Attached files

file filename
8-K - FORM 8-K - HCA Healthcare, Inc.d577741d8k.htm

Exhibit 99.1

 

LOGO

 

   FOR IMMEDIATE RELEASE
INVESTOR CONTACT:    MEDIA CONTACT:
Mark Kimbrough    Ed Fishbough
615-344-2688    615-344-2810

HCA Reports Second Quarter 2013 Results

Nashville, Tenn., August 1, 2013 – HCA Holdings, Inc. (NYSE: HCA) today announced financial and operating results for the second quarter ended June 30, 2013.

Key second quarter metrics (all percentage changes compare 2Q 2013 to 2Q 2012 unless noted):

 

   

Revenues increased 4.2 percent to $8.450 billion

 

   

Net income attributable to HCA Holdings, Inc. totaled $423 million, or $0.91 per diluted share

 

   

Adjusted EBITDA increased 7.6 percent to $1.689 billion

 

   

Cash flows from operations totaled $814 million

 

   

Same facility equivalent admissions increased 1.1 percent while same facility admissions increased 1.3 percent

 

   

Same facility revenue per equivalent admission increased 2.9 percent

“We are pleased with the second quarter results, produced through volume growth, increasing acuity and favorable expense management by our operating teams,” stated Richard M. Bracken, HCA Chairman and CEO. “Our operating teams are doing an excellent job providing cost efficient and quality care,” concluded Bracken.

Revenue growth in the second quarter was reflective of increased patient volumes and improved revenue per equivalent admission. Revenue in the second quarter of 2013 increased to $8.450 billion, from $8.112 billion in the second quarter of 2012.

Same facility equivalent admissions increased 1.1 percent in the second quarter of 2013 compared to the prior year period, while same facility admissions increased 1.3 percent. On a same facility basis, emergency room visits increased 0.8 percent in the second quarter of 2013, compared to the prior year period.

Net income attributable to HCA Holdings, Inc. totaled $423 million, or $0.91 per diluted share, compared to $391 million, or $0.85 per diluted share, in the second quarter of 2012. Results for the second quarter of 2013 include gains on sales of facilities of $4 million, compared to losses on sales of facilities of $2 million in the second quarter of 2012.

 

1


Adjusted EBITDA increased to $1.689 billion compared to $1.569 billion in the second quarter of 2012. Adjusted EBITDA is a non-GAAP financial measure. Tables providing supplemental information on Adjusted EBITDA and reconciling net income attributable to HCA Holdings, Inc. to Adjusted EBITDA are included in this release.

During the second quarter of 2013, salaries and benefits, supplies and other operating expenses totaled $6.825 billion, or 80.7 percent of revenues, compared to $6.622 billion, or 81.7 percent of revenues, in the second quarter of 2012.

Six Months Ended June 30, 2013

Revenues for the six months ended June 30, 2013 totaled $16.890 billion compared to $16.517 billion in the same period of 2012. Net income attributable to HCA Holdings, Inc. was $767 million, or $1.66 per diluted share, compared to $931 million, or $2.03 per diluted share, for the first six months of 2012. Results for the six months ended June 30, 2013 include a loss on retirement of debt of $17 million, or $0.02 per diluted share, and losses on sales of facilities of $12 million, or $0.02 per diluted share. Results for the six months ended June 30, 2012 include net favorable Medicare adjustments which increased revenues by $188 million, Adjusted EBITDA by $170 million and diluted earnings per share by $0.22.

Balance Sheet and Cash Flows from Operations

As of June 30, 2013, HCA Holdings, Inc.’s balance sheet reflected cash and cash equivalents of $462 million, total debt of $28.200 billion and total assets of $27.934 billion. Total debt outstanding declined by $408 million from the first quarter of 2013. During the second quarter of 2013, capital expenditures totaled $492 million, excluding acquisitions. Net cash provided by operating activities in the second quarter of 2013 totaled $814 million compared to $1.460 billion in the prior year’s second quarter. The decline in cash flows from operating activities was primarily due to favorable changes in operating assets and liabilities during the second quarter of 2012. Accounts receivable declined $390 million during the second quarter of 2012, which included the receipt of the rural floor Medicare settlement of $271 million.

As of June 30, 2013, HCA operated 161 hospitals and 114 freestanding surgery centers.

Guidance

The Company today is reaffirming its previously issued guidance ranges for 2013.

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: https://event.webcasts.com/starthere.jsp?ei=1019699 or through the Company’s Investor Relations web page, www.hcahealthcare.com.

 

2


Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the federal securities laws, which involve risks and uncertainties. Forward-looking statements include statements that do not relate solely to historical facts. Forward-looking statements can be identified by the use of words like “may,” “believe,” “will,” “expect,” “project,” “estimate,” “anticipate,” “plan,” “initiative” or “continue.” These forward-looking statements are based on our current plans and expectations and are subject to a number of known and unknown uncertainties and risks, many of which are beyond our control, which could significantly affect current plans and expectations and our future financial position and results of operations. These factors include, but are not limited to, (1) the impact of our substantial indebtedness and the ability to refinance such indebtedness on acceptable terms, (2) the effects related to the implementation of the Budget Control Act of 2011 (“BCA”) and the potential for future deficit reduction legislation that may alter BCA-mandated spending reductions, which include cuts to Medicare payments, or create additional spending reductions, (3) the effects related to the enactment and implementation of the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act (collectively, the “Health Reform Law”), the possible enactment of additional federal or state health care reforms and possible changes to the Health Reform Law and other federal, state or local laws or regulations affecting the health care industry, (4) increases in the amount and risk of collectability of uninsured accounts and deductibles and copayment amounts for insured accounts, (5) the ability to achieve operating and financial targets, and attain expected levels of patient volumes and control the costs of providing services, (6) possible changes in the Medicare, Medicaid and other state programs, including Medicaid upper payment limit programs or waiver programs, that may impact reimbursements to health care providers and insurers, (7) the highly competitive nature of the health care business, (8) changes in service mix, revenue mix and surgical volumes, including potential declines in the population covered under managed care agreements, the ability to enter into and renew managed care provider agreements on acceptable terms and the impact of consumer driven health plans and physician utilization trends and practices, (9) the efforts of insurers, health care providers and others to contain health care costs, (10) the outcome of our continuing efforts to monitor, maintain and comply with appropriate laws, regulations, policies and procedures, (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 availability and terms of capital to fund the expansion of our business and improvements to our existing facilities, (13) changes in accounting practices, (14) changes in general economic conditions nationally and regionally in our markets, (15) future divestitures which may result in charges and possible impairments of long-lived assets, (16) changes in business strategy or development plans, (17) delays in receiving payments for services provided, (18) the outcome of pending and any future tax audits, appeals and litigation associated with our tax positions, (19) potential adverse impact of known and unknown government investigations, litigation and other claims that may be made against us, (20) our ongoing ability to demonstrate meaningful use of certified electronic health record technology and recognize income for the related Medicare or Medicaid incentive payments, and (21) other risk factors described in our annual report on Form 10-K for the year ended December 31, 2012 and our other filings with the Securities and Exchange

 

3


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 release refer to HCA Holdings, Inc. and its affiliates

 

4


HCA Holdings, Inc.

Condensed Consolidated Comprehensive Income Statements

Second Quarter

(Dollars in millions, except per share amounts)

 

     2013     2012  
     Amount     Ratio     Amount     Ratio  

Revenues before provision for doubtful accounts

   $ 9,473        $ 9,153     

Provision for doubtful accounts

     1,023          1,041     
  

 

 

     

 

 

   

Revenues

     8,450        100.0     8,112        100.0

Salaries and benefits

     3,848        45.5        3,707        45.7   

Supplies

     1,470        17.4        1,422        17.5   

Other operating expenses

     1,507        17.8        1,493        18.5   

Electronic health record incentive income

     (52     (0.6     (70     (0.9

Equity in earnings of affiliates

     (12     (0.1     (9     (0.1

Depreciation and amortization

     425        5.1        420        5.2   

Interest expense

     462        5.5        448        5.5   

Losses (gains) on sales of facilities

     (4     (0.1     2        —     
  

 

 

   

 

 

   

 

 

   

 

 

 
     7,644        90.5        7,413        91.4   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     806        9.5        699        8.6   

Provision for income taxes

     269        3.2        214        2.6   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

     537        6.3        485        6.0   

Net income attributable to noncontrolling interests

     114        1.3        94        1.2   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to HCA Holdings, Inc.

   $ 423        5.0      $ 391        4.8   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted earnings per share

   $ 0.91        $ 0.85     

Shares used in computing diluted earnings per share (000)

     463,184          458,621     

Comprehensive income attributable to HCA Holdings, Inc.

   $ 472        $ 353     
  

 

 

     

 

 

   

 

5


HCA Holdings, Inc.

Condensed Consolidated Comprehensive Income Statements

For the Six Months Ended June 30, 2013 and 2012

(Dollars in millions, except per share amounts)

 

     2013     2012  
     Amount     Ratio     Amount     Ratio  

Revenues before provision for doubtful accounts

   $ 18,667        $ 18,352     

Provision for doubtful accounts

     1,777          1,835     
  

 

 

     

 

 

   

Revenues

     16,890        100.0     16,517        100.0

Salaries and benefits

     7,765        46.0        7,443        45.1   

Supplies

     2,949        17.5        2,841        17.2   

Other operating expenses

     3,030        17.8        2,986        18.1   

Electronic health record incentive income

     (91     (0.5     (125     (0.8

Equity in earnings of affiliates

     (20     (0.1     (20     (0.1

Depreciation and amortization

     849        5.0        837        5.0   

Interest expense

     934        5.5        890        5.4   

Losses on sales of facilities

     12        0.1        3        —     

Loss on retirement of debt

     17        0.1        —          —     
  

 

 

   

 

 

   

 

 

   

 

 

 
     15,445        91.4        14,855        89.9   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     1,445        8.6        1,662        10.1   

Provision for income taxes

     470        2.8        538        3.3   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

     975        5.8        1,124        6.8   

Net income attributable to noncontrolling interests

     208        1.3        193        1.2   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to HCA Holdings, Inc.

   $ 767        4.5      $ 931        5.6   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted earnings per share

   $ 1.66        $ 2.03     

Shares used in computing diluted earnings per share (000)

     462,782          458,467     

Comprehensive income attributable to HCA Holdings, Inc.

   $ 798        $ 922     
  

 

 

     

 

 

   

 

6


HCA Holdings, Inc.

Supplemental Non-GAAP Disclosures

Operating Results Summary

(Dollars in millions, except per share amounts)

 

                  For the Six Months  
     Second Quarter      Ended June 30,  
     2013     2012      2013      2012  

Revenues

   $ 8,450      $ 8,112       $ 16,890       $ 16,517   

Net income attributable to HCA Holdings, Inc.

   $ 423      $ 391       $ 767       $ 931   

Losses (gains) on sales of facilities (net of tax)

     (3     1         8         2   

Loss on retirement of debt (net of tax)

     —          —           11         —     
  

 

 

   

 

 

    

 

 

    

 

 

 

Net income attributable to HCA Holdings, Inc., excluding losses (gains) on sales of facilities and loss on retirement of debt (a)

     420        392         786         933   

Depreciation and amortization

     425        420         849         837   

Interest expense

     462        448         934         890   

Provision for income taxes

     268        215         480         539   

Net income attributable to noncontrolling interests

     114        94         208         193   
  

 

 

   

 

 

    

 

 

    

 

 

 

Adjusted EBITDA (a)

   $ 1,689      $ 1,569       $ 3,257       $ 3,392   
  

 

 

   

 

 

    

 

 

    

 

 

 

Diluted earnings per share:

          

Net income attributable to HCA Holdings, Inc.

   $ 0.91      $ 0.85       $ 1.66       $ 2.03   

Losses (gains) on sales of facilities

     —          —           0.02         —     

Loss on retirement of debt

     —          —           0.02         —     
  

 

 

   

 

 

    

 

 

    

 

 

 

Net income attributable to HCA Holdings, Inc., excluding losses (gains) on sales of facilities and loss on retirement of debt (a)

   $ 0.91      $ 0.85       $ 1.70       $ 2.03   
  

 

 

   

 

 

    

 

 

    

 

 

 

Shares used in computing diluted earnings per share (000)

     463,184        458,621         462,782         458,467   

 

(a) Net income attributable to HCA Holdings, Inc., excluding losses (gains) on sales of facilities and loss on retirement of debt and Adjusted EBITDA should not be considered as measures of financial performance under generally accepted accounting principles (“GAAP”). We believe net income attributable to HCA Holdings, Inc., excluding losses (gains) on sales of facilities and loss on retirement of debt and Adjusted EBITDA are important measures that supplement discussions and analysis of our results of operations. We believe it is useful to investors to provide disclosures of our results of operations on the same basis used by management. Management relies upon net income attributable to HCA Holdings, Inc., excluding losses (gains) on sales of facilities and loss on retirement of debt 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 Holdings, Inc., excluding losses (gains) on sales of facilities and loss on retirement of debt and GAAP net income attributable to HCA Holdings, 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 losses on retirement of debt will occur in future periods, but the amounts recognized can vary significantly from period to period, do not directly relate to the ongoing operations of our health care facilities and complicate period comparisons of our results of operations and operations comparisons with other health care companies.

Net income attributable to HCA Holdings, Inc., excluding losses (gains) on sales of facilities and loss on retirement of debt and Adjusted EBITDA are not measures of financial performance under GAAP, and should not be considered as alternatives to net income attributable to HCA Holdings, 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 Holdings, Inc., excluding losses (gains) on sales of facilities and loss on retirement of debt and Adjusted EBITDA are not measurements determined in accordance with GAAP and are susceptible to varying calculations, net income attributable to HCA Holdings, Inc., excluding losses (gains) on sales of facilities and loss on retirement of debt and Adjusted EBITDA, as presented, may not be comparable to other similarly titled measures presented by other companies.

 

7


HCA Holdings, Inc.

Condensed Consolidated Balance Sheets

(Dollars in millions)

 

     June 30,     March 31,     December 31,  
     2013     2013     2012  

ASSETS

      

Current assets:

      

Cash and cash equivalents

   $ 462      $ 594      $ 705   

Accounts receivable, net

     4,915        4,877        4,672   

Inventories

     1,152        1,104        1,086   

Deferred income taxes

     401        385        385   

Other

     861        827        915   
  

 

 

   

 

 

   

 

 

 

Total current assets

     7,791        7,787        7,763   

Property and equipment, at cost

     30,077        29,764        29,527   

Accumulated depreciation

     (16,848     (16,620     (16,342
  

 

 

   

 

 

   

 

 

 
     13,229        13,144        13,185   

Investments of insurance subsidiaries

     405        423        515   

Investments in and advances to affiliates

     120        107        104   

Goodwill and other intangible assets

     5,534        5,541        5,539   

Deferred loan costs

     264        274        290   

Other

     591        606        679   
  

 

 

   

 

 

   

 

 

 
   $ 27,934      $ 27,882      $ 28,075   
  

 

 

   

 

 

   

 

 

 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

      

Current liabilities:

      

Accounts payable

   $ 1,657      $ 1,691      $ 1,768   

Accrued salaries

     1,036        969        1,120   

Other accrued expenses

     1,871        1,893        1,849   

Long-term debt due within one year

     1,456        1,438        1,435   
  

 

 

   

 

 

   

 

 

 

Total current liabilities

     6,020        5,991        6,172   

Long-term debt

     26,744        27,170        27,495   

Professional liability risks

     960        970        973   

Income taxes and other liabilities

     1,695        1,763        1,776   

EQUITY (DEFICIT)

      

Stockholders’ deficit attributable to HCA Holdings, Inc.

     (8,823     (9,323     (9,660

Noncontrolling interests

     1,338        1,311        1,319   
  

 

 

   

 

 

   

 

 

 

Total deficit

     (7,485     (8,012     (8,341
  

 

 

   

 

 

   

 

 

 
   $ 27,934      $ 27,882      $ 28,075   
  

 

 

   

 

 

   

 

 

 

 

8


HCA Holdings, Inc.

Condensed Consolidated Statements of Cash Flows

For the Six Months Ended June 30, 2013 and 2012

(Dollars in millions)

 

     2013     2012  

Cash flows from operating activities:

    

Net income

   $ 975      $ 1,124   

Adjustments to reconcile net income to net cash provided by operating activities:

    

Changes in operating assets and liabilities

     (2,335     (1,927

Provision for doubtful accounts

     1,777        1,835   

Depreciation and amortization

     849        837   

Income taxes

     183        326   

Losses sales of facilities

     12        3   

Loss on retirement of debt

     17        —     

Amortization of deferred loan costs

     28        29   

Share-based compensation

     51        23   

Other

     (3     7   
  

 

 

   

 

 

 

Net cash provided by operating activities

     1,554        2,257   
  

 

 

   

 

 

 

Cash flows from investing activities:

    

Purchase of property and equipment

     (896     (784

Acquisition of hospitals and health care entities

     (23     (139

Disposition of hospitals and health care entities

     31        6   

Change in investments

     102        35   

Other

     (4     (4
  

 

 

   

 

 

 

Net cash used in investing activities

     (790     (886
  

 

 

   

 

 

 

Cash flows from financing activities:

    

Issuance of long-term debt

     —          1,350   

Net change in revolving credit facilities

     (20     (820

Repayment of long-term debt

     (768     (608

Distributions to noncontrolling interests

     (196     (191

Payment of debt issuance costs

     (5     (19

Distributions to stockholders

     (10     (982

Income tax benefits

     61        71   

Other

     (69     (27
  

 

 

   

 

 

 

Net cash used in financing activities

     (1,007     (1,226
  

 

 

   

 

 

 

Change in cash and cash equivalents

     (243     145   

Cash and cash equivalents at beginning of period

     705        373   
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 462      $ 518   
  

 

 

   

 

 

 

Interest payments

   $ 909      $ 854   

Income tax payments, net

   $ 226      $ 141   

 

9


HCA Holdings, Inc.

Operating Statistics

 

     Second Quarter     For the Six Months
Ended June 30,
 
     2013     2012     2013     2012  

Operations:

        

Number of Hospitals

     161        163        161        163   

Number of Freestanding Outpatient Surgery Centers

     114        110        114        110   

Licensed Beds at End of Period

     41,792        41,817        41,792        41,817   

Weighted Average Licensed Beds

     41,842        41,789        41,855        41,765   

Reported:

        

Admissions

     433,000        428,200        877,200        871,500   

% Change

     1.1       0.6  

Equivalent Admissions

     708,700        700,800        1,416,700        1,411,900   

% Change

     1.1       0.3  

Revenue per Equivalent Admission

   $ 11,924      $ 11,576      $ 11,922      $ 11,699   

% Change

     3.0       1.9  

Inpatient Revenue per Admission

   $ 11,811      $ 11,363      $ 11,765      $ 11,566   

% Change

     3.9       1.7  

Patient Days

     2,049,600        2,012,300        4,222,800        4,131,200   

% Change

     1.9       2.2  

Equivalent Patient Days

     3,355,700        3,293,800        6,819,900        6,692,500   

% Change

     1.9       1.9  

Inpatient Surgery Cases

     126,500        126,700        251,200        255,000   

% Change

     -0.2       -1.5  

Outpatient Surgery Cases

     222,200        219,800        433,300        437,300   

% Change

     1.1       -0.9  

Emergency Room Visits

     1,726,400        1,714,200        3,475,700        3,402,600   

% Change

     0.7       2.1  

Outpatient Revenues as a Percentage of Patient Revenues

     37.7     38.8     37.1     37.8

Average Length of Stay

     4.7        4.7        4.8        4.7   

Occupancy

     53.8     52.9     55.7     54.3

Equivalent Occupancy

     88.1     86.7     90.0     88.0

Same Facility:

        

Admissions

     432,200        426,800        874,900        868,900   

% Change

     1.3       0.7  

Equivalent Admissions

     704,900        697,500        1,407,800        1,405,000   

% Change

     1.1       0.2  

Revenue per Equivalent Admission

   $ 11,891      $ 11,558      $ 11,899      $ 11,685   

% Change

     2.9       1.8  

Inpatient Revenue per Admission

   $ 11,813      $ 11,389      $ 11,775      $ 11,578   

% Change

     3.7       1.7  

Inpatient Surgery Cases

     126,500        126,200        250,800        254,000   

% Change

     0.2       -1.3  

Outpatient Surgery Cases

     216,800        216,700        423,300        432,300   

% Change

     0.0       -2.1  

Emergency Room Visits

     1,720,200        1,706,100        3,459,200        3,382,500   

% Change

     0.8       2.3  

 

10