<PAGE> 1
UNITED STATES
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 (DATE OF EARLIEST EVENT REPORTED): AUGUST 11, 1998
OXFORD HEALTH PLANS, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-19442 06-1118515
(State or other jurisdiction) (Commission (IRS Employer
of incorporation) File Number) 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)
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ITEM 5. OTHER EVENTS.
The Company's earnings Press Release dated August 11, 1998 is attached
as an Exhibit hereto and incorporated herein by reference.
ITEM 7. Financial Statements and Exhibits
(c) Exhibits
99 Press Release dated August 11, 1998
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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.
Date: August 11, 1998 By: /s/ YON Y. JORDEN
----------------------------
YON Y. JORDEN
Chief Financial Officer
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OXFORD HEALTH PLANS, INC. AND SUBSIDIARIES
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Page
Number Description of Document Number
- ------ ----------------------- ------
<S> <C> <C>
99 Press Release dated August 11, 1998 5
</TABLE>
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EXHIBIT 99
[OXFORD HEALTH PLANS LETTERHEAD]
For Further Information:
Investor Contact: Mitch Truwit
(203) 851-1986
Media Contact: Madeline Hardart
(212) 885-0417
Nicole Reilly
(212)885-0338
FOR IMMEDIATE RELEASE
OXFORD HEALTH PLANS, INC. ANNOUNCES SECOND QUARTER RESULTS
$286 Million in Restructuring and Unusual Charges Associated with Turnaround
Plan Leads to a $508 Million Reported GAAP Operating Loss
Oxford CEO Payson Outlines Plan to Achieve Profitability Within 12 Months
NORWALK, CONNECTICUT, AUGUST 11, 1998 -- Oxford Health Plans, Inc.
(NASDAQ: OXHP) announced today that it had recorded restructuring charges of
$174 million and unusual charges of $112 million principally associated with the
implementation of the Company's turnaround plan in the quarter ended June 30,
1998, resulting in a pre-tax loss of $508 million for the quarter. Despite these
reported losses, Oxford's Net Cash Provided by Operating Activities was $29.5
million in the second quarter. "The actions announced today represent a 'line in
the sand' separating Oxford's past and its future as we implement our plans to
restore Oxford to profitability," stated Norman C. Payson, M.D., Oxford's chief
executive officer. "Oxford continues to have extraordinary franchise value and a
leading market position in the New York Metropolitan market. Our turnaround
plans are built on this strong foundation."
The Net Loss we reported today does not provide a clear picture of the
Company's current operating performance because of the one-time charges and
non-recurring expenses," said Yon Yoon Jorden, the Company's new chief financial
officer. "Despite these operating losses, Net Cash provided by Operating
Activities was $29.5 million in the second quarter, bringing our June 30th Cash
and Marketable Securities to $1.1 billion. On a normalized basis, Cash Flows
from Operations was a loss of $85 million, after removing the one-time effects
of tax refunds, extraordinary receivables collections and adding back one-time
financing transaction costs," said Ms. Jorden.
The Company also announced that the New York State Insurance Department
had completed its financial examinations of Oxford's New York subsidiaries. "We
have fully cooperated with the Department's requests and have recently
contributed $152 million to our New York subsidiaries, to satisfy the issues
addressed in the examination, and ensure that the New York subsidiaries meet all
statutory capital requirements," stated Dr. Payson. "We appreciate the
assistance and guidance of the Department staff and Superintendent Levin in
bringing the Department's examinations of Oxford to a successful
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conclusion. Going forward, the Company has over $1 billion in cash and
marketable securities, strengthened reserves to pay medical claims, and
subsidiaries that currently meet their regulatory capital requirements."
The Company also noted that it continued to experience high levels of
retention in its physician network and membership as a testament to its strong
brand. In New York magazine's recent study of the "Best Doctors in New York",
Oxford's network was found to have 85% of those "Best Doctors" who participate
in an HMO, approximately 45% greater than the next closest competitor.1 The
Company is also pleased that in two separate independent consumer satisfaction
studies conducted in 1998, the Company's New York HMO was ranked the top health
plan among all enrollees in the New York City area market of plans included in
the 1998 MEDSTAT Quality CatalystTM Program in alliance with J.D. Power and
Associates and the New England Medical Center, and its point-of-service (POS)
program won for the third consecutive time as the top-rated POS program in the
New York City area by CareData Inc.2
The Company reported the following financial data:
(1) Revenue for the quarter ended June 30, 1998 was $1.2 billion,
an increase of 12% from the year earlier quarter. Revenue for
the six months ended June 30, 1998 was $2.4 billion, an
increase of 18% from the year earlier period. Total membership
was 2,004,700 at June 30, 1998, an increase of 9% from June
30, 1997. Membership and Revenue were down modestly in the
second quarter versus the first quarter, in part because of
the Company's withdrawal from the Connecticut Medicaid
Program.
(2) The quarterly loss includes restructuring and unusual charges
principally associated with the implementation of the
Turnaround Plan outlined by Dr. Payson. The restructuring
charge of $174 million includes $45 million in provisions
related to consolidation of operations mostly comprised of the
writedown of leasehold improvements as well as the termination
of certain lease commitments, a $62 million provision for
disposition of non-core assets, investments and subsidiaries,
a $51 million reserve for Non-Core Medicare and Medicaid
businesses where the Company will restructure or exit by year
end and $16 million in reserves for certain other assets. The
Company also recorded unusual charges of $112 million,
including $38 million for the write-off of the Company's
investment in FPA Medical Management, Inc., which recently
filed for bankruptcy protection, and $74 million for
strengthening of various reserves and allowances.
(3) Health care services expense for the second quarter was $1.2
billion, and the medical loss ratio (health care services as a
percentage of premium revenue) was 102.8%. The Medical Loss
Ratio was adversely affected by the impact of claim reserve
strengthening and changes to estimated reserves for premiums
receivable related to prior periods, which are distinct from
the Restructuring and Unusual Charges. After removing the
effect of these charges, the Medical Loss Ratio was 95%. This
loss ratio includes business lines that will be discontinued
or restructured, which have higher medical loss ratios.
(4) Marketing, general and administrative expenses including
depreciation and amortization were $204 million for the second
quarter, essentially flat compared to the first quarter of
1998. The second quarter of 1998 also included $21 million for
interest and financing expense primarily relating to the
closing of the Company's issuance of $350 million in Preferred
Stock to affiliates of Texas Pacific Group and other
investors, the issuance of $200 million of senior notes and
the borrowing of $150 million under a senior secured term
loan. Interest charges on the senior notes and term loan will
amount to approximately $9 million per quarter in future
quarters.
"The charges taken today are an important step in the implementation of
the Company's plan to return to profitability within the next 12 months and
identify the resources required to accomplish our goal," said Dr. Payson. "The
new management team is aggressively pursuing our turnaround plan, is pleased
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with our initial progress and is confident we will achieve our goal of
profitability in the second half of 1999." The Company's turnaround plan calls
for:
1. Focus on Oxford's core commercial market in metropolitan New
York and dispose of or restructure non-core businesses. The
Company has withdrawn from the Medicaid business in
Connecticut and New Jersey, and has confined its New York
Medicaid program primarily to Brooklyn; and the Company has
transferred medical risk to a third party in its Pennsylvania
Medicaid program and intends to do so in New York prior to
year end. In Medicare, the Company is finalizing negotiations
to enter into risk sharing agreements with healthcare
providers. Oxford is in the process of selling or closing its
commercial health plans in Florida, New Hampshire and Illinois
and it plans to be out of these markets by year end.
2. Reduction in administrative costs. Under the leadership of the
Company's Chief Administrative Officer, Marv Rich, the
Company's goal is to reduce administrative expense to total
approximately 14.5% of revenue in 1999 versus 17% in the first
half of 1998. The Company's cost reduction goals include
eliminating administrative costs of discontinued businesses,
consolidation of management responsibilities already underway,
consolidation of operations and real estate and reduction of
use of outside consultants. The Company estimates that the
second half of 1998 administrative costs will be approximately
10% less than the first half administrative costs.
3. Physician and Hospital rate adjustments. The Company recently
announced selective physician fee reductions primarily in
specialist physician fees estimated to equate to 1.75% of
commercial premiums. These adjustments bring the Company's
reimbursement levels more in line with market levels. The
Company also intends to renegotiate its hospital reimbursement
levels in a thorough review of its hospital network. The
Company will continue its model of fee for service
reimbursement for commercial programs and does not intend to
significantly reduce the size of its high quality network of
physicians.
4. Utilization management initiative. The Company has focused
efforts underway to work with network physicians and hospitals
to reduce unnecessary utilization. This quality-driven program
is being carried out under the leadership of the Company's
Chief Medical Officer Dr. Alan Muney and has the potential for
savings given the Company's relatively high utilization
levels.
5. Institute reasonable premium price increases. Oxford has begun
to institute price increases for its commercial group products
to better reflect the value and cost of its products. Since
the beginning of the Third Quarter, Oxford has realized
average price increases of approximately 7% on renewed
commercial group accounts.
6. Strengthen Operations. The Company will continue its
commitment to improve claims payment and service performance.
Tom Beauchamp, who recently joined Oxford as Vice President of
Information Systems, will spearhead continuing efforts to
enhance the Company's system performance and capabilities, and
Vikki Pryor, Vice President of Operations, is leading efforts
at improving claims turnaround and accuracy and telephone
service.
"When I assumed leadership of this Company, I set out to retain our customer
base and physician network, improve claims payment, rationalize operations,
bring our reimbursement rates more in line with the market, improve the computer
systems, return the Company to profitability and maintain Oxford's status as the
premier health plan in the New York area," added Dr. Payson. "We are making
progress in each of these areas and I feel more confident than ever that we will
succeed."
"Norm has an excellent recovery plan in place, one that addresses issues of the
past and positions the Company to retain its premier position in the market over
the long term," added Fred F. Nazem, the Company's chairman.
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"Our original investment thesis was premised on Oxford's unique franchise value
and our confidence in the new management team's ability to turnaround the
financial losses. After the first 90 days, our confidence is as strong as ever,"
said Jonathan Coslet, partner of Texas Pacific Group.
1. Study appeared in New York Magazine, June 8, 1998, Volume 31, No. 22.
Information is as reported by New York magazine. The Company has not
independently verified the accuracy of physician participation information
appearing in the study.
2. 1998 MEDSTAT Quality CatalystTM Program Enrollee Study. Study based on 31,175
health plan enrollee responses in 20 U.S. Markets. 10 plans ranked in the New
York City market. Visit www.medstat.com for full list of plans included.
Oxford's HMO products are underwritten by Oxford Health Plans (NY), Inc. and
Insurance benefits are underwritten by Oxford Health Insurance, Inc.
CareData Reports, Inc. 1998 CareData survey conducted May-August 1998 in the New
York City, Suburbs and Long Island regions. The Long Island region survey is
based on responses from 1,332 employees enrolled in HMO and point-of service
plans. The following point-of-service plans were included: Aetna U.S.
Healthcare, Oxford Health Plans, United HealthCare and Vytra. The New York City
& Northern Suburbs region survey is based on responses from 1,957 employees
enrolled in HMO and point-of-service plans. The following point-of-service plans
were included: Aetna U.S. Healthcare, Oxford Health Plans, and United
HealthCare. Oxford's HMO products are underwritten by Oxford Health Plans (NY),
Inc., Oxford Health Plans (NJ), Inc., Oxford Health Plans (CT), Inc., Oxford
Health Plans (PA), Inc., and insurance products are underwritten by Oxford
Health Insurance, Inc.
Cautionary Statement Regarding Forward-Looking Statements
Certain statements contained in this press release, such as statements
concerning the Company's future results of operations or financial position,
future health care costs and administrative costs, future premium rates for
commercial business, future physician network, future hospital utilization
levels, future claims payment and service performance and other operations
matters, future transfer of certain Medicaid risks, future Medicare risk sharing
agreements with healthcare providers, future dispositions of certain businesses
and assets, the Company's belief as to its ability to implement the turnaround
plan and achieve its goals, and other statements regarding matters that are not
historical facts, are forward-looking statements (as such term is defined in the
Securities Exchange Act of 1934, as amended); and because such statements
involve risks and uncertainties, actual results may differ materially from those
expressed or implied by such forward-looking statements. Factors that could
cause actual results to differ materially include, but are not limited to:
- - The Company's ability to develop processes and systems to support its
operations.
- - Changes in Federal or State regulation relating to health care and
health benefit plans.
- - Rising medical costs or higher utilization of medical services,
including higher out-of-network utilization under point of service
plans.
- - Competition from health benefit plan providers and competitive pressure
on pricing Oxford products.
- - High administrative costs in operating the Company's business and the
cost and impact on service of changing technologies.
- - The effect, if any, of recent events at the Company (including any
adverse publicity) on future enrollment in the Company's health benefit
plans.
- - Any changes in the Company's estimates of its medical costs and
expected cost trends as a result of information gained in the process
of continuing to reconcile delayed claims or claims paid or denied in
error and to pay down backlogged claims.
- - The impact of litigation (including purported class actions filed
against the Company and certain officers and directors), regulatory
proceedings and other governmental action (including the ongoing
examination, investigation and review of the Company by various Federal
and State authorities).
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- - Those factors included in the discussion under the caption
"Management's Discussion and Analysis of the Financial Condition and
Results of Operations - Cautionary Statement Regarding Forward-Looking
Statements" in the Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1998.
-- TABLES FOLLOW --
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OXFORD HEALTH PLANS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(IN THOUSANDS, EXCEPT PER SHARE, PER MEMBER PER MONTH AND MEMBERSHIP HIGHLIGHTS
DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
----------------------------- ---------------------------------
Revenues: 1998 1997 1998 1997
------------ ------------ -------------- ---------------
<S> <C> <C> <C> <C>
Premiums earned $ 1,155,952 1,044,510 2,369,037 2,014,625
Third-party administration, net 4,311 3,040 9,313 6,116
Investment and other income (expense), net 30,849 14,374 42,385 28,498
- ----------------------------------------------------------------------------------------------------------------------------------
Total revenues 1,191,112 1,061,924 2,420,735 2,049,239
- ----------------------------------------------------------------------------------------------------------------------------------
Expenses:
Health care services 1,188,265 832,790 2,254,702 1,610,526
Marketing, general and administrative 184,894 152,210 370,451 289,606
- ----------------------------------------------------------------------------------------------------------------------------------
Total expenses 1,373,159 985,000 2,625,153 1,900,132
- ----------------------------------------------------------------------------------------------------------------------------------
Earnings (loss) before income taxes, financing charges,
depreciation and amortization, restructuring and
unusual charges (182,047) 76,924 (204,418) 149,107
Other charges:
Interest and other financing charges 20,752 -- 27,601 --
Depreciation and amortization of property and equipment 18,765 13,712 34,241 26,100
Restructuring charges 174,266 -- 199,266 --
Unusual charges 111,790 -- 111,790 --
Equity in net loss of affiliate -- 120 -- 1,020
- ----------------------------------------------------------------------------------------------------------------------------------
Total other charges 325,573 13,832 372,898 27,120
- ----------------------------------------------------------------------------------------------------------------------------------
Earnings (loss) before income taxes (507,620) 63,092 (577,316) 121,987
Income tax expense (benefit) -- 25,917 (24,394) 50,433
- ----------------------------------------------------------------------------------------------------------------------------------
Net earnings (loss) (507,620) 37,175 (552,922) 71,554
Less preferred stock dividends and amortization (5,718) -- (5,718) --
- ----------------------------------------------------------------------------------------------------------------------------------
Net earnings (loss) attributable to common stock $ (513,338) 37,175 (558,640) 71,554
==================================================================================================================================
Earnings (loss) per common share-basic $ (6.41) .48 (7.00) .92
Earnings (loss) per common share-diluted $ (6.41) .45 (7.00) .87
Weighted average common shares outstanding-basic 80,131 78,188 79,817 78,015
Effect of dilutive securities-stock options -- 4,486 -- 4,498
- ----------------------------------------------------------------------------------------------------------------------------------
Weighted average common shares outstanding-diluted 80,131 82,674 79,817 82,513
==================================================================================================================================
Selected information:
Medical-loss ratio 102.8% 79.7% 95.2% 79.9%
Administrative-loss ratio 17.6% 15.8% 17.0% 15.6%
PMPM premium revenue $ 197.00 198.36 198.44 196.96
PMPM medical expense $ 202.51 158.15 188.86 157.45
Fully insured member months 5,867.7 5,265.7 11,938.3 10,228.5
</TABLE>
<TABLE>
<CAPTION>
Membership at
June 30 Increase
- ------------------------------------------------------------------------------
MEMBERSHIP HIGHLIGHTS 1998 1997 (Decrease)
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Freedom Plan 1,362,300 1,218,300 144,000
HMO 276,300 235,900 40,400
Medicare 159,500 145,600 13,900
Medicaid 140,600 187,600 (47,000)
- --------------------------------------------------------------------------------------------------
Total Fully Insured 1,938,700 1,787,400 151,300
Self-funded 66,000 46,100 19,900
- ---------------------------------------------------------------------------------------------------
Total Membership 2,004,700 1,833,500 171,200
===================================================================================================
</TABLE>
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OXFORD HEALTH PLANS, INC. AND SUBSIDIARIES
QUARTERLY CONSOLIDATED STATEMENTS OF OPERATIONS
2ND QUARTER 1998 VERSUS 1ST QUARTER 1998
(IN THOUSANDS, EXCEPT PER SHARE, PER MEMBER PER MONTH AND MEMBERSHIP DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
2nd 1st Increase (Decrease)
-----------------------------
Revenues: Quarter Quarter Amount %
------------- -------------- ----------- ---------
<S> <C> <C> <C> <C>
Premiums earned 1,155,952 $ 1,213,085 (57,133) (4.7%)
Third-party administration, net 4,311 5,002 (691) (13.8%)
Investment and other income (expense), net 30,849 11,536 19,313 167.4%
- ------------------------------------------------------------------------------------------------------------------
Total revenues 1,191,112 1,229,623 (38,511) (3.1%)
- ------------------------------------------------------------------------------------------------------------------
Expenses:
Health care services 1,188,265 1,066,437 121,828 11.4%
Marketing, general and administrative 184,894 185,557 (663) (0.4%)
- ------------------------------------------------------------------------------------------------------------------
Total expenses 1,373,159 1,251,994 121,165 9.7%
- ------------------------------------------------------------------------------------------------------------------
Earnings (loss) before income taxes, financing charges,
depreciation and amortization, restructuring and
unusual charges (182,047) (22,371) (159,676) 713.8%
Other charges:
Interest and other financing charges 20,752 6,849 13,903 203.0%
Depreciation and amortization of property and equipment 18,765 15,476 3,289 21.3%
Restructuring charges 174,266 25,000 149,266 597.1%
Unusual charges 111,790 -- 111,790 --
- ------------------------------------------------------------------------------------------------------------------
Total other charges 325,573 47,325 278,248 588.0%
- ------------------------------------------------------------------------------------------------------------------
Earnings (loss) before income taxes (507,620) (69,696) (437,924) 628.3%
Income tax expense (benefit) -- (24,394) 24,394 (100.0%)
- ------------------------------------------------------------------------------------------------------------------
Net earnings (loss) (507,620) (45,302) (462,318) 1020.5%
Less preferred stock dividends and amortization (5,718) -- (5,718) --
- ------------------------------------------------------------------------------------------------------------------
Net earnings (loss) attributable to common stock $ (513,338) (45,302) (468,036) 1033.1%
==================================================================================================================
Earnings (loss) per common share-basic (6.41) $ (.57) (5.84) 1024.6%
Earnings (loss) per common share-diluted (6.41) $ (.57) (5.84) 1024.6%
Weighted average common shares outstanding-basic 80,131 79,488
Effect of dilutive securities-stock options -- --
- ------------------------------------------------------------------------------------------------------------------
Weighted average common shares outstanding-diluted 80,131 79,488
==================================================================================================================
Selected information:
Medical-loss ratio 102.8% 87.9% -- --
Administrative-loss ratio 17.6% 16.5% -- --
PMPM premium revenue $197.00 $ 199.83 (2.83) (1.4%)
PMPM medical expense $202.51 $ 175.67 26.84 15.3%
Fully insured member months 5,867.7 6,070.6 (202.9) (3.3%)
Membership:
Freedom Plan 1,362,300 1,400,200 (37,900) (2.7%)
HMO 276,300 280,900 (4,600) (1.6%)
Medicare 159,500 162,600 (3,100) (1.9%)
Medicaid 140,600 183,500 (42,900) (23.4%)
- ------------------------------------------------------------------------------------------------------------------
Total Fully Insured 1,938,700 2,027,200 (88,500) (4.4%)
Self-funded 66,000 68,500 (2,500) (3.6%)
- ------------------------------------------------------------------------------------------------------------------
Total Membership 2,004,700 2,095,700 (91,000) (4.3%)
=================================================================================================================================
</TABLE>
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OXFORD HEALTH PLANS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
FIRST QUARTER 1998, SECOND QUARTER 1998 AND SIX MONTHS ENDED JUNE 30, 1998
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
1st 2nd Six
Cash flows from operating activities: Quarter Quarter Months
------------- ------------ ------------
<S> <C> <C> <C>
Net earnings (loss) $ (45,302) (507,620) (552,922)
Adjustments to reconcile net earnings to net cash provided by operating
activities:
Depreciation and amortization 16,059 19,303 35,362
Noncash restructuring and unusual charges -- 205,631 205,631
Deferred income taxes (24,407) (4,749) (29,156)
Realized gain on sale of investments (1,372) (749) (2,121)
Other, net 1,312 2,084 3,396
Changes in assets and liabilities:
Premiums receivable (13,903) 74,637 60,734
Other receivables (8,066) (6,014) (14,080)
Prepaid expenses and other current assets (10,752) 9,348 (1,404)
Medical costs payable (23,764) 106,132 82,368
Trade accounts payable and accrued expenses 24,110 51,074 75,184
Income taxes payable/refundable 48,836 68,544 117,380
Unearned premiums (77,706) 7,566 (70,140)
Other, net 378 4,315 4,693
- --------------------------------------------------------------------------------------------------------------------
Net cash provided (used) by operating activities (114,577) 29,502 (85,075)
- --------------------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Capital expenditures (29,657) (6,989) (36,646)
Purchases of available-for-sale securities (154,891) (345,380) (500,271)
Sales and maturities of available-for-sale securities 151,110 265,030 416,140
Investment in unconsolidated affiliates 3,579 (8,984) (5,405)
Other, net 1,018 1,069 2,087
- --------------------------------------------------------------------------------------------------------------------
Net cash used by investing activities (28,841) (95,254) (124,095)
- --------------------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Proceeds from exercise of stock options 330 993 1,323
Proceeds of preferred stock, net of issuance expenses -- 338,148 338,148
Proceeds of notes and loans payable 200,000 350,000 550,000
Redemption of notes and loans payable -- (200,000) (200,000)
Proceeds of sale of common stock -- 10,000 10,000
Debt issuance expenses -- (11,251) (11,251)
Payments under capital leases -- (1,570) (1,570)
- --------------------------------------------------------------------------------------------------------------------
Net cash provided by financing activities 200,330 486,320 686,650
- --------------------------------------------------------------------------------------------------------------------
Net increase in cash and cash equivalents 56,912 420,568 477,480
Cash and cash equivalents at beginning of period 4,141 61,053 4,141
- --------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period $ 61,053 481,621 481,621
====================================================================================================================
Supplemental cash flow information:
Cash payments (refunds) for income taxes, net $ (46,018) (61,859) (107,877)
Cash payments for interest expense 3,881 6,451 10,332
Supplemental schedule of noncash investing and financing activities:
Unrealized appreciation (depreciation) of short-term investments (5,043) (2,730) (7,773)
Issuance of preferred stock warrants -- 67,000 67,000
Capital lease obligations incurred $ 20,309 1,398 21,707
</TABLE>
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<PAGE> 9
OXFORD HEALTH PLANS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
JUNE 30, 1998 AND DECEMBER 31, 1997
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
ASSETS
JUNE 30, Dec. 31,
1998 1997
-------------- ------------
Current assets: (Unaudited)
<S> <C> <C>
Cash and cash equivalents $ 481,621 4,141
Short-term investments-available-for-sale, at market value 636,403 635,743
Premiums receivable 207,703 275,646
Other receivables 47,198 45,418
Prepaid expenses and other current assets 11,501 10,097
Refundable income taxes 3,059 120,439
Deferred income taxes 37,530 38,092
- ----------------------------------------------------------------------------------------------------------------
Total current assets 1,425,015 1,129,576
Property and equipment, at cost, net of accumulated depreciation and
amortization of $143,433 in 1998 and $125,926 in 1997 127,989 147,093
Deferred income taxes 110,398 86,406
Restricted investments - hold-to-maturity, at amortized cost 47,641 --
Other noncurrent assets 40,158 34,914
- ----------------------------------------------------------------------------------------------------------------
Total assets $ 1,751,201 1,397,989
================================================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of capital lease obligations $ 6,819 --
Medical costs payable 916,327 762,959
Trade accounts payable and accrued expenses 254,518 152,152
Unearned premiums 54,463 124,603
Deferred income taxes -- 9,059
- ----------------------------------------------------------------------------------------------------------------
Total current liabilities 1,232,127 1,048,773
Senior notes payable 200,000 --
Term loan payable 150,000 --
Obligations under capital leases 13,312 --
- ----------------------------------------------------------------------------------------------------------------
Total liabilities 1,595,439 1,048,773
Redeemable preferred stock 276,866 --
Shareholder's equity:
Preferred stock, $.01 par value, authorized 2,000,000 shares -- --
Common stock, $.01 par value, authorized 400,000,000
shares; issued and outstanding 80,354,390 in 1998
and 79,474,439 in 1997 803 795
Additional paid-in capital 525,325 437,653
Accumulated deficit (648,803) (95,498)
Unrealized net appreciation of investments 1,571 6,266
- ----------------------------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity $ 1,751,201 1,397,989
================================================================================================================
</TABLE>
13
