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The Honolulu Advertiser
Posted on: Monday, June 10, 2002

Queen's Health Systems retains Moody's A1 rating

Advertiser Staff

Moody's Investor Services has affirmed its outlook for the Queen's Health Systems A1 rating and stable outlook on $305 million of debt.

Moody's cited Queen's recent management changes, solid balance sheet, large endowment and valuable real estate holdings.

"We believe significant changes at the organization, including board and management changes and the divestiture of the organizations managed care business, has shifted the momentum ... and has resulted in improvement in financial performance," Moody's said.

Queen's Health System, the parent company of The Queen's Medical Center, has improved its operating income for the nine months ended March 31 to $16.4 million, compared with an operating loss of $4.5 million for the same period in 2001.

Moody's said all operating divisions of Queen's have shown improvement. The most significant have been at the medical center which represents 78 percent of the company's total revenue.

"Over the past two years, we have strategically implemented changes and refocused our efforts to concentrate on patient care and bringing about financial discipline," said Gary Okamoto, president and chief executive officer of The Queen's Health Systems.

Queen's has about $340 million in unrestricted cash and investments. In addition, it has reduced its debt by about $12 million to $339 million. Moody's said Queen's management is evaluating capital spending plans that may require more borrowing or greater use of internal financial resources.