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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 April 21, 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 April 21, 1999, Columbia/HCA Healthcare Corporation (the "Company")
announced operating results for the first quarter ended March 31, 1999.
The Company also announced that, subject to certain financing
arrangements and regulatory approvals, its Board of Directors has authorized the
spin-offs of LifePoint Hospitals, Inc. and Triad Hospitals, Inc. (America and
Pacific Groups, respectively) to the stockholders of Columbia/HCA and
established April 30, 1999 as the record date for the distribution.
ITEM 7. EXHIBIT
Exhibit 20 Copy of press release dated April 21, 1999.
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: April 21, 1999
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EXHIBIT 20
COLUMBIA/HCA REPORTS FIRST QUARTER 1999
EPS From Continuing Operations of $0.42
Excluding Non-recurring Items
Board Authorizes Spin-Off, Sets Record Date of April 30
Nashville, Tenn., April 21, 1999 - Columbia/HCA Healthcare Corporation (NYSE:
COL) today announced operating results for the first quarter ended March 31,
1999.
For the first quarter, revenues from continuing operations totaled $4.7
billion compared to $4.9 billion in the first quarter of 1998. Net income from
continuing operations, excluding gains on sales of facilities, impairment of
long-lived assets and restructuring of operations and investigation related
costs, totaled $271 million or $0.42 per diluted share for the first quarter of
1999 compared to $241 million or $0.37 per diluted share in the first quarter of
1998. Net income for the first quarter totaled $322 million or $0.50 per diluted
share compared to $197 million or $0.31 per diluted share in the first quarter
of 1998.
The Company sold 7 hospitals and certain other non-core assets during
the quarter resulting in a pretax gain of $249 million ($151 million net of
tax), or $0.24 per diluted share. The Company also recorded asset impairment
charges of approximately $106 million ($80 million net of tax), or $0.13 per
diluted share during the quarter.
During the quarter, the Company's remaining core assets had combined net
income from continuing operations, excluding gains on sales of facilities,
impairment of long-lived assets and restructuring of operations and
investigation related costs, of $0.44 per diluted share; assets sold or being
held for sale experienced a net loss of ($0.02) per diluted share, while assets
to be distributed to shareholders broke even during the quarter.
For the quarter ended March 31, 1999, same-facility admissions increased
by 3.5 percent. Same-facility equivalent admissions, which reflect inpatient and
outpatient volumes, increased 3.6 percent.
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At March 31, 1999, the Company's balance sheet reflected total debt of
approximately $6.3 billion, stockholders' equity of $7.5 billion and total
assets of $18.8 billion. Capital expenditures for the quarter totaled $301
million. The Company's total debt-to-capital ratio was to 43 percent at March
31, 1999 compared to 45 percent at December 31, 1998 and 52 percent at March 31,
1998.
Subject to certain financing arrangements and regulatory approvals, the
Company's Board of Directors has authorized the spin-offs of LifePoint
Hospitals, Inc. and Triad Hospitals, Inc. (America and Pacific Groups,
respectively) to the stockholders of Columbia/HCA. The spin-off will be
accomplished through a distribution of one share of LifePoint and one share of
Triad common stock for every 19 shares of Columbia/HCA common stock outstanding
on the record date, which will be April 30, 1999. The effective date of the
spin-off will be on or about May 7, 1999.
The Internal Revenue Service has ruled that the spin-off generally will
be tax-free to the Company's stockholders (except for any cash received in lieu
of fractional shares of LifePoint and Triad common stock). Further details
concerning the spin-off will be provided to stockholders in an information
statement to be distributed by the Company prior to the effective date of the
spin-off.
The Company has recently settled forward purchase contracts associated
with the July 1998, $1 billion share repurchase program representing 27.1
million shares at a cost of approximately $580 million. In accordance with the
terms of the forward purchase contracts, the shares remained issued and
outstanding until the contracts were settled by the Company. The remaining
forward purchase contracts, totaling 12.3 million shares and approximately $305
million, are expected to be settled early during the second quarter. Shares
valued in excess of $100 million were purchased by the Company in the open
market.
In February 1999, the Board authorized a second $1 billion share
repurchase program. As of April 20, 1999, Columbia/HCA has repurchased 6.9
million shares of its common stock for approximately $131 million.
Columbia/HCA's annual shareholders meeting will be held on May 27, 1999
in Nashville, Tennessee, for shareholders of record as of April 5, 1999.
* * *
This press release contains forward-looking statements based on current
management expectations. Numerous factors, including 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.
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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.
Columbia/HCA Healthcare Corporation
Consolidated Operating Results Summary
(Dollars in millions, except per share amounts)
First Quarter
1999 1998
Revenues $4,655 $4,901
EBITDA (a) $878 $901
Net income:
Income from continuing
operations, excluding gains
on sales of facilities,
impairment on long-lived
assets and restructuring of
operations and investigation
related costs $271 $241
Gains on sales of facilities
(net of tax) 151 -
Impairment of long-lived assets
(net of tax) (80) -
Restructuring of operations and
investigation related costs
(net of tax) (20) (22)
Loss from operations of
discontinued businesses
(net of tax) - (22)
Net income $322 $197
Diluted earnings per share:
Income from continuing
operations, excluding gains on
sales of facilities, impairment
on long-lived assets and
restructuring of operations
and investigation related costs $0.42 $0.37
Gains on sales of facilities 0.24 -
Impairment of long-lived assets (0.13) -
Restructuring of operations and
investigation related costs (0.03) (0.03)
Loss from operations of
discontinued businesses - (0.03)
Net income $0.50 $0.31
Shares used in computing diluted
earnings per share (000) 641,352 644,933
(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
First Quarter
(Dollars in millions, except per share amounts)
1999 1998
Amount Ratio Amount Ratio
Revenues $4,655 100.0% $4,901 100.0%
Salaries and benefits 1,860 40.0 2,013 41.1
Supplies 722 15.5 746 15.2
Other operating expenses 892 19.0 940 19.2
Provisions for doubtful accounts 338 7.3 343 7.0
Equity in earnings of affiliates (35) (0.7) (42) (0.9)
3,777 81.1 4,000 81.6
EBITDA 878 18.9 901 18.4
Depreciation and amortization 296 6.4 309 6.3
Interest expense 111 2.4 153 3.1
Gains on sale of facilities (249) (5.3) - -
Impairment of long-lived assets 106 2.3 - -
Restructuring of operations and
investigation related costs 30 0.6 38 0.8
Income from continuing operations
before minority interests and
income taxes 584 12.5 401 8.2
Minority interests in earnings of
consolidated entities 14 0.3 20 0.4
Income from continuing operations
before income taxes 570 12.2 381 7.8
Provision for income taxes 248 5.3 162 3.4
Income from continuing operations 322 6.9 219 4.4
Loss from operations of
discontinued businesses (net of
tax benefit) - - (22) (0.4)
Net Income $322 6.9 $197 4.0
Diluted earnings per share:
Income from continuing operations,
excluding gains on sales of
facilities, impairment of
long-lived assets and re-
structuring of operations and
investigation related costs $0.42 $0.37
Gains on sales of facilities 0.24 -
Impairment long-lived assets (0.13) -
Restructuring of operations and
investigation related costs (0.03) (0.03)
Loss from operations of
discontinued businesses - (0.03)
Net income $0.50 $0.31
Shares used in computing
diluted earnings per share
(000) 641,352 644,933
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Columbia/HCA Healthcare Corporation
Consolidated Balance Sheets
(Dollars in millions)
March 31 December 31
1999 1998
ASSETS
Current assets:
Cash and cash
equivalents $586 $297
Accounts receivable, net 2,250 2,096
Other 1,398 1,470
Total current assets 4,234 3,863
Property and equipment,
at cost 15,410 15,644
Accumulated depreciation (6,261) (6,195)
9,149 9,449
Investments of insurance
subsidiary 1,533 1,614
Investments in and
advances to affiliates 865 1,275
Intangible assets,
net 2,815 2,910
Other 201 318
$18,797 $19,429
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Accounts payable $748 $784
Other current
liabilities 1,681 1,707
Long-term debt due
within one year 763 1,068
Total current
liabilities 3,192 3,559
Long-term debt 5,566 5,685
Professional liability
risks, deferred taxes
and other liabilities 1,788 1,839
Minority interests in
equity of consolidated
entities 772 765
Stockholders' equity 7,479 7,581
$18,797 $19,429
Current ratio 1.33 1.09
Ratio of debt to
debt plus common and
minority equity 43.4% 44.7%
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Columbia/HCA Healthcare Corporation
Operating Statistics
First Quarter
1999 1998
Consolidated Hospitals
Number of Hospitals 273 310
Weighted Average
Licensed Beds 52,451 60,765
Licensed Beds at
End of Period 51,797 60,739
Admissions 477,400 508,200
Equivalent Admissions 703,300 756,600
Patient Days 2,389,200 2,593,500
Equivalent Patient
Days 3,519,200 3,861,700
Emergency Room Visits 1,399,400 1,412,100
Outpatient Revenues as
a Percentage of
Patient Revenues 37.6% 36.8%
Surgery Cases 378,800 441,500
Average Length of Stay 5.0 5.1
Occupancy 50.6% 47.4%
Equivalent Occupancy 74.5% 70.6%
Number of Consolidated
and Non-Consolidated
(50/50 Equity Joint
Ventures) Hospitals:
Consolidated 273 310
Non-Consolidated
(50/50 Equity
Joint Ventures 24 26
Total Number
of Hospitals 297 336
Q1-1999 Group Results
($ in millions)
Assets Sold
Core or Held
Assets Triad LifePoint for Sale
Revenues $4,039 $368 $134 $114
EBITDA $821 $41 $22 ($6)
% Margin 20.3% 11.1% 16.3% -5.1%
Proforma EBITDA(1) - $40 $21 -
Same Facility
Admissions +3.3% +5.4% +6.9% -4.5%
(1) On a pro forma basis to reflect the results of LifePoint's and
Triad's operations as if the distribution and the divestitures of certain
facilities occurred as of the beginning of the period.
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