SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________________________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report February 10, 1994
(Date of Earliest Event Reported)
COLUMBIA/HCA HEALTHCARE CORPORATION
(Exact name of Registrant as specified in its Charter)
DELAWARE
(State of Incorporation)
001-11239 75-2497104
(Commission (I.R.S. Employer
File Number) Identification No.)
201 West Main Street, Louisville, Kentucky 40202
(Address of principal executive offices) (Zip Code)
(502) 572-2000
(Registrant's telephone number, including area code)
<PAGE>
ITEM 7.(a) FINANCIAL STATEMENTS
The accompanying unaudited pro forma condensed combined financial
statements supplement the pro forma information included in
the Registration Statement on Form S-4 (No. 33-50735), as amended, filed
by Columbia Healthcare Corporation ("Columbia") on December
14, 1993 in connection with a proposed merger with HCA - Hospital Corporation
of America ("HCA") (the "Merger").
The pro forma financial statements should be read in conjunction
with the pro forma financial information included in the aforementioned
Registration Statement and the related historical consolidated financial
statements of Columbia and HCA.
-2-
<PAGE>
<TABLE>
Columbia Healthcare Corporation and HCA - Hospital Corporation of America
Unaudited Pro Forma Condensed Combined Statement of Income
For the Nine Months Ended September 30, 1993
(Dollars in millions except per share amounts)
<CAPTION>
Pro
Forma
Columbia HCA Combined
-------- -------- --------
<S> <C> <C> <C> <C>
Revenues ............................................... $3,829 $3,852 $7,681
------ ------ ------
Salaries, wages and benefits ........................... 1,646 1,509 3,155
Supplies ............................................... 630 621 1,251
Other operating expenses ............................... 682 731 1,413
Provision for doubtful accounts ........................ 214 196 410
Depreciation and amortization .......................... 222 192 414
Interest expense ....................................... 102 149 251
Investment income ...................................... (21) (24) (45)
Restructuring and unusual items ........................ 151 - 151
------ ------ ------
3,626 3,374 7,000
------ ------ ------
Income from continuing operations before minority
interest and income taxes ............................ 203 478 681
Minority interest in earnings of consolidated entities . 10 - 10
------ ------ ------
Income from continuing operations before
income taxes ......................................... 193 478 671
Provision for income taxes ............................. 78 194 272
------ ------ ------
Income from continuing operations before
extraordinary items .................................. 115 284 399
Income from operations of discontinued
health plan segment, net of income taxes ............. 16 - 16
Extraordinary loss on early extinguishment of debt ..... (70) (14) (84)
------ ------ ------
Net income ......................................... $61 $270 $331
====== ====== ======
Earnings per common share and common equivalent share:
Income from continuing operations before
extraordinary items ................................ $1.18
Income from operations of discontinued
health plan segment ................................ 0.04
Extraordinary loss on early extinguishment of debt ... (0.24)
------
Net income ......................................... $0.98
======
See notes to unaudited pro forma condensed combined financial statements.
-3-
<PAGE>
Columbia Healthcare Corporation and HCA - Hospital Corporation of America
Unaudited Pro Forma Condensed Combined Statement of Operations
For the Nine Months Ended September 30, 1992
(Dollars in millions except per share amounts)
Pro
Forma
Columbia HCA Combined
-------- -------- --------
Revenues ............................................... $3,572 $3,888 $7,460
------ ------ ------
Salaries, wages and benefits ........................... 1,526 1,545 3,071
Supplies ............................................... 583 619 1,202
Other operating expenses ............................... 627 774 1,401
Provision for doubtful accounts ........................ 217 174 391
Depreciation and amortization .......................... 207 203 410
Interest expense ....................................... 84 227 311
Investment income ...................................... (31) (34) (65)
Restructuring and unusual items ........................ 138 394 532
------ ------ ------
3,351 3,902 7,253
------ ------ ------
Income (loss) from continuing operations before
minority interest and income taxes ................... 221 (14) 207
Minority interest in earnings of consolidated entities . 8 - 8
------ ------ ------
Income (loss) from continuing operations before
income taxes ......................................... 213 (14) 199
Provision for income taxes ............................. 75 92 167
------ ------ ------
Income (loss) from continuing operations before cumu-
lative effect of a change in accounting principle .... 138 (106) 32
Discontinued operations:
Loss from operations of discontinued
health plan segment, net of income tax benefit ..... (114) - (114)
Costs associated with discontinuance of health
plan segment, net of income tax benefit ............ (17) - (17)
Cumulative effect on prior years of a change in
accounting for income taxes .......................... 51 - 51
------ ------ ------
Net income (loss) .................................. $58 ($106) ($48)
====== ====== ======
Earnings per common share and common equivalent share:
Income from continuing operations before cumulative
effect of a change in accounting principle ......... $0.10
Discontinued operations:
Loss from operations of discontinued
health plan segment .............................. (0.35)
Costs associated with discontinuance of health
plan segment ..................................... (0.06)
Cumulative effect on prior years of a change in
accounting for income taxes ........................ 0.16
------
Net loss ........................................... ($0.15)
======
See notes to unaudited pro forma condensed combined financial statements.
-4-
<PAGE>
Columbia Healthcare Corporation and HCA - Hospital Corporation of America
Unaudited Pro Forma Condensed Combined Statement of Income
For the Year Ended December 31, 1992
(Dollars in millions except per share amounts)
Pro
Forma
Columbia HCA Combined
-------- -------- --------
Revenues ............................................... $4,806 $5,126 $9,932
------ ------ ------
Salaries, wages and benefits ........................... 2,069 2,043 4,112
Supplies ............................................... 788 825 1,613
Other operating expenses ............................... 833 1,016 1,849
Provision for doubtful accounts ........................ 285 230 515
Depreciation and amortization .......................... 276 265 541
Interest expense ....................................... 117 284 401
Investment income ...................................... (39) (42) (81)
Restructuring and unusual items ........................ 138 301 439
------ ------ ------
4,467 4,922 9,389
------ ------ ------
Income from continuing operations before minority
interest and income taxes ............................ 339 204 543
Minority interest in earnings of consolidated entities . 10 - 10
------ ------ ------
Income from continuing operations before
income taxes ......................................... 329 204 533
Provision for income taxes ............................. 118 176 294
------ ------ ------
Income from continuing operations before cumulative
effect of a change in accounting principle ........... 211 28 239
Discontinued operations:
Loss from operations of discontinued
health plan segment, net of income tax benefit ..... (108) - (108)
Costs associated with discontinuance of health
plan segment, net of income tax benefit ............ (17) - (17)
Cumulative effect on prior years of a change in
accounting for income taxes .......................... 51 - 51
------ ------ ------
Net income ......................................... $137 $28 $165
====== ====== ======
Earnings per common share and common equivalent share:
Income from continuing operations before cumulative
effect of a change in accounting principle ......... $0.73
Discontinued operations:
Loss from operations of discontinued
health plan segment .............................. (0.33)
Costs associated with discontinuance of health
plan segment ..................................... (0.06)
Cumulative effect on prior years of a change in
accounting for income taxes ........................ 0.16
------
Net income ......................................... $0.50
======
See notes to unaudited pro forma condensed combined financial statements.
-5-
<PAGE>
Columbia Healthcare Corporation and HCA - Hospital Corporation of America
Unaudited Pro Forma Condensed Combined Statement of Income
For the Year Ended December 31, 1991
(Dollars in millions)
Pro
Forma
Columbia HCA Combined
-------- -------- --------
Revenues ............................................... $4,612 $4,986 $9,598
------ ------ ------
Salaries, wages and benefits ........................... 2,004 1,972 3,976
Supplies ............................................... 720 747 1,467
Other operating expenses ............................... 717 1,022 1,739
Provision for doubtful accounts ........................ 277 231 508
Depreciation and amortization .......................... 248 276 524
Interest expense ....................................... 111 486 597
Investment income ...................................... (34) (30) (64)
Restructuring and unusual items ........................ - 300 300
------ ------ ------
4,043 5,004 9,047
------ ------ ------
Income (loss) from continuing operations before
minority interest and income taxes ................... 569 (18) 551
Minority interest in earnings of consolidated entities . 9 - 9
------ ------ ------
Income (loss) from continuing operations before
income taxes ......................................... 560 (18) 542
Provision for income taxes ............................. 202 (13) 189
------ ------ ------
Income (loss) from continuing operations ............... 358 (5) 353
Discontinued operations:
Income from operations of discontinued
health plan segment, net of income taxes ........... 16 - 16
------ ------ ------
Net income (loss) .................................. 374 (5) 369
Preferred stock dividend requirements .................. - 18 18
------ ------ ------
Net income (loss) applicable to common stock ....... $374 ($23) $351
====== ====== ======
See notes to unaudited pro forma condensed combined financial statements.
-6-
<PAGE>
Columbia Healthcare Corporation and HCA - Hospital Corporation of America
Unaudited Pro Forma Condensed Combined Statement of Income
For the Year Ended December 31, 1990
(Dollars in millions)
Pro
Forma
Columbia HCA Combined
-------- -------- --------
Revenues ............................................... $4,010 $4,631 $8,641
------ ------ ------
Salaries, wages and benefits ........................... 1,666 1,844 3,510
Supplies ............................................... 624 690 1,314
Other operating expenses ............................... 653 933 1,586
Provision for doubtful accounts ........................ 233 211 444
Depreciation and amortization .......................... 220 279 499
Interest expense ....................................... 119 575 694
Investment income ...................................... (34) (35) (69)
Unusual items .......................................... - 22 22
------ ------ ------
3,481 4,519 8,000
------ ------ ------
Income from continuing operations before minority
interest and income taxes ............................ 529 112 641
Minority interest in earnings of consolidated entities . 4 - 4
------ ------ ------
Income from continuing operations before
income taxes ......................................... 525 112 637
Provision for income taxes ............................. 190 50 240
------ ------ ------
Income from continuing operations ...................... 335 62 397
Discontinued operations:
Loss from operations of discontinued
health plan segment, net of income tax benefit ..... (6) - (6)
------ ------ ------
Net income ......................................... 329 62 391
Preferred stock dividend requirements .................. - 63 63
------ ------ ------
Net income (loss) applicable to common stock ....... $329 ($1) $328
====== ====== ======
See notes to unaudited pro forma condensed combined financial statements.
</TABLE>
-7-
<PAGE>
<TABLE>
Columbia Healthcare Corporation and HCA - Hospital Corporation of America
Unaudited Pro Forma Condensed Combined Balance Sheet
(Dollars in millions)
<CAPTION>
December 31, 1992 December 31, 1991
-------------------------- --------------------------
Pro Pro
Forma Forma
Columbia HCA Combined Columbia HCA Combined
ASSETS -------- -------- -------- -------- -------- --------
Current assets:
<S> <C> <C> <C> <C> <C> <C> <C>
Cash and cash equivalents ........ $95 $122 $217 $42 $633 $675
Marketable securities ............ 14 - 14 19 - 19
Accounts receivable, net ......... 827 797 1,624 885 768 1,653
Inventories ...................... 138 100 238 118 93 211
Deferred income taxes ............ 96 161 257 37 211 248
Other ............................ 94 131 225 50 54 104
------ ------ ------ ------ ------ ------
Total current assets ........... 1,264 1,311 2,575 1,151 1,759 2,910
Property and equipment, net ........ 2,658 2,590 5,248 2,528 2,704 5,232
Net assets of discontinued
operations ....................... 376 - 376 411 - 411
Investments of professional
liability insurance subsidiaries . 302 342 644 286 278 564
Intangible assets, net ............. 195 1,052 1,247 84 1,374 1,458
Other .............................. 96 161 257 81 187 268
------ ------ ------ ------ ------ ------
Total assets ................... $4,891 $5,456 $10,347 $4,541 $6,302 $10,843
====== ====== ====== ====== ====== ======
LIABILITIES AND COMMON STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable ................. $199 $211 $410 $177 $225 $402
Accrued expenses ................. 549 565 1,114 470 505 975
Income taxes ..................... 92 - 92 93 65 158
Long-term debt due within
one year ....................... 32 321 353 37 703 740
------ ------ ------ ------ ------ ------
Total current liabilities ...... 872 1,097 1,969 777 1,498 2,275
Long-term debt ..................... 1,256 2,047 3,303 1,122 3,296 4,418
Deferred credits and other
liabilities ...................... 456 897 1,353 451 854 1,305
Minority interest in equity of
consolidated entities ............ 31 - 31 23 - 23
Common stockholders' equity ........ 2,276 1,415 3,691 2,168 654 2,822
------ ------ ------ ------ ------ ------
Total liabilities and common
stockholders' equity ......... $4,891 $5,456 $10,347 $4,541 $6,302 $10,843
====== ====== ====== ====== ====== ======
See notes to unaudited pro forma condensed combined financial statements.
</TABLE>
-8-
<PAGE>
<TABLE>
Columbia Healthcare Corporation and HCA - Hospital Corporation of America
Unaudited Pro Forma Condensed Combined Statement of Cash Flows
For the Nine Months Ended September 30, 1993
(Dollars in millions)
<CAPTION>
Pro
Forma
Columbia HCA Combined
-------- -------- --------
<S> <C> <C> <C> <C>
Net cash provided by operating activities ....................... $436 $606 $1,042
----- ----- -----
Cash flows from investing activities:
Purchase of property and equipment ............................ (280) (350) (630)
Acquisition of hospitals and healthcare facilities ............ (78) - (78)
Sales of assets ............................................... 127 43 170
Change in investments ......................................... 7 (7) -
Other ......................................................... (9) (6) (15)
----- ----- -----
Net cash used in investing activities ................ (233) (320) (553)
----- ----- -----
Cash flows from financing activities:
Issuance of long-term debt .................................... 3 1,175 1,178
Net change in commercial paper borrowings and lines of credit . 219 - 219
Repayment of long-term debt ................................... (308) (1,543) (1,851)
Payment of cash dividends ..................................... (36) - (36)
Payment to Humana Inc. in spinoff transaction ................. (135) - (135)
Issuance of common stock, net of payment of withholding taxes
related to exercise of stock options ........................ 27 11 38
Other ......................................................... (5) (1) (6)
----- ----- -----
Net cash used in financing activities ................ (235) (358) (593)
----- ----- -----
Change in cash and cash equivalents ............................. (32) (72) (104)
Cash and cash equivalents at beginning of period ................ 95 122 217
----- ----- -----
Cash and cash equivalents at end of period ...................... $63 $50 $113
===== ===== =====
See notes to unaudited pro forma condensed combined financial statements.
-9-
<PAGE>
Columbia Healthcare Corporation and HCA - Hospital Corporation of America
Unaudited Pro Forma Condensed Combined Statement of Cash Flows
For the Nine Months Ended September 30, 1992
(Dollars in millions)
Pro
Forma
Columbia HCA Combined
-------- -------- --------
Net cash provided by operating activities ....................... $589 $424 $1,013
----- ----- -----
Cash flows from investing activities:
Purchase of property and equipment ............................ (257) (210) (467)
Acquisition of hospitals and healthcare facilities ............ (61) - (61)
Sales of assets ............................................... 41 26 67
Investment in discontinued operations ......................... (71) - (71)
Change in investments ......................................... (7) (31) (38)
Other ......................................................... 3 (4) (1)
----- ----- -----
Net cash used in investing activities ................ (352) (219) (571)
----- ----- -----
Cash flows from financing activities:
Issuance of long-term debt .................................... 239 1 240
Net change in commercial paper borrowings and lines of credit . (167) (3) (170)
Repayment of long-term debt ................................... (150) (1,518) (1,668)
Payment of cash dividends ..................................... (107) - (107)
Issuance of common stock, net of payment of withholding taxes
related to exercise of stock options ........................ 5 776 781
Other ......................................................... (8) (1) (9)
----- ----- -----
Net cash used in financing activities ................ (188) (745) (933)
----- ----- -----
Change in cash and cash equivalents ............................. 49 (540) (491)
Cash and cash equivalents at beginning of period ................ 42 633 675
----- ----- -----
Cash and cash equivalents at end of period ...................... $91 $93 $184
===== ===== =====
See notes to unaudited pro forma condensed combined financial statements.
-10-
<PAGE>
Columbia Healthcare Corporation and HCA - Hospital Corporation of America
Unaudited Pro Forma Condensed Combined Statement of Cash Flows
For the Year Ended December 31, 1992
(Dollars in millions)
Pro
Forma
Columbia HCA Combined
-------- -------- --------
Cash flows from continuing operations:
Net income .................................................... $137 $28 $165
Adjustments to reconcile net income to net cash
provided by operating activities:
Loss from discontinued operations ......................... 108 - 108
Minority interest in earnings of consolidated entities .... 10 - 10
Restructuring and unusual items ........................... 138 301 439
Costs associated with discontinuance of health plan segment 19 - 19
Depreciation and amortization ............................. 276 265 541
Amortization of debt discounts and loan costs ............. - 78 78
Noncash interest on exchange debentures ................... - 4 4
Deferred income taxes ..................................... (41) 75 34
Change in operating assets and liabilities:
(Increase) decrease in accounts receivable ............. 115 (17) 98
Increase in inventories and other assets ............... (49) (9) (58)
Decrease in income taxes ............................... (12) (148) (160)
Increase in other liabilities .......................... 36 47 83
Change in accounting for income taxes ..................... (51) - (51)
Other ..................................................... (18) (5) (23)
----- ----- -----
Net cash provided by continuing operations ........... 668 619 1,287
----- ----- -----
Cash flows from investing activities:
Purchase of property and equipment ............................ (359) (309) (668)
Acquisition of hospitals and healthcare facilities ............ (36) - (36)
Sales of assets ............................................... 53 172 225
Investment in discontinued operations ......................... (71) - (71)
Change in investments ......................................... 3 (38) (35)
Other ......................................................... (2) (6) (8)
----- ----- -----
Net cash used in investing activities ................ (412) (181) (593)
----- ----- -----
Cash flows from financing activities:
Issuance of long-term debt .................................... 239 1 240
Net change in commercial paper borrowings and lines of credit . (143) (33) (176)
Repayment of long-term debt ................................... (150) (1,649) (1,799)
Payment of cash dividends ..................................... (143) - (143)
Issuance of common stock, net of payment of withholding taxes
related to exercise of stock options ........................ 7 734 741
Other ......................................................... (13) (2) (15)
----- ----- -----
Net cash used in financing activities ................ (203) (949) (1,152)
----- ----- -----
Change in cash and cash equivalents ............................. 53 (511) (458)
Cash and cash equivalents at beginning of period ................ 42 633 675
----- ----- -----
Cash and cash equivalents at end of period ...................... $95 $122 $217
===== ===== =====
Interest payments ............................................... $111 $208 $319
Income tax payments, net of refunds ............................. 169 191 360
See notes to unaudited pro forma condensed combined financial statements.
-11-
<PAGE>
Columbia Healthcare Corporation and HCA - Hospital Corporation of America
Unaudited Pro Forma Condensed Combined Statement of Cash Flows
For the Year Ended December 31, 1991
(Dollars in millions)
Pro
Forma
Columbia HCA Combined
-------- -------- --------
Cash flows from continuing operations:
Net income (loss) ............................................. $374 ($5) $369
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Income from discontinued operations ....................... (16) - (16)
Minority interest in earnings of consolidated entities .... 9 - 9
Restructuring and unusual items ........................... - 300 300
Depreciation and amortization ............................. 248 276 524
Amortization of debt discounts and loan costs ............. - 116 116
Noncash interest on exchange debentures ................... - 57 57
Deferred income taxes ..................................... 27 (237) (210)
Change in operating assets and liabilities:
Increase in accounts receivable ........................ (17) (36) (53)
Increase in inventories and other assets ............... (28) (14) (42)
Increase (decrease) in income taxes .................... (15) 68 53
Increase in other liabilities .......................... 82 82 164
Other ..................................................... (9) (5) (14)
----- ----- -----
Net cash provided by continuing operations ........... 655 602 1,257
----- ----- -----
Cash flows from investing activities:
Purchase of property and equipment ............................ (453) (192) (645)
Acquisition of hospitals and healthcare facilities ............ (96) - (96)
Sales of assets ............................................... 116 744 860
Investment in discontinued operations ......................... (76) - (76)
Change in investments ......................................... (35) 2 (33)
Other ......................................................... (6) (19) (25)
----- ----- -----
Net cash provided by (used in) investing activities .. (550) 535 (15)
----- ----- -----
Cash flows from financing activities:
Issuance of long-term debt .................................... 194 22 216
Net change in commercial paper borrowings and lines of credit . 161 (37) 124
Repayment of long-term debt ................................... (354) (536) (890)
Payment of cash dividends ..................................... (134) - (134)
Issuance of common stock, net of payment of withholding taxes
related to exercise of stock options ........................ 71 - 71
Other ......................................................... (6) - (6)
----- ----- -----
Net cash used in financing activities ................ (68) (551) (619)
----- ----- -----
Change in cash and cash equivalents ............................. 37 586 623
Cash and cash equivalents at beginning of period ................ 5 47 52
----- ----- -----
Cash and cash equivalents at end of period ...................... $42 $633 $675
===== ===== =====
Interest payments ............................................... $114 $355 $469
Income tax payments, net of refunds ............................. 190 195 385
See notes to unaudited pro forma condensed combined financial statements.
-12-
<PAGE>
Columbia Healthcare Corporation and HCA - Hospital Corporation of America
Unaudited Pro Forma Condensed Combined Statement of Cash Flows
For the Year Ended December 31, 1990
(Dollars in millions)
Pro
Forma
Columbia HCA Combined
-------- -------- --------
Cash flows from continuing operations:
Net income .................................................... $329 $62 $391
Adjustments to reconcile net income to net cash
provided by operating activities:
Loss from discontinued operations ......................... 6 - 6
Minority interest in earnings of consolidated entities .... 4 - 4
Unusual items ............................................. - 47 47
Depreciation and amortization ............................. 220 279 499
Amortization of debt discounts and loan costs ............. - 129 129
Deferred income taxes ..................................... (8) (29) (37)
Change in operating assets and liabilities:
Increase in accounts receivable ........................ (92) (9) (101)
(Increase) decrease in inventories and other assets .... 1 (13) (12)
Increase (decrease) in income taxes .................... 17 (2) 15
Increase in other liabilities .......................... 64 167 231
Other ..................................................... 11 8 19
----- ----- -----
Net cash provided by continuing operations ........... 552 639 1,191
----- ----- -----
Cash flows from investing activities:
Purchase of property and equipment ............................ (369) (183) (552)
Acquisition of hospitals and healthcare facilities ............ (192) - (192)
Sales of assets ............................................... 32 452 484
Investment in discontinued operations ......................... 11 - 11
Change in investments ......................................... (4) 4 -
Other ......................................................... (3) (13) (16)
----- ----- -----
Net cash provided by (used in) investing activities .. (525) 260 (265)
----- ----- -----
Cash flows from financing activities:
Issuance of long-term debt .................................... 150 495 645
Net change in commercial paper borrowings and lines of credit . 58 6 64
Repayment of long-term debt ................................... (132) (1,350) (1,482)
Payment of cash dividends ..................................... (114) - (114)
Issuance of common stock, net of payment of withholding taxes
related to exercise of stock options ........................ 8 - 8
Other ......................................................... (1) (7) (8)
----- ----- -----
Net cash used in financing activities ................ (31) (856) (887)
----- ----- -----
Change in cash and cash equivalents ............................. (4) 43 39
Cash and cash equivalents at beginning of period ................ 9 4 13
----- ----- -----
Cash and cash equivalents at end of period ...................... $5 $47 $52
===== ===== =====
Interest payments ............................................... $117 $408 $525
Income tax payments, net of refunds ............................. 218 119 337
See notes to unaudited pro forma condensed combined financial statements.
-13-
<PAGE>
Columbia Healthcare Corporation and HCA - Hospital Corporation of America
Notes to Unaudited Pro Forma Condensed Combined Financial Statements
Note 1 - Basis of Presentation
The accompanying unaudited pro forma condensed combined financial
statements supplement the pro forma information included in the
Registration Statement on Form S-4 (No. 33-50735), as amended,
filed by Columbia on December 14, 1993 in connection with the Merger.
These pro forma financial statements are presented using the pooling of
interests method of accounting, and reflect the combination of the
historical consolidated financial data of Columbia and HCA as if the
Merger had been consummated at the beginning of the earliest period
presented.
The pro forma financial statements should be read in
conjunction with the pro forma financial information included in the
aforementioned Registration Statement and the related historical
consolidated financial statements of Columbia and HCA.
Note 2 - Earnings per Common and Common Equivalent Share
For all applicable periods presented in the pro forma condensed
combined statements of income, shares used in the computation of
earnings per common and common equivalent share give effect to the
issuance of 1.05 shares of Columbia common stock in exchange for each
share of HCA common stock held.
Shares used in the computation of earnings per common and common
equivalent share totaled 328,563,900 for the year ended December 31, 1992,
and 338,744,300 and 324,874,000 for the nine months ended
September 30, 1993 and 1992, respectively. Earnings per common and
common equivalent share are not presented for periods prior to the
initial public offering of HCA Class A Common Stock in March 1992.
Note 3 - Income Taxes
Prior to the Merger, both Columbia and HCA had adopted the provisions of
Statement of Financial Accounting Standards No. 109, "Accounting for
Income Taxes" ("SFAS 109"), as of January 1, 1992, the cumulative effect
of which increased 1992 net income by $51 million. On April 1, 1989, HCA
adopted the provisions of Statement of Financial Accounting Standards No.
96, "Accounting for Income Taxes," in connection with the acquisition of
the common stock of then publicly held Hospital Corporation of America by
a management-led investor group.
Had the provisions of SFAS 109 been adopted in 1989, provision for income
taxes for subsequent periods would not have been materially affected.
-14-
</TABLE>
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this Report to be signed on its
behalf by the undersigned hereunto duly authorized.
COLUMBIA/HCA HEALTHCARE CORPORATION
RICHARD A. LECHLEITER
Vice President and Controller
DATED: February 22, 1994
-15-
<PAGE>
