ITEM 1. BUSINESS.
GENERAL
Ramsay Health Care, Inc. ("RHCI" or the "Company") is one of the leading providers of behavioral health services in the country. RHCI has two business units: a facilities division offering patient care through integrated networks of mental health delivery systems in eleven states principally in the southeast and southwest built around 15 inpatient hospitals with 1,264 beds, day hospitals, subacute units, outpatient centers, and residential treatment centers; and a managed care division providing utilization control and cost management services. The Company also operates mental health programs for public sector and private owners under management contracts.
FACILITIES DIVISION
The following table provides information concerning the 15 inpatient facilities owned and/or operated by the Company at June 30, 1994.
(1) A leased hospital facility. See "Item 2.
ITEM 2. PROPERTIES.
Information relating to the Company's owned and leased hospital facilities, their locations and licensed bed capacity is contained under the caption "Item 1. Business -- Facilities Division." Such information is incorporated herein by reference.
The building in which the Company's facility at Houma, Louisiana is located is leased for an initial period ending January 31, 2005 (with an option to renew for 20 years). The Company has entered into a 50-year ground lease for the property on which its 70-bed facility at Morgantown, West Virginia is located. For the Bethany, Oklahoma facility, the Company has one year remaining on a three-year lease with options to renew totaling an additional 9 years.
The Company leases its corporate headquarters in New Orleans, Louisiana for a term of five years ending in April 1999, and leases other space for various clinics and regional offices.
See Item 1. Business--Acquisitions and Sales.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS.
The Company is subject to claims and suits arising in the ordinary course of business. In the opinion of management, the ultimate resolution of such pending legal proceedings will not have a material adverse effect on the Company's financial position.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
PART II
ITEM 5.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
The Company's Common Stock is traded in the over-the-counter market and is quoted on the NASDAQ National Market System under the symbol RHCI. On September 22, 1994 there were 667 holders of record of the Company's Common Stock. No dividends have been declared on the Common Stock since the Company was organized. Under the terms of its current credit agreement, the Company is limited as to the amount of dividends it can pay on its Common Stock unless certain conditions are met. The following table sets forth the range of high and low closing sales prices per share of the Common Stock for each of the quarters during the years ended June 30, 1994 and 1993, as reported on the NASDAQ National Market System:
On September 22, 1994, the closing sales price of the Company's Common Stock was $ 7 3/8 per share.
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA.
The following table sets forth selected consolidated financial information for the periods shown and is qualified by reference to, and should be read in conjunction with, the Consolidated Financial Statements and Notes thereto and "Item 7.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
RESULTS OF OPERATIONS
Operating revenues of the facilities are affected by changes in the rates the Company charges or by changes in the number of patient days in the period. Additionally, increases in one factor can offset decreases in the other. Patient days are primarily a function of the number of admissions multiplied by the average length of stay by all patients. Accordingly, increases in admissions can offset, in whole or in part, decreases in average length of stay.
Generally, charges for each facility's services are reimbursed under third-party reimbursement programs at the amount billed or at a rate which can be less than the facility's charges. This lower rate can be based on a negotiated per diem amount or based on the facility's costs as audited or projected by the third-party payors. When operating revenues (charges) per patient day are higher than the negotiated per diem rate or the facility's costs, the difference is added to contractual adjustments. Bad debts consist primarily of the uncollectible commercial and self-pay accounts receivable.
The Company records amounts due to or from third-party reimbursement sources based on its best estimates of amounts to be ultimately received or paid under cost reports filed with appropriate intermediaries, such as Blue Cross. The final determination of amounts earned under reimbursement programs is subject to review and audit by these intermediaries. Differences between amounts recorded as estimated settlements and the audited amounts are reflected as adjustments to the Company's net revenues in the period the final determination is made. During the years ended June 30, 1992, 1993, and 1994 the Company recorded contractual adjustment benefits of approximately $2,400,000, $2,300,000, and $1,400,000 respectively. The adjustments were made to reflect the combined effects of intermediary audits and the routine evaluation of prior year estimated settlements. There can be no assurances that any future adjustments will be of a favorable nature or of a magnitude comparable to those made in fiscal 1992, 1993, or 1994.
Under certain state Medicaid programs, the Company received significant payments pursuant to enhanced reimbursement rates under disproportionate share programs in fiscal 1994, 1993 and 1992. Statutory changes will decrease the level of disproportionate share payments in the future. The Company is investigating certain cost saving and other measures to attempt partially to offset the effects of this decrease. In addition, many state Medicaid programs are seeking to control costs through relationships with managed care organizations. As a result, there can be no assurance as to the amounts or forms of disproportionate share payments or other Medicaid payments in future periods.
In recent years, approximately 7% to 17% of the Company's patient revenues have come from CHAMPUS since some of the Company's hospitals are in close proximity to major military installations in the United States. Congress has imposed a reduction in the annual reimbursable length of stay for patients covered by the mental health benefits of CHAMPUS, a federal government health benefit program for the members (active and retired) of all seven uniformed services and their families. Effective October 1, 1991, CHAMPUS began to limit its coverage for hospital psychiatric services to 30 days for adult patients, 45 days for child and adolescent patients and 150 days for RTC services, subject to waivers which will be available under limited circumstances if an extension of the length of stay can be justified. The lengths of stay currently experienced by the Company for adult, child and adolescent hospital programs for CHAMPUS beneficiaries have usually been within the new limits applicable to hospital stays. See "Item 1. Business -- Sources of Revenue."
The following table sets forth, for the periods indicated, certain items of the Company's Consolidated Statements of Operations as a percentage of the Company's net revenues.
1994 COMPARED TO 1993
Net revenues for fiscal 1994 were $137.0 million compared to $136.4 million in fiscal 1993. Net outpatient revenues increased to $18.2 million for fiscal 1994, an increase of 43% over fiscal 1993, offsetting a decline in inpatient revenues of 9.6% from the prior year. Also, revenues from the managed care division (which began in October 1993) offset the revenues lost from the facilities that were sold during fiscal 1994. See "Item 1. Business--Acquisitions and Sales." Net outpatient revenues comprised 14.2% of total net patient revenues for fiscal 1994 compared to 9.5% for the prior year. Same store admissions increased 5% over the prior year while inpatient average length of stay declined from 18.3 days in fiscal 1993 to 17.6 days for fiscal 1994. Contractual adjustment benefits of approximately $1.4 and $2.3 million were recognized in fiscal 1994 and 1993, respectively, to reflect the combined effects of intermediary audits and the routine evaluation of prior year estimated settlements. There can be no assurances that any future adjustments will be favorable or of a comparable magnitude.
Salaries, wages and benefits and other operating expenses were 78.6% of net revenues for fiscal 1994 compared to 76.5% for the prior year. Additional costs associated with the managed care operations and the start-up phase of subacute ventures exceeded the cost savings derived from the containment measures at the Company's inpatient facilities.
The provision for doubtful accounts was 4.3% of net revenues for fiscal 1994 compared to 6.0% in fiscal 1993. The decrease reflects the shift in payor base toward more Medicaid, fixed rate, negotiated rate and cost-based contracts, as well as the increase in managed care revenues which are less susceptible to uncollectibility.
Depreciation and amortization was 5.0% of net revenues for fiscal 1994 as compared to 4.8% in fiscal 1993. The increase relates primarily to depreciation and amortization of the preopening costs of the facility opened in January 1993, the amortization of cost in excess of net asset value and other intangibles associated with the acquisition of Florida Psychiatric Management, Inc., offset in part by the effect of the sales of the two facilities in fiscal 1994. See "Item 1. Business--Acquisitions and Sales."
Interest and other financing charges decreased from 7.0% of net revenues for fiscal 1993 to 6.5% of net revenues for fiscal 1994. The decrease is attributable to reduced levels of debt during fiscal 1994.
The Company recorded net charges totaling $802,000 in 1994 relating to the sale of certain inpatient facilities and closure of certain outpatient operations. The Company recorded a loss of $1,109,000 during 1993 from the closure of its leased facility, Oak Grove Hospital, in Concord, California. The loss includes provisions for severance expense and other expenses incurred with the termination of this lease. In addition, the Company recorded a provision for loss at June 30, 1993 for the potential sales of Cumberland Hospital in Fayetteville, NC and Harbor Oaks Hospital in Fort Walton Beach, FL of $6,415,000. The estimated losses were based on a letter of intent relating to the sale of the Cumberland facility and the existence of a lease with an option to purchase for the Harbor Oaks facility. The Cumberland facility was subsequently sold in August 1993. See "Item 1. Business--Acquisitions and Sales."
The Company recorded a non-recurring charge of $1,367,000 in 1993 resulting primarily from a decision not to proceed with the development of additional inpatient psychiatric facilities in certain markets.
Minority interests reflects the limited partners of Three Rivers Hospital's share of income before income taxes at that facility. See "Item 1. Business--Ownership Arrangements and Operating Agreements."
The Company recognized an after-tax loss of $155,000 in 1994 from early extinguishment of the industrial revenue bonds in connection with the sale of Atlantic Shores Hospital. The Company recognized a loss of $1,580,000 on early extinguishment of a 16.1% subordinated note in fiscal 1993. These losses are reflected as extraordinary items in the consolidated statements of operations. See "Liquidity and Capital Resources" below.
The Company had net income of $1,322,000 in fiscal 1994 compared to a net loss of $1,560,000 in fiscal 1993. Excluding the non- recurring charges noted above, the Company's operations continued to be adversely affected by reductions in third party reimbursement levels.
1993 COMPARED TO 1992
Net revenues for fiscal 1993 were $136.4 million compared to $136.9 million in fiscal 1992. Same store patient days remained constant during the two years as increases in admissions of 10% were offset by reduced lengths of stay from 19.8 days to 18.3 days. Expanded outpatient and day treatment programs offset the declining reimbursement levels for inpatient care, allowing the Company to maintain approximately the same level of net revenues in 1993 and 1992. Contractual adjustment benefits from prior years totaling $2.3 million and $2.4 million are reflected in net revenues for 1993 and 1992, respectively, to reflect the combined effects of intermediary audits and the routine evaluation of prior year estimated settlements. There can be no assurances that any future adjustments will be favorable or of a comparable magnitude.
Salaries, wages and benefits and other operating expenses were 76.5% of net revenues for 1993, as compared to 73.6% in 1992. A principal reason for the increase relates to the incremental costs associated with the development of outpatient revenue sources.
The provision for doubtful accounts was 6.0% of net revenues for 1993, as compared to 6.3% for 1992. Although higher insurance deductibles and coinsurance levels resulted in increased amounts due from patients, increased emphasis on receivables allowed the Company to control this expense component.
Depreciation and amortization was 4.8% of net revenues for 1993, as compared to 4.0% for 1992. The increase relates to depreciation of the Company's new management information system and amortization of preopening costs relating to the new facilities opened in the second quarter of fiscal 1992 and the third quarter of fiscal 1993. See "Item 1. Business--Acquisitions and Sales."
Interest and other financing charges were 7.0% of net revenues for 1993 as compared to 7.6% in 1992. The decrease is attributable to reduced levels of debt during fiscal 1993.
The Company recorded a loss of $1,109,000 during 1993 from the closure of its leased facility, Oak Grove Hospital, in Concord, California. The loss includes provisions for severance expense and other expenses incurred with the termination of this lease. In addition, the Company recorded a provision for loss at June 30, 1993 for the
potential sales of Cumberland Hospital in Fayetteville, NC and Harbor Oaks Hospital in Fort Walton Beach, FL of $6,415,000. The estimated losses were based on a letter of intent relating to the sale of the Cumberland facility and the existence of a lease with an option to purchase for the Harbor Oaks facility. The Cumberland facility was subsequently sold in August 1993. See "Item 1. Business--Acquisitions and Sales."
The Company recorded a non-recurring charge of $1,367,000 in 1993 resulting primarily from a decision not to proceed with the development of additional inpatient psychiatric facilities in certain markets. The Company recorded a non-recurring restructuring charge of $2,283,000 during 1992 resulting from the Company's reassessment of its strategic direction to meet the changing demands of both payors and the public. The 1992 charge included provisions for severance packages and for the potentially unrecoverable portion of an investment in a hospital joint venture. See "Item 1. Business--Ownership Arrangements and Operating Agreements."
Minority interests reflect the limited partners of Three Rivers Hospital's share of income before income taxes at that facility for the 1993 fiscal year.
The Company recognized a loss of $1,580,000 on the early extinguishment of a 16.1% subordinated note in fiscal 1993, which is reflected as an extraordinary item in the consolidated statements of operations. In fiscal 1992, the Company wrote off deferred loan costs of $678,000 ($366,000 after applicable income tax benefit) which is reflected as an extraordinary item in the consolidated statements of operations. The write-off resulted from the early retirement of the Company's $34 million bank term debt. See "Liquidity and Capital Resources" below. The Company realized income tax benefits of $953,000 in fiscal 1992 relating to the utilization of net operating loss carryovers of prior years, which is also reflected as an extraordinary item in the consolidated statements of operations.
Effective July 1, 1992, the Company changed its method of accounting for income taxes from the deferred method to the liability method required by FASB Statement No. 109, "Accounting for Income Taxes". The cumulative effect of adopting Statement No. 109 as of July 1, 1992 was to increase net income for the fiscal year ended June 30, 1993 by $2,353,000.
The Company had a net loss of $1,560,000 in fiscal 1993 compared to net income of $5,934,000 in fiscal 1992. In addition to the charges noted above, the decrease resulted from disproportionate increases in salaries and certain operating costs.
IMPACT OF INFLATION
The psychiatric hospital industry is labor intensive, and wages and related expenses increase in inflationary periods. Additionally, suppliers generally seek to pass along rising costs to the Company in the form of higher prices. The Company monitors the operations of its facilities to mitigate the effect of inflation and the increase in costs of health care. To the extent possible, the Company seeks to offset increased costs through increased rates, new programs, and operating efficiencies. However, changes in reimbursement patterns may hinder the Company's ability to realize the full effect of rate increases. To date, inflation has not had a significant impact on operations.
LIQUIDITY AND CAPITAL RESOURCES
On February 10, 1994, the Company sold its Atlantic Shores Hospital for $4.8 million. The $4.3 million outstanding balance of the industrial revenue bonds associated with that facility was repaid with the proceeds from such sale.
On August 31, 1993, the Company sold its Cumberland Hospital for $12.3 million. Of the total proceeds, $10.9 million was restricted for the repayment of debt as such amounts become due. At June 30, 1994, $5.3 million was still available and is included in restricted cash on the consolidated balance sheet.
On June 30, 1993, the interests in the Company controlled by Paul J. Ramsay, the Company's Chairman, were recapitalized. The Company issued 142,486 shares of Class B Preferred Stock, Series C (the "Series C Preferred Stock") in exchange for all outstanding shares of the Company's Class B Preferred Stock, Series 1987, the Company's $2 million 16.1% Subordinated Promissory Note and $500,000 in cash. The Series C Preferred Stock has ten votes per share and is convertible at the option of the holder into ten shares of the Company's common stock. It pays a 5% per annum dividend and has a $50.84 liquidation preference.
On May 21, 1993, the Company finalized a credit facility for letters of credit (to support the Company's outstanding variable rate industrial revenue bonds) and working capital (the "1993 Credit Facility"). The 1993 Credit Facility includes $27.5 million in letters of credit and a $4 million working capital facility, which replace similar components of the 1990 Credit Facilities described below. The 1993 Credit Facility expires on May 15, 1996. There were no amounts outstanding under the working capital facility at June 30, 1994 or 1993.
On July 30, 1991, the Company completed a public offering (the "Public Offering") of 2,700,000 shares of Common Stock from which it received net proceeds (after payment of expenses) of $31,038,000 (including proceeds received by the Company from the exercise of certain warrants by certain of the selling stockholders in such offering). The net proceeds from this offering, together with approximately $1,250,000 of the Company's internally generated funds, were used to repay in full the remaining unpaid principal of the Bank Term Debt referred to below.
On April 30, 1990, the Company completed the refinancing of its then existing senior debt and a portion of its subordinated debt and entered into new credit agreements (the "1990 Credit Facilities") with a group of insurance companies and with a group of banks. The 1990 Credit Facilities included $56,500,000 in senior secured notes, $34,000,000 in bank term debt (the "Bank Term Debt"), approximately $31,000,000 in letters of credit (the "Bank Letters of Credit"), $3,000,000 in subordinated secured notes and $5,000,000 in a working capital facility (the "Bank Working Capital Facility"). The senior secured notes bear interest at 11.6% and are due in semi-annual installments beginning March 31, 1993 and ending on March 31, 2000. The Bank Term Debt bore interest at a variable rate, which at June 30, 1991 was 9.75%, and was due in quarterly installments beginning March 31, 1991 with the balance due on April 30, 1998. The Bank Term Debt was repaid with the Company's net proceeds from the Public Offering and the Company's internally generated funds. The subordinated secured notes bear interest at 15.6% and are due in semi-annual installments beginning March 31, 1994 and ending on March 31, 2000.
The Company's current primary cash requirements relate to its normal operating and debt service expenses, routine capital improvements at its facilities and the expansion of its outpatient programs. In addition, at the current time, the Company's specific development projects include ongoing expansion of its subacute ventures, its management contract operations and its network of affiliations with medical/surgical hospitals and other healthcare providers. At the current time, the Company does not have any commitments to make any material capital expenditures. In connection with any future acquisitions, the Company may determine to make capital improvements at the acquired facilities, although it is the Company's intention to acquire facilities requiring low capital investment. On the basis of its historical experience and projected cash needs, the Company believes that its internally generated funds from operations, together with its $4,000,000 working capital facility and funds derived from any future asset sales will be sufficient to fund its current cash requirements and future identifiable needs. At the present time, the Company does not have any agreement to sell any of its assets.
The Company is also considering various options regarding the expansion of its managed care operations. Additional sources of capital would be required to undertake this expansion. There can be no assurances that the Company will expand its managed care operations.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Financial statements of the Company and its consolidated subsidiaries are set forth herein beginning on page.
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL DISCLOSURE.
Not applicable.
PART III
ITEM 10.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Information with respect to the Company's executive officers is contained in Part I under "Item 1. Business -- Executive Officers of the Registrant." The information required by this Item with respect to directors will be contained in the Company's definitive Proxy Statement ("Proxy Statement") for its 1994 Annual Meeting of Stockholders to be held on November 28, 1994 and is incorporated herein by reference. Such Proxy Statement will be filed with the Securities and Exchange Commission not later than 120 days subsequent to June 30, 1994.
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION.
The information required with respect to this Item will be contained in the Proxy Statement, and such information is incorporated herein by reference.
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The information required with respect to this Item will be contained in the Proxy Statement, and such information is incorporated herein by reference.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The information required with respect to this Item will be contained in the Proxy Statement, and such information is incorporated herein by reference.
PART IV
ITEM 14.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(A) DOCUMENTS FILED AS PART OF THE REPORT:
1. FINANCIAL STATEMENTS
Information with respect to this Item is contained on Pages to of this Annual Report on Form 10-K.
2. FINANCIAL STATEMENT SCHEDULES
Information with respect to this Item is contained on Pages S-1 to S-5 of this Annual Report on Form 10-K.
3. EXHIBITS
Information with respect to this Item is contained in the attached Index to Exhibits.
(B) REPORTS ON FORM 8-K:
There were no reports on Form 8-K filed by the Company for the quarter ended June 30, 1994.
(C) EXHIBITS REQUIRED BY ITEM 601 OF REGULATION S-K:
Exhibits required to be filed by the Company pursuant to Item 601 of Regulation S-K are contained in Exhibits listed in response to Item 14(a)3, and are incorporated herein by reference. The management contracts and compensatory plans and arrangements required to be filed as an Exhibit to this Form 10-K are listed in Exhibits 10.71, 10.72, 10.73, 10.74, 10.75, 10.81, 10.82 and 10.83.
POWER OF ATTORNEY
The registrant, and each person whose signature appears below, hereby appoints Gregory H. Browne and Thomas M. Haythe as attorneys-in-fact with full power of substitution, severally, to execute in the name and on behalf of the registrant and each such person, individually and in each capacity stated below, one or more amendments to the annual report which amendments may make such changes in the report as the attorney-in-fact acting deems appropriate and to file any such amendment to the report with the Securities and Exchange Commission.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto fully authorized.
Dated:
RAMSAY HEALTH CARE, INC.
OCTOBER 3, 1994 By /s/ GEREGORY H. BROWNE GREGORY H. BROWNE CHIEF EXECUTIVE OFFICER, PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER AND DIRECTOR
Pursuant to the requirements of the Securities and Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
DATE SIGNATURE/TITLE - - - ---- ---------------
Dated:
October 3, 1994 By /s/ PAUL J. RAMSAY Paul J. Ramsay Chairman of the Board and Director
Dated:
October 3, 1994 By /s/ GREGORY H. BROWNE Gregory H. Browne Chief Executive Officer, Principal Financial and Accounting Officer and Director
Dated:
October 3, 1994 By /s/ AARON BEAM, JR. Aaron Beam, Jr. Director
DATE SIGNATURE/TITLE - - - ---- ---------------
Dated:
By____________________________ Peter J. Evans Director
Dated:
October 3, 1994 By /s/ ROBERT E. GALLOWAY Robert E. Galloway Director
Dated:
October 3, 1994 By /s/ THOMAS M. HAYTHE Thomas M. Haythe Director
Dated:
October 3, 1994 By /s/ STEVEN J. SHULMAN Steven J. Shulman Director
Dated:
October 3, 1994 By /s/ MICHAEL S. SIDDLE Michael S. Siddle Director
Dated:
By__________________________ Bruce R. Soden Senior Vice President and Director
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RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
The following consolidated financial statements of the Registrant and its subsidiaries are submitted herewith in response to Item 8 and Item 14(a)(1):
The following Financial Statement Schedules of the Registrant and its subsidiaries are submitted herewith in response to Item 14(a)(2):
All other schedules have been omitted because they are inapplicable or the information is provided in the consolidated financial statements including the notes thereto.
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REPORT OF INDEPENDENT AUDITORS
Board of Directors and Stockholders RAMSAY HEALTH CARE, INC.
We have audited the accompanying consolidated balance sheets of Ramsay Health Care, Inc. and Subsidiaries as of June 30, 1994 and 1993, and the related consolidated statements of operations, stockholders' equity, and cash flows for each of the three years in the period ended June 30, 1994. Our audits also included the financial statement schedules listed in the Index at Item 14(a). These financial statements and schedules are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedules 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 consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Ramsay Health Care, Inc. and Subsidiaries at June 30, 1994 and 1993, and the consolidated results of their operations and their cash flows for each of the three years in the period ended June 30, 1994, in conformity with generally accepted accounting principles. Also, in our opinion, the related financial statement schedules, when considered in relation to the basic financial statements taken as a whole, present fairly in all material respects the information set forth therein.
As discussed in the Note on Income Taxes on page to the consolidated financial statements, the Company changed its method of accounting for income taxes in 1993.
ERNST & YOUNG LLP
New Orleans, Louisiana September 1, 1994
RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - - - ------------------------------------------
BASIS OF PRESENTATION
The consolidated financial statements include the accounts of the Company and its majority-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.
INDUSTRY
The Company is a provider of a full continuum of behavioral health services. Its facilities division operates private, free-standing acute care psychiatric hospitals as well as outpatient day hospitals, freestanding day treatment centers, subacute units, and residential treatment centers. Its managed care division provides managed mental health care services.
AFFILIATED COMPANIES
Ramsay Holdings HSA Limited ("Holdings") owns approximately 18% of the outstanding Common Stock of the Company and 50% of the outstanding Class B Convertible Preferred Stock, Series C of the Company. Paul Ramsay Holdings Pty. Limited owns the remaining 50% of the outstanding Class B Convertible Preferred Stock, Series C. Together, these two entities affiliated with Paul J. Ramsay own common stock and preferred stock in the Company which in total represents an approximate 31% voting interest.
MEDICARE AND OTHER CONTRACTED REIMBURSEMENT PROGRAMS
Net revenues include estimated reimbursable amounts from Medicare and other contracted reimbursement programs. Amounts received by the Company for treatment of patients covered by such programs, which may be based on the cost of services provided or predetermined rates, are generally less than the established billing rates of the Company's hospitals. Final determination of amounts earned under contracted reimbursement programs is subject to review and audit by the appropriate agencies. See Note on Reimbursement from Third-Party Contractual Agencies.
CHARITY CARE
The Company provides care to patients who meet certain criteria under its charity care policy without charge or at amounts less than its established rates. Because the Company does not pursue collection of amounts determined to qualify as charity care, they are not reported as revenue.
INTANGIBLE ASSETS
Cost in excess of net asset value of purchased businesses is amortized on a straight-line basis, over periods ranging from fifteen to forty years. Other intangible assets, principally the value assigned to acquired clinical protocols and contracts related to the managed care division, are amortized on a straight-line basis over a fifteen year period.
Preopening costs, principally salaries and other costs incurred prior to opening a new facility or program, are deferred and amortized on a straight-line basis over two years.
Loan costs are amortized ratably over the life of the loan and are included in interest expense. In fiscal 1994, the Company wrote off $258,000 of deferred loan costs ($155,000 after applicable income tax benefit) in connection with the early retirement of the bonds associated with Atlantic Shores Hospital which was sold in February 1994. In fiscal 1993, the Company incurred approximately $1,573,000 in deferred loan costs in connection with the refinancing of its debt under the 1993 Credit Facilities. In fiscal 1992, the Company wrote off $678,000 of deferred loan costs ($366,000 after applicable income tax benefit) in connection with the early retirement of its $34 million bank term debt.
RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Accumulated amortization of the Company's intangible assets as of June 30, 1994 and 1993 was $9,896,000 and $10,311,000, respectively.
PROPERTY AND EQUIPMENT
Property and equipment are stated at cost. The Company capitalizes interest, salaries and other costs for site selection and design incurred during the construction period. Upon sale or retirement of property or equipment, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss is included in operations.
Depreciation is computed substantially on the straight-line method for financial reporting purposes and on accelerated methods for income tax purposes. The general range of estimated useful lives is twenty to forty years for buildings and five to twenty years for equipment.
PROFESSIONAL AND GENERAL LIABILITY INSURANCE
The Company maintains a self-insurance program for its hospital professional liability insurance and commercial and general liability insurance. The Company and its facilities are insured for professional and general liability in the aggregate amount of $25 million with self-insured retentions of $500,000 per claim. It is the Company's policy to record the liability for uninsured losses related to asserted and unasserted claims arising from reported incidents and losses related to unreported incidents based upon an actuarial valuation of the Company's past experience and other relevant information.
INCOME TAXES
The Company recognizes deferred income taxes on significant temporary differences between financial statement and income tax reporting. The Company adopted FASB Statement No. 109 as of July 1, 1992 (See note on Income Taxes on page).
RESTRUCTURING AND OTHER CHARGES
In 1993, the Company recorded a non-recurring charge of $1,367,000 resulting primarily from a decision not to develop additional inpatient psychiatric facilities in certain markets. In 1992, the Company recorded a charge against earnings of $2,283,000 reflecting the reassessment of its strategic direction. The 1992 charge included provisions for severance packages and for the potential unrecoverable portion of an investment in a hospital joint venture.
EARNINGS PER SHARE
Primary earnings per share are calculated by dividing income before extraordinary items and cumulative effect of accounting change and net income by the weighted average number of common and dilutive common equivalent shares outstanding during each period. The Company's common stock equivalents include Class A Convertible Preferred Stock, Class B Convertible Preferred Stock, Series C and stock options and warrants to purchase Common Stock. Fully diluted earnings per share are calculated assuming the conversion of the Class B redeemable convertible preferred stock prior to its exchange on June 30, 1993; see note on Related Party Transactions.
MINORITY INTERESTS
The equity of minority shareholders or partners in Company subsidiaries is reported on the balance sheet as minority interests. Minority interests reflect changes for the respective share of income of the subsidiaries attributable to the minority shareholders or partners, the effect of which is also reflected in the results of operations of the Company, and for distributions made to the minority shareholders or partners.
RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
CASH EQUIVALENTS
Cash equivalents include short-term, highly liquid interest-bearing investments, consisting primarily of certificates of deposit, commercial paper and money market mutual funds. The carrying values of these cash equivalents approximate fair value.
RESTRICTED CASH
Restricted cash represents the remaining proceeds from the sale of Cumberland Hospital that are held in trust for the repayment of debt. The carrying value of restricted cash approximates fair value.
CASH HELD IN TRUST
Cash held in trust is revocable by the Company under certain circumstances and includes cash and short-term investments for payment of self-insurance losses. The carrying value of this cash held in trust approximates fair value.
ACQUISITIONS AND SALES - - - ----------------------
In August 1991, the Company purchased a 72-bed hospital facility in San Antonio, Texas and other personal property for a cash purchase price of $2,100,000. After refurbishments and renovations totaling approximately $1,800,000, the facility, Mission Vista Hospital, opened as a 66-bed facility in November 1991.
In December 1991, the Company entered into a one-year lease for a 36-bed facility in Concord, California. The Company had an option to purchase this facility for $1,050,000, which expired in December 1992. The Company did not exercise this option, terminated operations at this facility in September 1992, and recognized a loss of $1,109,000 on closure.
In November 1992, the Company purchased a 64-bed facility in Covington, Louisiana for $2,000,000. The facility, Three Rivers Hospital, opened in January 1993.
In January 1993, the Company terminated operations at its facility in Fort Walton Beach, Florida and subsequently leased that facility to another health care provider. That lease gives the lessee the option to purchase the facility at a fixed price. The Company recognized a provision for loss on potential sale of this facility of approximately $2.8 million in 1993. The cost and accumulated depreciation relating to this facility are approximately $8,900,000 and $4,800,000, respectively, at June 30, 1994.
In June 1993, the Company signed a letter of intent to sell its Cumberland Hospital in Fayetteville, North Carolina for approximately $12.3 million. In connection with this sale, the Company wrote off approximately $4 million of costs in excess of net asset value of purchased businesses and recorded an overall provision for loss of approximately $3.6 million in 1993. The sale of the facility was completed in August 1993.
In October 1993, the Company purchased the stock of Florida Psychiatric Management, Inc., a regional provider of mental health care cost management services based in Orlando, Florida for a cash payment of $4.0 million, the issuance of an aggregate of $2.5 million of three-year 7% debentures, and contingent consideration based on the attainment of certain earnings and revenue levels over the ensuing two years. In connection with this acquisition, the Company recorded cost in excess of net asset value of purchased businesses and other intangible assets of approximately $3.9 million and $3 million, respectively.
In February 1994, the Company sold its 50-bed Atlantic Shores Hospital in Daytona Beach, Florida for $4.8 million.
RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
In June 1994, the Company purchased the assets and assumed certain liabilities of Human Dynamics Institute, a Phoenix Arizona- based managed mental health business for a cash payment of $1.0 million, a three-year, $1.0 million note bearing interest at 8.25%, 172,850 shares of common stock of Ramsay Managed Care, Inc., a subsidiary of the Company, and contingent consideration based upon the attainment of certain revenue levels over the ensuing two years. In connection with this acquisition, the Company recorded cost in excess of net asset value of purchased businesses totalling approximately $3 million.
The operations of Florida Psychiatric Management, Inc. and Human Dynamics Institute are included in the consolidated statements of operations from the dates of acquisition. Unaudited pro forma consolidated operating results of the Company as if the acquisitions had occurred as of July 1, 1992, are as follows:
LONG-TERM DEBT - - - --------------
The Company's long-term debt is as follows: . .
The aggregate scheduled maturities of long-term debt during the five years subsequent to June 30, 1994 follow: 1995 -- $9,460,000; 1996 -- $10,610,000; 1997 -- $9,383,000; 1998 -- $8,325,000; and 1999 -- $10,443,000.
The Company has pledged as collateral substantially all of its real property.
On May 21, 1993, the Company finalized a credit facility (the "1993 Credit Facility") for letters of credit (to support the variable rate revenue bonds) and working capital with a group of banks. The 1993 Credit Facility includes approximately $27.5 million in letters of credit and $4.0 million in a working capital facility which replaced the $31.0 million in letters of credit and the $5.0 million working capital facility included in the 1990 Credit Facilities. The 1993 Credit Facility expires on May 15, 1996. There were no amounts outstanding under the working capital facility at June 30, 1994 or 1993.
RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
On April 30, 1990, the Company entered into credit facilities (the "1990 Credit Facilities") with a group of insurance companies and banks. The 1990 Credit Facilities included $56.5 million in Senior Secured Notes, $34.0 million in bank term debt (the "Bank Term Debt"), approximately $31.0 million in letters of credit, $3.0 million in Subordinated Secured Notes and $5.0 million in a working capital facility. The Senior Secured Notes bear interest at 11.6% and are due in semi-annual installments through March 31, 2000. The Bank Term Debt was paid out in September 1991 from the proceeds of the Company's stock offering and internally generated funds. The Bank Term Debt bore interest at a variable rate and was due in quarterly installments that began on March 31, 1991 with the balance due on April 30, 1998. The Subordinated Secured Notes bear interest at 15.6% and are due in semi-annual installments through March 31, 2000.
Under the 1993 and 1990 Credit Facilities, the Company is required to meet certain covenants, including: (1) the maintenance of a minimum level of consolidated tangible net worth; (2) the maintenance of a working capital ratio; and (3) the maintenance of certain fixed charge coverage and debt service ratios. At June 30, 1994 the Company was in compliance with each such covenant.
The Company has entered into loan agreements with various state and local governmental agencies for the purpose of financing or providing reimbursement for the construction costs of certain of the Company's psychiatric hospitals or treatment facilities within respective states. Each state governmental agency funded its loan with proceeds of tax-exempt variable rate demand revenue bonds in the same amount as its loan. These loans, which have a term generally of 30 years, have an outstanding balance at June 30, 1994 totalling $21 million. The interest rate will be the same as the applicable revenue bonds which ranged from 2.5% to 5.5% at June 30, 1994. The Company is required to deliver an irrevocable standby letter of credit for each bond in an amount equal to the total principal payments due under the bond, plus a stipulated number of days interest. Such letters of credit are provided in the 1993 Credit Facility.
In December 1992, the Company completed a sale and leaseback of its management information systems, with a cost of $1,857,000 and accumulated depreciation of $185,000 at the time of the transaction, with net proceeds from the transaction approximating $1,857,000. The lease was accounted for as a capital lease.
FASB Statement No. 107, "Disclosures about Fair Value of Financial Instruments", requires disclosure of fair value information about financial instruments. The fair values of the Company's long-term debt (excluding capital lease obligations) are estimated using discounted cash flow analyses, based on the Company's estimated current incremental borrowing rates for similar types of borrowing arrangements. The carrying amounts of all long-term debt are the same as the estimated fair values with the exception of the $48,025,000 and $2,769,000 borrowings. The fair values of these two notes are estimated to be $51,463,000 and $3,227,000, respectively, at June 30, 1994 and $56,319,000 and $3,500,000, respectively, at June 30, 1993.
INCOME TAXES - - - ------------
During the fourth quarter of fiscal 1993, effective July 1, 1992, the Company changed its method of accounting for income taxes from the deferred method to the liability method required by FASB Statement No. 109, "Accounting for Income Taxes." As permitted under the new rules, prior years' financial statements were not restated. The cumulative effect of adopting Statement No. 109 as of July 1, 1992 was to increase net income in 1993 by $2,353,000.
RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's deferred tax liabilities and assets are as follows:
The provision for income taxes consists of the following:
The provision for income taxes is reported in the consolidated statements of operations as follows:
RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
The provision for income taxes included in the consolidated statements of operations differs from the amounts computed by applying the statutory rate to income before income taxes, as follows:
The sources of timing differences on which deferred taxes have been provided and the related income tax effects for the year ended June 30, 1992 are as follows:
At June 30, 1994, net operating loss carryovers of approximately $17 million, which expire from 2000 to 2003, and alternative minimum tax credit carryovers of approximately $1,668,000, are available to reduce future federal income taxes subject to certain annual limitations.
STOCKHOLDERS' EQUITY - - - --------------------
The Class A Convertible Preferred Stock is not entitled to receive dividends, is not redeemable, does not have any liquidation preference, has no voting rights and is convertible at any time into Common Stock on a share-for-share basis. The conversion rate of the Class A Convertible Preferred Stock may be adjusted if the Company effects diluting issues such as share dividends, combinations and reclassifications, as well as if the Company sells Common Stock for an effective price of less than $6.06 per share.
The Certificate of Incorporation of the Company, as amended, authorizes the issuance of 1,000,000 shares of Class B Convertible Preferred Stock, $1.00 par value.
RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
In March 1993, the Board of Directors authorized 152,321 shares of the Class B Convertible Preferred Stock as Class B Preferred Stock, Series C. These shares are entitled to cumulative dividends at a rate of 5% per annum payable quarterly in arrears. These shares are entitled to a liquidation preference of $50.84 per share under certain circumstances. The shares are convertible into that number of fully paid and nonassessable shares of Common Stock that results from dividing the conversion price in effect at conversion into $50.84 and multiplying the quotient obtained by the number of shares of Series C Preferred Stock being converted. The current conversion price is $5.084 per share. Each share of Series C Preferred Stock is entitled to ten (10) votes on all matters put to a vote of the shareholders of the Company and otherwise has voting rights and powers equal to the voting rights and powers of the Common Stock.
On June 30, 1993, the Company issued 142,486 shares of Class B Preferred Stock, Series C in a recapitalization of the interests of Paul J. Ramsay, the Company's chairman. (See note on Related Party Transactions.)
On July 30, 1991, the Company completed a public offering (the "Offering") of 2,700,000 shares of its Common Stock. An additional 405,000 shares of Common Stock were sold by selling stockholders upon the exercise of the underwriters' over-allotment option, including 90,832 shares issued upon the exercise by certain selling stockholders of warrants to purchase Common Stock and 4,590 shares issued upon the conversion of Class A Preferred Stock by a selling stockholder. The net proceeds from the Offering (after expenses and including amounts received from the exercise of warrants by certain selling stockholders) of $31,038,000, together with internally generated funds, were used to pay off the unpaid portion of the Bank Term Debt.
At June 30, 1994, an aggregate 1,675,672 options were outstanding under the Company's various option plans. These are set forth below:
At June 30, 1994, 1,034,334 shares were exercisable under the terms of the plans. At June 30, 1994, 1,774,338 shares were reserved for issuance under the Company's stock option plans.
In connection with a 1988 refinancing, the Company issued to Citibank, N.A. warrants to purchase 166,667 shares of the Company's Common Stock at $10.50 per share. The warrants contain an antidilution provision requiring adjustment to the purchase price and the number of shares upon occurrence of certain transactions. The issuance of the Class B
RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Preferred Stock Series C and the granting and repricing of stock options resulted in an adjustment in the Purchase Price to $9.30. Warrants for a total of 138,417 shares are still outstanding. These warrants are exercisable on or before April 1, 1995. As part of the 1990 refinancing, the Company issued warrants to Aetna Life Insurance Company and Monumental Life Insurance Company to purchase an aggregate of 113,301 shares of the Company's Common Stock at $9.61 per share. As a result of antidilution provision adjustments, the Purchase Price is currently $8.39 per share and warrants for a total of 106,986 shares are still outstanding. These warrants are exercisable on or before March 31, 2000.
On January 8, 1992, in consideration of the release of certain rights by the Company's former President and Chief Executive Officer, the Company issued non-transferable five-year warrants to purchase 200,000 shares of Common Stock at an exercise price per share of $9.50. These warrants were surrendered in December, 1992 at a cash amount equal to $2.00 times the number of warrants surrendered.
Under the Company's current credit agreements, the Company is presently limited as to the amount of dividends it can pay to the holders of its Common Stock and Class B Convertible Preferred Stock, Series C.
REIMBURSEMENT FROM THIRD-PARTY CONTRACTUAL AGENCIES - - - ---------------------------------------------------
The Company records amounts due to or from third-party contractual agencies based on its best estimates of amounts to be ultimately received or paid under cost reports filed with the appropriate intermediaries. Final determination of amounts earned under contractual reimbursement programs is subject to review and audit by the appropriate intermediaries. Differences between amounts recorded as estimated settlements and the audited amounts are reflected as adjustments to net revenues in the period the final determination is made. During the years ended June 30, 1994, 1993 and 1992, the Company recorded contractual reimbursement benefits of approximately $1,400,000, $2,300,000 and $2,400,000, respectively, for the combined effects of intermediary audits and the routine evaluation of prior year estimated settlements. Management believes that adequate provision has been made for any adjustments that may result from future intermediary reviews or audits.
LITIGATION - - - ----------
The Company is subject to claims and suits arising in the ordinary course of business. In the opinion of management, the ultimate resolution of such pending legal proceedings will not have a material adverse effect on the Company's financial position.
PENSION PLAN - - - ------------
On December 1, 1985, the Company established a 401(k) tax deferred savings plan, administered by an independent trustee, covering substantially all employees over age twenty-one meeting a one-year minimum service requirement. The plan was adopted for the purpose of supplementing employees' retirement, death and disability benefits. The Company may, at its option, contribute to the plan through an Employer Matching Account, but is under no obligation to do so. An employee becomes vested in his Employer Matching Account over a four-year period.
The Company contributed $160,000, $175,000, and $195,000 to the plan during the years ended June 30, 1994, 1993 and 1992, respectively.
RELATED PARTY TRANSACTIONS - - - --------------------------
In connection with the Paul Ramsay Group's cash investment in 1987, the Company issued 333,333 shares of Class B Convertible Preferred Stock, Series 1987. Dividends were at an annual rate of 6%, were cumulative and payable quarterly in arrears.
RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
On June 30, 1993, the interests in the Company controlled by Paul J. Ramsay, the Company's chairman, were recapitalized. The Company issued 142,486 shares of Class B Preferred Stock, Series C in exchange for all outstanding shares of the Company's Class B Convertible Preferred Stock, Series 1987, the Company's $2 million 16.1% subordinated promissory note to affiliate and $500,000 in cash. The early extinguishment of the $2 million 16.1% subordinated promissory note resulted in an extraordinary loss of $1,580,000 in 1993.
The Company expensed $698,000, $678,000, and $657,000 in management fees to Holdings during the years ended June 30, 1994, 1993 and 1992, respectively. There were no significant amounts due to or from related parties at June 30, 1994 or 1993.
RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
QUARTERLY RESULTS OF OPERATIONS AND OTHER SUPPLEMENTAL INFORMATION (UNAUDITED)
Following is a summary of the Company's quarterly results of operations for the years ended June 30, 1994 and 1993.
(1) The quarterly earnings per share amounts may not equal the annual amounts due to changes in the average common and dilutive common equivalent shares outstanding during the year.
In the quarter ended June 30, 1993, the Company recorded provisions for losses on sales and closure of hospitals and restructuring and other charges totaling $7,782,000.
FINANCIAL STATEMENT SCHEDULES SCHEDULE IV
RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES INDEBTEDNESS OF AND TO RELATED PARTIES--NOT CURRENT
________________________
(1) Represents a 16.1% Subordinated Promissory Note due April 1, 2000. The Note was subordinated to bank and investor obligations. On June 30, 1993, the Note was eliminated in conjunction with the recapitalization of the interests of Paul J. Ramsay.
S-1 SCHEDULE V
RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES PROPERTY AND EQUIPMENT
_______________
(1) Sale of hospitals. (2) Routine retirements. (3) Purchase of hospital. (4) Write-off of certificate of need (CON) costs.
S-2
SCHEDULE VI
RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION OF PROPERTY AND EQUIPMENT
_______________
(1) Routine retirements. (2) Allowance for loss on potential sale of hospital. (3) Sale of hospitals. (4) Accumulated depreciation on acquisitions.
S-3 SCHEDULE VIII
RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS
_______________
(1) Write-offs of uncollectible patient accounts receivable.
S-4 SCHEDULE X
RAMSAY HEALTH CARE, INC. AND SUBSIDIARIES SUPPLEMENTARY INCOME STATEMENT INFORMATION
Amounts for amortization of intangible assets, maintenance and repairs and royalties are not presented, as such amounts are less than 1% of net revenues.
S-5
INDEX OF EXHIBITS
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E-9
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Copies of exhibits filed with this Annual Report on Form 10-K or incorporated herein by reference do not accompany copies hereof for distribution to stockholders of the Company. The Company will furnish a copy of any of such exhibits to any stockholder requesting it.
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