals, including the two hospitals operated through joint ventures and two
hospitals leased to and operated by an unaffiliated third party, as well as 14
ambulatory surgery centers.
What We Do
Our general, acute care hospitals typically provide a full range of services
commonly available in hospitals, such as internal medicine, general surgery,
cardiology, oncology, neurosurgery, orthopedics and obstetrics, as well as
diagnostic and emergency services. Our hospitals also generally provide
outpatient and ancillary health care services such as outpatient surgery,
laboratory, radiology, respiratory therapy, cardiology and physical therapy.
Outpatient surgical services also are provided by our ambulatory surgery
centers. In addition, certain of our general, acute care hospitals have a
limited number of licensed psychiatric beds.
Our Business Strategy
Our primary objectives are to provide quality health care services and to
enhance the financial performance of our company by increasing utilization of
our facilities and improving operating efficiencies, using the following
strategies:
. Build on our position in small cities and high population growth urban
markets in the Southern, Western and Southcentral United States.
. Actively recruit physicians.
. Enhance our specialty services and outpatient services and improve our
emergency room facilities.
. Improve operating efficiencies through enhanced cost management and resource
control.
. Develop strong relationships with our physicians and other local physicians.
. Grow our company through existing hospital expansion, new hospital and
ambulatory surgery center construction and selective acquisitions.
. Our company has also focused on streamlining our portfolio of facilities by
divesting those facilities which do not meet our primary objectives.
8
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Our Formation
Triad owns and operates the health care services business which, prior to
the distribution described below, comprised the Pacific Group of Columbia/HCA.
Columbia/HCA established the Pacific Group as an independent, publicly-traded
company by distributing all outstanding shares of Triad common stock to the
stockholders of Columbia/HCA on May 11, 1999. Columbia/HCA no longer owns any
shares of Triad common stock. On May 11, 1999 Columbia/HCA also distributed to
its stockholders all outstanding shares of the common stock of LifePoint
Hospitals Inc., a newly formed company comprising the former America Group of
Columbia/HCA. The common stock of Triad is quoted on the Nasdaq National Market
System (Symbol: TRIH).
In connection with the distribution, Healthtrust Inc.--The Hospital
Company, a wholly owned subsidiary of Columbia/HCA, transferred all of the
assets comprising the Pacific Group to Triad and Triad transferred such assets
to Holdings, and Holdings ultimately assumed $673.8 million of debt
obligations. Such debt obligations consisted of $340.0 million of term loans
with a syndicate of banks pursuant to a new credit agreement, the $325.0
million of notes issued in the private offering and $8.8 million of other debt
assumed from Columbia/HCA. Holdings also received a commitment for revolving
credit loans under the new credit agreement in an aggregate principal amount of
up to $125.0 million.
In connection with the distribution, Triad and Columbia/HCA entered into a
distribution agreement and agreements providing for certain transitional
services that Triad will purchase from Columbia/HCA, the allocation of certain
liabilities and obligations and indemnification arrangements by Columbia/HCA
with respect to the governmental investigations of certain Columbia/HCA
business practices and certain other matters. To understand these agreements
more fully, you should read the detailed descriptions of such agreements
included elsewhere in this prospectus and the agreements which have previously
been filed with the Commission by Triad, and are incorporated by reference to
the registration statement of which this prospectus forms a part.
Principal Executive Offices
Our principal executive offices are located at 13455 Noel Road, 20th Floor,
Dallas, Texas 75240, and our phone number is (972) 789-2700. Our corporate
Website address is http://www.triadhospitals.com. Information contained on our
Website is not part of this prospectus.
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Summary Financial Data
The following table sets forth summary historical financial data of Triad
for each of the fiscal years in the five year period ended December 31, 1998
and for the six months ended June 30, 1998 and 1999. The table should be read
together with the Combined Financial Statements and the related notes of Triad
included elsewhere in this prospectus, and "Management's Discussion and
Analysis of Financial Condition and Results of Operations."
The summary financial data at December 31, 1994, 1995 and 1996 and at June
30, 1998 and 1999 and for the years ended December 31, 1994 and 1995 and for
the six months ended June 30, 1998 and 1999 is unaudited, but in the opinion of
management, reflects all adjustments necessary for a fair presentation of such
information. Such adjustments are of a recurring nature.
Operating results for the six months ended June 30, 1999 are not
necessarily indicative of the results that may be expected for the fiscal year
ending December 31, 1999.
The ratio of earnings to fixed charges presented in the following table is
computed by dividing income (loss) from continuing operations before fixed
charges, minority interests and income taxes by fixed charges. Fixed charges
consist of interest charges, which is interest expense plus interest charged to
construction, and the portion of rent expense which is deemed to be equivalent
to interest expense. Triad's earnings (losses) were insufficient to cover fixed
charges for the years ended December 31, 1997 and 1998, and the six months
ended June 30, 1998 and 1999 by $15.1 million, $115.6 million, $15.2 million
and $60.1 million, respectively.
In your review of the following table you should note that:
. the data presented for income (loss) from continuing operations, net income
(loss), basic earnings (loss) per share and diluted earnings (loss) per
share includes charges related to impairment of long-lived assets of $55.1
million, or $32.9 million after-tax, and $13.7 million, or $8.2 million
after-tax, for the years ended December 31, 1998 and 1997, respectively, and
$33.9 million, or $25.2 million after-tax for the six months ended June 30,
1999; and
. capital expenditures for the year ended December 31, 1994 includes the
acquisition of seven hospitals from EPIC Healthcare Group, Inc. in May 1994.
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<TABLE>
<CAPTION>
Six Months
Ended
Years Ended December 31, June 30,
------------------------------------------------ ------------------
1994 1995 1996 1997 1998 1998 1999
-------- -------- -------- -------- -------- -------- --------
(Dollars in millions, except per share amounts)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Summary of Operations:
Revenues................ $1,290.5 $1,558.9 $1,600.5 $1,609.3 $1,588.7 $ 813.8 $ 707.7
Income (loss) from
continuing operations.. 54.0 84.9 68.3 (19.0) (85.5) (14.6) (45.4)
Net income (loss)....... 55.5 87.2 74.7 (19.8) (87.1) (14.6) (45.4)
Basic earnings (loss)
per share:
Income (loss) from
continuing
operations............ $ 1.80 $ 2.83 $ 2.28 $ (0.63) $ (2.85) $ (0.49) $ (1.51)
Net income (loss)...... 1.85 2.91 2.49 (0.66) (2.90) (0.49) (1.51)
Shares used in
computing basic
earnings (loss) per
share (in millions)... 29.9 29.9 29.9 29.9 29.9 30.1 30.1
Diluted earnings (loss)
per share:
Income (loss) from
continuing
operations............ $ 1.78 $ 2.79 $ 2.26 $ (0.63) $ (2.85) (0.49) (1.51)
Net income (loss)...... 1.83 2.87 2.47 (0.66) (2.90) (0.49) (1.51)
Shares used in
computing diluted
earnings (loss) per
share (in millions)... 30.3 30.3 30.2 29.9 29.9 30.1 30.1
Financial Position:
Assets.................. $1,169.4 $1,351.8 $1,426.3 $1,410.5 $1,371.3 1,364.4 $1,495.5
Long-term debt,
including amounts due
within one year........ 32.3 29.0 17.1 15.4 14.4 14.9 668.8
Intercompany balances
payable to
Columbia/HCA........... 331.3 392.6 521.7 525.0 613.7 550.6 --
Working capital......... 127.9 156.3 156.5 150.3 184.9 158.8 141.8
Capital expenditures.... 203.4 115.0 94.4 120.1 114.9 47.3 66.0
Operating Data:
EBITDA(a)............... $ 206.2 $ 285.2 $ 294.5 $ 187.8 $ 149.0 $ 86.9 $ 71.5
Number of hospitals at
end of period(b)....... 38 39 39 39 39 39 38
Number of licensed beds
at end of period(c).... 5,660 5,926 5,872 5,859 5,909 5,907 4,974
Weighted average
licensed beds(d)....... 5,325 5,900 5,882 5,860 5,877 5,907 5,058
Number of available beds
at end of period(e).... 5,048 5,344 5,052 5,230 5,199 5,192 4,453
Admissions(f)........... 147,923 170,392 171,265 172,926 169,590 87,268 79,194
Adjusted admissions(g).. 211,382 257,292 266,660 275,125 276,771 139,752 128,285
Average length of stay
(days)(h).............. 5.2 5.2 5.0 4.9 4.9 5.0 4.6
Average daily
census(i).............. 2,111 2,405 2,338 2,326 2,260 2,400 2,039
Occupancy rate(j)....... 42% 45% 46% 44% 43% 46% 46%
Selected Ratios:
Ratio of earnings to
fixed charges.......... 3.3x 4.0x 3.0x -- -- -- --
</TABLE>
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<PAGE>
(a) EBITDA is defined as income from continuing operations before depreciation
and amortization, interest expense, management fees, impairment of long-
lived assets, minority interests 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 other
financial statement data presented in the combined 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.
(b) Number of hospitals includes two facilities which are leased to a third
party and two hospitals not consolidated for financial reporting purposes
for 1999. This table does not include any operating statistics for these
facilities.
(c) Licensed beds are those beds for which a facility has been granted approval
to operate from the applicable state licensing agency.
(d) Represents the average number of licensed beds, weighted based on periods
owned.
(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 hospitals and is used by
management and certain investors as a general measure of inpatient volume.
(g) Equivalent admissions is used by management and certain investors as a
general measure of combined inpatient and outpatient volume. Equivalent
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 equivalent
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 admitted patients stay 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.
(i) Represents the average number of patients in Triad's hospital beds each
day.
(j) Represents the percentage of hospital available beds occupied by patients.
Both average daily census and occupancy rate provide measures of the
utilization of inpatient rooms. The declining occupancy rate is primarily
attributed to the trend toward more services, that were previously
performed in an inpatient setting, being performed on an outpatient basis
and the decline in average length of stay per admission.
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<PAGE>
RISK FACTORS
In evaluating an investment in the notes, you should carefully consider
the following factors in addition to all other information contained in this
prospectus.
High Degree of Leverage and Debt Service Obligations May Adversely Affect
Triad
Triad is highly leveraged. As of June 30, 1999, Triad's consolidated long-
term debt was $668.8 million. Triad also may draw upon revolving credit loans
in an aggregate principal amount of up to $125.0 million. Triad also has the
ability to incur additional debt, subject to limitations imposed by the new
credit agreement and the indenture governing the notes. While Triad believes
that future operating cash flow, together with available financing
arrangements, will be sufficient to fund its operating requirements, leverage
and debt service requirements could have important consequences to holders of
the notes, including the following:
. such requirements may make Triad more vulnerable to economic downturns and
to adverse changes in business conditions, such as further limitations on
reimbursement under Medicare and Medicaid programs;
. Triad's ability to obtain additional financing in the future for working
capital, capital expenditures, acquisitions, general corporate purposes or
other purposes may be impaired;
. a substantial portion of Triad's cash flow from operations may have to be
dedicated to the payment of principal and interest on its indebtedness,
thereby reducing the funds available for operations;
. certain of the borrowings may be at variable rates of interest, which
would make Triad vulnerable to increases in interest rates; and
. the indebtedness of Triad contains numerous financial and other
restrictive covenants, including restrictions on payments of dividends,
incurrences of indebtedness and sale of assets, the failure to comply with
which may result in an event of default which, if not cured or waived,
could cause such indebtedness to be declared immediately due and payable.
Any substantial increase in Triad's debt levels or the inability to borrow
funds at favorable interest rates or to comply with the financial or other
restrictive covenants could have a material adverse effect on the business,
financial condition, results of operations or prospects of Triad.
There May Not be Sufficient Assets to Pay the Notes
In the event of a bankruptcy, liquidation, dissolution, reorganization or
similar proceeding against Holdings, the assets of Holdings must be used to
pay senior debt in full before making any payments to holders of the notes.
Because of this obligation to pay the senior debt first, there may not be
sufficient assets to pay all or any of the amounts due on the notes. The notes
are also unsecured and, therefore, are effectively subordinated to any secured
debt of Holdings, whether or not such debt is senior by its terms.
As of June 30, 1999, $335.0 million in debt of Holdings would have been
senior in priority to the notes, all of which would have been incurred under
the new credit agreement, which is senior by its terms to the notes and is
secured by liens on substantially all of the assets of Holdings and the pledge
of the common stock of all existing and future material subsidiaries of
Holdings and by subsidiary guarantees secured by substantially all of the
assets of the guarantors.
Restrictions Imposed by Senior Debt May Lead to Acceleration of Indebtedness
The new credit agreement includes covenants that require Holdings to meet
certain financial ratios and financial conditions that may require that
Holdings take action to reduce debt
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<PAGE>
or to act in a manner contrary to its business objectives. In addition, the new
credit agreement restricts, among other things, Holdings' ability to incur
additional indebtedness and make acquisitions and capital expenditures beyond a
certain level. If Holdings fails to comply with the restrictions contained in
the new credit agreement, the lenders can declare the entire amount owed
thereunder immediately due and payable, and prohibit Holdings from making
payments of interest and principal on the notes until the default is cured or
all such debt is paid or otherwise satisfied in full. If Holdings were unable
to repay such borrowings, such lenders could proceed against the collateral
securing the new credit agreement. If any senior debt is accelerated, the
assets of Holdings may not be sufficient to repay in full such indebtedness and
the other indebtedness of Holdings, including the notes, in which event the
interests of the senior debt lenders may conflict with the interests of the
holders of the notes. For the six month period ended June 30, 1999, Triad's
earnings were insufficient to cover fixed charges by $60.1 million.
Loss of Physicians or Other Key Personnel Could Adversely Affect Triad's
Business
Since physicians generally direct the majority of hospital admissions, the
success of Triad, in part, is dependent upon the number and quality of
physicians on its hospitals' medical staffs, the admissions practices of such
physicians and the maintenance of good relations with such physicians. Hospital
physicians are generally not employees and, in many of the markets served by
Triad, most physicians have admitting privileges at other hospitals.
Triad is also dependent upon the continued services and management
experience of James D. Shelton and other of its executive officers. If Mr.
Shelton or any of such other executive officers were to resign their positions
or otherwise be unable to serve, the operating results of Triad could be
adversely affected. In addition, the success of Triad depends on its ability to
attract and retain managers at its hospitals and related facilities, on the
ability of its officers and key employees to manage growth successfully and on
its ability to attract and retain skilled employees.
No Operating History as an Independent Company; Net Losses
Prior to the distribution, Triad operated as the Pacific Group division of
Columbia/HCA. Accordingly, Triad does not have a long operating history as an
independent, publicly-traded company and, prior to the distribution, Triad had
historically relied on Columbia/HCA for various financial, administrative and
managerial expertise relevant to the conduct of its business. Triad maintains
its own lines of credit and banking relationships, employs its own senior
executives and performs its own administrative functions, except that
Columbia/HCA continues to provide certain support services to Triad on a
contractual basis. The operations of Triad did not generate a profit for the
six months ended 1999 or 1998, or the years 1998 or 1997. There can be no
assurances that Triad will not continue to have net losses as an independent,
publicly-traded company. See "Unaudited Pro Forma Condensed Combined Financial
Statements" and "Arrangements Relating to the Distribution" for more
information regarding Triad's financial results and Triad's arrangements with
Columbia/HCA and see "Management's Discussion and Analysis of Financial
Condition and Results of Operations" for certain factors that could affect
Triad's ability to generate profits.
Limits on Reimbursement and Health Care Reform Legislation May Reduce
Profitability
A significant portion of the revenues of Triad are derived from the Medicare
and Medicaid programs, which are highly regulated and subject to frequent and
substantial changes. In recent years, fundamental changes in the Medicare and
Medicaid programs, including the implementation of a prospective payment system
("PPS") for inpatient services at medical/surgical hospitals, have resulted in
limitations on, and reduced levels of payment and reimbursement for, a
substantial portion of hospital procedures and costs. The Federal Balanced
Budget Act of 1997, which establishes a plan to balance the Federal budget by
fiscal year 2002, includes significant additional reductions in spending levels
for the Medicare and Medicaid programs. These include, among others, payment
reductions for inpatient and outpatient hospital services,
14
<PAGE>
establishment of a PPS for hospital outpatient services, skilled nursing
facilities and home health agencies under Medicare, and repeal of the Federal
payment standard (the so-called "Boren Amendment") for hospitals and nursing
facilities under Medicaid. A number of states also are considering legislation
designed to reduce their Medicaid expenditures and to provide universal
coverage and additional care, including enrolling Medicaid recipients in
managed care programs and imposing additional taxes on hospitals to help
finance or expand the states' Medicaid systems. In addition, private payers
increasingly are attempting to control health care costs through direct
contracting with hospitals to provide services on a discounted basis, increased
utilization review and greater enrollment in managed care programs such as
health maintenance organizations and preferred provider organizations ("PPOs").
Triad believes that hospital operating margins have been, and may continue to
be, under significant pressure because of deterioration in pricing flexibility
and payer mix, and growth in operating expenses in excess of the increase in
prospective payments under the Medicare program.
In recent years, an increasing number of legislative proposals have been
introduced or proposed in Congress and in some state legislatures that would
effect major changes in the health care system, either nationally or at the
state level. Among the proposals under consideration or already enacted are
price controls on hospitals, insurance market reforms to increase the
availability of group health insurance to small businesses, Medicare and
Medicaid managed care programs and requirements that all businesses offer
health insurance coverage to their employees. While Triad anticipates that the
rate of increase in payments to hospitals will be reduced as a result of future
Federal and state legislation, it
is uncertain at this time what legislation on health care reform may ultimately
be enacted or whether other changes in the administration or interpretation of
governmental health care programs will occur. There can be no assurance that
future health care legislation or other changes in the administration or
interpretation of governmental health care programs will not have a material
adverse effect on the business, financial condition, results of operations or
prospects of Triad.
In connection with the distribution, Triad was required to re-enroll
certain of its facilities as Medicaid providers. There can be no assurances
that the states will enroll the Triad hospitals in their Medicaid programs on a
timely basis. Any significant delay in enrollment could negatively affect the
operating cash flow of Triad.
Reimbursement by Managed Care Organizations May Reduce Hospital Profitability
The competitive position of Triad's hospitals also is affected by the
increasing number of initiatives undertaken during the past several years by
major purchasers of health care, including Federal and state governments,
insurance companies and employers, to revise payment methodologies and monitor
health care expenditures in order to contain health care costs. As a result of
these initiatives, managed care organizations offering prepaid and discounted
medical services packages represent an increasing portion of Triad's
admissions, resulting in reduced hospital revenue growth nationwide. If Triad
is unable to lower costs through increased operational efficiencies and the
trend toward declining reimbursements and payments continues, Triad's results
of operations and cash flow will be adversely affected.
Competition
The health care business is highly competitive and competition among
hospitals and other health care providers for patients has intensified in
recent years. More than half of Triad's hospitals operate in geographic areas
where they compete with at least one other hospital that provides most of the
services offered by Triad's hospitals. Certain of these competing facilities
offer services, including extensive medical research and medical education
programs, which are not offered by Triad's facilities. Some of the hospitals
that compete with Triad are owned by tax-supported governmental agencies or
not-for-profit entities supported by endowments and charitable
15
<PAGE>
contributions which can finance capital expenditures on a tax-exempt basis and
are exempt from sales, property and income taxes. In these markets, Triad also
faces competition from other providers such as outpatient surgery and
diagnostic centers.
Less than half of Triad's hospitals operate in geographic areas where they
are currently the sole provider of hospital services in their communities.
While these hospitals face less direct competition in their immediate service
areas than would be expected in larger communities, they do face competition
from other hospitals, including larger tertiary care centers. Although these
competing hospitals may be as far as 30 to 50 miles away, patients in these
Triad markets may migrate to, may be referred by local physicians to, or may be
lured by incentives from managed care plans to travel to, such distant
hospitals.
Risks Associated with Potential Acquisitions
One element of Triad's business strategy is expansion through the selective
acquisition of acute care hospitals in selected markets. The competition to
acquire hospitals in the markets targeted by Triad is significant, and there
can be no assurance that suitable acquisitions, for which other health care
companies, including those with greater financial resources than Triad, may be
competing, can be accomplished on terms favorable to Triad, that financing, if
necessary, can be obtained for such acquisitions or that acquired facilities
can be effectively integrated with Triad's operations. The consummation of
acquisitions may result in the incurrence or assumption by Triad of additional
indebtedness. In addition, in order to ensure the tax-free treatment of the
distribution, Triad is limited in the amount of stock it may issue as
consideration for acquisitions.
Acquired businesses may have unknown or contingent liabilities, including
liabilities for failure to comply with health care laws and regulations.
Although Triad has policies to conform the practices of acquired facilities to
its standards, and generally will seek indemnification from prospective sellers
covering these matters, there can be no assurance that Triad will not become
liable for past activities of acquired businesses or that any such liabilities
will not be material.
In recent years, the legislatures and attorneys general of several states
have increased their level of interest in transactions involving the sale of
hospitals by not-for-profit entities. Such heightened scrutiny may increase the
cost and difficulty or prevent the completion of transactions with not-for-
profit organizations in certain states in the future.
Geographic Concentration of Operations Could Adversely Affect Triad
After Triad's completed, planned and pending divestitures, 12 of Triad's
remaining 28 hospitals will be located in the state of Texas, and three of
Triad's remaining 28 hospitals will be located in the state of Arizona. After
giving effect to such divestitures for the year ended December 31, 1998 and the
six months ended June 30, 1999, respectively, 48.3% and 49.5% of Triad's
revenue was generated by Triad's Texas hospitals and 18.2% and 22.0% of Triad's
revenue was generated by Triad's Arizona hospitals. Accordingly, any change in
the current demographic, economic, competitive and regulatory conditions in
Texas or Arizona could have a material adverse effect on the business,
financial condition, results of operations or prospects of Triad.
Extensive Regulation Could Adversely Affect Triad
The health care industry is subject to extensive Federal, state and local
laws and regulations relating to licensure, conduct of operations, ownership of
facilities, addition of facilities and services, payment for services and
prices for services that are extremely complex and for which, in many
instances, the industry does not have the benefit of significant regulatory or
judicial interpretation. In particular, Medicare and Medicaid antifraud and
abuse amendments, codified under Section 1128B(b) of the Social Security Act
(the "Anti-Kickback Statute"), prohibit certain business practices and
relationships related to items or services reimbursable under Medicare,
Medicaid and other Federal health care programs, including the payment or
receipt of remuneration to induce or arrange for the referral of patients
covered by a Federal or state health care program. Sanctions for violating the
Anti-Kickback Statute include criminal penalties and
16
<PAGE>
civil sanctions, including civil money penalties and possible exclusion from
government programs such as Medicare and Medicaid. Pursuant to the Medicare and
Medicaid Patient and Program Protection Act of 1987, the United States
Department of Health and Human Services ("HHS") has issued regulations which
describe some of the conduct and business relationships immune from prosecution
under the Anti-Kickback Statute. The fact that a given business arrangement
does not fall within a safe harbor does not render the arrangement illegal.
However, business arrangements of health care service providers that fail to
satisfy the applicable safe harbor criteria risk scrutiny by enforcement
authorities. Certain of the current business arrangements of Triad do not
qualify for a safe harbor.
The Health Insurance Portability and Accountability Act of 1996, which
became effective January 1, 1997, amends, among other things, Title XI (42
U.S.C. (S) 1301 et seq.) to broaden the scope of certain fraud and abuse laws
to include all health care services, whether or not they are reimbursed under a
Federal program, and creates new enforcement mechanisms to combat fraud and
abuse, including an incentive program under which individuals can receive up to
$1,000 for providing information on Medicare fraud and abuse that leads to the
recovery of at least $100 of Medicare funds.
Triad provides financial incentives to recruit physicians into the
communities served by its hospitals, including loans and minimum revenue
guarantees. Although HHS has proposed a safe harbor for certain physician
recruitment, no safe harbor for physician recruitment is currently in force.
Several of the free standing surgery centers affiliated with Triad have
physician investors. Triad also enters into employment agreements, independent
contractor agreements, leases and other agreements with physicians. There can
be no assurance that regulatory authorities who enforce the Anti-Kickback
Statute will not determine that such activities or any other arrangements of
any of the hospitals or surgery centers owned and operated by Triad violate the
Anti-Kickback Statute or other Federal laws. Such a determination could subject
Triad to liabilities under the Social Security Act, including criminal
penalties, civil monetary penalties and/or exclusion from participation in
Medicare, Medicaid or other Federal health care programs, any of which could
have a material adverse effect on the business, financial condition, results of
operations or prospects of Triad.
In addition, Section 1877 of the Social Security Act, commonly known as the
"Stark Law," was amended, effective January 1, 1995, to significantly broaden
the scope of prohibited referrals by physicians under the Medicare and Medicaid
programs to providers of designated health services with which such physicians
have ownership or certain other financial arrangements. Certain exceptions are
available for physicians maintaining an ownership interest in an entire
hospital or surgery center, employment agreements, leases, physician
recruitment and certain other physician arrangements. Final implementing
regulations have not yet been adopted, and there can be no assurance that the
physician arrangements of Triad will be found to be in compliance with the
Stark Law, as such law ultimately may be interpreted. Many states have adopted
or are considering similar anti-kickback and physician self-referral
legislation, some of which extends beyond the scope of the Federal law to
prohibit the payment or receipt of remuneration for the referral of patients
and physician self-referrals regardless of the source of the payment for the
care. Both Federal and state government agencies have announced heightened and
coordinated civil and criminal enforcement efforts. In addition, the Office of
the Inspector General of the United States Department of Health and Human
Services and the Department of Justice have from time to time established
enforcement initiatives that focus on specific billing practices or other
suspected areas of abuse. Current initiatives include a focus on hospital
billing for outpatient charges associated with inpatient services, as well as
hospital laboratory billing practices. Triad is cooperating with the government
agencies which are responsible for such initiatives where such initiatives
involve its hospitals.
Triad exercises care in structuring its arrangements with physicians and
other referral
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sources to comply in all material respects with applicable laws. It is
possible, however, that government officials charged with responsibility for
enforcing such laws could assert that Triad, or certain transactions in which
it is involved, are in violation of such laws. It is also possible that such
laws ultimately could be interpreted by the courts in a manner inconsistent
with the interpretations of Triad.
Many states have enacted or are considering enacting laws affecting the
conversion or sale of not-for-profit hospitals. These laws, in general, include
provisions relating to state attorney general approval, advance notification
and community involvement. In addition, state attorneys general in states
without specific conversion legislation may exercise authority over these
transactions based upon existing law. In many states there has been an
increased interest in the oversight of not-for-profit conversions. The adoption
of conversion legislation and the increased review of not-for-profit hospital
conversions may limit the ability of Triad to acquire not-for-profit hospitals.
Some states require prior approval for the purchase, construction and
expansion of health care facilities, based upon a state's determination of need
for additional or expanded health care facilities or services. Such
determinations, embodied in Certificates of Need ("CONs") issued by
governmental agencies with jurisdiction over health care facilities, may be
required for capital expenditures exceeding a prescribed amount, changes in bed
capacity or services and certain other matters. One state in which Triad
currently owns a hospital, Alabama, has enacted CON legislation affecting acute
care hospital services. There can be no assurance that Triad will be able to
obtain required CONs in the future or that the failure to obtain any required
CONs will not have a material adverse effect on the business, financial
condition, results of operations or prospects of Triad.
The laws, rules and regulations described above are complex and subject to
interpretation. In the event of a determination that Triad is in violation of
such laws, rules or regulations, or if further changes in the regulatory
framework occur, any such determination or changes could have a material
adverse effect on business, financial condition, results of operations or
prospects of Triad. See "Government Regulation and Other Factors" for a
detailed discussion of laws and regulations affecting Triad.
Potential Adverse Impact of Columbia/HCA Investigations and Litigation
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, through written notice and other means, 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 the subject of a formal order of investigation by the
Commission. Columbia/HCA understands that the Commission investigation includes
the anti-fraud, periodic reporting and internal accounting control provisions
of the Federal securities laws.
According to published reports, on July 2, 1999, a federal jury in Tampa,
Florida found two Columbia/HCA employees guilty of conspiracy and making false
statements on Medicare and Champus cost reports for years 1992 and 1993 and a
Medicaid cost report for 1993. Both were found not guilty of obstructing a
federal auditor. One other employee was acquitted of all counts for which he
had been charged and the jury was unable to reach a verdict with respect to
another employee.
Columbia/HCA is a defendant in several qui tam actions, or actions under a
state statute 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, 31 U.S.C. (S) 3729 et
seq., for improper claims submitted to the government for reimbursement. The
lawsuits seek three times the amount of damages caused to the United
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States by the submission of any Medicare or Medicaid 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 the knowledge of Columbia/HCA, the government has
intervened in five qui tam actions. Columbia/HCA is aware of additional qui tam
actions that remain under seal and believes that there may be other sealed qui
tam cases of which it is unaware.
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. For a detailed discussion of such
suits, see "Government Regulation and Other Factors--Governmental Investigation
of Columbia/HCA and Related Litigation" for more information regarding such
litigation.
It is too early to predict the effect or outcome of any of the ongoing
investigations or qui tam and other actions, or whether any additional
investigations or litigation will be commenced. If Columbia/HCA is found to
have violated Federal or state laws relating to Medicare, Medicaid or similar
programs, then 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. Any
such sanctions or losses could have a material adverse effect on Columbia/HCA's
financial position and results of operations.
Pursuant to the distribution agreement entered into by and among
Columbia/HCA, Triad and LifePoint in connection with the distribution,
Columbia/HCA has agreed to indemnify Triad and LifePoint in respect of any
losses which they may incur as a result of the proceedings described above.
Columbia/HCA has also agreed to indemnify Triad and LifePoint in respect of any
losses which they 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 distribution date and
relate to the proceedings described above. Columbia/HCA has also agreed that,
in the event that any hospital owned by Triad or LifePoint is permanently
excluded from participation in the Medicare and Medicaid programs as result of
the proceedings described above, then Columbia/HCA will make a cash payment to
Triad or LifePoint, as the case may be, 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. Each of Triad and LifePoint
has agreed that, in connection with the government 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. See "Arrangements Relating to the
Distribution--Distribution Agreement" for a more detailed discussion of such
arrangement. 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 distribution date,
whether or not Triad is indemnified for similar acts, practices and omissions
occurring prior to the distribution date.
Columbia/HCA believes that the ongoing governmental investigations and
related media coverage may have had a negative effect on Columbia/HCA's results
of operations, which included Triad for the periods prior to the distribution
date which are presented herein. The extent to which Triad may or may not
continue to be affected by the ongoing investigations of Columbia/HCA, the
initiation of
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additional investigations, if any, and the related media coverage cannot be
predicted. It is possible that these matters could have a material adverse
effect on the business, financial condition, results of operations or prospects
of Triad in future periods.
Professional Liability Risks Could Adversely Affect Results of Operations and
Cash Flow
As is typical in the health care industry, Triad is subject to claims and
legal actions by patients and others in the ordinary course of business.
Columbia/HCA and Triad have cooperated in the purchase of insurance coverage
for professional and general liability risks for periods ending on or after the
distribution date. Substantially all losses in periods prior to the
distribution are insured through a wholly-owned insurance subsidiary of
Columbia/HCA and excess loss policies maintained by Columbia/HCA. See
"Arrangements Relating to the Distribution--Insurance Allocation and
Administration Agreement" for a more detailed discussion of such arrangement.
Because substantially all liability for professional and general liability
claims incurred is insured through a wholly-owned insurance subsidiary of
Columbia/HCA and excess loss policies maintained by Columbia/HCA, and
Columbia/HCA maintains the related reserve, no reserve for professional and
general liability risks is recorded on the balance sheets of Triad. While the
professional and general liability insurance coverage maintained for the Triad
business has been adequate to provide for liability claims in the past, and the
insurance coverage to be obtained for future periods is expected to be adequate
for future claims, there can be no assurance that such insurance will be
adequate.
Liability of Triad if the Distribution is Taxable
On March 30, 1999, Columbia/HCA received a ruling from the IRS concerning
the United States Federal income tax consequences of the distribution. The tax
ruling provides that, because the distribution qualifies under Section 355 of
the Internal Revenue Code of 1986, the distribution generally will be tax-free
to Columbia/HCA and to Columbia/HCA's stockholders, except for any cash
received instead of fractional shares. The tax ruling is based upon the
accuracy of representations made by Columbia/HCA as to numerous factual matters
and as to the intention to take, or to refrain from taking, certain future
actions. The inaccuracy of any of those factual representations or the failure
to take the intended actions, or the taking of actions which were represented
would not be taken, could cause the IRS to revoke all or part of the tax ruling
retroactively.
If the distribution were not to qualify for tax-free treatment under
Section 355 of the Code, then, in general, additional corporate tax (which
would be substantial) would be payable by the consolidated group of which
Columbia/HCA is the common parent. Under the consolidated return rules, each
member of the consolidated group, including Triad, would be jointly and
severally liable for such tax liability. If the distribution did not qualify
for tax-free treatment under Section 355 of the Code, the resulting tax
liability would have a material adverse effect on the business, financial
position, results of operations or prospects of Columbia/HCA and, possibly,
also of Triad.
Columbia/HCA, Triad and LifePoint entered into a tax sharing and
indemnification agreement, which allocates tax liabilities among Columbia/HCA,
Triad and LifePoint and addresses certain other tax matters such as
responsibility for filing tax returns, control of and cooperation in tax
litigation, and the tax treatment of the distribution. Generally, Columbia/HCA
will be responsible for taxes that are allocable to periods prior to the
distribution date, and each of Columbia/HCA, Triad and LifePoint will be
responsible for its own tax liabilities, including its allocable share of taxes
shown on any consolidated, combined or other tax return filed by Columbia/HCA,
for periods after the distribution date. The tax sharing and indemnification
agreement prohibits Triad and LifePoint from taking actions that could
jeopardize the tax treatment of either the distribution or the restructuring
that preceded the distribution, and requires Triad and LifePoint to indemnify
each other and
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Columbia/HCA for any taxes or other losses that result from any such actions.
Holding Company Structure Risks
Holdings is a holding company and holds most of its assets at, and conducts
most of its operations through, direct and indirect subsidiaries. As a holding
company, the results of operations of Holdings will depend on the results of
operations of its subsidiaries. Moreover, Holdings is dependent on dividends or
other intercompany transfers of funds from such subsidiaries to meet its debt
service and other obligations, including payment of principal and interest on
the notes. The ability of Holdings' subsidiaries to pay dividends or make other
payments or advances to Holdings will depend on their operating results and
will be subject to applicable laws and restrictions contained in agreements
governing indebtedness of such subsidiaries.
The claims of creditors of the subsidiaries of Holdings, including trade
creditors, will generally have priority as to the assets of such subsidiaries
over the claims of creditors of Holdings, including the noteholders. As of
June 30, 1999, on a pro forma basis after the elimination of the facilities to
be divested or which Triad has divested, the aggregate amount of indebtedness
and other obligations of Holdings' subsidiaries, including trade payables,
would have been approximately $708.1 million, including the guarantees of the
notes offered hereby.
Possible Lack of Year 2000 Compliance May Adversely Affect Triad
Until May 2006, Triad will continue to obtain most of its computer
applications and support from Columbia Information Systems, Inc., a wholly-
owned subsidiary of Columbia/HCA, pursuant to a computer and data processing
services agreement. Columbia Information Systems does not warrant that the
software and hardware used by Columbia Information Systems in providing
services to Triad will be Year 2000 ready, but Columbia Information Systems is
currently making efforts in a professional, timely and workmanlike manner that
it deems reasonable to address in a timely manner Year 2000 issues with respect
to the software licensed to Triad under the computer and data processing
services agreement. Columbia Information Systems and Triad also have taken
steps to examine and remediate the software systems and applications of Triad
not obtained from Columbia/HCA and the non-information technology systems, such
as vendor products, medical equipment and other related equipment with embedded
chips of Triad to ensure that they are Year 2000 ready. In connection with the
distribution, Columbia/HCA's wholly owned subsidiary CHCA Management Services,
L.P. and Triad entered into a Year 2000 professional services agreement,
pursuant to which CHCA will continue its ongoing program to inspect medical
equipment at Triad facilities for Year 2000 readiness. Under such agreement,
Triad remains solely responsible for any lack of Year 2000 compliance. See
"Arrangements Relating to the Distribution--Computer and Data Processing
Services Agreement" and "--Other Agreements" for a more detailed discussion of
such arrangements.
Any malfunctions in such systems, applications or equipment could have a
material adverse effect on the business, financial condition or results of
operations of Triad. Triad is currently unable to reasonably estimate the
ultimate cost to be incurred by it for the assessment, remediation, upgrade,
replacement and testing of its impacted information and non-information
technology systems. Triad is dependent upon Columbia/HCA for the Year 2000
readiness of a majority of its information technology systems. Triad is
responsible for the Year 2000 readiness of its non-information technology
systems. Triad is responsible for contingency planning in respect of Year 2000-
related risks in both areas. Any failure by Triad or Columbia/HCA to adequately
address such matters could have a material adverse effect on their businesses,
financial conditions, results of operations and prospects of Triad.
In addition, Triad has significant ongoing relationships with government
agencies, third party payers, vendors, suppliers and others that may have
computer systems with Year 2000 problems. The Health Care Financing
Administration recently announced that, due to
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potential Year 2000 concerns, Medicare reimbursement updates for hospitals
scheduled to take effect October 1, 1999 will be delayed until April 1, 2000,
although reimbursement rates will be adjusted to replace revenues lost due to
such delay. If the fiscal intermediaries and governmental agencies with which
Triad transacts business, and which are responsible for payment to Triad under
the Medicare and Medicaid programs, other payers, or suppliers and vendors
experience problems in Year 2000 readiness, that could have a material adverse
effect on the business, financial condition, results of operations and
prospects of Triad. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Impact of Year 2000 Computer Issues" for a
more detailed discussion of Triad's Year 2000 assessment.
You May Not Receive A Change in Control Payment
In the event of a change in control, Holdings is required to make an offer
for cash to repurchase the notes at 101% of the principal amount thereof, plus
accrued and unpaid interest, if any, thereof to the repurchase date. However,
the new credit agreement prohibits the purchase of outstanding notes prior to
repayment of the borrowings under the new credit agreement and any exercise by
the holders of the notes of their right to require Holdings to repurchase the
notes may cause an event of default under the new credit agreement. In
addition, Holdings may not have the financial resources necessary to repurchase
the notes upon a change in control. See "Description of the Notes--Certain
Covenants--Purchase of Notes Upon a Change in Control" for a more detailed
description of the change in control provision.
You May Not be Able to Sell Your Notes
There is no existing trading market for the exchange notes and no such
market may develop. The absence of such market adversely affects the liquidity
of an investment in the notes. If a market for the exchange notes does develop,
future trading prices will depend on many factors, including among other
things, prevailing interest rates and the market for similar securities,
general economic conditions and the financial condition and performance of, and
prospects for, Triad. Triad does not intend to apply for listing of the
exchange notes on any securities exchange or for quotation through any over-
the-counter market.
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THE EXCHANGE OFFER
Purpose and Effect of the Exchange Offer
The old notes were originally sold in a private offering by Healthtrust on
May 11, 1999 to Goldman, Sachs & Co., NationsBanc Montgomery Securities LLC,
Chase Securities Inc., Salomon Smith Barney Inc. and SG Cowen Securities
Corporation, as initial purchasers and then assumed by Triad and then in turn
by Holdings. In connection with the private offering of the notes, our company,
the guarantors and the initial purchasers entered into a registration rights
agreement in which we and the guarantors agreed to:
(1) use our reasonable best efforts to file a registration statement for
the exchange notes within 90 days after the issue date of the old notes;
(2) use our reasonable best efforts to cause the registration statement to
become effective within 180 days after the issue date of the old notes; and
(3) promptly upon the effectiveness of the registration statement, offer to
the holders of the old notes the opportunity to exchange their old notes for
a like principal amount of exchange notes, and to hold such exchange offer
open for at least 30 days after the date notice of the exchange offer is
mailed to holders.
The exchange notes will be issued without a restrictive legend and may be
reoffered and resold by the holder without restrictions or limitations under
the Securities Act, except as described below. We have agreed in the
registration rights agreement to use our reasonable best efforts to complete
the exchange offer and issue the exchange notes within 30 business days after
the registration statement is declared effective. This exchange offer is
intended to satisfy our exchange offer obligations under the registration
rights agreement.
For each old note surrendered to us pursuant to the exchange offer, the
holder of such old note will receive an exchange note having a principal amount
equal to that of the surrendered old note. The term "holder" with respect to
the exchange offer means any person in whose name old notes are registered on
our books or any other person who has obtained a properly completed bond power
from the registered holder or any person whose old notes are held of record by
The Depository Trust Company ("DTC") who desires to deliver such old notes by
book-entry transfer through DTC.
Under existing interpretations of the staff of the Commission contained in
several no-action letters to third parties, the exchange notes, including the
related guarantees, would in general be freely transferable by holders thereof
after the exchange offer without further registration under the Securities Act.
However any purchaser of old notes who is either an "affiliate" of our company
within the meaning of Rule 405 of the Securities Act or who intends to
participate in the exchange offer for the purpose of distributing the exchange
notes:
(1) will not be able to tender its old notes in the exchange offer,
(2) will not be able to rely on the interpretations of the staff of the
Commission, and
(3) must comply with the registration and prospectus delivery requirements
of the Securities Act in connection with any sale or transfer of the old
notes, unless such sale or transfer is made pursuant to an exemption from
such requirements.
Each holder that wishes to exchange its old notes for exchange notes will
be required to represent in a letter of transmittal that:
. any exchange notes received by it will be acquired in the ordinary course of
its business,
. it has no arrangement or understanding with any person to participate in a
distribution of the exchange notes in violation of the Securities Act,
. it is not an affiliate of our company,
. if such holder is not a broker-dealer, that it is not engaged in, and does
not intend to engage in a distribution of the exchange notes, and
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. if such holder is a broker-dealer (a "Participating Broker-Dealer) that will
receive exchange notes for its own account in exchange for old notes that
are acquired as a result of market-making or other trading activities, that
it will deliver a prospectus in connection with any resale of such exchange
notes.
The Commission has taken the position that Participating Broker-Dealers may
fulfill their prospectus delivery requirements with respect to resales of the
exchange notes with the prospectus contained in the registration statement.
Each of our company and the guarantors have agreed in the registration rights
agreement that it will make available, during the period required by the
Securities Act, a prospectus meeting the requirements of the Securities Act for
use by Participating Broker-Dealers and other persons, if any, with similar
prospectus delivery requirements for use in connection with any resale of
exchange notes. We will keep the registration statement effective for a period
of 180 days after the exchange offer has been completed in order to permit
resales of exchange notes acquired by broker-dealers in after-market
transactions.
However, the Commission has recently proposed that its interpretations
referred to above be repealed. We cannot predict whether the Commission will
act on this proposal prior to the completion of this exchange offer. If those
interpretations are repealed prior to completion of this exchange offer,
holders of old notes will not be able to receive exchange notes pursuant to an
exchange offer. Rather, as described below, we and the guarantors will be
required to register the notes pursuant to a shelf registration statement in
connection with resales by holders of the notes. Holders of notes will be
required to deliver a prospectus to purchasers and will be subject to certain
of the civil liability provisions under the Securities Act in connection with
such resales.
If,
(1) prior to completion of the exchange offer, existing Commission
interpretations are changed such that the exchange notes would not in general
be freely transferable under the Securities Act,
(2) the exchange offer is not completed within 220 days following the issue
date of the old notes,
(3) any holder of notes notifies our company prior to the 20th day
following completion of the exchange offer that:
(a) due to a change in law or policy such holder is not eligible to
participate in the exchange offer;
(b) due to a change in law or policy such holder may not resell the
exchange notes acquired by it in the exchange offer to the public without a
prospectus, and the prospectus contained in the exchange offer registration
statement is not appropriate or available for such resales by such holder;
(c) such holder is a broker-dealer and owns notes acquired directly from
us or an affiliate of our company; or
(4) the holders of a majority of the notes may not resell the exchange
notes they acquired in the exchange offer without restriction under the
Securities Act and without restriction under applicable blue sky or state
securities laws,
then, in each case, our company and the guarantors will, instead of, or in the
case of clause (3) above, in addition to, completing the exchange offer, file
and use our reasonable best efforts to cause a registration statement under the
Securities Act relating to a shelf registration of the notes for resale by
holders (the "Resale Registration") to become effective and to remain effective
until the earlier of two years following the effective date of the shelf
registration statement or such time as all securities covered by the shelf
registration statement have been sold pursuant to the shelf registration
statement.
Our company and the guarantors will, in the event of a Resale Registration,
(1) provide to the holders of the applicable notes copies of the prospectus
that is a part of the shelf registration statement filed in connection with
the Resale Registration,
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(2) notify each such holder when the shelf registration statement for the
applicable notes has become effective, and
(3) take certain other actions as are required to permit unrestricted
resales of the notes.
A holder that sells its notes pursuant to the Resale Registration
(1) will be required to be named as a selling security holder in the
related prospectus and to deliver a prospectus to the purchaser,
(2) will be subject to certain of the civil liability provisions under the
Securities Act in connection with such sales, and
(3) will be bound by the provisions of the registration rights agreement
that are applicable to such holder, including certain indemnification
obligations.
The old notes provide, among other things, that if
(1) our company and the guarantors have not filed any of the registration
statements required by the registration rights agreement on or prior to the
date specified for such filing;
(2) any of such registration statements is not declared effective on or
prior to the date specified for such effectiveness;
(3) the exchange offer is not consummated within 30 business days after the
effective date of the exchange offer registration statement; or
(4) the shelf registration statement or the exchange offer registration
statement is declared effective but thereafter ceases to be effective, except
as specifically permitted therein, without being succeeded by an additional
registration which was filed and declared effective (any such event referred
to in clauses (1)-(4), a "Registration Default"),
then, from the date that a Registration Default or Defaults occurs through, but
excluding the date when all Registration Defaults are cured, the interest rate
on the applicable notes will
(1) increase by .25% for the first 90-day period or portion thereof
immediately following the occurrence of such Registration Default or
Defaults, and
(2) thereafter increase by an additional .25% at the beginning of each
subsequent 90-day period, or portion thereof, while a Registration Default or
Defaults is continuing.
The additional interest on any affected old notes may not exceed 1.0% in the
aggregate. Following the cure of all Registration Defaults, the interest rate
on the notes will revert to the original rate. Additional interest will not
accrue and be payable as set forth above during any period when a shelf
registration statement is permitted to be suspended under the registration
rights agreement.
Following the consummation of the exchange offer, holders of old notes who
were eligible to participate in the exchange offer but who did not tender their
old notes will not have any further registration rights, and the old notes will
continue to be subject to certain restrictions on transfer. Accordingly, the
liquidity of the market for the old notes could be adversely affected.
The above summary highlights the material provisions of the registration
rights agreement, but does not restate that agreement in its entirety. We urge
you to review all of the provisions of the registration rights agreement,
because it, and not this summary description, defines your rights as holders to
exchange your old notes for registered notes. A copy of the registration rights
agreement has previously been filed with the Commission by Triad, and the
registration rights agreement is incorporated by reference to the registration
statement of which this prospectus forms a part.
Terms of the Exchange Offer
This prospectus and the accompanying letter of transmittal contain the
terms and conditions for the exchange offer. Upon the terms and subject to the
conditions set forth in this prospectus and in the accompanying letter of
transmittal, we will accept for exchange all old notes which are properly
tendered and not withdrawn on or prior to 5:00 p.m., New York City time, on the
expiration date. After authentication of the exchange notes by the
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trustee or an authentication agent, we will issue and deliver $1,000 principal
amount of exchange notes in exchange for each $1,000 principal amount of
outstanding old notes accepted in the exchange offer. Holders may tender some
or all of their old notes in the exchange offer in denominations of $1,000 and
integral multiples thereof.
The form and terms of the exchange notes are identical in all material
respects to the form and terms of the old notes, except that
(1) the offering of the exchange notes has been registered under the
Securities Act,
(2) the exchange notes will not be subject to transfer restrictions or
registration rights, and
(3) certain provisions relating to an increase in the stated interest rate
on the old notes provided for under certain circumstances will be eliminated.
The exchange notes will evidence the same debt as the old notes. The
exchange notes will be issued under and entitled to the benefits of the
indenture.
As of the date of this prospectus, $325,000,000 aggregate principal amount
of the old notes is outstanding. In connection with the issuance of the old
notes, arrangements were made for the old notes to be issued and transferable
in book-entry form through the facilities of DTC, acting as a depositary. The
exchange notes will also be issuable and transferable in book-entry form
through DTC.
This prospectus, together with the accompanying letter of transmittal, is
initially being sent to all registered holders of the old notes as of the close
of business on , 1999. The exchange offer is not conditioned upon any
minimum aggregate principal amount of old notes being tendered. However, our
obligation to accept old notes for exchange pursuant to the exchange offer is
subject to certain customary conditions that we describe under "--Conditions to
the Exchange Offer" below.
We shall be deemed to have accepted validly tendered old notes when, as and
if we have given oral or written notice thereof to the exchange agent. The
exchange agent will act as agent for the tendering holders for the purpose of
receiving exchange notes from us and delivering exchange notes to such holders.
If any tendered old notes are not accepted for exchange because of an
invalid tender or the occurrence of certain other events set forth herein,
certificates for any such unaccepted old notes will be returned, at our cost,
to the tendering holder thereof as promptly as practicable after the expiration
date.
Holders who tender old notes in the exchange offer will not be required to
pay brokerage commissions or fees or, subject to the instructions in the letter
of transmittal, transfer taxes with respect to the exchange of old notes
pursuant to the exchange offer. We will pay all charges and expenses, other
than certain applicable taxes, in connection with the exchange offer. See "--
Solicitation of Tenders; Fees and Expenses" for more detailed information
regarding the expenses of the exchange offer.
By executing or otherwise becoming bound by the letter of transmittal, you
will be making the representations described under "--Procedures for Tendering"
below.
Expiration Date; Extensions; Amendments
. The term "expiration date" shall mean 5:00 p.m., New York City time, on
, 1999, unless we, in our sole discretion, extend the exchange
offer, in which case the term "expiration date" shall mean the latest date
to which the exchange offer is extended. We may extend the exchange offer at
any time and from time to time by giving oral or written notice to the
exchange agent and by timely public announcement.
. We expressly reserve the right, at any time, to extend the period of time
during which the exchange offer is open, and thereby delay acceptance of any
old notes, by giving oral or written notice of such extension to the
exchange agent and notice of such extension to the holders as
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described below. During any such extension, all old notes previously
tendered will remain subject to the exchange offer and may be accepted for
exchange by us. Any old notes not accepted for exchange for any reason will
be returned without expense to the tendering holder thereof as promptly as
practicable after the expiration or termination of the exchange offer.
. We expressly reserve the right to amend or terminate the exchange offer, and
not to accept for exchange any old notes that we have not yet accepted for
exchange, if any of the conditions set forth herein under "--Conditions to
the Exchange Offer" shall have occurred and shall not have been waived by
us, if such conditions are permitted to be waived by our company.
. We will give oral or written notice of any such extension, amendment,
termination or non-acceptance described above to holders of the old notes as
promptly as practicable. If the exchange offer is amended in a manner
determined by us to constitute a material change, we will promptly disclose
such amendment in a manner reasonably calculated to inform the holders of
such amendment and we will extend the exchange offer to the extent required
by law.
. Without limiting the manner in which we may choose to make public
announcements of any extension, amendment, termination or non-acceptance of
the exchange offer, and subject to applicable law, we will have no
obligation to publish, advertise or otherwise communicate any such public
announcement other than by issuing a timely release to the Dow Jones News
Service.
Interest on the Exchange Notes
Interest on the exchange notes will accrue from the last interest payment
date on which interest was paid on the old notes surrendered in exchange
therefor or, if no interest has been paid on the old notes, from the issue date
of the old notes. Interest on the exchange notes will be payable semi-annually
on May 15 and November 15 of each year, commencing November 15, 1999.
Procedures for Tendering
What to submit and how
Each holder of old notes wishing to accept the exchange offer must
complete, sign and date the letter of transmittal, or a facsimile thereof, in
accordance with the instructions contained herein and therein. Each holder
shall then mail or otherwise deliver such letter of transmittal, or such
facsimile, together with the old notes to be exchanged and any other required
documentation, to Citibank, N.A., as exchange agent, at the address set forth
below under "--Exchange Agent" on or prior to the expiration date. A holder may
also effect a tender of old notes pursuant to the procedures for book-entry
transfer as provided for herein and therein. By executing the letter of
transmittal, each holder will represent to our company that, among other
things,
(1) the exchange notes acquired pursuant to the exchange offer are being
acquired in the ordinary course of business of the person receiving such
exchange notes, whether or not such person is the holder,
(2) that neither the holder nor any such other person has any arrangement
or understanding with any person to participate in the distribution of such
exchange notes, and
(3) that neither the holder nor any such other person is an "affiliate," as
defined in Rule 405 under the Securities Act, of our company.
Any financial institution that is a participant in DTC's Book-Entry
Transfer Facility system may make book-entry delivery of the old notes by
causing DTC to transfer such old notes into the exchange agent's account in
accordance with DTC's procedure for such transfer. Although delivery of old
notes may be effected through book-entry transfer into the exchange agent's
account at DTC, the letter of transmittal, or facsimile thereof, with any
required signature
27
<PAGE>
guarantees and any other required documents, must, in any case, be transmitted
to and received by the exchange agent at its address set forth herein under "--
Exchange Agent" prior to 5:00 p.m., New York City time, on the expiration date.
Delivery of documents to DTC in accordance with its procedures does not
constitute delivery to the exchange agent.
Only a holder may tender its old notes in the exchange offer. To tender in
the exchange offer, a holder must:
(1) complete, sign and date the letter of transmittal or a facsimile
thereof,
(2) have the signatures thereof guaranteed if required by the letter of
transmittal, and
(3) unless such tender is being effected pursuant to the procedure for
book-entry transfer, mail or otherwise deliver such letter of transmittal or
such facsimile, together with the old notes and other required documents, to
the exchange agent, prior to 5:00 p.m., New York City time, on the expiration
date.
The tender by a holder will constitute an agreement between such holder,
our company and the exchange agent in accordance with the terms and subject to
the conditions set forth herein and in the letter of transmittal. If less than
all of the old notes are tendered, a tendering holder should fill in the amount
of old notes being tendered in the appropriate box on the letter of
transmittal. The entire amount of old notes delivered to the exchange agent
will be deemed to have been tendered unless otherwise indicated.
The method of delivery of old notes and the letter of transmittal and all
other required documents to the exchange agent is at the election and risk of
the holders. Instead of delivery by mail, it is recommended that holders use an
overnight or hand delivery service. In all cases, sufficient time should be
allowed to ensure delivery to the exchange agent prior to the expiration date.
No letter of transmittal or old notes should be sent to Triad. Holders may also
request that their respective brokers, dealers, commercial banks, trust
companies or nominees effect such tender for holders, in each case as set forth
herein and in the letter of transmittal.
Any beneficial owner whose old notes are registered in the name of his
broker, dealer, commercial bank, trust company or other nominee and who wishes
to tender should contact such registered holder promptly and instruct such
registered holder to tender on his behalf. If such beneficial owner wishes to
tender on his own behalf, such beneficial owner must, prior to completing and
executing the letter of transmittal and delivering his old notes, either make
appropriate arrangements to register ownership of the old notes in such owner's
name or obtain a properly completed bond power from the registered holder. The
transfer of record ownership may take considerable time.
Required representations in letter of transmittal
The letter of transmittal will include representations to our company that,
among other things,
(1) the exchange notes acquired pursuant to the exchange offer are being
acquired in the ordinary course of business of the person receiving such
exchange notes, whether or not such person is the holder,
(2) neither the holder nor any such other person is engaged in, intends to
engage in or has any arrangement or understanding with any person to
participate in the distribution of such exchange notes,
(3) neither the holder nor any such other person is an "affiliate," as
defined in Rule 405 under the Securities Act, of our company, and
(4) if the tendering holder is a broker or dealer as defined in the
Exchange Act, then
(a) it acquired the old notes for its own account as a result of market-
making activities or other trading activities, and
(b) it has not entered into any arrangement or understanding with our
company or any "affiliate" of our company within the meaning of Rule 405
under the Securities Act to distribute the exchange notes to be received in
the exchange offer.
28
<PAGE>
In the case of a broker-dealer that receives exchange notes for its own
account in exchange for old notes which were acquired by it as a result of
market-making or other trading activities, the letter of transmittal will also
include an acknowledgement that the broker-dealer will deliver a copy of this
prospectus in connection with the resale by it of exchange notes received
pursuant to the exchange offer; however, by so acknowledging and by delivering
a prospectus, such holder will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. See "Plan of
Distribution."
How to sign your letter of transmittal and other documents
Signatures on a letter of transmittal or a notice of withdrawal, as the
case may be, must be guaranteed by a member firm of a registered national
securities exchange or of the National Association of Securities Dealers, Inc.,
a commercial bank or trust company having an office or correspondent in the
United States or an "eligible guarantor institution" within the meaning of Rule
17Ad-15 under the Exchange Act (each an "Eligible Institution"), unless the old
notes tendered pursuant thereto are tendered
(1) by a registered holder who has not completed the box entitled "Special
Registration Instructions" or "Special Delivery Instructions" of the letter
of transmittal, or
(2) for the account of an Eligible Institution.
If the letter of transmittal is signed by a person other than the
registered holder of old notes, such old notes must be endorsed or accompanied
by appropriate bond powers which authorize such person to tender the old notes
on behalf of the registered holder, in either case signed as the name of the
registered holder or holders appears on the old notes. If the letter of
transmittal or any old notes or bond powers are signed or endorsed by trustees,
executors, administrators, guardians, attorneys-in-fact, officers of
corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and unless waived by us, evidence
satisfactory to us of their authority to so act must be submitted with such
letter of transmittal.
Important rules concerning the exchange offer
You should note that:
. All questions as to the validity, form, eligibility, including time of
receipt, acceptance and withdrawal of the tendered old notes will be
determined by us in our sole discretion, which determination will be final
and binding.
. We reserve the absolute right to reject any and all old notes not properly
tendered or any old notes the acceptance of which would, in our judgment or
the judgment of our counsel, would be unlawful.
. We also reserve the absolute right to waive any irregularities or conditions
of tender as to particular old notes. Our company's interpretation of the
terms and conditions of the exchange offer, including the instructions in
the letter of transmittal, will be final and binding on all parties. Unless
waived, any defects or irregularities in connection with tenders of old
notes must be cured within such time as we shall determine.
. Although we intend to notify holders of defects or irregularities with
respect to any tender of old notes, neither our company, the exchange agent
nor any other person shall be under any duty to give notification of any
defect or irregularity with respect to tenders of old notes, nor shall any
of them incur any liability for failure to give such notification.
. Tenders of old notes will not be deemed to have been made until such
irregularities have been cured or waived. Any old notes received by the
exchange agent that we determine are not properly tendered or the tender of
which is otherwise rejected by us and as to which the defects or
irregularities have not been cured or waived by us will be returned by the
exchange agent to the tendering holder unless otherwise provided in the
letter of transmittal, as soon as practicable following the expiration date.
29
<PAGE>
Book-Entry Transfer
The exchange agent will make a request promptly after the date of this
prospectus to establish accounts with respect to the old notes at the DTC for
the purpose of facilitating the exchange offer. Any financial institution that
is a participant in the DTC's system may make book-entry delivery of old notes
by causing the DTC to transfer such old notes into the exchange agent's account
with respect to the old notes in accordance with DTC's Automated Tender Offer
Program procedures for such transfer. However, the exchange for the old notes
so tendered will only be made after timely confirmation of such book-entry
transfer of old notes into the exchange agent's account, and timely receipt by
the exchange agent of an agent's message and any other documents required by
the letter of transmittal. The term "agent's message" means a message,
transmitted by DTC and received by the exchange agent and forming a part of the
confirmation of a book-entry transfer, which states that DTC has received an
express acknowledgment from a participant that is tendering old notes that such
participant has received the letter of transmittal and agrees to be bound by
the terms of the letter of transmittal, and that we may enforce such agreement
against the participant.
Although delivery of old notes may be effected through book-entry transfer
into the exchange agent's account at DTC, an appropriate letter of transmittal
properly completed and duly executed with any required signature guarantee and
all other required documents must in each case be transmitted to and received
or confirmed by the exchange agent at its address set forth below on or prior
to the expiration date, or you must comply with the guaranteed delivery
procedures described below. Delivery of documents to DTC does not constitute
delivery to the exchange agent.
Guaranteed Delivery Procedures
If you are a registered holder of old notes and you wish to tender such old
notes but your old notes are not immediately available, or time will not permit
your old notes or other required documents to reach the exchange agent before
the expiration date, or the procedure for book-entry transfer cannot be
completed on a timely basis, you may effect a tender if:
(1) the tender is made through an Eligible Institution;
(2) prior to the expiration date, the exchange agent receives from such
Eligible Institution a properly completed and duly executed notice of
guaranteed delivery, by facsimile transmittal, mail or hand delivery
(a) stating the name and address of the holder, the certificate number or
numbers of such holder's old notes and the principal amount of such old
notes tendered,
(b) stating that the tender is being made thereby, and
(c) guaranteeing that, within three New York Stock Exchange trading days
after the expiration date, the letter of transmittal or facsimile thereof,
together with the certificate(s) representing the old notes to be tendered
in proper form for transfer, or confirmation of a book-entry transfer into
the exchange agent's account at DTC of old notes delivered electronically,
and any other documents required by the letter of transmittal, will be
deposited by the Eligible Institution with the exchange agent; and
(3) such properly completed and executed letter of transmittal, or
facsimile thereof, together with the certificate(s) representing all tendered
old notes in proper form for transfer, or confirmation of a book-entry
transfer into the exchange agent's account at DTC of old notes delivered
electronically and all other documents required by the letter of transmittal
are received by the exchange agent within three NYSE trading days after the
expiration date.
Upon request to the exchange agent, a notice of guaranteed delivery will be
sent to holders who wish to tender their old notes according to the guaranteed
delivery procedures set forth above.
30
<PAGE>
Withdrawal of Tenders
Except as otherwise provided herein, tenders of old notes may be withdrawn
at any time prior to 5:00 p.m. New York City time, on the expiration date.
For a withdrawal to be effective, a written or facsimile transmission
notice of withdrawal must be received by the exchange agent at its address set
forth herein prior to 5:00 p.m., New York City time, on the expiration date.
Any such notice of withdrawal must:
. specify the name of the person having deposited the old notes to be
withdrawn (the "Depositor"),
. identify the old notes to be withdrawn, including the certificate number or
number and principal amount of such old notes or, in the case of old notes
transferred by book-entry transfer, the name and number of the account at
DTC to be credited,
. be signed by the Depositor in the same manner as the original signature on
the letter of transmittal by which such old notes were tendered, including
any required signature guarantee, or be accompanied by documents of
transfer sufficient to permit the trustee with respect to the old notes to
register the transfer of such old notes into the name of the Depositor
withdrawing the tender, and
. specify the name in which any such old notes are to be registered, if
different from that of the Depositor.
Please note that all questions as to the validity, form and eligibility,
including time of receipt, of such withdrawal notices will be determined by
us, and our determination shall be final and binding on all parties. Any old
notes so withdrawn will be deemed not to have been validly tendered for
purposes of the exchange offer, and no exchange notes will be issued with
respect thereto unless the old notes so withdrawn are validly retendered.
Properly withdrawn old notes may be retendered by following one of the
procedures described above under "--Procedures for Tendering" at any time
prior to the expiration date.
Conditions to the Exchange Offer
Notwithstanding any other term of the exchange offer, we will not be
required to accept for exchange, or to issue exchange notes in exchange for,
any old notes, and may terminate or amend the exchange offer as provided
herein before the acceptance of such old notes if, in our company's judgment,
any of the following conditions has occurred or exists or has not been
satisfied:
(1) that the exchange offer, or the making of any exchange by a holder,
violates any applicable interpretation of the staff of the Commission,
(2) that any action or proceeding shall have been instituted or threatened
in any court or by or before any governmental agency or body with respect to
the exchange offer, or
(3) that there has been proposed, adopted or enacted any law, statute, rule
or regulation that, in the sole judgment of our company, might materially
impair our ability to proceed with the exchange offer.
If we determine that we may terminate the exchange offer for any of the
reasons set forth above, we may
(1) refuse to accept any old notes and return any old notes that have been
tendered to the holders thereof,
(2) extend the exchange offer and retain all old notes tendered prior to
the expiration date of the exchange offer, subject to the rights of such
holders of tendered old notes to withdraw their tendered old notes, or
(3) waive such termination event with respect to the exchange offer and
accept all properly tendered old notes that have not been withdrawn. If such
waiver constitutes a material change in the exchange offer, we will disclose
such change by means of a supplement to this prospectus that will be
distributed to each registered holder, and we will extend the exchange offer
for a period of
31
<PAGE>
five to ten business days, depending upon the significance of the waiver and
the manner of disclosure to the registered holders, if the exchange offer
would otherwise expire during such period.
The above conditions are for our sole benefit and may be asserted by us
regardless of the circumstances giving rise to such condition. Our failure at
any time to exercise the foregoing rights shall not be deemed to be a waiver by
us of any such right and each such right shall be deemed an ongoing right which
may be asserted at any time and from time to time.
Exchange Agent
Citibank, N.A., the trustee under the indenture, has been appointed as
exchange agent for the exchange offer. All executed letters of transmittal
should be directed to the exchange agent at one of the addresses set forth
below. In such capacity, the exchange agent has no fiduciary duties and will be
acting solely on the basis of directions of our company. Questions, requests
for assistance and requests for additional copies of this prospectus or of the
letter of transmittal should be directed to the exchange agent addressed as
follows:
By Courier:
Citibank, N.A.
915 Broadway
5th Floor
New York, NY 10010
By Mail:
Citibank, N.A.
P.O. Box 685
Old Chelsea Station
New York, New York 10113
By Hand Delivery:
Citibank, N.A.
Corporate Trust Window
111 Wall Street, 5th Floor
New York, New York 10043
Facsimile for Eligible Institutions:
(212) 505-2248
Attention: Customer Service
To Confirm by Telephone:
(808) 270-0808
Delivery to an address or facsimile number other than those listed above
will not constitute a valid delivery.
Solicitation of Tenders; Fees and Expenses
We will pay all expenses of soliciting tenders pursuant to the exchange
offer. The principal solicitation pursuant to the exchange offer is being made
by mail. Additional solicitations may be made by officers and regular employees
of our company and our affiliates in person, by telegraph, telephone or
telecopier.
We have not retained any dealer-manager in connection with the exchange
offer and will not make any payments to broker, dealers or other persons
soliciting acceptances of the exchange offer. We will, however, pay the
exchange agent reasonable and customary fees for its services and will
reimburse the exchange agent for its reasonable out-of-pocket costs and
expenses in connection therewith and will indemnify the exchange agent for all
losses and claims incurred by it as a result of the exchange offer.
We may also pay brokerage houses and other custodians, nominees and
fiduciaries the reasonable out-of-pocket expenses incurred by them in
forwarding copies of this prospectus, letters of transmittal and related
documents to the beneficial owners of the old notes and in handling or
forwarding tenders for exchange.
The expenses to be incurred in connection with the exchange offer,
including fees and expenses of the exchange agent and trustee and accounting
and legal fees and printing costs, will be paid by our company.
We will pay all transfer taxes, if any, applicable to the exchange of old
notes pursuant to the exchange offer. If, however, certificates representing
exchange notes or old notes for principal amounts not tendered or accepted for
exchange are to be delivered to, or are to be registered or issued in the name
of, any person other than the registered holder of the old notes tendered, or
if tendered old notes are registered in the name of any person other than the
person signing the letter of
32
<PAGE>
transmittal, or if the transfer tax is imposed for any reason other than the
exchange of old notes pursuant to the exchange offer, then the amount of any
such transfer taxes, whether imposed on the registered holder or any other
persons, will be payable by the tendering holder. If satisfactory evidence of
payment of such taxes or exemption therefrom is not submitted with the letter
of transmittal, the amount of such transfer taxes will be billed by us directly
to such tendering holder.
Accounting Treatment
The exchange notes will be recorded at the same carrying value as the old
notes, as reflected in our accounting records on the date of the exchange.
Accordingly, no gain or loss for accounting purposes will be recognized by us
as a result of the consummation of the exchange offer. The expenses of the
exchange offer will be amortized by us over the term of the exchange notes.
Consequences of Failure to Exchange
As a result of the making of, and upon acceptance for exchange of all
validly tendered old notes pursuant to the terms of, this exchange offer, we
will have fulfilled a covenant contained in the registration rights agreement.
Holders of the old notes who do not tender their old notes in the exchange
offer will continue to hold such old notes and will be entitled to all the
rights, and subject to the limitations applicable thereto, under the indenture
and the registration rights agreement, except for any such rights under
registration rights agreement that by their terms terminate or cease to have
further effect as a result of making of this exchange offer. All untendered old
notes will continue to be subject to the restrictions on transfer set forth in
the Indenture. Accordingly, such old notes may be resold only:
(1) to our company,
(2) pursuant to a registration statement which has been declared effective
under the Securities Act,
(3) in the United States to qualified institutional buyers within the
meaning of Rule 144A in reliance upon the exemption from the registration
requirements of the Securities Act provided by Rule 144A,
(4) in the United States to Institutional Accredited Investors, as defined
in Rule 502(a)(1), (2), (3) or (7) promulgated under the Securities Act, in
transactions exempt from the registration requirements of the Securities Act,
(5) outside the United States in transactions complying with the provisions
of Regulation S under the Securities Act, or
(6) pursuant to any other available exemption from the registration
requirements under the Securities Act.
To the extent that old notes are tendered and accepted in the exchange offer,
the liquidity of the trading market for untendered old notes could be adversely
affected.
33
<PAGE>
USE OF PROCEEDS
The exchange offer is intended to satisfy certain of our obligations under
the registration rights agreement. We will not receive any cash proceeds from
the exchange offer.
CAPITALIZATION
The following table sets forth the capitalization of Triad as of June 30,
1999, and as adjusted to reflect the elimination of facilities divested or to
be divested or which Triad has ceased to operate. This table should be read
together with the Unaudited Pro Forma Condensed Consolidated Financial
Information and the related notes, "Management's Discussion and Analysis of
Financial Condition and Results of Operations," as well as the Consolidated
Financial Statements of Triad and the related notes appearing elsewhere in this
prospectus.
<TABLE>
<CAPTION>
As of June 30,
1999
------------------
As
Actual Adjusted
-------- --------
(Dollars
in millions)
<S> <C> <C>
Long term debt, including amounts due in one year:
New credit agreement...................................... $335.0 335.0
Notes offered hereby...................................... 325.0 325.0
Other long-term debt...................................... 8.8 6.8
-------- --------
Total long-term debt..................................... 668.8 666.8
Stockholders' equity:
Common stock, par value $0.01 per share; 90.0 million
shares
authorized; 33.9 million shares issued and outstanding... 0.3 0.3
Additional paid-in capital................................ 607.8 607.8
Unearned ESOP compensation................................ (34.0) (34.0)
Retained deficit.......................................... (3.5) (32.7)
-------- --------
Total stockholders' equity............................... 570.6 541.4
-------- --------
Total capitalization..................................... $1,239.4 $1,208.2
======== ========
</TABLE>
34
<PAGE>
SELECTED HISTORICAL FINANCIAL DATA
The following table sets forth selected historical financial data of Triad
for each of the years in the five year period ended December 31, 1998 and for
the six months ended June 30, 1998 and 1999. The table should be read together
with the Consolidated Financial Statements and related notes included elsewhere
in this prospectus and "Management's Discussion and Analysis of Financial
Condition and Results of Operations."
The selected financial data at December 31, 1994, 1995 and 1996 and June
30, 1998 and 1999 and for the years ended December 31, 1994 and 1995 and for
the six months ended June 30, 1998 and 1999 is unaudited, but in the opinion of
management, reflects all adjustments necessary for a fair presentation of such
information. Such adjustments are of a recurring nature.
Operating results for the six months ended June 30, 1999 are not
necessarily indicative of the results that may be expected for the fiscal year
ending December 31, 1999.
35
<PAGE>
<TABLE>
<CAPTION>
Six Months Ended
Years Ended December 31, June 30,
-------------------------------------------------- ------------------
1994 1995 1996 1997 1998 1998 1999
-------- -------- -------- -------- -------- -------- --------
(Dollars in millions, except per share
amounts)
<S> <C> <C> <C> <C> <C> <C> <C>
Summary of Operations:
Revenues................ $1,290.5 $1,558.9 $1,600.5 $1,609.3 $1,588.7 $ 813.8 $ 707.7
Salaries and benefits... 541.4 636.8 628.1 666.8 700.5 352.4 303.5
Supplies................ 180.2 217.7 221.9 232.8 241.6 123.0 102.6
Other operating
expenses............... 273.5 321.0 351.7 385.9 362.6 181.4 161.0
Provision for doubtful
accounts............... 89.2 98.2 106.5 138.5 138.4 72.6 67.6
Depreciation and
amortization........... 68.0 84.3 94.5 102.9 109.6 52.8 54.3
Interest expense
allocated from
Columbia/HCA........... 28.7 34.6 49.9 58.4 66.8 32.3 22.5
Interest expense........ 2.0 2.0 2.1 2.1 2.1 1.1 9.6
ESOP expense............ -- -- -- -- -- -- 0.5
Management fees
allocated from
Columbia/HCA........... 17.4 21.0 20.7 25.4 29.3 15.0 8.9
Impairment of long-lived
assets................. -- -- -- 13.7 55.1 -- 33.9
-------- -------- -------- -------- -------- -------- --------
1,200.4 1,415.6 1,475.4 1,626.5 1,706.0 830.6 764.4
-------- -------- -------- -------- -------- -------- --------
Income (loss) from
continuing operations
before minority
interests, equity in
earnings and income
taxes.................. 90.1 143.3 125.1 (17.2) (117.3) (16.8) (56.7)
Minority interests in
earnings of
consolidated entities.. (0.6) (1.4) (10.8) (11.5) (11.0) (6.5) (4.7)
Equity in earnings
(loss) of non-
consolidating
entities............... -- -- 2.2 2.5 3.4 2.5 (1.5)
-------- -------- -------- -------- -------- -------- --------
Income (loss) from
continuing operations
before income taxes.... 89.5 141.9 116.5 (26.2) (124.9) (20.8) (62.9)
Income tax (provision)
benefit................ (35.5) (57.0) (48.2) 7.2 39.4 6.2 17.5
-------- -------- -------- -------- -------- -------- --------
Income (loss) from
continuing
operations(a).......... $ 54.0 $ 84.9 $ 68.3 $ (19.0) $ (85.5) $ (14.6) $ (45.4)
======== ======== ======== ======== ======== ======== ========
Net income (loss)(a).... $ 55.5 $ 87.2 $ 74.7 $ (19.8) $ (87.1) $ (14.6) $ (45.4)
======== ======== ======== ======== ======== ======== ========
Basic earnings (loss)
per share:
Income (loss) from
continuing
operations(a).......... $ 1.80 $ 2.83 $ 2.28 $ (0.63) $ (2.85) $ (0.49) $ (1.51)
Net income (loss)(a).... $ 1.85 $ 2.91 $ 2.49 $ (0.66) $ (2.90) $ (0.49) $ (1.51)
Shares used in computing
basic earnings (loss)
per share (in
millions).............. 29.9 29.9 29.9 29.9 29.9 30.1 30.1
Diluted earnings (loss)
per share:
Income (loss) from
continuing
operations(a)........ $ 1.78 $ 2.79 $ 2.26 $ (0.63) $ (2.85) $ (0.49) $ (1.51)
Net income (loss)(a).. $ 1.83 $ 2.87 $ 2.47 $ (0.66) $ (2.90) $ (0.49) $ (1.51)
Shares used in
computing diluted
earnings (loss) per
share (in millions).. 30.3 30.3 30.2 29.9 29.9 30.1 30.1
Financial Position:
Assets.................. $1,169.4 $1,351.8 $1,426.3 $1,410.5 $1,371.3 $1,364.4 $1,495.5
Long-term debt,
including amounts due
within one year........ 32.3 29.0 17.1 15.4 14.4 14.9 668.8
Intercompany balances
payable to
Columbia/HCA........... 331.3 392.6 521.7 525.0 613.7 550.6 --
Working capital......... 127.9 156.3 156.5 150.3 184.9 158.8 141.8
Capital expenditures.... 203.4(m) 115.0 94.4 120.1 114.9 47.3 66.0
Other Operating Data:
EBITDA(b)............... $ 206.2 $ 285.2 $ 294.5 $ 187.8 $ 149.0 $ 86.9 $ 71.5
Number of hospitals at
end of period(c)....... 38 39 39 39 39 39 38
Number of licensed beds
at end of period(d).... 5,660 5,926 5,872 5,859 5,909 5,907 4,974
Weighted average
licensed beds(e)....... 5,325 5,900 5,882 5,860 5,877 5,907 5,058
Number of available beds
at end of period(f).... 5,048 5,344 5,052 5,230 5,199 5,192 4,452
Admissions(g)........... 147,923 170,392 171,265 172,926 169,590 87,268 79,194
Adjusted admissions(h).. 211,382 257,292 266,660 275,125 276,771 139,752 128,285
Average length of stay
(days)(i).............. 5.2 5.2 5.0 4.9 4.9 5.0 4.6
Average daily
census(j).............. 2,111 2,405 2,338 2,326 2,260 2,400 2,039
Occupancy rate(k)....... 42% 45% 46% 44% 43% 46% 46%
Ratio of earnings to
fixed charges(l)....... 3.3x 4.0x 3.0x -- -- -- --
</TABLE>
- --------
(a) Includes charges related to impairment of long-lived assets of $55.1
million ($32.9 million after-tax) and $13.7 million ($8.2 million after-
tax) for the years ended December 31, 1998 and 1997, respectively, and
$33.9 million ($25.2 million after-tax) for the six months ended June 30,
1999.
36
<PAGE>
(b) EBITDA is defined as income from continuing operations before depreciation
and amortization, interest expense, 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, cash flows
generated by operating, investing or financing activities or other financial
statement data presented in the combined 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.
(c) Number of hospitals includes two facilities which are leased to a third
party and two hospitals not consolidated for financial reporting purposes
for 1999. This table does not include any operating statistics for these
facilities.
(d) Licensed beds are those beds for which a facility has been granted approval
to operate from the applicable state licensing agency.
(e) Represents the average number of licensed beds, weighted based on periods
owned.
(f) Available beds are those beds a facility actually has in use.
(g) Represents the total number of patients admitted (in the facility for a
period in excess of 23 hours) to Triad's hospitals and is used by
management and certain investors as a general measure of inpatient volume.
(h) Equivalent admissions is used by management and certain investors as a
general measure of combined inpatient and outpatient volume. Equivalent
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 equivalent
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.
(i) Represents the average number of days admitted patients stay 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.
(j) Represents the average number of patients in Triad's hospital beds each
day.
(k) Represents the percentage of hospital licensed beds occupied by patients.
Both average daily census and occupancy rate provide measures of the
utilization of inpatient rooms. The declining occupancy rate is primarily
attributed to the trend toward more services, that were previously
performed in an inpatient setting, being performed on an outpatient basis
and the decline in average length of stay per admission.
(l) The ratio of earnings to fixed charges was computed by dividing (i) income
from continuing operations before fixed charges, minority interests and
income taxes by (ii) fixed charges, which consist of interest charges
(interest expense plus interest charged to construction) and the portion of
rent expense which is deemed to be equivalent to interest expense. Triad's
earnings were insufficient to cover fixed charges for the years ended
December 31, 1997 and 1998 by $15.1 million and $115.6 million,
respectively and for the six months ended June 30, 1998 and 1999 by $15.2
million and $60.1 million, respectively.
(m) Includes the acquisition of seven hospitals from EPIC Healthcare Group,
Inc. in May 1994.
37
<PAGE>
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following Unaudited Pro Forma Condensed Consolidated Financial
Statements of Triad are based on the historical consolidated financial
statements, which reflect periods during which the businesses that comprise
Triad did not operate as a separate, independent company and certain estimates,
assumptions and allocations were made in preparing such financial statements.
Therefore such historical consolidated financial statements do not necessarily
reflect the consolidated results of operations or financial position that would
have existed had Triad been a separate, independent company for the entire
periods presented.
The Unaudited Pro Forma Condensed Consolidated Statement of Operations for
the year ended December 31, 1998 and the six months ended June 30, 1999
reflects the results of Triad's operations as if the distribution and the
divestitures of facilities that Triad has divested or intends to divest during
the next twelve months had occurred at the beginning of 1998 and the beginning
of 1999, respectively. The Unaudited Pro Forma Condensed Consolidated Balance
Sheet assumes that such divestitures had occurred on June 30, 1999.
The Unaudited Pro Forma Condensed Consolidated Financial Statements should
be read in conjunction with the historical financial statements and the related
notes of Triad included elsewhere in this prospectus. The pro forma condensed
consolidated financial information is presented for informational purposes only
and does not purport to reflect the results of operations or financial position
of Triad or the results of operations or financial position that would have
occurred had Triad been operated as a separate, independent company for the
entire periods presented, nor is it indicative of Triad's future results.
38
<PAGE>
Unaudited Pro Forma Condensed Consolidated Statement of Operations
Year Ended December 31, 1998
(Dollars in millions, except per share amounts)
<TABLE>
<CAPTION>
Pro Forma Pro
Historical Adjustments Forma
---------- ----------- --------
<S> <C> <C> <C>
Revenues................................... $1,588.7 $(326.6)(a) $1,078.2
(183.9)(b)
Salaries and benefits...................... 700.5 (168.0)(a) 442.7
(91.3)(b)
5.9 (e)
(4.4)(f)
Supplies................................... 241.6 (47.6)(a) 157.0
(37.4)(b)
0.4 (e)
Other operating expenses................... 362.6 (85.1)(a) 249.1
(38.1)(b)
9.7 (e)
Provision for doubtful accounts............ 138.4 (31.3)(a) 96.4
(10.7)(b)
Depreciation and amortization.............. 109.6 (27.5)(a) 82.1
ESOP expense............................... -- 4.4 (f) 4.4
Interest expense allocated from
Columbia/HCA.............................. 66.8 (28.9)(a) --
(3.2)(b)
(34.7) (c)
Management fees allocated from
Columbia/HCA.............................. 29.3 (5.8)(a) --
(3.3)(b)
(20.2)(e)
Interest expense........................... 2.1 67.5 (c) 69.6
Impairment of long-lived assets............ 55.1 (47.7)(a) --
(7.4)(b)
-------- ------- --------
1,706.0 (604.7) 1,101.3
-------- ------- --------
Loss from continuing operations before
minority interests and income tax
benefit................................... (117.3) 94.2 (23.1)
Minority interests in earnings of
consolidated entities..................... (11.0) 0.7 (a) (10.1)
0.2 (b)
Equity in earnings of non-consolidating
entities.................................. 3.4 -- 3.4
-------- ------- --------
Loss from continuing operations before
income taxes.............................. (124.9) 95.1 (b) (29.8)
Income tax benefit......................... 39.4 (30.6)(d) 8.8
-------- ------- --------
Loss from continuing operations............ $ (85.5) $ 64.5 $ (21.0)
======== ======= ========
Basic and diluted loss per share (f)....... $ (2.86) $ (0.70)
Shares (in millions) used in computing
basic and diluted loss per share (f)...... 29.9 29.9
</TABLE>
The accompanying notes are an integral part of the unaudited pro forma
condensed consolidated financial statements.
39
<PAGE>
Unaudited Pro Forma Consolidated Statements of Operations
For the Six Months Ended June 30, 1999
(Dollars in millions, except for per share amounts)
<TABLE>
<CAPTION>
Pro Forma Pro
Historical Adjustments Forma
---------- ----------- ------
<S> <C> <C> <C>
Revenues...................................... $707.7 $(140.2)(a) $571.9
4.4 (b)
Salaries and benefits......................... 303.5 (71.9)(a) 231.1
(0.2)(b)
(1.7)(f)
1.4 (e)
Supplies...................................... 102.6 (19.1)(a) 83.5
(0.1)(b)
0.1 (e)
Other operating expenses...................... 161.0 (36.5)(a) 123.0
(3.5)(b)
2.0 (e)
Provision for doubtful accounts............... 67.6 (15.7)(a) 47.3
(4.6)(b)
Depreciation and amortization................. 54.3 (12.7)(a) 41.6
Interest expense allocated from Columbia/HCA.. 22.5 (9.4)(a) --
(13.1)(c)
Interest expense.............................. 9.6 24.4 (c) 34.0
ESOP expense.................................. 0.5 1.7 (f) 2.2
Interest expense allocated from Columbia/HCA.. 18.5 (9.4)(a) --
(9.1)(c)
Interest expense.............................. 13.6 20.4 (c) 34.0
Management fees allocated from Columbia/HCA... 8.9 (3.8)(a) --
(5.1)(e)
Impairment of long-lived assets............... 33.9 (33.9)(a) --
------ ------- ------
764.4 (201.7) 562.7
------ ------- ------
Income (loss) from continuing operations
before minority interests, equity in
earnings, and income tax benefit............. (56.7) 65.9 9.2
Minority interests in earnings of consolidated
entities..................................... (4.7) (0.2)(a) (4.8)
0.1 (b)
Equity in loss of non-consolidating entities.. (1.5) -- (1.5)
------ ------- ------
Income (loss) from continuing operations
before income taxes.......................... (62.9) 65.8 2.9
Income tax benefit............................ 17.5 (20.0)(d) (2.5)
------ ------- ------
Income (loss) from continuing operations...... $(45.4) $ 45.8 $ 0.4
====== ======= ======
Basic and diluted earnings (loss) per share
(f).......................................... $(1.51) $ 0.01
Shares (in millions) used in computing basic
and diluted earnings (loss) per share (f).... 30.1 30.1
</TABLE>
The accompanying notes are an integral part of the unaudited pro forma
condensed consolidated financial statements.
40
<PAGE>
Unaudited Pro Forma Condensed Consolidated Balance Sheet
June 30, 1999
(Dollars in millions, except per share amounts)
<TABLE>
<CAPTION>
Pro Forma Pro
Historical Adjustments Forma
---------- ----------- --------
<S> <C> <C> <C>
ASSETS
------
Current assets:
Cash and cash equivalents.................. $ 55.6 $139.1 (a) $ 194.3
(0.4)(b)
Accounts receivable, net................... 182.5 (44.3)(a) 139.0
0.8 (b)
Inventories................................ 39.4 (8.8)(a) 30.6
Income taxes............................... 43.2 43.2
Other...................................... 56.8 (4.4)(a) 50.7
(1.7)(b)
-------- ------ --------
377.5 80.3 457.8
Property and equipment, at cost.............. 1,485.7 (343.6)(a) 1,142.1
Accumulated depreciation..................... (711.4) 226.4 (a) (485.0)
-------- ------ --------
774.3 (117.2) 657.1
Intangible assets, net....................... 244.4 (7.6)(a) 215.8
(21.0)(b)
Investment in equity of affiliates........... 79.7 79.7
Other........................................ 19.6 (1.0)(a) 17.2
(1.4)(b)
-------- ------ --------
$1,495.5 $(67.9) $1,427.6
======== ====== ========
LIABILITIES AND EQUITY
----------------------
Current liabilities:
Accounts payable........................... $ 51.1 $(10.1)(a) $ 41.3
0.3(b)
Current portion of long-term debt.......... 93.4 (0.2)(a) 93.2
Accrued salaries........................... 33.7 (6.8)(a) 26.9
Other current liabilities.................. 57.5 (10.0)(a) 42.6
(4.9)(b)
-------- ------ --------
Total current liabilities.................... 235.7 (31.7) 204.0
Long-term debt............................... 575.4 (1.8)(a) 573.6
Deferred taxes and other liabilities......... 61.7 (0.7)(a) 60.8
(0.2)(b)
Minority interests in equity of consolidated
entities.................................... 52.1 (2.9)(a) 47.8
(1.4)(b)
-------- ------ --------
Total liabilities............................ 924.9 (38.7) 886.2
Stockholders equity:
Preferred stock, par value $0.01 per share;
10.0 million shares authorized; no shares
issued...................................... -- --
Common stock, par value $0.01 per share;
90.0 million shares authorized, 33.9 million
shares issued and outstanding............... 0.3 0.3
Additional paid-in capital................... 607.8 607.8
Unearned ESOP compensation................... (34.0) (34.0)
Retained deficit............................. (3.5) (11.7)(a) (32.7)
(17.5)(b)
-------- ------ --------
Total stockholders' equity................... 570.6 (29.2) 541.4
-------- ------ --------
$1,495.5 $(67.9) $1,427.6
======== ====== ========
</TABLE>
The accompanying notes are an integral part of the unaudited pro forma
condensed consolidated financial statements.
41
<PAGE>
Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
Note 1--Basis of Presentation
The pro forma condensed consolidated financial statements reflect the
combination of historical financial information of the facilities to be part of
Triad and the pro forma adjustments described in Note 2.
Note 2--Pro Forma Adjustments
(a) To reflect the following completed divestiture and cessation of
operations and planned divestitures in 1999:
(1) elimination of the assets, liabilities, the six months ended June
30, 1999 and the year ended December 31, 1998 results of operations of two
acute care hospitals which were sold during the six months ended June 30,
1999 (the proceeds of such sale were received by Columbia/HCA);
(2) elimination of the assets, liabilities and the six months ended
June 30, 1999 and the year ended December 31, 1998 results of operations
of four acute care hospitals and one psychiatric hospital for which
management believes dispositions over the next 12 months are probable; and
(3) elimination of the assets, liabilities and the six months ended
June 30, 1999 and the year ended December 31, 1998 results of operations
of four acute care hospitals which were sold subsequent to June 30, 1999.
(4) To record the estimated cash proceeds and gain (loss) on sale of
the five facilities to be divested and the cash proceeds and gain (loss)
on sale of the four facilities that were divested subsequent to June 30,
1999.
(b) To reflect the long term lease payment of $16.0 million per year and
elimination of operating assets and liabilities and the six months ended June
30, 1999 and the year ended December 31, 1998 results of operations of two
acute care hospitals and three ambulatory surgery centers in Kansas City,
Missouri in January 1999.
(c) To adjust interest expense to an annual amount of $69.6 million for the
periods prior to the distribution in the six months ended June 30, 1999 and
$69.6 million for the year ended December 31, 1998. The interest expense
adjustment is based on the elimination of all intercompany amounts payable by
Triad to Columbia/HCA prior to the Spin-off ($613.7 million at December 31,
1998) and the assumption of certain indebtedness from Columbia/HCA in the
aggregate amount of $673.8 million at an average interest rate of 9.83% and
approximately $1.5 million in amortization of the estimated loan issuance
costs.
(d) To adjust income tax expense for the estimated impact of the pro forma
adjustments.
(e) To adjust to the estimated, incremental general and administrative
costs of an estimated annual rate of $22.4 million in the periods prior to the
distribution in the six months ended June 30, 1999 and the year ended December
31, 1998 (in addition to $7.6 million in the six months ended of June 30, 1999
and $6.4 in 1998 in costs already included in the historical combined statement
of operations) that would have been incurred if Triad had managed comparable
general and administrative functions and to eliminate the management fee
allocated from Columbia/HCA.
(f) To adjust historical retirement plan expense recorded as a component of
salaries and wages and record the estimated Triad Hospitals, Inc. Retirement
Savings Plan (the "ESOP") expense. The ESOP was established in connection with
the distribution and the ESOP purchased 3.0 million newly issued shares of
Triad common stock. The ESOP shares will be released from a suspense account
and allocated to Triad participating employees over a 10 year period. The
noncash ESOP expense is recognized as the shares are committed to be released
and allocated to the participants and will be based upon the fair value of the
shares released.
42
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This discussion should be read together with the historical financial
statements and the related notes of Triad included elsewhere in this prospectus
and the information set forth under "Selected Historical Financial Data" and
"Unaudited Pro Forma Condensed Consolidated Financial Statements" and the
related notes.
Overview
Triad owns and operates the health care service business which comprised
the Pacific Group of Columbia/HCA until the distribution by Columbia/HCA to its
shareholders of all of the shares of outstanding common stock of Triad. The
distribution, which occurred on May 11, 1999, marked the beginning of Triad's
operations as an independent, publicly-traded company. As such, the historical
financial statements of Triad may not be indicative of Triad's future
performance, nor do they necessarily reflect what the financial position and
results of operations of Triad would have been if it had operated as a
separate, stand-alone entity during the entire periods covered. See "Risk
Factors--No Operating History as an Independent Company; Net Losses."
As of January 1, 1999 Triad owned or operated 39 hospitals, including two
facilities Triad is leasing from others and an investment in one hospital that
is accounted for using the equity method, 19 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 located
in eleven western, southwestern and southcentral states. During the six months
ended June 30, 1999, Triad sold two hospitals, the proceeds of which were
retained by Columbia/HCA, and ceased operations of one hospital. Triad also
completed a swap of one of its hospitals, Doctors Hospital of Laredo, for a
hospital located in Victoria, Texas on June 1, 1999. On January 1, 1999, Triad
transferred two acute care hospitals and three ambulatory surgery centers
located in the Kansas City, Missouri area to an unaffiliated third party
pursuant to a long-term lease which provides for payment to Triad of rental
amounts approximating $16.0 million per year. Also, in May 1999, Triad opened
one hospital, which is accounted for using the equity method. In September
1999, Triad sold five of its acute care hospitals and one of its ambulatory
surgery centers.
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,
. the highly competitive nature of the health care business,
. the efforts of insurers, health care providers and others to contain health
care costs,
. possible changes in the Medicare and Medicaid programs that may further
limit reimbursements to health care providers and insurers,
. changes in Federal, state or local regulation affecting the health care
industry,
. the possible enactment of Federal or state health care reform,
. the ability to attract and retain qualified management and personnel,
including physicians,
. the departure of key executive officers from Triad,
. claims and legal actions relating to professional liabilities and other
matters,
. fluctuations in the market value of Triad common stock,
43
<PAGE>
. changes in accounting practices,
. changes in general economic conditions,
. future divestitures which may result in additional charges,
. the ability to enter into managed care provider arrangements on acceptable
terms,
. the complexity of integrated computer systems and the success and expense of
the remediation efforts of Columbia/HCA, Triad and relevant third parties in
achieving Year 2000 readiness, and
. the availability and terms of capital to fund the expansion of Triad,
. changes in business strategy on development plans,
. timeliness of reimbursement payments received under government programs,
. other risk factors described herein.
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. You 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
During the year ended December 31, 1998 and the six months ended June 30,
1999, Triad experienced declines in revenue and volumes in relation to
comparable periods in prior years. Management believes four primary factors
have contributed to the declines in revenue during the year ended December 31,
1998:
(1) the impact of reductions in Medicare payments mandated by the Balanced
Budget Act,
(2) the continuing trend toward the conversion of more services to an
outpatient basis,
(3) the impact of the government investigations, and
(4) the impact of factors relating to the distribution.
In addition, during the six months ended June 30, 1999, three additional
factors from the four stated above contributed to the declines in revenue:
(1) the announced divestitures of hospitals in certain markets;
(2) the disposition of two acute care hospitals and cessation of operations
of one acute care hospital; and
(3) the transfer pursuant to a long-term lease to an unaffiliated third
party of two acute care hospitals and three ambulatory surgery centers.
In the healthcare industry, operations are subject to certain seasonal
fluctuations, including decreases in patient utilization during holiday periods
and increases in patient utilization during the cold weather months.
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 Balanced Budget Act, Triad's reimbursement from
the Medicare and Medicaid programs was reduced in 1999 and 1998 and will be
further reduced as some reductions in reimbursement levels are phased in over
the next two years. 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 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
44
<PAGE>
and cash flows are being significantly reduced. Net patient revenues related
to Medicare and Medicaid patients were 41.2% and 42.8% of total net patient
revenues for the six months ended June 30, 1999 and 1998, respectively, and
42.2% and 42.7% for the years ended December 31, 1998 and 1997, respectively.
Net patient revenues related to managed care plan patients were 31.7% and
25.2% of total net patient revenues for the six months ended June 30, 1999 and
1998, respectively and 26.7% and 23.2% for the years ended December 31, 1998
and 1997, respectively. Net patient revenues from capitation arrangements, or
prepaid health service agreements, are less than 1% of net patient revenues in
each period presented. See "Reimbursement."
Management of Triad has focused on streamlining its portfolio of
facilities to eliminate those with poor financial performance, weak
competitive market positions or locations in certain urban markets. As a
result, management determined that eleven of the facilities--10 general, acute
care hospitals and one psychiatric hospital--which were part of the
Columbia/HCA Pacific Group as of January 1, 1999, did not meet Triad's
strategic plan and decided to divest these facilities. During the first six
months of 1999, Columbia/HCA and Triad sold two hospitals and ceased
operations of one hospital, which had net revenues of $9.8 million and $22.0
million and losses before impairment charges and income tax benefit of $7.8
million and $8.2 million for the six months ended June 30, 1999 and 1998,
respectively and net revenues of $29.1 million and $34.2 million and losses
before impairment charges and income tax benefit of $12.4 million and $8.9
million for the years ended December 31, 1998 and 1997, respectively. Of the
remaining eight facilities, four facilities, including the facility where
operations were ceased, were sold in September 1999 and the sale of the other
five facilities is expected to be completed over the next twelve months. For
the six months ended June 30, 1999 and 1998, the eleven facilities divested or
to be divested contributed net revenues of $140.0 million and $183.6 million
and losses before impairment charges and income tax benefit of $28.3 million
and $30.9 million, respectively and net revenues of $334.6 million and $379.8
million and losses before impairment charges and income tax benefit of $69.8
million and $52.8 million for the years ended December 31, 1998 and 1997,
respectively.
On January 1, 1999, Triad transferred two acute care hospitals and three
ambulatory surgery centers located in the Kansas City, Missouri area to an
unaffiliated third party pursuant to a long-term lease which provides for
payment to Triad of rental amounts approximating $16.0 million per year. For
the six months ended June 30, 1999 and 1998, these leased facilities
contributed net revenues, exclusive of the $8.0 million lease payments, of
$(4.4) million and $100.2 million and income (loss) before impairment charges
and income tax benefit of $(12.4) million and $7.9 million, respectively. For
the years ending December 31, 1998 and 1997, these leased facilities
contributed net revenues of $199.7 million and $190.4 million and income
(losses) before impairment changes and income tax benefit of $4.4 million and
$(5.3) million, respectively. These leased hospitals, along with the
facilities divested and to be divested, accounted for a majority of the
decrease in revenue and volume for Triad.
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. Net outpatient revenues grew to
47.6% for the six months ended June 30, 1999 from 47.2% for the comparable
period in 1998 and 48.6% of net patient revenues for the year ended December
31, 1998 from 46.6% during the prior year.
Management believes that the impact of the ongoing governmental
investigations of certain Columbia/HCA business practices and the related
media coverage may have created uncertainties with physicians, patients and
45
<PAGE>
payers in certain markets. Such governmental investigation is described under
"Government Regulation and Other Factors--Governmental Investigation of
Columbia/HCA and Related Litigation."
Management also believes that Columbia/HCA's restructuring of operations,
including the distribution of Triad and LifePoint and the announced
divestitures of several facilities, have created similar uncertainties with
physicians, patients and payers. In addition, management believes that Triad's
revenues and volume growth have been affected by the focus of management and
resources on Triad's planned divestiture program during 1998. Management also
believes that the financial results of Triad have been impacted by
Columbia/HCA's strategy which has been developed on a system-wide basis and has
generally focused on larger facilities and markets.
Reductions in the rate of increase in Medicare and Medicaid reimbursement,
increasing percentages of the 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 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 made by the local management teams and
local physicians.
In connection with the distribution, 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 distribution, and Triad agreed to indemnify Columbia/HCA for and pay to
Columbia/HCA any payments received by it relating to such cost reports relating
to periods ending on or prior to the date of the distribution. 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 $37.5 million as of June 30, 1999.
46
<PAGE>
Operating Results Summary
Following are comparative summaries of results from continuing operations
for the years ended December 31, 1996, 1997 and 1998 and the six months ended
June 30, 1998 and 1999. Dollars are in millions, except per share amounts and
ratios.
<TABLE>
<CAPTION>
Years Ended December 31,
-----------------------------------------------------------------
1996 1997 1998
--------------------- --------------------- ---------------------
Amount Percentage Amount Percentage Amount Percentage
--------- ---------- --------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Revenues................ $ 1,600.5 100.0 $ 1,609.3 100.0 $ 1,588.7 100.0
Salaries and benefits... 628.1 39.2 666.8 41.4 700.5 44.1
Supplies................ 221.9 13.9 232.8 14.5 241.6 15.2
Other operating
expenses............... 351.7 22.0 385.9 24.0 362.6 22.8
Provision for doubtful
accounts............... 106.5 6.7 138.5 8.6 138.4 8.7
Depreciation and
amortization........... 94.5 5.9 102.9 6.3 109.6 7.0
Interest expense
allocated from
Columbia/HCA........... 49.9 3.1 58.4 3.6 66.8 4.2
Interest expense........ 2.1 0.1 2.1 0.2 2.1 0.1
Management fees
allocated from
Columbia/HCA........... 20.7 1.3 25.4 1.6 29.3 1.8
Impairment of long-lived
assets................. -- -- 13.7 0.9 55.1 3.5
--------- ----- --------- ----- --------- -----
1,475.4 92.2 1,626.5 101.1 1,706.0 107.4
--------- ----- --------- ----- --------- -----
Income (loss) from
continuing operations
before minority
interests, equity in
earnings and income
taxes (benefit)........ 125.1 7.8 (17.2) (1.1) (117.3) (7.4)
Minority interests in
earnings of
consolidated entities.. (10.8) (0.7) (11.5) (0.7) (11.0) (0.7)
Equity in earnings of
non-consolidating
entities............... 2.2 0.2 2.5 0.2 3.4 0.2
--------- ----- --------- ----- --------- -----
Income (loss) from
continuing operations
before income taxes
(benefit).............. 116.5 7.3 (26.2) (1.6) (124.9) (7.9)
Income tax (provision)
benefit................ (48.2) (3.0) 7.2 0.4 39.4 2.5
--------- ----- --------- ----- --------- -----
Income (loss) from
continuing operations.. $ 68.3 4.3 $ (19.0) (1.2) $ (85.5) (5.4)
========= ===== ========= ===== ========= =====
Income (loss) per common
share from continuing
operations............. $ 2.26 $ (0.63) $ (2.85)
EBITDA (a).............. 294.5 187.8 149.0
Number of hospitals at
end of period.......... 39 39 39
Licensed beds at end of
period (b)............. 5,872 5,859 5,909
Available beds at end of
period (c)............. 5,052 5,230 5,199
Admissions (d).......... 171,265 172,926 165,590
Adjusted admissions
(e).................... 266,660 275,125 276,771
Patient days (f)........ 852,698 848,921 824,925
Adjusted patient days
(g).................... 1,373,054 1,358,274 1,344,628
Average length of stay
(h).................... 5.0 4.9 4.9
Average daily census
(i).................... 2,338 2,326 2,260
Occupancy rate (j)...... 46.3% 44.4% 43.4%
Net patient revenue per
adjusted patient day... 1,136 1,161 1,154
Gross inpatient
revenue................ 1,847.7 2,058.0 2,060.2
Gross outpatient
revenue................ 1,127.6 1,243.2 1,302.2
Gross outpatient revenue
percentage............. 37.9% 37.7% 38.7%
Net inpatient revenue... 855.0 841.8 797.6
Net outpatient revenue.. 704.4 734.6 753.5
Net outpatient revenue
percentage............. 45.2% 46.6% 48.6%
</TABLE>
47
<PAGE>
Operating Results Summary (continued)
<TABLE>
<CAPTION>
Six Months Ended June 30,
-----------------------------------------
1998 1999
-------------------- --------------------
Amount Percentage Amount Percentage
-------- ---------- -------- ----------
<S> <C> <C> <C> <C>
Revenues............................ $ 813.8 100.0 $ 707.7 100.0
Salaries and benefits............... 352.4 43.3 303.5 42.9
Supplies............................ 123.0 15.1 102.6 14.5
Other operating expenses............ 181.4 22.3 161.0 22.7
Provision for doubtful accounts..... 72.6 8.9 67.6 9.5
Depreciation and amortization....... 52.8 6.5 54.3 7.7
Interest expense allocated from
Columbia/HCA....................... 32.3 4.0 22.5 3.2
Interest expense.................... 1.1 0.1 9.6 1.3
ESOP expense........................ -- -- 0.5 0.1
Management fees allocated from
Columbia/HCA....................... 15.0 1.8 8.9 1.3
Impairment of long-lived assets..... -- -- 33.9 4.8
-------- ----- -------- -----
830.6 102.0 764.4 108.0
-------- ----- -------- -----
Loss from continuing operations
before minority interests, equity
in earnings and income tax
benefit............................ (16.8) 2.0 (56.7) (8.0)
Minority interests in earnings of
consolidated entities.............. (6.5) (0.8) (4.7) (0.7)
Equity in earnings (loss) of non-
consolidating entities............. 2.5 0.3 (1.5) (0.2)
-------- ----- -------- -----
Loss from continuing operations
before income tax benefit.......... (20.8) (2.5) (62.9) (8.9)
Income tax benefit.................. 6.2 0.8 17.5 2.5
-------- ----- -------- -----
Loss from continuing operations..... $ (14.6) (1.7) $ (45.4) (6.4)
======== ===== ======== =====
Loss per common share from
continuing operations.............. $ (0.49) $ (1.51)
EBITDA (a).......................... $ 86.9 $ 71.5
Number of hospitals at end of period
(b)................................ 39 38
Licensed beds at end of period (c).. 5,907 4,974
Available beds at end of period
(d)................................ 5,192 4,452
Admissions (e)...................... 87,268 79,194
Adjusted admissions (f)............. 139,752 128,285
Patient days (g).................... 432,017 366,933
Adjusted patient days (h)........... 691,836 594,390
Emergency room visits............... 294,571 286,329
Average length of stay (i).......... 5.0 4.6
Average daily census (j)............ 2,400 2,039
Occupancy rate (k).................. 46.2% 45.8%
Net patient revenue per adjusted
patient day........................ 1,176 1,154
Gross inpatient revenue............. $1,071.1 $ 961.4
Gross outpatient revenue............ $ 644.2 $ 595.9
Gross outpatient revenue
percentage......................... 37.6% 38.3%
Net inpatient revenue............... $ 419.6 $ 359.6
Net outpatient revenue.............. $ 374.7 $ 326.3
Net outpatient revenue percentage... 47.2% 47.6%
</TABLE>
- --------
(a) EBITDA is defined as income from continuing operations before depreciation
and amortization, interest expense, management fees, impairment of long-
lived assets, minority interests in earnings of consolidated entities and
income tax benefit. 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, cash flows
48
<PAGE>
generated by operating, investing or financing activities or other financial
statement data presented in the combined 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.
(b) Number of hospitals include two facilities which are leased to a third
party and two hospitals not consolidated for financial reporting purposes
for 1999. This table does not include any operating statistics for these
facilities.
(c) Licensed beds are those beds for which a facility has been granted approval
to operate from the applicable state licensing agency.
(d) Available beds are those beds a facility actually has in use.
(e) Represents the total number of patients admitted (in the facility for a
period in excess of 23 hours) to the Company's facilities and is used by
management and certain investors as a general measure of inpatient volume.
(f) 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.
(g) Represents the total number of days each patient stays in the Company's
hospitals.
(h) Adjusted patient days is used by management and certain investors as a
general measure of combined inpatient and outpatient volume. Adjusted
patient days are computed by multiplying patient days (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
patient days computation "equates" outpatient revenue to the volume measure
(patient days) used to measure inpatient volume resulting in a general
measure of combined inpatient and outpatient volume.
(i) Represents the average number of days an admitted patient stays in the
Company'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.
(j) Represents the average number of patients in the Company's hospital beds
each day.
(k) Represents the percentage of hospital available beds occupied by patients.
Both average daily census and occupancy rate provide measures of the
utilization of inpatient rooms. The declining occupancy rate is primarily
attributed to the trend toward more services, that were previously
performed in an inpatient setting, being performed on an outpatient basis
and the decline in average length of stay per admission.
49
<PAGE>
Six Months Ended June 30, 1999 and 1998
Losses from continuing operations before income tax benefit increased to
$62.9 million in the six months ended June 30, 1999 from $20.8 million in the
six months ended June 30, 1998. The increase in pretax loss was primarily
attributable to impairment charges of $33.9 million recorded in the first
quarter of 1999 due to the management reassessment of the facilities that would
not be part of the Company's core markets. Other increases in pretax loss were
attributable to reduction of pretax income relating to the leased facilities in
the Kansas City, Missouri area of $22.2 million in the six months ended June
30, 1999 compared to the six months ended June 30, 1998, $1.8 million of
favorable cost report settlements in 1998 and $4.0 million reduction in equity
in earnings of non-consolidating entities due to the start up of operations of
a hospital that opened in May 1999. These were partially offset by $8.0 million
of lease income from the leased facilities, a $3.5 million reduction in
interest expense and corporate overhead compared to the allocation of interest
expense and management fees from Columbia/HCA and $10.0 million improvement in
the operations of facilities that will remain after the planned divestiture.
Revenues decreased 13.0% to $707.7 million in the six months ended June 30,
1999 compared to $813.8 million in the six months ended June 30, 1998.
Inpatient admissions decreased 9.2% and adjusted admissions, adjusted to
reflect combined inpatient and outpatient volume, decreased 8.2% in the six
months ended June 30, 1999 compared to the six months ended June 30, 1998.
Revenues, admissions and adjusted admissions declined primarily as a result of
the facilities that were leased in January 1999. In the six months ended June
30, 1998, these facilities had revenues of $100.2 million, admissions of 9,255
and adjusted admissions of 14,682. Other factors contributing to the reduction
of revenues include a $12.2 million reduction relating to the sale of two
hospitals and cessation of operations of one hospital in the six months ended
June 30, 1999 compared to the six months ended June 30, 1998 and $1.8 million
of favorable cost report settlements in 1998. These were partially offset by
$8.0 million of lease income from the leased facilities in the six months ended
June 30, 1999 and improvement in the operations of facilities that will remain
after the planned divestitures.
Revenues have been decreasing over the past several years due to several
factors. These factors include:
.decreases in Medicare rates of reimbursement mandated by the Balanced
Budget Act which became effective October 1, 1997; such rates lowered
revenues by approximately $6.0 million compared to $2.8 million during the
six months ended June 30, 1999 and 1998, respectively, and
.continued increases in discounts from the growing number of managed care
payers; managed care as a percent of net revenues increased to 31.7%
compared to 25.1% during the six months ended June 30, 1999 and 1998,
respectively.
Salaries and benefits, as a percentage of revenues, decreased to 42.9% in
the six months ended June 30, 1999 from 43.3% in the six months ended June 30,
1998. The decrease was primarily attributable to the leased facilities, which
had a higher percentage of salaries and benefits to net revenue. This decrease
was partially offset by $2.0 million in bonuses, relating to pre-distribution
activities, that were incurred in 1999.
Supply costs decreased as a percentage of revenues to 14.5% in the first
quarter of 1999 from 15.1% in the first quarter of 1998 due to the leased
facilities having a higher percentage of supply costs to net revenue.
Other operating expenses, primarily consisting of contract services,
professional fees, repairs and maintenance, rents and leases, utilities,
insurance and non-income taxes, as a percentage of revenues, increased to
22.87% in the six months ended June 30, 1999 from 22.3% in the six months ended
June 30, 1998 due primarily to the collection fees relating to collection
efforts on the remaining accounts receivable of the leased facilities in 1999.
50
<PAGE>
Provision for doubtful accounts, as a percentage of revenues, increased to
9.5% in the six months ended June 30, 1999 from 8.9% in the six months ended
June 30, 1998 due to $3.6 million of certain write offs and adjustments
relating to the leased facilities in the first quarter of 1999 and a $2.0
million adjustment that was made at one facility in the first quarter of 1999
to reflect deterioration in accounts receivable. Additionally, the uncertain
status of the held for sale facilities contributed to the increase.
Depreciation and amortization increased as a percentage of revenues to 7.7%
in the six months ended June 30, 199 from 6.5% in the six months ended June 30,
1998, primarily due to the increased capital expenditures and to the decrease
in net revenues.
Interest expense allocated from Columbia/HCA which was represented by
interest incurred on the net intercompany balance with Columbia/HCA, decreased
to $22.5 million in the six months ended June 30, 1999 compared to $32.3
million in the six months ended June 30, 1998 due to the distribution which
eliminated the intercompany balances.
Interest expense, which includes $0.6 million of interest income, increased
to $9.6 million in the six months ended June 30, 1999 from $1.1 million in the
six months ended June 30, 1998 due to the assumption of an additional $665.0
million in debt from Columbia/HCA in the distribution.
Management fees allocated from Columbia/HCA decreased to $8.9 million from
$15.0 million during the six months ended June 30, 1999 compared to the six
months ended June 30, 1998, due to the distribution from Columbia/HCA.
Impairments on long-lived assets were $33.9 million during the six months
ended June 30, 1999 due to the management reassessment of certain facilities
that would not be part of the core markets that Triad would go forward with
after the distribution. Management determined that the potential sales prices
of these facilities would not cover the book value of the facilities and a
write down would be necessary.
Minority interests, which are primarily related to one ambulatory surgery
center joint venture in Arizona, decreased slightly as a percentage of revenues
to 0.7% in the six months ended June 30, 1999 from 0.8% in the six months ended
June 30, 1998.
Years Ended December 31, 1998 and 1997
The loss from continuing operations before income tax benefit increased to
$124.9 million in 1998 from a loss from continuing operations before income tax
benefit of $26.2 million in 1997. The increase in pretax loss was
due to several factors. Among these were impairment charges of $55.1 million in
1998 compared to $13.7 million in 1997 due to management's reassessment of
facilities that would not be part of Triad's core markets. Also, the increase
pretax loss was attributable to increased losses of $17.0 million on the
facilities that management has determined do not meet Triad's strategic plan.
Other factors that contributed to the increase was the inability to adjust
expenses in line with decreases in volumes. The level of management's attention
being devoted to the governmental investigations, reactions by certain
physicians and patients to the related negative media coverage and management
changes at several levels and locations throughout Triad have contributed to
Triad's inability to implement changes to reduce operating expenses in response
to the volume and revenue growth rate declines.
Revenues decreased by 1.3% to $1,588.7 million in 1998 compared to $1,609.3
million in 1997. Inpatient admissions decreased 1.9% from a year ago and
equivalent admissions, adjusted to reflect combined inpatient and outpatient
volume increased 0.6%. The decrease in revenues and the small 0.6% increase in
equivalent admissions resulted in a 1.9% decline in revenue per equivalent
admission.
The decline in revenue per equivalent admission was due to several factors,
including:
. decreases in Medicare reimbursement rates mandated by the Balanced Budget
Act which became effective October 1,
51
<PAGE>
1997, which reimbursement rates lowered 1998 revenues by approximately $17.0
million,
. continued increases in discounts from the growing number of managed care
payers; managed care as a percentage of total admissions increased to 32% in
1998 compared to 29% during 1997, and
. the announced divestitures of hospitals in certain markets.
Salaries and benefits, as a percentage of revenues, increased to 44.1% in
1998 from 41.4% in 1997. The increase was due to a 4.4% increase in salaries
and benefits per equivalent admission and Triad's inability to adjust staffing
levels to mitigate the declining revenue per equivalent admission. Man-hours
per equivalent admission increased 1.1% compared to last year.
Supply costs increased as a percentage of revenues to 15.2% in 1998 from
14.5% in 1997 due to the 1.9% decline in net revenue per equivalent admission,
while the cost of supplies per equivalent admission increased 3.2%.
Other operating expenses, which includes contract services, professional
fees, repairs and maintenance, rents and leases, utilities, insurance,
marketing and non-income taxes, decreased as a percentage of revenues to 22.6%
in 1998 from 23.8% in 1997. The decrease was due to small decreases in several
of these expense categories as a percentage of revenues, including lower
marketing costs being incurred due to the cancellation of a national branding
campaign.
Provision for doubtful accounts, as a percentage of revenues, increased to
8.7% in 1998 from 8.6% in 1997. The increase was due to internal factors such
as information system conversions, including patient accounting systems, at
certain facilities and external factors such as payer mix shifts to managed
care plans, which resulted in increased amounts of patient co-payments and
deductibles and increases in claim audits and remittance denials from certain
payers. Management is not able to quantify the effects of each of these
factors, but the shift in payer mix is expected to continue and the provisions
for doubtful accounts is likely to remain at higher levels than in past years,
1996 and prior.
Depreciation and amortization increased as a percentage of revenues to 7.0%
in 1998 from 6.3% in 1997. The increase was primarily due to the 1.3% decline
in revenues on a same-facility basis and increased capital expenditures related
to ancillary services such as outpatient services and information systems.
Interest expense, which is primarily represented by interest incurred on
the net intercompany balance with Columbia/HCA, increased to $68.9 million in
1998 compared to $60.5 million in 1997, primarily as a result of an increase in
the average balance of the advances from Columbia/HCA during 1998 compared to
the same period in 1997. This was due, in part, to a $76.4 million decline in
cash flows from operations.
During 1998, Triad, as part of its strategic business plan, decided to
divest certain of its facilities. The divestitures are expected to be completed
in 1999 through sales, leases, joint ventures or closures. The carrying value
for
these facilities expected to be sold was reduced to fair value, based upon
estimated selling values, resulting in a pre-tax impairment charge of $55.1
million. See Note 5 of the Notes to Combined Financial Statements included
elsewhere herein for more detailed information on such divestitures.
Management fees allocated by Columbia/HCA were $29.3 million in 1998 and
$25.4 million in 1997. These amounts represent allocations, using revenues as
the allocation basis, of the corporate general and administrative expenses of
Columbia/HCA. Management estimates that if they managed comparable general and
administrative functions for Triad as a separate, independent entity, the costs
incurred would be approximately $22.4 million, based upon their 1999
projections.
Minority interests were 0.7% as a percentage of revenues in both 1998 and
1997.
Triad incurred a $1.6 million net loss from operations of its discontinued
home health
52
<PAGE>
businesses in 1998 compared to net income of $4.9 million during the prior year
period. The loss is primarily due to revenue reductions related to Medicare
rates of reimbursement for home health visits under the Balanced Budget Act and
a decline in home health visits.
Years Ended December 31, 1997 and 1996
Income (loss) from continuing operations before income taxes (benefit)
declined to a loss of $26.2 million in 1997 from income of $116.5 million in
1996. The facilities that Triad divested or plans to divest contributed to the
decline in profitability by incurring losses from continuing operations before
income tax benefit of approximately $52.8 million and income from continuing
operations before income taxes of approximately $0.7 million for the years
ended December 31, 1997 and 1996, respectively. Another factor contributing to
the decline in income (loss) from continuing operations was Triad's inability
to adjust expenses in line with the decreases experienced in revenue and
reimbursement trends. Management's attention to the governmental
investigations, reactions by certain physicians and patients to the related
negative media coverage and management changes at several levels and locations
throughout Triad contributed to Triad's inability to implement changes to
reduce operating expenses in response to the revenue and reimbursement rate
declines.
Revenues increased 0.6% to $1,609.3 million in 1997 compared to $1,600.5
million in 1996. Inpatient admissions increased 1.0% and equivalent admissions,
adjusted to reflect combined inpatient and outpatient volume, increased 3.2%.
On a same facility basis, revenues increased 0.6%, admissions increased 1.7%
and equivalent admissions increased 3.9% from 1996. The lower growth rate in
both reported and same facility revenues, compared to the increases in
equivalent admissions, resulted in declines in revenue per equivalent admission
of 2.5% on a reported basis and 3.1% on a same facility basis. As previously
discussed, the increase in outpatient volume, reflected by the increases in
equivalent admissions, is primarily a result of the continuing trend of certain
services, previously provided in an inpatient setting, being converted to an
outpatient setting.
The decline in revenue per equivalent admission was due to several factors,
including:
. decreases in Medicare reimbursement rates mandated by the Balanced Budget
Act which became effective October 1, 1997, which reimbursement rates
lowered fourth quarter 1997 revenues by approximately $5.0 million;
. continued increases in discounts from the growing number of managed care
payers; managed care as a percentage of total admissions increased to 29% in
1997 compared to 25% during 1996; and
. delays experienced in obtaining Medicare cost report settlements; cost
report filings and settlements results netted to zero in 1997 compared to
favorable revenue adjustments of $32.4 million in 1996.
Salaries and benefits, as a percentage of revenues, increased to 41.4% in
1997 from 39.2% in 1996. The decline in revenues per equivalent admission was a
primary factor in the increase. A 2.9% increase in salaries and benefits per
equivalent admission resulted from the combined effect of decreasing man-hours
per equivalent admission of 1.8, while labor cost per man-hour increased 4.3%
and revenue per equivalent admission declined 2.5%.
Supply costs increased as a percentage of revenues to 14.5% in 1997 from
13.9% in 1996 due to a decline in net revenue per equivalent admission while
the cost of supplies per equivalent admission increased 1.7%.
Other operating expenses, which includes professional fees, contract
services, repairs and maintenance, rent, utilities, insurance, marketing and
non-income taxes, increased as a percentage of revenues to 23.8% in 1997 from
21.8% in 1996. The increase was due to small increases in several of these
expense categories as a percentage of revenues.
Provision for doubtful accounts, as a percentage of revenues, increased to
8.6% in 1997 from 6.7% in 1996 due to internal factors such as continued
computer information system
53
<PAGE>
conversions, including patient accounting systems, at various facilities and
external factors such as payer mix shifts to managed care plans, resulting in
increased amounts of patient co-payments and deductibles, and payer remittance
slowdowns. The information system conversions hampered the business office
billing functions and collection efforts in those facilities as some resources
are directed to installing and converting systems and building new data files,
rather than devoting full effort to billing and collecting receivables.
Depreciation and amortization increased as a percentage of revenues to 6.3%
in 1997 from 5.9% in 1996, primarily due to the slowdown in revenue growth.
Interest expense increased to $60.5 million in 1997 compared to $52.0
million in 1996, primarily as a result of an increase in the average balance of
the advances from Columbia/HCA during 1997 compared to 1996. Net cash provided
by operating activities declined by $65.0 million in 1997 compared to 1996.
During the fourth quarter of 1997 Triad determined that the recorded values
of certain long-lived assets related to certain surgery centers and physician
practices were not deemed fully recoverable based upon the operating results
trends and projected future cash flows. The recorded value for these surgery
centers and physician practices was reduced to estimated fair value resulting
in a pre-tax impairment charge of $13.7 million.
Minority interests were 0.7% as a percentage of revenues both in 1997 and
1996.
Triad earned $4.9 million net income from operations of its discontinued
home health business in 1997 compared to net income of $6.4 million during
1996. The majority of the decline in income from operations of the discontinued
home health businesses was due to revenue reductions related to Medicare rates
of reimbursement for home health visits under the Balanced Budget Act. During
1997, Triad recorded a $2.9 million charge, net of tax benefits, on the
expected divestiture of the home health businesses.
Pro Forma Operating Results Summary
The following is a summary of pro forma results from continuing operations
for the six months ended June 30, 1999 and 1998.
Dollars are in millions, except per share amounts and ratios. The pro forma
operating results from continuing operations reflect the following adjustments
at the beginning of each period:
(1) To reflect the following completed divestiture and cessation of
operations and planned divestitures in 1999:
(a) elimination of the first six months of 1999 and 1998 results of
operations of two acute care hospitals which were sold during the first six
months of 1999, the proceeds of which sales were retained by Columbia/HCA;
(b) elimination of the first six months of 1999 and 1998 results of
operations of four acute care hospitals and one psychiatric hospital for
which Triad's management believes dispositions over the next twelve months
are probable; and
(c) elimination of the first six months of 1999 and 1998 results of
operations of four acute care hospitals which were sold subsequent to June
30, 1999.
(2) To reflect the long term lease payment of $16.0 million per year and
elimination of operations in the first six months of 1999 and 1998 of two
acute care hospitals and three ambulatory surgery centers in the Kansas City,
Missouri area in January 1999 as though such lease had commenced at the
beginning of each period.
(3) To adjust to the estimated, incremental general and administrative
costs of an annual amount of $22.4 million for the periods prior to the
distribution in 1999 and the first six months of 1998, in addition to $7.6
million in the first six months of 1999 and $3.7 million in the first six
months of 1998 in costs already included in the consolidated statement of
operations, that would have been incurred if Triad had managed comparable
general and administrative functions and to eliminate the management fee
allocated from Columbia/HCA.
54
<PAGE>
(4) To adjust historical retirement plan expenses recorded as a component
of salaries and wages and record the estimated annual Triad Hospitals, Inc.
Retirement Savings Plan (the "ESOP") expense. Triad's ESOP was established on
June 10, 1999 and the ESOP purchased 3.0 million newly issued shares of
Triad's common stock. The ESOP shares will be released from a suspense
account and allocated to Triad's participating employees over a 10-year
period. The non-cash ESOP expense will be recognized as the shares are
committed to be released and allocated to the participants and will be based
upon the fair value of the shares released.
(5) To adjust interest expense to an annual amount of $69.6 million for the
periods prior to the distribution in 1999 and the first six months of 1998.
The interest expense adjustment is based on the elimination of all
intercompany amounts payable to Columbia/HCA and the assumption of certain
indebtedness from Columbia/HCA in the aggregate amount of approximately
$673.8 million at an assumed average interest rate of 9.83% and approximately
$1.5 million in amortization of the estimated loan issuance costs.
(6) To adjust provision for income taxes for the estimated impact of the
pro forma adjustments.
(7) Pro forma income (loss) per share was computed using the weighted
average shares outstanding for the six months ended June 30, 1999.
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Pro Forma Operating Results Summary
<TABLE>
<CAPTION>
For the six months ended June 30,
-----------------------------------------
1998 1999
-------------------- --------------------
Amount Percentage Amount Percentage
-------- ---------- -------- ----------
<S> <C> <C> <C> <C>
Revenues............................. $ 542.8 100.0 $ 571.9 100.0
Salaries and benefits................ 217.8 40.1 231.1 40.4
Supplies............................. 76.7 14.1 83.5 14.6
Other operating expenses............. 123.0 22.7 123.0 21.5
Provision for doubtful accounts...... 48.9 9.0 47.3 8.3
Depreciation and amortization........ 39.5 7.3 41.6 7.3
Interest expense..................... 34.8 6.4 34.0 6.0
ESOP expense......................... 2.2 0.4 2.2 0.4
-------- ----- -------- -----
542.9 100.0 562.7 98.4
-------- ----- -------- -----
Income from continuing operations
before minority interests, equity in
earnings, and income taxes.......... (0.1) -- 9.2 1.6
Minority interests in earnings of
consolidated entities............... (5.7) (1.1) (4.8) (0.8)
Equity in earnings (loss) of
unconsolidated subsidiaries......... 2.4 0.5 (1.5) (0.3)
-------- ----- -------- -----
Income (loss) from continuing
operations before income taxes...... (3.4) (0.6) 2.9 0.5
Income tax (provision) benefit....... 0.1 -- (2.5) (0.4)
-------- ----- -------- -----
Income (loss) from continuing
operations.......................... $ (3.3) (0.6) $ 0.4 0.1
======== ===== ======== =====
Income (loss) per common share from
continuing operations............... $ (0.11) $ 0.01
Pro forma EBITDA (a)................. $ 78.9 $ 85.5
Number of hospitals at end of
period (b).......................... 28 29
Licensed beds at end of period (c)... 3,506 3,522
Available beds at end of period (d).. 3,059 3,196
Admissions (e)....................... 57,800 61,446
Adjusted admissions (f).............. 97,551 103,859
Patient days (g)..................... 272,173 278,273
Adjusted patient days (h)............ 459,357 470,350
Emergency room visits................ 208,296 225,209
Average length of stay (i)........... 4.7 4.5
Average daily census (j)............. 1,512 1,546
Occupancy rate (k)................... 49.4% 48.4%
Net patient revenue per adjusted
patient day......................... 1,181 1,177
Gross inpatient revenue.............. $ 634.5 $ 706.8
Gross outpatient revenue............. $ 436.4 $ 487.9
Gross outpatient revenue percentage.. 40.8% 40.8%
Net inpatient revenue................ $ 243.9 $ 266.7
Net outpatient revenue............... $ 275.2 $ 287.1
Net outpatient revenue percentage.... 53.0% 51.8%
</TABLE>
- --------
(a) Pro forma EBITDA is EBITDA, as defined previously, adjusted (1) as if the
spin-off and the divestitures of certain facilities that Triad intends to
divest or cease to operate during 1999 had occurred at the beginning of
1998, (2) as if the long term lease of the Kansas City facilities in
January 1999 had occurred at the beginning of each period, (3) to exclude
non-cash ESOP expense and (4) to include Triad's management's estimated
corporate overhead costs of $22.4 million on an annual basis that are
recorded in the Pro Forma Operating Results Summary to replace the
management fees allocated by Columbia/HCA. Pro forma EBITDA is commonly
used
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as an analytical indicator of leverage capacity and debt service ability.
Pro forma EBITDA should not be considered as a measure of financial
performance under generally accepted accounting principles, and the items
excluded from pro forma EBITDA are significant components in understanding
and assessing financial performance. Pro forma EBITDA should not be
considered in isolation or as an alternative to net income, cash flows
generated by operating, investing or financing activities or other
financial statement data presented in the combined financial statements as
an indicator of financial performance or liquidity. Because pro forma
EBITDA is not a measurement determined in accordance with generally
accepted accounting principles and is thus susceptible to varying
calculations, pro forma EBITDA as presented may not be comparable to other
similarity titled measures of the companies.
(b) Number of hospitals include two facilities which are leased to a third
party and two hospitals not consolidated for financial reporting purposes
for each period. This table does not include any operating statistics for
these facilities.
(c) Licensed beds are those beds for which a facility has been granted
approval to operate from the applicable state licensing agency.
(d) Available beds are those beds a facility actually has in use.
(e) Represents the total number of patients admitted to Triad's facilities or
in the facility for a period in excess of 23 hours and is used by
management and certain investors as a general measure of inpatient
volume.
(f) 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.
(g) Represents the total number of days each patient stays in Triad's
hospitals.
(h) Adjusted patient days is used by management and certain investors as a
general measure of combined inpatient and outpatient volume. Adjusted
patient days are computed by multiplying patient days (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 patient days computation "equates" outpatient revenue to the
volume measure (patient days) used to measure inpatient volume resulting
in a general measure of combined inpatient and outpatient volume.
(i) 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.
(j) Represents the average number of patients in Triad's hospital beds each
day.
(k) Represents the percentage of hospital available beds occupied by
patients. Both average daily census and occupancy rate provide measures
of the utilization of inpatient rooms. The declining occupancy rate is
primarily attributed to the trend toward more services, that were
previously performed in an inpatient setting, being performed on an
outpatient basis and the decline in average length of stay per admission.
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Pro Forma Comparisons of the Six Months Ended June 30, 1999 and 1998
The following discussion compares the results of the six months ended June
30, 1999 on a pro forma basis to the results of the six months ended June 30,
1998 on a pro forma basis, in each case giving effect to the assumptions set
forth above the summary table of pro forma results from continuing operations
for the six months ended June 30, 1999 and June 30, 1998.
On a pro forma basis, income from continuing operations before income taxes
increased to $2.9 million in the six months ended June 30, 1999 from a loss
from continuing operations before income taxes of $3.4 million in the six
months ended June 30, 1998. The pro forma increase was primarily due to the
improved operations of the facilities that will remain after the planned
divestitures. This was partially offset by start-up of operations at one
facility, that is accounted for using the equity method, which opened in May
1999 and $1.8 million of favorable cost report settlements in the six months
ended June 30, 1998.
On a pro forma basis, revenues increased 5.4% to $571.9 million in the six
months ended June 30, 1999 compared to $542.8 million in the six months ended
June 30, 1998. Inpatient admissions increased 6.3% and adjusted admissions
increased 6.5% in the six months ended June 30, 1999 compared to the six months
ended June 30, 1998 on a pro forma basis. The increase in revenues, on a pro
forma basis, was due primarily to increased focus by management on the markets
that met Triad's strategic plan as Triad progressed toward and completed the
distribution. That increased management attention decreased the uncertainty in
the affected markets as to the eventual disposition of the facilities. The
increase was partially offset by $1.8 million of favorable cost report
settlements in the six months ended June 30, 1998.
On a pro forma basis, salaries and benefits, as a percentage of net
revenue, increased to 40.4% in the six months ended June 30, 1999 from 40.1% in
the six months ended June 30, 1998 due to $2.0 million bonuses, relating to
pre-distribution activities, that were incurred during the six months ended
June 30, 1999.
On a pro forma basis, supplies, as a percentage of net revenue, increased
to 14.6% compared to 14.1% in the six months ended June 30, 1999 and 1998,
respectively. The increase was due to increase in the purchases of higher cost
items due to higher acute care patients and increases in prices.
On a pro forma basis, provision for doubtful accounts, as a percentage of
net revenue, decreased to 8.3% in the six months ended June 30, 1999 from 9.0%
in the six months ended June 30, 1998 due to increased focus by management on
the core facilities that will remain with Triad after the planned divestitures.
On a pro forma basis, other operating expenses, as a percentage of net
revenue, decreased to 21.5% from 22.7% for the six months ended June 30, 1999
and 1998, respectively. This was primarily due to Triad reducing the use of
outside contract services.
On a pro forma basis, depreciation and amortization, interest expense and
minority interests in earnings of consolidated entities remained relatively
unchanged for the six months ended June 30, 1999 compared to June 30, 1998.
Liquidity and Capital Resources
Prior to the distribution Triad relied upon Columbia/HCA for liquidity and
sources of capital to supplement any needs not met by operations. As an
independent publicly-traded company, Triad now has direct access to the capital
markets and the ability to enter into its own borrowing arrangements. At June
30, 1999, Triad had working capital of $141.8 million.
Cash provided by continuing operating activities was $62.6 million in the
six months ended June 30, 1999 compared to $11.4 million in the six months
ended June 30, 1998. The increase was due to an increase in accounts payable
and other current liabilities, decrease in
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inventories and other assets and a smaller increase in accounts receivable in
1999 than 1998.
Cash used in investing activities increased to $102.1 million in the six
months ended June 30, 1999 from $36.5 million in the six months ended June 30,
1998. This was due to an increase of construction projects in the six months
ended June 30, 1999 compared to the six months ended June 30, 1998 and
investments in a new hospital, which is not consolidated for financial
reporting purposes, which opened in May 1999. Triad expects to expend
approximately $120 million ($90 million for expansion) in capital expenditures
from the date of the distribution through the end of 1999, of which $7.4
million has been spent, and approximately $90 million ($50 million for
expansion) in 2000.
Cash provided by financing activities was $95.1 million in the six months
ended June 30, 1999 compared to $25.1 million in the six months ended June 30,
1998. This was due primarily to changes in the intercompany balances with
Columbia/HCA.
In connection with the distribution, all intercompany accounts payable by
Triad to Columbia/HCA were eliminated, and Holdings ultimately assumed $673.8
million of debt obligations from Columbia/HCA.
The debt consisted originally of:
. a $75.0 million asset sale bridge loan bearing interest at LIBOR plus 3.25%
per annum due May 11, 2000,
. a $65.0 million Tranche A loan bearing interest at LIBOR plus 3.25% with
principal amounts due beginning in 1999 through 2004,
. a $200.0 million Tranche B loan bearing interest at LIBOR plus 4.00% with
principal amounts due beginning in 1999 through 2005, and
. the $325.0 million of notes due in 2009.
Triad also assumed various indebtedness of Columbia/HCA related to specific
hospitals in an aggregate amount of approximately $8.8 million with interest
rates averaging 5.7% maturing over five years. Triad also assumed a $125.0
million revolving line of credit bearing interest at LIBOR plus 3.25% due in
2004. No amounts were outstanding under the revolving credit facility as of
July 31, 1999. Triad made a $5.0 million principal payment on the asset sale
bridge loan in June 1999. In September 1999, Triad repaid the entire balance of
the asset sale bridge loan.
Triad's bank debt is secured by a pledge of substantially all of its
assets. The bank debt agreements require that Triad comply with various
financial ratios and tests, including a minimum net worth test, a total funded
debt to EBITDA ratio, a senior funded debt to EBITDA ratio, and a minimum fixed
charge coverage ratio, all as defined in the bank debt agreements. The bank
debt agreements and the indenture relating to the notes also contain covenants
that, among other things, limit the ability of Triad to incur additional
indebtedness, pay dividends on, redeem or purchase its capital stock, make
investments and capital expenditures, engage in transactions with affiliates,
create certain liens, sell assets, and consolidate, merge or transfer assets.
As previously discussed, based upon a review of all facilities and trends
in each market, management of Triad has determined that 10 acute care hospitals
and one psychiatric hospital are not compatible with Triad's strategic plans.
Of the facilities to be divested, two acute care hospitals were sold during the
six months ended June 30, 1999, the proceeds of which were retained by
Columbia/HCA, and the operations of one acute care hospital were ceased. Triad
is required to use future sales proceeds on the remaining facilities to retire
certain outstanding indebtedness.
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 located in the Kansas City, Missouri area. The lease
payments are approximately $16.0 million per year. In January 2001, the lessee
has an option to purchase the facilities for approximately $130.0 million. As
of June 30, 1999, these facilities assets had a carrying value of $86.5
million.
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On June 1, 1999 Triad completed a swap of its facility in Laredo, Texas for
a facility in Victoria, Texas and $4.4 million in cash. Management expects that
this transaction will reduce pre-tax earnings for the remainder of the fiscal
year by approximately $3.0 million. No gain or loss was recorded during the
second quarter of 1999 relating to the swap. The Company is currently
finalizing an appraisal of the Victoria, Texas hospital and expects the
appraisal to be completed during the third quarter. Any gain or loss as a
result of final appraisal will be recognized during the third quarter, although
the gain or loss should be minimal.
Triad sold its joint venture facility in Amarillo, Texas, which was not
part of the facilities that are identified elsewhere in this prospectus as held
for sale, for $27.9 million on September 1, 1999. Triad's share of the proceeds
were $22.8 million less approximately $1.0 million of franchise tax incurred on
the sale. As of June 30, 1999, the carrying value of this facility was $8.5
million. For the six months ended June 30, 1999, this facility had net revenues
of $5.0 million, and pre-tax income of $0.3 million. For the six months ended
June 30, 1998, net revenues were $5.5 million, and pre-tax income was $1.0
million.
On September 3, 1999, Triad sold two acute care hospitals in Anaheim,
California and Huntington Beach, California for $35.0 million plus working
capital, which was $5.7 million at June 30, 1999. The carrying value of these
facilities was $32.9 million at June 30, 1999. For the six months ended June
30, 1999, these facilities had net revenues of $50.1 million and $51.8 million,
respectively. Pre-tax loss for these facilities was $3.1 million and $7.1
million for the six months ended June 30, 1999 and 1998, respectively.
Triad sold acute care hospitals in Beaumont, Texas and Silsbee, Texas on
September 30, 1999 for approximately $13.6 million. The carrying value of these
facilities was $14.3 million at June 30, 1999. For the six months ended June
30, 1999 and 1998 these facilities had net revenues of $26.5 million and $29.1
million respectively and pre-tax loss of $8.1 million and $6.7 million,
respectively.
Triad has entered into a definitive purchase agreement to sell a majority
of the assets of its acute care hospital in Phoenix, Arizona for approximately
$30.0 million. The sale of these assets should be completed during the fourth
quarter. The carrying value of these assets was $30.3 million at June 30, 1999.
For the six months ended June 30, 1999 and 1998, this facility had net revenues
of $24.4 million and $42.7 million, respectively and pre-tax loss of $7.2
million and $5.2 million, respectively.
In connection with the distribution, Triad established an ESOP, which
purchased from Triad at fair market value 3.0 million shares of Triad common
stock. The ESOP financed the purchase primarily by issuing a promissory note to
Triad, which will be amortized in equal installments over 10 years beginning
December 31, 1999. ESOP expense will be recognized based on the number of
shares to be released based on loan repayments during each year multiplied by
the average share price during that year. ESOP shares outstanding for the
earnings per share calculation will be the average number of shares to be
released.
Although Triad's indebtedness will be more substantial than was
historically the case for its predecessor entities, management expects that
operations and working capital facilities will provide sufficient liquidity for
the remainder of fiscal 1999 and for the next several years.
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.
According to published reports, on July 2, 1999, a federal jury in Tampa,
Florida found two Columbia/HCA employees guilty of
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conspiracy and making false statements on Medicare and Champus costs reports
for years 1992 and 1993 and a Medicaid cost report for 1993. Both were found
not guilty of obstructing a federal auditor. One other employee was acquitted
of all counts for which he had been charged and the jury was unable to reach a
verdict with respect to another employee.
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 distribution
date which are presented herein. The extent to which Triad may or may not
continue to be affected after the distribution 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, Triad and LifePoint in connection with the distribution,
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 distribution date 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. See
"Arrangements Relating to the Distribution--Distribution Agreement" for a more
detailed description of such indemnification obligations. 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 distribution date, whether or not Triad
is indemnified for similar acts, practices and omissions occurring prior to the
distribution date. See Note 3 and Note 11 of the Notes to Combined Financial
Statements of Triad included elsewhere herein for a more detailed description
of such liabilities.
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.
Impact of Year 2000 Computer Issues
Background and General Information
The Year 2000 issues facing Triad are the result of two potential
malfunctions that could have an impact on Columbia/HCA's and Triad's systems
and equipment, including Columbia/HCA's systems and equipment which Triad
relies upon. The first issue arises due to computers being programmed to use
two rather than four digits to define the applicable year. The second issue
arises in embedded chips, where microchips and microcontrollers have been
designed using two rather than four digits
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to define the applicable year. Certain of Columbia/HCA's computer programs, as
well as Triad's building infrastructure components such as alarm systems and
HVAC systems, and medical devices that are date sensitive may recognize a date
using "00" as the year 1900 rather than the year 2000. If uncorrected, these
issues could result in computer system and program failures or equipment and
medical device malfunctions that could result in a disruption of business
operations or that could affect patient diagnosis and treatment.
In connection with the distribution, Triad and Columbia/HCA entered into a
computer and data processing services agreement, pursuant to which Triad
obtains most of its information technology and information technology
infrastructure systems from Columbia Information Systems. Columbia Information
Systems does not warrant that the software and hardware used by Columbia
Information Systems in providing services to Triad will be Year 2000 ready but
Columbia Information Systems is currently making efforts in a professional,
timely, and workmanlike manner that it deems reasonable to address Year 2000
issues with respect to the software licensed to Triad under the computer and
data processing services agreement. In connection with its participation in
Columbia/HCA's Year 2000 project, Triad has made and will continue to make
certain expenditures related to software systems and applications not obtained
from Columbia Information Systems and non-information technology systems such
as vendor products, medical equipment and other related equipment with embedded
chips, to ensure that they are Year 2000 ready. For more information on Triad's
information technology systems, see "Arrangements Relating to the
Distribution--Computer and Data Processing Services Agreement" and "--
Transitional Services Agreement."
Pursuant to the computer and data processing services agreement, Triad
relies on Columbia Information Systems to provide most of its computer support
and information technology services. Columbia/HCA and Triad are also continuing
an ongoing program to inspect medical equipment at Triad facilities for Year
2000 readiness. Triad is dependent upon Columbia/HCA for the Year 2000
readiness of a majority of its information technology systems. Triad is
responsible for the Year 2000 readiness of its non-information technology
systems. Triad is responsible for contingency planning in respect of Year 2000-
related risks in both areas. Any failure by Columbia/HCA to adequately address
such matters could have a material adverse effect on the business, financial
condition and/or results of operations or prospects of Triad.
Columbia/HCA is utilizing both internal and external resources to manage
and implement its Year 2000 program. With the assistance of external resources,
Columbia/HCA and Triad have undertaken development of contingency plans in the
event that their Year 2000 efforts, or the Year 2000 efforts of third parties
upon which Columbia/HCA and Triad rely, are not accurately or timely completed.
Columbia/HCA has developed a contingency planning methodology and Triad will
implement contingency plans throughout 1999.
Information Technology Systems
With respect to the information technology systems portions of
Columbia/HCA's Year 2000 project, which address the inventory, assessment,
remediation, testing and implementation of internally developed software,
Columbia/HCA has identified various software applications that are being
addressed on separate time lines. Columbia/HCA has begun remediating these
software applications and is testing the software applications where
remediation has been completed. Columbia/HCA has also completed the assessment
of mission critical third party software--software which is essential for day
to day operations--and has developed testing and implementation plans with
separate time lines. Columbia/HCA has completed and placed into production 99%
of software applications and anticipates completing, in all material respects,
remediation, testing and implementation for internally developed and mission
critical third party software. Remediation testing and implementation of
various software applications will be complete in the fourth quarter of 1999.
These exceptions to the information technology systems goals should not have a
material effect on Columbia/HCA's readiness, and accordingly Triad's.
Columbia/HCA's efforts with respect to the information technology
infrastructure portion
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of Columbia/HCA's Year 2000 project are currently on schedule in all material
respects for Triad's facilities.
With respect to the information technology infrastructure portion of
Columbia/HCA's Year 2000 project, Columbia/HCA has undertaken a program to
inventory, assess and correct, replace or otherwise address impacted vendor
supplied products--hardware, systems software, business software, and
telecommunication equipment. Columbia/HCA has implemented a program to contact
vendors, analyze information provided, and remediate, replace or otherwise
address information technology products that pose a material Year 2000 impact.
Columbia/HCA anticipates completion, in all material respects, of the
information technology infrastructure portion of its program by September 30,
1999, revised from an expected completion date of June 30, 1999. With respect
to such revised date, the information technology infrastructure portion of
Columbia/HCA's Year 2000 project is currently on schedule in all material
respects for Triad's facilities.
Columbia/HCA presently believes that with modifications to existing
software or the installation of upgraded software under the information
technology infrastructure portion, the Year 2000 will not pose material
operational problems for its computer systems. However, if such modifications
or upgrades are not accomplished in a timely manner, Year 2000-related failures
may present a material adverse impact on the operations of Triad.
Non-Information Technology Systems and Equipment
With respect to the non-information technology infrastructure portion of
Columbia/HCA's Year 2000 project, Columbia/HCA and Triad have undertaken a
program to inventory, assess and correct, replace or otherwise address impacted
vendor products, medical equipment and other related equipment with embedded
chips. Columbia/HCA and Triad have implemented a program to contact vendors,
analyze information provided, and remediate, replace or otherwise address
devices or equipment that could have a material Year 2000 impact. Columbia/HCA
and Triad anticipate completion, in all material respects, of the non-
information technology infrastructure portion of the program by a revised date
of September 30, 1999, from the previously anticipated date of June 30, 1999.
With respect to such revised date, the non-information technology
infrastructure portion of Columbia/HCA's Year 2000 project is currently on
schedule in all material respects.
Columbia/HCA and Triad are prioritizing its non-information technology
infrastructure efforts by focusing on equipment and medical devices that will
have a direct impact on patient care and health. Columbia/HCA and Triad are
directing substantial efforts to repair, replace, upgrade or otherwise address
this equipment and these medical devices in order to minimize risk to patient
safety and health. Columbia/HCA and Triad are relying on information that is
being provided to it by equipment and medical device manufacturers regarding
the Year 2000 readiness of their products. While Columbia/HCA and Triad are
attempting to evaluate information provided by its previous and current
vendors, there can be no assurance that in all instances accurate information
is being provided. Columbia/HCA and Triad also cannot in all instances
guarantee that the repair, replacement or upgrade of all non-information
technology infrastructure systems will occur on a timely basis or that such
repairs, replacements or upgrades will avoid all Year 2000 problems.
Third Party Payers and Intermediaries, and Suppliers
Columbia/HCA has initiated communications with Triad's major third party
payers and intermediaries, including government payers and intermediaries.
Triad relies on these entities for accurate and timely reimbursement of claims,
often through the use of electronic data interfaces. Columbia/HCA has not
received assurances that these interfaces will be converted in a timely manner.
Testing with payers and intermediaries was not completed by June 30, 1999
because the payers and intermediaries were not ready to test with
Columbia/HCA's systems. These tests will continue through the end of the year.
Failure of these third party systems could have a material adverse effect on
Triad's cash flow or results of operations.
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Columbia/HCA and Triad have initiated communications with Triad's mission
critical suppliers and vendors--those suppliers and vendors whose products and
services are essential for day-to-day operations--to verify their ability to
continue to deliver goods and services through the Year 2000. Columbia/HCA and
Triad have not received assurances from all mission critical suppliers and
vendors that they will be able to continue to deliver goods and services
through the Year 2000, but Columbia/HCA and Triad are continuing its efforts to
obtain such assurances. The failure of these third parties could have a
material impact on operations and/or the ability of Triad to provide health
care services.
With the assistance of external resources, Columbia/HCA and Triad have
undertaken the development of contingency plans in the event that its Year 2000
efforts, or the Year 2000 efforts of third parties upon which Columbia/HCA and
Triad rely, are not accurately or timely completed. Columbia/HCA has developed
a contingency planning methodology and along with Triad will implement
contingency plans throughout 1999.
Year 2000 Risks
While Columbia/HCA and Triad are developing contingency plans to address
possible failure scenarios, Triad recognizes that there are "worst-case"
scenarios which may develop and are largely outside its or Columbia/HCA's
control. Triad recognizes the risks associated with extended infrastructure,
such as power, water and telecommunications, failure, the interruption of
insurance and government program payments to the organization and the failure
of equipment or software that could impact patient safety or health despite the
assurances of third parties. Columbia/HCA and Triad are addressing these and
other failure scenarios in its contingency planning effort and is engaging
third parties in discussions regarding how to manage common failure scenarios,
but neither Columbia/HCA nor Triad can currently estimate the likelihood or the
potential cost of such failures. Currently, Triad does not believe that any
reasonably likely worst case scenario will have a material impact on its
revenues or operations. Those reasonably likely worst case scenarios include
continued expenditures for remediation, continued expenditures for replacement
or upgrade of equipment, continued efforts regarding contingency planning,
increased staffing for the periods immediately preceding and after January 1,
2000, and possible payment delays from Triad's payers.
Costs and Expenses
The Year 2000 project costs incurred by Columbia/HCA will have an impact on
the computer and data processing services agreement with Triad. Triad is not
currently able to reasonably estimate the ultimate cost to be incurred by it
for the assessment, remediation, upgrade, replacement and testing of its
impacted non-information technology systems. The majority of the costs, except
the cost of new equipment, related to the Year 2000 project will be expensed as
incurred and are expected to be funded through operating cash flows.
The estimated completion dates for the Year 2000 modifications are based on
Columbia/HCA's management's best estimates, which were derived utilizing
numerous assumptions of future events, including the continued availability of
certain resources, third party modification plans and other factors. However,
there can be no guarantees that these estimates will be achieved and actual
results could differ materially from those anticipated. Specific factors that
might cause such material differences include, but are not limited to, the
availability and cost of personnel trained in this area and the ability to
locate and correct all relevant computer codes and all medical equipment.
Effects of Inflation and Changing Prices
Various federal, state and local laws have been enacted that, in certain
cases, limit Triad's ability to increase prices. Revenues for acute care
hospital services rendered to Medicare patients are established under the
federal government's prospective payment system. Total Medicare revenues
approximated 34.6% in 1998, 35.4% in 1997 and 36.5% in 1996.
Management believes that hospital industry operating margins have been, and
may continue to be, under significant pressure because of deterioration in
inpatient volumes, changes in payer mix and growth in operating expenses in
excess of the increase in prospective payments under the Medicare
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program. Management expects that the average rate of increase in Medicare
prospective payments will continue to decline slightly in 1999. In addition, as
a result of increasing regulatory and competitive pressures, Triad's ability to
maintain operating margins through price increases to non-Medicare patients is
limited.
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 the services provided by and reimbursement to health care
providers 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.
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BUSINESS
General
Triad provides health care services through its hospitals and ambulatory
surgery centers located in small cities and selected high growth urban markets
in the Southern, Western and Southcentral United States. Triad owns and
operates the health care services business that comprised the Pacific Group of
Columbia/HCA prior to the distribution.
As of June 30, 1999, Triad's facilities included 37 general, acute care
hospitals, one psychiatric hospital, and 17 ambulatory surgery centers,
excluding two surgery centers that are not consolidated for accounting
purposes, located in the states of Alabama, Arizona, Arkansas, California,
Kansas, Louisiana, Missouri, New Mexico, Oklahoma, Oregon and Texas. Two
hospitals included among these facilities are operated through 50/50 joint
ventures that are not consolidated for financial reporting purposes.
Triad's management has focused on streamlining Triad's portfolio of
facilities to eliminate those with poor financial performance, weak competitive
market positions or locations in certain urban markets. As a result of this
initiative, Triad has decided to divest certain of its facilities. Since
December 31, 1998, Triad has sold seven of the general, acute care hospitals
and one ambulatory surgery center that it operated as of such date, and has
transferred under long term leases two of such hospitals and three of such
surgery centers to an unaffiliated third party. Triad currently intends to sell
an additional four of its general, acute care hospitals, its one psychiatric
hospital, and certain of the ambulatory surgery centers that it operated as of
June 30, 1999, for one of which Triad has entered into a definitive purchase
agreement with an anticipated sale date in the fourth quarter. In addition to
these divestitures, Triad opened a new hospital in May 1999 that is operated
through a 50/50 joint venture that is not consolidated for financial reporting
purposes. Triad also completed a swap of one of its hospitals, Doctors Hospital
of Laredo, for a hospital located in Victoria, Texas on June 1, 1999. Triad
also sold one hospital in Amarillo, Texas on September 1, 1999 that was not
part of the facilities referenced above. Following the divestitures, Triad
expects its facilities to include 28 hospitals, including the two hospitals
operated through joint ventures and two hospitals leased to and operated by an
unaffiliated third party, as well as 14 ambulatory surgery centers.
For the year ended December 31, 1998, Triad generated $1,588.7 million in
revenues and $149.0 million in EBITDA. For the six months ended June 30, 1999
Triad generated $707.7 million in revenue and $71.5 million in EBITDA.
For the year ended December 31, 1998, on a pro forma basis to reflect the
distribution and related transactions and the elimination of facilities
divested and to be divested or which Triad has ceased to operate, excluding the
Amarillo facility, Triad generated $1,078.2 million in revenues and $136.4
million in EBITDA. For the six months ended June 30, 1999, on such a pro forma
basis, Triad generated $571.9 million in revenues and $85.5 million in EBITDA.
In addition to providing capital resources, Triad makes available a variety
of management services to its health care facilities. These services include
ethics and compliance programs, national supply and equipment purchasing and
leasing contracts, accounting, financial and clinical systems, governmental
reimbursement assistance, information systems, legal support, personnel
management and internal audit, access to regional managed care networks, and
resource management. Some of these services initially will be provided through
transitional arrangements made with Columbia/HCA. Triad also will participate
and have an equity interest, along with Columbia/HCA and LifePoint, in a group
purchasing organization which makes certain national supply and equipment
contracts available to Triad's facilities. See "Arrangements Relating to the
Distribution" for a more detailed discussion of these arrangements.
Triad's Markets
Most of Triad's facilities are located in two distinct types of markets in
the Southern,
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Western and Southcentral United States. After the cessation of operations and
completion of the planned divestitures, three-quarters of the Triad hospitals
will be located in small cities, generally with populations less than 150,000
residents and located more than 60 miles from a major urban center. Triad's
hospitals are usually either the only hospital or one of two or three
hospitals. The remainder of Triad's 28 hospitals will be located in five
larger urban areas. The urban areas where Triad operates are typically
characterized by a high rate of population growth, such as Phoenix and Tucson,
Arizona. Approximately half of Triad's facilities are located in the states of
Arizona and Texas.
Small Cities
Triad believes that the small cities of the Southern, Western and
Southcentral United States are attractive to health care service providers as
a result of favorable demographic and economic trends. Twenty-five of the 36
general, acute care hospitals that Triad operated as of June 30, 1999 were
located in these markets. Of these hospitals, 12 hospitals were located in
communities where they were the sole hospital and 13 hospitals were located in
communities where they were one of only two or three hospitals. After
completion of Triad's planned divestitures and the cessation of operations
described above, 20 of Triad's 28 remaining general, acute care hospitals will
be located in small cities. Of these hospitals, nine will be located in
communities where they currently are the sole hospital and 11 hospitals will
be located in communities where they currently are one of only two or three
hospitals.
While Triad's hospitals located in these small cities are more likely to
face direct competition than facilities located in smaller non-urban markets,
that competition usually is limited to a single competitor in the relevant
market. Triad believes that the smaller populations and relative dominance of
the one or two acute care hospitals in these markets also limit the entry of
alternate non-hospital providers, such as outpatient surgery centers or
rehabilitation or diagnostic imaging centers, as well as managed care plans.
Larger Urban Markets
Eleven of the 36 general, acute care hospitals that Triad operated as of
June 30, 1999 were located in larger urban markets of the Southern, Western
and Southcentral United States, and after completion of the planned
divestitures and closure described above, eight of Triad's 28 remaining
general, acute care hospitals will be located in such urban markets.
In addition to the direct competition Triad faces from other health care
providers in its markets, there are higher levels of managed care penetration
in the larger urban markets or, in other words, a higher relative proportion
of the market population enrolled in managed care programs such as HMOs and
PPOs.
Business Strategy
Triad's primary objectives are to provide quality health care services and
to enhance its financial performance by increasing utilization of its
facilities and improving operating efficiencies, using the following
strategies:
. Build on Position in Small Cities and High Population Growth Urban Markets.
Triad believes that as a result of its efforts to strengthen its base of
assets, it is well positioned to build upon its portfolio of facilities in
the Southern, Western and Southcentral United States. Triad believes that,
unlike rural markets which have small populations, Triad's small city
markets can support increased specialty services which produce relatively
higher revenues than other health care services. In addition, in Triad's
small city markets managed care penetration is generally lower than in
urban areas and, therefore, Triad believes that it will be in a better
position to negotiate more favorable managed care contracts in these
markets. Triad also intends to strengthen its competitive position in the
fast growing larger urban areas of the Southwest where it currently
operates.
. Recruit Physicians. Triad plans to actively recruit additional primary care
physicians. Triad believes that primary care physicians are frequently the
first contact point for a
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patient and that each hospital must establish strong physician relationships
in its community in order to enhance patient care and fulfill the needs of
the growing population in Triad's markets.
. Enhance Specialty Services, Outpatient Services and Emergency Rooms. Triad
believes that many of its markets are large enough to support additional
specialty services, such as women's centers, orthopedic facilities, oncology
centers and neurology care, and intends to selectively increase these
services in order to reduce patient outmigration to urban hospitals. To
support this expansion of specialty services, Triad plans to actively
recruit additional specialists to its facilities. Recognizing that the shift
from inpatient to outpatient care recently experienced by the health care
industry is likely to continue, Triad intends to continue to enhance the
access to and the convenience of its outpatient service capabilities by
improving its free-standing ambulatory surgery centers, restructuring its
hospital facilities and surgery capacity to better accommodate outpatient
treatment, and improving its emergency room facilities.
. Improve Operating Efficiencies through Enhanced Cost Management and Resource
Control. Triad has initiated several measures to improve the financial
performance of its facilities through greater control of operating expenses.
Triad has focused on reducing salaries, wages and benefits, the largest
component of operating expense, at the facility level. Triad also has
instituted a financial training program for its hospital managers to teach
effective management of hospital revenues and expenses. Triad plans to
improve resource management through cooperative initiatives with physicians
to eliminate unnecessary tests and procedures.
. Develop Strong Relationships with Physicians. Triad believes recruiting and
retaining motivated physicians is vitally important to its long term
success. Triad believes a model for effective health care service delivery
can be developed cooperatively with physicians and the hospitals which will
result in improved quality of care. In each of its markets, Triad is
establishing a Physician Leadership Group made up of leading area physicians
who will work with corporate and hospital management to establish local
priorities. Corporate objectives will be addressed by a national Physician
Leadership Group comprised of representatives of local Physician Leadership
Groups and members of Triad management. In an effort to further improve
communication with its physicians, Triad has appointed a senior manager who
is an experienced physician to oversee physician relations.
. Grow Through Existing Hospital Expansion, New Hospital and Ambulatory
Surgery Center Construction and Selective Acquisitions. Triad intends to
identify expansion opportunities in areas where management perceives that
demand is not being adequately met due to rapid population growth or
insufficient existing health care services. Triad plans to selectively
expand its existing hospitals by adding clinical facilities or medical
office buildings. Triad plans to construct new hospitals and also may seek
to make acquisitions in select markets. Triad has recently built a new
facility in South Tulsa, Oklahoma through a joint venture with Hillcrest
Healthcare Systems. The facility opened in May 1999 and is 50% owned by
Triad. Triad believes that potential acquisition opportunities may arise
when other health care providers choose to divest facilities or when
independent hospitals believe that they can benefit from becoming part of a
larger hospital company. Currently, Triad does not have specific plans for
additional new facilities or acquisitions.
Operations
Triad's general, acute care hospitals typically provide a full range of
services commonly available in hospitals, such as
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internal medicine, general surgery, cardiology, oncology, neurosurgery,
orthopedics and obstetrics, as well as diagnostic and emergency services. These
hospitals also generally provide outpatient and ancillary health care services
such as outpatient surgery, laboratory, radiology, respiratory therapy,
cardiology and physical therapy. Outpatient services also are provided by
ambulatory surgery centers operated by Triad. In addition, certain of Triad's
general, acute care hospitals have a limited number of licensed psychiatric
beds.
Each of Triad's hospitals is governed by a board of trustees, which
includes members of the hospital's medical staff. The board of trustees
establishes policies concerning the medical, professional and ethical
practices, monitors such practices, and is responsible for ensuring that these
practices conform to established standards. Triad maintains quality assurance
programs to support and monitor quality of care standards and to meet
accreditation and regulatory requirements. Patient care evaluations and other
quality of care assessment activities are monitored on a continuing basis.
Services and Utilization
Hospital revenues depend upon inpatient occupancy levels, the volume of
outpatient procedures and the charges or negotiated payment rates for such
services. Charges and reimbursement rates for inpatient routine services vary
significantly depending on the type of service, such as medical/surgical,
intensive care or psychiatric, and the geographic location of the hospital.
Triad believes that important factors relating to the overall utilization
of a hospital include the quality and market position of the hospital and the
number, quality and specialties of physicians providing patient care within the
facility. Generally, Triad believes that the ability of a hospital to meet the
health care needs of its community is determined by its breadth of services,
level of technology, emphasis on quality of care and convenience for patients
and physicians. Other factors which impact utilization include the growth in
local population, local economic conditions, market penetration of managed care
programs and the availability of reimbursement programs such as Medicare and
Medicaid. Utilization across the industry also is being affected by improved
treatment protocols as a result of advances in medical technology and
pharmacology.
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The following table sets forth certain operating statistics for hospitals
owned by Triad for each of the past five years ended December 31, and for the
six months ended June 30, 1999.
Medical/surgical hospital operations are
subject to certain seasonal fluctuations, including decreases in patient
utilization during holiday periods and increases in patient utilization during
the cold weather months.
<TABLE>
<CAPTION>
Six Months
Ended
Years Ended December 31, June 30,
------------------------------------------- ----------
1994 1995 1996 1997 1998 1999
------- ------- ------- ------- ------- ----------
<S> <C> <C> <C> <C> <C> <C>
Number of hospitals at
end of period(a)....... 38 39 39 39 39 38
Number of licensed beds
at end of period(b).... 5,660 5,926 5,872 5,859 5,909 4,974
Weighted average
licensed beds(c)....... 5,325 5,900 5,882 5,860 5,877 5,058
Admissions(d)........... 147,923 170,392 171,265 172,926 169,590 79,194
Equivalent
admissions(e).......... 211,382 257,292 266,660 275,125 276,771 128,285
Average length of stay
(days)(f).............. 5.2 5.2 5.0 4.9 4.9 4.6
Average daily
census(g).............. 2,111 2,405 2,338 2,326 2,260 2,039
Occupancy rate(h)....... 40% 41% 40% 40% 39% 46%
</TABLE>
- --------
(a) Number of hospitals includes two facilities which are leased to a third
party and two hospitals not consolidated for financial reporting purposes
for 1999. This table does not include any operating statistics for these
facilities.
(b) Licensed beds are those beds for which a facility has been granted approval
to operate from the applicable state licensing agency.
(c) Represents the average number of licensed beds weighted based on periods
owned.
(d) Represents the total number of patients admitted (in the facility for a
period in excess of 23 hours) to Triad's hospitals and is used by
management and certain investors as a general measure of inpatient volume.
(e) Equivalent admissions is used by management and certain investors as a
general measure of combined inpatient and outpatient volume. Equivalent
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 equivalent
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.
(f) Represents the average number of days admitted patients stay 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.
(g) Represents the average number of patients in Triad's hospital beds each
day.
(h) Represents the percentage of hospital licensed beds occupied by patients.
Both average daily census and occupancy rate provide measures of the
utilization of inpatient rooms. The declining occupancy rate is primarily
attributed to the trend toward more services, that were previously
performed in an inpatient setting, being performed on an outpatient basis
and the decline in average length of stay per admission.
Triad's hospitals have experienced significant shifts from inpatient to
outpatient care as well as decreases in average lengths of inpatient stay,
primarily as a result of improvements in technology and clinical practices and
hospital payment changes by Medicare, insurance carriers and self-insured
employers. These hospital payment changes generally encourage the utilization
of outpatient, rather than inpatient, services whenever possible, and shortened
lengths of stay for inpatient care. Triad has responded to the outpatient trend
by enhancing its hospitals' outpatient service capabilities, including:
(1) dedicating resources to its freestanding ambulatory surgery centers at
or near certain of its hospital facilities,
(2) reconfiguring certain hospitals to more effectively accommodate
outpatient treatment by, among other things, providing more convenient
registration procedures and separate entrances, and
(3) restructuring existing surgical capacity to allow a greater number and
range of
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procedures to be performed on an outpatient basis.
Triad's facilities will continue to emphasize those outpatient services
that can be provided on a quality, cost-effective basis and that the company
believes will experience increased demand.
Sources of Revenue
Triad receives payment for patient services from the Federal government
primarily under the Medicare program, state governments under their respective
Medicaid programs, HMOs, PPOs and other private insurers as well as directly
from patients. The approximate percentages of net patient revenues from
continuing operations of Triad's facilities from such sources during the
periods specified below were as follows:
<TABLE>
<CAPTION>
Years Ended December 31,
----------------------------
1996 1997 1998
-------- -------- --------
<S> <C> <C> <C>
Medicare.......................................... 36.5% 36.5% 35.6%
Medicaid.......................................... 6.9 6.2 6.6
Other sources..................................... 56.6 57.3 57.8
-------- -------- --------
Total............................................. 100.0% 100.0% 100.0%
======== ======== ========
</TABLE>
Medicare is a Federal program that provides certain hospital and medical
insurance benefits to persons age 65 and over, some disabled persons and
persons with end-stage renal disease. Medicaid is a Federal-state program
administered by the states which provides hospital benefits to qualifying
individuals who are unable to afford care. All of Triad's hospitals are
certified as providers of Medicare and Medicaid services. Amounts received
under the Medicare and Medicaid programs are generally significantly less than
the hospital's customary charges for the services provided.
To attract additional volume, most of Triad's hospitals offer discounts
from established charges to certain large group purchasers of health care
services, including private insurance companies, employers, HMOs, PPOs and
other managed care plans. These discount programs limit Triad's ability to
increase charges in response to increasing costs. See "--Competition."
In addition to government programs, Triad is reimbursed by private payers
including HMOs, PPOs, private insurance companies, employers and individual
private payers. Patients are generally not responsible for any difference
between customary hospital charges and amounts reimbursed for such services
under Medicare, Medicaid, some private insurance plans, HMOs or PPOs, but are
responsible for services not covered by such plans, exclusions, deductibles or
co-insurance features of their coverage. The amount of such exclusions,
deductibles and co-insurance has generally been increasing each year.
Collection of amounts due from individuals is typically more difficult than
from governmental or business payers. For more information on the reimbursement
programs on which Triad's revenues are dependent, see "Reimbursement."
Competition
The competition among hospitals and other health care providers has
intensified in recent years as hospital occupancy rates have declined. Triad's
strategies are designed, and management believes that its hospitals are
positioned, to be competitive under these changing circumstances.
Twelve of the general, acute care hospitals operated by Triad as of June
30, 1999, including one of the hospitals operated through a joint venture, were
located in geographic areas where they were the only hospital in the community.
These hospitals generally face less competition in their immediate patient
service areas than would be expected in larger communities, and there is
usually a lower level of managed care penetration in these areas than there
would be in larger urban markets. While these Triad hospitals are generally the
primary provider of hospital services in their respective communities, they
face competition from larger tertiary care centers. Although these competitive
hospitals may be as far as 30 to 50 miles away, patients may migrate to, may be
referred by local physicians to, or may be lured by incentives from managed
care plans to travel to, such distant hospitals.
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Ten of the general, acute care hospitals operated by Triad as of June 30,
1999 were located in geographic areas where they competed with only one other
hospital. The remaining 14 general, acute care hospitals were located in
geographic areas where they competed with more than one other hospital.
Additionally, in the past several years, the number of freestanding outpatient
surgery and diagnostic centers in the geographic areas in which Triad operates
has increased significantly. As a result, Triad's hospitals operate in an
increasingly competitive environment. The rates charged by Triad's hospitals
are intended to be competitive with those charged by other local hospitals for
similar services. In some cases, competing hospitals are more established than
Triad's hospitals. Certain of these competing facilities, particularly in
Triad's urban markets, offer services, including extensive medical research and
medical education programs, which are not offered by Triad's facilities. In
addition, in certain of the urban markets where Triad operates, there are large
teaching hospitals which provide highly specialized facilities, equipment and
services which may not be available at Triad's hospitals. Also, some of the
hospitals that compete with Triad's facilities are owned by tax-supported
governmental agencies or by not-for-profit entities supported by endowments and
charitable contributions which can finance capital expenditures on a tax-exempt
basis.
One of the most significant factors in the competitive position of a
hospital is the number and quality of physicians affiliated with the hospital.
Although physicians may at any time terminate their affiliation with a hospital
operated by Triad, Triad's hospitals seek to retain physicians of varied
specialties on the hospitals' medical staffs and to attract other qualified
physicians. Triad believes that physicians refer patients to a hospital
primarily on the basis of the quality of services it renders to patients and
physicians, the quality of other physicians on the medical staff, the location
of the hospital and the quality of the hospital's facilities, equipment and
employees. Accordingly, Triad strives to maintain high ethical and professional
standards and quality facilities, equipment, employees and services for
physicians and their patients.
Another major factor in the competitive position of a hospital is
management's ability to negotiate service contracts with purchasers of group
health care services. HMOs and PPOs attempt to direct and control the use of
hospital services through managed care programs and to obtain discounts from
hospitals' established charges. In addition, employers and traditional health
insurers are increasingly interested in containing costs through negotiations
with hospitals for managed care programs and discounts from established
charges. Generally, hospitals compete for service contracts with group health
care service purchasers on the basis of price, market reputation, geographic
location, quality and range of services, quality of the medical staff and
convenience. The importance of obtaining contracts with managed care
organizations varies from market to market depending on the market strength of
such organizations.
State CON laws, which place limitations on a hospital's ability to expand
hospital services and add new equipment, may also have the effect of
restricting competition. Alabama is the only state where Triad operates that
has CON laws affecting acute care services. The application process for
approval of covered services, facilities, changes in operations and capital
expenditures in Alabama is highly competitive. In those states which have no
CON laws or which set relatively high thresholds before expenditures become
reviewable by state authorities, competition in the form of new services,
facilities and capital spending is more prevalent. Triad has not experienced,
and does not expect to experience, any material adverse effects from state CON
requirements or from the imposition, elimination or relaxation of such
requirements. See "Government Regulation and Other Factors."
Triad, and the health care industry as a whole, face the challenge of
continuing to provide quality patient care while dealing with rising costs,
strong competition for patients and a general reduction of reimbursement rates
by both private and government payers. As both private and government payers
reduce the scope of what may be reimbursed and reduce
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<PAGE>
reimbursement levels for what is covered, Federal and state efforts to reform
the health care system may further impact reimbursement rates. Changes in
medical technology, existing and future legislation, regulations and
interpretations and competitive contracting for provider services by private
and government payers may require changes in Triad's facilities, equipment,
personnel, rates and/or services in the future.
The hospital industry and Triad's hospitals continue to have significant
unused capacity. Inpatient utilization, average lengths of stay and average
occupancy rates continue to be negatively affected by payer-required pre-
admission authorization, utilization review and payer pressure to maximize
outpatient and alternative health care delivery services for less acutely ill
patients. Admissions constraints, payer pressures and increased competition are
expected to continue. Triad endeavors to meet these challenges by expanding
many of its facilities to include outpatient centers, offering discounts to
private payer groups, upgrading facilities and equipment and offering new
programs and services.
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Properties
The following table lists the hospitals owned, except as otherwise
indicated, by Triad
as of June 30, 1999. Triad has sold or currently intends to sell certain of the
general, acute care hospitals and its psychiatric hospital.
<TABLE>
<CAPTION>
Facility Name City State Licensed Beds
- ------------- ---- ----- -------------
<S> <C> <C> <C>
Crestwood Medical Center................. Huntsville AL 120
Medical Center of South Arkansas(1)...... El Dorado AR 360
Paradise Valley Hospital................. Phoenix AZ 159
El Dorado Hospital....................... Tucson AZ 166
Northwest Hospital....................... Tucson AZ 174
San Leandro Hospital..................... San Leandro CA 122
Mission Bay Memorial Hospital............ San Diego CA 128
Overland Park Regional Medical
Center(2)............................... Overland Park KS --
Women & Children's Hospital.............. Lake Charles LA 80
Independence Regional Health Center(2)... Independence MO --
Medical Center of Carlsbad............... Carlsbad NM 116
Lea Regional Hospital.................... Hobbs NM 250
Claremore Regional Hospital.............. Claremore OK 89
Southcrest Hospital(1)................... Tulsa OK 119
Willamette Valley Medical Center......... McMinnville OR 80
Douglas Medical Center................... Roseburg OR 118
Alice Regional Hospital.................. Alice TX 131
Brownwood Regional Medical Center(3)..... Brownwood TX 218
College Station Medical Center........... College Station TX 119
Navarro Regional Hospital................ Corsicana TX 168
Longview Regional Hospital............... Longview TX 164
Woodland Heights Medical Center.......... Lufkin TX 137
Medical Center of Pampa.................. Pampa TX 107
San Angelo Community Medical Center...... San Angelo TX 165
Community Medical Center of Sherman...... Sherman TX 160
DeTar Hospital........................... Victoria TX 217
Victoria Regional Medical Center......... Victoria TX 156
Gulf Coast Medical Center................ Wharton TX 161
Panhandle Surgical Hospital(4)........... Amarillo TX 21
Held for Sale:
DeQueen Regional Medical Center.......... DeQueen AR 122
Medical Park Hospital.................... Hope AR 91
Phoenix Regional Medical Center(8)....... Phoenix AZ 290
West Anaheim Medical Center(5)........... Anaheim CA 219
Huntington Beach Hospital(5)............. Huntington Beach CA 134
Research Psychiatric Center(6)........... Kansas City MO 100
Beaumont Medical and Surgical
Hospital(7)............................. Beaumont TX 366
Silsbee Doctors Hospital(7).............. Silsbee TX --
Medical Center at Terrell(3)............. Terrell TX 130
</TABLE>
- --------
(1) Triad holds a fifty percent equity interest in a non-consolidated joint
venture which owns and operates this facility.
(2) Triad continues to own the assets related to these hospitals, but has
transferred the exclusive rights to use and control the hospitals'
operations to a separate, independent entity pursuant to a long-term lease
agreement effective as of January 1, 1999.
(3) Triad currently leases each of these hospitals pursuant to long-term leases
which provide that it has the exclusive right to use and control the
hospital operations.
(4) Triad sold this facility on September 1, 1999.
(5) Triad sold this facility on September 3, 1999.
(6) Triad holds a sixty percent equity interest in a consolidated joint venture
which owns and operates the Research Psychiatric Center.
(7)Triad sold this facility on September 30, 1999.
(8)Triad has signed a definitive agreement to sell this facility.
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In addition to the hospitals listed in the table above, as of June 30,
1999, Triad operated 17 ambulatory surgery centers, including three surgery
centers that are operated by an unaffiliated third party pursuant to a long-
term lease and excluding two surgery centers that are not consolidated for
financial reporting purposes, certain of which Triad currently intends to sell.
Medical office buildings also are operated in conjunction with its hospitals.
These office buildings are primarily occupied by physicians who practice at
Triad's hospitals.
Triad's headquarters are located in approximately 45,000 square feet of
space in one office building in Dallas, Texas. After the distribution date,
Triad is sub-leasing this space from Columbia/HCA. See "Arrangements Relating
to the Distribution--Lease Agreements" for a more detailed description of such
arrangement.
Triad's headquarters, hospitals and other facilities are suitable for their
respective uses and are, in general, adequate for Triad's present needs.
Employees and Medical Staff
At June 30, 1999, Triad had approximately 17,400 employees, including
approximately 5,000 part-time employees. Employees at one hospital are
currently represented by a labor union. Triad considers its employee relations
to be good. While Triad's non-union hospitals experience union organizational
activity from time to time, Triad does not expect such efforts to materially
affect its future operations. Triad's hospitals, like most hospitals, have
experienced labor costs rising faster than the general inflation rate. There
can be no assurance as to future availability and cost of qualified medical
personnel.
Triad's hospitals are staffed by licensed physicians who have been admitted
to the medical staff of individual hospitals. With certain exceptions,
physicians generally are not employees of Triad's hospitals. However, some
physicians provide services in Triad's hospitals under contracts, which
generally describe a term of service, provide and establish the duties and
obligations of such physicians, require the maintenance of certain performance
criteria and fix compensation for such services. Any licensed physician may
apply to be admitted to the medical staff of any of Triad's hospitals, but
admission to the staff must be approved by the hospital's medical staff and the
appropriate governing board of the hospital in accordance with established
credentialing criteria. Members of the medical staffs of Triad's hospitals
located in areas where there are other hospitals often also serve on the
medical staffs of other hospitals and may terminate their affiliation with a
hospital at any time.
Triad's Regulatory Compliance Program
It is Triad's policy that its business be conducted with integrity and in
compliance with the law. Triad is developing a corporate-wide compliance
program, which will focus on all areas of regulatory compliance, including
physician recruitment, reimbursement and cost reporting practices and
laboratory operations.
This regulatory compliance program is intended to assure that high
standards of conduct are maintained in the operation of Triad's business and to
help assure that policies and procedures are implemented so that employees act
in full compliance with all applicable laws, regulations and company policies.
Under the regulatory compliance program, Triad will provide initial and
periodic legal compliance and ethics training to every employee, review various
areas of Triad's operations, and develop and implement policies and procedures
designed to foster compliance with the law. Triad will regularly monitor its
ongoing compliance efforts. The program also will include a mechanism for
employees to report, without fear of retaliation, any suspected legal or
ethical violations to their supervisors or designated compliance officers in
Triad's hospitals.
Legal Proceedings
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 contracts or for wrongful restriction of or
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interference with physician's staff privileges. In certain of these actions,
plaintiffs request punitive or other damages that may not be covered by
insurance. Triad is currently not a party to any such proceeding which, in
management's opinion, would have a material adverse effect on Triad's business,
financial condition or results of operations.
Where You Can Get More Information
Triad is required to comply with the reporting requirements of the Exchange
Act and must file annual, quarterly and other reports with the Commission.
Triad is also subject to the proxy solicitation requirements of the Exchange
Act and, accordingly, will furnish audited financial statements to their
respective stockholders in connection with their annual meetings of
stockholders.
Holdings has filed with the Commission a registration statement under the
Securities Act covering the notes to be issued in the exchange offer. As
permitted by the Commission rules, this prospectus omits certain information
included in the registration statement. For further information pertaining to
the notes, we refer you to the registration statement, including its exhibits.
Any statements made in this prospectus concerning the contents of any contract,
agreement or other document is not necessarily complete. If we have filed any
such contract, agreement or other document as an exhibit to the registration
statement, you should read the exhibit for a more complete understanding of the
document or matter involved. You may read and copy any of the information we
file with the Commission at the Commission's public reference rooms at Room
1024, 450 Fifth Street, N.W., Washington, D.C., at 7 World Trade Center, 13th.
Floor, New York, New York 10048 and at Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661-2511. You can also obtain copies of
filed documents by mail from the public reference section of the Commission at
Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates.
Please call the Commission at 1-800-SEC-0330 for further information on the
public reference rooms. Filed documents are also available to the public on the
Commission's web site at http://www.sec.gov.
Following the exchange offer, Holdings will be required to file annual,
quarterly and special reports, proxy statements and other information with the
Commission. Our obligation to file periodic reports with the Commission will be
suspended if the notes issued in the exchange offer are held of record by fewer
than 300 holders as of the beginning of any year. However, to the extent
permitted, the indenture governing the notes requires us to file with the
Commission financial and other information for public availability. In
addition, the indenture governing the notes requires us to deliver to you
copies of all reports that we file with the Commission without any cost to you.
We will also furnish such other reports as we may determine or as the law
requires.
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REIMBURSEMENT
Medicare. Under the Medicare program, acute care hospitals receive
reimbursement under a prospective payment system ("PPS") for inpatient hospital
services. Psychiatric, long-term care, rehabilitation, specially designated
children's hospitals and certain designated cancer research hospitals, as well
as psychiatric or rehabilitation units that are distinct parts of a hospital
and meet Health Care Financing Administration criteria for exemption, are
currently exempt from PPS and are reimbursed on a cost-based system, subject to
certain cost limits known as TEFRA limits.
Under the PPS, fixed payment amounts per inpatient discharge are
established based on the patient's assigned diagnosis related group ("DRG").
DRGs classify treatments for illnesses according to the estimated intensity of
hospital resources necessary to furnish care for each principal diagnosis. DRG
rates have been established for each hospital participating in the Medicare
program and are based upon a statistically normal distribution of severity.
When treatments for certain patients fall well outside the normal distribution,
providers receive additional payments. DRG payments do not consider a specific
hospital's costs, but are adjusted for area wage differentials. The majority of
capital costs for acute care facilities are reimbursed on a prospective payment
system based on DRG weights times a federal rate adjusted for a geographic
rate.
DRG rates are updated and re-calibrated annually and have been affected by
several recent Federal enactments. The index used to adjust the DRG rates,
known as the "market basket index," gives consideration to the inflation
experienced by hospitals and entities outside of the health care industry in
purchasing goods and services. However, for several years the percentage
increases to the DRG rates have been lower than the percentage increases in the
costs of goods and services purchased by hospitals. The DRG rates are adjusted
each Federal fiscal year, which begins on October 1. The historical DRG rate
increases were 1.1%, 1.5% and 2.0% for Federal fiscal years 1995, 1996 and
1997, respectively. For Federal fiscal year 1998, there was no increase. The
budgeted updates for Federal fiscal years 1999 through 2002 are market basket
index minus 1.9%, 1.8%, 1.1% and 1.1%, respectively. Triad anticipates that
future legislation may decrease the future rate of increase for DRG payments,
but is not able to predict the amount of the reduction.
Outpatient services provided at general, acute care hospitals typically are
reimbursed by Medicare at the lower of customary charges or approximately 82%
of actual cost, subject to additional limits on the reimbursement of certain
outpatient services. The Balanced Budget Act, enacted August 5, 1997, contains
provisions that affect outpatient hospital services, including a requirement
that HCFA adopt a prospective payment system for outpatient hospital services
to begin January 1, 1999. However, implementation of the PPS will be delayed
because of Year 2000 systems concerns. The outpatient PPS will be implemented
as soon as possible after January 1, 2000. At such time as the PPS is
implemented, the rates will be based on the rates that would have been in
effect January 1, 1999, updated by the rate of increase in the hospital market
basket minus one percentage point. Triad is not able to predict the effect, if
any, that the new payment system will have on its financial results. After the
fee schedule is established for this new system, the fee schedule is to be
updated by the market basket minus 1.0% for each of Federal fiscal years 2000
through 2002. Similarly, effective January 1, 1999, therapy services rendered
by hospitals to outpatients and inpatients not reimbursed under Medicare, Part
A are reimbursed according to the Medicare physician fee schedule.
The Balanced Budget Act mandates a prospective payment system for skilled
nursing facility services for Medicare cost reporting periods commencing after
June 30, 1998, hospital outpatient services beginning January 1, 1999, home
health services for Medicare cost reporting periods beginning after September
30, 1999, and inpatient rehabilitation hospital services for Medicare cost
reporting
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periods beginning after September 30, 2000. Prior to the commencement of the
prospective payment systems, payment constraints will be applied to PPS-exempt
hospitals and units for Medicare cost reporting periods beginning on or after
October 1, 1997. For the year ended December 31, 1998, Triad had 126 units and
2 hospitals that were reimbursed under this methodology.
Payments to PPS-exempt hospitals and units, such as inpatient psychiatric,
rehabilitation and long-term hospital services, are based upon reasonable cost,
subject to a cost per discharge target. These limits are updated annually by a
market basket index. For Federal fiscal year 1995, 1996 and 1997, the market
basket index rate of increase was 3.7%, 3.4%, and 2.5% respectively. For
Federal fiscal year 1998, there was no increase. For Federal fiscal year 1999,
the market basket index is projected to be 2.4%. The update for cost reporting
periods from October 1, 1998 to September 30, 1999 is the market basket index
less a percentage point between 0% and 2.4% depending on the hospital's or
unit's costs in relation to the ceiling. Furthermore, limits have been
established for the cost per discharge target at the 75th percentile for each
category of PPS-exempt hospitals and hospital units, such as psychiatric,
rehabilitation and long-term hospitals. For Federal fiscal year 1998, these
limits were $10,534, $19,104, and $37,688 per discharge, respectively. For
Federal fiscal year 1999, these limits are $10,787, $19,562 and $38,593 per
discharge, respectively. In addition, the cost per discharge for new
hospitals/hospital units cannot exceed 110% of the national median target rate
for hospitals in the same category. For Federal fiscal year 1998, these amounts
were $8,517, $16,738, and $18,947 per discharge for psychiatric, rehabilitation
and long-term hospital services, respectively. For Federal fiscal year 1999,
these amounts are $8,686, $17,077 and $22,010 per discharge, respectively.
Skilled nursing facilities have historically been reimbursed by Medicare on
the basis of actual costs, subject to certain limits. The Balanced Budget Act
requires the establishment of a prospective payment system for Medicare skilled
nursing facilities under which facilities will be paid a Federal per diem rate
for virtually all covered services. The new payment system will be phased in
over three cost reporting periods, starting with cost reporting periods
beginning on or after July 1, 1998. The law also institutes consolidated
billing for skilled nursing facility services, under which payments for most
non-physician Part B services for beneficiaries no longer eligible for Part A
skilled nursing facility care will be made to the facility, regardless of
whether the item or service was furnished by the facility, by others under
arrangement, or under any other contracting or consulting arrangement.
Consolidated billing is being implemented on a transition basis. As of December
31, 1998, 27 of Triad's hospitals operated skilled nursing facilities.
Currently, physicians are paid by Medicare according to the physician fee
schedule. However, physicians working in rural health clinics, such as those
maintained by Triad, are reimbursed for their professional and administrative
services through the rural health clinic subject to per visit limits unless the
rural health clinic is based at a rural hospital with less than 50 beds. There
are 20 rural health clinics affiliated with Triad hospitals.
Medicare has special payment provisions for "sole community hospitals." A
sole community hospital is generally the only hospital in at least a 35-mile
radius. Six of Triad's facilities qualify as sole community hospitals under
Medicare regulations. Special payment provisions related to sole community
hospitals include a higher reimbursement rate, which is based on a blend of
hospital-specific costs and the national reimbursement rate, and a 90% payment
"floor" for capital costs which guarantees the sole community hospital capital
reimbursement equal to 90% of capital cost. In addition, the CHAMPUS program
has special payment provisions for hospitals recognized as sole community
hospitals for Medicare purposes.
Medicaid. Most state Medicaid payments are made under a prospective payment
system or under programs which negotiate payment
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levels with individual hospitals. Medicaid reimbursement is often less than a
hospital's cost of services. Medicaid is currently funded jointly by the state
and the Federal governments. The Federal government and many states are
currently considering significant reductions in the level of Medicaid funding
while at the same time expanding Medicaid benefits, which could adversely
affect future levels of Medicaid reimbursement received by the hospitals of
Triad.
On November 27, 1991, Congress enacted the Medicaid Voluntary Contribution
and Provider-Specific Tax Amendments of 1991, which limit the amount of
voluntary contributions and provider-specific taxes that can be used by states
to fund Medicaid and require the use of broad-based taxes for such funding. As
a result of enactment of these amendments, certain states in which Triad
operates have adopted broad-based provider taxes to fund their Medicaid
programs. The impact of these new taxes upon Triad has not been materially
adverse. However, Triad cannot predict whether any additional broad-based
provider taxes will be adopted by the states in which it operates and,
accordingly, it is not able to assess the effect of such additional taxes on
its results of operations or financial position.
Annual Cost Reports. All hospitals participating in the Medicare program,
whether paid on a reasonable cost basis or under PPS, are required to meet
certain financial reporting requirements. Federal regulations require
submission of annual cost reports covering medical costs and expenses
associated with the services provided by each hospital to Medicare
beneficiaries. Review of previously submitted annual cost reports and the cost
report preparation process are areas included in the ongoing government
investigations of Columbia/HCA. It is too early to predict the outcome of these
investigations, but if Triad, or any of its facilities, were found to be in
violation of Federal or state laws relating to Medicare, Medicaid or similar
programs, they could be subject to substantial monetary fines, civil and
criminal penalties and exclusion from participation in the Medicare and
Medicaid programs. Any such sanctions could have a material adverse effect on
the financial position and results of operations of Triad. Columbia/HCA has
agreed to indemnify Triad in respect of losses arising from such government
investigations. See "Arrangements Relating to the Distribution--Distribution
Agreement" and "Government Regulation and Other Factors--Governmental
Investigation of Columbia/HCA and Related Litigation" for more information
regarding such arrangement.
Annual cost reports required under the Medicare and Medicaid programs are
subject to routine audits, which may result in adjustments to the amounts
ultimately determined to be due to Triad under these reimbursement programs.
These audits often require several years to reach the final determination of
amounts earned under the programs. Providers also have rights of appeal, and it
is common to contest issues raised in audits of prior years' reports. Pursuant
to the terms of the distribution agreement, Triad will be responsible for the
Medicare, Medicaid and Blue Cross cost reports, and associated receivables and
payables, for its facilities for all periods ending after the distribution
date. Columbia/HCA has agreed to indemnify Triad with respect to the Medicare,
Medicaid and Blue Cross cost reports for the Triad facilities relating to
periods ending on or prior to the distribution date. See "Arrangements Relating
to the Distribution--Distribution Agreement."
Managed Care. Pressures to control the cost of health care have resulted in
increases to the percentage of admissions and net revenues attributable to
managed care payers. The percentage of Triad's admissions attributable to
managed care payers increased from 28.7% for the year ended December 31, 1997
to 32.2% for the year ended December 31, 1998 and the percentage of Triad's net
revenues attributable to managed care payers increased from 23.2% for the year
ended December 31, 1997 to 26.7% for the year ended December 31, 1998. Triad
expects that the trend toward increasing percentages related to managed care
payers will continue in the future. Triad generally receives lower payments
from managed care payers than from traditional commercial/indemnity insurers;
however, as part of its business strategy, Triad
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intends to take steps to improve its managed care position. See "Business--
Business Strategy" for a more detailed discussion of such strategy.
Commercial Insurance. Triad hospitals provide services to some individuals
covered by private health care insurance. Private insurance carriers make
direct payments to such hospitals or, in some cases, reimburse their policy
holders, based upon the particular hospital's established charges and the
particular coverage provided in the insurance policy.
Commercial insurers are continuing efforts to limit the payments for
hospital services by adopting discounted payment mechanisms, including
prospective payment or DRG based payment systems, for more inpatient and
outpatient services. To the extent that such efforts are successful and reduce
the insurers' reimbursement to hospitals and the costs of providing services to
their beneficiaries, such reduced levels of reimbursement may have a negative
impact on the operating results of the hospitals of Triad.
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GOVERNMENT REGULATION AND OTHER FACTORS
Licensure, Certification and Accreditation. Health care facility
construction and operation is subject to Federal, state and local regulations
relating to the adequacy of medical care, equipment, personnel, operating
policies and procedures, fire prevention, rate-setting and compliance with
building codes and environmental protection laws. Facilities are subject to
periodic inspection by governmental and other authorities to assure continued
compliance with the various standards necessary for licensing and
accreditation. All of the health care facilities of Triad are properly licensed
under appropriate state laws. All of the hospitals affiliated with Triad are
certified under the Medicare and Medicaid programs and all but one such
hospital are accredited by the Joint Commission on Accreditation of Healthcare
Organizations, the effect of which is to permit the facilities to participate
in the Medicare and Medicaid programs. Certain of Triad's psychiatric
facilities do not participate in these programs. Should any facility lose its
accreditation by this Joint Commission, or otherwise lose its certification
under the Medicare program, the facility would be unable to receive
reimbursement from the Medicare and Medicaid programs. The facilities of Triad
are in substantial compliance with current applicable Federal, state, local and
independent review body regulations and standards. The requirements for
licensure, certification and accreditation are subject to change and, in order
to remain qualified, it may be necessary for Triad to effect changes in their
facilities, equipment, personnel and services.
Certificates of Need. The construction of new facilities, the acquisition
of existing facilities, and the addition of new beds or services may be subject
to review by state regulatory agencies under a CON program. Triad operates one
hospital in a state (Alabama) that requires CON approval to expand acute care
hospital services. Such laws generally require appropriate state agency
determination of public need and approval prior to the addition of beds or
services or certain other capital expenditures. Failure to obtain necessary
state approval can result in the inability to expand facilities, add services,
complete an acquisition or change ownership. Further, violation may result in
the imposition of civil sanctions or the revocation of a facility's license.
State Rate Review. The state of Arizona adopted legislation mandating rate
or budget review for hospitals. In the aggregate, state rate or budget review
and indigent tax provisions have not materially adversely affected the results
of operations of Triad. Triad is not able to predict whether any additional
state rate or budget review or indigent tax provisions will be adopted and,
accordingly, is not able to assess the effect thereof on its results of
operations or financial condition.
Utilization Review. Federal law contains numerous provisions designed to
ensure that services rendered by hospitals to Medicare and Medicaid patients
meet professionally recognized standards, are medically necessary and that
claims for reimbursement are properly filed. These provisions include a
requirement that a sampling of admissions of Medicare and Medicaid patients
must be reviewed by peer review organizations, which review the appropriateness
of Medicare and Medicaid patient admissions and discharges, the quality of care
provided, the validity of DRG classifications and the appropriateness of cases
of extraordinary length of stay or cost. Peer review organizations may deny
payment for services provided, may assess fines and also have the authority to
recommend to HHS that a provider which is in substantial noncompliance with the
standards of the peer review organization be excluded from participation in the
Medicare program. Utilization review is also a requirement of most non-
governmental managed care organizations.
Medicare Regulations and Fraud and Abuse. Participation in the Medicare
program is heavily regulated by Federal statute and regulation. If a hospital
provider fails substantially to comply with the numerous conditions of
participation in the Medicare program or performs certain prohibited acts, such
hospital's participation in the Medicare
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program may be terminated or civil or criminal penalties may be imposed upon it
under certain provisions of the Social Security Act. Prohibited acts include:
. making false claims to Medicare, including claims for services not rendered,
misrepresenting actual services rendered in order to obtain higher
reimbursement or cost report fraud;
. making claims for items or services that are "medically unnecessary";
. routinely waiving co-payments or deductibles to induce patients to order
items or services from a specific provider;
. contracting with individuals that they know or should know have been
excluded from participation in a federal healthcare program;
. offering, paying or receiving any remuneration (including kickbacks, bribes
or rebates) in return for referrals or purchasing items or services
reimbursable under a federal health program;
. failing to stabilize any individual who comes to a hospital's emergency room
with an "emergency medical condition," within the scope of services
available by the facility; and
. transferring any stabilized patient to another health care facility before
the other facility has agreed to the transfer of the patient, if the other
facility does not have sufficient room and staff to treat the patient,
without the patient's emergency department medical records, or without
appropriate life support equipment.
The provisions of the Anti-Kickback Statute prohibit providers and others
from soliciting, receiving, offering or paying, directly or indirectly, any
remuneration in return for either making a referral for a service or item
covered by a federal healthcare program or ordering any covered service or
item. Violations of this statute may be punished by a fine of up to $50,000 or
imprisonment for each violation and damages up to three times the total amount
of remuneration. In addition, the Medicare Patient and Program Protection Act
of 1987, as amended by the Health Insurance Portability and Accountability Act
of 1996 ("HIPAA") and the Balanced Budget Act (as so amended, the "Protection
Act") imposes penalties for a violation of these prohibitions, including
exclusion from participation in federal healthcare programs such as Medicare
and Medicaid.
The Protection Act authorized the Office of the Inspector General ("OIG")
to publish regulations outlining certain categories of activities that would be
deemed not to violate the Anti-Kickback Statute. In 1991, the OIG published
final safe harbor regulations implementing the Congressional intent expressed
in the Protection Act. Currently there are safe harbors for certain physician
investments, rental of space or equipment, personal services and management
contracts, warranties, discounts, payments to employees, group purchasing
organizations and waivers of deductibles. The preamble to the safe harbor
regulations states that the failure of a particular business arrangement to
comply with the regulations does not determine whether the arrangement violates
the Anti-Kickback Statute because the regulations do not make conduct illegal.
Any conduct that could be construed to be illegal after the promulgation of
this rule would have been illegal prior to the publication of the regulations.
Additional safe harbors have been proposed, including a safe harbor for
physician investments in entities located in rural areas as well as
freestanding ambulatory surgery centers. Triad is not able to determine if or
when such proposed safe harbors will be enacted, and if enacted whether it will
be able to meet the requirements for protection.
HIPAA, which became effective on January 1, 1997, amends, among other
things, Title XI (42 U.S.C. (S) 1301 et seq.) to broaden the scope of certain
fraud and abuse laws to include all health care services, whether or not they
are reimbursed under a Federal program, and creates new enforcement mechanisms
to combat fraud and abuse, including an incentive program under which
individuals can receive up to $1,000 for providing information on Medicare
fraud and abuse that leads to the recovery of at least $100 of Medicare funds.
Under HIPAA, health care fraud, now defined as knowingly
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and willfully executing or attempting to execute a "scheme or device" to
defraud any health care benefit program, is made a Federal criminal offense. In
addition, for the first time, Federal enforcement officials will have the
ability to exclude from Medicare and Medicaid any investors, officers and
managing employees associated with business entities that have committed health
care fraud, even if the investor, officer or employee had no knowledge of the
fraud. HIPAA also establishes a new violation for the payment of inducements to
Medicare or Medicaid beneficiaries in order to influence those beneficiaries to
order or receive services from a particular provider or practitioner. The
Balanced Budget Act also allows civil monetary penalties to be imposed on a
provider contracting with individuals or entities that the provider knows or
should know is excluded from a federal healthcare program.
The OIG at HHS is responsible for identifying and eliminating fraud, abuse
and waste in HHS programs and for promoting efficiency and economy in HHS
departmental operations. The OIG carries out this mission through a nationwide
program of audits, investigations and inspections. In order to provide guidance
to health care providers, the OIG has from time to time issued "fraud alerts"
which, although they do not have the force of law, identify features of
transactions, which may indicate that the transaction could violate the Anti-
Kickback Statute or other federal heathcare laws. The OIG has identified the
following incentive arrangements as potential violations:
. ""gainsharing'' or the practice of giving physicians a percentage share of
any reduction in the hospital's costs for patient care attributable in part
to the physician's efforts.
. payment of any sort of incentive by the hospital each time a physician
refers a patient to the hospital;
. the use of free or significantly discounted office space or equipment (in
facilities usually located close to the hospital);
. provision of free or significantly discounted billing, nursing or other
staff services;
. free training for a physician's office staff in areas such as management
techniques and laboratory techniques;
. guarantees which provide that, if the physician's income fails to reach a
predetermined level, the hospital will supplement the remainder up to a
certain amount;
. low-interest or interest-free loans, or loans which may be forgiven if a
physician refers patients (or some number of patients) to the hospital;
. payment of the costs of a physician's travel and expenses for conferences;
. coverage on the hospital's group health insurance plans at an
inappropriately low cost to the physician; or
. payment for services (which may include consultations at the hospital) which
require few, if any, substantive duties by the physician, or payment for
services in excess of the fair market value of services rendered.
The OIG has encouraged persons having information about hospitals who offer
the above types of incentives to physicians to report such information to the
OIG.
Section 1877 of the Social Security Act, commonly known as the "Stark Law",
prohibits referrals of Medicare and Medicaid patients by physicians to entities
with which the physician has a financial relationship and which provide certain
"designated health services" which are reimbursable by Medicare or Medicaid.
"Designated health services" include, among other things, clinical laboratory
services, physical and occupational therapy services, radiology services,
durable medical equipment, home health services, and inpatient and outpatient
hospital services. Sanctions for violating the Stark Law include civil money
penalties up to $15,000 per prohibited service provided, assessments equal to
twice the dollar value of each such service provided and exclusion from the
Medicare and Medicaid programs. There are a number of exceptions to the self-
referral prohibition, including an exception if the physician has an ownership
interest in the entire hospital. In addition, a
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physician may have an ownership interest in and refer patients to an entity
providing designated health services if the entity is located in a rural area.
The requirements of the "rural provider" exception are;
(1) the provider is located in an area that is not considered a
metropolitan statistical area, and
(2) at least 75 percent of the patients served by the facility reside in a
rural area.
Proposed regulations implementing the Stark Law, as amended, have not been
implemented. Triad cannot predict the final form that such regulations will
take or the effect that the Stark Law or the regulations promulgated thereunder
will have on Triad.
Triad provides financial incentives to recruit physicians into the
communities served by its hospitals, including loans and minimum revenue
guarantees. Although HHS has proposed a safe harbor for certain physician
recruitment, no safe harbor for physician recruitment is currently in force.
Additionally, physicians who are in a position to generate referrals hold
investment interests in several of Triad's hospitals and surgery centers. The
ownership structure of some of these facilities may not be protected by a safe
harbor. Triad also enters into certain independent contractor agreements,
employment agreements, leases and other agreements with physicians. Although
Triad believes that its arrangements with physicians comply with current law,
since some of these arrangements do not meet the requirements for safe harbor
protection there can be no assurance that regulatory authorities who enforce
such laws will not determine that such activities or other physician
arrangements violate the Anti-Kickback Statute or other applicable laws. Such a
determination could subject Triad to liabilities under the Social Security Act,
including criminal penalties, civil monetary penalties and/or exclusion from
participation in Medicare, Medicaid or other Federal health care programs, any
of which could have a material adverse effect on the business, financial
condition or results of operations of Triad.
Evolving interpretations of current, or the adoption of new, Federal or
state laws or regulations could affect many of the arrangements entered into by
Triad's hospitals. There is increasing scrutiny by law enforcement authorities,
HHS, OIG, the courts and Congress of arrangements between health care providers
and potential referral sources to ensure that the arrangements are not designed
as a mechanism to exchange remuneration for patient care referrals and
opportunities. Investigators have also demonstrated a willingness to look
behind the formalities of a business transaction to determine the underlying
purpose of payments between health care providers and potential referral
sources.
The Social Security Act also imposes criminal and civil penalties for
submitting false claims to Medicare and Medicaid. False claims include, but are
not limited to, billing for services not rendered, misrepresenting actual
services rendered in order to obtain higher reimbursement and cost report
fraud. Like the Anti-Kickback Statute, this statute is very broad. Careful and
accurate coding of claims for reimbursement, including cost reports, must be
performed to avoid liability under the false claims statutes.
Many of the states in which Triad operates also have adopted, or are
considering adopting, laws that prohibit payments to physicians in exchange for
referrals similar to the Anti-Kickback Statute, some of which apply regardless
of the source of payment for care. These statutes typically provide criminal
and civil penalties as well as loss of licensure. Many states also have passed
self-referral legislation similar to the Stark Law, prohibiting the referral of
patients to entities with which the physician has a financial relationship
regardless of the source of payment for care. Little precedent exists for the
interpretation or enforcement of these state laws.
Corporate Practice of Medicine. Some of the states in which Triad operates
have laws that prohibit corporations and other entities from employing
physicians or that prohibit certain direct and indirect payments or fee-
splitting arrangements between health care providers. In addition, some states
restrict certain business relationships between physicians and pharmacies.
Possible sanctions for violation of
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these restrictions include loss of a physician's license and civil and criminal
penalties. These statutes vary from state to state, are often vague and have
seldom been interpreted by the courts or regulatory agencies. Although Triad
exercises care to structure its arrangements with health care providers to
comply with the relevant state law, and believes such arrangements comply with
applicable laws in all material respects, there can be no assurance that
governmental officials charged with responsibility for enforcing these laws
will not assert that Triad, or certain transactions in which it is involved, is
in violation of such laws, or that such laws ultimately will be interpreted by
the courts in a manner consistent with the interpretations of Triad.
Health Care Reform. Health care, as one of the largest industries in the
United States, continues to attract much legislative interest and public
attention. In recent years, an increasing number of legislative proposals have
been introduced or proposed in Congress and in some state legislatures that
would effect major changes in the health care system, either nationally or at
the state level. Proposals that have been considered include cost controls on
hospitals, insurance market reforms to increase the availability of group
health insurance to small businesses, patients' bills of rights and
requirements that all businesses offer health insurance coverage to their
employees. The costs of certain proposals would be funded in significant part
by reductions in payments by governmental programs, including Medicare and
Medicaid, to health care providers such as hospitals. There can be no assurance
that future health care legislation or other changes in the administration or
interpretation of governmental health care programs will not have a material
adverse effect on the business, financial condition or results of operations of
Triad.
Conversion Legislation. Many states have enacted or are considering
enacting laws affecting the conversion or sale of not-for-profit hospitals.
These laws, in general, include provisions relating to attorney general
approval, advance notification and community involvement. In addition, state
attorneys general in states without specific conversion legislation may
exercise authority over these transactions based upon existing law. In many
states there has been an increased interest in the oversight of not-for-profit
conversions. The adoption of conversion legislation and the increased review of
not-for-profit hospital conversions may increase the cost and difficulty or
prevent the completion of transactions with not-for-profit organizations in
certain states in the future.
Revenue Ruling 98-15. During March 1998, the IRS issued guidance regarding
the tax consequences of joint ventures between for-profit and not-for-profit
hospitals. Triad has not determined the impact of the tax ruling on its
existing joint ventures, or the development of future ventures, and is
consulting with its joint venture partners and tax advisers to develop an
appropriate course of action. The tax ruling could limit joint venture
development with not-for-profit hospitals, require the restructuring of certain
existing joint ventures with not-for-profits and influence the exercise of "put
agreements"--agreements that require the purchase of the partner's interest in
the joint venture--by certain existing joint venture partners.
Environmental Matters. Triad is subject to various Federal, state and local
statutes and ordinances regulating the discharge of materials into the
environment. Triad does not expect that it will be required to expend any
material amounts in order to comply with these laws and regulations or that
compliance will materially affect its capital expenditures, earnings or
competitive position.
Insurance. As is typical in the health care industry, Triad is subject to
claims and legal actions by patients in the ordinary course of business. To
cover these claims, Triad maintains professional malpractice liability
insurance and general liability insurance in amounts which it believes to be
sufficient for its operations, although some claims may exceed the scope of the
coverage in effect. Triad also maintains umbrella coverage. At various times in
the past, the cost of malpractice and other liability insurance has risen
significantly. Therefore, there can be no assurance that such insurance will
continue to be available at
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reasonable prices which will allow Triad to maintain adequate levels of
coverage. Substantially all losses in periods prior to the distribution are
insured through a wholly-owned insurance subsidiary of Columbia/HCA and excess
loss policies maintained by Columbia/HCA. Columbia/HCA has agreed to indemnify
Triad in respect of claims covered by such insurance policies, and workers
compensation claims arising prior to the distribution. See "Arrangements
Relating to the Distribution--Distribution Agreement" and "--Insurance
Allocation and Administration Agreement" for a more detailed discussion of such
arrangements.
Because substantially all liability for general and professional liability
claims incurred is insured through a wholly-owned insurance subsidiary of
Columbia/HCA and excess loss policies maintained by Columbia/HCA, and
Columbia/HCA maintains the related reserve, no reserve for general and
professional liability risks is recorded on the balance sheets of Triad. Any
losses incurred in excess of amounts maintained under such insurance will be
funded from working capital. There can be no assurance that the cash flow of
Triad will be adequate to provide for professional and general liability claims
in the future.
Governmental Investigation of Columbia/HCA and Related Litigation. In March
1997, various facilities of Columbia/HCA's El Paso, Texas operations were
searched by Federal authorities pursuant to search warrants, and government
agents removed various records and documents. In February 1998, an additional
warrant was executed and a single computer was seized.
In July 1997, various Columbia/HCA affiliated facilities and offices were
searched pursuant to search warrants. During July, September and November 1997,
Columbia/HCA also was served with subpoenas requesting records and documents
related to laboratory billing and DRG coding in various states and home health
operations in various jurisdictions, including, but not limited to, Florida. In
January 1998, Columbia/HCA received a subpoena which requested records and
documents relating to physician relationships.
The United States District Court for the Middle District of Florida, in
Fort Myers, issued an indictment against three employees of a subsidiary of
Columbia/HCA in July 1997. The indictment relates to the alleged false
characterization of interest payments on certain debt resulting in Medicare and
CHAMPUS overpayments since 1986 to Columbia Fawcett Memorial Hospital, a Port
Charlotte, Florida hospital that was acquired by Columbia/HCA in 1992.
Columbia/HCA has been served with subpoenas for various records and documents.
In July 1998, a fourth employee of a subsidiary of Columbia/HCA was indicted by
a superseding indictment. According to published reports, on July 2, 1999, a
federal jury in Tampa, Florida found two Columbia/HCA employees guilty of
conspiracy and making false statements on Medicare and CHAMPUS cost reports for
years 1992 and 1993 and a Medicaid cost report for 1993. Both were found not
guilty of obstructing a federal auditor. One other employee was acquitted of
all counts for which he had been charged and the jury was unable to reach a
verdict with respect to another employee.
Several hospital facilities affiliated with Columbia/HCA in various states
have received individual Federal and/or state government inquiries, both
informal and formal, requesting information related to reimbursement from
government programs.
Columbia/HCA is cooperating in these investigations and understands,
through written notice and other means, that it is a target in these
investigations. Given the scope 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 also is the subject of a formal order of investigation by the
Commission. Columbia/HCA understands that the investigation includes the anti-
fraud, periodic reporting and internal accounting control provisions of the
Federal securities laws.
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Columbia/HCA is a defendant in several qui tam actions, or actions under
state statutes which are 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, 31 U.S.C. (S) 3729 et
seq., 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 the
knowledge of Columbia/HCA, the government has intervened in five qui tam
actions. Columbia/HCA is aware of additional qui tam actions that remain under
seal and believes that there may be other sealed qui tam cases of which it is
unaware.
Since April 8, 1997, numerous Federal securities class action and
derivative lawsuits have been brought against Columbia/HCA and a number of its
current and former directors, officers and employees. On October 10, 1997, all
of the securities class action claims were consolidated into a single-captioned
case which seeks the certification of a class of persons or entities who
acquired Columbia/HCA's common stock from April 9, 1994 to September 9, 1997.
The lawsuit alleges, among other things, that the defendants committed
violations of the Federal securities laws by materially inflating
Columbia/HCA's revenues and earnings through a number of practices, including
upcoding, maintaining reserve cost reports, disseminating false and misleading
statements, cost shifting, illegal reimbursements, improper billing, unbundling
and violating various Medicare laws. The lawsuit seeks compensatory damages,
costs and expenses. On October 10, 1997, all of the derivative law claims were
consolidated into a single-captioned case. The lawsuit alleges, among other
things, derivative claims against the individual defendants that they
intentionally or negligently breached their fiduciary duties to Columbia/HCA by
authorizing, permitting or failing to prevent Columbia/HCA from engaging in
various schemes to improperly increase revenue, upcoding, improper cost
reporting, improper referrals, improper acquisition practices and overbilling.
In addition, the lawsuit asserts a derivative claim against some of the
individual defendants for breaching their fiduciary duties by engaging in
insider trading. The lawsuit seeks restitution, damages, recoupment of fines or
penalties paid by Columbia/HCA, restitution and pre-judgment interest against
the alleged insider trading defendants, and costs and disbursements. In
addition, the lawsuit seeks orders prohibiting Columbia/HCA from paying
individual defendants employment benefits, terminating all improper business
relationships with individual defendants, and requiring Columbia/HCA to
implement effective corporate governance and internal control mechanisms
designed to monitor compliance with Federal and state laws and ensure reports
to the Board of material violations of law.
Several derivative actions have been filed in state court by certain
purported stockholders of Columbia/HCA against certain of Columbia/HCA's
current and former officers and directors alleging breach of fiduciary duty and
failure to take reasonable steps to ensure that Columbia/HCA did not engage in
illegal practices which exposed Columbia/HCA to significant damages.
A suit filed on November 7, 1997 against Columbia/HCA and certain members
of the retirement committee alleges violations of the Employee Retirement
Income Security Act of 1974. The suit alleges Columbia/HCA breached its
fiduciary duty to participants in Columbia/HCA's stock bonus plan, fraudulently
concealed information from the public and fraudulently inflated Columbia/HCA's
stock price through billing fraud, over charges, inaccurate medical cost
reports and illegal kickbacks for physician referrals.
Columbia/HCA also is a defendant in a number of Federal and state court
actions filed by patients and/or payers, alleging, in general, improper and
fraudulent billing, overcharging, coding and physician referrals, as well as
other
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violations of law. Certain of the lawsuits have been conditionally certified as
class actions and others are purported class actions.
It is too early to predict the effect or outcome of any of the ongoing
investigations or qui tam, stockholder derivative and class action lawsuits, or
whether any additional investigations or litigation will be commenced. If
Columbia/HCA is found to have violated Federal or state laws relating to
Medicare, Medicaid or similar programs, then 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, stockholder derivative and class action lawsuits may be
substantial and Columbia/HCA could be subject to substantial costs resulting
from an adverse outcome of one or more of such lawsuits. Any such sanctions or
losses could have a material adverse effect on Columbia/HCA's financial
position and results of operations.
Pursuant to the distribution agreement entered into by and among
Columbia/HCA, Triad and LifePoint in connection with the distribution,
Columbia/HCA has agreed to indemnify Triad and LifePoint in respect of any
losses which they may incur as a result of the proceedings described above.
Columbia/HCA has also agreed to indemnify Triad and LifePoint in respect of any
losses which they 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 distribution date and
relate to the proceedings described above. Columbia/HCA has also agreed that,
in the event that any hospital owned by Triad or LifePoint 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 or LifePoint, as the case may be, 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. Each of Triad and LifePoint
has agreed that, in connection with the government 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. See "Arrangements Relating to the
Distribution--Distribution Agreement" for a more detailed discussion of such
arrangement. 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. Additionally, Columbia/HCA will not indemnify Triad for losses
relating to any acts, practices and omissions engaged in by Triad after the
distribution date, whether or not Triad is indemnified for similar acts,
practices and omissions occurring prior to the distribution date.
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MANAGEMENT
Directors and Executive Officers
The following table sets forth information regarding the directors and
executive officers of Triad.
<TABLE>
<CAPTION>
Name Age Position with Triad
---- --- -------------------
<C> <C> <S>
James D. Shelton.......... 45 Chairman of the Board, President and Chief
Executive Officer; Director
Michael J. Parsons........ 43 Executive Vice President and Chief Operating
Officer; Director
Burke W. Whitman.......... 43 Executive Vice President, Chief Financial
Officer and Treasurer
Donald P. Fay............. 55 Executive Vice President, Secretary and General
Counsel
Christopher A. Holden..... 34 Senior Vice President
Nicholas J. Marzocco...... 44 Senior Vice President
G. Wayne McAlister........ 52 Senior Vice President
W. Stephen Love........... 47 Senior Vice President of Finance, Controller
William R. Huston......... 44 Senior Vice President of Finance
Thomas G. Loeffler, Esq... 52 Director
Thomas F. Frist III....... 31 Director
Marvin Runyon............. 74 Director
Uwe E. Reinhardt, Ph.D. .. 60 Director
Dale V. Kesler............ 60 Director
Gale Sayers............... 56 Director
</TABLE>
The Triad certificate of incorporation provides that the Triad Board of
Directors will be divided into three classes, with the classes to be as nearly
equal in number as possible, and that, of the initial Triad directors
following the distribution, one-third will continue to serve until the 2000
annual meeting of stockholders, one-third will continue to serve until the
2001 annual meeting of stockholders, and one-third will continue to serve
until the 2002 annual meeting of stockholders. Of the initial directors, Mr.
Kesler and Mr. Runyon will serve until the 2000 annual meeting of
stockholders; Mr. Frist, Mr. Shelton and Mr. Sayers will serve until the 2001
annual meeting of stockholders; and Mr. Loeffler, Mr. Parsons and Dr.
Reinhardt will serve until the 2002 annual meeting of stockholders. Starting
with the 2000 annual meeting of stockholders, one class of directors will be
elected each year for a three-year term.
James D. Shelton is the Chairman of the Board, President and Chief
Executive Officer and a Director of Triad since May 11, 1999. From January 1,
1998, through May 11, 1999, he served as the President of the Pacific Group of
Columbia/HCA. Prior to that time, Mr. Shelton served as President of the
Central Group of Columbia/HCA from June 1994 until January 1, 1998; Executive
Vice President of the Central Division of National Medical Enterprises, Inc.
(presently called Tenet Healthcare Corporation) from May 1993 to June 1994;
and Senior Vice President of Operations of National Medical Enterprises, Inc.
prior thereto.
Michael J. Parsons is an Executive Vice President and Chief Operating
Officer and a Director of Triad since May 11, 1999. From January 1, 1998,
through May 11, 1999, he served as the Chief Operating Officer of the Pacific
Group. Prior to that time, Mr. Parsons served as Chief Financial Officer of
the Central Group of Columbia/HCA from July 1994 until January 1, 1998; and
Chief Financial Officer of the Central Group of National Medical Enterprises,
Inc. prior thereto.
Burke W. Whitman is an Executive Vice President, Chief Financial Officer
and Treasurer of Triad since May 11, 1999. From February 1, 1999, through May
11, 1999, he served as Chief Financial Officer of the Pacific Group of
Columbia/HCA. From May 1994 until January 31, 1999, he served as President,
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Chief Financial Officer, Director and Co-founder of Deerfield Health
Corporation. Prior to such time, Mr. Whitman served as Vice President,
Development and Finance of Almost Family, Inc., a wholly-owned subsidiary of
Caretenders Health Corporation.
Donald P. Fay is an Executive Vice President, Secretary and the General
Counsel of Triad since May 11, 1999. From January 1, 1998, through May 11,
1999, he served as Senior Vice President of the Pacific Group of Columbia/HCA.
Prior to that time, Mr. Fay served as Vice President--Legal of Columbia/HCA
from February 1994 through December 1997, and Senior Counsel of Columbia/HCA
prior thereto.
Christopher A. Holden is a Senior Vice President of Triad since May 11,
1999. From January 1, 1998, through May 11, 1999, he served as President--West
Division of the Pacific Group of Columbia/HCA. Prior to such time, Mr. Holden
was President of the West Texas Division of the Central Group of Columbia/HCA
from September 1997 until January 1, 1998; Vice President of Administration for
the Central Group of Columbia/HCA from August 1994 until September 1997; and
Assistant Vice President--Administration of the Central Group of National
Medical Enterprises, Inc. prior thereto.
Nicholas J. Marzocco is a Senior Vice President of Triad since May 11,
1999. From January 1, 1998, through May 11, 1999, he has served as President--
East Division of the Pacific Group of Columbia/HCA. Prior to that time, Mr.
Marzocco served as Chief Operating Officer of the Louisiana Division of
Columbia/HCA from September 1996 until January 1, 1998; and Chief Executive
Officer of North Shore Regional Medical Center, a 310-bed hospital owned by
National Medical Enterprises, Inc. and located in Slidell, Louisiana, prior
thereto.
G. Wayne McAlister is a Senior Vice President of Triad since May 11, 1999.
From March 15, 1999, through May 11, 1999, he served as President--Central
Division of the Pacific Group of Columbia/HCA. Prior to such time Mr. McAlister
was an independent senior hospital management consultant from June 1997 until
March 15, 1999; Regional Vice President of Paracelsus Healthcare Corporation
from June 1995 until May 1997; Vice President, Operations, of Tenet Healthcare
Corporation from August 1993 until May 1995; and President/Chief Operating
Officer and Vice President of Operations of Healthcare International from
February 1988 until November 1992.
W. Stephen Love is a Senior Vice President of Finance and the Controller of
Triad since May 11, 1999. From March 1, 1999, through May 11, 1999, he served
as Senior Vice President of Finance/Controller of the Pacific Group of
Columbia/HCA. Prior to that time he served as Senior Vice President/Corporate
Chief Financial Officer-Operations of Charter Behavioral Health Systems, L.L.C.
(formerly Charter Medical System) from December 1997 until March 1, 1999;
Senior Vice President/Corporate Chief Financial Officer of Charter Behavioral
Health Systems, L.L.C. from June 1997 until December 1997; and Vice President,
Financial and Hospital Operations of Charter Medical System prior thereto.
William R. Huston is a Senior Vice President of Finance of Triad since May
11, 1999. From January 1999, through May 11, 1999, he served as Senior Vice
President of Finance of the Pacific Group of Columbia/HCA. Prior to that time
he served as Division Chief Financial Officer of various divisions of the
Central Group of Columbia/HCA from April 1995 to December 1998; and Division
Chief Financial Officer of Tenet Healthcare Corporation prior thereto.
Thomas G. Loeffler, Esq. has served as a Partner at the law firm of Arter &
Hadden LLP since June 1993; he was an attorney and a consultant prior thereto.
Mr. Loeffler served as a member of the U.S. Congress from 1979 to 1987. Mr.
Loeffler is a Director of Billing Concepts Corp., Introgen Therapeutics, Inc.
and the University of Texas Investment Management Company and is Vice Chairman
of the Board of Regents of the University of Texas System. Mr. Loeffler became
a Director of Triad on the distribution date.
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Thomas F. Frist III is the Co-founder of FS Partners, LLC, a private
investment firm formed in 1994. Prior to such time, he was assistant to a
principal at Rainwater, Inc., a private investment firm. Mr. Frist became a
Director of Triad on the distribution date.
Marvin Runyon served as the 70th Postmaster General of the United States
from 1992 through 1998. Mr. Runyon was Chairman of the Board of the Tennessee
Valley Authority from 1988 to 1992 and President and Chief Executive Officer of
Nissan Motor Manufacturing Corporation U.S.A. prior thereto. Mr. Runyon is a
Director of ProTeam.com and Stamps.com. Mr. Runyon became a Director of Triad
on the distribution date.
Uwe E. Reinhardt, Ph.D. is the James Madison Professor of Political Economy
and Professor of Economics and Public Affairs at Princeton University. Mr.
Reinhardt is a Trustee of Duke University Health Center, H&Q Healthcare
Investors and H&Q Life Sciences Investors, a Member of the Board of the Center
for Healthcare Strategies, Inc. and a Member of the External Advisory Panel for
Health, Nutrition and Population, The World Bank. Mr. Reinhardt became a
Director of Triad on the distribution date.
Dale V. Kesler served as a partner at Arthur Andersen LLP until April 1996
and as Managing Partner of Arthur Andersen's Dallas/Fort Worth office from 1983
to 1994. Mr. Kesler is a director of CellStar Corporation, Elcor Corporation,
American Homestar Corporation, New Millenium Homes, Resource Services, Inc. and
Compass Banks--Dallas. Mr. Kesler became a Director of Triad on the
distribution date.
Gale Sayers is President and CEO of Sayers Computer Sources, a computer
resale firm, that he co-founded in 1984. Mr. Sayers manages Sayers and Sayers
Enterprises, a sport marketing and public relations firm. Mr. Sayers became a
director of Triad on May 25, 1999.
Committees of the Board of Directors
The Board of Directors has a number of standing committees, including an
executive committee, an audit and compliance committee, and a compensation
committee. The Board of Directors does not have a standing nominating
committee, but rather acts as a committee of the whole to screen candidates to
be nominated for election thereto by the stockholders or chosen to fill newly
created directorships or vacancies on the Triad Board of Directors.
The executive committee may exercise certain powers of the Board of
Directors regarding the management and direction of the business and affairs of
Triad when the Board of Directors is not in session. All action taken by the
executive committee is reported to and reviewed by the Board of Directors. The
members of the executive committee are Mr. Loeffler, Mr. Kesler and Mr.
Shelton, with Mr. Shelton serving as Chair.
The audit and compliance committee of the Board of Directors reviews and
makes reports and recommendations to the Board of Directors with respect to the
selection of the independent auditors of Triad and its subsidiaries, the
arrangements for and the scope of the audits to be performed by them and the
internal audit activities, accounting procedures and controls of Triad, and
reviews the annual consolidated financial statements of Triad. The committee
also monitors adherence to Triad's regulatory compliance program. The members
of the audit and compliance committee are Dr. Reinhardt, Mr. Kesler and Mr.
Runyon, with Mr. Runyon serving as Chair.
The compensation committee of the Triad Board of Directors is responsible
for approving compensation arrangements for executive management of Triad,
reviewing compensation plans relating to officers, grants of options and other
benefits under Triad's employee benefit plans and reviewing generally Triad's
employee compensation policy. The members of the compensation committee are Mr.
Sayers, Mr. Frist and Mr. Loeffler, with Mr. Loeffler serving as Chair.
Compensation of Directors
The annual retainer for outside directors who are neither officers nor
employees of Triad is $18,000 and the Board meeting fee is $1,500 per meeting.
Committee members receive a fee of $500 per meeting payable only for
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attendance at committee meetings not held in conjunction with a meeting of the
Board of Directors. Directors also are reimbursed for expenses incurred
relating to attendance at meetings. Under the outside directors stock and
incentive compensation plan, each non-employee director may elect to receive,
in lieu of all or any portion, in multiples of 25%, of his annual retainer,
deferred stock units, the payout of which, at the election of the director, may
be deferred for two years or until the end of such director's term of office.
The payment of deferred stock units will be made through the issuance of a
stock certificate for a number of shares equal to the number of deferred stock
units.
The plan further provides that each non-employee director will receive a
one-time grant of an option, as of a date to be selected by the Board, to
acquire shares of Triad common stock, exercisable at the fair market value of
Triad common stock on the date of grant, for a number of shares to be
determined by the Board. Each person who is a non-employee director on the day
of the annual meeting of Triad's stockholders will be granted on a date to be
selected by the Board, an option to acquire shares of Triad common stock,
exercisable at the fair market value of Triad common stock on the date of
grant, for a number of shares to be determined by the Board. The one-time
options and the annual options will each become exercisable as to one-quarter
of the shares covered by the option on each of the first four anniversaries of
the date of grant. Upon the occurrence of a change of control of Triad, each
outstanding option shall become fully and immediately exercisable.
The plan further provides that non-employee directors may receive
discretionary option grants.
Executive Compensation
The following table sets forth the compensation paid by Columbia/HCA to the
chief executive officer of Triad and the four executive officers of Triad who
were, based on such compensation, the most highly compensated Triad executive
officers for the year ended December 31, 1998. All cash compensation was paid
by Columbia/HCA and all stock compensation was in the form of Columbia/HCA
common stock or options to purchase shares of Columbia/HCA common stock. The
principal positions listed in the table are those that such persons currently
hold with Triad.
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Summary Compensation Table
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
---------------------------------- ------------------------------------
Other Restricted Securities All
Annual Stock Underlying Other
Name and Principal Salary Bonus Compensation Awards Options/SARS Compensation
Position Year ($)(2) ($)(3) ($)(4) ($)(5) (#)(6) ($)(7)
------------------ ---- -------- ------- ------------ ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
James D. Shelton (1)... 1998 $529,125 $ -- $ -- $124,490 -- $9,448
Chairman, President
and 1997 $415,000 $41,500 $ -- $221,400 350,000 $7,629
Chief Executive
Officer 1996 $350,000 $35,000 $ -- $187,000 82,500 $7,214
Michael J. Parsons..... 1998 $309,375 $ -- $ -- $ 37,493 -- $7,561
Executive Vice 1997 $225,000 $56,250 $ -- $ 75,000 135,000 $7,629
President and Chief
Operating Officer
Nicholas J. Marzocco... 1998 $271,688 $ -- $34,448 $ 51,745 -- $7,224
Senior Vice President 1997 $207,000 $77,625 $31,158 $ 34,510 64,000 $7,004
Christopher A. Holden.. 1998 $243,750 $ -- $26,594 $ 64,997 -- $7,399
Senior Vice President 1997 $195,000 $42,840 $28,950 $ -- 60,000 $6,373
Donald P. Fay.......... 1998 $240,300 $ -- $ -- $ -- 4,200 $8,348
Executive Vice 1997 $178,000 $62,300 $ -- $ -- 12,000 $8,438
President, Secretary
and General Counsel
</TABLE>
- ---------
(1) Pursuant to Commission rules, includes information for 1996 because Mr.
Shelton's compensation for that year was previously included in public
disclosure by Columbia/HCA.
(2) 1998 salary amounts do not include the value of restricted stock awards
granted in lieu of a portion of annual salary.
(3) Reflects bonus earned during the fiscal year. In some instances, all or a
portion of the bonus was paid during the following fiscal year. Each of the
executive officers identified in the table, except for Messrs. Holden and
Fay, had the option to take all or part of their bonus in shares of
Columbia/HCA restricted stock at a 25% discount from the fair market value
at the time of grant, which is reflected in the Restricted Stock Awards
column. Columbia/HCA's cash bonus program was discontinued in August 1997.
(4) Perquisites and other personal benefits did not exceed the lesser of either
$50,000 or 10% of the total of annual salary and bonus for any executive
officer identified in the table. Other compensation consists principally of
relocation expenses.
(5) 1998 amounts represent the average of the closing prices of Columbia/HCA
shares issued pursuant to Columbia/HCA's amended and restated 1995
management stock purchase plan in lieu of a portion of annual salary on
trading days during the deferral period. 1997 amounts represent the average
of the closing price on the five trading days prior to the grant date of
shares of Columbia/HCA shares granted pursuant to Columbia/HCA's amended
and restated 1995 management stock purchase plan in lieu of all or a
portion of a cash bonus. As of January 1, 1999, Messrs. Shelton, Parsons,
Marzocco and Holden held an aggregate of 21,172, 6,971, 3,136 and 2,453
shares of restricted stock, respectively. Pursuant to Commission rules,
after deducting the consideration paid therefor, the shares held by Messrs.
Marzocco and Holden had a net pre-tax value of $12,933 and $11,965,
respectively, and the shares held by Messrs. Shelton and Parsons were
without value. Dividends will be payable on shares of restricted stock if
and to the extent paid on Columbia/HCA's common stock generally, regardless
of whether or not the shares are vested.
(6) Options to acquire shares of Columbia/HCA common stock. Columbia/HCA
granted options at two separate times in 1997. The 1997 regular grant was
issued in February 1997. A special grant was issued in November 1997 to
help ensure the retention and motivation of key executives, including
Messrs. Shelton, Parsons, Marzocco and Holden, at the time Columbia/HCA was
reorganizing. On average, the size of the November 1997 grant is two times
a competitive median long-term grant for a two-year period (1998-99).
(7) Consists of Columbia/HCA contributions to Columbia/HCA's savings and
investment plan, money purchase plan and stock bonus plan.
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Columbia/HCA Option Grants in 1998
The following table sets forth information on grants of options to purchase
shares of Columbia/HCA common stock made during 1998 to the persons named in
the Summary Compensation Table. For a discussion of the treatment of such
options and certain replacement grants of options to purchase shares of Triad
common stock, see "Arrangements Relating to the Distribution --Benefits and
Employment Matters Agreement--Treatment of Columbia/HCA Common Stock Options."
Option/SAR Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Potential Realizable Value
Percent of At Assumed Annual Rates
Number of Total of Stock Price
Securities Options/SARs Appreciation for Securities
Underlying Granted to Exercise or Option Term(4)
SARS/Options Employees in Base Price Expiration ----------------------------
Name Granted(#)(1) Fiscal Year ($/sh)(2)(3) Date 5%($) 10%($)
---- ------------- ------------ ------------ ---------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
James D. Shelton........ -- -- -- -- -- --
Michael J. Parsons...... -- -- -- -- -- --
Nicholas J. Marzocco.... -- -- -- -- -- --
Christopher A. Holden... -- -- -- -- -- --
Donald P. Fay........... 4,200 0.06% $26.4688 3/5/08 $ 69,913.56 $ 177,174.69
</TABLE>
- ---------
(1) Options to acquire Columbia/HCA common stock.
(2) The option exercise price may be paid in shares of Columbia/HCA common
stock owned by the executive officer, in cash, or a combination thereof.
(3) The ten-year options become exercisable with respect to 25% of the shares
covered thereby on the second, third, fourth and fifth anniversary dates
following the date of grant. The exercise price was equal to the fair
market value of the Columbia/HCA common stock on the date of the grant.
(4) The potential realizable value portion of the foregoing table illustrates
value that might be realized upon exercise of the options immediately prior
to the expiration of their term, assuming the specified compounded rates of
appreciation on the Columbia/HCA common stock over the term of the options.
These amounts do not take into account provisions of the options relating
to termination of the option following termination of employment, non-
transferability or vesting over periods of up to five years.
Aggregated Option/SAR Exercises In Last Fiscal Year and FY-End Option/SAR
Values
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Options/SARs at Fiscal Options/SARs at Fiscal
Year-End(#) Year-End($)(1)
------------------------- -------------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
James D. Shelton............ 84,375 453,125 -- --
Michael J. Parsons.......... 37,125 178,875 -- --
Nicholas J. Marzocco........ 3,750 75,250 -- --
Christopher A. Holden....... 5,280 71,280 -- --
Donald P. Fay............... 27,750 39,450 -- --
</TABLE>
- ---------
(1) The closing price for the Columbia/HCA common stock, as reported by the
NYSE, on December 31, 1998 was $24.75. Value is calculated on the basis of
the difference between the option exercise price and $24.75, multiplied by
the number of shares of Columbia/HCA common stock underlying the option.
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<PAGE>
Benefits and Employment Matters Agreement
In connection with the distribution, Columbia/HCA, LifePoint and Triad
entered into the benefits and employment matters agreement, which allocates
responsibilities for employee compensation, benefits, labor, benefit plan
administration and certain other employment matters on and after the
distribution date. Among other things, the benefits and employment matters
agreement generally provides for grants to Triad employees of options to
purchase shares of LifePoint common stock and Triad common stock in respect of
vested options to purchase Columbia/HCA common stock, other than incentive
stock options, and grants to purchase Triad stock in replacement of incentive
stock options covering Columbia/HCA common stock. The benefits and employment
matters agreement also provides for the establishment of certain of the
benefit plans described in this section. See "Arrangements Relating to the
Distribution--Benefits and Employment Matters Agreement" for a more detailed
description of such arrangements.
The 1999 Long-Term Incentive Plan
Reservation of Shares. Triad adopted the 1999 long-term incentive plan
pursuant to which 5,350,000 shares of Triad common stock have been reserved
for issuance. The shares of Triad common stock to be issued will be made
available from authorized but unissued shares of Triad common stock or issued
shares that have been reacquired by Triad. If any shares of Triad common stock
that are the subject of an award are not issued and cease to be issuable for
any reason, such shares will no longer be charged against the maximum share
limitations and may again be made subject to awards. In the event of certain
corporate reorganizations, recapitalizations or other specified corporate
transactions affecting Triad or the Triad common stock, proportionate
adjustments may be made to the number of shares available for grant, as well
as the other maximum share limitations, under the long-term incentive plan,
and the number of shares and prices under outstanding awards.
Duration. The long-term incentive plan has a term of 10 years, subject to
earlier termination or amendment by the Triad Board of Directors.
Administration. The long-term incentive plan is administered by the
compensation committee of the Board of Directors. Subject to the limitations
set forth in the long-term incentive plan, the compensation committee has the
authority to determine the persons to whom awards are granted, the types of
awards to be granted, the time at which awards will be granted, the number of
shares, units or other rights subject to each award, the exercise, base or
purchase price of an award (if any), the time or times at which the award will
become vested, exercisable or payable, and the duration of the award.
Eligibility. All employees of Triad and its subsidiaries and, in the case
of awards other than incentive stock options, any consultant or independent
contractor providing services to Triad or a subsidiary, are eligible to be
granted awards under the long-term incentive plan, as selected from time to
time by the compensation committee in its sole discretion.
Types of Awards. The long-term incentive plan will authorize the grant of
the following types of awards:
. Stock Options (nonqualified and incentive stock options). The maximum
number of shares that may be covered under options granted to any
individual in any calendar year is 700,000 shares. The exercise price of an
option may be determined by the compensation committee, provided that the
exercise price per share of an option may not be less than the fair market
value of a share of Triad common stock on the date of grant. The value of
Triad common stock,
determined at the time of grant, that may be subject to incentive stock
options that become exercisable by an employee in any one year is limited
to $100,000. The maximum term of any stock option will be ten years from
the date of grant. The compensation committee is to determine
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<PAGE>
the extent to which an option will become and/or remain exercisable in the
event of termination of employment or service of a participant under
various circumstances, including retirement, death or disability, subject
to certain limitations for incentive stock options. Subject to certain
terms and conditions, an option may be exercised in whole or in part at any
time during the term thereof by written notice to Triad, together with
payment of the aggregate exercise price of the option. In addition to the
exercise price, the participant must pay Triad in cash or, at the
compensation committee's discretion, in Triad common stock, the full amount
of all applicable income tax and employment tax amounts required to be
withheld in connection with the exercise of the option.
. Stock Appreciation Rights. A stock appreciation right may be granted either
in tandem with an option or without a related option. A stock appreciation
right entitles the holder, upon exercise, to receive a payment based on the
excess of the fair market value of a share of Triad common stock on the
date of exercise over the base price of the stock appreciation right, which
may not be less than the fair market value of a share of Triad common stock
on the date of grant, multiplied by the number of shares as to which such
stock appreciation right is being exercised. The maximum term of a stock
appreciation right will be 10 years from the date of grant. No more than
700,000 shares of Triad common stock may be subject to stock appreciation
rights granted to any one participant during any calendar year. Stock
appreciation rights are payable, in the discretion of the compensation
committee, in cash, in shares of Triad common stock, or in a combination of
cash and shares of Triad common stock.
. Performance Awards. Performance awards are units denominated on the date of
grant either in shares of Triad common stock or in specified dollar
amounts. The compensation committee may grant performance awards that are
intended to qualify as performance-based compensation under Section 162(m)
of the Internal Revenue Code of 1986, as amended (a "Section 162(m)
Award"), as well as performance awards that are not Section 162(m) Awards.
Performance awards are payable upon the achievement of performance criteria
established by the compensation committee at the beginning of the
applicable performance period. At the time of grant, the compensation
committee establishes the number of units, the duration of the performance
period or periods, the applicable performance criteria, and, in the case of
performance units, the target unit value or range of unit values for the
performance awards. At the end of the performance period, the compensation
committee determines the payment to be made, based on the extent to which
the performance goals have been achieved. Performance awards are payable,
in the discretion of the compensation committee, in cash, in shares of
Triad common stock, or in a combination of cash and shares of Triad common
stock. The maximum amount of compensation that may be payable to a
participant during any one calendar year with respect to a performance unit
shall be $4.2 million. The maximum number of performance shares granted to
a participant during any one calendar year shall be 280,000 performance
shares.
. Phantom Stock. An award of phantom stock gives the participant the right to
receive payment at the end of a fixed vesting period based on the value of
a share of Triad common stock at the time of vesting. Phantom stock units
are subject to such restrictions and conditions to payment as the
compensation committee determines are appropriate. An award of phantom
stock may be granted, at the discretion of the compensation committee,
together with an award of dividend equivalent rights for the same number of
shares covered thereby. Phantom stock awards are payable, in the discretion
of the compensation committee, in cash, in shares of Triad common stock
having an equivalent fair market value on the
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<PAGE>
applicable vesting dates, or in a combination thereof.
. Restricted Stock Awards. An award of restricted stock represents shares of
Triad common stock that are issued subject to such restrictions on transfer
and incidents of ownership, and such forfeiture conditions, as the
compensation committee deems appropriate. The committee may grant an award
of restricted stock that is a Section 162(m) Award. The restrictions imposed
upon an award of restricted stock will lapse in accordance with the vesting
requirements specified by the compensation committee in the award agreement.
Such vesting requirements may be based on the continued employment of the
participant for a specified time period or on the attainment of specified
business goals or performance criteria established by the compensation
committee. The compensation committee may, in connection with an award of
restricted stock, require the payment of a specified purchase price. Subject
to the transfer restrictions and forfeiture restrictions relating to the
restricted stock award, the participant will have the rights of a
stockholder of Triad, including all voting and dividend rights, during the
restriction period, unless the compensation committee determines otherwise
at the time of the grant. The maximum number of shares of common stock that
may be subject to a restricted stock award granted to a participant during
any one calendar year shall be 280,000 shares.
. Dividend Equivalents. Dividend equivalent awards entitle the holder to a
right to receive cash payments determined by reference to dividends declared
on the Triad common stock during the term of the award, which will not
exceed 10 years from the date of grant. Dividend equivalent awards may be
granted on a stand-alone basis or in tandem with other awards under the
long-term incentive plan. Dividend equivalent awards are payable in cash or
in shares of Triad common stock, as determined by the compensation
committee.
Change in Control. The compensation committee may, in an award agreement,
provide for the effect of a change in control, as defined in the long-term
incentive plan, on the award. Such provisions may include the acceleration of
an award's vesting or extension of the time for exercise, the elimination or
modification of performance or other conditions, the cash settlement of an
award or other adjustments that the compensation committee considers
appropriate.
Triad Executive Stock Purchase Plan
Reservation of Shares. Under the Triad executive stock purchase plan, 1.0
million shares of Triad common stock have been reserved for issuance pursuant
to all rights granted under the plan. The shares of Triad common stock to be
issued will be made available from authorized but unissued shares of Triad
common stock or issued shares that have been reacquired by Triad. To the extent
that any right to purchase Triad common stock granted under the plan is
forfeited, cancelled or otherwise terminated, the shares of Triad common stock
covered thereunder will no longer be charged against the maximum share
limitation and may again be made subject to rights granted under the plan. In
the event of certain corporate reorganizations, recapitalizations or other
specified corporate transactions affecting Triad or the Triad common stock,
proportionate adjustments may be made to the number of shares available for
grant and the number of shares under outstanding grants.
Duration. The Triad executive stock purchase plan has a term of 10 years,
subject to earlier termination or amendment by the Board of Directors.
Administration. The Triad executive stock purchase plan is administered by
the compensation committee of the Board of Directors. Subject to limitations to
be set forth in the executive stock purchase plan, the compensation committee
has the authority to determine the persons to whom rights are granted, the time
at which rights will be granted, the number of shares that may be
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<PAGE>
purchased under a right, the date or period during which such right may be
exercised and all other terms of the right. With the consent of the affected
participant, the compensation committee has the authority to cancel and replace
outstanding rights previously granted with new rights for the same or a
different number of shares and to amend the terms of any outstanding right.
Eligibility. All executive employees of Triad and its subsidiaries are
eligible to receive rights under the executive stock purchase plan.
Initial Grants. The executive stock purchase plan specifically provides for
initial grants of rights to certain executive officers. These rights were to be
exercised for a period beginning on the distribution date and ending on the
21st trading date of the Triad common stock. Messrs. Shelton, Whitman, Parsons,
Fay, Marzocco, Holden, McAlister, Huston and Love purchased 400,000, 160,000,
80,000, 40,000, 40,000, 40,000, 30,000, 40,000 and 40,000 shares, respectively,
prior to the expiration of the exercise period.
Exercise of Rights. A right will be exercised by written notice to Triad on
or prior to a specified exercise date. Such written notice will be an agreement
by the participant to pay the full purchase price of the Triad common stock by
means of a purchase loan, except to the extent the notice is accompanied by a
cash payment.
Purchase Loan. Triad will loan each participant 100% of the purchase price
of Triad common stock acquired by the participant under a right, on a full
recourse basis, to the extent the participant does not elect to pay the
purchase price in cash. The purchase price of the Triad common stock acquired
shall equal the fair market value of such common stock on the date preceding
the purchase. The loan will be secured by the shares purchased. Interest will
be paid upon the loan's maturity or upon the loan's prepayment and will accrue
at the applicable Federal rate, compounded semi-annually. However, if the
participant's employment terminates for cause or the participant voluntarily
terminates employment other than for a good reason within three years of
purchasing the shares, or, if earlier, the date of a change in control, in
addition to any amounts otherwise due under the loan, including accrued
interest, the participant will be required to pay Triad the additional interest
that would have been payable in respect of the loan, if the regular interest
rate on such purchase loan had been the prime rate, and interest thereon at
such rate to the actual date of payment.
Loan Maturity and Repayment. A loan will mature upon the earlier of
(1) the fifth anniversary following the purchase of the shares,
(2) termination of the participant's employment for any reason, or
(3) bankruptcy of the participant.
Within 120 days following the loan's maturity, the participant will be
required to pay Triad the full amount remaining due on the loan, including all
unpaid accrued interest.
Loan Prepayments. The loan may be prepaid, in whole or in part, at any
time. At any time following the earlier of the second anniversary following the
purchase of the shares, or a change in control, such shares may, at the
participant's election, be sold to repay the loan. Any cash dividends received
on the purchased shares prior to payment of the full amount due on such loan,
net of assumed Federal, state and local income taxes, will be used to prepay
the loan.
Transfer Restrictions. A participant will not be entitled to delivery of
the stock certificates representing the shares purchased and none of such
shares may be sold, assigned, transferred, pledged, hypothecated or otherwise
encumbered or disposed of, except by will or the applicable laws of descent and
distribution, until the later of
(a) full repayment of the purchase price and accrued interest and any
additional amount that may be due under the Triad executive stock
purchase plan, and
(b) the earlier of
(1) the third anniversary of the date the shares were purchased,
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<PAGE>
(2) the participant's termination of employment or bankruptcy, and
(3) a change in control.
However, such shares may be sold to pay the loan at maturity, or to
voluntarily prepay such loan at any time after the earlier of the second
anniversary of the date the shares were purchased, or a change in control.
Death or Disability Benefit. In the event of termination of employment
because of death or disability, where the amount remaining due on the loan,
including accrued interest, is greater than the fair market value of the shares
purchased, as of the date of such death or disability, Triad will pay a death
or disability benefit equal to the amount of such payment remaining due over
the shares' fair market value as of the date of such death or disability.
Triad Annual Incentive Plan
General. Triad adopted the annual incentive plan to provide for the payment
of annual cash bonuses following the close of each plan year to eligible
employees based upon the achievement of objective performance criteria for such
plan year. Awards may be granted under the plan that are intended to qualify as
Section 162(m) Awards, as well as awards that are not intended to so qualify.
The maximum award payable to any individual for any plan year is $750,000.
Administration. The annual incentive plan is administered by the
compensation committee of the Board of Directors. The compensation committee
may delegate this authority as it deems appropriate.
Eligibility. Generally, participants are selected by the compensation
committee prior to the start of each plan year from among those employees who,
in the compensation committee's opinion, are in a position to make significant
contributions to Triad's success. Selection to participate in the plan for any
given year does not automatically entitle an individual to be selected as a
participant with respect to any subsequent plan year. If the compensation
committee determines during the course of any plan year that a participant is
ineligible for continued participation on account of demotion, the individual
is eligible to receive a prorated award, subject to the compensation
committee's right to reduce or cancel such award.
Performance Criteria. For each plan year, the compensation committee will
establish the (i) performance criteria, (ii) a performance goal and weighting
for each criterion and (iii) a target award and an award schedule for each
participant. An award schedule sets forth a participant's target award,
performance criteria and the performance goal, weighting and other applicable
adjustments for each performance criterion. Once established for a plan year,
award schedules may not be amended or otherwise modified, unless the
compensation committee, in its discretion, determines that award schedules have
been affected by extraordinary, unusual or nonrecurring items of income or
expense, or change in accounting principles or revaluation of assets.
Payment of Awards. As soon as practicable following the close of the plan
year for which an award is to be made, the compensation committee will
determine the award payable to a participant based upon that individual's
achievement of his or her performance goals. All determinations of awards and
achievement of performance goals will be certified in writing by the
compensation committee, which, in its discretion, may decrease the amount of
award otherwise payable. As soon as practicable following the determination of
an award, the award will be paid in a lump sum cash payment.
Termination of Employment. An award will not be paid unless the participant
is an employee on the date the award is to be paid. However, if the
participant's employment terminates on account of death, disability or
retirement or if the participant is terminated by the company other than for
cause, the participant (or his or her beneficiary) will be paid a pro rated
award in cash. If the participant is terminated for cause, any right to payment
of an award will be forfeited.
The Triad Management Stock Purchase Plan
Reservation of Shares. 260,000 shares of Triad common stock may be
distributed
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<PAGE>
pursuant to all awards of restricted shares or in respect of restricted share
units under the management stock purchase plan. The shares of Triad common
stock to be issued will be made available from authorized but unissued shares
of Triad common stock or issued shares that have been reacquired by Triad. If
any shares of Triad common stock that are the subject of an award are
forfeited, the related shares will no longer be charged against such maximum
share limitation and may again be made subject to awards. In the event of
certain corporate reorganizations, recapitalizations or other specified
corporate transactions affecting Triad or the Triad common stock, such
substitution or adjustment shall be made in the aggregate number of Triad
common stock that may be distributed as restricted shares or in respect of
restricted share units under the management stock purchase plan, and the number
of restricted shares and/or restricted share units outstanding under the
management stock purchase plan, as may be determined to be appropriate by the
compensation committee in its sole discretion.
Duration. The management stock purchase plan has a term of ten years,
subject to earlier termination or amendment by the Triad Board of Directors.
Administration. The management stock purchase plan is administered by the
compensation committee. The compensation committee has authority to administer
the plan and to exercise all the powers and authorities either specifically
granted to it under, or necessary or advisable in the administration of, the
management stock purchase plan, including, without limitation, to interpret the
plan, to prescribe, amend and rescind rules and regulations relating to the
plan, to determine the terms and provisions of agreements, which need not be
identical, entered into under the plan and to make all other determinations
deemed necessary or advisable for the administration of the plan.
Eligibility. All Triad employees or groups of employees designated by the
compensation committee in its sole discretion are eligible to be granted
awards.
Restricted Share Awards. The compensation committee may make awards of
restricted shares. Under the management stock purchase plan, a participant may
elect to reduce his base salary up to a maximum percentage established by the
compensation committee with respect to his employee classification and, in lieu
of salary, receive a number of restricted shares equal to the amount of such
salary reduction divided by a dollar amount equal to 75% of the average market
value, as defined in the plan, of Triad common stock on the date on which such
restricted share is granted. Restricted shares will be granted on June 30 and
December 31 of each calendar year for which a salary reduction election is in
effect.
An award of restricted shares represents shares of Triad common stock that
are issued subject to such restrictions on transfer and incidents of ownership,
and such forfeiture conditions, as set forth in the plan and as the
compensation committee deems appropriate. Generally, the restricted period of
restricted shares granted under the management stock purchase plan will be
three years from the date of grant. Subject to such transfer and forfeiture
restrictions, the participant shall have all rights of a stockholder with
respect to such restricted shares, including the right to receive dividends and
the right to vote such restricted shares.
Conversion of Restricted Shares into Restricted Share Units. If during the
restricted period the compensation committee determines that Triad may lose its
Federal income tax deduction in connection with the future lapsing of the
restrictions on restricted shares because of the deductibility cap of Section
162(m) of the Code, the compensation committee, in its discretion, may convert
some or all of the restricted shares into an equal number of share units, as to
which payment will be postponed until such time as Triad will not lose its
Federal income tax deduction for such payment under Section 162(m). Until
payment of the restricted share units is made, the participant will be credited
with dividend equivalents on the restricted share units, which dividend
equivalents will be converted into additional restricted share units.
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Termination of Employment During the Restricted Period. If during the
restricted period the participant's employment is terminated by Triad either
for cause, as defined in the plan, or for any reason by the participant, the
participant will forfeit his or her rights in the restricted shares which shall
automatically be considered to be cancelled, and shall have only an unfunded
right to receive from Triad's general assets a cash payment equal to the lesser
of
(1) the fair market value of such restricted shares on the participant's
last day of employment or
(2) the aggregate base salary foregone by the participant as a condition of
receiving the restricted shares.
If a participant's employment is terminated by Triad without cause during
the restricted period, the participant will forfeit his rights in the
restricted shares, which shall automatically be considered to be cancelled, and
shall have only an unfunded right to receive from Triad's general assets a cash
payment equal to either
(1) the fair market value of such restricted shares on the participant's
last day of employment or
(2) the aggregate base salary foregone by the participant as a condition of
receiving the restricted shares, with the compensation committee to
have the sole discretion as to which of such amounts shall be payable.
If the employment of a participant holding restricted share units
terminates during the restricted period relating to the restricted share units,
they shall be treated in a manner substantially equivalent to the treatment of
restricted shares set forth above.
Upon a termination of employment which results from a participant's death
or disability, all restrictions then outstanding with respect to restricted
shares held by the participant automatically will expire. Upon the retirement
of a participant, the compensation committee shall determine, in its
discretion, whether all restrictions then outstanding with respect to
restricted shares held by the participant shall expire or whether the
participant shall instead be treated as though the participant's employment had
been terminated by Triad without cause, as described above.
Change in Control. Upon the occurrence of a change in control of Triad, the
restricted period automatically will terminate as to all restricted shares
awarded under the plan.
Employee Stock Ownership Plan
Triad established for the benefit of its employees a leveraged ESOP which,
on June 10, 1999, purchased 3 million newly issued shares of Triad common stock
from Triad. The purchase price of the shares was financed by issuing a
promissory note to Triad. Initially, all such shares are held in a suspense
account under the ESOP. Triad will contribute annually to the ESOP the funds
required to repay the ESOP loan. As the ESOP loan is repaid, shares will be
released from the suspense account and will be allocated to accounts
established for participants under the ESOP. The loan will be repaid in equal
installments over a 10 year period. Generally, each employee of Triad and its
participating subsidiaries will participate in the ESOP as of the first January
1 after his or her date of hire. Each participant in the ESOP will be fully
vested in his accounts after completion of seven years of service with Triad,
including any pre-distribution service with Columbia/HCA and its affiliates.
Employment Contracts, Termination Of Employment Arrangements and Change in
Control Arrangements
Each of Messrs. Parsons, Marzocco, Holden and Fay will participate in an
enhanced severance plan through December 31, 1999. In the event that any of
Messrs. Parsons, Marzocco or Holden is terminated without cause during 1999, he
will receive continued payment of his then-current base salary and his target
bonus for twenty-four months after such termination. In the event that Mr. Fay
is terminated without cause during 1999, he will receive continued payment of
his then-current base salary and his target bonus for twelve months after such
termination. Severance policies for termination occurring subsequent to
December 31, 1999 have not yet been established.
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CERTAIN TRANSACTIONS
Triad made loans to certain executive officers in connection with such
officers initial purchases of Triad common stock under the Triad executive
stock purchase plan, the balances are as follows: Mr. Shelton, $3,746,000; Mr.
Parsons, $749,200; Mr. Marzocco, $377,100; Mr. Holden, $377,100; Mr. Fay,
$377,100; Mr. Huston, $377,100; Mr. Love, $374,600; Mr. McAlister, $282,825;
and Mr. Whitman, $1,498,400. See "Management--Triad Executive Stock Purchase
Plan" for a more detailed description of such plan and loans.
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PRINCIPAL STOCKHOLDERS
The following table sets forth information regarding the beneficial
ownership of Triad common stock as of October 1, 1999, by each person known by
Triad to be a beneficial owner of 5% or more of the outstanding Triad common
stock and beneficial ownership of Triad common stock by each director and named
executive officer and all directors and executive officers as a group:
<TABLE>
<CAPTION>
Number of Percent of
Name of Beneficial Owner Shares(1)(2) Class
- ------------------------ ------------ ----------
<S> <C> <C>
Triad Hospitals, Inc. Retirement Savings Plan......... 3,000,000 8.8%
Blue Ridge Limited Partnership, JAG Holdings LLC, and
John A. Griffin(3)................................... 1,720,000 5.1%
FMR Corp., Edward C. Johnson 3d and Abigail P.
Johnson(4)........................................... 2,486,463 7.5%
Greenlight Capital, L.L.C., David Einhorn and Jeffrey
A. Keswin (5)........................................ 2,540,500 7.5%
Wellington Management Company, LLP(6)................. 3,512,774 11.8%
James D. Shelton(7)................................... 559,004 1.6%
Thomas G. Loeffler, Esq............................... 1,565 *
Thomas F. Frist III................................... 320,857 *
Marvin Runyon......................................... 1,565 *
Michael J. Parsons(7)................................. 113,618 *
Nicholas J. Marzocco(7)............................... 55,651 *
Christopher A. Holden(7).............................. 55,983 *
Donald P. Fay(7)...................................... 57,357 *
Uwe E. Reinhardt, Ph.D................................ 0 *
Dale V. Kesler........................................ 782 *
Gale Sayers........................................... 0 *
William R. Huston(7).................................. 55,917 *
W. Stephen Love(7).................................... 55,000 *
Wayne G. McAlister(7)................................. 41,255 *
Burke W. Whitman(7)................................... 240,000 *
All Directors and Executive Officers as a Group (15
persons)(7).......................................... 1,233,785 3.7%
</TABLE>
- --------
* Less than one percent.
(1) Unless otherwise indicated, each stockholder shown on the table has sole
voting and investment power with respect to the shares beneficially owned.
The number of shares shown does not include the interest of certain persons
in shares held by family members in their own right.
(2) Each named person or group is deemed to be the beneficial owner of
securities which may be acquired within 60 days through the exercise or
conversion of options, warrants and rights, if any, and such securities are
deemed to be outstanding for the purpose of computing the percentage
beneficially owned by such person or group. Such securities are not deemed
to be outstanding for the purpose of computing the percentage beneficially
owned by any other person or group. Accordingly, the indicated number of
shares includes shares issuable upon conversion of convertible securities
or upon exercise of options (including employee stock options) held by such
person or group.
(3) The ownership given for Blue Ridge Limited Partnership, JAG Holdings LLC
and John A. Griffin is based on information contained in the Schedule 13G
dated October 1, 1999, filed with the Commission by Blue Ridge Limited
Partnership in respect of its beneficial ownership of Triad Hospitals, Inc.
common stock. The address of Blue Ridge Limited Partnership is 660 Madison
Avenue, 20th floor, New York, New York 10021.
(4) The ownership given for FMR Corp., Edward C. Johnson 3d and Abigail P.
Johnson is based on information contained in the Schedule 13G dated
February 1, 1999, filed with the Commission by FMR Corp. in respect of its
beneficial ownership of Columbia/HCA common stock. The address of FMR Corp
is 82 Devonshire Street, Boston, Massachusetts 02109.
(5) The ownership given for Greenlight Capital, L.L.C., David Einhorn and
Jeffrey H. Keswin is based on information contained in the Schedule 13D
dated August 16, 1999, filed with the Commission by Greenlight Capital,
L.L.C. in respect of its beneficial ownership of Triad Hospitals, Inc.
common stock. The address of Greenlight Capital, L.L.C. is 420 Lexington
Avenue, Suite 875, New York, New York 10170.
(6) The ownership given for Wellington Management Company, LLP is based on
information contained in the Schedule 13G dated June 10, 1999 filed with
the Commission by Wellington Management Company, LLP in respect of its
beneficial ownership of Triad Hospitals, Inc. common stock. The address of
Wellington Management Company, LLP is 75 State Street, Boston,
Massachusetts 02109.
(7) Of the shares reported for Messrs. Shelton, Parsons, Marzocco, Holden, Fay,
Huston, Love, McAlister and Whitman, 157,628, 33,182, 15,381, 15,625,
17,286, 15,629, 15,000, 11,250 and 60,000 shares, respectively, represent
shares that are issuable by options that are exercisabe within 60 days.
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ARRANGEMENTS RELATING TO THE DISTRIBUTION
Immediately prior to the distribution, Triad was a wholly owned subsidiary
of Columbia/HCA and, until the distribution, the results of operations of the
assets and entities that constitute Triad were included in Columbia/HCA's
consolidated financial statements. The distribution was completed on May 11,
1999 and Columbia/HCA no longer has any ownership interest in Triad, which is
an independent, publicly-traded company, although certain Columbia/HCA benefit
plans received shares of Triad in the distribution. On the distribution date,
Columbia/HCA also distributed to its stockholders all outstanding shares of the
common stock of LifePoint, a recently formed company comprising the former
America Group of Columbia/HCA. After the distribution, Columbia/HCA no longer
has any ownership interest in LifePoint and neither Triad nor LifePoint has any
ownership interest in the other.
Immediately prior to the distribution, Columbia/HCA, Triad and LifePoint
entered into certain agreements to define their ongoing relationships after the
distribution and to allocate tax, employee benefits and certain other
liabilities and obligations arising from periods prior to the distribution
date. These agreements are summarized below. A copy of each of these agreements
has previously been filed with the Commission by Triad, and is incorporated by
reference to the registration statement, of which this prospectus forms a part.
The following descriptions include a summary of the material terms of these
agreements but do not purport to be complete and are qualified in their
entirety by reference to the complete text of the agreements.
Distribution Agreement
Columbia/HCA, Triad and LifePoint entered into a distribution agreement
which provided for, among other things, certain corporate transactions required
to effect the distribution and other arrangements among Columbia/HCA, Triad and
LifePoint subsequent to the distribution. The distribution agreement also sets
forth the conditions to the distribution.
Transfers of Assets to Triad and LifePoint
The distribution agreement provided that Columbia/HCA would transfer all of
its right, title and interest in the assets constituting the Pacific Group
business to Triad and all of its right, title and interest in the assets
constituting the America Group business to LifePoint. The distribution
agreement further provided that each of Triad and LifePoint would take such
action, if any, as may be necessary to transfer assets owned by it so that,
upon completion of all asset transfers by Columbia/HCA, Triad and LifePoint,
the assets constituting the Pacific Group business would be owned by Triad and
the assets constituting the America Group business would be owned by LifePoint.
Each party to the distribution agreement agreed to exercise its reasonable
efforts to obtain promptly any necessary consents and approvals and to take
such actions as may be reasonably necessary or desirable to carry out the
purposes of the distribution agreement and the other agreements summarized
below. In the event that any transfers contemplated by the distribution
agreement were not effected on or prior to the distribution date, the parties
agreed to cooperate to effect such transfers as promptly as practicable
following the distribution date, and pending any such transfers, to hold any
asset not so transferred in trust for the use and benefit of the party entitled
thereto, at the expense of the party entitled thereto, and to retain any
liability not so transferred for the account of the party by whom such
liability was to be assumed. All assets were transferred without any
representation or warranty, on an "as is-where is" basis and the relevant
transferee assumed the risk that any necessary consent to transfer was not
obtained.
Allocation of Financial Responsibility
The distribution agreement provides for, among other things, assumptions of
liabilities and cross-indemnities designed to allocate, effective as of the
distribution date, financial responsibility for the liabilities arising out of
or in connection with:
. the assets and entities that constitute Triad and its subsidiaries,
including liabilities
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arising in respect of the transfer of such assets and entities to Triad, as
well as the Triad Form 10 registration statement, subject to limited
exceptions, to Triad; and
. the assets and entities that constitute LifePoint and its subsidiaries,
including liabilities arising in respect of the transfer of such assets and
entities to LifePoint, as well as the LifePoint Form 10 registration
statement, subject to limited exceptions, to LifePoint.
Pursuant to the distribution agreement, Columbia/HCA will indemnify Triad
and LifePoint for any losses which they may incur arising from the pending
governmental investigations of certain of Columbia/HCA's business practices.
Columbia/HCA will also indemnify Triad and LifePoint for any losses which they
may incur arising from stockholder actions and other legal proceedings related
to the governmental investigations which are currently pending against
Columbia/HCA, and from 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 distribution date and relate to the
pending proceedings. Columbia/HCA has also agreed that, in the event that any
hospital owned by Triad or LifePoint 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 or LifePoint, as the
case may be, 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. Each of Triad and LifePoint 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. Columbia/HCA will not indemnify Triad or LifePoint for
losses relating to any acts, practices and omissions engaged in by Triad or
LifePoint after the distribution date, whether or not Triad or LifePoint is
indemnified for similar acts, practices and omissions occurring prior to the
distribution date. See "Risk Factors--Potential Adverse Impact of Columbia/HCA
Investigations and Litigation" and "Government Regulation and Other Factors--
Governmental Investigation of Columbia/HCA and Related Litigation."
Prior to the distribution, Columbia/HCA, through its wholly owned insurance
subsidiary and through third party carriers, maintained insurance for the
businesses of Triad and LifePoint. The distribution agreement provides that
Columbia/HCA also will be solely responsible for:
. claims against Triad or LifePoint covered by an insurance policy maintained
by Columbia/HCA, without regard to deductible amounts, coinsurance amounts
and policy limits, which are based upon facts and circumstances occurring
prior to the distribution date; and
. workers' compensation claims against Triad or LifePoint if the underlying
injury or condition was incurred before the distribution.
Government Programs
Triad and LifePoint are responsible for the Medicare, Medicaid and Blue
Cross cost reports, and associated receivables and payables, for their
facilities, for all periods ending after the distribution date. Columbia/HCA
has agreed to indemnify Triad and Lifepoint with respect to the Medicare,
Medicaid and Blue Cross cost reports, and associated receivables and payables,
for the Triad and LifePoint facilities relating to periods ending on or prior
to the distribution date. Triad and LifePoint are responsible for their own
cost report functions after the distribution date, as well as for any
terminating cost reports required to be filed in respect of the distribution.
Other Matters
Each of Columbia/HCA, Triad and LifePoint generally agrees to provide to
the other parties reasonable access to certain corporate records and
information reasonably requested by another party. Each of Columbia/HCA, Triad
and LifePoint is generally required to maintain the confidentiality of
confidential information it possesses regarding
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another party. The parties will endeavor to resolve any disputes which may
arise through discussion among senior management of the affected parties. If
such discussions do not succeed in resolving a disputed matter, the parties
retain the right to commence a legal action.
The distribution agreement also provides that, generally, the costs and
expenses incurred through the distribution date in connection with the
distribution are properly allocable to, and will be paid by, Columbia/HCA.
Except as set forth in the distribution agreement or any related agreement,
each party bears its own costs and expenses after the distribution.
Tax Sharing and Indemnification Agreement
Columbia/HCA, Triad and LifePoint entered into a tax sharing and
indemnification agreement, which allocates tax liabilities among Columbia/HCA,
Triad and LifePoint and addresses certain other tax matters such as
responsibility for filing tax returns, control of and cooperation in tax
litigation, and qualification of the distribution as a tax-free transaction.
Generally, Columbia/HCA will be responsible for taxes that are allocable to
periods prior to the distribution date, and each of Columbia/HCA, Triad and
LifePoint will be responsible for its own tax liabilities, including its
allocable share of taxes shown on any consolidated, combined or other tax
return filed by Columbia/HCA, for periods after the distribution date.
The tax sharing and indemnification agreement prohibits Triad and LifePoint
from taking actions that could jeopardize the tax treatment of either the
distribution or the internal restructuring that preceded the distribution, and
requires Triad and LifePoint to indemnify each other and Columbia/HCA for any
taxes or other losses that result from any such actions. In connection with
preserving the tax treatment of the distribution and the internal restructuring
that preceded the distribution, Triad and LifePoint agreed to take such actions
as Columbia/HCA may request and Triad and LifePoint each made certain covenants
including covenants that, for a period of three years following the
distribution, they generally will not authorize, undertake or facilitate any of
the following absent the consent of Columbia/HCA:
(1) an issuance of additional stock or other equity instrument, other than
pursuant to the employee benefit plans previously described,
(2) any merger, dissolution, consolidation, redemption, or complete or
partial liquidation,
(3) a transfer or disposition of assets, other than the disposition of
certain assets that have been identified for divestiture, or
(4) a recapitalization or other change in capital structure.
Benefits and Employment Matters Agreement
Columbia/HCA, Triad and LifePoint entered into a benefits and employment
matters agreement, which allocates responsibilities for employee compensation,
benefits, labor, benefit plan administration and certain other employment
matters on and after the distribution date.
General Allocation
Each of Triad and LifePoint assumed responsibility as employer in respect
of its employees from and after the distribution date. Subject to specific
exceptions, Columbia/HCA retains the liabilities in respect of former employees
associated with the facilities and operations of Triad and LifePoint who
terminated employment on or prior to the distribution date. Benefit plans
established by Triad or LifePoint generally will recognize past service with
Columbia/HCA.
Defined Contribution and Welfare Benefit Plans
The benefits and employment matters agreement provides that each of Triad
and LifePoint will adopt a new defined contribution plan for its respective
employees, as well as for the respective former employees associated with the
facilities and operations of Triad and LifePoint. Generally, assets of the
current Columbia/HCA money purchase pension, stock bonus and salary deferral
plans that are attributable to current and former employees of Triad and
LifePoint were transferred, effective immediately prior to the distribution
date, to the new plans, and Triad and LifePoint provide
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benefits under such plans to their current and former employees. Except for
such transferred assets, Columbia/HCA retains sole responsibility for all
liabilities and obligations under the existing Columbia/HCA defined
contribution plans.
Triad and LifePoint adopted welfare benefit plans for their employees that
are substantially identical to the benefit plans of Columbia/HCA. Generally,
Columbia/HCA is responsible for all liabilities and obligations relating to
claims incurred or premiums owed in respect of welfare plans for periods prior
to the distribution date and Triad or LifePoint, as appropriate, assumed such
responsibility for periods thereafter with respect to its current or former
employees.
Columbia/HCA will provide certain administrative and investment services in
respect of the Triad and LifePoint welfare plans. Services will be provided
through the end of 1999 in respect of Triad welfare plans and were provided
through May 31, 1999 in respect of LifePoint welfare plans. Triad and LifePoint
have agreed to indemnify Columbia/HCA and its agents in respect of the services
performed for such plans, so long as Columbia/HCA and its agents shall have
acted in good faith in performing such services.
The Triad ESOP and the LifePoint ESOP
Each of Triad and LifePoint established an ESOP. On June 10, 1999, the
Triad ESOP purchased from Triad, at fair market value, 3.0 million newly issued
shares of Triad common stock, and the LifePoint ESOP purchased from LifePoint,
at fair market value, 2,796,719 newly issued shares of LifePoint common stock.
Each purchase was financed primarily by issuing a promissory note to Triad in
the case of the Triad ESOP or issuing a promissory note to LifePoint in the
case of the LifePoint ESOP.
Each loan will be amortized over a period of not more than 10 years.
Treatment of Columbia/HCA Common Stock Options
Pursuant to the benefits and employment matters agreement, each of Triad
and LifePoint established new stock option plans and adjusted outstanding
Columbia/HCA common stock options to reflect the distribution. The nature of
the adjustment depended on the type of option, as follows:
. Incentive Stock Options: The option spread, whether positive or negative, at
the distribution date with respect to each of the existing Columbia/HCA
options intended to qualify as incentive stock options under Section 422 of
the Code ("ISOs") was preserved by having each such ISO replaced entirely by
an ISO issued by the appropriate post-distribution date employer.
. Vested Nonqualified Stock Options: Except in the case of vested Columbia/HCA
nonqualified stock options to acquire a small number of shares, the option
spread, whether positive or negative, at the distribution date with respect
to each of the existing vested Columbia/HCA nonqualified stock options was
preserved by adjusting the exercise price of such Columbia/HCA options and
having Triad and LifePoint issue additional vested nonqualified stock
options. This rule applied regardless of which post-distribution date
employer employs the optionee. Similar adjustments were made with respect to
vested Columbia/HCA nonqualified stock options held by non-employee
directors. In the case of vested Columbia/HCA nonqualified stock options to
acquire a small number of shares, such Columbia/HCA options were adjusted in
a manner that preserved the pre-distribution value of such Columbia/HCA
options.
. Non-Vested Nonqualified Stock Options: Non-vested nonqualified options to
acquire Triad and LifePoint stock were issued to certain employees of
Columbia/HCA.
See "Management--The 1999 Long-Term Incentive Plan" for a more detailed
description of such plan.
Insurance Allocation and Administration Agreement
Columbia/HCA has maintained various insurance policies for the benefit of
the Pacific Group and the America Group. Substantially all
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losses in periods prior to the distribution are insured through a wholly-owned
insurance subsidiary of Columbia/HCA and excess loss policies maintained by
Columbia/HCA. Columbia/HCA, Triad and LifePoint entered into an insurance
allocation and administration agreement to provide for their continuing rights
and obligations in respect of such insurance after the distribution date and to
define their relationship regarding the insurance on their respective
properties.
The insurance allocation and administration agreement provides that any
claims against insurers outstanding on the distribution date will be for the
benefit of the party who will own the asset which is the basis for the claim,
or, in the case of a liability claim, which is the owner of the facility at
which the activity which is the subject of the claim occurred. Columbia/HCA
will pay to Triad or LifePoint, as the case may be, any portion of such a claim
that is unpaid by an insurer to satisfy deductible, co-insurance or self-
insurance amounts, unless such amounts were paid to or accounted for by the
affected entity prior to the distribution date. Columbia/HCA, Triad and
LifePoint will do all things necessary to ensure that all of the insurance
policies which provide coverage to Triad and LifePoint remain available after
the distribution date to the same extent they were available prior to the
distribution date. Any retroactive rate adjustments for periods ending on or
before the distribution date in respect of such insurance policies will be paid
or received by Columbia/HCA.
Columbia/HCA, Triad and LifePoint will cooperate with each other in the
purchase of insurance coverage for periods after the distribution date,
although each retains the right to obtain separate insurance under certain
circumstances. Triad and LifePoint expect to purchase continuous coverage under
extensions or renewals of existing, or new, policies issued by Health Care
Indemnity, Inc., a subsidiary of Columbia/HCA. They also will endeavor to
obtain coverage for claims incurred but not reported prior to the distribution
date which would have been covered by the insurance policies existing at that
time, if the policies obtained to cover periods after the distribution do not
cover such claims. Columbia/HCA will bear the cost of any such additional
coverage.
Columbia/HCA will defend any claim made against two or more of the parties,
if indemnification for the claim is available to Triad or LifePoint, as the
case may be, under the distribution agreement. If indemnification under the
distribution agreement is not available and there is no other agreement or
indemnification in respect of such claim, the parties to the claim will jointly
defend the claim and will attempt to agree upon an appropriate allocation of
liability, subject to arbitration in the event the parties disagree.
Columbia/HCA, or an affiliate of Columbia/HCA, will continue to administer
all claims under the insurance policies in effect prior to the distribution
date and, for an interim period, will also administer claims under the new
policies that will cover periods after the distribution date.
Computer and Data Processing Services Agreement
Columbia/HCA's wholly owned subsidiary Columbia Information Systems, Inc.
entered into a computer and data processing services agreement with Triad.
Pursuant to this agreement, Columbia Information Systems provides computer
installation, support, training, maintenance, data processing and other related
services to Triad. The initial term of the agreement is seven years, which will
be followed by a wind-down period of up to one year. Columbia Information
Systems charges fees to Triad for services provided under this agreement that
are market competitive based on Columbia Information Systems' costs incurred in
providing such services. In the event the agreement is terminated by Triad, it
will be required to pay a termination fee equal to the first month's billed
fees, multiplied by the remaining number of months in the agreement. Columbia
Information Systems does not warrant that the software and hardware used by
Columbia Information Systems in providing services to Triad will be Year 2000
ready. Columbia Information Systems is currently making efforts in a
professional, timely and workmanlike manner that it deems reasonable to address
Year 2000 issues with respect to the software licensed to Triad under the
computer and data processing services agreement.
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Lease Agreements
Columbia/HCA entered into an agreement with Triad, pursuant to which Triad
sub-leases from Columbia/HCA its principal executive offices at the same price
per square foot as is payable under the existing Columbia/HCA lease. The Triad
sub-lease will terminate on January 31, 2003.
Transitional Services Agreement
Columbia/HCA entered into a transitional services agreement with Triad.
Pursuant to this agreement, Columbia/HCA continues to furnish various
administrative services to Triad. These services include support in various
aspects of payroll processing and tax reporting for employees of Triad, real
estate design and construction management, and legal, human resources,
insurance and accounting matters. The agreement will terminate on December 31,
2000, but may be terminated by Triad as to specific services before
December 31, 2000. Triad pays fees to Columbia/HCA for services provided in
amounts equal to Columbia/HCA's costs incurred in providing such services.
Other Agreements
Columbia/HCA entered into agreements with Triad whereby Columbia/HCA shares
telecommunications services with Triad under Columbia/HCA's agreements with its
telecommunications services provider and whereby Columbia/HCA will make certain
account collection services available to Triad. Triad will also participate,
along with Columbia/HCA, in a group purchasing organization which will make
certain national supply and equipment contracts available to its facilities.
Pursuant to a Year 2000 professional services agreement, Columbia/HCA also will
continue its ongoing program of inspecting medical equipment at Triad's
hospitals to assure Year 2000 compliance. Under such agreement, Triad remains
solely responsible for any lack of Year 2000 compliance. The agreement
terminates June 30, 2000.
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DESCRIPTION OF THE NOTES
You can find definitions of certain terms used in this description under
the subheading "--Certain Definitions." In this description, the word
"Holdings" refers only to Triad Hospitals Holdings, Inc. and not to any of its
subsidiaries.
The notes were issued under an indenture dated as of May 11, 1999, between
Healthtrust and Citibank N.A. as trustee. Triad assumed the obligations of
Healthtrust and Holdings assumed the obligations of Triad with respect to the
notes through a supplemental indenture dated as of May 11, 1999. The following
summary highlights certain material terms of the indenture. Because this is a
summary, it does not contain all of the information that is included in the
indenture. You should read the entire indenture, including the definitions of
certain terms used below, because it, and not this summary, defines your rights
as holders of the notes. The indenture is subject to and governed by the Trust
Indenture Act of 1939, as amended. A copy of the indenture has previously been
filed with the Commission by Triad, and the indenture is incorporated by
reference to the registration statement of which this prospectus forms a part.
Brief Description of the Exchange Notes
These notes:
. are our unsecured senior subordinated obligations;
. are subordinated in right of payment to all existing and future Senior
Indebtedness of our company;
. are identical, in all material respects, to the form and terms of the old
notes, except that the exchange notes have been registered under the
Securities Act;
. mature on May 15, 2009;
. bear interest at the rate of 11% per year from May 11, 1999, or from the
most recent interest payment date to which interest has been paid or
provided for; and
. are unconditionally guaranteed by the guarantors on a senior subordinated
basis.
Principal, Maturity and Interest
The notes will mature on May 15, 2009, and are limited to $325,000,000
aggregate principal amount. Holdings will pay interest semiannually on May 15
and November 15 every year, beginning November 15, 1999, to the Person in whose
name the note or any predecessor note is registered at the close of business on
the May 1 or November 1 next preceding such interest payment date.
Interest on the notes will be computed on the basis of a 360-day year
comprised of twelve 30-day months.
Holdings will pay principal of, premium, if any, and interest on the notes
at the office of Holdings in New York City maintained for such purposes, which
is currently the corporate trust office of the trustee. You may exchange your
notes or register any transfer of notes at that office as well. At the option
of Holdings, interest may be paid by check mailed to the registered address of
the holder of the notes.
The notes will be issued only in registered form without coupons, in
denominations of $1,000 and integral multiples of $1,000. No service charge
will be made for any registration of transfer or exchange or redemption of
notes, but Holdings may require payment of an amount sufficient to cover any
tax or other governmental charge that may be imposed in connection therewith.
Optional Redemption
Holdings may, at its option, redeem all or any portion of the notes at the
following redemption prices, expressed as percentages of their principal
amounts, at any time on or after May 15, 2004, if redeemed during the twelve-
month period beginning on May 15 of the year set forth below, plus, in each
case, any accrued and unpaid interest:
<TABLE>
<CAPTION>
Redemption
Year Price
---- ----------
<S> <C>
2004................ 105.500%
2005................ 103.667%
2006................ 101.883%
2007 and
thereafter......... 100.000%
</TABLE>
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Optional Redemption upon Qualified Equity Offerings. At any time and from
time to time prior to May 15, 2002, Holdings may use the net proceeds of one or
more Qualified Equity Offerings to redeem up to 35% of the aggregate principal
amount of the notes originally issued at a redemption price equal to 111% of
the principal amount thereof, plus accrued interest, if any, to the date of
redemption; provided:
(1)at least 65% of the aggregate principal amount of the notes originally
issued plus 65% of the aggregate principal amount of any notes issued pursuant
to a supplemental indenture remains outstanding after the redemption; and
(2)the redemption occurs within 60 days of the closing of the Qualified
Equity Offering.
Selection and Notice of Redemption
If less than all the notes are to be redeemed at any time, the trustee will
select the particular notes to be redeemed not more than 60 days prior to the
redemption date by such method as the trustee will deem fair and appropriate.
No notes of a principal amount of $1,000 or less shall be redeemed in part.
Notice of redemption will be mailed by first-class mail, at least 30 but not
more than 60 days before the redemption date, to each holder of notes to be
redeemed at its registered address. On and after the redemption date, interest
will cease to accrue on notes or portions of notes called for redemption.
Sinking Fund
The notes will not be entitled to the benefit of any sinking fund.
Note Guarantees
The guarantors jointly and severally guarantee Holdings' obligations under
the notes on an unsecured senior subordinated basis. Each guarantee will be
subordinated to the prior payment in full of all Guarantor Senior Indebtedness
of that guarantor. The obligations of each guarantor under its guarantee will
be limited as necessary to prevent that guarantee from constituting a
fraudulent conveyance or fraudulent transfer under applicable law.
Each guarantor that makes a payment or distribution of more than its
proportionate share under a guarantee shall be entitled to a contribution from
each other such guarantor which has not paid its proportionate share of such
payment or distribution.
Under certain circumstances, Holdings will be able to designate current or
future subsidiaries as Unrestricted Subsidiaries. Unrestricted Subsidiaries
will not be subject to the restrictive covenants set forth in the indenture.
The indenture provides that so long as no Default exists or would exist,
the note guarantee issued by any note guarantor and any Liens securing such
guarantee shall be automatically and unconditionally released and discharged
upon
(a) any sale, exchange or transfer to any Person that is not an Affiliate
of Holdings of all of Holdings' Capital Stock in, or all or substantially all
of the assets of, such guarantor, which transaction is otherwise in compliance
with the indenture or
(b) the designation of such Restricted Subsidiary as an Unrestricted
Subsidiary in accordance with the terms of the indenture.
Ranking
The payment of principal of, premium, if any, Additional Interest, if any,
and interest on the notes will be subordinated to the prior payment in full of
all Senior Indebtedness of Holdings.
The holders of Senior Indebtedness will be entitled to receive payment in
full in cash or cash equivalents of all Senior Indebtedness,
before the holders of notes will be entitled to receive any payment with
respect to the notes, in the event of any distribution to creditors of
Holdings:
(1) in an insolvency, bankruptcy receivership, liquidation, reorganization
or similar proceeding relating to Holdings or to its assets,
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(2) in a liquidation, dissolution or other winding-up of Holdings, whether
voluntary or involuntary,
(3) in an assignment for the benefit of creditors or other marshaling of
assets or liabilities of Holdings, except in connection with the consolidation
or merger of Holdings or its liquidation or dissolution following the
conveyance, transfer or lease of its properties and assets substantially as an
entirety upon the terms and conditions described under "Consolidation, Merger
and Sale of Assets" below.
The above provision will not apply to any payment or distribution in the
form of equity securities or subordinated securities of Holdings or any
successor obligor that, in the case of any such subordinated securities, are
subordinated in right of payment to all Senior Indebtedness that may at the
time be outstanding to at least the same extent as the notes are so
subordinated (such equity securities or subordinated securities hereinafter
being "Permitted Junior Securities") and any payments made pursuant to the
provisions described under "--Certain Covenants--Defeasance or Covenant
Defeasance of Indenture" from monies or U.S. Government Obligations previously
deposited with the trustee.
Because the notes are subordinate to the Senior Indebtedness, any such
payment or distribution of the assets of the Holdings, other than a payment in
the form of Permitted Junior Securities and payments made pursuant to the
provisions described under "--Certain Covenants--Defeasance or Covenant
Defeasance of Indenture" from monies or U.S. Government Obligations previously
deposited with the trustee, will first be paid to the holders of Senior
Indebtedness payment or distribution, directly to the holders ratably according
to the amounts of Senior Indebtedness remaining unpaid to the extent necessary
to make payment in full of all Senior Indebtedness, after giving effect to any
concurrent payment or distribution to the holders of such Senior Indebtedness.
Other than Permitted Junior Securities and payments made pursuant to the
provisions described under "--Certain Covenants-- Defeasance or Covenant
Defeasance of Indenture" from monies or U.S. Government Obligations previously
deposited with the trustee, Holdings also may not make any payment with respect
to the notes:
(1) if a payment default on Designated Senior Indebtedness occurs, until
such payment default shall have been cured or waived in writing or shall have
ceased to exist or such Designated Senior Indebtedness shall have been
discharged or paid in full; or
(2) for the period specified below (a "Payment Blockage Period") upon
(a) the occurrence of any default or event of default with respect to any
Designated Senior Indebtedness, other than any payment default, pursuant to
which the maturity thereof may be accelerated (a "Non-Payment Default"), and
(b) receipt by the trustee of written notice of the occurrence of such
default or event of default from the trustee or other representative of holders
of Designated Senior Indebtedness.
The Payment Blockage Period will commence upon the date of receipt by the
trustee of written notice from the trustee or such other representative of the
holders of the Designated Senior Indebtedness in respect of which the Non-
Payment Default exists and shall end on the earliest of:
(1) 179 days thereafter, provided that any Designated Senior Indebtedness
as to which notice was given shall not theretofore have been accelerated;
(2) the date on which such Non-Payment Default is cured, waived or ceases
to exist;
(3) the date on which such Designated Senior Indebtedness is discharged
or paid in full in cash or cash equivalents; or
(4) the date on which such Payment Blockage Period shall have been
terminated by written notice to the trustee or Holdings from the trustee or
such other representative initiating such Payment
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Blockage Period, after which Holdings will resume making any and all
required payments in respect of the notes, including any missed payments,
unless the holders of the Designated Senior Indebtedness or their
representatives have accelerated the maturity of such Designated Senior
Indebtedness. In any event, not more than one Payment Blockage Period may
be commenced during any period of 360 consecutive days. No event of default
that existed or was continuing on the date of the commencement of any
Payment Blockage Period will be, or can be made, the basis for the
commencement of a subsequent Payment Blockage Period, unless such default
has been cured or waived for a period of not less than 90 consecutive days
after the commencement of the initial Payment Blockage Period.
In the event that any payment shall be made to the trustee which is not
paid over to the holders of the notes and which is prohibited by the provisions
of the three preceding paragraphs, then such payment will be paid over and
delivered by the trustee to the representative of holders of Designated Senior
Indebtedness for application thereto. After all Senior Indebtedness is paid in
full and until the notes are paid in full, holders of the notes shall be
subrogated, equally and ratably with all other Indebtedness that is pari passu
in right of payment with the notes, to the rights of holders of Senior
Indebtedness to receive distributions applicable to Senior Indebtedness.
Failure by Holdings to make any required payment in respect of the notes
when due or within any applicable grace period, whether or not occurring during
a Payment Blockage Period, will result in an Event of Default and, thereafter,
holders of the notes will have the right to accelerate the maturity of the
notes. See "--Events of Default."
By reason of the subordination provisions described above, in the event of
liquidation, receivership, reorganization or insolvency of Holdings, creditors
of Holdings who are holders of Senior Indebtedness may recover more, ratably,
than the holders of the notes, and assets which would otherwise be available to
pay obligations in respect of the notes will be available only after all Senior
Indebtedness has been paid in full, and consequently, there may not be
sufficient assets remaining to pay amounts due on any or all of the notes.
Moreover, the notes will be structurally subordinated to the liabilities of
subsidiaries of Holdings which are not guarantors.
At June 30, 1999, on a pro forma basis, after giving effect to the
elimination of facilities divested or to be divested:
(a) outstanding Senior Indebtedness of Holdings was $335.0 million;
(b) Holdings would have had no Senior Subordinated Indebtedness other
than the notes; and
(c) Restricted Subsidiaries would have had approximately $383.1 million
of indebtedness and other obligations, including trade payables and lease
obligations and excluding the guarantees of the notes.
Each guarantee will be an unsecured senior subordinated obligation of the
respective guarantor issuing such guarantee, ranking pari passu in right of
payment with all other existing and future Senior Subordinated Indebtedness of
such guarantor, if any. The Indebtedness evidenced by each such guarantee will
be subordinated on the same basis to the Guarantor Senior Indebtedness as the
notes are subordinated to Senior Indebtedness. Notwithstanding anything else
contained herein, neither the trustee nor the holders of the notes may receive
or accept payments under the guarantees at a time when they are not entitled to
receive payment under the notes pursuant to the provisions under this caption
"Ranking."
At June 30, 1999, on a pro forma basis, after giving effect to the
elimination of facilities divested or to be divested:
(a) outstanding Guarantor Senior Indebtedness would have been
approximately $335.0 million; and
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(b) the Guarantors would have had no Guarantor Senior Subordinated
Indebtedness other than the Note Guarantees.
Although the indenture limits the amount of Indebtedness that Holdings and
its Restricted Subsidiaries may incur, such Indebtedness may be substantial and
all of it may be Senior Indebtedness or Guarantor Senior Indebtedness, as the
case may be.
Certain Covenants
Limitation on Indebtedness. Other than Permitted Indebtedness, Holdings will
not, and will not permit any of its Restricted Subsidiaries to, create, issue,
assume, guarantee or in any manner become directly or indirectly liable for the
payment of, or otherwise incur (collectively, "incur"), any Indebtedness,
including any Acquired Indebtedness. However, if no Default or Event of Default
has occurred and is continuing, Holdings or any guarantor may incur
Indebtedness, including Acquired Indebtedness, if at the time of the incurrence
of such Indebtedness, the Consolidated Fixed Charge Coverage Ratio of Holdings
would have been at least 2.25 to 1 for the four full fiscal quarters
immediately preceding the incurrence of such Indebtedness, taken as one period,
after giving pro forma effect to
(1) the incurrence of such Indebtedness and, if applicable, the application
of the net proceeds from the Indebtedness, including to refinance other
Indebtedness, as if such Indebtedness was incurred, and the application of such
proceeds occurred, on the first day of such four-quarter period,
(2) the incurrence, repayment or retirement of any other Indebtedness by
Holdings and its Restricted Subsidiaries since the first day of such four-
quarter period as if such Indebtedness was incurred, repaid or retired on the
first day of such four-quarter period, except that, in making such computation,
the amount of Indebtedness under any revolving credit facility shall be
computed based upon the average daily balance of such Indebtedness during such
four-quarter period, and
(3) the acquisition, whether by purchase, merger or otherwise, or
disposition, whether by sale, merger or otherwise, of any company, entity or
business, including, without limitation, a Hospital, acquired or disposed of by
Holdings or its Restricted Subsidiaries, as the case may be, since the first
day of such four-quarter period, as if such acquisition or disposition occurred
on the first day of such four-quarter period.
For purposes of determining compliance with this covenant, in the event
that an item of proposed Indebtedness meets the criteria of more than one of
the categories described in clauses (a) through (n) of the definition of
Permitted Indebtedness as of the date of incurrence thereof or is entitled to
be incurred pursuant to the first paragraph of this covenant as of the date of
incurrence thereof, Holdings may, in its sole discretion, classify or
reclassify such item of Indebtedness in any manner that complies with this
covenant.
For purposes of this covenant,
(1) accrual of interest, the accretion of accreted value and the payment of
interest in the form of additional Indebtedness will not be deemed to be an
incurrence of Indebtedness, and
(2) the payment of dividends on Redeemable Capital Stock in the form of
additional shares of the same class of Redeemable Capital Stock will not be
deemed an issuance of Redeemable Capital Stock.
Limitation on Restricted Payments.
(a) Holdings will not, and will not permit any Restricted Subsidiary to,
directly or indirectly, take any of the following actions:
(1) declare or pay any dividend on, or make any distribution to direct or
indirect holders of, any shares of the Capital Stock of Holdings, other
than dividends or distributions payable solely in shares of Qualified
Capital Stock of Holdings or options, warrants or other rights to acquire
such shares of Qualified Capital Stock;
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(2) purchase, redeem or otherwise acquire or retire for value any shares
of Capital Stock of Holdings or any Affiliate of Holdings,or any options,
warrants or other rights to acquire such shares of Capital Stock other than
any Capital Stock owned by Holdings or any wholly owned Restricted
Subsidiary or any direct or indirect parent of Holdings.
(3) declare or pay any dividend, or make any distribution to holders of,
any shares of Capital Stock of any Restricted Subsidiary, other than to
Holdings or any of its wholly owned Restricted Subsidiaries or to all
holders of Capital Stock of such Restricted Subsidiary on a pro rata basis;
(4) make any principal payment on, or repurchase, redeem, defease or
otherwise acquire or retire for value, prior to any scheduled principal
payment, sinking fund payment or maturity, any Indebtedness of Holdings or
any guarantor or any guarantee of the notes that is subordinate in right of
payment to the notes; or
(5) make any Investment, other than any Permitted Investment, in any
person.
All such payments and other actions described in clauses (1) through (5)
are collectively referred to as "Restricted Payments",
However, Holdings or a Restricted Subsidiary may make a Restricted Payment
if, at the time of and immediately after giving effect to, such Restricted
Payment:
(A) no Default or Event of Default shall have occurred and be continuing;
(B) Holdings would, after giving pro forma effect to such Restricted
Payment as if it had been made at the beginning of the applicable four-quarter
period, have been permitted to incur at least $1.00 of additional Indebtedness,
other than Permitted Indebtedness, pursuant to the "Limitation on Indebtedness"
covenant; and
(C) the aggregate amount of all Restricted Payments, including proposed
Restricted Payments, made after the date of the indenture, shall not exceed the
sum of:
(1) 50% of the cumulative Consolidated Adjusted Net Income, or if
such cumulative Consolidated Adjusted Net Income shall be a loss, minus
100% of such loss, of Holdings accrued during the period beginning on
the first day of Holdings' first fiscal quarter after the date of the
Indenture and ending on the last day of Holdings' last fiscal quarter
ending prior to the date of such proposed Restricted Payment; plus
(2) 100% of the aggregate net cash proceeds received after the date
of the Indenture by Holdings from the issuance or sale, other than to
any Restricted Subsidiary, of shares of Qualified Capital Stock of
Holdings, including upon the exercise of options, warrants or rights,
or warrants, options or rights to purchase shares of Qualified Capital
Stock of Holdings; plus
(3) the aggregate net cash proceeds received after the date of the
Indenture by Holdings from the issuance or sale, other than to any
Restricted Subsidiary, of debt securities or Redeemable Capital Stock
that have been converted into or exchanged for Qualified Capital Stock
of Holdings, to the extent such securities were originally sold for
cash, together with the aggregate net cash proceeds received by
Holdings at the time of such conversion or exchange; plus
(4) without duplication of any amounts included in clause (C)(1)
above, to the extent that any Investment constituting a Restricted
Payment that was made after the date of the Indenture is sold or is
otherwise liquidated or repaid, an amount equal to the lesser of
(x) the cash proceeds with respect to such Investment, less the
cost of the disposition of such Investment and net of taxes, and
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(y) the initial amount of such Investment; plus
(5) without duplication, an amount equal to the sum of
(x) the net reduction in Investments in Unrestricted Subsidiaries
resulting from cash dividends, repayments of loans or advances or other
transfers of assets, in each case to Holdings or any Restricted
Subsidiary from Unrestricted Subsidiaries, plus
(y) the portion, proportionate to Holdings' equity interest in such
subsidiary, of the fair market value of the net assets of an
Unrestricted Subsidiary at the time such Unrestricted Subsidiary is
designated a Restricted Subsidiary, in each case since January 1, 1999;
provided, however, that the sum of clauses (5)(x) and (5)(y) above
shall not exceed, in the case of any Unrestricted Subsidiary, the
amount of Investments previously made by Holdings or any Restricted
Subsidiary in such Unrestricted Subsidiary; plus
(6) other Restricted Payments in an aggregate amount not to exceed
$10.0 million.
(b) So long as, with respect to clauses (2), (3), (4), (5), (6) and (12)
below, no Default or Event of Default has occurred and is continuing or would
be caused thereby, the preceding provision will not prohibit:
(1) the payment of any dividend within 60 days after the date of
declaration thereof, if at such date of declaration such payment would have
complied with the provisions of paragraph (a) above;
(2) the acquisition of any shares of Capital Stock of Holdings either
(x) in exchange for, shares of Qualified Capital Stock of Holdings,
or;
(y) out of the net cash proceeds of a substantially concurrent
issuance and sale, other than to a Restricted Subsidiary, of shares of
Qualified Capital Stock of Holdings;
(3) the acquisition of any Indebtedness that is subordinate to the notes
either
(x) in exchange for shares of Qualified Capital Stock Holdings or
(y) out of the net cash proceeds of a substantially concurrent
issuance and sale, other than to a Restricted Subsidiary, of, shares of
Qualified Capital Stock of Holdings;
(4) the purchase of any Indebtedness that is subordinate to the notes at
a purchase price no greater than 101% of the principal amount thereof in
the event of a Change in Control in accordance with provisions similar to
the "Purchase of Notes upon a Change in Control" covenant; provided that
prior to such purchase Holdings has made the Change in Control Offer as
provided in such covenant and has purchased all notes validly tendered for
payment in connection with such Change in Control Offer;
(5) the purchase of any Indebtedness that is subordinate to the notes
from Net Cash Proceeds to the extent permitted by the "Limitation on Sale
of Assets" covenant; provided, however, that such purchase will be excluded
in subsequent calculations in the amount of Restricted Payments;
(6) the acquisition or retirement for value of any Indebtedness that is
subordinate to the notes, other than Redeemable Capital Stock, in exchange
for, or out of the Net Cash Proceeds of a substantially concurrent
incurrence, other than to a Restricted Subsidiary, of, new Indebtedness
that is subordinate to the notes so long as
(x) the principal amount of such new subordinated Indebtedness does not
exceed the principal amount, or, if such subordinated Indebtedness being
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refinanced provides for an amount less than the principal amount thereof to
be due and payable upon a declaration of acceleration thereof, such lesser
amount as of the date of determination, of
(A) the Indebtedness being so purchased, redeemed, defeased, acquired
or retired, plus
(B) the lesser of the amount of any premium required to be paid in
connection with such refinancing pursuant to the terms of the
Indebtedness as refinanced or the amount of any premium reasonably
determined as necessary to accomplish such refinancing, plus,
(C) in either case, the amount of reasonable expenses of Holdings
incurred in connection with such refinancing, and
(y) such new Subordinated Indebtedness is pari passu with or
subordinated to, as applicable, the notes to the same extent as such
Indebtedness so purchased, redeemed, defeased, acquired or retired and
(z) such new Indebtedness has an Average Life longer than the Average
Life of the notes and a final stated maturity date of principal later than
the final stated maturity date of principal of the notes;
(7) payments to Triad to pay its operating and administrative expenses
incurred in the ordinary course of business, including, payroll expenses,
directors' fees, legal and audit expenses, Commission compliance expenses
and corporate franchise and other taxes, in an amount not to exceed $3.0
million in any fiscal year; provided that any such payments shall be
treated as expense items in the consolidated financial statements of
Holdings;
(8) payments to Triad to pay expenses incurred under the corporate
integrity program referenced in the distribution agreement;
(9) payments to Triad to pay expenses incurred under the Transition
Agreements;
(10) repurchases by Holdings of Capital Stock of Triad pursuant to any
stockholder's agreement, management equity subscription plan or agreement,
stock option plan or agreement or employee benefit plan of Triad or
Holdings, in an aggregate amount not to exceed $2.0 million in any fiscal
year, with any unused amounts in any fiscal year being carried over to the
next fiscal year;
(11) payments to Triad pursuant to the tax sharing agreement between
Triad, Holdings and its subsidiaries, to the extent required for Triad to
pay any Federal, state or local income taxes, but only to the extent that
such income taxes are attributable to the income of Holdings and its
subsidiaries; and
(12) the redemption, repurchase, acquisition or retirement of equity
interests in any Restricted Subsidiary or any Permitted Joint Venture of
Holdings or a Restricted Subsidiary; provided that if Holdings or any
Restricted Subsidiary incurs Indebtedness in connection with such
redemption, repurchase, acquisition or retirement, after giving effect to
such incurrence and such redemption, repurchase, acquisition or retirement,
Holdings would have been permitted to incur $1.00 of additional
Indebtedness pursuant to the first paragraph of "--Limitation on
Indebtedness" above.
The actions described in clauses (1), (2), (3), (10), to the extent not
related to the ESOP, and (12) above shall be Restricted Payments that shall be
permitted to be taken in accordance with this paragraph (b) but shall reduce
the amount that would otherwise be available for Restricted Payments under
clause (3) of paragraph (a) above. The actions described in all other clauses
of this paragraph (b), including without limitation clause (10) to the extent
related to the ESOP, shall be Restricted Payments that shall be permitted to be
taken in accordance with this paragraph (b), but shall not reduce the amount
that would
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otherwise be available for Restricted Payments under clause (3) of paragraph
(a).
The amount of all Restricted Payments other than cash shall be the fair
market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued by Holdings or such Restricted
Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair
market value of any non-cash Restricted Payment shall be determined in good
faith by the board of directors of Holdings or such Restricted Subsidiary, as
apllicable, whose determination with respect thereto shall be conclusive. If
Holdings or a Restricted Subsidiary makes a Restricted Payment which, at the
time of the making of such Restricted Payment would in the good faith
determination of Holdings be permitted under the provisions of the indenture,
such Restricted Payment shall be deemed to have been made in compliance with
the indenture notwithstanding any subsequent adjustments made in good faith to
Holdings' financial statements affecting Consolidated Adjusted Net Income of
Holdings for any period.
Limitation on Issuances and Sales of Capital Stock of Restricted
Subsidiaries.
Holdings will not permit
(1) any Restricted Subsidiary to issue any Capital Stock, other than to
Holdings or a wholly owned Restricted Subsidiary, and
(2) any Person, other than Holdings or a wholly owned Restricted Subsidiary,
to own any Capital Stock of any Restricted Subsidiary;
provided, however, that this covenant shall not prohibit
(a) the issuance or any sale, transfer, lease, conveyance, or other
disposition of all, but not less than all, of the issued and outstanding
Capital Stock of any Restricted Subsidiary owned by Holdings or any of its
Restricted Subsidiaries in compliance with the other provisions of the
Indenture, so long as the Net Cash Proceeds, if any, from such sale, transfer,
lease, conveyance or other disposition is applied in accordance with the
"Limitation on Sale of Assets" covenant,
(b) the ownership by other Persons of Qualified Capital Stock issued prior
to the time such Restricted Subsidiary became a subsidiary of Holdings that was
neither issued in contemplation of such subsidiary becoming a subsidiary nor
acquired at that time,
(c) the ownership by directors of director qualifying shares or the
ownership by foreign nationals of Capital Stock of any Restricted Subsidiary,
to the extent mandated by applicable law,
(d) arrangements existing on original the issuance date of the notes,
(e) any issuance, sale or other disposition of Capital Stock, other than
preferred stock, of a Restricted Subsidiary if, immediately after giving effect
thereto, such Restricted Subsidiary would remain a Restricted Subsidiary, or
(f) any issuance, sale or other disposition of Capital Stock of a
Restricted Subsidiary if, immediately after giving effect thereto, such Person
would no longer constitute a Restricted Subsidiary and any Investment in such
Person remaining after giving effect thereto would have been permitted to be
made, and shall be deemed to have been made, under the "Limitation on
Restricted Payments" covenant on the date of such issuance, sale or other
disposition.
Limitation on Transactions with Affiliates. Holdings will not, and will not
permit any Restricted Subsidiary to, directly or indirectly, enter into, amend
or permit to exist any agreement, loan advance, guarantee or other transaction
or series of related transactions, including, without limitation, the sale,
purchase, exchange or lease of assets, property or services, with, or for the
benefit of, any Affiliate of Holdings or any Restricted Subsidiary, other than
Holdings or a Restricted Subsidiary, unless:
(1) such transaction or series of transactions are on terms that are no
less favorable to Holdings or such Restricted Subsidiary, as the case may be,
than would have been able to be obtained at such time in a comparable
transaction on an arm's-length basis with an unrelated third-party,
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(2) with respect to any transaction or series of related transactions
involving aggregate consideration equal to or greater than $2,000,000, Holdings
has delivered to the trustee an officers' certificate certifying that such
transaction or series of transactions complies with clause (1) above and such
transaction or series of related transactions shall have been approved by the
board of directors of Holdings, including a majority of the disinterested
directors of Holdings, and
(3) with respect to any transaction or series of related transactions
involving aggregate consideration equal to or greater than $10,000,000,
Holdings has obtained a written opinion as to the fairness to Holdings or such
Restricted Subsidiary of such transaction or series of related transactions,
from a financial point of view.
The restrictions set forth in the above paragraph shall not apply to:
(a) reasonable and customary directors' fees, indemnification and similar
arrangements, consulting fees, employee salaries, bonuses or employment
agreements, compensation or employee benefit arrangements and incentive
arrangements with any officer, director or employee of Holdings or a Restricted
Subsidiary entered into in the ordinary course of business,
(b) any transactions made in compliance with the "Limitation on Restricted
Payments" covenant,
(c) loans and advances to officers, directors and employees of Holdings or
any Restricted Subsidiary in the ordinary course of business in accordance with
the past practices of Holdings or any Restricted Subsidiary not exceeding $15.0
million in the aggregate outstanding at any time,
(d) the Spin-Off Transactions, and
(e) any transactions made in accordance with and pursuant to the Transition
Agreements.
Limitation on Liens. (1) Holdings will not, and will not permit any
Restricted Subsidiary to, directly or indirectly, create or permit to exist any
Lien securing Indebtedness of Holdings that ranks pari passu in right of
payment with the notes or Indebtedness of Holdings that is subordinate to the
notes upon or against any of its property or assets including any shares of
stock or Indebtedness of any Restricted Subsidiary or any proceeds therefrom,
or assign or otherwise convey any right to receive income thereon, unless:
(a) in the case of any Lien securing Indebtedness of Holdings that ranks on
pari passu in right of payment with the notes, the notes are secured by a Lien
on such property, assets or proceeds that is senior in priority to or pari
passu with such Lien and
(b) in the case of any Lien securing Indebtedness of Holdings that is
subordinate to the notes, the notes are secured by a Lien on such property,
assets or proceeds that is senior in priority to such Lien.
Provided, however, that the preceding restrictions will not apply to
Permitted Liens.
(2) Holdings will not permit any guarantor to, directly or indirectly,
create, or permit to exist any Lien securing Indebtedness of such guarantor
that ranks pari passu in right of payment with the notes guarantee or
Indebtedness of such guarantor that is subordinate to the notes guarantee or
with respect to such Restricted Subsidiary's properties or assets, including
any shares of stock or Indebtedness of any subsidiary or such guarantor, or any
proceeds therefrom, or assign or otherwise convey any right to receive income
thereon, unless:
(a) in the case of any Lien securing Indebtedness of the guarantor that
ranks pari passu in right of payment to the notes guarantee, the note guarantee
of such guarantor is secured by a Lien or such property, assets or proceeds
that is senior in priority to or pari passu with such Lien and
(b) in the case of any Lien securing Indebtedness of such guarantor, the
note guarantee of such guarantor is secured by a Lien on such property, assets
or proceeds that is senior in priority to such Lien.
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Purchase of Notes upon a Change in Control. If a Change in Control occurs,
each holder of notes will have the right to require Holdings to repurchase all
or any part of that holder's notes pursuant to the offer described below (the
"Change in Control Offer"), at a purchase price in cash equal to 101% of the
aggregate principal amount of notes purchased, plus accrued and unpaid interest
thereon, if any, to the date of purchase.
Within 30 days following any Change in Control, Holdings will notify the
trustee thereof and give written notice of the Change in Control to each holder
of notes by first-class mail, describing the transaction or transactions that
constitute the Change in Control and stating, among other things,
(1) the Change in Control purchase price and the purchase date, which must
be a business day no earlier than 30 days nor more than 60 days from the date
such notice is mailed, other than as may be required by law;
(2) that any note not tendered will continue to accrue interest;
(3) that, unless Holdings defaults in the payment of the Change in Control
purchase price, any notes accepted for payment pursuant to the Change in
Control Offer shall cease to accrue interest after the Change in Control
purchase date; and
(4) the procedures that a holder of notes must follow to accept a Change in
Control Offer or to withdraw such acceptance.
On the Change in Control purchase date, Holdings will, to the extent
lawful,
(1) accept for payment all notes or portions of notes properly tendered
pursuant to the Change in Control Offer,
(2) deposit with the paying agent an amount equal to the Change in Control
purchase price in respect of all notes or portions of notes so tendered and
(3) deliver or cause to be delivered to the trustee the notes so accepted
together with an officers' certificate stating the aggregate principal amount
of notes or portions of notes being purchased by Holdings.
The paying agent will promptly mail to each holder of notes so tendered the
Change in Control purchase price for such notes, and the trustee will promptly
authenticate and mail, or cause to be transferred by book entry, to each holder
a new note equal in principal amount in a principal amount of $1,000 or an
integral multiple thereof.
Within 90 days following any Change in Control, but prior to the repurchase
of notes as provided above, Holdings will either repay all outstanding Senior
Indebtedness or obtain the requisite consents, if any, under all agreements
governing Senior Indebtedness to permit the repurchase of notes as provided
above.
Holdings will publicly announce the results of the Change in Control Offer
on or as soon as practicable after the Change of Control purchase date.
Holdings shall not be required to make a Change in Control Offer upon a Change
in Control if a third party makes the Change in Control Offer in compliance
with the Change in Control Offer requirements and purchases all notes validly
tendered under such Change in Control Offer.
The Change in Control provisions described above will be applicable whether
or not any other provisions of the indenture are applicable. Except as
described above with respect to a Change in Control, the indenture does not
contain provisions that permit the holders of the notes to require Holdings to
repurchase or redeem the notes in the event of a takeover, recapitalization or
similar transaction.
The senior credit agreement prohibits, and other future agreements relating
to Senior Indebtedness to which Holdings becomes a party may prohibit, Holdings
from purchasing any notes following a Change in Control and provide that
certain Change in Control events with respect to Holdings would constitute a
default under such agreements. If a Change in Control occurs at a time when
Holdings is prohibited from purchasing notes, Holdings could seek the consent
of its lenders to the
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purchase of notes or could attempt to refinance the borrowings that contain
such prohibition. If Holdings does not obtain such a consent or repay such
borrowings, Holdings will remain prohibited from purchasing notes. Holdings'
failure to purchase tendered notes following a Change in Control would
constitute an Event of Default under the indenture which, in turn, constitutes
a default under the senior credit agreement. In such circumstance, the
subordination provisions in the indenture would likely restrict payments to the
holders of notes. See "--Ranking."
One of the events which constitutes a Change in Control under the indenture
is the disposition of "all or substantially all" of Holdings' assets. With
respect to the disposition of property or assets, the phrase "all or
substantially all" as used in the indenture varies according to the facts and
circumstances of the subject transaction, has no clearly established meaning
under relevant law and is subject to judicial interpretation. Accordingly, in
certain circumstances, there may be a degree of uncertainty in ascertaining
whether a particular transaction would involve a disposition of "all or
substantially all" of the property or assets of an entity, and therefore it may
be unclear whether a Change in Control has occurred and whether Holdings is
required to make a Change in Control Offer.
The existence of a holder's right to require Holdings to purchase such
holder's notes upon a Change in Control may deter a third party from acquiring
Holdings in a transaction that constitutes a Change in Control.
Holdings will comply with the applicable tender offer rules, including Rule
14e-1 under the Exchange Act, and any other applicable securities laws and
resolutions in connection with a Change in Control Offer.
Limitation on Sale of Assets. (a) Holdings will not, and will not permit any
of its Restricted Subsidiaries to, engage in any Asset Sale unless
(1) Holdings or the Restricted Subsidiary, as the case may be, receives
consideration at the time of such Asset Sale at least equal to the fair market
value of the assets sold and
(2), at least 75% of such consideration is in the form of cash or Cash
Equivalents or Replacement Assets.
For purposes of this provision each of the following shall be deemed to be
cash:
(A) Indebtedness, other than Subordinated Indebtedness, of Holdings or a
Restricted Subsidiary that is assumed by the transferee in such Asset Sale and
from which Holdings and the Restricted Subsidiaries are fully released; and
(B) notes, securities or other similar obligations received by Holdings or
any Restricted Subsidiary from such transferee that are converted into cash
within 30 days of the related Asset Sale by Holdings or the Restricted
Subsidiaries to the extent of the cash received in the conversion.
Notwithstanding the foregoing, the 75% limitation referred to in clause (2)
will not apply to any Asset Sale in which the cash or Cash Equivalents portion
of the consideration received is equal to or greater than what the after-tax
proceeds would have been had such Asset Sale complied with the 75% limitation.
(b) Within 12 months after the receipt of any Net Cash Proceeds from an
Asset Sale, Holdings may use such Net Cash Proceeds to:
(1) prepay any then outstanding Senior Indebtedness of Holdings or any
Restricted Subsidiary or
(2) invest, or enter into a legally binding agreement to invest, in
(A) other properties or assets to replace the properties or assets that
were the subject of the Asset Sale or
(B) in properties and assets that will be used in businesses of Holdings
or its Restricted Subsidiaries, as the case may be, existing at the time such
assets are sold, or
(C) in any Related Business or in Capital Stock of a Person, the
principal portion of whose assets consist of such property or
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assets, provided that Holdings or such Restricted Subsidiary shall acquire at
least the same percentage of equity and voting interest in such Person as
Holdings or such Restricted Subsidiary held with respect to the assets disposed
of in such Asset Sale.
The assets referred to in clauses (A), (B) and (C) constitute "Replacement
Assets."
Pending the final application of any such Net Cash Proceeds, Holdings may
temporarily reduce Senior Indebtedness or otherwise invest such Net Cash
Proceeds in any manner that is not prohibited by the indenture. If any such
legally binding agreement to invest such Net Cash Proceeds is terminated, then
Holdings may, within 90 days of such termination or within 12 months of such
Asset Sale, whichever is later, invest such Net Cash Proceeds as provided in
clause (1) or (2). The amount of Net Cash Proceeds not used as set forth above
in this paragraph (b) constitutes "Excess Proceeds."
(c) When the aggregate amount of Excess Proceeds exceeds $10.0 million,
Holdings shall, within 30 business days, make an offer to purchase (an "Excess
Proceeds Offer") from all holders of notes, on a pro rata basis, the maximum
principal amount of notes that may be purchased with the Excess Proceeds. The
offer price as to each note shall be payable in cash in an amount equal to 100%
of the principal amount of such note plus accrued and unpaid interest thereon,
if any, to the date of purchase. To the extent that the aggregate principal
amount of notes tendered pursuant to an Excess Proceeds Offer is less than the
Excess Proceeds, Holdings may use such deficiency for any lawful purpose not
prohibited by the indenture. If the aggregate principal amount of notes
tendered by holders of notes exceeds the Excess Proceeds, notes to be purchased
will be selected on a pro rata basis.
Notwithstanding the foregoing, if Holdings is required to commence an
Excess Proceeds Offer at any time when the terms of any outstanding securities
of Holdings ranking pari passu in right of payment with the notes provide that
a similar offer must be made with respect to such other securities, then:
(1) the Excess Proceeds Offer for the notes shall be made concurrently with
such other offers, and
(2) securities of each issue will be accepted on a pro rata basis in
proportion to the aggregate principal amount of securities of each issue which
the holders thereof elect to have purchased.
Any Excess Proceeds Offer will be made only to the extent permitted under,
and subject to prior compliance with, the terms of agreements governing Senior
Indebtedness. Upon completion of an Excess Proceeds Offer, the amount of Excess
Proceeds shall be reset to zero.
Limitation on Guarantees of Indebtedness by Restricted
Subsidiaries. (a) Holdings will not permit any Restricted Subsidiary, directly
or indirectly, to guarantee, assume or in any other manner become liable with
respect to any Indebtedness of Holdings that is pari passu in right of payment
with the notes or indebtedness of Holdings that is subordinate to the notes
unless, with respect to any guarantee by a Restricted Subsidiary of pari passu
Indebtedness of Holdings, any such guarantee shall be pari passu with such
Restricted Subsidiary's note guarantee, and with respect to any guarantee by a
Restricted Subsidiary of subordinated Indebtedness of Holdings, any such
guarantee shall be subordinated to such Restricted Subsidiary's note guarantee
at least to the same extent as such guaranteed Indebtedness is subordinated to
the notes.
(b) Notwithstanding the foregoing, any guarantee of the notes created
pursuant to the provisions described in the foregoing paragraph (a) will
provide by its terms that it will automatically and unconditionally be released
and discharged upon
(1) any sale, exchange or transfer to any Person not an Affiliate of
Holdings of all of Holdings' Capital Stock of such Restricted Subsidiary,
which sale, exchange or transfer is otherwise in compliance with the
indenture, or
(2) the designation of such Restricted Subsidiary as an Unrestricted
Subsidiary in accordance with the terms of the indenture.
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Limitation on Dividends and Other Payment Restrictions Affecting Restricted
Subsidiaries. Holdings will not, and will not permit any Restricted Subsidiary
to, directly or indirectly, create or permit to exist or become effective any
consensual encumbrance or restriction on the ability of any Restricted
Subsidiary to
(a) pay dividends or make any other distributions on its Capital Stock or
with respect to any other interest or participation in, or measured by, its
profits to Holdings or any other Restricted Subsidiary,
(b) pay any Indebtedness owed to Holdings or any other Restricted Subsidiary,
(c) make loans or advances to Holdings or any other Restricted Subsidiary,
(d) transfer any of its properties or assets to Holdings or any other
Restricted Subsidiary or
(e) guarantee any Indebtedness of Holdings or any other Restricted
Subsidiary.
However, the preceding restrictions will not apply to encumbrances or
restrictions existing under or by reason of:
(1) applicable law,
(2) customary provisions restricting subletting or assignment of any lease or
assignment of any other contract to which Holdings or any Restricted Subsidiary
is a party or to which any of their respective properties or assets are
subject,
(3) any agreement or other instrument of a Person acquired by Holdings or any
Restricted Subsidiary in existence at the time of such acquisition, but not
created in contemplation thereof, which encumbrance or restriction is not
applicable to any Person, or the properties or assets of any Person, other than
the Person, or the property or assets of the Person, so acquired, so long as
the agreement containing the restriction does not violate any other provision
of the Indenture,
(4) encumbrances and restrictions in effect on the issuance date of the
notes, including pursuant to the senior credit agreement and its related
documentation,
(5) any encumbrance or restriction contained in contracts for sales of assets
permitted by the "Limitation on Sale of Assets" covenant with respect to the
assets to be sold pursuant to such contract,
(6) in the case of clause (4) above, restrictions contained in security
agreements or mortgages securing Indebtedness of a Restricted Subsidiary
permitted under the indenture to the extent such restrictions restrict the
transfer of the property subject to such security agreements or mortgages and
(7) any encumbrance or restriction existing under any agreement that extends,
renews, refinances or replaces the agreements containing the encumbrances or
restrictions in the foregoing clauses (3) and (4), provided that the terms and
conditions of any such encumbrances or restrictions are no more restrictive
than those contained in such agreement.
Limitation on Other Senior Subordinated Indebtedness. Neither Holdings nor
any guarantor will incur, create, assume, guarantee or in any other manner
become directly or indirectly liable with respect to or responsible for, or
permit to remain outstanding, any Indebtedness, other than the notes, that is
subordinate or junior in right of payment to any Senior Indebtedness, or, in
the case of any guarantor, Guarantor Senior Indebtedness, unless such
Indebtedness is also pari passu with, or subordinate in right of payment to,
the notes or the note guarantee of such guarantor, as applicable, pursuant to
subordination provisions substantially similar to those contained in the
indenture.
Reports. For as long as the notes are outstanding, Holdings will file on a
timely basis with the Commission, to the extent such filings are accepted by
the Commission and whether or not Holdings has a class of securities registered
under the Exchange Act, the annual reports, quarterly reports and other
documents specified in Section 13 15(d) of the Exchange Act, as applicable.
Holdings will also deliver to the trustee, and mail to each holder of notes,
copies of such reports and documents within 15 days after the date on which
Holdings files such
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reports and documents with the Commission or the date on which Holdings would
be required to file such reports and documents if Holdings were so required. If
filing such reports and documents with the Commission is not accepted by the
Commission or is prohibited under the Exchange Act, Holdings will supply copies
of reports and documents to any prospective holder of notes promptly upon
written request.
Consolidation, Merger and Sale of Assets
Holdings will not, in a single transaction or through a series of
transactions,
(A) consolidate with or merge with or into another Person;
(B) sell, assign, convey, transfer, lease or otherwise dispose of all or
substantially all of its assets to another Person; or
(C) permit any of its Restricted Subsidiaries to enter into any transaction
or series of transactions which would, in the aggregate, result in the sale,
assignment, conveyance, transfer, lease or other disposition of all or
substantially all of the assets of
Holdings and its Restricted Subsidiaries on a consolidated basis to another
Person,
unless:
(1) either
(a) Holdings will be the continuing corporation or
(b) the Person, if other than Holdings, formed by or surviving any such
consolidation merger or to which such sale, assignment, conveyance, transfer,
lease or disposition shall have been made;
(x) is a corporation organized and existing under the laws of the United
States, any state thereof or the District of Columbia and
(y) expressly assumes, by a supplemental indenture in form reasonably
satisfactory to the trustee, Holdings' obligation for the due and punctual
payment of the principal of, premium, if any, Additional Interest, if any,
and interest on all the notes and the performance and observance of every
covenant of the indenture on the part of Holdings to be performed or
observed;
(2) immediately before and immediately after giving effect to such
transaction or series of transactions on a pro forma basis, and treating any
obligation of Holdings or any Restricted Subsidiary incurred in connection with
or as a result of such transaction as having been incurred at the time of the
transaction, no Default or Event of Default will have occurred and be
continuing;
(3) immediately before and immediately after giving effect to such
transaction or series of transactions on a pro forma basis, on the assumption
that the transaction or series of transactions occurred on the first day of the
four-quarter period immediately prior to the consummation of such transaction
or series of transactions with the appropriate adjustments with respect to the
transaction or series of transactions being included in such pro forma
calculation, Holdings, or the surviving entity if Holdings is not the
continuing obligor under the indenture, shall be able to incur at least $1.00
of additional Indebtedness, other than Permitted Indebtedness, under the
provisions of the "Limitation on Indebtedness" covenant;
(4) immediately after giving effect to such transaction on a pro forma
basis, the Consolidated Net Worth of Holdings, or the surviving entity if
Holdings is not the continuing obligor under the indenture, is equal to or
greater than the Consolidated Net Worth of Holdings immediately prior to such
transaction; and
(5) each guarantor, unless it is the other party to the transactions
described above, shall have by supplemental indenture confirmed that its
guarantee will apply to the obligations of Holdings or the surviving entity, as
the case may be, under the indenture and the notes.
In connection with any such consolidation, merger, sale, assignment,
conveyance, transfer, lease or other disposition, Holdings or the surviving
entity will deliver to the trustee, in form and substance reasonably
satisfactory to the trustee, an officers' certificate and an
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opinion of counsel, each stating that such consolidation, merger, sale,
assignment, conveyance, transfer, lease or other disposition, and, if
applicable, such supplemental indenture, comply with the requirements of the
indenture and that all conditions precedent provided for in the indenture
relating to such transaction have been complied with.
Each guarantor, other than any subsidiary whose guarantee is being released
in connection with a transaction pursuant to the provisions of "--Note
Guarantees" or "--Certain Covenants--Limitation on Guarantees of Indebtedness
by Restricted Subsidiaries", will not, and Holdings will not permit a guarantor
to:
(A) merge or consolidate with or into any other entity, other than Holdings
or any other guarantor, or
(B) sell, assign, convey, transfer, lease or otherwise dispose of its
properties and assets on a consolidated basis substantially as an entirety to
any entity, other than Holdings or any guarantor,
unless
(1) either
(a) such guarantor is the continuing corporation or partnership, or
(b) the Person, if other than such guarantor, formed by such consolidation
or merger or to which such sale, assignment, conveyance, transfer, lease or
disposition of all or substantially all of the properties and assets of such
guarantor shall have been made,
(x) is a corporation or partnership organized and existing under the laws
of the United States, any state thereof or the District of Columbia, and
(y) expressly assumes, by a supplemental indenture, in form satisfactory to
the trustee, all the obligations of such guarantor under the notes and the
indenture;
(2) immediately before and immediately after giving effect to such
transaction on a pro forma basis, no Default or Event of Default shall have
occurred and be continuing; and
(3) such guarantor shall have delivered to the trustee an officers'
certificate and an opinion of counsel, each stating that such consolidation,
merger, sale, assignment, conveyance, transfer, lease or disposition and such
supplemental indenture comply with the indenture.
Upon any consolidation or merger, or any sale, assignment, conveyance,
transfer, lease or disposition of all or substantially all of the properties
and assets of Holdings or any guarantor in accordance with the immediately
preceding paragraphs, the successor Person formed by such consolidation or into
which Holdings or such guarantor, as the case may be, is merged or to which
such sale, assignment, conveyance, transfer, lease or disposition is made,
shall succeed to, and be substituted for, and may exercise every right and
power of, Holdings or such guarantor, as the case may be, under the indenture
and/or the guarantees, as the case may be, with the same effect as if such
successor had been named as Holdings or such guarantor, as the case may be,
therein and/or in the guarantee, as the case may be. When a successor assumes
all the obligations of its predecessor under the indenture, the notes or a
guarantee, as the case may be, the predecessor shall be released from those
obligations; provided that in the case of a transfer by lease, the predecessor
shall not be released from the payment of principal and interest on the notes
or a guarantee, as the case may be.
Events of Default
Each of the following is an "Event of Default":
(1) default for 30 days in the payment when due of any interest on any
note;
(2) default in the payment of the principal of or premium, if any, on any
note at its maturity, upon acceleration, optional redemption, mandatory
redemption, required purchase or otherwise;
(3) default in the performance, or breach, of the provisions described in
"Consolidation, Merger and Sale of Assets," the failure to make or
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consummate a Change in Control Offer in accordance with the provisions of
the "Purchase of Notes upon a Change in Control" covenant or the failure to
make or consummate an Excess Proceeds Offer in accordance with the
provisions of the "Limitation on Sale of Assets" covenant;
(4) without duplication, default in the performance, or breach, of any
covenant or warranty Holdings or any guarantor contained in the indenture
or any guarantee, which default or breach continues for a period of 30 days
after Holdings receives written notice specifying the default from the
trustee or the holders of at least 25% of the outstanding principal amount
of the notes;
(5) Either
(A) one or more defaults in the payment when due of the principal of
or premium, if any, on Indebtedness of Holdings or any Restricted
Subsidiary aggregating $10.0 million or more, which default continues
after any applicable grace period and is not cured or waived; or
(B) Indebtedness of Holdings or any Restricted Subsidiary aggregating
$10.0 million or more shall have been accelerated or otherwise declared
due and payable, or required to be prepaid or repurchased, other than
by regularly scheduled required prepayment, prior to the stated
maturity date thereof;
(6) failure by Holdings or any of its Restricted Subsidiaries to pay
final, judgments aggregating in excess of$10.0 million which judgments are
not discharged, paid or stayed for a period of 60 days;
(7) except as permitted by the indenture, any guarantee of a Material
Subsidiary or group of Restricted Subsidiaries that, taken together, would
constitute a Material Subsidiary ceases to be in full force and effect or
is declared null and void or any Material Subsidiary or group of Restricted
Subsidiaries that, taken together, would constitute a Material Subsidiary
denies that it has any further liability under any guarantee, or gives
notice to such effect; or
(8) certain events of bankruptcy, insolvency or reorganization with
respect to Holdings or any of its Material Subsidiaries or group of
Restricted Subsidiaries that, taken together, would constitute a Material
Subsidiary.
If an Event of Default other than an event of bankruptcy or insolvency
occurs and is continuing, the trustee or the holders of at least 25% in
principal amount of the notes then outstanding may declare all of the notes to
be due and payable by notice in writing to Holdings, and the same shall become
immediately due and payable.
If an Event of Default due to an event of bankruptcy or insolvency occurs
and is continuing, then the notes shall ipso facto become and be immediately
due and payable without any declaration or other act on the part of the trustee
or any holder of notes.
At any time after a declaration of acceleration under the indenture, but
before a judgment or decree for payment of the money due has been obtained by
the trustee, the holders of a majority in principal amount of the outstanding
notes, by written notice to Holdings and the trustee, may rescind such
declaration and its consequences if:
(1) Holdings has paid or deposited with the trustee a sum sufficient
to pay
(a) all overdue interest on all outstanding notes,
(b) all unpaid principal of and premium, if any, on any
outstanding notes that has become due otherwise than by such
declaration of acceleration and interest thereon at the rate borne by
the notes,
(c) to the extent that payment of such interest is lawful,
interest on overdue interest and overdue principal at the rate borne
by the notes,
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(d) all sums paid or advanced by the trustee under the indenture
and the reasonable compensation, expenses, disbursements and advances
of the trustee, its agents and counsel; and
(2) all Events of Default, other than the non-payment of amounts of
principal of, premium, if any, or interest on the notes that has become
due solely by such declaration of acceleration, have been cured or waived.
No such rescission shall affect any subsequent default or impair any right
consequent thereto.
No individual holder of any of the notes has any right to institute any
proceeding with respect to the indenture or any remedy thereunder, unless:
(1) the holders of at least 25% in aggregate principal amount of the
outstanding notes have made written request, and offered reasonable
indemnity, to the trustee to institute such proceeding,
(2) the trustee has failed to institute such proceeding within 60 days
after receipt of such notice and
(3) the trustee, within such 60-day period, has not received
directions inconsistent with such written request by holders of a majority
in principal amount of the outstanding notes.
Such limitations do not apply, however, to a suit instituted by a holder of
a note for the enforcement of the payment of the principal of, premium, if any,
or interest on such note when due.
The holders of at least a majority in principal amount of the outstanding
notes may, on behalf of the holders of all the notes, waive any past Defaults
under the indenture, except a Default in the payment of the principal of,
premium, if any, or interest on any note, or in respect of a covenant or
provision which under the indenture cannot be modified or amended without the
consent of the holder of each note outstanding.
If a Default or an Event of Default occurs and is continuing and is known
to the trustee, the trustee will mail to each holder of the notes notice of the
Default or Event of Default within 10 days after the occurrence thereof. Except
in the case of a Default or an Event of Default in payment of any notes, the
trustee may withhold the notice to the holders of such notes if a committee of
its trust officers in good faith determines that withholding the notice is in
the interests of the holders of the notes.
Holdings is required to furnish to the trustee annual and quarterly
statements as to the performance by Holdings and the guarantors of their
respective obligations under the indenture. Holdings is also required to notify
the trustee within five business days of the occurrence of any Default or Event
of Default.
Legal Defeasance or Covenant Defeasance of Indenture
Holdings may, at its option and at any time, elect to have its obligations
and the obligations of the guarantors with respect to the outstanding notes
discharged ("legal defeasance"). Such legal defeasance means that Holdings will
be deemed to have paid and discharged the entire indebtedness represented by
the outstanding notes except for:
(1) the rights of holders of the outstanding notes to receive payments in
respect of the principal of, premium, if any, and interest on the notes when
such payments are due,
(2) Holdings' obligations to issue temporary notes, register the transfer or
exchange of any notes, replace mutilated, destroyed, lost or stolen notes,
maintain an office or agency for payments in respect of the notes and segregate
and hold such payments in trust,
(3) the rights, powers, trusts, duties and immunities of the trustee, and
(4) the legal defeasance provisions of the indenture.
In addition, Holdings may, at its option and at any time, elect to have the
obligations of
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Holdings and any guarantor released with respect to certain covenants set forth
in the indenture ("covenant defeasance"), and thereafter any omission to comply
with such obligations will not constitute a Default or an Event of Default with
respect to the notes. In the event covenant defeasance occurs, certain events,
not including non-payment, bankruptcy, receivership, reorganization and
insolvency events described under "Events of Default", will no longer
constitute an Event of Default with respect to the notes.
In order to exercise either legal defeasance or covenant defeasance:
(1) Holdings must irrevocably deposit with the trustee, in trust,
specifically for the benefit of the holders of the notes, money, non-callable
U.S. government obligations or a combination thereof, in an amount sufficient,
in the opinion of a nationally recognized firm of independent public
accountants, to pay the principal of, premium, if any, and interest on the
outstanding notes on the stated date for payment thereof or on the applicable
redemption date as the case may be;
(2) no Default or Event of Default will have occurred and be continuing on
the date of such deposit or, insofar as an Event of Default from of bankruptcy
or insolvency is concerned, at any time during the period ending on the 91st
day after the date of deposit,
(3) such legal defeasance or covenant defeasance will not result in a
breach or violation of, or constitute a default under, the indenture, the
senior credit agreement or any other material agreement or instrument to which
Holdings or any guarantor is a party or by which it is bound,
(4) in the case of legal defeasance, Holdings shall have delivered to the
trustee an opinion of counsel stating that
(A) Holdings has received from, or there has been published by, the
Internal Revenue Service a ruling, or
(B) since the date of the final offering circular, there has been a
change in applicable federal income tax law,
in either case to the effect that, and based thereon such opinion shall confirm
that the holders of the outstanding notes will not recognize income, gain or
loss for federal income tax purposes as a result of such legal defeasance and
will be subject to federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such legal defeasance had
not occurred,
(5) in the case of covenant defeasance, Holdings shall have delivered to
the trustee an opinion of counsel to the effect that the holders of the notes
outstanding will not recognize income, gain or loss for federal income tax
purposes as a result of such covenant defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such covenant defeasance had not occurred,
(6) in the case of legal defeasance or covenant defeasance, Holdings shall
have delivered to the trustee an opinion of counsel to the effect that
(A) the trust funds will not be subject to any rights of holders of
Senior Indebtedness under the subordination provisions of the indenture and
(B) after the 91st day following the deposit or after the date such
opinion is delivered, the trust funds will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally,
(7) Holdings shall have delivered to the trustee an officers' certificate
stating that the deposit was not made by Holdings with the intent of preferring
the holders of the notes or any guarantee over the other creditors of either
Holdings or any guarantor with the intent of hindering, delaying or defrauding
creditors of either Holdings or any guarantor, and
(8) Holdings shall have delivered to the trustee an officers' certificate
and an opinion of counsel, each stating that all conditions precedent relating
to either the legal defeasance or the covenant defeasance, as the case may be,
have been complied with.
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Satisfaction and Discharge
The indenture will cease to be of further effect when
(1) either:
(a) all the notes theretofore authenticated and delivered, other than
destroyed, lost or stolen notes which have been replaced or paid and notes
for whose payment money has been deposited in trust or segregated and held
in trust by Holdings and thereafter repaid to Holdings or discharged from
such trust, have been delivered to the trustee for cancellation or
(b) all notes not theretofore delivered to the trustee for cancellation
(x) have become due and payable,
(y) will become due and payable at the applicable date of maturity
within one year or
(z) are to be called for redemption within one year under
arrangements satisfactory to the trustee, and Holdings has irrevocably
deposited with the trustee funds in an amount sufficient to pay and
discharge the entire Indebtedness on the notes not theretofore
delivered to the trustee for cancellation, for principal of, premium,
if any, and interest on the notes to the date of deposit, the
applicable date of maturity or the redemption date, as the case may be,
(2) Holdings has paid or caused to be paid all sums payable under the
indenture by Holdings, and
(3) Holdings has delivered to the trustee an officers' certificate and an
opinion of counsel, each stating that all conditions precedent under the
indenture relating to the satisfaction and discharge of the indenture have been
complied with.
This satisfaction and discharge shall not apply to surviving rights of
registration or transfer or exchange of the notes, as expressly provided for in
the indenture.
Transfer and Exchange
A holder may transfer or exchange notes in accordance with the indenture.
The registrar and the trustee may require a holder, among other things, to
furnish appropriate endorsements and transfer documents and Holdings may
require a holder to pay any taxes and fees required by law or permitted by the
indenture. Holdings is not required to transfer or exchange any note selected
for redemption. Also, Holdings is not required to transfer or exchange any note
for a period of 15 days before a selection of notes to be redeemed. The
registered holder of a note will be treated as the owner of it for all
purposes.
Amendments and Waivers
With certain exceptions, modifications and amendments of the Indenture may
be made by a supplemental indenture entered into by Holdings, the guarantors
and the trustee with the consent of the holders of a majority in aggregate
outstanding principal amount of the notes then outstanding; provided, however,
that no such modification or amendment may, without the consent of the holder
of each outstanding note affected thereby:
(1) change the stated maturity date of the principal of, or any installment
of interest on, any note;
(2) reduce the principal of, or premium, if any, or the rate of interest on
any notes;
(3) make any notes payable in money other than that stated in the notes;
(4) impair the right to institute suit for the enforcement of any such
payment after the stated maturity date of any note, or, in the case of
redemption, on or after the redemption date;
(5) following the occurrence of an Asset Sale, amend, change or modify the
obligation of Holdings to make and consummate an Excess Proceeds Offer with
respect to any Asset Sale in accordance with the "Limitation on Sale of Assets"
covenant, including amending, changing or modifying any definition relating
thereto in any manner materially adverse to the holders of the notes affected
thereby;
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(6) following the occurrence of a Change in Control, amend, change or
modify the obligation of Holdings to make and consummate a Change in Control
Offer in the event of a Change in Control in accordance with the "Purchase of
Notes Upon a Change in Control" covenant, including amending, changing or
modifying any definition relating thereto in any manner materially adverse to
the holders of the notes affected thereby;
(7) reduce the amount of notes whose holders must consent to any
supplemental indenture or any waiver of compliance with provisions of the
indenture;
(8) modify any of the provisions relating to supplemental indentures
requiring the consent of holders or relating to the waiver of past defaults or
relating to the waiver of certain covenants, except
(a) to increase the percentage of outstanding notes required for such
actions or
(b) to provide that certain other provisions of the indenture cannot be
modified or waived without the consent of the holder of each note affected
thereby; or
(9) amend or modify any of the provisions of the indenture relating to any
guarantee in any manner adverse to the holders of the notes.
In addition, any amendment to the provisions of the indenture which relate
to subordination will require the consent of the holders of at least 66- 2/3%
in aggregate principal amount of the notes then outstanding if such amendment
would adversely affect the rights of holders of the notes.
Notwithstanding the foregoing, without the consent of any holder of the
notes, Holdings, any guarantor and the trustee may modify or amend the
indenture:
(1) to evidence the succession of another Person to Holdings, a guarantor
or any other obligor on the notes, and the assumption by any such successor of
the covenants of Holdings or such obligor or guarantor in the indenture and in
the notes and in any guarantee in accordance with "--Consolidation, Merger and
Sale of Assets;"
(2) to add to the covenants of Holdings, any guarantor or any other obligor
upon the notes for the benefit of the holders of the notes or to surrender any
right or power conferred upon Holdings or any other obligor upon the notes, as
applicable, in the indenture, in the notes or in any guarantee;
(3) to cure any ambiguity, or to correct or supplement any provision in the
indenture, the notes or any guarantee which may be defective or inconsistent
with any other provision in the indenture, the notes or any guarantee or make
any other provisions with respect to matters or questions arising under the
indenture, the notes or any guarantee; provided that, in each case, such
provisions shall not adversely affect the interest of the holders of the notes;
(4) to comply with the requirements of the Commission in order to effect or
maintain the qualification of the indenture under the Trust Indenture Act;
(5) to add a guarantor under the indenture;
(6) to evidence and provide the acceptance of the appointment of a
successor trustee under the indenture;
(7) to mortgage, pledge, hypothecate or grant a security interest in favor
of the trustee for the benefit of the holders of the notes as additional
security for the payment and performance of Holdings' and any guarantor's
obligations under the indenture, in any property or assets.
The holders of a majority in principal amount of the notes outstanding may
waive compliance with certain restrictive covenants and provisions of the
indenture.
The Trustee
The indenture provides that, except during the continuance of an Event of
Default, the trustee will perform only such duties as are specifically set
forth in the indenture. If an Event of Default has occurred and is continuing,
the trustee will exercise such rights
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and powers vested in it by the indenture and use the same degree of care and
skill in its exercise as a prudent Person would exercise under the
circumstances in the conduct of such Person's own affairs. Subject to such
provisions, the trustee will be under no obligation to exercise any of its
rights or powers under the indenture at the request of any holder of notes,
unless such holder shall have offered to the trustee security and indemnity
satisfactory to it against any loss, liability or expense.
If the trustee becomes a creditor of Holdings or any guarantor, the
indenture limits its rights to obtain payment of claims in certain cases or to
realize on certain property received by it in respect of any such claims, as
security or otherwise. The trustee is permitted to engage in other
transactions; however, if it acquires any conflicting interest it must
eliminate such conflict or resign.
Governing Law
The indenture, the notes and the guarantees will be governed by, and
construed in accordance with, the laws of the State of New York.
Certain Definitions
Set forth below are certain defined terms used in the indenture. Reference
is made to the indenture for a full disclosure of all such terms, as well as
any other capitalized terms used herein for which no definition is provided.
"Acquired Indebtedness" means Indebtedness of a Person
(a) existing at the time such Person becomes a Restricted Subsidiary or
(b) assumed in connection with the acquisition of assets constituting
substantially all the assets of such Person, any division or line of business
of such Person or any other properties or assets of such Person other than in
the ordinary course of business from such Person.
Acquired Indebtedness shall be deemed to be incurred on the date of the
related acquisition of assets from any Person or the date the acquired Person
becomes a Restricted Subsidiary.
"Additional Interest" has the meaning set forth in the Registration Rights
Agreement.
"Affiliate" means, with respect to any specified Person,
(a) any other Person directly or indirectly controlling or controlled by or
under direct or indirect common control with such specified Person or
(b) any other Person that owns, directly or indirectly, 10% or more of such
specified Person's Capital Stock or
(c) any executive officer or director of any such specified Person or other
Person.
For the purposes of this definition, "control," when used with respect to
any specified Person, means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise.
"Asset Sale" means any sale, issuance, conveyance, transfer, lease or other
disposition, including, without limitation, by way or merger, consolidation or
sale and leaseback transaction (collectively, a "transfer"), directly or
indirectly, in one of a series of related transactions, of
(a) any Capital Stock of any Restricted Subsidiary,
(b) all or substantially all of the properties and assets of any division
or line of business of Holdings or any Restricted Subsidiary, or
(c) any other properties or assets of Holdings or any Restricted Subsidiary
other than in the ordinary course of business.
For the purposes of this definition, the term "Asset Sale" shall not
include any transfer of properties or assets
(1) that is governed by the provisions of the indenture described under "--
Consolidation, Merger and Sale of Assets,"
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(2) between or among Holdings and Restricted Subsidiaries in accordance
with the terms of the indenture,
(3) a Hospital Swap,
(4) with an aggregate fair market value of less than $1.0 million,
(5) long-term leases, in effect on the date the notes were issued, of
Hospitals to another Person,
(6) long-term leases of Hospitals to another Person; provided that the
aggregate book value of the properties subject to such leases at any one time
outstanding does not exceed 15% of the Total Assets of Holdings at the time
any such lease is entered into,
(7) that are obsolete, damaged or worn out equipment or inventory that is
no longer useful in the conduct of Holdings' or its subsidiaries' business and
that is disposed of in the ordinary course of business,
(8) that constitutes a sale or other disposition of accounts receivable in
the ordinary course of business, including for purposes of financing, for cash
and in an amount at least equal to the fair market value of such accounts
receivable, or
(9) that is made the subject of an Investment consummated in compliance
with "Certain Covenants--Limitation on Restricted Payments."
"Attributable Debt" of any Person in respect of a sale and leaseback
transaction means, at the time of determination, the present value of the
obligation of such Person as lessee for net rental payments, excluding all
amounts required to be paid on account of maintenance and repairs, insurance,
taxes, assessments, water, utilities and similar charges to the extent
included in such rental payments. during the remaining term of the lease
included in such sale and leaseback transaction including any period for which
such lease has been extended or may, at the option of the lessor, be extended.
Such present value shall be calculated using a discount rate equal to the rate
of interest implicit in such transaction, determined in accordance with GAAP.
"Average Life" means, as of the date of determination with respect to any
Indebtedness, the quotient obtained by dividing
(a) the sum of the products of (1) the number of years from the date of
determination to the date or dates of each successive scheduled principal
payment, including, without limitation, any sinking fund requirements, of such
Indebtedness multiplied by (2) the amount of each such principal payment by
(b) the sum of all such principal payments.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, partnership interests, participation, rights in or other
equivalents, however designated, of such Person's capital stock, and any
rights, other than debt securities convertible into capital stock, warrants or
options exchangeable for or convertible into such capital stock, whether now
outstanding or issued after the date of the indenture.
"Capitalized Lease Obligation" means, with respect to any Person, any
obligation of such Person under a lease of, or other agreement conveying the
right to use, any property, whether real, personal or mixed, that is required
to be classified and accounted for as a capital lease obligation under GAAP,
and, for the purpose of the indenture, the amount of such obligation at any
date shall be the capitalized amount thereof at such date, determined in
accordance with GAAP.
"Cash Equivalents" means
(a) any evidence of Indebtedness with a maturity of one year or less
issued or directly and fully guaranteed or insured by the United States or
any agency or instrumentality thereof, provided that the full faith and
credit of the United States is pledged in support thereof;
(b) certificates of deposit or acceptances with a maturity of one year or
less of any financial institution that is a member of the Federal Reserve
System having combined capital and surplus and undivided profits of not
less than $500.0 million;
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(c) commercial paper with a maturity of one year or less issued by a
corporation that is not an Affiliate of Holdings and is organized under the
laws of any state of the United States or the District of Columbia and
rated at least A-1 by S&P or any successor rating agency or at least P-1 by
Moody's or any successor rating agency;
(d) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (a) and (b) above;
(e) demand and time deposits with a domestic commercial bank that is a
member of the Federal Reserve System having combined capital and surplus
and undivided profits of not less than $500.0 million; and
(f) investments in funds investing solely in investments of the types
described in clauses (a) through (e) above.
"Change in Control" means the occurrence of any of the following events:
(a) any "person" or "group" (as such terms are used in Sections 13(d) and
14(d) of the Exchange Act) is or becomes the "beneficial owner" (as defined
in Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person shall
be deemed to have "beneficial ownership" of all securities that such Person
has the right to acquire, whether such right is exercisable immediately or
only after the passage of time), directly or indirectly, of more than 35%
of the total outstanding voting stock of Triad or Holdings;
provided that neither of the following events by itself shall constitute a
Change in Control under this clause (a):
(1) Triad is the "beneficial owner" of more than 35% of the total
outstanding voting stock of Holdings or
(2) the ESOP is the "beneficial owner" of more than 35% of the total
outstanding voting stock of Triad;
(b) Triad or Holdings consolidates with, or merges with or into, another
Person or conveys, transfers, leases or otherwise disposes of all or
substantially all of its assets to any Person, or any Person consolidates
with, or merges with or into, Triad or Holdings, in any such event pursuant
to a transaction in which the outstanding voting stock of Triad or Holdings
is converted into or exchanged for cash, securities or other property,
other than any such transaction
(x) where the outstanding voting stock of Triad or Holdings is not
converted or exchanged at all, except to the extent necessary to reflect a
change in the jurisdiction of incorporation of Triad or Holdings, or is
converted into or exchanged for
(A) voting stock, other than Redeemable Capital Stock, of the surviving
or transferee corporation and/or
(B) cash, securities and other property, other than Capital Stock of the
surviving or transferee corporation, in an amount that could be paid by
Holdings as a Restricted Payment as described under, or is otherwise not
prohibited by, the "Limitation on Restricted Payments" covenant and
(4) immediately after such transaction, no "person" or "group" (as such
terms are used in Sections 13(d) and 14(d) of the Exchange Act) is the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act,
except that a Person shall be deemed to have "beneficial ownership" of all
securities that such Person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of more than 35% of the total outstanding voting stock of the
surviving or transferee corporation;
(c) during any consecutive two year period, individuals who at the
beginning of such period constituted the board of directors of Triad or
Holdings, together with any new directors whose election to such board of
directors, or whose nomination for election by the stockholders of Triad or
Holdings, was approved by a vote of66 2/3% of the directors then still in
office
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who were either directors at the beginning of such period or whose election
or nomination for election was previously so approved, cease for any reason
to constitute a majority of the board of directors of Triad or Holdings
then in office; or
(d) Triad or Holdings is liquidated or dissolved or adopts a plan of
liquidation or dissolution other than, in the case of Holdings, in a
transaction which complies with the provisions described under
"Consolidation, Merger and Sale of Assets;" or
(e) for as long as a holding company ownership structure is maintained
over Holdings, Triad or a company 100% of the Capital Stock of which is
owned directly by Triad ceases to own at least a majority of the total
outstanding voting stock and Capital Stock of Holdings.
"Consolidated Adjusted Net Income" means, for any period, the consolidated
net income (or loss) of Holdings and all Restricted Subsidiaries for such
period as determined in accordance with GAAP, adjusted by excluding, without
duplication,
(a) any net after-tax extraordinary gains or losses, less all fees and
expenses relating thereto,
(b) any net after-tax gains or losses, less all fees and expenses
relating thereto, attributable to asset dispositions other than in the
ordinary course of business,
(c) the portion of net income (or loss) of any Person, other than
Holdings or a Restricted Subsidiary, including Unrestricted Subsidiaries,
in which Holdings or any Restricted Subsidiary has an ownership interest,
except to the extent of the amount of dividends or other distributions
actually paid to Holdings or any Restricted Subsidiary in cash dividends or
distributions during such period,
(d) for purposes of "Certain Covenants--Limitation on Restricted
Payments" above, the net income (or loss) of any Person combined with
Holdings or any Restricted Subsidiary on a "pooling of interests" basis
attributable to any period prior to the date of combination,
(e) the net income of any Restricted Subsidiary to the extent that the
declaration or payment of dividends or similar distributions by such
Restricted Subsidiary is not at the date of determination permitted,
directly or indirectly, by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to such Restricted Subsidiary or its
stockholders, except to the extent of the amount of cash dividends or other
distributions actually paid to Holdings or a Restricted Subsidiary not
subject to such restriction by such Restricted Subsidiary during such
period and
(f) for purposes of calculating Consolidated Adjusted Net Income under
the "Limitation on Restricted Payment" covenant any net income (or loss)
from any Restricted Subsidiary while it was an Unrestricted Subsidiary at
any time during such period other than any amounts actually received from
such Restricted Subsidiary during such period.
"Consolidated Fixed Charge Coverage Ratio" of Holdings means, for any
period, the ratio of
(a) the sum of Consolidated Adjusted Net Income and, to the extent
deducted in computing Consolidated Adjusted Net Income, Consolidated
Interest Expense, Consolidated Income Tax Expense and Consolidated Non-Cash
Charges, less all non-cash items increasing Consolidated Adjusted Net
Income, in each case, for such period to
(b) the sum of (1) Consolidated Interest Expense and (2) cash dividend
payments on preferred stock of Holdings or any Restricted Subsidiary and
non-cash dividends due on preferred stock of any Restricted Subsidiary for
such period.
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"Consolidated Income Tax Expense" means, for any period, the provision for
federal, state, local and foreign income taxes of Holdings and all Restricted
Subsidiaries for such period as determined on a consolidated basis in
accordance with GAAP.
"Consolidated Interest Expense" means, for any period, without duplication,
the sum of
(a) the interest expense of Holdings and its Restricted Subsidiaries for
such period, including, without limitation,
(1) amortization of debt discount,
(2) the net cost/benefit of Interest Rate Agreements, including
amortization of discounts,
(3) the interest portion of any deferred payment obligation,
(4) commissions, discounts, and other fees and charges owed with respect to
letters of credit and bankers acceptance financing and similar transactions,
and
(5) amortization of debt issuance costs, plus
(b) the interest component of Capitalized Lease Obligations of Holdings
and its Restricted Subsidiaries during such period, plus
(c) the interest of Holdings and its Restricted Subsidiaries that was
capitalized during such period, plus
(d) interest on Indebtedness of another Person that is guaranteed by
Holdings or any Restricted Subsidiary or secured by a Lien on assets of
Holdings or a Restricted Subsidiary, to the extent such interest is
actually paid by Holdings or such Restricted Subsidiary, in each case as
determined on a consolidated basis in accordance with GAAP;
provided that
(x) the Consolidated Interest Expense attributable to interest on any
Indebtedness computed on a pro forma basis and bearing a floating interest
rate shall be computed as if the rate in effect on the date of computation
had been the applicable rate for the entire period, and
(y) in making such computation, the Consolidated Interest Expense
attributable to interest on any Indebtedness under a revolving credit
facility computed on a pro forma basis shall be computed based upon the
average daily balance of such Indebtedness during the applicable period.
Notwithstanding the foregoing, the interest rate with respect to any
Indebtedness covered by any Interest Rate Agreement shall be deemed to be
the effective interest rate with respect to such Indebtedness after taking
into account such Interest Rate Agreement.
"Consolidated Net Worth" means the total of the amounts shown on the
balance sheet of Holdings and its Restricted Subsidiaries, determined on a
consolidated basis in accordance with GAAP, as of the end of the most recent
fiscal quarter of Holdings ending prior to the taking of any action for the
purpose of which the determination is being made, as
(a) the aggregate paid-in capital relating to such Capital Stock plus
(b) any retained earnings or earned surplus less (1) any accumulated
deficit and (2) any amounts attributable to Redeemable Capital Stock.
"Consolidated Non-Cash Charges" means, for any period, the aggregate
depreciation, amortization, depletion and other non-cash expenses of Holdings
and any Restricted Subsidiary reducing Consolidated Adjusted Net Income for
such period, determined on a consolidated basis in accordance with GAAP,
excluding any such non-cash charge that requires an accrual of or reserve for
cash charges for any future period.
"Currency Agreements" means any spot or forward foreign exchange agreements
and currency swap, currency option or other similar financial agreements or
arrangements entered into by Holdings or any of its Restricted Subsidiaries in
the ordinary course of business
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and designated to protect against or manage exposure to fluctuations in foreign
currency exchange rates.
"Default" means any event that is, or after notice or passage of time or
both would be, an Event of Default.
"Designated Senior Indebtedness" means:
(1) all Senior Indebtedness under the senior credit agreement; and
(2) any other Senior Indebtedness which, at the time of determination,
has an aggregate principal amount outstanding of at least $35.0 million and
that has been specifically designated in the instrument evidencing such
Senior Indebtedness as "Designated Senior Indebtedness" of Holdings.
"ESOP" means the Triad Hospitals, Inc. Retirement Savings Plan.
"ESOP Loans" means loans to the ESOP by Holdings or guarantees by Holdings
of loans to the ESOP by a third party lender, in either case in connection with
the purchase as promptly as practicable of shares of Triad common stock by the
ESOP.
"fair market value" means, with respect to any asset or property, the sale
value that would be obtained in an arm's-length transaction between an informed
and willing seller under no compulsion to sell and an informed and willing
buyer under no compulsion to buy. Fair market value shall be determined by the
board of directors of Holdings in good faith.
"Generally Accepted Accounting Principles" or "GAAP" means generally
accepted accounting principles in the United States, consistently applied, that
are in effect on the date of determination.
"guarantee" means, as applied to any obligation,
(a) a guarantee, other than by endorsement of negotiable instruments for
collection in the ordinary course of business, direct or indirect, in any
manner, of any part or all of such obligation and
(b) an agreement, direct or indirect, contingent or otherwise, the
practical effect of which is to assure in any way the payment or
performance, or payment of damages in the event of non-performance, of all
or any part of such obligation, including, without limiting the foregoing,
the payment of amounts drawn by letters of credit.
"guarantor" means each Restricted Subsidiary as of the date that Holdings
executes and delivers its supplemental indenture to the indenture and any
Restricted Subsidiary that incurs a guarantee; provided that upon the release
and discharge of any Person from its note guarantee in accordance with the
indenture, such Person shall cease to be a guarantor.
"Guarantor Senior Indebtedness" of a guarantor means Indebtedness of such
guarantor consisting of:
(1) a guarantee of any Senior Indebtedness under the senior credit
agreement or any other Senior Indebtedness; and
(2) the principal of, premium, if any, and interest on all other
Indebtedness of such a guarantor, other than the guarantee issued by such
guarantor, whether outstanding on the date of the indenture or thereafter
created, incurred or assumed, unless, in the case of any particular
Indebtedness, the instrument creating or evidencing the Indebtedness
expressly provides that such Indebtedness shall not be senior in right of
payment to such guarantee.
Notwithstanding the foregoing, "Guarantor Senior Indebtedness" of a
guarantor shall not include:
(a) Indebtedness evidenced by the note guarantee of such guarantor;
(b) Indebtedness of such guarantor that is expressly subordinated in
right of payment to any Guarantor Senior Indebtedness of such guarantor;
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(c) Indebtedness of such guarantor that by operation of law is
subordinate to any general unsecured obligations of such guarantor;
(d) Indebtedness of such guarantor to the extent incurred in violation of
any covenant of the indenture;
(e) any liability for federal, state or local taxes or other taxes, owed
or owing by such guarantor;
(f) accounts payable or other liabilities owed or owing by such guarantor
to trade creditors, including guarantees thereof or instruments evidencing
such liabilities;
(g) amounts owed by such guarantor for compensation to employees or for
services rendered to such guarantor;
(h) Indebtedness of such guarantor to any Affiliate of Holdings;
(i) Capital Stock of such guarantor; and
(j) Indebtedness which when incurred and without respect to any election
under Section 1111(b) of Title 11 of the United States Code is without
recourse to such guarantor or any subsidiary of Holdings.
"Hospital" means a hospital, outpatient clinic, long-term care facility,
medical office building or other facility or business that is used or useful in
or related to the provision of healthcare services.
"Hospital Swap" means an exchange of assets and, to the extent necessary to
equalize the value of the assets being exchanged, cash by Holdings or a
Restricted Subsidiary for one or more hospitals and/or one or more Related
Businesses, or for 100% of the Capital Stock of any Person owning or operating
one or more hospitals and/or one or more Related Businesses, provided that cash
does not exceed 20% of the sum of the amount of the cash and the fair market
value of the Capital Stock or assets received or given by Holdings or a
Restricted Subsidiary in such transaction.
"Indebtedness" means, with respect to any Person, without duplication,
(a) all liabilities of such Person for borrowed money, including
overdrafts, or for the deferred purchase price of property or services,
excluding any trade payables and other accrued current liabilities incurred in
the ordinary course of business, but including, without limitation, all
obligations, contingent or otherwise, of such Person in connection with any
letters of credit and acceptances issued under letter of credit facilities,
acceptance facilities or other similar facilities,
(b) all obligations of such Person evidenced by bonds, notes, debentures or
other similar instruments,
(c) indebtedness of such Person created or arising under any conditional
sale or other title retention agreement with respect to property acquired by
such Person, even if the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
property, but excluding trade payables arising in the ordinary course of
business,
(d) all Capitalized Lease Obligations of such Person,
(e) all obligations of such Person under or in respect of Interest Rate
Agreements or Currency Agreements,
(f) all indebtedness referred to in the preceding clauses of other Persons
and all dividends of other Persons, the payment of which is secured by, or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by, any Lien or with respect to property, including,
without limitation, accounts and contract rights, owned by such Person, even
though such Person has not assumed or become liable for the payment of such
Indebtedness, the amount of such obligation being deemed to be the lesser of
the value of such property or asset or the amount of the obligation so secured,
(g) all guarantees by such Person of Indebtedness referred to in this
definition or any other Person,
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(h) all Redeemable Capital Stock of such Person valued at the greater of
its voluntary or involuntary maximum fixed repurchase price plus accrued and
unpaid dividends and
(i) all Attributable Debt of such Person.
For purposes of this definition, the "maximum fixed repurchase price" of
any Redeemable Capital Stock which does not have a fixed repurchase price shall
be calculated in accordance with the terms of such Redeemable Capital Stock as
if such Redeemable Capital Stock were purchased on any date on which
Indebtedness shall be required to be determined pursuant to the indenture, and
if such price is based upon, or measured by, the fair market value of such
Redeemable Capital Stock, such fair market value shall be determined in good
faith by the board of directors of the issuer of such Redeemable Capital Stock.
"Interest Rate Agreements" means any interest rate protection agreements
and other types of interest rate hedging agreements, including, without
limitation, interest rate swaps, caps, floors, collars and similar agreements,
designed to protect against or manage exposure to fluctuations in interest
rates.
"Investment" means, with respect to any Person, any direct or indirect
advance, loan, guarantee or other extension of credit or capital contribution
to, by means of any transfer of cash or other property to others or any payment
for property or services for the account or use of others, or any purchase,
acquisition or ownership by such Person of any Capital Stock, bonds, notes,
debentures or other securities or evidences of Indebtedness issued or owned by,
any other Person and all other items that would be classified as investments on
a balance sheet prepared in accordance with GAAP.
In addition, the portion, proportionate to Holdings' or a Restricted
Subsidiary's equity interest in each of their respective subsidiaries, of the
fair market value of the net assets of any Restricted Subsidiary at the time
that such Restricted Subsidiary is designated an Unrestricted Subsidiary shall
be deemed to be an "Investment" made by Holdings in such Unrestricted
Subsidiary at such time. Upon a redesignation of such subsidiary as a
Restricted Subsidiary, Holdings shall be deemed to continue to have a permanent
"Investment" in an Unrestricted Subsidiary equal to an amount (if positive)
equal to
(x) Holdings' or one of its subsidiaries' "Investment" in such subsidiary
at the time of such redesignation less
(y) the portion, proportionate to Holdings', or one of its subsidiaries'
equity interest in such subsidiary, of the fair market value of the net assets
of such subsidiary at the time of such redesignation.
"Investment" shall exclude extensions of trade credit on commercially
reasonable terms in accordance with normal trade practices.
"Lien" means any mortgage, charge, pledge, lien (statutory or otherwise),
security interest, hypothecation, assignment for security, claim, or preference
of priority or other encumbrance upon or with respect to any property of any
kind, real or personal, movable or immovable, now owned or hereafter acquired.
A Person shall be deemed to own subject to a Lien any property which such
Person has acquired or holds subject to the interest of a vendor or lessor
under any conditional sale agreement, capital lease or other title retention
agreement having substantially the same economic effect as the foregoing.
"Material Subsidiary" of a Person means any Restricted Subsidiary that
would be a significant subsidiary of such person, as defined in rule 1-02 of
Regulation S-X promulgated by the Commission.
"Net Cash Proceeds" means, with respect to any Asset Sale, the proceeds
thereof in the form of cash or cash equivalents including payments in respect
of deferred payment obligations when received in the form of, or stock or other
assets when disposed for, cash or cash equivalents, except to the extent that
such obligations are financed or sold with recourse to Holdings or any
Restricted Subsidiary, net of
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(a) brokerage commissions and other fees and expenses, including, without
limitation, fees and expenses of legal counsel and investment banks, recording
fees, transfer fees and appraiser fees, related to such Asset Sale,
(b) provisions for all taxes payable as a result of such Asset Sale,
(c) payments made to retire Indebtedness where payment of such Indebtedness
is secured by the assets or properties which are the subject of such Asset Sale
or where such Indebtedness must by its terms, or as required by applicable law,
be repaid out of the proceeds of such Asset Sale,
(d) amounts required to be paid to any Person, other than Holdings or any
Restricted Subsidiary owning a beneficial interest in or having a Lien on the
assets subject to the Asset Sale,
(e) all distributions and other payments required to be made to non-
majority interest holders in the subsidiaries of Holdings or Permitted Joint
Ventures as a result of such Asset Sale and
(f) appropriate amounts to be provided by Holdings or any Restricted
Subsidiary, as the case may be, as a reserve required in accordance with GAAP
against any liabilities associated with such Asset Sale and retained by
Holdings or any Restricted Subsidiary, as the case may be, after such Asset
Sale, including, without limitation, pension and other post-employment benefit
liabilities, liabilities related to environmental matters and liabilities under
any indemnification obligations associated with such Asset Sale, all as
reflected in an officers' certificate delivered to the trustee.
"Permitted Indebtedness" means any of the following:
(a) Indebtedness of Holdings or any Restricted Subsidiary under the
senior credit agreement in an aggregate principal amount at any one time
outstanding not to exceed $465.0 million less, without duplication,
(1) the aggregate amount of all repayments of the principal amount of
any term loans under the senior credit agreement or a permanent reduction
of the commitments with respect to any revolving credit indebtedness under
the senior credit agreement in either case made in accordance with the
covenant described under "Certain Covenant--Limitation on Sale of Assets"
and
(2) the aggregate amount of all repayments of the principal amount of
any loan in respect of the asset sale bridge loan facility of the senior
credit agreement in effect on the date of the indenture.
(b) Indebtedness of Holdings pursuant to the notes or of any Restricted
Subsidiary pursuant to a guarantee;
(c) without duplication, Indebtedness of Holdings or any Restricted
Subsidiary outstanding on the date of the indenture and immediately
following consummation of the Spin-Off Transactions in an amount not to
exceed $11.0 million;
(d) Indebtedness of Holdings owing to any Restricted Subsidiary; provided
that any disposition, pledge or transfer of any such Indebtedness to a
Person, other than a disposition, pledge or transfer to Holdings or another
Restricted Subsidiary, shall be deemed to be an incurrence of such
Indebtedness by Holdings not permitted by this clause (d);
(e) Indebtedness of a Restricted Subsidiary owing to Holdings or to
another Restricted Subsidiary; provided that any disposition, pledge or
transfer of any such Indebtedness to a Person, other than a disposition,
pledge or transfer to Holdings or a Restricted Subsidiary, shall be deemed
to be an incurrence of such Indebtedness by such Restricted Subsidiary not
permitted by this clause (e);
(f) guarantees of any Restricted Subsidiary made in accordance with the
provisions of the "Limitation on Guarantees of Indebtedness by Restricted
Subsidiaries" or the "Limitation on Other
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Restricted Senior Subordinated Indebtedness" covenants;
(g) obligations of Holdings or any guarantor entered into in the ordinary
course of business
(1) pursuant to Interest Rate Agreements designed to protect Holdings or
any Restricted Subsidiary against fluctuations in interest rates in respect
of Indebtedness of Holdings or any Restricted Subsidiary, which obligations
do not exceed the aggregate principal amount of such Indebtedness and
(2) pursuant to Currency Agreements entered into by Holdings or any of
its Restricted Subsidiaries in respect of its assets or obligations, as the
case may be, denominated in a foreign currency;
(h) Indebtedness of Holdings or any guarantor in respect of Purchase
Money Obligations and Capitalized Lease Obligations of Holdings or any
guarantor in an aggregate amount which does not exceed $20.0 million at any
one time outstanding;
(i) Indebtedness of Holdings or any guarantor consisting of guarantees,
indemnities, hold backs or obligations in respect of purchase price
adjustments in connection with the acquisition or disposition of assets,
including, without limitation, shares of Capital Stock of Restricted
Subsidiaries, or contingent payment obligations incurred in connection with
the acquisition of assets which are contingent on the performance of the
assets acquired, other than guarantees of Indebtedness incurred by any
Person acquiring all or any portion of such assets of shares of Capital
Stock of such Restricted Subsidiary for the purpose of financing such
acquisition; provided that the maximum allowable liability in respect of
all such Indebtedness shall at no time exceed the gross proceeds actually
received by Holdings and its Restricted Subsidiaries;
(j) Indebtedness of Holdings or any guarantor represented by
(1) letters of credit for the account of Holdings or any Restricted
Subsidiary or
(2) other obligations to reimburse third parties pursuant to any surety
bond or other similar arrangements, which letters of credit or other
obligations, as the case may be, are intended to provide security for
workers' compensation claims, payment obligations in connection with self-
insurance or other similar requirements in the ordinary course of business;
(k) any renewals, extensions, substitutions, refinancing or replacements
(each, for purposes of this clause, a "refinancing") of any Indebtedness
incurred pursuant to the first paragraph under "Certain Covenants--
Limitation on Indebtedness" or referred to in clauses (a)(2), (b) or (c) of
this definition, including any successive refinancings, so long as
(1) any such new indebtedness shall be in a principal amount that does
not exceed the principal amount so refinanced, plus the lesser of the
amount of any premium required to be paid in connection with such
refinancing pursuant to the terms of the Indebtedness refinanced or the
amount of any premium reasonably determined as necessary to accomplish such
refinancing,
(2) in the case of any refinancing by Holdings of Indebtedness that is
pari passu in right of payment with the notes or Indebtedness that is
subordinate to the notes, such new Indebtedness is made pari passu with or
subordinate to the notes at least to the same extent as the Indebtedness
being refinanced,
(3) in the case of any refinancing by any guarantor of Indebtedness that
is pari passu in right of payment with the note guarantee or Indebtedness
that is subordinate to the note guarantee, such new Indebtedness is made
pari passu with or subordinate to the note guarantee of such guarantor at
least to the same extent as the Indebtedness being refinanced,
(4) such new Indebtedness has an Average Life no shorter than the
Average
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Life of the Indebtedness being refinanced and final stated maturity date of
principal no earlier than the final stated maturity date of principal of
the Indebtedness being refinanced and
(5) Indebtedness of Holdings or a guarantor may only be refinanced with
Indebtedness of Holdings or a guarantor, as the case may be;
(l) payments to or by Holdings to fund the payment of or payment by Triad
of dividends, loans, distributions or annual contributions calculated in
accordance with the requirements of Section 415 of the Internal Revenue
Code to the ESOP in amounts equal to amounts expended by Triad or Holdings
to repurchase shares of its Capital Stock from deceased or retired
employees in accordance with the terms of the ESOP as in effect on the date
of the Indenture and from employees whose employment with Holdings or any
of its subsidiaries has terminated for any reason, in each case
contemplated by this clause (l) only to the extent mandatorily required by
the ESOP as in effect on the date of the indenture, the Internal Revenue
Code or ERISA; and, provided, further, that in each such case Holdings or
Triad has deferred making any cash payments in respect of such repurchase
obligations to the maximum extent possible under the ESOP as in effect on
the date of the Indenture or as modified from time to time to comply with
law;
(m) Physician Support Obligations incurred by Holdings or any Restricted
Subsidiary; and
(n) Indebtedness of Holdings or any guarantor not otherwise permitted by
the foregoing clauses (a) through (m) in an aggregate principal amount not
in excess of $40.0 million at any one time outstanding.
"Permitted Investments" means any of the following:
(a) Investments in Cash Equivalents;
(b) Investments in Holdings or any Restricted Subsidiary;
(c) intercompany Indebtedness to the extent permitted under clauses (d)
or (e) of the definition of "Permitted Indebtedness;"
(d) Investments in an amount not to exceed $10.0 million at any one time
outstanding;
(e) Investments by Holdings or any Restricted Subsidiary in another
Person, if as a result of such Investment
(1) such other Person becomes a Restricted Subsidiary or
(2) such other Person is merged or consolidated with or into, or
transfers or conveys all or substantially all of its assets to, Holdings or
a Restricted Subsidiary;
(f) Investments acquired in the Spin-Off Transactions;
(g) bonds, notes, debentures and other securities received as
consideration for Assets Sales to the extent permitted under the
"Limitation on Sale of Assets" covenant;
(h) any Investment in a Person engaged principally in a Related Business
prior to such Investment if
(1) Holdings would, at the time of such Investment and after giving pro
forma effect thereto as if such Investment had been made at the beginning
of the most recently ended four full fiscal quarter period for which
consolidated financial statements are available immediately preceding the
date of such Investment, have been permitted to incur at least $1.00 of
additional Indebtedness pursuant to the Consolidated Fixed Charge Coverage
Ratio test set forth in the first paragraph under the "Limitation on
Indebtedness" covenant and
(2) the aggregate amount, including cash and the book value of property
other than cash, as determined by the board of directors, of all
Investments made pursuant to this clause (h) by Holdings and its Restricted
Subsidiaries does not exceed in
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the aggregate 15% of the Total Assets of Holdings at the time the
Investment is made; provided that Investments of up to $25.0 million shall
be permitted under this paragraph (h) without regard to the requirements of
clause (1) of this paragraph (h);
(i) Physician Support Obligations made by Holdings or any Restricted
Subsidiary;
(j) in the event Holdings or a Restricted Subsidiary shall establish a
subsidiary for the purpose of insuring the healthcare businesses or
facilities owned or operated by Holdings, any subsidiary, any Permitted
Joint Venture or any physician employed by or on the medical staff of any
such business or facility (the "Insurance Subsidiary"), Investments in an
amount which do not exceed the minimum amount of capital required under the
laws of the jurisdiction in which the Insurance Subsidiary is formed, and
any Investment by such Insurance Subsidiary which is a legal investment for
an insurance company under the laws of the jurisdiction in which the
Insurance Subsidiary is formed and made in the ordinary course of business
and rated in one of the four highest rating categories;
(k) Investments made in connection with Hospital Swaps;
(l) Investments in prepaid expenses, negotiable instruments held for
collection and lease, utility and workers' compensation, performance and
other similar deposits made in the ordinary course of business;
(m) loans and advances to officers, directors and employees made in the
ordinary course of business of less than $15.0 million in the aggregate at
any one time outstanding;
(n) Interest Rate Agreements and Currency Agreements permitted under
"Certain Covenants--Limitation on Indebtedness;"
(o) Investments represented by accounts receivable created or acquired in
the ordinary course of business;
(p) Investments existing on the date on which the notes were originally
issued and any renewal or replacement thereof on terms and conditions no
less favorable than that being renewed or replaced;
(q) any Investment to the extent that the consideration therefor is
Qualified Capital Stock;
(r) shares of Capital Stock or other securities received in settlement of
debts owed to Holdings or any Restricted Subsidiary as a result of
foreclosure, perfection or enforcement of any Lien or indebtedness or in
connection with any good faith settlement of a bankruptcy proceeding; or
(s) the ESOP Loans.
"Permitted Joint Venture" means, with respect to any Person,
(a) any corporation, association, limited liability company or other
business entity (other than a partnership) of which 50% or more of the total
voting power of shares of Capital Stock entitled, without regard to the
occurrence of any contingency, to vote in the election of directors, managers
or trustees thereof and 50% or more of the total equity interests is at the
time of determination owned or controlled, directly or indirectly, by such
Person or one or more of the Restricted Subsidiaries of that Person or a
combination thereof and
(b) any partnership of which 50% or more of the general or limited
partnership interests are owned or controlled, directly or indirectly, by such
Person or one or more of the Restricted Subsidiaries of that Person or a
combination thereof,
which in the case of each of clauses (a) and (b) is engaged in a Related
Business.
"Permitted Liens" means
(a) Liens existing on the Issue Date;
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(b) Liens securing any Interest Rate Agreements of Holdings or any
Restricted Subsidiary;
(c) Liens securing any Indebtedness incurred under clause (k) of the
definition of "Permitted Indebtedness," the proceeds of which are used to
refinance Indebtedness of Holdings or any Restricted Subsidiary; provided that
such Liens extend to or cover only the assets currently securing the
Indebtedness being refinanced;
(d) Liens securing Acquired Indebtedness incurred by Holdings and any
Restricted Subsidiary and permitted under the "Limitation on Indebtedness"
covenant, provided that such Liens attach solely to the assets acquired;
(e) Liens securing Indebtedness owing to Holdings or a Restricted
Subsidiary;
(f) Liens securing Purchase Money Obligations incurred in accordance with
the indenture;
(g) Liens for taxes, assessments or governmental charges or claims either
(1) not delinquent or
(2) contested in good faith by appropriate proceedings and as to which
Holdings or its Restricted Subsidiaries shall have set aside on its books such
reserves as required pursuant to GAAP;
(h) statutory Liens and other Liens imposed by law incurred in the ordinary
course of business for sums not yet delinquent or being contested in good
faith, if Holdings or its Restricted Subsidiaries shall have made such
reserves, as required by GAAP;
(i) Liens incurred or deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other types
of social security, or to secure the performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases, government contracts,
performance and return-of-money bonds and other similar obligations;
(j) judgment Liens not giving rise to an Event of Default so long as such
Lien is adequately bonded and any appropriate legal proceedings which may have
been duly initiated for the review of such judgment shall not have been finally
terminated or the period within which such proceedings may be initiated shall
not have expired;
(k) easements, rights-of-way, zoning restrictions and other similar charges
or encumbrances in respect of real property not interfering in any material
respect with the conduct of the business of Holdings or any of its Restricted
Subsidiaries; or
(l) any interest or title of a lessor in assets or property subject to
Capitalized Lease Obligations or an operating lease of Holdings or any
Restricted Subsidiary.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
"Physician Support Obligation" means a loan to or on behalf of, or a
guarantee of indebtedness of, a physician or healthcare professional providing
service to patients in the service area of a Hospital or other health care
facility operated by Holdings or any of its Restricted Subsidiaries made or
given by Holdings or any Subsidiary of Holdings
(a) in the ordinary course of its business and
(b) pursuant to a written agreement having a period not to exceed four
years.
"Public Equity Offering" means an offer and sale of common stock which is
Qualified Capital Stock of Triad or Holdings made on a primary basis by Triad
or Holdings pursuant to a registration statement that has been declared
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effective by the Commission pursuant to the Securities Act, other than a
registration statement on Form S-8 or otherwise relating to equity securities
issuable under any employee benefit plan of Triad or Holdings.
"Purchase Money Obligations" means any Indebtedness of Holdings or any
Restricted Subsidiary incurred to finance the acquisition or construction of
any property or business, including Indebtedness incurred within 90 days
following such acquisition or construction, including Indebtedness of a Person
existing at the time such Person becomes a subsidiary of Holdings or assumed by
Holdings or a subsidiary of Holdings in connection with the acquisition of
assets from such person; provided, however, that any Lien on such Indebtedness
shall not extend to any property other than the property so acquired or
constructed.
"Qualified Capital Stock" of any Person means any and all Capital Stock of
such Person other than Redeemable Capital Stock.
"Qualified Equity Offering" means
(a) any Public Equity Offering or
(b) an offering of Qualified Capital Stock of Triad or Holdings to non-
Affiliates with gross proceeds to Triad or Holdings in excess of $35.0 million.
"Redeemable Capital Stock" means any class of Capital Stock that, either by
its terms, by the terms of any securities into which it is convertible or
exchangeable or by contract or otherwise, is, or upon the happening of an event
or passage of time would be, required to be redeemed, whether by sinking fund
or otherwise, prior to the date that is 91 days after the final stated maturity
date of the notes or is redeemable at the option of the holder thereof at any
time prior to such date, or is convertible into or exchangeable for debt
securities at any time prior to such date, unless it is convertible or
exchangeable solely at the option of Holdings.
"Related Business" means a healthcare business affiliated or associated
with a Hospital or any business related or ancillary to the provision of
healthcare services or information or the investment in, or the management,
leasing or operation of, a Hospital.
"Restricted Subsidiary" means any subsidiary other than an Unrestricted
Subsidiary.
"sale and leaseback transaction" means any transaction or series of related
transactions pursuant to which Holdings or a Restricted Subsidiary sells or
transfers any property or assets in connection with the leasing of such
property or asset to the seller or transferor.
"senior credit agreement" means the credit agreement dated as of May 11,
1999 among Healthtrust, the lenders party thereto and Bank of America National
Trust and Savings Association, as Administrative Agent, as such agreement may
be amended, renewed, extended, substituted, refinanced, restructured, replaced,
supplemented or otherwise modified from time to time.
"Senior Indebtedness" means:
(1) all obligations of Holdings related to the senior credit agreement,
whether for principal, premium, if any, interest, including interest
accruing after the filing of, or which would have accrued but for the
filing of, a petition by or against Holdings under applicable bankruptcy
laws, whether or not such interest is lawfully allowed as a claim after
such filing, and other amounts due in connection therewith, including any
fees, premiums, expenses and indemnities; and
(2) the principal of, premium, if any, and interest on all other
Indebtedness of Holdings other than the notes, whether outstanding on the
date of the indenture or thereafter created, incurred or assumed, unless,
in the case of any particular Indebtedness, the instrument creating or
evidencing the indebtedness expressly provides that such Indebtedness shall
not be senior in right of payment to the notes.
Notwithstanding the foregoing, "Senior Indebtedness" does not include:
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(a) Indebtedness evidenced by the notes;
(b) Indebtedness of Holdings that is expressly subordinated in right of
payment to any Senior Indebtedness of Holdings or the notes;
(c) Indebtedness of Holdings that by operation of law is subordinate to
any general unsecured obligations of Holdings,
(d) Indebtedness of Holdings to the extent incurred in violation of any
covenant prohibiting the incurrence of Indebtedness under the indenture;
(e) any liability for federal, state or local taxes or other taxes, owed
or owing by Holdings;
(f) accounts payable or other liabilities owed or owing by Holdings to
trade creditors, including guarantees thereof or instruments evidencing
such liabilities;
(g) amounts owed by Holdings for compensation to employees or for
services rendered to Holdings;
(h) Indebtedness of Holdings to any subsidiary or any other Affiliate of
Holdings;
(i) Capital Stock of Holdings; and
(j) Indebtedness which when incurred and without respect to any election
under Section 1111(b) of Title 11 of the United States Code is without
recourse to Holdings or any Restricted Subsidiary.
"Spin-Off-Distribution" means the distribution to holders of Columbia/HCA
stock of all of the outstanding shares of Triad.
"Spin-Off Transactions" means the transactions described in this prospectus
under the caption "The Distribution."
"stated maturity" means, when used with respect to any note or any
installment of interest thereon, the date specified in such note as the fixed
date on which the principal of such note or such installment of interest is due
and payable, and, when used with respect to any other Indebtedness, means the
date specified in the instrument governing such indebtedness as the fixed date
on which the principal of such indebtedness or any installment of interest
thereon is due and payable.
"subsidiary" means any Person a majority of the equity ownership or voting
stock of which is at the time owned, directly or indirectly, by Holdings or by
one or more other subsidiaries. For purposes of this definition, any directors'
qualifying shares shall be disregarded in determining the ownership of a
subsidiary.
"Total Assets" of Holdings means the total consolidated assets of Holdings
and its Restricted Subsidiaries as shown on the most recent balance sheet of
Holdings.
"Transition Agreements" means the collective reference to the
(a) distribution agreement among Columbia/HCA, Triad and LifePoint;
(b) tax sharing and indemnification agreement among Columbia/HCA, Triad and
LifePoint;
(c) benefits and employment matters agreement among Columbia/HCA, Triad and
LifePoint;
(d) insurance allocation and administration agreement among Columbia/HCA,
Triad and LifePoint;
(e) computer and data processing services agreement between Columbia
Information Systems and Triad;
(f) subleases between certain subsidiaries of Columbia/HCA and Triad
relating to Triad's principal executive offices;
(g) transitional services agreement between Columbia/HCA and Triad;
(h) agreement to share telecommunications services between Columbia
Information Systems and Triad; and
(i) agreements between Columbia/HCA and Triad relating to the provision of
account collection services and relating to Triad's participation in a group
purchasing organization with Columbia/HCA.
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"Unrestricted Subsidiary" means
(a) any direct or indirect subsidiary that at the time of determination
shall be an Unrestricted Subsidiary, as designated by the board of directors of
Holdings, as provided below, and
(b) any subsidiary of any Unrestricted Subsidiary;
provided, however, that in no event shall any guarantor be an Unrestricted
Subsidiary. The board of directors of Holdings may designate any subsidiary to
be an Unrestricted Subsidiary so long as
(1) neither Holdings nor any Restricted Subsidiary is directly or
indirectly liable for any Indebtedness of such subsidiary,
(2) no default with respect to any Indebtedness of such subsidiary would
permit, upon notice, lapse of time or otherwise, any holder of any other
Indebtedness of Holdings or any Restricted Subsidiary, except any nonrecourse
guarantee given solely to support the pledge by Holdings or a Restricted
Subsidiary of the Capital Stock of an Unrestricted Subsidiary, to declare a
default on such other Indebtedness or cause the payment thereof to be
accelerated or payable prior to its stated maturity and
(3) any Investment in such subsidiary made as a result of designating such
subsidiary an Unrestricted Subsidiary will not violate the provisions of the
"Limitation on Unrestricted Subsidiaries" covenant. Any such designation by the
board of directors of Holdings shall be evidenced to the trustee by filing a
board resolution with the trustee giving effect to such designation. The board
of directors of Holdings may designate any Unrestricted Subsidiary as a
Restricted Subsidiary if immediately after giving effect to such designation,
there would be no Default or Event of Default under the indenture and Holdings
would be permitted to incur $1.00 of additional Indebtedness, other than
Permitted Indebtedness, pursuant to the "Limitation on Indebtedness" covenant.
"U.S. Government Obligations" means securities that are
(a) direct obligations of the United States of America for the timely
payment of which its full faith and credit is pledged or
(b) obligations of a Person controlled or supervised by and acting as an
agency or instrumentality of the United States of America the timely
payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America, which, in either case, are not
callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank (as defined in Section
3(a)(2) of the Securities Act), as custodian with respect to any such U.S.
Government Obligation or a specific payment of principal of or interest on
any such U.S. Government Obligation held by such custodian for the account
of the holder of such depository receipt, provided that, except as required
by law, such custodian is not authorized to make any deduction from the
amount payable to the holder of such depository receipt from any amount
received by the custodian in respect of the U.S. Government Obligation or
the specific payment of principal of or interest on the U.S. Government
Obligation evidenced by such depository receipt.
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DESCRIPTION OF NEW CREDIT AGREEMENT
In connection with the distribution of Triad stock to Columbia/HCA
shareholders, Holdings assumed certain indebtedness under a $465.0 million new
credit agreement with a syndicate of banks, and NationsBanc Montgomery
Securities, LLC as lead arranger. Capitalized terms not otherwise defined in
this section shall have the meanings ascribed to such terms in the new credit
agreement, a copy of which has previously been filed with the Commission by
Triad, and is incorporated by reference to the registration statement, of which
this prospectus forms a part. The $465.0 million new credit agreement consists
of:
. a $65.0 million Tranche A term loan facility,
. a $200.0 million Tranche B term loan facility,
. a $75.0 million asset sale bridge loan facility, and
. a $125.0 million revolving credit facility.
Repayments. Repayments under the term loan facilities are due in quarterly
installments, with quarterly amortization based on agreed upon annual amounts.
The final payment under the Tranche A term loan facility will be due and
payable in May 2005 and the final payment under the Tranche B term loan
facility will be due and payable in November 2005. The asset sale bridge loan
facility will be due and payable in May 2000. In addition to the scheduled
amortization, Holdings will be required to repay borrowings under the bridge
loan facility and the term loan facilities with proceeds from asset sales,
subject to certain exceptions, and with proceeds from issuance of equity or
debt securities other than the notes.
Any voluntary prepayment of the Tranche B term loan facility made at any
time prior to the first anniversary of the distribution date will be in an
amount equal to 102% of the principal amount of such prepayment, and any
voluntary prepayment of the Tranche B term loan facility made after the first
anniversary of the distribution date but prior to the second anniversary of the
distribution date will be in an of such prepayment. The proceeds from sales of
certain identified assets, including the hospitals Triad currently is holding
for sale, first will be used to repay the bridge loan facility, until that
facility is paid in full. The revolving credit facility, which was undrawn at
the time of the distribution, is available for working capital and other
general corporate purposes, and any outstanding amounts thereunder will be due
and payable in May 2005.
Interest. At Holdings' option, the loans under the new credit agreement
will bear interest at a rate per annum equal to:
. LIBOR plus an applicable margin; or
. the higher of the administrative agent's prime rate or 0.5% above the
federal funds rate, in each case plus an applicable margin.
The applicable margin initially will be a fixed margin and after six months
will be based on the ratio of Holdings' consolidated total funded debt to
EBITDA, as defined in the new credit agreement.
Collateral and Guarantees. Triad will guarantee the borrowings and other
obligations under the new credit agreement, which guarantee will be secured by
a first priority pledge of the capital stock of Holdings. Holdings will also
grant a first priority pledge of its assets to secure the new credit agreement.
Holdings' subsidiaries will guarantee the borrowings under the new credit
agreement, which guarantees will be secured by a first priority pledge of
assets of the subsidiaries.
Covenants. The new credit agreement contains covenants that, among other
things, limit Holdings' and certain of its subsidiaries' ability to incur
additional indebtedness, pay dividends on, redeem or purchase its capital
stock, make investments and capital expenditures, engage in transactions with
affiliates, create certain liens, sell assets and consolidate, merge or
transfer assets. In addition, Holdings is required to comply with various
financial ratios and tests, including a
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minimum net worth test, a total funded debt to EBITDA ratio, a senior funded
debt to EBITDA ratio and a minimum fixed charged coverage ratio, all as defined
in the new credit agreement. The new credit agreement also contains provisions
that prohibit any modification of the indenture governing the notes in any
manner adverse to the lenders under the new credit agreement and limits the
ability of Holdings to refinance the notes without first obtaining consent
under the new credit agreement.
The above summary highlights the material provisions of the new credit
agreement but does not purport to be complete. You should read the complete
text of the new credit agreement, a copy of which has previously been filed
with the Commission by Triad, and is incorporated by reference to the
registration statement of which this prospectus is a part.
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BOOK-ENTRY; DELIVERY AND FORM
Except as set forth below, the exchange notes will be issued in the form of
one or more fully registered notes in global form without coupons (each a
"Global Note"). The Global Notes will be deposited with, or on behalf of, DTC,
and registered in the name of DTC or a nominee thereof. The old notes, to the
extent validly tendered and accepted and directed by their holders in their
letters of transmittal, will be exchanged through book-entry electronic
transfer for the Global Note.
Global Notes
Pursuant to procedures established by DTC, interests in the Global Notes
will be shown on, and the transfer of such interest will be effected only
through, records maintained by DTC or its nominee with respect to interests of
persons who have accounts with DTC ("participants") and the records of
participants with respect to interests of persons other than participants.
So long as DTC or its nominee is the registered owner or holder of the
notes, DTC or such nominee will be considered the sole owner or holder of the
notes represented by such Global Notes for all purposes under the indenture. No
beneficial owner of an interest in the Global Notes will be able to transfer
such interest except in accordance with DTC's procedures, in addition to those
provided for under the indenture with respect to the notes.
The laws of some states require that certain persons take physical delivery
in definitive form of securities that they own. Consequently, your ability to
transfer your beneficial interests in a Global Note to such persons may be
limited to that extent. Because DTC can act only on behalf of its participants,
which in turn act on behalf of indirect participants and certain banks, your
ability to pledge your interests in a Global Note to persons or entities that
do not participate in the DTC system, or otherwise take actions in respect of
such interests, may be affected by the lack of a physical certificate
evidencing such interests.
Holdings will make payments of the principal of, premium, if any, and
interest on Global Notes to DTC or its nominee as the registered owner thereof.
Neither Holdings nor the trustee nor any of their respective agents will have
any responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in the Global Notes
or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.
Holdings expects that DTC or its nominee, on receipt of any payment of
principal or interest in respect of a Global Note representing any notes held
by it or its nominee, will immediately credit participants' accounts with
payments in amounts proportionate to their respective beneficial interests in
the principal amount of such Global Note for such notes as shown on the records
of DTC or its nominee. Holdings also expects that payments by participants to
owners of beneficial interests in such Global Note held through such
participants will be governed by standing instructions and customary practices,
as is now the case with securities held for the accounts of customers
registered in "street name." Such payment will be the responsibility of such
participants.
Transfers between participants in DTC will be effected in accordance with
DTC's procedures, and will be settled in same-day funds.
Notes that are issued as described below under "Certificated Notes" will be
issued in registered definitive form without coupons (each, a "Certificated
Note"). Upon transfer of Certificated Notes, such Certificated Notes may,
unless the Global Note has previously been exchanged for Certificated Notes, be
exchanged for an interest in the Global Note representing the principal amount
of notes being transferred.
DTC has advised Holdings that it will take any action permitted to be taken
by a holder of notes, including the presentation of notes for
149
<PAGE>
exchange as described below and the conversion of notes, only at the direction
of one or more participants to whose account with DTC interests in the Global
Notes are credited and only in respect of such portion of the aggregate
principal amount of the notes as to which such participant or participants has
or have given such direction. However if there is an Event of Default under the
notes, the Global Notes will be exchanged for legended notes in certificated
form, and distributed to DTC's participants.
DTC has advised Holdings that it is
(1) is a limited purpose trust company organized under the laws of the
State of New York,
(2) a member of the Federal Reserve System,
(3) a "clearing corporation" within the meaning of the Uniform
Commercial Code and
(4) a "Clearing Agency" registered pursuant to the provisions of
Section 17A of the Exchange Act.
DTC was created to hold securities for its participants and facilitate
the clearance and settlement of securities transactions between
participants through electronic book-entry changes in accounts of its
participants, thereby eliminating the need for physical transfer and
delivery of certificates. Participants include securities brokers and
dealers, banks, trust companies and clearing corporations and may include
certain other organizations. Indirect access to the DTC system is
available to other entities such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a
participant, either directly or indirectly ("indirect participants").
Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of beneficial ownership interests in the Global Notes among
participants of DTC, it is under no obligation to perform or continue to
perform such procedures, and such procedures may be discontinued at any time.
None of Holdings, the trustee or any of their respective agents will have any
responsibility for the performance by DTC or its participants or indirect
participants of their respective obligations under the rules and procedures
governing their operations, including maintaining, supervising or reviewing the
records relating to, or payments made on account of, beneficial ownership
interests in Global Notes.
DTC management is aware that some computer applications, systems and the
like for processing data ("Systems") that are dependent upon calendar dates,
including dates before, on and after January 1, 2000, may encounter "Year 2000
problems." DTC has informed its participants and other members of the financial
community (the "Industry") that it has developed and is implementing a program
so that its Systems, as the same relate to the timely payment of distributions,
including principal and interest payments, to securityholders, book-entry
deliveries and settlement of trades within DTC, continue to function
appropriately. This program includes a technical assessment and a remediation
plan, each of which is complete. Additionally, DTC's plan includes a testing
phase, which is expected to be completed within appropriate time frames.
However, DTC's ability to perform properly its services is also dependent
upon other parties, including, but not limited to, issuers and their agents, as
well as third party vendors from whom DTC licenses software and hardware and
third party vendors from whom DTC relies for information or the provision of
services, including telecommunication and electrical utility service providers,
among others. DTC has informed the Industry that it is contacting and will
continue to contact third party vendors from whom DTC acquires services to:
(1) impress upon them the importance of such services being Year 2000
compliant; and
(2) determine the extent of their efforts for Year 2000 remediation
and, as appropriate, testing of their services.
150
<PAGE>
In addition, DTC is in the process of developing such contingency plans,
as it deems appropriate.
According to DTC, the foregoing information with respect to DTC has been
provided to the Industry for informational purposes only and it not intended
to serve as a representation, warranty or contract modification of any kind.
Certificated Notes
You may not exchange your beneficial interest in a Global Note for a note
in certificated form unless:
(1) DTC notifies Holdings that it is unwilling or unable to continue as
depositary for the Global Note, or DTC ceases to be a "clearing agency"
registered under the Exchange Act, and in either case, Holdings
thereupon fails to appoint a successor depositary within 120 days; or
(2) Holdings, at its option, notifies the trustee in writing that is
electing to issue the notes in certificated form; or
(3) an Event of Default shall have occurred and be continuing with respect
to the notes.
In all cases, Certificated Notes delivered in exchange for any Global Note
or beneficial interests therein will be registered in the names, and issued in
any approved denominations, requested by or on behalf of the depositary in
accordance with its customary procedures.
151
<PAGE>
PLAN OF DISTRIBUTION
Each Participating Broker-Dealer that receives exchange notes for its own
account pursuant to the exchange offer must acknowledge that it will deliver a
prospectus in connection with any resale of such exchange notes. This
prospectus, as it may be amended or supplemented from time to time, may be used
by a Participating Broker-Dealer in connection with resales of exchange notes
received in exchange for notes where such notes were acquired as a result of
market-making activities or other trading activities. We have agreed that, for
a period of 180 days after the expiration date, we will make this prospectus,
as it may be amended or supplemented, available to any Participating Broker-
Dealer for use in connection with any such resale.
We will not receive any proceeds from any sale of exchange notes by
Participating Broker-Dealers.
Exchange notes received by Participating Broker-Dealers for their own
account pursuant to the exchange offer may be sold from time to time in one or
more transactions
. in the over-the-counter market,
. in negotiated transactions,
. through the writing of options on the exchange notes, or
. a combination of such methods of resale,
at market prices prevailing at the time of resale, at prices related to such
prevailing market prices or at negotiated prices.
Any such resale may be made:
. directly to purchasers or
. to or through brokers or dealers who may receive compensation in the
form of commissions or concessions from any such Participating Broker-
Dealer or the purchasers of any such exchange notes.
Any Participating Broker-Dealer that resells exchange notes that were
received by it for its own account pursuant to the exchange offer and any
broker or dealer that participates in a distribution of such new notes may be
deemed to be an "underwriter" within the meaning of the Securities Act and any
profit on any such resale of exchange notes and any commission or concessions
received by any such persons may be deemed to be underwriting compensation
under the Securities Act. The letter of transmittal states that, by
acknowledging that it will deliver and by delivering a prospectus, a
Participating Broker-
Dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act.
For a period of 180 days after the expiration date, we will promptly send
additional copies of this prospectus and any amendment or supplement to this
prospectus to any Participating Broker-Dealer that requests such documents in
the letter of transmittal. We have agreed to pay all expenses incident to the
exchange offer, including the expenses of one counsel for the holders of the
notes, other than commissions and concessions of any Participating Broker-
Dealer and will indemnify the holders of the notes, including any Participating
Broker-Dealers, against certain liabilities, including liabilities under the
Securities Act.
152
<PAGE>
MATERIAL FEDERAL INCOME TAX CONSIDERATIONS
The following is a discussion of the material U.S. federal income tax
considerations relevant to the exchange of notes for the exchange notes
pursuant to the exchange offer. This discussion is based upon currently
existing provisions of the Internal Revenue Code of 1986, as amended, Treasury
regulations promulgated thereunder, and administrative and judicial
interpretations thereof, all as in effect on the date hereof and all of which
are subject to change, possibly on a retroactive basis. There can be no
assurance that the Internal Revenue Service will not take positions contrary to
those taken in this discussion, and no ruling from the Internal Revenue Service
has been or will be sought. This discussion does not address all of the U.S.
federal income tax considerations that may be relevant to particular holders of
notes in light of their individual circumstances, nor does it address the U.S.
federal income tax considerations that may be relevant to holders subject to
special rules, including, for example, banks and other financial institutions,
insurance companies, tax-exempt entities, dealers in securities, and persons
holding notes as part of a hedging or conversion transaction or a straddle.
Holders are urged to consult their own tax advisors as to the particular
U.S. federal income tax consequences to them of exchanging notes for exchange
notes, as well as the tax consequences under state, local, foreign and other
tax laws, and the possible effects of changes in tax laws.
The Company believes that the exchange of notes for the exchange notes
pursuant to the exchange offer will not be treated as an "exchange" for U.S.
federal income tax purposes. Consequently, the Company believes that a holder
that exchanges notes for exchange notes pursuant to the exchange offer will not
recognize taxable gain or loss on such exchange, such holder's adjusted tax
basis in the exchange notes will be the same as its adjusted tax basis in the
notes exchanged therefor immediately before such exchange, and such holder's
holding period for the exchange notes will include the holding period for the
notes exchanged therefor.
153
<PAGE>
LEGAL MATTERS
The validity of the exchange notes
offered hereby will be passed upon for
Holdings by Dewey Ballantine LLP, New York, New York.
EXPERTS
Ernst & Young LLP, independent auditors, have audited the combined
financial statements of Triad Hospitals, Inc. at December 31, 1998 and 1997,
and for each of the three years in the period ended December 31, 1998, as set
forth in their report included in this prospectus. We have included the
combined financial statements of Triad Hospitals, Inc. in the prospectus and
elsewhere in the registration statement in reliance on Ernst & Young LLP's
report, given on their authority as experts in accounting and auditing.
154
<PAGE>
INDEX TO FINANCIAL STATEMENTS
TRIAD HOSPITALS, INC. COMBINED FINANCIAL STATEMENTS
<TABLE>
<S> <C>
Report of Independent Auditors........................................... F-2
Combined Statements of Operations--for the years ended December 31, 1998,
1997 and 1996........................................................... F-3
Combined Balance Sheets--December 31, 1998 and 1997...................... F-4
Combined Statements of Equity--for the years ended December 31, 1998,
1997 and 1996........................................................... F-5
Combined Statements of Cash Flows--for the years ended December 31, 1998,
1997 and 1996........................................................... F-6
Notes to Combined Financial Statements................................... F-7
Condensed Consolidated Statements of Operations--for the six months ended
June 30, 1999 and 1998 (unaudited)...................................... F-20
Condensed Consolidated Balance Sheets--June 30, 1999 and December 31,
1998 (unaudited)........................................................ F-21
Condensed Consolidated Statements of Cash Flows--for the six months ended
June 30, 1999 and 1998 (unaudited)...................................... F-22
Notes to Condensed Consolidated Financial Statements..................... F-23
</TABLE>
Explanatory Note: The historical combined financial statements presented
herein are those of the Pacific Group of Columbia/HCA Healthcare Corporation.
Prior to the distribution date, the assets and liabilities of the Pacific Group
were contributed to Triad Hospitals, Inc., a newly-formed Delaware holding
company. On the distribution date, the assets and liabilities of the Pacific
Group constituted substantially all of the assets and liabilities of Triad
Hospitals, Inc.
F-1
<PAGE>
REPORT OF INDEPENDENT AUDITORS
To the Board of Directors and Stockholders
Columbia/HCA Healthcare Corporation
We have audited the accompanying combined balance sheets of the net assets
and operations to be contributed to Triad Hospitals, Inc. (see Note 1) as of
December 31, 1998 and 1997 and the related combined statements of operations,
equity and cash flows for each of the three years in the period ended December
31, 1998. These combined financial statements are the responsibility of
management of Columbia/HCA Healthcare Corporation (the "Company"). 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 audits 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 combined financial position of the net assets and
operations to be contributed to Triad Hospitals, Inc. (see Note 1) at December
31, 1998 and 1997 and the combined results of their operations and their cash
flows for each of the three years in the period ended December 31, 1998 in
conformity with generally accepted accounting principles.
As explained in Note 7 to the combined financial statements, effective
January 1, 1997, the Company changed its method of accounting for start-up
costs.
ERNST & YOUNG LLP
Nashville, Tennessee
February 26, 1999
F-2
<PAGE>
TRIAD HOSPITALS, INC.
COMBINED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31 1998, 1997 AND 1996
(Dollars in millions, except per share amounts)
<TABLE>
<CAPTION>
1998 1997 1996
-------- -------- --------
<S> <C> <C> <C>
Revenues......................................... $1,588.7 $1,609.3 $1,600.5
Salaries and benefits............................ 700.5 666.8 628.1
Supplies......................................... 241.6 232.8 221.9
Other operating expenses......................... 362.6 385.9 351.7
Provision for doubtful accounts.................. 138.4 138.5 106.5
Depreciation and amortization.................... 109.6 102.9 94.5
Interest expense allocated from Columbia/HCA..... 66.8 58.4 49.9
Interest expense................................. 2.1 2.1 2.1
Management fees allocated from Columbia/HCA...... 29.3 25.4 20.7
Impairment of long-lived assets.................. 55.1 13.7 --
-------- -------- --------
1,706.0 1,626.5 1,475.4
-------- -------- --------
Income (loss) from continuing operations before
minority interests, equity in earnings and
income taxes.................................... (117.3) (17.2) 125.1
Minority interests in earnings of consolidated
entities........................................ (11.0) (11.5) (10.8)
Equity in earnings of non-consolidating
entities........................................ 3.4 2.5 2.2
-------- -------- --------
Income (loss) from continuing operations before
income taxes ................................... (124.9) (26.2) 116.5
Income tax provision (benefit)................... 39.4 7.2 (48.2)
-------- -------- --------
Income (loss) from continuing operations......... (85.5) (19.0) 68.3
Discontinued operations:
Income (loss) from operations, net of income
taxes (benefit) of $(0.7), $3.2 and $4.1 for
the years ended December 31, 1998, 1997 and
1996, respectively............................ (1.6) 4.9 6.4
Estimated loss on disposal, net of income tax
benefit of $1.9................................. -- (2.9) --
Cumulative effect of accounting change, net of
income tax benefit of $1.8...................... -- (2.8) --
-------- -------- --------
Net income (loss).............................. $ (87.1) $ (19.8) $ 74.7
======== ======== ========
Basic earnings (loss) per share (see Note 13):
Income (loss) from continuing operations....... $ (2.85) $ (0.63) $ 2.28
Income (loss) from discontinued operations..... (0.05) 0.06 0.21
Cumulative effect of accounting change......... -- (0.09) --
-------- -------- --------
Net income (loss)............................ $ (2.90) $ (0.66) $ 2.49
======== ======== ========
Diluted earnings (loss) per share (see Note 13):
Income (loss) from continuing operations....... $ (2.85) $ (0.63) $ 2.26
Income (loss) from discontinued operations..... (0.05) 0.06 0.21
Cumulative effect of accounting change......... -- (0.09) --
-------- -------- --------
Net income (loss)............................ $ (2.90) $ (0.66) $ 2.47
======== ======== ========
</TABLE>
The accompanying notes are an integral part of the combined financial
statements.
F-3
<PAGE>
TRIAD HOSPITALS, INC.
COMBINED BALANCE SHEETS
DECEMBER 31, 1998 AND 1997
(Dollars in millions)
<TABLE>
<CAPTION>
Pro Forma
Liabilities
and Equity
1998
(see Note 2) 1998 1997
------------ -------- --------
(unaudited)
<S> <C> <C> <C>
ASSETS
Current assets:
Accounts receivable, less allowances for
doubtful accounts of $155.9 and $136.9 at
December 31, 1998 and 1997................. $ 199.3 $ 191.8
Inventories................................. 44.8 43.2
Income taxes................................ 37.9 31.9
Other....................................... 23.9 23.3
-------- --------
305.9 290.2
Property and equipment, at cost:
Land........................................ 82.0 81.1
Buildings................................... 604.9 639.4
Equipment................................... 712.0 655.5
Construction in progress (estimated cost to
complete and equip after December 31,
1998--$107.8).............................. 63.7 46.9
-------- --------
1,462.6 1,422.9
Accumulated depreciation...................... (703.1) (624.2)
-------- --------
759.5 798.7
Intangible assets, net of accumulated
amortization of $50.2 and $40.5 at December
31, 1998 and 1997............................ 272.9 279.9
Investment in equity of affiliates............ 24.3 21.6
Other......................................... 8.7 20.1
-------- --------
$1,371.3 $1,410.5
======== ========
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable............................ $ 47.5 $ 47.5 $ 62.6
Accrued salaries............................ 34.8 34.8 38.1
Other current liabilities................... 38.7 38.7 39.2
-------- -------- --------
121.0 121.0 139.9
Intercompany balances payable to
Columbia/HCA................................. -- 613.7 525.0
Long-term debt................................ 675.0 13.4 14.4
Deferred taxes and other liabilities.......... 62.5 62.5 81.3
Minority interests in equity of consolidated
entities..................................... 60.0 60.0 62.1
Equity, investments by Columbia/HCA........... 452.8 500.7 587.8
-------- -------- --------
$1,371.3 $1,371.3 $1,410.5
======== ======== ========
</TABLE>
The accompanying notes are an integral part of the combined financial
statements.
F-4
<PAGE>
TRIAD HOSPITALS, INC.
COMBINED STATEMENTS OF EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
(Dollars in millions)
<TABLE>
<CAPTION>
Pro Forma
1998
(see Note 2) 1998 1997 1996
------------ ------ ------ ------
(unaudited)
<S> <C> <C> <C> <C>
Equity at beginning of period.............. $587.8 $587.8 $607.6 $532.9
Net income (loss)........................ (87.1) (87.1) (19.8) 74.7
Recapitalization upon assumption of
debt.................................... (47.9) -- -- --
------ ------ ------ ------
Equity at end of period.................... $452.8 $500.7 $587.8 $607.6
====== ====== ====== ======
</TABLE>
The accompanying notes are an integral part of the combined financial
statements.
F-5
<PAGE>
TRIAD HOSPITALS, INC.
COMBINED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
(Dollars in millions)
<TABLE>
<CAPTION>
1998 1997 1996
------- ------- -------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income (loss).................................. $ (87.1) $ (19.8) $ 74.7
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Provision for doubtful accounts................... 138.4 138.5 106.5
Depreciation and amortization..................... 109.6 102.9 94.5
Deferred income taxes (benefit)................... (24.6) (10.8) 0.8
Impairment of long-lived assets................... 55.1 13.7 --
Loss (income) from discontinued operations........ 1.6 (2.0) (6.4)
Cumulative effect of accounting change............ -- 2.8 --
Increase (decrease) in cash from operating assets
and liabilities:
Accounts receivable.............................. (145.9) (115.3) (135.0)
Inventories and other assets..................... (2.1) (1.6) 3.4
Accounts payable and other current liabilities... (18.9) (6.8) 19.0
Other............................................. (2.2) (1.3) 7.8
------- ------- -------
Net cash provided by operating activities....... 23.9 100.3 165.3
------- ------- -------
Cash flows from investing activities:
Purchase of property and equipment................. (114.9) (120.1) (94.4)
Investment in and advances to affiliates........... (2.7) (2.5) (19.1)
Other.............................................. 5.9 8.1 2.5
------- ------- -------
Net cash used in investing activities........... (111.7) (114.5) (111.0)
------- ------- -------
Cash flows from financing activities:
Decrease in long-term debt, net.................... (0.9) (1.3) (11.5)
Increase (decrease) in intercompany balances with
Columbia/HCA, net................................. 88.7 15.5 (42.8)
------- ------- -------
Net cash provided by (used in) financing
activities..................................... 87.8 14.2 (54.3)
------- ------- -------
Change in cash and cash equivalents................. $ -- $ -- $ --
======= ======= =======
Interest payments................................... $ 69.4 $ 61.1 $ 52.2
Income tax payments (refunds), net.................. $ (15.9) $ 3.6 $ 46.6
</TABLE>
The accompanying notes are an integral part of the combined financial
statements.
F-6
<PAGE>
TRIAD HOSPITALS, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS
NOTE 1--COLUMBIA/HCA'S PROPOSED SPIN-OFF OF PACIFIC GROUP
In 1998, the Board of Directors of Columbia/HCA Healthcare Corporation
("Columbia/HCA") approved in principle the spin-off of its operations
comprising the Pacific Group to its shareholders (the "Distribution") as an
independent, publicly-traded company. The Pacific Group and the independent,
publicly-traded company to which its assets and liabilities will be contributed
are hereinafter referred to as "Triad Hospitals, Inc." or "Triad." The
Distribution is subject to obtaining a tax ruling by the Internal Revenue
Service ("IRS") that would allow it to be tax-free to Columbia/HCA and its
shareholders, various regulatory approvals and approval of a definitive plan by
Columbia/HCA's Board of Directors. Triad is comprised of 39 hospitals
(including two facilities that are being leased from Triad and an investment in
one hospital that is accounted for using the equity method), 19 free-standing
ambulatory surgery centers (including three ambulatory surgery centers that are
being leased from Triad and two investments in surgery centers that are
accounted for using the equity method) and related health care entities located
in eleven western, southwestern and southeastern states. The accompanying
financial statements, prepared on the pushed down basis of the historical cost
to Columbia/HCA, represent the combined financial position, results of
operations and cash flows of Triad.
In connection with the Distribution, all intercompany amounts payable by
Triad to Columbia/HCA will be eliminated, and Triad will assume certain
indebtedness from Columbia/HCA. In addition, Triad will enter into various
agreements with Columbia/HCA which are intended to facilitate orderly changes
for both companies in a way which will be minimally disruptive to each entity.
The combined financial statements included herein may not necessarily be
indicative of the results of operations, financial position and cash flows of
Triad in the future or had it operated as a separate, independent company
during the periods presented. The combined financial statements included herein
do not reflect any changes that may occur in the financing and operations of
Triad as a result of the Distribution.
NOTE 2--ACCOUNTING POLICIES
Principles of Combination
The combined financial statements include the accounts of Triad and all
affiliated subsidiaries and entities controlled by Triad through Triad's direct
or indirect ownership of a majority voting interest. Significant intercompany
transactions within Triad have been eliminated. Investments in entities which
Triad does not control, but in which it has a substantial ownership interest
and can exercise significant influence, are accounted for using the equity
method.
The preparation of the combined financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements
and accompanying notes. Actual results could differ from those estimates.
Equity
Equity represents the net investment in Triad by Columbia/HCA. It includes
common stock, additional paid-in-capital and net earnings.
F-7
<PAGE>
TRIAD HOSPITALS, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)
NOTE 2--ACCOUNTING POLICIES--(Continued)
Revenues
Triad's health care facilities have entered into agreements with third-
party payers, including government programs and managed care health plans,
under which the facilities are paid based upon established charges, the cost of
providing services, predetermined rates per diagnosis, fixed per diem rates or
discounts from established charges.
Revenues are recorded at estimated amounts due from patients and third-
party payers for the health care services provided. Settlements under
reimbursement agreements with third-party payers are estimated and recorded in
the period the related services are rendered and are adjusted in future periods
as final settlements are determined. The net adjustments to estimated
settlements resulted in increases to revenues of $3.0 million and $32.4 million
for the years ended December 31, 1998 and 1996, respectively (adjustments for
1997 netted to zero). In association with the ongoing Federal investigations
into certain of Columbia/HCA's business practices, the applicable governmental
agencies have ceased the settlement of cost reports. Since the cost reports are
not being settled, the Company is not receiving updated information which has
historically been the basis used to adjust estimated settlement amounts. At
this time, the Company cannot predict when, or if, the historical cost report
settlement process will be resumed. Management believes that adequate
provisions have been made for adjustments that may result from final
determination of amounts earned under these programs. Columbia/HCA will retain
sole responsibility for, and be entitled to, any Medicare, Medicaid or cost-
based Blue Cross settlements relating to cost reporting periods ending on or
prior to the distribution date. The estimated net settlement amount as of
December 31, 1998 was a credit of approximately $38.3 million and is included
in accounts receivable in the accompanying balance sheet.
Triad provides care without charge to patients who are financially unable
to pay for the health care services they receive. Because Triad does not pursue
collection of amounts determined to qualify as charity care, they are not
reported in revenues.
Accounts Receivable
Triad receives payment for services rendered from federal and state
agencies (under the Medicare, Medicaid and CHAMPUS programs), managed care
health plans, commercial insurance companies, employers and patients. During
the years ended December 31, 1998, 1997 and 1996, approximately 35.6%, 36.5%
and 36.5%, respectively, of Triad's revenues related to patients participating
in the Medicare program. Triad recognizes that revenues and receivables from
government agencies are significant to its operations, but it does not believe
that there are significant credit risks associated with these government
agencies. Triad does not believe that there are any other significant
concentrations of revenues from any particular payer that would subject it to
any significant credit risks in the collection of its accounts receivable.
Inventories
Inventories are stated at the lower of cost (first-in, first-out) or
market.
Long-Lived Assets
(a) Property and Equipment
Property and equipment are stated at cost. Routine maintenance and repairs
are charged to expense as incurred. Expenditures that increase capacities or
extend useful lives are capitalized.
F-8
<PAGE>
TRIAD HOSPITALS, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)
NOTE 2--ACCOUNTING POLICIES--(Continued)
Depreciation expense, computed using the straight-line method, was $99.0
million, $90.8 million and $83.2 million for the years ended December 31, 1998,
1997 and 1996, respectively. Buildings and improvements are depreciated over
estimated useful lives ranging generally from 10 to 40 years. Estimated useful
lives of equipment vary generally from 3 to 10 years.
(b) Intangible Assets
Intangible assets consist primarily of costs in excess of the fair value of
identifiable net assets of acquired entities and are amortized using the
straight-line method, generally over periods ranging from 30 to 40 years for
hospital acquisitions and periods ranging from 5 to 20 years for physician
practice and clinic acquisitions. Noncompete agreements and debt issuance costs
are amortized based upon the terms of the respective contracts or loans.
When events, circumstances and operating results indicate that the carrying
values of certain long-lived assets and the related identifiable intangible
assets might be impaired, Triad prepares projections of the undiscounted future
cash flows expected to result from the use of the assets and their eventual
disposition. If the projections indicate that the recorded amounts are not
expected to be recoverable, such amounts are reduced to estimated fair value.
Income Taxes
Columbia/HCA files consolidated federal and state income tax returns which
includes all of its eligible subsidiaries, including Triad. The provisions for
income taxes (benefits) in the combined statements of operations for all
periods presented have been computed on a separate return basis (i.e., assuming
Triad had not been included in a consolidated income tax return with
Columbia/HCA). All income tax payments are made by Triad through Columbia/HCA.
Deferred tax assets and liabilities result principally from certain revenue
and expense items being recognized for tax purposes in years other than the
year in which they are reflected in the combined financial statements.
General and Professional Liability Risks
Columbia/HCA assumes the liability for all general and professional
liability claims incurred through the distribution date. Accordingly, no
reserve for professional and general liability risks is recorded in the
accompanying combined balance sheets. The cost of general and professional
liability coverage is allocated by Columbia/HCA's captive insurance company to
Triad based on actuarially determined estimates. Triad intends to continue the
general and professional coverage with Columbia/HCA under the same general
terms, through December 31, 1999. The cost for the years ended December 31,
1998, 1997 and 1996 was approximately $27.0 million, $22.9 million and $21.4
million, respectively.
Triad participates in a self-insured program for workers' compensation and
health insurance administered by Columbia/HCA. Columbia/HCA will retain sole
responsibility for all workers' compensation and health claims incurred prior
to the distribution date. Accordingly, no reserves for worker's compensation
and health claims liability risks are recorded in the accompanying combined
balance sheets. The cost for these programs is based upon claims paid, plus an
actuarially determined amount for claims incurred but not reported. The cost
for the years ended December 31, 1998, 1997 and 1996 was approximately $8.1
million, $8.1 million and $7.6 million, respectively.
F-9
<PAGE>
TRIAD HOSPITALS, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)
NOTE 2--ACCOUNTING POLICIES--(Continued)
Management Fees
Columbia/HCA incurs various corporate general and administrative expenses.
These corporate overhead expenses are allocated to Triad based on net revenues.
In the opinion of Columbia/HCA management, this allocation method is
reasonable.
The management fees allocated to Triad are greater than management's
estimate of the general and administrative costs that would have been incurred
if Triad had been a separate, independent entity and had otherwise managed
comparable general and administrative functions. Based upon Triad management's
projections for 1999, if Triad had managed comparable general and
administrative functions, Triad would have incurred approximately $22.4 million
for general and administrative expenses compared to the $29.3 million of
management fees allocated from Columbia/HCA for the year ended December 31,
1998. Subsequent to the Distribution, Triad will be required to manage these
functions and will be responsible for the expenses associated with the
management of a separate public corporation.
Pro Forma Data (unaudited)
The pro forma combined balance sheet and statement of equity as of December
31, 1998 includes adjustments to reflect the elimination of intercompany
balances payable to Columbia/HCA and the assumption of $675 million in debt
financing in connection with the distribution. The debt financing, which is
currently being arranged, is expected to consist of senior term loans,
subordinated notes and other indebtedness.
Disclosures about Segments of an Enterprise
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 131, Disclosures about Segments of an
Enterprise and Related Information ("SFAS 131"). SFAS 131 establishes standards
for the way that public business enterprises report information about operating
segments in annual financial statements and requires that those enterprises
report selected information about operating segments in interim financial
reports. It also establishes standards for related disclosures about products
and services, geographic areas and major customers. Triad will adopt the new
requirements in the annual report following the Distribution as identification
of the reportable operating segments has not been determined by management at
this time.
Disclosures of Derivative Instruments
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, Accounting for Derivative Instruments
and Hedging Activities, which is required to be adopted in years beginning
after June 15, 1999. Because of Triad's minimal use of derivatives, management
does not anticipate that the adoption of the new statement will have a
significant effect on earnings or the financial position of Triad.
NOTE 3--COLUMBIA/HCA INVESTIGATIONS, LITIGATION AND INDEMNIFICATION RIGHTS
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
F-10
<PAGE>
TRIAD HOSPITALS, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)
NOTE 3--COLUMBIA/HCA INVESTIGATIONS, LITIGATION AND INDEMNIFICATION RIGHTS--
(Continued)
cooperating in these investigations and understands, through written notice and
other means, 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. The government has intervened in two qui tam
actions. 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.
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 or outcome of any of the ongoing
investigations or qui tam and other actions, or whether any additional
investigations or litigation 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. Any
such sanctions or losses could have a material adverse effect on Columbia/HCA's
financial position and results of operations.
Columbia/HCA has agreed to indemnify Triad in respect of any losses which
it may incur as a result of the proceedings described above. 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 distribution date and relate to 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 (See Note 11--Contingencies). Columbia/HCA will not indemnify Triad
for losses relating to any acts, practices and omissions engaged in by Triad
after the distribution date, whether or not Triad is indemnified for similar
acts, practices and omissions occurring prior to the distribution date.
F-11
<PAGE>
TRIAD HOSPITALS, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)
NOTE 4--INCOME TAXES
The provision for income taxes (benefit) for the years ended December 31,
1998, 1997 and 1996 consists of the following (dollars in millions):
<TABLE>
<CAPTION>
1998 1997 1996
------ ----- -----
<S> <C> <C> <C>
Current:
Federal............................................... $(12.5) $ 3.0 $40.0
State................................................. (2.3) 0.6 7.4
Deferred:
Federal............................................... (20.8) (9.1) 0.7
State................................................. (3.8) (1.7) 0.1
------ ----- -----
$(39.4) $(7.2) $48.2
====== ===== =====
</TABLE>
A reconciliation of the federal statutory rate to the effective income tax
rate follows:
<TABLE>
<CAPTION>
1998 1997 1996
---- ---- ----
<S> <C> <C> <C> <C>
Federal statutory rate............................. 35.0 % 35.0 % 35.0%
State income taxes, net of federal income tax
benefit........................................... 3.1 2.4 4.3
Non-deductible intangible assets................... (6.5) (8.8) 2.2
Other items, net................................... (0.2) (1.5) 0.3
---- ---- ----
Effective income tax rate.......................... 31.4 % 27.1 % 41.8%
==== ==== ====
</TABLE>
A summary of the items comprising the deferred tax assets and liabilities
at December 31 follows (dollars in millions):
<TABLE>
<CAPTION>
1998 1997
------------------ ------------------
Assets Liabilities Assets Liabilities
------ ----------- ------ -----------
<S> <C> <C> <C> <C>
Depreciation and fixed asset basis
differences........................ $ -- $63.4 $ -- $82.1
Doubtful accounts................... 29.8 -- 24.2 --
Compensation........................ 8.4 -- 8.1 --
Other............................... 5.3 4.0 5.4 4.1
----- ----- ----- -----
$43.5 $67.4 $37.7 $86.2
===== ===== ===== =====
</TABLE>
Deferred income taxes of $37.9 million and $31.9 million at December 31,
1998 and 1997, respectively, are included in current assets. Noncurrent
deferred income tax liabilities totaled $61.8 million and $80.4 million at
December 31, 1998 and 1997, respectively.
At December 31, 1998, state net operating loss carryforwards (expiring in
years 1999 through 2003) available to offset future taxable income approximated
$69.0 million. Utilization of net operating loss carryforwards in any one year
may be limited and, in certain cases, result in a reduction of intangible
assets. Net deferred tax assets related to such carryforwards are not
significant.
Columbia/HCA and Triad will enter into a tax sharing and indemnification
agreement which will provide that Columbia/HCA will generally be responsible
for all taxes that are allocable to periods prior to the distribution date and
Columbia/HCA and Triad will each be responsible for its own tax liabilities for
periods after the distribution date. The Tax Sharing and Indemnification
Agreement will not have an impact on the realization of deferred tax assets or
the payment of deferred tax liabilities
F-12
<PAGE>
TRIAD HOSPITALS, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)
NOTE 4--INCOME TAXES--(Continued)
of Triad except to the extent that the temporary differences giving rise to
such deferred tax assets and liabilities as of the distribution date are
adjusted as a result of final tax settlements after the distribution date. In
the event of such adjustments, the tax sharing and indemnification agreement
will provide for certain payments between Columbia/HCA and Triad as
appropriate.
NOTE 5--IMPAIRMENT OF LONG-LIVED ASSETS
Triad adopted Statement of Financial Accounting Standards No. 121,
Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets to be
Disposed of ("SFAS 121"), during the first quarter of 1996. SFAS 121 addresses
accounting for the impairment of long-lived assets and long-lived assets to be
disposed of, certain identifiable intangibles and goodwill related to those
assets, and provides guidance for recognizing and measuring impairment losses.
The statement requires that the carrying amount of impaired assets be reduced
to fair value.
During the third and fourth quarters of 1998 Triad decided to sell certain
hospital facilities and surgery centers that were identified as not compatible
with Triad's operating plans, based upon management's review of all facilities,
and giving consideration to current and expected competition in each market,
expected population trends in each market and the current and expected capital
needs in each market. The carrying value of the long-lived assets related to
certain of these facilities
(4 hospital facilities and one surgery center), of approximately $75.7 million,
was reduced to fair value, based on estimates of selling values, for a total
non-cash charge of $31.1 million. For the years ended December 31, 1998, 1997
and 1996, respectively, these facilities to be divested had net revenues of
approximately $91.8 million, $97.8 million and $104.1 million and incurred
losses from continuing operations before income tax benefits and the asset
impairment charge of approximately $(30.4) million, $(28.2) million and $(11.7)
million. Triad expects to complete the sales of these facilities during 1999.
Triad recorded, during the fourth quarters of 1998 and, 1997, impairment
losses of approximately $24.0 million and $13.7 million, respectively, related
to one hospital facility in 1998, and intangibles and other long-lived assets
of certain surgery centers and physician practices in 1997, 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 being held and
used are now recorded at estimated fair value, based upon discounted, estimated
future cash flows.
The impairment charges did not have a significant impact on Triad's cash
flows and are not expected to significantly impact cash flows for future
periods. As a result of the write-downs, depreciation and amortization expense
related to these assets will decrease in future periods. In the aggregate, the
net effect of the change in depreciation and amortization expense is not
expected to have a material effect on operating results for future periods.
NOTE 6--DISCONTINUED OPERATIONS
During the fourth quarter of 1998, Columbia/HCA and Triad completed the
divestiture of their home health businesses and received proceeds of
approximately $3.9 million, which approximated the carrying value of the net
assets of discontinued operations. The $3.9 million amount related to the net
assets of discontinued operations was included in other (non-current) assets at
December 31, 1997. Columbia/HCA and Triad implemented plans to sell the home
health businesses during the third quarter of 1997. The combined financial
statements reflect the results of operations and net assets of the home health
businesses as discontinued operations.
F-13
<PAGE>
TRIAD HOSPITALS, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)
NOTE 6--DISCONTINUED OPERATIONS--(Continued)
Triad recorded a loss from discontinued operations of $1.6 million (net of
tax benefits) in 1998. Triad was not able to reasonably estimate, at the time
the decision was made to sell the home health businesses, whether these
businesses would incur losses during the period they were being held for sale.
The ability to estimate operating results during the period these businesses
were being held for sale was negatively impacted by certain changes in Medicare
reimbursement rates, and the need to obtain certain regulatory approvals
affected the ability to estimate the timing of the completion of the sales.
Revenues for the home health businesses disposed of were approximately
$38.3 million, $74.4 million and $79.6 million for the years ended December 31,
1998, 1997 and 1996, respectively.
The after-tax loss incurred upon the divestiture of the home health
businesses of $(2.9) million was recorded during the fourth quarter of 1997 and
is presented in the "Discontinued operations" section of the combined
statements of operations.
NOTE 7--ACCOUNTING CHANGE
During 1997, Triad changed its method of accounting for start-up costs. The
change involved expensing these costs as incurred, rather than capitalizing and
subsequently amortizing such costs. Triad believes the new method is preferable
due to certain changes in business strategy and reviews of emerging accounting
guidance on accounting for similar (i.e., start-up, software system training
and process reengineering) costs.
The change in accounting principle resulted in the write-off of the costs
capitalized as of January 1, 1997. The cumulative effect of the write-off,
which totals $2.8 million (net of tax benefit), has been expensed and reflected
in the statements of operations for the year ended December 31, 1997. Had the
new method been used in the past, the pro forma effect on prior years would
have primarily affected 1996 (such costs incurred for periods prior to 1996 are
considered immaterial to operations for those periods). The pro forma effect on
the years ended December 31, 1997 and 1996 follows (dollars in millions):
<TABLE>
<CAPTION>
1997 1996
------------------ ------------------
As As
Reported Pro Forma Reported Pro Forma
-------- --------- -------- ---------
<S> <C> <C> <C> <C>
Income (loss) from continuing
operations............................. $(19.0) $(19.0) $68.3 $65.5
Net income (loss)....................... $(19.8) $(17.0) $74.7 $71.9
</TABLE>
NOTE 8--LONG TERM DEBT AND INTERCOMPANY BALANCES PAYABLE TO COLUMBIA/HCA
A summary of long-term debt follows (including related interest rates at
December 31, 1998), (dollars in millions):
<TABLE>
<CAPTION>
1998 1997
----- -----
<S> <C> <C>
Total debt, average life of 5 years (rates averaging 5.7%)......... $14.4 $15.4
Less amounts due within one year................................... 1.0 1.0
----- -----
$13.4 $14.4
===== =====
</TABLE>
F-14
<PAGE>
TRIAD HOSPITALS, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)
NOTE 8--LONG TERM DEBT AND INTERCOMPANY BALANCES PAYABLE TO COLUMBIA/HCA--
(Continued)
Intercompany balances represent the net excess of funds transferred to or
paid on behalf of Triad over funds transferred to the centralized cash
management account of Columbia/HCA. Generally, this balance is increased by
cash transfers from and payments of debt made by Columbia/HCA, construction
project additions paid by Columbia/HCA, and certain fees and services provided
by Columbia/HCA, including information systems services and other operating
expenses, such as payroll, interest, insurance and income taxes. Generally, the
balance is decreased through daily cash deposits by Triad to the account. Triad
is charged interest on the intercompany balances at various rates ranging from
6% to 10% and the interest computations are based on the outstanding balance at
each month end. The net intercompany balances were $613.7 million and $525.0
million at December 31, 1998 and December 31, 1997, respectively. Interest
expense related to the net intercompany balances was $68.0 million, $59.6
million and $51.0 million for the years ended December 31, 1998, 1997 and 1996,
respectively.
In connection with the Distribution, all amounts payable by Triad to
Columbia/HCA will be eliminated, and Triad will assume certain indebtedness
from Columbia/HCA.
NOTE 9--STOCK BENEFIT PLANS
Triad employees have participated in the Columbia/HCA Healthcare
Corporation 1992 Stock and Incentive Plan (the "1992 Plan"). Under the 1992
Plan, stock options are generally granted at no less than the market price on
the date of grant. Options are exercisable in whole or in part beginning two to
five years after the grant and ending ten years after the grant. The number of
options granted to Triad employees under Columbia/HCA's option plan was
approximately 327,400 options, 1,121,800 options and 487,091 options, during
1998, 1997 and 1996, respectively.
Immediately following the Distribution, nonvested Columbia/HCA stock
options held by Triad employees will be cancelled and Triad may, in its
discretion, grant unvested stock option awards. The vested Columbia/HCA stock
options held by Triad employees will generally be converted into a combination
of Triad stock options, Columbia/HCA stock options and stock options of
Columbia/HCA's other spin-off company, LifePoint Hospitals, Inc., in a manner
that preserves the pre-spin-off intrinsic value and the pre-spin-off ratio of
the exercise prices to the underlying market value of the related common stock.
At December 31, 1998 there were approximately 2,482,800 Columbia/HCA stock
options held by Triad employees. That amount includes an aggregate of
approximately 2,011,400 unvested options that will be cancelled. Triad cannot
currently determine the number of shares of its common stock that will be
subject to any discretionary grants of options by Triad after the Distribution.
F-15
<PAGE>
TRIAD HOSPITALS, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)
NOTE 9--STOCK BENEFIT PLANS--(Continued)
The following table summarizes information regarding the options
outstanding at December 31, 1998:
<TABLE>
<CAPTION>
Options Outstanding Options Exercisable
-------------------------------- --------------------
Weighted
Average Weighted Weighted
Number Remaining Average Number Average
Outstanding Contractual Exercise Exercisable Exercise
Range of Exercise Prices at 12/31/98 Life Price at 12/31/98 Price
- ------------------------ ----------- ----------- -------- ----------- --------
<S> <C> <C> <C> <C> <C>
$11.55 to $12.22......... 45,900 4 years $11.85 45,900 $11.85
0.40 to 26.50......... 171,000 5 years 24.59 132,600 24.17
26.52 to 32.50......... 329,600 6 years 27.91 167,100 27.90
33.67 to 37.92......... 487,100 7 years 37.12 123,400 37.12
28.19 to 39.88......... 1,121,800 8 years 33.81 2,400 39.88
26.47............... 327,400 9 years 26.47 -- --
--------- -------
2,482,800 471,400
========= =======
</TABLE>
Triad has adopted the disclosure provisions of Statement of Financial
Accounting Standards No. 123 ("SFAS 123"), Accounting for Stock-Based
Compensation, but continues to measure stock-based compensation cost in
accordance with Accounting Principles Board Opinion No. 25 and its related
interpretations. If Triad had measured compensation cost for the Columbia/HCA
stock options granted to its employees during 1998, 1997 and 1996 under the
fair value based method prescribed by SFAS 123, the net income (loss) would
have been changed to the pro forma amounts set forth below (dollars in
millions):
<TABLE>
<CAPTION>
1998 1997 1996
------ ------ -----
<S> <C> <C> <C>
Net income (loss)
Reported............................................... $(87.1) $(19.8) $74.7
Pro forma.............................................. $(88.0) $(20.8) $74.3
Basic earnings (loss) per share:
As reported............................................ $(2.90) $(0.66) $2.49
Pro forma.............................................. $(2.93) $(0.69) $2.48
Diluted earnings (loss) per share:
As reported............................................ $(2.90) $(0.66) $2.47
Pro forma.............................................. $(2.93) $(0.69) $2.45
</TABLE>
The fair values of Columbia/HCA stock options granted to Triad employees
used to compute pro forma net income disclosures were estimated on the date of
grant using the Black-Scholes option-pricing model based on the following
weighted average assumptions used by Columbia/HCA:
<TABLE>
<CAPTION>
1998 1997 1996
------- ------- -------
<S> <C> <C> <C>
Risk free interest rate................................. 4.74% 5.61% 5.81%
Expected life........................................... 6 years 6 years 6 years
Expected volatility..................................... 23.90% 23.90% 23.90%
Expected dividend yield................................. .30% .23% .19%
</TABLE>
The weighted-average fair values of Columbia/HCA stock options granted to
Triad employees during the years ended 1998, 1997 and 1996 were $8.77, $12.03
and $13.47 per option, respectively.
F-16
<PAGE>
TRIAD HOSPITALS, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)
NOTE 9--STOCK BENEFIT PLANS--(Continued)
The pro forma amounts above are not necessarily representative of the
effects of stock-based awards on future pro forma net income because (1) future
grants of employee stock options by management may not be comparable to awards
made to employees while Triad was a part of Columbia/HCA, (2) the assumptions
used to compute the fair value of any stock option awards will be specific to
Triad and therefore may not be comparable to the Columbia/HCA assumptions used
and (3) they exclude the pro forma compensation expense related to unvested
stock options granted before 1996.
NOTE 10--RETIREMENT PLANS
Triad participates in Columbia/HCA's defined contribution retirement plans,
which cover substantially all employees. Benefits are determined primarily as a
percentage of a participant's earned income and are vested over specific
periods of employee service. Retirement plan expense was $21.0 million, $18.6
million and $15.9 million for the years ended December 31, 1998, 1997 and 1996,
respectively. Amounts approximately equal to retirement plan expense are funded
annually.
NOTE 11--CONTINGENCIES
Significant Legal Proceedings
Various lawsuits, claims and legal proceedings have been and are expected
to be instituted or asserted against Columbia/HCA and Triad, including those
relating to shareholder derivative and class action complaints; purported class
action lawsuits filed by patients and payers alleging, in general, improper and
fraudulent billing, coding and physician referrals, as well as other violations
of law; certain qui tam or "whistleblower" actions alleging, in general,
unlawful claims for reimbursement or unlawful payments to physicians for the
referral of patients, as well as other violations and litigation matters. While
the amounts claimed may be substantial, the ultimate liability cannot be
determined or reasonably estimated at this time due to the considerable
uncertainties that exist. Therefore, it is possible that Columbia/HCA's and
Triad's results of operations, financial position and liquidity in a particular
period could be materially, adversely affected upon the resolution of certain
of these contingencies. (See Note 3--Columbia/HCA Investigations, Litigation
and Indemnification Rights, for a description of the ongoing government
investigations and Columbia/HCA's obligations to indemnify Triad with respect
to losses arising from such governmental investigations and related
proceedings).
General Liability Claims
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
claimants may ask for punitive damages against Triad, which are usually not
covered by insurance. It is management's opinion that the ultimate resolution
of pending claims and legal proceedings will not have a material adverse effect
on Triad's results of operations or financial position.
F-17
<PAGE>
TRIAD HOSPITALS, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)
NOTE 12--OTHER CURRENT LIABILITIES AND ALLOWANCES FOR DOUBTFUL ACCOUNTS
A summary of other current liabilities as of December 31 follows (in
millions):
<TABLE>
<CAPTION>
1998 1997
----- -----
<S> <C> <C>
Employee benefit plans............................................. $20.7 $20.6
Taxes, other than income........................................... 9.3 8.5
Other.............................................................. 8.7 10.1
----- -----
$38.7 $39.2
===== =====
</TABLE>
A summary of activity in Triad's allowances for doubtful accounts follows
(in millions):
<TABLE>
<CAPTION>
Accounts
Balances at Additions Written off, Balances at
Beginning of Charged to Net of End of
Period Expense Recoveries Period
------------ ---------- ------------ -----------
<S> <C> <C> <C> <C>
Allowances for doubtful
accounts:
Year ended December 31,
1996...................... $ 59.9 $106.5 $ (63.3) $103.1
Year ended December 31,
1997...................... 103.1 138.5 (104.7) 136.9
Year ended December 31,
1998...................... 136.9 138.4 (119.4) 155.9
</TABLE>
NOTE 13--EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted
earnings per share from continuing operations (dollars and shares in millions,
except per share amounts):
<TABLE>
<CAPTION>
1998 1997 1996
------ ------ -----
<S> <C> <C> <C>
Numerator (a):
Income (loss) from continuing operations............... $(85.5) $(19.0) $68.3
====== ====== =====
Denominator (b):
Share reconciliation:
Shares used for basic earnings per share............... 29.9 29.9 29.9
Effect of dilutive securities (c)...................... -- -- 0.3
------ ------ -----
Shares used for diluted earnings per share............. 29.9 29.9 30.2
====== ====== =====
Earnings per share:
Basic earnings (loss) per share from continuing
operations............................................ $(2.85) $(0.63) $2.28
====== ====== =====
Diluted earnings (loss) per share from continuing
operations............................................ $(2.85) $(0.63) $2.26
====== ====== =====
</TABLE>
(a)Amount is used for both basic and diluted earnings per share computations
since there is no earnings effect related to the dilutive securities.
(b)Triad expects to issue approximately 29,900,000 shares of Triad common stock
on the distribution date. Earnings per share information has been presented as
if approximately 29,900,000 shares had been outstanding for all periods
presented.
(c)The dilutive effect of approximately 0.2 million shares, related to stock
options, for each year ended December 31, 1998 and 1997 were not included in
the computation of diluted earnings per share because to do so would have been
anti-dilutive for those periods.
F-18
<PAGE>
TRIAD HOSPITALS, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)
NOTE 14--UNAUDITED, QUARTERLY FINANCIAL INFORMATION
The quarterly interim financial information shown below has been prepared
by the Company's management and is unaudited. It should be read in conjunction
with the audited combined financial statements appearing herein (dollars in
millions, except per share amounts).
<TABLE>
<CAPTION>
1998
---------------------------------
First Second Third Fourth
------ ------ ------ ------
<S> <C> <C> <C> <C>
Revenues............................. $414.0 $399.8 $389.6 $385.3
Net loss............................. $ (4.5) $(10.1) $(22.1)(a) $(50.4)(b)
Basic and diluted loss per share (see
Note 13)............................ $(0.15) $(0.34) $(0.73)(a) $(1.68)(b)
<CAPTION>
1997
---------------------------------
First Second Third Fourth
------ ------ ------ ------
<S> <C> <C> <C> <C>
Revenues............................. $433.2 $415.9 $382.8 $377.4
Net income (loss):
Income (loss) before accounting
change............................ $ 30.0 $ 21.8 $(12.9) $(55.9)(c)
Cumulative effect of accounting
change............................ (2.8) -- -- --
------ ------ ------ ------
Net income (loss)................ $ 27.2 $ 21.8 $(12.9) $(55.9)
====== ====== ====== ======
Basic and diluted earnings (loss) per
share (see Note 13):
Income (loss) before accounting
change............................ $ 1.00 $ 0.72 $(0.43) $(1.86)(c)
Cumulative effect of accounting
change............................ (0.09) -- -- --
------ ------ ------ ------
Net income (loss)................ $ 0.91 $ 0.72 $(0.43) $(1.86)
====== ====== ====== ======
</TABLE>
- --------
(a) During the third quarter of 1998, Triad recorded a $19.3 million pretax
charge related to the impairment of certain long-lived assets (See Note 5--
Impairment of Long-lived Assets).
(b) During the fourth quarter of 1998, Triad recorded a $35.8 million pretax
charge related to the impairment of certain long-lived assets (See Note 5--
Impairment of Long-lived Assets).
(c) During the fourth quarter of 1997, Triad recorded a $13.7 million pretax
charge related to the impairment of certain long-lived assets (See Note 5--
Impairment of Long-lived Assets).
F-19
<PAGE>
TRIAD HOSPITALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the periods ending June 30, 1999 and 1998
Unaudited
(Dollars in millions, except per share amounts)
<TABLE>
<CAPTION>
For the For the
three months six months
ended ended
---------------------- ----------------------
1999 1998 1999 1998
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Revenues....................... $ 340.1 $ 399.8 $ 707.7 $ 813.8
Salaries and benefits.......... 146.6 174.3 303.5 352.4
Supplies....................... 48.5 59.0 102.6 123.0
Other operating expenses....... 79.1 93.0 161.0 181.4
Provision for doubtful
accounts...................... 33.1 35.7 67.6 72.6
Depreciation and amortization.. 26.3 26.6 54.3 52.8
Interest expense allocated from
Columbia/HCA.................. 5.2 16.8 22.5 32.3
Interest expense............... 8.9 0.5 9.6 1.1
ESOP expense................... 0.5 -- 0.5 --
Management fees allocated from
Columbia/HCA.................. 2.1 7.4 8.9 15.0
Impairment of long-lived
assets........................ -- -- 33.9 --
---------- ---------- ---------- ----------
Total operating expenses....... 350.3 413.3 764.4 830.6
---------- ---------- ---------- ----------
Loss from continuing operations
before
minority interest, equity in
earnings
and income tax benefit........ (10.2) (13.5) (56.7) (16.8)
Minority interests in earnings
of
consolidated entities......... (2.5) (2.5) (4.7) (6.5)
Equity in earnings (loss) of
unconsolidated subsidiaries... (1.9) 1.1 (1.5) 2.5
Income tax benefit............. 5.1 4.4 17.5 6.2
---------- ---------- ---------- ----------
Loss from continuing
operations.................... (9.5) (10.5) (45.4) (14.6)
Income from operations of
discontinued businesses, net
of income tax provision of
$0.6 for the three months
ended
1998.......................... -- 0.4 -- --
---------- ---------- ---------- ----------
Net loss....................... $ (9.5) $ (10.1) $ (45.4) $ (14.6)
========== ========== ========== ==========
Loss per common share:
Loss from continuing
operations................... $ (0.31) $ (0.34) $ (1.51) $ (0.49)
Income from operations of
discontinued business........ -- 0.01 -- --
---------- ---------- ---------- ----------
Net loss....................... $ (0.31) $ (0.33) $ (1.51) $ (0.49)
========== ========== ========== ==========
Weighted average shares used in
loss per share calculations... 30,300,016 30,300,016 30,111,116 30,111,116
</TABLE>
See notes to the condensed consolidated financial statements.
F-20
<PAGE>
TRIAD HOSPITALS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
Unaudited
(Dollars in millions)
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
-------- ------------
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents............................. $ 55.6 $ --
Accounts receivable, less allowance for doubtful
accounts of
$179.8 at June 30, 1999 and $155.9 at December 31,
1998................................................. 182.5 199.3
Inventories........................................... 39.4 44.8
Income taxes.......................................... 43.2 37.9
Other................................................. 56.8 23.9
-------- --------
Total current assets.................................... 377.5 305.9
Property and equipment, at cost:
Land.................................................. 81.9 82.0
Buildings............................................. 604.0 604.9
Equipment............................................. 727.9 712.0
Construction in progress.............................. 71.9 63.7
-------- --------
1,485.7 1,462.6
Accumulated depreciation.............................. (711.4) (703.1)
-------- --------
774.3 759.5
Intangible assets, net of accumulated amortization of
$54.8 at
June 30, 1999 and $50.2 at December 31, 1998........... 244.4 272.9
Investment in equity of affiliates...................... 79.7 24.3
Other................................................... 19.6 8.7
-------- --------
Total assets............................................ $1,495.5 $1,371.3
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable...................................... $ 51.1 $ 47.5
Current portion of long-term debt..................... 93.4 0.9
Accrued salaries...................................... 33.7 34.8
Other current liabilities............................. 57.5 37.8
-------- --------
Total current liabilities............................... 235.7 121.0
Intercompany balances payable to Columbia/HCA........... -- 613.7
Long-term debt.......................................... 575.4 13.4
Deferred taxes and other liabilities.................... 61.7 62.5
Minority interests in equity of consolidated entities... 52.1 60.0
-------- --------
Total liabilities....................................... 924.9 870.6
Stockholders equity:
Equity, investments by Columbia/HCA................... -- 500.7
Common stock $.01 per value; 90,000,000 shares
authorized;
33,869,851 shares outstanding at June 30, 1999....... 0.3 --
Additional paid-in capital............................ 607.8 --
Unearned ESOP compensation............................ (34.0) --
Retained deficit...................................... (3.5) --
-------- --------
Total stockholders' equity.............................. 570.6 500.7
-------- --------
Total liabilities and stockholders' equity.............. $1,495.5 $1,371.3
======== ========
</TABLE>
See notes to the condensed consolidated financial statements.
F-21
<PAGE>
TRIAD HOSPITALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the periods ended June 30, 1999 and 1998
Unaudited
(Dollars in millions)
<TABLE>
<CAPTION>
For the three For the six
months ended months ended
--------------- --------------
1999 1998 1999 1998
------ ------- ------ ------
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net loss.................................... $ (9.5) $ (10.1) $(45.4) $(14.6)
Adjustments to reconcile net loss to net
cash
provided by operating activities:
Provision for doubtful accounts............. 33.1 35.7 67.6 72.6
ESOP expense................................ 0.5 -- 0.5 --
Depreciation and amortization............... 26.3 26.6 54.3 52.8
Deferred income tax benefit................. (5.1) (4.4) (17.5) (6.2)
Impairment of long-lived assets............. -- -- 33.9 --
Income from discontinued operations......... -- (0.4) -- --
Increase (decrease) in cash from operating
assets and
liabilities................................
Accounts receivable......................... (27.5) (25.1) (53.1) (67.3)
Inventories and other assets................ (0.9) (3.3) 8.4 (7.5)
Accounts payable and other current
liabilities................................ 21.2 5.4 22.4 (6.2)
Other....................................... -- (0.5) (8.5) (12.2)
------ ------- ------ ------
Net cash provided by operating
activities............................... 38.1 23.9 62.6 11.4
Cash flows from investing activities:
Purchases of property and equipment......... (46.2) (19.3) (66.0) (47.3)
Proceeds received on sale of assets......... 4.3 -- 4.3 --
Investment in and advances to affiliates.... (54.3) (3.6) (55.4) (5.8)
Other....................................... 11.9 7.8 15.0 16.6
------ ------- ------ ------
Net cash used in investing activities..... (84.3) (15.1) (102.1) (36.5)
Cash flows from financing activities:
Payments of long-term debt.................. (5.0) -- (11.1) (0.5)
Increase (decrease) in intercompany balances
with
Columbia/HCA, net.......................... 106.8 (8.8) 106.2 25.6
------ ------- ------ ------
Net cash provided by (used in) financing
activities............................... 101.8 (8.8) 95.1 25.1
------ ------- ------ ------
Change in cash and cash equivalents........... 55.6 -- 55.6 --
Cash and cash equivalents at beginning of
period....................................... -- -- -- --
------ ------- ------ ------
Cash and cash equivalents at end of period.... $ 55.6 $ -- $ 55.6 $ --
====== ======= ====== ======
Interest payments............................. $ 8.0 $ 17.3 $ 26.0 $ 33.5
Income tax payments........................... $ -- $ -- $ -- $ --
</TABLE>
See notes to the condensed consolidated financial statements.
F-22
<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. (the "Company"). In the
opinion of management, all adjustments considered 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 combined financial
statements and notes thereto for the year ended December 31, 1998 included in
the Company's Registration Statement on Form 10.
The balance sheet at December 31, 1998 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--SPIN-OFF OF TRIAD HOSPITALS, INC.
On May 11, 1999, Columbia/HCA Healthcare Corporation ("Columbia/HCA")
completed the spin-off of the Company to its shareholders (the "Spin-off") by a
pro rata distribution of 29,898,688 shares of common stock. The accompanying
financial statements for the periods prior to the Spin-off were prepared on the
push down basis of the historical cost to Columbia/HCA and represent the
combined financial position, results of operations and cash flows of the
Company for those periods.
The condensed consolidated balance sheet as of June 30, 1999 includes
adjustments to reflect certain transactions in connection with the Spin-off.
The changes to stockholders' equity from the Spin-off are as follows:
F-23
<PAGE>
TRIAD HOSPITALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Unaudited
NOTE 2--SPIN-OFF OF TRIAD HOSPITALS, INC.--(Continued)
<TABLE>
<CAPTION>
Equity
Investments
Additional Unearned by Total
Common Paid-in ESOP Retained Columbia/ Stockholders'
Stock Capital Compensation Deficit HCA Equity
------ ---------- ------------ -------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Balance December 31,
1998................... $ -- $ -- $ -- $ -- $500.7 $500.7
Distribution of common
stock.................. 0.3 43.6 -- -- -- 43.9
Executive Stock Purchase
Plan loans............. -- (9.1) -- -- -- (9.1)
Recapitalization upon
distribution........... -- 545.3 -- -- (500.7) 44.6
Elimination of
intercompany balances.. -- 719.9 -- -- -- 719.9
Assumption of long-term
debt................... -- (665.0) -- -- -- (665.0)
Debt issue costs........ -- 15.0 -- -- -- 15.0
Issuance of note
receivable from ESOP... -- -- (34.5) -- -- (34.5)
ESOP compensation
earned................. -- -- 0.5 -- -- 0.5
Net loss prior to Spin-
off.................... -- (41.9) -- -- -- (41.9)
Net loss-post Spin-off.. -- -- -- (3.5) -- (3.5)
---- ------ ------ ----- ------ ------
Balance June 30, 1999... $0.3 $607.8 $(34.0) $(3.5) $ -- $570.6
==== ====== ====== ===== ====== ======
</TABLE>
The consolidated financial statements included herein may not necessarily
be indicative of the results of operations, financial position and cash flows
of the Company in the future or had it operated as a separate, independent
company during those periods prior to the spin-off. The consolidated financial
statements included herein do not reflect all of the changes that may occur in
the operations of the Company as a result of the Spin-off.
On May 11, 1999, Columbia/HCA also completed the spin-off of a separate,
independent company, LifePoint Hospitals, Inc. ("LifePoint").
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.
In addition, the Company has entered into various agreements with
Columbia/HCA which are intended to facilitate orderly changes for both
companies in a way which will be minimally disruptive to each entity (see NOTE
9).
NOTE 3--COMPANY OPERATIONS
As of January 1, 1999, the Company owned or operated 39 hospitals
(including two facilities the Company is leasing from others and an investment
in one hospital that is accounted for using the equity method), 19 free-
standing ambulatory surgery centers (including two investments in ambulatory
surgery centers that are accounted for using the equity method) and related
health care
F-24
<PAGE>
TRIAD HOSPITALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Unaudited
entities located in eleven western, southwestern and southcentral states.
During the six months ended June 30, 1999, the Company sold two hospitals, the
proceeds of which were retained by Columbia/HCA, and ceased operations of one
hospital. Also, on January 1, 1999, the Company transferred two acute care
hospitals and three ambulatory surgery centers located in the Kansas City,
Missouri area to an unaffiliated third party pursuant to a long-term lease
which provides for payment to the Company of rental amounts approximating $16.0
million per year. The Company also opened one new hospital that is accounted
for using the equity method.
On June 1, 1999, the Company completed the exchange of one hospital located
in Laredo, Texas for one hospital located in Victoria, Texas and $4.4 million
in cash. The assets received were recorded at book value of the assets
exchanged plus a proportionate share of cash received to the estimated fair
value of assets received. No gain or loss was recognized during the three month
period ended June 30, 1999. The Company is currently in the process of
finalizing an appraisal of the Victoria, Texas hospital. The Company expects
the finalized appraisal to be completed during the third quarter of 1999 and
any gain or loss will be recognized at that time, although the gain or loss
should be minimal.
NOTE 4--IMPAIRMENT OF LONG-LIVED ASSETS
The Company has adopted the provisions of Statement of Financial Accounting
Standards No. 121, Accounting of the Impairment of Long-Lived Assets and Long-
Lived Assets to be Disposed of ("SFAS 121"). SFAS 121 addresses accounting for
the impairment of long-lived assets and long-lived assets to be disposed of,
certain identifiable intangibles and goodwill related to those assets, and
provides guidance for recognizing and measuring impairment losses. The
statement requires that the carrying amount of impaired assets be reduced to
fair value.
As discussed previously, during the six months ended June 30, 1999, the
Company sold two hospitals and ceased to operate another hospital. The Company
intends to sell eight additional facilities (7 general, acute care hospitals
and one psychiatric hospital) that were identified as not compatible with the
Company's operating plans, based upon management's review of all facilities,
and giving consideration to current and expected competition in each market,
expected population trends in each market and the current and expected capital
needs in each market. At June 30, 1999, the carrying value of the long-lived
assets relating to the remaining eight facilities to be sold and the one
facility where operations were ceased was $101.4 million. The eight facilities
to be sold and the three facilities that were either sold or closed contributed
net revenues of $61.8 million, and $81.4 million for the three months ended
June 30, 1999 and 1998, respectively and $138.8 million, and $175.0 million for
the six months ended June 30, 1999 and 1998, respectively. These facilities
also contributed losses before impairment charges and income tax benefit of
$17.2 million and $16.6 million for the three months ended June 30, 1999 and
1998, respectively and $24.6 million and $26.0 million, for the six months
ended June 30, 1999 and 1998, respectively. The Company expects to complete the
sales of the remaining eight facilities and the one hospital where operations
were ceased over the next twelve months. The Company is required to use sales
proceeds on the remaining facilities to retire certain outstanding indebtedness
(see NOTE 5).
In the six months ended June 30, 1999, the carrying value of the long-lived
assets related to certain of these facilities (3 hospital facilities), of
approximately $50.6 million, was reduced to fair value, based on estimates of
selling values, for a total non-cash charge of $30.8 million. These three
facilities had net revenues of approximately $21.7 million and $23.0 million
for the three months ended June 30, 1999 and 1998, respectively and $46.7
million and $47.9 million for the six months
F-25
<PAGE>
TRIAD HOSPITALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Unaudited
ended June 30, 1999 and 1998, respectively. These facilities also contributed
losses from continuing operations before income tax benefit and the asset
impairment charge of approximately $4.7 million, and $3.9 million, for the
three months ended June 30, 1999 and 1998, respectively and $8.2 million for
each of the six months ended June 30, 1999 and 1998.
During the six months ended June 30, 1999, the Company 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.
The impairment charges, totaling $33.9 million, did not have a significant
impact on the Company's cash flows and are not expected to significantly impact
cash flows for future periods. As a result of the write-downs, depreciation and
amortization expense related to these assets will decrease in future periods.
In the aggregate, the net effect of the change in depreciation and amortization
expense is not expected to have material effect on operating results for future
periods.
NOTE 5--LONG-TERM DEBT
In connection with the Spin-off, the Company assumed $673.8 million of debt
financing from Columbia/HCA. The debt consisted originally of a $75.0 million
asset sale bridge loan bearing interest at LIBOR plus 3.25% (8.44% per annum at
July 31, 1999) due May 11, 2000, a $65.0 million Tranche A term loan bearing
interest at LIBOR plus 3.25% (8.44% per annum at July 31, 1999) with principal
amounts due beginning in 1999 through 2004, a $200.0 million Tranche B term
loan bearing interest at LIBOR plus 4% (9.19% per annum at July 31, 1999) with
principal amounts due beginning in 1999 through 2005, and $325.0 million senior
subordinated notes bearing interest at 11% due in 2009 with interest payments
due semi-annually. The Company also assumed various indebtedness of
Columbia/HCA related to specific hospitals in the aggregate amount of $8.8
million with interest rates averaging 5.7% maturing over five years.
The Company's bank debt is secured by a pledge of substantially all of its
assets. The debt agreements require that the Company comply with various
financial ratios and tests and have restrictions on new indebtedness, asset
sales and use of proceeds therefrom, capital expenditures and dividends.
The Company made a $5.0 million principal payment on the asset sale bridge
loan in June 1999.
The Company's senior subordinated notes are guaranteed by all operating
subsidiaries of the Company (the "Subsidiary Guarantors"). The guarantee
obligations of the Subsidiary Guarantors are full, unconditional and joint and
several. The Company is currently in the process of registering the senior
subordinated notes with the Securities and Exchange Commission. 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 the Company has determined that
separate financial statements would not be material to investors.
F-26
<PAGE>
TRIAD HOSPITALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Unaudited
The Company does not wholly own certain Subsidiary Guarantors, although all
assets, liabilities, equity and earnings of these entities fully and
unconditionally jointly and severally guarantee the senior subordinated notes.
The ownership percentages of the Company and its subsidiaries in these Company-
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>
June 30, December 31,
Summarized Balance Sheets 1999 1998
------------------------- -------- ------------
<S> <C> <C>
Current assets....................................... $18.0 $20.0
Non-current assets................................... 59.8 55.5
----- -----
Total assets......................................... $77.8 $75.5
===== =====
Current liabilities.................................. $ 5.3 $ 4.4
Non-current liabilities.............................. 4.3 4.2
Equity............................................... 68.2 66.9
----- -----
Total liabilities and equity......................... $77.8 $75.5
===== =====
</TABLE>
<TABLE>
<CAPTION>
For the three For the six
months ended months ended
----------------- -----------------
June 30, June 30, June 30, June 30,
Summarized Statement of Income 1999 1998 1999 1998
- ------------------------------ -------- -------- -------- --------
<S> <C> <C> <C> <C>
Net revenues................................ $21.1 $24.0 $41.9 $47.5
Income from continuing operations........... $ 5.4 $ 5.5 $10.3 $11.8
Net income.................................. $ 5.4 $ 5.5 $10.3 $11.8
</TABLE>
Non-current assets shown above include intercompany receivables of $11.3
million and $7.1 million as of June 30, 1999 and December 31, 1998,
respectively.
Subsequent to June 30, 1999, the Company sold three of the non-wholly owned
Subsidiary Guarantors. The summarized combined financial information for the
remaining non-wholly owned Subsidiary Guarantors are as follows:
<TABLE>
<CAPTION>
June 30, December 31,
Summarized Balance Sheets 1999 1998
------------------------- -------- ------------
<S> <C> <C>
Current assets....................................... $15.0 $16.7
Non-current assets................................... 56.3 52.8
----- -----
Total assets......................................... $71.3 $69.5
===== =====
Current liabilities.................................. $ 4.0 $ 3.5
Non-current liabilities.............................. 4.3 4.2
Equity............................................... 63.0 61.8
----- -----
Total liabilities and equity......................... $71.3 $69.5
===== =====
</TABLE>
F-27
<PAGE>
TRIAD HOSPITALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Unaudited
<TABLE>
<CAPTION>
For the three For the six
months ended months ended
----------------- -----------------
June 30, June 30, June 30, June 30,
Summarized Statement of Income 1999 1998 1999 1998
- ------------------------------ -------- -------- -------- --------
<S> <C> <C> <C> <C>
Net revenues................................ $17.5 $18.9 $34.2 $37.5
Income from continuing operations........... $ 5.0 $ 4.2 $ 9.3 $ 9.6
Net income.................................. $ 5.0 $ 4.2 $ 9.3 $ 9.6
</TABLE>
Non-current assets shown above include intercompany receivables of $15.3
million and $11.8 million as of June 30, 1999 and December 31, 1998,
respectively.
The Company also assumed a $125.0 million revolving line of credit bearing
interest at LIBOR plus 3.25% due in 2004. No amounts were outstanding as of
July 31, 1999.
A five-year maturity schedule is as follows (in millions):
<TABLE>
<S> <C>
1999............................................ $ 92.9
2000............................................ 14.0
2001............................................ 13.4
2002............................................ 20.9
2003............................................ 57.9
Thereafter...................................... 469.7
------
$668.8
======
</TABLE>
As part of the assumption of the above reference debt financing, the
Company also assumed approximately $15.0 million in debt issue costs, which
will be amortized over the lives of the loans. Accumulated amortization of the
debt issue costs was $0.5 million at June 30, 1999.
NOTE 6--STOCK BENEFIT PLANS
In connection with the Spin-off, the Company adopted the 1999 Long-Term
Incentive Plan, for which 5,350,000 shares of the Company's common stock have
been reserved for issuance. The 1999 Long-Term Incentive Plan authorizes the
grant of stock options, stock appreciation rights and other stock based awards
to officers and employees of the Company. On the Spin-off date, 554,921 stock
options were granted under this plan, relating to pre-existing vested
Columbia/HCA options. These options have varying prices based on the exercise
price of the pre-existing Columbia/HCA options and were exercisable on the date
of the grant. On June 10, 1999, 2,897,126 stock options were granted under this
plan with an exercise price of the market price on the date of the grant. These
options are exercisable beginning in part from date of grant to four years
after the grant. All options granted under this plan expire in 10 years from
date of grant.
The Company has also adopted the Executive Stock Purchase Plan, for which
1,000,000 shares of the Company's common stock were reserved for issuance. The
Executive Stock Purchase Plan grants to specified executives of the Company a
right to purchase shares of common stock from the Company. The Company loaned
each participant in the plan 100% of the purchase price of the Company's common
stock, on a full recourse basis. The principal and interest of the loans will
mature on the fifth anniversary following the purchase of the shares,
termination of the participants' employment or bankruptcy of the participant.
In addition, the Committee has granted to such
F-28
<PAGE>
TRIAD HOSPITALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Unaudited
executives stock options equal to three-quarters of a share for each share
purchased. The exercise price of these stock options is to equal the purchase
price of the shares and expire in 10 years. 970,000 shares have been purchased
by participants in the plan and options to purchase an additional 727,500
shares were issued in connection with such purchased shares. The options are
exercisable 50% on the grant date and 50% two years from grant date. The total
amount, which has been loaned to participants to purchase shares under the
plan, is $9.1 million which was recorded as a reduction to additional paid-in
capital.
Also, the Company adopted various other plans for which 500,000 shares of
the Company's common stock have been reserved for issuance. On June 10, 1999,
the Company granted under such plans 120,000 options to non-employee
directors, which are exercisable over a four year period. The company also
granted 340,000 options to Columbia/HCA executives with the exercise price of
such options at market price on the date of grant and were exercisable on the
date of grant. Columbia/HCA agreed to pay the Company $1.5 million in exchange
for the issuance of these options. All of these options expire 10 years after
grant.
The following table summarizes information regarding the options
outstanding at June 30, 1999:
<TABLE>
<CAPTION>
Options Outstanding Options Exercisable
-------------------------------- --------------------
Weighted
Average Weighted Weighted
Number Remaining Average Number Average
Outstanding Contractual Exercise Exercisable Exercise
at 6/30/99 Life Price at 6/30/99 Price
----------- ----------- -------- ----------- --------
<S> <C> <C> <C> <C> <C>
Range of Exercise Prices
$0.07 to $18.84.......... 4,639,547 10 years $11.27 1,437,396 $11.28
</TABLE>
The Company has adopted the disclosure provisions of Statement of
Financial Accounting Standards No. 123 ("SFAS 123"), Accounting for Stock-
Based Compensation, but continues to measure stock-based compensation cost in
accordance with Accounting Principles Board Opinion No. 25 and its related
interpretations. If the Company had measured compensation cost for the stock
options granted to its employees under the fair value based method prescribed
by SFAS 123, the net loss would have been changed to the pro forma amounts set
forth below (dollars in millions):
<TABLE>
<CAPTION>
For the three For the six
months ended months ended
June 30, 1999 June 30, 1999
------------- -------------
<S> <C> <C>
Net loss
As reported................................. $ (9.5) $(45.4)
Pro forma................................... $(16.1) $(52.0)
Basic loss per share:
As reported................................. $(0.31) $(1.51)
Pro forma................................... $(0.53) $(1.73)
</TABLE>
The fair values of stock options granted to the Company's employees used
to compute pro forma net loss disclosures were estimated on the date of grant
using the Black-Scholes option-pricing model based on the following weighted
average assumptions:
<TABLE>
<S> <C>
Risk free interest rate......................................... 6.16%
Expected life................................................... 10 years
Expected volatility............................................. 23.90%
Expected dividend yield......................................... --
</TABLE>
F-29
<PAGE>
TRIAD HOSPITALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Unaudited
The weighted-average fair values of stock options granted to Triad
employees during the six months ended June 30, 1999, was $11.05 per option.
In connection with the Spin-off, the Company established an Employee Stock
Ownership Plan ("ESOP") for substantially all of its employees. The ESOP
purchased from the Company, at fair market value, 3,000,000 shares of the
Company's common stock. The purchase was primarily financed by the ESOP issuing
a promissory note to the Company, which will be repaid annually in equal
installments over a 10-year period beginning December 31, 1999. The Company
will make contributions to the ESOP which the ESOP will use to repay the loan.
The Company's stock acquired by the ESOP is held in a suspense account and will
be allocated to participants at market value from the suspense account as the
loan is repaid.
The loan to the ESOP is recorded as unearned ESOP compensation on the
Company's Condensed Consolidated Balance Sheets. Reductions are made to
unearned ESOP compensation
as shares are committed to be released to participants at cost. Recognition of
ESOP expense is based on the average market price of shares committed to be
released to participants. Shares are deemed to be committed to be released
ratably during each period as the employees perform services. The difference
between average market price and cost of the shares are shown as a change in
additional paid-in capital. As the shares are committed to be released, the
shares become outstanding for earnings per share calculations. The Company
recognized ESOP expense of $0.5 million during the three months ended June 30,
1999.
The ESOP shares as of June 30, 1999 were as follows:
<TABLE>
<S> <C>
Shares committed to be released............................ 42,857
Unreleased shares.......................................... 2,957,143
-------------
Total ESOP shares........................................ 3,000,000
=============
Fair value of unreleased shares............................ $39.9 million
</TABLE>
NOTE 7--LOSS PER SHARE
Loss per common share is based on the weighted average number of shares
outstanding assuming the shares issued at the Spin-off were outstanding at the
beginning of each period through June 30, 1999, adjusted for the shares issued
to the ESOP (see NOTE 6). Weighted average shares for the three and six months
ended June 30, 1999 are as follows:
<TABLE>
<CAPTION>
For the three For the six
months ended months ended
June 30, 1999 June 30, 1999
------------- -------------
<S> <C> <C>
Weighted average shares exclusive of ESOP... 30,278,587 30,089,687
Average of ESOP shares committed to be
released................................... 21,429 21,429
---------- ----------
Weighted average shares outstanding......... 30,300,016 30,111,116
========== ==========
</TABLE>
Loss per common share for the three and six month periods ended June 30,
1998 is presented as if the weighted average shares referenced above had been
outstanding for each period.
F-30
<PAGE>
TRIAD HOSPITALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Unaudited
NOTE 8--DISCONTINUED OPERATIONS
During the three months ended June 30, 1998, the Company recorded income
from discontinued operations related to the divestiture of home health
businesses of $0.4 million (net of income tax benefit). The Company recorded a
loss from discontinued operations relating to these divestitures of $0.4
million (net of income tax benefit) for the three months ended March 31, 1998.
Revenues for the home health businesses disposed of were approximately $12.5
million and $27.3 million for the three and six months ended June 30, 1998.
Columbia/HCA and the Company completed the divestiture and received proceeds of
approximately $3.9 million, which approximated the carrying value of the net
assets of discontinued operations during the fourth quarter of 1998. The
consolidated financial statements reflect the results of operations and net
assets of the home health businesses as discontinued operations.
NOTE 9--AGREEMENTS WITH COLUMBIA/HCA
As described below, the Company has entered into several agreements with
Columbia/HCA to facilitate an orderly change after the Spin-off.
Columbia/HCA, the Company and LifePoint have entered into a distribution
agreement providing for certain arrangements among Columbia/HCA, the Company
and LifePoint subsequent to the date of the Spin-off. The distribution
agreement generally provides that the Company will be financially responsible
for liabilities arising out of or in connection with the assets and entities
that constitute the Company. The distribution agreement provides, however, that
Columbia/HCA will indemnify the Company for any losses, which it incurs arising
from the pending governmental investigations of certain of Columbia/HCA's
business practices. The distribution agreement further provides that
Columbia/HCA will indemnify the Company for any losses which it may incur
arising from stockholder actions and other legal proceedings related to the
governmental investigations which are currently pending against Columbia/HCA,
and from proceedings which may be commenced by governmental authorities or by
private parties in the future that arise from acts, practices or omissions
engaged in prior to the date of the Spin-off and related to such proceedings.
Columbia/HCA has also agreed that, in the event that any hospital owned by the
Company as of the date of the Spin-off 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 the
Company 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 less the net proceeds of the sale or other
disposition of the excluded hospital. Columbia/HCA will not indemnify the
Company for losses relating to any acts, practices and omissions engaged in by
the Company after the date of the Spin-off, whether or not the Company is
indemnified for similar acts, practices and omissions occurring prior to the
date of the Spin-off.
Columbia/HCA is negotiating one or more compliance agreements setting forth
certain agreements to comply with applicable laws and regulations. The Company
is obligated to participate with Columbia/HCA in these negotiations.
In connection with the Spin-off, Columbia/HCA also agreed to indemnify the
Company 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 the Company agreed to indemnify Columbia/HCA for
and pay to Columbia/HCA any payments received by it relating to such
F-31
<PAGE>
TRIAD HOSPITALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Unaudited
cost reports. The Company will be responsible for the filing of these cost
reports and any terminating cost reports. The Company has recorded a receivable
from Columbia/HCA of $37.5 million at June 30, 1999 relating to the
indemnification.
Columbia/HCA, the Company and LifePoint entered into a tax sharing and
indemnification agreement, which allocates tax liabilities among Columbia/HCA,
the Company and LifePoint, and addresses certain other tax matters such as
responsibility for filing tax returns, control of and cooperation in tax
litigation and qualification of the Spin-off as a tax-free transaction.
Generally, Columbia/HCA will be responsible for taxes that are allocable to
periods prior to the Spin-off, and Columbia/HCA, the Company and LifePoint will
each be responsible for its own tax liabilities (including its allocable share
of taxes shown on any consolidated, combined or other tax return filed by
Columbia/HCA) for periods after the Spin-off. The tax sharing and
indemnification agreement
prohibits the Company from taking actions that could jeopardize the tax
treatment of either the Spin-off or the internal restructuring of Columbia/HCA
that preceded the Spin-off, and requires the Company to indemnify Columbia/HCA
for any taxes or other losses that result from any such actions.
Prior to the date of the Spin-off, Columbia/HCA maintained various
insurance policies for the benefit of the Company and LifePoint. In connection
with the Spin-off, Columbia/HCA, the Company and LifePoint entered into an
agreement relating to insurance matters which provides that any claims against
insurers outstanding at the Spin-off will be for the benefit of the party who
will own the asset which is the basis for the claim, or, in the case of
liability claim, which is the owner of the facility at which the activity which
is the subject of the claim occurred. Columbia/HCA will pay the Company any
portion of such a claim that is unpaid by an insurer to satisfy deductible, co-
insurance or self- insurance amounts (unless such amounts were paid to or
accounted for by the affected entity prior to the Spin-off). Columbia/HCA and
the Company have ensured that all of the insurance policies in effect after the
Spin-off provide the same coverage to the Company that were available prior to
the Spin-off. The Company has purchased continuous coverage under extensions or
renewals of existing, or new, policies issued by Health Care Indemnity, Inc., a
subsidiary of Columbia/HCA. Any retroactive rate adjustments for periods ending
on or before the Spin-off, in respect of such insurance policies, will be paid
or received by Columbia/HCA.
Columbia/HCA's wholly owned subsidiary Columbia Information Services, Inc.
("CIS"), entered into a computer and data processing services agreement with
the Company. Pursuant to this agreement, CIS will provide computer
installation, support, training, maintenance, data processing and other related
services to the Company. The initial term of the agreement is seven years,
which will be followed by a wind-down period of up to one year. CIS charges the
Company approximately $19.0 million per year for services provided under this
agreement. In the event the agreement is terminated by the Company, it will be
required to pay a termination fee equal to the first month's billed fees,
multiplied by the remaining number of months in the agreement. CIS does not
warrant that the software and hardware used by CIS in providing services to the
Company will be Year 2000 ready, although CIS is currently making efforts in a
professional, timely and workmanlike manner that it deems reasonable to address
Year 2000 issues with respect to the software licensed to the Company under the
computer and data processing services agreements. Pursuant to a Year 2000
professional services agreement, Columbia/HCA also will continue its ongoing
program of inspecting medical equipment at Triad's hospitals to assure Year
2000 compliance. Under such agreement, Triad remains solely responsible for any
lack of Year 2000 compliance. The agreement terminates June 30, 2000.
F-32
<PAGE>
TRIAD HOSPITALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Unaudited
Columbia/HCA, the Company and LifePoint entered into an agreement relating
to benefit and employment matters which allocates responsibilities for
employment compensation, benefits, labor, benefit plan administration and
certain other employment matters on and after the date of the Spin-off. The
agreement generally provides that the Company assumed responsibility for its
employees from and after the date of the Spin-off, and that Columbia/HCA
retains the liabilities with respect to former employees associated with the
facilities and operations of the Company who terminated employment on or prior
to the date of the Spin-off. Benefit plans established by the Company generally
recognize past service with Columbia/HCA.
Columbia/HCA also entered into an agreement with the Company, pursuant to
which the Company sub-leases from Columbia/HCA its principal executive offices
(at the same price per square foot as is payable under the existing
Columbia/HCA lease). The Company's sub-lease will terminate on January 31,
2003.
Columbia/HCA also entered into a transitional service agreement with the
Company pursuant to which Columbia/HCA will continue to furnish various
administrative services to the Company. These services will include support in
various aspects of payroll processing and tax reporting for employees of the
Company, real estate design and construction management, legal, human
resources, insurance and accounting matters on an as needed basis. Each
agreement will terminate on December 31, 2000, but may be terminated by the
Company as to specific services before December 31, 2000. The Company pays fees
to Columbia/HCA for services provided in amounts equal to Columbia/HCA's costs
incurred in providing such services.
The Company is a partner along with Columbia/HCA and LifePoint, in a group
purchasing organization which makes certain national supply and equipment
contracts available to their respective facilities.
Columbia/HCA entered into agreements with the Company whereby Columbia/HCA
will share telecommunications services with the Company under Columbia/HCA's
agreements with its telecommunications services provider and whereby
Columbia/HCA will make certain account collection services available to the
Company.
NOTE 10--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 the Company'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.
F-33
<PAGE>
TRIAD HOSPITALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Unaudited
According to published reports, on July 2, 1999, a federal jury in Tampa,
Florida found two Columbia/HCA employees guilty of conspiracy and making false
statements on Medicare and CHAMPUS cost reports for years 1992 and 1993 and a
Medicaid cost report for 1993. Both were found not guilty of obstructing a
federal auditor. One other employee was acquitted of all counts for which he
had been charged and the jury was unable to reach a verdict with respect to
another employee.
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 the
Company in respect of any losses which it may incur as a result of the
proceedings described above (see the description of the distribution agreement
in NOTE 9 for a description of such indemnification arrangement). If any of
such indemnified matters were successfully asserted against the Company, 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 the
Company. Columbia/HCA will not indemnify the Company for losses relating to any
acts, practices and omissions engaged in by the Company after the date of the
Spin-off, whether or not the Company is indemnified for similar acts, practices
and omissions occurring prior to the date of the Spin-off.
General Liability Claims
The Company 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 the Company, 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 the Company's results of operations or financial
position.
NOTE 11--DERIVATIVES
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities" ("SFAS 133"), which was required to be adopted in years
beginning after June 15, 1999. In May 1999, the effective date of SFAS 133 was
deferred until year beginning after June 15, 2000. Because of the Company's
minimal use of derivatives, management does not anticipate that the adoption of
the new statement will have a significant effect on the results of operations
or the financial position of the Company.
F-34
<PAGE>
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All tendered old notes, executed letters of transmittal and other related
documents should be directed to the exchange agent. Questions and requests for
assistance and requests for additional copies of the prospectus, the letter of
transmittal and other related documents should be addressed to the exchange
agent as follows:
By Courier:
Citibank, N.A.
915 Broadway, 5th Floor
New York, N.Y. 10010
By Mail:
Citibank, N.A.
P.O. Box 685
Old Chelsea Station
New York, New York 10113
By Hand:
Citibank, N.A.
Corporate Trust Window
111 Wall Street, 5th Floor
New York, New York 10043
Facsimile for Eligible Institutions:
(212) 505-2248
To Confirm by Telephone:
(800) 270-0808
Originals of all documents submitted by facsimile should be sent promptly
by hand, overnight delivery, or registered by certified mail.
No dealer, salesperson or other person is authorized to give any information
or to represent anything not contained in this prospectus. You must not rely on
any unauthorized information or representations. This prospectus is an offer to
sell only the notes offered hereby, but only under circumstances and in
jurisdictions where it is lawful to do so. The information contained in this
prospectus is current only as of its date.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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Triad Hospitals Holdings, Inc.
$325,000,000
11% Series B Senior Subordinated Notes
due 2009
----------------
PROSPECTUS
----------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Summary....................................................... 1
Risk Factors............................................................. 13
The Exchange Offer....................................................... 23
Use of Proceeds.......................................................... 34
Capitalization........................................................... 34
Selected Historical Financial Data....................................... 35
Unaudited Pro Forma Condensed Combined Financial Statements.............. 38
Management's Discussion and Analysis of Financial Condition and Results
of Operations........................................................... 43
Business................................................................. 66
Reimbursement............................................................ 77
Government Regulation and Other Factors.................................. 81
Management............................................................... 89
Certain Transactions..................................................... 102
Principal Stockholders................................................... 103
Arrangements Relating to the Distribution................................ 104
Description of the Notes................................................. 110
Description of New Credit Agreement...................................... 147
Book-Entry; Delivery and Form............................................ 149
Plan of Distribution..................................................... 152
Material Federal Income Tax Considerations............................... 153
Legal Matters............................................................ 154
Experts.................................................................. 154
Index to Financial Statements............................................ F-1
</TABLE>
, 1999
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Directors and Officers.
The Certificate of Incorporation of Triad Holdings (the "Triad Holdings
Certificate") provides that a director of Triad Holdings will not be liable to
Triad Holdings or its stockholders for monetary damages for breach of fiduciary
duty as a director, to the full extent permitted by the Delaware General
Corporation Law (the "DGCL"), as amended or interpreted from time to time.
In addition, the Triad Holdings Certificate states that Triad Holdings
shall, to the full extent permitted by the DGCL, as amended or interpreted from
time to time, indemnify all directors, officers and employees whom it may
indemnify pursuant thereto and, in addition, Triad Holdings may, to the extent
permitted by the DGCL, indemnify agents of Triad Holdings or other persons.
Section 145 of the DGCL permits indemnification against expenses, fines,
judgments and settlements incurred by any director, officer or employee of a
company in the event of pending or threatened civil, criminal, administrative
or investigative proceeding, if such person was, or was threatened to be made,
a party by reason of the fact that he or she is or was a director, officer, or
employee of the company. Section 145 also provides that the indemnification
provided for therein shall not be deemed exclusive of any other rights to which
those seeking indemnification may otherwise be entitled. In addition, Triad
Holdings maintains a directors' and officers' liability insurance policy.
Item 21. Exhibits and Financial Statement Schedules.
(a) Exhibits
<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<C> <S>
2.1 --Distribution Agreement dated May 11, 1999 by and among
Columbia/HCA, Triad Hospitals, Inc. and LifePoint Hospitals,
Inc., incorporated by reference from Exhibit 2.1 to Triad
Hospitals' Quarterly Report on Form 10-Q, for the quarter ended
March 31, 1999.
3.1 --Certificate of Incorporation of Triad Holdings, incorporated by
reference from Exhibit 3.1 to Triad Hospitals' Quarterly Report
on Form 10-Q, for the quarter ended March 31, 1999.
3.2 --Bylaws of Triad Holdings, incorporated by reference from Exhibit
3.2 to Triad Hospitals' Quarterly Report on Form 10-Q, for the
quarter ended March 31, 1999.
4.1 --Indenture (including form of 11% Senior Subordinated Notes due
2009) dated as of May 11, 1999, between Healthtrust and Citibank
N.A. as Trustee, incorporated by reference form Exhibit 4.2(a) to
Triad Hospitals' Quarterly Report on Form 10-Q, for the quarter
ended March 31, 1999.
4.2 --Form of 11% Senior Subordinated Notes due 2009 (filed as part of
Exhibit 4.1).
4.3 --Registration Rights Agreement dated as of May 11, 1999 between
Healthtrust and the Initial Purchasers named therein,
incorporated by reference from Exhibit 4.4(a) to Triad Hospitals'
Quarterly Report on Form 10-Q, for the quarter ended March 31,
1999.
4.4 --Triad Assumption Agreement dated May 11, 1999 between
Healthtrust and Triad Hospitals, incorporated by reference from
Exhibit 4.4(b) to Triad Hospitals' Quarterly Report on Form 10-Q,
for the quarter ended March 31, 1999.
</TABLE>
II-1
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<C> <S>
4.5 --Holdings Assumption Agreement dated May 11, 1999 between Triad
Hospitals, Inc. and Triad Holdings, incorporated by reference
form Exhibit 4.4(c) to Triad Hospitals' Quarterly Report on Form
10-Q, for the quarter ended March 31, 1999.
4.6 --Guarantor Assumption Agreements dated May 11, 1999 between Triad
Holdings and the Guarantors signatory thereto, incorporated by
reference from Exhibit 4.4(d) to Triad Hospitals' Quarterly
Report on Form 10-Q, for the quarter ended March 31, 1999.
5.1 --Opinion of Dewey Ballantine LLP as to the legality of the
securities being registered.*
10.1 --Tax Sharing and Indemnification Agreement, dated May 11, 1999,
by and among Columbia/HCA, LifePoint Hospitals and Triad
Hospitals incorporated by reference from Exhibit 10.1 to Triad
Hospitals' Quarterly Report on Form 10-Q, for the quarter ended
March 31, 1999.
10.2 --Benefits and Employment Matters Agreement, dated May 11, 1999 by
and among Columbia/HCA, LifePoint Hospitals and Triad Hospitals
incorporated by reference from Exhibit 10.2 to Triad Hospitals'
Quarterly Report on Form 10-Q, for the quarter ended March 31,
1999.
10.3 --Insurance Allocation and Administration Agreement, dated May 11,
1999, by and among Columbia/HCA, LifePoint Hospitals and Triad
Hospitals incorporated by reference from Exhibit 10.3 to Triad
Hospitals' Quarterly Report on Form 10-Q, for the quarter ended
March 31, 1999.
10.4 --Transitional Services Agreement dated May 11, 1999 by and
between Columbia/HCA and Triad Hospitals incorporated by
reference from Exhibit 10.4 to Triad Hospitals' Quarterly Report
on Form 10-Q, for the quarter ended March 31, 1999.
10.5 --Computer and Data Processing Services Agreement dated May 11,
1999 by and between Columbia Information Systems, Inc. and Triad
Hospitals incorporated by reference from Exhibit 10.5 to Triad
Hospitals' Quarterly Report on Form 10-Q, for the quarter ended
March 31, 1999.
10.6 --Agreement to Share Telecommunications Services dated May 11,
1999 by and between Columbia Information Systems, Inc. and Triad
Hospitals incorporated by reference from Exhibit 10.6 to Triad
Hospitals' Quarterly Report on Form 10-Q, for the quarter ended
March 31, 1999.
10.7 --Year 2000 Professional Services Agreement dated May 11, 1999 by
and between CHCA Management Services, L.P. and Triad Hospitals
incorporated by reference from Exhibit 10.7 to Triad Hospitals'
Quarterly Report on Form 10-Q, for the quarter ended March 31,
1999.
10.8 --Sub-Lease Agreement dated May 11, 1999 by and between Med-Point
LLC and Triad Hospitals incorporated by reference from Exhibit
10.8 to Triad Hospitals' Quarterly Report on Form 10-Q, for the
quarter ended March 31, 1999.
10.9 --Sub-Lease Agreement dated May 11, 1999 by and between
Healthtrust and Triad Hospitals, incorporated by reference from
Exhibit 10.9 to Triad Hospitals' Quarterly Report on Form 10-Q,
for the quarter ended March 31, 1999.
10.10 --Triad Hospitals, Inc. 1999 Long-Term Incentive Plan incorporated
by reference from Exhibit 10.10 to Triad Hospitals' Quarterly
Report on Form 10-Q, for the quarter ended March 31, 1999.
10.11 --Triad Hospitals, Inc. Executive Stock Purchase Plan incorporated
by reference from Exhibit 10.11 to Triad Hospitals' Quarterly
Report on Form 10-Q, for the quarter ended March 31, 1999.
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<C> <S>
10.12 --Triad Hospitals, Inc. Management Stock Purchase Plan
incorporated by reference from Exhibit 10.12 to Triad Hospitals'
Quarterly Report on Form 10-Q, for the quarter ended March 31,
1999.
10.13 --Triad Hospitals, Inc. Outside Directors Stock and Incentive
Compensation Plan incorporated by reference from Exhibit 10.13 to
Triad Hospitals' Quarterly Report on Form 10-Q, for the quarter
ended March 31, 1999.
10.14 --Credit Agreement, dated as of May 11, 1999 among Healthtrust,
Inc.-- The Hospital Company and certain subsidiaries from time to
time party thereto, as Borrower, the several lenders from time to
time party thereto, Citicorp USA, Inc. and The Chase Manhattan
Bank as syndication agents, Credit Lyonnais New York Branch and
Societe Generale as co-agents, Bank of America National Trust and
Savings Association as administrative agent and NationsBanc
Montgomery Securities, LLC as lead arranger and sole book manager
incorporated by reference from Exhibit 10.14 to Triad Hospitals'
Quarterly Report on Form 10-Q, for the quarter ended March 31,
1999.
10.15 --Assumption Agreement dated as of May 11, 1999 by and between
Bank of America National Trust and Savings Association and Triad
Hospitals incorporated by reference from Exhibit 10.15 to Triad
Hospitals' Quarterly Report on Form 10-Q, for the quarter ended
March 31, 1999.
10.16 --Assumption Agreement dated as of May 11, 1999 by and between
Bank of America National Trust and Savings Association and Triad
Holdings incorporated by reference from Exhibit 10.16 to Triad
Hospitals' Quarterly Report on Form 10-Q, for the quarter ended
March 31, 1999.
12.1 --Statement of Computation of Ratio of Earnings to Fixed Charges.*
21.1 --List of the Subsidiaries of Triad Holdings.
23.1 --Consent of Dewey Ballantine LLP (included as part of its opinion
filed as Exhibit 5.1 hereto).*
23.2 --Consent of Ernst & Young LLP.*
24.1 --Power of Attorney (included in Part II of this Amendment No. 1
to the Registration Statement).
25.1 --Form T-1 Statement of Eligibility of Trustee.
99.1 --Form of Letter of Transmittal.*
99.2 --Form of Notice of Guaranteed Delivery.*
99.3 --Form of Letter to Clients.*
99.4 --Form of Letter to Brokers.*
99.5 --Form of Instructions to Registered Holders.*
</TABLE>
- --------
* Filed herewith.
Item 22. Undertakings.
1. The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement.
II-3
<PAGE>
Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from the
low or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission pursuant
to Rule 424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the
effective registration statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.
(b) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(c) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
2. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
3. Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
4. The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11 or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through
the date of responding to the request.
5. The undersigned registrant hereby undertakes to supply by means of post-
effective amendment all information concerning a transaction, and the company
being acquired involved therein, that was not the subject of and included in
the registration statement when it became effective.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Triad Hospitals Holdings, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President October 22, 1999
______________________________________ and Secretary; Director
Donald P. Fay (Principal Executive
Officer)
* Treasurer; Director October 22, 1999
______________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
* Director October 22, 1999
______________________________________
W. Stephen Love
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Alice Hospital, LLC
By: SOLE MEMBER:
APS Medical, LLC
By: /s/ Donald P. Fay
----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive Officer)
James D. Shelton
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Alice Surgeons, LLC
By: SOLE MEMBER:
APS Medical, LLC
By: /s/ Donald P. Fay
----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive Officer)
James D. Shelton
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President and October 22, 1999
___________________________________________ Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
APS Medical, LLC
By: SOLE MEMBER:
Triad Hospitals Holdings, Inc.
By: /s/ Donald P. Fay
----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and
Donald P. Fay Secretary; Director
(Principal Executive
Officer)
* Treasurer; Director October 22, 1999
___________________________________________ (Principal
Burke W. Whitman Financial and Accounting
Officer)
* Director October 22, 1999
___________________________________________
</TABLE> W. Stephen Love
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-8
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October , 1999.
Arizona Medco, LLC
By: SOLE MEMBER:
Triad Hospitals Holdings, Inc.
By: /s/ Donald P. Fay
----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and
Donald P. Fay Secretary; Director
(Principal Executive
Officer)
* Treasurer; Director October 22, 1999
___________________________________________ (Principal
Burke W. Whitman Financial and Accounting
Officer)
* Director October 22, 1999
___________________________________________
</TABLE> W. Stephen Love
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-10
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Beauco, LLC
By: SOLE MEMBER:
Triad Hospitals Holdings, Inc.
By: /s/ Donald P. Fay
----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and
Donald P. Fay Secretary; Director
(Principal Executive
Officer)
* Treasurer; Director October 22, 1999
___________________________________________ (Principal
Burke W. Whitman Financial and Accounting
Officer)
* Director October 22, 1999
___________________________________________
</TABLE> W. Stephen Love
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Beaumont Regional, LLC
By: SOLE MEMBER:
Beauco, LLC
By: /s/ Donald P. Fay
----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
</TABLE> Donald P. Fay
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Brazos Valley of Texas, L.P.
GENERAL PARTNER:
Brazos Valley Surgical Center, LLC
By: /s/ Donald P. Fay
----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No.1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
</TABLE> Donald P. Fay
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Brazos Medco, LLC
By: SOLE MEMBER:
Triad Hospitals Holdings, Inc.
By: /s/ Donald P. Fay
----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and
Donald P. Fay Secretary; Director
(Principal Executive
Officer)
* Treasurer; Director October 22, 1999
___________________________________________ (Principal
Burke W. Whitman Financial and Accounting
Officer)
* Director October 22, 1999
___________________________________________
</TABLE> W. Stephen Love
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Brazos Valley Surgical Center, LLC
By: SOLE MEMBER:
Brazos Medco, LLC
By: /s/ Donald P. Fay
----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-15
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Brownwood Hospital, L.P.
GENERAL PARTNER:
Brownwood Medical Center, LLC
By: /s/ Donald P. Fay
----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-16
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Brownwood Medical Center, LLC
By: SOLE MEMBER:
Southern Texas Medical Center, LLC
By: /s/ Donald P. Fay
----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-17
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
BVSC, LLC
By: SOLE MEMBER:
Brazos Medco, LLC
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-18
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Carlsbad Medical Center, LLC
By: SOLE MEMBER:
Triad Hospitals Holdings, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President and October 22, 1999
___________________________________________ Secretary; Director
Donald P. Fay (Principal Executive Officer)
* Treasurer; Director October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
* Director October 22, 1999
___________________________________________
</TABLE> W. Stephen Love
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-19
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Claremore Physicians, LLC
By: SOLE MEMBER:
Triad Holdings II, LLC
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-20
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Claremore Regional Hospital, LLC
By: SOLE MEMBER:
Triad Holdings II, LLC
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
</TABLE> Donald P. Fay
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-21
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Clinico, LLC
By: SOLE MEMBER:
Triad Holdings II, LLC
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
</TABLE> Donald P. Fay
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-22
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
College Station Hospital, L.P.
GENERAL PARTNER:
College Station Medical Center, LLC
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
</TABLE> Donald P. Fay
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-23
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
College Station Medical Center, LLC
By: SOLE MEMBER:
College Station Merger, LLC
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-24
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
College Station Merger, LLC
By: SOLE MEMBER:
Triad Hospitals Holdings, Inc.
By: /s/ Donald P. Fay
----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Director
Donald P. Fay (Principal Executive
Officer)
* Treasurer; Director October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
* Director October 22, 1999
___________________________________________
W. Stephen Love
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-25
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Coronado Hospital, LLC
By: SOLE MEMBER:
Coronado Medical, LLC
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-26
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Coronado Medial, LLC
By: SOLE MEMBER:
Triad Hospitals Holdings, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Director
Donald P. Fay (Principal Executive
Officer)
* Treasurer; Director October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
* Director October 22, 1999
___________________________________________
W. Stephen Love
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-27
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Crestwood Healthcare, L.P.
GENERAL PARTNER:
Crestwood Hospital & Nursing Home,
Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Director (Principal
Donald P. Fay Executive Officer)
* Treasurer and Director October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
* Director October 22, 1999
___________________________________________
W. Stephen Love
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-28
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
CRESTWOOD HOSPITAL HOLDINGS, INC.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Director (Principal
Donald P. Fay Executive Officer)
* Treasurer and Director October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
* Director October 22, 1999
___________________________________________
W. Stephen Love
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-29
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Crestwood Hospital & Nursing Home,
Inc.
By: /s/ Donald P. Fay
----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Director (Principal
Donald P. Fay Executive Officer)
* Treasurer and Director October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
* Director October 22, 1999
___________________________________________
W. Stephen Love
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-30
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
CSDS, LLC
By: SOLE MEMBER:
Triad Holdings III, Inc.
By: /s/ Donald P. Fay
----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Director (Principal
Donald P. Fay Executive Officer)
* Treasurer and Director October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
* Director October 22, 1999
___________________________________________
W. Stephen Love
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-31
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
CSMC, LLC
By: SOLE MEMBER:
College Station Merger, LLC
By: /s/ Donald P. Fay
----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-32
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Dallas Physician Practice, L.P.
GENERAL PARTNER:
DFW Physerv, LLC
By: /s/ Donald P. Fay
----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-33
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Dallas PHY Service, LLC
By: SOLE MEMBER:
Triad Hospitals Holdings, Inc.
By: /s/ Donald P. Fay
----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Director
Donald P. Fay (Principal Executive
Officer)
* Treasurer; Director October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
* Director October 22, 1999
___________________________________________
W. Stephen Love
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-34
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Day Surgery, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Director (Principal
Donald P. Fay Executive Officer)
* Treasurer and Director October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
* Director October 22, 1999
___________________________________________
W. Stephen Love
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-35
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
DeQueen Health Services, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Director (Principal
Donald P. Fay Executive Officer)
* Treasurer and Director October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
* Director October 22, 1999
___________________________________________
W. Stephen Love
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-36
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
DeQueen Regional Medical Center, LLC
By: SOLE MEMBER:
DeQueen Health Services, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and
Donald P. Fay Director (Principal
Executive Officer)
* Treasurer and Director October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
* Director October 22, 1999
___________________________________________
</TABLE> W. Stephen Love
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-37
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Detar Hospital, LLC
By: SOLE MEMBER:
VHC Medical, LLC
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-38
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
DFW PHYSERV, LLC
By: SOLE MEMBER:
Triad Hospitals Holdings, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President and October 22, 1999
___________________________________________ Secretary; Director
Donald P. Fay (Principal Executive Officer)
* Treasurer; Director October 22, 1999
___________________________________________ (Principal
Burke W. Whitman Financial and Accounting
Officer)
* Director October 22, 1999
___________________________________________
</TABLE> W. Stephen Love
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-40
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Doctors Medical Center, LLC
By: SOLE MEMBER:
Mid-Plains, LLC
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-41
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Doctors of Laredo, LLC
By: SOLE MEMBER:
Mid-Plains, LLC
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-42
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Douglas Medical Center, LLC
By: SOLE MEMBER:
Triad Hospitals Holdings, Inc.
By: /s/ Donald P. Fay
----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and
Donald P. Fay Secretary; Director
(Principal Executive
Officer)
* Treasurer; Director October 22, 1999
___________________________________________ (Principal
Burke W. Whitman Financial and Accounting
Officer)
* Director October 22, 1999
___________________________________________
</TABLE> W. Stephen Love
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-43
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
E.D. Clinics, LLC
By: SOLE MEMBER:
Arizona Medco, LLC
By: /s/ Donald P. Fay
----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-44
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
El Dorado Medical Center, LLC
By: SOLE MEMBER:
Arizona Medco, LLC
By: /s/ Donald P. Fay
----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-45
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Eye Care Surgicare, Ltd.
GENERAL PARTNER:
Surgicare of Independence, Inc.
By: /s/ Donald P. Fay
----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and
Donald P. Fay Director (Principal
Executive Officer)
* Treasurer and Director October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
* Director October 22, 1999
___________________________________________
</TABLE> W. Stephen Love
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-46
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Eye Institute of Southern Arizona,
LLC
By: SOLE MEMBER:
Triad Hospitals Holdings, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President and October 22, 1999
___________________________________________ Secretary; Director
Donald P. Fay (Principal Executive Officer)
* Treasurer; Director October 22, 1999
___________________________________________ (Principal
Burke W. Whitman Financial and Accounting
Officer)
* Director October 22, 1999
___________________________________________
</TABLE> W. Stephen Love
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-47
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Gallagher Park Surgicenter, Ltd.
GENERAL PARTNER:
Surgicare of Sherman, Inc.
By: /s/ Donald P. Fay
----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and
Donald P. Fay Director (Principal
Executive Officer)
* Treasurer and Director October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
* Director October 22, 1999
___________________________________________
</TABLE> W. Stephen Love
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-48
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
GCMC, LLC
By: SOLE MEMBER:
Wharton Medco, LLC
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-49
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
GH Texas, LLC
By: SOLE MEMBER:
Triad Hospitals Holdings, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President and October 22, 1999
___________________________________________ Secretary; Director
Donald P. Fay (Principal Executive Officer)
* Treasurer; Director October 22, 1999
___________________________________________ (Principal
Burke W. Whitman Financial and Accounting
Officer)
* Director October 22, 1999
___________________________________________
</TABLE> W. Stephen Love
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-50
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
GHC Hospital, LLC
By: SOLE MEMBER:
Triad Hospitals Holdings, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and
Donald P. Fay Secretary; Director
(Principal Executive
Officer)
* Treasurer; Director October 22, 1999
___________________________________________ (Principal
Burke W. Whitman Financial and Accounting
Officer)
* Director October 22, 1999
___________________________________________
</TABLE> W. Stephen Love
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-51
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Gulf Coast Hospital, L.P.
GENERAL PARTNER:
Gulf Coast Medical Center, LLC
By: /s/ Donald P. Fay
----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-52
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Gulf Coast Medical Center, LLC
By: SOLE MEMBER:
Wharton Medco, LLC
By: /s/ Donald P. Fay
----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
</TABLE> Donald P. Fay
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-53
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
HDP DeQueen, LLC
By: SOLE MEMBER:
Triad Holdings II, LLC
By: /s/ Donald P. Fay
----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
</TABLE> Donald P. Fay
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-54
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
HDP Woodland Heights, L.P.
GENERAL PARTNER:
HDP Woodland Property, LLC
By: /s/ Donald P. Fay
----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
</TABLE> Donald P. Fay
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-55
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
HDP Woodland Property, LLC
By: SOLE MEMBER:
Triad Hospitals Holdings, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President and October 22, 1999
___________________________________________ Secretary; Director
Donald P. Fay (Principal Executive Officer)
* Treasurer; Director October 22, 1999
___________________________________________ (Principal
Burke W. Whitman Financial and Accounting
Officer)
* Director October 22, 1999
___________________________________________
</TABLE> W. Stephen Love
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-56
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
HDPWH, LLC
By: SOLE MEMBER:
Triad Hospitals Holdings, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President and October 22, 1999
___________________________________________ Secretary; Director
Donald P. Fay (Principal Executive Officer)
* Treasurer; Director October 22, 1999
___________________________________________ (Principal
Burke W. Whitman Financial and Accounting
Officer)
* Director October 22, 1999
___________________________________________
</TABLE> W. Stephen Love
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-57
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Healdsburg of California, LLC
By: SOLE MEMBER:
Triad Hospitals Holdings, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President and October 22, 1999
___________________________________________ Secretary; Director
Donald P. Fay (Principal Executive Officer)
* Treasurer; Director October 22, 1999
___________________________________________ (Principal
Burke W. Whitman Financial and Accounting
Officer)
* Director October 22, 1999
___________________________________________
</TABLE> W. Stephen Love
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-58
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Hobbs Medco, LLC
By: SOLE MEMBER:
Triad Hospitals Holdings, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President and October 22, 1999
___________________________________________ Secretary; Director
Donald P. Fay (Principal Executive Officer)
* Treasurer; Director October 22, 1999
___________________________________________ (Principal
Burke W. Whitman Financial and Accounting
Officer)
* Director October 22, 1999
___________________________________________
</TABLE> W. Stephen Love
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-59
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Hobbs Physician Practice, LLC
By: SOLE MEMBER:
Hobbs Medco, LLC
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-60
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Hospital of Beaumont, LLC
By: SOLE MEMBER:
Beauco, LLC
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-61
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
HTI Tuson Rehabilitation, Inc.
/s/ Donald P. Fay
By:
----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President and October 22, 1999
___________________________________________ Director (Principal Executive
Donald P. Fay Officer)
* Treasurer and Director October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
* Director October 22, 1999
___________________________________________
</TABLE> W. Stephen Love
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-62
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Independence Regional Health Center,
LLC
By: SOLE MEMBER:
Triad Holdings II, LLC
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
</TABLE> Donald P. Fay
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-63
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Kansas City Surgicenter, Ltd.
GENERAL PARTNER:
Day Surgery, Inc.
By: /s/ Donald P. Fay
----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Director (Principal
Donald P. Fay Executive Officer)
* Treasurer and Director October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
* Director October 22, 1999
___________________________________________
W. Stephen Love
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-64
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Kensingcare, LLC
By: SOLE MEMBER:
Triad Holdings II, LLC
By: /s/ Donald P. Fay
----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
</TABLE> Donald P. Fay
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-65
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Lake Area Surgicare, LP
GENERAL PARTNER:
Surgicare Outpatient Center of Lake
Charles, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and
Donald P. Fay Director (Principal
Executive Officer)
* Treasurer and Director October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
* Director October 22, 1999
___________________________________________
</TABLE> W. Stephen Love
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-66
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Laredo Hospital, L.P.
GENERAL PARTNER:
Doctors of Laredo, LLC
/s/ Donald P. Fay
By: ________________________________
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
</TABLE> Donald P. Fay
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-67
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Laredo Interest, LLC
By: SOLE MEMBER:
Triad Holdings III, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Director (Principal
Donald P. Fay Executive Officer)
* Treasurer and Director October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
* Director October 22, 1999
___________________________________________
</TABLE> W. Stephen Love
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-68
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Lea Regional Hospital, LLC
By: SOLE MEMBER:
Hobbs Medco, LLC
By: /s/ Donald P. Fay
----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
</TABLE> Donald P. Fay
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-69
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Longview Medical Center, L.P.
GENERAL PARTNER:
Regional Hospital of Longview, LLC
By: /s/ Donald P. Fay
----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-70
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Longview Merger, LLC
By: SOLE MEMBER:
Triad Hospitals Holdings, Inc.
By: /s/ Donald P. Fay
----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and
Donald P. Fay Secretary; Director
(Principal Executive
Officer)
* Treasurer; Director October 22, 1999
___________________________________________ (Principal
Burke W. Whitman Financial and Accounting
Officer)
* Director October 22, 1999
___________________________________________
</TABLE> W. Stephen Love
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-71
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
LRH, LLC
By: SOLE MEMBER:
Longview Merger, Inc.
By: /s/ Donald P. Fay
----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and
Donald P. Fay Secretary; Director
(Principal Executive
Officer)
* Treasurer; Director October 22, 1999
___________________________________________ (Principal
Burke W. Whitman Financial and Accounting
Officer)
* Director October 22, 1999
___________________________________________
</TABLE> W. Stephen Love
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-72
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
LS PSYCHIATRIC LLC
By: SOLE MEMBER:
Triad Holdings III, Inc.
By: /s/ Donald P. Fay
----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Director (Principal
Donald P. Fay Executive Officer)
* Treasurer and Director October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
* Director October 22, 1999
___________________________________________
</TABLE> W. Stephen Love
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-73
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
MCI Panhandle Surgical, L.P.
GENERAL PARTNER:
Panhandle Property, LLC
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-74
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Medical Center at Terrell, LLC
By: SOLE MEMBER:
Triad-Medical Center at Terrell
Subsidiary, LLC
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-75
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Medical Center of Brownwood, LLC
By: SOLE MEMBER:
Southern Texas Medical Center, LLC
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
</TABLE> Donald P. Fay
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-76
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Medical Center of Sherman, LLC
By: SOLE MEMBER:
Triad-Medical Center of Sherman
Subsidiary, LLC
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
</TABLE> Donald P. Fay
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-77
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Medical Holdings, Inc.
By: /s/ Donald P. Fay
----------------------------------
Donald P. Fay Executive Vice
President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Director (Principal
Donald P. Fay Executive Officer)
* Treasurer and Director October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
* Director October 22, 1999
___________________________________________
</TABLE> W. Stephen Love
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-78
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Medical Management, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Director (Principal
Donald P. Fay Executive Officer)
* Treasurer and Director October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
* Director October 22, 1999
___________________________________________
W. Stephen Love
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-79
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, October 22, 1999.
Medical Park Hospital, LLC
By: SOLE MEMBER:
Triad Holdings II, LLC
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-80
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Medical Park MSO, LLC
By: SOLE MEMBER:
Triad Holdings II, LLC
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-81
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Memorial Hospital, LLC
By: SOLE MEMBER:
Triad Hospitals Holdings, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President and October 22, 1999
___________________________________________ Secretary; Director
Donald P. Fay (Principal Executive Officer)
* Treasurer; Director October 22, 1999
___________________________________________ (Principal
Burke W. Whitman Financial and Accounting
Officer)
* Director October 22, 1999
___________________________________________
W. Stephen Love
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-82
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Mid-Plains, LLC
By: SOLE MEMBER:
Triad Hospitals Holdings, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and
Donald P. Fay Secretary; Director
(Principal Executive
Officer)
* Treasurer; Director October 22, 1999
___________________________________________ (Principal
Burke W. Whitman Financial and Accounting
Officer)
* Director October 22, 1999
___________________________________________
</TABLE> W. Stephen Love
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-83
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Midwest Psychiatric Center, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Director (Principal
Donald P. Fay Executive Officer)
* Treasurer and Director October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
* Director October 22, 1999
___________________________________________
W. Stephen Love
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-84
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Mission Bay Memorial Hospital, LLC
By: SOLE MEMBER:
Triad Hospitals Holdings, Inc.
By: /s/ Donald P. Fay
----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and
Donald P. Fay Secretary; Director
(Principal Executive
Officer)
* Treasurer; Director October 22, 1999
___________________________________________ (Principal
Burke W. Whitman Financial and Accounting
Officer)
* Director October 22, 1999
___________________________________________
W. Stephen Love
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-85
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Missouri Healthserv, LLC
By: SOLE MEMBER:
Triad Holdings III, Inc.
By: /s/ Donald P. Fay
----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Director (Principal
Donald P. Fay Executive Officer)
* Treasurer and Director October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
* Director October 22, 1999
___________________________________________
W. Stephen Love
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-86
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Navarro Hospital, L.P
GENERAL PARTNER:
Navarro Regional, LLC
By: /s/ Donald P. Fay
----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-87
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Navarro Regional, LLC
By: SOLE MEMBER:
Triad-Navarro Regional Hospital
Subsidiary, LLC
By: /s/ Donald P. Fay
----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-88
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Northwest Hospital, LLC
By: SOLE MEMBER:
Triad Hospitals Holdings, Inc.
/s/ Donald P. Fay
By:
----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President and October 22, 1999
___________________________________________ Secretary; Director (Principal
Donald P. Fay Executive Officer)
* Treasurer; Director (Principal October 22, 1999
___________________________________________ Financial and Accounting
Burke W. Whitman Officer)
* Director October 22, 1999
___________________________________________
W. Stephen Love
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-89
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
NRH, LLC
By: SOLE MEMBER:
Triad-Navarro Regional Hospital
Subsidiary, LLC
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, thisAmendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-90
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Odessa, LLC
By: SOLE MEMBER:
Triad Holdings II, LLC
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-91
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Oregon Healthcorp, LLC
By: SOLE MEMBER:
Triad Hospitals Holdings, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President and October 22, 1999
___________________________________________ Secretary; Director (Principal
Donald P. Fay Executive Officer)
* Treasurer; Director (Principal October 22, 1999
___________________________________________ Financial and Accounting
Burke W. Whitman Officer)
* Director October 22, 1999
___________________________________________
W. Stephen Love
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-92
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Osborn Ambulatory Surgical Group,
Ltd.
GENERAL PARTNER:
Samaritan Surgicenters of Arizona,
LLC
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-93
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Overland Park Regional Medical
Center, LLC
By: SOLE MEMBER:
Triad Hospitals Holdings, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President and October 22, 1999
___________________________________________ Secretary; Director (Principal
Donald P. Fay Executive Officer)
* Treasurer; Director (Principal October 22, 1999
___________________________________________ Financial and Accounting
Burke W. Whitman Officer)
* Director October 22, 1999
___________________________________________
W. Stephen Love
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-94
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Pacific East Division Office, L.P.
GENERAL PARTNER:
Triad Texas, LLC
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-95
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Pacific Group ASC Division, Inc.
By: /s/ Donald P. Fay
----------------------------------
Donald P. Fay Executive Vice
President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and
Donald P. Fay Director (Principal
Executive Officer)
* Treasurer and Director October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
* Director October 22, 1999
___________________________________________
W. Stephen Love
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-96
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Pacific Physicians Services, LLC
By: SOLE MEMBER:
Sprocket Medical Management, LLC
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-97
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Pacific West Division Office, LLC
By: SOLE MEMBER:
Triad Hospitals Holdings, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President and October 22, 1999
___________________________________________ Secretary; Director (Principal
Donald P. Fay Executive Officer)
* Treasurer; Director (Principal October 22, 1999
___________________________________________ Financial and Accounting
Burke W. Whitman Officer)
* Director October 22, 1999
___________________________________________
W. Stephen Love
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-98
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Palm Drive Hospital, L.P.
GENERAL PARTNER:
Palm Drive medical Center, LLC
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-99
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No.1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Palm Drive Medical Center, LLC
By: SOLE MEMBER:
Sebastopol, LLC
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-100
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Pampa Hospital, L.P.
GENERAL PARTNER:
Pampa Medical Center, LLC
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-101
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this The Amendment No. 1 to the Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of
Dallas, State of Texas, on October 22, 1999.
Pampa Medical Center, LLC
By: SOLE MEMBER:
Coronado Medical, LLC
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-102
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
PDMC, LLC
By: SOLE MEMBER:
Sebastopol, LLC
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-103
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Pecos Valley of New Mexico, LLC
By: SOLE MEMBER:
Triad Hospitals Holdings, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President and October 22, 1999
___________________________________________ Secretary; Director (Principal
Donald P. Fay Executive Officer)
* Treasurer; Director (Principal October 22, 1999
___________________________________________ Financial and Accounting
Burke W. Whitman Officer)
* Director October 22, 1999
___________________________________________
W. Stephen Love
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
104
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Phoenix Amdeco, LLC
By: SOLE MEMBER:
Triad Hospitals Holdings, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and
Donald P. Fay Secretary; Director
(Principal Executive
Officer)
* Treasurer; Director October 22, 1999
___________________________________________ (Principal
Burke W. Whitman Financial and Accounting
Officer)
* Director October 22, 1999
___________________________________________
</TABLE> W. Stephen Love
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-105
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Phoenix Surgical, LLC
By: SOLE MEMBER:
Triad Hospitals Holdings, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President and October 22, 1999
___________________________________________ Secretary; Director
Donald P. Fay (Principal Executive Officer)
* Treasurer; Director October 22, 1999
___________________________________________ (Principal
Burke W. Whitman Financial and Accounting
Officer)
* Director October 22, 1999
___________________________________________
</TABLE> W. Stephen Love
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-106
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Physicians and Surgeons Hospital of
Alice, L.P.
GENERAL PARTNER:
Alice Hospital, LLC
By: /s/ Donald P. Fay
----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
</TABLE> Donald P. Fay
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-107
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Phys-Med, LLC
By: SOLE MEMBER:
Triad Holdings II, LLC
By: /s/ Donald P. Fay
----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
</TABLE> Donald P. Fay
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-108
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Piney Woods Healthcare System, L.P.
GENERAL PARTNER:
Woodland Heights Medical Center, LLC
By: /s/ Donald P. Fay
----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
</TABLE> Donald P. Fay
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-109
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Primary Medical, LLC
By: SOLE MEMBER:
Triad Holdings II, LLC
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
</TABLE> Donald P. Fay
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-110
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Amendment No. 1 to the Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of
Dallas, State of Texas, on October 22, 1999.
Psychiatric Services of Paradise
Valley, LLC
By: SOLE MEMBER:
Triad Hospitals Holdings, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President and October 22, 1999
___________________________________________ Secretary; Director
Donald P. Fay (Principal Executive Officer)
* Treasurer; Director October 22, 1999
___________________________________________ (Principal
Burke W. Whitman Financial and Accounting
Officer)
* Director October 22, 1999
___________________________________________
</TABLE> W. Stephen Love
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-111
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Regional Hospital of Longview, LLC
By: SOLE MEMBER:
Longview Merger, LLC
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
</TABLE> Donald P. Fay
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-112
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
SACMC, LLC
By: SOLE MEMBER:
San Angelo Medical, LLC
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
</TABLE> Donald P. Fay
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-113
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Samaritan Surgicenters of Arizona,
LLC
By: SOLE MEMBER:
Surgicenters of America, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and
Donald P. Fay Director (Principal
Executive Officer)
* Treasurer and Director October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
* Director October 22, 1999
___________________________________________
</TABLE> W. Stephen Love
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-114
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
San Angelo Community Medical Center,
LLC
By: SOLE MEMBER:
San Angelo Medical, LLC
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-115
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
San Angelo Hospital, L.P.
GENERAL PARTNER:
San Angelo Community Medical Center,
LLC
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22,1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-116
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
San Angelo Medical, LLC
By: SOLE MEMBER:
Triad Hospitals Holdings, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President and October 22, 1999
___________________________________________ Secretary; Director
Donald P. Fay (Principal Executive Officer)
* Treasurer; Director October 22, 1999
___________________________________________ (Principal
Burke W. Whitman Financial and Accounting
Officer)
* Director October 22, 1999
___________________________________________
</TABLE> W. Stephen Love
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-117
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
San Diego Hospital, L.P.
GENERAL PARTNER:
Mission Bay Memorial Hospital, LLC
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-118
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
San Leandro Hospital, L.P.
GENERAL PARTNER:
San Leandro Medical Center, LLC
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-119
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
San Leandro Medical Center, LLC
By: SOLE MEMBER:
San Leandro, LLC
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-120
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
San Leandro, LLC
By: SOLE MEMBER:
Triad Hospitals Holdings, Inc.
By: /s/ Donald P. Fay
----------------------------------
Donald P. Fay Executive Vice
President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and
Donald P. Fay Secretary; Director
(Principal Executive
Officer)
* Treasurer; Director October 22, 1999
___________________________________________ (Principal
Burke W. Whitman Financial and Accounting
Officer)
* Director October 22, 1999
___________________________________________
</TABLE> W. Stephen Love
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-121
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
SDH, LLC
By: SOLE MEMBER:
Silsbee Texas, LLC
By: /s/ Donald P. Fay
----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal
Burke W. Whitman Financial and Accounting
Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-122
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
SDH LP, LLC
By: SOLE MEMBER:
Triad Holdings III, Inc.
By: /s/ Donald P. Fay
----------------------------------
Donald P. Fay Executive Vice
President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and
Donald P. Fay Director (Principal
Executive Officer)
* Treasurer; Director October 22, 1999
___________________________________________ (Principal
Burke W. Whitman Financial and Accounting
Officer)
* Director October 22, 1999
___________________________________________
</TABLE> W. Stephen Love
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-123
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Sebastopol, LLC
By: SOLE MEMBER:
Triad Hospitals Holdings, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay Executive Vice
President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and
Donald P. Fay Secretary; Director
(Principal Executive
Officer)
* Treasurer; Director October 22, 1999
___________________________________________ (Principal
Burke W. Whitman Financial and Accounting
Officer)
* Director October 22, 1999
___________________________________________
</TABLE> W. Stephen Love
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-124
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Sherman Hospital, L.P.
GENERAL PARTNER:
Medical Center of Sherman, LLC
By: /s/ Donald P. Fay
----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-125
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Sherman Medical Center, LLC
By: SOLE MEMBER:
Triad Medical Center of Sherman
Subsidiary, LLC
By: /s/ Donald P. Fay
----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-126
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Silsbee Medical Center, LLC
By: SOLE MEMBER:
Silsbee Texas, LLC
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-127
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Silsbee Texas, LLC
By: SOLE MEMBER:
Triad Hospitals Holdings, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President and October 22, 1999
___________________________________________ Secretary; Director
Donald P. Fay (Principal Executive Officer)
* Treasurer; Director October 22, 1999
___________________________________________ (Principal
Burke W. Whitman Financial and Accounting
Officer)
* Director October 22, 1999
___________________________________________
</TABLE> W. Stephen Love
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-128
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
SLH, LLC
By: SOLE MEMBER:
San Leandro, LLC
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-129
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
South Alabama Managed Care
Contracting, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President and October 22, 1999
___________________________________________ Director (Principal Executive
Donald P. Fay Officer)
* Treasurer and Director October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
* Director October 22, 1999
___________________________________________
W. Stephen Love
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-130
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
South Alabama Medical Management
Services, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President and October 22, 1999
___________________________________________ Director (Principal Executive
Donald P. Fay Officer)
* Treasurer and Director October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
* Director October 22, 1999
___________________________________________
</TABLE> W. Stephen Love
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-131
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
South Alabama Physicians Service,
Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President and October 22, 1999
___________________________________________ Director (Principal Executive
Donald P. Fay Officer)
* Treasurer and Director October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
* Director October 22, 1999
___________________________________________
</TABLE> W. Stephen Love
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-132
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
South Arkansas Clinic, LLC
By: SOLE MEMBER:
Triad Holdings II, LLC
By:
----------------------------------
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-133
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Southern Texas Medical Center, LLC
By: SOLE MEMBER:
Triad Hospitals Holdings, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President and October 22, 1999
___________________________________________ Secretary; Director (Principal
Donald P. Fay Executive Officer)
* Treasurer; Director (Principal October 22, 1999
___________________________________________ Financial and Accounting
Burke W. Whitman Officer)
* Director October 22, 1999
___________________________________________
</TABLE> W. Stephen Love
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-134
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Sprocket Medical Management, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President and October 22, 1999
___________________________________________ Director (Principal Executive
Donald P. Fay Officer)
* Treasurer and Director October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
* Director October 22, 1999
___________________________________________
</TABLE> W. Stephen Love
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-135
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Surgicare of Amarillo, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President and October 22, 1999
___________________________________________ Director (Principal Executive
Donald P. Fay Officer)
* Treasurer and Director October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
* Director October 22, 1999
___________________________________________
W. Stephen Love
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-136
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Surgical Center of Amarillo, LLC
By: SOLE MEMBER:
Triad Hospitals Holdings, Inc.
By: /s/ Donald P. Fay
----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Director
Donald P. Fay (Principal Executive
Officer)
* Treasurer; Director October 22, 1999
___________________________________________ (Principal
Burke W. Whitman Financial and Accounting
Officer)
* Director October 22, 1999
___________________________________________
</TABLE> W. Stephen Love
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-137
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Surgicenters of America, Inc.
By: /s/ Donald P. Fay
----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ (Principal Executive
Donald P. Fay Officer)
* Treasurer and Director October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
* Director October 22, 1999
___________________________________________
W. Stephen Love
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-138
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Surgicenters of America, L.P.
GENERAL PARTNER:
Samaritan Surgicenters of Arizona,
LLC
By: /s/ Donald P. Fay
----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-139
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Surgicenter of Johnson County, Inc.
/s/ Donald P. Fay
By:
----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President and October 22, 1999
___________________________________________ Director (Principal Executive
Donald P. Fay Officer)
* Treasurer and Director October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
* Director October 22, 1999
___________________________________________
</TABLE> W. Stephen Love
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-140
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Surgicenter of Johnson County, Ltd.
GENERAL PARTNER:
Surgicenter of Johnson County, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President and October 22, 1999
___________________________________________ Director (Principal Executive
Donald P. Fay Officer)
* Treasurer and Director October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
* Director October 22, 1999
___________________________________________
</TABLE> W. Stephen Love
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-141
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Surgicare of Independence, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President and October 22, 1999
___________________________________________ Director (Principal Executive
Donald P. Fay Officer)
* Treasurer and Director October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
* Director October 22, 1999
___________________________________________
</TABLE> W. Stephen Love
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-142
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Surgicare of North Anaheim, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Director (Principal
Donald P. Fay Executive Officer)
* Treasurer and Director October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
* Director October 22, 1999
___________________________________________
W. Stephen Love
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-143
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Surgicare of San Leandro, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Director (Principal
Donald P. Fay Executive Officer)
* Treasurer and Director October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
* Director October 22, 1999
___________________________________________
</TABLE> W. Stephen Love
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-144
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Surgicare of Sherman, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Director (Principal
Donald P. Fay Executive Officer)
* Treasurer and Director October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
* Director October 22, 1999
___________________________________________
W. Stephen Love
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-145
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Surgicare of Southeast Texas, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President and October 22, 1999
___________________________________________ Director (Principal Executive
Donald P. Fay Officer)
* Treasurer and Director October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
* Director October 22, 1999
___________________________________________
W. Stephen Love
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-146
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Surgicare of Victoria, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President and October 22, 1999
___________________________________________ Director (Principal Executive
Donald P. Fay Officer)
* Treasurer and Director October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
* Director October 22, 1999
___________________________________________
W. Stephen Love
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-147
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Surgicare Outpatient Center of Lake
Charles, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Director (Principal
Donald P. Fay Executive Officer)
* Treasurer and Director October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
* Director October 22, 1999
___________________________________________
W. Stephen Love
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-148
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Surgicare of Victoria, Ltd.
GENERAL PARTNER:
Surgicare of Victoria, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Director (Principal
Donald P. Fay Executive Officer)
* Treasurer and Director October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
* Director October 22, 1999
___________________________________________
W. Stephen Love
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-149
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22,1999.
Terrell Hospital, L.P.
GENERAL PARTNER:
Terrell Medical Center, LLC
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-150
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Terrell Medical Center, LLC
By: SOLE MEMBER:
Triad-Medical Center at Terrell
Subsidiary, LLC
By:
----------------------------------
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-151
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
The Surgical Hospital of Amarillo,
Ltd.
GENERAL PARTNER:
Surgicare of Amarillo, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President and October 22, 1999
___________________________________________ Director (Principal Executive
Donald P. Fay Officer)
* Treasurer and Director October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
* Director October 22, 1999
___________________________________________
W. Stephen Love
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-152
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Triad-Arizona, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Director (Principal
Donald P. Fay Executive Officer)
* Treasurer and Director October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
* Director October 22, 1999
___________________________________________
W. Stephen Love
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-153
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Triad CSGP, LLC
By: SOLE MEMBER:
Triad Holdings II, LLC
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-154
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Triad CSLP, LLC
By: SOLE MEMBER:
Triad Hospitals Holdings, Inc.
/s/ Donald P. Fay
By:
----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and
Donald P. Fay Secretary; Director
(Principal Executive
Officer)
* Treasurer; Director October 22, 1999
___________________________________________ (Principal
Burke W. Whitman Financial and Accounting
Officer)
* Director October 22, 1999
___________________________________________
</TABLE> W. Stephen Love
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-155
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Triad Corporate Services, Limited
Partnership
GENERAL PARTNER:
Triad CSGP, LLC
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-156
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Triad-El Dorado, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Director (Principal
Donald P. Fay Executive Officer)
* Treasurer and Director October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
* Director October 22, 1999
___________________________________________
</TABLE> W. Stephen Love
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-157
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Triad Healthcare System of Phoenix,
L.P.
GENERAL PARTNER:
Triad of Phoenix, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Director (Principal
Donald P. Fay Executive Officer)
* Treasurer and Director October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
* Director October 22, 1999
___________________________________________
W. Stephen Love
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-158
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Triad Holdings II, LLC
By: SOLE MEMBER:
Triad Hospitals Holdings, Inc.
By: /s/ Donald P. Fay
----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President and October 22, 1999
___________________________________________ Secretary; Director (Principal
Donald P. Fay Executive Officer)
* Treasurer; Director (Principal October 22, 1999
___________________________________________ Financial and Accounting
Burke W. Whitman Officer)
* Director October 22, 1999
___________________________________________
</TABLE> W. Stephen Love
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-159
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Triad Holdings III, Inc.
By: /s/ Donald P. Fay
----------------------------------
Donald P. Fay Executive Vice
President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Director (Principal
Donald P. Fay Executive Officer)
* Treasurer and Director October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
* Director October 22, 1999
___________________________________________
</TABLE> W. Stephen Love
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-160
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Triad-Medical Center at Terrell
Subsidiary, LLC
By: SOLE MEMBER:
Triad Hospitals Holdings, Inc.
By: /s/ Donald P. Fay
----------------------------------
Donald P. Fay Executive Vice
President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President and October 22, 1999
___________________________________________ Secretary; Director (Principal
Donald P. Fay Executive Officer)
* Treasurer; Director (Principal October 22, 1999
___________________________________________ Financial and Accounting
Burke W. Whitman Officer)
* Director October 22, 1999
___________________________________________
</TABLE> W. Stephen Love
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-161
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Triad-Medical Center of Sherman
Subsidiary, LLC
By: SOLE MEMBER:
Triad Hospitals Holdings, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President and October 22, 1999
___________________________________________ Secretary; Director
Donald P. Fay (Principal Executive Officer)
* Treasurer; Director October 22, 1999
___________________________________________ (Principal
Burke W. Whitman Financial and Accounting
Officer)
* Director October 22, 1999
___________________________________________
</TABLE> W. Stephen Love
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-162
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Triad-Navarro Regional Hospital
Subsidiary, LLC
By: SOLE MEMBER:
Triad Hospitals Holdings, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President and October 22, 1999
___________________________________________ Secretary; Director
Donald P. Fay (Principal Executive Officer)
* Treasurer; Director October 22, 1999
___________________________________________ (Principal
Burke W. Whitman Financial and Accounting
Officer)
* Director October 22, 1999
___________________________________________
</TABLE> W. Stephen Love
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-163
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Triad of Arizona (L.P.), Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President and October 22, 1999
___________________________________________ Director (Principal Executive
Donald P. Fay Officer)
* Treasurer and Director October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
* Director October 22, 1999
___________________________________________
</TABLE> W. Stephen Love
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-164
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Triad of Phoenix, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President and October 22, 1999
___________________________________________ Director (Principal Executive
Donald P. Fay Officer)
* Treasurer and Director October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
* Director October 22, 1999
___________________________________________
</TABLE> W. Stephen Love
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-165
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Triad RC, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President and October 22, 1999
___________________________________________ Director (Principal Executive
Donald P. Fay Officer)
* Treasurer and Director October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
* Director October 22, 1999
___________________________________________
W. Stephen Love
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-166
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Triad-South Tulsa Hospital Company,
Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President and October 22, 1999
___________________________________________ Director (Principal Executive
Donald P. Fay Officer)
* Treasurer and Director October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
* Director October 22, 1999
___________________________________________
</TABLE> W. Stephen Love
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-167
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Triad Texas, LLC
By: SOLE MEMBER:
Triad Hospitals Holdings, Inc.
/s/ Donald P. Fay
By:
----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and
Donald P. Fay Secretary; Director
(Principal Executive
Officer)
* Treasurer; Director October 22, 1999
___________________________________________ (Principal
Burke W. Whitman Financial and Accounting
Officer)
* Director October 22, 1999
___________________________________________
</TABLE> W. Stephen Love
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-168
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Trosco, LLC
By: SOLE MEMBER:
Triad Holdings II, LLC
/s/ Donald P. Fay
By:
----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-169
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Trufor Pharmacy, LLC
By: SOLE MEMBER:
Triad Holdings II, LLC
By: /s/ Donald P. Fay
----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-170
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
VFARC, LLC
By: SOLE MEMBER:
Triad Holdings III, Inc.
By: /s/ Donald P. Fay
----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President and October 22, 1999
___________________________________________ Director (Principal Executive
Donald P. Fay Officer)
* Treasurer and Director October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
* Director October 22, 1999
___________________________________________
</TABLE> W. Stephen Love
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-171
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
VHC Holdings, LLC
By: SOLE MEMBER:
Triad Holdings III, Inc.
By: /s/ Donald P. Fay
----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President and October 22, 1999
___________________________________________ Director (Principal Executive
Donald P. Fay Officer)
* Treasurer and Director October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
* Director October 22, 1999
___________________________________________
</TABLE> W. Stephen Love
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-172
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
VHC Medical, LLC
By: SOLE MEMBER:
Triad Hospitals Holdings, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President and October 22, 1999
___________________________________________ Secretary; Director
Donald P. Fay (Principal Executive Officer)
* Treasurer; Director October 22, 1999
___________________________________________ (Principal
Burke W. Whitman Financial and Accounting
Officer)
* Director October 22, 1999
___________________________________________
</TABLE> W. Stephen Love
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-173
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Victoria Hospital, LLC
By: SOLE MEMBER:
VHC Medical, LLC
/s/ Donald P. Fay
By:
----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-174
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Victoria of Texas, L.P.
GENERAL PARTNER:
Detar Hospital, LLC
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-175
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
VMF Medical, LLC
By: SOLE MEMBER:
Triad Holdings III, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President and October 22, 1999
___________________________________________ Director (Principal Executive
Donald P. Fay Officer)
* Treasurer and Director October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
* Director October 22, 1999
___________________________________________
W. Stephen Love
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-176
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
VRMC Limited Partnership
GENERAL PARTNER:
Laredo Interest, LLC
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-177
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Wagoner Community Hospital, LLC
By: SOLE MEMBER:
Triad Holdings II, LLC
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-178
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
WAMC, LLC
By: SOLE MEMBER:
West Anaheim, LLC
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-179
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
West Anaheim Medical Center, LLC
By: SOLE MEMBER:
West Anaheim, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President and October 22, 1999
___________________________________________ Director (Principal Executive
Donald P. Fay Officer)
* Treasurer and Director October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
* Director October 22, 1999
___________________________________________
W. Stephen Love
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-180
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
West Anaheim, LLC
By: SOLE MEMBER:
Triad Hospitals Holdings, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President and October 22, 1999
___________________________________________ Secretary; Director (Principal
Donald P. Fay Executive Officer)
* Treasurer; Director (Principal October 22, 1999
___________________________________________ Financial and Accounting
Burke W. Whitman Officer)
* Director October 22, 1999
___________________________________________
W. Stephen Love
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-181
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Wharton Medco, LLC
By: SOLE MEMBER:
Triad Hospitals Holdings, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President and October 22, 1999
___________________________________________ Secretary; Director (Principal
Donald P. Fay Executive Officer)
* Treasurer; Director (Principal October 22, 1999
___________________________________________ Financial and Accounting
Burke W. Whitman Officer)
* Director October 22, 1999
___________________________________________
W. Stephen Love
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-182
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
WHMC, LLC
By: SOLE MEMBER:
Triad Holdings III, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President and October 22, 1999
___________________________________________ Director (Principal Executive
Donald P. Fay Officer)
* Treasurer; Director October 22, 1999
___________________________________________ (Principal
Burke W. Whitman Financial and Accounting
Officer)
* Director October 22, 1999
___________________________________________
W. Stephen Love
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-183
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Willamette Valley Clinics, LLC
By: SOLE MEMBER:
Oregon Healthcorp, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President and October 22, 1999
___________________________________________ Director (Principal Executive
Donald P. Fay Officer)
* Treasurer; Director October 22, 1999
___________________________________________ (Principal
Financial and Accounting
Burke W. Whitman Officer)
* Director October 22, 1999
___________________________________________
W. Stephen Love
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-184
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Willamette Valley Medical Center,
LLC
By: SOLE MEMBER:
Oregon Healthcorp, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President and October 22, 1999
___________________________________________ Director (Principal Executive
Donald P. Fay Officer)
* Treasurer; Director October 22, 1999
___________________________________________ (Principal
Burke W. Whitman Financial and Accounting
Officer)
* Director October 22, 1999
___________________________________________
W. Stephen Love
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-185
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
WM Medical, LLC
By: SOLE MEMBER:
Triad Holdings III, Inc.
/s/ Donald P. Fay
By:----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President and October 22, 1999
___________________________________________ Director (Principal Executive
Donald P. Fay Officer)
* Treasurer and Director October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
* Director October 22, 1999
___________________________________________
W. Stephen Love
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-186
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Women & Children's Hospital, LLC
By: SOLE MEMBER:
Triad Holdings II, LLC
/s/ Donald P. Fay
By:
----------------------------------
Donald P. Fay
Manager
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President and Manager October 22, 1999
___________________________________________ (Principal Executive
James D. Shelton Officer)
* Treasurer and Manager October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Secretary; Manager
Donald P. Fay
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-187
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on October 22, 1999.
Woodland Heights Medical Center, LLC
By: SOLE MEMBER:
Triad Holdings III, Inc.
/s/ Donald P. Fay
By:
----------------------------------
Donald P. Fay
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Donald P. Fay Executive Vice President October 22, 1999
___________________________________________ and Director (Principal
Donald P. Fay Executive Officer)
* Treasurer and Director October 22, 1999
___________________________________________ (Principal Financial and
Burke W. Whitman Accounting Officer)
* Director October 22, 1999
___________________________________________
W. Stephen Love
</TABLE>
/s/ Donald P. Fay
*By:
----------------------------------
Donald P. Fay
Attorney-in-Fact
II-188
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<C> <S>
2.1 --Distribution Agreement dated May 11, 1999 by and among Columbia/HCA,
Triad Hospitals, Inc. and LifePoint Hospitals, Inc., incorporated by
reference from Exhibit 2.1 to Triad Hospitals' Quarterly Report on
Form 10-Q, for the quarter ended March 31, 1999.
3.1 --Certificate of Incorporation of Triad Holdings, incorporated by
reference from Exhibit 3.1 to Triad Hospitals' Quarterly Report on
Form 10-Q, for the quarter ended March 31, 1999.
3.2 --Bylaws of Triad Holdings, incorporated by reference from Exhibit 3.2
to Triad Hospitals' Quarterly Report on Form 10-Q, for the quarter
ended March 31, 1999.*
4.1 --Indenture (including form of 11% Senior Subordinated Notes due 2009)
dated as of May 11, 1999, between Healthtrust, Inc.--The Hospital
Company and Citibank N.A. as Trustee, incorporated by reference from
Exhibit 4.2(a) to Triad Hospitals' Quarterly Report on Form 10-Q, for
the quarter ended March 31, 1999.
4.2 --Form of 11% Senior Subordinated Notes due 2009 (filed as part of
Exhibit 4.4).
4.3 --Registration Rights Agreement dated as of May 11, 1999 between
Healthtrust and the Initial Purchasers named therein, incorporated by
reference from Exhibit 4.4(a) to Triad Hospitals' Quarterly Report on
Form 10-Q, for the quarter ended March 31, 1999.
4.4 --Triad Assumption Agreement dated May 11, 1999 between Healthtrust
and Triad Hospitals, incorporated by reference from Exhibit 4.4(b) to
Triad Hospitals' Quarterly Report on Form 10-Q, for the quarter ended
March 31, 1999.
4.5 --Holdings Assumption Agreement dated May 11, 1999 between Triad
Hospitals and Triad Holdings, incorporated by reference from Exhibit
4.4(c) to Triad Hospitals' Quarterly Report on Form 10-Q, for the
quarter ended March 31, 1999.
4.6 --Guarantor Assumption Agreements dated May 11, 1999 between Triad
Holdings and the Guarantors signatory thereto, incorporated by
reference from Exhibit 4.4(d) to Triad Hospitals' Quarterly Report on
Form 10-Q, for the quarter ended March 31, 1999.
5.1 --Opinion of Dewey Ballantine LLP as to the legality of the securities
being registered.*
10.1 --Tax Sharing and Indemnification Agreement, dated May 11, 1999, by
and among Columbia/HCA, LifePoint Hospitals and Triad Hospitals,
incorporated by reference from Exhibit 10.1 to Triad Hospitals'
Quarterly Report on Form 10-Q, for the quarter ended March 31, 1999.
10.2 --Benefits and Employment Matters Agreement, dated May 11, 1999 by and
among Columbia/HCA, LifePoint Hospitals and Triad Hospitals,
incorporated by reference from Exhibit 10.2 to Triad Hospitals'
Quarterly Report on Form 10-Q, for the quarter ended March 31, 1999.
10.3 --Insurance Allocation and Administration Agreement, dated May 11,
1999, by and among Columbia/HCA, LifePoint Hospitals and Triad
Hospitals, incorporated by reference from Exhibit 10.3 to Triad
Hospitals' Quarterly Report on Form 10-Q, for the quarter ended March
31, 1999.
10.4 --Transitional Services Agreement dated May 11, 1999 by and between
Columbia/HCA and Triad Hospitals, incorporated by reference from
Exhibit 10.4 to Triad Hospitals' Quarterly Report on Form 10-Q, for
the quarter ended March 31, 1999.
10.5 --Computer and Data Processing Services Agreement dated May 11, 1999
by and between Columbia Information Systems, Inc. and Triad
Hospitals, incorporated by reference from Exhibit 10.5 to Triad
Hospitals' Quarterly Report on Form 10-Q, for the quarter ended March
31, 1999.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<C> <S>
10.6 --Agreement to Share Telecommunications Services dated May 11, 1999 by
and between Columbia Information Systems, Inc. and Triad Hospitals,
incorporated by reference from Exhibit 10.6 to Triad Hospitals'
Quarterly Report on Form 10-Q, for the quarter ended March 31, 1999.
10.7 --Year 2000 Professional Services Agreement dated May 11, 1999 by and
between CHCA Management Services, L.P. and Triad Hospitals,
incorporated by reference from Exhibit 10.7 to Triad Hospitals'
Quarterly Report on Form 10-Q, for the quarter ended March 31, 1999.
10.8 --Sub-Lease Agreement dated May 11, 1999 by and between Med-Point LLC
and Triad Hospitals, incorporated by reference from Exhibit 10.8 to
Triad Hospitals' Quarterly Report on Form 10-Q, for the quarter ended
March 31, 1999.
10.9 --Sub-Lease Agreement dated May 11, 1999 by and between Healthtrust
and Triad Hospitals, incorporated by reference from Exhibit 10.9 to
Triad Hospitals' Quarterly Report on Form 10-Q, for the quarter ended
March 31, 1999.
10.10 --Triad Hospitals, Inc. 1999 Long-Term Incentive Plan, incorporated by
reference from Exhibit 10.10 to Triad Hospitals' Quarterly Report on
Form 10-Q, for the quarter ended March 31, 1999.
10.11 --Triad Hospitals, Inc. Executive Stock Purchase Plan, incorporated by
reference from Exhibit 10.11 to Triad Hospitals' Quarterly Report on
Form 10-Q, for the quarter ended March 31, 1999.
10.12 --Triad Hospitals, Inc. Management Stock Purchase Plan, incorporated
by reference from Exhibit 10.12 to Triad Hospitals' Quarterly Report
on Form 10-Q, for the quarter ended March 31, 1999.
10.13 --Triad Hospitals, Inc. Outside Directors Stock and Incentive
Compensation Plan, incorporated by reference from Exhibit 10.13 to
Triad Hospitals' Quarterly Report on Form 10-Q, for the quarter ended
March 31, 1999.
10.14 --Credit Agreement, dated as of May 11, 1999 among Healthtrust, Inc.--
The Hospital Company and certain subsidiaries from time to time party
thereto, as Borrower, the several lenders from time to time party
thereto, Citicorp USA, Inc. and The Chase Manhattan Bank as
syndication agents, Credit Lyonnais New York Branch and Societe
Generale as co-agents, Bank of America National Trust and Savings
Association as administrative agent and NationsBanc Montgomery
Securities, LLC as lead arranger and sole book manager, incorporated
by reference from Exhibit 10.14 to Triad Hospitals' Quarterly Report
on Form 10-Q, for the quarter ended March 31, 1999.
10.15 --Assumption Agreement dated as of May 11, 1999 by and between Bank of
America National Trust and Savings Association and Triad Hospitals,
incorporated by reference from Exhibit 10.15 to Triad Hospitals'
Quarterly Report on Form 10-Q, for the quarter ended March 31, 1999.
10.16 --Assumption Agreement dated as of May 11, 1999 by and between Bank of
America National Trust and Savings Association and Triad Holdings,
incorporated by reference from Exhibit 10.16 to Triad Hospitals'
Quarterly Report on Form 10-Q, for the quarter ended March 31, 1999.
12.1 --Statement of Computation of Ratio of Earnings to Fixed Charges.*
21.1 --List of the Subsidiaries of Triad Holdings.*
23.1 --Consent of Dewey Ballantine LLP (included as part of its opinion
filed as Exhibit 5.1 hereto).*
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<C> <S>
23.2 --Consent of Ernst & Young LLP.*
24.1 --Power of Attorney (included in Part II of this
Registration Statement).
25.1 --Form T-1 Statement of Eligibility of Trustee.
99.1 --Form of Letter of Transmittal.*
99.2 --Form of Notice of Guaranteed Delivery.*
99.3 --Form of Letter to Clients.*
99.4 --Form of Letter to Brokers.*
99.5 --Form of Instructions to Registered Holders.*
</TABLE>
- --------
* Filed herewith.
<PAGE>
Exhibit 5.1
[Letterhead of Dewey Ballantine LLP]
October 22, 1999
Triad Hospitals Holdings, Inc.
13455 Noel Road, 20th floor
Dallas, TX 75240
Re: 11% Series B Senior Subordinated Notes due 2009 (the "Exchange Notes")
Ladies and Gentlemen:
We have acted as counsel for Triad Hospitals Holdings Inc., a Delaware
corporation (the "Company"), in connection with the Company's offer to
exchange (the "Exchange Offer") up to $325,000,000 aggregate principal amount
of Exchange Notes which have been registered under the Securities Act of 1933,
as amended (the "Securities Act") for its existing 11% Senior Subordinated
Notes due 2009 (the "Old Notes"), as described in the Prospectus (the
"Prospectus") contained in the Registration Statement on Form S-4 (as amended
or supplemented, the "Registration Statement"), to be filed with the
Securities and Exchange Commission. The Old Notes were issued, and the
Exchange Notes are proposed to be issued, under an indenture dated as of May
11, 1999 (the "Indenture"), between the Company and Citibank N.A., as Trustee.
Capitalized terms not otherwise defined herein shall have the meanings
ascribed to them in the Registration Statement.
In arriving at the opinion expressed below, we have examined originals or
copies, certified or otherwise identified to our satisfaction, of such
documents, corporate records, certificates, agreements and other matters as we
have deemed necessary or advisable for the purposes of rendering this opinion.
In such examination, we have assumed, without independent investigation,
(i) the genuineness of all signatures; (ii) the legal capacity of all
individuals who have executed any of the documents reviewed by us; (iii) the
authenticity of all documents submitted to us as originals; (iv) the
conformity to executed documents of all unexecuted copies submitted to us; and
(v) the authenticity of, and the conformity to, original documents of all
documents submitted to us as certified or photocopied copies. As to certain
factual matters material to our opinion, we have relied upon oral statements,
written information and certificates of officials and representatives of the
Company and others, and we have not independently verified the accuracy of the
statements contained therein.
Based on the foregoing, and subject to the assumptions, limitations,
exceptions and qualifications set forth herein, we are of the opinion that the
Exchange Notes to be offered and issued by the Company have been duly
authorized and, when executed and authenticated in accordance with the terms
of the Indenture pursuant to which they will be issued and delivered in
exchange for the applicable Old Notes in accordance with the Exchange Offer,
will be validly issued and constitute binding obligations of the Company,
except as the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally or by
general equitable principles.
In rendering the foregoing opinion, our examination of matters of law has
been limited to the laws of the State of New York, the General Corporation Law
of the State of Delaware and the federal laws of the United States of America,
as in effect on the date hereof.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement and to the reference made to this firm under the
caption "Legal Matters" in the Prospectus. In giving this consent, we do not
thereby admit that we are included within the category of persons whose
consent
<PAGE>
is required under Section 7 of the Securities Act, or the rules and regulations
of the Securities and Exchange Commission promulgated thereunder.
This opinion is rendered solely to you in connection with the above matter.
This opinion may not be relied upon by you for any other purpose or relied upon
by or furnished to any other person without our prior written consent.
Very truly yours,
/s/ Dewey Ballantine LLP
_____________________________________
DEWEY BALLANTINE LLP
2
<PAGE>
Exhibit 12.1
Triad Hospitals, Inc
Computation of Ratios of Earnings to Fixed Charges
<TABLE>
<CAPTION>
For the For the
Six Months Six Months
Ended Ended
June 30, June 30, For the Years Ended December 31,
1999 1998 1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings:
Income from continuing operations before
minority interests and income taxes $ (58.2) $ (14.3) $ (113.9) $ (14.7) $ 127.3 $ 143.3 $ 90.1
Fixed charges, exclusive of capitalized interest 38.0 40.2 82.4 73.6 64.5 47.6 38.7
--------------------------------------------------------------------------
Income as adjusted $ (20.2) $ 25.9 $ (31.5) $ 58.9 $ 191.8 $ 190.9 $ 128.8
==========================================================================
Fixed Charges:
Interest charged to expense $ 32.1 $ 33.4 $ 68.9 $ 60.5 $ 52.0 $ 36.6 $ 30.7
Portion of rents representative of interest 5.9 6.8 13.5 13.1 12.5 11.0 8.0
--------------------------------------------------------------------------
38.0 40.2 82.4 73.6 64.5 47.6 38.7
Interest expense included in cost of plant construction 1.9 0.9 1.7 0.4 0.6 0.6 0.3
--------------------------------------------------------------------------
$ 39.9 $ 41.1 $ 84.1 $ 74.0 $ 65.1 $ 48.2 $ 39.0
==========================================================================
Ratios of Earnings to Fixed Charges (A) (A) (A) (A) 3.0 4.0 3.3
==========================================================================
</TABLE>
(A) Triad's earnings were insufficient to cover fixed charges by $60.1 million
and $15.2 million for the six months ended June 30, 1999 and 1998,
respectively, and $115.6 million and $15.1 million for the years ended
December 31, 1998 and 1997, respectively
<PAGE>
Exhibit 21.1
Subsidiaries of Triad Hospitals Holdings, Inc.
----------------------------------------------
<TABLE>
<CAPTION>
State of Incorporation/
----------------------
Name of Subsidiary Organization
------------------ ------------
<S> <C>
1. Alice Hospital, LLC Delaware
2. Alice Surgeons, LLC Delaware
3. The Surgical Hospital of Amarillo, Ltd. Delaware
4. APS Medical, LLC Delaware
5. Arizona ASC Management, Inc. Arizona
6. Arizona Medco, LLC Delaware
7. Beauco, LLC Delaware
8. Beaumont Regional, LLC Delaware
9. Brazos Medco, LLC Delaware
10. Brazos Valley of Texas, L.P. Delaware
11. Brazos Valley Surgical Center, LLC Delaware
12. Brownwood Hospital, L.P. Delaware
13. Brownwood Medical Center, LLC Delaware
14. BVSC, LLC Delaware
15. Carlsbad Medical Center, LLC Delaware
16. Claremore Regional Hospital, LLC Delaware
17 Claremore Physicians, LLC Delaware
18. Clinico, LLC Delaware
19. College Station Hospital, L.P. Delaware
20. College Station Medical Center, LLC Delaware
21. College Station Merger, LLC Delaware
22. Coronado Hospital, LLC Delaware
23. Coronado Medical, LLC Delaware
24. Crestwood Healthcare, L.P. Delaware
25. Crestwood Hospital & Nursing Home, Inc. Delaware
26. Crestwood Hospital Holdings, Inc. Alabama
27. CSDS, LLC Alabama
28. CSMC, LLC Delaware
29. Dallas PHY Service, LLC Delaware
30. Dallas Physician Practice, L.P. (d/b/a (TX) Dallas Delaware
Practice, L.P.)
31. Day Surgery, Inc. Delaware
32. DeQueen Health Services, Inc. Kansas
33. DeQueen Regional Medical Center, LLC Arkansas
34 Detar Hospital, LLC Delaware
35. DFW Physerv, LLC Delaware
36. Doctors Medical Center, LLC Delaware
37. Doctors of Laredo, LLC (d/b/a (TX) Laredo Doctors, Delaware
LLC)
38. Douglas Medical Center, LLC Delaware
</TABLE>
<PAGE>
<TABLE>
<S> <C>
39. E.D. Clinics, LLC Delaware
40. El Dorado Medical Center, LLC Delaware
41. Eye Care Surgicare, Ltd. Delaware
42. Eye Institute of Southern Arizona, LLC Missouri
43. Gallagher Park Surgicenter, Ltd. Delaware
44. GCMC, LLC Texas
45. GH Texas, LLC Delaware
46. GHC Hospital, LLC Delaware
47. Gulf Coast Hospital, L.P. Delaware
48. Gulf Coast Medical Center, LLC (d/b/a (TX) GC Medical Center, LLC) Delaware
49. HDP DeQueen, LLC Delaware
50. HDP Woodland Heights, L.P. Delaware
51. HDP Woodland Property, LLC Delaware
52. HDPWH, LLC Delaware
53. Healdsburg of California, LLC Delaware
54. Hobbs Medco, LLC Delaware
55. Hobbs Physician Practice, LLC Delaware
56. Hospital of Beaumont, LLC Delaware
57. Independence Regional Health Center, LLC California
58. Kansas City Surgicenter, Ltd. Delaware
59. Kensingcare, LLC Missouri
60. Lake Area Surgicare, LP Delaware
61. Laredo Hospital, L.P. Louisiana
62. Laredo Interest, LLC Delaware
63. Lea Regional Hospital, LLC Delaware
64. Longview Medical Center, L.P. Delaware
65. Longview Merger, LLC Delaware
66. LRH, LLC Delaware
67. LS Psychiatric LLC Delaware
68. MCI Panhandle Surgical, L.P. Delaware
69. Medical Center at Terrell, LLC Delaware
70. Medical Center of Brownwood, LLC Delaware
71. Medical Center of Sherman, LLC Delaware
72. Medical Holdings, Inc. Delaware
73. Medical Management, Inc. Kansas
74. Medical Park Hospital, LLC Kansas
75. Medical Park MSO, LLC Delaware
76. Memorial Hospital, LLC Delaware
</TABLE>
2
<PAGE>
<TABLE>
<S> <C>
77. Mid-Plains, LLC Delaware
78. Midwest Psychiatric Center, Inc. Delaware
79. Mission Bay Memorial Hospital, LLC Missouri
80. Missouri HealthServ, LLC Delaware
81. Navarro Hospital, L.P. Delaware
82. Navarro Regional, LLC (d/b/a (TX) NavReg, LLC) Delaware
83. Northwest Hospital, LLC California
84. NRH, LLC Delaware
85. Odessa, LLC Delaware
86. Oregon Healthcorp, LLC Delaware
87. Osborn Ambulatory Surgery Group, Ltd. Delaware
88. Overland Park Regional Medical Center, LLC Arizona
89. Pacific East Division Office, L.P. Delaware
90. Pacific Group ASC Division, Inc. Delaware
91. Pacific Physicians Services, LLC (d/b/a (AZ) West Coast Services, LLC; (TX) Pacific Arizona
Services, LLC)
92. Pacific West Division Office, LLC Delaware
93. Palm Drive Hospital, L.P. Delaware
94. Palm Drive Medical Center, LLC Delaware
95. Pampa Hospital, L.P. Delaware
96. Pampa Medical Center, LLC (d/b/a (TX) Pam-Med, LLC) Delaware
97. PDMC, LLC Delaware
98. Pecos Valley of New Mexico, LLC Delaware
99. Phoenix Amdeco, LLC Delaware
100. Phoenix Surgical, LLC Delaware
101. Physicians and Surgeons Hospital of Alice, L.P. Delaware
102. Phys-Med, LLC Delaware
103. Piney Woods Healthcare System, L.P. Delaware
104. Primary Medical, LLC Delaware
105. Psychiatric Services of Paradise Valley, LLC Delaware
106. Regional Hospital of Longview, LLC Delaware
107. SACMC, LLC Delaware
108. Samaritan Surgicenters of Arizona, LLC Delaware
109. San Angelo Community Medical Center, LLC (d/b/a (TX) San Angelo MC, LLC) Arizona
110. San Angelo Hospital, L.P. Delaware
111. San Angelo Medical, LLC Delaware
112. San Diego Hospital, L.P. Delaware
113. San Leandro Hospital, L.P. Delaware
114. San Leandro Medical Center, LLC Delaware
115. San Leandro, LLC Delaware
116. SDH, LLC Delaware
117. SDH LP, LLC Delaware
</TABLE>
3
<PAGE>
<TABLE>
<S> <C>
118. Sebastopol, LLC Delaware
119. Sherman Hospital, L.P. Delaware
120. Sherman Medical Center, LLC Delaware
121. Silsbee Medical Center, LLC (d/b/a (TX) Silsbee Delaware
Center, LLC)
122. Silsbee Texas, LLC Delaware
123. SLH, LLC Delaware
124. South Alabama Managed Care Contracting, Inc. Delaware
125. South Alabama Medical Management Services, Inc. Alabama
126. South Alabama Physicians Service, Inc. Alabama
127. South Arkansas Clinic, LLC Alabama
128. Southern Texas Medical Center, LLC Delaware
129. Sprocket Medical Management, Inc. Delaware
130. Surgical Center of Amarillo, LLC Texas
131. Surgicare of Amarillo, Inc. Texas
132. Surgicare of Independence, Inc. Texas
133. Surgicare of North Anaheim, Inc. Missouri
134. Surgicare of San Leandro, Inc. California
135. Surgicare of Sherman, Inc. California
136. Surgicare of Southeast Texas, Inc. Texas
137. Surgicare of Victoria, Inc. Texas
138. Surgicare of Victoria, Ltd. Texas
139. Surgicare Outpatient Center of Lake Charles, Inc. Texas
140. Surgicenter of Johnson County, Inc. Louisiana
141. Surgicenter of Johnson County, Ltd. Kansas
142. Surgicenters of America, Inc. Kansas
143. Surgicenters of America, L.P. Arizona
144. Terrell Hospital, L.P. Arizona
145. Terrell Medical Center, LLC Delaware
146. Triad - Arizona, Inc. Delaware
147. Triad - El Dorado, Inc. Delaware
148. Triad - South Tulsa Hospital Company, Inc. Arkansas
149. Triad Corporate Services, Limited Partnership Oklahoma
150. Triad CSGP, LLC Delaware
151. Triad CSLP, LLC Delaware
152. Triad Healthcare System of Phoenix, L.P. Delaware
153. Triad Holdings II, LLC Delaware
154. Triad Holdings III, Inc. Delaware
155. Triad of Arizona (L.P.), Inc. Delaware
156. Triad of Phoenix, Inc. Arizona
157. Triad RC, Inc. Arizona
158. Triad Texas, LLC Delaware
159. Triad-Medical Center at Terrell Subsidiary, LLC Delaware
160. Triad-Medical Center of Sherman Subsidiary, LLC Delaware
161. Triad-Navarro Regional Hospital Subsidiary, LLC Delaware
162. TROSCO, LLC Delaware
163. Trufor Pharmacy, LLC Delaware
164. VFARC, LLC Delaware
165. VHC Holdings, LLC Delaware
</TABLE>
4
<PAGE>
<TABLE>
<S> <C>
166. VHC Medical, LLC Delaware
167. Victoria Hospital, LLC Delaware
168. Victoria of Texas, L.P. Texas
169. VMF Medical, LLC Delaware
170. VRMC Limited Partnership Delaware
171. Wagoner Community Hospital, LLC (d/b/a (OK) Wagoner Hospital, LLC) Texas
172. WAMC, LLC Delaware
173. West Anaheim Medical Center, LLC Delaware
174. West Anaheim, LLC Delaware
175. Wharton Medco, LLC Texas
176. WHMC, LLC Delaware
177. Willamette Valley Clinics, LLC Delaware
178. Willamette Valley Medical Center, LLC Delaware
179. WM Medical, LLC Delaware
180. Women & Children's Hospital, LLC (d/b/a (LA) Women & Children's Hospital of Delaware, LLC) Delaware
181. Woodland Heights Medical Center, LLC Delaware
182. HTI TUCSON Rehabilitation, Inc. Arizona
</TABLE>
5
<PAGE>
<TABLE>
<S> <C>
1. Alice Hospital, LLC Delaware
2. Alice Surgeons, LLC Delaware
3. The Surgical Hospital of Amarillo, Ltd. Delaware
4. APS Medical, LLC Delaware
5. Arizona ASC Management, Inc. Arizona
6. Arizona Medco, LLC Delaware
7. Beauco, LLC Delaware
8. Beaumont Regional, LLC Delaware
9. Brazos Medco, LLC Delaware
10. Brazos Valley of Texas, L.P. Delaware
11. Brazos Valley Surgical Center, LLC Delaware
12. Brownwood Hospital, L.P. Delaware
13. Brownwood Medical Center, LLC Delaware
14. BVSC, LLC Delaware
15. Carlsbad Medical Center, LLC Delaware
16. Claremore Regional Hospital, LLC Delaware
17 Claremore Physicians, LLC Delaware
18. Clinico, LLC Delaware
19. College Station Hospital, L.P. Delaware
20. College Station Medical Center, LLC Delaware
21. College Station Merger, LLC Delaware
22. Coronado Hospital, LLC Delaware
23. Coronado Medical, LLC Delaware
24. Crestwood Healthcare, L.P. Delaware
25. Crestwood Hospital & Nursing Home, Inc. Delaware
26. Crestwood Hospital Holdings, Inc. Alabama
27. CSDS, LLC Alabama
28. CSMC, LLC Delaware
29. Dallas PHY Service, LLC Delaware
30. Dallas Physician Practice, L.P. (d/b/a (TX) Dallas Delaware
31 Practice, L.P.)
32. Day Surgery, Inc. Delaware
33. DeQueen Health Services, Inc. Kansas
34. DeQueen Regional Medical Center, LLC Arkansas
35 Detar Hospital, LLC Delaware
36. DFW Physerv, LLC Delaware
37. Doctors Medical Center, LLC Delaware
38. Doctors of Laredo, LLC (d/b/a (TX) Laredo Doctors, Delaware
39 LLC)
40. Douglas Medical Center, LLC Delaware
41. E.D. Clinics, LLC Delaware
42. El Dorado Medical Center, LLC Delaware
43. Eye Care Surgicare, Ltd. Delaware
44. Eye Institute of Southern Arizona, LLC Missouri
45. Gallagher Park Surgicenter, Ltd. Delaware
46. GCMC, LLC Texas
47. GH Texas, LLC Delaware
48. GHC Hospital, LLC Delaware
49. Gulf Coast Hospital, L.P. Delaware
50. Gulf Coast Medical Center, LLC (d/b/a (TX) GC Medical Center, LLC) Delaware
51. HDP DeQueen, LLC Delaware
52. HDP Woodland Heights, L.P. Delaware
53. HDP Woodland Property, LLC Delaware
54. HDPWH, LLC Delaware
55. Healdsburg of California, LLC Delaware
56. Hobbs Medco, LLC Delaware
57. Hobbs Physician Practice, LLC Delaware
58. Hospital of Beaumont, LLC Delaware
59. Independence Regional Health Center, LLC California
60. Kansas City Surgicenter, Ltd. Delaware
61. Kensingcare, LLC Missouri
62. Lake Area Surgicare, LP Delaware
63. Laredo Hospital, L.P. Louisiana
64. Laredo Interest, LLC Delaware
65. Lea Regional Hospital, LLC Delaware
66. Longview Medical Center, L.P. Delaware
67. Longview Merger, LLC Delaware
68. LRH, LLC Delaware
69. LS Psychiatric LLC Delaware
70. MCI Panhandle Surgical, L.P. Delaware
71. Medical Center at Terrell, LLC Delaware
72. Medical Center of Brownwood, LLC Delaware
73. Medical Center of Sherman, LLC Delaware
74. Medical Holdings, Inc. Delaware
75. Medical Management, Inc. Kansas
76. Medical Park Hospital, LLC Kansas
77. Medical Park MSO, LLC Delaware
78. Memorial Hospital, LLC Delaware
79. Mid-Plains, LLC Delaware
80. Midwest Psychiatric Center, Inc. Delaware
81. Mission Bay Memorial Hospital, LLC Missouri
82. Missouri HealthServ, LLC Delaware
83. Navarro Hospital, L.P. Delaware
84. Navarro Regional, LLC (d/b/a (TX) NavReg, LLC) Delaware
85. Northwest Hospital, LLC California
86. NRH, LLC Delaware
87. Odessa, LLC Delaware
88. Oregon Healthcorp, LLC Delaware
89. Osborn Ambulatory Surgery Group, Ltd. Delaware
90. Overland Park Regional Medical Center, LLC Arizona
91. Pacific East Division Office, L.P. Delaware
92. Pacific Group ASC Division, Inc. Delaware
93. Pacific Physicians Services, LLC (d/b/a (AZ) West Coast Services, LLC; (TX) Pacific Arizona
94 Services, LLC)
95. Pacific West Division Office, LLC Delaware
96. Palm Drive Hospital, L.P. Delaware
97. Palm Drive Medical Center, LLC Delaware
98. Pampa Hospital, L.P. Delaware
99. Pampa Medical Center, LLC (d/b/a (TX) Pam-Med, LLC) Delaware
100. PDMC, LLC Delaware
101. Pecos Valley of New Mexico, LLC Delaware
102. Phoenix Amdeco, LLC Delaware
103. Phoenix Surgical, LLC Delaware
104. Physicians and Surgeons Hospital of Alice, L.P. Delaware
105. Phys-Med, LLC Delaware
106. Piney Woods Healthcare System, L.P. Delaware
107. Primary Medical, LLC Delaware
108. Psychiatric Services of Paradise Valley, LLC Delaware
109. Regional Hospital of Longview, LLC Delaware
110. SACMC, LLC Delaware
111. Samaritan Surgicenters of Arizona, LLC Delaware
112. San Angelo Community Medical Center, LLC (d/b/a (TX) San Angelo MC, LLC) Arizona
113. San Angelo Hospital, L.P. Delaware
114. San Angelo Medical, LLC Delaware
115. San Diego Hospital, L.P. Delaware
116. San Leandro Hospital, L.P. Delaware
117. San Leandro Medical Center, LLC Delaware
118. San Leandro, LLC Delaware
119. SDH, LLC Delaware
120. SDH LP, LLC Delaware
121. Sebastopol, LLC Delaware
122. Sherman Hospital, L.P. Delaware
123. Sherman Medical Center, LLC Delaware
124. Silsbee Medical Center, LLC (d/b/a (TX) Silsbee Delaware
125 Center, LLC)
126. Silsbee Texas, LLC Delaware
127. SLH, LLC Delaware
128. South Alabama Managed Care Contracting, Inc. Delaware
129. South Alabama Medical Management Services, Inc. Alabama
130. South Alabama Physicians Service, Inc. Alabama
131. South Arkansas Clinic, LLC Alabama
132. Southern Texas Medical Center, LLC Delaware
133. Sprocket Medical Management, Inc. Delaware
134. Surgical Center of Amarillo, LLC Texas
135. Surgicare of Amarillo, Inc. Texas
136. Surgicare of Independence, Inc. Texas
137. Surgicare of North Anaheim, Inc. Missouri
138. Surgicare of San Leandro, Inc. California
139. Surgicare of Sherman, Inc. California
140. Surgicare of Southeast Texas, Inc. Texas
141. Surgicare of Victoria, Inc. Texas
142. Surgicare of Victoria, Ltd. Texas
143. Surgicare Outpatient Center of Lake Charles, Inc. Texas
144. Surgicenter of Johnson County, Inc. Louisiana
145. Surgicenter of Johnson County, Ltd. Kansas
146. Surgicenters of America, Inc. Kansas
147. Surgicenters of America, L.P. Arizona
148. Terrell Hospital, L.P. Arizona
149. Terrell Medical Center, LLC Delaware
150. Triad - Arizona, Inc. Delaware
151. Triad - El Dorado, Inc. Delaware
152. Triad - South Tulsa Hospital Company, Inc. Arkansas
153. Triad Corporate Services, Limited Partnership Oklahoma
154. Triad CSGP, LLC Delaware
155. Triad CSLP, LLC Delaware
156. Triad Healthcare System of Phoenix, L.P. Delaware
157. Triad Holdings II, LLC Delaware
158. Triad Holdings III, Inc. Delaware
159. Triad of Arizona (L.P.), Inc. Delaware
160. Triad of Phoenix, Inc. Arizona
161. Triad RC, Inc. Arizona
162. Triad Texas, LLC Delaware
163. Triad-Medical Center at Terrell Subsidiary, LLC Delaware
164. Triad-Medical Center of Sherman Subsidiary, LLC Delaware
165. Triad-Navarro Regional Hospital Subsidiary, LLC Delaware
166. TROSCO, LLC Delaware
167. Trufor Pharmacy, LLC Delaware
168. VFARC, LLC Delaware
169. VHC Holdings, LLC Delaware
170. VHC Medical, LLC Delaware
171. Victoria Hospital, LLC Delaware
172. Victoria of Texas, L.P. Texas
173. VMF Medical, LLC Delaware
174. VRMC Limited Partnership Delaware
175. Wagoner Community Hospital, LLC (d/b/a (OK) Wagoner Hospital, LLC) Texas
176. WAMC, LLC Delaware
177. West Anaheim Medical Center, LLC Delaware
178. West Anaheim, LLC Delaware
179. Wharton Medco, LLC Texas
180. WHMC, LLC Delaware
181. Willamette Valley Clinics, LLC Delaware
182. Willamette Valley Medical Center, LLC Delaware
183. WM Medical, LLC Delaware
184. Women & Children's Hospital, LLC (d/b/a (LA) Women & Children's Hospital of Delaware, LLC) Delaware
185. Woodland Heights Medical Center, LLC Delaware
182. HTI TUCSON Rehabilitation, Inc. Arizona
</TABLE>
<PAGE>
Exhibit 23.2
Consent of Ernst & Young LLP, Independent Auditors
We consent to the reference to our firm under the caption "Experts" and
to the use of our report dated February 26, 1999, with respect to the combined
financial statements of Triad Hospitals, Inc. and its subsidiaries included in
the Registration Statement, Amendment No. 1 to Form S-4 and related Prospectus
of Triad Hospitals Holdings, Inc. for the registration of $325,000,000 11%
Series B Senior Subordinated Notes due 2009.
Nashville, Tennessee
October 19, 1999
<PAGE>
Exhibit 99.1
TRIAD HOSPITALS HOLDINGS, INC.
LETTER OF TRANSMITTAL
for Tender of all Outstanding
11% Senior Subordinated Notes due 2009
in exchange for
11% Series B Senior Subordinated Notes due 2009
Which Have Been Registered Under the Securities Act of 1933
Pursuant to the Prospectus dated , 1999
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON , 1999, UNLESS THE EXCHANGE OFFER IS EXTENDED.
To: Citibank, N.A. (the "Exchange Agent")
By Hand: By Courier:
By Registered or
Certified Mail:
Citibank, N.A. Citibank, N.A.
Corporate Trust Window 915 Broadway, 5th Floor
Citibank, N.A. 111 Wall Street, 5th New York, NY 10010
P.O. Box 685 floor
Old Chelsea Station New York, NY 10043
New York, NY 10113
Facsimile for Eligible Institutions:
Citibank, N.A..
(212) 505-2248
To Confirm by Telephone:
(800) 270-0808
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OR TRANSMISSION TO A FACSIMILE
NUMBER OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY. THE
METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING CERTIFICATES, IS AT THE RISK OF
THE HOLDER. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
The undersigned acknowledges that he or she has received the Prospectus,
dated , 1999 (the "Prospectus") of Triad Hospitals Holdings Inc., a
Delaware corporation (the "Company") and this Letter of Transmittal and the
instructions hereto (the "Letter of Transmittal"), which together constitute
the Company's offer (the "Exchange Offer") to exchange $1,000 principal amount
of each of its 11% Series B Senior Subordinated Notes due 2009 (the "Exchange
Notes") that have been registered under the Securities Act of 1933, as amended
(the "Securities Act"), pursuant to a Registration Statement of which the
Prospectus is a part, for each $1,000 principal amount of each of its
outstanding 11% Senior Subordinated Notes due 2009 (the "Old Notes"), of which
$325,000,000 aggregate principal amount is outstanding, upon the terms and
subject to the conditions set forth in the Prospectus. The term "Expiration
Date" shall mean 5:00 p.m., New York City time, on , 1999, unless the
Company, in its sole discretion, extends the Exchange Offer, in which case the
term shall mean the latest date and time to which the Exchange Offer is
extended by the Company. Capitalized terms used but not defined herein have
the meaning given to them in the Prospectus.
<PAGE>
This Letter of Transmittal is to be used either if (i) certificates
representing Old Notes are to be physically delivered to the Exchange Agent
herewith by Holders, (ii) tender of Old Notes is to be made by book-entry
transfer to an account maintained by the Exchange Agent at The Depository
Trust Company ("DTC"), pursuant to the procedures set forth in "The Exchange
Offer--Procedures for Tendering" in the Prospectus by any financial
institution that is a participant in DTC and whose name appears on a security
position listing as the owner of Old Notes or (iii) tender of Old Notes is to
be made according to the guaranteed delivery procedures set forth in the
Prospectus under "The Exchange Offer--Guaranteed Delivery Procedures."
Delivery of this Letter of Transmittal and any other required documents must
be made to the Exchange Agent. Delivery of documents to DTC does not
constitute delivery to the Exchange Agent.
The term "Holder" as used herein means any person in whose name Old Notes
are registered on the books of the Company or any other person who has
obtained a properly completed bond power from the registered holder.
All Holders of Old Notes who wish to tender their Old Notes must, prior to
the Expiration Date: (1) complete, sign, and deliver this Letter of
Transmittal, or a facsimile thereof, to the Exchange Agent, in person or to
the address set forth above; and (2) tender (and not withdraw) his or her Old
Notes or, if a tender of Old Notes is to be made by book-entry transfer to the
account maintained by the Exchange Agent at DTC, confirm such book-entry
transfer (a "Book-Entry Confirmation"), in each case in accordance with the
procedures for tendering described in the Instructions to this Letter of
Transmittal. Holders of Old Notes whose certificates are not immediately
available, or who are unable to deliver their certificates or Book-Entry
Confirmation and all other documents required by this Letter of Transmittal to
be delivered to the Exchange Agent on or prior to the Expiration Date, must
tender their Old Notes according to the guaranteed delivery procedures set
forth under the caption "The Exchange Offer--Guaranteed Delivery Procedures"
in the Prospectus. (See Instruction 2.)
Upon the terms and subject to the conditions of the Exchange Offer, the
acceptance for exchange of the Old Notes validly tendered and not withdrawn
and the issuance of the Exchange Notes will be made promptly following the
Expiration Date. For the purposes of the Exchange Offer, the Company shall be
deemed to have accepted for exchange validly tendered Old Notes when, as and
if the Company has given written notice thereof to the Exchange Agent.
The undersigned has completed, executed and delivered this Letter of
Transmittal to indicate the action the undersigned desires to take with
respect to the Exchange Offer. Holders who wish to tender their Old Notes must
complete this Letter of Transmittal in its entirety.
Please read the entire Letter of Transmittal and the Prospectus carefully
before checking any box below. The instructions included in this Letter of
Transmittal must be followed. Questions and requests for assistance or for
additional copies of the Prospectus, this Letter of Transmittal and the Notice
of Guaranteed Delivery may be directed to the Exchange Agent. See Instruction
12 herein.
Holders who wish to accept the Exchange Offer and tender their Old Notes
must complete this Letter of Transmittal in its entirety and comply with all
of its terms.
2
<PAGE>
List below the Old Notes to which this Letter of Transmittal relates. If
the space provided below is inadequate, the Certificate Numbers and Principal
Amounts should be listed on a separate signed schedule, attached hereto. The
minimum permitted tender is $1,000 in principal amount of each of the 11%
Senior Subordinated Notes due 2009. All other tenders must be in integral
multiples of $1,000.
DESCRIPTION OF 11% SENIOR SUBORDINATED NOTES DUE 2009
Box I
<TABLE>
<S> <C> <C>
Name(s) and Address(es) of Registered Hold-
er(s)*
(Please fill in, if blank)
- -------------------------------------------------------------------------------------------
(A) (B)
Aggregate Principal
Certificate Amount Tendered
Number(s)* (if less than all)**
--------------------------------------------------
--------------------------------------------------
--------------------------------------------------
--------------------------------------------------
--------------------------------------------------
Total Principal
Amount of Old Notes
Tendered
</TABLE>
- --------
* Need not be completed by book-entry holders.
** Need not be completed by Holders who wish to tender with respect to all
Old Notes listed.
3
<PAGE>
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Box II Box III
SPECIAL REGISTRATION
INSTRUCTIONS
(See Instructions 4, 5 and 6)
To be completed ONLY if
certificates for Old Notes in a
principal amount not tendered, or
Exchange Notes issued in exchange
for Old Notes accepted for
exchange, are to be issued in the
name of someone other than the
undersigned.
Issue certificate(s) to:
Name ______________________________
(Please Print)
___________________________________
(Please Print)
Address ___________________________
___________________________________
(Including Zip Code)
___________________________________
(Tax Identification or Social Security Number)
SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 4, 5 and 6)
To be completed ONLY if
certificates for Old Notes in a
principal amount not tendered, or
Exchange Notes issued in exchange
for Old Notes accepted for
exchange, are to be delivered to
someone other than the
undersigned.
Deliver certificate(s) to:
Name ______________________________
(Please Print)
___________________________________
(Please Print)
Address ___________________________
___________________________________
(Including Zip Code)
___________________________________
(Tax Identification or Social Security Number)
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A FACSIMILE HEREOF (TOGETHER WITH
THE CERTIFICATE(S) FOR OLD NOTES OR A CONFIRMATION OF BOOK-ENTRY TRANSFER OF
SUCH OLD NOTES AND ALL OTHER REQUIRED DOCUMENTS) OR, IF GUARANTEED DELIVERY
PROCEDURES ARE TO BE COMPLIED WITH, A NOTICE OF GUARANTEED DELIVERY, MUST BE
RECEIVED BY THE EXCHANGE AGENT PRIOR TO THE EXPIRATION DATE.
[_]CHECK HERE IF OLD NOTES ARE BEING DELIVERED BY DTC TO AN ACCOUNT
MAINTAINED BY THE EXCHANGE AGENT WITH DTC AND COMPLETE THE FOLLOWING:
Name of Tendering Institution ____________
[_]The Depository Trust
Company
Account Number __________________________________________________________
Transaction Code Number _________________________________________________
Holders whose Old Notes are not immediately available or who cannot
deliver their Old Notes and all other documents required hereby to the
Exchange Agent on or prior to the Expiration Date may tender their Old Notes
according to the guaranteed delivery procedures set forth in the Prospectus
under the caption "The Exchange Offer--Guaranteed Delivery Procedures." (See
Instruction 2.)
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[_]CHECK HERE IF OLD NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE
THE FOLLOWING:
Name(s) of tendering Holder(s) __________________________________________
Date of Execution of Notice of Guaranteed Delivery ______________________
Name of Institution which Guaranteed Delivery ___________________________
Transaction Code Number _________________________________________________
[_]CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
THERETO.
Name: ___________________________________________________________________
Address: ________________________________________________________________
If the undersigned is not a broker-dealer, the undersigned represents that
it is not engaged in, and does not intend to engage in, a distribution of
Exchange Notes. If the undersigned is a broker-dealer that will receive
Exchange Notes for its own account in exchange for Old Notes that were
acquired as a result of market-making activities or other trading activities,
it acknowledges that it will deliver a prospectus in connection with any
resale of such Exchange Notes; however, by so acknowledging and by delivering
a prospectus, the undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
Subject to the terms and conditions of the Exchange Offer, the undersigned
hereby tenders to Triad Hospitals Holdings, Inc. (the "Company") the principal
amount of Old Notes indicated above.
Subject to and effective upon the acceptance for exchange of the principal
amount of Old Notes tendered hereby in accordance with this Letter of
Transmittal, the undersigned sells, assigns and transfers to, or upon the
order of, the Company all right, title and interest in and to the Old Notes
tendered hereby. The undersigned hereby irrevocably constitutes and appoints
the Exchange Agent as its agent and attorney-in-fact (with full knowledge that
the Exchange Agent also acts as the agent of the Company and as Trustee and
Registrar under the Indenture for the Old Notes and the Exchange Notes) with
respect to the tendered Old Notes with full power of substitution (such power
of attorney being deemed an irrevocable power coupled with an interest),
subject only to the right of withdrawal described in the Prospectus, to (i)
deliver certificates for such Old Notes to the Company or transfer ownership
of such Old Notes on the account books maintained by DTC, together, in either
such case, with all accompanying evidences of transfer and authenticity to, or
upon the order of, the Company and (ii) present such Old Notes for transfer on
the books of the Company and receive all benefits and otherwise exercise all
rights of beneficial ownership of such Old Notes, all in accordance with the
terms of the Exchange Offer.
The undersigned acknowledges that the Exchange Offer is being made in
reliance upon interpretative advice given by the staff of the Securities and
Exchange Commission to third parties in connection with transactions similar
to the Exchange Offer, so that the Exchange Notes issued pursuant to the
Exchange Offer in exchange for the Old Notes may be offered for resale, resold
and otherwise transferred by holders thereof (other than a broker-dealer who
purchased such Old Notes directly from the Company for resale pursuant to Rule
144A or any other available exemption under
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the Securities Act or a person that is an "affiliate" of the Company or any
Guarantor within the meaning of Rule 405 under the Securities Act) without
compliance with the registration and prospectus delivery provisions of the
Securities Act, provided that such Exchange Notes are acquired in the ordinary
course of such holders' business and such holders have no arrangement with any
person to participate in the distribution of such Exchange Notes.
The undersigned agrees that acceptance of any tendered Old Notes by the
Company and the issuance of Exchange Notes in exchange therefor shall
constitute performance in full by the Company of its obligations under the
Registration Rights Agreement, (as defined in the Prospectus) and that, upon
the issuance of the Exchange Notes, the Company will have no further
obligations or liabilities thereunder (except in certain limited
circumstances).
The undersigned represents and warrants that (i) the Exchange Notes
acquired pursuant to the Exchange Offer are being acquired in the ordinary
course of business of the person receiving Exchange Notes (which shall be the
undersigned unless otherwise indicated in the box entitled "Special Delivery
Instructions" above) (the "Recipient"), (ii) neither the undersigned nor the
Recipient (if different) is engaged in, intends to engage in or has any
arrangement or understanding with any person to participate in the
distribution of such Exchange Notes, and (iii) neither the undersigned nor the
Recipient (if different) is an "affiliate" of the Company or any Guarantor as
defined in Rule 405 under the Securities Act. If the undersigned is not a
broker-dealer, the undersigned further represents that it is not engaged in,
and does not intend to engage in, a distribution of the Exchange Notes. If the
undersigned is a broker-dealer, the undersigned further (x) represents that it
acquired Old Notes for the undersigned's own account as a result of market-
making activities or other trading activities, (y) represents that it has not
entered into any arrangement or understanding with the Company or any
"affiliate" of the Company (within the meaning of Rule 405 under the
Securities Act) to distribute the Exchange Notes to be received in the
Exchange Offer and (z) acknowledges that it will deliver a prospectus meeting
the requirements of the Securities Act (for which purposes delivery of the
Prospectus, as the same may be hereafter supplemented or amended, shall be
sufficient) in connection with any resale of Exchange Notes received in the
Exchange Offer. Such a broker-dealer will not be deemed, solely by reason of
such acknowledgment and prospectus delivery, to admit that it is an
"underwriter" within the meaning of the Securities Act.
The undersigned understands and agrees that the Company reserves the right
not to accept tendered Old Notes from any tendering holder if the Company
determines, in its sole and absolute discretion, that such acceptance could
result in a violation of applicable securities laws.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, exchange, assign and transfer the Old
Notes tendered hereby and to acquire Exchange Notes issuable upon the exchange
of such tendered Old Notes, and that, when the same are accepted for exchange,
the Company will acquire good and unencumbered title thereto, free and clear
of all liens, restrictions, charges and encumbrances and not subject to any
adverse claim. The undersigned also warrants that it will, upon request,
execute and deliver any additional documents deemed to be necessary or
desirable by the Exchange Agent or the Company in order to complete the
exchange, assignment and transfer of tendered Old Notes or transfer of
ownership of such Old Notes on the account books maintained by a book-entry
transfer facility.
The undersigned understands and acknowledges that the Company reserves the
right in its sole discretion to purchase or make offers for any Old Notes that
remain outstanding subsequent to the Expiration Date or, as set forth in the
Prospectus under the caption "The Exchange Offer--Procedures for Tendering,"
to terminate the Exchange Offer and, to the extent permitted by applicable
law, purchase Old Notes in the open market, in privately negotiated
transactions or otherwise. The terms of any such purchases or offers could
differ from the terms of the Exchange Offer.
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The undersigned understands that the Company may accept the undersigned's
tender by delivering written notice of acceptance to the Exchange Agent, at
which time the undersigned's right to withdraw such tender will terminate. For
purposes of the Exchange Offer, the Company shall be deemed to have accepted
validly tendered Old Notes when, as and if the Company has given oral (which
shall be confirmed in writing) or written notice thereof to the Exchange
Agent.
The undersigned understands that the first interest payment following the
Expiration Date will include unpaid interest on the Old Notes accrued through
the date of issuance of the Exchange Notes.
The undersigned understands that tenders of Old Notes pursuant to the
procedures described under the caption "The Exchange Offer--Procedures for
Tendering" in the Prospectus and in the instructions hereto will constitute a
binding agreement between the undersigned and the Company upon the terms and
subject to the conditions of the Exchange Offer.
The undersigned acknowledges that the Exchange Offer is subject to the
more detailed terms set forth in the Prospectus and, in case of any conflict
between the terms of the Prospectus and this Letter of Transmittal, the
Prospectus shall prevail.
If any tendered Old Notes are not accepted for exchange pursuant to the
Exchange Offer for any reason, certificates for any such unaccepted Old Notes
will be returned (except as noted below with respect to tenders through DTC),
at the Company's cost and expense, to the undersigned at the address shown
below or at a different address as may be indicated herein under "Special
Delivery Instructions" as promptly as practicable after the Expiration Date.
All authority conferred or agreed to be conferred by this Letter of
Transmittal shall survive the death, incapacity or dissolution of the
undersigned, and every obligation of the undersigned under this Letter of
Transmittal shall be binding upon the undersigned's heirs, personal
representatives, successors and assigns. This tender may be withdrawn only in
accordance with the procedures set forth in this Letter of Transmittal.
By acceptance of the Exchange Offer, each broker-dealer that receives
Exchange Notes pursuant to the Exchange Offer hereby acknowledges and agrees
that upon the receipt of notice by the Company of the happening of any event
which makes any statement in the Prospectus untrue in any material respect or
which requires the making of any changes in the Prospectus in order to make
the statements therein not misleading (which notice the Company agrees to
deliver promptly to such broker-dealer), such broker-dealer will suspend use
of the Prospectus until the Company has amended or supplemented the Prospectus
to correct such misstatement or omission and has furnished copies of the
amended or supplemented prospectus to such broker-dealer.
Unless otherwise indicated under "Special Registration Instructions,"
please issue the certificates representing the Exchange Notes issued in
exchange for the Old Notes accepted for exchange and return any certificates
for Old Notes not tendered or not exchanged, in the name(s) of the undersigned
(or, in either such event in the case of Old Notes tendered by DTC, by credit
to the account at DTC). Similarly, unless otherwise indicated under "Special
Delivery Instructions," please send the certificates representing the Exchange
Notes issued in exchange for the Old Notes accepted for exchange and any
certificates for Old Notes not tendered or not exchanged (and accompanying
documents, as appropriate) to the undersigned at the address shown below the
undersigned's signature(s), unless, in either event, tender is being made
through DTC. In the event that both "Special Registration Instructions" and
"Special Delivery Instructions" are completed, please issue the certificates
representing the Exchange Notes issued in exchange for the Old Notes accepted
for exchange in the name(s) of, and return any certificates for Old Notes not
tendered or not exchanged to, the person(s) so indicated. The undersigned
understands that the Company has no obligations pursuant to the "Special
Registration Instructions" or "Special Delivery Instructions" to transfer any
Old Notes from the name of the registered Holder(s) thereof if the Company
does not accept for exchange any of the Old Notes so tendered.
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Holders who wish to tender the Old Notes and (i) whose Old Notes are not
immediately available or (ii) who cannot deliver their Old Notes, this Letter
of Transmittal or any other documents required hereby to the Exchange Agent
prior to the Expiration Date, may tender their Old Notes according to the
guaranteed delivery procedures set forth in the Prospectus under the caption
"The Exchange Offer--Guaranteed Delivery Procedures." See Instruction 1
regarding the completion of the Letter of Transmittal.
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PLEASE SIGN HERE WHETHER OR NOT
OLD NOTES ARE BEING PHYSICALLY TENDERED HEREBY
AND WHETHER OR NOT TENDER IS TO BE MADE
PURSUANT TO THE GUARANTEED DELIVERY PROCEDURES
This Letter of Transmittal must be signed by the registered holder(s) as
their name(s) appear on the Old Notes or, if tendered by a participant in DTC,
exactly as such participant's name appears on a security listing as the owner
of Old Notes, or by person(s) authorized to become registered holder(s) by a
properly completed bond power from the registered holder(s), a copy of which
must be transmitted with this Letter of Transmittal. If Old Notes to which
this Letter of Transmittal relate are held of record by two or more joint
holders, then all such holders must sign this Letter of Transmittal. If
signature is by a trustee, executor, administrator, guardian, attorney-in-
fact, officer of a corporation or other person acting in a fiduciary or
representative capacity, then such person must (i) set forth his or her full
title below and (ii) unless waived by the Company, submit evidence
satisfactory to the Company of such person's authority so to act. (See
Instruction 4.)
X ________________________________________ _________________________________
Date
X ________________________________________ _________________________________
Date
Signature(s) of
Holder(s) or
Authorized Signatory
Name(s): __________________________ Address: ______________________________
Name(s): __________________________ Address: ______________________________
(Please Print) (including Zip Code)
Capacity: _____________________ Area Code and Telephone Number: _______
Social Security No.: __________
PLEASE COMPLETE SUBSTITUTE FORM W-9 HEREIN
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Box IV
SIGNATURE GUARANTEE (See Instruction 1)
Certain Signatures Must Be Guaranteed by an Eligible Institution
-----------------------------------------------------------------------------
(Name of Eligible Institution Guaranteeing Signatures)
-----------------------------------------------------------------------------
(Address (including zip code) and Telephone Number (including area code) of
Firm)
-----------------------------------------------------------------------------
(Authorized Signature)
-----------------------------------------------------------------------------
(Printed Name)
-----------------------------------------------------------------------------
(Title)
Date: _______________
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INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. Guarantee of Signatures. Signatures on this Letter of Transmittal need
not be guaranteed if (a) this Letter of Transmittal is signed by the
registered holder(s) of the Old Notes tendered herewith and such holder(s)
have not completed the box set forth herein entitled "Special Registration
Instructions" or the box entitled "Special Delivery Instructions" or (b) such
Old Notes are tendered for the account of an Eligible Institution. (See
Instruction 6.) Otherwise, all signatures on this Letter of Transmittal or a
notice of withdrawal, as the case may be, must be guaranteed by a member firm
of a registered national securities exchange or of the National Association of
Securities Dealers, Inc. or a commercial bank or trust company having an
office or correspondent in the United States (an "Eligible Institution"). All
signatures on bond powers and endorsements on certificates must also be
guaranteed by an Eligible Institution.
2. Delivery of this Letter of Transmittal and Old Notes. Certificates for
all physically delivered Old Notes or confirmation of any book-entry transfer
to the Exchange Agent at DTC of Old Notes tendered by book-entry transfer, as
well as, in each case (including cases where tender is affected by book-entry
transfer), a properly completed and duly executed copy of this Letter of
Transmittal or facsimile hereof and any other documents required by this
Letter of Transmittal must be received by the Exchange Agent at its address
set forth herein prior to 5:00 p.m., New York City time, on the Expiration
Date. The method of delivery of the tendered Old Notes, this Letter of
Transmittal and all other required documents to the Exchange Agent is at the
election and risk of the Holder and the delivery will be deemed made only when
actually received by the Exchange Agent. If Old Notes are sent by mail,
registered mail with return receipt requested, properly insured, is
recommended. In all cases, sufficient time should be allowed to ensure timely
delivery. No Letter of Transmittal or Old Notes should be sent to the Company.
The Exchange Agent will make a request to establish an account with
respect to the Old Notes at the Depositary for purposes of the Exchange Offer
within two business days after receipt of this Prospectus, and any financial
institution that is a participant in the Depositary may make book-entry
delivery of Old Notes by causing the Depositary to transfer such Old Notes
into the Exchange Agent's account at the Depositary in accordance with the
Depositary's procedures for transfer. However, although delivery of Old Notes
may be effected through book-entry transfer at the Depositary, the Letter of
Transmittal, with any required signature guarantees or an Agent's Message (as
defined below) in connection with a book-entry transfer and any other required
documents, must, in any case, be transmitted to and received by the Exchange
Agent at the address specified on the cover page of the Letter of Transmittal
on or prior to the Expiration Date or the guaranteed delivery procedures
described below must be complied with.
A Holder may tender Old Notes that are held through the Depositary by
transmitting its acceptance through the Depositary's Automatic Tender Offer
Program, for which the transaction will be eligible, and the Depositary will
then edit and verify the acceptance and send an Agent's Message to the
Exchange Agent for its acceptance. The term "Agent's Message" means a message
transmitted by the Depositary to, and received by, the Exchange Agent and
forming part of the Book-Entry Confirmation, which states that the Depositary
has received an express acknowledgment from each participant in the Depositary
tendering the Old Notes and that such participant has received the Letter of
Transmittal and agrees to be bound by the terms of the Letter of Transmittal
and the Company may enforce such agreement against such participant.
Holders who wish to tender their Old Notes and (i) whose Old Notes are not
immediately available, or (ii) who cannot deliver their Old Notes, this Letter
of Transmittal or any other documents required hereby to the Exchange Agent
prior to the Expiration Date or comply with book-entry transfer
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procedures on a timely basis must tender their Old Notes according to the
guaranteed delivery procedures set forth in the Prospectus. See "The Exchange
Offer--Guaranteed Delivery Procedures." Pursuant to such procedure: (i) such
tender must be made by or through an Eligible Institution; (ii) prior to the
Expiration Date, the Exchange Agent must have received from the Eligible
Institution a properly completed and duly executed Notice of Guaranteed
Delivery (by facsimile transmission, overnight courier, mail or hand delivery)
setting forth the name and address of the Holder of the Old Notes, the
certificate number or numbers of such Old Notes and the principal amount of
Old Notes tendered, stating that the tender is being made thereby and
guaranteeing that, within three New York Stock Exchange trading days after the
Expiration Date, this Letter of Transmittal (or facsimile hereof) together
with the certificate(s) representing the Old Notes and any other required
documents will be deposited by the Eligible Institution with the Exchange
Agent; and (iii) such properly completed and executed Letter of Transmittal
(or facsimile hereof), as well as all other documents required by this Letter
of Transmittal and the certificate(s) representing all tendered Old Notes in
proper form for transfer (or a confirmation of book-entry transfer of such Old
Notes into the Exchange Agent's account at DTC), must be received by the
Exchange Agent within three New York Stock Exchange trading days after the
Expiration Date, all in the manner provided in the Prospectus under the
caption "The Exchange Offer--Guaranteed Delivery Procedures." Any Holder who
wishes to tender his Old Notes pursuant to the guaranteed delivery procedures
described above must ensure that the Exchange Agent receives the Notice of
Guaranteed Delivery prior to 5:00 p.m., New York City time, on the Expiration
Date. Upon request to the Exchange Agent, a Notice of Guaranteed Delivery will
be sent to Holders who wish to tender their Old Notes according to the
guaranteed delivery procedures set forth above.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance of tendered Old Notes, and withdrawal of tendered Old
Notes will be determined by the Company in its sole discretion, which
determination will be final and binding. All tendering holders, by execution
of this Letter of Transmittal (or facsimile thereof), shall waive any right to
receive notice of the acceptance of the Old Notes for exchange. The Company
reserves the absolute right to reject any and all Old Notes not properly
tendered or any Old Notes, the Company's acceptance of which would, in the
opinion of counsel for the Company, be unlawful. The Company also reserves the
right to waive any irregularities or conditions of tender as to particular Old
Notes, The Company's interpretation of the terms and conditions of the
Exchange Offer (including the instructions in this Letter of Transmittal)
shall be final and binding on all parties. Unless waived, any defects or
irregularities in connection with tenders of Old Notes must be cured within
such time as the Company shall determine. Neither the Company, the Exchange
Agent nor any other person shall be under any duty to give notification of
defects or irregularities with respect to tenders of Old Notes, nor shall any
of them incur any liability for failure to give such notification. Tenders of
Old Notes will not be deemed to have been made until such defects or
irregularities have been cured to the Company's satisfaction or waived. Any
Old Notes received by the Exchange Agent that are not properly tendered and as
to which the defects or irregularities have not been cured or waived will be
returned by the Exchange Agent to the tendering Holders pursuant to the
Company's determination, unless otherwise provided in this Letter of
Transmittal as soon as practicable following the Expiration Date. The Exchange
Agent has no fiduciary duties to the Holders with respect to the Exchange
Offer and is acting solely on the basis of directions of the Company.
3. Inadequate Space. If the space provided is inadequate, the certificate
numbers and/or the number of Old Notes should be listed on a separate signed
schedule attached hereto.
4. Tender by Holder. Only a Holder of Old Notes may tender such Old Notes
in the Exchange Offer. Any beneficial owner of Old Notes who is not the
registered Holder and who wishes to tender should arrange with such registered
holder to execute and deliver this Letter of Transmittal on such beneficial
owner's behalf or must, prior to completing and executing this Letter of
Transmittal and delivering his Old Notes, either make appropriate arrangements
to register ownership of the Old Notes in such beneficial owner's name or
obtain a properly completed bond power from the registered holder or properly
endorsed certificates representing such Old Notes.
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5. Partial Tenders; Withdrawals. Tenders of Old Notes will be accepted
only in integral multiples of $1,000. If less than the entire principal amount
of any Old Notes is tendered, the tendering Holder should fill in the
principal amount tendered in the third column of the box entitled "Description
of 11% Senior Subordinated Notes due 2009" above. The entire principal amount
of any Old Notes delivered to the Exchange Agent will be deemed to have been
tendered unless otherwise indicated. If the entire principal amount of all Old
Notes is not tendered, then Old Notes for the principal amount of Old Notes
not tendered and a certificate or certificates representing Exchange Notes
issued in exchange for any Old Notes accepted will be sent to the Holder at
his or her registered address, unless a different address is provided in the
"Special Delivery Instructions" box above on this Letter of Transmittal or
unless tender is made through DTC, promptly after the Old Notes are accepted
for exchange.
Except as otherwise provided herein, tenders of Old Notes may be withdrawn
at any time prior to 5:00 p.m., New York City time, on the Expiration Date. To
withdraw a tender of Old Notes in the Exchange Offer, a written or facsimile
transmission notice of withdrawal must be received by the Exchange Agent at
its address set forth herein prior to 5:00 p.m., New York City time, on the
Expiration Date. Any such notice of withdrawal must (i) specify the name of
the person having deposited the Old Notes to be withdrawn (the "Depositor"),
(ii) identify the Old Notes to be withdrawn (including the certificate number
or numbers and principal amount of such Old Notes, or, in the case of Old
Notes transferred by book-entry transfer the name and number of the account at
DTC to be credited), (iii) be signed by the Depositor in the same manner as
the original signature on the Letter of Transmittal by which such Old Notes
were tendered (including any required signature guarantees) or be accompanied
by documents of transfer sufficient to have the Registrar with respect to the
Old Notes register the transfer of such Old Notes into the name of the person
withdrawing the tender and (iv) specify the name in which any such Old Notes
are to be registered, if different from that of the Depositor. All questions
as to the validity, form and eligibility (including time of receipt) of such
notices will be determined by the Company, whose determination shall be final
and binding on all parties. Any Old Notes so withdrawn will be deemed not to
have been validly tendered for purposes of the Exchange Offer and no Exchange
Notes will be issued with respect thereto unless the Old Notes so withdrawn
are validly retendered. Any Old Notes which have been tendered but which are
not accepted for exchange by the Company will be returned to the Holder
thereof without cost to such Holder as soon as practicable after withdrawal,
rejection of tender or termination of the Exchange Offer. Properly withdrawn
Old Notes may be retendered by following one of the procedures described in
the Prospectus under "The Exchange Offer--Procedures for Tendering" at any
time prior to the Expiration Date.
6. Signatures on the Letter of Transmittal; Bond Powers and
Endorsements. If this Letter of Transmittal (or facsimile hereof) is signed by
the registered holder(s) of the Old Notes tendered hereby, the signature must
correspond with the name(s) as written on the face of the Old Note without
alteration, enlargement or any change whatsoever.
If any of the Old Notes tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If a number of Old Notes registered in different names are tendered, it
will be necessary to complete, sign and submit as many copies of this Letter
of Transmittal as there are different registrations of Old Notes.
If this Letter of Transmittal (or facsimile hereof) is signed by the
registered Holder or Holders (which term, for the purposes described herein,
shall include a book-entry transfer facility whose name appears on a security
listing as the owner of the Old Notes) of Old Notes tendered and the
certificate or certificates for Exchange Notes issued in exchange therefor is
to be issued (or any untendered
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principal amount of Old Notes to be reissued) to the registered Holder, then
such Holder need not and should not endorse any tendered Old Notes, nor
provide a separate bond power. In any other case, such Holder must either
properly endorse the Old Notes tendered or transmit a properly completed
separate bond power with this Letter of Transmittal with the signatures on the
endorsement or bond power guaranteed by an Eligible Institution.
If this Letter of Transmittal (or facsimile hereof) is signed by a person
other than the registered Holder or Holders of any Old Notes listed, such Old
Notes must be endorsed or accompanied by appropriate bond powers in each case
signed as the name of the registered Holder or Holders appears on the Old
Notes.
If this Letter of Transmittal (or facsimile hereof) or any Old Notes or
bond powers are signed by trustees, executors, administrators, guardians,
attorneys-in-fact, or officers of corporations or others acting in a fiduciary
or representative capacity, such persons should so indicate when signing, and
unless waived by the Company, evidence satisfactory to the Company of their
authority so to act must be submitted with this Letter of Transmittal.
Endorsements on Old Notes or signatures on bond powers required by this
Instruction 6 must be guaranteed by an Eligible Institution.
7. Special Registration and Delivery Instructions. Tendering Holders
should indicate, in the applicable box or boxes, the name and address to which
Exchange Notes or substitute Old Notes for principal amounts not tendered or
not accepted for exchange are to be issued or sent, if different from the name
and address of the person signing this Letter of Transmittal. In the case of
issuance in a different name, the taxpayer identification or social security
number of the person named must also be indicated.
8. Backup Federal Income Tax Withholding and Substitute Form W-9. Under
the federal income tax laws, payments that may be made by the Company on
account of Exchange Notes issued pursuant to the Exchange Offer may be subject
to backup withholding at the rate of 31%. In order to avoid such backup
withholding, each tendering Holder should complete and sign the Substitute
Form W-9 included in this Letter of Transmittal and either (a) provide the
correct taxpayer identification number ("TIN") and certify, under penalties of
perjury, that the TIN provided is correct and that (i) the Holder has not been
notified by the Internal Revenue Service (the "IRS") that the Holder is
subject to backup withholding as a result of failure to report all interest or
dividends or (ii) the IRS has notified the Holder that the Holder is no longer
subject to backup withholding; or (b) provide an adequate basis for exemption.
If the tendering Holder has not been issued a TIN and has applied for one, or
intends to apply for one in the near future, such Holder should check the box
in Part 3 of the Substitute Form W-9, sign and date the Substitute Form W-9
and sign the Certificate of Payee Awaiting Taxpayer Identification Number. If
the box in Part 3 is checked and the Exchange Agent or the Company is not
provided with a TIN by the time of payment, the Company (or the Paying Agent
under the Indenture governing the Exchange Notes) will withhold 31% on all
payments until a TIN is provided. If either the Exchange Agent or the Company
is not provided with the correct TIN, the Holder may be subject to a $50
penalty imposed by the IRS. Certain Holders (including, among others, all
corporations and certain foreign individuals) are not subject to these backup
withholding and reporting requirements. In order for a foreign individual to
qualify as an exempt recipient, such Holder must submit a statement
(generally, IRS Form W-8), signed under penalties of perjury, attesting to
that individual's exempt status. Such statements can be obtained from the
Exchange Agent. For further information concerning backup withholding and
instructions for completing the Substitute Form W-9 (including how to obtain a
taxpayer identification number if you do not have one and how to complete the
Substitute Form W-9 if Old Notes are registered in more than one name),
consult the enclosed "Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9."
14
<PAGE>
Failure to complete the Substitute Form W-9 will not, by itself, cause Old
Notes to be deemed invalidly tendered, but may require the Company (or the
Paying Agent) to withhold 31% of the amount of any payments made on account of
the Exchange Notes. Backup withholding is not an additional federal income
tax. Rather, the federal income tax liability of a person subject to backup
withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a refund may be obtained from the IRS.
9. Transfer Taxes. The Company will pay all transfer taxes, if any,
applicable to the exchange of Old Notes pursuant to the Exchange Offer. If,
however, certificates representing Exchange Notes or Old Notes for principal
amounts not tendered or accepted for exchange are to be delivered to, or are
to be registered in the name of, any person other than the registered holder
of the Old Notes tendered hereby, or if tendered Old Notes are registered in
the name of a person other than the person signing this Letter of Transmittal,
or if a transfer tax is imposed for any reason other than the exchange of Old
Notes pursuant to the Exchange Offer, then the amount of any such transfer
taxes (whether imposed on the registered holder or on any other persons) will
be payable by the tendering Holder. If satisfactory evidence of payment of
such taxes or exemption therefrom is not submitted with this Letter of
Transmittal, the amount of such transfer taxes will be billed directly to such
tendering Holder. See the Prospectus under "The Exchange Offer--Solicitation
of Tenders; Fees and Expenses."
Except as provided in this Instruction 9, it will not be necessary for
transfer tax stamps to be affixed to the Old Notes listed in this Letter of
Transmittal.
10. Waiver of Conditions. The Company reserves the right, in its sole
discretion, to amend, waive or modify specified conditions of the Exchange
Offer in the case of any Old Notes tendered.
11. Mutilated, Lost, Stolen or Destroyed Old Notes. Any tendering Holder
whose Old Notes have been mutilated, lost, stolen or destroyed should contact
the Exchange Agent at the address indicated herein for further instructions.
12. Requests for Assistance or Additional Copies. Requests for assistance
and requests for additional copies of the Prospectus or this Letter of
Transmittal may be directed to the Exchange Agent at the address specified in
the Prospectus. Holders may also contact their broker, dealer, commercial
bank, trust company or other nominee for assistance concerning the Exchange
Offer.
(DO NOT WRITE IN SPACE BELOW)
Certificate Surrendered Old Notes Tendered Old Notes Accepted
_________________________ _________________________ _________________________
_________________________ _________________________ _________________________
Date Received ___________ Accepted by _____________ Checked by ______________
Delivery Prepared by ____ Checked by ______________ Date ____________________
15
<PAGE>
IMPORTANT TAX INFORMATION
Under federal income tax laws, a Holder whose tendered Old Notes are
accepted for exchange is required to provide such Holder's correct TIN on
Substitute Form W-9 below or otherwise establish a basis for exemption from
backup withholding. If such Holder is an individual, the TIN is his or her
social security number. If a Holder does not provide a correct TIN, a $50
penalty may be imposed by the Internal Revenue Service, and payments made with
respect to Exchange Notes issued pursuant to the Exchange Offer may be subject
to backup withholding.
Certain Holders (including, among others, all corporations and certain
foreign persons) are not subject to these backup withholding and reporting
requirements. Exempt Holders should indicate their exempt status on Substitute
Form W-9. A foreign person may qualify as an exempt recipient by submitting to
the Exchange Agent a properly completed Internal Revenue Service Form W-8,
signed under penalties of perjury, attesting to that Holder's exempt status. A
Form W-8 can be obtained from the Exchange Agent. See the enclosed "Guidelines
for Certification of Taxpayer Identification Number on Substitute Form W-9"
for additional instructions.
If backup withholding applies, the Company (or Paying Agent) is required
to withhold 31% of any payments made to the Holder or other payee. Backup
withholding is not an additional federal income tax. Rather, the federal
income tax liability of persons subject to backup withholding will be reduced
by the amount of tax withheld. If withholding results in an overpayment of
taxes, a refund may be obtained from the Internal Revenue Service.
Purpose of Substitute Form W-9
To prevent backup withholding on payments made with respect to Exchange
Notes issued pursuant to the Exchange Offer, the Holder is required to provide
either: (i) the Holder's correct TIN by completing the form below, certifying
that the TIN provided on Substitute Form W-9 is correct (or that such Holder
is awaiting a TIN) and that (A) the Holder has been notified by the Internal
Revenue Service that the Holder is subject to backup withholding as a result
of failure to report all interest or dividends or (B) the Internal Revenue
Service has notified the Holder that the Holder is no longer subject to backup
withholding or (ii) an adequate basis for exemption.
What Number to Give on Substitute Form W-9
The Holder is required to give the TIN (e.g., social security number or
employer identification number) of the registered Holder of the Old Notes. If
the Old Notes are held in more than one name or are not held in the name of
the actual owner, consult the enclosed "Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9" for additional guidance
on which number to report.
16
<PAGE>
TO BE COMPLETED BY ALL TENDERING HOLDERS
PAYER'S NAME: TRIAD HOSPITALS HOLDINGS, INC.
- -------------------------------------------------------------------------------
Part 1--PLEASE
PROVIDE YOUR TIN IN Social Security
THE BOX AT RIGHT AND Number(s) or
CERTIFY BY SIGNING Employer
AND DATING BELOW Identification
Number(s)
SUBSTITUTE
Form W-9
____________________
Department of the
Treasury -------------------------------------------------------
Part 2--Certification--Under penalties of perjury, I
certify that:
Internal Revenue Service(1) The number shown on this form is my correct
taxpayer identification number (or I am
waiting for a number to be issued to me),
and
(2) I am not subject to backup withholding
because: (a) I am exempt from backup
withholding, or (b) I have not been
notified by the Internal Revenue Service
(IRS) that I am subject to backup
withholding as a result of a failure to
report all interest or dividends, or (c)
the IRS has notified me that I am no longer
subject to backup withholding.
Payer's Request For
Taxpayer
Identification Number
("TIN") and
Certification
Certification Instructions--You must cross out
item (2) above if you have been notified by the
IRS that you are currently subject to backup
withholding because of underreporting interest
or dividends on your tax return.
-------------------------------------------------------
Name ____________________ Part 3--Awaiting
TIN [_]
Address _________________
Signature _______________
Date: ___________________
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN A $50
PENALTY IMPOSED BY THE INTERNAL REVENUE SERVICE AND BACKUP
WITHHOLDING OF 31% OF ANY REPORTABLE CASH PAYMENTS. PLEASE REVIEW
THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL
DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX
IN PART 3 OF THE SUBSTITUTE FORM W-9.
CERTIFICATE OF PAYEE AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification
number has not been issued to me, and either (1) I have mailed or
delivered an application to receive a taxpayer identification number to
the appropriate Internal Revenue Service Center or Social Security
Administration Office or (2) I intend to mail or deliver an application
in the near future. I understand that if I do not provide a taxpayer
identification number by the time of payment, 31% of all reportable cash
payments made to me thereafter will be withheld until I provide a
taxpayer identification number.
__________________________________ ___________________________________
Signature Date
17
<PAGE>
Exhibit 99.2
NOTICE OF GUARANTEED DELIVERY
FOR 11% SENIOR SUBORDINATED NOTES DUE 2009
OF TRIAD HOSPITALS HOLDINGS, INC.
As set forth in the Prospectus dated , 1999 (the "Prospectus") of Triad
Hospitals Holdings, Inc. (the "Company") and in the Letter of Transmittal (the
"Letter of Transmittal"), this form or a form substantially equivalent to this
form must be used to accept the Exchange Offer (as defined below) if the
certificates for the outstanding 11% Senior Subordinated Notes due 2009 (the
"Old Notes") of the Company and all other documents required by the Letter of
Transmittal cannot be delivered to the Exchange Agent by the expiration of the
Exchange Offer or compliance with book-entry transfer procedures cannot be
effected on a timely basis. Such form may be delivered by hand or transmitted
by facsimile transmission, telex or mail to the Exchange Agent no later than
the Expiration Date, and must include a signature guarantee by an Eligible
Institution as set forth below. Capitalized terms used herein but not defined
herein have the meanings ascribed thereto in the Prospectus.
To:
Citibank, N.A.
By Mail: By Hand: By Courier:
Citibank, N.A. P.O. Box Citibank, N.A. Corporate Citibank, N.A. 915
685 Old Chelsea Trust Window111 Wall Broadway, 5th Floor New
StationNew York, New York Street, 5th floor New York, New York 10010
10113 York, New York 10043
By Facsimile for Eligible
Institutions: (212) 505-
2248
To Confirm by Telephone:
(800) 270-0808
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE
DOES NOT CONSTITUTE A VALID DELIVERY. THE METHOD OF DELIVERY OF ALL DOCUMENTS,
INCLUDING CERTIFICATES, IS AT THE RISK OF THE HOLDER. IF DELIVERY IS BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED. THE INSTRUCTIONS ACCOMPANYING THE LETTER OF TRANSMITTAL SHOULD BE
READ CAREFULLY BEFORE THIS NOTICE OF GUARANTEED DELIVERY IS COMPLETED.
This Notice of Guaranteed Delivery is not to be used to guarantee
signatures. If a signature on a Letter of Transmittal is required to be
guaranteed by an Eligible Institution under the instruction thereto, such
signatures must appear in the applicable space provided on the Letter of
Transmittal for Guarantee of Signature(s).
<PAGE>
Ladies and Gentlemen:
The undersigned acknowledges receipt of the Prospectus and the related
Letter of Transmittal which describes the Company's offer (the "Exchange
Offer") to exchange $1,000 in principal amount of a new series of 11% Series B
Senior Subordinated Notes due 2009 (the "Exchange Notes") for each $1,000 in
principal amount of the Old Notes.
The undersigned hereby tenders to the Company the aggregate principal
amount of Old Notes set forth below on the terms and conditions set forth in
the Prospectus and the related Letter of Transmittal pursuant to the
guaranteed delivery procedure set forth in the "The Exchange Offer-Guaranteed
Delivery Procedures" section in the Prospectus and the accompanying Letter of
Transmittal.
The undersigned understand that no withdrawal of a tender of Old Notes may
be made on or after the Expiration Date. The undersigned understands that for
a withdrawal of a tender of Old Notes to be effective, a written notice of
withdrawal that complies with the requirements of the Exchange Offer must be
timely received by the Exchange Agent at one of its addresses specified on the
cover of this Notice of Guaranteed Delivery prior to the Expiration Date.
The undersigned understands that the exchange of Old Notes for Exchange
Notes pursuant to the Exchange Offer will be made only after timely receipt by
the Exchange Agent of (i) such Old Notes (or Book-Entry Confirmation of the
transfer of such Old Notes into the Exchange Agent's account at The Depository
Trust Company (the "Depositary" or "DTC")) and (ii) a Letter of Transmittal
(or facsimile thereof) with respect to such Old Notes, properly completed and
duly executed, with any required signature guarantees, this Notice of
Guaranteed Delivery and any other documents required by the Letter of
Transmittal or a properly transmitted Agent's Message. The term "Agent's
Message" means a message transmitted by the Depositary to, and received by,
the Exchange Agent and forming part of the confirmation of a book-entry
transfer, which states that the Depositary has received an express
acknowledgment from each participant in the Depositary tendering the Old Notes
and that such participant has received the Letter of Transmittal and agrees to
be bound by the terms of the Letter of Transmittal and the Company may enforce
such agreement against such participant.
All authority conferred or agreed to be conferred by this Notice of
Guaranteed Delivery shall not be affected by, and shall survive, the death or
incapacity of the undersigned, and every obligation of the undersigned under
this Notice of Guaranteed Delivery shall be binding upon the heirs, executors,
administrators, trustees in bankruptcy, personal and legal representatives,
successors and assigns of the undersigned.
2
<PAGE>
PLEASE SIGN AND COMPLETE
Signature(s) or Registered Owner(s) or Authorized
Signatory: ____________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
Principal Amount of Old Notes Tendered:
_______________________________________________________________________________
Certificate No(s) of Old Notes (if available):
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
Date: _________________________________________________________________________
Name(s) of Registered Holder(s)
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
Address: ______________________________________________________________________
_______________________________________________________________________________
Area Code and Telephone No.: __________________________________________________
If Old Notes will be delivered by book-entry transfer at The Depository Trust
Company, insert
Depository Account No.: _______________________________________________________
This Notice of Guaranteed Delivery must be signed by the registered
Holder(s) of Old Notes exactly as its (their) name(s) appear on certificates
for Old Notes or on a security position listing as the owner of Old Notes, or
by person(s) authorized to become registered Holder(s) by endorsements and
documents transmitted with this Notice of Guaranteed Delivery. If signature is
by a trustee, executor, administrator, guardian, attorney-in-fact, officer or
other person acting in a fiduciary or representative capacity, such person
must provide the following information.
Please print name(s) and address(es)
Name(s): ___________________________________________________________________
___________________________________________________________________
Capacity: ___________________________________________________________________
Address(es):___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
DO NOT SEND OLD NOTES WITH THIS FORM. OLD NOTES SHOULD BE SENT TO THE
EXCHANGE AGENT TOGETHER WITH A PROPERLY COMPLETED AND DULY EXECUTED LETTER OF
TRANSMITTAL.
3
<PAGE>
GUARANTEE
(Not to be used for signature guarantee)
The undersigned, a member firm of a registered national securities
exchange or of the National Association of Securities Dealers, Inc. or a
commercial bank or trust company having an office or a correspondent in the
United States, or otherwise an "eligible guarantor institution" within the
meaning of Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended,
hereby (a) represents that each holder of Old Notes on whose behalf this
tender is being made "own(s)" the Old Notes covered hereby within the meaning
of Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), (b) represents that such tender of Old Notes complies with
Rule 14e-4 of the Exchange Act and (c) guarantees that, within three New York
Stock Exchange trading days from the expiration date of the Exchange Offer, a
properly completed and duly executed Letter of Transmittal (or a facsimile
thereof), together with certificates representing the Old Notes covered hereby
in proper form for transfer (or confirmation of the book-entry transfer of
such Old Notes into the Exchange Agent's account at The Depository Trust
Company, pursuant to the procedure for book-entry transfer set forth in the
Prospectus) and required documents will be deposited by the undersigned with
the Exchange Agent.
The undersigned acknowledges that it must deliver the Letter of
Transmittal and Old Notes tendered hereby to the Exchange Agent within the
time period set forth above and the failure to do so could result in financial
loss to the undersigned.
Name of Firm: ________________________
______________________________________
Authorized Signature
Address: _____________________________
Name: ________________________________
______________________________________
Title: _______________________________
Area Code and Telephone No.: _________
Date: ________________________________
4
<PAGE>
Exhibit 99.3
TRIAD HOSPITALS HOLDINGS, INC.
OFFER TO EXCHANGE
Its
11% Series B Senior Subordinated Notes due 2009
for any and all of its outstanding
11% Senior Subordinated Notes due 2009
To Our Clients:
Enclosed for your consideration are the Prospectus, dated , 1999 (the
"Prospectus") and the related Letter of Transmittal (which together with the
Prospectus constitute the "Exchange Offer") in connection with the offer by
LifePoint Hospitals Holdings, Inc., a Delaware corporation (the "Company"), to
exchange its outstanding 10 3/4% Series B Senior Subordinated Notes due 2009
(the "Fixed Rate Notes") (the "Exchange Notes") for any and all of the
outstanding 10 3/4% Senior Subordinated Notes due 2009 (the "Old Notes"), upon
the terms and subject to the conditions set forth in the Exchange Offer.
We are the Registered Holders of Old Notes held for your account. An
exchange of the Old Notes can be made only by us as the Registered Holders and
pursuant to your instructions. The Letter of Transmittal is furnished to you
for your information only and cannot be used by you to exchange the Old Notes
held by us for your account. The Exchange Offer provides a procedure for
holders to tender by means of guaranteed delivery.
We request information as to whether you wish us to exchange any or all of
the Old Notes held by us for your account upon the terms and subject to the
conditions of the Exchange Offer.
Your attention is directed to the following:
1. The Exchange Notes will be exchanged for the Old Notes at the rate of
$1,000 principal amount of Exchange Notes for each $1,000 principal amount
of Old Notes. Interest on the Exchange Notes issued pursuant to the
Exchange Offer will accrue from the last interest payment date on which
interest was paid on the Old Notes surrendered in exchange therefor or, if
no interest has been paid, from the original date of issuance of the Old
Notes. Interest on the Exchange Notes is payable semi-annually on each May
15 and November 15, commencing November 15, 1999. The Exchange Notes will
bear interest (as do the Old Notes) at a rate equal to 10 3/4% per annum.
The form and terms of the Exchange Notes are identical in all material
respects to the form and terms of the Old Notes, except that (i) the
offering of the Exchange Notes has been registered under the Securities Act
of 1933, as amended (the "Securities Act"), (ii) the Exchange Notes will
not be subject to transfer restrictions and (iii) certain provisions
relating to an increase in the stated interest rate on the Old Notes
provided for under certain circumstances will be eliminated.
2. Based on an interpretation by the staff of the Securities and
Exchange Commission, Exchange Notes issued pursuant to the Exchange Offer
in exchange for Old Notes may be offered for resale, resold and otherwise
transferred by holders thereof (other than any such holder which is an
"affiliate" of the Company within the meaning of Rule 405 under the
Securities Act or a "broker" or "dealer" registered under the Securities
Exchange Act of 1934, as amended) without compliance with the registration
and prospectus delivery provisions of the Securities Act, provided that
such Exchange Notes are acquired in the ordinary course of such holders'
business and such holders have no arrangement or understanding with any
person to participate in the distribution of such Exchange Notes. See the
discussion in the Prospectus under "The Exchange Offer--Purpose and Effect
of the Exchange Offer."
<PAGE>
3. The Exchange Offer is not conditioned on any minimum principal amount
of Old Notes being tendered.
4. Notwithstanding any other term of the Exchange Offer, the Company will
not be required to accept for exchange, or exchange Exchange Notes for, any
Old Notes not theretofore accepted for exchange, and may terminate or amend
the Exchange Offer as provided herein before the acceptance of such Old
Notes, if any of the conditions described in the Prospectus under "The
Exchange Offer--Conditions to the Exchange Offer" exist.
5. Tendered Old Notes may be withdrawn at any time prior to 5:00 p.m.,
New York City time, on , 1999.
6. Any transfer taxes applicable to the exchange of the Old Notes
pursuant to the Exchange Offer will be paid by the Company, except as
otherwise provided in the Prospectus under "The Exchange Offer--
Solicitation of Tenders; Fees and Expenses" and in Instruction 9 of the
Letter of Transmittal.
If you wish to have us tender any or all of your Old Notes, please so
instruct us by completing, detaching and returning to us the instruction form
attached hereto. An envelope to return your instructions is enclosed. If you
authorize a tender of your Old Notes, the entire principal amount of Old Notes
held for your account will be tendered unless otherwise specified on the
instruction form. Your instructions should be forwarded to us in ample time to
permit us to submit a tender on your behalf by the Expiration Date.
The Exchange Offer is not being made to, nor will tenders be accepted from
or on behalf of, (i) holders of the Old Notes in any jurisdiction in which the
making of the Exchange Offer or acceptance thereof would not be in compliance
with the laws of such jurisdiction or would otherwise not be in compliance
with any provision of any applicable security law and (ii) holders of Old
Notes who are affiliates of the Company.
2
<PAGE>
Exhibit 99.4
TRIAD HOSPITALS HOLDINGS, INC.
OFFER TO EXCHANGE
Its
11% Series B Senior Subordinated Notes due 2009
for any and all of its outstanding
11% Senior Subordinated Notes due 2009
To Brokers, Dealers, Commercial
Banks, Trust Companies and
Other Nominees:
We are enclosing herewith an offer by LifePoint Hospitals Holdings, Inc.,
a Delaware corporation (the "Company"), to exchange its 10 3/4% Series B
Senior Subordinated Notes due 2009 (the "Exchange Notes") for any and all of
its outstanding 10 3/4% Senior Subordinated Notes due 2009 (the "Old Notes"),
upon the terms and subject to the conditions set forth in the accompanying
Prospectus, dated , 1999 (the "Prospectus"), and related Letter of
Transmittal (which together with the Prospectus constitutes the "Exchange
Offer").
The Exchange Offer provides a procedure for holders to tender the Old
Notes by means of guaranteed delivery.
The Exchange Offer will expire at 5:00 p.m., New York City time, on ,
1999, unless extended (the "Expiration Date"). Tendered Old Notes may be
withdrawn at any time prior to 5:00 p.m., New York City time, on the
Expiration Date.
Based on an interpretation by the staff of the Securities and Exchange
Commission, Exchange Notes issued pursuant to the Exchange Offer in exchange
for Old Notes may be offered for resale, resold and otherwise transferred by
holders thereof (other than any such holder which is an "affiliate" of the
Company within the meaning of Rule 405 under the Securities Act or a "broker"
or "dealer" registered under the Securities Exchange Act of 1934, as amended)
without compliance with the registration and prospectus delivery provisions of
the Securities Act provided that such Exchange Notes are acquired in the
ordinary course of such holders' business and such holders have no arrangement
with any person to participate in the distribution of such Exchange Notes. See
the discussion in the Prospectus under "The Exchange Offer--Purpose and Effect
of the Exchange Offer."
The Exchange Offer is not conditioned on any minimum principal amount of
Old Notes being tendered.
Notwithstanding any other term of the Exchange Offer, the Company will not
be required to accept for exchange, or exchange Exchange Notes for, any Old
Notes not theretofore accepted for exchange, and may terminate or amend the
Exchange Offer as provided herein before the acceptance of such Old Notes, if
any of the conditions described in the Prospectus under "The Exchange Offer--
Terms of the Exchange Offer" exist.
The Company reserves the right not to accept tendered Old Notes from any
tendering holder if the Company determines, in its sole and absolute
discretion, that such acceptance could result in a violation of applicable
securities laws.
For your information and for forwarding to your clients for whom you hold
Old Notes registered in your name or in the name of your nominee, we are
enclosing the following documents:
1. A Prospectus dated , 1999.
<PAGE>
2. A letter of Transmittal for your use and for the information of your
clients.
3. A printed form of letter which may be sent to your clients for whose
accounts you hold Old Notes registered in your name or in the name of your
nominee, with space provided for obtaining such clients' instructions with
regard to the Exchange Offer.
4. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9 of the Internal Revenue Service (included in Letter of
Transmittal).
WE URGE YOU TO CONTACT YOUR
CLIENTS AS PROMPTLY AS POSSIBLE.
Any inquiries you may have with respect to the Exchange Offer may be
addressed to, and additional copies of the enclosed materials may be obtained
from the Exchange Agent at the following telephone number: (800) 270-0808.
Very truly yours,
TRIAD HOSPITALS HOLDINGS, INC.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
AS THE AGENT OF THE COMPANY, THE EXCHANGE AGENT OR ANY OTHER PERSON OR
AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON
BEHALF OF ANY OF THEM IN CONNECTION WITH THE EXCHANGE OFFER OTHER THAN THE
DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED THEREIN.
2
<PAGE>
Exhibit 99.5
TRIAD HOSPITALS HOLDINGS, INC.
OFFER TO EXCHANGE
Its
11% Series B Senior Subordinated Notes due 2009
for any and all of its
11% Senior Subordinated Notes due 2009
Instruction to Registered Holder from Beneficial Owner
The undersigned acknowledge(s) receipt of your letter and the enclosed
Prospectus and the related Letter of Transmittal, in connection with the offer
by the Company to exchange the 11% Senior Subordinated Notes due 2009 (the
"Old Notes").
This will instruct you to tender the principal amount of Old Notes
indicated below held by you for the account of the undersigned, upon the terms
and subject to the conditions set forth in the Prospectus and the related
Letter of Transmittal.
The undersigned represents that (i) the 11% Series B Senior Subordinated
Notes due 2009 (the "Exchange Notes") to be acquired pursuant to the Exchange
Offer in exchange for the Old Notes designated below are being obtained in the
ordinary course of business of the person receiving such Exchange Notes, (ii)
neither the undersigned nor any other person receiving such Exchange Notes is
participating, intends to participate, or has any arrangement or understanding
with any person to participate, in the distribution of such Exchange Notes,
and (iii) it is not an "affiliate," as defined under Rule 405 of the
Securities Act of 1933 (the "Securities Act"), of the Company. Affiliates of
the Company may not tender their Old Notes in the Exchange Offer.
If the undersigned is a "broker" or "dealer" registered under the
Securities Exchange Act of 1934 that acquired Old Notes for its own account
pursuant to its market-making or other trading activities (other than Old
Notes acquired directly from the Company), the undersigned understands and
acknowledges that it may be deemed to be an "underwriter" within the meaning
of the Securities Act and, therefore, must deliver a prospectus relating to
the Exchange Notes in connection with any resales by it of Exchange Notes
acquired for its own account in the Exchange Offer. Notwithstanding the
foregoing, the undersigned does not thereby admit that it is an "underwriter"
within the meaning of the Securities Act.
You are hereby instructed to tender all Old Notes held for the account of the
undersigned unless otherwise indicated below.
[_] Do not tender any Old Notes
[_] Tender Old Notes in the aggregate principal amount of $
SIGNATURE:
______________________________________________________
Name of Beneficial Owner (please print)
By ___________________________________________________
Signature
______________________________________________________
Address
______________________________________________________
Area Code and Telephone Number
Dated: , 1999
