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, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from ____ to _____
Commission File Number 1-11141
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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, 2000 and 1999 with Report of Independent Auditors
Health Management Associates, Inc. Retirement Savings Plan
Audited Financial Statements and Supplemental Schedules
Years ended December 31, 2000 and 1999
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 At End of Year).... 12
Schedule H, Line 4j--Schedule of Reportable Transactions......... 13
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,
2000 and 1999, 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, 2000 and 1999, 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 at end of year) as of December 31, 2000 and schedule of reportable
transactions for the year ended December 31, 2000 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 11, 2001
2
Health Management Associates, Inc. Retirement Savings Plan
Statements of Net Assets Available for Benefits
December 31
2000 1999
----------------------------------
Assets
Investments, at fair value:
Health Management Associates, Inc.
common stock $ 68,167,334 $ 45,903,207
Collective trust funds 21,233,074 18,034,169
Mutual funds 43,460,526 36,511,483
Participant loans 4,463,167 3,787,729
----------------------------------
137,324,101 104,236,588
Cash 114,086 47,127
Receivables:
Participants' contributions 1,728,085 1,555,660
Employer's contribution 807,444 703,965
Accrued income 34,452 73,812
----------------------------------
Total receivables 2,569,981 2,333,437
----------------------------------
Net assets available for benefits $ 140,008,168 $106,617,152
==================================
See accompanying notes.
3
Health Management Associates, Inc. Retirement Savings Plan
Statements of Changes in Net Assets Available for Benefits
Year ended December 31
2000 1999
-----------------------------------
Additions
Investment results:
Net appreciation (depreciation) in fair value of
investments:
Health Management Associates, Inc.
common stock $ 25,338,395 $ (22,108,843)
Collective trust funds (414,343) 384,422
Mutual funds (3,810,228) 1,518,082
Interest and dividends 4,034,317 2,805,586
-----------------------------------
25,148,141 (17,400,753)
Contributions:
Participants 16,276,935 16,086,849
Employer 3,326,140 4,082,659
-----------------------------------
19,603,075 20,169,508
-----------------------------------
Total additions 44,751,216 2,768,755
Deductions
Benefit payments 11,304,042 7,466,774
Administrative expenses 56,158 35,313
-----------------------------------
Total deductions 11,360,200 7,502,087
Increase (decrease) in net assets available
for benefits 33,391,016 (4,733,332)
Net assets available for benefits at
beginning of year 106,617,152 111,350,484
-----------------------------------
Net assets available for benefits at end of year $ 140,008,168 $ 106,617,152
===================================
See accompanying notes.
4
Health Management Associates, Inc. Retirement Savings Plan
Notes to Financial Statements
December 31, 2000
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.
Effective April 1, 2001, the Plan was amended and CIGNA Retirement and
Investment Services was designated as the Plan's trustee and administrator,
replacing Merrill Lynch Trust Company as the Plan's Trustee.
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 nondiscretionary 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, 2000 and 1999, nondiscretionary
contributions of approximately $442,000 and $362,000, 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 investment results.
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 expenses of the Plan.
Forfeitures aggregated approximately $935,000 and $259,000 for the years
ended December 31, 2000 and 1999, 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 accounting principles
generally accepted in the United States 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.
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 values of individual investments that represent 5% or more of the
Plan's net assets are as follows:
December 31
2000 1999
-------------------------------
Health Management Associates, Inc.
Common Stock /(1)/ $ 68,167,334 $ 45,903,207
Merrill Lynch Retirement Preservation
Trust 16,633,680 14,841,319
Massachusetts Investors Trust 20,983,748 20,564,575
Merrill Lynch Balanced Capital Fund 7,919,852 7,195,784
/(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, 2000 and
1999:
Health Management
Associates, Inc.
Common Stock Cash Total
------------------------------------------------------
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)
Transfers to participant directed
investments (net) (215,733) (33,573) (249,306)
------------------------------------------------------
Net assets available for benefits at
December 31, 1999 45,903,207 47,127 45,950,334
Net appreciation in fair value of
investments 25,338,395 - 25,338,395
Interest and dividend income 141,444 - 141,444
Contributions:
Participants 3,919,261 (1,026) 3,918,235
Employer 3,052,561 (14) 3,052,547
Participant loans (533,883) - (533,883)
Benefit payments (4,817,949) 57,585 (4,760,364)
Transfers to participant directed
investments (net) (4,835,702) 10,414 (4,825,288)
------------------------------------------------------
Net assets available for benefits at
December 31, 2000 $ 68,167,334 $114,086 $ 68,281,420
======================================================
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Health Management Associates, Inc. Retirement Savings Plan
Notes to Financial Statements (continued)
5. Income Tax Status
The Plan has received an opinion 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 Administrator believes the
Plan is being operated in compliance with the applicable requirements of the
Code and, therefore, believes that the Plan is qualified and the related trust
is tax exempt.
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 $68,167,000
and $45,903,000 as of December 31, 2000 and 1999, respectively. The Company paid
the majority of administrative expenses on behalf of the Plan for the years
ended December 31, 2000 and 1999.
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 No.: 001
Schedule H, Line 4i
Schedule of Assets (Held At End of Year)
December 31, 2000
(e)
(b) (c) (d) Current
(a) Identity of Issue Description of Investment Cost Value
- ---------------------------------------------------------------------------------------------------------------------------
* Health Management Associates, Inc. Common Stock $45,053,565 $ 68,167,334
* Merrill Lynch Trust Company Collective Trust Aggressive Bond (1) 24,149
* Merrill Lynch Trust Company Collective Trust International Index
Fund (1) 29,551
* Merrill Lynch Trust Company Collective Trust Small Capital Index
Fund (1) 94,777
* Merrill Lynch Trust Company Equity Index Trust (1) 4,344,482
* Merrill Lynch Trust Company Retirement Preservation Trust (1) 16,633,680
* Merrill Lynch Trust Company Retirement Preservation Trust GM (1) 106,434
Pilgrim International Value Fund CL A (1) 558,197
Van Kampen American Value Fund (1) 165,950
Federated Investors Federated Bond Fund (1) 1,130,915
AIM Small Capital Growth Fund (1) 1,468,169
PIMCO Total Return Fund CL A (1) 92,482
PIMCO Total Return Fund CL A GM (1) 241,829
State Street Aurora Fund (1) 438,545
Lord, Abbett & Co. Developing Growth (1) 2,772,274
Alliance Growth & Income Fund (1) 550,125
Alliance Premier Growth Fund CL A (1) 637,216
Alliance Premier Growth Fund A GM (1) 215,731
Calvert Income Fund (1) 241,267
Chase Vista Large Capital Equity (1) 180,808
Mercury HW International Value Fund (1) 2,116,677
* Merrill Lynch Trust Company Growth Fund (1) 2,677,908
Massachusetts Investors Growth Stock Fund (1) 1,068,834
Massachusetts Investors Trust Fund (1) 20,983,748
* Merrill Lynch Trust Company Balanced Capital Fund (1) 7,919,852
Participants Loan Fund, 8.75% - 9.50% - 4,463,167
-------------
$137,324,101
=============
* 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 No.: 001
Schedule H, Line 4j
Schedule of Reportable Transactions
Year ended December 31, 2000
(c) Purchase
(a) Identity of Party Involved (b) Description of Asset Price
- ----------------------------------------------------------------------------------------
Category (iii) - Series of transactions in excess of 5% of Plan assets.
Health Management Associates, Inc. Common stock $5,080,769
Health Management Associates, Inc. Common stock -
(h) Current
Value of Asset
(d) Selling (g) Cost of on Date of (i) Net Gain or
Price Asset Transaction (Loss)
- --------------------------------------------------------------
$ - $5,080,769 $5,080,969 $ -
4,022,940 4,028,580 4,022,940 (5,640)
There are no category (i), (ii) or (iv) transactions during the year ended
December 31, 2000.
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 21, 2001 By /s/ Robert E. Farnham
---------------------
Robert E. Farnham
Senior Vice President - Finance
14