CompManagement leases a 70,000 square foot office building in Dublin, Ohio, which is used as the principal office facilities for CompManagement and CompManagement Health Systems. The building lease is for a term of 15 years, provides for annual rent payments ranging from $251,864 in year one to $953,312 in year eight and thereafter, and requires CompManagement to pay all operating expenses for the building. The lease also provides for, among other things, three renewal options of five years each, an option to purchase the building, and a right of first offer with respect to the sale of such building. The lease restricts CompManagement's ability to distribute funds and/or assets to the Company or another affiliate unless CompManagement meets certain tangible net worth requirements. CompManagement also leases office space in Akron, Cincinnati, Cleveland, and Toledo, Ohio, which is used as service centers for its operations.
(1) HMO health care costs calculated as a percentage of Medicaid and commercial revenues.
The Company is a managed care holding company whose operating subsidiaries are Health Power HMO, CompManagement, and CompManagement Health Systems. Health Power HMO provides comprehensive managed health care services to members of its HMO, primarily Medicaid recipients enrolled in the OWF Program, in four service areas encompassing 19 Ohio counties in and around the cities of Columbus, Dayton, Cincinnati, Cleveland, and Youngstown. Health Power HMO has a one-year NCQA accreditation which expires March 26, 1999. CompManagement, which was acquired by the Company in July 1995, offers claims management, risk management, and medical cost containment services to employers with respect to workers' compensation and unemployment compensation claims. It is one of the largest companies in Ohio offering such services, currently serving approximately 13,000 employers located throughout Ohio. CompManagement Health Systems is a state-wide certified MCO providing medical management services for workers' compensation claims under Ohio's Health Partnership Program for approximately 20,000 employers. Because all workers' compensation claims are reimbursed by BWC, CompManagement Health Systems does not assume any risk for the payment of medical or disability benefits to employees with respect to workers' compensation claims.
The Company's acquisition of CompManagement was accounted for as a pooling of interests. For purposes of the following discussion, and except as otherwise described below, the revenues and expenses of CompManagement Health Systems have been included with the revenues and expenses of CompManagement. In addition, the following discussion reflects the acquisition of certain contract rights from ChoiceCare Health Plans, Inc. ("ChoiceCare") which enabled the Medicaid recipients previously served by ChoiceCare to be automatically enrolled in Health Power HMO as of July 1, 1996.
This discussion should be read in conjunction with the consolidated financial statements, notes, and tables included elsewhere in this report. The Company cautions readers that any forward looking statements contained in this Form 10-K or any other reports or documents prepared by the Company involve risks and uncertainties and are subject to change based on various factors. Certain of these factors are discussed in greater detail in various parts of this Item 7.
Health Power HMO has entered into agreements to sell the contract rights for its Medicaid membership in Cuyahoga (Cleveland) and Mahoning (Youngstown) Counties, Ohio to Emerald HMO, Inc. and Total Health Care Plan, Inc., respectively. Pursuant to its provider agreement with ODHS, Health Power HMO was providing health care services to approximately 2,700 residents in those counties as of December 31, 1997, which represented over 99% of Health Power HMO's membership in its Northeast service area. The aggregate sale prices for these transactions are expected to be approximately $700,000. The Company plans to exit the Northeast service area as soon as permissible following the completion of these transactions because of the insignificant membership remaining in that service area.
During most of 1997, Health Power HMO offered health care services to employees of the State of Ohio in its Columbus, Dayton, and Cincinnati service areas pursuant to commercial group contracts with ODAS. Health Power HMO terminated its commercial group contract with ODAS for the Dayton service area effective March 1, 1997. Furthermore, ODAS did not renew its commercial group contracts with Health Power HMO for the Columbus and Cincinnati service areas, and these contracts terminated as of December 1, 1997. The termination of the commercial group contracts for the Columbus and Cincinnati service areas resulted in the reduction of approximately 5,700 commercial members. It is anticipated that the loss of revenue from the termination of the commercial group contracts for the Columbus and Cincinnati service areas will result in an approximate 11% reduction in the Company's consolidated revenues. The Company's management has implemented expense reduction measures to mitigate the loss of revenues associated with the termination of these contracts. However, these commercial group contracts, in the aggregate, were not profitable in 1997.
The Company's revenues increased $9.7 million, or 14.7%, to $75.8 million during 1997, from $66.1 million for 1996. CompManagement's revenues increased $15.5 million, or 232.5%, to $22.2 million during 1997, as compared to $6.7 million for the prior year, as a result of an increase in the number of employers contracting for its services, and in particular, employers participating in group rating plans, and to $11.3 million in revenues received by CompManagement Health Systems, which entity was not operational in 1996. Health Power HMO's revenues decreased $5.8 million, or 9.7%, to $53.6 million during 1997, from $59.4 million for 1996. Health Power HMO's commercial revenues decreased $4.4 million, or 28.7%, to $10.8 million during 1997, as compared to $15.2 million for the prior year. Commercial revenues decreased primarily as a result of a 31.8% decrease in members months, which offset a 4.5% increase in revenue per member months. The decrease in the commercial revenues and member months was the result of actions to eliminate unprofitable commercial
Health Power HMO's health care costs decreased $6.2 million, or 10.8%, to $51.1 million during 1997, from $57.3 million for 1996. Health care costs, stated as a percentage of Health Power HMO's revenues (the "HMO medical loss ratio"), were 95.3% for 1997, as compared to 96.4% for 1996. The decrease in the HMO medical loss ratio was primarily due to a decrease in per member health care costs of 3.2% for Medicaid business during 1997, as compared to the prior year. The foregoing results include increases in health care cost reserves for the fourth quarter in 1997, discussed below, and a single large commercial medical claim of approximately $1.0 million incurred primarily during the second half of 1997.
During 1996, the Company elected to write-off the entire purchase price of $5.0 million paid by Health Power HMO to acquire certain contract rights with respect to the ChoiceCare provider agreement with ODHS.
The Company's interest and other income increased $0.4 million to $1.2 million for 1997, from $0.8 million for 1996. This increase resulted primarily from an increase in other income related to the private label managed care product and an increase in interest income related to increases in the average available investable cash balance.
The Company had an income tax benefit of $1.6 million for 1997, as compared to $1.8 for 1996. The 1997 tax benefit was the result of the recognition of a deferred tax asset in the amount of $2.2 million, which was offset by tax expense on the Company's income from operations. The recognition of the $2.2 million deferred tax asset was due to the reversal of the valuation allowance established in 1996 for the deferred tax asset, which reversal was based on the Company's return to profitable operations and management's expectations of profitable operations in future periods. This deferred tax asset recognition was recorded in accordance with Financial Accounting Standards ("SFAS") No. 109, "Accounting for Income Taxes."
The Company's revenues increased $7.3 million, or 12.5%, to $66.1 million during 1996, from $58.8 million for 1995. CompManagement's revenues increased $1.1 million, or 19.8%, to $6.7 million during 1996, as compared to the prior year, as a result of an increase in the number of employers contracting for its services, and in particular, employers participating in group rating plans. Health Power HMO's revenues increased $6.2 million, or 11.7%, to $59.4 million during 1996, from $53.2 million for 1995. Health Power HMO's Medicaid revenues increased 17.7% during 1996, as compared to the prior year, primarily as a result of a 25.6% increase in member months which was primarily due to the enrollment of the Medicaid recipients previously served by ChoiceCare, which more than offset a 6.3% decrease in the revenue per member months. Health Power HMO's commercial revenues decreased 2.8% during 1996, as compared to the prior year, primarily as a result of a 3.2% decrease in the revenue per member month. The decrease in the Medicaid revenue per member month resulted from the July 1, 1996 capitation rate reduction of approximately 12% from ODHS. The decrease in the commercial revenue per member month was the result of a competitive and price sensitive commercial marketplace.
Health Power HMO's health care costs increased $11.0 million, or 23.9%, to $57.3 million during 1996, from $46.2 million for 1995. The 1996 results included a fourth quarter adjustment in which Health Power HMO decreased its health care costs by approximately $1.0 million to record retention of risk-sharing funds previously accrued for payment to its primary care physicians. The HMO medical loss ratio was 96.4% for 1996, as compared to 86.9% for 1995. The increase in the HMO medical loss ratio was primarily due to increases in per member health care costs of 14.0% and 2.6% for commercial and Medicaid business, respectively, during 1996, as compared to the prior year, along with the aforementioned 3.2% decrease in per member commercial revenue and the 6.3% decrease in per member Medicaid revenue during the same period. The decrease in the commercial per member revenue was attributable to rate decreases based upon the competitive and price sensitive commercial marketplace during 1996. The decrease in the Medicaid per member revenue was attributable to decreases in the capitation rates from ODHS. The capitation rates from ODHS are fixed in advance of each year's agreement, and Health Power HMO is unable to adjust such rates during the contract term. ODHS bases its rates, in part, on its estimates of Medicaid health care costs increases. During 1996, Health Power HMO experienced health care cost increases at rates in excess of the ODHS cost estimates.
The Company's SGA expenses increased $2.3 million, or 16.9%, to $15.9 million for 1996, from $13.6 million for 1995. CompManagement's SGA expenses increased $1.7 million, or 38.3%, to $6.3 million for 1996, from $4.5 million for 1995. This increase was primarily the result of expenses incurred by CompManagement Health Systems in connection with the development of its MCO operations and increases in CompManagement's selling commissions. Health Power HMO's SGA expenses increased $0.6 million, or 6.1%, to $9.6 million for 1996, from $9.1 million for 1995. This increase was primarily the result of expenses incurred in connection with obtaining NCQA accreditation and expansion into the Northeast service area. The HMO administrative ratio was 16.2% for 1996, as compared to 17.0% for 1995. The improvement in the HMO administrative ratio was due to the achievement of certain operating efficiencies as fixed overhead costs and expenses were allocated over a larger membership base due to the increase in membership resulting from the ChoiceCare transaction.
During 1996, Health Power HMO acquired certain contract rights from ChoiceCare for a purchase price of $5.0 million. This acquisition enabled the Medicaid recipients previously served by ChoiceCare to be automatically enrolled in Health Power HMO as of July 1, 1996. Because of the nature of the intangible asset acquired, the Company elected to write-off the entire purchase price in 1996.
The Company had an income tax benefit of $1.8 million for 1996, as compared to an income tax benefit of $14,000 for 1995. This tax benefit was the result of a loss from operations of $12.1 million.
As a result of the foregoing, the Company sustained a net loss of $9.5 million, or $(2.49) per share, diluted, for 1996, as compared to net income of $96,000, or $0.03 per share, diluted, for 1995.
At December 31, 1997, the Company had working capital of $2.0 million, as compared to working capital of $1.6 million at December 31, 1996. At December 31, 1997, cash and cash equivalents were $8.4 million, a decrease of $5.5 million from $13.9 million at December 31, 1996. This decrease was attributable primarily to a decrease in cash from operating activities of $3.7 million and a decrease in cash from investing activities of $1.8 million. The Company's cash and cash equivalents do not include statutory cash deposits segregated as required by ODI and ODHS. These deposits of $0.4 million as of December 31, 1997, are included with other assets on the balance sheet.
Historically, health care costs have risen at a higher rate than the general rate of inflation. The Company believes that its cost containment procedures and contractual arrangements with providers mitigate, but do not wholly offset, the effects of health care cost inflation on its operating results. While the Company does not anticipate capitation rate
reductions from ODHS in 1998, as was experienced in 1995 and 1996, it anticipates only a slight increase in such rates to occur during the second half of 1998. There can be no assurance that health care costs will not increase at a rate in excess of such capitation rate increases. Because of the foregoing, the Company may be unable to offset the adverse effects of inflationary health care cost increases to its operations.
Any forward looking statements contained in this Form 10-K or any other reports or documents prepared by the Company or made by management of the Company involve risks and uncertainties, and are subject to change based on various important factors. The following factors, among others, in some cases have affected and in the future could affect the Company's actual financial performance.
CompManagement Health Systems participates in Ohio's Health Partnership Program through its contract with OBWC. This contract is for a two-year term expiring in March 1999. There can be no assurance that OBWC will renew this contract when it expires. Furthermore, OBWC may at any time initiate proceedings to decertify CompManagement Health Systems as an MCO if CompManagement Health Systems fails to satisfactorily perform its duties under the contract, and if such decertification occurs, the contract will automatically terminate. Finally, 50% of the fees payable under this contract are subject to the attainment of certain objective and subjective performance measurements established by OBWC. There can be no assurance that CompManagement Health Systems will be able to meet all or any of these performance measurements. This contract accounts for all of its revenues, which revenues were $11.3 million in 1997. For the year ended December 31, 1997, CompManagement Health Systems' revenues represented approximately 14.9% of the Company's consolidated revenues. The loss of this contract or the failure to significantly satisfy the performance measurements under the contract would have a material adverse effect on the Company's business, financial condition, and operations.
CompManagement provides administrative services for group rating plans for over 35 trade associations, which include approximately 12,000 employers. Each association and employer administrative agreement is typically for a one-year service period. Revenues from group rating plans represented approximately 58% of CompManagement's 1997 revenues, with three trade associations accounting for approximately 41% of such revenues. There can be no assurance that the agreements with these three trade associations or any other associations or
deductible, which is currently $75,000. Health Power HMO also maintains, as required by ODHS, stop-loss insurance with respect to its Medicaid members. No assurance can be given as to the future availability or cost of such reinsurance or stop-loss coverage or that losses or risks will be maintained within the limits of such coverage. Notwithstanding the maintenance of reinsurance coverage, the severity of claims, in particular by Health Power HMO's commercial members, could have a material adverse effect on the Company's operations.
The Company's subsidiaries each operate in industries which are highly competitive. Each of the Company's subsidiaries compete with numerous types of competitors, many of which have greater financial and other resources. Additional competitors may enter the Company's areas of operations in the future.
We have audited the accompanying consolidated balance sheets of Health Power, Inc., and Subsidiaries as of December 31, 1997 and 1996, and the related consolidated statements of operations, stockholders' equity, and cash flows for each of the three years in the period ended December 31, 1997. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Health Power, Inc., and Subsidiaries as of December 31, 1997 and 1996, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 1997, in conformity with generally accepted accounting principles.
B. BASIS OF PRESENTATION: The accompanying consolidated financial statements are presented in accordance with generally accepted accounting principles (GAAP). The Company's HMO subsidiary is subject to regulation by the Ohio Department of Insurance (the Department) and is required to file separate financial statements with the Department prepared in accordance with prescribed or permitted statutory accounting practices. Such practices differ in certain respects from GAAP. Significant statutory differences relate to certain assets designated as "nonadmitted", principally intercompany accounts and prepaids (which are charged directly to surplus) and deferred federal income taxes both of which are not recognized for statutory reporting purposes.
C. PRINCIPLES OF CONSOLIDATION: The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
E. PROPERTY AND EQUIPMENT: Depreciation of property and equipment is computed using the straight-line method over the estimated useful lives of the assets, ranging from 3 to 25 years.
Contract revenues are derived from claims management, administrative, consulting services, and managed care administration services which are recorded as earned based on the requirements and duration of the related contract. Revenue from the managed care administration services are recognized on a monthly basis based on the contracted administrative fee with the OBWC. In addition, contract revenue earned is recorded for some incentive awards when the claims are processed to which the incentive is related and a bonus award is recorded in the year earned. Revenue on certain contracts has been deferred and is recognized into income on a pro rata basis over the related contract periods, which typically range between 3 and 12 months. Commission expense associated with these contracts is also deferred and recognized into expense on a pro rata basis over the related contract periods. For services related to group rating contracts, fees are paid to the group's sponsor and netted against contract revenues. For the year ended December 31, 1997, contract revenue from a major client approximated 32% of the Company's contract revenue.
G. HEALTH CARE COSTS: Health care costs include primary care and physician-related costs and hospital costs. Primary care and physician-related costs represent expenses incurred under contracts and arrangements with health care providers in rendering services to enrollees. Such costs include fee-for-service amounts and capitation (a monthly fixed fee per enrollee) recognized in providing medical, vision, pharmacy and other health care services. Hospital costs are recognized when hospital services are provided to enrollees and include stop-loss insurance coverage premiums, net of recoveries (see Note 7). Such expenses are recognized as incurred, except as noted below.
J. STOCK-BASED COMPENSATION: The Company applies APB Opinion No. 25, Accounting for Stock Issued to Employees (APB No. 25) and related interpretations in accounting for its stock-based compensation plans. In 1995, the FASB issued Statement of Financial Accounting Standards (SFAS) No. 123, Accounting for Stock-Based Compensation which is effective for fiscal years beginning after December 15, 1995. Under SFAS No. 123, companies may elect to recognize stock-based compensation expense based on the fair value of the awards or continue to account for stock-based compensation under APB No. 25. The Company has elected to continue to apply the provisions of APB No. 25 (see Note 12).
The Company provides a director stock award plan to the directors of Health Power, Inc., Health Power HMO, Inc., and CompManagement, Inc. Under this plan, the directors elect percentages of their director fees to be paid in cash or in stock of Health Power, Inc. Payment of the director fees is made subsequent to attendance of the respective meeting. In 1997, the Company issued 10,167 shares of common stock with a market value of $32,452 to the directors. The Company records the expense in the year the stock is issued.
In June 1997, the FASB issued SFAS No. 130, Reporting Comprehensive Income. This statement establishes standards for reporting of comprehensive income and its components in a full set of general-purpose financial statements. Health Power, Inc. will be required to adopt this statement as of January 1, 1998. The impact of the statement on Health Power, Inc.'s financial statements is not expected to be material.
In June 1997, the FASB issued SFAS No. 131, Disclosure about Segments of an Enterprise and Related Information. This statement provides guidance for the way public enterprises report information about operating segments in annual financial statements and requires selected information about operating segments in interim financial reports. It also requires certain related disclosures about products and services, geographic areas and major customers. The segment and other information disclosure are required for the year ended December 31, 1998. The Company will adopt this standard beginning in 1998, and the segments currently presented will not change.
Certificates of deposit represent amounts held on deposit or pledged under the terms of the HMO's Certificate of Authority with the Ohio Department of Insurance and the Ohio Department of Human Services.
The Company's HMO went through a claims vendor conversion at the end of 1996 and into 1997 and due to this conversion the health care costs payable had to be adjusted during 1997.
During 1997 and 1996, the Company elected not to remit any capitation costs withheld and risk-sharing funds. The Company retained $51,097 and $177,105 of capitation costs withheld from commercial primary care providers in 1997 and 1996, respectively, and retained $361,719 and $825,254 of capitation costs withheld from Medicaid primary care providers in 1997 and 1996, respectively. Retained costs were netted against health care costs in the fourth quarter 1997 and 1996.
The Company's HMO maintains stop-loss insurance coverage for 85% of inpatient hospital costs in excess of $50,000 ($40,000 prior to April 1, 1996) per Medicaid member, per contract year. The HMO also maintains stop-loss insurance coverage for varying percentages (generally 80%) of inpatient hospital costs in excess of $75,000 per commercial member, per contract year, subject to certain limitations. These reinsurance contracts do not relieve the Company of its obligations to commercial members, and failure of reinsurers to honor their obligations could result in losses to the Company.
Stop-loss insurance premiums of $1,872,282, $1,848,274 and $1,500,957 are included in health care costs for 1997, 1996 and 1995, respectively. Stop-loss recoveries of $1,178,104, $1,897,806 and $1,248,179 are deducted from health care costs for 1997, 1996 and 1995, respectively.
CompManagement is party to employment agreements with certain employees. The agreements call for certain levels of commission expense to be paid by CompManagement to these individuals for selected contract revenue earned over a two-year period, which ended in July 1996. In 1997, CompManagement and CompManagement Health Systems amended the above employee agreements to include certain commissions to be paid to certain employees based on a percent of contract revenue recorded from the managed care administrative services provided to the OBWC and extended the agreement to December 31, 1999. Total commission expense paid in 1997 and 1996 in connection with these agreements was approximately $2,050,000 and $74,000, respectively.
The (provision) benefit for income taxes in 1997, 1996 and 1995 consists of the following:
The components of the net deferred tax asset as of December 31, 1997 and 1996 were as follows:
Due to the current consolidated profitable operations of the Company, management believes that it is more likely than not that the Company will generate sufficient future taxable income to realize the entire deferred tax asset, therefore, the valuation allowance established in 1996 has been reversed.
At December 31, 1997 the Company had the following net federal investment credits and tax credit carryforwards available:
In January 1998, the Company's HMO has entered into agreements to sell the contract rights for its Medicaid membership in the Youngstown (Mahoning County) and Cleveland (Cuyahoga County) Ohio area. The HMO has agreed to a sales price per Medicaid member of $305 and $325 for the Youngstown contract and Cleveland contract, respectively. These members represent 9% of total Medicaid members at December 31, 1997. In addition, it has entered into an agreement to transfer the contract right for its Butler County Medicaid membership in exchange for contract rights of the unaffiliated entity's Montgomery County Medicaid membership. These transactions are subject to certain conditions and approval of the Department and ODHS. Management expects to complete the transactions in the second quarter of 1998.
As of December 31, 1997, future minimum rental payments under the leases are as follows:
a. Health Care Providers: During 1997, 1996 and 1995, primary care and physician-related costs of $1,485,107, $2,854,159 and $2,127,691, respectively, resulted from transactions between the Company's HMO and affiliated providers. Such transactions resulted in receivables from related primary care providers of $31,570 and $150,026, as of December 31, 1997 and 1996.
Under the Plans, the Company is authorized to issue shares of common stock pursuant to "awards" granted in various forms, including incentive stock options (intended to qualify under Section 422 of the Internal Revenue Code of 1986, as amended), nonqualified stock options, and other similar stock-based awards to directors and eligible employees of the Company for up to 400,000 common shares of the Company. The Company granted stock options in 1997, 1996 and 1995 under the Plans in the form of incentive stock options and nonqualified stock options. In January 1997, the Company registered 35,000 shares of common stock for the 1996 directors' stock award plan. In February 1998, the Company registered 180,000 shares of common stock under an executive stock option plan.
b. Employee and Director Stock Options: The Company granted market price stock options in 1997, 1996 and 1995 to employees and directors. The stock options granted in 1997, 1996 and 1995 have terms of 10 years. The options granted to directors were vested immediately on the grant date. The options granted to employees vest at the rate of 25% per year on each of the first four anniversaries of the date of grant. Options granted to various executives vest 100% at the end of six years (subject to acceleration to a two-year period depending on the performance of the Company or at the discretion of the Compensation Committee). In accordance with APB 25, the Company has not recognized any compensation cost for these stock options granted in 1997, 1996 and 1995.
A summary of the status of the Company's stock options, and the changes during the years is presented below:
c. ProForma Net Income and Net Income per Common Share: Had the compensation cost for the Company's stock-based compensation plans been determined consistent with SFAS 123, the Company's net income and net income per common share for 1996 and 1997 would approximate the pro forma amounts below:
Each of the options has a fair value of $3.36 for purposes of SFAS 123. The fair value of each stock option is estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions: no dividend yield; a risk-free interest rate of 6.64%; an expected life of five years; and a volatility of 54.73%. Based on the
The Company maintains 401(k) plans for its employees meeting certain age requirements and completing six months to one year of employment. The Company may make discretionary contributions not to exceed 1% and 6% of the participant's compensation for the plan year for Health Power HMO and CompManagement, respectively. The Company's discretionary contributions to the 401(k) plans were approximately $56,308, $37,829 and $40,221 for 1997, 1996 and 1995, respectively.
On March 20, 1997, the Company's HMO was released from the December 5, 1996, order of supervision issued by the Department. The release occurred after affiliates of the HMO paid cash and transferred property in payment of, and pledged a certificate of deposit as security for, amounts due to the HMO, which actions satisfied the Department's supervision release requirements.
Payment of dividends by HMOs is subject to prior approval by the Department when the fair market value of the dividend or distribution, inclusive of any other dividends or distributions made within the preceding 12 months, is in excess of 10% of the HMO's total statutory net worth as of the preceding December 31. As a result of the HMO's failure to meet the statutory net worth requirements at December 31, 1997 and January 1, 1998, no dividends can be paid by the HMO to the Company.
In March 1994, the Company issued 915,060 shares of common stock in connection with an initial public offering.
In connection with the initial public offering, the Company issued warrants to its underwriters to purchase 30,000 shares of common stock at an exercise price of $13.20. None of the warrants has been exercised as of December 31, 1997. The warrants expire on March 3, 1999.
The Company operates in three business segments, HMO, workers' and unemployment compensation consulting services, and managed care services for the OBWC. Separate results of the consolidated Company's segments for the period ended December 31, 1997 are as follows:
There were no cash dividends paid by the Company's consolidated subsidiaries to the Company in 1997, 1996, or 1995.