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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K
Mark One:
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
For the Fiscal Year Ended December 31, 1995
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EX-
CHANGE ACT OF 1934 [NO FEE REQUIRED]
For the Transition Period from to .
COMMISSION FILE NUMBER 1-11239
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COLUMBIA/HCA HEALTHCARE CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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DELAWARE 75-2497104
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
ONE PARK PLAZA
NASHVILLE, TENNESSEE 37203
(Address of Principal Executive (Zip Code)
Offices)
Registrant's Telephone Number, Including Area Code: (615) 327-9551
Securities Registered Pursuant to Section 12(b) of the Act:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
Common Stock, $.01 Par Value New York Stock Exchange
Securities Registered Pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the Registrant (1) has filed all reports re-
quired to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the Reg-
istrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [_]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of Registrant's knowledge, in definitive proxy or information state-
ments incorporated by reference in Part III of this Form 10-K or any amendment
to this Form 10-K. [_]
As of March 15, 1996, there were outstanding 433,354,931 shares of the Reg-
istrant's Common Stock and 14,000,000 shares of the Registrant's Nonvoting
Common Stock. As of March 15, 1996 the aggregate market value of the Common
Stock held by non-affiliates was approximately $22,866,000,000. For purposes
of the foregoing calculation only, the Registrant's directors, executive offi-
cers, and The Columbia/HCA Healthcare Corporation Stock Bonus Plan have been
deemed to be affiliates.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's 1995 Annual Report to Stockholders for the year
ended December 31, 1995 are incorporated by reference into Parts I, II and IV.
Portions of the Registrant's definitive Proxy Statement for its 1996 Annual
Meeting of Stockholders are incorporated by reference into Part III hereof.
The Exhibit Index is on page 29.
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<PAGE>
INDEX
<TABLE>
<CAPTION>
PAGE
REFERENCE
---------
<C> <S> <C> <C> <C>
PART I
Item 1. Business.......................................... 1
Item 2. Properties........................................ 19
Item 3. Legal Proceedings................................. 20
Submission of Matters to a Vote of Security
Item 4. Holders........................................... 22
PART II
Item 5. Market for the Registrant's Common Equity and
Related Stockholder Matters...................... 22
Item 6. Selected Financial Data........................... 22
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.............. 22
Item 8. Financial Statements and Supplementary Data....... 22
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.............. 22
PART III
Directors and Executive Officers of the
Item 10. Registrant........................................ 22
Item 11. Executive Compensation............................ 22
Security Ownership of Certain Beneficial Owners
Item 12. and Management.................................... 23
Item 13. Certain Relationships and Related Transactions.... 23
PART IV
Exhibits, Financial Statement Schedules and
Item 14. Reports on Form 8-K............................... 23
</TABLE>
<PAGE>
PART I
ITEM 1. BUSINESS.
GENERAL
Columbia/HCA Healthcare Corporation is one of the largest health care serv-
ices companies in the United States. At December 31, 1995, the Company oper-
ated 313 general, acute care hospitals and 25 psychiatric hospitals in 32
states and two foreign countries. The Company is a partner in several 50/50
joint ventures that own and operate 19 hospitals and 3 outpatient surgery cen-
ters, which are accounted for using the equity method. Such facilities are in-
cluded in the hospitals operated totals, but are not consolidated for finan-
cial statement purposes and for purposes of reporting certain operating sta-
tistics. In addition, as part of its comprehensive health care networks, the
Company operates facilities that provide a broad range of outpatient and an-
cillary services. At December 31, 1995, the Company operated more than 130
outpatient surgery centers and 200 home health agencies. The term the "Compa-
ny" as used herein refers to Columbia/HCA Healthcare Corporation and its di-
rect and indirect subsidiaries and affiliated partnerships, unless otherwise
stated or indicated by context.
The Company's primary objective is to provide to the markets it serves a
comprehensive array of quality health care services in the most cost effective
manner possible. The Company's general, acute care hospitals usually provide a
full range of services commonly available in hospitals to accommodate such
medical specialties as internal medicine, general surgery, cardiology, oncolo-
gy, neurosurgery, orthopedics and obstetrics, as well as diagnostic and emer-
gency services. Outpatient and ancillary health care services are provided by
the Company's general, acute care hospitals as well as at freestanding facili-
ties operated by the Company including outpatient surgery and diagnostic cen-
ters, rehabilitation facilities, home health care agencies and other facili-
ties. In addition, the Company operates psychiatric hospitals which generally
provide a full range of mental health care services in inpatient, partial hos-
pitalization and outpatient settings.
On April 24, 1995, the Company acquired Healthtrust, Inc.--The Hospital Com-
pany ("Healthtrust") pursuant to a merger transaction accounted for as a pool-
ing of interests (the "Healthtrust Merger"). Healthtrust began operations
through the acquisition of a group of hospitals and related assets (the
"Healthtrust Formation") from Hospital Corporation of America (the predecessor
to HCA) in September 1987. On May 5, 1994, Healthtrust acquired EPIC Holdings,
Inc. ("EPIC") in a transaction accounted for as a purchase (the "EPIC Merg-
er"). On September 16, 1994, the Company acquired Medical Care America, Inc.
("MCA") in a transaction accounted for as a purchase (the "MCA Merger"). On
February 10, 1994, the Company acquired HCA-Hospital Corporation of America
("HCA") pursuant to a merger transaction accounted for as a pooling of inter-
ests (the "HCA Merger"). Effective September 1, 1993, the Company acquired Ga-
len Health Care, Inc. ("Galen") pursuant to a merger transaction accounted for
as a pooling of interests (the "Galen Merger"). Galen began operations as an
independent publicly held corporation upon the distribution of all of its com-
mon stock (the "Spinoff") by its then 100% owner, Humana Inc. ("Humana"), on
March 1, 1993.
The Company, through various predecessor entities, began operations on July
1, 1988. The Company was incorporated in Nevada in January 1990 and reincorpo-
rated in Delaware in September 1993. The Company's principal executive offices
are located at One Park Plaza, Nashville, Tennessee 37203, and its telephone
number at such address is (615) 327-9551.
BUSINESS STRATEGY
The Company's strategy is to become a significant, comprehensive provider of
quality health care services in targeted markets. The Company pursues its
strategy by acquiring the health care facilities necessary to develop a com-
prehensive health care network with wide geographic presence throughout the
market. Typically, the Company enters a market by acquiring one or more
1
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mid- to large-size general, acute care hospitals (over 150 licensed beds),
which have either desirable physical plants or ones which can be upgraded on
an economically feasible basis. The Company then upgrades equipment and facil-
ities and adds new services to increase the attractiveness of the hospital to
local physicians and patient populations. The Company typically develops a
network by acquiring additional health care facilities including additional
general, acute care hospitals, psychiatric hospitals and outpatient facilities
such as surgery centers, diagnostic centers, physical therapy centers and
other treatment or wellness facilities including home health care agencies. By
developing a comprehensive health care network in a local market, the Company
achieves greater visibility and is better able to attract physicians and pa-
tients by offering a full range of services in the entire market area. The
Company is also able to reduce operating costs by sharing certain services
among several facilities in the same market and is better positioned to work
with health maintenance organizations ("HMOs"), preferred provider organiza-
tions ("PPOs") and employers.
Upon acquisition of a facility, the Company hires experienced executives to
manage its operations and decentralizes operational decision making to the lo-
cal level, while providing local physicians and managers the opportunity to
purchase equity interests in the operations through a partnership or corporate
structure. Management believes the Company's strategy of co-ownership of its
facilities with physicians and management produces significant operational ad-
vantages. Physicians who have an ownership interest in a facility take a more
active role in recruiting other physicians and in improving efficiency by con-
taining costs and making more rational capital expenditure decisions, and of-
ten are more active supporters of operations and medical staff quality assur-
ance activities, as they have a direct personal interest in the success and
reputation of the facility. Moreover, because the Company's facilities are co-
owned with and operated by prominent members of the local medical community,
both community support for the facilities and the Company's ability to recruit
physicians to the facilities are enhanced. In addition, by providing local
managers of its facilities the opportunity to purchase equity interests in
such facilities, the Company creates incentives on the part of its local man-
agers to operate their facilities successfully with a long-term perspective.
HEALTH CARE FACILITIES
The Company currently owns, manages or operates hospitals, ambulatory sur-
gery centers, diagnostic centers, cardiac rehabilitation centers, physical
therapy centers, radiation oncology centers, comprehensive outpatient rehabil-
itation centers and home health care agencies and programs.
The Company currently operates 313 general, acute care hospitals with 62,936
licensed beds. Most of the Company's general, acute care hospitals provide
medical and surgical services, including inpatient care, intensive and cardiac
care, diagnostic services and emergency services. The general, acute care hos-
pitals also provide outpatient services such as outpatient surgery, laborato-
ry, radiology, respiratory therapy, cardiology and physical therapy. A local
advisory board, which usually includes members of the hospital's medical
staff, generally makes recommendations concerning the medical, professional
and ethical practices at each hospital and monitors such practices. However,
the hospital is ultimately responsible for ensuring that these practices con-
form to established standards. When the Company acquires a hospital, it estab-
lishes quality assurance programs to support and monitor quality of care stan-
dards and to meet accreditation and regulatory requirements. Patient care
evaluations and other quality of care assessment activities are monitored on a
continuing basis.
Like most hospitals, the Company's hospitals do not engage in extensive med-
ical research and medical education programs. However, some of the Company's
hospitals have an affiliation with medical schools, including the clinical ro-
tation of medical students.
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The Company currently operates 25 psychiatric hospitals with 2,866 licensed
beds. The Company's psychiatric hospitals provide therapeutic programs tai-
lored to child psychiatric, adolescent psychiatric, adult psychiatric, adoles-
cent alcohol or drug abuse and adult alcohol or drug abuse patients. The hos-
pitals use the treatment team concept whereby the admitting physician, team
psychologist, social workers, nurses, therapists and counselors coordinate
each phase of therapy. Services provided by this team include crisis interven-
tion, individual psychotherapy, group and family therapy, social services,
chemical dependency counseling, behavioral modification and physical medicine.
Family aftercare plans are actively promoted from the time of admission,
through hospitalization and after discharge. An aftercare plan measures each
patient's post-program progress and utilizes one or more self-help groups.
Program procedures are designed to ensure that quality standards are achieved
and maintained. Certain of the Company's general, acute care hospitals also
have a limited number of licensed psychiatric beds.
Other outpatient or related health care services operated by the Company in-
clude ambulatory surgery centers, diagnostic centers, outpatient physical
therapy/rehabilitation centers, outpatient radiation therapy centers, cardiac
rehabilitation centers, skilled nursing services and home health/infusion
services. These outpatient and related services are an integral component of
the Company's strategy to develop a comprehensive health care network in each
of its target markets. The Company currently operates more than 130 outpatient
surgery centers and 200 home health agencies (nearly all of which are hospi-
tal-based).
In addition to providing capital resources, the Company makes available a
variety of management services to its health care facilities, most signifi-
cantly: national supply and equipment purchasing and leasing contracts; finan-
cial policies; accounting, financial and clinical systems; governmental reim-
bursement assistance; construction planning and coordination; information sys-
tems; legal; personnel management; and internal audit.
SOURCES OF REVENUE
Hospital revenues depend upon inpatient occupancy levels, the extent to
which ancillary services and therapy programs are ordered by physicians and
provided to patients, the volume of outpatient procedures and the charges or
negotiated payment rates for such services. Charges and reimbursement rates
for inpatient routine services vary significantly depending on the type of
service (e.g., medical/surgical, intensive care or psychiatric) and the geo-
graphic location of the hospital. The Company has experienced an increase in
the percentage of patient revenues attributable to outpatient services. This
increase is primarily the result of advances in technology (which allow more
services to be provided on an outpatient basis), acquisitions of additional
outpatient facilities and increased pressures from Medicare, Medicaid, HMOs,
PPOs, employers and insurers to reduce hospital stays and provide services,
where possible, on a less expensive outpatient basis.
The Company receives payment for patient services from the federal govern-
ment primarily under the Medicare program, state governments under their re-
spective Medicaid programs, HMOs, PPOs and other private insurers and directly
from patients. The approximate percentages of patient revenues of the
Company's facilities from such sources during the periods specified below were
as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
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1995 1994 1993
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<S> <C> <C> <C>
Medicare...................................... 36% 35% 34%
Medicaid...................................... 6 6 6
Other sources................................. 58 59 60
-------- -------- --------
Total......................................... 100% 100% 100%
======== ======== ========
</TABLE>
3
<PAGE>
Medicare is a federal program that provides certain hospital and medical in-
surance benefits to persons age 65 and over, some disabled persons and persons
with end-stage renal disease. Medicaid is a federal-state program administered
by the states which provides hospital benefits to qualifying individuals who
are unable to afford care. Substantially all of the Company's hospitals are
certified as providers of Medicare and Medicaid services. Amounts received un-
der the Medicare and Medicaid programs are generally significantly less than
the hospital's customary charges for the services provided.
To attract additional volume, most of the Company's hospitals offer dis-
counts from established charges to certain large group purchasers of health
care services, including Blue Cross, other private insurance companies, em-
ployers, HMOs, PPOs and other managed care plans. Blue Cross is a private
health care program that funds hospital benefits through independent plans
that vary in each state. These discount programs limit the Company's ability
to increase charges in response to increasing costs. See "Competition." Pa-
tients are generally not responsible for any difference between customary hos-
pital charges and amounts reimbursed for such services under Medicare, Medic-
aid, some Blue Cross plans, HMOs or PPOs, but are responsible to the extent of
any exclusions, deductibles or co-insurance features of their coverage. The
amount of such exclusions, deductibles and co-insurance has generally been in-
creasing each year. Collection of amounts due from individuals is typically
more difficult than from governmental or business payors.
Medicare
Under the Medicare program the Company receives reimbursement under a pro-
spective payment system ("PPS") for the routine and ancillary operating costs
of most Medicare inpatient hospital services. Psychiatric, long-term care, re-
habilitation, pediatric and certain designated cancer research hospitals, as
well as psychiatric or rehabilitation units that are distinct parts of a hos-
pital, are currently exempt from PPS and are reimbursed on a cost based sys-
tem, subject to certain cost caps. It is uncertain what impact, if any, the
federal efforts to reform the health care system or balance the federal budget
will have on the current method of Medicare reimbursement.
Under PPS, fixed payment amounts per inpatient discharge were established
based on the patient's assigned diagnosis related group ("DRG"). DRG's clas-
sify patients' treatments for illnesses according to the estimated intensity
of hospital resources necessary to furnish care for each principal diagnosis.
DRG rates have been established for each individual hospital participating in
the Medicare program and are based upon a statistically normal distribution of
severity. Patients falling well outside the normal distribution are afforded
additional payments and defined as "outliers." Under PPS, hospitals may retain
payments in excess of costs but must absorb costs in excess of such payments;
therefore, hospitals are encouraged to operate more efficiently.
DRG rates are updated and recalibrated periodically and have been affected
by several recent federal enactments. The index used by the Health Care Fi-
nancing Administration ("HCFA") to adjust the DRG rates gives consideration to
the inflation experienced by hospitals in purchasing goods and services ("mar-
ket basket"). However, for several years the percentage increases to the DRG
rates have been lower than the percentage increases in the costs of goods and
services purchased by hospitals. The market basket is adjusted each federal
fiscal year ("FY") which begins on October 1. The market basket for FY 1993
was 4.1%, FY 1994 was 4.3%, FY 1995 was 3.6% and for FY 1996 is 3.5%.
The Omnibus Budget Reconciliation Act of 1993 ("OBRA-93") extended the re-
duction enacted by the Omnibus Budget Reconciliation Act of 1990 ("OBRA-90")
in the Medicare DRG payments to healthcare providers through 1997. A substan-
tial number of the Company's hospitals are classified as urban hospitals for
reimbursement purposes. The net updates of DRG rates for large urban and other
urban hospitals are established as follows: FY 1994 and FY 1995 market basket
4
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minus 2.5%; FY 1996 market basket minus 2%; and FY 1997 market basket minus
0.5%. Management cannot predict how future adjustments by Congress and HCFA
will affect the profitability of the Company's health care facilities.
The provisions of OBRA-90 required the Secretary (the "Secretary") of the
Department of Health and Human Services ("HHS") to develop a proposal for a
PPS for all hospital-based outpatient services and inpatient psychiatric care.
The Secretary's report, which was due on September 1, 1991, was submitted to
Congress on March 17, 1995. The Secretary's report recommends a phase-in of
PPS for outpatient services with prospective payment rates being established
initially for surgical and radiological services and other diagnostic proce-
dures that account for almost half of hospital outpatient Medicare charges.
Other groups of outpatient services would be brought under PPS as appropriate
methodologies are developed. The report also addressed changes to beneficiary
coinsurance and the computation of coinsurance under the current blended pay-
ment method. Implementation of the Secretary's proposals would require Con-
gress to enact legislation. The Company is unable to assess whether such leg-
islation, if any, will be enacted in connection with changes to Medicare reim-
bursement of hospital outpatient services. Until such time as the Secretary
has implemented a PPS for all hospital-based outpatient services, OBRA-90 di-
rects that payments for the reasonable cost of outpatient hospital services
(other than for capital related costs) be reimbursed at 94.2% of such reason-
able costs for cost reporting periods falling within FY 1991 through FY 1995.
OBRA-93 extended this reduction through FY 1998.
Subsequent to September 30, 1991 and through FY 1992, capital related pay-
ments for inpatient hospital services were made at the rate of 90% of reason-
able capital costs. The PPS capital costs reimbursement applies an estimated
national average of FY 1989 Medicare capital costs per patient discharge up-
dated to FY 1992 by the estimated increase in Medicare capital costs per dis-
charge (the "Federal Rate"). Capital PPS is applicable to cost reports begin-
ning on or after October 1, 1991. Under capital PPS reimbursement a 10 year
transition period has been established. A hospital is paid under one of the
following two different payment methodologies during this transition period:
(i) hospitals with a hospital-specific rate (the rate established for a hospi-
tal based on the cost report ending on or before December 31, 1990) below the
Federal Rate would be paid on a fully prospective payment methodology and (ii)
hospitals with a hospital-specific rate above the Federal Rate would be paid
based on a hold-harmless payment methodology or 100% of the Federal Rate
whichever results in a higher payment. A hospital is paid under one methodol-
ogy throughout the entire transition. After the transition period, all hospi-
tals would be paid the Federal Rate.
The impact of PPS capital reimbursement in the first two years has not been
material to Medicare capital reimbursement. The hospital-specific rates for FY
1994 decreased 2.16%. The established Federal Rate for FY 1994 was reduced by
9.33% to $378 per patient discharge and for FY 1995 was reduced by 0.4% to
$377 per patient discharge. The hospital-specific rate for FY 1996 increased
18.6%. The Federal Rate for FY 1996 increased 21.2% to $457 per patient dis-
charge. These increases were primarily the result of the expiration of a bud-
get neutrality provision of OBRA-90 that limited payments to 90% of payments
estimated to have been made on a reasonable cost basis during the fiscal year.
Legislation passed by Congress and vetoed by the President would have resulted
in a reduction of capital payment rates for FY 1996.
Medicaid
Most state Medicaid payments are made under a prospective payment system or
under programs which negotiate payment levels with individual hospitals. Med-
icaid reimbursement is generally substantially less than a hospital's cost of
services. Medicaid is currently funded approximately 50% by the states and ap-
proximately 50% by the federal government. The federal government and many
states are currently considering significant reductions in the level of Medic-
aid funding while at the same time expanding Medicaid benefits, which could
adversely affect future levels of Medicaid reimbursement received by the
Company's hospitals.
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On November 27, 1991, Congress enacted the Medicaid Voluntary Contribution
and Provider-Specific Tax Amendments of 1991 (the "Medicaid Amendments"),
which limit the amount of voluntary contributions and provider-specific taxes
that can be used by states to fund Medicaid and require the use of broad-based
taxes for such funding. As a result of enactment of the Medicaid Amendments,
certain states in which the Company operates have adopted broad-based provider
taxes to fund their Medicaid programs. To date, the impact upon the Company of
these new taxes has not been materially adverse. However, the Company is un-
able to predict whether any additional broad-based provider taxes will be
adopted by the states in which it operates and, accordingly, is unable to as-
sess the effect thereof on its results of operations or financial position.
Annual Cost Reports
The Company's annual cost reports which are required under the Medicare and
Medicaid programs are subject to audit which may result in adjustments to the
amounts ultimately determined to be due the Company under these reimbursement
programs. These audits often require several years to reach the final determi-
nation of amounts earned under the programs. Providers also have rights of ap-
peal, and the Company is currently contesting certain issues raised in audits
of prior years' reports. Management believes that adequate provision has been
made in its financial statements for any material retroactive adjustments that
might result from all of such audits and that final resolution of all of these
issues will not have a material adverse effect upon the Company's results of
operations or financial position. Since the inception of the Medicare prospec-
tive payment system in 1983, the amount of reimbursement to the Company's gen-
eral, acute care hospitals potentially affected by audit adjustments has sub-
stantially diminished.
Commercial Insurance
The Company's hospitals provide services to individuals covered by private
health care insurance. Private insurance carriers either reimburse their pol-
icy holders or make direct payments to the Company's hospitals based upon the
particular hospital's established charges and the particular coverage provided
in the insurance policy. Blue Cross is a health care financing program that
provides its subscribers with hospital benefits through independent organiza-
tions that vary from state to state. The Company's hospitals are paid directly
by local Blue Cross organizations on the basis agreed to by each hospital and
Blue Cross by a written contract.
Recently, several commercial insurers have undertaken efforts to limit the
costs of hospital services by adopting prospective payment or DRG based sys-
tems. To the extent such efforts are successful, and to the extent that the
insurers' systems fail to reimburse hospitals for the costs of providing serv-
ices to their beneficiaries, such efforts may have a negative impact on the
operating results of the Company's hospitals.
HOSPITAL UTILIZATION
The Company believes that the two most important factors relating to the
overall utilization of a hospital are the quality and market position of the
hospital and the number and quality of physicians providing patient care
within the facility. Generally, the Company believes that the ability of a
hospital to be a market leader is determined by its breadth of services, level
of technology, emphasis on quality of care and convenience for patients and
physicians. Other factors which impact utilization include the growth in local
population, local economic conditions and market penetration of managed care
programs.
The following table sets forth certain operating statistics for hospitals
owned and operated by the Company for each of the most recent five years.
Medical/surgical hospital operations are subject to certain seasonal fluctua-
tions, including decreases in patient utilization during holiday pe-
6
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riods and increases in the cold weather months. Psychiatric hospital opera-
tions are also subject to certain seasonal fluctuations, including decreases
in patient occupancy during the summer months and holiday periods.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------------------------------
1995(E) 1994 1993 1992 1991
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Number of hospitals (a). 319 311 274 281 301
Weighted average
licensed beds (b)...... 61,617 57,517 53,247 51,955 54,072
Admissions (c).......... 1,774,800 1,565,500 1,451,000 1,448,000 1,486,200
Average length of stay
(days)................. 5.3 5.6 5.8 6.0 6.3
Average daily census.... 25,917 23,841 22,973 23,569 25,816
Occupancy rate (d)...... 42% 41% 43% 45% 48%
</TABLE>
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(a) End of period.
(b) Weighted average licensed beds is defined as the number of licensed beds
after giving effect to the length of time the beds have been licensed dur-
ing the period.
(c) Admissions represent the number of patients admitted for inpatient treat-
ment.
(d) Occupancy rates are calculated by dividing average daily census by
weighted average licensed beds.
(e) This does not include 19 facilities that are not consolidated for finan-
cial reporting purposes.
Beginning in 1983, hospitals began experiencing significant shifts from in-
patient to outpatient care as well as decreases in average lengths of inpa-
tient stay, primarily as a result of hospital payment changes by Medicare, in-
surance carriers and self-insured employers. These changes generally encour-
aged the utilization of outpatient, rather than inpatient, services whenever
possible, and shortened lengths of stay for inpatient care. Another factor af-
fecting hospital utilization levels is improved treatment protocols as a re-
sult of medical technology and pharmacological advances.
COMPETITION
Generally, other hospitals in the local markets served by most of the
Company's hospitals provide services that are offered by the Company's hospi-
tals. Additionally, in the past several years, the number of free-standing
outpatient surgery and diagnostic centers in the geographic areas in which the
Company operates has increased significantly. As a result, most of the
Company's hospitals operate in an increasingly competitive environment. The
rates charged by the Company's hospitals are intended to be competitive with
those charged by other local hospitals for similar services. In some cases,
competing hospitals are more established than the Company's hospitals. Also,
some competing hospitals are owned by tax-supported government agencies and
many others by tax-exempt corporations which may be supported by endowments
and charitable contributions and which are exempt from sales, property and in-
come taxes. Such exemptions and support are not available to the Company's
hospitals. In addition, in certain localities served by the Company there are
large teaching hospitals which provide highly specialized facilities, equip-
ment and services which may not be available at most of the Company's hospi-
tals. Psychiatric hospitals frequently attract patients from areas outside
their immediate locale and, therefore, the Company's psychiatric hospitals
compete with both local and regional hospitals, including the psychiatric
units of general, acute care hospitals.
The Company believes that its hospitals compete within local markets on the
basis of many factors, including the quality of care, ability to attract and
retain quality physicians, location, breadth of services, technology offered
and prices charged. The competition among hospitals and other health care
providers has intensified in recent years as hospital occupancy rates have de-
clined. The Company's strategies are designed, and management believes that
its hospitals are positioned, to be competitive under these changing circum-
stances.
7
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One of the most significant factors in the competitive position of a hospi-
tal is the number and quality of physicians affiliated with the hospital. Al-
though physicians may at any time terminate their affiliation with a hospital
operated by the Company, the Company seeks to retain physicians of varied spe-
cialties on its hospitals' medical staffs and to attract other qualified phy-
sicians. The Company believes that physicians refer patients to a hospital
primarily on the basis of the quality of services it renders to patients and
physicians, the quality of other physicians on the medical staff, the location
of the hospital and the quality of the hospital's facilities, equipment and
employees. Accordingly, the Company strives to maintain high ethical and pro-
fessional standards and quality facilities, equipment, employees and services
for physicians and their patients.
Another major factor in the competitive position of a hospital is its man-
agement's ability to negotiate service contracts with purchasers of group
health care services. HMOs and PPOs attempt to direct and control the use of
hospital services through managed care programs and to obtain discounts from
hospitals' established charges. In addition, employers and traditional health
insurers are increasingly interested in containing costs through negotiations
with hospitals for managed care programs and discounts from established
charges. Generally, hospitals compete for service contracts with group health
care service purchasers on the basis of price, market reputation, geographic
location, quality and range of services, quality of the medical staff and con-
venience. The importance of obtaining contracts with managed care organiza-
tions varies from market to market depending on the market strength of such
organizations.
State certificate of need ("CON") laws, which place limitations on a hospi-
tal's ability to expand hospital services and add new equipment, may also have
the effect of restricting competition. The application process for approval of
covered services, facilities, changes in operations and capital expenditures
is, therefore, highly competitive. In those states which have no CON laws or
which set relatively high levels of expenditures before they become reviewable
by state authorities, competition in the form of new services, facilities and
capital spending is more prevalent. The Company has not experienced, and does
not expect to experience, any material adverse effects from state CON require-
ments or from the imposition, elimination or relaxation of such requirements.
See "Regulation and Other Factors."
The Company, and the health care industry as a whole, face the challenge of
continuing to provide quality patient care while dealing with rising costs,
strong competition for patients and a general reduction of reimbursement rates
by both private and government payors. As both private and government payors
reduce the scope of what may be reimbursed and reduce reimbursement levels for
what is covered, federal and state efforts to reform the United States health
care system may further impact reimbursement rates. Changes in medical tech-
nology, existing and future legislation, regulations and interpretations and
competitive contracting for provider services by private and government payors
may require changes in the Company's facilities, equipment, personnel, rates
and/or services in the future.
The hospital industry and the Company's hospitals continue to have signifi-
cant unused capacity, and, thus, there is substantial competition for pa-
tients. Inpatient utilization, average lengths of stay and average occupancy
rates continue to be negatively affected by payor-required pre- admission au-
thorization, utilization review and by payor pressure to maximize outpatient
and alternative health care delivery services for less acutely ill patients.
Increased competition, admissions constraints and payor pressures are expected
to continue. To meet these challenges, the Company has expanded many of its
hospitals' facilities to include outpatient centers, offers discounts to pri-
vate payor groups, enters into capitation contracts in some service areas, up-
grades facilities and equipment and offers new programs and services.
8
<PAGE>
REGULATION AND OTHER FACTORS
Licensure, Certification and Accreditation
Health care facility construction and operation is subject to federal, state
and local regulations relating to the adequacy of medical care, equipment,
personnel, operating policies and procedures, fire prevention, rate-setting
and compliance with building codes and environmental protection laws. Facili-
ties are subject to periodic inspection by governmental and other authorities
to assure continued compliance with the various standards necessary for li-
censing and accreditation. All of the Company's health care facilities are
properly licensed under appropriate state laws. Substantially all of the
Company's general, acute care hospitals are certified under the Medicare pro-
gram or are accredited by the Joint Commission on Accreditation of Health Care
Organizations ("Joint Commission"), the effect of which is to permit the fa-
cilities to participate in the Medicare and Medicaid programs. Certain of the
Company's psychiatric hospitals do not participate in these programs. Should
any facility lose its Joint Commission accreditation, or otherwise lose its
certification under the Medicare program, the facility would be unable to re-
ceive reimbursement from the Medicare and Medicaid programs. Management be-
lieves that the Company's facilities are in substantial compliance with cur-
rent applicable federal, state, local and independent review body regulations
and standards. The requirements for licensure, certification and accreditation
are subject to change and, in order to remain qualified, it may be necessary
for the Company to effect changes in its facilities, equipment, personnel and
services.
Certificates of Need
The construction of new facilities, the acquisition of existing facilities,
and the addition of new beds or services may be subject to review by state
regulatory agencies under a CON program. The Company operates hospitals in
some states that require approval under a CON program. Such laws generally re-
quire appropriate state agency determination of public need and approval prior
to the addition of beds or services or certain other capital expenditures.
Failure to obtain necessary state approval can result in the inability to ex-
pand facilities, complete an acquisition or change ownership. Further, viola-
tion may result in the imposition of civil or, in some cases, criminal sanc-
tions, the denial of Medicare or Medicaid reimbursement or the revocation of a
facility's license.
State Rate Review
Some states in which the Company owns hospitals have adopted legislation
mandating rate or budget review for hospitals or have adopted taxes on hospi-
tal revenues, assessments or licensure fees to fund indigent health care
within the state.
In Florida, a budget review process and limitations on net revenue increases
per admission have been in effect with respect to the Company's hospitals
since January 1, 1986. The increase in hospital net revenues per admission is
limited to an annually-determined percentage increase in costs that Florida
hospitals pay for goods and services plus a statutory 2%, plus additional
amounts which recognize the effect of patient days related to Medicare, Medic-
aid and uncompensated charity care. This law limits the ability of Florida
hospitals to increase rates to maintain operating margins. The Company owned
55 hospitals aggregating 13,378 beds in Florida as of December 31, 1995.
In the aggregate, state rate or budget review and indigent tax provisions
have not materially adversely affected the Company's results of operations.
The Company is unable to predict whether any additional state rate or budget
review or indigent tax provisions will be adopted and, accordingly, is unable
to assess the effect thereof on its results of operations or financial condi-
tion.
9
<PAGE>
Utilization Review
Federal law contains numerous provisions designed to ensure that services
rendered by hospitals to Medicare and Medicaid patients meet professionally
recognized standards, are medically necessary and that claims for reimburse-
ment are properly filed. These provisions include a requirement that a sam-
pling of admissions of Medicare and Medicaid patients must be reviewed by peer
review organizations ("PROs"), which review the appropriateness of Medicare
and Medicaid patient admissions and discharges, the quality of care provided,
the validity of DRG classifications and the appropriateness of cases of ex-
traordinary length of stay or cost. PROs may deny payment for services provid-
ed, may assess fines and also have the authority to recommend to HHS that a
provider which is in substantial noncompliance with the standards of the PRO
be excluded from participating in the Medicare program. Utilization review is
also a requirement of most non- governmental managed care organizations.
Medicare Regulations and Fraud and Abuse
Participation in the Medicare program is heavily regulated by federal stat-
ute and regulation. If a hospital provider fails substantially to comply with
the numerous conditions of participation in the Medicare program or performs
certain prohibited acts (e.g., (i) making false claims to Medicare for serv-
ices not rendered or misrepresenting actual services rendered in order to ob-
tain higher reimbursement; (ii) paying remuneration for Medicare referrals (so
called "fraud and abuse" which is prohibited by the "anti-kickback" provisions
of the Social Security Act); (iii) failing to stabilize all individuals who
come to its emergency room who have an "emergency medical condition," whether
or not any such individual is eligible for Medicare; (iv) transferring any
stabilized patient to another health care facility before such other facility
has agreed to the transfer of such patient, while such other facility does not
have sufficient room and staff to treat the patient, without the patient's
emergency department medical records, or without appropriate life support
equipment; and (v) transferring any unstabilized patient except those trans-
ferred at the patient's request or with physician certification that the medi-
cal risks from the transfer are less harmful than continued treatment at the
transferring facility), such hospital's participation in the Medicare program
may be terminated or civil or criminal penalties may be imposed upon such hos-
pital under certain provisions of the Social Security Act.
Moreover, HHS and the courts have interpreted the "fraud and abuse" anti-
kickback provisions of the Social Security Act (presently codified in Section
1128B(b) of the Social Security Act, hereinafter the "Antifraud Amendments")
broadly to include the intentional offer, payment, solicitation or receipt of
anything of value if one purpose of the payment is to induce the referral of
Medicare business. Health care providers generally are concerned that many
relatively innocuous, or even beneficial, commercial arrangements with their
physicians may technically violate this strict interpretation of the Antifraud
Amendments.
In 1976 Congress established the Office of Inspector General ("OIG") at HHS
to identify and eliminate fraud, abuse and waste in HHS programs and to pro-
mote efficiency and economy in HHS departmental operations. The OIG carries
out this mission through a nationwide program of audits, investigations and
inspections. In order to provide guidance to health care providers on ways to
engage in legitimate business practices and avoid scrutiny under the fraud and
abuse statute, the OIG has from time to time issued "fraud alerts" identifying
features of transactions, which, if present, may indicate that the transaction
violates the fraud and abuse law. In May 1992, the OIG issued a special fraud
alert regarding hospital incentives to physicians. The alert identified the
following incentive arrangements as potential violations of the statute: (a)
payment of any sort of incentive by the hospital each time a physician refers
a patient to the hospital, (b) the use of free or significantly discounted of-
fice space or equipment (in facilities usually located close to the hospital),
(c) provision of free or significantly discounted billing, nursing or other
staff services, (d) free training for a physician's office staff in areas such
as management techniques,
10
<PAGE>
CPT coding and laboratory techniques, (e) guarantees which provide that, if
the physician's income fails to reach a predetermined level, the hospital will
supplement the remainder up to a certain amount, (f) low-interest or interest-
free loans, or loans which may be forgiven if a physician refers patients (or
some number of patients) to the hospital, (g) payment of the costs of a physi-
cian's travel and expenses for conferences, (h) coverage on the hospital's
group health insurance plans at an inappropriately low cost to the physician
and (i) payment for services (which may include consultations at the hospital)
which require few, if any, substantive duties by the physician, or payment for
services in excess of the fair market value of services rendered. In this
fraud alert the OIG encouraged persons having information about hospitals who
offer the above types of incentives to physicians to report such information
to the OIG.
In addition, on July 29, 1991, the OIG issued final regulations outlining
certain "safe harbor" practices, which, although potentially capable of induc-
ing prohibited referrals of business under Medicare or state health programs,
would not be subject to enforcement action under the Social Security Act. The
practices covered by the regulations include certain physician joint venture
transactions, rental of space and equipment, personal services and management
contracts, sales of physician practices, referral services, warranties, dis-
counts, payments to employees, group purchasing organizations and waivers of
beneficiary deductibles and co-payments. Additional proposed safe harbors are
expected to be published in the near future by the OIG, including a safe har-
bor regulation for physician recruitment. Certain of the Company's current ar-
rangements with physicians, including joint ventures, do not qualify for the
current safe harbor exemptions and, as a result, such arrangements risk scru-
tiny by the OIG and may be subject to enforcement action. The failure of these
arrangements to satisfy all of the conditions of the applicable safe harbor
criteria does not mean that the arrangements are illegal. Nevertheless, cer-
tain of the Company's current financial arrangements with physicians, includ-
ing joint ventures, and the Company's future development of joint ventures and
other financial arrangements with physicians, could be adversely affected by
the failure of such arrangements to comply with the safe harbor regulations,
or the future adoption of other legislation or regulation in these areas.
Effective January 1, 1991, Section 1877 of the Social Security Act (commonly
known as "Stark I") prohibited referrals of Medicare and Medicaid patients to
clinical laboratories with which a referring physician has a financial rela-
tionship. OBRA-93 included certain amendments to Section 1877 (such amendments
commonly known as "Stark II") which substantially broadened the scope of pro-
hibited physician self-referrals to include referrals by physicians to enti-
ties with which the physician has a financial relationship and which provide
certain "designated health services" which are reimbursable by Medicare or
Medicaid. "Designated health services" include not only the clinical labora-
tory services which were the only such services covered by Stark I, but also,
among other things, physical and occupational therapy services, radiology
services, durable medical equipment, home health, and inpatient and outpatient
hospital services. Sanctions for violating Stark I or II include civil money
penalties up to $15,000 per prohibited service provided, assessments equal to
200% of the dollar value of each such service provided and exclusion from the
Medicare and Medicaid programs. Stark II contains certain exceptions to the
self-referral prohibition, including an exception if the physician has an own-
ership interest in the entire hospital. Stark II became effective January 1,
1995 and contemplates the promulgation of regulations implementing the new
provisions. The Company cannot predict the final form that such regulations
will take or the effect that Stark II or the regulations to be promulgated
thereunder will have on the Company.
The Social Security Act also imposes criminal and civil penalties for making
false claims to Medicare and Medicaid for services not rendered or for misrep-
resenting actual services rendered in order to obtain higher reimbursement.
Like the Antifraud Amendments, this statute is very broad. Careful and accu-
rate coding of claims for reimbursement must be performed to avoid liability
under the false claims statutes.
11
<PAGE>
The OIG has requested information regarding the Company's procedures for
preparing Medicare cost reports. The Company is cooperating with the OIG and
has provided various information in order to explain the Company's practices.
Management believes that any claims in this regard, if asserted, would not
have a material adverse effect on the Company's financial position or results
of operations.
Certain of the Company's current financial arrangements with physicians, in-
cluding joint ventures, and the Company's future development of joint ventures
and other financial arrangements with physicians, could be adversely affected
by the failure of such arrangements to comply with the Antifraud Amendments,
Section 1877, current state laws or other legislation or regulation in these
areas adopted in the future. The Company is unable to predict the effect of
such regulations or whether other legislation or regulations at the federal or
state level in any of these areas will be adopted, what form such legislation
or regulations may take or their impact on the Company. The Company is contin-
uing to enter into new financial arrangements with physicians and other prov-
iders in a manner structured to comply in all material respects with these
laws. There can be no assurance, however, that (i) governmental officials
charged with the responsibility for enforcing these laws will not assert that
the Company is in violation thereof or (ii) such statutes will ultimately be
interpreted by the courts in a manner consistent with the Company's interpre-
tation.
The federal Medicaid regulations also prohibit fraudulent and abusive prac-
tices and authorize the exclusion from such program of providers in violation
of such regulations.
State Legislation
Some of the states in which the Company operates have laws that prohibit
corporations and other entities from employing physicians and practicing medi-
cine for a profit or that prohibit certain direct and indirect payments or
fee-splitting arrangements between health care providers that are designed to
induce or encourage the referral of patients to, or the recommendation of,
particular providers for medical products and services. In addition, some
states restrict certain business relationships between physicians and pharma-
cies. Possible sanctions for violation of these restrictions include loss of
licensure and civil and criminal penalties. These statutes vary from state to
state, are often vague and have seldom been interpreted by the courts or regu-
latory agencies. Although the Company exercises care in an effort to structure
its arrangements with health care providers to comply with the relevant state
statutes, and although management believes that the Company is in compliance
with these laws, there can be no assurance that (i) governmental officials
charged with responsibility for enforcing these laws will not assert that the
Company or certain transactions in which it is involved are in violation of
such laws and (ii) such state laws will ultimately be interpreted by the
courts in a manner consistent with the practices of the Company.
Health Care Reform
Health care, as one of the largest industries in the United States, contin-
ues to attract much legislative interest and public attention. In recent
years, an increasing number of legislative proposals have been introduced or
proposed in Congress and in some state legislatures that would effect major
changes in the health care system, either nationally or at the state level.
Among the proposals under consideration are cost controls on hospitals, insur-
ance market reforms to increase the availability of group health insurance to
small businesses, requirements that all businesses offer health insurance cov-
erage to their employees and the creation of a single government health insur-
ance plan that would cover all citizens. The costs of certain proposals would
be funded in significant part by reductions in payments by governmental pro-
grams, including Medicare and Medicaid, to health care providers such as hos-
pitals. There can be no assurance that future health care legislation or other
changes in the administration or interpretation of governmental health
12
<PAGE>
care programs will not have a material adverse effect on the Company's busi-
ness, financial condition or results of operations.
ENVIRONMENTAL MATTERS
The Company is subject to various federal, state and local statutes and or-
dinances regulating the discharge of materials into the environment. Manage-
ment does not believe that the Company will be required to expend any material
amounts in order to comply with these laws and regulations or that compliance
will materially affect its capital expenditures, earnings or competitive posi-
tion.
INSURANCE
As is typical in the health care industry, the Company is subject to claims
and legal actions by patients in the ordinary course of business. Through a
wholly-owned insurance subsidiary, the Company insures a substantial portion
of its general and professional liability risks. The Company's health care fa-
cilities are insured by the insurance subsidiary for losses of up to $25 mil-
lion per occurrence. The Company also maintains general and professional lia-
bility insurance with unrelated commercial carriers for losses in excess of
amounts insured by its insurance subsidiary.
The Company and its insurance subsidiary maintain allowances for loss for
professional and general liability risks which totalled $1.2 billion at Decem-
ber 31, 1995. Management considers such allowances, which are based on actua-
rially determined estimates, to be adequate for such liability risks. Any
losses incurred in excess of the established allowances for loss will be re-
flected as a charge to earnings of the Company. Any losses incurred in excess
of amounts funded and maintained with commercial excess liability insurance
carriers will be funded from the Company's working capital. While the
Company's cash flow has been adequate to provide for alleged and unforeseen
liability claims in the past, there can be no assurance that such amounts will
continue to be adequate. If payments for general and professional liabilities
exceed anticipated losses, the results of operations and financial condition
of the Company could be adversely affected.
EMPLOYEES AND MEDICAL STAFFS
At December 31, 1995, the Company had approximately 240,000 employees, in-
cluding approximately 77,000 part-time employees. Employees at 14 hospitals
are represented by various labor unions. The Company considers its employee
relations to be satisfactory. While the Company's hospitals experience union
organizational activity from time to time, the Company does not expect such
efforts to materially affect its future operations. The Company's hospitals,
like most hospitals, have experienced labor costs rising faster than the gen-
eral inflation rate. In recent years, the Company generally has not experi-
enced material difficulty in recruiting and retaining employees, including
nurses and professional staff members, primarily as a result of staff reten-
tion programs and general economic conditions. There can be no assurance as to
future availability and cost of qualified medical personnel.
The Company's hospitals are staffed by licensed physicians who have been ad-
mitted to the medical staff of individual hospitals. With limited exceptions,
physicians generally are not employees of the Company's hospitals. However,
some physicians provide services in the Company's hospitals under contracts,
which generally describe a term of service, provide and establish the duties
and obligations of such physicians, require the maintenance of certain perfor-
mance criteria and fix compensation for such services. Any licensed physician
may apply to be admitted to the medical staff of any of the Company's hospi-
tals, but admission to the staff must be approved by the hospital's medical
staff and the appropriate governing board of the hospital in accordance with
established credentialling criteria. Members of the medical staffs of the
Company's hospitals often also serve on the medical staffs of other hospitals,
and may terminate their affiliation with a hospital at any time.
13
<PAGE>
PENDING HCA TAX LITIGATION; SPINOFF TAX RULING
As a result of examinations by the Internal Revenue Service (the "IRS") of
HCA's federal income tax returns, HCA received statutory notices of deficiency
for the years 1981 through 1988. HCA has filed petitions in the U.S. Tax Court
opposing these claimed deficiencies. Additionally, the IRS completed its exam-
ination for the years 1989 and 1990 and has issued proposed adjustments, which
HCA has protested. In the aggregate, the IRS is claiming additional taxes and
interest of approximately $600 million. Management of the Company is of the
opinion that HCA has properly reported its income and paid its taxes in accor-
dance with applicable laws and in accordance with agreements established with
the IRS during previous examinations. In management's opinion, the final out-
come from the IRS's examinations of prior years' income taxes will not have a
material adverse effect on the results of operations, financial position or
liquidity of the Company. If all or the majority of the positions of the IRS
are upheld, however, the financial position, results of operations and liquid-
ity of the Company could be materially adversely affected. Management believes
that any cash payments necessary as a result of such final outcome would be
funded with cash from operations and, if necessary, with amounts available un-
der the Company's revolving credit or other borrowing facilities.
Certain actions or events both in and beyond the control of the Company
could render the Spinoff or certain related transactions taxable. In connec-
tion with the Spinoff, Humana received rulings from the IRS to the effect,
among other things, that the Spinoff was tax-free under Section 355 of the In-
ternal Revenue Code of 1986, as amended (the "Code"). Prior to the Galen Merg-
er, Galen received a supplemental tax ruling that the Galen Merger would not
alter such tax rulings. Although generally binding on the IRS, each of the tax
rulings and the supplemental tax ruling is subject to the accuracy of certain
factual representations and assumptions contained in the ruling requests made
by Humana and Galen. While the Company is not aware of any facts or circum-
stances which would cause such representations and assumptions to be inaccu-
rate, there can be no assurances in this regard. Each of Galen and Humana
would be liable for the full amount of any tax if the Spinoff were held tax-
able, although as between Galen and Humana, Galen would be liable for approxi-
mately 61% of that tax under a Tax Sharing and Indemnification Agreement en-
tered into in connection with the Spinoff (unless the Spinoff became taxable
by reason of actions or events deemed to be in the control of Galen, in which
event Galen would be responsible for 100% of such tax).
ERISA MATTERS
In connection with the Healthtrust Formation in 1987, Healthtrust's Employee
Stock Ownership Plan (the "ESOP") purchased approximately 50.9 million shares
of Healthtrust common stock for $810 million. The purchase price was based on
the determination of the committee administering the ESOP (the "ESOP Commit-
tee") as to the fair market value of such shares at that time. Based on such
determination, and subject to limitations contained in the Code, Healthtrust
has claimed income tax deductions for contributions to the ESOP for the years
to which such contributions relate. Contributions to the ESOP were used by the
ESOP to pay interest and principal on the loans owed to Healthtrust. These
payments were in turn used by Healthtrust to pay interest and principal on the
ESOP term loans under a Healthtrust bank credit agreement and certain other
indebtedness related to the ESOP. As a result, Healthtrust was effectively
able to obtain a deduction for principal, as well as interest payments, on
ESOP related borrowings. If the ESOP Committee's determination of fair market
value was incorrect, Healthtrust's contribution to the ESOP may not be fully
deductible, which could have a material adverse effect on the Company.
It was intended that qualified holders of the ESOP term loans and the other
indebtedness incurred in connection with the ESOP be entitled to exclude from
taxable income 50% of the interest received on such indebtedness. In addition,
the loans to the ESOP and the purchase of
14
<PAGE>
Healthtrust common stock by the ESOP were intended to qualify for exemption
from the "prohibited transaction" rules under the Code and the Employee Re-
tirement Income Security Act of 1974, as amended ("ERISA"), which rules gener-
ally prohibit sale and loan transactions between an employer and a qualified
retirement plan. The 50% interest exclusion and the prohibited transaction ex-
emption were available only if the plan was designed to invest primarily in
"employer securities". It is likely that if Healthtrust and HCA were deemed to
have been members of the same "controlled group of corporations" for purposes
of the relevant section in the Code or ERISA, the stock of HCA, and not
Healthtrust's common stock, would have been "employer securities" for these
purposes. Healthtrust and HCA concluded that they were not in the same "con-
trolled group of corporations" (as defined in Section 409(l) of the Code). If,
notwithstanding such conclusion, HCA's common stock were deemed to have been
"employer securities" for such purposes, there could be severe adverse conse-
quences to Healthtrust, including violation of the prohibited transaction
rules discussed above (which could subject Healthtrust or other disqualified
persons with respect to the ESOP to an excise tax and could require that cer-
tain corrective action be taken) and retroactive increases in the rate of in-
terest payable on certain of Healthtrust's previously outstanding ESOP related
indebtedness as a result of the loss of the 50% interest exclusion. In addi-
tion, the 50% interest exclusion and the prohibited transaction exemption were
available only if the price paid by the ESOP reflected the fair market value
of the employer securities as determined in good faith by the plan fiducia-
ries. Accordingly, if the ESOP Committee's determination of fair market value
was incorrect, the 50% interest exclusion might not have been fully available
and Healthtrust or other disqualified persons may have committed prohibited
transactions, either of which events could have a material adverse effect on
the Company.
The purchase of EPIC common stock by the EPIC Employee Stock Ownership Plan
(the "EPIC ESOP") in connection with EPIC's acquisition (the "EPIC Formation")
of its facilities from American Medical International, Inc. ("AMI") in 1988
was structured in a manner similar to the purchase of Healthtrust common stock
by the ESOP in connection with the Healthtrust Formation and was intended to
(i) qualify for exemption from the "prohibited transaction" rules of the Code
and ERISA, (ii) permit EPIC to deduct for federal income tax purposes its con-
tributions to the EPIC ESOP used to pay principal and interest on loans made
by EPIC to the EPIC ESOP and (iii) permit qualified holders of indebtedness
incurred in connection with the EPIC ESOP to benefit from the 50% interest ex-
clusion provision referred to above. Exemption from the prohibited transaction
rules and the availability of the ESOP related benefits described above de-
pends on (i) the amount the EPIC ESOP paid for EPIC common stock not having
exceeded the fair market value of that EPIC common stock, (ii) the EPIC common
stock being "employer securities" and (iii) compliance with the other relevant
provisions of the Code and ERISA. If (i) the EPIC ESOP paid an amount in ex-
cess of fair market value for the EPIC common stock, (ii) the EPIC common
stock were to fail to qualify as "employer securities" or (iii) the EPIC ESOP
were to fail to comply with the other relevant provisions of the Code or
ERISA, such events could have a material adverse effect on the Company.
15
<PAGE>
EXECUTIVE OFFICERS OF THE REGISTRANT
The executive officers of the Company as of March 28, 1996, were as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION(S)
---- --- -----------
<S> <C> <C>
R. Clayton McWhorter.... 62 Chairman of the Board
Thomas F. Frist, Jr.,
M.D.................... 57 Vice Chairman of the Board
Richard L. Scott........ 43 President and Chief Executive Officer
David T. Vandewater..... 45 Chief Operating Officer
Stephen T. Braun........ 40 Senior Vice President and General Counsel
Victor L. Campbell...... 49 Senior Vice President
Richard E. Chapman...... 47 Senior Vice President--Information Systems
David C. Colby.......... 42 Senior Vice President and Treasurer
Kenneth C. Donahey...... 45 Senior Vice President and Controller
W. Leon Drennan......... 40 Senior Vice President--Internal Audit
Samuel A. Greco......... 44 Senior Vice President--Operations Finance
Neil D. Hemphill........ 42 Senior Vice President--Human Resources/Administration
Jamie E. Hopping........ 42 President--Western Group
Daniel J. Moen.......... 44 President--Columbia Sponsored Network Group
Joseph D. Moore......... 49 Senior Vice President--Development
Lindy B. Richardson..... 49 Senior Vice President--Marketing/Public Affairs
Richard A. Schweinhart.. 46 Senior Vice President--Columbia Sponsored Networks
James D. Shelton........ 42 President--Central Group
Donald E. Steen......... 49 President--International Group
David R. White.......... 48 President--Mid-America Group
</TABLE>
R. Clayton McWhorter has served as Chairman of the Board of the Company
since April 1995. Mr. McWhorter was Chairman and Chief Executive Officer of
Healthtrust from 1987 to April 1995 and was President of Healthtrust from 1991
to April 1995. Mr. McWhorter served as President and Chief Operating Officer
of Hospital Corporation of America (HCA's predecessor) from 1985 to 1987, and
as a Director of Hospital Corporation of America from 1983 to 1987.
Thomas F. Frist, Jr., M.D. has served as Vice Chairman of the Board of the
Company since April 1995. From February 1994 to April 1995, he was Chairman of
the Board of the Company. Dr. Frist was Chairman of the Board, President and
Chief Executive Officer of HCA-Hospital Corporation of America ("HCA") from
1988 to February 1994. Dr. Frist, a founder of the predecessor of HCA, was
previously Chairman and Chief Executive Officer of such predecessor from Au-
gust 1985 until September 1987.
Richard L. Scott has served as President, Chief Executive Officer and a di-
rector of the Company since September 1993. Mr. Scott was Chairman, Chief Ex-
ecutive Officer and a director of the Company or its predecessors from July
1988 to September 1993. Mr. Scott is also a director of Banc One Corporation.
David T. Vandewater has served as Chief Operating Officer of the Company
since September 1993. Mr. Vandewater was President of the Company from Febru-
ary 1991 to September 1993 and served as its Executive Vice President from May
1990 until February 1991. From July 1988 until February 1990, Mr. Vandewater
was an Executive Vice President and Chief Operating Officer of Republic Health
Corporation (presently called OrNda Healthcorp).
Stephen T. Braun has served as Senior Vice President and General Counsel of
the Company since September 1993. Mr. Braun served as Vice President and Gen-
eral Counsel of the Company
16
<PAGE>
from October 1991 until September 1993. From July 1987 to October 1991, Mr.
Braun practiced law with the law firm of Doherty, Rumble & Butler, Profes-
sional Association, Saint Paul, Minnesota.
Victor L. Campbell has served as Senior Vice President of the Company since
February 1994. For more than five years prior to that time, Mr. Campbell
served as HCA's Vice President for Investor, Corporate, and Government Rela-
tions. Mr. Campbell is currently a director of the Federation of American
Health Systems and the American Hospital Association.
Richard E. Chapman has served as Senior Vice President--Information Systems
of the Company since February 1995. Mr. Chapman served as Vice President--In-
formation Systems for Columbia from September 1993 until February 1995. Mr.
Chapman also served as Vice President--Information Systems for both Galen and
Humana from 1988 until September 1993.
David C. Colby has served as Senior Vice President and Treasurer of the Com-
pany since February 1994. Mr. Colby served as Chief Financial Officer of the
Company or its predecessors from July 1988 until April 1995. Mr. Colby was
elected Treasurer of the Company in November 1991.
Kenneth C. Donahey has served as Senior Vice President and Controller of the
Company since April 1995. Prior to that time, Mr. Donahey served as Senior
Vice President and Controller of Healthtrust from April 1993 to April 1995.
Mr. Donahey also served as Vice President and Controller of Healthtrust from
1987 to 1993.
W. Leon Drennan has served as Senior Vice President--Internal Audit of the
Company since February 1995. From February 1994 to January 1995, Mr. Drennan
served as Vice President of the Company. Mr. Drennan served as Vice Presi-
dent--Internal Audit for HCA from 1987 until 1994.
Samuel A. Greco has served as Senior Vice President--Operations Finance of
the Company since July 1992. Mr. Greco served as Senior Vice President of Fi-
nance--South Florida Division of the Company from November 1990 to July 1992.
Mr. Greco was Chief Financial Officer of University Hospital, Tamarac, Flori-
da, which is owned and operated by the Company, from January 1990 to November
1990.
Neil D. Hemphill has served as Senior Vice President--Human Resources of the
Company since February 1994. Mr. Hemphill served as Vice President--Human Re-
sources of the Company from June 1992 to February 1994. Mr. Hemphill was a Di-
rector of Human Resources of Republic Health Corporation (presently called
OrNda Healthcorp) from January 1985 to June 1992.
Jamie E. Hopping has served as President--Western Group of the Company since
January 1996. From January 1993, Ms. Hopping was Chief Operating Officer of
the Company's South Florida Division and in February 1994 was named President
of the South Florida Division. From 1990 to 1993, Ms. Hopping was Chief Execu-
tive Officer of Deering Hospital in South Florida.
Daniel J. Moen has served as President--Columbia Sponsored Network Group
since March 1996, and served as President of the Company's Florida Group from
February 1994 until March 1996. Mr. Moen was President of the Company's South
Florida Division from October 1991 until February 1994. From 1989 until Sep-
tember 1991, he served as Vice President, South Florida Market for Humana Inc.
Joesph D. Moore has served as Senior Vice President--Development of the Com-
pany since February 1994. Mr. Moore was Senior Vice President--Finance and De-
velopment of HCA from January 1993 to February 1994. Mr. Moore was Senior Vice
President--Development of HCA from April 1992 until January 1993 and Vice
President--Development of HCA from 1980 until April 1992.
17
<PAGE>
Lindy B. Richardson has served as Senior Vice President--Marketing/Public
Affairs of the Company since February 1994. Ms. Richardson served as Vice
President--Marketing/Public Affairs of the Company from September 1993 to Feb-
ruary 1994. Ms. Richardson served as Director of Marketing/Public Affairs for
both Galen and Humana from 1988 to September 1993.
Richard A. Schweinhart has served as Senior Vice President--Columbia Spon-
sored Networks of the Company since March 1996. From April 1995 until March
1996, Mr. Schweinhart served as Senior Vice President--Nonhospital Operations,
and from September 1993 until April 1995 as Senior Vice President--Finance of
the Company. Mr. Schweinhart served as Senior Vice President--Finance for both
Galen and Humana from November 1991 to September 1993. Mr. Schweinhart also
served as Vice President--Finance of Humana from 1988 until November 1991.
James D. Shelton has served as President--Central Group of the Company since
June 1994. From May 1993 to June 1994, Mr. Shelton was employed by National
Medical Enterprises, Inc. ("NME") (presently called Tenet Healthcare Corpora-
tion) as Executive Vice President of the Central Division. Mr. Shelton served
as Senior Vice President of Operations for NME from August 1986 until May
1993.
Donald E. Steen has served as President--International Group of the Company
since November 1995. From September 1994 until November 1995, Mr. Steen served
as President--Western Group of the Company. Mr. Steen was formerly President
and Chief Executive Officer of Medical Care America from September 1992 until
September 1994 and President, Chief Executive Officer of Medical Care Interna-
tional from September 1981 to September 1992.
David R. White joined the Company in March 1994 and has served as Presi-
dent--National Group of the Company since June 1995. Before this period, he
served as Executive Vice President and Chief Operating Officer with Community
Health Systems, Inc. for eight years.
18
<PAGE>
ITEM 2. PROPERTIES.
The following table lists, by state, the number of hospitals owned, managed
or operated by the Company as of December 31, 1995:
<TABLE>
<CAPTION>
LICENSED
STATE HOSPITALS BEDS
----- --------- --------
<S> <C> <C>
Alabama................................................ 8 1,218
Alaska................................................. 1 238
Arizona................................................ 5 777
Arkansas............................................... 3 554
California............................................. 13 1,755
Colorado............................................... 10 2,324
Delaware............................................... 1 74
Florida................................................ 55 13,378
Georgia................................................ 19 3,207
Idaho.................................................. 2 436
Illinois............................................... 9 2,964
Indiana................................................ 2 466
Kansas................................................. 3 1,260
Kentucky............................................... 14 2,946
Louisiana.............................................. 22 3,413
Mississippi............................................ 2 264
Missouri............................................... 3 786
Nevada................................................. 1 688
New Hampshire.......................................... 3 295
New Mexico............................................. 2 381
North Carolina......................................... 7 980
Ohio................................................... 3 1,168
Oklahoma............................................... 7 1,131
Oregon................................................. 2 198
South Carolina......................................... 5 903
Tennessee.............................................. 28 4,372
Texas.................................................. 69 13,318
Utah................................................... 10 1,277
Virginia............................................... 15 3,155
Washington............................................. 1 110
West Virginia.......................................... 6 909
Wyoming................................................ 1 70
<CAPTION>
INTERNATIONAL
-------------
<S> <C> <C>
Switzerland............................................ 1 185
United Kingdom......................................... 5 602
--- ------
338 65,802
=== ======
</TABLE>
In addition to the hospitals listed in the above table, the Company operates
more than 135 outpatient surgery centers. The Company also operates medical
office buildings in conjunction with its hospitals. These office buildings are
primarily occupied by physicians who practice at the Company's hospitals.
19
<PAGE>
The Company owns and maintains its headquarters in approximately 400,000
square feet of space in four office buildings in Nashville, Tennessee.
The Company's headquarters, hospitals and other facilities are suitable for
their respective uses and are, in general, adequate for the Company's present
needs.
ITEM 3. LEGAL PROCEEDINGS.
The Company is currently, and from time to time, subject to claims and suits
arising in the ordinary course of business, including claims for personal in-
juries or for wrongful restriction of, or interference with, physicians' staff
privileges. In certain of these actions the claimants have asked for punitive
damages against the Company, which are usually not covered by insurance. In
the opinion of management, the ultimate resolution of any of these pending
claims and legal proceedings will not have a material adverse effect on the
Company's results of operations or financial position.
A class action styled Mary Forsyth et al. v. Humana Inc. et al., Case #CV-S-
89-249-PMP (L.R.L.), was filed on March 29, 1989, in the United States Dis-
trict Court for the District of Nevada (the "Forsyth" case). On August 12,
1991, a Second Amended Complaint was filed in the Forsyth case which signifi-
cantly increased the amount of damages claimed by the plaintiffs in previously
filed complaints. The claimed damages increased from $10 million to
$84,520,143 in connection with a count which alleges a violation of the Em-
ployee Retirement Income Security Act (the "ERISA Count"); from $10 million to
$181,034,570 (before trebling) in connection with an alleged violation of the
Sherman Anti-Trust Act (the "Anti-Trust Count"); and from $10 million to
$181,034,570 (before trebling) for an alleged violation of the Racketeer In-
fluenced and Corrupt Organization Act (the "RICO Count"). In late March 1992,
as part of the discovery process, the plaintiffs provided information in re-
gard to their calculation of damages which indicates they are seeking recovery
of $49,440,000 of damages plus approximately $15,396,000 of interest in the
ERISA Count and $103,562,165 of damages (before trebling) plus approximately
$31,800,000 of interest in the RICO Count. Specific amounts were not readily
apparent for the Anti-Trust Count but it appears the plaintiffs believe their
claimed damages in the Anti-Trust Count would be similar to those in the RICO
Count. The ERISA Count, which is being asserted by the Co-Payer Class, claims
that Humana Inc. ("Humana") violated a fiduciary duty in connection with (i)
the calculation of co-insurance payments required under policies issued by
Humana's insurance subsidiary ("Humana Insurance") for insureds who were
treated at Sunrise Hospital in Las Vegas (now owned by the Company), and (ii)
payments to the hospital by Humana Insurance. The Anti-Trust Count, which is
being asserted by the Premium Payer Class, alleges that Sunrise Hospital has
monopolized or has attempted to monopolize the for-profit, acute care hospital
services market in Clark County, Nevada, and that Humana Insurance engaged in
predatory pricing in connection with the sale of insurance policies to members
of such class. The plaintiffs have also indicated damages with respect to the
Co-Payer Class. The RICO Count, which is being asserted by both the Premium
Payer and Co-Payer Classes, alleges fraud in connection with (i) the sale of
insurance policies to members of the Premium Payer Class and (ii) the calcula-
tion of the co-insurance payments. On June 22, 1992, defendants filed a Motion
for Summary Judgment on all three counts of the Complaint. On July 21, 1993,
Summary Judgment was entered in favor of defendants on all counts, although
the Court allowed the Co-Payer Class to file a Third Amended Complaint. On Au-
gust 24, 1993, the plaintiffs filed a Third Amended Complaint against Humana
Insurance, seeking to recover at least $2,000,000, plus interest, which repre-
sents the difference between their co-insurance payments and what the payments
would have been if calculated based on the discounted payments made by Humana
Insurance to Sunrise Hospital. The plaintiffs filed a Motion for Summary Judg-
ment on the Third Amended Complaint on November 10, 1993. The Court granted
the plaintiff's Motion for Summary Judgment on June 3, 1994. The plaintiffs
have
20
<PAGE>
appealed the grant of defendants Motion for Summary Judgment on the RICO Count
and the Anti-Trust Count. The matter was argued before the Ninth Circuit Court
of Appeals on December 4, 1995. There has been no ruling as of the date here-
of. Pursuant to an Assumption of Liabilities and Indemnification Agreement en-
tered into in connection with the Spinoff, Humana assumed approximately 39%
and Galen assumed approximately 61% of all liabilities, costs and expenses
arising out of certain identified legal proceedings and claims, including the
Forsyth case.
A class action, In re Medical Care America, Inc. Securities Litigation, is
pending in the United States District Court for the Northern District of Tex-
as, Dallas Division (Civil Action No. 3-92-CV-1996-R). A class has been certi-
fied by the Court consisting of all persons who owned securities of Medical
Care America, Inc. ("MCA") at the close of trading on September 24, 1992 and
who acquired those securities either in purchases in the open market following
the September 9, 1992 merger of Medical Care International, Inc. ("MCI") and
Critical Care America, Inc. ("CCA") forming MCA or through exchange of their
securities in said companies pursuant to the merger, and who allegedly sus-
tained damages as a result of such purchases, subject to certain exclusions
(the "Class Members"). The named defendants include MCA, MCI, CCA as well as
certain officers and/or directors of MCA, MCI or CCA. The plaintiffs seek to
recover damages sustained by Class Members as a result of alleged violations
by the defendants of Section 11 of the Securities Act of 1933, as amended, and
Section 10(b) of the Securities Exchange Act of 1934, as amended, and Rule
10b-5 promulgated thereunder. In addition, the complaint asserts claims under
the state law of Texas which have not been certified for class treatment at
the present time, without prejudice to any party's rights regarding certifica-
tion of such claims in the future. The complaint alleges a course of conduct
in which the defendants knowingly or recklessly failed to state material in-
formation and released false and misleading information to the investing pub-
lic, regarding the earnings, profitability and business prospects of MCA and
of MCI and CCA prior to their merger. The plaintiffs allege that, as a result
of this false and misleading information, the market price of MCA securities
was artificially inflated throughout the class period. The plaintiffs further
allege that, upon the dissemination on September 25, 1992 of the true facts
concerning MCA's earnings, profitability and business prospects, the market
price of MCA common stock dropped precipitously, resulting in a significant
market loss of over $1 billion, and causing damages to plaintiffs and the
other Class Members. The litigation has been tentatively settled for $60 mil-
lion. The settlement is subject to the approval of the Court as well as a ma-
jority of the Class Members.
A lawsuit captioned United States of America ex rel. James Thompson v.
Columbia/HCA Healthcare Corporation et al., was filed on March 10, 1995 in the
United States District Court for the Southern District of Texas, Corpus
Christi Division (Civil Action No. C-95-110). The lawsuit is a qui tam action
brought by a private party (or "relator") on behalf of the United States of
America. The relator claims that the defendants (the Company and certain sub-
sidiaries and affiliated partnerships) engaged in a widespread strategy to pay
physicians money for referrals and engaged in other conduct to induce refer-
rals, such as: (i) offering physicians equity interests in hospitals; (ii) of-
fering loans to physicians; (iii) paying money under the guise of "consulta-
tion fees" to physicians to guarantee their capital investment; (iv) paying
consultation fees, rent or other monies to physicians; (v) providing free or
reduced rate rents for office space; (vi) providing free or reduced-rate vaca-
tions and trips; (viii) providing income guarantees; and (ix) granting physi-
cians exclusive rights to perform procedures in particular fields of practice.
The lawsuit is premised on alleged violations of the False Claims Act, 31
U.S.C. (S)3729 et seq. The complaint seeks damages of three times the amount
of all Medicare claims (involving false claims) presented by the defendants to
the federal government, a civil penalty of not less than $5,000 nor more than
$10,000 for each such Medicare or Medicaid claim, attorneys' fees and costs.
Although expressly permitted to do so, the United States has thus far declined
to intervene in the case and assume prosecution of the claims asserted by the
relator. The defendants filed a Motion to Dismiss the Second Amended Complaint
on November 29, 1995. Discovery has been stayed pending a ruling
21
<PAGE>
on the motion. The Company believes that the allegations in the complaint are
without merit and intends to pursue the defense of this action vigorously.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matters were submitted to a vote of security holders during the fourth
quarter of 1995.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
The information required by this item is set forth in the Company's 1995 An-
nual Report to Stockholders under the heading "Stock Information and Divi-
dends," which information is incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA.
The information required by this item is set forth in the Company's 1995 An-
nual Report to Stockholders under the heading "Selected Financial Data," which
information is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
The information required by this item is set forth in the Company's 1995 An-
nual Report to Stockholders under the heading "Management's Discussion and
Analysis of Financial Condition and Results of Operations," which information
is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The information required by this item is set forth on pages 16 through 39 in
the Company's 1995 Annual Report to Stockholders, which information is incor-
porated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The information required by this Item is set forth under the heading "Elec-
tion of Directors" in the definitive proxy materials of the Company to be
filed in connection with its 1996 Annual Meeting of Stockholders, except for
the information regarding executive officers of the Company, which is con-
tained in Item 1 of Part I of this Annual Report on Form 10-K. The information
required by this Item contained in such definitive proxy materials is incorpo-
rated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION.
The information required by this Item is set forth under the heading "Execu-
tive Compensation" in the definitive proxy materials of the Company to be
filed in connection with its 1996 Annual Meeting of Stockholders, which infor-
mation is incorporated herein by reference.
22
<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The information required by this Item is set forth under the heading "Prin-
cipal Stockholders" in the definitive proxy materials of the Company to be
filed in connection with its 1996 Annual Meeting of Stockholders, which infor-
mation is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The information required by this Item is set forth under the heading "Cer-
tain Transactions" in the definitive proxy materials of the Company to be
filed in connection with its 1996 Annual Meeting of Stockholders, which infor-
mation is incorporated herein by reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
(a) Documents filed as part of the report:
1. Financial Statements
The consolidated financial statements to be included in Part II,
Item 8, are incorporated by reference to the Company's 1995 An-
nual Report to Stockholders (See Exhibit 13).
2. List of Financial Statement Schedules
Schedule II--Valuation and Qualifying Accounts for the years
ended December 31, 1995, 1994 and 1993 is included in Page S-1
of this Annual Report on Form 10-K. All other schedules are
omitted because the required information is not present or not
present in material amounts.
3. List of Exhibits
3.1 Restated Certificate of Incorporation of the Company (filed as
Exhibit 3(a) to the Company's Current Report on Form 8-K dated
February 11, 1994, and incorporated herein by reference).
3.2(a) By-laws of the Company (filed as Exhibit 2.2 to the Company's
Registration Statement on Form 8-A dated August 31, 1993, and
incorporated herein by reference).
3.2(b) Amendment to By-laws of the Company (filed as Exhibit 3(b).1 to
the Company's Current Report on Form 8-K dated February 11,
1994, and incorporated herein by reference).
4.1 Specimen Certificate for shares of Common Stock, par value $.01
per share, of the Company (filed as Exhibit 4.1 to the Company's
Form SE to Form 10-K for the fiscal year ended December 31,
1993, and incorporated herein by reference).
4.2 Columbia Hospital Corporation 9% Subordinated Mandatory Convert-
ible Note Due June 30, 1999 (filed as Exhibit 4.4 to the
Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1990, and incorporated herein by reference).
4.3 Registration Rights Agreement between the Company and The 1818
Fund, L.P. dated March 18, 1991 (filed as Exhibit 4.5 to the
Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1990, and incorporated herein by reference).
4.4 Securities Purchase Agreement by and between the Company and The
1818 Fund, L.P. dated as of March 18, 1991 (filed as Exhibit 4.6
to the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1990, and incorporated herein by reference).
23
<PAGE>
4.5 Warrant to purchase shares of Common Stock, par value $.01 per
share, of the Company (filed as Exhibit 4.7 to the Company's
Annual Report on Form 10-K for the fiscal year ended December
31, 1990, and incorporated herein by reference).
4.6 Registration Rights Agreement dated as of March 16, 1989, by and
among HCA- Hospital Corporation of America and the persons
listed on the signature pages thereto (filed as Exhibit (g)(24)
to Amendment No. 3 to the Schedule 13E-3 filed by HCA-Hospital
Corporation of America, Hospital Corporation of America and The
HCA Profit Sharing Plan on March 22, 1989, and incorporated
herein by reference).
4.7 Assignment and Assumption Agreement dated as of February 10,
1994, between HCA-Hospital Corporation of America and the Com-
pany relating to the Registration Rights Agreement, as amended
(filed as Exhibit 4.7 to the Company's Annual Report on Form 10-
K for the fiscal year ended December 31, 1993, and incorporated
herein by reference).
4.8 Amended and Restated Rights Agreement dated February 10, 1994
between the Company and Mid-America Bank of Louisville and Trust
Company (filed as Exhibit 4.8 to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1993, and in-
corporated herein by reference).
4.9(a) $1 Billion Credit Agreement dated as of February 10, 1994 (the
"364 Day Agreement"), among the Company, the Several Banks and
Other Financial Institutions, and Chemical Bank as Agent and as
CAF Loan Agent (filed as Exhibit 4.9 to the Company's Annual Re-
port on Form 10-K for the fiscal year ended December 31, 1993,
and incorporated herein by reference).
4.9(b) Agreement and Amendment to the 364 Day Agreement dated as of
September 26, 1994 (filed as Exhibit 4.9 to the Company's Regis-
tration Statement on Form S-4 (File No. 33-56803), and incorpo-
rated herein by reference).
4.9(c) Agreement and Amendment to the 364 Day Agreement dated as of
February 28, 1996 (which Agreement and Amendment is filed here-
with).
4.10(a) $2 Billion Credit Agreement dated as of February 10, 1994 (the
"Credit Facility"), among the Company, the Several Banks and
Other Financial Institutions, and Chemical Bank as Agent and as
CAF Loan Agent (filed as Exhibit 4.10 to the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1993,
and incorporated herein by reference).
4.10(b) Agreement and Amendment to the Credit Facility dated as of Sep-
tember 26, 1994 (filed as Exhibit 4.10 to the Company's Regis-
tration Statement on Form S-4 (File No. 33-56803), and incorpo-
rated herein by reference).
4.10(c) Agreement and Amendment to the Credit Facility dated as of Feb-
ruary 28, 1996 (which Agreement and Amendment is filed here-
with).
4.11 Indenture dated as of December 15, 1993 between the Company and
The First National Bank of Chicago, as Trustee (filed as Exhibit
4.11 to the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1993, and incorporated herein by refer-
ence).
10.1 Agreement and Plan of Merger among the Company, COL Acquisition
Corporation and Healthtrust, Inc.--The Hospital Company dated as
of October 4, 1994 (filed as Exhibit 2 to the Company's Regis-
tration Statement on Form S-4 (File No. 33-56803), and incorpo-
rated herein by reference).
10.2 Agreement and Plan of Merger among the Company, CHOS Acquisition
Corporation and HCA-Hospital Corporation of America dated as of
October 2, 1993 (filed as Exhibit 2 to the Company's Registra-
tion Statement on Form S-4 (File No. 33-50735), and incorporated
herein by reference).
24
<PAGE>
10.3 Agreement and Plan of Merger between Galen Health Care, Inc. and
the Company dated as of June 10, 1993 (filed as Exhibit 2 to the
Company's Registration Statement on Form S-4 (File No. 33-
49773), and incorporated herein by reference).
10.4 Agreement and Plan of Merger among Hospital Corporation of Amer-
ica, HCA- Hospital Corporation of America and TF Acquisition,
Inc. dated November 21, 1988 plus a list identifying the con-
tents of all omitted exhibits to the Agreement and Plan of
Merger plus an agreement of Hospital Corporation of America to
furnish supplementally to the Securities and Exchange Commission
upon request a copy of all omitted exhibits (filed as Exhibit 2
to Hospital Corporation of America's Current Report on Form 8-K
dated November 21, 1988, and incorporated herein by reference).
10.5 Amendment No. 1 to Agreement and Plan of Merger dated as of Feb-
ruary 7, 1989, among Hospital Corporation of America, HCA-Hospi-
tal Corporation of America and TF Acquisition, Inc. (filed as
Exhibit 2(b) to Hospital Corporation of America's Annual Report
on Form 10-K for the year ended December 31, 1988, and incorpo-
rated herein by reference).
10.6 Columbia Hospital Corporation Stock Option Plan (filed as Ex-
hibit 10.13 to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1990, and incorporated herein by
reference).*
10.7 Columbia Hospital Corporation 1992 Stock and Incentive Plan
(filed as Exhibit 10.14 to the Company's Registration Statement
on Form S-1 (Reg. No. 33-48886), and incorporated herein by ref-
erence).*
10.8 Columbia Hospital Corporation Outside Directors Nonqualified
Stock Option Plan (filed as Exhibit 28.1 to the Company's Regis-
tration Statement on Form S-8 (File No. 33-55272), and incorpo-
rated herein by reference).*
10.9 HCA-Hospital Corporation of America 1989 Nonqualified Stock Op-
tion Plan, as amended through December 16, 1991 (filed as Ex-
hibit 10(g) to HCA-Hospital Corporation of America's Registra-
tion Statement on Form S-1 (File No. 33-44906), and incorporated
herein by reference).*
10.10 Form of Stock Option Agreement under the HCA-Hospital Corpora-
tion of America 1989 Nonqualified Stock Option Plan (filed as
Exhibit 10(j) to HCA-Hospital Corporation of America's Annual
Report on Form 10-K for the year ended December 31, 1989, and
incorporated herein by reference).*
10.11 HCA-Hospital Corporation of America Nonqualified Initial Option
Plan (filed as Exhibit 4.6 to the Company's Registration State-
ment on Form S-3 (File No. 33-52379), and incorporated herein by
reference).*
10.12 Termination Agreement between the Company and Carl F. Pollard
dated December 16, 1993 (filed as Exhibit 10.11 to the Company's
Annual Report on Form 10-K for the fiscal year ended December
31, 1993, and incorporated herein by reference).*
10.13 Form of Indemnity Agreement with certain officers and directors
(filed as Exhibit 10(kk) to Galen Health Care, Inc.'s Registra-
tion Statement on Form 10, as amended, and incorporated herein
by reference).
10.14 Form of Severance Pay Agreement between Galen Health Care, Inc.
and certain executives (filed as Exhibit 10(jj) to Galen Health
Care, Inc.'s Registration Statement on Form 10, as amended, and
incorporated herein by reference).*
10.15 Form of Severance Agreement between HCA-Hospital Corporation of
America and certain executives dated as of November 1, 1993
(filed as Exhibit 10.15 to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1993, and incorpo-
rated herein by reference).*
25
<PAGE>
10.16 Assumption Agreement among the Company, CHOS Acquisition Corpo-
ration and HCA-Hospital Corporation of America dated as of Feb-
ruary 10, 1994, relating to the Severance Agreements (filed as
Exhibit 10.16 to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1993, and incorporated herein
by reference).*
10.17 Form of Severance Pay Agreement between the Company and certain
executives dated as of June 10, 1993 (filed as Exhibit 10.17 to
the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1993, and incorporated herein by reference).*
10.18 Form of Galen Health Care, Inc. 1993 Adjustment Plan (filed as
Exhibit 4.15 to the Company's Registration Statement on Form S-8
(File No. 33-50147), and incorporated herein by reference).*
10.19 Columbia/HCA Healthcare Corporation Annual Incentive Plan (filed
as Exhibit 10.19 to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1993, and incorporated herein
by reference).*
10.20 Columbia/HCA Healthcare Corporation Directors' Retirement Policy
(filed as Exhibit 10.20 to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1993, and incorpo-
rated herein by reference).*
10.21 HCA-Hospital Corporation of America 1992 Stock Compensation Plan
(filed as Exhibit 10(t) to HCA-Hospital Corporation of America's
Registration Statement on Form S-1 (File No. 33-44906), and in-
corporated herein by reference).*
10.22 Columbia/HCA Healthcare Corporation 1995 Management Stock Pur-
chase Plan (which plan is filed herewith).*
10.23 Employment Agreement, dated November 15, 1993 by and between
Medical Care America, Inc. and Donald E. Steen (which agreement
is filed herewith).*
10.24 Employment Agreement, dated April 24, 1995 by and between the
Company and R. Clayton McWhorter (which agreement is filed here-
with).*
11 Statement re Computation of Earnings Per Common and Common
Equivalent Share.
12 Statement re Computation of Ratio of Earnings to Fixed Charges.
13 Portions of the 1995 Annual Report to Stockholders of the Compa-
21 ny.
List of Subsidiaries.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Sr. Judith Ann Karam, CSA.
27 Financial Data Schedule.
- --------
* Management compensatory plan or arrangement.
(b) Reports on Form 8-K.
<TABLE>
<CAPTION>
DATE OF CURRENT
REPORT ITEM(S) REPORTED
--------------- ----------------
<C> <S>
November 24, 1995 Form of 7.19% Debenture due 2015 and 7.50% Debenture due
2095 issued by the Company
December 8, 1995 Form of 7.05% Debenture due 2027 issued by the Company
</TABLE>
26
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Ex-
change Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Dated: March 29, 1996
COLUMBIA/HCA HEALTHCARE CORPORATION
/s/ Richard L. Scott
By: _________________________________
RICHARD L. SCOTT PRESIDENT AND
CHIEF EXECUTIVE OFFICER
Pursuant to the requirements of the Securities Exchange Act of 1934, this re-
port has been signed below by the following persons on behalf of the registrant
and in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
/s/ R. Clayton McWhorter Chairman of the March 29, 1996
- ------------------------------------- Board
R. CLAYTON MCWHORTER
/s/ Thomas F. Frist, Jr., M.D. Vice Chairman of the March 29, 1996
- ------------------------------------- Board
THOMAS F. FRIST, JR., M.D.
/s/ Richard L. Scott President, Chief March 29, 1996
- ------------------------------------- Executive Officer
RICHARD L. SCOTT and Director
/s/ David C. Colby Senior Vice March 29, 1996
- ------------------------------------- President and
DAVID C. COLBY Treasurer
(Principal
Financial Officer)
/s/ Kenneth C. Donahey Senior Vice March 29, 1996
- ------------------------------------- President and
KENNETH C. DONAHEY Controller
(Principal
Accounting Officer)
/s/ Magdalena Averhoff, M.D. Director March 29, 1996
- -------------------------------------
MAGDALENA AVERHOFF, M.D.
27
<PAGE>
SIGNATURE TITLE DATE
/s/ Charles J. Kane Director March 29, 1996
- -------------------------------------
CHARLES J. KANE
/s/ John W. Landrum Director March 29, 1996
- -------------------------------------
JOHN W. LANDRUM
/s/ T. Michael Long Director March 29, 1996
- -------------------------------------
T. MICHAEL LONG
/s/ Donald S. MacNaughton Director March 29, 1996
- -------------------------------------
DONALD S. MACNAUGHTON
Director
- -------------------------------------
RODMAN W. MOORHEAD III
/s/ Carl E. Reichardt Director March 29, 1996
- -------------------------------------
CARL E. REICHARDT
/s/ Frank S. Royal, M.D. Director March 29, 1996
- -------------------------------------
FRANK S. ROYAL, M.D.
Director
- -------------------------------------
Director
ROBERT D. WALTER
- -------------------------------------
WILLIAM T. YOUNG
28
<PAGE>
INDEX TO EXHIBITS
EXHIBIT
NO. DESCRIPTION
- ------- -----------
1. Financial Statements
The consolidated financial statements to be included in Part II,
Item 8, are incorporated by reference to the Company's 1995 An-
nual Report to Stockholders (See Exhibit 13).
2. List of Financial Statement Schedules
Schedule II--Valuation and Qualifying Accounts for the years
ended December 31, 1995, 1994 and 1993 is included in Page S-1
of this Annual Report on Form 10-K. All other schedules are
omitted because the required information is not present or not
present in material amounts.
3. List of Exhibits
3.1 Restated Certificate of Incorporation of the Company (filed as
Exhibit 3(a) to the Company's Current Report on Form 8-K dated
February 11, 1994, and incorporated herein by reference).
3.2(a) By-laws of the Company (filed as Exhibit 2.2 to the Company's
Registration Statement on Form 8-A dated August 31, 1993, and
incorporated herein by reference).
3.2(b) Amendment to By-laws of the Company (filed as Exhibit 3(b).1 to
the Company's Current Report on Form 8-K dated February 11,
1994, and incorporated herein by reference).
4.1 Specimen Certificate for shares of Common Stock, par value $.01
per share, of the Company (filed as Exhibit 4.1 to the Company's
Form SE to Form 10-K for the fiscal year ended December 31,
1993, and incorporated herein by reference).
4.2 Columbia Hospital Corporation 9% Subordinated Mandatory Convert-
ible Note Due June 30, 1999 (filed as Exhibit 4.4 to the
Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1990, and incorporated herein by reference).
4.3 Registration Rights Agreement between the Company and The 1818
Fund, L.P. dated March 18, 1991 (filed as Exhibit 4.5 to the
Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1990, and incorporated herein by reference).
4.4 Securities Purchase Agreement by and between the Company and The
1818 Fund, L.P. dated as of March 18, 1991 (filed as Exhibit 4.6
to the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1990, and incorporated herein by reference).
4.5 Warrant to purchase shares of Common Stock, par value $.01 per
share, of the Company (filed as Exhibit 4.7 to the Company's
Annual Report on Form 10-K for the fiscal year ended December
31, 1990, and incorporated herein by reference).
4.6 Registration Rights Agreement dated as of March 16, 1989, by and
among HCA- Hospital Corporation of America and the persons
listed on the signature pages thereto (filed as Exhibit (g)(24)
to Amendment No. 3 to the Schedule 13E-3 filed by HCA-Hospital
Corporation of America, Hospital Corporation of America and The
HCA Profit Sharing Plan on March 22, 1989, and incorporated
herein by reference).
29
<PAGE>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
4.7 Assignment and Assumption Agreement dated as of February 10,
1994, between HCA-Hospital Corporation of America and the Com-
pany relating to the Registration Rights Agreement, as amended
(filed as Exhibit 4.7 to the Company's Annual Report on Form 10-
K for the fiscal year ended December 31, 1993, and incorporated
herein by reference).
4.8 Amended and Restated Rights Agreement dated February 10, 1994
between the Company and Mid-America Bank of Louisville and Trust
Company (filed as Exhibit 4.8 to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1993, and in-
corporated herein by reference).
4.9(a) $1 Billion Credit Agreement dated as of February 10, 1994 (the
"364 Day Agreement"), among the Company, the Several Banks and
Other Financial Institutions, and Chemical Bank as Agent and as
CAF Loan Agent (filed as Exhibit 4.9 to the Company's Annual Re-
port on Form 10-K for the fiscal year ended December 31, 1993,
and incorporated herein by reference).
4.9(b) Agreement and Amendment to the 364 Day Agreement dated as of
September 26, 1994 (filed as Exhibit 4.9 to the Company's Regis-
tration Statement on Form S-4 (File No. 33-56803), and incorpo-
rated herein by reference).
4.9(c) Agreement and Amendment to the 364 Day Agreement dated as of
February 28, 1996 (which Agreement and Amendment is filed here-
with).
4.10(a) $2 Billion Credit Agreement dated as of February 10, 1994 (the
"Credit Facility"), among the Company, the Several Banks and
Other Financial Institutions, and Chemical Bank as Agent and as
CAF Loan Agent (filed as Exhibit 4.10 to the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1993,
and incorporated herein by reference).
4.10(b) Agreement and Amendment to the Credit Facility dated as of Sep-
tember 26, 1994 (filed as Exhibit 4.10 to the Company's Regis-
tration Statement on Form S-4 (File No. 33-56803), and incorpo-
rated herein by reference).
4.10(c) Agreement and Amendment to the Credit Facility dated as of Feb-
ruary 28, 1996 (which Agreement and Amendment is filed here-
with).
4.11 Indenture dated as of December 15, 1993 between the Company and
The First National Bank of Chicago, as Trustee (filed as Exhibit
4.11 to the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1993, and incorporated herein by refer-
ence).
10.1 Agreement and Plan of Merger among the Company, COL Acquisition
Corporation and Healthtrust, Inc.--The Hospital Company dated as
of October 4, 1994 (filed as Exhibit 2 to the Company's Regis-
tration Statement on Form S-4 (File No. 33-56803), and incorpo-
rated herein by reference).
10.2 Agreement and Plan of Merger among the Company, CHOS Acquisition
Corporation and HCA-Hospital Corporation of America dated as of
October 2, 1993 (filed as Exhibit 2 to the Company's Registra-
tion Statement on Form S-4 (File No. 33-50735), and incorporated
herein by reference).
10.3 Agreement and Plan of Merger between Galen Health Care, Inc. and
the Company dated as of June 10, 1993 (filed as Exhibit 2 to the
Company's Registration Statement on Form S-4 (File No. 33-
49773), and incorporated herein by reference).
30
<PAGE>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
10.4 Agreement and Plan of Merger among Hospital Corporation of Amer-
ica, HCA- Hospital Corporation of America and TF Acquisition,
Inc. dated November 21, 1988 plus a list identifying the con-
tents of all omitted exhibits to the Agreement and Plan of
Merger plus an agreement of Hospital Corporation of America to
furnish supplementally to the Securities and Exchange Commission
upon request a copy of all omitted exhibits (filed as Exhibit 2
to Hospital Corporation of America's Current Report on Form 8-K
dated November 21, 1988, and incorporated herein by reference).
10.5 Amendment No. 1 to Agreement and Plan of Merger dated as of Feb-
ruary 7, 1989, among Hospital Corporation of America, HCA-Hospi-
tal Corporation of America and TF Acquisition, Inc. (filed as
Exhibit 2(b) to Hospital Corporation of America's Annual Report
on Form 10-K for the year ended December 31, 1988, and incorpo-
rated herein by reference).
10.6 Columbia Hospital Corporation Stock Option Plan (filed as Ex-
hibit 10.13 to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1990, and incorporated herein by
reference).*
10.7 Columbia Hospital Corporation 1992 Stock and Incentive Plan
(filed as Exhibit 10.14 to the Company's Registration Statement
on Form S-1 (Reg. No. 33-48886), and incorporated herein by ref-
erence).*
10.8 Columbia Hospital Corporation Outside Directors Nonqualified
Stock Option Plan (filed as Exhibit 28.1 to the Company's Regis-
tration Statement on Form S-8 (File No. 33-55272), and incorpo-
rated herein by reference).*
10.9 HCA-Hospital Corporation of America 1989 Nonqualified Stock Op-
tion Plan, as amended through December 16, 1991 (filed as Ex-
hibit 10(g) to HCA-Hospital Corporation of America's Registra-
tion Statement on Form S-1 (File No. 33-44906), and incorporated
herein by reference).*
10.10 Form of Stock Option Agreement under the HCA-Hospital Corpora-
tion of America 1989 Nonqualified Stock Option Plan (filed as
Exhibit 10(j) to HCA-Hospital Corporation of America's Annual
Report on Form 10-K for the year ended December 31, 1989, and
incorporated herein by reference).*
10.11 HCA-Hospital Corporation of America Nonqualified Initial Option
Plan (filed as Exhibit 4.6 to the Company's Registration State-
ment on Form S-3 (File No. 33-52379), and incorporated herein by
reference).*
10.12 Termination Agreement between the Company and Carl F. Pollard
dated December 16, 1993 (filed as Exhibit 10.11 to the Company's
Annual Report on Form 10-K for the fiscal year ended December
31, 1993, and incorporated herein by reference).*
10.13 Form of Indemnity Agreement with certain officers and directors
(filed as Exhibit 10(kk) to Galen Health Care, Inc.'s Registra-
tion Statement on Form 10, as amended, and incorporated herein
by reference).
10.14 Form of Severance Pay Agreement between Galen Health Care, Inc.
and certain executives (filed as Exhibit 10(jj) to Galen Health
Care, Inc.'s Registration Statement on Form 10, as amended, and
incorporated herein by reference).*
10.15 Form of Severance Agreement between HCA-Hospital Corporation of
America and certain executives dated as of November 1, 1993
(filed as Exhibit 10.15 to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1993, and incorpo-
rated herein by reference).*
31
<PAGE>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
10.16 Assumption Agreement among the Company, CHOS Acquisition Corpo-
ration and HCA-Hospital Corporation of America dated as of Feb-
ruary 10, 1994, relating to the Severance Agreements (filed as
Exhibit 10.16 to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1993, and incorporated herein
by reference).*
10.17 Form of Severance Pay Agreement between the Company and certain
executives dated as of June 10, 1993 (filed as Exhibit 10.17 to
the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1993, and incorporated herein by reference).*
10.18 Form of Galen Health Care, Inc. 1993 Adjustment Plan (filed as
Exhibit 4.15 to the Company's Registration Statement on Form S-8
(File No. 33-50147), and incorporated herein by reference).*
10.19 Columbia/HCA Healthcare Corporation Annual Incentive Plan (filed
as Exhibit 10.19 to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1993, and incorporated herein
by reference).*
10.20 Columbia/HCA Healthcare Corporation Directors' Retirement Policy
(filed as Exhibit 10.20 to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1993, and incorpo-
rated herein by reference).*
10.21 HCA-Hospital Corporation of America 1992 Stock Compensation Plan
(filed as Exhibit 10(t) to HCA-Hospital Corporation of America's
Registration Statement on Form S-1 (File No. 33-44906), and in-
corporated herein by reference).*
10.22 Columbia/HCA Healthcare Corporation 1995 Management Stock Pur-
chase Plan (which plan is filed herewith).*
10.23 Employment Agreement, dated November 15, 1993 by and between
Medical Care America, Inc. and Donald E. Steen (which agreement
is filed herewith).*
10.24 Employment Agreement, dated April 24, 1995 by and between the
Company and R. Clayton McWhorter (which agreement is filed here-
with).*
11 Statement re Computation of Earnings Per Common and Common
Equivalent Share.
12 Statement re Computation of Ratio of Earnings to Fixed Charges.
13 Portions of the 1995 Annual Report to Stockholders of the Compa-
21 ny.
List of Subsidiaries.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Sr. Judith Ann Karam, CSA.
27 Financial Data Schedule.
- --------
* Management compensatory plan or arrangement.
32
<PAGE>
COLUMBIA/HCA HEALTHCARE CORPORATION
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
ADDITIONS
BALANCE AT CHARGED TO BALANCE
BEGINNING COSTS AND DEDUCTIONS AT END
OF PERIOD EXPENSES OR PAYMENTS OF PERIOD
---------- ---------- ----------- ---------
<S> <C> <C> <C> <C>
Allowances for doubtful accounts:
Year ended December 31, 1993..... $583 $699 $(645) $637
Year ended December 31, 1994..... 637 853 (706) 784
Year ended December 31, 1995..... 784 998 (881) 901
</TABLE>
S-1
<PAGE>
EXHIBIT 4.9C
AGREEMENT AND AMENDMENT
AGREEMENT AND AMENDMENT, dated as of February 28, 1996 (the
"February 1996 Agreement and Amendment"), among COLUMBIA/HCA HEALTHCARE
-------------------------------------
CORPORATION, a Delaware corporation formerly known as Columbia Healthcare
Corporation (the "Company"), the several banks and other financial institutions
-------
from time to time parties hereto (the "Banks"), BANK OF AMERICA NATIONAL TRUST
-----
AND SAVINGS ASSOCIATION, CREDIT LYONNAIS CAYMAN ISLAND BRANCH, DEUTSCHE BANK AG,
THE FIRST NATIONAL BANK OF CHICAGO, THE INDUSTRIAL BANK OF JAPAN, LIMITED,
ATLANTA AGENCY, MORGAN GUARANTY TRUST COMPANY OF NEW YORK, NATIONSBANK, N.A.,
PNC BANK, KENTUCKY, INC., COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A.
"RABOBANK NEDERLAND", NEW YORK BRANCH, THE SAKURA BANK, LTD. NEW YORK BRANCH,
THE SUMITOMO BANK LIMITED, NEW YORK BRANCH, TORONTO DOMINION (TEXAS), INC. AND
WACHOVIA BANK OF GEORGIA, N.A., as Co-Agents (collectively, the "Co-Agents"),
---------
and CHEMICAL BANK, a New York banking corporation, as agent for the Banks
hereunder (in such capacity, the "Agent") and as CAF Loan agent (in such
-----
capacity, the "CAF Loan Agent").
--------------
W I T N E S S E T H :
WHEREAS, the Company, the Co-Agents, the Agent, the CAF Loan
Agent and certain banks and other financial institutions (the "Original Banks")
--------------
are parties to the Agreement and Amendment, dated as of February 27, 1995 (the
"February 1995 Agreement and Amendment"), adopting and incorporating by
-------------------------------------
reference all of the terms and provisions of the Credit Agreement, dated as of
February 10, 1994 as incorporated by reference into and amended by the September
1994 Agreement and Amendment (as defined below) (as so adopted and incorporated
by reference into and amended by the February 1995 Agreement and Amendment and
as further amended, supplemented or otherwise modified to the date hereof, the
"Original Credit Agreement"), pursuant to which such parties committed to make
-------------------------
loans to the Company for a period of 364 days;
WHEREAS, effective as of the Closing Date (as defined below),
the Company intends to terminate the Commitments (as defined in the Original
Credit Agreement) of the Original Banks under the Original Credit Agreement
pursuant to subsection 2.4(a) of the Original Credit Agreement;
WHEREAS, the Company has requested that the Co-Agents, the
Agent, the CAF Loan Agent and the Banks enter into a new agreement adopting and
incorporating by reference all of the terms and provisions of the Original
Credit Agreement with certain amendments and modifications thereto; and
<PAGE>
2
WHEREAS, the Co-Agents, the Agent, the CAF Loan Agent and the
Banks are willing to so enter into a new agreement, but only upon the terms and
subject to the conditions set forth below;
NOW THEREFORE, in consideration of the promises and mutual
agreements herein contained and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged by each of the parties
hereto, the parties hereto hereby agree as follows:
SECTION 1. Adoption and Incorporation of Original Credit
---------------------------------------------
Agreement. Subject to the amendments and modifications set forth in Sections 3
- ---------
through 11 of this Agreement, all of the terms and provisions of the Original
Credit Agreement are hereby adopted and incorporated by reference into this
Agreement, with the same force and effect as if fully set forth herein. This
Agreement shall not constitute an amendment or waiver of any provision of the
Original Credit Agreement not expressly referred to herein and shall not be
construed as an amendment, waiver or consent to any action on the part of the
Company that would require an amendment, waiver or consent of the Agent or the
Banks except as expressly stated herein. Except as expressly amended hereby, the
provisions of the Original Credit Agreement as adopted and incorporated by
reference into this Agreement are and shall remain in full force and effect.
SECTION 2. Definitions. As used in this Agreement, terms
-----------
defined herein are used as so defined and, unless otherwise defined herein,
terms defined in the Original Credit Agreement are used herein as therein
defined.
SECTION 3. Defined Terms. For purposes of this Agreement,
-------------
subsection 1.1 of the Original Credit Agreement as adopted and incorporated by
reference into this Agreement is hereby amended as follows:
(a) by deleting the defined terms "Agreement", "Applicable
Margin", "Closing Date", "Original Banks" and "Original Credit Agreement" in
their entirety and substituting in lieu thereof in proper alphabetical order the
following:
"`Agreement': the Original Credit Agreement as adopted and
---------
incorporated by reference into the February 1996 Agreement and
Amendment, as amended by the February 1996 Agreement and Amendment and
as further amended, supplemented or otherwise modified from time to
time.";
"`Applicable Margin': (i) with respect to Alternate Base Rate
-----------------
Loans, 0% per annum and (ii) with respect to Eurodollar Loans, 0.205%
per annum.";
<PAGE>
3
"'Closing Date': the date on which all of the conditions
------------
precedent for the Closing Date set forth in Section 12 of the February
1996 Agreement and Amendment shall have been fulfilled; provided,
---------
however, that for purposes of Section 4 of the Original Credit
-------
Agreement, the term "Closing Date" shall mean the Original Closing
Date.";
"'Original Banks': as defined in the recitals to the February
--------------
1996 Agreement and Amendment."; and
"'Original Credit Agreement': as defined in the Recitals to
-------------------------
the February 1996 Agreement and Amendment.".
(b) by inserting in said subsection 1.1 of the Original Credit
Agreement in the appropriate alphabetical order the following defined term:
"`February 1996 Agreement and Amendment': the Agreement and
-------------------------------------
Amendment, dated as of February 28, 1996, among the Company, the Banks,
Bank of America National Trust and Savings Association, Credit Lyonnais
Cayman Island Branch, Deutsche Bank AG, The First National Bank of
Chicago, The Industrial Bank of Japan, Limited, Atlanta Agency, Morgan
Guaranty Trust Company of New York, NationsBank, N.A., PNC Bank,
Kentucky, Inc., Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A.
"Rabobank Nederland", New York Branch, The Sakura Bank, Ltd. New York
Branch, The Sumitomo Bank Limited, New York Branch, Toronto Dominion
(Texas), Inc. and Wachovia Bank of Georgia, N.A., as Co-Agents, the
Agent and the CAF Loan Agent.".
SECTION 4. Facility Fee. For purposes of this Agreement,
------------
subsection 2.3(a) of the Original Credit Agreement as adopted and incorporated
by reference into this Agreement is hereby amended by deleting the word "0.080%"
therein and substituting in lieu thereof the word "0.070%".
SECTION 5. Financial Information. For purposes of this
---------------------
Agreement, subsection 3.3 of the Original Credit Agreement as adopted and
incorporated by reference into this Agreement is hereby amended by deleting such
subsection in its entirety and substituting in lieu thereof the following:
"3.3 Financial Information. The Company has furnished
---------------------
to the Agent and each Bank copies of the following:
(a) the Annual Report of the Company for the fiscal year ended
December 31, 1994, containing the consolidated balance sheet of the
Company and its Subsidiaries as at said date and the related
consolidated statements of income, common stockholders' equity and
changes in financial position for the fiscal year then ended,
accompanied by the opinion of Coopers & Lybrand;
<PAGE>
4
(b) the Annual Report of the Company on Form 10-K for the
fiscal year ended December 31, 1994;
(c) quarterly financial statements of the Company, including
balance sheets, for the fiscal periods ended March 31, 1995, June 30,
1995 and September 30, 1995; and
(d) Current Reports on Form 8-K filed with the Securities and
Exchange Commission on November 20, 1995 and December 5, 1995,
respectively.
Such financial statements (including any notes thereto) have been
prepared in accordance with GAAP and fairly present the financial
conditions of the corporations covered thereby at the dates thereof and
the results of their operations for the periods covered thereby,
subject to normal year-end adjustments in the case of interim
statements. As of the date hereof, neither the Company nor any of its
Subsidiaries has any known contingent liabilities of any significant
amount which are not referred to in said financial statements or in the
notes thereto which could reasonably be expected to have a material
adverse effect on the business or assets or on the condition, financial
or otherwise, of the Company and its Subsidiaries, on a consolidated
basis.".
SECTION 6. Litigation. For purposes of this Agreement,
----------
subsection 3.6 of the Original Credit Agreement as adopted and incorporated by
reference into this Agreement is hereby amended by deleting such subsection in
its entirety and substituting in lieu thereof the following:
"3.6 Litigation. Except as disclosed in the Company's Annual
----------
Report on Form 10-K for its fiscal year ended December 31, 1994 and its
Quarterly Reports on Form 10-Q for its fiscal quarters ended March 31,
1995, June 30, 1995 and September 30, 1995, in each case as filed with
the Securities and Exchange Commission and previously distributed to
the Banks, and except as set forth on Schedule V hereto, there is no
litigation, at law or in equity, or any proceeding before any federal,
state, provincial or municipal board or other governmental or
administrative agency pending or to the knowledge of the Company
threatened which, after giving effect to any applicable insurance, may
involve any material risk of a material adverse effect on the business
or assets or on the condition, financial or otherwise, of the Company
and its Subsidiaries on a consolidated basis or which seeks to enjoin
the consummation of any of the transactions contemplated by this
Agreement or any other Loan Document and involves any material risk
that any such injunction will be issued, and no judgment, decree, or
order of any federal, state, provincial or municipal court, board or
other governmental or administrative agency has been issued against the
Company or any Subsidiary which has, or may
<PAGE>
5
involve, a material risk of a material adverse effect on the business
or assets or on the condition, financial or otherwise, of the Company
and its Subsidiaries on a consolidated basis. The Company does not
believe that the final resolution of the matters disclosed in its
Annual Report on Form 10-K for its fiscal year ended December 31, 1994
and its Quarterly Reports on Form 10-Q for its fiscal quarters ended
March 31, 1995, June 30, 1995 and September 30, 1995, in each case as
filed with the Securities and Exchange Commission and previously
distributed to the Banks, and of the matters set forth on Schedule V
hereto will have a material adverse effect on the business or assets or
condition, financial or otherwise, of the Company and its Subsidiaries
on a consolidated basis.".
SECTION 7. Negative Pledge. For purposes of this Agreement,
---------------
subsection 5.12 of the Original Credit Agreement as adopted and incorporated by
reference into this Agreement is hereby amended (a) by deleting the phrase
"except for" in the first sentence thereof and substituting in lieu thereof the
following phrase:
"and the Company will not create or have outstanding any
security on or over the capital stock of any of its Subsidiaries that
own a Principal Property and will ensure that no Subsidiary will create
or have outstanding any security on or over the capital stock of any of
its respective Subsidiaries that own a Principal Property except in
either case for";
(b) by inserting the phrase "or on capital stock, as the case
may be," immediately after each occurrence of the word "property" in paragraph
(b) of the first sentence thereto; and
(c) by deleting paragraph (f) of the first sentence thereto in
its entirety and substituting in lieu thereof the following:
"(f) any security created in connection with the borrowing of
funds if within 120 days such funds are used to repay Indebtedness in
at least the same principal amount as secured by other security of
Principal Property or capital stock of a Subsidiary that owns a
Principal Property, as the case may be, with an independent appraised
fair market value at least equal to the appraised fair market value of
the Principal Property or capital stock of a Subsidiary that owns a
Principal Property, as the case may be, secured by the new security;
and".
SECTION 8. Commitment Amounts and Percentages; Lending
-------------------------------------------
Offices; Addresses for Notice. For purposes of this Agreement, Schedule I to the
- -----------------------------
Original Credit Agreement as adopted and incorporated by reference into this
Agreement is hereby amended
<PAGE>
6
by deleting such Schedule in its entirety and substituting in lieu thereof
Schedule I to this Agreement.
SECTION 9. Subsidiaries of the Company. For purposes of this
---------------------------
Agreement, Schedule II to the Original Credit Agreement as adopted and
incorporated by reference into this Agreement is hereby amended by deleting such
Schedule in its entirety and substituting in lieu thereof Schedule II to this
Agreement.
SECTION 10. Indebtedness. For purposes of this Agreement,
------------
Schedule III to the Original Credit Agreement as adopted and incorporated by
reference into this Agreement is hereby amended by deleting such Schedule in its
entirety and substituting in lieu thereof Schedule III to this Agreement.
SECTION 11. Litigation. For purposes of this Agreement, the
----------
Original Credit Agreement as adopted and incorporated by reference into this
Agreement is hereby amended by adding thereto Schedule V to this Agreement.
SECTION 12. Conditions Precedent. The obligations of each Bank
--------------------
to make the Loans contemplated by subsections 2.1 and 2.2 of the Original Credit
Agreement as adopted and incorporated by reference into this Agreement shall be
subject to the compliance by the Company with its agreements herein contained
(including its agreements contained in the Original Credit Agreement as adopted
and incorporated by reference into this Agreement) and to the satisfaction on or
before the Closing Date of the following further conditions:
(a) Loan Documents. The Agent shall have received (i) this
--------------
Agreement, executed and delivered by a duly authorized officer of the Company,
with a counterpart for each Bank, and (ii) for the account of each Bank, a
Revolving Credit Note and a Grid CAF Loan Note conforming to the requirements
hereof and executed by a duly authorized officer of the Company.
(b) Legal Opinions. On the Closing Date each Bank shall have
--------------
received from any general, associate, or assistant general counsel to the
Company or any other counsel to the Company satisfactory to the Agent, such
opinions as the Agent shall have reasonably requested with respect to the
transactions contemplated by this Agreement.
(c) Company Officers' Certificate. The representations and
-----------------------------
warranties contained in Section 3 of the Original Credit Agreement as adopted
and incorporated by reference into, and as amended by, this Agreement shall be
true and correct on the Closing Date with the same force and effect as though
made on and as of such date; on and as of the Closing Date and after giving
effect to this Agreement, no Default shall have occurred (except a Default which
shall have been waived in writing or which shall have been cured) and no Default
shall exist after giving effect to the Loan to be made; and the Agent
<PAGE>
7
shall have received a certificate containing a representation to these effects
dated the Closing Date and signed by a Responsible Officer.
(d) General. All instruments and legal and corporate
-------
proceedings in connection with the Loans contemplated by this Agreement shall be
satisfactory in form and substance to the Agent, and the Agent shall have
received copies of all documents, and favorable legal opinions and records of
corporate proceedings, which the Agent may have reasonably requested in
connection with the Loans and other transactions contemplated by this Agreement.
(e) Termination of Commitments of the Original Banks. On the
------------------------------------------------
Closing Date, the Commitments (as defined in the Original Credit Agreement) of
the Original Banks under the February 1995 Agreement and Amendment shall have
been terminated.
SECTION 13. Expenses. The Company agrees to pay or reimburse
--------
the Agent for all of its reasonable out-of-pocket costs and expenses incurred in
connection with the development, preparation and execution of, and any
amendment, supplement or modification to, this Agreement and the Notes and any
other documents prepared in connection herewith, and the consummation of the
transactions contemplated hereby and thereby, including, without limitation, the
reasonable fees and disbursements of counsel to the Agent.
SECTION 14. GOVERNING LAW. THIS AGREEMENT AND THE NOTES AND
-------------
THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND THE NOTES
SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW
OF THE STATE OF NEW YORK.
SECTION 15. Counterparts. This Agreement may be executed by
------------
one or more of the parties to this Agreement on any number of separate
counterparts and all of said counterparts taken together shall be deemed to
constitute one and the same instrument. A set of the copies of this Agreement
signed by all the parties shall be lodged with the Company and the Agent.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
COLUMBIA/HCA HEALTHCARE CORPORATION
By: /s/ David Anderson
------------------------------------------
Name: David Anderson
Title: Vice President - Finance
CHEMICAL BANK, as Agent, as CAF
Loan Agent and as a Bank
By: /s/ Mary E. Cameron
------------------------------------------
Name: Mary E. Cameron
Title: Vice President
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as a Co-Agent and as a Bank
By: /s/ Ruth Z. Edwards
------------------------------------------
Name: Ruth Z. Edwards
Title: Vice President
CREDIT LYONNAIS CAYMAN ISLAND BRANCH, as a
Co-Agent and as a Bank
By: /s/ Farboud Tavangar
------------------------------------------
Name: Farboud Tavangar
Title: Authorized Signature
DEUTSCHE BANK AG, NEW YORK AND/OR CAYMAN
ISLANDS BRANCH, as a Co-Agent and as a Bank
By: /s/ Stephan A. Wiedemann /s/ Tom Foley
------------------------------------------
Name: Stephan A. Wiedemann/Tom Foley
Title: Vice President/Associate
<PAGE>
THE FIRST NATIONAL BANK OF CHICAGO,
as a Co-Agent and as a Bank
By: /s/ L. Richard Schiller
------------------------------------------
Name: L. Richard Schiller
Title: Vice President
THE INDUSTRIAL BANK OF JAPAN, LIMITED,
ATLANTA AGENCY, as a Co-Agent and as a Bank
By: /s/ Shusai Nagai
------------------------------------------
Name: Shusai Nagai
Title: General Manager
MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as
a Co-Agent and as a Bank
By: /s/ Penelope J.B. Cox
------------------------------------------
Name: Penelope J.B. Cox
Title: Vice President
NATIONSBANK, N.A. as a Co-Agent and as a Bank
By: /s/ Patrick J. Neal
------------------------------------------
Name: Patrick J. Neal
Title: Vice President
By: /s/ S.W. Choppin
------------------------------------------
Name: S.W. Choppin
Title: Vice President
PNC BANK, KENTUCKY, INC. as a Co-Agent and as
a Bank
By:/s/ Jefferson M. Green
------------------------------------------
Name: Jefferson M. Green
Title: Vice President
<PAGE>
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A. "RABOBANK NEDERLAND", NEW
YORK BRANCH, as a Co-Agent and as a Bank
By: /s/ Terrell Boyle /s/ W. Jeffrey Vollack
------------------------------------------
Name: Terrell Boyle/W. Jeffrey Vollack
Title: VP/VP, Manager
THE SAKURA BANK, LTD. NEW YORK BRANCH, as a
Co-Agent and as a Bank
By: /s/ Masahiro Nakajo
------------------------------------------
Name: Masahiro Nakajo
Title: Senior VP & Manager
THE SUMITOMO BANK LIMITED, NEW YORK BRANCH,
as a Co-Agent and as a Bank
By: /s/ Yoshinori Kawamura
------------------------------------------
Name: Yoshinori Kawamura
Title: Joint General Manager
TORONTO DOMINION (TEXAS), INC., as a Co-Agent
and as a Bank
By: /s/ Diane Bailey
------------------------------------------
Name: Diane Bailey
Title: Vice President
WACHOVIA BANK OF GEORGIA, N.A., as a Co-Agent
and as a Bank
By: /s/ Nick T. Weaver
------------------------------------------
Name: Nick T. Weaver
Title: Vice President
FIRST INTERSTATE BANK OF CALIFORNIA, as a
Bank
By: /s/ Peter G. Olson /s/ Lancy Gin
------------------------------------------
Name: Peter G. Olson/Lancy Gin
Title: Senior VP/Asst. VP
<PAGE>
THE FUJI BANK LIMITED, as a Bank
By: /s/ S. Fujimoto
------------------------------------------
Name: S. Fujimoto
Title: Joint General Manager
THE MITSUBISHI BANK, LTD., as a Bank
By: /s/ Hiroaki Fuchida
------------------------------------------
Name: Hiroaki Fuchida
Title: Senior Vice President
DAI ICHI KANGYO BANK, as a Bank
By: /s/ Noboru Hasegawa
------------------------------------------
Name: Noboru Hasegawa
Title: General Manager
THE BANK OF NEW YORK, as a Bank
By: /s/ Gregory L. Batson
------------------------------------------
Name: Gregory L. Batson
Title: Vice President
SUNTRUST BANK, NASHVILLE, N.A., as a Bank
By: /s/ Kevin P. Lavender
------------------------------------------
Name: Kevin P. Lavender
Title: Group Vice President
ABN AMRO BANK N.V., as a Bank
By: /s/ Kathryn C. Toth /s/ S.K. Kersten
------------------------------------------
Name: K.C. Toth/S.K. Kersten
Title: Vice President/Asst. VP
<PAGE>
THE TOKAI BANK, LIMITED, NEW YORK BRANCH, as
a Bank
By: /s/ Masaharu Muto
------------------------------------------
Name: Masahuru Muto
Title: Deputy General Manager
FIRST UNION NATIONAL BANK OF NORTH CAROLINA,
as a Bank
By: /s/ Joseph H. Towell
------------------------------------------
Name: Joseph H. Towell
Title: Senior Vice President
THE NORTHERN TRUST COMPANY, as a Bank
By: /s/ Pete T. Sinelli
------------------------------------------
Name: Pete T. Sinelli
Title: Commercial Banking Officer
MELLON BANK, N.A., as a Bank
By: /s/ Richard Arnington
------------------------------------------
Name: Richard Arnington
Title: Vice President
ARAB BANK PLC, GRAND CAYMAN BRANCH, as a Bank
By: /s/ Peter Boyadjian
------------------------------------------
Name: Peter Boyadjian
Title: Senior Vice President
THE BANK OF NOVA SCOTIA, as a Bank
By: /s/ W.J. Brown
------------------------------------------
Name: W.J. Brown
Title: Vice President
<PAGE>
CITIBANK, N.A. as a Bank
By: /s/ Thomas D. Stott
------------------------------------------
Name: Thomas D. Stott
Title: Vice President
COMMERZBANK AG, as a Bank
By: /s/ Harry P. Yergey Eric R. Kagerer
------------------------------------------
Name: Harry P. Yergey/Eric R. Kagerer
Title: Vice President/Asst. VP
DEN DANSKE BANK AKTIESELSKAB, as a Bank
By: /s/ John A. O'Neill
------------------------------------------
Name: John A. O'Neill
Title: Vice President
By: /s/ Bent V. Christensen
------------------------------------------
Name: Bent V. Christensen
Title: Vice President
FIRST AMERICAN NATIONAL BANK, as a Bank
By: /s/ Sandra G. Hamrick
------------------------------------------
Name: Sandra G. Hamrick
Title: Assistant Vice President
FLEET NATIONAL BANK OF CONNECTICUT, as a Bank
By: /s/ Amy E. Fredericks
------------------------------------------
Name: Amy E. Fredericks
Title: Vice President
THE MITSUBISHI TRUST AND BANKING CORPORATION,
as a Bank
By: /s/ Hachiro Hosoda
------------------------------------------
Name: Hachiro Hosoda
Title: Senior Vice President
<PAGE>
NATIONAL CITY BANK, KENTUCKY, as a Bank
By: /s/ Deroy Scott
------------------------------------------
Name: Deroy Scott
Title: Vice President
BARNETT BANK OF TAMPA, N.A., as a Bank
By: /s/ Lawrence Katz
------------------------------------------
Name: Lawrence Katz
Title: Vice President
THE BANK OF TOKYO TRUST COMPANY, as a Bank
By: /s/ Amanda S. Ryan
------------------------------------------
Name: Amanda S. Ryan
Title: Vice President
UNITED STATES NATIONAL BANK OF OREGON, as a
Bank
By: /s/ Fiza Noordin
------------------------------------------
Name: Fiza Noordin
Title: Corporate Banking Officer
THE SUMITOMO TRUST & BANKING CO., LTD., NEW
YORK BRANCH, as a Bank
By: /s/ Suraj P. Bhatia
------------------------------------------
Name: Suraj P. Bhatia
Title: Senior Vice President & Manager
of Corporate Finance
YASUDA TRUST AND BANKING, as a Bank
By: /s/ Makoto Tagawa
------------------------------------------
Name: Makoto Tagawa
Title: Deputy General Manager
<PAGE>
THE BANK OF YOKOHAMA LTD., NEW YORK BRANCH,
as a Bank
By: /s/ Takeshi Suzuki
------------------------------------------
Name: Takeshi Suzuki
Title: VP & Senior Manager
BANCA NAZIONALE DEL LAVORO S.P.A. - NEW YORK
BRANCH, as a Bank
By: /s/ Giulio Giovine
------------------------------------------
Name: Giulio Giovine
Title: Vice President
By: /s/ Carlo Vecchi
------------------------------------------
Name: Carlo Vecchi
Title: Senior Vice President
THE BOATMEN'S NATIONAL BANK OF ST. LOUIS, as
a Bank
By: /s/ David E. Wilsdorf
------------------------------------------
Name: David E. Wilsdorf
Title: Vice President
THE MITSUI TRUST & BANKING CO., LTD., NEW
YORK BRANCH, as a Bank
By: /s/ Margaret Holloway
------------------------------------------
Name: Margaret Holloway
Title: Vice President & Manager
UNION PLANTERS BANK, as a Bank
By: /s/ Michael F. Sparta
------------------------------------------
Name: Michael F. Sparta
Title: Vice President
BANK ONE, TEXAS, NA, as a Bank
By: /s/ Craig F. Hartberg
------------------------------------------
Name: Craig F. Hartberg
Title: Senior Vice President
<PAGE>
SCHEDULE I
Commitment Amounts and Percentages;
Lending Offices; Addresses for Notice
A. Commitment Amounts and Percentages.
<TABLE>
<CAPTION>
COMMITMENT COMMITMENT
NAME OF BANK AMOUNT PERCENTAGE
- ------------ ----------- ----------
<S> <C> <C>
CHEMICAL BANK $87,000,000 5.800%
BANK OF AMERICA NATIONAL TRUST 55,500,000 3.700
AND SAVINGS ASSOCIATION
CREDIT LYONNAIS CAYMAN ISLAND BRANCH 55,500,000 3.700
DEUTSCHE BANK AG, 55,500,000 3.700
NEW YORK AND/OR CAYMAN ISLANDS BRANCH
THE FIRST NATIONAL BANK OF CHICAGO 55,500,000 3.700
THE INDUSTRIAL BANK OF JAPAN, 55,500,000 3.700
LIMITED, ATLANTA AGENCY
MORGAN GUARANTY TRUST COMPANY 55,500,000 3.700
OF NEW YORK
NATIONSBANK, N.A 55,500,000 3.700
PNC BANK, KENTUCKY, INC 55,500,000 3.700
COOPERATIEVE CENTRALE RAIFFEISEN- 55,500,000 3.700
BOERENLEENBANK B.A. "RABOBANK
NEDERLAND", NEW YORK BRANCH
THE SAKURA BANK, LTD 55,500,000 3.700
NEW YORK BRANCH
THE SUMITOMO BANK LIMITED, 55,500,000 3.700
NEW YORK BRANCH
TORONTO DOMINION (TEXAS), INC 55,500,000 3.700
WACHOVIA BANK OF GEORGIA, N.A 55,500,000 3.700
FIRST INTERSTATE BANK OF CALIFORNIA 51,750,000 3.450
THE FUJI BANK LIMITED 51,750,000 3.450
THE MITSUBISHI BANK, LTD 41,625,000 2.775
DAI ICHI KANGYO BANK 41,250,000 2.750
THE BANK OF NEW YORK 37,500,000 2.500
SUNTRUST BANK, NASHVILLE, N.A 37,500,000 2.500
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
COMMITMENT COMMITMENT
NAME OF BANK AMOUNT PERCENTAGE
- ------------ ----------- ----------
<S> <C> <C>
THE MITSUBISHI TRUST AND BANKING $32,625,000 2.175%
CORPORATION/THE BANK OF TOKYO
TRUST COMPANY 1/
ABN AMRO BANK N.V 30,000,000 2.000
THE TOKAI BANK, LIMITED, NEW YORK BRANCH 30,000,000 2.000
FIRST UNION NATIONAL BANK OF 28,125,000 1.875
NORTH CAROLINA
THE NORTHERN TRUST COMPANY 28,125,000 1.875
MELLON BANK, N.A 20,625,000 1.375
ARAB BANK PLC, GRAND CAYMAN BRANCH 18,750,000 1.250
THE BANK OF NOVA SCOTIA 18,750,000 1.250
CITIBANK, N.A 18,750,000 1.250
COMMERZBANK AG 18,750,000 1.250
DEN DANSKE BANK AKTIESELSKAB 18,750,000 1.250
FIRST AMERICAN NATIONAL BANK 18,750,000 1.250
FLEET NATIONAL BANK OF CONNECTICUT 18,750,000 1.250
BANK ONE, TEXAS, N.A 18,750,000 1.250
NATIONAL CITY BANK, KENTUCKY 18,750,000 1.250
BARNETT BANK OF TAMPA, N.A 15,000,000 1.000
UNITED STATES NATIONAL BANK OF OREGON 13,125,000 0.875
THE SUMITOMO TRUST & BANKING CO., 11,250,000 0.750
LTD., NEW YORK BRANCH
YASUDA TRUST AND BANKING 11,250,000 0.750
THE BANK OF YOKOHAMA LTD., 9,375,000 0.625
NEW YORK BRANCH
BANCA NAZIONALE DEL LAVORO S.P.A.- 9,375,000 0.625
NEW YORK BRANCH
THE BOATMAN'S NATIONAL BANK OF ST. LOUIS 9,375,000 0.625
THE MITSUI TRUST & BANKING CO., LTD., 9,375,000 0.625
NEW YORK BRANCH
UNION PLANTERS BANK 3,750,000 0.250
-------------- -------
TOTAL $1,500,000,000 100.00%
============== =======
</TABLE>
- ----------
1/ On March 31, 1996, The Mitsubishi Trust and Banking Corporation (commitment
amount of $31,250,000/commitment percentage of 1.250%) is expected to merge
with The Bank of Tokyo Trust Company (commitment amount of
$23,125,000/commitment percentage .925%).
<PAGE>
B. LENDING OFFICES; ADDRESSES FOR NOTICE.
CHEMICAL BANK
-------------
Domestic Lending Office: Chemical Bank
270 Park Avenue
New York, NY 10017
Eurodollar Lending Office: Chemical Bank
270 Park Avenue
New York, NY 10017
Address for Notices: See subsection 8.2 of the Original
Credit Agreement as adopted and
incorporated by reference into this
Agreement
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
------------------------------------------------------
Domestic Lending Office: Bank of America National Trust
and Savings Association
555 S. Flower Street
Mail Code 5618
Los Angeles, CA 90071
Eurodollar Lending Office: Bank of America National Trust
and Savings Association
1850 Gateway Blvd., 4th Floor
Concord, CA 94520
Address for Notices: Bank of America National Trust
and Savings Association
555 S. Flower Street
Los Angeles, CA 90071
Attention: James Emslie
Telecopy: (213) 228-2756
Confirmation: (213) 228-2669
Attention: Wyatt Ritchie
Telecopy: (213) 228-2756
Confirmation: (213) 228-9734
CREDIT LYONNAIS CAYMAN ISLAND BRANCH
------------------------------------
Domestic Lending Office: Credit Lyonnais Cayman Island
Branch
c/o Credit Lyonnais
1301 Avenue of the Americas
20th Floor
New York, NY 10019
Eurodollar Lending Office: Credit Lyonnais Cayman Island
Branch
c/o Credit Lyonnais
<PAGE>
1301 Avenue of the Americas
20th Floor
New York, NY 10019
Address for Notices: Credit Lyonnais Cayman Island
Branch
c/o Credit Lyonnais
1301 Avenue of the Americas
20th Floor
New York, NY 10019
Attention: Farboud Tavangar
Telecopy: (212) 261-3440
Confirmation: (212) 261-7832
Credit Lyonnais (New York)
1301 Avenue of the Americas
New York, NY 10019
Attention: Evan S. Wasser
Telecopy: (212) 261-3440
Confirmation: (212) 261-7748
DEUTSCHE BANK AG, NEW YORK AND/OR CAYMAN ISLANDS BRANCHES
---------------------------------------------------------
Domestic Lending Office: Deutsche Bank AG,
New York Branch
31 West 52nd Street
New York, NY 10019
Eurodollar Lending Office: Deutsche Bank, AG,
Cayman Islands Branch
31 West 52nd Street
New York, NY 10019
Address for Notices: Deutsche Bank AG,
New York Branch
31 West 52nd Street
New York, NY 10019
Attention: Robert A. Maddux,
Director
Telecopy: (212) 474-8212
Confirmation: (212) 474-8228
THE FIRST NATIONAL BANK OF CHICAGO
----------------------------------
Domestic Lending Office: The First National Bank of Chicago
First National Plaza
Mail Suite 0091
Chicago, IL 60670-0091
Eurodollar Lending Office: The First National Bank of Chicago
First National Plaza
Mail Suite 0091
Chicago, IL 60670-0091
Address for Notices: The First National Bank of Chicago
<PAGE>
First National Plaza
Mail Suite 0091
Chicago, IL 60670-0091
Attention: William S. Wheatley
Telecopy: (312) 732-2016
Confirmation: (312) 732-5033
THE INDUSTRIAL BANK OF JAPAN, LIMITED, ATLANTA AGENCY
-----------------------------------------------------
Domestic Lending Office: The Industrial Bank of Japan
Trust Company
245 Park Avenue
New York, NY 10167
Eurodollar Lending Office: The Industrial Bank of Japan
Trust Company
245 Park Avenue
New York, NY 10167
Address for Notices: The Industrial Bank of Japan,
Limited, Atlanta Agency
191 Peachtree Street NE, Suite 3600
Atlanta, GA 30303
Attention: Jackie Brunetto
Telecopy: (404) 577-6818
Confirmation: (404) 420-3325
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
-----------------------------------------
Domestic Lending Office: Morgan Guaranty Trust Company
of New York
60 Wall Street
New York, NY 10160
Eurodollar Lending Office: Morgan Guaranty Trust Company
of New York
Nassau, Bahamas Office
c/o J.P. Morgan Services Inc.
Euro-Loan Servicing Unit
Morgan Christiana Center
500 Stanton Christiana Road
Newark, DE 19713
Address for Notices: Morgan Guaranty Trust Company
of New York
60 Wall Street
New York, NY 10160
Attention: Penelope Cox
Telecopy: (212) 648-6018
Confirmation: (212) 648-6414
<PAGE>
NATIONSBANK, N.A.
-----------------
Domestic Lending Office: NationsBank, N.A.
One NationsBank Plaza
Charlotte, NC 28255
Eurodollar Lending Office: NationsBank, N.A.
One NationsBank Plaza
Charlotte, NC 28255
Address for Notices: NationsBank, N.A.
One National Bank Plaza, 5th Floor
Nashville, TN 37239
Attention: Ashley Crabtree
Telecopy: (615) 749-4640
PNC BANK, KENTUCKY, INC.
------------------------
Domestic Lending Office: PNC Bank, Kentucky, Inc.
Citizens Plaza
Louisville, KY 40296
Eurodollar Lending Office: PNC Bank, Kentucky, Inc.
Citizens Plaza
Louisville, KY 40296
Address for Notices: PNC Bank (Pittsburgh-Fifth Avenue)
2 PNC Plaza
620 Liberty Avenue
Pittsburgh, PA 16265
Attention: Edward Weisto
Telecopy: (412)762-2784
PNC Bank, Kentucky, Inc.
500 West Jefferson Street
8th Floor
Louisville, KY 40296
Attention: Jefferson Green
Telecopy: (502) 581-2302
Confirmation: (502) 581-4734
COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A.,
"RABOBANK NEDERLAND", NEW YORK BRANCH
-----------------------------------------------------
Domestic Lending Office: Rabobank Nederland
245 Park Avenue
New York, NY 10167
Eurodollar Lending Office: Rabobank Nederland
245 Park Avenue
New York, NY 10167
Address for Notices: Rabobank Nederland (Atlanta)
1 Atlantic Center, Suite 3460-1201,
Peachtree Street
<PAGE>
Atlanta GA 30309-3400
Attention: Terrell Boyle
Telecopy: (404) 877-9150
Confirmation: (404) 877-9106
THE SAKURA BANK, LTD. NEW YORK BRANCH
-------------------------------------
Domestic Lending Office: The Sakura Bank, Ltd.
New York Branch
277 Park Avenue
New York, NY 10172
Eurodollar Lending Office: The Sakura Bank, Ltd.
New York Branch
277 Park Avenue
New York, NY 10172
Address for Notices: The Sakura Bank, Ltd.
New York Branch
277 Park Avenue
45th Floor
New York, NY 10172
Attention: Masahiro Nakajo
Telecopy: (212) 888-7651
Confirmation: (212) 756-6773
THE SUMITOMO BANK LIMITED, NEW YORK BRANCH
------------------------------------------
Domestic Lending Office: The Sumitomo Bank Limited,
New York Branch
One World Trade Center
Suite 9651
New York, NY 10048
Eurodollar Lending Office: The Sumitomo Bank Limited,
New York Branch
One World Trade Center
Suite 9651
New York, NY 10048
Address for Notices: The Sumitomo Bank Limited,
New York Branch
277 Park Avenue, 6th Floor
New York, NY 10167
Attention: Jeffrey L. Toner
Telecopy: (212) 224-5188
Confirmation: (212) 224-4142
<PAGE>
TORONTO DOMINION (TEXAS), INC.
------------------------------
Domestic Lending Office: The Toronto-Dominion Bank,
Houston Agency
909 Fannin Street, Suite 1700
Houston, TX 77010
Eurodollar Lending Office: The Toronto-Dominion Bank,
Houston Agency
909 Fannin Street, Suite 1700
Houston, TX 77010
Address for Notices: The Toronto-Dominion Bank
(New York)
31 West 52nd Street
New York 10019-6101
Attention: Robert F. Maloney
Telecopy: (212) 974-0396
Confirmation: (212) 358-0750
WACHOVIA BANK OF GEORGIA, N.A.
------------------------------
Domestic Lending Office: Wachovia Bank of Georgia, N.A.
191 Peachtree Street, N.E.
Atlanta, GA 30303
Eurodollar Lending Office: Wachovia Bank of Georgia, N.A.
191 Peachtree Street, N.E.
Atlanta, GA 30303
Address for Notices: Wachovia Bank of Georgia, N.A.
191 Peachtree Street, N.E.
28th Floor
Atlanta, GA 30303
Attention: Nick Weaver
Telecopy: (404) 332-5016
Confirmation: (404) 332-4062
FIRST INTERSTATE BANK OF CALIFORNIA
-----------------------------------
Domestic Lending Office: First Interstate Bank of
California
1055 Wilshire Boulevard, B10-6
Los Angeles, California 90017
Eurodollar Lending Office: First Interstate Bank of
California
Nassau Branch
c/o 1055 Wilshire Boulevard, B10-6
Los Angeles, California 90017
Address for Notices: First Interstate Bank of
California
222 West Adams Street
Suite 2180
<PAGE>
Chicago, IL 60606
Attention: James Lent
Telecopy: (312) 553-4783
Confirmation: (312) 553-4777
THE FUJI BANK LIMITED
---------------------
Domestic Lending Office: The Fuji Bank, Limited
225 West Wacker Drive
Chicago, IL 60606
Eurodollar Lending Office: The Fuji Bank, Limited
225 West Wacker Drive
Chicago, IL 60606
Address for Notices: The Fuji Bank, Limited (Atlanta)
245 Peachtree Center Avenue, NE,
Suite 21
Atlanta GA 30303-1208
Attention: Brett Johnson
Telecopy: (404) 653-2119
Confirmation: (404) 653-2113
THE MITSUBISHI BANK, LTD.
-------------------------
Domestic Lending Office: The Mitsubishi Bank, Ltd.
2 World Financial Center
225 Liberty Street
39th Floor
New York, NY 10281
Eurodollar Lending Office: The Mitsubishi Bank, Ltd.
2 World Financial Center
225 Liberty Street
39th Floor
New York, NY 10281
Address for Notices: The Mitsubishi Bank, Ltd.
2 World Financial Center
225 Liberty Street
New York, NY 10281
Attention: Hiroaki Fuchida
Telecopy: (212) 667-3562
Confirmation: (212) 667-2884
<PAGE>
DAI ICHI KANGYO BANK
--------------------
Domestic Lending Office: Dai Ichi Kangyo Bank (Atlanta)
285 Peachtree St., Suite 2400
Atlanta, GA 30303
Eurodollar Lending Office Dai Ichi Kangyo Bank (Atlanta)
285 Peachtree St., Suite 2400
Atlanta, GA 30303
Address for Notices: Dai Ichi Kangyo Bank (Atlanta)
285 Peachtree St., Suite 2400
Atlanta, GA 30303
Attention: Gunther Kittel
Telecopy: (404) 581-9657
Confirmation: (404) 581-0200
THE BANK OF NEW YORK
---------------------
Domestic Lending Office: The Bank of New York
One Wall Street, 22nd Floor
New York, NY 10286
Eurodollar Lending Office: The Bank of New York
One Wall Street, 22nd Floor
New York, NY 10286
Address for Notices: The Bank of New York
One Wall Street
New York, NY 10286
Attention: Gregory Batson
Telecopy: (212) 635-6434
Confirmation: (212) 635-6898
SUNTRUST BANK, NASHVILLE, N.A.
------------------------------
Domestic Lending Office: Suntrust Bank, Nashville, N.A.
201 Fourth Avenue North
Nashville, TN 37244
Eurodollar Lending Office: Suntrust Bank, Nashville, N.A.
201 Fourth Avenue North
Nashville, TN 37244
Address for Notices: Suntrust Bank, Nashville, N.A.
201 Fourth Avenue North
Nashville, TN 37244
Attention: Kevin Lavender
Telecopy: (615) 748-5161
Confirmation: (615) 748-4465
<PAGE>
THE MITSUBISHI TRUST AND BANKING CORPORATION
--------------------------------------------
Domestic Lending Office: The Mitsubishi Trust and
Banking Corporation
520 Madison Avenue
25th Floor
New York, NY 10022
Eurodollar Lending Office: The Mitsubishi Trust and
Banking Corporation
520 Madison Avenue
25th Floor
New York, NY 10022
Address for Notices: The Mitsubishi Trust and
Banking Corporation
520 Madison Avenue
New York, NY 10022
Attention: Clifford Teller
Telecopy: (212) 644-6825
Confirmation: (212) 891-8269
THE BANK OF TOKYO TRUST COMPANY
-------------------------------
Domestic Lending Office: The Bank of Tokyo Trust
Company
1251 Avenue of the Americas
New York, NY 10116
Eurodollar lending Office: The Bank of Tokyo Trust
Company
1251 Avenue of the Americas
New York, NY 10116
Address for Notices: The Bank of Tokyo Trust
Company
1251 Avenue of the Americas
12th Floor
New York, NY 10116
Attention: Amanda Ryan
Telecopy: (212) 782-6440
Confirmation: (212) 782-4322
<PAGE>
ABN AMRO BANK N.V.
------------------
Domestic Lending Office: ABN AMRO Bank N.V. -
Pittsburgh Branch
One PPG Place, Suite 2950
Pittsburgh, PA 15222-5400
Eurodollar Lending Office: ABN AMRO Bank N.V. -
Pittsburgh Branch
One PPG Place, Suite 2950
Pittsburgh, PA 15222-5400
Address for Notices: ABN AMRO Bank N.V. -
Pittsburgh Branch
One PPG Place, Suite 2950
Pittsburgh, PA 15222-5400
Attention: Dennis F. Lennon
Telecopy: (412) 566-2266
Confirmation: (412) 566-2256
THE TOKAI BANK, LIMITED, NEW YORK BRANCH
----------------------------------------
Domestic Lending Office: The Tokai Bank, Ltd.
New York Branch
55 East 52nd Street
New York, NY 10055
Eurodollar Lending Office: The Tokai Bank, Ltd.
New York Branch
55 East 52nd Street
New York, NY 10055
Address for Notices: The Tokai Bank, Ltd.
New York Branch
55 East 52nd Street
11th Floor
New York, NY 10055
Attention: Masaharu Muto
Telecopy: (212) 754-2170
Confirmation: (212) 339-1120
Attention: Stuart Schulman
Telecopy: (212) 754-2170
Confirmation: (212) 339-1117
<PAGE>
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
-------------------------------------------
Domestic Lending Office: First Union National
Bank of North Carolina
One First Union Center
301 S. College Street
Charlotte, NC 28288
Eurodollar Lending Office: First Union National
Bank of North Carolina
One First Union Center
301 S. College Street
Charlotte, NC 28288
Address for Notices: First Union National
Bank of North Carolina
One First Union Center
301 S. College Street, TW19
Charlotte, NC 28288
Attention: John W. Ransom
Telecopy: (704) 383-9144
Confirmation: (704) 383-5212
THE NORTHERN TRUST COMPANY
--------------------------
Domestic Lending Office: The Northern Trust Company
50 South La Salle Street
Chicago, IL 60675
Eurodollar Lending Office: The Northern Trust Company
50 South La Salle Street
Chicago, IL 60675
Address for Notices: The Northern Trust Company
50 South La Salle Street, B-11
Chicago, IL 60675
Attention: Lia Taylor
Telecopy: (312) 444-3508
Confirmation: (312) 444-4196
<PAGE>
MELLON BANK, N.A.
-----------------
Domestic Lending Office: Mellon Bank, N.A.
2 Mellon Bank Center
Room 270
Pittsburgh, PA 15259
Eurodollar Lending Office: Mellon Bank, N.A.
2 Mellon Bank Center
Room 270
Pittsburgh, PA 15259
Address for Notices: Mellon Bank, N.A.
2 Mellon Bank Center
Pittsburgh, PA 15259-0001
Attention: Marsha Wicker
Telecopy: (412) 234-9010
Confirmation: (412) 234-3594
ARAB BANK PLC, GRAND CAYMAN BRANCH
----------------------------------
Domestic Lending Office: Arab Bank Plc, Grand Cayman
Branch
520 Madison Avenue
New York, NY 10022
Eurodollar Lending Office: Arab Bank Plc, Grand Cayman
Branch
520 Madison Avenue
New York, NY 10022
Address for Notices: Arab Bank Plc, Grand Cayman
Branch
520 Madison Avenue
New York, NY 10022
Attention: Peter Boyadjian
Telecopy: (212) 593-4632
Confirmation: (212) 715-9702
<PAGE>
THE BANK OF NOVA SCOTIA
-----------------------
Domestic Lending Office: The Bank of Nova Scotia
600 Peachtree Street NE
Suite 2700
Atlanta, GA 30808
Eurodollar Lending Office: The Bank of Nova Scotia
600 Peachtree Street NE
Suite 2700
Atlanta, GA 30808
Address for Notices: The Bank of Nova Scotia
(Atlanta)
600 Peachtree Street NE
Suite 2700
Atlanta, GA 30308
Attention: Carolyn Lopez
Telecopy: (404) 888-8998
Confirmation: (408) 877-1507
CITIBANK, N.A.
--------------
Domestic Lending Office: Citicorp North America, Inc.
2001 Ross Avenue
Suite 1400
Dallas, TX 75201
Eurodollar Lending Office: Citicorp North America, Inc.
2001 Ross Avenue
Suite 1400
Dallas, TX 75201
Address for Notices: Citicorp (New York)
399 Park Avenue
New York, NY
Attention: Margaret Brown
Telecopy: (212) 793-3053
Confirmation: (212) 659-0501
<PAGE>
COMMERZBANK AG
--------------
Domestic Lending Office: Commerzbank AG
Two World Financial Center
32nd Floor
New York, NY 10281
Eurodollar Lending Office: Commerzbank AG
Two World Financial Center
32nd Floor
New York, NY 10281
Address for Notices: Commerzbank AG (Atlanta)
1230 Peachtree Street N.E.
Suite 3500
Atlanta, GA 30309
Attention: Eric Kagerer
Telecopy: (404) 888-6539
Confirmation: (404) 888-6517
DEN DANSKE BANK AKTIESELSKAB
----------------------------
Domestic Lending Office: Den Danske Bank Aktieselskab
(New York)
280 Park Avenue, 4th Floor
East Building
New York, NY 10017
Eurodollar Lending Office: Den Danske Bank Aktieselskab
(New York)
280 Park Avenue, 4th Floor
East Building
New York, NY 10017
Address for Notices: Den Danske Bank Aktieselskab
(New York)
280 Park Avenue, 4th Floor
East Building
New York, NY 10017
Attention; Mogens Sondergard
Telecopy: (212) 370-9239
Confirmation: (212) 984-8472
<PAGE>
FIRST AMERICAN NATIONAL BANK
----------------------------
Domestic lending Office: First American National Bank
327 Union Street
Nashville, TN 37237
Eurodollar Lending Office: First American National Bank
327 Union Street
Nashville, TN 37237
Address for Notices: First American National Bank
(Nashville)
300 Union Street, 2nd Floor
Nashville, TN 37237
Attention: Sandra Hamrick
Telecopy: (615) 748-2812
Confirmation: (615) 748-2191
FLEET NATIONAL BANK OF CONNECTICUT
----------------------------------
Domestic Lending Office: Fleet Bank (Boston)
76 State Street
Mail Stop MABOFO4A
Boston, MA 02109
Eurodollar Lending Office: Fleet Bank (Boston)
76 State Street
Mail Stop MABOFO4A
Boston, MA 02109
Address for Notices: Fleet National Bank of Connecticut
76 State Street
Mail Stop MABOFO4A
Boston, MA 02109
Attention: Amy Fredericks
Telecopy: (617) 343-1634
Confirmation: (617) 346-1646
<PAGE>
BANK ONE, TEXAS, NA
-------------------
Domestic Lending Office: Bank One, Texas, NA
500 Throckmorton
Fort Worth, TX 76102
Eurodollar Lending Office: Bank One, Texas, NA
500 Throckmorton
Fort Worth, TX 76102
Address for Notices: Bank One, Texas, NA (Dallas)
1717 Main Street
Dallas, TX 75201
Attention: J.R. Thomas
Telecopy: (214) 290-2683
Confirmation: (214) 290-2586
NATIONAL CITY BANK, KENTUCKY
----------------------------
Domestic Lending Office: National City Bank, Kentucky
101 South Fifth Street
Louisville, KY 40202
Eurodollar Lending Office: National City Bank, Kentucky
101 South Fifth Street
Louisville, KY 40202
Address for Notices: National City Bank, Kentucky
National City Tower
Suite 800
Louisville, KY 40202
Attention: Deroy Scott
Telecopy: (502) 581-4424
Confirmation: (502) 581-7821
BARNETT BANK OF TAMPA, N.A.
---------------------------
Domestic Lending Office: Barnett Bank of Tampa, N.A.
50 North Laura Street
Jacksonville, FL 32202
Eurodollar Lending Office: Barnett Bank of Tampa, N.A.
50 North Laura Street
Jacksonville, FL 32202
Address for Notices: Barnett Bank of Tampa, N.A.
(Jacksonville)
50 North Laura Street
Jacksonville, FL 32202
Attn: Larry Katz
Telecopy: (904) 791-7063
Confirmation: (904) 791-5081
<PAGE>
UNITED STATES NATIONAL BANK OF OREGON
-------------------------------------
Domestic Lending Office: United States National Bank
of Oregon
555 S.W. Oak Street
Suite 400
Portland, OR 97204
Eurodollar Lending Office: United States National Bank
of Oregon
555 S.W. Oak Street
Suite 400
Portland, OR 97204
Address for Notices: United States National Bank
of Oregon
555 S.W. Oak Street
Suite 400
Portland, OR 97204
Attention: Fiza Noordin
Telecopy: (503) 275-4267
Confirmation: (503) 275-6360
THE SUMITOMO TRUST & BANKING CO., LTD., NEW YORK BRANCH
-------------------------------------------------------
Domestic Lending Office: Sumitomo Trust & Banking (New York)
527 Madison Avenue, 8th Floor
New York, NY 10022
Eurodollar Lending Office: Sumitomo Trust & Banking (New York)
527 Madison Avenue, 8th Floor
New York, NY 10022
Address for Notices: Sumitomo Trust & Banking (New York)
527 Madison Avenue, 8th Floor
New York, NY 10022
Attention: Robin Schreiber
Telecopy: (212) 418-4848
Confirmation: (212) 326-0781
<PAGE>
YASUDA TRUST AND BANKING
------------------------
Domestic Lending Office: Yasuda Trust and Banking
666 Fifth Avenue
New York, NY 10103
Eurodollar Lending Office: Yasuda Trust and Banking
666 Fifth Avenue
New York, NY 10103
Address for Notices: Yasuda Trust and Banking
285 Peachtree Center NE, Suite 2104
Atlanta, GA 30303
Attention: Sanjay Sinha
Telecopy: (404) 584-7816
Confirmation: (404) 584-7807
THE BANK OF YOKOHAMA LTD., NEW YORK BRANCH
------------------------------------------
Domestic Lending Office: Bank of Yokohama Ltd. (New York)
One World Trade Center, Suite 8067
New York, NY 10048
Domestic Lending Office: Bank of Yokohama Ltd. (New York)
One World Trade Center, Suite 8067
New York, NY 10048
Domestic Lending Office: Bank of Yokohama Ltd. (New York)
One World Trade Center, Suite 8067
New York, NY 10048
Attention: Michael Cantone
Telecopy: (212) 938-5450
Confirmation: (212) 775-1700 x 213
<PAGE>
BANCA NAZIONALE DEL LAVORO S.P.A.-NEW YORK BRANCH
-------------------------------------------------
Domestic Lending Office: Banca Nazionale del Lavoro
S.P.A. (New York)
25 West 51st Street, 3rd Floor
New York, NY 10019
Eurodollar Lending Office: Banca Nazionale del Lavoro
S.P.A. (New York)
25 West 51st Street, 3rd Floor
New York, NY 10019
Address for Notices: Banca Nazionale del Lavoro
S.P.A. (New York)
25 West 51st Street, 3rd Floor
New York, NY 10019
Attention: Giulio Giovine
Telecopy: (212) 765-2978
Confirmation: (212) 581-0710
Attention: Roberto Mancone
Telecopy: (312) 444-9410
Confirmation: (312) 444-9250
THE BOATMEN'S NATIONAL BANK OF ST. LOUIS
----------------------------------------
Domestic Lending Office: The Boatmen's National Bank
of St. Louis
One Boatmen's Plaza
800 Market Street
St. Louis, MO 63166
Eurodollar Lending Office: The Boatmen's National Bank
of St. Louis
One Boatmen's Plaza
800 Market Street
St. Louis, MO 63166
Address for Notices: The Boatmen's National Bank
of St. Louis
800 Market Street
St. Louis, MO 63166-0236
Attention: David Wilsdorf
Telecopy: (314) 466-7783
Confirmation: (314) 466-7681
<PAGE>
THE MITSUI TRUST & BANKING CO., LTD., NEW YORK BRANCH
-----------------------------------------------------
Domestic Lending Office: Mitsui Trust & Banking (Chicago)
190 South LaSalle Street
Suite 1900
Chicago, IL 60603
Eurodollar Lending Office: Mitsui Trust & Banking (Chicago)
190 South LaSalle Street
Suite 1900
Chicago, IL 60603
Address for Notices: Mitsui Trust & Banking (Chicago)
190 South LaSalle Street
Suite 1900
Chicago, IL 60603
Attention: Koichi Yokoyama
Telecopy: (312) 201-0593
Confirmation: (312) 201-4707
UNION PLANTERS BANK
-------------------
Domestic Lending Office: Union Planters National Bank
401 Union Street, Second Floor
Nashville, TN 37219
Eurodollar Lending Office: Union Planters National Bank
401 Union Street, Second Floor
Nashville, TN 37219
Address for Notices: Union Planters National Bank
401 Union Street, Second Floor
Nashville, TN 37219
Attention: Mike Sparta
Telecopy: (615) 726-4274
Confirmation: (615) 726-4394
<PAGE>
SCHEDULE III
COLUMBIA HCA HEALTHCARE CORPORATION
Summary Schedule of Total Indebtedness
December 31, 1995
<TABLE>
<CAPTION>
Long-term debt:
- --------------
Secured debt:
<S> <C>
Medical City Dallas - Capitalized lease .......... $34,358,303
Other secured debt ............................... 168,936,653
--------------
Total secured debt ............................... 203,294,956
Unsecured debt (net of discounts):
- ---------------------------------
Notes and debebtures
7.15% notes due 2004 ............................. 148,816,040
6.5% notes due 1999 .............................. 174,172,222
6.125% notes due 2000 ............................ 149,073,084
7.5% debebtures due 2023 ......................... 147,499,627
8.36% debentures due 2024 ........................ 149,042,740
6.91% debentures due 2005 ........................ 465,439,654
7.69% debentures due 2025 ........................ 287,492,918
6.41% notes due 2000 ............................. 196,064,000
7.58% debentures due 2025 ........................ 123,790,669
7.19% debentures due 2015 ........................ 148,691,020
7.50% debentures due 2095 ........................ 197,750,012
7.05% debentures due 2027 ........................ 148,688,466
$200 mil floating rate notes ..................... 170,231,757
8.126% MTN due 2003 .............................. 99,467,595
8.02% MTN due 2002 ............................... 49,739,884
7.60% MTN due 2001 ............................... 49,748,103
$100 mil floating rate notes ..................... 99,978,268
8.05% MTN due 2006 ............................... 54,680,726
8.85% MTN due 2007 ............................... 148,048,498
9.0% MTN due 2014 ................................ 148,711,082
8.7% MTN due 2010 ................................ 148,981,613
6.63% MTN due 2002 ............................... 149,217,300
6.73% MTN due 2003 ............................... 99,473,717
8.87% MTN due 2003 ............................... 124,270,994
Zero coupon deb due 1997-2002 .................... 154,938,793
8.00% debentures due 1996 ........................ 107,858,834
Other notes and debentures ....................... 7,450,203
--------------
Total notes and debentures ............ 3,949,317,839
--------------
Commercial paper ................................. 2,907,444,236
Bank borrowings .................................. 105,311,110
Other unsecured debt ............................. 43,788,332
Subordinated notes and debentures (net of discounts)
6.75% debentures due 2006 ........................ 112,504,143
10.33% Sr Swiss notes due 1998 ................... 54,453,455
Other subordinated notes and debentures .......... 3,730,163
--------------
Total subordinated notes and debentures 170,687,761
--------------
Total consolidated long-term debt (12/31/95) ............. $7,379,844,234
--------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Commitments and contingencies:
- -----------------------------
Letters of credit (beneficiary):
<S> <C>
TIG Insurance Company ............................ 3,850,000
Arizona State Treasurer .......................... 1,500,000
AmSouth Bank of Alabama .......................... 8,000,000
Texas Workers Compensation ....................... 1,374,675
Commonwealth of Kentucky Workers Compensation .... 2,821,414
Mid-America Health Partners, Inc. ................ 1,477,500
The Fidelity & Casualty Company of New York ...... 57,731,756
Louisiana Patient Compensation Fund .............. 1,000,000
Louisiana Patient Compensation Fund .............. 3,825,000
Travelers Insurance Company ...................... 17,401,050
General Reinsurance Corporation .................. 5,079,479
AmSouth Bank of Alabama .......................... 1,218,000
The St. Paul Fire and Marine Insurance Company ... 15,500,000
Other letters of credit .......................... 5,700,112
--------------
Total letters of credit ............... 126,278,986
Guarantees of indebtedness (beneficiary):
First Security Bank of Nevada .................... 3,500,000
Key Bank of Utah ................................. 4,100,000
Other guarantees of indebtedness ................. 500,000
--------------
Total guarantees of indebtedness ...... 8,100,000
--------------
Total commitments and contingencies (12/31/95) ........... 134,378,986
--------------
TOTAL INDEBTEDNESS (12/31/95) ............................ $7,514,223,220
==============
</TABLE>
<PAGE>
EXHIBIT 4.10C
AGREEMENT AND AMENDMENT
AGREEMENT AND AMENDMENT, dated as of February 28, 1996 (the
"February 1996 Agreement and Amendment"), among COLUMBIA/HCA HEALTHCARE
-------------------------------------
CORPORATION, a Delaware corporation formerly known as Columbia Healthcare
Corporation (the "Company"), the several banks and other financial institutions
-------
from time to time parties hereto (the "Banks"), BANK OF AMERICA NATIONAL TRUST &
-----
SAVINGS ASSOCIATION, CREDIT LYONNAIS CAYMAN ISLAND BRANCH, DEUTSCHE BANK AG, THE
FIRST NATIONAL BANK OF CHICAGO, THE INDUSTRIAL BANK OF JAPAN, LIMITED, ATLANTA
AGENCY, MORGAN GUARANTY TRUST COMPANY OF NEW YORK, NATIONSBANK, N.A., PNC BANK,
KENTUCKY, INC., COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A. "RABOBANK
NEDERLAND", NEW YORK BRANCH, THE SAKURA BANK, LTD. NEW YORK BRANCH, THE SUMITOMO
BANK LIMITED, NEW YORK BRANCH, TORONTO DOMINION (TEXAS), INC. AND WACHOVIA BANK
OF GEORGIA, N.A., as Co-Agents (collectively, the "Co-Agents"), and CHEMICAL
---------
BANK, a New York banking corporation, as agent for the Banks hereunder (in such
capacity, the "Agent") and as CAF Loan agent (in such capacity, the "CAF Loan
----- --------
Agent").
- -----
W I T N E S S E T H:
WHEREAS, the Company, the Co-Agents, the Agent, the CAF Loan
Agent and certain banks and other financial institutions (the "Original Banks")
--------------
are parties to the Agreement and Amendment, dated as of February 27, 1995 (the
"February 1995 Agreement and Amendment"), adopting and incorporating by
-------------------------------------
reference all of the terms and provisions of the Credit Agreement, dated as of
February 10, 1994 as incorporated by reference into and amended by the September
1994 Agreement and Amendment (as defined below) (as so adopted and incorporated
by reference into and amended by the February 1995 Agreement and Amendment and
as further amended, supplemented or otherwise modified to the date hereof, the
"Original Credit Agreement"), pursuant to which such parties committed to make
-------------------------
loans to the Company for a period of five years;
WHEREAS, effective as of the Closing Date (as defined below),
the Company intends to terminate the Commitments (as defined in the Original
Credit Agreement) of the Original Banks under the Original Credit Agreement
pursuant to subsection 2.4(a) of the Original Credit Agreement;
WHEREAS, the Company has requested that the Co-Agents, the
Agent, the CAF Loan Agent and the Banks enter into a new agreement adopting and
incorporating by reference all of the terms and provisions of the Original
Credit Agreement with certain amendments and modifications thereto; and
<PAGE>
2
WHEREAS, the Co-Agents, the Agent, the CAF Loan Agent and the
Banks are willing to so enter into a new agreement, but only upon the terms and
subject to the conditions set forth below;
NOW THEREFORE, in consideration of the promises and mutual
agreements herein contained and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged by each of the parties
hereto, the parties hereto hereby agree as follows:
SECTION 1. Adoption and Incorporation of Original Credit
---------------------------------------------
Agreement. Subject to the amendments and modifications set forth in Sections 3
- ---------
through 12 of this Agreement, all of the terms and provisions of the Original
Credit Agreement are hereby adopted and incorporated by reference into this
Agreement, with the same force and effect as if fully set forth herein. This
Agreement shall not constitute an amendment or waiver of any provision of the
Original Credit Agreement not expressly referred to herein and shall not be
construed as an amendment, waiver or consent to any action on the part of the
Company that would require an amendment, waiver or consent of the Agent or the
Banks except as expressly stated herein. Except as expressly amended hereby, the
provisions of the Original Credit Agreement as adopted and incorporated by
reference into this Agreement are and shall remain in full force and effect.
SECTION 2. Definitions. As used in this Agreement, terms
-----------
defined herein are used as so defined and, unless otherwise defined herein,
terms defined in the Original Credit Agreement are used herein as therein
defined.
SECTION 3. Defined Terms. For purposes of this Agreement,
-------------
subsection 1.1 of the Original Credit Agreement as adopted and incorporated by
reference into this Agreement is hereby amended as follows:
(a) by deleting the defined terms "Agreement", "Closing Date",
"Original Banks", "Original Credit Agreement" and "Termination Date" in their
entirety and substituting in lieu thereof in proper alphabetical order the
following:
"`Agreement': the Original Credit Agreement as adopted and
---------
incorporated by reference into the February 1996 Agreement and
Amendment, as amended by the February 1996 Agreement and Amendment and
as further amended, supplemented or otherwise modified from time to
time.";
"'Closing Date': the date on which all of the conditions
------------
precedent for the Closing Date set forth in Section 13 of the February
1996 Agreement and Amendment shall have been fulfilled; provided,
--------
however, that for purposes of Section 4 of the Original Credit
-------
Agreement, the term "Closing Date" shall mean the Original Closing
Date.";
<PAGE>
3
"'Original Banks': as defined in the recitals to the February
--------------
1996 Agreement and Amendment.";
"'Original Credit Agreement': as defined in the Recitals to
-------------------------
the February 1996 Agreement and Amendment."; and
"`Termination Date': the date one day before the fifth
----------------
anniversary of the Closing Date (or, if such date is not a Business
Day, the next succeeding Business Day), or such other Business Day to
which the Termination Date may be changed pursuant to subsection 2.4 of
the Original Credit Agreement as adopted and incorporated by reference
into the February 1996 Agreement and Amendment).".
(b) by inserting in said subsection 1.1 of the Original Credit
Agreement in the appropriate alphabetical order the following defined term:
"`February 1996 Agreement and Amendment': the Agreement and
-------------------------------------
Amendment, dated as of February 28, 1996, among the Company, the Banks,
Bank of America National Trust & Savings Association, Credit Lyonnais
Cayman Island Branch, Deutsche Bank AG, The First National Bank of
Chicago, The Industrial Bank of Japan, Limited, Atlanta Agency, Morgan
Guaranty Trust Company of New York, NationsBank, N.A., PNC Bank,
Kentucky, Inc., Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A.
"Rabobank Nederland", New York Branch, The Sakura Bank, Ltd. New York
Branch, The Sumitomo Bank Limited, New York Branch, Toronto Dominion
(Texas), Inc. and Wachovia Bank of Georgia, N.A., as Co-Agents, the
Agent and the CAF Loan Agent.".
SECTION 4. Facility Fee. For purposes of this Agreement,
------------
subsection 2.3(a) of the Original Credit Agreement as adopted and incorporated
by reference into this Agreement is hereby amended by deleting the table
contained therein and substituting in lieu thereof the following:
"Type of Period Facility Fee
--------------- ------------
Level I Period .0750%
Level II Period .0900%
Level III Period .1250%
Level IV Period .1875%
Level V Period .2500%.".
SECTION 5. Financial Information. For purposes of this
---------------------
Agreement, subsection 3.3 of the Original Credit Agreement as adopted and
incorporated by reference into this Agreement is hereby amended by deleting such
subsection in its entirety and substituting in lieu thereof the following:
<PAGE>
4
"3.3 Financial Information. The Company has furnished to the
---------------------
Agent and each Bank copies of the following:
(a) the Annual Report of the Company for the fiscal year ended
December 31, 1994, containing the consolidated balance sheet of the
Company and its Subsidiaries as at said date and the related
consolidated statements of income, common stockholders' equity and
changes in financial position for the fiscal year then ended,
accompanied by the opinion of Coopers & Lybrand;
(b) the Annual Report of the Company on Form 10-K for the
fiscal year ended December 31, 1994;
(c) quarterly financial statements of the Company, including
balance sheets, for the fiscal periods ended March 31, 1995, June 30,
1995 and September 30, 1995; and
(d) Current Reports on Form 8-K filed with the Securities and
Exchange Commission on November 20, 1995 and December 5, 1995,
respectively.
Such financial statements (including any notes thereto) have been
prepared in accordance with GAAP and fairly present the financial
conditions of the corporations covered thereby at the dates thereof and
the results of their operations for the periods covered thereby,
subject to normal year-end adjustments in the case of interim
statements. As of the date hereof, neither the Company nor any of its
Subsidiaries has any known contingent liabilities of any significant
amount which are not referred to in said financial statements or in the
notes thereto which could reasonably be expected to have a material
adverse effect on the business or assets or on the condition, financial
or otherwise, of the Company and its Subsidiaries, on a consolidated
basis.".
SECTION 6. Litigation. For purposes of this Agreement,
----------
subsection 3.6 of the Original Credit Agreement as adopted and incorporated by
reference into this Agreement is hereby amended by deleting such subsection in
its entirety and substituting in lieu thereof the following:
"3.6 Litigation. Except as disclosed in the Company's Annual
----------
Report on Form 10-K for its fiscal year ended December 31, 1994 and its
Quarterly Reports on Form 10-Q for its fiscal quarters ended March 31,
1995, June 30, 1995 and September 30, 1995, in each case as filed with
the Securities and Exchange Commission and previously distributed to
the Banks, and except as set forth on Schedule VI hereto, there is no
litigation, at law or in equity, or any proceeding before any federal,
state, provincial or municipal board or other governmental or
administrative agency pending or to the knowledge of the Company
threatened which, after giving effect to any
<PAGE>
5
applicable insurance, may involve any material risk of a material
adverse effect on the business or assets or on the condition, financial
or otherwise, of the Company and its Subsidiaries on a consolidated
basis or which seeks to enjoin the consummation of any of the
transactions contemplated by this Agreement or any other Loan Document
and involves any material risk that any such injunction will be issued,
and no judgment, decree, or order of any federal, state, provincial or
municipal court, board or other governmental or administrative agency
has been issued against the Company or any Subsidiary which has, or may
involve, a material risk of a material adverse effect on the business
or assets or on the condition, financial or otherwise, of the Company
and its Subsidiaries on a consolidated basis. The Company does not
believe that the final resolution of the matters disclosed in its
Annual Report on Form 10-K for its fiscal year ended December 31, 1994
and its Quarterly Reports on Form 10-Q for its fiscal quarters ended
March 31, 1995, June 30, 1995 and September 30, 1995, in each case as
filed with the Securities and Exchange Commission and previously
distributed to the Banks, will have a material adverse effect on the
business or assets or condition, financial or otherwise, of the Company
and its Subsidiaries on a consolidated basis.".
SECTION 7. Negative Pledge. For purposes of this Agreement,
---------------
subsection 5.12 of the Original Credit Agreement as adopted and incorporated by
reference into this Agreement is hereby amended (a) by deleting the phrase
"except for" in the first sentence thereof and substituting in lieu thereof the
following phrase:
"and the Company will not create or have outstanding any
security on or over the capital stock of any of its Subsidiaries that
own a Principal Property and will ensure that no Subsidiary will create
or have outstanding any security on or over the capital stock of any of
its respective Subsidiaries that own a Principal Property except in
either case for";
(b) by inserting the phrase "or on capital stock, as the case
may be," immediately after each occurrence of the word "property" in paragraph
(b) of the first sentence thereto; and
(c) by deleting paragraph (f) of the first sentence thereto in
its entirety and substituting in lieu thereof the following:
"(f) any security created in connection with the borrowing of
funds if within 120 days such funds are used to repay Indebtedness in
at least the same principal amount as secured by other security of
Principal Property or capital stock of a Subsidiary that owns a
Principal Property, as the
<PAGE>
6
case may be, with an independent appraised fair market value at least
equal to the appraised fair market value of the Principal Property or
capital stock of a Subsidiary that owns a Principal Property, as the
case may be, secured by the new security; and".
SECTION 8. Commitment Amounts and Percentages; Lending
-------------------------------------------
Offices; Addresses for Notice. For purposes of this Agreement, Schedule I to the
- -----------------------------
Original Credit Agreement as adopted and incorporated by reference into this
Agreement is hereby amended by deleting such Schedule in its entirety and
substituting in lieu thereof Schedule I to this Agreement.
SECTION 9. Subsidiaries of the Company. For purposes of this
---------------------------
Agreement, Schedule II to the Original Credit Agreement as adopted and
incorporated by reference into this Agreement is hereby amended by deleting such
Schedule in its entirety and substituting in lieu thereof Schedule II to this
Agreement.
SECTION 10. Indebtedness. For purposes of this Agreement,
------------
Schedule III to the Original Credit Agreement as adopted and incorporated by
reference into this Agreement is hereby amended by deleting such Schedule in its
entirety and substituting in lieu thereof Schedule III to this Agreement.
SECTION 11. Applicable Margins. For purposes of this
------------------
Agreement, Schedule V to the Original Credit Agreement as adopted and
incorporated by reference into this Agreement is hereby amended by deleting such
Schedule in its entirety and substituting in lieu thereof Schedule V to this
Agreement.
SECTION 12. Litigation. For purposes of this Agreement, the
----------
Original Credit Agreement as adopted and incorporated by reference into this
Agreement is hereby amended by adding thereto Schedule VI to this Agreement.
SECTION 13. Conditions Precedent. The obligations of each Bank
--------------------
to make the Loans contemplated by subsections 2.1 and 2.2 of the Original Credit
Agreement as adopted and incorporated by reference into this Agreement shall be
subject to the compliance by the Company with its agreements herein contained
(including its agreements contained in the Original Credit Agreement as adopted
and incorporated by reference into this Agreement) and to the satisfaction on or
before the Closing Date of the following further conditions:
(a) Loan Documents. The Agent shall have received (i) this
--------------
Agreement, executed and delivered by a duly authorized officer of the Company,
with a counterpart for each Bank, and (ii) for the account of each Bank, a
Revolving Credit Note and a Grid CAF Loan Note conforming to the requirements
hereof and executed by a duly authorized officer of the Company.
<PAGE>
7
(b) Legal Opinions. On the Closing Date each Bank shall have
--------------
received from any general, associate, or assistant general counsel to the
Company or any other counsel to the Company satisfactory to the Agent, such
opinions as the Agent shall have reasonably requested with respect to the
transactions contemplated by this Agreement.
(c) Company Officers' Certificate. The representations and
-----------------------------
warranties contained in Section 3 of the Original Credit Agreement as adopted
and incorporated by reference into, and as amended by, this Agreement shall be
true and correct on the Closing Date with the same force and effect as though
made on and as of such date; on and as of the Closing Date and after giving
effect to this Agreement, no Default shall have occurred (except a Default which
shall have been waived in writing or which shall have been cured) and no Default
shall exist after giving effect to the Loan to be made; and the Agent shall have
received a certificate containing a representation to these effects dated the
Closing Date and signed by a Responsible Officer.
(d) General. All instruments and legal and corporate
-------
proceedings in connection with the Loans contemplated by this Agreement shall be
satisfactory in form and substance to the Agent, and the Agent shall have
received copies of all documents, and favorable legal opinions and records of
corporate proceedings, which the Agent may have reasonably requested in
connection with the Loans and other transactions contemplated by this Agreement.
(e) Termination of Commitments of the Original Banks. On the
------------------------------------------------
Closing Date, the Commitments (as defined in the Original Credit Agreement) of
the Original Banks under the February 1995 Agreement and Amendment shall have
been terminated.
SECTION 14. Expenses. The Company agrees to pay or reimburse
--------
the Agent for all of its reasonable out-of-pocket costs and expenses incurred in
connection with the development, preparation and execution of, and any
amendment, supplement or modification to, this Agreement and the Notes and any
other documents prepared in connection herewith, and the consummation of the
transactions contemplated hereby and thereby, including, without limitation, the
reasonable fees and disbursements of counsel to the Agent.
SECTION 15. GOVERNING LAW. THIS AGREEMENT AND THE NOTES AND
-------------
THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND THE NOTES
SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW
OF THE STATE OF NEW YORK.
SECTION 16. Counterparts. This Agreement may be
------------
executed by one or more of the parties to this Agreement on any
number of separate counterparts and all of said counterparts
taken together shall be deemed to constitute one and the same
<PAGE>
8
instrument. A set of the copies of this Agreement signed by all
the parties shall be lodged with the Company and the Agent.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
COLUMBIA/HCA HEALTHCARE CORPORATION
By: /s/ David Anderson
------------------------------------------
Name: David Anderson
Title: Vice President - Finance
CHEMICAL BANK, as Agent, as CAF
Loan Agent and as a Bank
By: /s/ Mary E. Cameron
------------------------------------------
Name: Mary E. Cameron
Title: Vice President
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as a Co-Agent and as a Bank
By: /s/ Ruth Z. Edwards
------------------------------------------
Name: Ruth Z. Edwards
Title: Vice President
CREDIT LYONNAIS CAYMAN ISLAND BRANCH, as a
Co-Agent and as a Bank
By: /s/ Farboud Tavangar
------------------------------------------
Name: Farboud Tavangar
Title: Authorized Signature
DEUTSCHE BANK AG, NEW YORK AND/OR CAYMAN
ISLANDS BRANCH, as a Co-Agent and as a Bank
By: /s/ Stephan A. Wiedemann /s/ Tom Foley
------------------------------------------
Name: Stephan A. Wiedemann/Tom Foley
Title: Vice President/Associate
<PAGE>
THE FIRST NATIONAL BANK OF CHICAGO,
as a Co-Agent and as a Bank
By: /s/ L. Richard Schiller
------------------------------------------
Name: L. Richard Schiller
Title: Vice President
THE INDUSTRIAL BANK OF JAPAN, LIMITED,
ATLANTA AGENCY, as a Co-Agent and as a Bank
By: /s/ Shusai Nagai
------------------------------------------
Name: Shusai Nagai
Title: General Manager
MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as
a Co-Agent and as a Bank
By: /s/ Penelope J.B. Cox
------------------------------------------
Name: Penelope J.B. Cox
Title: Vice President
NATIONSBANK, N.A. as a Co-Agent and as a Bank
By: /s/ Patrick J. Neal
------------------------------------------
Name: Patrick J. Neal
Title: Vice President
By: /s/ S.W. Choppin
------------------------------------------
Name: S.W. Choppin
Title: Vice President
PNC BANK, KENTUCKY, INC. as a Co-Agent and as
a Bank
By:/s/ Jefferson M. Green
------------------------------------------
Name: Jefferson M. Green
Title: Vice President
<PAGE>
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A. "RABOBANK NEDERLAND", NEW
YORK BRANCH, as a Co-Agent and as a Bank
By: /s/ Terrell Boyle /s/ W. Jeffrey Vollack
------------------------------------------
Name: Terrell Boyle/W. Jeffrey Vollack
Title: VP/VP, Manager
THE SAKURA BANK, LTD. NEW YORK BRANCH, as a
Co-Agent and as a Bank
By: /s/ Masahiro Nakajo
------------------------------------------
Name: Masahiro Nakajo
Title: Senior VP & Manager
THE SUMITOMO BANK LIMITED, NEW YORK BRANCH,
as a Co-Agent and as a Bank
By: /s/ Yoshinori Kawamura
------------------------------------------
Name: Yoshinori Kawamura
Title: Joint General Manager
TORONTO DOMINION (TEXAS), INC., as a Co-Agent
and as a Bank
By: /s/ Diane Bailey
------------------------------------------
Name: Diane Bailey
Title: Vice President
WACHOVIA BANK OF GEORGIA, N.A., as a Co-Agent
and as a Bank
By: /s/ Nick T. Weaver
------------------------------------------
Name: Nick T. Weaver
Title: Vice President
FIRST INTERSTATE BANK OF CALIFORNIA, as a
Bank
By: /s/ Peter G. Olson /s/ Lancy Gin
------------------------------------------
Name: Peter G. Olson/Lancy Gin
Title: Senior VP/Asst. VP
<PAGE>
THE FUJI BANK LIMITED, as a Bank
By: /s/ S. Fujimoto
------------------------------------------
Name: S. Fujimoto
Title: Joint General Manager
THE MITSUBISHI BANK, LTD., as a Bank
By: /s/ Hiroaki Fuchida
------------------------------------------
Name: Hiroaki Fuchida
Title: Senior Vice President
DAI ICHI KANGYO BANK, as a Bank
By: /s/ Noboru Hasegawa
------------------------------------------
Name: Noboru Hasegawa
Title: General Manager
THE BANK OF NEW YORK, as a Bank
By: /s/ Gregory L. Batson
------------------------------------------
Name: Gregory L. Batson
Title: Vice President
SUNTRUST BANK, NASHVILLE, N.A., as a Bank
By: /s/ Kevin P. Lavender
------------------------------------------
Name: Kevin P. Lavender
Title: Group Vice President
ABN AMRO BANK N.V., as a Bank
By: /s/ Kathryn C. Toth /s/ S.K. Kersten
------------------------------------------
Name: K.C. Toth/S.K. Kersten
Title: Vice President/Asst. VP
<PAGE>
THE TOKAI BANK, LIMITED, NEW YORK BRANCH, as
a Bank
By: /s/ Masaharu Muto
------------------------------------------
Name: Masahuru Muto
Title: Deputy General Manager
FIRST UNION NATIONAL BANK OF NORTH CAROLINA,
as a Bank
By: /s/ Joseph H. Towell
------------------------------------------
Name: Joseph H. Towell
Title: Senior Vice President
THE NORTHERN TRUST COMPANY, as a Bank
By: /s/ Pete T. Sinelli
------------------------------------------
Name: Pete T. Sinelli
Title: Commercial Banking Officer
MELLON BANK, N.A., as a Bank
By: /s/ Richard Arnington
------------------------------------------
Name: Richard Arnington
Title: Vice President
ARAB BANK PLC, GRAND CAYMAN BRANCH, as a Bank
By: /s/ Peter Boyadjian
------------------------------------------
Name: Peter Boyadjian
Title: Senior Vice President
THE BANK OF NOVA SCOTIA, as a Bank
By: /s/ W.J. Brown
------------------------------------------
Name: W.J. Brown
Title: Vice President
<PAGE>
CITIBANK, N.A. as a Bank
By: /s/ Thomas D. Stott
------------------------------------------
Name: Thomas D. Stott
Title: Vice President
COMMERZBANK AG, as a Bank
By: /s/ Harry P. Yergey Eric R. Kagerer
------------------------------------------
Name: Harry P. Yergey/Eric R. Kagerer
Title: Vice President/Asst. VP
DEN DANSKE BANK AKTIESELSKAB, as a Bank
By: /s/ John A. O'Neill
------------------------------------------
Name: John A. O'Neill
Title: Vice President
By: /s/ Bent V. Christensen
------------------------------------------
Name: Bent V. Christensen
Title: Vice President
FIRST AMERICAN NATIONAL BANK, as a Bank
By: /s/ Sandra G. Hamrick
------------------------------------------
Name: Sandra G. Hamrick
Title: Assistant Vice President
FLEET NATIONAL BANK OF CONNECTICUT, as a Bank
By: /s/ Amy E. Fredericks
------------------------------------------
Name: Amy E. Fredericks
Title: Vice President
THE MITSUBISHI TRUST AND BANKING CORPORATION,
as a Bank
By: /s/ Hachiro Hosoda
------------------------------------------
Name: Hachiro Hosoda
Title: Senior Vice President
<PAGE>
NATIONAL CITY BANK, KENTUCKY, as a Bank
By: /s/ Deroy Scott
------------------------------------------
Name: Deroy Scott
Title: Vice President
BARNETT BANK OF TAMPA, N.A., as a Bank
By: /s/ Lawrence Katz
------------------------------------------
Name: Lawrence Katz
Title: Vice President
THE BANK OF TOKYO TRUST COMPANY, as a Bank
By: /s/ Amanda S. Ryan
------------------------------------------
Name: Amanda S. Ryan
Title: Vice President
UNITED STATES NATIONAL BANK OF OREGON, as a
Bank
By: /s/ Fiza Noordin
------------------------------------------
Name: Fiza Noordin
Title: Corporate Banking Officer
THE SUMITOMO TRUST & BANKING CO., LTD., NEW
YORK BRANCH, as a Bank
By: /s/ Suraj P. Bhatia
------------------------------------------
Name: Suraj P. Bhatia
Title: Senior Vice President & Manager
of Corporate Finance
YASUDA TRUST AND BANKING, as a Bank
By: /s/ Makoto Tagawa
------------------------------------------
Name: Makoto Tagawa
Title: Deputy General Manager
<PAGE>
THE BANK OF YOKOHAMA LTD., NEW YORK BRANCH,
as a Bank
By: /s/ Takeshi Suzuki
------------------------------------------
Name: Takeshi Suzuki
Title: VP & Senior Manager
BANCA NAZIONALE DEL LAVORO S.P.A. - NEW YORK
BRANCH, as a Bank
By: /s/ Giulio Giovine
------------------------------------------
Name: Giulio Giovine
Title: Vice President
By: /s/ Carlo Vecchi
------------------------------------------
Name: Carlo Vecchi
Title: Senior Vice President
THE BOATMEN'S NATIONAL BANK OF ST. LOUIS, as
a Bank
By: /s/ David E. Wilsdorf
------------------------------------------
Name: David E. Wilsdorf
Title: Vice President
THE MITSUI TRUST & BANKING CO., LTD., NEW
YORK BRANCH, as a Bank
By: /s/ Margaret Holloway
------------------------------------------
Name: Margaret Holloway
Title: Vice President & Manager
UNION PLANTERS BANK, as a Bank
By: /s/ Michael F. Sparta
------------------------------------------
Name: Michael F. Sparta
Title: Vice President
BANK ONE, TEXAS, NA, as a Bank
By: /s/ Craig F. Hartberg
------------------------------------------
Name: Craig F. Hartberg
Title: Senior Vice President
<PAGE>
SCHEDULE I
Commitment Amounts and Percentages;
Lending Offices; Addresses for Notice
A. Commitment Amounts and Percentages.
<TABLE>
<CAPTION>
COMMITMENT COMMITMENT
NAME OF BANK AMOUNT PERCENTAGE
- ------------ ------------ ----------
<S> <C> <C>
CHEMICAL BANK $145,000,000 5.800%
BANK OF AMERICA NATIONAL TRUST 92,500,000 3.700
AND SAVINGS ASSOCIATION
CREDIT LYONNAIS CAYMAN ISLAND BRANCH 92,500,000 3.700
DEUTSCHE BANK AG, 92,500,000 3.700
NEW YORK AND/OR CAYMAN ISLANDS BRANCH
THE FIRST NATIONAL BANK OF CHICAGO 92,500,000 3.700
THE INDUSTRIAL BANK OF JAPAN, 92,500,000 3.700
LIMITED, ATLANTA AGENCY
MORGAN GUARANTY TRUST COMPANY 92,500,000 3.700
OF NEW YORK
NATIONSBANK, N.A 92,500,000 3.700
PNC BANK, KENTUCKY, INC 92,500,000 3.700
COOPERATIEVE CENTRALE RAIFFEISEN- 92,500,000 3.700
BOERENLEENBANK B.A. "RABOBANK
NEDERLAND", NEW YORK BRANCH
THE SAKURA BANK, LTD 92,500,000 3.700
NEW YORK BRANCH
THE SUMITOMO BANK LIMITED, 92,500,000 3.700
NEW YORK BRANCH
TORONTO DOMINION (TEXAS), INC. 92,500,000 3.700
WACHOVIA BANK OF GEORGIA, N.A. 92,500,000 3.700
FIRST INTERSTATE BANK OF CALIFORNIA 86,250,000 3.450
THE FUJI BANK LIMITED 86,250,000 3.450
THE MITSUBISHI BANK, LTD. 69,375,000 2.775
DAI ICHI KANGYO BANK 68,750,000 2.750
THE BANK OF NEW YORK 62,500,000 2.500
SUNTRUST BANK, NASHVILLE, N.A 62,500,000 2.500
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
COMMITMENT COMMITMENT
NAME OF BANK AMOUNT PERCENTAGE
- ------------ ------------ ----------
<S> <C> <C>
THE MITSUBISHI TRUST AND BANKING $54,375,000 2.175%
CORPORATION/THE BANK OF TOKYO
TRUST COMPANY 1/
ABN AMRO BANK N.V. 50,000,000 2.000
THE TOKAI BANK, LIMITED, NEW YORK BRANCH 50,000,000 2.000
FIRST UNION NATIONAL BANK OF 46,875,000 1.875
NORTH CAROLINA
THE NORTHERN TRUST COMPANY 46,875,000 1.875
MELLON BANK, N.A. 34,375,000 1.375
ARAB BANK PLC, GRAND CAYMAN BRANCH 31,250,000 1.250
THE BANK OF NOVA SCOTIA 31,250,000 1.250
CITIBANK, N.A. 31,250,000 1.250
COMMERZBANK AG 31,250,000 1.250
DEN DANSKE BANK AKTIESELSKAB 31,250,000 1.250
FIRST AMERICAN NATIONAL BANK 31,250,000 1.250
FLEET NATIONAL BANK OF CONNECTICUT 31,250,000 1.250
BANK ONE, TEXAS, N.A. 31,250,000 1.250
NATIONAL CITY BANK, KENTUCKY 31,250,000 1.250
BARNETT BANK OF TAMPA, N.A. 25,000,000 1.000
UNITED STATES NATIONAL BANK OF OREGON 21,875,000 0.875
THE SUMITOMO TRUST & BANKING CO., 18,750,000 0.750
LTD., NEW YORK BRANCH
YASUDA TRUST AND BANKING 18,750,000 0.750
THE BANK OF YOKOHAMA LTD., 15,625,000 0.625
NEW YORK BRANCH
BANCA NAZIONALE DEL LAVORO S.P.A.- 15,625,000 0.625
NEW YORK BRANCH
THE BOATMAN'S NATIONAL BANK OF ST. LOUIS 15,625,000 0.625
THE MITSUI TRUST & BANKING CO., LTD., 15,625,000 0.625
NEW YORK BRANCH
UNION PLANTERS BANK 6,250,000 0.250
-------------- ------
TOTAL $2,500,000,000 100.00%
============== ======
</TABLE>
- ----------
1/ On March 31, 1996, The Mitsubishi Trust and Banking Corporation (commitment
amount of $31,250,000/commitment percentage of 1.250%) is expected to merge
with The Bank of Tokyo Trust Company (commitment amount of
$23,125,000/commitment percentage .925%).
<PAGE>
<TABLE>
B. LENDING OFFICES; ADDRESSES FOR NOTICE.
<S> <C>
CHEMICAL BANK
-------------
Domestic Lending Office: Chemical Bank
270 Park Avenue
New York, NY 10017
Eurodollar Lending Office: Chemical Bank
270 Park Avenue
New York, NY 10017
Address for Notices: See subsection 8.2 of the Original
Credit Agreement as adopted and
incorporated by reference into this
Agreement
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
------------------------------------------------------
Domestic Lending Office: Bank of America National Trust
and Savings Association
555 S. Flower Street
Mail Code 5618
Los Angeles, CA 90071
Eurodollar Lending Office: Bank of America National Trust
and Savings Association
1850 Gateway Blvd., 4th Floor
Concord, CA 94520
Address for Notices: Bank of America National Trust
and Savings Association
555 S. Flower Street
Los Angeles, CA 90071
Attention: James Emslie
Telecopy: (213) 228-2756
Confirmation: (213) 228-2669
Attention: Wyatt Ritchie
Telecopy: (213) 228-2756
Confirmation: (213) 228-9734
CREDIT LYONNAIS CAYMAN ISLAND BRANCH
------------------------------------
Domestic Lending Office: Credit Lyonnais Cayman Island
Branch
c/o Credit Lyonnais
1301 Avenue of the Americas
20th Floor
New York, NY 10019
Eurodollar Lending Office: Credit Lyonnais Cayman Island
Branch
c/o Credit Lyonnais
</TABLE>
<PAGE>
<TABLE>
<S> <C>
1301 Avenue of the Americas
20th Floor
New York, NY 10019
Address for Notices: Credit Lyonnais Cayman Island
Branch
c/o Credit Lyonnais
1301 Avenue of the Americas
20th Floor
New York, NY 10019
Attention: Farboud Tavangar
Telecopy: (212) 261-3440
Confirmation: (212) 261-7832
Credit Lyonnais (New York)
1301 Avenue of the Americas
New York, NY 10019
Attention: Evan S. Wasser
Telecopy: (212) 261-3440
Confirmation: (212) 261-7748
DEUTSCHE BANK AG, NEW YORK AND/OR CAYMAN ISLANDS BRANCHES
---------------------------------------------------------
Domestic Lending Office: Deutsche Bank AG,
New York Branch
31 West 52nd Street
New York, NY 10019
Eurodollar Lending Office: Deutsche Bank, AG,
Cayman Islands Branch
31 West 52nd Street
New York, NY 10019
Address for Notices: Deutsche Bank AG,
New York Branch
31 West 52nd Street
New York, NY 10019
Attention: Robert A. Maddux,
Director
Telecopy: (212) 474-8212
Confirmation: (212) 474-8228
THE FIRST NATIONAL BANK OF CHICAGO
----------------------------------
Domestic Lending Office: The First National Bank of Chicago
First National Plaza
Mail Suite 0091
Chicago, IL 60670-0091
Eurodollar Lending Office: The First National Bank of Chicago
First National Plaza
Mail Suite 0091
Chicago, IL 60670-0091
Address for Notices: The First National Bank of Chicago
</TABLE>
<PAGE>
<TABLE>
<S> <C>
First National Plaza
Mail Suite 0091
Chicago, IL 60670-0091
Attention: William S. Wheatley
Telecopy: (312) 732-2016
Confirmation: (312) 732-5033
THE INDUSTRIAL BANK OF JAPAN, LIMITED, ATLANTA AGENCY
-----------------------------------------------------
Domestic Lending Office: The Industrial Bank of Japan
Trust Company
245 Park Avenue
New York, NY 10167
Eurodollar Lending Office: The Industrial Bank of Japan
Trust Company
245 Park Avenue
New York, NY 10167
Address for Notices: The Industrial Bank of Japan,
Limited, Atlanta Agency
191 Peachtree Street NE, Suite 3600
Atlanta, GA 30303
Attention: Jackie Brunetto
Telecopy: (404) 577-6818
Confirmation: (404) 420-3325
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
-----------------------------------------
Domestic Lending Office: Morgan Guaranty Trust Company
of New York
60 Wall Street
New York, NY 10160
Eurodollar Lending Office: Morgan Guaranty Trust Company
of New York
Nassau, Bahamas Office
c/o J.P. Morgan Services Inc.
Euro-Loan Servicing Unit
Morgan Christiana Center
500 Stanton Christiana Road
Newark, DE 19713
Address for Notices: Morgan Guaranty Trust Company
of New York
60 Wall Street
New York, NY 10160
Attention: Penelope Cox
Telecopy: (212) 648-6018
Confirmation: (212) 648-6414
</TABLE>
<PAGE>
<TABLE>
<S> <C>
NATIONSBANK, N.A.
-----------------
Domestic Lending Office: NationsBank, N.A.
One NationsBank Plaza
Charlotte, NC 28255
Eurodollar Lending Office: NationsBank, N.A.
One NationsBank Plaza
Charlotte, NC 28255
Address for Notices: NationsBank, N.A.
One National Bank Plaza, 5th Floor
Nashville, TN 37239
Attention: Ashley Crabtree
Telecopy: (615) 749-4640
PNC BANK, KENTUCKY, INC.
------------------------
Domestic Lending Office: PNC Bank, Kentucky, Inc.
Citizens Plaza
Louisville, KY 40296
Eurodollar Lending Office: PNC Bank, Kentucky, Inc.
Citizens Plaza
Louisville, KY 40296
Address for Notices: PNC Bank (Pittsburgh-Fifth Avenue)
2 PNC Plaza
620 Liberty Avenue
Pittsburgh, PA 16265
Attention: Edward Weisto
Telecopy: (412)762-2784
PNC Bank, Kentucky, Inc.
500 West Jefferson Street
8th Floor
Louisville, KY 40296
Attention: Jefferson Green
Telecopy: (502) 581-2302
Confirmation: (502) 581-4734
COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A.,
"RABOBANK NEDERLAND", NEW YORK BRANCH
-----------------------------------------------------
Domestic Lending Office: Rabobank Nederland
245 Park Avenue
New York, NY 10167
Eurodollar Lending Office: Rabobank Nederland
245 Park Avenue
New York, NY 10167
Address for Notices: Rabobank Nederland (Atlanta)
1 Atlantic Center, Suite 3460-1201,
Peachtree Street
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Atlanta GA 30309-3400
Attention: Terrell Boyle
Telecopy: (404) 877-9150
Confirmation: (404) 877-9106
THE SAKURA BANK, LTD. NEW YORK BRANCH
-------------------------------------
Domestic Lending Office: The Sakura Bank, Ltd.
New York Branch
277 Park Avenue
New York, NY 10172
Eurodollar Lending Office: The Sakura Bank, Ltd.
New York Branch
277 Park Avenue
New York, NY 10172
Address for Notices: The Sakura Bank, Ltd.
New York Branch
277 Park Avenue
45th Floor
New York, NY 10172
Attention: Masahiro Nakajo
Telecopy: (212) 888-7651
Confirmation: (212) 756-6773
THE SUMITOMO BANK LIMITED, NEW YORK BRANCH
------------------------------------------
Domestic Lending Office: The Sumitomo Bank Limited,
New York Branch
One World Trade Center
Suite 9651
New York, NY 10048
Eurodollar Lending Office: The Sumitomo Bank Limited,
New York Branch
One World Trade Center
Suite 9651
New York, NY 10048
Address for Notices: The Sumitomo Bank Limited,
New York Branch
277 Park Avenue, 6th Floor
New York, NY 10167
Attention: Jeffrey L. Toner
Telecopy: (212) 224-5188
Confirmation: (212) 224-4142
</TABLE>
<PAGE>
<TABLE>
<S> <C>
TORONTO DOMINION (TEXAS), INC.
------------------------------
Domestic Lending Office: The Toronto-Dominion Bank,
Houston Agency
909 Fannin Street, Suite 1700
Houston, TX 77010
Eurodollar Lending Office: The Toronto-Dominion Bank,
Houston Agency
909 Fannin Street, Suite 1700
Houston, TX 77010
Address for Notices: The Toronto-Dominion Bank
(New York)
31 West 52nd Street
New York 10019-6101
Attention: Robert F. Maloney
Telecopy: (212) 974-0396
Confirmation: (212) 358-0750
WACHOVIA BANK OF GEORGIA, N.A.
------------------------------
Domestic Lending Office: Wachovia Bank of Georgia, N.A.
191 Peachtree Street, N.E.
Atlanta, GA 30303
Eurodollar Lending Office: Wachovia Bank of Georgia, N.A.
191 Peachtree Street, N.E.
Atlanta, GA 30303
Address for Notices: Wachovia Bank of Georgia, N.A.
191 Peachtree Street, N.E.
28th Floor
Atlanta, GA 30303
Attention: Nick Weaver
Telecopy: (404) 332-5016
Confirmation: (404) 332-4062
FIRST INTERSTATE BANK OF CALIFORNIA
-----------------------------------
Domestic Lending Office: First Interstate Bank of
California
1055 Wilshire Boulevard, B10-6
Los Angeles, California 90017
Eurodollar Lending Office: First Interstate Bank of
California
Nassau Branch
c/o 1055 Wilshire Boulevard, B10-6
Los Angeles, California 90017
Address for Notices: First Interstate Bank of
California
222 West Adams Street
Suite 2180
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Chicago, IL 60606
Attention: James Lent
Telecopy: (312) 553-4783
Confirmation: (312) 553-4777
THE FUJI BANK LIMITED
---------------------
Domestic Lending Office: The Fuji Bank, Limited
225 West Wacker Drive
Chicago, IL 60606
Eurodollar Lending Office: The Fuji Bank, Limited
225 West Wacker Drive
Chicago, IL 60606
Address for Notices: The Fuji Bank, Limited (Atlanta)
245 Peachtree Center Avenue, NE,
Suite 21
Atlanta GA 30303-1208
Attention: Brett Johnson
Telecopy: (404) 653-2119
Confirmation: (404) 653-2113
THE MITSUBISHI BANK, LTD.
-------------------------
Domestic Lending Office: The Mitsubishi Bank, Ltd.
2 World Financial Center
225 Liberty Street
39th Floor
New York, NY 10281
Eurodollar Lending Office: The Mitsubishi Bank, Ltd.
2 World Financial Center
225 Liberty Street
39th Floor
New York, NY 10281
Address for Notices: The Mitsubishi Bank, Ltd.
2 World Financial Center
225 Liberty Street
New York, NY 10281
Attention: Hiroaki Fuchida
Telecopy: (212) 667-3562
Confirmation: (212) 667-2884
</TABLE>
<PAGE>
<TABLE>
<S> <C>
DAI ICHI KANGYO BANK
--------------------
Domestic Lending Office: Dai Ichi Kangyo Bank (Atlanta)
285 Peachtree St., Suite 2400
Atlanta, GA 30303
Eurodollar Lending Office Dai Ichi Kangyo Bank (Atlanta)
285 Peachtree St., Suite 2400
Atlanta, GA 30303
Address for Notices: Dai Ichi Kangyo Bank (Atlanta)
285 Peachtree St., Suite 2400
Atlanta, GA 30303
Attention: Gunther Kittel
Telecopy: (404) 581-9657
Confirmation: (404) 581-0200
THE BANK OF NEW YORK
--------------------
Domestic Lending Office: The Bank of New York
One Wall Street, 22nd Floor
New York, NY 10286
Eurodollar Lending Office: The Bank of New York
One Wall Street, 22nd Floor
New York, NY 10286
Address for Notices: The Bank of New York
One Wall Street
New York, NY 10286
Attention: Gregory Batson
Telecopy: (212) 635-6434
Confirmation: (212) 635-6898
SUNTRUST BANK, NASHVILLE, N.A.
------------------------------
Domestic Lending Office: Suntrust Bank, Nashville, N.A.
201 Fourth Avenue North
Nashville, TN 37244
Eurodollar Lending Office: Suntrust Bank, Nashville, N.A.
201 Fourth Avenue North
Nashville, TN 37244
Address for Notices: Suntrust Bank, Nashville, N.A.
201 Fourth Avenue North
Nashville, TN 37244
Attention: Kevin Lavender
Telecopy: (615) 748-5161
Confirmation: (615) 748-4465
</TABLE>
<PAGE>
<TABLE>
<S> <C>
THE MITSUBISHI TRUST AND BANKING CORPORATION
--------------------------------------------
Domestic Lending Office: The Mitsubishi Trust and
Banking Corporation
520 Madison Avenue
25th Floor
New York, NY 10022
Eurodollar Lending Office: The Mitsubishi Trust and
Banking Corporation
520 Madison Avenue
25th Floor
New York, NY 10022
Address for Notices: The Mitsubishi Trust and
Banking Corporation
520 Madison Avenue
New York, NY 10022
Attention: Clifford Teller
Telecopy: (212) 644-6825
Confirmation: (212) 891-8269
THE BANK OF TOKYO TRUST COMPANY
-------------------------------
Domestic Lending Office: The Bank of Tokyo Trust
Company
1251 Avenue of the Americas
New York, NY 10116
Eurodollar lending Office: The Bank of Tokyo Trust
Company
1251 Avenue of the Americas
New York, NY 10116
Address for Notices: The Bank of Tokyo Trust
Company
1251 Avenue of the Americas
12th Floor
New York, NY 10116
Attention: Amanda Ryan
Telecopy: (212) 782-6440
Confirmation: (212) 782-4322
</TABLE>
<PAGE>
<TABLE>
<S> <C>
ABN AMRO BANK N.V.
------------------
Domestic Lending Office: ABN AMRO Bank N.V. -
Pittsburgh Branch
One PPG Place, Suite 2950
Pittsburgh, PA 15222-5400
Eurodollar Lending Office: ABN AMRO Bank N.V. -
Pittsburgh Branch
One PPG Place, Suite 2950
Pittsburgh, PA 15222-5400
Address for Notices: ABN AMRO Bank N.V. -
Pittsburgh Branch
One PPG Place, Suite 2950
Pittsburgh, PA 15222-5400
Attention: Dennis F. Lennon
Telecopy: (412) 566-2266
Confirmation: (412) 566-2256
THE TOKAI BANK, LIMITED, NEW YORK BRANCH
----------------------------------------
Domestic Lending Office: The Tokai Bank, Ltd.
New York Branch
55 East 52nd Street
New York, NY 10055
Eurodollar Lending Office: The Tokai Bank, Ltd.
New York Branch
55 East 52nd Street
New York, NY 10055
Address for Notices: The Tokai Bank, Ltd.
New York Branch
55 East 52nd Street
11th Floor
New York, NY 10055
Attention: Masaharu Muto
Telecopy: (212) 754-2170
Confirmation: (212) 339-1120
Attention: Stuart Schulman
Telecopy: (212) 754-2170
Confirmation: (212) 339-1117
</TABLE>
<PAGE>
<TABLE>
<S> <C>
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
-------------------------------------------
Domestic Lending Office: First Union National
Bank of North Carolina
One First Union Center
301 S. College Street
Charlotte, NC 28288
Eurodollar Lending Office: First Union National
Bank of North Carolina
One First Union Center
301 S. College Street
Charlotte, NC 28288
Address for Notices: First Union National
Bank of North Carolina
One First Union Center
301 S. College Street, TW19
Charlotte, NC 28288
Attention: John W. Ransom
Telecopy: (704) 383-9144
Confirmation: (704) 383-5212
THE NORTHERN TRUST COMPANY
--------------------------
Domestic Lending Office: The Northern Trust Company
50 South La Salle Street
Chicago, IL 60675
Eurodollar Lending Office: The Northern Trust Company
50 South La Salle Street
Chicago, IL 60675
Address for Notices: The Northern Trust Company
50 South La Salle Street, B-11
Chicago, IL 60675
Attention: Lia Taylor
Telecopy: (312) 444-3508
Confirmation: (312) 444-4196
</TABLE>
<PAGE>
<TABLE>
<S> <C>
MELLON BANK, N.A.
-----------------
Domestic Lending Office: Mellon Bank, N.A.
2 Mellon Bank Center
Room 270
Pittsburgh, PA 15259
Eurodollar Lending Office: Mellon Bank, N.A.
2 Mellon Bank Center
Room 270
Pittsburgh, PA 15259
Address for Notices: Mellon Bank, N.A.
2 Mellon Bank Center
Pittsburgh, PA 15259-0001
Attention: Marsha Wicker
Telecopy: (412) 234-9010
Confirmation: (412) 234-3594
ARAB BANK PLC, GRAND CAYMAN BRANCH
----------------------------------
Domestic Lending Office: Arab Bank Plc, Grand Cayman
Branch
520 Madison Avenue
New York, NY 10022
Eurodollar Lending Office: Arab Bank Plc, Grand Cayman
Branch
520 Madison Avenue
New York, NY 10022
Address for Notices: Arab Bank Plc, Grand Cayman
Branch
520 Madison Avenue
New York, NY 10022
Attention: Peter Boyadjian
Telecopy: (212) 593-4632
Confirmation: (212) 715-9702
</TABLE>
<PAGE>
<TABLE>
<S> <C>
THE BANK OF NOVA SCOTIA
-----------------------
Domestic Lending Office: The Bank of Nova Scotia
600 Peachtree Street NE
Suite 2700
Atlanta, GA 30808
Eurodollar Lending Office: The Bank of Nova Scotia
600 Peachtree Street NE
Suite 2700
Atlanta, GA 30808
Address for Notices: The Bank of Nova Scotia
(Atlanta)
600 Peachtree Street NE
Suite 2700
Atlanta, GA 30308
Attention: Carolyn Lopez
Telecopy: (404) 888-8998
Confirmation: (408) 877-1507
CITIBANK, N.A.
--------------
Domestic Lending Office: Citicorp North America, Inc.
2001 Ross Avenue
Suite 1400
Dallas, TX 75201
Eurodollar Lending Office: Citicorp North America, Inc.
2001 Ross Avenue
Suite 1400
Dallas, TX 75201
Address for Notices: Citicorp (New York)
399 Park Avenue
New York, NY
Attention: Margaret Brown
Telecopy: (212) 793-3053
Confirmation: (212) 659-0501
</TABLE>
<PAGE>
<TABLE>
<S> <C>
COMMERZBANK AG
--------------
Domestic Lending Office: Commerzbank AG
Two World Financial Center
32nd Floor
New York, NY 10281
Eurodollar Lending Office: Commerzbank AG
Two World Financial Center
32nd Floor
New York, NY 10281
Address for Notices: Commerzbank AG (Atlanta)
1230 Peachtree Street N.E.
Suite 3500
Atlanta, GA 30309
Attention: Eric Kagerer
Telecopy: (404) 888-6539
Confirmation: (404) 888-6517
DEN DANSKE BANK AKTIESELSKAB
----------------------------
Domestic Lending Office: Den Danske Bank Aktieselskab
(New York)
280 Park Avenue, 4th Floor
East Building
New York, NY 10017
Eurodollar Lending Office: Den Danske Bank Aktieselskab
(New York)
280 Park Avenue, 4th Floor
East Building
New York, NY 10017
Address for Notices: Den Danske Bank Aktieselskab
(New York)
280 Park Avenue, 4th Floor
East Building
New York, NY 10017
Attention; Mogens Sondergard
Telecopy: (212) 370-9239
Confirmation: (212) 984-8472
</TABLE>
<PAGE>
<TABLE>
<S> <C>
FIRST AMERICAN NATIONAL BANK
----------------------------
Domestic lending Office: First American National Bank
327 Union Street
Nashville, TN 37237
Eurodollar Lending Office: First American National Bank
327 Union Street
Nashville, TN 37237
Address for Notices: First American National Bank
(Nashville)
300 Union Street, 2nd Floor
Nashville, TN 37237
Attention: Sandra Hamrick
Telecopy: (615) 748-2812
Confirmation: (615) 748-2191
FLEET NATIONAL BANK OF CONNECTICUT
----------------------------------
Domestic Lending Office: Fleet Bank (Boston)
76 State Street
Mail Stop MABOFO4A
Boston, MA 02109
Eurodollar Lending Office: Fleet Bank (Boston)
76 State Street
Mail Stop MABOFO4A
Boston, MA 02109
Address for Notices: Fleet National Bank of Connecticut
76 State Street
Mail Stop MABOFO4A
Boston, MA 02109
Attention: Amy Fredericks
Telecopy: (617) 343-1634
Confirmation: (617) 346-1646
</TABLE>
<PAGE>
<TABLE>
<S> <C>
BANK ONE, TEXAS, NA
-------------------
Domestic Lending Office: Bank One, Texas, NA
500 Throckmorton
Fort Worth, TX 76102
Eurodollar Lending Office: Bank One, Texas, NA
500 Throckmorton
Fort Worth, TX 76102
Address for Notices: Bank One, Texas, NA (Dallas)
1717 Main Street
Dallas, TX 75201
Attention: J.R. Thomas
Telecopy: (214) 290-2683
Confirmation: (214) 290-2586
NATIONAL CITY BANK, KENTUCKY
----------------------------
Domestic Lending Office: National City Bank, Kentucky
101 South Fifth Street
Louisville, KY 40202
Eurodollar Lending Office: National City Bank, Kentucky
101 South Fifth Street
Louisville, KY 40202
Address for Notices: National City Bank, Kentucky
National City Tower
Suite 800
Louisville, KY 40202
Attention: Deroy Scott
Telecopy: (502) 581-4424
Confirmation: (502) 581-7821
BARNETT BANK OF TAMPA, N.A.
---------------------------
Domestic Lending Office: Barnett Bank of Tampa, N.A.
50 North Laura Street
Jacksonville, FL 32202
Eurodollar Lending Office: Barnett Bank of Tampa, N.A.
50 North Laura Street
Jacksonville, FL 32202
Address for Notices: Barnett Bank of Tampa, N.A.
(Jacksonville)
50 North Laura Street
Jacksonville, FL 32202
Attn: Larry Katz
Telecopy: (904) 791-7063
Confirmation: (904) 791-5081
</TABLE>
<PAGE>
<TABLE>
<S> <C>
UNITED STATES NATIONAL BANK OF OREGON
-------------------------------------
Domestic Lending Office: United States National Bank
of Oregon
555 S.W. Oak Street
Suite 400
Portland, OR 97204
Eurodollar Lending Office: United States National Bank
of Oregon
555 S.W. Oak Street
Suite 400
Portland, OR 97204
Address for Notices: United States National Bank
of Oregon
555 S.W. Oak Street
Suite 400
Portland, OR 97204
Attention: Fiza Noordin
Telecopy: (503) 275-4267
Confirmation: (503) 275-6360
THE SUMITOMO TRUST & BANKING CO., LTD., NEW YORK BRANCH
-------------------------------------------------------
Domestic Lending Office: Sumitomo Trust & Banking (New York)
527 Madison Avenue, 8th Floor
New York, NY 10022
Eurodollar Lending Office: Sumitomo Trust & Banking (New York)
527 Madison Avenue, 8th Floor
New York, NY 10022
Address for Notices: Sumitomo Trust & Banking (New York)
527 Madison Avenue, 8th Floor
New York, NY 10022
Attention: Robin Schreiber
Telecopy: (212) 418-4848
Confirmation: (212) 326-0781
</TABLE>
<PAGE>
<TABLE>
<S> <C>
YASUDA TRUST AND BANKING
------------------------
Domestic Lending Office: Yasuda Trust and Banking
666 Fifth Avenue
New York, NY 10103
Eurodollar Lending Office: Yasuda Trust and Banking
666 Fifth Avenue
New York, NY 10103
Address for Notices: Yasuda Trust and Banking
285 Peachtree Center NE, Suite 2104
Atlanta, GA 30303
Attention: Sanjay Sinha
Telecopy: (404) 584-7816
Confirmation: (404) 584-7807
THE BANK OF YOKOHAMA LTD., NEW YORK BRANCH
------------------------------------------
Domestic Lending Office: Bank of Yokohama Ltd. (New York)
One World Trade Center, Suite 8067
New York, NY 10048
Domestic Lending Office: Bank of Yokohama Ltd. (New York)
One World Trade Center, Suite 8067
New York, NY 10048
Domestic Lending Office: Bank of Yokohama Ltd. (New York)
One World Trade Center, Suite 8067
New York, NY 10048
Attention: Michael Cantone
Telecopy: (212) 938-5450
Confirmation: (212) 775-1700 x 213
</TABLE>
<PAGE>
<TABLE>
<S> <C>
BANCA NAZIONALE DEL LAVORO S.P.A.-NEW YORK BRANCH
-------------------------------------------------
Domestic Lending Office: Banca Nazionale del Lavoro
S.P.A. (New York)
25 West 51st Street, 3rd Floor
New York, NY 10019
Eurodollar Lending Office: Banca Nazionale del Lavoro
S.P.A. (New York)
25 West 51st Street, 3rd Floor
New York, NY 10019
Address for Notices: Banca Nazionale del Lavoro
S.P.A. (New York)
25 West 51st Street, 3rd Floor
New York, NY 10019
Attention: Giulio Giovine
Telecopy: (212) 765-2978
Confirmation: (212) 581-0710
Attention: Roberto Mancone
Telecopy: (312) 444-9410
Confirmation: (312) 444-9250
THE BOATMEN'S NATIONAL BANK OF ST. LOUIS
----------------------------------------
Domestic Lending Office: The Boatmen's National Bank
of St. Louis
One Boatmen's Plaza
800 Market Street
St. Louis, MO 63166
Eurodollar Lending Office: The Boatmen's National Bank
of St. Louis
One Boatmen's Plaza
800 Market Street
St. Louis, MO 63166
Address for Notices: The Boatmen's National Bank
of St. Louis
800 Market Street
St. Louis, MO 63166-0236
Attention: David Wilsdorf
Telecopy: (314) 466-7783
Confirmation: (314) 466-7681
</TABLE>
<PAGE>
<TABLE>
<S> <C>
THE MITSUI TRUST & BANKING CO., LTD., NEW YORK BRANCH
-----------------------------------------------------
Domestic Lending Office: Mitsui Trust & Banking (Chicago)
190 South LaSalle Street
Suite 1900
Chicago, IL 60603
Eurodollar Lending Office: Mitsui Trust & Banking (Chicago)
190 South LaSalle Street
Suite 1900
` Chicago, IL 60603
Address for Notices: Mitsui Trust & Banking (Chicago)
190 South LaSalle Street
Suite 1900
Chicago, IL 60603
Attention: Koichi Yokoyama
Telecopy: (312) 201-0593
Confirmation: (312) 201-4707
UNION PLANTERS BANK
-------------------
Domestic Lending Office: Union Planters National Bank
401 Union Street, Second Floor
Nashville, TN 37219
Eurodollar Lending Office: Union Planters National Bank
401 Union Street, Second Floor
Nashville, TN 37219
Address for Notices: Union Planters National Bank
401 Union Street, Second Floor
Nashville, TN 37219
Attention: Mike Sparta
Telecopy: (615) 726-4274
Confirmation: (615) 726-4394
</TABLE>
<PAGE>
SCHEDULE III
COLUMBIA HEALTHCARE CORPORATION
Summary Schedule of Total Indebtedness
December 31, 1995
<TABLE>
<CAPTION>
Long-term debt:
Secured debt:
<S> <C>
Medical City Dallas - Capitalized lease .......... $34,358,303
Other secured debt ............................... 168,936,653
--------------
Total secured debt ............................... 203,294,956
==============
Unsecured debt (net of discounts):
Notes and debebtures
7.15% notes due 2004 ............................. 148,816,040
6.5% notes due 1999 .............................. 174,172,222
6.125% notes due 2000 ............................ 149,073,084
7.5% debebtures due 2023 ......................... 147,499,627
8.36% debentures due 2024 ........................ 149,042,740
6.91% debentures due 2005 ........................ 465,439,654
7.69% debentures due 2025 ........................ 287,492,918
6.41% notes due 2000 ............................. 196,064,000
7.58% debentures due 2025 ........................ 123,790,669
7.19% debentures due 2015 ........................ 148,691,020
7.50% debentures due 2095 ........................ 197,750,012
7.05% debentures due 2027 ........................ 148,688,486
$200 mil floating rate notes ..................... 170,231,757
8.126% MTN due 2003 .............................. 99,467,595
8.02% MTN due 2002 ............................... 49,739,884
7.60% MTN due 2001 ............................... 49,748,103
$100 mil floating rate notes ..................... 99,978,268
8.05% MTN due 2006 ............................... 54,680,726
8.85% MTN due2007 ................................ 148,048,498
9.0% MTN due 2014 ................................ 148,711,082
8.7% MTN due 2010 ................................ 148,981,613
6.63% MTN due 2002 ............................... 149,217,300
6.73% MTN due 2003 ............................... 99,473,717
6.87% MTN due 2003 ............................... 124,270,994
Zero coupon deb due 1997-2002 .................... 154,938,793
8.00% debentures due 1996 ........................ 107,858,834
Other notes and debentures ....................... 7,450,203
--------------
Total notes and debentures ............ 3,949,317,839
--------------
Commercial paper ................................. 2,907,444,236
Bank borrowings .................................. 105,311,110
Other unsecured debt ............................. 43,788,332
Subordinated notes and debentures (net of discounts)
6.75% debentures due 2006 ........................ 112,504,143
10.33% Sr Swiss notes due 1998 ................... 54,453,455
Other subordinated notes and debentures .......... 3,730,163
--------------
Total subordinated notes and debentures 170,687,761
--------------
Total consolidated long-term debt (12/31/95) ............. $7,379,844,234
--------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Commitments and contingencies:
Letters of credit (beneficiary):
<S> <C>
TIG Insurance Company ............................ 3,650,000
Arizona State Treasurer .......................... 1,500,000
AmSouth Bank of Alabama .......................... 8,000,000
Texas Workers Compensation ....................... 1,374,675
Commonwealth of Kentucky Workers Compensation .... 2,821,414
Mid-America Health Partners, Inc. ................ 1,477,500
The Fidelity & Casualty Company of New York ...... 57,731,756
Louisiana Patient Compensation Fund .............. 1,000,000
Louisiana Patient Compensation Fund .............. 3,825,000
Travelers Insurance Company ...................... 17,401,050
General Reinsurance Corporation .................. 5,079,479
AmSouth Bank of Alabama .......................... 1,218,000
The St. Paul Fire and Marine Insurance Company ... 15,500,000
Other letters of credit .......................... 5,700,112
--------------
Total letters of credit ............... 126,278,986
Guarantees of indebtedness (beneficiary):
First Security Bank of Nevada .................... 3,500,000
Key Bank of Utah ................................. 4,100,000
Other guarantees of indebtedness ................. 500,000
--------------
Total guarantees of indebtedness ...... 8,100,000
--------------
Total commitments and contingencies (12/31/95) ........... 134,378,986
--------------
TOTAL INDEBTEDNESS (12/31/95) ............................ $7,514,223,220
==============
</TABLE>
<PAGE>
SCHEDULE V
Applicable Margins
------------------
================================================================================
REVOLVING CREDIT LOANS
- --------------------------------------------------------------------------------
Alternate Base
Rate Loans Eurodollar Loans
- --------------------------------------------------------------------------------
Level I Period .0000% .1750%
- --------------------------------------------------------------------------------
Level II Period .0000% .1850%
- --------------------------------------------------------------------------------
Level III Period .0000% .2250%
- --------------------------------------------------------------------------------
Level IV Period .0000% .3125%
- --------------------------------------------------------------------------------
Level V Period .0000% .3500%
================================================================================
<PAGE>
EXHIBIT 10.22
Columbia/HCA Healthcare Corporation
1995 Management Stock Purchase Plan
1. Purposes; Construction.
-----------------------
This Plan shall be known as the "Columbia/HCA Healthcare Corporation 1995
Management Stock Purchase Plan" and is hereinafter referred to as the
"Plan". The purposes of the Plan are to attract and retain highly-qualified
executives, to align executive and stockholder long-term interests by
creating a direct link between executive compensation and stockholder
return, to enable executives to develop and maintain a substantial share
ownership position in Columbia/HCA Healthcare Corporation (the "Company"),
and to provide incentives to such executives to contribute to the success
of the Company's business. The provisions of the Plan are intended to
satisfy the requirements of Section 16(b) of the Securities Exchange Act of
1934, as amended from time to time (the "Exchange Act"), and shall be
interpreted in a manner consistent with the requirements thereof, as now or
hereafter construed, interpreted and applied by regulation, rulings and
cases.
2. Administration of the Plan.
--------------------------
(a) The Plan shall be administered by the Compensation Committee ("the
Committee") which consists of two or more directors of the Company,
none of whom shall be officers or employees of the Company and all of
whom shall be "disinterested persons" with respect to the Plan within
the meaning of Rule 16(b) under the Exchange Act. The members of the
Committee shall be appointed by and serve at the pleasure of the Board
of Directors.
(b) The Committee shall have plenary authority in its discretion, but
subject to the express provisions of the Plan, (i) to administer the
Plan and to exercise all the powers and authorities either
specifically granted to it under the Plan or necessary or advisable in
the administration of the Plan, including, without limitation, to
interpret the Plan; to prescribe, amend and rescind rules and
regulations relating to the Plan; to determine the terms and
provisions of the Agreements (which need not be identical), and (ii)
to make all other determinations deemed necessary or advisable for the
administration of the Plan. The Committee's determinations on the
foregoing matters shall be final and conclusive.
(c) No member of the Board or the Committee shall be liable for any action
taken or determination made in good faith with respect to the Plan or
any grant hereunder.
3. Definitions.
-----------
As used in this Plan, the following words and phrases shall have the
meanings indicated:
A-1
<PAGE>
(a) "Agreement" shall mean an agreement entered into between the Company
and a Participant in connection with a grant under the Plan.
(b) "Board" shall mean the Board of Directors of the Company.
(c) "Annual Bonus" shall mean the bonus earned by a Participant under the
Annual Bonus Plan.
(d) "Annual Bonus Plan" shall mean the Columbia/HCA Healthcare Corporation
Annual Incentive Plan, as amended from time to time.
(e) "Cause" shall mean the Participant's fraud, embezzlement, defalcation,
gross negligence in the performance or nonperformance of the
Participant's duties or failure or refusal to perform the
Participant's duties (other than as a result of Disability) at any
time while in the employ of the Company or a Subsidiary.
(f) "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
(g) "Committee" shall mean the Compensation Committee of the Board.
(h) "Company" shall mean Columbia/HCA Healthcare Corporation, a Delaware
corporation, or any successor corporation.
(i) "Disability" shall mean a Participant's total and permanent inability
to perform his or her duties with the Company or any or its
subsidiaries or affiliates by reason of any medically determinable
physical or mental impairment, within the meaning of Code Section
22(e)(3).
(j) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time and as now or hereafter construed,
interpreted and applied by regulations, rulings and cases.
(k) "Fair Market Value" per Share or Restricted Share shall mean the
average of the closing prices on the New York Stock Exchange Composite
Transactions Tape (or its equivalent if the Shares are not traded on
the New York Stock Exchange) of a Share for the five trading days
prior to the relevant valuation date.
(l) "Participant" shall mean a person who receives a grant of Restricted
Shares under the Plan.
(m) "Plan" shall mean the Columbia/HCA Healthcare Corporation 1995
Management Stock Purchase Plan.
(n) "Restricted Period" shall have the meaning given in Section 6(d)
hereof.
A-2
<PAGE>
(o) "Restricted Share" or "Restricted Shares" shall mean the common stock
purchased hereunder subject to restrictions.
(p) "Restricted Share Unit" or "Restricted Share Units" shall have the
meaning given in Section 6(j) hereof.
(q) "Rule 16(b)-3" shall mean Rule 16(b)-3, as in effect from time to
time, promulgated by the Securities and Exchange Commission under
Section 16 of the Exchange Act, including any successor to such Rule.
(r) "Section 16 Person" shall mean a Participant who is subject to the
reporting and short swing liability provisions of Section 16 of the
Exchange Act.
(s) "Shares" shall mean the voting shares of common stock of the Company,
with a par value of $.01 per share.
(t) "Subsidiary" shall mean any subsidiary of the Company (whether or not
a subsidiary at the date the Plan is adopted) which is designated by
the Committee or Board to participate in the Plan.
4. Stock Subject to Plan.
---------------------
The maximum number of Shares which shall be reserved for the purchase of
Restricted Shares under the Plan shall be 2,000,000 Shares, which number
shall be subject to adjustment as provided in Article 7 hereof. Such Shares
may be either authorized but unissued Shares or Shares that shall have been
or may be reacquired by the Company.
If any outstanding Restricted Shares under the Plan should be forfeited and
reacquired by the Company, the Shares so forfeited shall (unless the Plan
shall have been terminated) again become available for use under the Plan,
to the extent permitted by Rule 16(b)-3.
5. Eligibility.
-----------
All Company officers shall be eligible to become Participants in this Plan.
Each Participant may elect to apply an amount equal to not less than 20
percent of his or her Annual Bonus (less applicable payroll deductions) to
the receipt of Restricted Shares granted pursuant to, and subject to the
terms and conditions of this Plan. At the election of any Participant, he
or she may elect to apply an amount equal to up to 100 percent of the
Annual Bonus (less applicable payroll deductions) to the receipt of
Restricted Shares granted pursuant to, and subject to the terms and
conditions of, this Plan. The amount of the Annual Bonus used to purchase
such Restricted Shares shall be calculated in accordance with the Company's
Annual Bonus Plan. Since the Restricted Shares are "purchased" with part or
all of the Annual Bonus, all Restricted Share grants under this Plan are
sometimes referred to herein
A-3
<PAGE>
as "purchases". Any such election shall be made in accordance with rules
established by the Committee; provided, however, that any such election by
a Section 16 Person must be made at least six months prior to the day the
amount of the Section 16 Person's Annual Bonus is finally determined under
the Annual Bonus Plan. Elections must be irrevocable and made not later
than 90 days after the commencement of the fiscal year to which the Annual
Bonus relates (except, in the Committee's discretion, an election as to the
first Annual Bonus under the Annual Bonus Plan).
6. Restricted Shares.
-----------------
Each grant of Restricted Shares under the Plan shall be evidenced by a
written Agreement between the Company and Participant, in such form as the
Committee may from time to time approve, and shall comply with the
following terms and conditions (and with such other terms and conditions
not inconsistent with the terms of this Plan as the Committee, in its
discretion, shall establish):
(a) Number of Shares. Each Agreement shall state the number of Restricted
Shares to be granted.
(b) Price. The price of each Restricted Share granted under the Plan
shall be discounted 25 percent from its Fair Market Value on the
relevant valuation date. The relevant valuation date shall be the date
the Committee designates as the payment date for the Annual Bonus.
(c) Restrictions. Restricted Shares may not be sold, assigned,
transferred, pledged, hypothecated or otherwise disposed of (except by
will or the applicable laws of descent and distribution) during the
Restricted Period. The Committee may also impose such other
restrictions and conditions on the Restricted Shares as it deems
appropriate.
(d) Restricted Period. Subject to such exceptions as may be determined by
the Committee in its discretion, the Restricted Period for Restricted
Shares granted under the Plan shall be three years from the date of
grant.
(e) Termination of Employment During Restricted Period. Except as
provided in this Section 6(e) or in Section 6(g) hereof, if during the
Restricted Period a Participant's employment is terminated either (i)
for Cause by the Company or a Subsidiary or (ii) for any reason by the
Participant, the Participant shall receive a cash payment equal to the
lesser of (i) the Fair Market Value on the last day of employment or
(ii) the aggregate amount of the Annual Bonus applied to the receipt,
in either case, of all Restricted Shares held by the Participant. Any
additional value shall be forfeited.
Except as otherwise provided in Section 6(e) or Section 6(g) hereof,
if during the Restricted Period a Participant's employment is
terminated by the Company or a Subsidiary without Cause, the
Participant shall receive a cash payment equal to either
A-4
<PAGE>
(i) the Fair Market Value on the last day of employment or (ii) the
aggregate amount of the Annual Bonus applied to the receipt, in either
case, of all Restricted Shares held by the Participant. The Committee
shall have the sole discretion as to the amount of the payment. Any
additional value shall be forfeited.
If the employment of a Participant holding Restricted Share Units
terminates during the Restricted Period relating to such Restricted
Share Units, they shall be treated in a manner substantially
equivalent to the treatment of Restricted Shares set forth above.
(f) Ownership. At the time of grant of Restricted Shares, a certificate
representing the number of Shares thereunder shall be registered in
the name of the Participant. Such certificate shall be held by the
Company or any custodian appointed by the Company for the account of
the Participant subject to the terms and conditions of the Plan, and
shall bear such a legend setting forth the restrictions imposed
thereon as the Committee, in its discretion, may determine. The
Participant shall have all rights of a stockholder with respect to the
Shares, including the right to receive dividends and the right to vote
such Shares, subject to the following restrictions: (i) the
Participant shall not be entitled to delivery of the stock certificate
until the expiration of the Restricted Period and the fulfillment of
any other restrictive conditions set forth in this Plan or the
Agreement with respect to such Restricted Shares; (ii) none of the
Restricted Shares may be sold, assigned, transferred, pledged,
hypothecated or otherwise encumbered or disposed of during such
Restricted Period or until after the fulfillment of any such other
restrictive conditions; and (iii) except as otherwise determined by
the Committee, all of the Restricted Shares shall be forfeited and all
rights of the Participant to such Shares shall terminate, without
further obligation on the part of the Company, unless the Participant
remains in the continuous employment of the Company for the entire
Restricted Period and unless any other restrictive conditions relating
to the Restricted Shares are met. Any common stock, any other
securities of the Company and any other property (except cash
dividends) distributed with respect to the Restricted Shares shall be
subject to the same restrictions, terms and conditions as such
Restricted Shares.
(g) Accelerated Lapse of Restrictions. Upon the termination of
Participant's employment which results from the Participant's death or
Disability, all restrictions then outstanding with respect to
Restricted Shares held by such Participant shall automatically expire
and be of no further force and effect.
(h) Termination of Restrictions. At the end of the Restricted Period and
provided that any other restrictive conditions of the Restricted
Shares are met, or at such earlier time as otherwise determined by the
Committee, all restrictions set forth in the Agreement relating to the
Restricted Shares or in the Plan shall lapse as to the Restricted
Shares subject thereto, and a stock certificate for the appropriate
number of Shares, free of the restrictions and restrictive stock
legend (other than required under the Securities Act of 1933 or
otherwise), shall be delivered to the Participant or his or her
beneficiary or estate, as the case may be.
A-5
<PAGE>
(i) Retirement of Participant. Upon retirement of Participant from the
Company, the Committee shall have the sole discretion as to the status
of the Restricted Shares.
(j) Restricted Share Units. If, during the Restricted Period relating to
a Participant's Restricted Shares, the Committee determines that the
Company may lose its federal income tax deduction in connection with
the future lapsing of the restrictions on such Restricted Shares
because of the deductibility cap of Section 162(m) of the Code, the
Committee, in its discretion, may convert some or all of such
Restricted Shares into an equal number of Restricted Share Units, as
to which payment will be postponed until such time as the payment will
not cause the Company to lose its federal income tax deduction for
such payment under Section 162(m). Until payment of the Restricted
Share Units is made, the Participant will be credited with dividend
equivalents on the Restricted Share Units, which dividend equivalents
will be converted into additional Restricted Share Units. When payment
of any Restricted Share Units is made, it will be made in unrestricted
Shares, except as provided in Section 6(e) or Section 6(h) hereof.
7. Dilution and Other Adjustments.
------------------------------
In the event of any merger, reorganization, consolidation,
recapitalization, stock dividend, stock split, or other change in corporate
structure affecting the Shares, such substitution or adjustment shall be
made in the aggregate number of Shares reserved for issuance under the Plan
and in the number of Restricted Shares outstanding under the Plan as may be
determined to be appropriate by the Committee, in its sole discretion,
provided that the number of Shares subject to the Plan shall always be a
whole number.
8. Payment of Withholding Taxes.
----------------------------
Subject to the requirements of Section 16(b) of the Exchange Act, the
Committee shall have discretion to permit or require a Participant, on such
terms and conditions as it determines, to pay all or a portion of any taxes
arising in connection with a grant of Restricted Shares hereunder or the
lapse of restrictions with respect thereto by having the applicable
employer withhold Shares or by the Participant's delivering other Shares
having a then-current Fair Market Value equal to the amount of taxes to be
withheld.
9. No Rights to Employment.
-----------------------
Nothing in the Plan or in any grant made or Agreement entered into pursuant
hereto shall confer upon any Participant the right to continue in the
employ of the Company or any Subsidiary or to be entitled to any
remuneration or benefits not set forth in the Plan or such Agreement or to
interfere with, or limit in any way, the right of the Company or any
Subsidiary to terminate such Participant's employment. Grants made under
the Plan shall not be affected by any change in duties or position of a
Participant as long as such Participant continues to be employed by the
Company or any Subsidiary.
A-6
<PAGE>
10. Amendment and Termination of the Plan.
-------------------------------------
The Board at any time and from time to time may suspend, terminate, modify
or amend the Plan; provided, however, that an amendment which requires
stockholder approval in order for the Plan to continue to comply with Rule
16(b)-3 or any other law, regulation or stock exchange requirement shall
not be effective unless approved by the requisite vote of stockholders. No
suspension, termination, modification or amendment of the Plan may
adversely affect any grants previously made, unless the written consent of
the Participant is obtained.
11. Approval of Stockholders.
------------------------
The Plan shall take effect upon its adoption by the Board but the Plan (and
any purchases made prior to the stockholder approval described in this
Article) shall be subject to the approval of the holders of a majority of
the securities of the Company present, or represented, and entitled to vote
at a meeting of stockholders held in accordance with applicable law, which
approval must occur within twelve months of the date the Plan is adopted by
the Board.
12. Term of the Plan.
----------------
The Plan shall terminate ten years from the date that the Plan was approved
by the Board. No other grants may be made after such termination, but
termination of the Plan shall not, without the consent of the holder of the
Restricted Shares, alter or impair any rights or obligations under any
option or other award theretofore granted.
13. Governing Law.
-------------
The Plan and the rights of all persons claiming hereunder shall be
construed and determined in accordance with the laws of the State of
Delaware without giving effect to the choice of law principles thereof,
except to the extent that such law is preempted by federal law.
A-7
<PAGE>
APPENDIX A
COLUMBIA/HCA HEALTHCARE CORPORATION
1995 MANAGEMENT STOCK PURCHASE PLAN
ELECTION FORM
PARTICIPANT NAME:_______________________________________________________
(PLEASE PRINT)
SOCIAL SECURITY NUMBER:_________________________________________________
Subject to the provisions of the Columbia/HCA Healthcare Corporation 1995
Management Stock Purchase Plan (the "Plan"), I hereby elect to receive a portion
or all of my Annual Bonus, if any, as follows:
Restricted Shares Cash
____________________________ ____________________________
(Percentage of Annual Bonus) (Percentage of Annual Bonus)
Note: If you elect to receive Restricted Shares it must be a minimum of 20
percent of the Annual Bonus. If you elect not to purchase Restricted
Shares, you will need to put "0" in Restricted Shares and 100% in Cash.
______ I hereby elect to have my withholding taxes taken at the time of
purchase.
______ I hereby elect to have my withholding taxes taken at the end of the
restricted period.
I have read the Columbia/HCA Healthcare Corporation 1995 Management Stock
Purchase Plan and understand that the Restricted Shares and this form are
subject to the terms of the Plan. I understand that this form must be returned
to Columbia/HCA Healthcare Corporation, Compensation Committee, c/o Annie
Middlebrook, One Park Plaza, Nashville, TN 37203 no later than June 30, 1995. If
this form is not filed timely with the Compensation Committee, I will be deemed
to have elected the option to receive all of my bonus in cash.
Signed: _________________________________
Date:_____________________________
A-8
<PAGE>
EXHIBIT 10.23
EMPLOYMENT AGREEMENT
This Employment Agreement is entered into on November 15, 1993 by and
between Medical Care America Inc., a Delaware corporation (hereinafter referred
to as "MCA"), and Donald E. Steen (hereinafter referred to as "Employee"),
with reference to the following facts:
RECITALS
A. MCA desires to employ Employee in the capacity and on the terms and
conditions hereinafter set forth and Employee is willing to serve in such
capacity and on such terms and conditions.
B. This Agreement shall replace the Employment Agreement dated March 1,
1993.
NOW, THEREFORE, it is hereby agreed as follows:
AGREEMENT
1. Employment. MCA hereby employs Employee as Chief Executive Officer of
----------
MCA.
2. Duties. During his employment, Employee shall devote substantially all
------
of his working time, energies and skills to the benefit of MCA's business.
Employee agrees to serve MCA diligently and to the best of his ability. In his
capacity as Chief Executive Officer of MCA, Employee shall report to the Board
of Directors of MCA and shall have such duties, responsibilities and authority
as are set forth in the By-Laws of MCA for the position of Chief Executive
Officer. In his capacity as Chief Executive Officer, Employee shall have
authority to hire such staff as Employee determines is necessary and to
determine the titles and compensation levels of such staff.
3. Compensation. Employee's compensation under this Agreement shall be as
------------
follows:
(a) Base Salary. MCA shall pay Employee a Base Salary ("Base Salary")
-----------
of $495,000 per year. In addition, the Board of Directors of MCA shall, in good
faith, consider granting increases in such salary based upon such factors as
Employee's performance and the growth and/or profitability of MCA, but it
1.
<PAGE>
shall have no obligation to grant any such increases in compensation. Such Base
Salary shall be payable in equal semi-monthly installments on the 15th day and
the last working day of the month, or at such other times and in such
installments as may be agreed upon between MCA and Employee. All payments shall
be subject to the deduction of payroll taxes and similar assessments as required
by law.
(b) Bonus. In addition to the Base Salary, Employee shall be eligible
-----
to receive bonus compensation in such amounts and at such times as the Board of
Directors of MCA shall, from time to time, determine.
4. Expenses and Benefits. Employee is authorized to incur reasonable
---------------------
expenses in connection with the business of MCA, including expenses for
entertainment, travel and similar matters. MCA will reimburse Employee for such
expenses upon presentation by Employee of such accounts and records as MCA shall
from time to time require. MCA also agrees to provide Employee with the
following benefits:
(a) Automobile. An automobile expense allowance of $1,000.00 per month
----------
to apply towards the cost of acquiring and maintaining an automobile for his use
in performing his duties hereunder, subject to periodic increases by action of
the Board of Directors.
(b) Insurance. Major medical health insurance and disability insurance
---------
as currently in place.
(c) Financial Planning. An allowance for financial planning and tax
------------------
planning of $2,500.00 per calendar year.
(d) Fitness Allowance. An allowance of $1,000.00 per calendar year for
-----------------
fitness dues or equipment.
(e) Employee Benefit Plans. Participation in any other employee benefit
----------------------
plans now existing or hereafter adopted by MCA for its employees.
(f) Other. Such items and benefits as MCA shall, from time to time,
-----
consider necessary or appropriate to assist Employee in the performance of his
duties.
(g) Vacations. Employee shall be entitled (in addition to the usual
---------
public holidays) to a paid vacation for a
2.
<PAGE>
period in each calendar year of four weeks, to be taken at such times as may be
approved by MCA.
5. Term. The term of this Agreement shall be from the date of this
----
Agreement to November 15, 1996, and shall thereafter be automatically renewed
for successive two year terms; provided, however, that either party may
terminate this Agreement at any time upon at least 60 days prior written notice.
A determination by MCA to terminate this Agreement may be made only by an
affirmative vote of not less than 75% of the members of the Board of Directors
of MCA then in office. In the event of such termination by MCA, Employee shall
be entitled to severance pay based on his Base Salary at the time of
termination, plus a bonus (payable monthly on a pro rata basis) at a rate equal
to the average annual bonuses paid to Employee for the two calendar years
preceding the date of notice of termination, for a period of 24 months following
termination or until November 15, 1996, whichever is later. Such severance pay
shall be payable in monthly installments and MCA shall continue the benefits set
forth in Sections 4(a) and (b) for the period during which such severance
payments are to be made. In addition, this Agreement shall terminate as provided
for in Section 7 or upon the death of Employee.
6. Disability.
----------
(a) In the event that Employee becomes Permanently Disabled (as
hereinafter defined) during the term of this Agreement, Employee shall continue
in the employ of MCA but his compensation hereunder shall be reduced to three-
fourths of the Base Salary then in effect as set forth in Section 3(a) hereof,
commencing upon the determination of Employee's Permanent Disability and
continuing thereafter until the first to occur of (i) 36 months or (ii) the
death of Employee; and during such period of time, Employee shall not be
entitled to payment of expenses or benefits specified in Section 4 hereof
(except for reimbursement of expenses incurred by Employee prior to becoming
Permanently Disabled), except that MCA shall continue to provide Employee with
the insurance benefits specified in Section 4(b) hereof. The obligation of MCA
for continuation of three-fourths of Employee's Base Salary shall be net of
payments to Employee from the disability insurance referred to in Section 4(b)
hereof .
(b) Definition of Disability. For purposes of this Agreement, the terms
------------------------
"Permanent Disability" or "Permanently Disabled" shall mean three months of
substantially continuous
3.
<PAGE>
disability. Disability shall be deemed "substantially continuous" if, as a
practical matter, Employee, by reason of his mental or physical health, is
unable to sustain reasonably long periods of substantial performance of his
duties. Frequent long illnesses, though different from the preceding illness and
though separated by relatively short periods of performance, shall be deemed to
be "substantially continuous." Disability shall be determined in good faith by
the Board of Directors, whose decision shall be final and binding upon Employee.
Employee hereby consents to medical examinations by such physicians and medical
consultants as MCA shall, from time to time, require.
7. Termination by MCA. MCA shall have the right to terminate Employee's
------------------
employment as hereinafter provided.
(a) Termination by MCA for Cause. MCA shall have the right to
----------------------------
terminate Employee's employment under this Agreement for Cause by an affirmative
vote to so terminate by not less than 75% of the members of MCA's Board of
Directors, in which event, no compensation shall be paid or other benefits
furnished to Employee after termination for Cause. Termination for Cause shall
be effective immediately upon notice sent or given to Employee.
(b) Definition of Cause. For purposes of this Agreement, the term
------------------
"Cause" shall mean and be strictly limited to: (i) conviction of a crime
constituting a felony under state or federal law; (ii) commission of any
material act of dishonesty against MCA; or (iii) willful and material breach of
this Agreement by Employee.
8. Definition of Change of Control. For purposes of Section 9 of this
-------------------------------
Agreement, "Change of Control" shall mean: (i) a change of stock ownership of
MCA of a nature that would be required to be reported in response to Item 6(a)
of Schedule 14A promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act") and any successor Item of a similar nature; or (ii)
the acquisition of beneficial ownership, directly or indirectly, by any person
(as such term is used in Sections 13(d) and 14(d)(2) of the Exchange Act) of
securities of MCA representing 25% or more of the combined voting power of MCA's
then outstanding securities; or (iii) a change during any period of two
consecutive years of a majority of the members of the Board of Directors of MCA
for any reason, unless the election, or the nomination for election by MCA's
shareholders, of each director was approved by a vote of at least two-thirds of
the directors then still in office who were directors at the
4.
<PAGE>
beginning of the period. Notwithstanding the foregoing, no Change of Control
shall be deemed to have occurred in connection with any merger or similar
transaction to which MCA is a party if at least one-half of the members of the
Board of Directors of the ultimate parent corporation of the surviving corporate
group consist of persons who were members of MCA's Board or on the date hereof
or persons elected or nominated for election by such persons.
9. Stock Options. In the event that MCA elects to terminate this
-------------
Agreement pursuant to Section 5 or there shall be a Change of Control of MCA (or
in the event MCA breaches this Agreement by termination of Employee without the
notice required under Section 5 or without Cause under Section 7), then MCA
shall amend all MCA stock options held by him and all restricted stock awards
made to him (whether issued subject to forfeiture or to be issued when and if
they become vested) so as to (a) cause to vest, immediately prior to the date of
such Change in Control or termination of employment, all such then unvested
stock options and restricted stock awards, and (b) provide Employee 90 days to
exercise such options (or such greater period as may have been provided in the
terms of such options). In addition, MCA will, consistent with all applicable
laws and regulations, use its reasonable efforts to assist Employee in securing
independent third party financing of the funds required by Employee to exercise
all vested but unexercised stock options held by him. If such financing is not
so obtained by Employee, then MCA shall loan to Employee the funds required by
Employee to exercise such options, which loan shall be repayable one year from
the date made, will be secured by MCA's common stock purchased upon exercise of
such options and will bear interest at the prime rate (floating) of Bank One -
Texas, N.A. To the extent that MCA refuses or is unable to comply with the
provisions of Section 9(a) hereof, the time period contemplated in Section 9(b)
shall commence on the date MCA complies with the provisions of said Section
9(a).
10. Non-competition and Confidentiality.
-----------------------------------
(a) Non-competition. Employee recognizes and understands that in
---------------
performing the responsibilities of his employment, he will occupy a position of
fiduciary trust and confidence, pursuant to which he will develop and acquire
experience and knowledge with respect to MCA's business. It is the expressed
intent and agreement of Employee and MCA that such
5.
<PAGE>
knowledge and experience shall be used exclusively in the furtherance of the
interests of MCA and not in any manner which would be detrimental to MCA's
interests. Employee further understands and agrees that MCA conducts its
business within a specialized market segment throughout the United States, and
that it would be detrimental to the interests of MCA if Employee used the
knowledge and experience which he currently possesses or which he acquires
pursuant to his employment hereunder for the purpose of directly or indirectly
competing with MCA, or for the purpose of aiding other persons or entities in so
competing with MCA, anywhere in the United States. Employee therefore agrees
that so long as he is employed by MCA and for a period of the greater of (i) the
time Employee is receiving a salary or severance payments or (ii) the time
granted under Section 9 to Employee to exercise stock options if options are
exercised or (iii) such time as MCA is loaning money or has a loan outstanding
to Employee, unless Employee first secures the written consent of MCA, Employee
will not directly or indirectly invest, engage or participate in or become
employed by any entity in direct or indirect competition with MCA's business
(which shall include the ownership and/or operation of outpatient ambulatory
surgical centers and outpatient eye care services and alternate site infusion
therapy services) anywhere in the United States, or contract to do so. These
non-competition provisions are not to be construed to prohibit Employee from
being employed in the health care industry, but rather to permit him to be so
employed so long as such employment does not involve Employee's direct or
indirect participation in a business which is the same or similar to MCA's
business (as defined above). In the event that the provisions of this Section
10 should ever be deemed to exceed the time or geographic limitations permitted
by applicable laws, then such provisions shall be reformed to the maximum time
or geographic limitations permitted by applicable laws.
(b) Remedies. Employee acknowledges that the restrictions contained
--------
in Section 10(a), in view of the nature of the business in which MCA is engaged,
are reasonable and necessary to protect the legitimate interests of MCA.
Employee understands that the remedies at law for his violations of any of the
covenants or provisions of Section 10(a) will be inadequate, that such violation
will cause irreparable injury within a short period of time, and that MCA shall
be entitled to preliminary injunctive relief against such violation. Such
injunctive relief shall be in addition to, and in no way in limitation of, any
and all other remedies MCA shall have in law and equity for the enforcement of
those covenants and provisions.
11. General Provisions.
------------------
6.
<PAGE>
(a) Notices. Any notice to be given hereunder by either party to
-------
the other may be effected by personal delivery, in writing or by mail,
registered or certified, postage prepaid with return receipt requested. Mailed
notices shall be addressed to the parties at the addresses set forth below, but
each party may change his or its address by written notice in accordance with
this Section 11(a). Notices delivered personally shall be deemed communicated
as of the actual receipt; mailed notices shall be deemed communicated as of
three days after mailing.
If to Employee: Donald B. Steen
5715 Thomas Court
Dallas, Texas 75252
If to MCA: Medical Care America, Inc.
13455 Noel Road, 20th Floor
Dallas, Texas 75240
(b) Partial Invalidity. If any provision in this Agreement is held
------------------
by a court of competent jurisdiction to be invalid, void or unenforceable, the
remaining provisions shall, nevertheless, continue in full force and without
being impaired or invalidated in any way.
(c) Governing Agreement. This Agreement shall be governed by and
-------------------
construed in accordance with the laws of the State of Texas.
(d) Attorneys Fees and Costs. If any action at law or in equity is
------------------------
necessary to enforce or interpret the terms of this Agreement, the prevailing
party shall be entitled to reasonable attorneys' fees, costs and necessary
disbursements in addition to any other relief to which he or it may be entitled.
(e) Assignment. This Agreement shall inure to the benefit of and
----------
bind the parties hereto and their respective legal representatives, successors
and assigns.
(f) Entire Agreement. This Agreement supersedes any and all other
----------------
Agreements, either oral or in writing, between the parties hereto with respect
to employment of Employee by MCA and contains all of the covenants and
agreements between the parties with respect to such employment. Each party to
this Agreement acknowledges that no representations, inducements or agreements,
oral or otherwise, have been embodied herein, and no other agreement, statement
or promise not contained in this Agreement shall be valid or binding. Any
modification of this Agreement will be effective only if it is in writing signed
by the party to be charged.
7.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
MEDICAL CARE AMERICA, INC.
By
--------------------------------------
Name
------------------------------------
Title
-----------------------------------
EMPLOYEE
----------------------------------------
Donald E. Steen
8.
<PAGE>
EXHIBIT 10.24
EMPLOYMENT AGREEMENT
--------------------
EMPLOYMENT AGREEMENT, dated as of April 24, 1995, by and between
COLUMBIA/HCA HEALTHCARE CORPORATION, a Delaware corporation (the "Corporation"),
and R. CLAYTON MCWHORTER ("Employee").
W I T N E S S E T H
-------------------
WHEREAS, the Corporation desires to recognize the outstanding
contributions made by Employee to Healthtrust, Inc. - The Hospital Company and
to secure the continuation of his services with the Corporation; and
WHEREAS, the Compensation Committee (the "Compensation Committee") of
the Board of Directors of the Corporation (the "Board"), by unanimous written
consent, authorized and directed the Corporation to enter into an Employment
Agreement with Employee;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
promises and covenants herein contained, the parties hereto agree as follows:
1. Terms and Duties
----------------
(a) The Corporation hereby employs Employee for a term commencing on
April 24, 1995, and ending on April 24, 1997 and Employee hereby agrees to serve
as Chairman of the Board of the Corporation during said period upon the terms
and conditions herein contained. As used in this Agreement, the phrase "term of
this Agreement" shall mean the period of time from April 24, 1995, to April 24,
1997, unless the parties agree to extend this Agreement, pursuant to Paragraph
1(c) below, in which case the term of this Agreement shall also include the
extension of such period pursuant to such agreement.
(b) During the term of this Agreement, Employee shall perform such
duties and assignments for the Corporation as may be determined from time to
time by the Chief Executive Officer of the Corporation and as are reasonable and
customary for a full-time Chairman of the Board.
(c) The Corporation and Employee hereby acknowledge that this
Agreement may be extended for an additional period, provided both parties agree
on the terms and conditions in writing at any time prior to April 24, 1997.
<PAGE>
2. Minimum Base Compensation, Bonus and Severance Payments
-------------------------------------------------------
(a) Commencing as of April 24, 1995, the Corporation agrees to pay
Employee a base salary (in addition to the other compensation and benefits
provided herein) at the rate per year of $800,000.00. Commencing as of July 1,
1995, the Corporation agrees to pay Employee a base salary (in addition to the
other compensation and benefits proposed herein) at the rate per year of
$600,000.00. Employee's annual base salary payable pursuant to this Paragraph
(including any changes thereto pursuant to Paragraph 2(b) below) is hereinafter
sometimes referred to as "Employee's Base Compensation". Employee's Base
Compensation shall be payable in accordance with the customary payroll practices
of the Corporation, but in no event less frequently than monthly. During the
term of this Agreement, the Compensation Committee may increase but not decrease
Employee's Base Compensation at any time by such amounts as it deems proper.
(b) Employer shall be eligible to receive such bonus awards or other
incentive compensation as shall be determined from time to time by the
Compensation Committee in its sole discretion. Nothing contained in this
Agreement shall preclude the Board from eliminating, reducing or otherwise
changing any term or condition of any such bonus award.
(c) The Corporation and the Employee hereby agree to terminate the
Severance Protection Agreement (the "Severance Agreement") dated as of October
1, 1994 between Employee and Healthtrust, Inc. - The Hospital Company
("Healthtrust") in consideration of the payment by the Corporation to Employee
of the sum of $2,400,000. The payment by the Corporation to the Employee shall
be made on or about July 1, 1995. The Employee agrees that acceptance of the
$2,400,000 from the Company, or any subsidiary thereof, constitutes the entire
obligation of the Company, and any subsidiary thereof, to the Employee and
constitutes full settlement of any claim for severance pay under the Severance
Agreement. Furthermore, the payment of the sum of $2,400,000 shall be in lieu
of any other severance or termination pay to which the Employee may be entitled.
(d) The restricted period with respect to the 20,115 shares of
Restricted Stock of the Corporation held by the Employee pursuant to the
Healthtrust Restricted Stock Program is hereby accelerated to vest as of July 1,
1995.
3. Participation in Benefit Plans
------------------------------
While employed under this Agreement, Employee shall be eligible to
participate in all executive compensation and employee benefit plans or programs
2
<PAGE>
generally applicable to senior management employees of the Corporation. Except
as otherwise provided herein, any such participation shall be in accordance with
the provisions of such plans or programs and nothing contained in this Agreement
is intended to or shall be deemed to affect adversely any of the Employee's
rights as a participant under any such plan or program. Nothing in this
Agreement shall preclude the Corporation from terminating or amending any such
plan or program so as to eliminate, reduce or otherwise change any benefit
payable thereunder. Notwithstanding the foregoing, Employee shall continue to
receive, during the term of this Agreement and at the Corporation's expense,
bookkeeping services, an auto allowance, medical spending account benefits, and
executive disability benefits substantially similar to those which he was
entitled to receive at Healthtrust.
4. Vacation
--------
Employee shall be entitled to vacation in accordance with the policies
of the Corporation in effect from time to time.
5. Reimbursement of Business Expenses
----------------------------------
Employee is authorized to incur reasonable expenses related to and for
promoting the business of the Corporation, including expenses for entertainment,
travel and similar items, and any such expenses paid by Employee from his own
funds shall be promptly reimbursed to him by the Corporation in accordance with
the policies and procedures of the Corporation in effect from time to time.
6. Source of Payments
------------------
In any case where coverage or benefits are required to be provided
under this Agreement but cannot be provided in accordance with the terms of the
Corporation's plans which are maintained for the Corporation's senior executive
or other employees generally, or both, such coverage and benefits shall be
provided from the general assets of the Corporation. No special or separate
fund shall be established and no other segregation of assets shall be made to
assure the payment of any such amounts. To the extent that any person acquires
a right to receive payments from the Corporation under this Agreement, such
right shall be no greater that the right of an unsecured general creditor of the
Corporation.
7. Termination by the Corporation of Employee's Employment for Cause
-----------------------------------------------------------------
(a) Notwithstanding any other provision of this Agreement, the
Corporation shall have the right to terminate Employee's employment upon written
3
<PAGE>
notice to Employee that the Board has found, based upon reasonable evidence
presented in writing to Employee, that Employee has materially breached this
Agreement by engaging in dishonest or fraudulent actions or willful misconduct
or has materially harmed the Corporation by performing his duties in a grossly
negligent manner. Employee shall upon receipt of such written notice and
evidence immediately cease to be an employee of the Corporation.
(b) In case of a termination by the Corporation on account of a breach
hereunder pursuant to Paragraph 7(a) above, the Corporation's obligations to
Employee under this Agreement shall cease upon the effective date of such
termination and the Corporation shall not be liable to continue paying Employee
the Employee's Base Compensation nor shall Employee be entitled to any rights or
benefits pursuant to Paragraph 3 above, other than as may be provided under the
terms of such plans which are generally applicable to participants who have
terminated employment under similar circumstances.
8. Disability
----------
(a) In the event of the total disability (as hereinafter defined) of
Employee during the term of this Agreement, the Corporation shall continue to
pay Employee's Base Compensation and shall continue Employee's participation in
its various executive compensation and employee benefit plans and programs
pursuant to Paragraph 3 above during the period of his total disability until
the end of the term of this Agreement; provided, however, that in the event
Employee is totally disabled for a continuous period exceeding one hundred fifty
(150) days the Corporation may, at its election, terminate Employee's employment
upon thirty (30) days' written notice, in which event Employee shall be entitled
to receive the benefits described in Paragraph 8(b) below. As used in this
Agreement, the term "total disability" shall mean the complete inability of
Employee to perform all of the duties of his position with the Corporation by
reason of any physical or mental ailment.
(b) In the event that Employee is totally disabled for a period
described in Paragraph 8(a) above and the Corporation elects to terminate
Employee's employment, the Corporation shall continue to pay Employee a
disability benefit ("Disability Benefit") equal to Employee's Base Compensation
in effect at the time of such termination for the greater of (i) the entire term
of this Agreement and (ii) one year from the date of termination. Payment of
the Disability Benefit under this Paragraph 8(b) shall commence within thirty
(30) days of the termination of Employee's employment under Paragraph 8(a)
above. In addition, Employee's participation (including dependent coverage) in
any life, accident, disability, health and dental insurance plans, and any other
similar welfare plans of the Corporation in effect immediately prior to the
effective date of the termination shall be continued, or
4
<PAGE>
equivalent benefits provided, by the Corporation during the period in which the
Disability Benefit is paid at no cost to Employee or his dependents.
(c) If Employee becomes entitled to and receives other disability
benefits under any disability payment plan paid for by the Corporation,
including disability insurance, the Disability Benefit otherwise payable by the
Corporation to Employee pursuant to Paragraph 8(b) above shall be reduced (but
not below zero) by the amount of any such other disability benefits received by
him, but only to the extent such benefits are attributable to payments made by
the Corporation.
9. Death
-----
If Employee should die during the term of this Agreement, the
Corporation shall continue to pay his estate or designated beneficiary or
beneficiaries a death benefit ("Death Benefit") equal to Employee's Base
Compensation in effect at the date of his death for the greater of (i) the
entire term of this Agreement or (ii) one year from the date of his death.
Payment of the Death Benefit shall commence within thirty (30) days of the date
of Employee's death. The Corporation shall also pay Employee's estate or
designated beneficiary or beneficiaries such other death benefits as become
payable under the terms of such travel accident, life insurance, and employee
stock ownership plan, and other executive compensation and employee benefit
plans and programs of the Corporation in which Employee was a participant on his
date of death. In addition, dependant coverage provided by any life, accident,
disability, health and dental insurance plans, and any other similar welfare
plans of the Corporation in effect immediately prior to the date of Employee's
death shall be continued, or equivalent benefits provided, by the Corporation
during the period in which the Death Benefit is paid at no cost to Employee or
his dependents.
10. Board Membership
----------------
In any instance where employee ceases to be an employee of the
Corporation pursuant to Paragraph 7(a) of this Agreement and if Employee is then
a member of the Board, Employee hereby agrees that, unless otherwise requested
by the Board, he shall simultaneously submit his resignation as a member of the
Board in writing on or before the date he ceases to be an employee of the
Corporation. If Employee fails or neglects to submit such resignation in
writing, this Paragraph 10 may be deemed by the Corporation to constitute
Employee's written resignation as a member of the Board effective on the same
date that Employee ceases to be an employee of the Corporation. If Employee
ceases to be an employee of the Corporation for any other reason, he shall not
be required to resign as a member of the Board.
5
<PAGE>
11. Waiver
------
Failure of either party hereto to insist upon strict compliance by the
other party with any term, covenant or condition hereof shall not be deemed a
waiver of such term, covenant or condition, nor shall any waiver or
relinquishment or failure to insist upon strict compliance of any right or power
hereunder at any one time or more times be deemed a waiver or relinquishment of
such right or power at any other time or times.
12. Withholding of Taxes
--------------------
The Corporation may withhold from any benefits payable under this
Agreement all federal, state, city or other taxes as shall be required pursuant
to any law or governmental regulation or ruling.
13. Facility of Payment
-------------------
If the Board shall find that any person to whom any amount is or was
payable hereunder is unable to care for his affairs because of illness or
accident, or is a minor, or has died, then the Board, if it so elects, may
direct that any payment due him or his estate (unless a prior claim therefor has
been made by a duly appointed legal representative) or any part thereof be paid
or applied for the benefit of such person or to or for the benefit of his
spouse, children or other dependents, an institution maintaining or having
custody of such person, any other person deemed by said Board to be a proper
recipient on behalf of such person otherwise entitled to payment, or any of
them, in such manner and proportion as the Board may deem proper. Any such
payment shall be in complete discharge of the liability of the Corporation
therefor.
14. Prior Agreements
----------------
This instrument sets forth the entire agreement between the parties
hereto with respect to the subject matter hereof.
15. Consolidation or Merger
-----------------------
Nothing in this Agreement shall preclude the Corporation from
consolidating or merging into or with, or transferring all or substantially all
of its assets to, another corporation or other entity (the "Successor Employer")
which assumes this Agreement and all obligations of the Corporation hereunder by
operation of law or affirmative action. Upon such a consolidation, merger or
transfer of assets and assumption, the term "Corporation" shall refer to the
Successor Employer and this Agreement shall continue in full force and effect.
6
<PAGE>
16. Unsecured Creditor Status
-------------------------
Employee shall have no right, title or interest whatsoever in or to
any investments which the Corporation may make to aid it in meeting its
obligations under this Agreement. Nothing contained in this Agreement, and no
action taken pursuant to its provisions, shall create or be construed to create
a trust of any kind, or a fiduciary relationship between the Corporation and
Employee, his beneficiary, legal representative or any other person. To the
extent that any person acquires a right to receive payments from the Corporation
under this Agreement, such right shall be no greater than the right of an
unsecured general creditor of the Corporation. All payments to be made
hereunder shall be paid from the general funds of the Corporation and no special
or separate fund shall be established and no segregation of assets shall be made
to assure payment of such amounts.
17. Non-Alienation of Benefits
--------------------------
Except insofar as applicable law may otherwise require, no amount
payable to or in respect of Employee at any time under this Agreement shall be
subject in any manner to alienation by anticipation, sale, transfer, assignment,
bankruptcy, pledge, attachment, charge or encumbrance of any kind, and any
attempt to so alienate, sell, transfer, assign, pledge, attach, charge or
otherwise encumber any such amount, whether presently or thereafter payable
shall be void; provided, however, that nothing in this Paragraph 17 shall
preclude Employee from designating a beneficiary or beneficiaries to receive any
benefit on his death.
18. Benefits
--------
Except as otherwise expressly provided herein, this Agreement shall
inure to the benefit of and be binding upon the Corporation, its successors and
assigns, and upon Employee, his beneficiaries, heirs, executors and
administrators.
19. Amendment
---------
No amendment or modification of this Agreement shall be deemed
effective unless and until executed in writing by Employee and the Corporation.
20. Severability
------------
If for any reason any provision of this Agreement shall be held
invalid, such invalidity shall not affect any other provision of this Agreement
not held so
7
<PAGE>
invalid, and all other such provisions shall to the full extent consistent with
law continue in full force and effect. If any such provision shall be held
invalid in part, such invalidity shall in no way affect the remaining portion of
such provision not held so invalid, and the remaining portion of such provision,
together with all other provisions of this Agreement, shall likewise to the full
extent consistent with law continue in full force and effect.
21. Headings
--------
The headings of paragraphs are included solely for convenience of
reference and shall not control the meaning or interpretation of any of the
provisions of this Agreement.
22. Governing Law
-------------
This Agreement shall be governed by the laws of the State of
Tennessee.
23. Notices
-------
Any notices required or desired to be given pursuant to this Agreement
shall be sufficient if in writing and transmitted by hand delivery or by
registered or certified mail. All communications to Employee shall be addressed
to:
R. Clayton McWhorter
400 Hyde Park
Nashville, TN 37215
All communications to the Corporation shall be addressed to:
Richard L. Scott
Columbia/HCA Healthcare Corporation
One Park Plaza
Nashville, TN 37203
Notwithstanding the foregoing, the Corporation and Employee may, by
notice in accordance herewith, designate a different address than contained
herein.
8
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused its name to be ascribed
to this Agreement by its duly authorized representative and Employee has
executed this Agreement as of the day and year first above written.
COLUMBIA/HCA HEALTHCARE CORPORATION
BY:______________________________________
Richard L. Scott
President and Chief Executive Officer
_________________________________________
R. Clayton McWhorter
9
<PAGE>
EXHIBIT 11
COLUMBIA/HCA HEALTHCARE CORPORATION
COMPUTATION OF EARNINGS PER COMMON
AND COMMON EQUIVALENT SHARE
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
(DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
1995 1994 1993
------- ------- -------
<S> <C> <C> <C>
PRIMARY EARNINGS PER COMMON AND COMMON EQUIVALENT
SHARE:
Earnings:
Income from continuing operations................. $ 1,064 $ 929 $ 720
Income from operations of discontinued health plan
segment, net of income taxes..................... - - 16
Extraordinary charges on extinguishments of debt,
net of income tax benefits....................... (103) (115) (97)
------- ------- -------
Net income.................................... $ 961 $ 814 $ 639
======= ======= =======
Shares used in the computation (in thousands):
Weighted average common shares outstanding...... 443,605 423,225 405,564
Dilutive effect of common stock equivalents..... 5,109 6,070 7,472
------- ------- -------
Shares used in computing earnings per common
and common equivalent share.................. 448,714 429,295 413,036
======= ======= =======
Primary earnings per common and common equivalent
share:
Income from continuing operations................. $ 2.37 $ 2.16 $ 1.75
Income from operations of discontinued health plan
segment.......................................... - - .04
Extraordinary charges on extinguishments of debt.. (.23) (.27) (.24)
------- ------- -------
Net income.................................... $ 2.14 $ 1.89 $ 1.55
======= ======= =======
FULLY DILUTED EARNINGS PER COMMON AND COMMON
EQUIVALENT SHARE:
Earnings:
Income applicable to common stock................. $ 1,064 $ 929 $ 720
Interest addback on convertible securities, net of
income taxes..................................... - 2 3
------- ------- -------
Adjusted income applicable to common stock...... 1,064 931 723
Income from operations of discontinued health
plan segment, net of income taxes................ - - 16
Extraordinary charges on extinguishments of debt,
net of income tax benefits....................... (103) (115) (97)
------- ------- -------
Net income.................................... $ 961 $ 816 $ 642
======= ======= =======
Shares used in the computation (in thousands):
Weighted average common shares outstanding...... 443,605 423,225 405,564
Dilutive effect of common stock equivalents and
other
dilutive securities............................ 5,421 7,510 10,624
------- ------- -------
Shares used in computing earnings per common
and common equivalent share.................. 449,026 430,735 416,188
======= ======= =======
Fully diluted earnings per common and common
equivalent share:
Income from continuing operations................. $ 2.37 $ 2.16 $ 1.74
Income from operations of discontinued health
plan segment..................................... - - .04
Extraordinary charges on extinguishments of debt.. (.23) (.27) (.23)
------- ------- -------
Net income.................................... $ 2.14 $ 1.89 $ 1.55
======= ======= =======
</TABLE>
<PAGE>
EXHIBIT 12
COLUMBIA/HCA HEALTHCARE CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(UNAUDITED)
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------
1995 1994 1993 1992 1991
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Earnings:
Income from continuing operations before
minority interests and income taxes...... $1,892 $1,580 $1,230 $ 652 $ 400
Fixed charges, exclusive of capitalized
interest................................. 589 491 497 584 817
------ ------ ------ ------ ------
$2,481 $2,071 $1,727 $1,236 $1,217
====== ====== ====== ====== ======
Fixed charges:
Interest charged to expense............... $ 460 $ 387 $ 415 $ 506 $ 748
One-third of rent expense and amortization
of deferred loan costs (a)............... 129 104 82 78 69
------ ------ ------ ------ ------
Fixed charges, exclusive of capitalized
interest................................. 589 491 497 584 817
Capitalized interest...................... 29 15 22 18 12
------ ------ ------ ------ ------
$ 618 $ 506 $ 519 $ 602 $ 829
====== ====== ====== ====== ======
Ratio of earnings to fixed charges.......... 4.01 4.09 3.33 2.05 1.47
====== ====== ====== ====== ======
</TABLE>
- --------
(a) One-third of rent expense is considered representative of the underlying
interest.
<PAGE>
EXHIBIT 13
COLUMBIA/HCA HEALTHCARE CORPORATION
SELECTED FINANCIAL DATA
AS OF AND FOR THE YEARS ENDED DECEMBER 31
(DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
1995 1994 1993 1992 1991
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
SUMMARY OF OPERATIONS:
Revenues................ $ 17,695 $ 14,543 $ 12,678 $ 12,226 $ 11,722
--------- --------- --------- --------- ---------
Salaries and benefits... 7,101 5,963 5,202 5,062 4,924
Supplies................ 2,558 2,144 2,015 1,948 1,774
Other operating
expenses............... 3,418 2,722 2,351 2,292 2,153
Provision for doubtful
accounts............... 998 853 699 652 638
Depreciation and
amortization........... 981 804 689 670 647
Interest expense........ 460 387 415 506 748
Investment income....... (100) (69) (74) (88) (83)
Merger, facility
consolidation and other
costs.................. 387 159 151 532 521
--------- --------- --------- --------- ---------
15,803 12,963 11,448 11,574 11,322
--------- --------- --------- --------- ---------
Income from continuing
operations before
minority interests and
income taxes........... 1,892 1,580 1,230 652 400
Minority interests in
earnings of
consolidated entities.. 113 40 18 25 24
--------- --------- --------- --------- ---------
Income from continuing
operations before
income taxes........... 1,779 1,540 1,212 627 376
Provision for income
taxes.................. 715 611 492 334 158
--------- --------- --------- --------- ---------
Income from continuing
operations............. 1,064 929 720 293 218
Discontinued operations:
Income (loss) from
operations of
discontinued health
plan segment, net of
income tax (benefit).. - - 16 (108) 16
Costs associated with
discontinuance of
health plan
segment, net of income
tax benefit........... - - - (17) -
Extraordinary charges on
extinguishments of
debt, net of income tax
benefits............... (103) (115) (97) (23) (114)
Cumulative effect on
prior years of a change
in accounting
for income taxes....... - - - 51 -
--------- --------- --------- --------- ---------
Net income............ $ 961 $ 814 $ 639 $ 196 $ 120
========= ========= ========= ========= =========
Earnings per common and
common equivalent
share(a):
Income from continuing
operations............ $ 2.37 $ 2.16 $ 1.75 $ .75 $ .59
Discontinued
operations:
Income (loss) from
operations of
discontinued health
plan segment.......... - - .04 (.27) .05
Costs associated with
discontinuance of
health plan segment... - - - (.05) -
Extraordinary charges
on extinguishments of
debt.................. (.23) (.27) (.24) (.06) (.34)
Cumulative effect on
prior years of a
change in accounting
for income taxes...... - - - .13 -
--------- --------- --------- --------- ---------
Net income............ $ 2.14 $ 1.89 $ 1.55 $ .50 $ .30
========= ========= ========= ========= =========
Shares used in computing
earnings per common and
common equivalent share
(in thousands)......... 448,714 429,295 413,036 394,378 334,676
Net cash provided by
continuing operations.. $ 2,254 $ 1,747 $ 1,585 $ 1,776 $ 1,607
FINANCIAL POSITION:
Assets.................. $ 19,892 $ 16,278 $ 12,685 $ 12,773 $ 13,081
Working capital......... 1,462 1,092 835 899 917
Net assets of
discontinued
operations............. - - - 376 411
Long-term debt,
including amounts due
within one year........ 7,380 5,672 4,682 4,735 6,380
Minority interests in
equity of consolidated
entities............... 722 278 67 51 44
Stockholders' equity.... 7,129 6,090 4,158 4,241 3,219
OPERATING DATA:
Number of hospitals at
end of period.......... 319 311 274 281 301
Number of licensed beds
at end of period....... 61,347 59,595 53,245 53,457 54,616
Weighted average
licensed beds.......... 61,617 57,517 53,247 51,955 54,072
Average daily census.... 25,917 23,841 22,973 23,569 25,819
Occupancy............... 42% 41% 43% 45% 48%
Admissions.............. 1,774,800 1,565,500 1,451,000 1,448,000 1,486,200
Average length of stay
(days)................. 5.3 5.6 5.8 6.0 6.3
</TABLE>
- --------
(a) Earnings per common and common equivalent share include the effect of
preferred stock dividend requirements totaling $18 million in 1991.
8
<PAGE>
COLUMBIA/HCA HEALTHCARE CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The Selected Financial Data and the accompanying consolidated financial
statements set forth certain information with respect to the financial posi-
tion, results of operations and cash flows of Columbia/HCA Healthcare Corpora-
tion ("Columbia/HCA") which should be read in conjunction with the following
discussion and analysis.
BACKGROUND INFORMATION AND BUSINESS STRATEGY
Healthtrust Merger
In April 1995, Columbia/HCA completed a merger transaction with Healthtrust,
Inc. -- The Hospital Company ("Healthtrust") (the "Healthtrust Merger"). At
the time of the Healthtrust Merger, Healthtrust operated 117 hospitals (ex-
cluding 2 hospitals which are accounted for using the equity method) and cer-
tain other ancillary health care facilities located in twenty-two states with
annual revenues approximating $3.4 billion. For accounting purposes, the
Healthtrust Merger was treated as a pooling of interests. Accordingly, the ac-
companying consolidated financial statements and selected financial and oper-
ating data included in this discussion and analysis give retroactive effect to
the Healthtrust Merger and include the combined operations of Columbia/HCA and
Healthtrust for all periods presented.
MCA Merger
In September 1994, Columbia/HCA completed a merger transaction with Medical
Care America, Inc. ("MCA") (the "MCA Merger"). MCA was a national provider of
alternative-site health care services through the operation of free-standing
surgical centers and certain other outpatient ancillary facilities located in
twenty-six states with annual revenues in excess of $400 million. The MCA
Merger was accounted for under the purchase method, and accordingly, the ac-
companying consolidated financial statements and selected financial and oper-
ating data included in this discussion and analysis include the operations of
MCA since September 1, 1994.
EPIC Merger
Prior to the merger with Columbia/HCA, Healthtrust completed a merger trans-
action with EPIC Holdings, Inc. ("EPIC") (the "EPIC Merger") in May 1994. EPIC
was a health care services provider that owned and operated 32 general acute
care hospitals with annual revenues in excess of $1 billion. The EPIC Merger
was accounted for under the purchase method, and accordingly, the accompanying
consolidated financial statements and selected financial and operating data
included in this discussion and analysis include the operations of EPIC since
May 1, 1994.
HCA Merger
Columbia Healthcare Corporation ("Columbia") completed a merger transaction
with HCA -Hospital Corporation of America ("HCA") (the "HCA Merger") in Febru-
ary 1994. At the time of the HCA Merger, HCA operated 97 hospitals located in
twenty-one states with annual revenues in excess of $5 billion. For accounting
purposes, the HCA Merger was treated as a pooling of interests. Accordingly,
the accompanying consolidated financial statements and selected financial and
operating data included in this discussion and analysis give retroactive ef-
fect to the HCA Merger and include the combined operations of Columbia and HCA
for all periods presented.
Galen Merger
In September 1993, Columbia Hospital Corporation ("CHC") completed a merger
transaction with Galen Health Care, Inc. ("Galen") (the "Galen Merger") to
form Columbia. At the time of the
9
<PAGE>
COLUMBIA/HCA HEALTHCARE CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
BACKGROUND INFORMATION AND BUSINESS STRATEGY (CONTINUED)
Galen Merger, CHC operated 22 hospitals and certain ancillary health care fa-
cilities in five major markets located in Florida and Texas. Annual revenues
of CHC were in excess of $1 billion. Galen operated 71 hospitals located in
eighteen states and two foreign countries with annual revenues of approxi-
mately $4 billion. The Galen Merger was accounted for as a pooling of inter-
ests. Accordingly, the accompanying consolidated financial statements and se-
lected financial and operating data included in this discussion and analysis
give retroactive effect to the Galen Merger and include the combined opera-
tions of CHC and Galen for all periods presented.
Spinoff Transaction
Prior to the merger with CHC, Galen became a publicly held corporation on
March 1, 1993 as a result of a tax-free spinoff transaction (the "Spinoff") by
Humana Inc. ("Humana"). The Spinoff separated Humana's previously integrated
hospital and managed care health plan businesses and was effected through the
distribution of Galen common stock to then current Humana common stockholders
on a one-for-one basis. For accounting purposes, because of the relative sig-
nificance of the hospital business, the pre-Spinoff financial statements of
Galen (and now those of Columbia/HCA) include the separate results of Humana's
hospital business, while the operating results and net assets of Humana's man-
aged care health plans have been classified as discontinued operations.
Business Strategy
Columbia/HCA's business strategy centers on working with physicians and
other health care providers to develop comprehensive, integrated health care
delivery networks in targeted markets. This strategy typically involves sig-
nificant health care facility acquisition and consolidation activities.
During the past several years, hospital industry inpatient admission trends
have been adversely impacted by cost containment efforts initiated by federal
and state governments and various third-party payers, including health mainte-
nance organizations, preferred provider organizations, commercial insurance
companies and employer-sponsored networks. In addition, a significant number
of medical procedures have shifted from inpatient to less expensive outpatient
settings as a result of both cost containment pressures and advances in medi-
cal technology.
In response to changes in the health care industry, Columbia/HCA has devel-
oped the following strategy to provide the highest quality health care serv-
ices at the lowest possible cost:
Deliver high quality services -- Through the use of clinical information
systems and continuous quality enhancement programs, Columbia/HCA focuses on
patient outcomes and strives to continuously improve the quality of care and
service provided to patients.
Become a significant provider of services -- Columbia/HCA attempts to (i)
consolidate services to reduce costs and (ii) develop the geographic coverage
necessary for inclusion in managed care and employer-sponsored networks in
each market.
Provide a comprehensive range of services -- In addition to the operation of
general, acute care hospitals, Columbia/HCA also operates psychiatric and re-
habilitation facilities, outpatient sur-gery and diagnostic centers, home
health agencies and other services. This strategy enables Columbia/HCA to at-
tract business from managed care plans and major employers seeking efficient
access to a wide array of health care services.
10
<PAGE>
COLUMBIA/HCA HEALTHCARE CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
RESULTS OF OPERATIONS
The following is a summary of continuing operations (dollars in millions,
except per share amounts).
<TABLE>
<CAPTION>
1995 1994 1993
-------------- -------------- --------------
AMOUNT RATIO AMOUNT RATIO AMOUNT RATIO
------- ----- ------- ----- ------- -----
<S> <C> <C> <C> <C> <C> <C>
Revenues....................... $17,695 100.0 $14,543 100.0 $12,678 100.0
------- ----- ------- ----- ------- -----
Salaries and benefits.......... 7,101 40.1 5,963 41.0 5,202 41.0
Supplies....................... 2,558 14.5 2,144 14.7 2,015 15.9
Other operating expenses....... 3,418 19.4 2,722 18.8 2,351 18.6
Provision for doubtful
accounts...................... 998 5.6 853 5.9 699 5.5
Investment income.............. (100) (0.6) (69) (0.5) (74) (0.6)
------- ----- ------- ----- ------- -----
13,975 79.0 11,613 79.9 10,193 80.4
------- ----- ------- ----- ------- -----
EBDITA (a)..................... 3,720 21.0 2,930 20.1 2,485 19.6
Depreciation and amortization.. 981 5.5 804 5.4 689 5.4
Interest expense............... 460 2.6 387 2.7 415 3.3
Merger and facility
consolidation costs........... 387 2.2 159 1.1 151 1.2
------- ----- ------- ----- ------- -----
Income from continuing
operations before minority
interests and income taxes.... 1,892 10.7 1,580 10.9 1,230 9.7
Minority interests in earnings
of consolidated entities...... 113 0.6 40 0.3 18 0.1
------- ----- ------- ----- ------- -----
Income from continuing
operations before income
taxes......................... 1,779 10.1 1,540 10.6 1,212 9.6
Provision for income taxes..... 715 4.1 611 4.2 492 3.9
------- ----- ------- ----- ------- -----
Income from continuing
operations.................... $ 1,064 6.0 $ 929 6.4 $ 720 5.7
======= ===== ======= ===== ======= =====
Earnings per common and common
equivalent share:
Excluding merger and facility
consolidation costs......... $ 2.90 $ 2.40 $ 1.99
Merger and facility
consolidation costs......... (.53) (.24) (.24)
------- ------- -------
Income from continuing
operations.................. $ 2.37 $ 2.16 $ 1.75
======= ======= =======
% changes from prior year:
Revenues..................... 21.7 14.7 3.7
EBDITA....................... 27.0 17.9 5.3
Income from continuing
operations before
income taxes................ 15.5 27.1 93.2
Income from continuing
operations.................. 14.6 28.9 146.5
Earnings per common and
common equivalent share..... 9.7 23.4 133.3
Other information excluding the
effect of
merger and facility
consolidation costs:
Income from continuing
operations
before income taxes......... $ 2,166 12.3 $ 1,699 11.7 $ 1,363 10.8
Income from continuing
operations.................. 1,299 7.3 1,031 7.1 818 6.5
% changes from prior year:
Income from continuing
operations before income
taxes..................... 27.4 24.7 17.6
Income from continuing
operations................ 26.0 25.8 15.7
Earnings per common and
common equivalent share... 20.8 20.6 10.6
</TABLE>
- --------
(a) Income from continuing operations before merger and facility consolidation
costs, depreciation, interest, minority interests, income taxes and amor-
tization. Although EBDITA is not a measure of operating performance calcu-
lated in accordance with generally accepted accounting principles, it is
commonly used as an analytical indicator within the health care provider
industry. In addition, EBDITA also serves as a measurement of leverage ca-
pacity and debt service ability. EBDITA should not be considered as a
measure of profitability or liquidity or as an alternative to net income,
cash flows generated by operating, investing or financing activities or
other financial statement data presented in the consolidated financial
statements as an indicator of financial performance.
11
<PAGE>
COLUMBIA/HCA HEALTHCARE CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
RESULTS OF OPERATIONS (CONTINUED)
Years ended 1995 and 1994
Revenues increased 21.7% to $17.7 billion in 1995 compared to the same pe-
riod last year, primarily as a result of acquisitions (including the EPIC
Merger in May 1994 and the MCA Merger in September 1994) and growth in inpa-
tient and outpatient volumes. On a same-hospital basis, revenues increased
10.2%, admissions increased 4.6% and adjusted admissions (adjusted to reflect
outpatient activity) increased 8.6% from a year ago. The increase in outpa-
tient activity is primarily a result of expanding home health and other outpa-
tient ancillary services.
Income before income taxes increased to $1.8 billion in 1995 from $1.5
billion in 1994 and pretax margins decreased to 10.1% in 1995 from 10.6% in
1994. Excluding the effect of the merger and facility consolidation costs
charged in 1995 and 1994, income before taxes increased 27.4% to $2.2 billion
in 1995 from $1.7 billion in 1994 and pretax margins increased to 12.3% in
1995 from 11.7% in 1994. The improvement in pretax income was attributable to
the combination of growth in revenues and improvements in the margin. Pretax
margins increased due to improvements in productivity and increased discounts
on medical supplies. Salaries and benefits declined as a percentage of
revenues to 40.1% in 1995 from 41.0% in 1994, and supply costs declined as a
percentage of revenues to 14.5% in 1995 compared to 14.7% in 1994. The
improvement in pretax margins was partially offset by an increase in other
operating expenses as a percentage of revenues to 19.4% in 1995 from 18.8% in
1994. This was due, in part, to the outsourcing of certain services.
Income before extraordinary charges increased 14.6% to $1.1 billion ($2.37
per share) during 1995 compared to $929 million ($2.16 per share) in 1994. Ex-
cluding the effects of the merger and facility consolidation costs charged in
1995 and 1994, income before extraordinary charges increased 26.0% to $1.3
billion ($2.90 per share) in 1995 compared to $1.0 billion ($2.40 per share)
in 1994.
During 1995, Columbia/HCA recorded $105 million of pretax charges incurred
in connection with the Healthtrust Merger. These costs included severance
costs, investment advisory fees, and certain charges based upon management's
implementation of actions to reduce corporate overhead costs and consolidate
management information systems. In addition, pretax charges of $282 million
were recorded to writedown assets to estimated net realizable value in connec-
tion with management's plans to consolidate duplicative facilities and replace
facilities in certain markets.
During 1994, Columbia/HCA recorded $159 million (before income taxes) of
merger and facility consolidation costs in connection with the HCA Merger.
In connection with the Healthtrust Merger, approximately $1.8 billion of
Healthtrust's debt was refinanced to reduce future interest expense and elimi-
nate certain restrictive covenants, resulting in an after-tax charge of $103
million ($.23 per share).
In connection with the HCA Merger, Columbia/HCA refinanced approximately
$2.2 billion of long-term debt resulting in an after-tax charge of $115 mil-
lion ($.27 per share).
Years ended 1994 and 1993
Revenues increased 14.7% to $14.5 billion in 1994 compared to the same pe-
riod in 1993, primarily as a result of acquisitions (including the MCA and
EPIC Mergers in 1994) and growth in inpatient and outpatient volumes. On a
same-hospital basis, admissions increased 1.9% and outpatient visits increased
34.5% compared to the previous year. The increase in outpatient activity is
primarily a result of expanding home health and other outpatient ancillary
services.
12
<PAGE>
COLUMBIA/HCA HEALTHCARE CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
RESULTS OF OPERATIONS (CONTINUED)
Income before income taxes increased to $1.5 billion in 1994 from $1.2 bil-
lion in 1993 and pretax margins increased to 10.6% in 1994 from 9.6% in 1993.
Excluding the effect of the merger and facility consolidation costs charged in
1994 and 1993, income before taxes increased 24.7% to $1.7 billion in 1994
from $1.4 billion in 1993 and pretax margins increased to 11.7% in 1994 from
10.8% in 1993. The improvement in pretax income was attributable to the combi-
nation of growth in revenues and reductions in interest expense resulting from
financing activities in 1994. In addition, pretax margins also increased due
to increased discounts on medical supplies. Supply costs declined as a per-
centage of revenues to 14.7% in 1994 compared to 15.9% in 1993.
Income before extraordinary charges increased 28.9% to $929 million ($2.16
per share) during 1994 compared to $720 million ($1.75 per share) in 1993. Ex-
cluding the effects of the merger and facility consolidation costs charged in
1994 and 1993, income before extraordinary charges increased 25.8% to $1.0
billion ($2.40 per share) in 1994 compared to $818 million ($1.99 per share)
in 1993.
During 1994, Columbia/HCA recorded $159 million (before income taxes) of
merger and facility consolidation costs in connection with the HCA Merger. In
connection with the Galen Merger, Columbia/HCA recorded charges in 1993 total-
ing $151 million (before income taxes).
Columbia/HCA incurred extraordinary charges (net of tax benefits) on early
extinguishments of debt of $115 million in 1994 and $97 million in 1993.
LIQUIDITY
Cash provided by continuing operations totaled $2.3 billion in 1995 compared
to $1.7 billion in 1994 and $1.6 billion in 1993. The increase in 1995 over
1994 is primarily due to the cash generated from the hospitals and health care
facilities acquired during 1995.
During 1995, capital expenditures (including acquisitions and investments in
and advances to affiliates) exceeded cash provided by continuing operations by
approximately $1.2 billion. Additional sources of cash used to fund the capi-
tal expenditures include the issuance of long-term debt and commercial paper
borrowings. Cash flows were also used in 1995 and 1994 to fund $83 million and
$146 million, respectively, of self-insured professional liability risks re-
lated to prior years and, in 1993, to finance a payment of $135 million to
Humana in connection with the Spinoff.
Working capital totaled $1.5 billion at December 31, 1995 compared to $1.1
billion at December 31, 1994. Management believes that cash flows from opera-
tions and amounts available under Columbia/HCA's revolving credit facilities
and related commercial paper programs are sufficient to meet expected future
liquidity needs.
A substantial portion of the merger and facility consolidation costs re-
corded during the past three years relate to the writedown of recorded assets
and, accordingly, did not have a material adverse effect on cash flows from
continuing operations.
Investments of Columbia/HCA's professional liability insurance subsidiary to
maintain statutory equity and pay claims totaled $1.2 billion and $973 million
at December 31, 1995 and 1994, respectively.
The Company has entered into various joint venture agreements whereby the
partners have an option to sell or "put" their interest in the joint ventures
back to the Company at prices based on fair value. The combined put price of
all negotiated joint ventures is material and could have a significant affect
on the Company's liquidity in the event all put options were exercised at the
same time.
13
<PAGE>
COLUMBIA/HCA HEALTHCARE CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
LIQUIDITY (CONTINUED)
In September 1993, the Board of Directors initiated the payment of a regular
quarterly cash dividend of $.03 per common share.
CAPITAL RESOURCES
Excluding acquisitions, capital expenditures totaled $1.5 billion in 1995
compared to $1.2 billion in 1994 and $1.1 billion in 1993. Planned capital ex-
penditures in 1996 are expected to approximate $1.7 billion. Management be-
lieves that its capital expenditure program is adequate to expand, improve and
equip existing health care facilities.
Columbia/HCA also expended $1.3 billion, $370 million and $167 million for
acquisitions (excluding the MCA, EPIC, Healthtrust, HCA and Galen Mergers)
during 1995, 1994 and 1993, respectively. In addition, Columbia/HCA acquired
investments in and made advances to affiliates for aggregate cash payments of
$609 million in 1995 compared to $6 million in 1994 and $12 million in 1993.
See Note 9 of the Notes to Consolidated Financial Statements for a description
of these activities.
In connection with the MCA Merger consummated in September 1994 (accounted
for under the purchase method), Columbia/HCA issued approximately 21.1 million
shares of common stock in exchange for all outstanding shares of MCA common
stock at an aggregate cost of $912 million.
In connection with the EPIC Merger consummated in May 1994 (accounted for
under the purchase method), Healthtrust paid cash in exchange for all out-
standing shares of EPIC common stock at an aggregate cost of $266 million. The
EPIC Merger was financed through the public offering of 5,262,400 shares of
Healthtrust common stock (effected for the Healthtrust Merger exchange ratio),
borrowings under bank credit agreements and internally generated funds.
As part of its business strategy, Columbia/HCA intends to acquire additional
health care facilities in the future. Since December 31, 1995 (through Febru-
ary 29, 1996), Columbia/HCA has expended $214 million toward the purchase of
five hospitals (or a controlling interest therein). These transactions, which
will be accounted for under the purchase method, were financed through the use
of internally generated funds and issuance of long-term debt.
Columbia/HCA expects to finance all capital expenditures with internally
generated and borrowed funds. Available sources of capital include public or
private debt, commercial paper, unused bank revolving credits and equity. At
December 31, 1995, there were projects under construction which had an esti-
mated additional cost to complete of approximately $923 million.
In connection with the Spinoff, stockholder's equity was reduced by $802
million in 1993 as a result of the following transactions with Humana: (i)
distribution 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). The notes were re-
financed in September 1993.
Subsequent to December 31, 1995, Columbia/HCA amended its revolving credit
agreements from an aggregate amount of $3.75 billion to $4.0 billion. The
Credit Facilities comprise a $2.5 billion five-year revolving credit agreement
and a $1.5 billion 364-day revolving credit agreement. The Credit Facilities
were established to support Columbia/HCA's commercial paper programs and re-
place prior revolving credit agreements. As of February 29, 1996, Columbia/HCA
had approximately $1.0 billion of credit available under the revolving credit
agreements.
14
<PAGE>
COLUMBIA/HCA HEALTHCARE CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
CAPITAL RESOURCES (CONTINUED)
Columbia/HCA's credit facilities contain customary covenants which include
(i) limitations on additional debt, (ii) limitations on sales of assets, merg-
ers and changes of ownership and (iii) maintenance of certain interest cover-
age ratios. Columbia/HCA was in compliance with all such covenants at December
31, 1995.
EFFECTS OF INFLATION AND CHANGING PRICES
Various federal, state and local laws have been enacted that, in certain
cases, limit Columbia/HCA's ability to increase prices. Revenues for acute
care hospital services rendered to Medicare patients are established under the
federal government's prospective payment system. Total Medicare revenues ap-
proximated 36% of total revenues in 1995, 35% in 1994 and 34% in 1993.
Management believes that hospital industry operating margins have been, and
may continue to be, under significant pressure because of deterioration in in-
patient volumes, changes in payer mix, and growth in operating expenses in ex-
cess of the increase in prospective payments under the Medicare program. Man-
agement expects that the average rate of increase in Medicare prospective pay-
ments will approximate 2% in 1996. In addition, as a result of increasing reg-
ulatory and competitive pressures, Columbia/HCA's ability to maintain operat-
ing margins through price increases to non-Medicare patients is limited.
HEALTH CARE REFORM
In recent years, an increasing number of legislative proposals have been in-
troduced or proposed in Congress and in some state legislatures that would
significantly affect health care systems in Columbia/HCA's markets. The cost
of certain proposals would be funded in significant part by reductions in pay-
ments by government programs, including Medicare and Medicaid, to healthcare
providers such as hospitals. While the Company is unable to predict which, if
any, proposals for healthcare reform will be adopted, there can be no assur-
ance that proposals adverse to the business of Columbia/HCA will not be adopt-
ed.
OTHER INFORMATION
In March 1996, the Tax Court ruled in Columbia/HCA's favor that the use of a
hybrid (primarily the cash basis) method of accounting by certain of HCA's
subsidiaries in calculating taxable income for the years 1981-1986 clearly re-
flected taxable income. Had the Internal Revenue Service (the "IRS") prevailed
on this issue, Columbia/HCA would have owed $614 million in taxes and inter-
est.
In February 1996, Columbia/HCA reached a partial settlement with the IRS in
connection with examinations of HCA's federal income tax returns for 1981
through 1988. Issues totaling $486 million in potential taxes and interest
payments were settled for approximately $87 million ($75 million paid in March
1994 and $12 million paid in November 1995). The payment and settlement of
these items did not have any effect on the results of operations.
Columbia/HCA is currently contesting income taxes and related interest ag-
gregating approximately $600 million proposed by the IRS for prior years. Man-
agement believes that final resolution of these disputes will not have a mate-
rial adverse effect on the financial position, results of operations or li-
quidity of Columbia/HCA. However, if all or a majority of the positions of the
IRS are upheld, the financial position, results of operations and liquidity of
Columbia/HCA could be materially adversely affected.
Resolution of various other loss contingencies, including litigation pending
against Columbia/HCA in the ordinary course of business, is not expected to
have a material adverse effect on its financial position or results of opera-
tions.
15
<PAGE>
COLUMBIA/HCA HEALTHCARE CORPORATION
CONSOLIDATED STATEMENT OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
(DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
1995 1994 1993
------- ------- -------
<S> <C> <C> <C>
Revenues............................................ $17,695 $14,543 $12,678
------- ------- -------
Salaries and benefits............................... 7,101 5,963 5,202
Supplies............................................ 2,558 2,144 2,015
Other operating expenses............................ 3,418 2,722 2,351
Provision for doubtful accounts..................... 998 853 699
Depreciation and amortization....................... 981 804 689
Interest expense.................................... 460 387 415
Investment income................................... (100) (69) (74)
Merger and facility consolidation costs............. 387 159 151
------- ------- -------
15,803 12,963 11,448
------- ------- -------
Income from continuing operations before minority
interests
and income taxes................................... 1,892 1,580 1,230
Minority interests in earnings of consolidated
entities........................................... 113 40 18
------- ------- -------
Income from continuing operations before income
taxes.............................................. 1,779 1,540 1,212
Provision for income taxes.......................... 715 611 492
------- ------- -------
Income from continuing operations................... 1,064 929 720
Income from operations of discontinued health plan
segment, net of income taxes of $9 ................ - - 16
Extraordinary charges on extinguishments of debt,
net of income
tax benefits of $67 in 1995, $72 in 1994 and $59 in
1993............................................... (103) (115) (97)
------- ------- -------
Net income.................................... $ 961 $ 814 $ 639
======= ======= =======
Earnings per common and common equivalent share:
Income from continuing operations................. $ 2.37 $ 2.16 $ 1.75
Income from operations of discontinued health plan
segment.......................................... - - .04
Extraordinary charges on extinguishments of debt.. (.23) (.27) (.24)
------- ------- -------
Net income.................................... $ 2.14 $ 1.89 $ 1.55
======= ======= =======
Shares used in computing earnings per common and
common equivalent share (in thousands)............. 448,714 429,295 413,036
======= ======= =======
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
16
<PAGE>
COLUMBIA/HCA HEALTHCARE CORPORATION
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1995 AND 1994
(DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
1995 1994
------- -------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents.................................. $ 232 $ 68
Accounts receivable, less allowances for doubtful accounts
of $901 -- 1995 and $784 -- 1994.......................... 2,665 2,346
Inventories................................................ 406 373
Income taxes receivable.................................... 113 15
Other...................................................... 784 545
------- -------
4,200 3,347
Property and equipment, at cost:
Land....................................................... 926 874
Buildings.................................................. 6,649 6,086
Equipment.................................................. 5,826 5,175
Construction in progress (estimated cost to complete and
equip after December 31, 1995 -- $923).................... 914 478
------- -------
14,315 12,613
Accumulated depreciation................................... (4,564) (3,987)
------- -------
9,751 8,626
Investments of professional liability insurance subsidiary... 1,071 888
Investments in and advances to affiliates.................... 1,021 110
Intangible assets net of accumulated amortization of $426 --
1995 and $310 -- 1994...................................... 3,497 3,058
Other........................................................ 352 249
------- -------
$19,892 $16,278
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable........................................... $ 829 $ 609
Accrued salaries........................................... 520 391
Other accrued expenses..................................... 1,146 1,131
Long-term debt due within one year......................... 243 124
------- -------
2,738 2,255
Long-term debt............................................... 7,137 5,548
Deferred taxes and other liabilities......................... 2,166 2,107
Minority interests in equity of consolidated entities........ 722 278
Stockholders' equity:
Common stock $.01 par; authorized 800,000,000 voting shares
and 25,000,000 nonvoting shares; issued and outstanding
431,699,700 voting shares and 14,119,000 nonvoting
shares -- 1995 and 427,837,300 voting shares and
14,119,000 nonvoting shares -- 1994....................... 4 4
Capital in excess of par value............................. 4,499 4,405
Other...................................................... 60 23
Retained earnings.......................................... 2,566 1,658
------- -------
7,129 6,090
------- -------
$19,892 $16,278
======= =======
</TABLE>
The accompanying notes are an integral part of
the consolidated financial statements.
17
<PAGE>
COLUMBIA/HCA HEALTHCARE CORPORATION
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
(DOLLARS IN MILLIONS)
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
COMMON STOCK
<CAPTION> ----------- CAPITAL IN
SHARES PAR EXCESS OF RETAINED
(000) VALUE PAR VALUE OTHER EARNINGS TOTAL
------- ----- ---------- ----- -------- ------
<S> <C> <C> <C> <C> <C> <C>
Balances, December 31, 1992. 403,086 $ 4 $ 3,113 $ 66 $ 1,058 $4,241
Net income................ 639 639
Cash dividends............ (9) (9)
Stock options exercised
and related tax benefits,
net of shares tendered in
partial payment therefor. 4,099 72 (35) 37
Spinoff transaction with
Humana Inc.:
Cash payment to Humana
Inc.................... (135) (135)
Noncash transactions:
Issuance of notes
payable............... (250) (250)
Distribution of net
investment in
discontinued health
plan operations....... (392) (392)
Transfer of a hospital
facility.............. (25) (25)
Net unrealized gains on
investment securities.... 27 27
Other..................... 918 25 25
------- --- ---------- ----- -------- ------
Balances, December 31, 1993. 408,103 4 3,210 58 886 4,158
Net income................ 814 814
Cash dividends ........... (42) (42)
Issuance of common stock.. 26,356 1,066 1,066
Stock options exercised
and related tax benefits,
net of shares tendered in
partial payment therefor. 1,898 46 (16) 30
Net unrealized losses on
investment securities.... (30) (30)
Other..................... 5,599 83 11 94
------- --- ---------- ----- -------- ------
Balances, December 31, 1994. 441,956 4 4,405 23 1,658 6,090
Net income................ 961 961
Cash dividends............ (53) (53)
Stock options exercised
and related tax benefits,
net of shares tendered in
partial payment therefor. 3,458 100 (7) 93
Net unrealized gains on
investment securities.... 31 31
Other..................... 405 (6) 13 7
------- --- ---------- ----- -------- ------
Balances, December 31, 1995. 445,819 $ 4 $ 4,499 $ 60 $ 2,566 $7,129
======= === ========== ===== ======== ======
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
18
<PAGE>
COLUMBIA/HCA HEALTHCARE CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
1995 1994 1993
------ ------- -------
<S> <C> <C> <C>
Cash flows from continuing operations:
Net income......................................... $ 961 $ 814 $ 639
Adjustments to reconcile net income to net cash
provided by operating activities:
Minority interests............................... 71 39 17
Merger and facility consolidation costs.......... 302 95 89
Depreciation and amortization.................... 981 804 689
Deferred income taxes............................ 15 27 (58)
Change in operating assets and liabilities:
(Increase) decrease in accounts receivable..... (198) (99) 12
Increase in inventories and other assets....... (174) (80) (9)
Increase (decrease) in income taxes............ (121) 1 (4)
Increase (decrease) in other liabilities....... 218 (67) 2
Extraordinary charges on extinguishments of debt. 170 187 156
Other............................................ 29 26 52
------ ------- -------
Net cash provided by continuing operations..... 2,254 1,747 1,585
------ ------- -------
Cash flows from investing activities:
Purchase of property and equipment................. (1,527) (1,206) (1,066)
Cash acquired in connection with Medical Care
America, Inc. merger transaction.................. - 106 -
Acquisition of EPIC Holdings, Inc.................. - (221) -
Acquisition of hospitals and health care
facilities........................................ (1,333) (370) (167)
Sale of assets..................................... 334 88 298
Investments in and advances to affiliates.......... (609) (6) (12)
Change in other investments........................ (283) (226) 21
Other.............................................. (182) (111) (41)
------ ------- -------
Net cash used in investing activities.......... (3,600) (1,946) (967)
------ ------- -------
Cash flows from financing activities:
Issuance of long-term debt......................... 2,257 2,361 2,113
Net change in commercial paper borrowings and lines
of credit......................................... 1,230 1,148 342
Repayment of long-term debt........................ (1,969) (3,724) (2,973)
Payment to Humana Inc. in spinoff transaction...... - - (135)
Payment of cash dividends.......................... (50) (36) (40)
Issuance of common stock........................... 42 191 43
Other.............................................. - (21) (34)
------ ------- -------
Net cash provided by (used in) financing
activities.................................... 1,510 (81) (684)
------ ------- -------
Change in cash and cash equivalents.................. 164 (280) (66)
Cash and cash equivalents at beginning of period..... 68 348 414
------ ------- -------
Cash and cash equivalents at end of period........... $ 232 $ 68 $ 348
====== ======= =======
Interest payments.................................... $ 479 $ 404 $ 375
Income tax payments, net of refunds.................. 748 508 484
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
19
<PAGE>
COLUMBIA/HCA HEALTHCARE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 -- ACCOUNTING POLICIES
Reporting Entity
Columbia/HCA Healthcare Corporation ("Columbia/HCA") is a Delaware corpora-
tion that operates hospitals and ancillary health care facilities through (i)
wholly owned subsidiaries, (ii) joint ventures or (iii) ownership of interests
in various partnerships in which subsidiaries of Columbia/HCA serve as the
managing general partner. Columbia/HCA owns and operates 319 hospitals and
more than 130 ambulatory surgery centers. Columbia/HCA is also a partner in
several 50/50 joint ventures that own and operate 19 hospitals and 3 ambula-
tory surgery centers which are accounted for using the equity method. The hos-
pitals and surgery centers are located in 36 states, England and Switzerland.
On April 24, 1995, Columbia/HCA completed a merger transaction with
Healthtrust, Inc. -- The Hospital Company ("Healthtrust") (the "Healthtrust
Merger"). See Note 2 for a description of the specific terms of the
Healthtrust Merger.
On September 16, 1994, Columbia/HCA completed a merger transaction with Med-
ical Care America, Inc. ("MCA") (the "MCA Merger"). See Note 3 for a descrip-
tion of the specific terms of the MCA Merger.
On May 5, 1994, Healthtrust completed a merger transaction with EPIC
Holdings, Inc. ("EPIC") (the "EPIC Merger"). See Note 4 for a description of
the specific terms of the EPIC Merger.
On February 10, 1994, Columbia Healthcare Corporation ("Columbia") completed
a merger transaction with HCA -- Hospital Corporation of America ("HCA") (the
"HCA Merger"). In connection with the transaction, Columbia changed its name
to Columbia/HCA. See Note 5 for a description of the specific terms of the HCA
Merger.
Columbia was formed on September 1, 1993 as a result of a merger involving
Columbia Hospital Corporation ("CHC") and Galen Health Care, Inc. ("Galen")
(the "Galen Merger"). See Note 6 for a description of the specific terms of
the Galen Merger.
Basis of Presentation
The preparation of financial statements in conformity with generally ac-
cepted accounting principles requires management to make estimates and assump-
tions that affect the amounts reported in the financial statements and accom-
panying notes. Actual results could differ from those estimates.
The consolidated financial statements include all subsidiaries and less than
100% owned entities controlled by Columbia/HCA. Significant intercompany
transactions have been eliminated. Investments which Columbia/HCA does not
control, but in which it has a substantial ownership interest and can exercise
significant influence, are accounted for using the equity method.
The MCA and EPIC Mergers and various other acquisitions and joint venture
transactions have been accounted for under the purchase method. Accordingly,
the accounts of these entities have been consolidated with those of
Columbia/HCA for periods subsequent to the acquisition of controlling inter-
est.
The Healthtrust, HCA and Galen Mergers have been accounted for by the pool-
ing-of-interests method. Accordingly, the consolidated financial statements
give retroactive effect to these transactions and include the combined opera-
tions of Healthtrust, HCA, Galen and CHC for all periods presented. In addi-
tion, the historical financial information related to Healthtrust and Galen
(which prior to the respective mergers were reported on a fiscal year ending
August 31) have been recast to conform to Columbia/HCA's annual reporting pe-
riod ending December 31.
20
<PAGE>
COLUMBIA/HCA HEALTHCARE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 1 -- ACCOUNTING POLICIES (CONTINUED)
Revenues
Columbia/HCA's health care facilities have entered into agreements with
third-party payers, including government programs and managed care health
plans, under which Columbia/HCA is paid based upon established charges, cost
of providing services, predetermined rates by diagnosis, fixed per diem rates
or discounts from established charges.
Revenues are recorded at estimated amounts due from patients and third-party
payers for the health care services provided, including anticipated settle-
ments under reimbursement agreements with third-party payers.
Cash and Cash Equivalents
Cash and cash equivalents include highly liquid investments with a maturity
of three months or less when purchased. Carrying values of cash and cash
equivalents approximate fair value due to the short-term nature of these in-
struments.
Accounts Receivable
Accounts receivable consist primarily of amounts due from the Medicare and
Medicaid programs, other government programs, managed care health plans, com-
mercial insurance companies and individual patients.
Inventories
Inventories are stated at the lower of cost (first-in, first-out) or market.
Property and Equipment
Depreciation expense, computed by the straight-line method, was $859 million
in 1995, $722 million in 1994 and $631 million in 1993. Columbia/HCA uses com-
ponent depreciation for buildings. Depreciation rates for buildings are equiv-
alent to useful lives ranging generally from 20 to 25 years. Estimated useful
lives of equipment vary generally from 3 to 10 years.
Investments
On December 31, 1993, Columbia/HCA adopted the provisions of Statement of
Financial Accounting Standards No. 115, "Accounting for Certain Investments in
Debt and Equity Securities" ("SFAS 115"), which requires that investments in
debt and equity securities be classified according to certain criteria.
Intangible Assets
Intangible assets consist primarily of costs in excess of the fair value of
identifiable net assets of acquired entities and are amortized using the
straight-line method generally over periods ranging from 30 to 40 years for
hospital acquisitions and periods ranging from 5 to 20 years for physician
practice, home health and clinic acquisitions. To the extent that operating
results indicate the probability that the carrying values of certain long-
lived assets and the related identifiable intangible assets have been im-
paired, Columbia/HCA would prepare projections of the undiscounted cash flows
from operations of the acquired entity over the remaining amortization period.
If the projections indicated that the recorded cost would not be recoverable,
such cost amounts would be reduced to estimated fair value.
21
<PAGE>
COLUMBIA/HCA HEALTHCARE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 1 -- ACCOUNTING POLICIES (CONTINUED)
Noncompete and debt issuance costs are amortized based upon the lives of the
respective contracts or loans.
Professional Liability Insurance Claims
Provisions for loss for professional liability risks are based upon actuari-
ally determined estimates. To the extent that subsequent claims information
varies from management's estimates, earnings are charged or credited.
Minority Interests in Consolidated Entities
The consolidated financial statements include all assets, liabilities, reve-
nues and expenses of less than 100% owned entities controlled by Columbia/HCA.
Accordingly, management has recorded minority interests in the earnings and
equity of such entities.
Columbia/HCA is a party to several partnership agreements which generally
include provisions for the redemption of minority interests using specified
valuation techniques.
Earnings per Common and Common Equivalent Share
Earnings per common and common equivalent share are based upon the weighted
average number of common shares outstanding adjusted for the dilutive effect
of common stock equivalents, consisting primarily of stock options.
Fully diluted earnings per common and common equivalent share are not pre-
sented because such amounts approximate earnings per common and common equiva-
lent share.
Newly Issued Accounting Standards
In October 1995, Statement of Financial Accounting Standards No. 123, "Ac-
counting for Stock-Based Compensation" ("SFAS 123"), was issued which, if
elected, would require companies to use a new fair value method of valuing
stock-based compensation plans. Columbia/HCA has elected to continue following
present accounting rules under Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees" which uses an intrinsic value
method and often results in no compensation expense. However, in 1996, in ac-
cordance with SFAS 123, Columbia/HCA will provide pro forma disclosure of what
net income and earnings per share would have been had the new fair value
method been used.
In March 1995, Statement of Accounting Standards No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of" ("SFAS 121"), was issued. SFAS 121 requires impairment losses to be re-
corded on long-lived assets used in operations when indicators of impairment
are present and the undiscounted cash flows estimated to be generated by those
assets are less than the assets' carrying amount. SFAS 121 also addresses the
accounting for long-lived assets that are expected to be disposed of.
Columbia/HCA will adopt SFAS 121 in the first quarter of 1996 and, based on
current circumstances, does not believe the effect of adoption will be materi-
al.
Reclassifications
Certain prior year amounts have been reclassified to conform to the 1995
presentation.
22
22
<PAGE>
COLUMBIA/HCA HEALTHCARE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 2 -- HEALTHTRUST MERGER
The Healthtrust Merger was consummated on April 24, 1995. Shares of
Healthtrust common stock were converted on a tax-free basis into approximately
80,411,800 shares of Columbia/HCA voting common stock (an exchange ratio of
0.88 of a share of Columbia/HCA common stock for each share of Healthtrust
common stock).
The Healthtrust Merger has been accounted for as a pooling of interests, and
accordingly, the consolidated financial statements give retroactive effect to
the Healthtrust Merger and include the combined operations of Columbia/HCA and
Healthtrust for all periods presented. The following is a summary of the re-
sults of operations of the separate entities for periods prior to the
Healthtrust Merger (dollars in millions):
<TABLE>
<CAPTION>
POOLING
COLUMBIA/HCA HEALTHTRUST ADJUSTMENTS COMBINED
------------ ----------- ----------- --------
<S> <C> <C> <C> <C>
Three months ended March 31,
1995 (unaudited):
Revenues...................... $ 3,337 $1,043 $ - $ 4,380
Net income.................... 292 66 - 358
1994:
Revenues...................... $11,132 $3,430 $(19) $14,543
Income from continuing opera-
tions........................ 745 186 (2) 929
Net income.................... 630 186 (2) 814
1993:
Revenues...................... $10,252 $2,443 $(17) $12,678
Income from continuing opera-
tions........................ 575 147 (2) 720
Net income.................... 507 134 (2) 639
</TABLE>
Pooling adjustments have been recorded to eliminate revenues and expenses
associated with computer information services provided to Healthtrust by
Columbia/HCA and to eliminate discounting of Healthtrust professional liabil-
ity loss provisions to conform to the Columbia/HCA method.
NOTE 3 -- MCA MERGER
The MCA Merger was consummated on September 16, 1994. MCA was a national
provider of health care services through the operation of freestanding surgi-
cal facilities.
In connection with the MCA Merger, all outstanding shares of MCA common
stock were converted on a tax-free basis into approximately 21,093,600 shares
of Columbia/HCA voting common stock (an exchange ratio of 0.7042 of a share of
Columbia/HCA common stock for each share of MCA common stock). The following
is a summary of the aggregate purchase price (dollars in millions, except per
share data):
<TABLE>
<S> <C>
Fair value of Columbia/HCA common stock ($42.25 per share) issued in
exchange for all outstanding MCA common stock....................... $ 891
Fair value of options to purchase Columbia/HCA common stock issued in
exchange for all outstanding options to purchase MCA common stock... 15
Transaction costs.................................................... 6
-----
$ 912
=====
</TABLE>
23
<PAGE>
COLUMBIA/HCA HEALTHCARE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 3 -- MCA MERGER (CONTINUED)
The MCA Merger has been accounted for by the purchase method, and according-
ly, the accounts of MCA have been consolidated with those of Columbia/HCA
since September 1, 1994. The excess of the aggregate purchase price over the
estimated fair value of net assets acquired (including property and equipment
of $217 million) approximated $903 million. See Note 10 for pro forma informa-
tion.
NOTE 4 -- EPIC MERGER
The EPIC Merger was completed on May 5, 1994. EPIC was a health care serv-
ices provider that owned and operated 32 general acute care hospitals.
In connection with the EPIC Merger, EPIC stockholders were paid $7.00 for
each outstanding share of EPIC common stock (an aggregate cost of $266 mil-
lion, including transaction costs). In addition, Healthtrust assumed approxi-
mately $713 million of EPIC long-term debt, of which approximately $681 mil-
lion was refinanced. The EPIC Merger was financed through the public offering
of 5,262,400 shares of Healthtrust common stock (effected for the Healthtrust
Merger exchange ratio), borrowings under bank credit agreements and internally
generated funds.
The EPIC Merger has been accounted for under the purchase method, and ac-
cordingly, the accounts of EPIC have been consolidated with those of
Columbia/HCA since May 1, 1994. The excess of the aggregate purchase price
over the estimated fair value of net assets acquired (including property and
equipment of $516 million) approximated $577 million. See Note 10 for pro
forma information.
NOTE 5 -- HCA MERGER
The HCA Merger was completed on February 10, 1994. In connection with the
HCA Merger, Columbia stockholders approved an amendment to Columbia's Certifi-
cate of Incorporation changing the name of the corporation to "Columbia/HCA
Healthcare Corporation". HCA was then merged into a wholly owned subsidiary of
Columbia/HCA. Shares of HCA Class A voting common stock and Class B nonvoting
common stock were converted on a tax-free basis into approximately 166,846,000
shares of Columbia/HCA voting common stock and approximately 18,990,000 shares
of Columbia/HCA nonvoting common stock, respectively (an exchange ratio of
1.05 shares of Columbia/HCA common stock for each share of HCA voting and non-
voting common stock). The HCA Merger has been accounted for as a pooling of
interests, and accordingly, the consolidated financial statements give retro-
active effect to the HCA Merger and include the combined operations of Colum-
bia and HCA for all periods presented.
NOTE 6 -- GALEN MERGER
The Galen Merger was consummated effective as of September 1, 1993. In con-
nection with the Galen Merger, CHC, a Nevada corporation, was merged into Co-
lumbia. Each CHC share of common stock was converted on a tax-free basis into
one share of Columbia common stock. Immediately subsequent thereto, a wholly
owned subsidiary of Columbia was merged into Galen, at which time Galen became
a wholly owned subsidiary of Columbia. In connection with this transaction,
Columbia issued approximately 123,830,000 shares of common stock in a tax-free
exchange for all of the outstanding common shares of Galen (an exchange ratio
of 0.775 of a share of Columbia common stock for each share of Galen common
stock). The Galen Merger has been accounted for as a pooling of interests, and
accordingly, the consolidated financial statements give retroactive effect to
the Galen Merger and include the combined operations of CHC and Galen for all
periods presented.
24
<PAGE>
COLUMBIA/HCA HEALTHCARE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 7 -- SPINOFF TRANSACTION AND DISCONTINUED OPERATIONS
Prior to the Galen Merger, Galen began operating its hospital business as an
independent publicly held corporation on March 1, 1993 as a result of a tax-
free spinoff transaction (the "Spinoff") by Humana Inc. ("Humana"), which re-
tained its managed care health plan business. The Spinoff separated Humana's
previously integrated hospital and managed care health plan businesses and was
effected through the distribution of Galen common stock to then current Humana
common stockholders on a one-for-one basis.
For accounting purposes, because of the relative significance of the hospi-
tal business, the pre-Spinoff consolidated financial statements of Galen (and
now those of Columbia/HCA) include the separate results of Humana's hospital
business, while the operations and net assets of Humana's managed care health
plans have been classified as discontinued operations.
In connection with the Spinoff, Galen entered into various agreements with
Humana which were intended to facilitate orderly changes for both the hospital
and managed care health plan businesses in a way which would be minimally dis-
ruptive to each entity.
Revenues of the discontinued managed care health plan business (included in
discontinued operations in the accompanying consolidated statement of income)
were $523 million in 1993.
NOTE 8 -- MERGER AND FACILITY CONSOLIDATION COSTS
1995
In the second quarter of 1995 Columbia/HCA recorded the following pretax
charges in connection with the Healthtrust Merger and certain facility consol-
idation costs (dollars in millions):
<TABLE>
<S> <C>
Employee benefit and certain severance actions........................ $ 46
Investment advisory and professional fees............................. 14
Costs of information systems consolidations, primarily related to the
writedown of assets.................................................. 19
Other................................................................. 26
----
105
----
Writedown of assets in connection with consolidation of duplicative
facilities and facility replacements................................. 282
----
$387
====
</TABLE>
The writedown of assets relates to management's assessment of certain mar-
kets in which there exists duplication of services and excess capacity in hos-
pital facilities. In the identified markets, Columbia/HCA expects to be able
to provide services more cost effectively by eliminating the fixed costs of
the facilities being closed and applying the fixed costs of the other facili-
ties to a larger patient base. The charge that was incurred is the amount con-
sidered necessary to record the identified assets at their estimated net real-
izable value and is substantially a non-cash
charge. Columbia/HCA expects to have all replacement facilities in progress
and to have completed the identified facility consolidations within twelve
months.
25
<PAGE>
COLUMBIA/HCA HEALTHCARE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 8 -- MERGER AND FACILITY CONSOLIDATION COSTS (CONTINUED)
1994
In the first quarter of 1994, the following pretax charges were recorded in
connection with the HCA Merger (dollars in millions):
<TABLE>
<S> <C>
Employee benefit and certain severance actions........................ $ 40
Investment advisory and professional fees............................. 12
Writedown of assets in connection with consolidation of duplicative
facilities........................................................... 53
Costs of information systems consolidations, primarily related to the
writedown of assets.................................................. 42
Other................................................................. 12
----
$159
====
</TABLE>
1993
In the third quarter of 1993, the following pretax charges were recorded in
connection with the Galen Merger (dollars in millions):
<TABLE>
<S> <C>
Employee benefit and certain severance actions........................ $ 47
Investment advisory and professional fees............................. 15
Writedown of assets in connection with consolidation of duplicative
facilities........................................................... 63
Administrative facility asset writedowns and conversion costs
associated
with the transaction................................................. 16
Provision for loss on planned sales of assets......................... 10
----
$151
====
</TABLE>
26
<PAGE>
COLUMBIA/HCA HEALTHCARE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 9 -- OTHER BUSINESS COMBINATIONS
During the past three years, Columbia/HCA has acquired various hospitals and
related ancillary health care facilities (or controlling interests in such fa-
cilities), all of which have been accounted for by the purchase method. Ac-
cordingly, the aggregate purchase price of these transactions has been allo-
cated to tangible and identifiable intangible assets acquired and liabilities
assumed based upon their respective fair values. The consolidated financial
statements include the accounts of acquired entities since the respective ac-
quisition dates.
The following is a summary of acquisitions consummated during the last three
years under the purchase method of accounting (excluding the MCA and EPIC
Mergers) (dollars in millions):
<TABLE>
<CAPTION>
1995 1994 1993
------- ----- -----
<S> <C> <C> <C>
Number of hospitals...................................... 29 12 6
Number of licensed beds.................................. 5,647 3,065 1,297
Purchase price information:
Fair value of assets acquired.......................... $ 1,816 $ 608 $ 254
Fair value of liabilities assumed...................... (148) (63) (50)
------- ----- -----
Net assets acquired.................................. 1,668 545 204
Net assets sold in exchange for acquired properties.... - (45) -
Contributions from minority partners................... (331) (124) (28)
Other.................................................. (4) (6) (9)
------- ----- -----
Net cash paid........................................ $ 1,333 $ 370 $ 167
======= ===== =====
</TABLE>
The purchase price paid in excess of the fair value of identifiable net as-
sets of acquired entities included in the table above aggregated $418 million
in 1995, $118 million in 1994 and $18 million in 1993.
The pro forma effect of these acquisitions on Columbia/HCA's results of op-
erations prior to consummation was not significant.
NOTE 10 -- PRO FORMA INFORMATION
The following unaudited pro forma information reflects the combined operat-
ing results of Columbia/HCA, MCA and EPIC as if the MCA Merger and EPIC Merger
had occurred at the beginning of the periods indicated (dollars in millions,
except per share data).
<TABLE>
<CAPTION>
1994 1993
------- -------
<S> <C> <C>
Revenues....................................................... $15,222 $14,157
Income from continuing operations.............................. 950 711
Net income..................................................... 923 528
Earnings per common and common equivalent share:
Income from continuing operations............................ $ 2.13 $ 1.60
Net income................................................... 2.07 1.18
</TABLE>
27
<PAGE>
COLUMBIA/HCA HEALTHCARE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 11 -- INCOME TAXES
Provision for income taxes consists of the following (dollars in millions):
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Current:
Federal..................................................... $594 $447 $463
State....................................................... 106 83 89
---- ---- ----
700 530 552
---- ---- ----
Deferred:
Federal..................................................... 12 70 (60)
State....................................................... 3 11 -
---- ---- ----
15 81 (60)
---- ---- ----
$715 $611 $492
==== ==== ====
A reconciliation of the federal statutory rate to the effective income tax
rate follows:
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Federal statutory rate........................................ 35.0% 35.0% 35.0%
State income taxes, net of federal income tax benefit......... 4.0 4.0 4.7
Costs in excess of net assets acquired........................ 1.6 1.3 1.2
Other items, net.............................................. (0.4) (0.6) (0.4)
---- ---- ----
Effective income tax rate..................................... 40.2% 39.7% 40.5%
==== ==== ====
</TABLE>
A summary of deferred income taxes by source included in the consolidated
balance sheet at December 31 follows (dollars in millions):
<TABLE>
<CAPTION>
1995 1994
------------------ ------------------
ASSETS LIABILITIES ASSETS LIABILITIES
------ ----------- ------ -----------
<S> <C> <C> <C> <C>
Depreciation.............................. $ - $ 870 $ - $ 887
Long-term debt............................ - 21 - 22
Professional liability risks.............. 409 - 366 -
Doubtful accounts......................... 216 - 216 -
Property losses........................... 34 - 46 -
Cash basis................................ - 18 - 39
Compensation.............................. 55 - 63 -
Capitalized leases........................ 19 - 19 -
Other..................................... 335 350 362 346
------ ------ ------ ------
$1,068 $1,259 $1,072 $1,294
====== ====== ====== ======
</TABLE>
Deferred income taxes totaling $379 million and $314 million at December 31,
1995 and 1994, respectively, are included in other current assets. Noncurrent
deferred income taxes, included in deferred taxes and other liabilities, to-
taled $570 million and $536 million at December 31, 1995 and 1994, respective-
ly.
At December 31, 1995, federal and state net operating loss carryforwards
(expiring in years 1996 through 2011) available to offset future taxable
income approximated $99 million and $446 million, respectively. Utilization of
net operating loss carryforwards in any one year may be limited and, in
certain cases, result in a reduction of intangible assets. Net deferred tax
assets included in the table above related to such carryforwards are not
significant.
28
<PAGE>
COLUMBIA/HCA HEALTHCARE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 11 -- INCOME TAXES (CONTINUED)
The Internal Revenue Service (the "IRS") has issued statutory notices of de-
ficiency in connection with its examination of HCA's federal income tax re-
turns for 1981 through 1988. Columbia/HCA is currently contesting these
claimed deficiencies in the United States Tax Court. The IRS has proposed cer-
tain adjustments in connection with its examination of HCA's 1989 and 1990
federal income tax returns. Columbia/HCA is currently contesting the 1989 and
1990 adjustments with the IRS. In August 1995, the IRS issued a statutory no-
tice of deficiency in connection with its examination of HCA's 1991 federal
income tax return. Columbia/HCA is currently contesting the 1991 claimed defi-
ciency in the United States Court of Federal Claims. The following is a dis-
cussion of certain disputed items and information on the settlement of certain
items.
1981-1988 Tax Litigation
A Tax Court decision is expected in 1996 regarding disputes over the valua-
tion of the Healthtrust preferred stock and stock purchase warrants HCA re-
ceived in connection with the sale of certain of its subsidiaries to
Healthtrust in 1987, HCA's method of calculating its deduction for doubtful
accounts, the depreciable lives utilized by HCA for constructed hospital fa-
cilities, investment tax credits, vacation pay deductions and income from for-
eign operations. The IRS is claiming an additional $190 million in income
taxes and $256 million in interest through December 31, 1995 with respect to
these issues.
A Tax Court decision is also expected in 1996 regarding HCA's claim that in-
surance premiums paid to its wholly owned insurance subsidiary ("Parthenon")
are deductible. Through December 31, 1995, Columbia/HCA is seeking a refund
totaling $63 million in income taxes and $122 million in interest.
Leveraged Buy-out Expenses
The IRS has proposed the capitalization of various expenses incurred in con-
nection with HCA's 1989 leveraged buy-out transaction, which HCA deducted in
calculating taxable income for the years 1989-1991. If the IRS prevails on
these issues, Columbia/HCA would owe additional income taxes of $95 million
and interest of $50 million through December 31, 1995.
Tax Court Decision-Method of Accounting
In March 1996, the Tax Court ruled in Columbia/HCA's favor that the use of a
method of accounting, primarily based upon the cash method, by certain of
HCA's subsidiaries in calculating taxable income for the years 1981-1986
clearly reflected taxable income. Had the IRS prevailed on this issue,
Columbia/HCA would have owed $68 million in income taxes and $546 million in
interest as of December 31, 1995. This ruling did not have any effect on the
results of operations.
Partial Settlement
In February 1996, HCA and the IRS filed a stipulation of settled issues with
the Tax Court regarding the 1981-1988 tax litigation. As a result of the par-
tial settlement, the following issues have been resolved: (1) in connection
with hospitals acquired by HCA in 1981 and 1985, the allocation of costs to
identifiable intangibles with ascertainable useful lives and to goodwill; (2)
HCA's use of straight-line rather than accelerated depreciation to calculate
its basis in the stock of the subsidiaries sold to Healthtrust in 1987; and
(3) certain investment tax and foreign tax credits which had been previously
disallowed by the IRS. Had the IRS prevailed on these issues, Columbia/HCA
would have owed an additional $197 million in income taxes and $289 million in
interest as of December 31, 1995. Columbia/HCA paid $38 million in income
taxes and $49
29
<PAGE>
COLUMBIA/HCA HEALTHCARE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 11 -- INCOME TAXES (CONTINUED)
million of interest ($75 million paid in March 1994 and $12 million paid in
November 1995) in settlement of these issues. The payment and settlement of
these items did not have any effect on the results of operations.
Management believes that HCA properly reported its income and paid its taxes
in accordance with applicable laws and agreements established with the IRS
during previous examinations, and that final resolution of these disputes will
not have a material adverse effect on the results of operations or financial
position of Columbia/HCA.
NOTE 12 -- PROFESSIONAL LIABILITY RISKS
Columbia/HCA insures a substantial portion of its professional liability
risks through a wholly owned insurance subsidiary. Provisions for such risks
underwritten by the subsidiary, including expenses incident to claim
settlements, were $177 million for 1995, $134 million for 1994 and $132
million for 1993. Amounts funded to the insurance subsidiary were $270 million
for 1995 (including $83 million of previously unfunded risks related to prior
years), $253 million for 1994 (including $146 million related to prior years)
and $62 million for 1993.
Allowances for professional liability risks, included principally in de-
ferred taxes and other liabilities, were $1.2 billion at both December 31,
1995 and 1994.
Columbia/HCA adopted the provisions of SFAS 115 on December 31, 1993. Ac-
cordingly, stockholders' equity was increased by $27 million (net of deferred
income taxes) to reflect the net unrealized gain on investments (all held by
the wholly owned insurance subsidiary) classified as available for sale. The
adoption of SFAS 115 had no effect on earnings in 1993. During 1995 and 1994,
stockholders' equity was increased by $31 million and decreased by $30 mil-
lion, respectively, to reflect the change in net unrealized holding gains and
losses on securities classified as available for sale. Prior to 1995
Columbia/HCA classified certain debt securities as held to maturity (none of
which were sold or transferred before actual maturity). Columbia/HCA no longer
classifies debt securities as held to maturity.
30
<PAGE>
COLUMBIA/HCA HEALTHCARE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 12 -- PROFESSIONAL LIABILITY RISKS (CONTINUED)
A summary of the insurance subsidiary's investments at December 31 follows
(dollars in millions):
<TABLE>
<CAPTION>
1995
----------------------------------------
UNREALIZED AMOUNTS
AMORTIZED ------------------ FAIR
COST GAINS LOSSES VALUE
--------- --------- --------- ------
<S> <C> <C> <C> <C>
Available for sale:
Fixed maturities:
United States Government....... $ 23 $ 1 $ - $ 24
States and municipalities...... 434 16 - 450
Mortgage-backed securities..... 103 2 (1) 104
Corporate and other............ 62 2 - 64
Money market funds............. 195 - - 195
Commercial paper............... 81 - - 81
Redeemable preferred stocks.... 35 - - 35
------ --------- --------- ------
933 21 (1) 953
------ --------- --------- ------
Equity securities:
Perpetual rate preferred
stocks........................ 8 1 - 9
Common stocks.................. 185 30 (6) 209
------ --------- --------- ------
193 31 (6) 218
------ --------- --------- ------
$1,126 $ 52 $ (7) 1,171
====== ========= =========
Amounts classified as current
assets............................ (100)
------
Investment carrying value.......... $1,071
======
</TABLE>
<TABLE>
<CAPTION>
1994
-------------------------------------
UNREALIZED AMOUNTS
AMORTIZED ------------------ FAIR
COST GAINS LOSSES VALUE
--------- -------- --------- -----
<S> <C> <C> <C> <C>
Held to maturity:
United States Government
obligations........................ $ 5 $ - $ - $ 5
Commercial paper.................... 192 - - 192
---- -------- --------- ----
197 - - 197
---- -------- --------- ----
Available for sale:
Fixed maturities:
United States Government.......... 38 - (1) 37
States and municipalities......... 360 3 (12) 351
Mortgage-backed securities........ 57 - (3) 54
Corporate and other............... 79 - (3) 76
Money market funds................ 58 - - 58
Redeemable preferred stocks....... 16 - (1) 15
---- -------- --------- ----
608 3 (20) 591
---- -------- --------- ----
Equity securities:
Perpetual rate preferred stocks... 29 1 - 30
Common stocks..................... 144 19 (8) 155
---- -------- --------- ----
173 20 (8) 185
---- -------- --------- ----
$978 $ 23 $ (28) 973
==== ======== =========
Amounts classified as current assets.. (85)
----
Investment carrying value............. $888
====
</TABLE>
31
<PAGE>
COLUMBIA/HCA HEALTHCARE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 12 -- PROFESSIONAL LIABILITY RISKS (CONTINUED)
The cost and estimated fair value of debt and equity securities at December
31, 1995 by contractual maturity are shown below (dollars in millions). Ex-
pected and contractual maturities will differ because the issuers of certain
securities may have the right to prepay or otherwise redeem such obligations
without penalty.
<TABLE>
<CAPTION>
AMORTIZED FAIR
COST VALUE
--------- ------
<S> <C> <C>
Available for sale:
Due in one year or less.................................. $ 343 $ 343
Due after one year through five years.................... 103 105
Due after five years through ten years................... 191 198
Due after ten years...................................... 296 307
------ ------
933 953
Equity securities........................................ 193 218
------ ------
$1,126 $1,171
====== ======
</TABLE>
The fair value of the subsidiary's investments is based generally on quoted
market prices.
The average maturity of the above investments (excluding common stocks) ap-
proximated 4.4 years at December 31, 1995 and the tax equivalent yield on such
investments averaged 9% for 1995, 8% for 1994 and 10% for 1993. Tax equivalent
yield is the rate earned on invested assets, excluding unrealized gains and
losses, adjusted for the benefit of nontaxable investment income.
Sales of securities for the years ended December 31 are summarized below
(dollars in millions). The cost of securities sold is based on the specific
identification method.
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Fixed maturities:
Cash proceeds.................................................. $427 $134 $185
Gross realized gains........................................... 3 1 4
Gross realized losses.......................................... 1 2 -
Equity securities:
Cash proceeds.................................................. $149 $ 98 $106
Gross realized gains........................................... 33 16 19
Gross realized losses.......................................... 8 5 10
</TABLE>
32
<PAGE>
COLUMBIA/HCA HEALTHCARE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 13 -- LONG-TERM DEBT
Capitalization
A summary of long-term debt at December 31 follows (dollars in millions):
<TABLE>
<CAPTION>
1995 1994
------ ------
<S> <C> <C>
Senior collateralized debt, 3.5% to 18% (rates generally fixed)
payable in periodic installments through 2034................... $ 203 $ 239
Senior debt, 3.0% to 13.3% (rates generally fixed) payable in
periodic installments through 2095.............................. 3,774 1,522
Senior debt (floating rates averaging 5.9%) payable in periodic
installments through 1997....................................... 270 299
Commercial paper (floating rates averaging 6.1%)................. 2,607 1,630
Commercial paper (rates generally fixed averaging 6.3%).......... 300 -
Bank credit agreements (floating rates averaging 6.1%)........... 56 709
Bank line of credit (floating rates averaging 6.0%).............. 49 149
Subordinated debt, 6.8% to 11.5% (rates generally fixed) payable
in periodic installments through 2015........................... 121 1,124
------ ------
Total debt, average life of ten years (rates averaging 7.1%)..... 7,380 5,672
Amounts due within one year...................................... 243 124
------ ------
Long-term debt................................................... $7,137 $5,548
====== ======
</TABLE>
Credit Facilities
Subsequent to December 31, 1995, Columbia/HCA amended its revolving credit
agreements (the "Credit Facilities") from an aggregate amount of $3.75 billion
to $4.0 billion. The Credit Facilities comprise a $2.5 billion five-year re-
volving credit agreement and a $1.5 billion 364-day revolving credit agree-
ment. The Credit Facilities were established to support Columbia/HCA's commer-
cial paper programs and replace prior revolving credit agreements. Interest is
payable generally at either LIBOR plus .18% to .35% (depending on
Columbia/HCA's credit rating), the prime lending rate or a competitive bid
rate. The Credit Facilities contain customary covenants which include (i) lim-
itations on additional debt, (ii) limitations on sales of assets, mergers and
changes of ownership and (iii) maintenance of certain interest coverage ra-
tios.
Significant Financing Activities
HEALTHTRUST MERGER
In connection with the Healthtrust Merger, Columbia/HCA completed exchange
offers for substantially all of Healthtrust's $1.0 billion subordinated notes
and debentures. Columbia/HCA defeased the remaining $44 million of unexchanged
subordinated notes and debentures in the third quarter. Additionally, in con-
nection with the Healthtrust Merger, $706 million of borrowings under the
Healthtrust $1.2 billion credit agreement were refinanced.
1995
During 1995 Columbia/HCA issued $150 million of 6.63% notes due 2002; $100
million of 6.73% notes due 2003; $125 million of 6.87% notes due 2003; $150
million of 8.7% notes due 2010; $150 million of 9.0% notes due 2014; $150 mil-
lion of 7.19% debentures due 2015; $125 million of 7.58% debentures due 2025;
$150 million of 7.05% debentures due 2027 and $200 million of 7.5% debentures
due 2095.
33
<PAGE>
COLUMBIA/HCA HEALTHCARE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 13 -- LONG-TERM DEBT (CONTINUED)
1994
During 1994 Columbia/HCA issued $175 million of 6.5% notes due 1999; $50
million of 7.6% notes due 2001; $50 million of 8.02% notes due 2002; $100 mil-
lion of 8.13% notes due 2003; $150 million of 7.15% notes due 2004; $200 mil-
lion of 10.25% notes due 2004; $55 million of 8.05% notes due 2006; $150 mil-
lion of 8.85% notes due 2007; and $150 million of 8.36% notes due 2024. Addi-
tionally, Columbia/HCA issued $100 million and $200 million of LIBOR-based
notes with final maturities of 1996 and 1997, respectively.
During 1994 a $40 million 9% subordinated mandatory convertible note due
1999 was converted into approximately 2.2 million shares of Columbia/HCA com-
mon stock.
1993
During 1993 Columbia/HCA issued $150 million of 6.13% notes due 2000, $300
million of 8.75% subordinated debentures due 2005 and $150 million of 7.5%
notes due 2023.
General Information
Borrowings under the commercial paper programs are classified as long-term
debt due to the credit available under the revolving credit agreements dis-
cussed above and management's intention to refinance these borrowings on a
long-term basis.
Maturities of long-term debt in years 1997 through 2000 are $250 million,
$120 million, $218 million and $411 million, respectively. Such amounts re-
flect maturities of debt for certain short-term debt classified as long-term,
based upon maturities under the revolving credit agreements. Approximately 4%
of Columbia/HCA's property and equipment is pledged on senior collateralized
debt.
During the past three years Columbia/HCA has reduced interest costs and
eliminated certain restrictive covenants by refinancing or prepaying high in-
terest rate debt, primarily through the use of existing cash and cash equiva-
lents and issuance of long-term debt, commercial paper and equity. Amounts re-
financed or prepaid totaled $1.8 billion in 1995, $2.2 billion in 1994 and
$1.4 billion in 1993. After-tax losses from refinancing activities aggregated
$103 million ($.23 per share) in 1995, $115 million ($.27 per share) in 1994
and $97 million ($.24 per share) in 1993.
The estimated fair value of Columbia/HCA's long-term debt was $7.7 billion
and $5.7 billion at December 31, 1995 and 1994, respectively, compared to car-
rying amounts aggregating $7.4 billion and $5.7 billion, respectively. The es-
timate of fair value is based upon the quoted market prices for the same or
similar issues of long-term debt with the same remaining maturities.
34
<PAGE>
COLUMBIA/HCA HEALTHCARE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 14 -- CONTINGENCIES
Management continually evaluates contingencies based upon the best available
evidence. In addition, allowances for loss are provided currently for disputed
items that have continuing significance, such as certain third-party reim-
bursements and deductions that continue to be claimed in current cost reports
and tax returns.
Management believes that allowances for loss have been provided to the ex-
tent necessary and that its assessment of contingencies is reasonable. Manage-
ment believes that resolution of contingencies will not materially affect
Columbia/HCA's financial position or results of operations.
Principal contingencies are described below:
Revenues -- Certain third-party payments are subject to examination by
agencies administering the programs. Columbia/HCA is contesting certain is-
sues raised in audits of prior year cost reports.
Professional liability risks -- Columbia/HCA has provided for loss for
professional liability risks based upon actuarially determined estimates.
Actual settlements and expenses incident thereto may differ from the provi-
sions for loss.
Income taxes -- Columbia/HCA is contesting adjustments proposed by the
IRS.
Spinoff -- Certain subsidiaries of Columbia/HCA are parties to risk-shar-
ing arrangements with Humana.
Regulatory review -- Federal regulators are investigating certain finan-
cial arrangements with physicians at two psychiatric hospitals.
Litigation -- Various suits and claims arising in the ordinary course of
business are pending against Columbia/HCA.
35
<PAGE>
COLUMBIA/HCA HEALTHCARE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 15 -- CAPITAL STOCK
The terms and conditions associated with each class of Columbia/HCA common
stock are substantially identical except for voting rights. All nonvoting com-
mon stockholders may convert their shares on a one-for-one basis into voting
common stock, subject to certain limitations. In addition, certain voting com-
mon stockholders may convert their shares on a one-for-one basis into nonvot-
ing common stock.
Columbia/HCA has plans under which options to purchase common stock may be
granted to officers, employees and directors. Generally options have been
granted at not less than the market price on the date of grant. Exercise pro-
visions vary, but most options are exercisable in whole or in part beginning
one to four years after grant and ending four to fifteen years after grant.
Activity in the plans is summarized below (share amounts in thousands):
<TABLE>
<CAPTION>
SHARES UNDER OPTION PRICE
OPTION PER SHARE
------------ ----------------
<S> <C> <C>
Balances, December 31, 1992....................... 16,213 $ 0.22 to $25.71
Granted......................................... 2,613 0.01 to 33.38
Exercised....................................... (4,123) 0.01 to 23.37
Cancelled or lapsed............................. (852) 0.22 to 25.71
------
Balances, December 31, 1993....................... 13,851 0.01 to 33.38
Granted......................................... 5,271 34.24 to 43.38
Conversion of MCA stock options................. 938 5.64 to 57.16
Exercised....................................... (1,921) 0.22 to 37.63
Cancelled or lapsed............................. (1,574) 0.22 to 57.16
------
Balances, December 31, 1994....................... 16,565 0.01 to 57.16
Granted......................................... 6,267 39.77 to 48.75
Exercised....................................... (3,656) 0.01 to 47.04
Cancelled or lapsed............................. (1,586) 0.22 to 57.16
------
Balances, December 31, 1995....................... 17,590 $ 0.22 to $57.16
======
</TABLE>
At December 31, 1995, options for 5,519,900 shares were exercisable. Shares
of common stock available for future grants were 8,941,900 at December 31,
1995 and 14,075,200 at December 31, 1994.
Shares of common stock reserved for the employee stock purchase plan were
8,615,200 at December 31, 1995.
Columbia/HCA has adopted a stockholder rights plan under which common stock-
holders have the right to purchase Series A Preferred Stock in the event of
accumulation of or tender offer for certain percentages of Columbia/HCA's com-
mon stock. The rights will expire in 2003 unless redeemed earlier by
Columbia/HCA. Columbia/HCA has authorized 25 million shares of preferred
stock. No preferred shares have been issued.
In September 1993 the Board of Directors initiated a regular quarterly cash
dividend on the common stock of $.03 per share.
36
<PAGE>
COLUMBIA/HCA HEALTHCARE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 16 -- EMPLOYEE BENEFIT PLANS
Columbia/HCA maintains noncontributory defined contribution retirement plans
covering substantially all employees. Benefits are determined as a percentage
of a participant's earned income and are vested over specified periods of em-
ployee service. Retirement plan expense was $110 million for 1995, $107 mil-
lion for 1994 and $121 million for 1993. Amounts equal to retirement plan ex-
pense are funded annually.
Columbia/HCA maintains various contributory savings plans which are avail-
able to employees who meet certain minimum requirements. Certain of the plans
require that Columbia/HCA match an amount ranging from 25% to 100% of a par-
ticipant's contribution up to certain maximum levels. The cost of these plans
totaled $24 million for 1995, $39 million for 1994 and $33 million for 1993.
Columbia/HCA contributions are funded periodically during the year.
NOTE 17 -- ACCRUED EXPENSES
A summary of other accrued expenses at December 31 follows (dollars in mil-
lions):
<TABLE>
<CAPTION>
1995 1994
------ ------
<S> <C> <C>
Workers' compensation......................................... $ 130 $ 136
Taxes other than income....................................... 226 181
Professional liability risks.................................. 115 133
Employee benefit plans........................................ 185 187
Interest...................................................... 199 170
Other......................................................... 291 324
------ ------
$1,146 $1,131
====== ======
</TABLE>
37
<PAGE>
COLUMBIA/HCA HEALTHCARE CORPORATION
QUARTERLY CONSOLIDATED FINANCIAL INFORMATION
(UNAUDITED)
(DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
1995
------------------------------------
FIRST SECOND THIRD FOURTH
------ ------ ------ ------
<S> <C> <C> <C> <C>
Revenues............................... $4,380 $4,361 $4,371 $4,583
Net income (loss):
Before extraordinary charges (a)..... 358 78 274 354
Extraordinary charges on extinguish-
ments of debt....................... - (96) (7) -
------ ------ ------ ------
Net income (loss).................. 358 (18) 267 354
Per common share:
Earnings (loss):
Before extraordinary charges (a)... .80 .17 .61 .79
Extraordinary charges on extin-
guishments of debt................ - (.21) (.02) -
------ ------ ------ ------
Net income (loss)................ .80 (.04) .59 .79
Cash dividends....................... .03 .03 .03 .03
Market prices (b):
High............................... 44 1/4 46 49 7/8 54
Low................................ 35 3/8 38 5/8 42 1/2 46 5/8
<CAPTION>
1994
------------------------------------
FIRST SECOND THIRD FOURTH
------ ------ ------ ------
<S> <C> <C> <C> <C>
Revenues............................... $3,432 $3,521 $3,668 $3,922
Net income:
Before extraordinary charges (c)..... 187 243 213 286
Extraordinary charges on extinguish-
ments of debt....................... (92) - (23) -
------ ------ ------ ------
Net income......................... 95 243 190 286
Per common share:
Earnings:
Before extraordinary charges (c)... .45 .58 .49 .64
Extraordinary charges on extin-
guishments of debt................ (.22) - (.05) -
------ ------ ------ ------
Net income....................... .23 .58 .44 .64
Cash dividends....................... .03 .03 .03 .03
Market prices (b):
High............................... 45 1/4 43 44 43 3/4
Low................................ 33 1/4 36 1/2 38 1/4 33 1/2
</TABLE>
- --------
(a) Second quarter results include $235 million ($.53 per share) of costs re-
lated to the Healthtrust Merger and the consolidation of certain facili-
ties. See Note 8 of the Notes to Consolidated Financial Statements.
(b) Represents high and low sales prices of Columbia/HCA. Columbia/HCA common
stock is traded on the New York Stock Exchange (ticker symbol COL).
(c) First quarter results include $102 million ($.24 per share) of costs re-
lated to the HCA Merger. See Note 8 of the Notes to Consolidated Financial
Statements.
38
<PAGE>
REPORT OF MANAGEMENT
To our Stockholders
Management is responsible for the preparation, integrity and objectivity of
the consolidated financial statements and related notes. To meet these respon-
sibilities, management maintains a system of internal control intended to in-
sure that key employees adhere to the highest standards of personal and pro-
fessional integrity. Although no cost effective internal control system will
preclude all errors and irregularities, we believe the established system of
internal control provides reasonable assurance that the assets are safeguard-
ed, transactions are recorded in accordance with management's policies and the
financial information is reliable.
The consolidated financial statements of Columbia/HCA Healthcare Corporation
have been prepared in conformity with generally accepted accounting principles
and include amounts based upon our best estimates and judgments. These finan-
cial statements have been audited and reported on by our independent auditors,
Ernst & Young LLP, in accordance with generally accepted auditing standards.
The Audit Committee of the Board of Directors, consisting entirely of outside
directors, meets regularly with management, internal auditors and Ernst &
Young LLP and reviews audit plans and results as well as management's actions
taken in discharging responsibilities for accounting, financial reporting and
internal control. Ernst & Young LLP and the internal auditors have direct and
confidential access to the Audit Committee at all times to discuss the results
of their examinations.
Kenneth C. Donahey
Senior Vice President and Controller
REPORT OF INDEPENDENT AUDITORS
To the Board of Directors and Stockholders
Columbia/HCA Healthcare Corporation
We have audited the accompanying consolidated balance sheet of Columbia/HCA
Healthcare Corporation as of December 31, 1995 and 1994, and the related con-
solidated statements of income, stockholders' equity and cash flows for each
of the three years in the period ended December 31, 1995. These financial
statements are the responsibility of the Company's management. Our responsi-
bility is to express an opinion on these financial statements based on our au-
dits.
We conducted our audits in accordance with generally accepted auditing stan-
dards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of mate-
rial misstatement. An audit includes examining, on a test basis, evidence sup-
porting the amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement pre-
sentation. We believe that our audits provide a reasonable basis for our opin-
ion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Columbia/HCA
Healthcare Corporation at December 31, 1995 and 1994, and the consolidated re-
sults of their operations and their cash flows for each of the three years in
the period ended December 31, 1995 in conformity with generally accepted ac-
counting principles.
LOGO
Nashville, Tennessee ERNST & YOUNG LLP
February 14, 1996,
except for Note 11
as to which the date
is March 8, 1996
39
<PAGE>
EXHIBIT 21
ALABAMA
- -------
Alabama-Tennessee Health Network, Inc.
Birmingham Outpatient Surgical Center, Inc.
Columbia/HCA Montgomery Healthcare System, Inc.
Community Hospital of Andalusia, Inc. d/b/a
Andalusia Hospital
Crestwood Hospital & Nursing Home, Inc. d/b/a
Crestwood Hospital
Doctor's Hospital of Mobile, Inc.
East Montgomery Medical Center, Inc. d/b/a
East Montgomery Medical Center
Florence Hospital, Inc. d/b/a
Florence Hospital
Four Rivers Medical Center PHO, Inc.
Galen Medical Corporation
HCA Health Services of Alabama, Inc.
Huntsville Physical Therapy, Inc. d/b/a
Sports Therapy & Rehabilitation of Huntsville
Maynor Eye Center, Inc.
Medical Center Shoals, Inc. d/b/a
Medical Center Shoals
Montgomery Regional Medical Center, Inc. d/b/a
Montgomery Regional Medical Center
North Alabama Healthcare System, Inc.
Northwest Medical Center, Inc. d/b/a
Northwest Medical Center
Northwest Medical Center Home Health
Diabetic Care Center
Behavioral Health Systems of North Broward
Olsten Kimberly Quality Care (Margate, FL)
Selma Medical Center Hospital, Inc. d/b/a
Four Rivers Medical Center
Linden Clinic
<PAGE>
Surgicare of Huntsville, Inc.
Surgicare of Mobile, Inc.
Surgicare of Montgomery, Inc.
ALASKA
- ------
Chugach Physical Therapy, Inc. d/b/a
Chugach Physical Therapy & Fitness Center
Columbia Behavioral Healthcare, Inc.
ARIZONA
- -------
Arizona ASC Management, Inc.
Galen of Arizona, Inc. d/b/a
Doctors Medical Plaza-South
Healthwest Regional Medical Center
Paradise Valley Hospital
Paradise Valley HomeCare
Columbia HomeCare
HCA Health Services of Arizona, Inc.
Hospital Corporation of Arizona d/b/a
Columbia El Dorado Hospital
ReHab Works
Hospital Corporation of Northwest, Inc.
HTI Tucson Rehabilitation, Inc.
Paradise Valley Psychiatric Services, Inc. d/b/a
Senior Horizons
Paradise Valley Psychiatric Services
Samaritan Surgicenters of Arizona, L.L.C.
Surgicare of Phoenix, Inc.
Surgicenter of Glendale, Inc. d/b/a
Glendale Surgicenter
Surgicenters of America, Inc. d/b/a
Surgicenter Pain Unit
Surgicenter
Tri-City Med, Inc. d/b/a
Tri-City Med Ambulance
<PAGE>
ARKANSAS
- --------
Central Arkansas Provider Network, Inc.
Columbia El Dorado, Inc.
Columbia Health System of Arkansas, Inc.
DeQueen Health Services, Inc. d/b/a
Community Hospital of DeQueen
DeQueen Regional Medical Center
Physician Management Services of DeQueen
HCA Health Services of Arkansas, Inc.
HCMH, Inc. d/b/a
Medical Park Hospital
MCSA, L.L.C. d/b/a
Medical Center of South Arkansas
Surgicare Outpatient Center of Ft. Smith, Inc.
BERMUDA
- -------
Parthenon Insurance Company, Limited
CALIFORNIA
- ----------
Amisub (Westside), Inc.
Birthing Facility of Beverly Hills, Inc.
C.H.L.H., Inc.
CH Systems
Chino Community Hospital Corporation, Inc. d/b/a
Chino Valley Medical Center
The Birthplace A Family Experience
Columbia Psychiatric MSO, LLC
Columbia/HCA San Clemente, Inc.
Community Hospital of Gardena Corporation, Inc.
EyeCare Providers of California, Inc.
<PAGE>
Galen-Soch, Inc.
HCA Allied Health Services of San Diego, Inc.
HCA Health Services of California, Inc.
HCA Hospital Services of San Diego, Inc.
Healdsburg General Hospital, Inc.
Huntington Intercommunity Hospital d/b/a
Huntington Beach Diagnostic Imaging Center
Columbia Huntington Beach Hospital and Medical Center
Las Encinas Hospital d/b/a
Columbia Las Encinas Hospital
LE Corporation d/b/a
The Oaks Retirement Center
Los Robles Regional Medical Center d/b/a
Los Robles Regional Medical Center
MCA Investment Company
Mission Bay Memorial Hospital, Inc.
Notami Hospitals of California, Inc. d/b/a
Healdsburg General Hospital
Mission Bay Memorial Hospital
The Good Samaritan Hospital of Santa Clara
San Jose Medical Center
South Valley Hospital
Good Samaritan Health System Home Care & Hospice
PPO Alliance
Psychiatric Company of California, Inc.
Samaritan Medical Center-San Clemente
Samaritan Medical Center - San Clemente, L.L.C.
San Joaquin Surgical Center, Inc.
Sebastopol Hospital Corporation d/b/a
Palm Drive Hospital
SLCO, Inc. d/b/a
San Leandro Hospital
Southwest Surgical Clinic, Inc.
<PAGE>
Surgical Centers of Southern California, Inc.
Surgicare of Anaheim, Inc.
Surgicare of Beverly Hills, Inc.
Surgicare of La Veta, Inc.
Surgicare of Laguna Hills, Inc.
Surgicare of Los Gatos, Inc.
Surgicare of Montebello, Inc.
Surgicare of North Anaheim, Inc.
Surgicare of Oceanside, Inc.
Surgicare of Orange, Inc.
Surgicare of San Leandro, Inc.
Surgicare of West Hills, Inc.
Sutter Corporation
Ukiah Hospital Corporation
Visalia Community Hospital, Inc.
West Anaheim Community Hospital d/b/a
Columbia West Anaheim Medical Center
West Hills Hospital d/b/a
West Hills Regional Medical Center
West Los Angeles Physicians' Hospital, Inc.
Westminster Community Hospital d/b/a
Humana Hospital-Westminster
Westside Hospital
Woodward Park Surgicenter, Inc.
COLORADO
- --------
Colorado Healthcare Management, Inc.
<PAGE>
Columbia - HealthOne, L.L.C.
Aurora Presbyterian Hospital
Aurora Regional Medical Center
Bethesda PsycHealth
Columbine Psychiatric Center
North Surburban Medical Center
Presbyterian/St. Luke's Medical Center
Rocky Mountain Rehabilitation Institute
Rose Medical Center
Spalding Rehabilitation Hospital
Swedish Medical Center
Columbia/HCA of Denver, Inc.
Columbia/Rose Health System, Inc.
Columbine Psychiatric Center, Inc.
EyeCare Providers of Colorado, Inc.
Galen of Aurora, Inc. d/b/a
Aurora Physicians Building
HCA Health Services of Colorado, Inc.
Health Care Indemnity, Inc.
Lakewood Surgicare, Inc.
MOVCO, Inc.
Rose Medical Center, Inc.
Surgicare of Denver Mid-Town, Inc.
Surgicare of Southeast Denver, Inc.
DELAWARE
- --------
Alice Physicians and Surgeons Hospital, Inc. d/b/a
Columbia Alice Physicians & Surgeons Hospital
AlternaCare Corp.
Alvin Community Hospital, Inc.
Columbia Alvin Medical Center
Amedicorp, Inc.
American Medicorp Development Co.
<PAGE>
BMC-CT, Inc.
CBH-CT, Inc.
CHC Finance Co.
CHC Holdings, Inc.
CHC Payroll Agent, Inc.
Coastal Bend Hospital, Inc.
Coastal Healthcare Services, Inc.
Columbia Auto Laboratories, Inc.
Columbia Healthcare Network of Central Kentucky, Inc.
Columbia Homecare Group, Inc. d/b/a
Lifeway Health Services
Columbia Hospital Corporation of Fort Worth
Columbia Hospital Corporation of Houston
Columbia Hospital Corporation-Delaware
Columbia/HCA Healthcare Corporation
Columbia/HCA Middle East Management Company
CoralStone Management, Inc.
Critical Care America, Inc.
Critical Care America-East, Inc.
Critical Care America-West, Inc.
Danforth Hospital, Inc. d/b/a
Columbia Mainland Medical Center
Delaware Psychiatric Company, Inc. d/b/a
Rockford Center
Denton Regional Medical Center, Inc. d/b/a
Regional Home Care - Flower Mound
DHL Corporation
DHL Management, Inc.
<PAGE>
Doctors Hospital of Augusta, Inc. d/b/a
Augusta Diagnostic Associates
Doctors' Hospital of Laredo, Inc.
Drake Development Company
Drake Development Company II
Drake Development Company III
Drake Development Company IV
Drake Development Company V
Drake Development Company VI
Drake Management Company
EarthStone HomeHealth Company
Eastside Hospital Holding, Inc.
Edison Homes-Southeast, Inc.
EPIC Development, Inc.
EPIC Diagnostic Centers, Inc. d/b/a
First Care Clinics
EPIC Diagnostic Management Company
EPIC Healthcare Group, Inc.
EPIC Healthcare Management Company
EPIC Holdings, Inc.
EPIC Master Leasing, Inc.
EPIC Surgery Centers, Inc.
EPIC Technology, Inc.
Extendicare Properties, Inc.
Forest Park Surgery Pavilion, Inc.
Fort Bend Hospital, Inc. d/b/a
Columbia Fort Bend Medical Center
Galen BH, Inc.
<PAGE>
Galen Health Care, Inc.
Galen Hospital Alaska, Inc. d/b/a
Columbia Alaska Regional Hospital
Galen Hospital Corporation, Inc.
Galendeco, Inc.
General Health Services, Inc. d/b/a
Edward White Hospital
GPCH Management, Inc.
GPCH-GP, Inc.
Greystone Healthcare, Inc.
H.H.U.K., Inc.
HCA, Inc.
HCA Health Services of Midwest, Inc. d/b/a
Columbia Doctors Hospital
HCA Healthcare Alliance, Inc.
HCA - Hospital Corporation of America
HCA Holding Corporation
HCA Investments, Inc.
HCA Psychiatric Company (DE)
HCA Wesley Rehabilitation Hospital, Inc.
Health Services (Delaware), Inc.
Health Services Acquisition Corp.
Healthcare Technology Assessment Corporation
Healthtrust, Inc. - The Hospital Company
Healthtrust Texas Management Services, Inc.
Hearthstone Home Health, Inc.
Hospital Development Properties, Inc. d/b/a
Murchison Medical Plaza
<PAGE>
Katy Medical Center, Inc. d/b/a
Columbia Katy Medical Center
Lake City Health Centers, Inc.
Loon Investments, Inc.
Mallard Finance Company
Managed Prescription Network, Inc.
Medical Arts Corporation
Medical Arts Hospital of Texarkana, Inc. d/b/a
Medical Arts Hospital - Texarkana
Medical Care America, Inc.
Medical Care Financial Services Corp.
Medical Care International, Inc.
Medical Care Real Estate Finance, Inc.
Medical Corporation of America, Inc.
Medical Plaza Hospital, Inc. d/b/a
Columbia Medical Center of Sherman
Medical Specialties, Inc. d/b/a
Coral Springs Family Medicine
Medistone Healthcare Ventures, Inc. d/b/a
Tomlinson Health Services
Medistone Management Company
MediVision, Inc.
MediVision of Mecklenburg County, Inc.
MediVision of Tampa, Inc. d/b/a
Tampa Eye Surgery Center
Mid-continent Health Services, Inc.
Mobile Corps., Inc.
MRT&C, INC.
North Texas Medical Center, Inc.
<PAGE>
Northwest Surgicare, Inc.
Notami (Texas), Inc.
Notami Holdco, Inc.
Notami Service Company
NTMC Management Company
NTMC Venture, Inc.
Orlando Outpatient Surgical Center, Inc.
Paragon SDS, Inc.
Paragon WSC, Inc.
Parkway Cardiac Center Management Company
Parkway Hospital, Inc.
PMM, Inc. d/b/a
Augusta Womens Medical Group
Primary Medical Management, Inc.
PSS-GP, Inc.
Riverside Hospital, Inc. d/b/a
Columbia Northwest Hospital
Round Rock Hospital, Inc. d/b/a
Round Rock Hospital
Suburban Medical Center at Hoffman Estates, Inc. d/b/a
Hoffman Estates Medical Center
Sun Bay Medical Office Building, Inc.
Surgicare Corporation
The Coltree Corporation
Westbury Hospital, Inc.
DISTRICT OF COLUMBIA
- --------------------
National Association of Family and Friends
<PAGE>
FLORIDA
- -------
Bay Hospital, Inc. d/b/a
Gulf Coast Hospital
Emerald Shores Medical Center
Big Cypress Medical Center, Inc.
Bonita Bay Surgery Center, Inc.
Broward Healthcare System, Inc.
Cape Coral Surgery Center, Inc.
CCH Management, Inc.
CCH-GP, Inc.
Cedarcare, Inc.
Cedars BTW Program, Inc.
Central Florida Regional Hospital, Inc. d/b/a
Central Florida Regional Hospital
Central Florida Home Care
Charlotte Community Hospital, Inc.
Charlotte County Physician - Hospital Organization, Inc.
Collier County Home Health Agency, Inc.
Columbia Credentialing Services, Inc.
Columbia Hospital Corporation of Central Miami
Columbia Hospital Corporation of Kendall
Columbia Hospital Corporation of Miami
Columbia Hospital Corporation of Miami Beach
Columbia Hospital Corporation of North Miami Beach
Columbia Hospital Corporation of South Broward d/b/a
Westside Regional Medical Center
Olsten Kimberly Quality Care (Plantation, FL)
Columbia Hospital Corporation of South Dade
Columbia Hospital Corporation of South Florida d/b/a
Florida Physicians Group
<PAGE>
Columbia Hospital Corporation of South Miami
Columbia Hospital Corporation of Tamarac
Columbia Hospital Corporation - SMM
Columbia Jacksonville Healthcare System, Inc.
Columbia Park Healthcare System, Inc.
Columbia Park Medical Center, Inc. d/b/a
Columbia Park Medical Center
Orlando Home Care
Columbia Staffing Services, Inc.
Columbia-Pinellas Long-Term, Inc.
Columbia/HCA of Treasure Coast, Inc.
Community Hospital of the Palm Beaches, Inc. d/b/a
Columbia Hospital
The Arthritis Center at Palm Beaches Medical Ctr.
Olsten Kimberly Quality Care (West Palm Beach, FL)
Community Hospitals of Galen, Inc. d/b/a
Cypress Medical Office Building
Daytona Medical Center, Inc. d/b/a
Daytona Medical Center
NSB Medical Associates
Ormond Beach Medical Associates
Deering Marketing and Communication Services, Inc.
Doctors Hospital Physician-Hospital Organization, Inc.
Doctors OB Clinic, Inc.
Doctors Osteopathic Medical Center, Inc. d/b/a
Gulf Coast Hospital
Olsten Kimberly Quality Care (Miami Lakes, FL)
Able Care (Ft. Myers)
Olsten Kimberly Quality Care (Ft. Myers, FL)
Doctors Pediatric Clinic, Inc.
Doctors Physician Clinic, Inc.
Doctors Same Day Surgery Center, Inc.
<PAGE>
East Point PHO, Inc.
East Pointe Hospital, Inc. d/b/a
Able Care (Lehigh, FL)
East Point Hospital
Columbia Healthlink
LeHigh Pediatrics
East Pointe Physician Management, Inc.
Edward White Hospital, Inc. d/b/a
Edward White Hospital
Edward White Physician Clinic, Inc.
Englewood Community Health Care Group, Inc.
Englewood Community Hospital Auxiliary, Inc.
Englewood Community Hospital, Inc. d/b/a
Englewood Community Hospital
Englewood Physician Hospital Organization, Inc.
EyeCare Providers of Florida, Inc.
Fawcett Memorial Hospital, Inc. d/b/a
Fawcett Memorial Hospital
Florida Home Health Services-Private Care, Inc. d/b/a
Florida Home Health-Private Care
Columbia Staffing Services
Florida Home Health Registry
Florida Medical Collection Services, Inc.
Florida MRI Services, Inc.
Florida Psychiatric Company, Inc.
Fort Walton Beach Medical Center, Inc. d/b/a
Destin Hospital
Ft. Walton Beach Medical Center
Advanced Home Health Care
Galen Hospital-Pembroke Pines, Inc. d/b/a
P & L Associates
Pembroke Pines Hospital
<PAGE>
Galen of Florida, Inc. d/b/a
Bushnell Family Practice Center
Dade City Hospital
Dade City Professional Building
Normandy Manor Transitional Living Facility
Orange Park Medical Center
St. Petersburg General Hospital
West Central Florida OB/GYN
Olsten Kimberly Quality Care (S. Pasadena, FL)
Olsten Kimberly Quality Care (Dade City, FL)
Columbia St. Petersburg Medical Center
Atlantic Home Health Care
Galencare, Inc.d/b/a
Brandon Hospital
Gateway Medical Services Organization, Inc. d/b/a
LaGrange Medical Clinic
Spanish Trail Medical Clinic
North Okaloosa Medical Center Emergency Depart
Grant Center Hospital of Ocala, Inc. Florida
Gulf Coast Health Technologies, Inc.
Gulf Coast Physicians, Inc.
Hamilton Memorial Hospital, Inc. d/b/a
Our Home Care
Hamilton Memorial Hospital
HCA Development Corporation of Florida
HCA Family Care Center, Inc.
HCA Health Services of Florida, Inc. d/b/a
L.W. Blake Hospital
Medical Center of Port St. Lucie
North Florida Regional Medical Center
Oak Hill Hospital
Olsten Kimberly Quality Care (Miami Lakes, FL)
Vero Home Care
Columbia Regional Medical Center at Bayonet Point
CareOne (Hudson, FL)
Blake Home Health
Olsten Kimberly Quality Care (Hudson, FL)
Olsten Kimberly Quality Care (Spring Hill, FL)
Olsten Kimberly Quality Care (Margate, FL)
HCA Healthcare - Florida, Inc.
HCA of Florida, Inc.
<PAGE>
HCA Physician Services of Tamarac, Inc.
Hernando County Physicians Organization, L.C.
Home Health of Citrus County, Inc.
Home Health of Lee County, Inc.
Hospital Corporation of Lake Worth
Hospital Development & Service Corp.
Imaging and Surgery Centers of Florida, Inc. d/b/a
Clearwater Imaging
Intercare, Inc.
Lake City Medical Services Organization, Inc.
Lake Forest Utilities, Inc.
Largo Medical Center, Inc. d/b/a
Largo Medical Center
Olsten Kimberly Quality Care (Largo, FL)
Largo MRI, Inc.
Lawnwood Medical Center, Inc. d/b/a
Harbour Shores of Lawnwood (Division of Lawnwood)
Lawnwood Regional Medical Center
Lawnwood Pavilion
M & M of Ocala, Inc.
Marion Community Hospital, Inc. d/b/a
Marion Community Hospital
Medical Care of Broward, Inc.
Medical Center of Port St. Lucie, Inc.
Medical Center of Santa Rosa, Inc. d/b/a
Santa Rosa Medical Center
Horizon Healthcare
MedPlan, Inc.
Memorial Healthcare Group, Inc. d/b/a
Memorial Hospital Jacksonville
Memorial Specialty Hospital
<PAGE>
MHS Partnership Holdings JSC, Inc.
MHS Partnership Holdings SDS, Inc.
Naples Rehabilitative Services, Inc.
Naples Rehab Center
New Port Richey Hospital, Inc. d/b/a
Community Home Health Care
New Port Richey Hospital
Olsten Kimberly Quality Care (Miami Lakes, FL)
Olsten Kimberly Quality Care (New Port Richey, FL)
North Beach Hospital, Inc.
North Central Florida Health System, Inc.
North Florida Immediate Care Center, Inc.
North Florida Infusion Corporation
North Florida Regional Investments, Inc.
North Florida Regional Medical Center - Gainesville PHO, L.L.C.
North Florida Regional Medical Center - Gainesville PO, L.L.C.
North Florida Regional Medical Center, Inc.
North Okaloosa Medical Center, Inc. d/b/a
North Okaloosa Medical Center
North Palm Beach County Surgery Center, Inc.
Northwest Florida Healthcare Systems, Inc.
Northwest Medical Center, Inc. (FL) d/b/a
Northwest Medical Center (FL)
Northwest Regional Investments, Inc.
Notami (Clearwater), Inc.
Notami Hospitals of Florida, Inc. d/b/a
Lake City Medical Center
Oak Hill Acquisition, Inc.
Oak Hill Physician Hospital Association, L.C.
Okaloosa Hospital, Inc. d/b/a
Twin Cities Hospital
<PAGE>
Okeechobee Hospital, Inc. d/b/a
Raulerson Hospital
OneSource Health Network of South Florida, Inc. d/b/a
OneSource Health Network
Orange Park Medical Center, Inc.
Orlando Depression Center, Inc. d/b/a
Orlando Depression Center
Osceola Regional Hospital, Inc. d/b/a
Orlando Home Care
Osceola Regional Hospital
TRICO Home Health Agency
Kissimmee Imaging
Central Florida Home Care
Palm Beach Healthcare System, Inc.
Palms West Diagnostic, Inc.
Palms West Hospital, Inc. d/b/a
Palms West Hospital
Palms West Physician Hospital Organization
Palms West Physician Hospital Organization, Inc.
Physical Therapy of Orlando, Inc. d/b/a
Kissimmee Physical Therapy
Orlando Hand & Microvascular
Central Florida Physical Therapy
Physician Healthcare Network of Central Florida Regional, Inc.
Physician Healthcare Network of Columbia Park Medical Center, Inc,
Physician Healthcare Network of Columbia Park, Inc.
Physician Healthcare Network of Osceola Regional Hospital, Inc.
Physician Healthcare Network, Inc.
Physician Services of Palm Beach County, Inc.
Primary Medical Care Associates, Inc.
Pulmonary Care Services, Inc.
Putnam Community Hospital PHO, L.L.C.
<PAGE>
Putnam Community Hospital PO, L.L.C.
Putnam Hospital, Inc. d/b/a
Putnam Community Hospital
Hospital Home Health
Santa Rosa Emergency Medical Services, Inc.
Santa Rosa Emergency Medical Services
Sarasota Doctors Hospital, Inc. d/b/a
Doctors Data Center
Doctors Home Health Services
Doctors Hospital of Sarasota
Doctors Medical Lab
Midtown Nuclear Medicine
Midtown Radiology
MRI of Sarasota
Sarasota Rehabilitation Center
Sarasota Vascular Lab
The Center for Breast Care
Olsten Kimberly Quality Care (Sarasota, FL)
Able Care (Sarasota, FL)
Sarasota Rehabilitative Center, Inc.
South Bay Physician Clinics, Inc
South Seminole Hospital, Inc. d/b/a
South Seminole Hospital
South Seminole Community Hospital
Healthworks Plus
Southwest Florida Health System, Inc.
Southwest Florida Management Associates, Inc.
Southwest Florida Physician Hospital Organization, Inc.
Southwest Florida Regional Medical Center, Inc. d/b/a
Southwest Florida Regional Medical Center
Columbia Care Medical Center
CareOne (Ft. Myers, FL)
Mature Adult Counseling Center
Columbia Care
Olsten Kimberly Quality Care (Ft. Myers, FL)
The Memory Center (SW FL Reg.)
Columbia Center For Cosmetic Surgery
St. Augustine Hospital, Inc.
<PAGE>
Sun City Hospital, Inc. d/b/a
South Bay Hospital
South Bay Transitional Care Unit
Surgicare America - Winter Park, Inc.
Surgicare of Altamonte Springs, Inc. d/b/a
Florida Surgery Center
Surgicare of Brandon, Inc.
Surgicare of Central Florida, Inc.
Surgicare of Countryside, Inc.
Surgicare of Deland, Inc.
Surgicare of Florida, Inc. d/b/a
Tampa Bay Area Anesthesia
Surgicare of Ft. Pierce, Inc.
Surgicare of Kissimmee, Inc.
Surgicare of Manatee, Inc.
Surgicare of Merritt Island, Inc.
Surgicare of New Port Richey, Inc.
Surgicare of Niceville, Inc.
Surgicare of Orange Park, Inc.
Surgicare of Orlando, Inc.
Surgicare of Pinellas, Inc.
Surgicare of Plantation, Inc.
Surgicare of Port St. Lucie, Inc.
Surgicare of Stuart, Inc.
Surgicare of Tallahassee, Inc.
Surgicare of West Boynton, Inc.
Surgicare of Zephyrhills, Inc.
Systems Medical Management, Inc.d/b/a
The Health Advantage Network
<PAGE>
Tallahassee Medical Center, Inc. d/b/a
Tallahassee Community Hospital
Tamarac Acquisition Corporation
Tamarac Hospital Corporation, Inc.
Tampa Bay Health System. Inc.
Tampa Surgi-Centre, Inc.
The Pinellas Healthcare Alliance, Inc.
The West Florida Professionals, Inc.
TSI Investments, Inc.
University Psychiatric Center, Inc.
Visions Healthcare, Inc.
Visual Health and Surgical Center, Inc.
Volusia Healthcare Network, Inc.
West Florida Regional Medical Center, Inc. d/b/a
Okaloosa Cancer Care Center
West Florida Regional Medical Center
Advanced Home Health Care
West Lake Joint Venture Investments, Inc.
Winter Park Physician Services, Inc.
Women's and Children's Health Connection, Inc.
GEORGIA
- -------
Academic Health, Inc.
Amisub of Georgia, Inc. d/b/a
Barrow Medical Center
AOSC Sports Medicine, Inc. d/b/a
Northside Sports Medicine and Rehabilitation Ctr.
Atlanta Outpatient Surgery Center, Inc.
Atlanta Rehabilitation Medicine Management, Inc.
<PAGE>
Barrow Medical Ventures, Inc.
Chatsworth Hospital Corp. d/b/a
Murray Medical Center
CMC Ventures, Inc.
Coliseum Park Hospital, Inc. d/b/a
Coliseum Medical Centers
Coliseum Physician Practice Company
Columbia Health Systems of Georgia Resource Network
Columbia Physicians Services, Inc.
Columbia Polk General Hospital, Inc.
Columbia-Georgia PT, Inc.
Columbia/HCA Healthcare Corporation of Atlanta
Columbus Cardiology, Inc.
Columbus Doctors Hospital, Inc. d/b/a
Doctors Hospital
Coosa Valley Home Health Care Agency, Inc. d/b/a
Coosa Valley Home Health Agency
Cumberland Physician Corporation
Doctors-I, Inc.
Doctors-II, Inc.
Doctors-III, Inc.
Doctors-IV, Inc.
Doctors-IX, Inc.
Doctors-V, Inc.
Doctors-VI, Inc.
Doctors-VII, Inc.
Doctors-VIII, Inc.
Doctors-X, Inc.
<PAGE>
Dublin Community Hospital, Inc. d/b/a
Fairview Park Hospital
Eastside Physician Practice Company
Gainesville Cardiology, Inc.
Georgia Psychiatric Company, Inc. d/b/a
Coliseum Psychiatric Hospital
Gwinnett Community Hospital, Inc. d/b/a
Eastside Medical Center
HCA Health Services of Georgia, Inc. d/b/a
Hughston Sports Medicine Hospital
Northlake Regional Medical Center
HCA Health Services of Gwinnett County, Inc.
HCA Parkway Investments, Inc.
Health Care Management Corporation d/b/a
Stewart Webster
Wheeler County Hospital
Lanier Physician Services, Inc.
Marietta Outpatient Medical Building, Inc.
Marietta Surgical Center, Inc.
Med Corp., Inc.
MedFirst, Inc.
Medical Center-West, Inc. d/b/a
Parkway Medical Center
MOSC Sports Medicine, Inc. d/b/a
SportsSouth Sports Medicine & Rehabilitation
North Cobb Physical Therapy, Inc. d/b/a
North Cobb Physical Therapy
Northlake Physician Practice Company
Palmyra Family Care Centers, Inc.
Palmyra Park Hospital, Inc. d/b/a
Palmyra Medical Centers
Parkway Physician Practice Company
<PAGE>
Redmond Oncology Services, Inc.
Redmond P.D.N., Inc.
Redmond Park Health Services, Inc.
Redmond Park Hospital, Inc.
Surgery Center of Rome, Inc.
Surgicare of Augusta, Inc. d/b/a
Augusta Surgical Center
Surgicare Outpatient Center of Brunswick, Inc.
West Paces Ferry Hospital, Inc. d/b/a
West Paces Medical Center
West Paces Services,.Inc.
HAWAII
- ------
Nenalani Insurance Services Corporation
IDAHO
- -----
Eastern Idaho Health Services, Inc. d/b/a
Eastern Idaho Regional Medical Center
Mountain River Hospital
HCA Health Services of Idaho, Inc.
Med Central, Inc.
West Valley Medical Center, Inc. d/b/a
West Valley Medical Center
ILLINOIS
- --------
Chicago Grant Hospital, Inc. d/b/a
Grant Hospital
Total Home Care of Chicago
COFH, Inc.
Columbia Chicago Osteopathic Hospitals, Inc.
<PAGE>
Columbia LaGrange Hospital, Inc. d/b/a
Grant Square Imaging
LaGrange Memorial Hospital
Galen Hospital Illinois, Inc. d/b/a
Michael Reese Hospital and Medical Center
Michael Reese Sears Tower
Michael Reese-North
Michael Reese North-One Day Surgery
Hardy Home Health Services
Michael Reese Chatham Ridge
Michael Reese Fertility Center
Michael Reese Hyde Park
Galen of Illinois, Inc. d/b/a
Community Medical Plaza
Illinois Psychiatric Hospital Company, Inc. d/b/a
Chicago Lakeshore Hospital
Riveredge Hospital
Woodland Hospital
Columbia Behavioral Health Provider Organization
Woodland Behavioral Practice Group
Michael Reese Physicians Groups, Inc.
Smith Laboratories, Inc.
Surgicare of Belleville, Inc.
Surgicare of Joliet, Inc.
Surgicare of North Michigan Ave., Inc.
Surgicare of Palos Heights, Inc.
INDIANA
- -------
BAMI-COL, Inc.
Basic American Medical, Inc.
F & E Community Developers of Florida, Inc.
HTI Health Services of Indiana, Inc. d/b/a
North Clark Community Hospital
Jeffersonville MediVision, Inc.
Surgicare of Jeffersonville, L.L.C.
<PAGE>
Terre Haute Regional Hospital, Inc. d/b/a
Terre Haute Regional Hospital
Regional Family Medical Center
Thomasville Hospital, Inc.
IOWA
- ----
Surgery Center of Des Moines, Inc.
KANSAS
- ------
Columbia/HCA Capital Corp.
Columbia/HCA of Dodge City, Inc.
Day Surgery, Inc.
Galen of Kansas, Inc.
Galichia Laboratories, Inc.
HCA Health Services of Kansas, Inc.
OB-GYN Diagostics, Inc.
Overland Park Homecare Services, Inc.
Surgicare of Wichita, Inc.
Surgicenter of Johnson County, Inc.
Western Plains Regional Hospital, Inc.
KENTUCKY
- --------
A. C. Medical, Inc.
B.G. MRI, Inc.
CHCK, Inc. d/b/a
Columbia Hospital Lexington
Primary Care Partners of Lexington
Columbia/HCA Healthcare Foundation, Inc.
Community Hospital, Inc. d/b/a
PineLake Medical Center
<PAGE>
Frankfort Hospital, Inc. d/b/a
Bluegrass Regional Primary Care Centre
Columbia Hospital Frankfort
Galen Heart Foundation, Inc.
Galen International Holdings, Inc.
Galen of Kentucky, Inc.
GALENCO, Inc.
Greenview Hospital, Inc. d/b/a
Greenview Hospital
Same Day Surgery
GSD, Inc.
Hospital Corporation of Kentucky d/b/a
Meadowview Regional Hospital
Maysville Family Medical Clinic - Brooksville Bran
Meadowview Regional Hospital Skilled Nursing Faci
Columbia Hospital Paris
Columbia Hospital Georgetown
Columbia Hospital Maysville
Kentucky IMS, Inc.
LACO, Inc.
Lake Cumberland Health Care, Inc.
Logan Memorial Hospital, Inc. d/b/a
Logan Memorial Hospital
River Valley Health Network, Inc.
South Central Kentucky Corp.
Springview Hospital, Inc. d/b/a
Springview Hospital
Subco of Kentucky, Inc.
Surgicare of Owensboro, Inc.
The Owensboro Surgery Center, Inc. d/b/a
Owensboro Ambulatory Surgical Facility
Tri-County Community Hospital, Inc.
<PAGE>
LOUISIANA
- ---------
Acadiana Care Center, Inc.
Acadiana Practice Management, Inc.
Acadiana Regional Pharmacy, Inc.
Columbia Healthcare System of Louisiana, Inc.
Columbia/HCA Healthcare Corporation of Central Louisiana
Columbia/HCA of New Orleans, Inc.
Columbia/Lakeview, Inc.
Cypress Medical Advantage, lnc.
Dauterive Hospital Corporation d/b/a
Dauterive Hospital
Physio-Industrial Network
Doctors Hospital of Opelousas Management, Inc.
Galen of Louisiana, Inc. d/b/a
Avoyelles Hospital
Springhill Medical Center
Northwest Regional Home Health Care
Hamilton Medical Center, Inc.
HCA Health Services of Louisiana, Inc. d/b/a
North Monroe Hospital
HCA Highland Hospital, Inc. d/b/a
Highland Hospital
Highland Park Hospital, Inc.
Lake Area Medical Center, Inc.
Lake Area Medical Management Services, Inc.
Lake Charles Surgery Center, Inc.
Lakeside Associates, Inc.
Louisiana Psychiatric Company, Inc. d/b/a
Cypress Hospital
DePaul Hospital
<PAGE>
Medical Center of Baton Rouge, Inc. d/b/a
Medical Center of Baton Rouge
Lakeside Hospital
Medical Center of Baton Rouge Genesis Family Center
New Orleans Surgicare, Inc. d/b/a
The Greater New Orleans Surgery Center
Northeast Louisiana Medical Management, Inc.
Notami (Opelousas), Inc.
Notami Hospitals of Louisiana, Inc. d/b/a
Lakeview Regional Medical Center
Riverview Medical Center
Savoy Medical Center
Riverview Medical Center, Inc.
Select Healthcare Services, Inc.
Surgicare Merger Company of Louisiana
Surgicare Outpatient Center of Baton Rouge, Inc.
Surgicare Outpatient Center of Lake Charles, Inc.
Surgicenter of East Jefferson, Inc.
University Healthcare System, L.C. d/b/a
Tulane University Hospital and Clinic
Ville Platte Acquisition Corp.
WGH, Inc.
Women's and Children's Hospital, Inc. d/b/a
Women's and Children's Hospital (LA)
MARYLAND
- --------
Surgicare of Prince Georges County, Inc.
MASSACHUSETTS
- -------------
Columbia Hospital Corporation of Massachusetts, Inc.
Health Imaging Center of Boston, Inc.
<PAGE>
Same Day Surgicare of New England, Inc. d/b/a
Same Day Surgicare of New England
Surgicare of Suburban, Inc.
Waltham Surgicare, Inc.
MICHIGAN
- --------
Critical Care America Pharmacy, Inc.
Surgicare of Saginaw, Inc.
MINNESOTA
- ---------
St. Cloud Surgical Center, Inc.
Surgicare of Minneapolis, Inc.
MISSISSIPPI
- -----------
Brookwood Medical Center of Gulfport, Inc.
Coastal Imaging Center of Gulfport, Inc.
Galen of Mississippi, Inc.
Garden Park Physician Services Corporation
GOSC-GP, INC.
Gulf Coast Medical Ventures, Inc.
HTI Health Services, Inc. d/b/a
Vicksburg Medical Center
Lakeland Physicians Medical Building, Inc.
Surgicare of Gulfport, Inc.
Surgicare of Jackson, Inc.
Surgicare of Mississippi, Inc.
VIP, Inc.
<PAGE>
MISSOURI
- --------
Business Health Services, Inc. d/b/a
Keystone Family Medical Clinic
Clinical Management Services, Inc. d/b/a
CareNow
Clinical Specialties, Inc. d/b/a
PRO-LAB
Columbia/HCA Kansas City Medical Management, Inc.
Comprehensive Care Clinics, Inc.
HCA Health Services of Missouri, Inc.
HEI Missouri, Inc.
HEI Sullivan, Inc.
Kensington Care Services, Inc. d/b/a
American Nursing Services-Overland Park
M.W.A., Inc.
Metropolitan Providers Alliance, Inc.
Midwest Psychiatric Center, Inc. d/b/a
Research Psychiatric Center
National Association of Senior Friends
Senior Friends - Aurora Regional Medical Center Cha
Notami Hospitals of Missouri, Inc.
Oak Grove Medical Clinic, Inc. d/b/a
Odessa MMP
Oak Grove MMP
Physical Therapy Affiliates, Inc. d/b/a
Physical Therapy Affiliates
Precise Imaging, Inc.
PRI-MED, Inc.
Regional Multicare Group, Inc.
Surgicare of Antioch Hills, Inc. d/b/a
North Hills Medical and Surgical Center
Surgicenter of Gladstone
<PAGE>
Surgicare of Independence, Inc.
Truman-Forest Pharmacy, Inc.
NEBRASKA
- --------
Omaha Healthcare System, Inc.
NEVADA
- ------
CHC Venture Co.
Chiron, Inc.
Columbia Hospital Corporation of West Houston
Desert Physical Therapy, Inc. d/b/a
Desert Physical Therapy
HCA Health Services of Nevada, Inc.
James Bros., Inc.
Las Vegas Physical Therapy, Inc. d/b/a
Lynn Maguire Physical Therapy
Las Vegas Surgicare, Inc.
National Care Services Corp. of Nevada d/b/a
Sunrise Diagnostic Center
Sunrise Medical Tower III
Sunrise Medical Tower IV
Sunrise Professional Pharmacy
Nevada Psychiatric Company, Inc.
Sunrise Hospital d/b/a
Sunrise Children's Hospital
Sunrise Hospital & Medical Center
Sunrise MoutainView Hospital and Medical Center
The Women's Hospital (Bought as an empty facility)
Sunrise MountainView Hospital
Sunrise Mountainview Hospital, Inc.
Sunrise Outpatient Services, Inc.
Sunrise Surgicenters, Inc.
<PAGE>
Surgicare of Las Vegas, Inc.
Surgicare of Reno, Inc.
NEW HAMPSHIRE
- -------------
Appledore Medical Group, Inc.
HCA Health Services of New Hampshire, Inc. d/b/a
Main Street Medical Park
Parkland Medical Center
Portsmouth Pavilion
Portsmouth Regional Hospital
Health Imaging Asset Management, Inc.
Health Imaging Center of Columbus, Inc.
Health Imaging Centers, Inc.
Parkland Physician Services, Inc.
Regional Psychiatric Company, Inc.
NEW MEXICO
- ----------
Guadalupe Medical Center, Inc. d/b/a
Guadalupe Medical Center
HCA Health Services of New Mexico, Inc.
Hobbs Community Hospital, Inc. d/b/a
Columbia Lea Regional Medical Center
Lea Regional Home Health
New Mexico Psychiatric Company, Inc. d/b/a
Heights Psychiatric Hospital
NEW YORK
- --------
Critical Care America of New York, Incorporated
NORTH CAROLINA
- --------------
Brunswick Health Alliance, Inc.
<PAGE>
CareOne Home Health Services, Inc. d/b/a
CareOne (Charlotte, NC)
CareOne (Monroe, NC)
Columbia-CFMH, Inc.
Cumberland Medical Center, Inc. d/b/a
Highsmith-Rainey Memorial Hospital
Davis Community Primary Care Network, Inc.
Eyecare Providers of North Carolina, Inc.
Fayetteville Healthcare System, Inc.
Galen of North Carolina, Inc.
HCA -Raleigh Community Hospital, Inc. d/b/a
Raleigh Community Hospital
Professional Fitness Program
Health Plus
Columbia Advantage Home Care
Heritage Hospital, Inc. d/b/a
Heritage Hospital
Northeastern Rehabilitation Center
Highsmith-Rainey Hospital Primary Care Network, Inc.
Hospital Corporation of North Carolina, Inc. d/b/a
The Brunswick Hosptial
Davis Community Hospital
HTI Health Services of North Carolina, Inc.
Optical Shop, Inc.
Raleigh Community Physical Therapy & Sports Medicine
Raleigh Community Primary Care Network, Inc.
Salem Optical Company, Inc.
Southeastern Eye Center, Inc.
Wake Psychiatric Hospital, Inc. d/b/a
Holly Hill Hospital
OHIO
- ----
Columbia/HCA Healthcare Corporation of Northern Ohio
<PAGE>
E.N.T. Services, Inc.
EyeCare Providers of Ohio, Inc.
Middleburg Heights Surgical Center, Inc.
Surgicare of East Cleveland, Inc.
Surgicare of Westlake, Inc.
OKLAHOMA
- --------
Claremore Regional Hospital, Inc.
Doctor's Hospital - Tulsa, Inc.
Edmond Physician Hospital Organization, Inc.
HCA Affiliated Services of Oklahoma, Inc.
HCA Health Services of Oklahoma, Inc. d/b/a
Presbyterian Hospital
Hospital Corporation of Seiling, Inc.
Integrated Management Services of Oklahoma, Inc.
Lake Region Health Alliance Corporation
Medical Imaging, Inc.
Notami Hospitals of Oklahoma, Inc. d/b/a
Northwest Hospital
Claremore Regional Hospital
Doctors Hospital-Tulsa
Southwestern Medical Center
Tulsa Regional Medical Center
The Specialty Hospital of Tulsa
Oklahoma Surgicare, Inc.
Southwestern Medical Center, Inc.
Surgicare of Tulsa, Inc. d/b/a
Surgicare of Tulsa
OREGON
- ------
Hospital Corporation of Douglas, Inc. d/b/a
Douglas Community Hospital
<PAGE>
McMinnville Hospital, Inc. d/b/a
McMinnville Community Hospital
Central Coast Counseling
Roseburg Ambulance, Inc. d/b/a
Roseburg Ambulance Service
Surgicare of Salem, Inc.
PENNSYLVANIA
- ------------
Basic American Medical Equipment Company, Inc.
Surgicare of Philadelphia, Inc.
RHODE ISLAND
- ------------
Atwood Surgicare, Inc.
Blackstone Valley Surgicare, Inc. d/b/a
Columbia Blackstone Valley Surgicare
Columbia Northeast Corporation
Pawtucket Outpatient Medical Building, Inc.
Wayland Square Surgicare, Inc. d/b/a
Columbia Wayland Square Surgicare
SOUTH CAROLINA
- --------------
Carolina Regional Surgery Center, Inc.
C/HCA Development, Inc.
Chesterfield General Hospital, Inc. d/b/a
Chesterfield General Hospital
Coastal Carolina Home Care, Inc.
Columbia/HCA Healthcare Corporation of South Carolina
Doctors Memorial Hospital, Inc.
DMH Spartanburg Management, Inc.
DMH Spartanburg, Inc.
HCA Healthcare - South Carolina, Inc.
<PAGE>
HCA South Carolina Health Services, Inc.
HTI South Carolina, Inc. d/b/a
Marlboro Park Hospital
Low Country Health Services, Inc. of the Southeast
Medical Office of Colleton, Inc.
Myrtle Beach Hospital, Inc. d/b/a
Grand Strand Regional Medical Center
North Trident Regional Hospital, Inc. d/b/a
Summerville Medical Center
Summerville Medical Center (Downtown)
Trident Regional Medical Center
Coastal Carolina Home Health
Trident Medical Services, Inc.
Walterboro Community Hospital, Inc. d/b/a
Colleton Regional Hospital
SWITZERLAND
- -----------
Permanence de L'Hopital de la Tour d/b/a
Geneva Out-Patient Clinic
Societe' Anonyme de l'Eploitation de l'Hopital de la d/b/a
Hospital de la Tour et Pavillon Gourgas
TENNESSEE
- ---------
Athens Community Hospital, Inc. d/b/a
Athens Regional Medical Center
Athens Orthopaedic Rehabilitation, Inc.
Benton Community Hospital, Inc.
Central Tennessee Hospital Corporation d/b/a
Horizon Medical Center
Cheatham Medical Center
Columbia HomeCare
Chattanooga Health System, Inc.
Chattanooga Healthcare Network Partner, Inc.
Chattanooga Healthcare Partner Network, Inc.
<PAGE>
Columbia Behavioral Health of Tennessee, L.L.C.
Columbia Health Management, Inc. d/b/a
Columbia Healthcare Network
Columbia Healthcare Network of Middle Tennessee,
Columbia Healthcare Network of Tri-Cities, Inc.
Columbia Healthcare Network of West Tennessee, Inc.
Columbia Integrated Health Systems, Inc.
Columbia Internal Medicine-Athens, Inc.
Columbia Medical Group - Athens, Inc.
Columbia Medical Group - Centennial, Inc.
Columbia Medical Group - Chatsworth, Inc.
Columbia Medical Group - Crockett, Inc.
Columbia Medical Group - Eastridge, Inc.
Columbia Medical Group - Hendersonville, Inc.
Columbia Medical Group - Indian Path, Inc.
Columbia Medical Group - Livingston, Inc.
Columbia Medical Group - Nashville Memorial, Inc.
Columbia Medical Group - North Side Specialty, Inc
Columbia Medical Group - North Side, Inc.
Columbia Medical Group - Parkridge, Inc.
Columbia Medical Group - Parthenon, Inc.
Columbia Medical Group - Regional, Inc.
Columbia Medical Group - River Park, Inc.
Columbia Medical Group - Southern Hills, Inc.
Columbia Medical Group - Southern Tennessee, Inc.
Columbia Medical Group - Stones River, Inc.
Columbia Medical Group - Summit, Inc.
<PAGE>
Columbia Medical Group - Sycamore Shoals, Inc.
Columbia Medical Group - Trinity, Inc.
Columbia Medical Group - Volunteer, Inc.
Columbia Private Duty Nursing Services of Davidson County, Inc.
Columbia/HCA Information Services, Inc.
Community and Occupational Health Services, Inc.
Crockett General Hospital, Inc. d/b/a
Crockett Hospital
Diagnostic Center Hospital Corporation
Eastern Tennessee Medical Services, Inc.
EyeCare Providers of Tennessee, Inc.
Galen of Tennessee, Inc. d/b/a
Care Plus Home Health Services of Chattanooga
East Ridge Hospital
General Care Corp. d/b/a
Regional Hospital of Jackson
HCA Capital Corporation
HCA Crossroads Residential Centers, Inc.
HCA Development Company, Inc.
HCA Donelson Investments, Inc.
HCA Health Services of Tennessee, Inc.
HCA Home and Clinical Services, Inc.
HCA International Company
HCA Medical Services, Inc.
HCA Physician Services, Inc.
HCA Properties, Inc.
HCA Psychiatric Company
HCA Realty, Inc.
<PAGE>
HCA Southern Hills Investments, Inc.
Health Enterprises, Inc.
Health Information Associates, L.L.C.
Healthtrust, Inc. - The Hospital Company (TN)
Hendersonville Hospital Corporation d/b/a
Hendersonville Hospital
Hometrust Management Services, Inc.
Horizon Occupational Health Services Corporation
Hospital Corporation of Smith and Overton County d/b/a
Livingston Regional Hospital
Hospital Corporation of Tennessee d/b/a
Volunteer General Hospital
Superior Home Health Care
Hospital Realty Corporation
HTI Edgefield, Inc.
HTI Medical Services Corporation
HTI Memorial Hospital Corporation d/b/a
Nashville Memorial Hospital
Columbia Subacute Services of Tennessee
HTI Tri-Cities Rehabilitation, Inc.
Humbolt Cedar Crest Hospital, Inc.
Indian Path Hospital, Inc. d/b/a
Indian Path Medical Center
Superior Home Health Care of East Tennessee
Superior Home Medical Equipment
Indian Path Medical Group
Superior Home Health of East Tennessee
Indian Path Rehabilitation Center, Inc.
IPH, Inc.
IPN Services, Inc.
Johnson City Eye & Ear Hospital, Inc. d/b/a
Johnson City Specialty Hopital
<PAGE>
Johnson City Medical Services, Inc. d/b/a
PyraMed Healthcare Services
Judy's Foods, Inc.
Medical Resource Group, Inc.
Middle Tennessee Medical Services Corporation d/b/a
Masterpiece Healthcare Services
North Side Hospital, Inc. d/b/a
North Side Hospital
Park Plaza Realty, Inc.
Parkridge Hospital, Inc. d/b/a
Parkridge Medical Center
Parkside Surgery Center, Inc.
Parthenon Financial Services, Inc.
Parthenon Travel Services, Inc.
River Park Hospital, Inc.
SCMH Corporation d/b/a
Smith County Memorial Hospital
The Renewal Center at Smith County Memorial Hosp
Southern Tennessee Ambulance Services, Inc.
SP Acquisition Corp. d/b/a
South Pittsburg Municipal Hospital
Stones River Hospital, Inc. d/b/a
Stones River Hospital
Southern Tennessee Medical Center
Southern Tennessee Skilled Facility
Southern Tennessee Home Care
Emerald-Hodgson Healthcare Center (and Hospital)
Sycamore Shoals Hospital, Inc d/b/a
Sycamore Shoals Hospital
TCPN, Inc.
Tennessee Healthcare Management, Inc. d/b/a
Columbia Care Medical Center
Columbia Physician Services
<PAGE>
Tennessee Psychiatric Company, Inc. d/b/a
Indian Path Pavilion
The Center for Health Services, Inc.
The Charter Cypress Behavioral Health System, L.L.C. d/b/a
Cypress Hospital
Trinity Hospital Corporation d/b/a
Trinity Hospital
Valley Psychiatric Hospital Corporation d/b/a
Valley Hospital
WDC, Inc. d/b/a
CEQUIP
TEXAS
- -----
Arlington Diagnostic South, Inc.
Austin Medical Center, Inc. d/b/a
Austin Diagnostic Clinic
Bailey Square Outpatient Surgical Center, Inc.
Bay Area Surgicare Center, Inc. d/b/a
Bay Area Surgicare Center
Bayview Psychiatric Organization
Beaumont Healthcare System, Inc.
Beaumont Hospital, Inc. d/b/a
Beaumont Regional Medical Center
Fannin Pavillion
Beaumont Medical Arts, Inc.
Beaumont Regional Physician Hospital Organization
Bedford-Northeast Community Hospital, Inc. d/b/a
Columbia HEB Hospital
Northeast Community Hospital Skilled Nursing Unit
Institute of Sports Rehabilitation and Fitness
Bellaire Imaging, Inc.
BMSH, Inc.
Brazos Acquisition Corp.
<PAGE>
Brownsville-Valley Regional Medical Center, Inc. d/b/a
Columbia Valley Regional Medical Center
Valley Regional Home Health Agency
South Texas Center for Home Health of Valley Regional
Brownwood Regional Hospital, Inc. d/b/a
Brownwood Regional Medical Center
Doctors Medical Clinic
Brownwood Regional Hospital Home Care Services
BVMC, Inc. d/b/a
Brazos Valley Medical Center
Brazos Valley Medical Center-Bremond
Brazos Valley Surgical Center
Brazos Valley Medical Center Homecare
CHC Payroll Corp.
CHC Realty Company
CHC-DC, Inc.
CHC-El Paso, Corp.
CHC-Miami Corp.
Clear Lake Regional Medical Center, Inc. d/b/a
Columbia Clear Lake Regional Medical Center
Columbia Champions Treatment Center, Inc. d/b/a
Columbia Champions Treatment Center
Columbia Family Birth Center, Inc.
Columbia Hospital Corporation at the Medical Center
Columbia Hospital Corporation of Arlington
Columbia Hospital Corporation of Bay Area
Columbia Hospital Corporation of Corpus Christi
Columbia Hospital Securities Corporation
Columbia Physician Hospital Organization
Columbia Physician Hospital Organization - Bellaire Hospital
Columbia Physician Hospital Organization - Rosewood Medical Center
Columbia Physician Hospital Organization Heights Hospital
<PAGE>
Columbia Physician Hospital Organization Sam Houston Memorial Hospital d/b/a
Columbia Physician Hospital Organization Sam Houston Memorial
Hospital/Spring Branch Medical Center
Columbia Provider Services, Inc.
Columbia Psychiatric Management Co.
Columbia Purchasing Group, Inc.
Columbia/HCA Healthcare Corp. of Central Texas
Columbia/HCA Heartcare of Corpus Christi, Inc.
Columbia/HCA of Houston, Inc.
Columbia/HCA of North Texas, Inc.
Columbia/HCA of San Angelo, Inc. d/b/a
Angelo Community Hospital
Columbia/HCA Physician Hospital Organization Medical Center Hospital
Columbia/HCA Physician Hospital Organization West Houston Medical Center
Conroe Hospital Corporation d/b/a
Columbia Conroe Medical Center
Coronado Community Hospital, Inc. d/b/a
Columbia Panhandle Regional Medical Center
Coronado Health Network
Custom Medical Management, Inc.
DFW Physician Services Corporation
DHA-Acquisition, Inc. d/b/a
Doctors Hospital (Airline)
Doctors Bay Area Physician Hospital Organization
Doctors Hospital (Conroe), Inc.
Doctors Hospital of Corpus Christi, Inc.
E.P. Physical Therapy Centers, Inc.
El Paso Nurses Unlimited, Inc. d/b/a
Nurses Unlimited of El Paso
El Paso Pathology Group, P.A.
<PAGE>
El Paso Surgicenter, Inc. d/b/a
Surgical Center of El Paso
Endoscopy Clinic of Dallas, Inc.
EPIC Properties, Inc.
EyeCare Providers of America, Inc.
EyeCare Providers of Texas, Inc.
Fort Worth Investments, Inc.
Fort Worth Medical Plaza, Inc. d/b/a
Columbia Plaza Medical Center of Fort Worth
Plaza Medical Center-East (Div. of Plaza Med Ctr.)
Homecare Plus
Galen Hospital of Baytown, Inc.
Galen Hospitals of Texas, Inc.
Greater Houston Preferred Provider Option, Inc. d/b/a
Greater Houston PPO
Gulf Coast Provider Network, Inc.
HCA - Arlington, Inc. d/b/a
Columbia Medical Center of Arlington
HCA Health Services of Texas, Inc.
HCA Physician Services of North Texas, Inc.
HCA Plano Imaging, Inc.
Health Institutions Purchasing Group, Inc.
HEI Construction, Inc.
HEI Orange, Inc.
HEI Publishing, Inc.
HEI Sealy, Inc.
Houston Northwest Surgical Partners, Inc.
HSP of Texas, Inc. d/b/a
Columbia Medical Center of Plano
HTI Gulf Coast, Inc.
<PAGE>
HTI Round Rock Clinics, Inc.
KPH-Consolidation, Inc. d/b/a
Columbia Kingwood Medical Center
Columbia Kingwood Homecare
Lockhart Acquisition Corp.
Longview Regional Hospital, Inc. d/b/a
Columbia Longview Regional Medical Center
Gilmer Home Care
Home Health Care
Longview Regional Physician Hospital Organization, Inc.
Mansfield Hospital, Inc.
Med Plus of El Paso, Inc.
Med-Center Hosp./Houston, Inc.
Medical Arts Hospital of Dallas, Inc. d/b/a
Columbia Medical Arts Hospital
Columbia Specialty Hospital
Medical Center Del Oro Hospital, Inc.
Medical Center Healthcare Alliance, Inc.
Medical City Dallas Hospital, Inc. d/b/a
Medical City Dallas Hospital
CareOne (Dallas,TX)
CareOne (Hurst,TX)
Comfort Health Care Services
MediPurchase, Inc.
Metroplex Surgicenters, Inc.
MGH Medical, Inc. d/b/a
Metropolitan Transitional Care Unit
MHS Surgery Centers, L.L.C.
Mid-Cities Surgi-Center, Inc. d/b/a
Mid-Cities Surgicenter
Midway Park Health Network, Inc.
Midway Park Medical Center Corporation d/b/a
Columbia Medical Center at Lancaster
<PAGE>
Navarro Memorial Hospital, Inc. d/b/a
Columbia Navarro Regional Hospital
Northeast PHO, Inc.
Panhandle Medical Management Services, Inc.
Paragon of Texas Health Properties, Inc.
Paragon Surgery Centers of Texas, Inc.
Pasadena Bayshore Hospital, Inc. d/b/a
Columbia Bayshore Medical Center
Physician Hospital Organization of the Brazos Valley
Physicians Alternative Purchasing Group, Inc.
Physicians MRI Services, Inc.
Regional Employee Assistance Program
Rio Grande Development Corp.
Rio Grande Regional Hospital, Inc.
Rio Grande Regional Investments, Inc.
Rosewood Medical Center, Inc. d/b/a
Columbia Rosewood Medical Center
S.A. Medical Center, Inc. d/b/a
South Austin Medical Center
CareOne (Austin,TX)
CareOne (Lockhart,TX)
CareOne (Marble Falls,TX)
CareOne (Austin,TX) (private duty)
San Antonio Regional Hospital, Inc. d/b/a
Bandera Medical Clinic
Silsbee Hospital, Inc. d/b/a
Silsbee Doctors Hospital
South Texas Surgicare, Inc.
Southwest Houston Surgicare, Inc.
Spring Branch Medical Center, Inc. d/b/a
Sam Houston Memorial Hospital (Div Spring Branch)
Columbia Spring Branch Medical Center
<PAGE>
Sun Towers/Vista Hills Holding Co.
Sunbelt Regional Medical Center, Inc. d/b/a
Columbia Sun Belt Medical Center
Doctors Hospital East Loop
Columbia Sun Belt Medical Center (East Campus)
Surgical Center of Irving, Inc.
Surgical Center of Wichita Falls, Inc.
Surgicare of Amarillo, Inc.
Surgicare of Central San Antonio, Inc.
Surgicare of Gramercy, Inc.
Surgicare of North San Antonio, Inc.
Surgicare of Sherman, Inc.
Surgicare of Southeast Texas, Inc.
Surgicare of Travis Center, Inc. d/b/a
Travis Centre Outpatient Surgery
Surgicare of Victoria, Inc.
Terrell Comunity Hospital, Inc. d/b/a
Columbia Medical Center at Terrell
Texas Healthcare, Inc.
Texas Medical Technologies, Inc.
Texas Outpatient Surgicare Center, Inc.
Texas Psychiatric Company, Inc.
The Woman's Physician Hospital Organization
Victoria Hospital Corporation d/b/a
DeTar Hospital
Village Oaks Medical Center, Inc. d/b/a
McQueeney Medical Clinic
W & C Hospital, Inc. d/b/a
The Woman's Place
Waco Hospital Corp.
<PAGE>
Waco Outpatient Surgical Center, Inc.
West Houston ASC, Inc.
West Houston Outpatient Medical Facility, Inc.
West Houston Surgicare, Inc.
Wharton Hospital Corporation d/b/a
Gulf Coast Medical Center
El Campo Memorial Hospital
South Texas Rural Health Clinic
WHMC, Inc. d/b/a
Columbia West Houston Medical Center
Woman's Hospital of Texas, Incorporated d/b/a
Columbia Woman's Hospital of Texas
Woodland Heights General Hospital, Inc. d/b/a
Woodland Heights Medical Center
U.K.
- ----
BMI/Columbia Healthcare Limited d/b/a
London Laboratory, MDL
Princess Grace Hospital
The Harley Street Clinic
The Portland Hospital for Women and Children
The Wellington Day Surgery Center
The Wellington Hospital
The Wellington Private Hospital Limited
UTAH
- ----
Brigham City Community Hospital, Inc. d/b/a
Brigham City Community Hospital
Brigham City Health Plan, Inc.
Castleview Hospital, Inc. d/b/a
Castleview Hospital
Columbia Home Care Services of Utah, Inc.
Eastern Utah Health Plan, Inc.
General Hospitals of Galen, Inc. d/b/a
Cartersville Medical Center
<PAGE>
HCA Health Services of Utah, Inc. d/b/a
St. Marks Hospital
Creekside Home Health Care
Healthtrust Utah Management Services, Inc.
Hospital Corporation of Utah d/b/a
Lakeview Hospital
Bountiful Laundry
HTI - Managed Care of Utah, Inc.
HTI Homemed of Utah, Inc.
HTI of Utah, Inc. d/b/a
Ashley Valley Medical Center
HTI Physician Services of Utah, Inc.
HTI Utah Data Corporation
Lakeview Health Plan, Inc.
Medical Services of Salt Lake City, Inc.
MGGI Corporation
MHHE Corporation
Mountain View Health Plan, Inc.
Mountain View Hospital, Inc. d/b/a
Mountain View Hospital
Mountain View Alcohol and Substance Abuse Program
The Birthplace
Small Miracles
Mountain View Professional Plaza
Ogden Medical Center, Inc. d/b/a
Ogden Regional Medical Center
Ogden Regional Health Plan, Inc.
Pioneer Valley Health Plan, Inc.
Pioneer Valley Hospital, Inc. d/b/a
Pioneer Valley Hospital
Salt Lake City Surgicare, Inc.
Southridge Professional Plaza, L.L.C.
<PAGE>
St. Mark's Investments, Inc.
West Jordan Hospital Corporation d/b/a
Jordan Valley Hospital
VIRGINIA
- --------
Behavioral Health of Virginia Corporation
Chicago Medical School Hospital, Inc.
Chippenham and Johnston-Willis Hospitals, Inc. d/b/a
Chippenham Medical Center
Johnston-Willis Hospital
Tucker Pavilion (Div. of Chippenham Hosp.)
Amelia Healthcare Clinic
Circle Terrace Hospital Corporation
Columbia Healthcare of Central Virginia, Inc. d/b/a
Columbia Primary Care
Columbia Practice Services
Columbia Home Therapies of Virginia, Inc.
Columbia Medical Group - Southwest Virginia, Inc.
Columbia/Alleghany Regional Hospital, Inc. d/b/a
Alleghany Regional Hospital
Alleghany Healthcare Services
Columbia/HCA John Randolph, Inc. d/b/a
John Randolph Medical Center
Columbia/HCA Retreat Hospital, Inc. d/b/a
The Retreat Hospital
Galen of Virginia, Inc. d/b/a
James Graham Brown Cancer Center
Galen Virginia Hospital Corporation
Galen-Med, Inc. d/b/a
Clinch Valley Medical Center
Lake Area Medical Center
Lakeland Medical Center
Metropolitan Health Services
HCA Ambulatory Surgery Investments, Inc.
<PAGE>
HCA Health Services of Virginia, Inc. d/b/a
Lewis-Gale Psychiatric Center
Dominion Hospital
Dominion Psychiatric Treatment Center
Greater Richmond Physician Referral Service
HCA Chester Office
Henrico Doctors Hospital
Petersburg Psychiatric Hospital
Reston Hospital Center
Health Resource Productions, Inc.
Imaging and Surgery Centers of Virginia, Inc. d/b/a
Fairfax City Imaging
Lewis-Gale Hospital, Inc. d/b/a
Lewis-Gale Hospital
Montgomery Regional Hospital, Inc. d/b/a
Montgomery Regional Hospital
Blue Ridge Health Clinic
MOS Temps, Inc.
New River Healthcare Plan, Inc.
NOCO, Inc.
Northern Virginia Hospital Corporation
Preferred Care of Richmond, Inc.
Pulaski Community Hospital, Inc. d/b/a
Pulaski Community Hospital
Reston Oncology Center Associates, Inc.
Richmond West End Real Estate, Inc.
Skipfor, Inc.
Surgicare of Virginia, Inc.
United Ambulance Service, Inc.
Virginia Psychiatric Company, Inc. d/b/a
Peninsula Center For Behavior Health
Poplar Springs Hospital
Barcroft Institute
Peninsula Hospital
Perspectives Health Services of Canada
<PAGE>
WASHINGTON
- ----------
Capital Network Services, Inc.
Olympia Hospital Corporation d/b/a
Capital Medical Center
Rainier Regional Rehabilitation Hospital, Inc.
WEST VIRGINIA
- -------------
Charleston Hospital, Inc. d/b/a
Columbia St. Francis Hospital
Galen of West Virginia, Inc. d/b/a
Columbia Home Infusion Services
Galen Shared Services
Greenbrier Valley Medical Center
St. Luke's Hospital
HCA Health Services of West Virginia, Inc.
Hospital Corporation of America
Raleigh General Hospital
Teays Valley Health Services, Inc. d/b/a
Putnam General Hospital
The Health Alliance of Southern West Virginia, Inc.
Tri Cities Health Services Corp. d/b/a
River Park Hospital (WVa)
West Virginia Management Services Organization, Inc.
WISCONSIN
- ---------
Psychiatric Company of Dane County, Inc.
WYOMING
- -------
Riverton MSO, Inc.
Wyoming Health Services, Inc. d/b/a
Riverton Memorial Hospital
<PAGE>
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Annual Report (Form 10-K)
of Columbia/HCA Healthcare Corporation of our report dated February 14, 1996,
except for Note 11 as to which the date is March 8, 1996, included in the 1995
Annual Report to Stockholders of Columbia/HCA Healthcare Corporation.
Our audit also included the financial statement schedule of Columbia/HCA
Healthcare Corporation listed in Item 14(a). This schedule is the responsibility
of the Company's management. Our responsibility is to express an opinion based
on our audits. In our opinion, the financial statement schedule referred to
above, when considered in relation to the basic financial statements taken as a
whole, presents fairly in all material respects the information set forth
therein.
We also consent to the incorporation by reference in the Registration Statements
on Forms S-3 (File Nos. 333-01337, 33-64105, 33-53661, 33-53409, 33-52379 and
33-50985) and Forms S-8 (File Nos. 33-62309, 33-62303, 33-55511, 33-55509,
33-55272, 33-55270, 33-52253, 33-51114, 33-51082, 33-51052, 33-50151, 33-50147,
33-49783 and 33-36571) of our report dated February 14, 1996, except for Note
11, as to which the date is March 8, 1996, with respect to the consolidated
financial statements incorporated herein by reference, and our report included
in the preceding paragraph with respect to the financial statement schedule
included in this Annual Report (Form 10-K) of Columbia/HCA Healthcare
Corporation for the year ended December 31, 1995.
Nashville, Tennessee
March 28, 1996
<PAGE>
EXHIBIT 23.2
CONSENT OF SR. JUDITH ANN KARAM, CSA
The undersigned hereby consents to the inclusion of her name in the Annual
Report to Stockholders and definitive Proxy Statement as a person nominated to
become a director of Columbia/HCA Healthcare Corporation upon election by the
stockholders at the 1996 Annual Meeting of Stockholders.
/s/ Sr. Judith Ann Karam, CSA
------------------------------------------
Sr. Judith Ann Karam, CSA
March 29, 1996
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
STATEMENT OF INCOME AND BALANCE SHEET AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 232
<SECURITIES> 0
<RECEIVABLES> 2,665
<ALLOWANCES> 901
<INVENTORY> 406
<CURRENT-ASSETS> 4,200
<PP&E> 14,315
<DEPRECIATION> 4,564
<TOTAL-ASSETS> 19,892
<CURRENT-LIABILITIES> 2,738
<BONDS> 7,137
<COMMON> 4
0
0
<OTHER-SE> 7,125
<TOTAL-LIABILITY-AND-EQUITY> 19,892
<SALES> 0
<TOTAL-REVENUES> 17,695
<CGS> 0
<TOTAL-COSTS> 9,659
<OTHER-EXPENSES> 3,418
<LOSS-PROVISION> 998
<INTEREST-EXPENSE> 460
<INCOME-PRETAX> 1,779
<INCOME-TAX> 715
<INCOME-CONTINUING> 1,064
<DISCONTINUED> 0
<EXTRAORDINARY> (103)
<CHANGES> 0
<NET-INCOME> 961
<EPS-PRIMARY> 2.14
<EPS-DILUTED> 2.14
</TABLE>
