EX-99.1 2 g22154exv99w1.htm EX-99.1 exv99w1
Exhibit 99.1
(HCA LOGO)   news
     
 
   
 
  FOR IMMEDIATE RELEASE
INVESTOR CONTACT:
  MEDIA CONTACT:
Mark Kimbrough
  Ed Fishbough
615-344-2688
  615-344-2810
HCA Reports Fourth Quarter and Year End 2009 Results
Nashville, Tenn., February 18, 2010 — HCA Inc. today announced financial and operating results for its fourth quarter and fiscal year ended December 31, 2009.
Fourth Quarter Summary:
    Revenues increased 4.7 percent to $7.605 billion from $7.265 billion in the fourth quarter of 2008.
 
    Net income attributable to HCA Inc. totaled $216 million, compared to $276 million in the prior year’s fourth quarter.
 
    Adjusted EBITDA totaled $1.343 billion, compared to $1.237 billion in the fourth quarter of 2008.
 
    Provision for doubtful accounts totaled $693 million, compared to $889 million in the prior year.
 
    Charity care and uninsured discounts totaled $1.499 billion, compared to $1.007 billion in the fourth quarter of 2008.
 
    Interest expense was flat at $500 million compared to the prior year’s fourth quarter.
 
    Same facility equivalent admissions and same facility admissions increased 2.6 percent and 1.2 percent, respectively, in the fourth quarter compared to the same period last year.
 
    Same facility revenue per equivalent admission increased 1.9 percent. Revenue per equivalent patient day, on a same facility basis, increased 3.3 percent.
 
    Total surgeries, on a same facility basis, declined 0.1 percent from the prior year’s fourth quarter.
 
    Same facility emergency department visits increased 9.1% compared to the fourth quarter of 2008.
Fourth quarter of 2009 performance was driven by solid inpatient, outpatient and emergency department volumes. HCA’s revenues for the fourth quarter totaled $7.605 billion, compared to $7.265 billion in the fourth quarter of 2008. Net income attributable to HCA Inc. for the fourth quarter of 2009 totaled $216 million, compared to $276 million in the prior year’s fourth quarter. Income before income taxes for the fourth quarter of 2009 was $451 million, compared to $379 million in the fourth of 2008. Adjusted EBITDA in the quarter totaled $1.343 billion, compared to $1.237 billion in the previous year’s fourth quarter. A table describing adjusted EBITDA and reconciling net income attributable to HCA Inc. to adjusted EBITDA is included in this release. Results for the fourth quarter of 2009 include impairments of

1


 

long-lived assets of $27 million and losses on sales of facilities of $7 million. Fourth quarter 2008 results include impairments of long-lived assets of $11 million and gains on sales of facilities of $7 million. The provision for income taxes was $112 million higher for the fourth quarter of 2009 ($147 million) than for the fourth quarter of 2008 ($35 million) due to the benefit recorded in the fourth quarter of 2008 related to the favorable revision to the proposed disallowance of certain prior period expenses and related interest.
The provision for doubtful accounts decreased to $693 million, or 9.1 percent of revenues, in the fourth quarter of 2009 from $889 million, or 12.2 percent of revenues, in the fourth quarter of 2008. The reduction in our provision for doubtful accounts was primarily attributable to an increase in charity care and uninsured discounts which totaled $1.499 billion in the fourth quarter of 2009 compared to $1.007 billion in the fourth quarter of 2008. The sum of the provision for doubtful accounts, uninsured discounts and charity care, as a percentage of the sum of net revenues, uninsured discounts and charity care was 24.1 percent for the fourth quarter of 2009 compared to 22.9 percent for the fourth quarter of 2008. Same facility uninsured admissions increased 0.2 percent in the fourth quarter of 2009 compared to the prior year’s fourth quarter. Same facility uninsured admissions comprised 6.4 percent of total admissions in the fourth quarter of 2009 compared to 6.5 percent in the fourth quarter of 2008.
During the fourth quarter of 2009, salaries and benefits, supply expense and other operating expenses totaled $5.633 billion compared to $5.192 billion in the fourth quarter of 2008. These expenses, as a percent of revenues, increased 2.5 percent in the fourth quarter of 2009 compared to the fourth quarter of 2008. This increase was primarily due to the impact of the increased revenue reductions for uninsured discounts and charity care which reduced the Company’s rate of net revenue growth in the quarter.
Same facility admissions increased 1.2 percent and same facility equivalent admissions increased 2.6 percent in the fourth quarter of 2009 compared to the prior year’s fourth quarter. Same facility inpatient surgeries declined 0.3 percent and same facility outpatient surgeries declined 0.1 percent in the fourth quarter. Same facility revenue per equivalent admission increased 1.9 percent in the fourth quarter of 2009 compared to the fourth quarter of 2008.
Revenues for the twelve months ended December 31, 2009 totaled $30.052 billion compared to $28.374 billion in 2008. Net income attributable to HCA Inc. was $1.054 billion for the year ended December 31, 2009 compared to $673 million in 2008. Adjusted EBITDA totaled $5.472 billion for 2009 compared to $4.574 billion for 2008. Results for the year ended December 31, 2009 include losses on sales of facilities of $15 million and impairments of long-lived assets of $43 million compared to gains on sales of facilities of $97 million and impairments of long-lived assets of $64 million in 2008.
Cash flows from operating activities increased $757 million to $2.747 billion for the year ended December 31, 2009, from $1.990 billion for the year ended December 31, 2008. The increase was due primarily to the $473 million increase in net income and $143 million improvement from changes in operating assets and liabilities and the provision for doubtful accounts.
As of December 31, 2009, HCA’s balance sheet reflected cash and cash equivalents of $312 million, total debt of $25.670 billion, and total assets of $24.131 billion. During the fourth quarter of 2009, capital expenditures totaled $402 million, excluding acquisitions. For the year ended December 31, 2009, capital expenditures totaled $1.317 billion, excluding acquisitions.
During 2009, HCA issued $3.060 billion aggregate principal amount of first and second lien notes. The net proceeds from the debt issuances were used to repay outstanding indebtedness under the Company’s senior secured term loan facilities.

2


 

On January 27, 2010, our Board of Directors declared a distribution to the Company’s stockholders and holders of vested stock options. The distribution was $17.50 per share and vested stock option, or approximately $1.750 billion in the aggregate. The distribution was paid on February 5, 2010 to holders of record on February 1, 2010. The distribution was funded using funds available under our existing senior secured credit facilities and approximately $100 million of cash on hand.
As of December 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 Time today. A live audio broadcast of the call via webcast will also be available to investors. The broadcast will be available on a replay basis beginning this afternoon. The webcast can be accessed at: http://www.videonewswire.com/event.asp?id=65983 or through the Company’s Investor Relations web page, www.hcahealthcare.com.
Cautionary Statement about 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) the possible enactment of federal or state health care reform and changes in federal, state or local laws or regulations affecting the health care industry, (4) 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, (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 supplemental payments pursuant to upper payment limit (“UPL”) programs, that may impact reimbursements to health care providers and insurers, (7) the highly competitive nature of the health care business, (8) 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, (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, (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

3


 

with our tax positions, (19) potential liabilities and other claims that may be asserted against us, and (20) 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.

4


 

HCA Inc.
Condensed Consolidated Income Statements
Fourth Quarter
(Dollars in millions)
                                 
    2009   2008
    Amount   Ratio   Amount   Ratio
 
                               
Revenues
  $ 7,605       100.0 %   $ 7,265       100.0 %
 
                               
Salaries and benefits
    3,078       40.5       2,877       39.6  
Supplies
    1,241       16.3       1,157       15.9  
Other operating expenses
    1,314       17.2       1,158       16.0  
Provision for doubtful accounts
    693       9.1       889       12.2  
Equity in earnings of affiliates
    (64 )     (0.8 )     (53 )     (0.7 )
Depreciation and amortization
    358       4.7       354       4.9  
Interest expense
    500       6.6       500       6.9  
Losses (gains) on sales of facilities
    7       0.1       (7 )     (0.1 )
Impairment of long-lived assets
    27       0.4       11       0.1  
         
 
                               
 
    7,154       94.1       6,886       94.8  
         
 
                               
Income before income taxes
    451       5.9       379       5.2  
 
Provision for income taxes
    147       1.9       35       0.5  
         
 
                               
Net income
    304       4.0       344       4.7  
 
Net income attributable to noncontrolling interests
    88       1.2       68       0.9  
         
 
                               
Net income attributable to HCA Inc.
  $ 216       2.8     $ 276       3.8  
         

5


 

HCA Inc.
Condensed Consolidated Income Statements
For the Years Ended December 31, 2009 and 2008
(Dollars in millions)
                                 
    2009   2008
    Amount   Ratio   Amount   Ratio
 
                               
Revenues
  $ 30,052       100.0 %   $ 28,374       100.0 %
 
                               
Salaries and benefits
    11,958       39.8       11,440       40.3  
Supplies
    4,868       16.2       4,620       16.3  
Other operating expenses
    4,724       15.7       4,554       16.1  
Provision for doubtful accounts
    3,276       10.9       3,409       12.0  
Equity in earnings of affiliates
    (246 )     (0.8 )     (223 )     (0.8 )
Depreciation and amortization
    1,425       4.8       1,416       5.0  
Interest expense
    1,987       6.6       2,021       7.1  
Losses (gains) on sales of facilities
    15             (97 )     (0.3 )
Impairment of long-lived assets
    43       0.1       64       0.2  
         
 
                               
 
    28,050       93.3       27,204       95.9  
         
 
                               
Income before income taxes
    2,002       6.7       1,170       4.1  
 
Provision for income taxes
    627       2.1       268       0.9  
         
 
                               
Net income
    1,375       4.6       902       3.2  
 
Net income attributable to noncontrolling interests
    321       1.1       229       0.8  
         
 
                               
Net income attributable to HCA Inc.
  $ 1,054       3.5     $ 673       2.4  
         

6


 

HCA Inc.
Supplemental Operating Results Summary
(Dollars in millions)
                                 
                    For the Years  
    Fourth Quarter     Ended December 31,  
    2009     2008     2009     2008  
 
                               
Revenues
  $ 7,605     $ 7,265     $ 30,052     $ 28,374  
 
                               
Net income attributable to HCA Inc.
  $ 216     $ 276     $ 1,054     $ 673  
Losses (gains) on sales of facilities (net of tax)
    4       (5 )     9       (58 )
Impairment of long-lived assets (net of tax)
    24       6       34       40  
 
                       
Net income attributable to HCA Inc., excluding losses (gains) on sales of facilities and impairment of long-lived assets (a)
    244       277       1,097       655  
Depreciation and amortization
    358       354       1,425       1,416  
Interest expense
    500       500       1,987       2,021  
Provision for income taxes
    153       38       642       253  
Net income attributable to noncontrolling interests
    88       68       321       229  
 
                       
 
                               
Adjusted EBITDA (a)
  $ 1,343     $ 1,237     $ 5,472     $ 4,574  
 
                       
 
(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 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 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 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 impairment of long-lived assets 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 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.

7


 

HCA Inc.
Condensed Consolidated Balance Sheets
(Dollars in millions)
                         
    December 31,     September 30,     December 31  
    2009     2009     2008  
 
                       
ASSETS
                       
Current assets:
                       
Cash and cash equivalents
  $ 312     $ 443     $ 465  
Accounts receivable, net
    3,692       3,499       3,780  
Inventories
    802       745       737  
Deferred income taxes
    1,192       1,099       914  
Other
    579       515       405  
 
                 
Total current assets
    6,577       6,301       6,301  
 
                       
Property and equipment, at cost
    24,669       24,389       23,714  
Accumulated depreciation
    (13,242 )     (13,038 )     (12,185 )
 
                 
 
    11,427       11,351       11,529  
 
                       
Investments of insurance subsidiary
    1,166       1,371       1,422  
Investments in and advances to affiliates
    853       855       842  
Goodwill
    2,577       2,596       2,580  
Deferred loan costs
    418       436       458  
Other
    1,113       1,210       1,148  
 
                 
 
                       
 
  $ 24,131     $ 24,120     $ 24,280  
 
                 
 
                       
LIABILITIES AND STOCKHOLDERS’ DEFICIT
                       
Current liabilities:
                       
Accounts payable
  $ 1,460     $ 1,199     $ 1,370  
Accrued salaries
    849       954       854  
Other accrued expenses
    1,158       1,316       1,282  
Long-term debt due within one year
    846       635       404  
 
                 
Total current liabilities
    4,313       4,104       3,910  
 
                       
Long-term debt
    24,824       25,279       26,585  
Professional liability risks
    1,057       1,097       1,108  
Income taxes and other liabilities
    1,768       1,782       1,782  
 
                 
Total liabilities
    31,962       32,262       33,385  
 
                       
Equity securities with contingent redemption rights
    147       147       155  
 
                       
EQUITY (DEFICIT)
                       
HCA Inc. stockholders’ deficit
    (8,986 )     (9,279 )     (10,255 )
Noncontrolling interests
    1,008       990       995  
 
                 
Total deficit
    (7,978 )     (8,289 )     (9,260 )
 
                 
 
  $ 24,131     $ 24,120     $ 24,280  
 
                 

8


 

HCA Inc.
Condensed Consolidated Statements of Cash Flow
For the Years Ended December 31, 2009 and 2008
(Dollars in millions)
                 
    2009     2008  
 
               
Cash flows from operating activities:
               
Net income
  $ 1,375     $ 902  
Adjustments to reconcile net income to net cash provided by operating activitie
       
Change in operating assets and liabilities
    (3,091 )     (3,367 )
Provision for doubtful accounts
    3,276       3,409  
Depreciation and amortization
    1,425       1,416  
Income taxes
    (520 )     (448 )
Losses (gains) sales of facilities
    15       (97 )
Impairment of long-lived assets
    43       64  
Amortization of deferred loan costs
    80       79  
Pay-in-kind interest
    58        
Share-based compensation
    40       32  
Other
    46        
 
           
 
               
Net cash provided by operating activities
    2,747       1,990  
 
           
 
               
Cash flows from investing activities:
               
Purchase of property and equipment
    (1,317 )     (1,600 )
Acquisition of hospitals and health care entities
    (61 )     (85 )
Disposal of hospitals and health care entities
    41       193  
Change in investments
    303       21  
Other
    (1 )     4  
 
           
 
               
Net cash used in investing activities
    (1,035 )     (1,467 )
 
           
 
               
Cash flows from financing activities:
               
Issuance of long-term debt
    2,979        
Net change in revolving bank credit facilities
    (1,335 )     700  
Repayment of long-term debt
    (3,103 )     (960 )
Distributions to noncontrolling interests
    (330 )     (178 )
Payment of debt issuance costs
    (70 )      
Other
    (6 )     (13 )
 
           
 
               
Net cash used in financing activities
    (1,865 )     (451 )
 
           
 
               
Change in cash and cash equivalents
    (153 )     72  
Cash and cash equivalents at beginning of period
    465       393  
 
           
 
               
Cash and cash equivalents at end of period
  $ 312     $ 465  
 
           
 
               
Interest payments
  $ 1,751     $ 1,979  
Income tax payments, net of refunds
  $ 1,147     $ 716  

9


 

HCA Inc.
Operating Statistics
                                 
                    For the Years  
    Fourth Quarter     Ended December 31,  
    2009     2008     2009     2008  
Consolidating Hospitals:
                               
 
                               
Number of Hospitals
    155       158       155       158  
Weighted Average Licensed Beds
    38,843       38,474       38,825       38,422  
Licensed Beds at End of Period
    38,839       38,504       38,839       38,504  
 
                               
Reported:
                               
Admissions
    385,300       380,100       1,556,500       1,541,800  
% Change
    1.4 %             1.0 %        
Equivalent Admissions
    603,800       587,300       2,439,000       2,363,600  
% Change
    2.8 %             3.2 %        
Revenue per Equivalent Admission
  $ 12,595     $ 12,370     $ 12,321     $ 12,005  
% Change
    1.8 %             2.6 %        
Inpatient Revenue per Admission
  $ 12,368     $ 11,742     $ 11,809     $ 11,336  
% Change
    5.3 %             4.2 %        
 
                               
Patient Days
    1,863,500       1,865,100       7,537,100       7,611,000  
Equivalent Patient Days
    2,920,200       2,882,100       11,810,700       11,667,700  
 
                               
Inpatient Surgery Cases
    122,200       121,300       494,500       493,100  
% Change
    0.7 %             0.3 %        
Outpatient Surgery Cases
    200,900       201,900       794,600       797,400  
% Change
    -0.5 %             -0.4 %        
 
                               
Emergency Room Visits
    1,394,600       1,276,900       5,593,500       5,246,400  
% Change
    9.2 %             6.6 %        
 
                               
Outpatient Revenues as a Percentage of Patient Revenues
    36.3 %     37.5 %     37.8 %     37.4 %
 
                               
Average Length of Stay
    4.8       4.9       4.8       4.9  
 
                               
Occupancy
    52.1 %     52.7 %     53.2 %     54.1 %
Equivalent Occupancy
    81.6 %     81.5 %     83.4 %     82.9 %
 
                               
Same Facility:
                               
Admissions
    378,400       374,000       1,528,500       1,510,600  
% Change
    1.2 %             1.2 %        
Equivalent Admissions
    591,800       577,100       2,390,600       2,312,700  
% Change
    2.6 %             3.4 %        
Revenue per Equivalent Admission
  $ 12,599     $ 12,362     $ 12,325     $ 12,007  
% Change
    1.9 %             2.6 %        
Inpatient Revenue per Admission
  $ 12,401     $ 11,777     $ 11,849     $ 11,377  
% Change
    5.3 %             4.1 %        
Inpatient Surgery Cases
    120,200       120,500       487,400       485,000  
% Change
    -0.3 %             0.5 %        
Outpatient Surgery Cases
    197,900       198,100       783,600       784,400  
% Change
    -0.1 %             -0.1 %        
 
                               
Emergency Room Visits
    1,361,400       1,247,800       5,455,100       5,096,200  
% Change
    9.1 %             7.0 %        
 
                               
Number of Consolidating and Nonconsolidating (Equity Joint Ventures) Hospitals:
                               
Consolidating
    155       158       155       158  
Nonconsolidating (Equity Joint Ventures)
    8       8       8       8  
 
                       
 
                               
Total Number of Hospitals
    163       166       163       166  
 
                       

10