EXHIBIT 99.3
As Filed with the Securities and Exchange Commission on June 29, 1999.
File No. 001-13252
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1998
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from ____ to ____
A. Full title of the plan and address of the plan, if different
from that of the issuer named below:
HBO & COMPANY PROFIT SHARING AND SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan
and the address of its principal executive office:
HBO & Company
5995 Windward Parkway
Alpharetta, Georgia 30005
(404) 338-6000
Independent Auditors' Report
----------------------------
Administrative Committee
HBO & Company Profit Sharing and Savings Plan
We have audited the accompanying statements of net assets available for benefits
of HBO & Company Profit Sharing and Savings Plan as of December 31, 1998 and
1997, and the related statements of changes in net assets available for benefits
for the years then ended. These financial statements are the responsibility of
the Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of HBO & Company
Profit Sharing and Savings Plan at December 31, 1998 and 1997, and the changes
in net assets available for benefits for the years then ended, in conformity
with generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules are presented
for the purpose of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Securities and Exchange Commission and the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The supplemental schedules have been subjected to the
auditing procedures applied in our audit of the basic financial statements and,
in our opinion, are fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
Snyder, Camp, Stewart & Co., LLP
Atlanta, Georgia
June 7, 1999
HBO & COMPANY
PROFIT SHARING AND SAVINGS PLAN
Financial Statements with Supplementary Schedules
December 31, 1998 and 1997
HBO & COMPANY PROFIT SHARING AND SAVINGS PLAN
Statements of Net Assets Available for Benefits
December 31, 1998 and 1997
1998 1997
---- ----
Assets:
Investments, at fair value:
HBO & Company Common Stock Fund $ 87,974,789 60,874,776
Fidelity Magellan Fund 47,569,294 32,119,878
Fidelity Growth and Income Fund 49,911,771 34,011,540
Fidelity Retirement Money Market Fund 9,838,027 7,894,849
Fidelity Asset Manager Fund 7,078,608 5,573,548
Fidelity Managed Income Fund 2,917,735 2,182,337
Fidelity Intermediate Bond Fund 3,781,383 2,507,457
Fidelity International Growth and Income Fund 2,778,598 2,418,736
Fidelity Blue Chip Growth Fund 19,543,406 9,852,141
Fidelity Equity Income II Fund 11,525,386 6,884,663
Janus Balanced Fund 936,587 -
Templeton Foreign A Fund 835,527 -
------------ -----------
Total investments 244,691,111 164,319,925
Contributions receivable from employer 562,078 461,898
Contributions receivable from participants 1,276,770 1,047,924
Loans receivable from participants 3,066,897 2,622,581
Accrued investment income 61,332 25,365
------------ -----------
Total assets 249,658,188 168,477,693
Liabilities - -
------------ -----------
Net assets available for benefits $249,658,188 168,477,693
============ ===========
See accompanying notes to financial statements.
HBO & COMPANY PROFIT SHARING AND SAVINGS PLAN
Statements of Changes in Net Assets Available for Benefits
For the Years Ended December 31, 1998 and 1997
1998 1997
---- ----
Additions to net assets attributed to:
Investment income $ 8,924,038 6,030,961
Unrealized appreciation (depreciation) in fair
value of investments 26,778,238 29,863,816
Realized gain (loss) on sale of investments 8,854,144 5,923,294
------------ -----------
Net increase from investment activities 44,556,420 41,818,071
Contributions:
Employer 7,877,002 5,800,893
Participants 42,225,921 18,054,177
Interest income on loans to participants 229,533 185,273
------------ -----------
Total additions 94,888,876 65,858,414
Deductions from net assets attributed to:
Benefits paid directly to participants (13,692,519) (8,251,092)
Administrative fees (15,862) (18,778)
------------ -----------
Net increase 81,180,495 57,588,544
Net assets available for benefits:
Beginning of year 168,477,693 110,889,149
------------ -----------
End of year $249,658,188 168,477,693
============ ===========
See accompanying notes to financial statements.
HBO & COMPANY PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements
December 31, 1998 and 1997
(1) Description of Plan
-------------------
The following description of HBO & Company Profit Sharing and Savings Plan
(the "Plan") provides only general information. The Plan document should be
referred to for a more complete description of the Plan's provisions.
The Plan is a defined contribution plan which covers all employees of HBO &
Company and HBO & Company of Georgia (jointly referred to herein as the
"Company") who have completed six months of service (12 months for pre-1995
plan years) and have attained age 21 as of a Plan entry date. The Plan's
entry dates are January 1, April 1, July 1, and October 1.
Each eligible employee can elect to defer a percentage of pretax
compensation, as defined, of from one to a maximum of fifteen percent and
may contribute such amounts to the Plan. Such deferral elections must be
made in whole percentages. If necessary, the salary deferral contributions
allowed by a participant will be reduced by the Plan's Administrative
Committee (see note 3) so that such contributions do not cause the Plan to
be discriminatory or exceed the limitations of the Internal Revenue Code.
The Company may also contribute to the Plan at the election of the Board of
Directors through matching contributions and/or discretionary
contributions. Each participant's share of Company discretionary
contributions is related to the participant's compensation, as defined.
Company contributions may not exceed the maximum allowable as a deduction
as defined by the Internal Revenue Code. During 1998 and 1997, the Company
contributed $.75 for each $1 contributed by employees; however, this
Company matching contribution was only applicable for employee
contributions of up to 4% of pretax compensation. No Company discretionary
contributions were authorized for the years ended December 31, 1998 and
1997.
Participants are 100% vested in their pretax compensation contributions and
earnings thereon at all times. Company matching and discretionary
contributions credited to a participant's account and earnings thereon vest
on a graded basis. A participant becomes 20% vested in his/her Company
account after one year of service and an additional 20% becomes vested in
each of the following four years until a participant fully vests after five
years of service (effective January 1, 1995). Prior to January 1, 1995, a
participant became 20% vested in his/her Company account after three years
of service and an additional 20% vested in each of the following four years
until a participant fully vested after seven years of service. Further, a
participant is automatically 100% vested without regard to years of service
in the event of termination due to death, disability, or attainment of age
65. Allocation of Plan earnings/losses is based on a participant's account
balance in the respective fund.
Forfeitures of terminated participants' nonvested accounts are allocated
among the remaining Plan participants at the end of the Plan year as if the
forfeitures are additional matching contributions, as designated by the
Administrative Committee. At December 31, 1998, forfeited nonvested
accounts amounted to $378,133. These accounts may be used to reduce future
employer contributions.
Prior to July 1, 1998, participants had the option to direct the investment
of their accounts between ten investment funds: the Fidelity Retirement
Money Market Fund, the Fidelity Managed Income Fund, the Fidelity
Intermediate Bond Fund, the Fidelity Growth and Income Fund, the Fidelity
Magellan Fund, the Fidelity Asset Manager Fund, the Fidelity International
Growth and Income Fund, the Fidelity Blue Chip Growth Fund, the Fidelity
Equity Income II Fund and HBO & Company Common Stock Fund. On July 1, 1998
contributions to the Fidelity International Growth and Income Fund were
discontinued and two additional funds, the Janus Balanced Fund and the
Templeton Foreign A Fund, were added to the Plan.
HBO & COMPANY PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
December 31, 1998 and 1997
(1) Description of Plan, Continued
------------------------------
Participants may borrow from their fund accounts a minimum of $1,000 up to
a maximum equal to the lesser of $50,000 or 50% of their vested account
balance. Loan terms range up to 5 years, except that loan terms for the
purchase of a primary residence are at the discretion of the Administrative
Committee. The loans are secured by the balance in the participant's
account and bear interest at a rate determined by the Administrative
Committee. Principal and interest is paid ratably through monthly payroll
deductions.
Upon termination, participants under age 65 with account balances totaling
more than $5,000 may elect to (1) delay the distribution of accounts or (2)
receive vested benefits generally in a lump sum distribution. The full
value of benefits (regardless of amount) is payable upon normal or
postponed retirement or to beneficiaries upon death of the participant.
Participants with balances totaling less than $5,000 or on total or
permanent disability receive a lump sum distribution of vested benefits.
Under a provision of the Plan, the Company, through actions of its Board of
Directors, reserves the right to terminate the Plan. If the Plan is
terminated, each participant becomes fully vested as of the termination
date.
(2) Summary of Significant Accounting Policies
------------------------------------------
The accounting records of the Plan are maintained on the accrual basis.
HBO & Company Common Stock and investment funds held for investment by the
Plan are stated at quoted market values from independent published sources.
Loans receivable from participants are stated at cost which approximates
fair value.
The change in the difference between current value and the cost of the
investments is reflected in the statement of changes in net assets
available for benefits as unrealized appreciation (depreciation) in fair
value of investments.
Realized gain (loss) on sale of investments is the difference between the
proceeds received and the average cost of investments sold.
Benefits are recorded when paid.
The preparation of financial statements in conformity with generally
accepted accounting principles requires the Plan administrator to make
estimates and assumptions that affect certain reported amounts and
disclosures. Accordingly, actual results may differ from those estimates.
(3) Administration
--------------
The Company's Employee Benefits Administrative Committee (the
"Administrative Committee") is the Plan administrator. Fidelity is the
Trustee with custodial responsibility for the Plan's assets. The Plan is
liable for all administrative expenses not paid by the Company. At the
direction of the Administrative Committee, the Plan's administrative
expenses for 1998 and 1997 were paid by the Company.
HBO & COMPANY PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
December 31, 1998 and 1997
(4) Income Tax Status
-----------------
The Plan is intended to be qualified under the Internal Revenue Code (the
"IRC"). A favorable ruling was obtained from the IRS as to the tax-exempt
status of the Plan in May 1997.
(5) Transactions with Parties In Interest
-------------------------------------
During the year ended December 31, 1998, the Plan purchased 2,103,273
shares of the Common Stock of HBO & Company, the Plan sponsor, for
$30,301,298, and sold 304,892 shares of the Common Stock of HBO & Company
for $10,529,746 in accordance with the terms of the Plan.
During the year ended December 31, 1997, the Plan purchased 780,292 shares
of the Common Stock of HBO & Company, the Plan sponsor, for $8,980,274, and
sold 138,013 shares of the Common Stock of HBO & Company for $8,449,660 in
accordance with the terms of the Plan.
(6) Reconciliation of Financial Statements to Form 5500
---------------------------------------------------
The following is a reconciliation of net assets available for benefits per
the financial statements at December 31, 1998 and 1997 to Form 5500:
1998 1997
---- ----
Net assets available for benefits per the
financial statements $249,658,188 168,477,693
Amounts allocated to withdrawing participants - -
------------ -----------
Net assets available for benefits per the
Form 5500 $249,658,188 168,477,693
============ ===========
The following is a reconciliation of benefits paid to participants per the
financial statements for the year ended December 31, 1998 to Form 5500:
Benefits paid to participants per the financial
statements $ 13,692,519
Add: Amounts allocated to withdrawing participants
at December 31, 1998 -
Less: Amounts allocated to withdrawing participants
at December 31, 1997 -
------------
Benefits paid to participants per Form 5500 $ 13,692,519
============
Amounts allocated to withdrawing participants on the Form 5500 include
benefit claims that have been processed and approved for payment prior to
December 31, but not yet paid as of that date.
(7) Investment Funds
----------------
The Plan provides for separate investment funds for participants as
described in note 1 to the financial statements. The following pages
summarize the net assets available for benefits and the changes in net
assets available for benefits for each fund for the years ended December
31, 1998 and 1997.
HBO & COMPANY PROFIT SHARING AND SAVINGS PLAN
Net Assets Available for Benefits by Investment Program
Fidelity
HBO & Fidelity Fidelity Fidelity Fidelity Fidelity Int'l
Company Fidelity Growth & Retirement Asset Managed Intermediate Growth
Common Magellan Income Money Mkt Manager Income Bond & Income
December 31, 1998 Stock Fund Fund Fund Fund Fund Fund Fund
- ----------------- ----------- ---------- ---------- ---------- --------- ------------ --------- ---------
Assets:
Investments at fair value $87,974,789 47,569,294 49,911,771 9,838,027 7,078,608 2,917,735 3,781,383 2,778,598
Contributions receivable
from employer company 119,012 102,362 109,905 39,204 20,254 8,715 15,431 -
Contributions receivable
from participants 251,272 231,916 260,624 67,797 50,755 18,958 37,268 -
Loans receivable from
participants 69,832 610,242 1,088,987 618,142 334,402 110,641 156,559 6,411
Accrued investment income 61,332 - - - - - - -
----------- ---------- ---------- ---------- --------- --------- --------- ---------
Total Assets 88,476,237 48,513,814 51,371,287 10,563,170 7,484,019 3,056,049 3,990,641 2,785,009
----------- ---------- ---------- ---------- --------- --------- --------- ---------
Liabilities - - - - - - - -
----------- ---------- ---------- ---------- --------- --------- --------- ---------
Net assets available for
benefits $88,476,237 48,513,814 51,371,287 10,563,170 7,484,019 3,056,049 3,990,641 2,785,009
=========== ========== ========== ========== ========= ========= ========= =========
December 31, 1997
- -----------------
Assets:
Investments at fair value $60,874,776 32,119,878 34,011,540 7,894,849 5,573,548 2,182,337 2,507,457 2,418,736
Contributions receivable
from employer company 99,573 86,445 98,263 26,053 19,715 9,414 11,416 18,768
Contributions receivable
from participants 198,607 192,927 245,976 52,396 47,235 21,187 29,812 39,702
Loans receivable from
participants 159,570 572,707 780,128 597,244 246,510 100,566 95,503 679
Accrued investment income 25,365 - - - - - - -
----------- ---------- ---------- ---------- --------- --------- --------- ---------
Total assets 61,357,891 32,971,957 35,135,907 8,570,542 5,887,008 2,313,504 2,644,188 2,477,885
----------- ---------- ---------- ---------- --------- --------- --------- ---------
Liabilities - - - - - - - -
----------- ---------- ---------- ---------- --------- --------- --------- ---------
Net assets available for
benefits $61,357,891 32,971,957 35,135,907 8,570,542 5,887,008 2,313,504 2,644,188 2,477,885
=========== ========== ========== ========== ========= ========= ========= =========
Fidelity Fidelity
Blue Chip Equity Janus Templeton
Growth Income II Balanced Foreign A
December 31, 1998 Fund Fund Fund Fund Total
- ----------------- ---------- ---------- ---------- --------- -----------
Assets:
Investments at fair value 19,543,406 11,525,386 936,587 835,527 244,691,111
Contributions receivable
from employer company 79,572 42,392 10,492 14,739 562,078
Contributions receivable
from participants 193,394 103,119 27,427 34,240 1,276,770
Loans receivable from
participants 34,652 56,170 (18,019) (1,122) 3,066,897
Accrued investment income - - - - 61,332
---------- ---------- --------- ------- -----------
Total Assets 19,851,024 11,727,067 956,487 883,384 249,658,188
---------- ---------- --------- ------- -----------
Liabilities - - - - -
---------- ---------- --------- ------- -----------
Net assets available for
benefits 19,851,024 11,727,067 956,487 883,384 249,658,188
========== ========== ========= ======= ===========
December 31, 1997
- -----------------
Assets:
Investments at fair value 9,852,141 6,884,663 - - 164,319,925
Contributions receivable
from employer company 54,478 37,773 - - 461,898
Contributions receivable
from participants 130,822 89,260 - - 1,047,924
Loans receivable from
participants 61,168 8,506 - - 2,622,581
Accrued investment income - - - - 25,365
---------- ---------- --------- ------- -----------
Total assets 10,098,609 7,020,202 - - 168,477,693
---------- ---------- --------- ------- -----------
Liabilities - - - - -
---------- ---------- --------- ------- -----------
Net assets available for
benefits 10,098,609 7,020,202 - - 168,477,693
========== ========== ========= ======= ===========
HBO & COMPANY PROFIT SHARING AND SAVINGS PLAN
Changes in Net Assets Available for Benefits by Investment Program
For the Year Ended December 31, 1998
Fidelity
HBO & Fidelity Fidelity Fidelity Fidelity Int'l
Company Fidelity Growth & Retirement Asset Managed Fidelity Growth
Common Magellan Income Money Mkt. Manager Income Intermediate & Income
Stock Fund Fund Fund Fund Fund Bond Fund Fund
------------ ----------- ----------- ----------- ---------- ---------- ------------- ----------
Additions to net assets
attributed to:
Investment income $ 215,968 2,156,833 2,586,663 460,071 1,273,855 146,888 192,643 93,814
Unrealized appreciation
(depreciation) in fair
value of investments 7,328,461 8,691,378 6,711,851 - (442,694) - 22,920 99,147
Realized gain (loss) on
sale of investments 5,603,218 903,176 1,442,500 - 152,745 - 3,743 85,260
----------- ---------- ---------- ---------- --------- --------- --------- ---------
Net increase from
investment activities 13,147,647 11,751,387 10,741,014 460,071 983,906 146,888 219,306 278,221
Contributions:
Employer 1,797,390 1,487,680 1,671,212 307,090 307,994 133,731 189,285 135,327
Participants 15,007,522 5,654,353 7,085,623 2,030,218 1,229,144 516,594 789,507 809,572
Interest income on loans
to participants 71,484 43,695 46,120 15,698 7,913 3,640 5,332 2,459
----------- ---------- ---------- ---------- --------- --------- --------- ---------
Total additions 30,024,043 18,937,115 19,543,969 2,813,077 2,528,957 800,853 1,203,430 1,225,579
Deductions from net assets
attributed to:
Benefits expense (4,049,188) (2,356,445) (2,544,862) (1,253,414) (415,349) (541,306) (268,217) (404,534)
Administrative expense (525) (2,850) (4,333) (2,176) (1,275) (823) (1,125) (75)
Interfund transfers 1,144,016 (1,035,963) (759,394) 435,141 (515,322) 483,821 412,365 (513,846)
----------- ---------- ---------- ---------- --------- --------- --------- ---------
Net increase 27,118,346 15,541,857 16,235,380 1,992,628 1,597,011 742,545 1,346,453 307,124
Net assets available for
benefits:
Beginning of year 61,357,891 32,971,957 35,135,907 8,570,542 5,887,008 2,313,504 2,644,188 2,477,885
----------- ---------- ---------- ---------- --------- --------- --------- ---------
End of year $88,476,237 48,513,814 51,371,287 10,563,170 7,484,019 3,056,049 3,990,641 2,785,009
=========== ========== ========== ========== ========= ========= ========= =========
Fidelity Fidelity
Blue Chip Equity Janus Templeton
Growth Income II Balanced Foreign A
Fund Fund Fund Fund Total
----------- ----------- --------- ---------- ------------
Additions to net assets
attributed to:
Investment income 708,380 1,004,202 13,315 71,406 8,924,038
Unrealized appreciation
(depreciation) in fair
value of investments 3,483,519 819,034 98,992 (34,370) 26,778,238
Realized gain (loss) on
sale of investments 456,570 209,850 (580) (2,338) 8,854,144
---------- ---------- ------- ------- -----------
Net increase from
investment activities 4,648,469 2,033,086 111,727 34,698 44,556,420
Contributions:
Employer 1,056,445 623,203 33,613 134,032 7,877,002
Participants 5,090,433 3,070,897 593,810 348,248 42,225,921
Interest income on loans
to participants 20,629 9,546 625 2,392 229,533
---------- ---------- ------- ------- -----------
Total additions 10,815,976 5,736,732 739,775 519,370 94,888,876
Deductions from net assets
attributed to:
Benefits expense (1,285,370) (565,922) (62) (7,850) (13,692,519)
Administrative expense (1,030) (1,650) - - (15,862)
Interfund transfers 222,839 (462,295) 216,774 371,864 -
---------- ---------- ------- ------- -----------
Net increase 9,752,415 4,706,865 956,487 883,384 81,180,495
Net assets available for
benefits:
Beginning of year 10,098,609 7,020,202 - - 168,477,693
---------- ---------- ------- ------- -----------
End of year 19,851,024 11,727,067 956,487 883,384 249,658,188
========== ========== ======= ======= ===========
HBO & COMPANY PROFIT SHARING AND SAVINGS PLAN
Changes in Net Assets Available for Benefits by Investment Program
For the Year Ended December 31, 1997
HBO & Fidelity Fidelity Fidelity Fidelity
Company Fidelity Growth & Retirement Asset Managed
Common Magellan Income Money Mkt Manager Income
Stock Fund Fund Fund Fund Fund
----------- ---------- ---------- ---------- --------- ---------
Additions to net assets
attributed to:
Investment income $ 74,474 2,014,711 1,517,739 393,012 476,161 123,686
Unrealized appreciation
(depreciation) in fair
value of investments 19,095,278 3,921,248 4,922,587 - 375,918 -
Realized gain (loss) on
sale of investments 4,083,091 440,334 944,504 - 91,381 -
----------- ---------- ---------- --------- --------- ---------
Net increase from
investment activities 23,252,843 6,376,293 7,384,830 393,012 943,460 123,686
Contributions:
Employer 1,284,216 1,169,345 1,300,979 146,783 277,969 126,223
Participants 3,226,750 3,310,968 4,056,772 1,186,532 888,432 353,540
Interest income on loans
to participants 52,447 40,000 35,884 11,275 8,881 5,764
----------- ---------- ---------- --------- --------- ---------
Total additions 27,816,256 10,896,606 12,778,465 1,737,602 2,118,742 609,213
Deductions from net assets
attributed to:
Benefits expense (1,837,481) (1,419,222) (2,004,556) (961,136) (482,324) (118,830)
Administrative expense (3,028) (3,450) (5,775) (2,175) (1,425) (375)
Interfund transfers (2,302,522) (463,183) 1,301,163 548,605 (67,154) (856)
----------- --------- --------- --------- --------- ---------
Net increase 23,673,225 9,010,751 12,069,297 1,322,896 1,567,839 489,152
Net assets available for
benefits:
Beginning of year 37,684,666 23,961,206 23,066,610 7,247,646 4,319,169 1,824,352
----------- ---------- ---------- --------- --------- ---------
End of year $61,357,891 32,971,957 35,135,907 8,570,542 5,887,008 2,313,504
=========== ========== ========== ========= ========= =========
Fidelity
Fidelity Int'l Fidelity Fidelity
Intermediate Growth Blue Chip Equity
Bond & Income Growth Income II
Fund Fund Fund Fund Total
----------- --------- ---------- --------- -----------
Additions to net assets
attributed to:
Investment income 137,428 141,226 461,173 691,351 6,030,961
Unrealized appreciation
(depreciation) in fair
value of investments 26,729 (57,275) 1,124,404 454,927 29,863,816
Realized gain (loss) on
sale of investments (2,686) 40,864 191,142 134,664 5,923,294
----------- --------- ---------- --------- -----------
Net increase from
investment activities 161,471 124,815 1,776,719 1,280,942 41,818,071
Contributions:
Employer 151,079 215,476 664,495 464,328 5,800,893
Participants 506,630 698,766 2,315,581 1,510,206 18,054,177
Interest income on loans
to participants 4,393 2,899 15,119 8,611 185,273
----------- --------- ---------- --------- -----------
Total additions 823,573 1,041,956 4,771,914 3,264,087 65,858,414
Deductions from net assets
attributed to:
Benefits expense (163,019) (267,447) (591,898) (405,179) (8,251,092)
Administrative expense (975) (150) (675) (750) (18,778)
Interfund transfers 124,955 125,918 381,819 351,255 -
----------- --------- ---------- --------- -----------
Net increase 784,534 900,277 4,561,160 3,209,413 57,588,544
Net assets available for
benefits:
Beginning of year 1,859,654 1,577,608 5,537,449 3,810,789 110,889,149
----------- --------- ---------- --------- -----------
End of year 2,644,188 2,477,885 10,098,609 7,020,202 168,477,693
=========== ========= ========== ========= ===========
HBO & COMPANY PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
December 31, 1998 and 1997
(8) Investments
-----------
During 1998 and 1997 the Plan's investments (including investments bought
and sold as well as held during the year) appreciated (depreciated) in fair
value as follows:
Net
Appreciation
(Depreciation) Fair Value
in Fair Value at End
During Year of Year
---------- -------
Year ended December 31, 1998:
Fair value as determined by quoted market price:
HBO & Company Common Stock Fund $ 12,931,679 87,974,789
Fidelity Magellan Fund 9,594,554 47,569,294
Fidelity Growth and Income Fund 8,154,351 49,911,771
Fidelity Retirement Money Market Fund - 9,838,027
Fidelity Asset Manager Fund (289,949) 7,078,608
Fidelity Managed Income Fund - 2,917,735
Fidelity Intermediate Bond Fund 26,663 3,781,383
Fidelity International Growth and Income Fund 184,407 2,778,598
Fidelity Blue Chip Growth Fund 3,940,089 19,543,406
Fidelity Equity Income II Fund 1,028,884 11,525,386
Janus Balanced Fund 98,412 936,587
Templeton Foreign A Fund (36,708) 835,527
----------- -----------
$ 35,632,382 244,691,111
=========== ===========
The current value of the HBO & Company Common Stock Fund, Fidelity Magellan
Fund, Fidelity Growth and Income Fund and Fidelity Blue Chip Growth Fund
held for investment at December 31, 1998 was $87,974,789, $47,569,294,
$49,911,771, and $19,543,406, respectively, each of which represents an
investment greater than 5% of the Plan's net assets.
Year ended December 31, 1997:
Fair value as determined by quoted market price:
HBO & Company Common Stock Fund $ 23,178,369 60,874,776
Fidelity Magellan Fund 4,361,582 32,119,878
Fidelity Growth and Income Fund 5,867,091 34,011,540
Fidelity Retirement Money Market Fund - 7,894,849
Fidelity Asset Manager Fund 467,299 5,573,548
Fidelity Managed Income Fund - 2,182,337
Fidelity Intermediate Bond Fund 24,043 2,507,457
Fidelity International Growth and Income Fund (16,411) 2,418,736
Fidelity Blue Chip Growth Fund 1,315,546 9,852,141
Fidelity Equity Income II Fund 589,591 6,884,663
----------- -----------
$ 35,787,110 164,319,925
=========== ===========
HBO & COMPANY PROFIT SHARING AND SAVINGS PLAN
Notes to Financial Statements, Continued
December 31, 1998 and 1997
(8) Investments, Continued
----------------------
The current value of the HBO & Company Common Stock Fund, Fidelity Magellan
Fund, Fidelity Growth and Income Fund and Fidelity Blue Chip Growth Fund
held for investment at December 31, 1997 was $60,874,776, $32,119,878,
$34,011,540, and $9,852,141, respectively, each of which represents an
investment greater than 5% of the Plan's net assets.
The realized gain on the sale of investments during the years ended
December 31, 1998 and 1997 was determined as follows:
1998 1997
------------- ------------
Aggregate proceeds $ 37,072,412 27,104,707
Aggregate cost (28,218,268) (21,181,413)
------------ -----------
Realized gain $ 8,854,144 5,923,294
============ ===========
During 1998 and 1997, the balance of unrealized appreciation (depreciation)
in the fair value of investments changed as follows:
Balance, December 31, 1996 $29,926,120
Current unrealized appreciation of investments,
net of realized gains (losses) 29,863,816
-----------
Balance, December 31, 1997 59,789,936
Current unrealized appreciation of investments,
net of realized gains (losses) 26,778,238
-----------
Balance, December 31, 1998 $86,568,174
===========
(9) Subsequent Events
-----------------
In January 1999, the Company merged with McKesson, Inc. and a decision was
made to merge the profit sharing plans of both companies. The plans were
merged effective April 1, 1999, forming the McKesson HBOC, Inc. Profit
Sharing Investment Plan. In conjunction with the merger, several amendments
were made to the Plan provisions, including a change that matching
contributions consist entirely of McKesson HBOC, Inc. common stock and a
change in Plan eligibility requirements. Subsequent to the Plan's merger,
the Plan's investment in the common stock of McKesson HBOC, Inc. had a
significant decline in market value.
SUPPLEMENTARY INFORMATION
HBO & COMPANY PROFIT SHARING AND SAVINGS PLAN
FEI # 37-0986839 - Plan #001
Item 27a - Schedule of Assets Held for Investment Purposes
December 31, 1998
-----------------
(a) Identity of (e) Current
Party Involved (b) Identity of Issue (c) Description (d) Cost Value
-------------- ----------------- ----------- ---- -----
Fidelity Investments Shares
- -------------------- ------
Fidelity Magellan Fund 393,720 $ 32,441,768 47,569,294
Fidelity Growth & Income Fund 1,088,826 33,731,695 49,911,771
Fidelity Retirement Money Market Fund 9,838,027 9,838,027 9,838,027
Fidelity Asset Manager Fund 407,051 6,907,885 7,078,608
Fidelity Managed Income Fund 2,917,735 2,917,735 2,917,735
Fidelity Intermediate Bond Fund 368,197 3,754,130 3,781,383
Fidelity International Growth & Income
Fund 132,884 2,655,951 2,778,598
Fidelity Blue Chip Growth Fund 387,843 14,755,434 19,543,406
Fidelity Equity Income II Fund 384,052 10,056,404 11,525,386
Janus Investments Shares
- ----------------- ------
Janus Janus Balanced Fund 47,761 837,595 936,587
Templeton Investments Shares
- --------------------- ------
Templeton Templeton Foreign A Fund 99,586 869,897 835,527
------- -------
118,766,521 156,716,322
Company Stock Fund
- ------------------
* HBO & Company Common Stock Shares
------
3,066,606 39,356,416 87,974,789
Participant Loans Participant Loans Interest
- ----------------- --------
7-13% - 3,066,897
---------- ------------
Total investments held 158,122,937 247,758,008
=========== ===========
December 31, 1997
-----------------
(a) Identity of (e) Current
Party Involved (b) Identity of Issue (c) Description (d) Cost Value
- ------------------- ----------------- ----------- ---- -----
Fidelity Investments Shares
- -------------------- ------
Fidelity Magellan Fund 337,146 25,683,731 32,119,878
Fidelity Growth & Income Fund 892,691 24,543,314 34,011,540
Fidelity Retirement Money Market Fund 7,894,849 7,894,849 7,894,849
Fidelity Asset Manager Fund 303,736 4,960,130 5,573,548
Fidelity Managed Income Fund 2,182,337 2,182,337 2,182,337
Fidelity Intermediate Bond Fund 246,554 2,503,124 2,507,457
Fidelity International Growth & Income
Fund 122,778 2,395,236 2,418,736
Fidelity Blue Chip Growth Fund 249,674 8,547,688 9,852,141
Fidelity Equity Income II Fund 254,893 6,234,715 6,884,663
----------- -----------
84,945,124 103,445,149
Company Stock Fund Shares
- ------------------ ------
* HBO & Company Common Stock 1,268,225 19,584,864 60,874,776
Interest
--------
Participant Loans Participant Loans 6-13% - 2,622,581
- ----------------- ----------- ----------
Total investments held $104,529,988 166,942,506
============ ===========
*Party in interest.
HBO & COMPANY PROFIT SHARING AND SAVINGS PLAN
FEI # 37-0986839 - Plan #001
Item 27d - Schedule of Reportable Transactions
Transactions or Series of Transactions in Excess of Five Percent
of the Current Value of Plan Assets
Number of Cost
(a) Identity of (b) Description Number of Shares or (c) Purchase (d) Selling of
Party Involved of Assets Transactions Units Price Price Assets
-------------- --------- ------------ ----- ----- ----- ------
Category (iii) - A series of transactions in excess of 5% of plan assets:
- ------------------------------------------------------------------------
December 31, 1998
- -----------------
HBO & Company Common Stock
Purchases 141 2,103,271 $ 24,698,080 $ 24,698,080
Sales 101 304,992 $ 10,529,746 4,926,528
Fidelity Magellan
Purchases 220 103,380 10,785,256 10,785,256
Sales 194 46,805 4,930,395 4,027,219
Fidelity Growth &
Income Fund
Purchases 232 362,941 14,717,497 14,717,497
Sales 204 282,817 6,971,616 5,529,116
Fidelity Retirement Money Mtk Fund
Purchases 233 7,163,580 7,163,580 7,163,580
Sales 184 5,215,571 5,215,571 5,215,571
Fidelity Blue Chip
Growth Fund
Purchases 218 196,995 8,403,792 8,403,792
Sales 174 58,825 2,652,616 2,196,046
December 31, 1997
- -----------------
HBO & Company Common Stock
Purchases 136 780,292 8,980,274 8,980,274
Sales 109 138,013 8,449,660 4,366,569
Fidelity Magellan
Purchases 209 86,379 7,849,019 7,849,019
Sales 178 38,470 3,417,652 2,977,319
Fidelity Growth &
Income Fund
Purchases 223 315,512 11,165,320 11,165,320
Sales 174 152,918 5,456,748 4,512,244
Fidelity Retirement Money Mkt Fund
Purchases 198 4,512,275 4,512,275 4,512,275
Sales 171 3,268,259 3,268,259 3,268,259
Fidelity Blue Chip
Growth Fund
Purchases 194 126,275 4,699,054 4,699,054
Sales 138 43,022 1,602,778 1,411,636
(h) Current Value
of Assets On (i) Net
(a) Identity of Transaction Gain
Party Involved Date (Loss)
-------------- ---- -----
Category (iii) - A series of transactions in excess of 5% of plan assets:
- ------------------------------------------------------------------------
December 31, 1998
- -----------------
HBO & Company
$ 24,698,080
10,529,746 $ 5,603,218
Fidelity
10,785,256
4,930,395 903,176
Fidelity
14,717,497
6,971,616 1,442,500
Fidelity
7,163,580
5,215,571 -
Fidelity
8,403,792
2,652,616 456,570
December 31, 1997
- -----------------
HBO & Company
8,980,274
8,449,660 4,083,091
Fidelity
7,849,019
3,417,652 440,333
Fidelity
11,165,320
5,456,748 944,504
Fidelity
4,512,275
3,268,259 -
Fidelity
4,699,054
1,602,778 191,142
SIGNATURES
----------
THE PLAN. Pursuant to the requirements of the Securities Exchange Act of
1934, the trustees (or other persons who administer the employee benefit plan)
have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
HBO & COMPANY PROFIT SHARING
AND SAVINGS PLAN
By: /s/ E. Christine Rumsey
------------------------
E. Christine Rumsey
DATE: June 29, 1999