EXHIBIT 20
[Logo of Columbia/HCA appears here]
NEWS
FOR IMMEDIATE RELEASE
INVESTOR CONTACT: MEDIA CONTACT:
Mark Kimbrough 615-344-2688 Jeff Prescott 615-344-5708
COLUMBIA/HCA REPORTS SECOND QUARTER EPS
OF $0.30 FROM CONTINUING OPERATIONS
BEFORE RESTRUCTURING AND INVESTIGATION COSTS
$1 BILLION SHARE REPURCHASE ANNOUNCED
NASHVILLE, TENN., JULY 29, 1998---Columbia/HCA Healthcare Corporation (NYSE:
COL) today announced operating results for the second quarter ended June 30,
1998, including EPS from continuing operations, before restructuring and
investigation related costs, of $0.30 per diluted share. The Company also
announced that it has been authorized by its Board of Directors to repurchase up
to $1 billion of its common stock.
The Company also announced today, that its Board of Directors has approved the
filing of a ruling request with the Internal Revenue Service for tax-free spin-
offs to stockholders of its America and Pacific Groups. The America Group
presently includes 22 rural hospitals and the Pacific Group includes 43 suburban
or secondary market hospitals. Columbia/HCA anticipates filing the ruling
request in August.
Thomas F. Frist, Jr. M.D., Chairman and CEO, stated, "We have accomplished a
great deal during the past twelve months, including the repositioning of the
Company to provide a more community-based, local focus for our hospitals. Also,
significant progress has been made in the development of a new culture within
the organization, defining the Company's mission and values, and focusing on
"patients first." Everyone within the organization should be proud of our
accomplishments, however, we recognize there still remains much to be
accomplished."
"We believe the future of this Company lies in returning to a focused
strategy that concentrates on those communities where we have a major healthcare
presence. Those hospitals and other service units which do not fit this
profile are being repositioned into other organizations that can more
effectively serve the needs of those local communities," Frist said.
Frist added, "I am particularly pleased with the significant progress
we have made this year in the restructuring of our assets; with the operational
improvements we have achieved, despite anticipated weaker results from assets
being sold; and with today's announced addition of a stock repurchase program to
enhance our overall financial strategy."
Since the beginning of 1998, the Company has announced or completed asset
sales totaling approximately $2.7 billion. The divestitures include Value RX
for approximately $409 million, Value Behavioral Health and Value Health
Sciences for approximately $210 million, 33 surgery centers for approximately
$500 million, 22 hospitals to a not-for-profit consortium for approximately $1.2
billion, homecare operations for approximately $100 million and an additional 15
hospitals in separate transactions for approximately $300 million.
Revenues from continuing operations approximated $4.8 billion in both the
second quarters ended June 30, 1998 and 1997. Net income from continuing
operations, before restructuring and investigation related costs, totaled $191
million, or $0.30 per diluted share for the second quarter of 1998 compared to
$385 million, or $0.58 per diluted share for the same period of 1997. Net
income totaled $78 million, or $0.12 per diluted share for the second quarter of
1998 compared to $412 million, or $0.62 per diluted share for the second quarter
of 1997.
Revenues for the six months ended June 30, 1998 totaled $9.7 billion, compared
to $9.8 billion in the first six months of 1997. Net income from continuing
operations, before restructuring and investigation related costs, totaled $432
million, or $0.67 per diluted share in the first half of 1998 compared to $840
million, or $1.24 per diluted share for the six months ended June 30, 1997.
Net income totaled $275 million, or $0.43 per diluted share in 1998, compared to
$835 million, or $1.24 per diluted share in 1997.
During the second quarter of 1998, the Company recognized an after-tax loss on
the sale of Value RX and Value Behavioral Health of approximately $73 million,
or $0.11 per diluted share.
During the second quarter of 1998, same-facility admissions, excluding
hospitals held for sale, increased by 0.4 percent. Additionally, second quarter
1998 satisfaction surveys of patients, physicians and employees at the Company's
hospitals all reflected continued improvement from recent quarters.
At June 30, 1998, the Company's balance sheet reflected total debt of
approximately $8.4 billion, stockholders equity of approximately $7.6 billion
and total assets of $21.0 billion. Debt was reduced by over $600 million during
the second quarter of 1998. During the first six months of 1998 total debt was
reduced by approximately $1.1 billion. The Company's debt-to-total capital
improved during the second quarter of 1998, to approximately 50 percent,
compared to 52 percent at March 31, 1998 and 54 percent at December 31, 1997.
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Columbia/HCA expects to commence the $1 billion common stock buyback through a
series of forward purchase contracts. The Company may conclude these efforts
through open market purchases or privately negotiated transactions, from time to
time, at management's discretion. A $1 billion share repurchase program at
current trading prices would represent approximately 5 percent of the Company's
$19 billion market capitalization.
***
The above statements may include forward-looking statements based on current
management expectations. Numerous factors exist which may cause results to
differ from these expectations. Many of the factors that will determine the
Company's future results are beyond the ability of the Company to control or
predict. These statements are subject to risks and uncertainties and,
therefore, actual results may differ materially. The Company undertakes no
obligation to update any forward-looking statements, or to make any other
forward looking statements, whether as a result of new information, future
events or otherwise. This information involves risks and uncertainties as
detailed from time to time in the Company's filings with the Securities and
Exchange Commission.
All references to "Company" and "Columbia/HCA" as used throughout this document
refer to Columbia/HCA Healthcare Corporation and its affiliates.
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COLUMBIA/HCA HEALTHCARE CORPORATION
CONSOLIDATED OPERATING RESULTS SUMMARY
(Dollars in millions, except per share amounts)
FOR THE SIX MONTHS
SECOND QUARTER ENDED JUNE 30,
------------------- --------------------
1998 1997 1998 1997
--------- -------- --------- ---------
Revenues................................................................. $ 4,781 $ 4,845 $ 9,682 $ 9,833
Operating income (a)..................................................... $ 796 $ 1,119 $ 1,697 $ 2,335
Net income:
Income from continuing operations, excluding restructuring of
operations and investigation related costs............................ $ 191 $ 385 $ 432 $ 840
Restructuring of operations and investigation related costs
(net of tax).......................................................... (18) - (40) -
Discontinued operations:
Income (loss) from operations of discontinued businesses
(net of tax)......................................................... (22) 27 (44) 51
Loss on disposal of discontinued businesses
(net of tax)......................................................... (73) - (73) -
Cumulative effect of accounting change (net of tax).................... - - - (56)
------------------- --------------------
Net income............................................................. $ 78 $ 412 $ 275 $ 835
=================== ===================
Diluted earnings per share:
Income from continuing operations, excluding restructuring of
operations and investigation related costs............................ $ 0.30 $ 0.58 $ 0.67 $ 1.24
Restructuring of operations and investigation related costs............ (0.03) - (0.06) -
Discontinued operations:
Income (loss) from operations of discontinued businesses.............. (0.04) 0.04 (0.07) 0.08
Loss on disposal of discontinued businesses........................... (0.11) - (0.11) -
Cumulative effect of accounting change................................. - - - (0.08)
------------------- -------------------
Net income............................................................. $ 0.12 $ 0.62 $ 0.43 $ 1.24
=================== ===================
Shares used in computing diluted earnings per share (000)................ 647,993 667,106 646,467 673,376
- ---------------------------------------
(a) Income from continuing operations before depreciation and amortization,
interest expense, restructuring of operations and investigation related
costs, minority interests and income taxes.
Certain prior year amounts have been reclassified to conform to current
year presentation.
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COLUMBIA/HCA HEALTHCARE CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
SECOND QUARTER
(DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
1998 1997
----------------------- --------------------
AMOUNT RATIO AMOUNT RATIO
------------ --------- ----------- -------
Revenues........................................ $ 4,781 100.0% $ 4,845 100.0%
Salaries and benefits........................... 1,998 41.8 1,850 38.2
Supplies........................................ 719 15.0 658 13.6
Other operating expenses........................ 961 20.2 943 19.4
Provision for doubtful accounts................. 340 7.1 310 6.4
Equity in earnings of affiliates................ (33) (0.7) (35) (0.7)
---------------------- -------------------
3,985 83.4 3,726 76.9
---------------------- -------------------
EBDITA........................................ 796 16.6 1,119 23.1
Depreciation and amortization................... 311 6.4 308 6.4
Interest expense................................ 145 3.0 123 2.5
Restructuring of operations and investigation
related costs................................. 31 0.7 - -
---------------------- -------------------
Income from continuing operations before
minority interests and income taxes........... 309 6.5 688 14.2
Minority interests in earnings of consolidated
entities...................................... 18 0.4 45 0.9
---------------------- -------------------
Income from continuing operations before income
taxes......................................... 291 6.1 643 13.3
Provision for income taxes...................... 118 2.5 258 5.4
---------------------- -------------------
Income from continuing operations............... 173 3.6 385 7.9
Discontinued operations:
Income (loss) from operations of discontinued
businesses (net of tax)....................... (22) (0.5) 27 0.6
Loss on disposal of discontinued businesses
(net of tax).................................. (73) (1.5) - -
---------------------- -------------------
Net income.................................... $ 78 1.6 $ 412 8.5
====================== ===================
Diluted earnings per share:
Income from continuing operations, excluding
restructuring of operations and investigation
related costs............................... $ 0.30 $0.58
Restructuring of operations and investigation
related costs............................... (0.03) -
Discontinued operations:
Income (loss) from operations of discontinued
businesses................................ (0.04) 0.04
Loss on disposal of discontinued businesses. (0.11) -
------------- ------------
Net income.................................... $ 0.12 $0.62
============= ============
Shares used in computing diluted earnings per
share (000)................................... 647,993 667,106
Certain prior year amounts have been reclassified to conform to current year
presentation.
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COLUMBIA/HCA HEALTHCARE CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
----------------------------- -----------------------
1998 1997
----------------------------- -----------------------
AMOUNT RATIO AMOUNT RATIO
------ ----- ------ -----
Revenues........................................ $ 9,682 100.0% $ 9,833 100.0%
Salaries and benefits........................... 4,011 41.4 3,726 37.9
Supplies........................................ 1,465 15.1 1,357 13.8
Other operating expenses........................ 1,901 19.7 1,905 19.4
Provision for doubtful accounts................. 683 7.1 607 6.2
Equity in earnings of affiliates................ (75) (0.8) (97) (1.0)
----------------------------- -----------------------
7,985 82.5 7,498 76.3
----------------------------- -----------------------
EBDITA........................................ 1,697 17.5 2,335 23.7
Depreciation and amortization................... 620 6.4 604 6.1
Interest expense................................ 298 3.1 236 2.4
Restructuring of operations and investigation
related costs................................. 69 0.7 - -
----------------------------- -----------------------
Income from continuing operations before
minority interests and income taxes........... 710 7.3 1,495 15.2
Minority interests in earnings of consolidated
entities........................................ 38 0.4 92 0.9
----------------------------- -----------------------
Income from continuing operations before income
taxes......................................... 672 6.9 1,403 14.3
Provision for income taxes...................... 280 2.8 563 5.7
----------------------------- -----------------------
Income from continuing operations............... 392 4.1 840 8.6
Discontinued operations:
Income (loss) from operations of discontinued
businesses (net of tax)..................... (44) (0.5) 51 0.5
Loss on disposal of discontinued businesses
(net of tax)................................ (73) (0.8) - -
Cumulative effect of accounting change (net of
tax)............................................ - - (56) (0.6)
----------------------------- -----------------------
Net income...................................... $ 275 2.8 $ 835 8.5
============================= =======================
Diluted earnings per share:
Income from continuing operations, excluding
restructuring of operations and investigation
related costs................................. $ 0.67 $ 1.24
Restructuring of operations and investigation
related costs................................. (0.06) -
Discontinued operations:
Income (loss) from operations of discontinued
businesses.................................. (0.07) 0.08
Loss on disposal of discontinued
businesses.................................. (0.11) -
Cumulative effect of accounting change.......... - (0.08)
-------------- -------------
Net income.......................................... $ 0.43 $ 1.24
============== =============
Shares used in computing diluted earnings per
share (000)................................... 646,467 673,376
Certain prior year amounts have been reclassified to conform to current year
presentation.
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COLUMBIA/HCA HEALTHCARE CORPORATION
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN MILLONS)
JUNE 30, MARCH 31, DECEMBER 31,
1998 1998 1997
-------------------- ------------------ -----------------
ASSETS
Current assets:
Cash and cash equivalents............................. $ 25 $ 128 $ 110
Accounts receivable, net.............................. 2,427 2,549 2,522
Other................................................. 1,594 1,348 1,791
-------------------- ------------------ -----------------
Total current assets............................... 4,046 4,025 4,423
Property and equipment, at cost.......................... 16,814 16,441 16,254
Accumulated depreciation................................ (6,442) (6,189) (6,024)
-------------------- ------------------ -----------------
10,372 10,252 10,230
Investments of insurance subsidiary...................... 1,508 1,490 1,422
Investments in and advances to affiliates................ 1,371 1,346 1,329
Intangible assets, net................................... 3,405 3,508 3,521
Net assets of discontinued operations.................... 141 789 841
Other.................................................... 205 220 236
-------------------- ------------------ -----------------
$21,048 $21,630 $22,002
==================== ================== =================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable...................................... $ 727 $ 862 $ 929
Other current liabilities............................. 1,623 1,569 1,712
Long-term debt due within one year.................... 2,669 242 132
-------------------- ------------------ -----------------
Total current liabilities.......................... 5,019 2,673 2,773
Long term debt........................................... 5,693 8,748 9,276
Professional liability risks, deferred taxes and
other liabilities..................................... 1,926 1,893 1,867
Minority interests in equity of consolidated entities.... 830 823 836
Stockholders' equity..................................... 7,580 7,493 7,250
-------------------- ------------------ -----------------
$21,048 $21,630 $22,002
==================== ================== =================
Current ratio............................................ 0.81 1.51 1.59
Ratio of debt to debt plus common and minority equity... 49.9% 51.9% 53.8%
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COLUMBIA/HCA HEALTHCARE CORPORATION
OPERATING STATISTICS
FOR THE SECOND QUARTERS AND SIX MONTHS ENDED JUNE 30, 1998 AND 1997
FOR THE SIX MONTHS
SECOND QUARTER ENDED JUNE 30,
---------------------- ----------------------
1998 1997 1998 1997
---------- ---------- ---------- ----------
CONSOLIDATED HOSPITALS:
- ---------------------
Number of Hospitals 309 315 309 315
Weighted Average Licensed Beds 60,712 61,203 60,738 61,212
Licensed Beds at End of Period 60,418 61,275 60,418 61,275
Admissions 474,400 477,200 982,000 974,400
Equivalent Admissions 731,900 729,600 1,487,700 1,461,500
Patient Days 2,321,900 2,358,800 4,910,100 4,914,900
Equivalent Patient Days 3,584,900 3,609,800 7,438,800 7,372,300
Emergency Room Visits 1,415,600 1,379,700 2,827,700 2,742,900
Outpatient Revenues as a Percentage of Patient Revenues 38.2% 37.6% 37.0% 36.3%
Average Length of Stay 4.9 4.9 5.0 5.0
Occupancy 42.0% 42.4% 44.7% 44.4%
Equivalent Occupancy 64.8% 64.8% 67.7% 66.6%
NUMBER OF CONSOLIDATED AND NON-CONSOLIDATED
- -------------------------------------------
(50/50 EQUITY JOINT VENTURES) HOSPITALS:
----------------------------------------
Consolidated 309 315
Non-Consolidated (50/50 Equity Joint Ventures) 26 27
--------- ---------
Total Number of Hospitals 335 342
========= =========
Certain prior year amounts have been reclassified to conform to current year presentation.
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