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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 February 14, 2000
(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 February 14, 2000, Columbia/HCA Healthcare Corporation (the "Company")
announced operating results for the year and fourth quarter ended December 31,
1999.
ITEM 7. EXHIBIT
Exhibit 20 Copy of press release dated February 14, 2000 relating to
fourth 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: February 16, 2000
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EXHIBIT 20
COLUMBIA/HCA
Healthcare Corporation
NEWS
================================================================================
FOR IMMEDIATE RELEASE
INVESTOR CONTACT MEDIA CONTACT
Mark Kimbrough: 615-344-2688 Jeff Prescott: 615-344-5708
COLUMBIA/HCA REPORTS 1999 RESULTS
EPS FROM CONTINUING OPERATIONS OF $1.30 IN 1999 VS $.91 IN 1998
EXCLUDING NON-RECURRING ITEMS
SAME-FACILITY NET REVENUES INCREASE 7.2% IN FOURTH QUARTER
NASHVILLE, TENN., FEBRUARY 14, 2000 - Columbia/HCA Healthcare Corporation (NYSE:
COL) today announced operating results for the year and fourth quarter ended
December 31, 1999.
"The past year has seen this organization capitalize on our strengths by
putting into place solid operational strategies and focusing on our local
hospitals," stated Thomas F. Frist, Jr., M.D., Chairman and Chief Executive
Officer of Columbia/HCA. "Through a realignment that brings decision making and
leadership back to our communities, we have begun to realize our shared culture,
a common vision of caring, compassion and quality care."
For the year ended December 31, 1999, revenues from continuing
operations totaled $16.7 billion compared with $18.7 billion for 1998. This
decline reflects the sale or spin-off to shareholders of approximately 85
hospitals and more than 20 ambulatory surgery centers since December 31, 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 $767 million or $1.30 per diluted share in
1999 compared to $590 million or $0.91 per diluted share for 1998. Net income
totaled $657 million or $1.11 per diluted share for 1999 versus net income of
$379 million or $0.59 per diluted share for 1998.
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Excluding acquisition related goodwill charges, net income from
continuing operations (excluding gains on sales of facilities, impairment of
long-lived assets, restructuring of operations and investigation related costs)
was $850 million or $1.45 per diluted share in 1999 compared to $682 million or
$1.05 per diluted share for 1998, a 38 percent increase from the prior year.
During 1999, the Company sold 24 hospitals, 4 surgery centers and
certain other non-core assets resulting in a pretax gain of $297 million ($164
million net of tax), or $0.28 per diluted share. The Company also recorded asset
impairment charges of approximately $220 million ($194 million net of tax), or
$0.33 per diluted share during 1999. Cash proceeds from asset sales during 1999
totaled approximately $945 million before tax.
For the fourth quarter ended December 31, 1999, revenues from
continuing operations totaled $3.9 billion compared to $4.4 billion in the
fourth 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 $159 million or $0.28 per
diluted share for the fourth quarter of 1999 compared to net income of $27
million or $0.04 per diluted share during the fourth quarter of 1998. Net income
for the fourth quarter of 1999 totaled $91 million or $0.16 per diluted share
compared to a net loss of ($42) million or ($0.06) per diluted share in the
fourth quarter of 1998.
During the fourth quarter of 1999, the Company sold 6 hospitals and
certain other non-core assets for approximately $79 million, resulting in a
pretax gain of $40 million ($13 million net of tax), or $0.02 per diluted share.
Asset impairment charges were recorded during the fourth quarter of 1999
resulting in a charge of $60 million ($63 million net of tax), or $0.11 per
diluted share.
For the year 1999, same facility admissions at the Company's hospitals
increased by 2.7 percent while same facility revenues increased 5.3 percent.
During the fourth quarter of 1999, same facility admissions increased by 3.9
percent and same facility revenues increased 7.2 percent.
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As of December 31, 1999, the Company operated 207 hospitals and 83
ambulatory surgery centers (including 12 hospitals and 3 ASCs owned through
equity joint ventures), compared to 305 hospitals and 107 ambulatory surgery
centers (including 24 hospitals and 5 ASCs owned through equity joint ventures)
as of December 31, 1998.
At December 31, 1999, the Company's balance sheet reflected total debt
of approximately $6.4 billion, stockholders equity of $5.6 billion and total
assets of $16.9 billion. Capital expenditures for 1999 totaled $1.3 billion. The
Company's total debt-to-capital ratio was 50 percent at year end 1999 compared
to 51 percent at September 30, 1999 and 45 percent at December 31, 1998.
On May 11, 1999, the Company completed the tax-free spin-offs to
Columbia/HCA shareholders of LifePoint Hospitals, Inc. (NASD: LPNT) and Triad
Hospitals, Inc. (NASD: TRIH). Columbia/HCA received approximately $900
million from the spin-off of the 57 hospitals.
During 1999, the Company repurchased 81 million shares of its common
stock at a total cost of approximately $2 billion. In addition, the Company's $1
billion share repurchase program, authorized in November 1999, was completed in
February 2000. Approximately 34.4 million shares have been purchased at an
average cost of approximately $29 per share. The majority of these shares were
purchased by certain financial organizations through a series of forward
purchase contracts. In accordance with the terms of the forward purchase
contracts, the shares purchased remain issued and outstanding until the forward
purchase contracts are settled by the Company.
Several factors continued to affect the Company's financial results
during the fourth quarter and full year 1999. These factors include - reduced
Medicare reimbursement mandated by the Balanced Budget Act of 1997 and changes
in Medicare outlier payments which reduced Medicare payments to the Company's
healthcare facilities by approximately $18 million during the fourth quarter of
1999 and approximately $124 million for the year 1999; and increased supply
expense due to the increasing costs of new technology and pharmaceuticals.
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The Company estimates that its Medicare reimbursement in 2000 will be
reduced by approximately $40-$45 million from the previous year due to
continuing provisions of the Balanced Budget Act of 1997 and changes in Medicare
outlier payments.
* * *
This press release contains forward-looking statements based on current
management expectations. Numerous risks, uncertainties and other 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 TWELVE MONTHS
FOURTH QUARTER ENDED DECEMBER 31,
--------------------- ---------------------
1999 1998 1999 1998
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenues ........................................................................ $ 3,942 $ 4,420 $ 16,657 $ 18,681
EBITDA (a) ...................................................................... $ 649 $ 489 $ 2,888 $ 2,868
Net income (loss):
Income from continuing operations, excluding gains on sales of facilities,
impairment of long-lived assets and restructuring of operations and
investigation related costs .......................................... $ 159 $ 27 $ 767 $ 590
Gains on sales of facilities (net of tax) ................................ 13 123 164 365
Impairment of long-lived assets (net of tax) ............................. (63) (152) (194) (349)
Restructuring of operations and investigation related costs (net of tax) (18) (21) (80) (74)
Discontinued operations:
Loss from operations of discontinued businesses (net of tax) ......... -- (19) -- (80)
Loss on disposal of discontinued businesses (net of tax) ............. -- -- -- (73)
--------------------- ---------------------
Net income (loss) ........................................................ $ 91 ($ 42) $ 657 $ 379
===================== =====================
Diluted earnings (loss) 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 .......................................... $ 0.28 $ 0.04 $ 1.30 $ 0.91
Gains on sales of facilities ............................................. 0.02 0.19 0.28 0.56
Impairment of long-lived assets .......................................... (0.11) (0.23) (0.33) (0.54)
Restructuring of operations and investigation related costs .............. (0.03) (0.04) (0.14) (0.11)
Discontinued operations:
Loss from operations of discontinued businesses ...................... -- (0.02) -- (0.12)
Loss on disposal of discontinued businesses .......................... -- -- -- (0.11)
Net income (loss) ........................................................ $ 0.16 ($ 0.06) $ 1.11 $ 0.59
===================== =====================
Shares used in computing diluted earnings per share (000) ....................... 568,589 644,387 591,029 646,649
</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
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
(DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
1999 1998
----------------------- ---------------------
AMOUNT RATIO AMOUNT RATIO
<S> <C> <C> <C> <C>
Revenues ............................................................ $ 16,657 100.0% $ 18,681 100.0%
Salaries and benefits ............................................... 6,749 40.5 7,811 41.8
Supplies ............................................................ 2,645 15.9 2,901 15.5
Other operating expenses ............................................ 3,196 19.2 3,771 20.2
Provision for doubtful accounts ..................................... 1,269 7.6 1,442 7.7
Equity in earnings of affiliates .................................... (90) (0.5) (112) (0.6)
----------------------- ---------------------
13,769 82.7 15,813 84.6
----------------------- ---------------------
EBITDA .......................................................... 2,888 17.3 2,868 15.4
Depreciation and amortization ....................................... 1,094 6.6 1,247 6.7
Interest expense .................................................... 471 2.8 561 3.0
Gains on sales of facilities ........................................ (297) (1.8) (744) (4.0)
Impairment of long-lived assets ..................................... 220 1.3 542 2.9
Restructuring of operations and investigation related costs ......... 116 0.7 111 0.6
----------------------- ---------------------
Income from continuing operations before minority interests
and income taxes ................................................ 1,284 7.7 1,151 6.2
Minority interests in earnings of consolidated entities ............. 57 0.3 70 0.4
----------------------- ---------------------
Income from continuing operations before income taxes ............... 1,227 7.4 1,081 5.8
Provision for income taxes .......................................... 570 3.5 549 3.0
----------------------- ---------------------
Income from continuing operations ................................... 657 3.9 532 2.8
Discontinued operations:
Loss from operations of discontinued businesses
(net of tax benefit) ...................................... -- -- (80) (0.4)
Loss on disposal of discontinued businesses
(net of tax benefit) ...................................... -- -- (73) (0.4)
----------------------- ---------------------
Net income ...................................................... $ 657 3.9 $ 379 2.0
======================= ======================
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 $ 1.30 $ 0.91
Gains on sales of facilities .................................... 0.28 0.56
Impairment of long-lived assets ................................. (0.33) (0.54)
Restructuring of operations and investigation related costs ..... (0.14) (0.11)
Discontinued operations:
Loss from operations of discontinued businesses ........... -- (0.12)
Loss on disposal of discontinued businesses ............... -- (0.11)
----------------------- ---------------------
Net income ..................................................... $ 1.11 $ 0.59
======================= ======================
Shares used in computing diluted earnings per share (000) ........... 591,029 646,649
</TABLE>
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COLUMBIA/HCA HEALTHCARE CORPORATION
CONSOLIDATED INCOME STATEMENTS
FOURTH QUARTER
(DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
1999 1998
---------------------- --------------------
AMOUNT RATIO Amount Ratio
------ ----- ------ -----
<S> <C> <C> <C> <C>
Revenues ............................................................ $ 3,942 100.0% $ 4,420 100.0%
Salaries and benefits ............................................... 1,630 41.3 1,900 43.0
Supplies ............................................................ 651 16.5 706 16.0
Other operating expenses ............................................ 745 18.9 956 21.6
Provision for doubtful accounts ..................................... 284 7.2 390 8.8
Equity in earnings of affiliates .................................... (17) (0.4) (21) (0.5)
---------------------- --------------------
3,293 83.5 3,931 88.9
---------------------- --------------------
EBITDA .......................................................... 649 16.5 489 11.1
Depreciation and amortization ....................................... 258 6.6 315 7.2
Interest expense .................................................... 120 3.0 121 2.7
Gains on sales of facilities ........................................ (40) (1.0) (207) (4.7)
Impairment of long-lived assets ..................................... 60 1.5 208 4.7
Restructuring of operations and investigation related costs ......... 32 0.8 21 0.5
---------------------- --------------------
Income from continuing operations before minority interests
and income taxes ................................................ 219 5.6 31 0.7
Minority interests in earnings of consolidated entities ............. 16 0.5 16 0.4
---------------------- --------------------
Income from continuing operations before income taxes ............... 203 5.1 15 0.3
Provision for income taxes .......................................... 112 2.8 38 0.9
---------------------- --------------------
Income (loss) from continuing operations ............................ 91 2.3 (23) (0.6)
Loss from operations of discontinued businesses
(net of tax benefit) ............................................ -- -- (19) (0.4)
Net income (loss) ............................................... $ 91 2.3 $ (42) (1.0)
====================== ====================
Diluted earnings (loss) 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 $ 0.28 $ 0.04
Gains on sales of facilities .................................... 0.02 0.19
Impairment of long-lived assets ................................. (0.11) (0.23)
Restructuring of operations and investigation related costs ..... (0.03) (0.04)
Loss from operations of discontinued businesses ................. (0.02)
---------------------- --------------------
Net income (loss) .............................................. $ 0.16 $ (0.06)
====================== ====================
Shares used in computing diluted earnings per share (000) ........... 568,589 644,387
</TABLE>
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COLUMBIA/HCA HEALTHCARE CORPORATION
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30, DECEMBER 31,
1999 1999 1998
--------- --------- ---------
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents ...................... $ 190 $ 124 $ 297
Accounts receivable, net ....................... 1,873 1,834 2,096
Other .......................................... 1,534 1,557 1,470
--------- --------- ---------
Total current assets ...................... 3,597 3,515 3,863
Property and equipment, at cost ..................... 14,084 13,955 15,644
Accumulated depreciation ............................ (5,594) (5,650) (6,195)
--------- --------- ---------
8,490 8,305 9,449
Investments of insurance subsidiary ................. 1,457 1,545 1,614
Investments in and advances to affiliates ........... 654 617 1,275
Intangible assets, net of accumulated amortization .. 2,319 2,481 2,910
Other ............................................... 368 164 318
--------- --------- ---------
$ 16,885 $ 16,627 $ 19,429
========= ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable ............................... $ 657 $ 608 $ 784
Other current liabilities ...................... 1,515 1,531 1,707
Long-term debt due within one year ............. 1,160 1,010 1,068
--------- --------- ---------
Total current liabilities ................. 3,332 3,149 3,559
Long-term debt ...................................... 5,284 5,522 5,685
Professional liability risks, deferred taxes and
other liabilities .............................. 1,889 1,679 1,839
Minority interests in equity of consolidated entities 763 768 765
Stockholders' equity ................................ 5,617 5,509 7,581
--------- --------- ---------
$ 16,885 $ 16,627 $ 19,429
========= ========= =========
Current ratio ....................................... 1.08 1.12 1.09
Ratio of debt to debt plus common and minority equity 50.2% 51.0% 44.7%
Shares outstanding (thousands) ...................... 564,273 563,282 642,578
</TABLE>
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COLUMBIA/HCA HEALTHCARE CORPORATION
OPERATING STATISTICS
<TABLE>
<CAPTION>
FOR THE TWELVE MONTHS
FOURTH QUARTER ENDED DECEMBER 31,
-------------------------- ----------------------------
1999 1998 1999 1998
---------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
CONSOLIDATED HOSPITALS:
Number of Hospitals .............. 195 281 195 281
Weighted Average Licensed Beds ... 42,850 55,594 46,291 59,104
Licensed Beds at End of Period ... 42,484 53,693 42,484 53,693
Admissions ....................... 381,700 448,500 1,625,400 1,891,800
Same Facility % Change ...... 3.9% 2.7%
Equivalent Admissions ............ 567,000 680,400 2,425,100 2,875,600
Same Facility % Change 3.1% 2.5%
Revenue per Equivalent Admission . $ 6,953 $ 6,497 $ 6,869 $ 6,496
Same Facility % Change ...... 4.0% 2.7%
Patient Days ..................... 1,875,400 2,201,800 8,030,800 9,387,300
Equivalent Patient Days .......... 2,785,900 3,339,400 11,982,000 14,268,600
Emergency Room Visits ............ 1,114,800 1,310,900 4,765,900 5,539,000
Outpatient Revenues as a
Percentage of Patient Revenues 38.5% 40.2% 38.8% 38.9%
Surgery Cases .................... 324,100 396,900 1,372,600 1,695,200
Average Length of Stay ........... 4.9 4.9 4.9 5.0
Occupancy ........................ 47.6% 43.0% 47.5% 43.5%
Equivalent Occupancy ............. 70.7% 65.2% 70.9% 66.1%
NUMBER OF CONSOLIDATED AND
NON-CONSOLIDATED (EQUITY
JOINT VENTURES) HOSPITALS:
Consolidated ..................... 195 281 195 281
Non-Consolidated (Equity
Joint Ventures) .............. 12 24 12 24
---------- ---------- ----------- -----------
Total Number of Hospitals ........ 207 305 207 305
========== ========== =========== ===========
</TABLE>
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