<PAGE>
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED NOVEMBER 22, 1993)
$150,000,000
COLUMBIA/HCA HEALTHCARE CORPORATION
8.36% DEBENTURES DUE 2024
-----------------
INTEREST PAYABLE APRIL 15 AND OCTOBER 15
-------------------
THE DEBENTURES MAY NOT BE REDEEMED BY THE COMPANY PRIOR TO MATURITY. THE
REGISTERED HOLDER OF EACH DEBENTURE MAY ELECT TO HAVE THAT DEBENTURE, OR ANY
PORTION THEREOF WHICH IS A MULTIPLE OF $1,000, REDEEMED ON APRIL 15, 2004 AT
90.95% OF THE PRINCIPAL AMOUNT TOGETHER WITH INTEREST PAYABLE TO THE
REDEMPTION DATE. SUCH ELECTION, WHICH IS IRREVOCABLE WHEN MADE, MUST BE
MADE WITHIN THE PERIOD COMMENCING ON FEBRUARY 15, 2004 AND ENDING AT
THE CLOSE OF BUSINESS ON MARCH 15, 2004.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-------------------
PRICE 100% AND ACCRUED INTEREST
-------------------
<TABLE>
<CAPTION>
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC(1) COMMISSIONS(2) COMPANY(1)(3)
---------------- ---------------- ----------------
<S> <C> <C> <C>
PER DEBENTURE............................ 100.00% .65% 99.35%
TOTAL.................................. $150,000,000 $975,000 $149,025,000
<FN>
- ---------
(1) PLUS ACCRUED INTEREST FROM APRIL 15, 1994.
(2) THE COMPANY HAS AGREED TO INDEMNIFY THE UNDERWRITERS AGAINST CERTAIN
LIABILITIES, INCLUDING LIABILITIES UNDER THE SECURITIES ACT OF 1933,
AS AMENDED.
(3) BEFORE DEDUCTING EXPENSES PAYABLE BY THE COMPANY ESTIMATED AT
$450,000.
</TABLE>
-------------------
THE DEBENTURES ARE OFFERED, SUBJECT TO PRIOR SALE, WHEN, AS AND IF ACCEPTED
BY THE UNDERWRITERS AND SUBJECT TO APPROVAL OF CERTAIN LEGAL MATTERS BY JENKENS
& GILCHRIST, A PROFESSIONAL CORPORATION, COUNSEL FOR THE UNDERWRITERS. IT IS
EXPECTED THAT DELIVERY OF THE DEBENTURES WILL BE MADE ON OR ABOUT APRIL 27, 1994
AT THE OFFICE OF MORGAN STANLEY & CO. INCORPORATED, NEW YORK, NEW YORK AGAINST
PAYMENT THEREFOR IN NEW YORK FUNDS.
-------------------
MORGAN STANLEY & CO.
INCORPORATED
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
MERRILL LYNCH & CO.
J.P. MORGAN SECURITIES INC.
APRIL 20, 1994
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SECURITIES
OFFERED HEREBY AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
NO PERSON IS AUTHORIZED BY THE COMPANY OR BY THE UNDERWRITERS OR ANY DEALER
TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE
CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE
ACCOMPANYING PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN SO AUTHORIZED. NEITHER
THIS PROSPECTUS SUPPLEMENT NOR THE ACCOMPANYING PROSPECTUS CONSTITUTES AN OFFER
TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE
SECURITIES DESCRIBED IN THIS PROSPECTUS SUPPLEMENT OR AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY JURISDICTION TO ANY
PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION. THE
DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS OR ANY
SALE MADE HEREUNDER DOES NOT IMPLY THAT THE INFORMATION CONTAINED HEREIN OR
THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE ON WHICH SUCH
INFORMATION IS GIVEN.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
PROSPECTUS SUPPLEMENT
The Company............................................................................................... S-3
Recent Events............................................................................................. S-3
Use of Proceeds........................................................................................... S-3
Ratio of Earnings to Fixed Charges........................................................................ S-4
Selected Supplemental Consolidated Financial Data......................................................... S-4
Description of the Debentures............................................................................. S-6
Underwriting.............................................................................................. S-7
Legal Opinions............................................................................................ S-7
PROSPECTUS
Available Information..................................................................................... 2
Incorporation of Certain Information by Reference......................................................... 2
The Company............................................................................................... 4
Ratio of Earnings to Fixed Charges........................................................................ 4
Use of Proceeds........................................................................................... 4
Description of the Debt Securities........................................................................ 4
Plan of Distribution...................................................................................... 12
Legal Opinions............................................................................................ 12
Experts................................................................................................... 13
</TABLE>
S-2
<PAGE>
THE COMPANY
Columbia/HCA Healthcare Corporation (the "Company") is a healthcare services
company that is primarily engaged in buying, selling, owning and operating
general, acute care and specialty hospitals and related healthcare facilities.
As of March 31, 1994, the Company operated 196 hospitals located in 26 states
and two foreign countries.
On February 10, 1994, the Company acquired HCA-Hospital Corporation of
America ("HCA") through a merger transaction accounted for as a pooling of
interests (the "HCA Merger"). Effective September 1, 1993, the Company
consummated a merger (the "Galen Merger") with Galen Health Care, Inc., a
Delaware corporation ("Galen"), pursuant to which a wholly owned subsidiary of
the Company merged with and into Galen in a transaction accounted for as a
pooling of interests. As a result of the Galen Merger, Galen became a wholly
owned subsidiary of the Company. Galen is a healthcare services company that
primarily owns and operates acute care hospitals. Galen began operations as an
independent publicly held corporation upon the distribution of all of its common
stock (the "Spinoff") by its then 100% owner Humana Inc. ("Humana"), on March 1,
1993.
The Company was formed in January 1990 as a Nevada corporation and
reincorporated in Delaware in September 1993. The Company's principal executive
offices are located at 201 West Main Street, Louisville, Kentucky 40202, and its
telephone number at such address is (502) 572-2000.
RECENT EVENTS
In connection with the HCA Merger, the Company established new revolving
credit facilities (the "Credit Facilities") with Chemical Bank as Agent and
numerous other banks and financial institutions as parties thereto in an
aggregate amount of $3.0 billion. The Credit Facilities consist of a $1 billion
four-year revolving credit facility and a $2 billion 364-day revolving credit
facility. The Credit Facilities provide credit support for the Company's $600
million Section 3(a)3 and $1.9 billion Section 4(2) commercial paper programs.
The Credit Facilities contain customary covenants, including (a) limitations on
additional debt and liens, (b) limitations on sales of assets, mergers and
changes of ownership and (c) maintenance of interest coverage.
Upon consummation of the HCA Merger, the Company repaid approximately $1.2
billion outstanding under the HCA bank credit agreements from cash, commercial
paper and bank borrowings. HCA's bank facilities were then cancelled. As a
result of this and certain other refinancing transactions, the Company expects
to incur an extraordinary loss of approximately $90 million on an after-tax
basis in the first quarter of 1994. The purpose of these refinancing
transactions is to reduce future interest expense.
USE OF PROCEEDS
The net proceeds from the sale of the Debentures offered hereby will be used
to repay indebtedness under the Company's four-year revolving credit facility,
which is one of the Credit Facilities that originated from the refinancing of
HCA's bank credit agreements. The current rate of the Company's 30-day LIBOR
borrowings (with maturities through May 16, 1994) under the four-year revolving
credit facility is 3.95%. See "Recent Events" for a description of the Credit
Facilities.
S-3
<PAGE>
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of the Company's consolidated
earnings to fixed charges and gives effect to the HCA Merger consummated on
February 10, 1994 for all periods presented.
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
- -----------------------------------------------------
1993 1992 1991 1990 1989
- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C>
3.42x 2.11x 1.82x 1.85x 1.83x
</TABLE>
For the purpose of computing the ratio of earnings to fixed charges,
"earnings" consists of income from continuing operations before income taxes,
minority interest and fixed charges. "Fixed charges" consists of interest
expense, debt amortization costs and one-third of rent expense, which
approximates the interest portion of rent expense.
SELECTED SUPPLEMENTAL CONSOLIDATED FINANCIAL DATA
The following supplemental consolidated financial data consists of
supplemental consolidated statements of operations of the Company for the years
ended December 31, 1993, 1992 and 1991 and certain summarized data with respect
to the Company's financial position as of December 31, 1993, 1992 and 1991, in
each case giving effect to the HCA Merger. The selected supplemental
consolidated financial data should be read in conjunction with the financial
statements and notes incorporated by reference in the accompanying Prospectus.
S-4
<PAGE>
COLUMBIA/HCA HEALTHCARE CORPORATION
SELECTED SUPPLEMENTAL CONSOLIDATED FINANCIAL DATA
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
1993 1992 1991
--------- --------- ---------
<S> <C> <C> <C>
SUMMARY OF OPERATIONS:
Revenues..................................................................... $ 10,252 $ 9,932 $ 9,598
--------- --------- ---------
Salaries, wages and benefits................................................. 4,215 4,112 3,976
Supplies..................................................................... 1,664 1,613 1,467
Other operating expenses..................................................... 1,893 1,849 1,739
Provision for doubtful accounts.............................................. 542 515 508
Depreciation and amortization................................................ 554 541 524
Interest expense............................................................. 321 401 597
Investment income............................................................ (66) (81) (64)
Non-recurring transactions................................................... 151 439 300
--------- --------- ---------
9,274 9,389 9,047
--------- --------- ---------
Income from continuing operations before minority interest and income
taxes....................................................................... 978 543 551
Minority interest in earnings of consolidated entities....................... 9 10 9
--------- --------- ---------
Income from continuing operations before income taxes........................ 969 533 542
Provision for income taxes................................................... 394 294 189
--------- --------- ---------
Income from continuing operations............................................ $ 575 $ 239 $ 353
--------- --------- ---------
--------- --------- ---------
Earnings per common and common equivalent share from continuing operations... $ 1.70 $ .73 $ 1.20
FINANCIAL POSITION:
Assets (1)................................................................... $ 10,216 $ 10,347 $ 10,843
Working capital.............................................................. 573 606 635
Long-term debt, including amounts due within one year (1)(2)................. 3,698 3,656 5,158
Minority interest in equity of consolidated entities......................... 57 31 23
Common stockholders' equity (1)(2)........................................... 3,471 3,691 2,822
<FN>
- ------------------------
(1) The Spinoff was effected on March 1, 1993. Common stockholders' equity was
reduced by $802 million resulting from the following transactions with
Humana: (i) distributions of the net assets of the health plan business
($392 million) and the net assets of a hospital facility ($25 million),
(ii) payment of cash ($135 million) and (iii) issuance of notes ($250
million).
(2) On March 4, 1992, HCA completed the issuance and sale of 39,100,000 shares
of its Class A Common Stock at an initial public offering price of $21.50
per share. The net proceeds from the offering (after deducting expenses
and underwriting discounts and commissions) were used to repay $352
million of debt outstanding under HCA's bank credit agreement, to pay $3.5
million in fees and expenses relating to amending the bank credit
agreement and to redeem, effective April 3, 1992, its 15 3/4% Subordinated
Discount Debentures and related interest aggregating $444 million.
</TABLE>
S-5
<PAGE>
DESCRIPTION OF THE DEBENTURES
The 8.36% Debentures Due 2024 (the "Debentures") offered hereby will be
issued under an Indenture, dated as of December 15, 1993, between the Company
and The First National Bank of Chicago, as Trustee, as supplemented from time to
time (the "Indenture"). The form of the Indenture is filed as an exhibit to the
Registration Statement of which the accompanying Prospectus is a part. The
following summary of certain provisions of the Indenture and of the Debentures
(referred to in the accompanying Prospectus as the "Debt Securities")
supplements, and to the extent inconsistent therewith replaces, the summaries of
certain provisions of the Debt Securities set forth in the accompanying
Prospectus, to which reference is hereby made. Such summary does not purport to
be complete and is subject to, and is qualified in its entirety by reference to,
all provisions of the Indenture, including the definitions therein of certain
terms.
The Debentures offered hereby will be limited to $150,000,000 aggregate
principal amount and will mature on April 15, 2024. The Debentures will bear
interest at the rate per annum shown on the cover of this Prospectus Supplement,
computed on the basis of a 360-day year of twelve 30-day months, from April 15,
1994 or from the most recent interest payment date to which interest has been
paid or provided for, payable semiannually on April 15 and October 15 of each
year, beginning on October 15, 1994. Interest payable on any Debenture which is
punctually paid or duly provided for on any interest payment date shall be paid
to the person in whose name such Debenture is registered at the close of
business on April 1 and October 1, as the case may be, preceding such interest
payment date. Principal of and interest on the Debentures will initially be
payable and the Debentures will be transferable at the Corporate Trust Office of
The First National Bank of Chicago, the Trustee, currently located at 14 Wall
Street, New York, New York 10005, provided that payment of interest may be made
at the option of the Company by checks mailed to the registered holders of the
Debentures.
The Debentures are not redeemable by the Company prior to maturity. The
Debentures will be subject to defeasance and covenant defeasance as provided in
the accompanying Prospectus.
The Debentures will be issued only in registered form in denominations of
$1,000 and any integral multiple thereof. The Debentures will be issued in
book-entry form only. The Debentures may be presented for transfer or exchange
at the corporate trust office of the Trustee in New York City. Debentures may be
exchanged for Debentures of other authorized denominations. Upon surrender for
exchange or transfer of any Debenture, the Trustee shall authenticate and
deliver in exchange for such Debenture, a Debenture or Debentures of the
appropriate series and denomination and of an equal principal amount. No service
charge will be imposed upon the holder of Debentures in connection with
exchanges for Debentures of a different denomination or for transfer thereof,
but the Trustee may charge the party requesting any transfer, exchange or
registration of the Debentures a sum sufficient to reimburse it for any stamp or
other tax or other governmental charge required to be paid in connection with
such transfer, exchange or registration. The Company and the Trustee may treat
the person in whose name any Debenture is registered as the owner of such
Debenture for all purposes.
REDEMPTION AT OPTION OF HOLDER
The Debentures will be redeemable on April 15, 2004, at the option of the
registered holders of the Debentures, at 90.95% of their principal amount
together with interest payable to the redemption date. In order for a Debenture
to be redeemed, the Company must receive at its office or agency in New York,
New York, during the period from and including February 15, 2004 to and
including March 15, 2004 (or, if such March 15, 2004 is not a Business Day, the
next succeeding Business Day), the Debenture with the form entitled "Option to
Require Redemption on April 15, 2004" on the reverse of the Debenture duly
completed. Any such notice received by the Company during the period from and
including February 15, 2004 to and including March 15, 2004 shall be
irrevocable. The redemption option may be exercised by the holder of a Debenture
for less than the entire principal amount of the Debenture, provided the
principal amount which is to be redeemed is equal to $1,000 or an integral
multiple of $1,000. All questions as to the validity, form, eligibility
(including time of receipt) and acceptance of any Debenture for redemption will
be determined by the Company, whose determination will be final and binding.
S-6
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in the Pricing Agreement
(which incorporates by reference the terms of the Underwriting Agreement), the
Company has agreed to sell to each of the Underwriters named below, severally,
and each of the Underwriters has severally agreed to purchase the principal
amount of the Debentures set forth opposite its name below.
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
OF
UNDERWRITERS DEBENTURES
- -------------------------------------------------------------------------------------- ----------------
<S> <C>
Morgan Stanley & Co. Incorporated..................................................... $ 37,500,000
Donaldson, Lufkin & Jenrette Securities Corporation................................... 37,500,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.............................................................. 37,500,000
J.P. Morgan Securities Inc. .......................................................... 37,500,000
----------------
Total............................................................................... $ 150,000,000
----------------
----------------
</TABLE>
The Underwriting Agreement provides that the obligation of the Underwriters
to pay for and accept delivery of the Debentures is subject to the approval of
certain legal matters by their counsel and to certain other conditions. Under
the terms and conditions of the Pricing Agreement, the Underwriters are
committed to take and pay for all of the Debentures, if any are taken.
The Underwriters initially propose to offer the Debentures in part directly
to purchasers at the initial public offering price set forth on the cover page
of this Prospectus Supplement and in part to certain securities dealers at such
price less a concession of .40% of the principal amount of the Debentures. The
Underwriters may allow, and such dealers may reallow, a concession not to exceed
.25% of the principal amount of the Debentures to certain brokers and dealers.
After the initial offering of the Debentures, the offering price and other
selling terms may from time to time be varied by the Underwriters.
The Debentures are a new issue of securities with no established trading
market. The Company has been advised by the Underwriters that the Underwriters
intend to make a market in the Debentures but are not obligated to do so and may
discontinue market making at any time without notice. No assurance can be given
as to the liquidity of the trading market for the Debentures.
The Company has agreed to indemnify the several Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as amended.
From time to time the Underwriters have provided, and continue to provide,
investment banking services to the Company. In the ordinary course of their
business, affiliates of J.P. Morgan Securities Inc. have engaged, and may in the
future engage, in commercial banking transactions with the Company and
affiliates of the Company.
LEGAL OPINIONS
Certain matters with respect to the validity of the Debentures offered
hereby will be passed upon for the Company by Stephen T. Braun, Senior Vice
President and General Counsel of the Company, and for the Underwriters by
Jenkens & Gilchrist, a Professional Corporation, Dallas, Texas. Jenkens &
Gilchrist, a Professional Corporation, has rendered, and continues to render,
certain legal services to the Company. As of January 31, 1994, Mr. Braun owned
approximately 1,072 shares and had options to purchase 44,500 shares of the
Company's Common Stock.
S-7
<PAGE>
PROSPECTUS
COLUMBIA HEALTHCARE CORPORATION
DEBT SECURITIES
------------------
Columbia Healthcare Corporation (the "Company") may offer at any time, or
from time to time, its debt securities consisting of debentures, notes and/or
other unsecured evidences of indebtedness (the "Debt Securities") with an
aggregate initial offering price not to exceed $800,000,000. The Company will
offer the Debt Securities to the public on terms determined by market
conditions. The Debt Securities may be offered separately or together, in
separate series, in amounts, at prices and on terms to be determined at the time
of sale and to be set forth in supplements to this Prospectus. The Debt
Securities may be sold for U.S. dollars or one or more foreign or composite
currencies and the principal of, premium, if any, and interest, if any, on the
Debt Securities may likewise be payable in U.S. dollars or one or more foreign
or composite currencies.
The Debt Securities will be senior obligations of the Company, unsecured and
unsubordinated to any other existing indebtedness of the Company.
The terms of the Debt Securities, including where applicable the specific
designation, aggregate principal amount, denominations, maturity, rate (which
may be fixed or variable) and time of payment of interest, if any, purchase
price, any terms for mandatory redemption or redemption at the option of the
Company or the holder and any terms for sinking fund payments, the initial
public offering price, and the names of any underwriters or agents, the
principal amounts, if any, to be purchased by underwriters, the compensation, if
any, of such underwriters or agents and any other terms in connection with the
offering and sale of the Debt Securities in respect of which this Prospectus is
being delivered, will be set forth in the accompanying Prospectus Supplement
(the "Prospectus Supplement").
The Debt Securities may be issuable in registered definitive form
("Certificated Notes") or may be represented by one or more permanent global
securities ("Global Notes"), as specified in the applicable Prospectus
Supplement. Except in limited circumstances, owners of beneficial interests in a
Global Note will not be entitled to receive physical delivery of Certificated
Notes and will not be considered the holders thereof. See "Description of the
Debt Securities -- Book-Entry System."
The Debt Securities may be sold to underwriters, to or through dealers,
acting as principals for their own account or acting as agents, or directly to
other purchasers. The Company may indemnify such underwriters, dealers and
agents against certain liabilities, including liabilities under the Securities
Act of 1933. See "Plan of Distribution."
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PRO-
SPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
------------------------
This Prospectus may not be used to consummate sales of Debt Securities
unless accompanied by a Prospectus Supplement.
November 22, 1993
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, therefore, files
reports, proxy statements and other information with the Securities and Exchange
Commission (the "Commission"). Such reports, proxy statements and other
information can be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549;
at its New York Regional Office, Seven World Trade Center, New York, New York
10048; and at its Chicago Regional Office, Northwestern Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material can
be obtained at prescribed rates, by writing to the Public Reference Section of
the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549. Such material
can also be inspected at the New York Stock Exchange, 20 Broad Street, New York,
New York 10005, on which the Company's Common Stock is listed.
This Prospectus constitutes a part of a Registration Statement on Form S-3
(together with all amendments, supplements and exhibits thereto, the
"Registration Statement") filed by the Company with the Commission under the
Securities Act of 1933, as amended (the "Securities Act"). This Prospectus omits
certain of the information set forth in the Registration Statement (in
accordance with the rules and regulations of the Commission), and reference is
hereby made to the Registration Statement and related exhibits for further
information with respect to the Company and the Debt Securities.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated herein by reference:
1. Annual Report on Form 10-K for the year ended December 31, 1992 (the
"Form 10-K").
2. The portions of the Proxy Statement for the Annual Meeting of
Stockholders held May 20, 1993 that have been incorporated by reference in
the Form 10-K.
3. Quarterly Reports on Form 10-Q for the interim periods ended March
31, 1993, June 30, 1993 and September 30, 1993.
4. Current Reports on Form 8-K dated June 10, 1993, September 16, 1993,
September 29, 1993, October 2, 1993, November 5, 1993, November 10, 1993 and
November 15, 1993.
5. Registration Statement on Form 8-A dated August 31, 1993.
6. Registration Statement on Form S-4 (File No. 33-49773).
7. Registration Statement on Form S-4 (File No. 33-50735).
The following Galen Health Care, Inc. documents are incorporated herein by
reference:
1. General Form for Registration of Securities on Form 10 dated
December 31, 1992 (File No. 1-11233).
2. Form 8, Amendment No. 1 to General Form for Registration of
Securities on Form 10 dated February 17, 1993.
3. Quarterly Reports on Form 10-Q for the interim periods ended
February 28, 1993 and May 31, 1993.
4. Current Report on Form 8-K dated June 10, 1993.
All reports and other documents subsequently filed by the Company pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Prospectus and prior to the termination of this offering shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of filing
of such reports and documents. Any statement set forth herein or in a document,
all or a
2
<PAGE>
portion of which is incorporated or deemed to be incorporated by reference
herein, will be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement set forth herein or in a subsequently
filed document deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
THE COMPANY WILL FURNISH, WITHOUT CHARGE, TO EACH PERSON TO WHOM A
PROSPECTUS AND PROSPECTUS SUPPLEMENT ARE DELIVERED, UPON WRITTEN OR ORAL
REQUEST, A COPY OF ANY OR ALL OF THE FOREGOING DOCUMENTS INCORPORATED HEREIN BY
REFERENCE OTHER THAN EXHIBITS TO SUCH DOCUMENTS (UNLESS SUCH EXHIBITS ARE
SPECIFICALLY INCORPORATED BY REFERENCE THEREIN). REQUESTS FOR SUCH DOCUMENTS
SHOULD BE SUBMITTED IN WRITING TO JOAN O. KROGER, SECRETARY, COLUMBIA HEALTHCARE
CORPORATION, 201 WEST MAIN STREET, LOUISVILLE, KENTUCKY 40202 OR BY TELEPHONE AT
(502) 572-2259.
3
<PAGE>
THE COMPANY
The Company is a health care services company that is primarily engaged in
buying, selling, owning and operating general, acute care and specialty
hospitals and related health care facilities. As of September 30, 1993, the
Company operated 95 hospitals with 21,675 licensed beds, located in 18 states
and two foreign countries.
Effective September 1, 1993, the Company consummated a merger (the "Galen
Merger") with Galen Health Care, Inc., a Delaware corporation ("Galen"),
pursuant to which a wholly owned subsidiary of the Company merged with and into
Galen, as a result of which Galen became a wholly owned subsidiary of the
Company. Galen is a health care services company that primarily owns and
operates acute care hospitals. Galen began operations as an independent publicly
held corporation upon the distribution of all of its common stock (the
"Spinoff") by its then 100% owner Humana Inc. ("Humana"), on March 1, 1993.
The Company was formed in January 1990 as a Nevada corporation and
reincorporated in Delaware in September 1993. The Company's principal executive
offices are located at 201 West Main Street, Louisville, Kentucky 40202, and its
telephone number at such address is (502) 572-2000.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of the Company's consolidated
earnings to fixed charges and gives effect to the Galen Merger consummated on
September 1, 1993 for all periods presented.
<TABLE>
<CAPTION>
FOR THE
NINE MONTHS ENDED
SEPTEMBER 30, FOR THE YEARS ENDED DECEMBER 31,
- -------------------- -----------------------------------------------------
1993 1992 1992 1991 1990 1989 1988
- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
2.54x 2.95x 3.16x 4.94x 4.72x 3.85x 3.60x
</TABLE>
For the purpose of computing the ratio of earnings to fixed charges,
"earnings" consists of income from continuing operations before income taxes,
minority interest and fixed charges. "Fixed charges" consists of interest
expense, debt amortization costs and one-third of rent expense, which
approximates the interest portion of rent expense. The computation for the nine
months ended September 30, 1993 is based on results of operations which include
$151 million of restructuring charges related to the Galen Merger. The
computations for the nine months ended September 30, 1992 and the year ended
December 31, 1992 are based on results of operations which include $138 million
of restructuring charges recorded primarily in connection with the Spinoff.
Interest expense related to the $385 million of indebtedness incurred by Galen
in connection with the Spinoff on March 1, 1993 is not reflected for periods
prior to the Spinoff.
A statement setting forth the computation of the ratio of earnings to fixed
charges for each of the five years ended December 31 is filed as an exhibit to
the Registration Statement of which this Prospectus is a part. The computation
for the nine months ended September 30, 1993 and 1992 is filed as an exhibit to
the related Form 10-Q which is incorporated by reference in such Registration
Statement.
USE OF PROCEEDS
The net proceeds from the sale of the Debt Securities offered hereby will be
used for general corporate purposes, which may include, without limitation,
repayment of commercial paper and other indebtedness, additional capitalization
of the Company's subsidiaries and affiliates, capital expenditures and possible
acquisitions, unless a specific determination as to the use of the proceeds is
otherwise described in the accompanying Prospectus Supplement.
DESCRIPTION OF THE DEBT SECURITIES
The following description summarizes certain general terms and provisions of
the Debt Securities. The particular terms of the Debt Securities, including the
nature of any variations from the following general provisions, will be
described in the Prospectus Supplement relating to such Debt Securities.
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The Debt Securities, which will represent senior indebtedness of the
Company, may be issued in one or more series under an Indenture between the
Company and The First National Bank of Chicago, as Trustee (the "Trustee"),
dated as of December 16, 1993 (the "Indenture"). The Indenture has been filed
with the Commission as an exhibit to the Registration Statement and is
incorporated by reference herein.
The following summary of certain provisions of the Indenture does not
purport to be complete and is subject to, and is qualified in its entirety by
reference to, all provisions of the Indenture, including the definition therein
of certain terms. All article and section references appearing herein are to
articles and sections of the Indenture. Unless otherwise defined herein, all
capitalized terms shall have the definitions set forth in the Indenture.
GENERAL
Since the Company is a holding company, the rights of the Company to
participate in any distribution of assets of any subsidiary upon its liquidation
or reorganization or otherwise (and thus the ability of holders of the Debt
Securities to benefit from such distribution) are subject to the prior claims of
creditors of that subsidiary, except to the extent that the Company may itself
be a creditor with recognized claims against that subsidiary. Claims on the
Company's subsidiaries by creditors may include claims of holders of
indebtedness and claims of creditors in the ordinary course of business. Such
claims may increase or decrease, and additional claims may be incurred in the
future.
The Indenture does not limit the aggregate principal amount of Debt
Securities that may be issued thereunder and provides that Debt Securities may
be issued from time to time in series. The Debt Securities will be unsecured
obligations of the Company and will rank on a parity with all other unsecured
and unsubordinated indebtedness of the Company. The Indenture limits the ability
of the Company and its Subsidiaries under certain circumstances to secure Debt
(as hereinafter defined) by mortgages on its Principal Properties (as
hereinafter defined), entering into Sale and Lease-Back Transactions or issuing
Subsidiary Debt or Preferred Stock as more fully described below.
The Prospectus Supplement will describe the following terms of the Debt
Securities being offered: (1) the title of the Debt Securities; (2) any limit on
the aggregate principal amount of the Debt Securities; (3) the date or dates on
which the Debt Securities may be issued and are or will be payable; (4) the rate
or rates per annum (which may be fixed or variable) at which the Debt Securities
will bear interest, if any, or the method by which such rate or rates shall be
determined, and the date or dates from which such interest, if any, will accrue;
(5) the date or dates on which such interest, if any, on the Debt Securities
will be payable and the Regular Record Dates for any such Interest Payment
Dates; and the extent to which, or the manner in which, any interest payable on
a global Debt Security ("Global Notes") on an Interest Payment Date will be paid
if other than in the manner described under "Book-Entry System" below; (6) each
office or agency where, subject to the terms of the Indenture as described below
under "Payment and Paying Agents," the principal of, and premium, if any, and
any interest on the Debt Securities will be payable and each office or agency
where, subject to the terms of the Indenture as described below under
"Denominations, Registration and Transfer," the Debt Securities may be presented
for registration of transfer or exchange; (7) the period or periods within
which, the price or prices at which, and the terms and conditions upon which the
Debt Securities may be redeemed at the option of the Company; (8) the
obligation, if any, of the Company to redeem, to repay or purchase the Debt
Securities pursuant to any sinking fund or analogous provisions or at the option
of a Holder thereof and the period or periods within which, the price or prices
at which and the terms and conditions upon which the Debt Securities will be
redeemed, repaid or purchased pursuant to any such obligation; (9) whether the
Debt Securities are to be issued with original issue discount within the meaning
of Section 1273(a) of the Internal Revenue Code of 1986, as amended (the
"Code"), and the regulations thereunder; (10) whether the Debt Securities are to
be issued in whole or in part in the form of one or more Global Notes and, if
so, the identity of the depositary, if any, for such Global Note or Notes; (11)
if other than Dollars, the Foreign Currency or Currencies or Foreign Currency
Units in which the principal of, and premium, if any, and any interest
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on the Debt Securities shall or may be paid and, if applicable, whether at the
election of the Company and/or the Holder, and the conditions and manner of
determining the exchange rate or rates; (12) any index used to determine the
amount of payment of principal of and premium, if any, and any interest on the
Debt Securities; (13) any addition to, or modification or deletion of, any
Events of Default or covenants provided for with respect to the Debt Securities;
(14) any other detailed terms and provisions of the Debt Securities which are
not inconsistent with the Indenture (Section 301). Any such Prospectus
Supplement will also describe any special provisions for the payment of
additional amounts with respect to the Debt Securities.
Debt Securities may be issued as Discount Securities to be sold at a
substantial discount below their principal amount. "Discount Securities" means
any Debt Securities issued with original issue discount for purposes of the
Code. Special United States income tax and other considerations applicable to
Discount Securities will be described in the Prospectus Supplement relating
thereto. Discount Securities may provide for the declaration or acceleration of
the Maturity of an amount less than the principal amount thereof upon the
occurrence of an Event of Default and the continuation thereof (Sections 101,
502).
DENOMINATIONS, REGISTRATION AND TRANSFER
Debt Securities of a series may be issuable in whole or in part in the form
of one or more Global Notes, as described below under "Book-Entry System."
Unless otherwise provided in an applicable Prospectus Supplement with respect to
a series of Debt Securities, the Debt Securities will be issuable in fully
registered form and in denominations of $1,000 or any multiple thereof. One or
more Global Notes will be issued in a denomination or aggregate denominations
equal to the aggregate principal amount of Outstanding Debt Securities of the
series to be represented by such Global Note or Notes. (Sections 201, 301, 302,
304).
Debt Securities of any series (other than a Global Note) will be
exchangeable for other Debt Securities of the same series and of a like
aggregate principal amount and tenor of different authorized denominations. Debt
Securities may be presented for exchange as provided above, and Debt Securities
(other than a Global Note) may be presented for registration of transfer (with
the form of transfer endorsed thereon duly executed), at the office of the
Security Registrar or co-Security Registrar designated by the Company for such
purpose with respect to any series of Debt Securities and referred to in an
applicable Prospectus Supplement, without service charge and upon payment of any
taxes and other governmental charges as described in the Indenture. Such
transfer or exchange will be effected upon the Security Registrar or co-Security
Registrar being satisfied with the documents of title and identity of the person
making the request. The Company has appointed the Trustee as Security Registrar
(Section 305).
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of, and premium, if any, and any interest on Debt Securities will
be made at the office of such Paying Agent or Paying Agents as the Company may
designate from time to time, except that at the option of the Company payment of
any interest may be made (i) by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register or (ii)
by wire transfer to an account maintained by the Person entitled thereto
(Section 307). Unless otherwise indicated in an applicable Prospectus
Supplement, payment of any installment of interest on Debt Securities will be
made to the Person in whose name such Debt Security is registered at the close
of business on the Regular Record Date for such interest (Section 307).
Unless otherwise indicated in an applicable Prospectus Supplement, the
Trustee will act as the Company's sole Paying Agent through its principal office
in the Borough of Manhattan, The City of New York, with respect to the Debt
Securities. Any Paying Agents outside the United States and other Paying Agents
in the United States initially designated by the Company for the Debt Securities
being offered will be named in an applicable Prospectus Supplement. The Company
may at any time
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designate additional Paying Agents or rescind the designation of any Paying
Agent or approve a change in the office through which any Paying Agent acts;
provided, however, the Company will be required to maintain a Paying Agent in
each Place of Payment for such series.
All moneys paid by the Company to the Trustee or a Paying Agent for the
payment of principal of, and premium, if any, and any interest on any Debt
Security which remain unclaimed at the end of two years after such principal,
premium or interest shall have become due and payable will be repaid to the
Company, and the Holder of such Debt Security may thereafter look only to the
Company for payment thereof (Section 1103).
BOOK-ENTRY SYSTEM
The Debt Securities of a series may be issued in whole or in part in the
form of one or more Global Notes that will be deposited with or on behalf of a
depositary located in the United States (a "Depositary") identified in the
Prospectus Supplement relating to such series.
The specific terms of the depositary arrangement with respect to any Debt
Securities of a series will be described in the Prospectus Supplement relating
to such series. The Company anticipates that the following provisions will apply
to all depositary arrangements.
Unless otherwise specified in an applicable Prospectus Supplement, Debt
Securities that are to be represented by a Global Note to be deposited with or
on behalf of a Depositary will be represented by a Global Note registered in the
name of such Depositary or its nominee. Upon the issuance of a Global Note in
registered form, the Depositary for such Global Note will credit, on its
book-entry registration and transfer system, the respective principal amounts of
the Debt Securities represented by such Global Note to the accounts of
institutions that have accounts with such Depositary or its nominee
("participants"). The accounts to be credited shall be designated by the
underwriters or agents of such Debt Securities or by the Company, if such Debt
Securities are offered and sold directly by the Company. Ownership of beneficial
interests in such Global Notes will be limited to participants or persons that
may hold interests through participants. Ownership of beneficial interests by
participants in such Global Notes will be shown on, and the transfer of that
ownership interest will be effected only through, records maintained by the
Depositary or its nominee for such Global Note. Ownership of beneficial
interests in Global Notes by persons that hold through participants will be
shown on, and the transfer of that ownership interest within such participant
will be effected only through, records maintained by such participant. The laws
of some jurisdictions require that certain purchasers of securities take
physical delivery of such securities in definitive form. Such limits and such
laws may impair the ability to transfer beneficial interests in a Global Note.
So long as the Depositary for a Global Note, or its nominee, is the
registered owner of such Global Note, such Depositary or such nominee, as the
case may be, will be considered the sole owner or holder of the Debt Securities
represented by such Global Note for all purposes under the Indenture governing
such Debt Securities. Except as set forth below, owners of beneficial interests
in such Global Notes will not be entitled to have Debt Securities of the series
represented by such Global Note registered in their names, will not receive or
be entitled to receive physical delivery of Debt Securities of such series in
definitive form and will not be considered the owners or holders thereof under
the Indenture.
Payment of principal of, premium, if any, and any interest on Debt
Securities registered in the name of or held by a Depositary or its nominee will
be made to the Depositary or its nominee, as the case may be, as the registered
owner or the holder of the Global Note representing such Debt Securities. None
of the Company, the Trustee, any Paying Agent or the Security Registrar for such
Debt Securities will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in a Global Note for such Debt Securities or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
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The Company expects that the Depositary for Debt Securities of a series,
upon receipt of any payment of principal, premium or interest in respect of a
permanent Global Note, will credit immediately participants' accounts with
payments in amounts proportionate to their respective beneficial interests in
the principal amount of such Global Note as shown on the records of such
Depositary. The Company 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,"
and will be the responsibility of such participants.
A Global Note may not be transferred except as a whole by the Depositary for
such Global Note to a nominee of such Depositary or by a nominee of such
Depositary to such Depositary or another nominee of such Depositary or by such
Depositary or any such nominee to a successor of such Depositary or a nominee of
such successor (Section 304). If a Depositary for Debt Securities of a series is
at any time unwilling or unable to continue as Depositary and a successor
Depositary is not appointed by the Company within 90 days, the Company will
issue Debt Securities in definitive registered form in exchange for the Global
Note or Notes representing such Debt Securities. In addition, the Company may at
any time and in its sole discretion determine not to have any Debt Securities
represented by one or more Global Notes and, in such event, will issue Debt
Securities in definitive registered form in exchange for all the Global Notes
representing such Debt Securities. In any such instance, an owner of a
beneficial interest in a Global Note will be entitled to physical delivery in
definitive form of Debt Securities of the series represented by such Global Note
equal in principal amount to such beneficial interest and to have such Debt
Securities registered in its name.
LIMITATIONS ON THE COMPANY AND CERTAIN SUBSIDIARIES
LIMITATIONS ON MORTGAGES
The Indenture provides that neither the Company nor any Subsidiary of the
Company will issue, assume or guarantee any notes, bonds, debentures or other
similar evidences of indebtedness for money borrowed ("Debt") secured by any
mortgages, liens, pledges or other encumbrances ("Mortgages") upon any Principal
Property (as hereinafter defined) without effectively providing that the Debt
Securities (together with, if the Company so determines, any other indebtedness
or obligation then existing or thereafter created ranking equally with the Debt
Securities) shall be secured equally and ratably with (or prior to) such Debt so
long as such Debt shall be so secured, except that this restriction will not
apply to: (1) Mortgages securing the purchase price or cost of construction of
property (or additions, substantial repairs, alterations or substantial
improvements thereto if the amount of such Debt does not exceed the cost
thereof), provided such Debt and the Mortgages are incurred within 18 months of
the acquisition or completion of construction and full operation (or within 18
months of the completion of such repairs, alterations or improvements); (2)
Mortgages existing on property at the time of its acquisition by the Company or
a Subsidiary or on the property of a corporation at the time of the acquisition
of such corporation by the Company or a Subsidiary (including acquisitions
through merger or consolidation); (3) Mortgages to secure Debt on which the
interest payments are exempt from federal income tax under Section 103 of the
Code; (4) Mortgages in favor of the Company or a Consolidated Subsidiary; (5)
Mortgages existing on the date of the Indenture; (6) certain Mortgages to
governmental entities; (7) Mortgages incurred in connection with the borrowing
of funds if within 120 days such funds are used to repay Debt in the same
principal amount secured by other Mortgages on Principal Property with an
independently appraised fair market value at least equal to the appraised fair
market value of the Principal Property which secures the new Mortgage; (8)
Mortgages incurred within 90 days (or any longer period, not in excess of one
year, as permitted by law) after acquisition of the related Principal Property
arising solely in connection with the transfer of tax benefits in accordance
with Section 168(f)(8) of the Code (or any similar provision adopted hereafter);
and (9) any extension, renewal or replacement of any Mortgage referred to in the
foregoing clauses (1) through (8) provided the amount secured is not increased
(Section 1105).
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LIMITATIONS ON SALE AND LEASE-BACK
The Indenture provides that neither the Company nor any Subsidiary will
enter into any Sale and Lease-Back Transaction with respect to any Principal
Property with any person (other than the Company or a Subsidiary) unless either
(i) the Company or such Subsidiary would be entitled, pursuant to the provisions
described in clauses (1) through (9) under "Limitations on Mortgages" above, to
incur Debt secured by a Mortgage on the Principal Property to be leased without
equally and ratably securing the Debt Securities, or (ii) the Company during or
immediately after the expiration of 120 days after the effective date of such
transaction applies to the voluntary retirement of its Funded Debt and/or the
acquisition or construction of Principal Property an amount equal to the greater
of the net proceeds of the sale of the property leased in such transaction or
the fair value in the opinion of the chief financial officer of the Company of
the leased property at the time such transaction was entered into, in each case
net of the principal amount of all debt securities delivered under the
Indenture, including the Debt Securities (Section 1106).
LIMITATIONS ON SUBSIDIARY DEBT AND PREFERRED STOCK
The Indenture provides that the Company may not permit any Restricted
Subsidiary (which term includes most of the Company's existing Subsidiaries) to,
directly or indirectly, create, incur, issue, assume or otherwise become liable
with respect to, extend the maturity of or become responsible for the payment
of, as applicable, any Debt or Preferred Stock other than (1) Debt outstanding
on the date of the Indenture; (2) Debt of a Restricted Subsidiary which
represents the assumption by such Restricted Subsidiary of Debt of another
Restricted Subsidiary; (3) Debt or Preferred Stock of any corporation or
partnership existing at the time such corporation or partnership becomes a
Subsidiary; (4) Debt of a Restricted Subsidiary arising from agreements
providing for indemnification, adjustment of purchase price or similar
obligations or from guarantees, letters of credit, surety bonds or performance
bonds securing any obligations of the Company or any of its Subsidiaries
incurred or assumed in connection with the disposition of any business, property
or Subsidiary, other than guarantees or similar credit support by any Restricted
Subsidiary of indebtedness incurred by any Person acquiring all or any portion
of such business, property or Subsidiary for the purpose of financing such
acquisition; (5) Debt of a Restricted Subsidiary in respect of performance,
surety and other similar bonds, bankers acceptances and letters of credit
provided by such Restricted Subsidiary in the ordinary course of business; (6)
Debt secured by a Mortgage incurred to finance the purchase price or cost of
construction of property (or additions, substantial repairs, alterations or
substantial improvements thereto), provided that (A) such Mortgage and the Debt
secured thereby are incurred within 18 months of the later of such acquisition
or completion of construction (or such addition, repair, alteration or
improvement) and full operation thereof and (B) such Mortgage does not relate to
any property other than the property so purchased or constructed (or added,
repaired, altered or improved); (7) Permitted Subsidiary Refinancing Debt (as
defined in the Indenture); (8) Debt (including without limitation, Debt arising
from a guarantee) of a Restricted Subsidiary to the Company or another
Subsidiary, but only for so long as held or owned by the Company or another
Subsidiary; or (9) any obligation pursuant to a Sale and Lease-Back Transaction
permitted pursuant to the provisions described under "Limitations on Sale and
Lease-Back" above (Section 1107).
Notwithstanding the foregoing, the Company and any one or more Subsidiaries,
including Restricted Subsidiaries, may, without securing the Debt Securities,
issue, assume or guarantee Debt or Preferred Stock or enter into any Sale and
Lease-Back Transaction that would otherwise be subject to the foregoing
restrictions in an aggregate principal amount which, together with all other
such Debt or Preferred Stock of the Company and its Subsidiaries (not including
Debt or Preferred Stock permitted pursuant to the foregoing paragraphs) and the
aggregate Attributable Debt (as defined below) in respect of Sale and Lease-Back
Transactions does not exceed 15% of Consolidated Net Tangible Assets (as
hereinafter defined) of the Company and its Consolidated Subsidiaries (Section
1108).
The term Principal Property is defined to mean each acute-care hospital
providing general medical and surgical services (excluding equipment, personal
property and hospitals that primarily
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provide specialty medical services, such as psychiatric and obstetrical and
gynecological services) owned solely by the Company and/or one or more of its
Subsidiaries and located in the United States. The term Consolidated Net
Tangible Assets is defined to mean the total amount of assets (less applicable
reserves and other properly deductible items) after deducting therefrom (i) all
current liabilities as disclosed on the consolidated balance sheet of the
Company (excluding any thereof that are by their terms extendible or renewable
at the option of the obligor thereon to a time more than 12 months after the
time as of which the amount thereof is being computed and excluding any deferred
income taxes that are included in current liabilities), and (ii) all goodwill,
trade names, trademarks, patents, unamortized debt discount and expense and
other like intangible assets, all as set forth on the most recent consolidated
balance sheet of the Company and computed in accordance with generally accepted
accounting principles. The term Attributable Debt is defined to mean (i) as to
any capitalized lease obligations, the Debt carried on the balance sheet in
accordance with generally accepted accounting principles, and (ii) as to any
operating leases, the total net minimum rent required to be paid under such
leases during the remaining term thereof discounted at the rate of 1% per annum
over the weighted average yield to maturity of all debt securities issued and
outstanding under the Indenture, including any outstanding Debt Securities,
compounded semi-annually (Section 101).
EVENTS OF DEFAULT
The following are Events of Default under the Indenture with respect to Debt
Securities of any series: (a) failure to pay principal of or any premium on any
Debt Security of that series when due; (b) failure to pay any interest on any
Debt Security of that series when due, continued for 30 days; (c) failure to
deposit any sinking fund payment in respect of any Debt Security of that series
when due; (d) failure to perform any other covenant of the Company in the
Indenture (other than a covenant included in the Indenture solely for the
benefit of a series of Debt Securities other than the series), continued for 60
days after written notice as provided in the Indenture; (e) certain events in
bankruptcy, insolvency or reorganization; and (f) any other Event of Default
provided with respect to Debt Securities of that series (Section 501). If any
Event of Default with respect to Debt Securities of any series at any time
Outstanding occurs and is continuing, either the Trustee or the Holders of at
least 25% in aggregate principal amount of the Outstanding Debt Securities of
that series may declare the principal amount (or, if the Debt Securities of that
series are Discount Securities, such portion of the principal amount as may be
specified in the terms of that series) of all the Debt Securities of that series
to be due and payable immediately. At any time after a declaration of
acceleration with respect to Debt Securities of any series has been made, but
before a judgment or decree based on acceleration has been obtained, the Holders
of a majority in aggregate principal amount of Outstanding Debt Securities of
that series may, under certain circumstances, rescind and annul such
acceleration (Section 502).
The Indenture provides that, subject to the duty of the Trustee during
default to act with the required standard of care, the Trustee will be under no
obligation to exercise any of its rights or powers under the Indenture at the
request or direction of any of the Holders, unless such Holders shall have
offered to the Trustee reasonable indemnity (Section 603). Subject to such
provisions for the indemnification of the Trustee, the Holders of a majority in
aggregate principal amount of the Outstanding Debt Securities of any series will
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or power
conferred on the Trustee, with respect to the Debt Securities of that series
(Section 512).
The Company is required to furnish the Trustee annually with a statement as
to the performance by the Company of certain of its obligations under the
Indenture and as to any default in such performance (Section 1109).
MODIFICATION AND WAIVER
Modifications of and amendments to the Indenture may be made by the Company
and the Trustee with the consent of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Debt Securities of each series
affected by such modification or amendment; provided,
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however, that no such modification or amendment may without the consent of the
Holder of each Outstanding Debt Security affected thereby, (a) change the Stated
Maturity of the principal of, or any installment of interest, if any, on, any
Debt Security, (b) reduce the principal amount of, or any premium or interest
on, any Debt Security, (c) reduce the amount of principal of Discount Securities
payable upon acceleration of the maturity thereof, (d) change the currency of
payment of principal of, or any premium or interest on, any Debt Security, (e)
impair the right to institute suit for the enforcement of any payment on or with
respect to any Debt Security, or (f) reduce the percentage in principal amount
of Outstanding Debt Securities of any series, the consent of whose Holders is
required for modification or amendment of the Indenture or for waiver of
compliance with certain provisions of the Indenture or for waiver of certain
defaults (Section 1002).
The Holders of a majority in aggregate principal amount of the Outstanding
Debt Securities of each series may, on behalf of all Holders of Debt Securities
of that series, waive any past default under the Indenture with respect to Debt
Securities of that series, except a default in the payment of principal or any
premium or interest or a covenant or provision that cannot be modified or
amended without the consent of the Holders of each Outstanding Debt Security
affected thereby (Section 513).
CONSOLIDATION, MERGER, SALE OR LEASE OF ASSETS
The Company, without the consent of the Holders of any of the Outstanding
Debt Securities under the Indenture, may consolidate with or merge into, or
transfer or lease its assets substantially as an entirety to any corporation
organized under the laws of any domestic jurisdiction, provided that the
successor corporation assumes the Company's obligations on the Debt Securities
and under the Indenture, that immediately after giving effect to the
transactions no Event of Default, and no event which, after notice or lapse of
time, or both, would become an Event of Default, shall have occurred and be
continuing, and that certain other conditions are met (Section 901).
DEFEASANCE
If so specified in the Prospectus Supplement with respect to the Debt
Securities of any series, the Company, at its option, (i) will be discharged
from any and all obligations in respect of the Debt Securities of such series
(except for certain obligations to register the transfer or exchange of Debt
Securities of such series, replace stolen, lost or mutilated Debt Securities of
such series, maintain paying agencies and hold moneys for payment in trust) or
(ii) will not be subject to provisions of the Indenture concerning limitations
upon Mortgages, Subsidiary Debt and Preferred Stock, Sale and Leaseback
Transactions, and consolidations, mergers and sales of assets, in each case if
the Company deposits with the Trustee, in trust, money or U.S. Government
Obligations (as defined) which through the payment of interest thereon and
principal thereof in accordance with their terms will provide money in an amount
sufficient to pay all the principal, premium, if any, and interest on the Debt
Securities of such series on the dates such payments are due in accordance with
the terms of such Debt Securities. To exercise any such option, the Company is
required, among other things, to deliver to the Trustee an opinion of counsel to
the effect that (1) the deposit and related defeasance would not cause the
Holders of the Debt Securities of such series to recognize income, gain or loss
for United States income tax purposes and (2) if the Debt Securities of such
series are then listed on any national securities exchange, such Debt Securities
would not be delisted from such exchange as a result of the exercise of such
option (Article Fourteen).
NOTICES
Notices to Holders will be given by mail to the addresses of such Holders as
they appear in the Security Register (Sections 101, 105).
GOVERNING LAW
The Indenture and the Debt Securities will be governed by, and construed in
accordance with, the laws of the State of New York (Section 111).
CONCERNING THE TRUSTEE
The Trustee has normal banking relationships with the Company.
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PLAN OF DISTRIBUTION
GENERAL
The Company may sell Debt Securities to or through underwriters or a group
of underwriters, directly to other purchasers, or through dealers or agents. The
distribution of the Debt Securities may be effected from time to time in one or
more transactions at a fixed price or prices, which may be changed, at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices or at negotiated prices. Each Prospectus Supplement will describe
the method of distribution, and time and place of delivery, of the offered Debt
Securities. The Company also may, from time to time, authorize dealers, acting
as the Company's agents, to solicit offers to purchase the offered Debt
Securities upon the terms and conditions set forth in any Prospectus Supplement.
In connection with the sale of Debt Securities, underwriters, dealers or
agents may receive compensation from the Company or from purchasers of Debt
Securities for whom they may act as agents, in the form of discounts,
concessions or commissions. Underwriters, dealers and agents that participate in
the distribution of Debt Securities may be deemed to be "underwriters," and any
discounts or commissions received by them and any profit on the resale of Debt
Securities by them may be deemed to be underwriting discounts and commissions,
under the Securities Act. Any such underwriter, dealer or agent will be
identified, and any such compensation will be described, in the Prospectus
Supplement relating to the offered Debt Securities.
Under agreements that may be entered into by the Company, underwriters,
dealers and agents that participate in the distribution of Debt Securities may
be entitled to indemnification by the Company against certain liabilities,
including liabilities under the Securities Act.
Each issuance of a series of Debt Securities will constitute a new issue of
securities with no established trading market. In the event that Debt Securities
of a series offered hereunder are not listed on a national securities exchange,
certain broker-dealers may make a market in the Debt Securities, but will not be
obligated to do so and may discontinue any market making at any time without
notice. No assurance can be given that any broker-dealer will make a market in
the Debt Securities of any series or as to the liquidity of the trading market
for such Debt Securities.
DELAYED DELIVERY ARRANGEMENT
If so indicated in the Prospectus Supplement relating to offered Debt
Securities, the Company will authorize dealers or other persons acting as the
Company's agents to solicit offers by certain institutions to purchase Debt
Securities from the Company pursuant to contracts providing for payment and
delivery on a future date. Institutions with which such contracts may be made
include commercial and savings banks, insurance companies, pension funds,
investment companies, educational and charitable institutions and others, but in
all cases such institutions must be approved by the Company. The obligations of
any purchaser under any such contract will be subject to the condition that the
purchase of Debt Securities shall not at the time of delivery be prohibited
under the laws of the jurisdiction to which such purchaser is subject. The
dealers and such other agents will not have any responsibility in respect of the
validity or performance of such contracts.
LEGAL OPINIONS
Certain matters with respect to the validity of the Debt Securities offered
hereby will be passed upon for the Company by Stephen T. Braun, Senior Vice
President and General Counsel of the Company, and for any underwriters, dealers
or agents, as the case may be, by Jenkens & Gilchrist, a Professional
Corporation, Dallas, Texas. As of November 1, 1993, Mr. Braun owned
approximately 402 shares and had options to purchase 44,500 shares of the
Company's Common Stock.
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EXPERTS
The consolidated financial statements and financial statement schedules of
Columbia Hospital Corporation, incorporated by reference in this Prospectus,
have been audited by Arthur Andersen & Co., independent public accountants, as
indicated in their report with respect thereto. Such financial statements and
schedules audited by Arthur Andersen & Co. have been incorporated herein by
reference in reliance upon the authority of said firm as experts in accounting
and auditing in giving such report.
The consolidated financial statements and financial statement schedules of
Galen and the supplemental consolidated financial statements and supplemental
financial statement schedules of the Company, incorporated herein by reference
in this Prospectus, have been audited by Coopers & Lybrand, independent
accountants, to the extent and for the periods indicated in their reports
thereon incorporated by reference herein, which include explanatory paragraphs
regarding (as to the Company) the merger of Columbia Hospital Corporation and
Galen Health Care, Inc. and (as to the Company and Galen) on a change in
accounting for income taxes. Such financial statements and financial statement
schedules audited by Coopers & Lybrand have been incorporated herein by
reference in reliance upon such reports given upon the authority of said firm as
experts in accounting and auditing.
The consolidated financial statements and financial statement schedules of
HCA-Hospital Corporation of America for the year ended December 31, 1992,
incorporated by reference in this Prospectus, and which are referred to and made
a part of this Prospectus, have been audited by Ernst & Young, independent
auditors, as set forth in their report thereon, included therein, and
incorporated herein by reference. Such financial statements and schedules are
incorporated herein by reference in reliance on such report given upon the
authority of such firm as experts in accounting and auditing.
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