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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A NO. 1
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): FEBRUARY 25, 1999
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.
In connection with the completion of the Company's year-end closing, certain
nonrecurring items that were previously classified as unusual charges and
restructuring charges in the second quarter of 1998 were reclassified to
operating and income tax captions in the 1998 statement of operations. A
reclassification of unusual charges aggregating approximately $73.5 million was
made related to charges taken in the second quarter for strengthening medical
claim reserves, establishing reserves for losses on provider advances, and
certain other asset impairment losses. A reclassification of restructuring
charges aggregating $18.8 million was made related to the write-down of
government program account receivables and accruals of certain litigation
defense costs and other expenses. These reclassifications do not affect the
reported net loss for the second quarter or for the full year of 1998, but do
have the effect of increasing the second quarter medical loss ratio and
administrative loss ratio from the levels previously reported and full year
ratios are also slightly higher.
Subsequent to the filing of the Company's Current Report on Form 8-K dated
February 25, 1999, a reclassification of previously reported restructuring
charges approximating $6.0 million was made related to certain deferred tax
assets, which changes are now included in the 1998 statement of operations as
reduction of the previously reported income tax benefit. Additionally,
approximately $1.6 million of amortization of preferred stock issuance expenses
was reclassified from accumulated deficit to additional paid-in capital. These
reclassifications have no effect on the reported net loss for the second quarter
or the full year of 1998.
<TABLE>
<CAPTION>
Before After
Quarter ended June 30, 1998 (Dollars in thousands) Reclassification Reclassification
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Total revenues $ 1,191,112 $ 1,191,112
Health services expenses 1,188,265 1,256,214
Marketing, general and administrative expenses 203,659 227,968
Restructuring charges 174,266 149,470
Unusual charges 111,790 38,341
Income tax expense - 5,957
Medical loss ratio 102.8% 108.7%
Administrative loss ratio 17.6% 19.6%
</TABLE>
The Company's revised balance sheets as of December 31, 1998 and 1997 and
statements of operations for the three months and years ended December 31, 1998
and 1997 are attached as Exhibits hereto and incorporated herein by reference.
ITEM 7. Financial Statements and Exhibits
(c) Exhibits
99(a) Revised Balance Sheets as of December 31, 1998 and 1997
99(b) Revised Statements of Operations for the three months and
years ended December 31, 1998 and 1997
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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: March 19, 1999 By: /s/ KURT B. THOMPSON
--------------------------
KURT B. THOMPSON
Chief Accounting Officer
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OXFORD HEALTH PLANS, INC. AND SUBSIDIARIES
EXHIBIT INDEX
Exhibit Page
Number Description of Document Number
- ------ ----------------------- ------
99(a) Revised Balance Sheets as of December 31, 1998 and 1997 5
99(b) Revised Statements of Operations for the three months and 6
years ended December 31, 1998 and 1997
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Exhibit 99(a)
OXFORD HEALTH PLANS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1998 AND 1997
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
ASSETS
1998 1997
----------- -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 237,717 $ 4,141
Investments - available-for-sale, at market value 922,990 635,743
Premiums receivable, net 110,254 275,646
Other receivables 36,540 42,517
Prepaid expenses and other current assets 9,746 10,097
Refundable income taxes -- 120,439
Deferred income taxes 43,385 38,092
----------- -----------
Total current assets 1,360,632 1,126,675
Property and equipment, at cost, net of accumulated depreciation and
amortization of $160,431 in 1998 and $125,926 in 1997 112,941 147,093
Deferred income taxes 94,182 86,406
Restricted investments - held-to-maturity, at amortized cost 44,798 --
Other noncurrent assets 25,197 29,927
----------- -----------
Total assets $ 1,637,750 $ 1,390,101
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Medical costs payable $ 850,197 $ 762,959
Trade accounts payable and accrued expenses 176,833 144,264
Unearned premiums 105,993 124,603
Current portion of capital lease obligations 15,938 --
Deferred income taxes 2,228 9,059
----------- -----------
Total current liabilities 1,151,189 1,040,885
Long-term debt 350,000 --
Obligations under capital leases 18,850 --
Redeemable preferred stock 298,816 --
Shareholder's equity (deficit):
Preferred stock, $.01 par value, authorized 2,000,000 shares -- --
Common stock, $.01 par value, authorized 400,000,000
shares; issued and outstanding 80,515,872 in 1998
and 79,474,439 in 1997 805 795
Additional paid-in capital 506,243 437,653
Accumulated deficit (692,290) (95,498)
Accumulated other comprehensive earnings 4,137 6,266
----------- -----------
Total liabilities and shareholders' equity (deficit) $ 1,637,750 $ 1,390,101
=========== ===========
</TABLE>
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Exhibit 99(b)
OXFORD HEALTH PLANS, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
Three Months and Years Ended December 31, 1998 and 1997
(In thousands, except per share, per
member per month and membership highlights data)
<TABLE>
<CAPTION>
Three Months Ended Year Ended
December 31 December 31
--------------------------- ---------------------------
Revenues: 1998 1997 1998 1997
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Premiums earned $ 1,100,227 $ 1,107,414 $ 4,612,328 $ 4,167,224
Third-party administration, net 4,455 2,501 17,838 12,592
Investment and other income (expense), net 23,809 28,628 91,436 73,704
----------- ----------- ----------- -----------
Total revenues 1,128,491 1,138,543 4,721,602 4,253,520
----------- ----------- ----------- -----------
Expenses:
Health care services 983,152 1,286,544 4,321,583 3,915,811
Marketing, general and administrative 154,796 227,677 708,452 679,567
----------- ----------- ----------- -----------
Total expenses 1,137,948 1,514,221 5,030,035 4,595,378
----------- ----------- ----------- -----------
Earnings (loss) before income taxes, financing charges,
depreciation and amortization, restructuring and
unusual charges (credits) ("EBITDA") (9,457) (375,678) (308,433) (341,858)
Other charges (credits):
Interest and other financing charges 12,851 11,118 55,857 11,118
Depreciation and amortization 16,588 18,048 67,141 61,045
Restructuring (29,043) -- 145,457 --
Unusual -- 41,618 38,341 41,618
Gain on sale of affiliate -- (25,168) -- (25,168)
Equity in net loss of affiliate -- -- -- 1,140
----------- ----------- ----------- -----------
Total other charges 396 45,616 306,796 89,753
----------- ----------- ----------- -----------
Loss before income taxes (9,853) (421,294) (615,229) (431,611)
Income tax benefit (1,905) (136,609) (18,437) (140,323)
----------- ----------- ----------- -----------
Net loss (7,948) (284,685) (596,792) (291,288)
Less preferred stock dividends and amortization (10,883) -- (27,668) --
----------- ----------- ----------- -----------
Net loss attributable to common stock $ (18,831) $ (284,685) $ (624,460) $ (291,288)
=========== =========== =========== ===========
Loss per common share-basic and diluted $ (.23) $ (3.58) $ (7.79) $ (3.70)
=========== =========== =========== ===========
Weighted-average common shares outstanding-basic and diluted 80,463 79,448 80,120 78,635
=========== =========== =========== ===========
Selected information:
Medical loss ratio 89.4% 116.2% 93.7% 94.0%
Administrative loss ratio 15.4% 22.1% 16.7% 17.6%
PMPM premium revenue $ 199.94 $ 190.73 $ 199.82 $ 193.06
PMPM medical expense $ 178.67 $ 221.60 $ 187.23 $ 181.46
Fully insured member months 5,502.7 5,806.1 23,081.9 21,584.7
</TABLE>
<TABLE>
<CAPTION>
Membership at
December 31
----------------------- Increase
MEMBERSHIP HIGHLIGHTS 1998 1997 (Decrease)
--------- --------- --------
<S> <C> <C> <C>
Freedom Plan 1,318,100 1,333,500 (15,400)
HMO 260,700 270,400 (9,700)
Medicare 148,600 161,000 (12,400)
Medicaid 97,800 189,600 (91,800)
--------- --------- --------
Total Fully Insured 1,825,200 1,954,500 (129,300)
Self-funded 56,200 53,600 2,600
--------- --------- --------
Total Membership 1,881,400 2,008,100 (126,700)
========= ========= ========
</TABLE>
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