The Company has a $400 million unsecured non-amortizing revolving credit agreement, which expires on July 8, 2002. The agreement includes a $50 million sublimit for letters of credit. The interest rate on borrowings is determined at the Company’s option at the prime rate, certificate of deposit rate plus .375% to .625%, Euro-dollar plus .25% to .50% or a money market rate. A facility fee ranging from .125% to .375% is required on the total commitment. The margins over the certificate of deposit, the Euro-dollar rates and the facility fee are based upon the Company’s leverage ratio. At December 31, 1999 the applicable margins over the certificate of deposit and the Euro-dollar rate were .55% and .425%, respectively, and the commitment fee was .20 %. There are no compensating balance requirements. At December 31, 1999, the Company had $222 million of unused borrowing capacity available under the revolving credit agreement.

    The Company also has a $100 million commercial paper credit facility. A large portion of the Company’s acute care patient accounts receivable are pledged as collateral to secure this commercial paper program. A commitment fee of .40% is required on the used portion and .20% on the unused portion of the commitment. This annually renewable program, which began in November 1993, is scheduled to expire or be renewed on October 30th of each year. Outstanding amounts of commercial paper which can be refinanced through available borrowings under the Company’s revolving credit agreement are classified as long-term. As of December 31, 1999, the Company had $10 million unused borrowing capacity under the terms of the commercial paper facility.

    The average amounts outstanding during 1999, 1998 and 1997 under the revolving credit and demand notes and commercial paper program were $246.1 million, $234.2 million and $100.3 million, respectively, with corresponding effective interest rates of 6.2%, 6.4%, and 6.8% including commitment and facility fees. The maximum amounts outstanding at any month-end were, $263.9 million in 1999, $289.6 million in 1998 and $124.2 million in 1997.

    As of December 31, 1999 and 1998, the Company had two interest rate swap agreements that fixed the rate of interest on a notional principal amount of $50 million for a period of three years. These interest rate swaps ex-pired on January 4, 2000. The average fixed rate obtained through these interest rate swaps was 6.20% including the Company’s current borrowing spread of .425%. The Company is also a party to three forward starting interest rate swaps to fix the rate of interest on a total notional principal amount of $75 million. The starting date on the interest rate swaps is August, 2000 and they mature in August, 2010. The average fixed rate of the three forward starting interest rate swaps, including the Company’s current borrowing spread of .425%, is 7.2%. The effective interest rate on the Company’s revolving credit, demand notes and commercial paper program, including the interest rate swap expense incurred on existing and now expired interest rate swaps, was 6.2%, 6.4%, and 6.8% during 1999, 1998 and 1997, respectively. Additional interest expense recorded as a result of the Company’s hedging activity was $202,000, $75,000 and $ 0 in 1999, 1998 and 1997, respectively. The Company is exposed to credit loss in the event of non-performance by the counterparty to the interest rate swap agreements. All of the counter parties are creditworthy financial institutions rated AA or better by Moody’s Investor Service and the Company does not anticipate non-performance. The estimated fair value of the interest rate swap obligations at December 31, 1999 was approximately $2.9 million.

    Covenants relating to long-term debt require maintenance of a minimum net worth, specified debt to total capital and fixed charge coverage ratios. The Company is in compliance with all required covenants as of December 31, 1999.

    The fair value of the Company’s long-term debt at December 31, 1999 and 1998 was approximately $420.5 million and $429.0 million, respectively.