In addition to these mergers and acquisitions, in fiscal year 1995 the Company's government contracts subsidiary was awarded a large government managed care contract in Washington and Oregon to provide services to approximately 227,000 CHAMPUS-eligible beneficiaries (the "Washington/Oregon Contract"), which commenced health care delivery in March 1995 and was awarded a similar contract in April 1995 in Oklahoma, Arkansas and parts of Louisiana and Texas to provide services to approximately 590,000 CHAMPUS-eligible beneficiaries (the "Region 6 Contract"), with health care delivery scheduled to commence in November 1995.
year 1993 revenues of $2,006.7 million by 17.8%, primarily as a result of increased commercial enrollment and specialty services revenues, including revenues generated from CalComp which was acquired in August 1993.
The ratio of SG&A expenses to total revenues (the "SG&A ratio") increased from 11.5% in fiscal year 1993 to 12.3% in fiscal year 1994 to 12.5% in fiscal year 1995. This increase was due primarily to the expiration of the CRI Contract which resulted in the cessation of contract revenues effective January 31, 1994 while various administrative costs related to claims processing and other activities continued during the wind-down period.
Interest expense increased in fiscal year 1994 from fiscal year 1993 due primarily to the issuance of $125 million of Senior Notes in June 1993. Interest expense decreased in fiscal year 1995 as a result of the prepayment of $11.4 million in bank debt by TDMC in November 1994.
In connection with the mergers of CareFlorida, TDMC and Intergroup, the Company recorded a charge for integration, restructuring and pooling costs of $124.8 million.
Activity (including Certain Costs Incurred in a Restructuring)" that are directly related to the mergers. Management of the Company anticipates the integration and restructuring of the combined entities will be substantially complete by the end of the fourth quarter of fiscal year 1996.
Full implementation of the restructuring plan will result in the termination of 638 employees (291 employees had been terminated as of June 30, 1995) by eliminating and consolidating duplicate administrative, information systems and sales functions.
The tax provision rate for fiscal year 1994 of 39.1% was 2.5% lower than for fiscal year 1993, because of acquisition expenditures in the earlier year which were not deductible for income tax purposes, and the acquisition in fiscal year 1994 of CalComp, which is not subject to state income or franchise taxes. The tax provision rate dropped further in fiscal year 1995 to 34.2% because of the combined effect of the acquisition and restructuring charge of $124.8 million and the resulting increased proportion of tax-exempt interest income as a percentage of pre-tax income. The rate was further reduced by the acquisition of Intergroup, which is not subject to state franchise or income taxes, and the elimination of a duplicate tax for undistributed income from Intergroup to its former parent company. These rate reductions were mitigated by the effects of non-deductible acquisition expenses.
The Company operates in a single industry segment, managed health care. The following table presents financial information reflecting the Company's operations by the three primary lines of business: (i) commercial operations; (ii) government contracts; and (iii) specialty services. This information is provided to facilitate a more meaningful discussion of the Company's results of operations. As patient services (the operations of the Company's two hospitals) represents less than 2.5% of the Company's total revenues for all lines of business, a detailed discussion is not presented.
The government contracts ratio improved in each of the last two fiscal years. The improvement from fiscal year 1993 to fiscal year 1994 was due primarily to lower health care costs under the CRI Contract attributable to effective managed care techniques, shifting of claims processing from an outside vendor to an internal function and increased change order revenue. The continued improvement in fiscal year 1995 was due to the continued phase-out of the CRI Contract. The government contracts ratio is expected to increase in fiscal year 1996 as a result of a full year of delivery of health care services under the Washington/Oregon Contract and delivery of health care services under the Region 6 Contract which are scheduled to commence in November 1995 and the TRICARE contract which are scheduled to comence in April 1996.
The following table sets forth CalComp's underwriting experience as measured by its combined ratio and its components (computed on a generally accepted accounting principles basis) for the fiscal year ended June 30, 1995 and the eleven months from August 1, 1993 (the date of acquisition) to June 30, 1994:
The following table presents unaudited consolidated operating results for the last eight fiscal quarters. The Company believes that all necessary adjustments, consisting only of normal recurring adjustments, have been included in the amounts stated below to present fairly the following quarterly results when read in conjunction with the Company's consolidated financial statements included elsewhere herein. Results of operations for any particular quarter are not necessarily indicative of results of operations for a full fiscal year.
Cash provided by operating activities was $201.9 million for the year ended June 30, 1995 as compared to $144.1 million for the prior year. The increase was due primarily to the Company's profitable operations, especially those of CalComp. The Company's cash and investments increased from $765.6 million at June 30, 1994 to $795.3 million at June 30, 1995. The Company invests its cash in investment grade securities.
The total cash portion of the purchase price for acquisitions completed in fiscal year 1995 described in Note 1 of the Notes to the Consolidated Financial Statements is $61.1 million, $53.2 million of which has been paid to date with the remainder to be paid in November 1995.
The Company's regulated subsidiaries are required to maintain minimum tangible net equity or capital and surplus. As of June 30, 1995, restricted net assets of the subsidiaries totaled approximately $34.3 million. Certain subsidiaries must also maintain current ratios of 1:1. During fiscal year 1995, the Company contributed $35 million to CalComp to meet rating agency requirements to maintain an A- rating and to support future premium growth. The Company also contributed $14 million to its United Kingdom subsidiary for required capital and surplus to support its operations. As the Company's businesses continue to grow, the Company expects to contribute additional cash to certain subsidiaries to support premium and revenue growth. In addition, the Company's regulated subsidiaries are required to keep securities on deposit in various states where they are licensed. At June 30, 1995, approximately $364.9 million in securities were restricted to satisfy various state regulatory and licensing requirements.
In December 1994, the Company established a $300 million unsecured revolving credit agreement with Citicorp USA, Inc. as Administrative Agent (the "Credit Agreement") for the lenders parties thereto. As of August 31, 1995, the Company has drawn $60 million under the Credit Agreement. In June 1993, the Company issued $125 million of Senior Notes due June 1, 2003, which bear interest at 7 3/4% due semi-annually. See Notes 7 and 12 to the Consolidated Financial Statements for a more detailed description of the TROL financing, the Credit Agreement and the Senior Notes.
Management of the Company continually evaluates opportunities to expand the Company's commercial, government contracts and specialty services operations. The Company's expansion options may include additional acquisitions and internal development of new products and programs.