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 28, 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 5. OTHER EVENTS
On February 28, 1994, Columbia/HCA Healthcare Corporation (the
"Company") announced its operating results for the fourth quarter and
year ended December 31, 1993. A copy of the press release issued by the
Company on February 28, 1994, and related financial information, is
attached hereto as Exhibit 20, and is incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS
(c) Exhibits.
Exhibit 20. Copy of the Company's press release dated February
28, 1994 and related financial information.
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: March 1, 1994
EXHIBIT 20
INVESTOR CONTACT: MEDIA CONTACT:
Victor L. Campbell Lindy B. Richardson
502/572-2119 or 615/320-2053 502/572-2153
Lee A. Wood
502/572-2115
COLUMBIA/HCA FOURTH QUARTER EARNINGS EXCEED ANALYSTS ESTIMATES
Admissions In Former Galen Hospitals Up 1.3%
Combined Fourth Quarter EPS Increased 18%
Louisville, KY, February 28, 1994 -- Columbia/HCA Healthcare
Corporation (NYSE:COL) today announced combined operating results for the
fourth quarter and year ended December 31, 1993. Since the recently
completed merger with HCA-Hospital Corporation of America (formerly
NYSE:HCA) will be accounted for under the pooling of interests method of
accounting, the 1993 operating results have been presented for Columbia
and HCA on a combined basis.
Excluding non-recurring transactions, Columbia/HCA's combined
earnings per share from continuing operations of $0.52 for the fourth
quarter ended December 31, 1993 increased 18% over the combined earnings
per share of $0.44 for the fourth quarter of 1992. Net revenues for the
fourth quarter of 1993 totaled $2.6 billion on a combined basis, compared
to $2.5 billion in last year's fourth quarter.
For the twelve months ended December 31, 1993, Columbia/HCA's
combined revenues totaled $10.3 billion, up from $9.9 billion in 1992.
Combined income from continuing operations before extraordinary or one-
time items totaled $673 million, or $1.99 per share in 1993 versus $597
million, or $1.82 per share in 1992.
Non-recurring transactions recorded in 1993 relate primarily to costs
incurred in connection with the Galen Health Care, Inc. (formerly
NYSE:GHC) merger completed in the third quarter and losses on early
extinguishment of debt. Operating results for 1992 include third quarter
charges related to Galen's spinoff transaction, the planned disposition of
certain HCA psychiatric and other facilities, and a fourth quarter gain on
the sale of investments.
Columbia/HCA's combined same hospital admissions increased 0.6% in
the fourth quarter of 1993, primarily as a result of a 1.3% increase in
admissions at former Galen hospitals, the first increase in eight quarters
for these facilities. HCA's same hospital admissions were relatively
unchanged in the fourth quarter, after being down 3.0% in the third
quarter. The former Columbia Hospital Corporation facilities recorded
same hospital admission growth of 5.9%, consistent with third quarter
results.
The following table highlights the combined operating results of
Columbia/HCA for the fourth quarter and twelve months ended December 31, 1993
and 1992, and reflects the various non-recurring transactions for the
respective periods:
<PAGE>
<TABLE>
Columbia/HCA Combined Operating Results
(Dollars In Millions, Except Per Share Amounts)
<CAPTION>
Fourth Quarter Twelve Months
----------------------------------------------------------------
1993 1992 % Change 1993 1992 % Change
---- ---- -------- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues. . . . . . . . . . . . . . . $2,571 $2,472 3.9% $10,252 $9,932 3.2%
Operating income(a) . . . . . . . . . $507 $464 9.0% $2,004 $1,924 4.2%
Net income :
Continuing operations:
Excluding non-recurring items . . $176 $149 18.3% $673 $597 12.8%
Non-recurring items (net of tax). - 58 (98) (358)
Discontinued operations . . . . . . - 6 16 (125)
Loss on extinguishment of debt. . . - - (84) -
Change in accounting for
income taxes. . . . . . . . . . . - - - 51
Net income . . . . . . . . . . $176 $213 $507 $165
Earnings per common share:
Continuing operations:
Excluding non-recurring items . . $0.52 $0.44 18.2% $1.99 $1.82 9.3%
Non-recurring items . . . . . . . - 0.17 (0.29) (1.09)
Discontinued operations . . . . . . - 0.02 0.04 (0.39)
Loss on extinguishment of debt. . . - - (0.24) -
Change in accounting for
income taxes. . . . . . . . . . . - - - 0.16
Net income . . . . . . . . . . $0.52 $0.63 $1.50 $0.50
Shares used in earnings per
share computations (000). . . . . . 340,642 340,065 339,222 328,564
(a) Income from continuing operations before non-recurring transactions, depreciation and amortization, interest expense,
minority interest and income taxes.
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</TABLE>
<PAGE>
"The fourth quarter demonstrated a significant improvement in
patient volume trends at the former Galen facilities," said David T.
Vandewater, Columbia/HCA's Chief Operating Officer. "At the same time,
the former HCA facilities reported significant increases in operating
income. These strong operating results are significant since it shows our
ability to improve operating performance while accomplishing two of the
largest mergers in the healthcare industry."
"The mergers with Galen and HCA have strategically placed
Columbia/HCA in a leadership role in the healthcare industry," said
Richard L. Scott, President and Chief Executive Officer of Columbia/HCA.
"As we expand our geographic coverage and comprehensive services networks,
we create additional opportunities to increase our patient volumes and
reduce healthcare costs for our customers. Our strong cash flow and
financial position allows Columbia/HCA to continue to make strategic
additions to these networks."
Columbia/HCA Healthcare Corporation is the largest healthcare
services provider, with 193 acute-care and specialty hospitals in 26
states and two foreign countries, employing over 130,000 people. With its
comprehensive service strategy, Columbia/HCA will work to meet the quality
healthcare needs of its communities in a cost-effective manner.
-- Separate and Combined Company Financial Summaries Follow --
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<PAGE>
<TABLE>
Columbia/HCA Healthcare Corporation
Combined Financial Summary
(Dollars in millions, except per share amounts)
<CAPTION>
FOURTH QUARTER
--------------------------------------------------------------------------------------
Columbia HCA Columbia/HCA
--------------------------------------------------------------------------------------
% % %
1993 1992 Change 1993 1992 Change 1993 1992 Change
---- ---- ------ ---- ---- ------ ---- ----- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues. . . . . . . . . . . . . . $1,301 $1,234 5.4 $1,270 $1,238 2.5 $2,571 $2,472 3.9
Operating income(a) . . . . . . . . $229 $220 3.8 $278 $244 13.8 $507 $464 9.0
Net income:
Continuing operations:
Excluding non-recurring
transactions . . . . . . $78 $73 7.6 $98 $76 28.7 $176 $149 18.3
Non-recurring transactions
(net of tax). . . . . . . . . - - - 58 - 58
Discontinued operations . . . . . - 6 - - - 6
Net income. . . . . . . . . . $78 $79 $98 $134 $176 $213
Earnings per common share:
Continuing operations:
Excluding non-recurring
transactions. . . . . . . . . $0.52 $0.49 6.1 $0.55 $0.42 31.0 $0.52 $0.44 18.2
Non-recurring transactions . . - - - 0.32 - 0.17
Discontinued operations . . . . . - 0.05 - - - 0.02
Net income. . . . . . . . . . $0.52 $0.54 $0.55 $0.74 $0.52 $0.63
Shares used in earnings per
share computations (000). . . . .150,954 148,879 179,818 181,087 340,642 340,065
(a) Income from continuing operations before non-recurring transactions, depreciation and amortization, interest expense,
minority interest and income taxes.
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<PAGE>
Columbia/HCA Healthcare Corporation
Combined Financial Summary
(Dollars in millions, except per share amounts)
YEAR
--------------------------------------------------------------------------------------
Columbia HCA Columbia/HCA
--------------------------------------------------------------------------------------
% % %
1993 1992 Change 1993 1992 Change 1993 1992 Change
---- ---- ------ ---- ---- ------ ---- ----- ------
Revenues. . . . . . . . . . . . . . $5,130 $4,806 6.7 $5,122 $5,126 (0.1) $10,252 $9,932 3.2
Operating income(a) . . . . . . . . $907 $870 4.3 $1,097 $1,054 4.1 $2,004 $1,924 4.2
Net income:
Continuing operations:
Excluding non-recurring
transactions. . . . . . . . . $291 $297 (1.6) $382 $300 27.0 $673 $597 12.8
Non-recurring transactions
(net of tax). . . . . . . . . (98) (86) - (272) (98) (358)
Discontinued operations . . . . . 16 (125) - - 16 (125)
Loss on extinguishment of debt. . (70) - (14) - (84) -
Change in accounting for
income taxes. . . . . . . . . . - 51 - - - 51
Net income . . . . . . . . . $139 $137 $368 $28 $507 $165
Earnings (loss) per common share:
Continuing operations:
Excluding non-recurring
transactions. . . . . . . . . $1.95 $2.05 (4.9) $2.13 $1.73 23.1 $1.99 $1.82 9.3
Non-recurring transactions. . . (0.67) (0.60) - (1.57) (0.29) (1.09)
Discontinued operations . . . . . 0.10 (0.87) - - 0.04 (0.39)
Loss on extinguishment of debt . (0.46) - (0.08) - (0.24) -
Change in accounting for
income taxes. . . . . . . . . . - 0.36 - - - 0.16
Net income. . . . . . . . . . $0.92 $0.94 $2.05 $0.16 $1.50 $0.50
Shares used in earnings per
share computations (000). . .. . 150,017 144,897 179,275 174,237 339,222 328,564
(a) Income from continuing operations before non-recurring transactions, depreciation and amortization, interest expense,
minority interest and income taxes.
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</TABLE>
<PAGE>
Victor L. Campbell
502/572-2119
615/320-2053
Lee A. Wood
502/572-2115
FOURTH QUARTER 1993
NOTES OF INTEREST
The merger of Columbia and HCA was effective February 10, 1994. The
results discussed throughout this report include: (a) Columbia/HCA
combined results on a pooled basis; (b) Columbia stand-alone results,
which include Galen on a pooled accounting basis; and (c) HCA stand-alone
results.
1) Columbia/HCA combined EPS from continuing operations was $0.52 for
4Q93 and $1.99 for the full year 1993 (excluding non-recurring
items). 4Q93 EPS of $0.52 increased 18% over combined 4Q92 EPS of
$0.44.
2) Columbia 4Q93 EPS from continuing operations of $0.52 exceeded the
average "First Call" analyst estimates of $0.50 and IBES estimates
of $0.49; full-year 1993 EPS for Columbia (after the retroactive
$0.03 tax increase reported in 3Q93) was $1.95, which was in line
with the average "First Call" analyst estimates before the tax
increase adjustment.
3) HCA 4Q93 EPS of $0.55 exceeded "First Call" analyst estimates of
$0.48; Full-Year 1993 EPS for HCA was $2.13 (before extraordinary
item), which exceeded the average "First Call" analysts estimates of
$2.07.
4) Columbia/HCA combined 1993 quarterly EPS (excluding non-recurring
and extraordinary items) was as follows: 1Q: $0.61; 2Q: $0.49;
3Q: $0.37; 4Q: $0.52.
5) Combined operating margins (EBDITA as a percent of net revenues) for
Columbia/HCA increased to 19.7% in 4Q93 from 18.8% in 4Q92. The
increase in 4Q93 resulted primarily from improvements in supply
costs at Columbia, and improvements in both supply and labor costs
at HCA.
6) Columbia's same hospital admissions were up 1.7% in 4Q93, primarily
due to a 1.3% increase in the former Galen hospitals (first positive
trend in eight quarters for Galen facilities), while former Columbia
Hospital Corporation facilities posted 5.9% same hospital admission
growth in 4Q93, consistent with the third quarter increase.
7) HCA same hospital medical/surgical admissions were down 0.5% in
4Q93, a significant improvement from the 3.2% decline experienced in
3Q93. HCA's strong 4Q93 same hospital outpatient visit growth of
9.0% produced a 1.1% same hospital increase in adjusted admissions
(as adjusted for outpatient activity).
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<PAGE>
8) Same hospital admissions for HCA's 23 psychiatric hospitals
increased 2.2% in 4Q93; average length of stay was 13.3 days for
4Q93 versus 15.0 days in 4Q92. Same hospital net psychiatric
revenue per adjusted patient day increased 3.7% in the 4Q93,
compared to the same period last year.
9) During 1993, HCA significantly downsized its psychiatric activities
from 45 hospitals at year end 1992 to its current 23 facilities;
accordingly, psychiatric revenues declined from $468 million in 1992
to $263 million (2.6% of combined Columbia/HCA revenues) in 1993.
Effective with the Columbia/HCA merger, all psychiatric hospitals
are being operated as part of their respective geographic
market/region along with the med-surg facilities rather than as a
separate business unit.
10) For the full year, Columbia/HCA's combined interest expense declined
from $401 million in 1992 (4% of revenues) to $321 million in 1993
(3.1% of revenues) primarily as a result of the initial public
offering of HCA common stock in 1992 and the refinancings of debt by
both Columbia and HCA in 1993. The ratio of debt to debt plus
equity was 51.6% at December 31, 1993 compared to 58.2% at December
31, 1992 (including the proforma effect of the Galen spinoff
transaction in 1993).
11) Columbia/HCA's balance sheet at 12/31/93 has combined assets of
$10.2 billion. Depreciation and amortization on a combined basis
increased from $541 million in 1992 (5.5% of revenues) to $554
million in 1993 (5.4% of revenues).
12) During the fourth quarter of 1993, Columbia and Galen negotiated $30
million in annual supply cost savings from their respective prior
supply cost contracts. Columbia/HCA is currently in the process of
renegotiating all of its supply contracts, and has announced
preliminary savings of $60 million annually on the first $220
million of renegotiated contracts (which will become effective
between March 1 and June 1, 1994), in addition to the $30 million
savings from the Galen merger.
13) Columbia has announced the acquisitions of 479-bed Grant Hospital of
Chicago, in Chicago, IL (completed 1/31/94), 366-bed Independence
Regional Health Center, in Independence, MO (completed 2/3/94), and
a joint venture of 339-bed Winter Park Memorial Hospital with the
tax-exempt owner (expected to be completed March 1).
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