UNITED STATES
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, 1999
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transaction period from ____ to
Commission File Number 1-11141
--------
HEALTH MANAGEMENT ASSOCIATES, INC.
RETIREMENT SAVINGS PLAN
(Full title of the plan)
HEALTH MANAGEMENT ASSOCIATES, INC.
5811 PELICAN BAY BLVD., SUITE 500
NAPLES, FLORIDA 34108-2710
(Name of issuer of the securities held pursuant to the
plan and address of its principal executive office)
Audited Financial Statements and Supplemental Schedules
Health Management Associates, Inc. Retirement Savings Plan
Years ended December 31, 1999 and 1998 with Report of Independent Auditors
Health Management Associates, Inc. Retirement Savings Plan
Audited Financial Statements and Supplemental Schedules
Years ended December 31, 1999 and 1998
Contents
Report of Independent Auditors.............................................. 2
Audited Financial Statements
Statements of Net Assets Available for Benefits............................. 3
Statements of Changes in Net Assets Available for Benefits.................. 4
Notes to Financial Statements............................................... 5
Supplemental Schedules
Schedule H, Line 4i - Schedule of Assets Held for Investment Purposes
at End of Year............................................................. 12
Schedule H, Line 4j - Schedule of Reportable Transactions................... 13
1
Report of Independent Auditors
The Plan Sponsor
Health Management Associates, Inc.
Retirement Savings Plan
We have audited the accompanying statements of net assets available for benefits
of Health Management Associates, Inc. Retirement Savings Plan as of December 31,
1999 and 1998, 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 auditing standards generally accepted
in the United States. 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 the Plan at
December 31, 1999 and 1998, and the changes in its net assets available for
benefits for the years then ended, in conformity with accounting principles
generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedule of assets
held for investment purposes at end of year as of December 31, 1999 and schedule
of reportable transactions for the year ended December 31, 1999 are presented
for purposes of additional analysis and are not a required part of the financial
statements but are supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. These supplemental schedules are the
responsibility of the Plan's management. The supplemental schedules have been
subjected to the auditing procedures applied in our audits of the financial
statements and, in our opinion, are fairly stated in all material respects in
relation to the financial statements taken as a whole.
ERNST & YOUNG LLP
Tampa, Florida
May 19, 2000
2
Health Management Associates, Inc. Retirement Savings Plan
Statements of Net Assets Available for Benefits
December 31
1999 1998
----------------------------------
Assets
Investments, at fair value:
Health Management Associates, Inc.
common stock $ 45,903,207 $ 63,246,002
Collective trust funds 18,034,169 15,077,010
Mutual funds 36,511,483 31,282,944
Participant loans 3,787,729 -
----------------------------------
104,236,588 109,605,956
Cash 47,127 61,184
Receivables:
Participants' contributions 1,555,660 1,041,704
Employer's contribution 703,965 592,275
Accrued income 73,812 49,365
----------------------------------
Total receivables 2,333,437 1,683,344
----------------------------------
Net assets available for benefits $106,617,152 $111,350,484
==================================
See accompanying notes.
3
Health Management Associates, Inc. Retirement Savings Plan
Statements of Changes in Net Assets Available for Benefits
Year ended December 31
1999 1998
-----------------------------------
Additions
Investment income:
Net (depreciation) appreciation in fair
value of investments:
Health Management Associates, Inc.
common stock $(22,108,843) $ 13,256,143
Collective trust funds 384,422 81,024
Mutual funds 1,518,082 1,958,314
Interest and dividends 2,805,586 2,310,667
-----------------------------------
(17,400,753) 17,606,148
Contributions:
Participants 16,086,849 13,821,296
Employer 4,082,659 3,604,766
-----------------------------------
20,169,508 17,426,062
-----------------------------------
Total additions 2,768,755 35,032,210
Deductions
Benefit payments 7,466,774 6,502,207
Administrative expenses 35,313 -
-----------------------------------
Total deductions 7,502,087 6,502,207
Transfers from related plan - 6,549,900
-----------------------------------
(Decrease) increase in net assets
available for benefits (4,733,332) 35,079,903
Net assets available for benefits at
beginning of year 111,350,484 76,270,581
-----------------------------------
Net assets available for benefits at end
of year $106,617,152 $111,350,484
===================================
See accompanying notes.
4
Health Management Associates, Inc. Retirement Savings Plan
Notes to Financial Statements
December 31, 1999
1. Description of the Plan
The following description of Health Management Associates, Inc. Retirement
Savings Plan (the "Plan") provides only general information. Participants should
refer to the Plan agreement for a more complete description of the Plan's
provisions.
General
The Plan's sponsor is Health Management Associates, Inc. (the "Company"). The
effective date of the Plan is October 1, 1990 (date of inception). The Plan was
amended and restated in its entirety effective January 1, 1998 and July 1, 1998.
The amendments incorporated the designation of Merrill Lynch Trust Company (the
"trustee") as the trustee of the Plan's investments and the provisions of the
River Oaks Hospital, Inc. 401(k) Profit Sharing Plan which was merged into the
Plan during 1998, respectively.
The Plan is intended to qualify as a salary reduction plan under Section 401(k)
and as a qualified defined contribution plan under Section 401(a) of the
Internal Revenue Code. The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974, as amended (ERISA).
All eligible employees of the Company, as defined, may elect to participate in
the Plan, provided that such employees are not persons covered under a
collective bargaining agreement under which retirement benefits have been the
subject of good faith bargaining or are not participants in any other qualified
plan maintained by the Company.
Contributions
Each year, participants may elect to defer from 1% to 20% of compensation
received during the plan year. The Company makes discretionary matching
contributions for participants at certain designated hospital subsidiaries equal
to a percentage of each participant's deferred compensation. In applying such
matching percentage, only salary reductions up to 6% of total compensation shall
be considered, and such Company matching contributions are limited to 3% of the
participant's total compensation during the plan year.
5
Health Management Associates, Inc. Retirement Savings Plan
Notes to Financial Statements (continued)
1. Description of the Plan (continued)
The Company match is in the form of Company securities, with the exception of
designated hospital subsidiaries which receive a nondiscretionary Company match
in cash. The Company match in Company securities is not subject to participant
direction. During the years ended December 31, 1999 and 1998, nondiscretionary
contributions of approximately $362,000 and $339,000, respectively, were made to
the Plan.
Participants' Accounts
Each participant's account is credited with the participant's contribution and
allocations of the Company's contribution and plan earnings. Allocations are
based on participant earnings or account balances, as defined in the plan
agreement. The benefit to which a participant is entitled is the benefit that
can be provided from the participant's vested account.
Withdrawals and Payments of Benefits
Upon retirement or death, the total vested value of a participant's account is
distributed to the participant or the beneficiary in cash unless the participant
or the beneficiary elects certain other forms of distribution available under
the Plan.
A participant is only entitled to make a withdrawal from his or her account
prior to separation from service if the participant qualifies for a hardship
withdrawal or a participant loan. If a participant separates from service before
vesting, the portion of the account attributable to Company contributions is not
forfeited until the participant incurs a five-year break in service. The Plan's
loan feature allows participants to borrow against their balance in accordance
with the loan policies established by the Company.
Forfeited balances of terminated participants' nonvested accounts are used to
reduce future Company contributions or pay administrative expense of the Plan.
Forfeitures aggregated approximately $259,000 and $388,000 at December 31, 1999
and 1998, respectively.
6
Health Management Associates, Inc. Retirement Savings Plan
Notes to Financial Statements (continued)
1. Description of the Plan (continued)
Vesting
Participants are immediately vested in their voluntary contributions plus actual
earnings thereon. A participant becomes one hundred percent vested in the
remainder of his or her accounts upon the occurrence of any of the following
events:
(a) The participant dies while still in service as an employee;
(b) The participant becomes totally and permanently disabled while still in
service as an employee; or
(c) The Plan is terminated by the Company.
In other cases, a gradual vesting scale applies, with one hundred percent
vesting occurring upon reaching seven years of vesting service. A plan year
during which an employee works for at least one thousand hours is counted as one
year of vesting service.
2. Summary of Significant Accounting Policies
Investment Valuation
Investments in mutual funds, collective trust funds, and equity securities are
stated at fair value based on quoted prices in an active market. Securities
traded on a national securities exchange are valued at the last reported sales
price on the last business day of the plan year.
Contributions
Contributions from participants are recorded when payroll deductions are made.
Company contributions accrue to the Plan at the payroll deduction dates. Such
amounts are remitted monthly to the trustee for investment based on the
investment options designated by the Plan's participants.
7
Health Management Associates, Inc. Retirement Savings Plan
Notes to Financial Statements (continued)
2. Summary of Significant Accounting Policies (continued)
Discretionary Company contributions accrue to the Plan when declared and are
remitted prior to the date the Company files its federal income tax return for
the corresponding fiscal year of the Company.
Investment Income
Dividend income is recorded on the ex-dividend date. Interest income is recorded
as earned. Purchases and sales of securities are recorded on a trade date basis.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates that affect the
amounts reported in the financial statements and accompanying notes. Actual
results inevitably will differ from those estimates, and such differences may be
material to the financial statements.
Reclassifications
Certain amounts in the 1998 financial statements have been reclassified to
conform to the 1999 presentation.
Administrative Expenses
The majority of administrative expenses for the Plan are paid directly by the
Company, and not from plan assets.
Benefit Payments
Benefits are recorded when paid.
8
Health Management Associates, Inc. Retirement Savings Plan
Notes to Financial Statements (continued)
3. Investments
The fair value of individual investments that represent 5% or more of the Plan's
net assets are as follows:
December 31
1999 1998
--------------------------------
Health Management Associates, Inc.
Common Stock/(1)/ $45,903,207 $63,246,002
Merrill Lynch Retirement Preservation 14,841,319 14,243,940
Trust
Massachusetts Investors Trust 20,564,575 18,769,875
Merrill Lynch Capital Fund 7,195,784 6,575,766
/(1)/ Nonparticipant-directed.
9
Health Management Associates, Inc. Retirement Savings Plan
Notes to Financial Statements (continued)
4. Changes in Nonparticipant-Directed Net Assets Available for Benefits
Following are the changes in net assets available for benefits by
nonparticipant-directed fund option for the years ended December 31, 1999 and
1998:
Health Management
Associates, Inc.
Common Stock Cash Total
------------------------------------------------------------
Net assets available for benefits at
December 31, 1997 $ 46,228,688 $ - $ 46,228,688
Net appreciation in fair value of
investments 13,256,143 13,256,143
Interest and dividend income 30,072 30,072
Contributions:
Participants 5,504,050 (3,575) 5,500,475
Employer 3,248,893 (1,179) 3,247,714
Benefit payments (3,803,430) 2,440 (3,800,990)
Transfers (from) to prior trustee and
related plan (849,771) 16,356 (833,415)
Interfund transfers (net) (368,643) 47,142 (321,501)
------------------------------------------------------------
Net assets available for benefits at
December 31, 1998 63,246,002 61,184 63,307,186
Net depreciation in fair value of
investments (22,108,843) - (22,108,843)
Interest and dividend income 105,294 - 105,294
Contributions:
Participants 5,192,281 4,601 5,196,882
Employer 3,886,883 2,536 3,889,419
Participant loans (1,863,862) - (1,863,862)
Benefit payments (2,338,815) 12,379 (2,326,436)
Interfund transfers (net) (215,733) (33,573) (249,306)
------------------------------------------------------------
Net assets available for benefits at
December 31, 1999 $ 45,903,207 $ 47,127 $ 45,950,334
============================================================
10
Health Management Associates, Inc. Retirement Savings Plan
Notes to Financial Statements (continued)
5. Income Tax Status
The Plan has received a determination letter from the Internal Revenue Service
dated September 20, 1999, stating that the Plan is qualified under Section
401(a) of the Internal Revenue Code (the "Code") and, therefore, the related
trust is exempt from taxation. Once qualified, the Plan is required to operate
in conformity with the Code to maintain its qualification. The Plan Sponsor has
indicated that it will take the necessary steps, if any, to maintain the Plan's
qualified status.
6. Party-in-Interest Transactions
Certain plan investments are shares of mutual and trust funds managed by the
trustee therefore, such transactions qualify as party-in-interest. The Plan held
investments in Company securities with a fair value of approximately $45,903,000
and $63,246,000 as of December 31, 1999 and 1998, respectively. The Company paid
the majority of administrative expenses on behalf of the Plan for the years
ended December 31, 1999 and 1998.
7. Plan Termination
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA. In the event of Plan termination,
participants will receive the vested portion of their account.
11
Health Management Associates, Inc. Retirement Savings Plan
EIN: 65-0261425
Plan # 001
Schedule H, Line 4i - Schedule of Assets Held for Investment Purposes at End of
Year
December 31, 1999
(a) (b) (c) (d) (e)
Current
Identity of Issue Description of Investment Cost Value
- ---------------------------------------------------------------------------------------------------------------
* Health Management Associates, Inc. Common Stock $53,659,215 $ 45,903,207
* Merrill Lynch Trust Company Collective Trust Aggressive Bond (1) 16
* Merrill Lynch Trust Company Collective Trust International Index
Fund (1) 11,294
* Merrill Lynch Trust Company Collective Trust Small Capital Index
Fund (1) 1,258
* Merrill Lynch Trust Company Equity Index Trust (1) 3,179,990
* Merrill Lynch Trust Company Retirement Preservation Trust (1) 14,841,319
* Merrill Lynch Trust Company Retirement Preservation Trust GM (1) 294
Pilgrim International Value Fund (1) 44,410
Pilgrim International Value Fund (1) 726
Van Kampen American Value Fund (1) 13,420
Federated Investors Federated Bond Fund (1) 1,074,518
AIM Small Capital Growth Fund (1) 140,141
Hotchkis & Wiley International Fund (1) 1,768,363
PIMCO Total Return Fund (1) 40
PIMCO Total Return Fund (1) 582
State Street Aurora Fund (1) 6,253
Lord, Abbett & Co. Developing Growth (1) 2,511,343
Lord, Abbett & Co. Developing Growth (1) 724
Alliance Growth & Income Fund (1) 7,945
Alliance Premier Growth Fund (1) 61,663
Alliance Premier Growth Fund (1) 766
* Merrill Lynch Trust Company Growth Fund (1) 3,101,831
Massachusetts Investors Growth Stock Fund (1) 18,397
Massachusetts Investors Trust Fund (1) 20,564,575
* Merrill Lynch Trust Company Capital Fund (1) 7,195,784
Participants Loan Fund, 8.75% - 9.50% - 3,787,729
-------------
$104,236,588
=============
* Indicates a party-in-interest to the Plan.
(1) Cost information has not been included because investments are participant
directed.
12
Health Management Associates, Inc. Retirement Savings Plan
EIN: 65-0261425
Plan # 001
Schedule H, Line 4j - Schedule of Reportable Transactions
Year ended December 31, 1999
(h) Current
Value of Asset
(c) Purchase (d) Selling (g) Cost of on Date of (i) Net Gain
(a) Identity of Party Involved (b) Description of Asset Price Price Asset Transaction or(Loss)
- ------------------------------------------------------------------------------------------------------------------------------------
Category (iii) - Series of transactions in excess of 5% of Plan assets.
Health Management Associates, Inc. Common stock $12,287,913 $ - $12,287,913 $12,287,913 $ -
Health Management Associates, Inc. Common stock - 7,191,288 9,527,621 7,191,288 (2,336,333)
There were no category (i), (ii) or (iv) transactions during the year ended
December 31, 1999.
Note: The information to be presented in columns (e) and (f) is not applicable.
13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
Health Management Associates, Inc., as Administrator, has duly caused this
Annual Report to be signed on its behalf by the undersigned hereunto duly
authorized.
Health Management Associates, Inc.,
AS ADMINISTRATOR OF
Health Management Associates, Inc.
Retirement Savings Plan
DATE: June 23, 2000 By: /s/ Robert E. Farnham
-----------------------
Robert E. Farnham
Vice President
Corporate Controller
14