<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
-------------------------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
------------------------- -----------------------
Commission File Number: 0-19442
---------------------------------------------------------
OXFORD HEALTH PLANS, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 06-1118515
- --------------------------------------------------------------------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
800 Connecticut Avenue - Norwalk, Connecticut 06854
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(203) 852-1442
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
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 registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
------- ------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date. The number of shares of common
stock, par value $.01 per share, outstanding on August 1, 1997 was 78,802,389.
1
<PAGE> 2
OXFORD HEALTH PLANS, INC.
INDEX TO FORM 10-Q
PART I - FINANCIAL INFORMATION
ITEM 1 Financial Statements
PAGE
Consolidated Balance Sheets at June 30, 1997 and
December 31, 1996 3
Consolidated Statements of Earnings for the Three
Months and Six Months Ended June 30, 1997 and 1996 4
Consolidated Statements of Cash Flows for the Six
Months Ended June 30, 1997 and 1996 5
Notes to Condensed Consolidated Financial Statements 6
ITEM 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
PART II - OTHER INFORMATION
ITEM 4 Submission of Matters to a Vote of Security Holders 11
ITEM 5 Other Information 11
ITEM 6 Exhibits and Reports on Form 8-K 11
Signatures
2
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
OXFORD HEALTH PLANS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
June 30, Dec. 31,
ASSETS 1997 1996
---------- ---------
<S> <C> <C>
Current assets: (Unaudited)
Cash and cash equivalents $ 23,809 72,160
Short-term investments - available-for-sale, at market value 664,846 767,312
Premiums receivable 421,828 315,126
Other receivables 19,323 26,343
Prepaid expenses and other current assets 5,076 5,814
Deferred income taxes 7,127 13,771
---------- ---------
Total current assets 1,142,009 1,200,526
Property and equipment, at cost, net of accumulated depreciation and
amortization of $95,838 in 1997 and $69,739 in 1996 121,279 104,954
Deferred income taxes 7,320 5,700
Other noncurrent assets 58,647 35,559
---------- ---------
Total assets $1,329,255 1,346,739
========== =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Medical costs payable $ 532,237 624,359
Trade accounts payable and accrued expenses 71,491 51,256
Income taxes payable 19,000 9,902
Unearned premiums 16,480 63,052
---------- ---------
Total current liabilities 639,208 748,569
---------- ---------
Shareholders' equity:
Preferred stock, $.01 par value, authorized 2,000,000 shares - -
Common stock, $.01 par value, authorized 400,000,000
shares; issued and outstanding 78,284,932 in 1997
and 77,376,282 in 1996 783 774
Additional paid-in capital 410,247 391,602
Retained earnings 267,344 195,790
Unrealized net appreciation of investments 11,673 10,004
---------- ---------
Total shareholders' equity 690,047 598,170
---------- ---------
Total liabilities and shareholders' equity $1,329,255 1,346,739
========== =========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
3
<PAGE> 4
OXFORD HEALTH PLANS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 1997 AND 1996
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Six Months
Ended June 30 Ended June 30
----------------------- -----------------------
1997 1996 1997 1996
Revenues: ----------- ------- --------- ---------
<S> <C> <C> <C> <C>
Premiums earned $ 1,044,510 712,768 2,014,625 1,360,950
Third-party administration, net 3,040 2,346 6,116 5,528
Investment and other income, net 14,374 10,214 28,498 16,990
----------- ------- --------- ---------
Total revenues 1,061,924 725,328 2,049,239 1,383,468
----------- ------- --------- ---------
Expenses:
Health care services 832,790 572,016 1,610,526 1,090,232
Marketing, general and administrative 165,922 113,553 315,706 220,313
----------- ------- --------- ---------
Total expenses 998,712 685,569 1,926,232 1,310,545
----------- ------- --------- ---------
Operating profit 63,212 39,759 123,007 72,923
Equity in net loss of affiliate (120) (1,000) (1,020) (2,050)
----------- ------- --------- ---------
Earnings before income taxes 63,092 38,759 121,987 70,873
Provision for income taxes 25,917 16,301 50,433 29,898
----------- ------- --------- ---------
Net earnings $ 37,175 22,458 71,554 40,975
=========== ======= ========= =========
Earnings per common and common equivalent
share:
Primary $ .45 .28 .87 .53
Fully diluted $ .45 .28 .87 .53
Weighted average shares of common stock and
common stock equivalents
outstanding:
Primary 82,674 80,791 82,513 77,988
Fully diluted 82,818 80,791 82,683 77,988
</TABLE>
See accompanying notes to condensed consolidated financial statements.
4
<PAGE> 5
OXFORD HEALTH PLANS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
SIX MONTHS ENDED JUNE 30, 1997 AND 1996
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
1997 1996
--------- --------
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 71,554 40,975
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization 27,491 20,124
Deferred income taxes 3,865 180
Realized gain on sale of investments (7,477) (2,655)
Equity in net loss of affiliate 1,020 2,050
Other, net 240 240
Changes in assets and liabilities:
Premiums receivable (106,702) (26,941)
Other receivables 7,020 (3,351)
Prepaid expenses and other current assets 738 (1,056)
Medical costs payable (92,122) 126,975
Trade accounts payable and accrued expenses 20,235 9,553
Income taxes payable 17,500 14,772
Unearned premiums (46,572) (41,277)
Other, net (4,041) (402)
--------- --------
Net cash provided (used) by operating activities (107,251) 139,187
--------- --------
Cash flows from investing activities:
Capital expenditures (42,730) (29,896)
Purchases of available-for-sale securities (304,867) (446,373)
Sales and maturities of available-for-sale securities 416,415 166,399
Investments in unconsolidated affiliates (20,564) (6,305)
Other, net 394 115
--------- --------
Net cash provided (used) by investing activities 48,648 (316,060)
--------- --------
Cash flows from financing activities - proceeds
Proceeds from issuance of common stock -- 220,541
Proceeds from exercise of stock options 10,252 6,243
--------- --------
Net cash provided by financing activities 10,252 226,784
--------- --------
Net increase (decrease) in cash and cash equivalents (48,351) 49,911
Cash and cash equivalents at beginning of period 72,160 58,450
--------- --------
Cash and cash equivalents at end of period $ 23,809 108,361
========= ========
Supplemental cash flow information - cash paid for income taxes $ 35,000 18,640
Supplemental schedule of noncash investing and financing activities:
Unrealized appreciation (depreciation) of short-term investments 2,828 (3,508)
Tax benefit realized on exercise of stock options 8,402 5,766
One-for-one stock dividend $ - 348
</TABLE>
See accompanying notes to condensed consolidated financial statements
5
<PAGE> 6
OXFORD HEALTH PLANS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(1) BASIS OF PRESENTATION
The interim condensed consolidated financial statements included herein
have been prepared by Oxford Health Plans, Inc. ("Oxford") and its subsidiaries
(collectively, the "Company") without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission (the "SEC"). Certain
information and footnote disclosures, normally included in the financial
statements prepared in accordance with generally accepted accounting principles,
have been condensed or omitted pursuant to SEC rules and regulations;
nevertheless, management of the Company believes that the disclosures herein are
adequate to make the information presented not misleading. The condensed
consolidated financial statements and notes should be read in conjunction with
the audited consolidated financial statements and notes thereto as of and for
each of the years in the three-year period ended December 31, 1996, included in
the Company's Form 10-K filed with the SEC in March 1997.
In the opinion of management, all adjustments, consisting only of normal
recurring adjustments, necessary to present fairly the consolidated financial
position of the Company with respect to the interim condensed consolidated
financial statements have been made. The results of operations for the interim
periods are not necessarily indicative of the results to be expected for the
full year.
(2) CAPITAL STOCK
On March 17, 1997, the Board of Directors unanimously adopted a
resolution, subject to shareholder approval, proposing an amendment to the
Company's Second Restated and Amended Certificate of Incorporation, as amended,
to increase the number of authorized shares of the Company's common stock from
200 million shares to 400 million shares. On April 22, 1997, the Company's
shareholders approved such amendment.
(3) EARNINGS PER SHARE
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, "Earnings Per Share," which
must be adopted for both interim and annual periods ending after December 15,
1997. This statement specifies the computation, presentation and disclosure
requirements for earnings per share. Adoption for any period prior to December
15, 1997 is not permitted, although pro forma disclosure of earnings per share
amounts computed under the statement in periods prior to the required adoption
is permitted. Had this standard been adopted for the three months ended June 30,
1997 and 1996, basic earnings per share and diluted earnings per share would
have been $.48 and $.45, respectively, for the 1997 period and $.30 and $.28,
respectively, for the 1996 period. For the six months ended June 30, 1997 and
1996, basic earnings per share and diluted earnings per share would have been
$.92 and $.87, respectively, for the 1997 period and $.57 and $.53,
respectively, for the 1996 period.
(4) SALE OF EQUITY INVESTMENT
The Company has entered into an agreement whereby FPA Medical
Management, Inc. ("FPA") will acquire Oxford's interest in Health Partners,
Inc. ("HPI") in a pooling of interests transaction. The Company will receive
shares of FPA common stock with a market value of approximately $50 million. As
a result of the transaction, the Company will recognize an after tax gain of
approximately $26 million. Completion of the transaction is subject to the
satisfaction of a number of conditions, including the approval of HPI's
shareholders.
(5) RECLASSIFICATIONS
Certain reclassifications have been made to the prior year's financial
statement amounts to conform to the current year's financial statement
presentation.
6
<PAGE> 7
NOTES TO FINANCIAL STATEMENTS
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following table shows membership by product:
<TABLE>
<CAPTION>
As of June 30 Increase
-------------------------- --------------------------
Membership: 1997 1996 Amount %
--------- --------- ------- ------
<S> <C> <C> <C> <C>
Freedom Plan 1,218,300 882,000 336,300 38.1%
HMO 235,900 165,500 70,400 42.5%
Medicare 145,600 98,000 47,600 48.6%
Medicaid 187,600 136,000 51,600 37.9%
--------- --------- ------- ------
Total fully insured 1,787,400 1,281,500 505,900 39.5%
Self-funded 46,100 39,600 6,500 16.4%
--------- --------- ------- ------
Total membership 1,833,500 1,321,100 512,400 38.8%
========= ========= ======= ======
</TABLE>
The following table provides certain statement of earnings data expressed as a
percentage of total revenues for the three months and six months ended June 30,
1997 and 1996:
<TABLE>
<CAPTION>
Three Months Six Months
Ended June 30 Ended June 30
-------------------------- -------------------------
Revenues: 1997 1996 1997 1996
--------- --------- ------- ------
<S> <C> <C> <C> <C>
Premiums earned 98.3% 98.3% 98.3% 98.4%
Third-party administration, net 0.3% 0.3% 0.3% 0.4%
Investment and other income, net 1.4% 1.4% 1.4% 1.2%
--------- --------- ------- ------
Total revenues 100.0% 100.0% 100.0% 100.0%
--------- --------- ------- ------
Expenses:
Health care services 78.4% 78.9% 78.6% 78.8%
Marketing, general and administrative 15.6% 15.7% 15.4% 15.9%
--------- --------- ------- ------
Total expenses 94.0% 94.6% 94.0% 94.7%
--------- --------- ------- ------
Operating earnings 6.0% 5.4% 6.0% 5.3%
Equity in net loss of affiliate - (0.1%) (0.1%) (0.2%)
--------- --------- ------- ------
Earnings before income taxes 6.0% 5.3% 5.9% 5.1%
Provision for income taxes 2.4% 2.2% 2.5% 2.2%
--------- --------- ------- ------
Net earnings 3.6% 3.1% 3.4% 2.9%
========= ========= ======= ======
Medical-loss ratio 79.7% 80.3% 79.9% 80.1%
========= ========= ======= ======
Administrative expense as a percentage
of operating revenue 15.8% 15.9% 15.6% 16.1%
========= ========= ======= ======
</TABLE>
7
<PAGE> 8
RESULTS OF OPERATIONS
The three months ended June 30, 1997 compared with the three months ended June
30, 1996
Total revenues for the quarter ended June 30, 1997 were $1.06 billion,
up 46% from $725.3 million during the same period in the prior year. Net
earnings for the second quarter of 1997 totaled $37.2 million, or 45 cents per
share, compared with $22.5 million, or 28 cents per share, for the second
quarter of 1996.
Total commercial premiums earned for the three months ended June 30,
1997 increased 44% to $746.2 million from $516.7 million in the same period in
the prior year. This increase is attributable to a 41% increase in member months
in the Company's commercial health care programs, primarily due to a 40% member
months increase in the Freedom Plan. Premium rates of commercial programs were
2.5% higher than in the second quarter of 1996.
Premiums earned from government programs increased 53% to $298.3
million in the second quarter of 1997 compared with $195.2 million in the second
quarter of 1996. Membership growth accounted for most of the change as member
months of Medicare programs increased 53% when compared with the prior year
second quarter, while member months of Medicaid programs increased by 41% over
the level of the prior year second quarter. The Clinton Administration and
Congressional leadership have reached an agreement on legislation aimed at
balancing the Federal budget, which includes provisions for $115 billion in
savings from Medicare programs over the next five years. The legislation changes
the way health plans are compensated for Medicare members by eliminating over
five years amounts paid for graduate medical education and increasing the blend
of national cost factors applied in determining local reimbursement rates over a
six-year phase-in period. Both changes would have the effect of reducing
reimbursement in high cost metropolitan areas with a large number of teaching
hospitals, such as the Company's service areas; however, the legislation
includes provision for a minimum increase of 2% annually in health plan Medicare
reimbursement for the next five years. The legislation also provides for
expedited licensure of provider-sponsored Medicare plans and a repeal in 1999 of
the rule requiring health plans to have one commercial enrollee for each
Medicare or Medicaid enrollee. These changes could have the effect of increasing
competition in the Medicare market, but would also facilitate the expansion of
the Company's Medicare business in markets where it lacks large commercial
enrollment.
Net third-party administration revenues for the three months ended June
30, 1997 increased 30% to $3.0 million from $2.3 million for the same period in
the prior year, attributable to a 19.5% increase in member months and an 8.4%
increase in per member per month revenue.
Net investment income for the three months ended June 30, 1997
increased 39% to $14.1 million from $10.2 million for the same period in 1996
due to an increase in invested cash compared with the prior year's period.
The medical-loss ratio (health care services expense stated as a
percentage of premium revenues) was 79.7% for the second quarter of 1997
compared with 80.3% for the second quarter of 1996, as a 2.8% overall increase
in medical cost per member per month was offset by a 3.5% overall increase in
premium revenue per member per month.
Marketing, general and administrative expenses totaled $165.9 million
in the second quarter of 1997 compared with $113.6 million in the second quarter
of 1996. The increase over the second quarter of 1996 is primarily attributable
to an $22.5 million rise in payroll and benefits due to increased staffing,
increased costs associated with the growth in membership in the Company's plans,
higher broker commissions attributable to the increase in premiums earned, and
expenses related to enhancements to management information systems necessary to
accommodate increased transaction volume. These expenses as a percent of
operating revenue were 15.8% during the second quarter of 1997 compared with
15.9% during the second quarter of 1996.
The Company's profitability is dependent, in part, on its ability to
predict and maintain effective control over health care costs (through, among
other things, appropriate benefit design, utilization review and case management
programs and its case rate and risk-sharing agreements with providers) while
providing members with quality health care. Factors such as utilization, new
technologies and health care practices,
8
<PAGE> 9
hospital costs, major epidemics, inability to establish acceptable compensation
agreements with providers and numerous other external influences may affect
Oxford's ability to control such costs. The Company uses its medical cost
containment capabilities, such as claim auditing systems, physician tracking
systems and utilization review protocols, and improved channeling to the most
cost-effective providers with a view to reducing the rate of growth in health
care services expense. There can be no assurance that Oxford will be successful
in mitigating the effect of any or all of the above listed or other factors.
Accordingly, past financial performance is not necessarily a reliable indicator
of future performance, and investors should not use historical performance to
anticipate results or future period trends.
The six months ended June 30, 1997 compared with the six months ended June 30,
1996
Total revenues for the six months ended June 30, 1997 were $2.05
billion, up 48% from $1.38 billion during the same period in the prior year. Net
earnings for the first six months of 1997 totaled $71.6 million, or 87 cents per
share, compared with $41.0 million, or 53 cents per share, for the first six
months of 1996.
Total commercial premiums earned for the six months ended June 30, 1997
increased 45% to $1.44 billion from the same period in the prior year. This
increase is attributable to a 42% increase in member months in the Company's
commercial health care programs, including a 41% member months increase in the
Freedom Plan.
Premiums earned from government programs increased 55% to $576.6
million in the first six months of 1997 compared with $371.7 million in the
first six months of 1996. Membership growth accounted for most of the change as
member months of Medicare programs increased 62% when compared with the prior
year second quarter, while member months of Medicaid programs increased by 45%
over the level of the prior year second quarter.
Net third-party administration revenues for the six months ended June
30, 1997 increased 10.6% to $6.1 million from $5.5 million for the same period
in the prior year, attributable to a 20.3% increase in member months, partially
offset by an 8.1% decrease in per member per month revenue.
Net investment income for the six months ended June 30, 1997 increased
68% to $28.4 million from $16.9 million for the same period last year due to the
increase in invested cash generated by cash flow from operations and
approximately $220 million of net proceeds from the Company's public offering in
April 1997.
The medical-loss ratio was 79.9% for the first six months of 1997
compared with 80.1% for the first six months of 1996, as a 2.6% overall increase
in medical cost per member per month was offset by a 2.8% overall increase in
premium revenue per member per month.
Marketing, general and administrative expenses totaled $315.7 million
in the first six months of 1997 compared with $220.3 million in the first six
months of 1996. The increase over the first six months of 1996 is primarily
attributable to a $37.9 million rise in payroll and benefits due to increased
staffing, increased costs associated with the growth in membership in the
Company's plans, higher broker commissions attributable to the increase in
premiums earned, and expenses related to enhancements to management information
systems necessary to accommodate increased transaction volume. These expenses as
a percent of operating revenue were 15.6% during the first six months of 1997
compared with 16.1% during the first six months of 1996.
LIQUIDITY AND CAPITAL RESOURCES
The Company's capital expenditures for the first six months of 1997
totaled $42.7 million. Such funds were used primarily for management information
systems and leasehold improvements related to business expansion. Except for
anticipated capital expenditures in the ordinary course of business, the Company
currently has no definitive commitments for use of material cash resources,
however, management
9
<PAGE> 10
continually evaluates opportunities to expand the Company's managed care
services and health plan operations.
Premiums receivable at June 30, 1997 increased to $421.8 million from
$315.1 at December 31, 1996 and $388.2 million at March 31, 1997 primarily as
the result of delays earlier this year in billing caused by conversion of
certain of the Company's operations to a new computer system, but receivables
have decreased slightly, measured by days in operating revenues outstanding, as
the Company's billing has returned to normal cycles. Cash flow used by
operations aggregated $107.3 million in the first six months of 1997 compared
with cash flow provided by operations of $139.2 million in the first six months
of 1996, primarily as a consequence of the prior billing delays as well as
claims advances to providers as described below.
The Company's medical costs payable, which includes reserves for
incurred but not reported claims ("IBNR"), was $532.2 million as of June 30,
1997, $657.8 million as of March 31, 1997, $624.4 million as of December 31,
1996 and $525.9 million as of September 30, 1996. The relative increase in
medical costs payable during the last three months of 1996 and the first three
months of 1997 resulted primarily from delays in claims payments also caused by
the computer system conversion referred to above. Delays in claims payments
continued during the first quarter of 1997, but the increase in medical costs
payable was mitigated by progress in paying backlogged claims and advance
payments to providers which aggregated approximately $89 million as of March 31,
1997. During the second quarter of 1997, the Company made significant progress
in paying current and backlogged claims and continued to make claims advances to
providers. Such advances aggregated approximately $271 million at June 30, 1997.
Such advance payments have been applied against medical costs payable in the
accompanying balance sheet. As a result, the Company's medical costs payable
declined by $125.6 million during the second quarter of 1997. The Company
believes that it will be able to recover outstanding advance payments, but any
failure to recover funds advanced would adversely affect earnings. The Company
estimates the amount of its reserves using standard actuarial methodologies
based upon historical data, including the average interval between the date
services are rendered and the date claims are paid, expected medical cost
inflation, seasonality patterns and increases in membership. The Company
believes that its reserves for IBNR are adequate in order to satisfy its
ultimate claim liability. However, the Company's rapid growth affects the
Company's ability to rely on historical information in making IBNR reserve
estimates.
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" contains certain forward-looking statements including
those related to pending regulatory changes. Actual results could differ
materially from those discussed. Additional information concerning factors that
could cause actual results to differ materially from those in such
forward-looking statements is contained in the Company Annual Report on Form
10-K under the caption "Business-Cautionary Statement Regarding Forward-Looking
Statements," incorporated herein by reference.
10
<PAGE> 11
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Annual Meeting of Stockholders of the Company was held on April 22,
1997 in connection with which proxies were solicited pursuant to Regulation 14A
of the Securities and Exchange Act of 1934, as amended. At the meeting
stockholders were asked to consider and vote upon the following proposals: (a)
election of three directors; (b) amendment of the Company's Second Amended and
Restated Certificate of Incorporation, as amended, to increase the number of
authorized shares of the Company's Common Stock from 200,000,000 shares to
400,000,000 shares; and (c) amendment of the Company's 1991 Stock Option Plan,
as amended (the "Plan"), to increase the number of shares that can be issued
under the Plan from 17,080,000 shares to 21,580,000 shares. At the meeting,
Stephen F. Wiggins, Robert B. Milligan, Jr. and Marcia Radosevich, Ph.D. were
each elected a director of the Company for a term to expire in 2000. Continuing
directors whose terms expire in 1999 are Fred F. Nazem and Thomas A. Scully.
Continuing directors whose terms expire in 1998 are Benjamin A. Safirstein, M.D.
and James B. Adamson. A total of 65,252,081 votes were cast in favor of, and
381,298 votes were cast to withhold authority for Mr. Wiggins' election. A total
of 65,300,116 were cast in favor of, and 333,263 votes were cast to withhold
authority for Mr. Milligan's election. A total of 65,300,098 were cast in favor
of, and 333,281 votes were cast to withhold authority for Dr. Radosevich's
election. The amendment to the Company's Second Amended and Restated Certificate
of Incorporation, as amended, was adopted with 59,292,354 votes cast for, and
6,282,390 votes cast against the proposal. In addition, there were 58,635 votes
abstaining related to the proposal. The amendment to the Plan was adopted with
48,760,599 votes cast for, and 8,862,544 votes cast against the proposal. In
addition, there were 312,486 votes abstaining and 7,697,750 broker nonvotes
related to the proposal.
ITEM 5. OTHER INFORMATION
The information contained in "Item 5. Other Events" included in the Company's
Current Report on Form 8-K dated and filed on July 31, 1997 is incorporated
herein by reference.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit No. Description of Document
11 Computation of Net Earnings Per Share of Common
Stock
99(a) Annual Report on Form 10-K of the Company for the
fiscal year ended December 31, 1996 (Commission
File No. 0-19442), incorporated herein by
reference
99(b) Current Report on Form 8-K, dated July 31, 1997
(Commission File No. 0-19442), incorporated herein
by reference
(b) Reports on Form 8-K
In a report on Form 8-K dated April 8, 1997, and filed April 11, 1997,
the Company reported, under Item 5. "Other Events," its press release
concerning its agreement to acquire a less than ten percent interest in
Compass PPA, Incorporated, the parent company of a commercial health
plan in Chicago, Illinois.
In a report on Form 8-K dated May 6, 1997, and filed May 7, 1997, the
Company reported, under Item 5. "Other Events," its first quarter 1997
earnings press release.
11
<PAGE> 12
(b) Reports on Form 8-K (continued)
In a report on Form 8-K dated July 31, 1997, and filed July 31, 1997,
the Company reported, under Item 5. "Other Events," the details of an
agreement with the New York State Attorney General concerning the
payment of interest on unpaid claims.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
OXFORD HEALTH PLANS, INC.
-------------------------
(Registrant)
August 5, 1997 /s/ WILLIAM M. SULLIVAN
- -------------------------- -------------------------
Date WILLIAM M. SULLIVAN
Chief Executive Officer
August 5, 1997 /s/ ANDREW B. CASSIDY
- ------------------------------- ------------------------
Date ANDREW B. CASSIDY, Executive
Vice President and Chief
Financial Officer
12
<PAGE> 13
OXFORD HEALTH PLANS, INC. AND SUBSIDIARIES
INDEX TO EXHIBITS
Exhibit Page
Number Description of Document Number
11 Computation of Net Earnings Per Share of Common Stock 14
99(a) Annual Report on Form 10-K of the Company for the fiscal
year ended December 31, 1996 (Commission File No. 0-19442),
incorporated herein by reference
99(b) Current Report on Form 8-K, dated July 31, 1997 (Commission
File No. 0-19442), incorporated herein by reference
13
<PAGE> 1
EXHIBIT 11
OXFORD HEALTH PLANS, INC. AND SUBSIDIARIES
COMPUTATION OF NET EARNINGS PER SHARE OF COMMON STOCK
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Three Months Six Months
Ended June 30 Ended June 30
------------------ -----------------
1997 1996 1997 1996
------- ------ ------ ------
<S> <C> <C> <C> <C>
PRIMARY:
Net earnings $37,175 22,458 71,554 40,975
======= ====== ====== ======
Weighted average number of shares of common stock and common stock
equivalents:
Weighted average number of shares outstanding 78,188 74,960 78,015 72,157
Dilutive effect of stock options 4,486 5,831 4,498 5,831
------- ------ ------ ------
Weighted average number of common stock
and common stock equivalents 82,674 80,791 82,513 77,988
======= ====== ====== ======
Earnings per common and common equivalent share $ .45 .28 .87 .53
======= ====== ====== ======
FULLY-DILUTED:
Net earnings $37,175 22,458 71,554 40,975
======= ====== ====== ======
Weighted average number of shares of common stock and common stock
equivalents:
Weighted average number of shares outstanding 78,188 74,960 78,015 72,157
Dilutive effect of stock options 4,630 5,831 4,668 5,831
------- ------ ------ ------
Weighted average number of common stock
and common stock equivalents 82,818 80,791 82,683 77,988
======= ====== ====== ======
Earnings per common and common equivalent share $ .45 .28 .87 .53
======= ====== ====== ======
</TABLE>
14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM (A) THE
CONSOLIDATED BALANCE SHEET AT JUNE 30, 1997 (UNAUDITED) AND THE CONSOLIDATED
STATEMENT OF EARNINGS FOR THE SIX MONTHS ENDING JUNE 30, 1997 (UNAUDITED) AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH (B) FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 23,809
<SECURITIES> 864,846
<RECEIVABLES> 421,828
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,142,009
<PP&E> 217,117
<DEPRECIATION> 95,838
<TOTAL-ASSETS> 1,329,255
<CURRENT-LIABILITIES> 639,208
<BONDS> 0
0
0
<COMMON> 783
<OTHER-SE> 689,264
<TOTAL-LIABILITY-AND-EQUITY> 1,329,255
<SALES> 2,020,741
<TOTAL-REVENUES> 2,049,239
<CGS> 0
<TOTAL-COSTS> 1,610,526
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 121,987
<INCOME-TAX> 50,433
<INCOME-CONTINUING> 71,554
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 71,554
<EPS-PRIMARY> 0.87
<EPS-DILUTED> 0.87
</TABLE>
