SEC Filings

10-12G/A
AMSURG CORP filed this Form 10-12G/A on 05/21/1997
Entire Document
 
<PAGE>   23
 
and cost savings and thus operate these contracts in a manner that will produce
profitability for AHC has not yet been established, because AHC's comprehensive
healthcare management contracts for people with diabetes are believed to be the
first of this type in the industry and have only been recently implemented or
are in the process of being implemented. During fiscal 1996, 13 DTCA contracts
for hospital services were discontinued or not renewed, and during the six
months ended February 28, 1997, three DTCA contracts were discontinued or not
renewed. Certain hospitals faced with pressures to make immediate cost
reductions have decided to eliminate DTCA's treatment programs. While AHC
believes this business is stabilizing, the general uncertainties associated with
changes taking place in the healthcare industry and DTCA's client hospitals'
reactions to the changes in the industry may continue to adversely affect
revenues and contract retention in future periods. See "BUSINESS OF AHC AFTER
DISTRIBUTION."
 
     Other risks associated with the business of AHC include regulatory risks
for the healthcare industry as a whole, efforts by hospitals and third party
payors to reduce costs, unusual and unforeseen patterns of healthcare
utilizations by individuals with diabetes in the managed care organizations with
which DTCA has executed an agreement, the ability or inability of such managed
care organizations to maintain the covered lives in the plans serviced by DTCA
and the ability or inability of DTCA to attract, retain and effectively manage
the employees required to implement the agreements with managed care
organizations.
 
     Following the Distribution, for a period of two years, Thomas G. Cigarran,
the Chairman and Chief Executive Officer of AHC and Henry D. Herr, the Chief
Financial Officer and a director of AHC, will provide advisory services to
AmSurg. The services, while limited in scope, may impact the amount of time
Messrs. Cigarran and Herr are able to devote to the business of AHC during this
period. See "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS -- Advisory
Agreements."
 
     EFFECT OF THE DISTRIBUTION ON THE AHC COMMON STOCK.  After the
Distribution, the AHC Common Stock will continue to be traded on the Nasdaq
National Market. As a result of the Distribution, AHC will no longer own any
AmSurg Common Stock and accordingly its balance sheet and income statement will
no longer reflect the assets and operation of AmSurg. AHC will be entirely
dependent upon the operation of DTCA and AOCC for its earnings and, as a result,
the trading prices of AHC Common Stock are expected to be lower than the trading
prices of AHC Common Stock immediately prior to the Distribution and such
trading prices may also be more volatile than they were prior to the
Distribution. The combined trading prices of AHC Common Stock and Class A Common
Stock after the Distribution may be less than, equal to or greater than the
trading prices of AHC Common Stock prior to the Distribution.
 
   
     CERTAIN FEDERAL INCOME TAX CONSIDERATIONS.  AHC has conditioned the
Distribution on the receipt of a ruling from the IRS to the effect that, among
other things, the Distribution will be substantially tax-free under Section 355
of the Code. Approximately 1.5% of the shares of Class B Common Stock
distributed in the Distribution will be subject to federal income taxation. In
addition, cash received in lieu of fractional share interests in the Class B
Common Stock will generally be taxable to recipients. The continuing validity of
the IRS ruling will be subject to certain factual representations and
assumptions. If such factual representations and assumptions were incorrect in a
material respect, the ruling would be jeopardized. AHC is not aware of any facts
or circumstances which should cause the representations and assumptions to be
untrue. If the Distribution were taxable, then (i) corporate level income taxes
would be payable by the consolidated group of which AHC is the common parent,
based upon the amount by which the fair market value of the Class B Common Stock
distributed in the Distribution exceeds AHC's basis therein and (ii) each holder
of AHC Common Stock who received shares of Class B Common Stock in the
Distribution would be treated as if the stockholder received a taxable
distribution, taxed as a dividend to the extent of such stockholder's pro rata
share of AHC's current and accumulated earnings and profits. Each AHC
stockholder should consult his or her own tax advisor with respect to the
specific tax consequences of the Distribution to such stockholder, including the
effect of state, local and foreign tax laws. See "THE DISTRIBUTION -- Certain
Federal Income Tax Consequences."
    
 
     PROPOSED TREASURY REGULATION REGARDING TAX DEDUCTION FOR AMORTIZATION OF
GOODWILL.  Effective on August 10, 1993, Section 197 of the Code was enacted to
allow goodwill and other intangible assets purchased after that date to be
amortized as a tax deduction. Previously, no tax deduction was allowed for
purchases of
 
                                       16