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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A NO. 1
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1998
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)
<TABLE>
<S> <C>
Delaware 06-1118515
(State or other jurisdiction of incorporation or organization) (IRS Employer Identification No.)
800 Connecticut Avenue, Norwalk, Connecticut 06854
(Address of principal executive offices) (Zip Code)
</TABLE>
(203) 852-1442
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock, Par
Value $.01 Per Share
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 by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K/A No. 1 or any amendment
to this Form 10-K/A No. 1. [X]
As of March 1, 1999, there were 80,757,351 shares of common stock issued and
outstanding. The aggregate market value of such stock held by nonaffiliates, as
of that date, was $1,451,478,000.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of Registrant's definitive Proxy Statement to be filed pursuant to
Regulation 14A (Part III)
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(3) INVESTMENTS
The following is a summary of marketable securities as of December 31, 1998
and 1997:
<TABLE>
<CAPTION>
Gross Gross
(In thousands) Amortized Unrealized Unrealized Fair
December 31, 1998: Cost Gains Losses Value
--------- ---------- ---------- --------
<S> <C> <C> <C> <C>
Available-for-sale:
U.S. government obligations $585,028 $ 4,568 $1,673 $587,923
Corporate obligations 331,596 3,688 218 335,066
-------- ------- ------ --------
Total debt securities 916,624 8,256 1,891 922,989
Equity securities 1 -- -- 1
--------- ---------- ---------- --------
Total short-term investments $916,625 $ 8,256 $1,891 $922,990
======== ======= ====== ========
Held-to-maturity - U.S. government
obligations $ 44,798 $ 1,028 $- $ 45,826
======== ======= ====== ========
December 31, 1997-all available-for-sale:
U.S. government obligations $252,817 $ 1,863 $ 256 $254,424
Corporate obligations 140,434 1,276 307 141,403
Municipal tax-exempt bonds 171,037 2,425 35 173,427
-------- ------- ------ --------
Total debt securities 564,288 5,564 598 569,254
Equity securities 60,834 6,027 372 66,489
======== ======= ====== ========
Total short-term investments $625,122 $11,591 $ 970 $635,743
======== ======= ====== ========
</TABLE>
The amortized cost and estimated fair value of marketable debt securities at
December 31, 1998, by contractual maturity, are shown below. Actual maturities
may differ from contractual maturities because the issuers of securities may
have the right to prepay such obligations without prepayment penalties.
<TABLE>
<CAPTION>
Available-for-Sale Held-to-Maturity
----------------------- ----------------------
Amortized Fair Amortized Fair
(In thousands) Cost Value Cost Value
--------- -------- --------- -------
<S> <C> <C> <C> <C>
Due in one year or less $ 74,138 $ 74,447 $ 3,229 $ 3,242
Due after one year through five
years 811,330 816,669 41,569 42,584
Due after five years through ten
years 31,156 31,873 -- --
--------- -------- --------- -------
Total $916,624 $922,989 $44,798 $45,826
======== ======== ======= =======
</TABLE>
Certain information related to marketable securities is as follows:
<TABLE>
<CAPTION>
(In thousands) 1998 1997 1996
--------- --------- ---------
<S> <C> <C> <C>
Proceeds from sale or maturity of available-for-sale
securities $ 993,488 $ 790,795 $ 345,081
Proceeds from sale or maturity of held-to-maturity
securities 3,500 -- --
--------- --------- ---------
Total proceeds from sale or maturity of marketable
securities $ 996,988 $ 790,795 $ 345,081
========= ========= =========
Gross realized gains on sale of available-for-sale
securities $ 19,986 $ 36,615 $ 9,036
Gross realized losses on sale of available-for-sale
securities (9,291) (7,879) (4,302)
--------- --------- ---------
Net realized gains on sale of marketable
securities $ 10,695 $ 28,736 $ 4,734
========= ========= =========
Net unrealized gain (loss) on available-for-sale
securities included
in comprehensive earnings (loss) $ (4,255) $ (6,336) $ 5,288
Deferred income tax expense
(benefit) (2,126) (2,598) 2,168
--------- --------- ---------
Other comprehensive earnings (loss) $ (2,129) $ (3,738) $ 3,120
========= ========= =========
</TABLE>
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(22) QUARTERLY INFORMATION (UNAUDITED)
Tabulated below are certain data for each quarter of 1998 and 1997.
<TABLE>
<CAPTION>
Quarter Ended
--------------------------------------------------------------------
(In thousands, except membership and
per share amounts) Mar. 31 Jun. 30 Sep. 30 Dec. 31
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Year ended December 31, 1998:
Net operating revenues $ 1,218,087 $ 1,160,263 $ 1,147,134 $ 1,104,682
Operating expenses 1,292,470 1,672,023 1,188,848 1,124,209
Net loss (45,302) (507,620) (35,922) (7,948)
Net loss attributable to common shares (45,302) (513,338) (46,989) (18,831)
Per common and common equivalent share:
Basic $ (0.57) $ (6.41) $ (0.58) $ (0.23)
Diluted $ (0.57) $ (6.41) $ (0.58) $ (0.23)
Membership at quarter-end 2,095,700 2,004,700 1,924,900 1,881,400
Year ended December 31, 1997:
Net operating revenues $ 973,191 $ 1,047,550 $ 1,049,160 $ 1,109,915
Operating expenses 927,520 998,712 1,196,198 1,573,355
Net earnings (loss) 34,379 37,175 (78,157) (284,685)
Per common and common equivalent share:
Basic $ 0.44 $ 0.48 $ (0.99) $ (3.58)
Diluted $ 0.42 $ 0.45 $ (0.99) $ (3.58)
Membership at quarter-end 1,738,800 1,833,500 1,942,600 2,008,100
</TABLE>
Net operating revenues include premiums earned and third-party administration
fees, net. Operating expenses include health care services and marketing,
general administrative expenses, and restructuring and unusual charges and
credits.
Restructuring charges related to severance and operations consolidation costs
increased operating expenses by $25.0 million in the first quarter of 1998.
Results of operations for the second quarter of 1998 reflects restructuring
charges of $149.5 million. These charges include a $55.7 million provision for
loss on disposal of noncore businesses and unconsolidated affiliates; a $51.0
million provision for loss on government contracts; a $29.3 million write-down
of property and equipment, primarily leasehold improvements; and a $13.5 million
provision for operations consolidation and severance costs (see note 13).
Results for the second quarter of 1998 also reflect an unusual charge of $38.3
million related to the write-down of the Company's investment in FPA Medical
Management, Inc. (see note 14).
The second quarter 1998 amount shown for operating expenses differs from that
included in the Company's Form 10-Q for the period ended June 30, 1998 due to
the reclassification to operating expense of $92.3 million of which $73.4
million was originally included in unusual charges and $24.8 million was
included in restructuring charges.
Results of operations for the fourth quarter of 1998 includes a net
restructuring credit of $29.0 million which represents a change in estimate of
the restructuring charges incurred in the second quarter of 1998 (see note 13).
Unusual charges related to write-downs of subsidiaries and unconsolidated
affiliates increased operating expenses by $41.6 million in the fourth quarter
of 1997 (see note 14).
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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, on the 26th day of
March, 1999.
` OXFORD HEALTH PLANS, INC.
By: /s/ KURT B. THOMPSON
------------------------------------
KURT B. THOMPSON
Principal Accounting Officer
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