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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report October 25, 1999
(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) 344-9551
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS
On October 25, 1999, Columbia/HCA Healthcare Corporation (the "Company")
announced operating results for the third quarter and nine months ended
September 30, 1999.
ITEM 7. EXHIBIT
Exhibit 20 Copy of press release dated October 25, 1999 relating to
third quarter earnings release.
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
- -----------------------------------
John M. Franck II
Corporate Secretary
DATED: October 26, 1999
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EXHIBIT 20
[COLUMBIA/HCA LOGO]
NEWS
- --------------------------------------------------------------------------------
FOR IMMEDIATE RELEASE
INVESTOR CONTACT MEDIA CONTACT
Mark Kimbrough: 615-344-2688 Jeff Prescott: 615-344-5708
COLUMBIA/HCA REPORTS THIRD QUARTER 1999
EPS FROM CONTINUING OPERATIONS OF $0.27
EXCLUDING NON-RECURRING ITEMS
SAME FACILITY REVENUE PER EQUIVALENT ADMISSION INCREASES 3.8%
SAME FACILITY ADMISSIONS INCREASES 2.0%
NASHVILLE, TENN., OCTOBER 25, 1999 - Columbia/HCA Healthcare Corporation (NYSE:
COL) today announced operating results for the third quarter and nine months
ended September 30, 1999.
For the third quarter of 1999, revenues totaled $3.9 billion compared
to $4.6 billion in the third quarter of 1998. This decline in revenues reflects
the sale or spin-off of approximately 100 hospitals and more than 20 ambulatory
surgery centers since September 30, 1998. Net income from continuing operations,
excluding restructuring of operations and investigation related costs, totaled
$155 million or $0.27 per diluted share for the third quarter of 1999, compared
to $131 million or $0.20 per diluted share in the third quarter of 1998. Net
income for the third quarter of 1999 totaled $138 million or $0.24 per diluted
share, compared to $146 million or $0.22 per diluted share in the third quarter
of 1998.
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For the quarter ended September 30, 1999, same facility revenues
increased 5.8 percent while same facility revenue per equivalent admission
increased 3.8 percent. Same facility admissions for the Company's hospitals
increased by 2.0 percent during the quarter.
Revenues for the nine months ended September 30, 1999, totaled $12.7
billion compared to $14.3 billion in the first nine months of 1998. Net income
from continuing operations, before gains on sales of facilities, impairment of
long-lived assets and restructuring of operations and investigation related
costs, totaled $608 million or $1.02 per diluted share in the first nine months
of 1999, compared to $563 million or $0.87 per diluted share for the nine months
ended September 30, 1998. Net income totaled $566 million or $0.95 per diluted
share in 1999, versus $421 million or $0.65 per diluted share in 1998.
Several factors continue to adversely affect the Company's financial
results during the first nine months of 1999. These factors include reduced
Medicare reimbursement mandated by the Balanced Budget Act of 1997; increased
supply expense due to the increasing costs of new technology and
pharmaceuticals; and increased bad debt expense.
As of September 30, 1999, the Company operated 214 hospitals and 84
ambulatory surgery centers (including 12 hospitals and 3 ASCs owned through
50/50 equity joint ventures), compared to 318 hospitals and 108 ambulatory
surgery centers (including 24 hospitals and 5 ASCs owned through equity joint
ventures) at September 30, 1998.
The Company sold 3 hospitals and certain investments in other non-core
assets during the third quarter of 1999 for approximately $131 million, net of
tax.
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At September 30, 1999, the Company's balance sheet reflected total debt of
approximately $6.5 billion, stockholders' equity of approximately $5.5 billion
and total assets of approximately $16.6 billion. Capital expenditures for the
quarter totaled approximately $246 million. The Company's total debt-to-capital
ratio was 51 percent at September 30, 1999, compared to 45 percent at September
30, 1998.
* * *
This press release contains forward-looking statements based on current
management expectations. Numerous factors including: (i.) the outcome of the
known and unknown governmental investigations and litigation involving the
Company's business practices, (ii.) possible changes in the Medicare program
that may further limit reimbursements to health care providers and insurers,
(iii.) the complexity of integrated computer systems and the success and expense
of the remediation efforts of the Company and relevant third parties in
achieving Year 2000 readiness, and (iv.) the ability to enter into managed care
provider arrangements on acceptable terms, and those detailed from time-to-time
in the Company's filings with the Securities and Exchange Commission, may cause
results to differ materially from those anticipated in the forward-looking
statements. 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.
Readers should not place undue reliance on forward-looking statements, which
reflect management's views only as of the date hereof. The Company undertakes no
obligation to revise or update any forward-looking statements, or to make any
other forward-looking statements, whether as a result of new information, future
events or otherwise.
All references to "Company" and "Columbia/HCA" as used throughout this document
refer to Columbia/HCA Healthcare Corporation and its affiliates.
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Columbia/HCA Healthcare Corporation
Consolidated Operating Results Summary
(Dollars in millions, except per share amounts)
<TABLE>
<CAPTION>
For the Nine Months
Third Quarter Ended September 30,
---------------------- ----------------------
1999 1998 1999 1998
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenues $ 3,899 $ 4,579 $ 12,715 $ 14,261
EBITDA (a) $ 655 $ 682 $ 2,239 $ 2,379
Net income:
Income from continuing operations,
excluding gains on sales of facilities,
impairment of long-lived assets
and restructuring of operations
and investigation
related costs $ 155 $ 131 $ 608 $ 563
Gains on sales
of facilities
(net of tax) -- 242 151 242
Impairment of long
-lived assets
(net of tax) -- (197) (131) (197)
Restructuring of
operations and
investigation
related costs
(net of tax) (17) (13) (62) (53)
Discontinued operations:
Loss from operations
of discontinued
businesses
(net of tax)- -- (17) -- (61)
Loss on disposal
of discontinued
businesses
(net of tax)- -- -- -- (73)
--------- --------- --------- ---------
Net income $ 138 $ 146 $ 566 $ 421
========= ========= ========= =========
</TABLE>
4
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<TABLE>
<S> <C> <C> <C> <C>
Diluted earnings per share
Income from continuing operations,
excluding gains on sales of facilities,
impairment of long-lived assets and
restructuring of operations and
investigation
related costs $ 0.27 $ 0.20 $ 1.02 $ 0.87
Gains on sales
of facilities
(net of tax) -- 0.38 0.25 0.38
Impairment of long
-lived assets -- (0.31) (0.22) (0.31)
Restructuring of
operations and
investigation
related costs (0.03) (0.02) (0.10) (0.08)
Discontinued operations:
Loss from operations
of discontinued
businesses -- (0.03) -- (0.10)
Loss on disposal
of discontinued
businesses -- -- -- (0.11)
--------- --------- --------- ---------
Net income $ 0.24 $ 0.22 $ 0.95 $ 0.65
========= ========= ========= =========
Shares used in computing
diluted earnings
per share (000) 567,789 647,243 598,594 646,734
</TABLE>
(a) EBITDA is defined as income from continuing operations before
depreciation and amortization, interest expense, gains on sales of
facilities, impairment of long-lived assets, restructuring of
operations and investigation related costs, minority interests and
income taxes.
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Columbia/HCA Healthcare Corporation
Consolidated Income Statements
Third Quarter
(Dollars in millions, except per share amounts)
<TABLE>
<CAPTION>
1999 1998
------------------ -------------------
Amount Ratio Amount Ratio
<S> <C> <C> <C> <C>
Revenues $ 3,899 100.0% $ 4,579 100.0%
Salaries and benefits 1,583 40.6 1,900 41.5
Supplies 618 15.9 730 15.9
Other operating expenses 733 18.7 914 20.0
Provision for
doubtful accounts 318 8.2 369 8.1
Equity in earnings
of affiliates (8) (0.2) (16) (0.4)
------- ----- ------- -----
3,244 83.2 3,897 85.1
------- ----- ------- -----
EBITDA 655 16.8 682 14.9
Depreciation and
amortization 262 6.8 312 6.7
Interest expense 122 3.1 142 3.1
Gains on sales of
facilities -- -- (537) (11.7)
Impairment of
long-lived assets -- -- 334 7.3
Restructuring of
operations and
investigation related
costs 24 0.6 21 0.5
------- ----- ------- -----
Income from continuing
operations before
minority interests
and income taxes 247 6.3 410 9.0
Minority interests in
earnings of consolidated
entities 13 0.3 16 0.4
------- ----- ------- -----
Income from continuing
operations before
income taxes 234 6.0 394 8.6
Provision for income
taxes 96 2.5 231 5.0
------- ----- ------- -----
Income from continuing
operations 138 3.5 163 3.6
Loss from operations
of discontinued businesses
(net of tax benefit) -- -- (17) (0.4)
------- ----- ------- -----
Net income $ 138 3.5 $ 146 3.2
======= ===== ======= =====
</TABLE>
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<TABLE>
<S> <C> <C>
Diluted earnings per share:
Income from continuing operations,
excluding gains on sales of
facilities, impairment of
long-lived assets and restructuring
and investigation related
costs $ 0.27 $ 0.20
Gains on sales of
facilities -- 0.38
Impairment of long-
lived assets -- (0.31)
Restructuring of operations
and investigation related
costs (0.03) (0.02)
Loss from operations
of discontinued
businesses -- (0.03)
----------- -----------
Net income $ 0.24 $ 0.22
=========== ===========
Shares used in computing diluted
earnings per
share(000) 567,789 647,243
</TABLE>
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Columbia/HCA Healthcare Corporation
Consolidated Income Statements
For the Nine Months Ended September 30,1999 and 1998
(Dollars in millions, except per share amounts)
<TABLE>
<CAPTION>
1999 1998
------------------- -------------------
Amount Ratio Amount Ratio
<S> <C> <C> <C> <C>
Revenues $ 12,715 100.0% $ 14,261 100.0%
Salaries and
benefits 5,119 40.3 5,911 41.4
Supplies 1,994 15.7 2,195 15.4
Other operating
expenses 2,451 19.2 2,815 19.7
Provision for doubtful
accounts 985 7.8 1,052 7.4
Equity in earnings
of affiliates (73) (0.6) (91) (0.6)
-------- ----- -------- -----
10,476 82.4 11,882 83.3
-------- ----- -------- -----
EBITDA 2,239 17.6 2,379 16.7
Depreciation and
amortization 836 6.4 932 6.6
Interest expense 351 2.8 440 3.1
Gains on sales of
facilities (257) (2.0) (537) (3.8)
Impairment of
long-lived assets 160 1.3 334 2.3
Restructuring of
operations and
investigation related
costs 84 0.7 90 0.6
-------- ----- -------- -----
Income from continuing operations
before minority interests
and income taxes 1,065 8.4 1,120 7.9
Minority interests in
earnings of consolidated
entities 41 0.3 54 0.4
-------- ----- -------- -----
Income from continuing
operations before
income taxes 1,024 8.1 1,066 7.5
Provision for income
taxes 458 3.6 511 3.6
-------- ----- -------- -----
Income from continuing
operations 566 4.5 555 3.9
Discontinued operations:
Loss from operations
of discontinued businesses
(net of tax benefit)- -- -- (61) (0.4)
Loss on disposal of
discontinued businesses
(net of tax benefit)- -- -- (73) (0.5)
-------- ----- -------- -----
Net income $ 566 4.5 $ 421 3.0
======== ===== ======== =====
</TABLE>
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<TABLE>
<S> <C> <C>
Diluted earnings per share:
Income from continuing operations,
excluding gains on sales of
facilities, impairment of
long-lived assets and restructuring
and investigation
related costs $ 1.02 $ 0.87
Gains on sales of
facilities 0.25 0.38
Impairment of long-
lived assets (0.22) (0.31)
Restructuring of
operations and
investigation related
costs (0.10) (0.08)
Discontinued operations:
Loss from operations
of discontinued
businesses -- (0.10)
Loss on disposal
of discontinued
businesses -- (0.11)
----------- -----------
Net income $ 0.95 $ 0.65
=========== ===========
Shares used in
computing diluted
earnings per share
(000) 598,594 646,734
</TABLE>
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Columbia/HCA Healthcare Corporation
Consolidated Balance Sheets
(Dollars in millions)
<TABLE>
<CAPTION>
September 30, June 30, December 31,
1999 1999 1998
------------- ------------- -------------
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash
equivalents $ 124 $ 83 $ 297
Accounts receivable,
net 1,834 1,821 2,096
Other 1,557 1,480 1,470
------------- ------------- -------------
Total current
assets 3,515 3,384 3,863
Property and equipment,
at cost 13,955 13,764 15,644
Accumulated
depreciation (5,650) (5,536) (6,195)
------------- ------------- -------------
8,305 8,228 9,449
Investments of insurance
subsidiary 1,545 1,578 1,614
Investments in and
advances to affiliates 617 793 1,275
Intangible assets, net of accumulated
amortization 2,481 2,523 2,910
Other 164 144 318
------------- ------------- -------------
$ 16,627 $ 16,650 $ 19,429
============= ============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 608 $ 629 $ 784
Other current
liabilities 1,531 1,456 1,707
Long-term debt
due within one year 1,010 942 1,068
------------- ------------- -------------
Total current
liabilities 3,149 3,027 3,559
Long-term debt 5,522 5,718 5,685
Professional liability
risks, deferred taxes
and other liabilities 1,679 1,703 1,839
Minority interests in
equity of consolidated
entities 768 768 765
Stockholders' equity 5,509 5,434 7,581
------------- ------------- -------------
$ 16,627 $ 16,650 $ 19,429
============= ============= =============
Current ratio 1.12 1.12 1.09
Ratio of debt to debt
plus common and
minority equity 51.0% 51.8% 44.7%
Shares Outstanding:
563,282,000 564,038,500 642,578,300
</TABLE>
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Columbia/HCA Healthcare Corporation
Operating Statistics
<TABLE>
<CAPTION>
For the Nine Months
Third Quarter Ended September 30,
------------------------ -------------------------
1999 1998 1999 1998
---------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
Consolidated Hospitals:
Number of Hospitals 202 294 202 294
Weighted Average
Licensed Beds 43,511 59,396 47,451 60,286
Licensed Beds at
End of Period 43,461 57,521 43,461 57,521
Admissions 370,500 459,700 1,243,700 1,443,300
Same Facility Change 2.0% 2.2%
Equivalent
Admissions 557,900 705,100 1,858,100 2,195,200
Same Facility Change 1.9% 2.1%
Revenue per Equivalent
Admission $ 6,988 $ 6,494 $ 6,843 $ 6,496
Same Facility Change 3.8% 2.2%
Patient Days 1,812,800 2,246,100 6,155,400 7,185,500
Equivalent
Patient Days 2,729,900 3,445,900 9,196,100 10,929,200
Emergency Room
Visits 1,091,000 1,400,400 3,651,100 4,228,100
Outpatient Revenues
as a Percentage
of Patient
Revenues 38.8% 39.3% 38.9% 38.4%
Surgery Cases 322,600 403,100 1,048,500 1,298,300
Average Length
of Stay 4.9 4.9 5.0 5.0
Occupancy 45.3% 41.1% 47.5% 43.7%
Equivalent Occupancy 68.2% 63.1% 71.0% 66.5%
Number of Consolidated and
Non-Consolidated (50/50 Equity
Joint Ventures) Hospitals:
Consolidated 202 294 202 294
Non-Consolidated
(50/50 Equity
Joint Ventures) 12 24 12 24
---------- ---------- ---------- -----------
Total Number of
Hospitals 214 318 214 318
========== ========== ========== ===========
</TABLE>
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