NASHVILLE, Tenn., Nov. 6 /PRNewswire-FirstCall/ -- HCA today announced
financial and operating results for its third quarter ended September 30,
2008.
Third Quarter Summary:
-- Revenues increased 6.6 percent to $7.002 billion.
-- Net income totaled $86 million, compared to $300 million in the
third quarter of 2007 (gains on sales of facilities were
$50 million, compared to $316 million in the third quarter of 2007).
-- Adjusted EBITDA totaled $1.053 billion, compared to $983 million in
the third quarter of 2007.
-- Interest expense decreased to $497 million, from $560 million in the
third quarter of 2007.
-- Same facility admissions increased 0.4 percent, and same facility
equivalent admissions increased 1.9 percent.
-- Same facility revenue per equivalent admission increased
5.7 percent.
-- Same facility inpatient surgeries declined 1.2 percent, while same
facility outpatient surgical cases increased 0.8 percent.
Revenues for the third quarter totaled $7.002 billion, compared to $6.569
billion in the third quarter of 2007. Adjusted EBITDA in the quarter totaled
$1.053 billion, compared to $983 million in the third quarter of 2007. A
table describing adjusted EBITDA and reconciling net income to adjusted EBITDA
for these periods is included in this release. Net income for the third
quarter of 2008 totaled $86 million, compared to $300 million in the third
quarter of 2007. Results for the third quarter of 2008 include gains on sales
of facilities of $50 million compared to $316 million in the third quarter of
2007. Results for the third quarter of 2008 also include an impairment of
long-lived assets of $44 million.
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The provision for doubtful accounts increased to $819 million, or 11.7
percent of revenues, in the third quarter of 2008 from $774 million, or 11.8
percent of revenues, in the third quarter of 2007. Same facility uninsured
admissions increased 0.9 percent in the third quarter of 2008 compared to the
third quarter of 2007.
Interest expense decreased to $497 million in the third quarter of 2008,
compared to $560 million in the same period of 2007, due primarily to a
reduction in the average effective interest rate on total debt.
Same facility admissions increased 0.4 percent and same facility
equivalent admissions increased 1.9 percent in the third quarter of 2008
compared to the third quarter of 2007. Same facility inpatient surgeries
declined 1.2 percent and same facility outpatient surgeries increased 0.8
percent in the third quarter of 2008 compared to the third quarter of 2007.
Same facility revenue per equivalent admission increased 5.7 percent in the
third quarter of 2008 compared to the third quarter of 2007. Same facility
charity and uninsured discounts totaled $917 million in the third quarter of
2008 compared to $793 million in the third quarter of 2007.
Revenues for the nine months ended September 30, 2008 totaled $21.109
billion compared to $19.975 billion for the same nine months of 2007.
Adjusted EBITDA for the nine month period in 2008 was $3.337 billion compared
to $3.439 billion for the same nine months of 2007. HCA's net income totaled
$397 million during the first nine months of 2008 compared to $596 million for
the same nine month period of 2007. Results for the nine months ended
September 30, 2008 include gains on sales of facilities of $90 million,
compared to $332 million of gains on sales of facilities for the nine months
ended September 30, 2007, and impairments on long-lived assets of $53 million
in the nine month period in 2008 compared to a $24 million impairment of long-
lived assets in the same nine month period of 2007.
As of September 30, 2008 HCA's balance sheet reflected cash and cash
equivalents of $444 million, total debt of $27.041 billion, and total assets
of $23.793 billion. During the third quarter, capital expenditures totaled
$398 million.
As of September 30, 2008, HCA operated 166 hospitals and 107 freestanding
surgery centers, including eight hospitals and eight freestanding surgery
centers operated through equity method joint ventures.
Earnings Conference Call
HCA will host a conference call for investors at 9:00 a.m. Central
Standard Time today. All interested investors are invited to access a live
audio broadcast of the call via webcast. The broadcast also will be available
on a replay basis beginning this afternoon. The webcast can be accessed at:
http://www.videonewswire.com/event.asp?id=52343
or through the Company's Investor Relations web page,
www.hcahealthcare.com.
FORWARD LOOKING STATEMENTS
This press release contains forward-looking statements based on current
management expectations. Those forward-looking statements include all
statements other than those made solely with respect to historical fact.
Numerous risks, uncertainties and other factors may cause actual results to
differ materially from those expressed in any forward-looking statements.
These factors include, but are not limited to, (1) the ability to recognize
the benefits of the recapitalization; (2) the impact of the substantial
indebtedness incurred to finance the recapitalization; (3) increases,
particularly in the current economic downturn, in the amount and risk of
collectibility of uninsured accounts, and deductibles and copayment amounts
for insured accounts; (4) the ability to achieve operating and financial
targets, and attain expected levels of patient volumes and control the costs
of providing services; (5) possible changes in the Medicare, Medicaid and
other state programs, including Medicaid supplemental payments pursuant to
upper payment limit programs, that may impact reimbursements to health care
providers and insurers; (6) the highly competitive nature of the health care
business; (7) changes in revenue mix and the ability to enter into and renew
managed care provider agreements on acceptable terms; (8) the efforts of
insurers, health care providers and others to contain health care costs; (9)
the outcome of our continuing efforts to monitor, maintain and comply with
appropriate laws, regulations, policies and procedures and our corporate
integrity agreement with the government; (10) changes in federal, state or
local laws or regulations affecting the health care industry; (11) increases
in wages and the ability to attract and retain qualified management and
personnel, including affiliated physicians, nurses and medical and technical
support personnel; (12) the possible enactment of federal or state health care
reform; (13) the availability and terms of capital to fund the expansion of
our business and improvements to our existing facilities; (14) changes in
accounting practices; (15) changes in general economic conditions nationally
and regionally in our markets; (16) future divestitures which may result in
charges; (17) changes in business strategy or development plans; (18) the
outcome of pending and any future tax audits, appeals and litigation
associated with our tax positions; (19) delays in receiving payment for
services provided; (20) potential liabilities and other claims that may be
asserted against us; (21) other risk factors described in our Annual Report
on Form 10-K and other filings with the Securities and Exchange Commission.
Many of the factors that will determine our future results are beyond our
ability to control or predict. In light of the significant uncertainties
inherent in the forward-looking statements contained herein, readers should
not place undue reliance on forward-looking statements, which reflect
management's views only as of the date hereof. We undertake no obligation to
revise or update any forward-looking statements, or to make any other forward-
looking statements, whether as a result of new information, future events or
otherwise.
All references to "Company" and "HCA" as used throughout this document
refer to HCA Inc. and its affiliates.
HCA Inc.
Consolidated Income Statements
Third Quarter
(Dollars in millions)
2008 2007
Amount Ratio Amount Ratio
Revenues $7,002 100.0% $6,569 100.0%
Salaries and benefits 2,883 41.2 2,701 41.1
Supplies 1,141 16.3 1,085 16.5
Other operating expenses 1,146 16.4 1,076 16.4
Provision for doubtful accounts 819 11.7 774 11.8
Losses on investments 1 - 1 -
Equity in earnings of affiliates (41) (0.6) (51) (0.8)
Depreciation and amortization 350 5.0 356 5.5
Interest expense 497 7.1 560 8.5
Gains on sales of facilities (50) (0.7) (316) (4.8)
Impairment of long-lived assets 44 0.6 - -
6,790 97.0 6,186 94.2
Income before minority interests
and income taxes 212 3.0 383 5.8
Minority interests in earnings of
consolidated entities 49 0.7 44 0.6
Income before income taxes 163 2.3 339 5.2
Provision for income taxes 77 1.1 39 0.6
Net income $86 1.2 $300 4.6
HCA Inc.
Consolidated Income Statements
For the Nine Months Ended September 30, 2008 and 2007
(Dollars in millions)
2008 2007
Amount Ratio Amount Ratio
Revenues $21,109 100.0% $19,975 100.0%
Salaries and benefits 8,563 40.6 8,002 40.1
Supplies 3,463 16.4 3,284 16.4
Other operating expenses 3,396 16.1 3,194 16.0
Provision for doubtful accounts 2,520 11.9 2,218 11.1
Gains on investments - - (6) -
Equity in earnings of affiliates (170) (0.8) (156) (0.8)
Depreciation and amortization 1,062 5.0 1,072 5.4
Interest expense 1,521 7.2 1,674 8.4
Gains on sales of facilities (90) (0.4) (332) (1.7)
Impairment of long-lived assets 53 0.3 24 0.1
20,318 96.3 18,974 95.0
Income before minority interests
and income taxes 791 3.7 1,001 5.0
Minority interests in earnings
of consolidated entities 161 0.7 160 0.8
Income before income taxes 630 3.0 841 4.2
Provision for income taxes 233 1.1 245 1.2
Net income $397 1.9 $596 3.0
HCA Inc.
Supplemental Operating Results Summary
(Dollars in millions)
For the Nine Months
Third Quarter Ended September 30,
2008 2007 2008 2007
Revenues $7,002 $6,569 $21,109 $19,975
Net income $86 $300 $397 $596
Gains on sales of facilities
(net of tax) (29) (193) (53) (203)
Impairment of long-lived assets
(net of tax) 28 - 34 15
Net income, excluding gains on sales
of facilities and impairment of
long-lived assets 85 107 378 408
Depreciation and amortization 350 356 1,062 1,072
Interest expense 497 560 1,521 1,674
Minority interests in earnings of
consolidated entities 49 44 161 160
Provision for income taxes 72 (84) 215 125
Adjusted EBITDA (a) $1,053 $983 $3,337 $3,439
(a) Net income, excluding gains on sales of facilities and impairment of
long-lived assets and adjusted EBITDA are non-GAAP financial
measures. We believe that net income, excluding gains on sales of
facilities and impairment of long-lived assets and adjusted EBITDA
are important measures that supplement discussions and analysis of
our results of operations. We believe that it is useful to investors
to provide disclosures of our results of operations on the same basis
as that used by management. Management relies upon net income,
excluding gains on sales of facilities and impairment of long-lived
assets and adjusted EBITDA as the primary measures to review and
assess operating performance of its hospital facilities and their
management teams.
Management and investors review both the overall performance
(including; net income, excluding gains on sales of facilities and
impairment of long-lived assets and GAAP net income) and operating
performance (adjusted EBITDA) of our health care facilities.
Adjusted EBITDA and the adjusted EBITDA margin (adjusted EBITDA
divided by revenues) are utilized by management and investors to
compare our current operating results with the corresponding periods
during the previous year and to compare our operating results with
other companies in the health care industry. It is reasonable to
expect that gains on sales of facilities and impairments of
long-lived assets will occur in future periods, but the amounts
recognized can vary significantly from quarter to quarter, do not
directly relate to the ongoing operations of our health care
facilities and complicate quarterly comparisons of our results of
operations and operations comparisons with other health care
companies.
Net income, excluding gains on sales of facilities and impairment of
long-lived assets and adjusted EBITDA are not measures of financial
performance under accounting principles generally accepted in the
United States, and should not be considered as alternatives to net
income as a measure of operating performance or cash flows from
operating, investing and financing activities as a measure of
liquidity. Because net income, excluding gains on sales of
facilities and impairment of long-lived assets and adjusted EBITDA
are not measurements determined in accordance with generally accepted
accounting principles and are susceptible to varying calculations,
net income, excluding gains on sales of facilities and impairment of
long-lived assets and adjusted EBITDA, as presented, may not be
comparable to other similarly titled measures presented by other
companies.
HCA Inc.
Condensed Consolidated Balance Sheets
(Dollars in millions)
September 30, June 30, December 31,
2008 2008 2007
ASSETS
Current assets:
Cash and cash equivalents $444 $368 $393
Accounts receivable, less allowance
for doubtful accounts 3,699 3,922 3,895
Inventories 716 715 710
Deferred income taxes 722 727 592
Other 517 557 615
Total current assets 6,098 6,289 6,205
Property and equipment, at cost 23,406 23,145 22,579
Accumulated depreciation (11,968) (11,709) (11,137)
11,438 11,436 11,442
Investments of insurance subsidiary 1,483 1,526 1,669
Investments in and advances to affiliates 824 833 688
Goodwill 2,601 2,630 2,629
Deferred loan costs 478 498 539
Other 871 858 853
$23,793 $24,070 $24,025
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable $1,191 $1,214 $1,370
Accrued salaries 849 785 780
Other accrued expenses 1,235 1,064 1,391
Long-term debt due within one year 368 341 308
Total current liabilities 3,643 3,404 3,849
Long-term debt 26,673 27,274 27,000
Professional liability risks 1,114 1,160 1,233
Deferred taxes and other liabilities 1,375 1,295 1,379
Minority interests in equity of
consolidated entities 969 959 938
Equity securities with contingent
redemption rights 163 163 164
Stockholders' deficit (10,144) (10,185) (10,538)
$23,793 $24,070 $24,025
HCA Inc.
Consolidated Statements of Cash Flows
For the Nine Months Ended September 30, 2008 and 2007
(Dollars in millions)
2008 2007
Cash flows from operating activities:
Net income $397 $596
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for doubtful accounts 2,520 2,218
Depreciation and amortization 1,062 1,072
Income taxes (379) (103)
Gains on sales of facilities (90) (332)
Impairment of long-lived assets 53 24
Change in operating assets and liabilities (2,420) (2,598)
Share-based compensation 25 17
Change in minority interests 10 33
Other 86 58
Net cash provided by operating activities 1,264 985
Cash flows from investing activities:
Purchase of property and equipment (1,115) (997)
Acquisition of hospitals and health care
entities (76) (21)
Disposition of hospitals and health care
entities 185 484
Change in investments 30 156
Other 4 13
Net cash used in investing activities (972) (365)
Cash flows from financing activities:
Net change in revolving bank credit facility 530 (370)
Repayment of long-term debt (775) (623)
Issuance of common stock - 100
Other 4 (14)
Net cash used in financing activities (241) (907)
Change in cash and cash equivalents 51 (287)
Cash and cash equivalents at beginning of period 393 634
Cash and cash equivalents at end of period $444 $347
Interest payments $1,380 $1,522
Income tax payments, net of refunds $612 $348
HCA Inc.
Operating Statistics
For the Nine Months
Third Quarter Ended September 30,
2008 2007 2008 2007
Consolidating Hospitals:
Number of Hospitals 158 162 158 162
Weighted Average Licensed
Beds 38,390 38,990 38,405 39,159
Licensed Beds at End of
Period 38,386 38,939 38,386 38,939
Reported:
Admissions 377,400 381,700 1,161,700 1,168,700
% Change -1.1% -0.6%
Equivalent Admissions 587,400 583,400 1,776,300 1,767,100
% Change 0.7% 0.5%
Revenue per Equivalent
Admission $11,922 $11,260 $11,884 $11,304
% Change 5.9% 5.1%
Inpatient Revenue per
Admission $11,224 $10,476 $11,203 $10,585
% Change 7.1% 5.8%
Patient Days 1,833,700 1,880,800 5,745,900 5,801,800
Equivalent Patient Days 2,854,700 2,875,200 8,785,600 8,772,300
Inpatient Surgery Cases 121,400 128,300 371,800 390,000
% Change -5.4% -4.7%
Outpatient Surgery Cases 196,500 196,400 595,500 604,800
% Change 0.1% -1.5%
Emergency Room Visits 1,303,100 1,273,900 3,969,500 3,827,800
% Change 2.3% 3.7%
Outpatient Revenues as a
Percentage of Patient
Revenues 38.5% 38.0% 37.3% 36.9%
Average Length of Stay 4.9 4.9 4.9 5.0
Occupancy 51.9% 52.4% 54.6% 54.3%
Equivalent Occupancy 80.8% 80.1% 83.5% 82.1%
Same Facility:
Admissions 376,700 375,100 1,156,400 1,146,600
% Change 0.4% 0.9%
Equivalent Admissions 585,000 573,900 1,764,700 1,734,800
% Change 1.9% 1.7%
Revenue per Equivalent
Admission $11,882 $11,239 $11,856 $11,272
% Change 5.7% 5.2%
Inpatient Revenue per
Admission $11,226 $10,495 $11,203 $10,585
% Change 7.0% 5.8%
Inpatient Surgery Cases 122,600 124,100 369,700 372,200
% Change -1.2% -0.7%
Outpatient Surgery Cases 195,500 193,900 589,400 593,500
% Change 0.8% -0.7%
Emergency Room Visits 1,295,100 1,258,100 3,947,300 3,768,200
% Change 2.9% 4.8%
Number of Consolidating and
Nonconsolidating
(Equity Joint Ventures)
Hospitals:
Consolidating 158 162 158 162
Nonconsolidating (Equity
Joint Ventures) 8 8 8 8
Total Number of Hospitals 166 170 166 170
