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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report February 6, 1998
(Date of Earliest Event Reported)
COLUMBIA/HCA HEALTHCARE CORPORATION
(Exact name of Registrant as specified in its Charter)
DELAWARE
(State of Incorporation)
001-11239 75-2497104
(Commission (I.R.S. Employer
File Number) Identification No.)
One Park Plaza, Nashville, Tennessee 37203
(Address of principal executive offices) (Zip Code)
(615) 327-9551
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS
On February 6, 1998, Columbia/HCA Healthcare Corporation (the
"Company" or "Columbia/HCA") announced that the Company anticipates recording
significant restructuring and certain other charges in its fourth quarter ended
December 31, 1997. The Company also anticipates reporting weaker than expected
financial results in the fourth quarter.
ITEM 7. EXHIBIT
Exhibit 20 Copy of press release dated February 6, 1998 relating to
expected fourth quarter restructuring charges and
earnings decline.
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
COLUMBIA/HCA HEALTHCARE CORPORATION
/s/ JOHN M. FRANCK II
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John M. Franck II
Corporate Secretary
DATED: February 6, 1998
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EXHIBIT 20
[LOGO OF COLUMBIA/HCA HEALTHCARE
CORPORATION APPEARS HERE] NEWS
================================================================================
FOR IMMEDIATE RELEASE
Investor Contact: Media Contact:
Mark Kimbrough 615/344-2688 Jeff Prescott 615/344-5708
COLUMBIA/HCA EXPECTS FOURTH QUARTER CHARGES AND
LOSS FROM OPERATIONS
NASHVILLE, TENN., FEBRUARY 6, 1998 -- Columbia/HCA Healthcare Corporation
(NYSE:COL) announced today that it anticipates recording significant
restructuring and certain other charges in its fourth quarter ended December 31,
1997. The Company also anticipates reporting weaker than expected financial
results in the fourth quarter.
The after-tax charges are comprised of approximately $750 million of
impairment charges relating to assets being closed or divested, approximately
$60 million of costs associated with ongoing government investigations and
severance costs, and approximately $60 million of charges related to a change in
accounting principles. Approximately $450 million of the asset impairment
charges relates to anticipated sales of the Company's home health operations and
certain business units acquired from Value Health in 1997. The change in
accounting principles relates to the Company's method of accounting for start-up
costs and resulted in a write-off of the costs capitalized as of January 1,
1997.
Including the restructuring, asset impairment and other charges, management
anticipates reporting a net loss for the fourth quarter of approximately $1.25
billion to $1.35 billion after-tax, or $1.95 to $2.10 per diluted share. The
Company expects a loss from continuing operations for the fourth quarter of
approximately $375 million to $425 million after-tax, or $0.60 to $0.70 per
diluted share, before restructuring and asset impairment charges.
"The second-half of 1997 was a period of tremendous challenge and change
for this Company," stated Thomas F. Frist, Jr., M.D., Chairman and Chief
Executive Officer. "However, we are confident that we have taken significant
steps forward in our efforts to reposition the Company for 1998 and future
years. While recognizing that 1998 will entail further challenges, we look
forward to the Company experiencing benefits from the recently announced
internal reorganization and restructuring plan which became effective January 1,
1998."
During the quarter, revenues declined by approximately 10% from the prior
year primarily due to a change in the Company's estimates of reserves for
discounts and contractual allowances from both managed care and government
payers and the impact of recently implemented Medicare reimbursement changes
mandated by the Balanced Budget Act of 1997. Also during the quarter, costs
incurred were higher than anticipated primarily due to increases in salaries,
wages and benefits, other operating expenses and bad debt expense.
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The Company estimates that same-facility admissions for the quarter
increased by approximately one-half of one percent while adjusted admissions,
which reflect both inpatient and outpatient volumes, increased by approximately
two percent.
The Company's financial statements for the year ended December 31, 1997 are
currently being audited by Ernst & Young LLP, the Company's independent
auditors. It is anticipated that the audit will be completed and the Company's
results of operations for the year and fourth quarter will be reported on or
about February 13, 1998.
Certain of the above information is forward-looking and as such, only
reflects the Company's best assessment at this time. Investors are cautioned
that forward-looking statements involve risks and uncertainty, that actual
results may differ materially from such statements, and that investors should
not place undue reliance on such statements. For a discussion of factors that
may affect actual results, investors should refer to the Company's filings with
the Securities and Exchange Commission.
# # #
All references to "Company or Columbia/HCA" as used throughout this document
refer to Columbia/HCA Healthcare Corporation and its affiliates.
The above statements may include forward-looking statements based on current
management expectations. Numerous factors exist which may cause results to
differ from these expectations. Many of the factors that will determine the
Company's future results are beyond the ability of the Company to control or
predict. These statements are subject to risks and uncertainties and,
therefore, actual results may differ materially. The reader should not rely on
any forward-looking statement. The Company undertakes no obligation to update
any forward-looking statements whether as a result of new information, future
events or otherwise. The information involves risks and uncertainties as
detailed from time to time in the Company's filings with the Securities and
Exchange Commission.
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