2014

HCA Reports First Quarter 2009 Results

NASHVILLE, Tenn., April 27 /PRNewswire/ -- HCA Inc. today announced financial and operating results for its first quarter ended March 31, 2009.

(Logo: http://www.newscom.com/cgi-bin/prnh/20050825/CLTH069LOGO )

First Quarter Summary:

  • Revenues increased 4.3 percent to $7.431 billion.
  • Net income attributable to HCA Inc. totaled $360 million, compared to $170 million in the prior year's first quarter.
  • Adjusted EBITDA totaled $1.457 billion, compared to $1.180 billion in the first quarter of 2008.
  • Provision for doubtful accounts decreased to $807 million, from $888 million in the prior year.
  • Interest expense decreased to $471 million, from $530 million in the prior year's first quarter.
  • Same facility equivalent admissions increased 1.9 percent, and same facility admissions declined 0.9 percent in the first quarter compared to the first quarter of 2008.
  • Same facility revenue per equivalent admission increased 2.7 percent.
  • Total surgeries on a same facility basis declined 0.6 percent from the previous year's first quarter.

Revenues for the first quarter totaled $7.431 billion, compared to $7.127 billion in the first quarter of 2008. Adjusted EBITDA in the quarter totaled $1.457 billion, compared to $1.180 billion in the previous year's first quarter. A table describing adjusted EBITDA and reconciling net income attributable to HCA Inc. to adjusted EBITDA for these periods is included in this release. Net income attributable to HCA Inc. for the first quarter of 2009 totaled $360 million, compared to $170 million in the prior year's first quarter. Results for the first quarter of 2009 include losses on sales of facilities of $5 million compared to gains of $51 million in the first quarter of 2008. First quarter 2009 results also include a $9 million charge for impairment of long-lived assets.

"We are pleased with the results of our first quarter. We believe these results reflect effective cost management, focused growth strategies, and a continued emphasis on our outcomes-driven patient care initiatives," said Richard M. Bracken, HCA's president and chief executive officer.

The provision for doubtful accounts decreased to $807 million, or 10.9 percent of revenues, in the first quarter of 2009 from $888 million, or 12.5 percent of revenues, in the first quarter of 2008, primarily due to a small decline in uninsured admissions and increased levels of charity care and uninsured discounts which reduces the Company's reported revenues. Same facility uninsured admissions declined 0.1 percent in the first quarter of 2009 compared to the prior year's first quarter. Same facility charity care and uninsured discounts totaled $1.082 billion in the first quarter of 2009 compared to $780 million in the first quarter of 2008.

During the first quarter of 2009, salaries and benefits, supply expense and other operating expenses totaled $5.235 billion compared to $5.126 billion in the first quarter of 2008, a decline of 1.4 percent, as a percent of revenues.

Interest expense decreased to $471 million in the first quarter of 2009, compared to $530 million in the same period of 2008, due primarily to a reduction in the average interest rate on our outstanding debt.

Same facility admissions declined 0.9 percent and same facility equivalent admissions increased 1.9 percent in the first quarter of 2009 compared to the prior year's first quarter. Same facility inpatient surgeries declined 0.5 percent and outpatient surgeries declined 0.7 percent in the first quarter. Same facility revenue per equivalent admission increased 2.7 percent in the first quarter of 2009 compared to the first quarter of 2008.

The Company has implemented an approach for determining emergency department (ED) evaluation and management (E/M) assignments based on the American College of Emergency Physicians (ACEP) model. This model uses interventions, such as cardiac monitoring, to indicate the acuity of the patient and the resources involved in the evaluation and management of the patient. These E/M assignments are utilized in preparing the patient bill. HCA converted to this system, which is used by many hospitals, because it is simpler and thus provides for more consistent emergency department E/M assignments than the "point" system previously used. The Company estimates adjusted EBITDA increased by approximately $75 million to $100 million in the first quarter of 2009 as a result of the ED evaluation and management change. While management believes there will be a continued future benefit from this change, the impact in future quarters may vary.

As of March 31, 2009, HCA's balance sheet reflected cash and cash equivalents of $356 million, total debt of $26.567 billion, and total assets of $24.284 billion. During the first quarter of 2009, capital expenditures totaled $337 million.

As of March 31, 2009, HCA operated 163 hospitals and 105 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 Daylight 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=57951 or through the Company's Investor Relations web page, www.hcahealthcare.com.

Cautionary Statement about Preliminary Results and Other Forward-Looking Information

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 and the ability to refinance such indebtedness on acceptable terms, (3) increases, particularly in the current economic downturn, in the amount and risk of collectability 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 ("UPL") 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, including potential declines in the population covered under managed care agreements due to the current economic downturn 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, (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) delays in receiving payments for services provided, (19) the outcome of pending and any future tax audits, appeals and litigation associated with our tax positions, (20) potential liabilities and other claims that may be asserted against us, and (21) other risk factors described in our annual report on Form 10-K for the year ended December 31, 2008 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.

                                     HCA Inc.
                     Condensed Consolidated Income Statements
                                   First Quarter
                               (Dollars in millions)

                                              2009               2008
                                              ----               ----
                                        Amount    Ratio    Amount    Ratio
                                        ------    -----    ------    -----

    Revenues                            $7,431    100.0%   $7,127    100.0%

    Salaries and benefits                2,923     39.3     2,839     39.8
    Supplies                             1,210     16.3     1,173     16.5
    Other operating expenses             1,102     14.8     1,114     15.5
    Provision for doubtful accounts        807     10.9       888     12.5
    Equity in earnings of affiliates       (68)    (0.9)      (67)    (0.9)
    Depreciation and amortization          353      4.8       357      5.1
    Interest expense                       471      6.3       530      7.4
    Losses (gains) on sales of
     facilities                              5      0.1       (51)    (0.7)
    Impairment of long-lived assets          9      0.1         -        -
                                           ---      ---       ---      ---

                                         6,812     91.7     6,783     95.2
                                         -----     ----     -----     ----

    Income before income taxes             619      8.3       344      4.8

    Provision for income taxes             187      2.5       119      1.6
                                           ---      ---       ---      ---

    Net income                             432      5.8       225      3.2

    Net income attributable to
     noncontrolling interests               72      1.0        55      0.8
                                            --      ---        --      ---

    Net income attributable to HCA Inc  $  360      4.8    $  170      2.4
                                        ======      ===    ======      ===



                                     HCA Inc.
                      Supplemental Operating Results Summary
                               (Dollars in millions)

                                                          First Quarter
                                                          -------------
                                                         2009       2008
                                                         ----       ----

    Revenues                                            $7,431     $7,127

    Net income attributable to HCA Inc.                  $ 360       $170
       Losses (gains) on sales of facilities (net
        of tax)                                              3        (30)
       Impairment of long-lived assets (net of tax)          6             
                                                           ---        ---

    Net income attributable to HCA Inc., excluding
     losses (gains) on sales of facilities and
     impairment of long-lived assets                       369        140
       Depreciation and amortization                       353        357
       Interest expense                                    471        530
       Provision for income taxes                          192         98
       Net income attributable to noncontrolling
        interests                                           72         55
                                                            --         --

       Adjusted EBITDA (a)                               $1,457    $1,180
                                                         ======    ======

    (a)  Net income attributable to HCA Inc., excluding losses (gains) on
         sales of facilities and impairment of long-lived assets and
         adjusted EBITDA are non-GAAP financial measures.  We believe that
         net income attributable to HCA Inc., excluding losses (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 attributable to HCA Inc.,
         excluding losses (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 attributable to HCA Inc., excluding losses
         (gains) on sales of facilities and impairment of long-lived assets
         and GAAP net income attributable to HCA Inc.) 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 losses (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 attributable to HCA Inc., excluding losses (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 attributable
         to HCA Inc. as a measure of operating performance or cash flows
         from operating, investing and financing activities as a measure of
         liquidity.  Because net income attributable to HCA Inc., excluding
         losses (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 attributable to HCA
         Inc., excluding losses (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)

                                                       March 31, December 31,
    ASSETS                                                2009       2008
                                                          ----       ----
    Current assets:
       Cash and cash equivalents                           $356       $465
       Accounts receivable, less allowance for
        doubtful accounts                                 3,870      3,780
       Inventories                                          717        737
       Deferred income taxes                                988        914
       Other                                                558        405
                                                            ---        ---
          Total current assets                            6,489      6,301

    Property and equipment, at cost                      23,913     23,714
    Accumulated depreciation                            (12,458)   (12,185)
                                                        --------   --------
                                                         11,455     11,529

    Investments of insurance subsidiary                   1,302      1,422
    Investments in and advances to affiliates               860        842
    Goodwill                                              2,579      2,580
    Deferred loan costs                                     452        458
    Other                                                 1,147      1,148
                                                          -----      -----

                                                        $24,284    $24,280
                                                        =======    =======

    LIABILITIES
    Current liabilities:
       Accounts payable                                  $1,200     $1,370
       Accrued salaries                                     823        854
       Other accrued expenses                             1,458      1,282
       Long-term debt due within one year                   416        404
                                                            ---        ---
          Total current liabilities                       3,897      3,910

    Long-term debt                                       26,151     26,585
    Professional liability risks                          1,098      1,108
    Income taxes and other liabilities                    1,853      1,782
                                                          -----      -----
          Total liabilities                              32,999     33,385

    Equity securities with contingent redemption
     rights                                                 154        155

    EQUITY (DEFICIT)
    HCA Inc. stockholders' deficit                       (9,888)   (10,255)
    Noncontrolling interests                              1,019        995
                                                          -----        ---
          Total deficit                                  (8,869)    (9,260)
                                                         -------    -------

                                                        $24,284    $24,280
                                                        =======    =======



                                  HCA Inc.
               Condensed Consolidated Statements of Cash Flows
                                First Quarter
                            (Dollars in millions)

                                                          2009        2008
                                                          ----        ----

    Cash flows from operating activities:
       Net income                                          $432       $225
       Adjustments to reconcile net income to net
        cash provided by operating activities:
          Change in operating assets and liabilities     (1,111)    (1,183)
          Provision for doubtful accounts                   807        888
          Depreciation and amortization                     353        357
          Income taxes                                       41         (9)
          Losses (gains) on sales of facilities               5        (51)
          Impairment of long-lived assets                     9             
          Change in noncontrolling interests                (48)       (49)
          Amortization of deferred loan costs                21         23
          Pay-in-kind interest                               39             
          Share-based compensation                            7          7
          Other                                              12         19
                                                             --         --

             Net cash provided by operating activities      567        227
                                                            ---        ---

    Cash flows from investing activities:
       Purchase of property and equipment                  (337)      (308)
       Acquisition of hospitals and health care entities    (38)       (24)
       Disposition of hospitals and health care entities      5        107
       Change in investments                                 76        (11)
       Other                                                  6          9
                                                            ---        ---

          Net cash used in investing activities            (288)      (227)
                                                           -----      -----
    Cash flows from financing activities:
       Issuance of long-term debt                           300          4
       Net change in revolving bank credit facility        (335)       650
       Repayment of long-term debt                         (339)      (575)
       Other                                                (14)        (1)
                                                            ----        ---

          Net cash (used in) provided by financing
           activities                                      (388)        78
                                                           -----        --

    Change in cash and cash equivalents                    (109)        78
    Cash and cash equivalents at beginning of period        465        393
                                                            ---        ---

    Cash and cash equivalents at end of period             $356       $471
                                                           ====       ====

    Interest payments                                      $344       $411
    Income tax payments, net of refunds                    $146       $127



                                  HCA Inc.
                           Operating Statistics

                                                           First Quarter
                                                           -------------
                                                          2009       2008
                                                          ----       ----
    Consolidating Hospitals:
    ------------------------

       Number of Hospitals                                  155        161
       Weighted Average Licensed Beds                    38,811     38,406
       Licensed Beds at End of Period                    38,763     38,375

    Reported:
       Admissions                                       396,200    401,700
          % Change                                         -1.4%
       Equivalent Admissions                            610,200    601,300
          % Change                                          1.5%
       Revenue per Equivalent Admission                 $12,178    $11,852
          % Change                                          2.8%
       Inpatient Revenue per Admission                  $11,468    $11,211
          % Change                                          2.3%

       Patient Days                                   1,953,100  2,024,600
       Equivalent Patient Days                        3,007,700  3,030,800

       Inpatient Surgery Cases                          122,600    125,400
          % Change                                         -2.2%
       Outpatient Surgery Cases                         194,400    196,900
          % Change                                         -1.3%

       Emergency Room Visits                          1,359,700  1,368,800
          % Change                                         -0.7%

       Outpatient Revenues as a Percentage of
        Patient Revenues                                   37.9%      35.8%

       Average Length of Stay                               4.9        5.0

       Occupancy                                           55.9%      57.9%
       Equivalent Occupancy                                86.1%      86.7%

     Same Facility:
        Admissions                                      390,300    393,800
          % Change                                         -0.9%
       Equivalent Admissions                            600,300    589,100
          % Change                                          1.9%
       Revenue per Equivalent Admission                 $12,159    $11,841
          % Change                                          2.7%
       Inpatient Revenue per Admission                  $11,496    $11,227
          % Change                                          2.4%

       Inpatient Surgery Cases                          121,200    121,800
          % Change                                         -0.5%
       Outpatient Surgery Cases                         192,400    193,700
          % Change                                         -0.7%

       Emergency Room Visits                          1,330,800  1,335,000
          % Change                                         -0.3%
    Number of Consolidating and Nonconsolidating
     (Equity Joint Ventures) Hospitals:

       Consolidating                                        155        161
       Nonconsolidating (Equity Joint Ventures)               8          8
                                                            ---        ---

       Total Number of Hospitals                            163        169
                                                            ===        ===

SOURCE HCA Inc.



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http://www.hcahealthcare.com

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