<PAGE> 1
EXHIBIT 99
For Further Information:
Investor Contact: Deborah Abraham
(203) 459-6674
Media Contact: Maria Gordon-Shydlo
(203) 459-7674
FOR IMMEDIATE RELEASE
OXFORD HEALTH PLANS, INC.
ANNOUNCES SECOND QUARTER 2000 RESULTS
DILUTED EARNINGS PER SHARE BEFORE EXTRAORDINARY ITEM OF $0.45
DILUTED EARNINGS PER SHARE AFTER EXTRAORDINARY ITEM OF $0.41
TRUMBULL, CONNECTICUT, JULY 26, 2000 Oxford Health Plans, Inc. (NASDAQ:
OXHP) announced today net income, after an extraordinary item related to debt
retirement, of $37 million or $0.41 per diluted common share, for the quarter
ended June 30, 2000. This compares to a net loss of $13 million or $0.16 per
diluted common share for the same period last year. "Oxford's solid results
reflect ongoing diligence in premium pricing, thoughtful healthcare
affordability measures and significant administrative economies. With an intense
focus on consumer, employer and physician preferences in the greater New York
area, we are enthusiastic about our long term prospects," said Oxford Health
Plans' Chairman and Chief Executive Officer, Norman C. Payson, M.D.
Revenues for the quarter ended June 30, 2000 were $1.01 billion,
compared to $1.05 billion in the second quarter last year. As of June 30, 2000,
Oxford's total membership was approximately 1.49 million compared to 1.52
million at the end of the first quarter of 2000. The decline in membership
reflects a net increase of over 4,300 members in the Company's large group
products offset by the effect of the restructuring of certain small group
product offerings.
5
<PAGE> 2
The medical loss ratio for the quarter ended June 30, 2000 of 80.9%
benefited from favorable development of prior period reserve estimates of
medical costs of approximately $15 million. Apart from this favorable
development, the medical loss ratio was 82.4% compared to a medical loss ratio
of 85.8% in the second quarter of 1999. The administrative loss ratio was 12.1%
for the quarter compared to 15.0% for the second quarter of last year. The
quarter's earnings were reduced by $3.6 million in extraordinary charges related
to the Company's previously announced accelerated retirement of its bank term
loan on May 17, 2000. Excluding favorable development of prior period medical
cost estimates, incremental severance and extraordinary items in the period, the
Company's fully diluted earnings were $0.36 per share. "The medical and
administrative loss ratios for the quarter compared favorably with the second
quarter of last year and illustrate the positive momentum of our Company. Our
operating performance demonstrates our ability to remain focused on health care
initiatives and administrative efficiencies while providing a positive
healthcare experience for our members," said Dr. Payson.
The Company reported positive cash flow from operations of $73 million
for the quarter ended June 30, 2000. As of June 30, 2000, the Company had
approximately $1.05 billion in current cash and marketable securities, including
$99 million at the parent company. As announced on July 24th, Oxford received
notice from New York State regulatory authorities that it would be allowed to
dividend $40 million from its New York health plan to the parent company. "This
payment, which was received yesterday, increased the parent company's available
cash to over $130 million. The combination of parent company cash and projected
operating cash flows for the remainder of 2000 will allow Oxford to pursue
additional opportunities for increasing shareholder value, including additional
enhancements in our capital structure," said Kurt B. Thompson, Oxford's Chief
Financial Officer.
Founded in 1984, Oxford Health Plans, Inc. provides health plans to
employers and individuals in New York, New Jersey and Connecticut, through its
direct sales force, independent insurance agents and brokers. Oxford's services
include traditional health maintenance organizations, point-of-service plans,
third party administration of employer-funded benefits plans and Medicare plans.
6
<PAGE> 3
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this press release, including statements concerning future
results of operations or financial position, the Company's long term prospects,
future ability to receive cash from its regulated subsidiaries, projected
operating cash flows for the remainder of 2000, future ability to pursue
opportunities for increasing shareholder value, future changes in the Company's
capital structure, and other statements contained herein regarding matters that
are not historical facts, are forward-looking statements (as such term is
defined in the Securities Exchange Act of 1934); 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:
- Changes in Federal or State regulation relating to health care and health
benefit plans, including proposed patient protection legislation and
mandated benefits.
- Rising medical costs or higher utilization of medical services, including
higher out-of-network utilization under point-of-service plans and new
drugs and technologies.
- Competitive pressure on the pricing of the Company's products, including
acceptance of premium rate increases by the Company's commercial groups.
- Higher than expected administrative costs in operating the Company's
business and the cost and impact on service of changing technologies.
- The ability of the Company to operationalize risk transfer and other
provider arrangements and the resolution of existing and future disputes
over the reconciliations and performance under such arrangements.
- Any changes in the Company's estimates of its medical costs and expected
cost trends.
- The impact of future developments in various litigation (including pending
class and derivative actions filed against the Company and certain of its
officers and directors, and other proceedings commenced against the Company
and several employees by certain healthcare providers), regulatory
proceedings and other governmental action (including the ongoing
examination, investigation and review of the Company by various Federal and
State authorities).
- The Company's ability to renew existing members and attract new members.
- The Company's ability to develop processes and systems to support its
operations and any future growth.
- The possibility of litigation similar to the purported class actions
brought against certain large national health plans.
- Those factors included in the discussion under the caption "Business -
Cautionary Statement Regarding Forward-Looking Statements" in the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1999 and
under the caption "Management's Discussion and Analysis of Financial
Condition and Results of Operations - Cautionary Statement Regarding
Forward-Looking Statements" in the Company's Quarterly Report on Form 10-Q
for the period ended March 31, 2000.
7
<PAGE> 4
OXFORD HEALTH PLANS, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
As of June 30, 2000 and December 31, 1999
(In thousands, except share data)
<TABLE>
<CAPTION>
ASSETS
June 30, Dec. 31,
2000 1999
--------------- ---------------
Current assets:
<S> <C> <C>
Cash and cash equivalents $ 206,196 $ 332,882
Investments - available-for-sale, at market value 843,472 829,054
Premiums receivable, net 53,808 64,071
Other receivables 25,559 32,588
Prepaid expenses and other current assets 5,311 3,862
Deferred income taxes 70,985 68,266
---------------------------------------------------------------------------------------------------------------
Total current assets 1,205,331 1,330,723
Property and equipment, net 37,497 49,519
Deferred income taxes 173,318 231,512
Restricted cash and investments 57,531 61,603
Other noncurrent assets 21,472 13,531
---------------------------------------------------------------------------------------------------------------
Total assets $1,495,149 $1,686,888
===============================================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Medical costs payable $ 644,256 $ 656,063
Trade accounts payable and accrued expenses 112,570 122,345
Unearned premiums 111,500 97,155
Current portion of capital lease obligations 10,252 12,467
---------------------------------------------------------------------------------------------------------------
Total current liabilities 878,578 888,030
Long-term debt 200,000 350,000
Obligations under capital leases 1,471 5,787
Redeemable preferred stock 228,695 344,316
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 83,738,061 shares in 2000
and 81,986,457 shares in 1999 837 820
Additional paid-in capital 488,073 488,030
Accumulated deficit (286,196) (372,350)
Accumulated other comprehensive loss (16,309) (17,745)
---------------------------------------------------------------------------------------------------------------
Total shareholders' equity 186,405 98,755
---------------------------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity $1,495,149 $1,686,888
===============================================================================================================
</TABLE>
8
<PAGE> 5
OXFORD HEALTH PLANS, INC. AND SUBSIDIARIES
Consolidated Statements of Earnings
Three and Six Months Ended June 30, 2000 and 1999
(In thousands, except per share, per member per month
and membership highlights data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------------------- -------------------------------
2000 1999 2000 1999
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Revenues:
Premiums earned $ 990,565 $1,033,670 $1,991,436 $2,060,256
Third-party administration, net 4,207 4,091 7,731 7,701
Investment and other income, net 18,025 13,020 36,011 43,129
------------------------------------------------------------------------------------------------------------------------------
Total revenues 1,012,797 1,050,781 2,035,178 2,111,086
------------------------------------------------------------------------------------------------------------------------------
Expenses:
Health care services 801,141 886,836 1,618,506 1,758,709
Marketing, general and administrative 120,024 155,210 241,793 304,947
Interest and other financing charges 8,626 12,180 20,088 26,230
------------------------------------------------------------------------------------------------------------------------------
Total expenses 929,791 1,054,226 1,880,387 2,089,886
------------------------------------------------------------------------------------------------------------------------------
Earnings (loss) before income taxes and extraordinary item 83,006 (3,445) 154,791 21,200
Income tax expense (benefit) 34,863 (1,446) 65,013 8,904
------------------------------------------------------------------------------------------------------------------------------
Net earnings (loss) before extraordinary item 48,143 (1,999) 89,778 12,296
Extraordinary item, net of income taxes (3,624) - (3,624) -
------------------------------------------------------------------------------------------------------------------------------
Net earnings (loss) 44,519 (1,999) 86,154 12,296
Less - preferred stock dividends and amortization (7,516) (11,377) (20,351) (22,459)
------------------------------------------------------------------------------------------------------------------------------
Net earnings (loss) attributable to common stock $ 37,003 $ (13,376) $ 65,803 $ (10,163)
==============================================================================================================================
Earnings (loss) per common share - basic:
Earnings (loss) before extraordinary item $ 0.48 $ (0.16) $ 0.84 $ (0.13)
Extraordinary item (0.04) - (0.04) -
------------------------------------------------------------------------------------------------------------------------------
Earnings (loss) per common share - basic $ 0.44 $ (0.16) $ 0.80 $ (0.13)
==============================================================================================================================
Earnings per common share - diluted:
Earnings before extraordinary item $ 0.45 $ (0.16) $ 0.81 $ (0.13)
Extraordinary item (0.04) - (0.04) -
------------------------------------------------------------------------------------------------------------------------------
Earnings per common share - diluted $ 0.41 $ (0.16) $ 0.77 $ (0.13)
==============================================================================================================================
Weighted-average common shares outstanding-basic 83,382 81,162 82,351 80,970
Effect of dilutive securities:
Stock options 4,464 - 3,114 -
Warrants 2,196 - - -
------------------------------------------------------------------------------------------------------------------------------
Weighted-average common shares outstanding-diluted 90,042 81,162 85,465 80,970
==============================================================================================================================
Selected Information:
Medical loss ratio 80.9% 85.8% 81.3% 85.4%
Administrative loss ratio 12.1% 15.0% 12.1% 14.7%
Earnings before income taxes, financing charges,
depreciation and amortization ("EBITDA") $ 100,267 $ 22,970 $ 193,431 $ 75,520
PMPM premium revenue $ 230.12 $ 212.11 $ 226.58 $ 208.39
PMPM medical expense $ 186.11 $ 181.98 $ 184.15 $ 177.89
Fully insured member months 4,304.6 4,873.2 8,789.1 9,886.5
</TABLE>
<TABLE>
<CAPTION>
As of June 30, As of Dec. 31,
------------------------------ ---------------
MEMBERSHIP HIGHLIGHTS 2000 1999 1999
---------------------------------------------------------------------------------------------- -------------- ---------------
<S> <C> <C> <C>
Freedom and Liberty Plans 1,115,900 1,269,400 1,210,500
HMO 223,000 242,100 235,400
Medicare 90,100 103,800 97,700
------------------------------------------------------------------------------------------------------------------------------
Total Fully Insured 1,429,000 1,615,300 1,543,600
Third-party Administration 62,600 53,400 50,100
------------------------------------------------------------------------------------------------------------------------------
Total Membership 1,491,600 1,668,700 1,593,700
==============================================================================================================================
</TABLE>
9
<PAGE> 6
OXFORD HEALTH PLANS, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Three and Six Months Ended June 30, 2000 and 1999
(In thousands)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------------------- -------------------------------
2000 1999 2000 1999
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net earnings (loss) $ 44,519 $ (1,999) $ 86,154 $ 12,296
Adjustments to reconcile net earnings (loss) to
net cash provided (used) by operating activities:
Depreciation and amortization 9,011 14,724 19,417 29,068
Deferred income taxes 30,880 (1,446) 61,030 8,904
Extraordinary item 3,624 - 3,624 -
Realized loss on sale of investments (235) 2,853 379 3,395
Other, net 1,420 481 1,420 1,272
Changes in assets and liabilities:
Premiums receivable 9,300 19,956 10,263 (3,426)
Other receivables 5,922 7,871 7,029 1,908
Prepaid expenses and other current assets 586 (2,075) (1,449) (2,242)
Medical costs payable (29,172) (53,000) (11,807) (108,787)
Trade accounts payable and accrued expenses (13,549) (15,246) (9,775) (25,814)
Income taxes payable/refundable - - - -
Unearned premiums 5,717 6,906 14,345 (60,699)
Other, net 4,651 (5,788) 1,297 (10,293)
-------------------------------------------------------------------------------------------------------------------------------
Net cash provided (used) by operating activities 72,674 (26,763) 181,927 (154,418)
-------------------------------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Capital expenditures (4,666) (3,066) (7,268) (4,147)
Purchases of investments (132,837) (338,562) (257,588) (597,917)
Sales and maturities of investments 139,739 322,688 243,469 683,077
Other, net (3,427) (11,582) (7,834) (11,189)
-------------------------------------------------------------------------------------------------------------------------------
Net cash provided (used) by investing activities (1,191) (30,522) (29,221) 69,824
-------------------------------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Proceeds from exercise of stock options 15,736 4,944 16,511 9,764
Cash dividends paid (5,972) - (5,972) -
Redemption of notes payable (139,400) - (153,400) -
Redemption of preferred stock - - (130,000) -
Payments under capital leases (2,786) (4,553) (6,531) (11,980)
-------------------------------------------------------------------------------------------------------------------------------
Net cash provided (used) by financing activities (132,422) 391 (279,392) (2,216)
-------------------------------------------------------------------------------------------------------------------------------
Net decrease in cash and cash equivalents (60,939) (56,894) (126,686) (86,810)
Cash and cash equivalents at beginning of period 267,135 207,801 332,882 237,717
-------------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period $ 206,196 $ 150,907 $ 206,196 $ 150,907
===============================================================================================================================
</TABLE>
10
