(Mark One) | ||
þ
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the quarterly period ended June 30, 2011 | ||
or
|
||
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the transition period from to |
Delaware | 27-3865930 | |
(State or other jurisdiction
of incorporation or organization) |
(I.R.S. Employer Identification No.) |
One Park Plaza
Nashville, Tennessee (Address of principal executive offices) |
37203 (Zip Code) |
Large accelerated filer o | Accelerated filer o | Non-accelerated filer þ | Smaller reporting company o |
Class of Common Stock | Outstanding at July 31, 2011 | |
Voting common stock, $.01 par value | 517,179,600 shares |
2
Quarter | Six Months | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Revenues
|
$ | 8,063 | $ | 7,756 | $ | 16,118 | $ | 15,300 | ||||||||
Salaries and benefits
|
3,320 | 3,076 | 6,615 | 6,148 | ||||||||||||
Supplies
|
1,295 | 1,251 | 2,570 | 2,451 | ||||||||||||
Other operating expenses
|
1,326 | 1,226 | 2,648 | 2,428 | ||||||||||||
Provision for doubtful accounts
|
775 | 788 | 1,424 | 1,352 | ||||||||||||
Equity in earnings of affiliates
|
(73 | ) | (75 | ) | (149 | ) | (143 | ) | ||||||||
Depreciation and amortization
|
358 | 355 | 716 | 710 | ||||||||||||
Interest expense
|
520 | 530 | 1,053 | 1,046 | ||||||||||||
Losses on sales of facilities
|
| | 1 | | ||||||||||||
Impairments of long-lived assets
|
| 91 | | 109 | ||||||||||||
Loss on retirement of debt
|
75 | | 75 | | ||||||||||||
Termination of management agreement
|
| | 181 | | ||||||||||||
7,596 | 7,242 | 15,134 | 14,101 | |||||||||||||
Income before income taxes
|
467 | 514 | 984 | 1,199 | ||||||||||||
Provision for income taxes
|
147 | 136 | 330 | 345 | ||||||||||||
Net income
|
320 | 378 | 654 | 854 | ||||||||||||
Net income attributable to noncontrolling interests
|
91 | 85 | 185 | 173 | ||||||||||||
Net income attributable to HCA Holdings, Inc.
|
$ | 229 | $ | 293 | $ | 469 | $ | 681 | ||||||||
Per share data:
|
||||||||||||||||
Basic earnings per share
|
$ | 0.44 | $ | 0.69 | $ | 0.98 | $ | 1.60 | ||||||||
Diluted earnings per share
|
$ | 0.43 | $ | 0.67 | $ | 0.94 | $ | 1.56 | ||||||||
Shares used in earnings per share calculations (in thousands):
|
||||||||||||||||
Basic
|
516,448 | 426,329 | 480,525 | 426,340 | ||||||||||||
Diluted
|
538,557 | 437,104 | 500,463 | 436,392 |
3
June 30, |
December 31, |
|||||||
2011 | 2010 | |||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 539 | $ | 411 | ||||
Accounts receivable, less allowance for doubtful accounts of
$3,955 and $3,939
|
3,946 | 3,832 | ||||||
Inventories
|
887 | 897 | ||||||
Deferred income taxes
|
894 | 931 | ||||||
Other
|
625 | 848 | ||||||
6,891 | 6,919 | |||||||
Property and equipment, at cost
|
26,338 | 25,641 | ||||||
Accumulated depreciation
|
(14,754 | ) | (14,289 | ) | ||||
11,584 | 11,352 | |||||||
Investments of insurance subsidiary
|
515 | 642 | ||||||
Investments in and advances to affiliates
|
843 | 869 | ||||||
Goodwill
|
2,719 | 2,693 | ||||||
Deferred loan costs
|
332 | 374 | ||||||
Other
|
993 | 1,003 | ||||||
$ | 23,877 | $ | 23,852 | |||||
LIABILITIES AND STOCKHOLDERS DEFICIT | ||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$ | 1,297 | $ | 1,537 | ||||
Accrued salaries
|
1,009 | 895 | ||||||
Other accrued expenses
|
1,283 | 1,245 | ||||||
Long-term debt due within one year
|
689 | 592 | ||||||
4,278 | 4,269 | |||||||
Long-term debt
|
24,631 | 27,633 | ||||||
Professional liability risks
|
987 | 995 | ||||||
Income taxes and other liabilities
|
1,515 | 1,608 | ||||||
Equity securities with contingent redemption rights
|
| 141 | ||||||
Stockholders deficit:
|
||||||||
Common stock $0.01 par; authorized
1,800,000,000 shares; outstanding 517,094,100 shares
in 2011 and 427,458,800 shares in 2010
|
5 | 4 | ||||||
Capital in excess of par value
|
3,072 | 386 | ||||||
Accumulated other comprehensive loss
|
(339 | ) | (428 | ) | ||||
Retained deficit
|
(11,419 | ) | (11,888 | ) | ||||
Stockholders deficit attributable to HCA Holdings,
Inc.
|
(8,681 | ) | (11,926 | ) | ||||
Noncontrolling interests
|
1,147 | 1,132 | ||||||
(7,534 | ) | (10,794 | ) | |||||
$ | 23,877 | $ | 23,852 | |||||
4
2011 | 2010 | |||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$ | 654 | $ | 854 | ||||
Adjustments to reconcile net income to net cash provided by
operating activities:
|
||||||||
Changes in operating assets and liabilities
|
(1,576 | ) | (1,698 | ) | ||||
Provision for doubtful accounts
|
1,424 | 1,352 | ||||||
Depreciation and amortization
|
716 | 710 | ||||||
Income taxes
|
317 | (111 | ) | |||||
Losses on sales of facilities
|
1 | | ||||||
Impairments of long-lived assets
|
| 109 | ||||||
Loss on retirement of debt
|
75 | | ||||||
Amortization of deferred loan costs
|
39 | 40 | ||||||
Share-based compensation
|
16 | 16 | ||||||
Other
|
| 23 | ||||||
Net cash provided by operating activities
|
1,666 | 1,295 | ||||||
Cash flows from investing activities:
|
||||||||
Purchase of property and equipment
|
(776 | ) | (536 | ) | ||||
Acquisition of hospitals and health care entities
|
(168 | ) | (31 | ) | ||||
Disposition of hospitals and health care entities
|
54 | 25 | ||||||
Change in investments
|
76 | 502 | ||||||
Other
|
2 | (11 | ) | |||||
Net cash used in investing activities
|
(812 | ) | (51 | ) | ||||
Cash flows from financing activities:
|
||||||||
Issuance of long-term debt
|
| 1,387 | ||||||
Net change in revolving credit facilities
|
(1,524 | ) | 1,329 | |||||
Repayment of long-term debt
|
(1,508 | ) | (1,529 | ) | ||||
Distributions to noncontrolling interests
|
(185 | ) | (176 | ) | ||||
Distributions to stockholders
|
(30 | ) | (2,251 | ) | ||||
Payment of debt issuance costs
|
(12 | ) | (25 | ) | ||||
Issuance of common stock
|
2,506 | | ||||||
Income tax benefits
|
49 | 56 | ||||||
Other
|
(22 | ) | 3 | |||||
Net cash used in financing activities
|
(726 | ) | (1,206 | ) | ||||
Change in cash and cash equivalents
|
128 | 38 | ||||||
Cash and cash equivalents at beginning of period
|
411 | 312 | ||||||
Cash and cash equivalents at end of period
|
$ | 539 | $ | 350 | ||||
Interest payments
|
$ | 1,043 | $ | 973 | ||||
Income tax (refunds) payments, net
|
$ | (36 | ) | $ | 400 |
5
NOTE 1 | INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS |
6
NOTE 1 | INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) |
NOTE 2 | INCOME TAXES |
7
NOTE 3 | EARNINGS PER SHARE |
Quarter | Six Months | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Net income attributable to HCA Holdings, Inc.
|
$ | 229 | $ | 293 | $ | 469 | $ | 681 | ||||||||
Weighted average common shares outstanding
|
516,448 | 426,329 | 480,525 | 426,340 | ||||||||||||
Effect of dilutive securities
|
22,109 | 10,775 | 19,938 | 10,052 | ||||||||||||
Shares used for diluted earnings per share
|
538,557 | 437,104 | 500,463 | 436,392 | ||||||||||||
Earnings per share:
|
||||||||||||||||
Basic earnings per share
|
$ | 0.44 | $ | 0.69 | $ | 0.98 | $ | 1.60 | ||||||||
Diluted earnings per share
|
$ | 0.43 | $ | 0.67 | $ | 0.94 | $ | 1.56 |
NOTE 4 | INVESTMENTS OF INSURANCE SUBSIDIARY |
June 30, 2011 | ||||||||||||||||
Unrealized |
||||||||||||||||
Amortized |
Amounts |
Fair |
||||||||||||||
Cost | Gains | Losses | Value | |||||||||||||
Debt securities:
|
||||||||||||||||
States and municipalities
|
$ | 305 | $ | 12 | $ | (1 | ) | $ | 316 | |||||||
Auction rate securities
|
152 | | (3 | ) | 149 | |||||||||||
Asset-backed securities
|
23 | | | 23 | ||||||||||||
Money market funds
|
229 | | | 229 | ||||||||||||
709 | 12 | (4 | ) | 717 | ||||||||||||
Equity securities
|
8 | 1 | (1 | ) | 8 | |||||||||||
$ | 717 | $ | 13 | $ | (5 | ) | 725 | |||||||||
Amounts classified as current assets
|
(210 | ) | ||||||||||||||
Investment carrying value
|
$ | 515 | ||||||||||||||
8
NOTE 4 | INVESTMENTS OF INSURANCE SUBSIDIARY (continued) |
December 31, 2010 | ||||||||||||||||
Unrealized |
||||||||||||||||
Amortized |
Amounts |
Fair |
||||||||||||||
Cost | Gains | Losses | Value | |||||||||||||
Debt securities:
|
||||||||||||||||
States and municipalities
|
$ | 312 | $ | 12 | $ | (1 | ) | $ | 323 | |||||||
Auction rate securities
|
251 | | (1 | ) | 250 | |||||||||||
Asset-backed securities
|
26 | 1 | (1 | ) | 26 | |||||||||||
Money market funds
|
135 | | | 135 | ||||||||||||
724 | 13 | (3 | ) | 734 | ||||||||||||
Equity securities
|
8 | 1 | (1 | ) | 8 | |||||||||||
$ | 732 | $ | 14 | $ | (4 | ) | 742 | |||||||||
Amounts classified as current assets
|
(100 | ) | ||||||||||||||
Investment carrying value
|
$ | 642 | ||||||||||||||
Amortized |
Fair |
|||||||
Cost | Value | |||||||
Due in one year or less
|
$ | 249 | $ | 250 | ||||
Due after one year through five years
|
139 | 147 | ||||||
Due after five years through ten years
|
122 | 124 | ||||||
Due after ten years
|
24 | 24 | ||||||
534 | 545 | |||||||
Auction rate securities
|
152 | 149 | ||||||
Asset-backed securities
|
23 | 23 | ||||||
$ | 709 | $ | 717 | |||||
9
NOTE 5 | LONG-TERM DEBT |
June 30, |
December 31, |
|||||||
2011 | 2010 | |||||||
Senior secured asset-based revolving credit facility (effective
interest rate of 1.4%)
|
$ | 1,080 | $ | 1,875 | ||||
Senior secured revolving credit facility
|
| 729 | ||||||
Senior secured term loan facilities (effective interest rate of
7.4%)
|
7,541 | 7,530 | ||||||
Senior secured first lien notes (effective interest rate of 8.4%)
|
4,078 | 4,075 | ||||||
Other senior secured debt (effective interest rate of 7.1%)
|
304 | 322 | ||||||
First lien debt
|
13,003 | 14,531 | ||||||
Senior secured cash-pay notes (effective interest rate of 9.7%)
|
3,396 | 4,501 | ||||||
Senior secured toggle notes (effective interest rate of 10.0%)
|
1,578 | 1,578 | ||||||
Second lien debt
|
4,974 | 6,079 | ||||||
Senior unsecured notes (effective interest rate of 7.1%)
|
7,343 | 7,615 | ||||||
Total debt (average life of 6.5 years, rates averaging 7.7%)
|
25,320 | 28,225 | ||||||
Less amounts due within one year
|
689 | 592 | ||||||
$ | 24,631 | $ | 27,633 | |||||
NOTE 6 | FINANCIAL INSTRUMENTS |
10
NOTE 6 | FINANCIAL INSTRUMENTS (continued) |
Notional |
Fair |
|||||||||||
Amount | Maturity Date | Value | ||||||||||
Pay-fixed interest rate swaps
|
$ | 7,100 | November 2011 | $ | (125 | ) | ||||||
Pay-fixed interest rate swaps (starting November 2011)
|
500 | December 2014 | 2 | |||||||||
Pay-fixed interest rate swaps (starting November 2011)
|
3,000 | December 2016 | (195 | ) | ||||||||
Pay-fixed interest rate swaps (starting November 2011)
|
1,000 | December 2017 | 11 |
Notional |
Fair |
|||||||||||
Amount | Maturity Date | Value | ||||||||||
Pay-fixed interest rate swap
|
$ | 900 | November 2011 | $ | (15 | ) | ||||||
Pay-variable interest rate swap
|
900 | November 2011 | 2 |
Notional |
Fair |
|||||||||||
Amount | Maturity Date | Value | ||||||||||
Euro United States Dollar currency swap
|
351 Euro | December 2011 | $ | 78 |
Location of Loss |
Amount of Loss |
|||||||||||
Amount of Loss |
Reclassified from |
Reclassified from |
||||||||||
Recognized in OCI on |
Accumulated OCI |
Accumulated OCI |
||||||||||
Derivatives in Cash Flow Hedging Relationships | Derivatives, Net of Tax | into Operations | into Operations | |||||||||
Interest rate swaps
|
$ | 49 | Interest expense | $ | 186 |
11
NOTE 6 | FINANCIAL INSTRUMENTS (continued) |
Location of Gain |
Amount of Gain |
|||||||
Recognized in |
Recognized in |
|||||||
Operations on |
Operations on |
|||||||
Derivatives Not Designated as Hedging Instruments | Derivatives | Derivatives | ||||||
Cross currency swap
|
Other operating expenses | $ | 39 |
NOTE 7 | ASSETS AND LIABILITIES MEASURED AT FAIR VALUE |
12
NOTE 7 | ASSETS AND LIABILITIES MEASURED AT FAIR VALUE (continued) |
13
NOTE 7 | ASSETS AND LIABILITIES MEASURED AT FAIR VALUE (continued) |
June 30, 2011 | ||||||||||||||||
Fair Value Measurements Using | ||||||||||||||||
Quoted Prices in |
||||||||||||||||
Active Markets for |
||||||||||||||||
Identical Assets |
Significant Other |
Significant |
||||||||||||||
and Liabilities |
Observable Inputs |
Unobservable Inputs |
||||||||||||||
Fair Value | (Level 1) | (Level 2) | (Level 3) | |||||||||||||
Assets:
|
||||||||||||||||
Investments of insurance subsidiary:
|
||||||||||||||||
Debt securities:
|
||||||||||||||||
States and municipalities
|
$ | 316 | $ | | $ | 316 | $ | | ||||||||
Auction rate securities
|
149 | | | 149 | ||||||||||||
Asset-backed securities
|
23 | | 23 | | ||||||||||||
Money market funds
|
229 | 229 | | | ||||||||||||
717 | 229 | 339 | 149 | |||||||||||||
Equity securities
|
8 | 2 | 4 | 2 | ||||||||||||
Investments of insurance subsidiary
|
725 | 231 | 343 | 151 | ||||||||||||
Less amounts classified as current assets
|
(210 | ) | (210 | ) | | | ||||||||||
$ | 515 | $ | 21 | $ | 343 | $ | 151 | |||||||||
Cross currency swap (Other assets)
|
$ | 78 | $ | | $ | 78 | $ | | ||||||||
Liabilities:
|
||||||||||||||||
Interest rate swaps (Income taxes and other liabilities)
|
$ | 320 | $ | | $ | 320 | $ | |
14
NOTE 7 | ASSETS AND LIABILITIES MEASURED AT FAIR VALUE (continued) |
December 31, 2010 | ||||||||||||||||
Fair Value Measurements Using | ||||||||||||||||
Quoted Prices in |
||||||||||||||||
Active Markets for |
||||||||||||||||
Identical Assets |
Significant Other |
Significant |
||||||||||||||
and Liabilities |
Observable Inputs |
Unobservable Inputs |
||||||||||||||
Fair Value | (Level 1) | (Level 2) | (Level 3) | |||||||||||||
Assets:
|
||||||||||||||||
Investments of insurance subsidiary:
|
||||||||||||||||
Debt securities:
|
||||||||||||||||
States and municipalities
|
$ | 323 | $ | | $ | 323 | $ | | ||||||||
Auction rate securities
|
250 | | | 250 | ||||||||||||
Asset-backed securities
|
26 | | 26 | | ||||||||||||
Money market funds
|
135 | 135 | | | ||||||||||||
734 | 135 | 349 | 250 | |||||||||||||
Equity securities
|
8 | 2 | 5 | 1 | ||||||||||||
Investments of insurance subsidiary
|
742 | 137 | 354 | 251 | ||||||||||||
Less amounts classified as current assets
|
(100 | ) | (100 | ) | | | ||||||||||
$ | 642 | $ | 37 | $ | 354 | $ | 251 | |||||||||
Cross currency swap (Other assets)
|
$ | 39 | $ | | $ | 39 | $ | | ||||||||
Liabilities:
|
||||||||||||||||
Interest rate swaps (Income taxes and other liabilities)
|
$ | 426 | $ | | $ | 426 | $ | |
Asset balances at December 31, 2010
|
$ | 251 | ||
Unrealized losses included in other comprehensive income
|
(1 | ) | ||
Settlements
|
(99 | ) | ||
Asset balances at June 30, 2011
|
$ | 151 | ||
15
NOTE 8 | CONTINGENCIES |
NOTE 9 | COMPREHENSIVE INCOME AND CAPITAL STRUCTURE |
Quarter | Six Months | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Net income attributable to HCA Holdings, Inc.
|
$ | 229 | $ | 293 | $ | 469 | $ | 681 | ||||||||
Change in fair value of derivative instruments
|
2 | (14 | ) | 69 | (26 | ) | ||||||||||
Change in fair value of
available-for-sale
securities
|
| (8 | ) | (1 | ) | (7 | ) | |||||||||
Foreign currency translation adjustments
|
| (6 | ) | 14 | (27 | ) | ||||||||||
Defined benefit plans
|
3 | 2 | 7 | 5 | ||||||||||||
Comprehensive income
|
$ | 234 | $ | 267 | $ | 558 | $ | 626 | ||||||||
16
NOTE 9 | COMPREHENSIVE INCOME AND CAPITAL STRUCTURE (continued) |
June 30, |
December 31, |
|||||||
2011 | 2010 | |||||||
Change in fair value of derivative instruments
|
$ | (203 | ) | $ | (272 | ) | ||
Change in fair value of
available-for-sale
securities
|
5 | 6 | ||||||
Foreign currency translation adjustments
|
(5 | ) | (19 | ) | ||||
Defined benefit plans
|
(136 | ) | (143 | ) | ||||
Accumulated other comprehensive loss
|
$ | (339 | ) | $ | (428 | ) | ||
Equity (Deficit) Attributable to HCA Holdings, Inc. | ||||||||||||||||||||||||||||
Capital in |
Accumulated |
Equity |
||||||||||||||||||||||||||
Common Stock |
Excess of |
Other |
Attributable to |
|||||||||||||||||||||||||
Shares |
Par |
Par |
Comprehensive |
Retained |
Noncontrolling |
|||||||||||||||||||||||
(000) | Value | Value | Loss | Deficit | Interests | Total | ||||||||||||||||||||||
Balances, December 31, 2010
|
427,459 | $ | 4 | $ | 386 | $ | (428 | ) | $ | (11,888 | ) | $ | 1,132 | $ | (10,794 | ) | ||||||||||||
Net income
|
| | | | 469 | 185 | 654 | |||||||||||||||||||||
Other comprehensive income
|
| | | 89 | | | 89 | |||||||||||||||||||||
Issuance of common stock
|
87,719 | 1 | 2,505 | | | | 2,506 | |||||||||||||||||||||
Distributions
|
| | | | | (185 | ) | (185 | ) | |||||||||||||||||||
Share-based benefit plans
|
1,916 | | 18 | | | | 18 | |||||||||||||||||||||
Reclassification of certain equity securities with contingent
redemption rights
|
| | 141 | | | | 141 | |||||||||||||||||||||
Other
|
| | 22 | | | 15 | 37 | |||||||||||||||||||||
Balances, June 30, 2011
|
517,094 | $ | 5 | $ | 3,072 | $ | (339 | ) | $ | (11,419 | ) | $ | 1,147 | $ | (7,534 | ) | ||||||||||||
NOTE 10 | SEGMENT AND GEOGRAPHIC INFORMATION |
17
NOTE 10 | SEGMENT AND GEOGRAPHIC INFORMATION (continued) |
Quarter | Six Months | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Revenues:
|
||||||||||||||||
National Group
|
$ | 3,448 | $ | 3,292 | $ | 6,903 | $ | 6,495 | ||||||||
Southwest Group
|
2,445 | 2,384 | 4,880 | 4,722 | ||||||||||||
Central Group
|
1,885 | 1,836 | 3,764 | 3,600 | ||||||||||||
Corporate and other
|
285 | 244 | 571 | 483 | ||||||||||||
$ | 8,063 | $ | 7,756 | $ | 16,118 | $ | 15,300 | |||||||||
Equity in earnings of affiliates:
|
||||||||||||||||
National Group
|
$ | (1 | ) | $ | (1 | ) | $ | (2 | ) | $ | (2 | ) | ||||
Southwest Group
|
(73 | ) | (74 | ) | (148 | ) | (140 | ) | ||||||||
Central Group
|
| | | (1 | ) | |||||||||||
Corporate and other
|
1 | | 1 | | ||||||||||||
$ | (73 | ) | $ | (75 | ) | $ | (149 | ) | $ | (143 | ) | |||||
Adjusted segment EBITDA:
|
||||||||||||||||
National Group
|
$ | 576 | $ | 602 | $ | 1,248 | $ | 1,264 | ||||||||
Southwest Group
|
567 | 568 | 1,162 | 1,135 | ||||||||||||
Central Group
|
318 | 324 | 651 | 667 | ||||||||||||
Corporate and other
|
(41 | ) | (4 | ) | (51 | ) | (2 | ) | ||||||||
$ | 1,420 | $ | 1,490 | $ | 3,010 | $ | 3,064 | |||||||||
18
NOTE 10 | SEGMENT AND GEOGRAPHIC INFORMATION (continued) |
Quarter | Six Months | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Depreciation and amortization:
|
||||||||||||||||
National Group
|
$ | 127 | $ | 128 | $ | 252 | $ | 256 | ||||||||
Southwest Group
|
110 | 106 | 221 | 213 | ||||||||||||
Central Group
|
89 | 90 | 177 | 178 | ||||||||||||
Corporate and other
|
32 | 31 | 66 | 63 | ||||||||||||
$ | 358 | $ | 355 | $ | 716 | $ | 710 | |||||||||
Adjusted segment EBITDA
|
$ | 1,420 | $ | 1,490 | $ | 3,010 | $ | 3,064 | ||||||||
Depreciation and amortization
|
358 | 355 | 716 | 710 | ||||||||||||
Interest expense
|
520 | 530 | 1,053 | 1,046 | ||||||||||||
Losses on sales of facilities
|
| | 1 | | ||||||||||||
Impairments of long-lived assets
|
| 91 | | 109 | ||||||||||||
Loss on retirement of debt
|
75 | | 75 | | ||||||||||||
Termination of management agreement
|
| | 181 | | ||||||||||||
Income before income taxes
|
$ | 467 | $ | 514 | $ | 984 | $ | 1,199 | ||||||||
NOTE 11 | ACQUISITIONS, DISPOSITIONS AND IMPAIRMENTS OF LONG-LIVED ASSETS |
NOTE 12 | SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION |
19
NOTE 12 | SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION (continued) |
HCA |
Subsidiary |
|||||||||||||||||||||||
Holdings, Inc. |
HCA Inc. |
Subsidiary |
Non- |
Condensed |
||||||||||||||||||||
Issuer | Issuer | Guarantors | Guarantors | Eliminations | Consolidated | |||||||||||||||||||
Revenues
|
$ | | $ | | $ | 4,515 | $ | 3,548 | $ | | $ | 8,063 | ||||||||||||
Salaries and benefits
|
| | 1,872 | 1,448 | | 3,320 | ||||||||||||||||||
Supplies
|
| | 720 | 575 | | 1,295 | ||||||||||||||||||
Other operating expenses
|
| 2 | 686 | 638 | | 1,326 | ||||||||||||||||||
Provision for doubtful accounts
|
| | 457 | 318 | | 775 | ||||||||||||||||||
Equity in earnings of affiliates
|
(246 | ) | | (30 | ) | (43 | ) | 246 | (73 | ) | ||||||||||||||
Depreciation and amortization
|
| | 194 | 164 | | 358 | ||||||||||||||||||
Interest expense
|
30 | 741 | (153 | ) | (98 | ) | | 520 | ||||||||||||||||
Loss on retirement of debt
|
| 75 | | | | 75 | ||||||||||||||||||
Management fees
|
| | (129 | ) | 129 | | | |||||||||||||||||
(216 | ) | 818 | 3,617 | 3,131 | 246 | 7,596 | ||||||||||||||||||
Income (loss) before income taxes
|
216 | (818 | ) | 898 | 417 | (246 | ) | 467 | ||||||||||||||||
Provision for income taxes
|
(13 | ) | (323 | ) | 347 | 136 | | 147 | ||||||||||||||||
Net income (loss)
|
229 | (495 | ) | 551 | 281 | (246 | ) | 320 | ||||||||||||||||
Net income attributable to noncontrolling interests
|
| | 18 | 73 | | 91 | ||||||||||||||||||
Net income (loss) attributable to HCA Holdings, Inc.
|
$ | 229 | $ | (495 | ) | $ | 533 | $ | 208 | $ | (246 | ) | $ | 229 | ||||||||||
20
NOTE 12 | SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION (continued) |
Subsidiary |
||||||||||||||||||||
HCA Inc. |
Subsidiary |
Non- |
Condensed |
|||||||||||||||||
Issuer | Guarantors | Guarantors | Eliminations | Consolidated | ||||||||||||||||
Revenues
|
$ | | $ | 4,479 | $ | 3,277 | $ | | $ | 7,756 | ||||||||||
Salaries and benefits
|
| 1,809 | 1,267 | | 3,076 | |||||||||||||||
Supplies
|
| 724 | 527 | | 1,251 | |||||||||||||||
Other operating expenses
|
1 | 665 | 560 | | 1,226 | |||||||||||||||
Provision for doubtful accounts
|
| 499 | 289 | | 788 | |||||||||||||||
Equity in earnings of affiliates
|
(745 | ) | (28 | ) | (47 | ) | 745 | (75 | ) | |||||||||||
Depreciation and amortization
|
| 197 | 158 | | 355 | |||||||||||||||
Interest expense
|
668 | (122 | ) | (16 | ) | | 530 | |||||||||||||
Impairments of long-lived assets
|
| 38 | 53 | | 91 | |||||||||||||||
Management fees
|
| (120 | ) | 120 | | | ||||||||||||||
(76 | ) | 3,662 | 2,911 | 745 | 7,242 | |||||||||||||||
Income before income taxes
|
76 | 817 | 366 | (745 | ) | 514 | ||||||||||||||
Provision for income taxes
|
(217 | ) | 259 | 94 | | 136 | ||||||||||||||
Net income
|
293 | 558 | 272 | (745 | ) | 378 | ||||||||||||||
Net income attributable to noncontrolling interests
|
| 14 | 71 | | 85 | |||||||||||||||
Net income attributable to HCA Holdings, Inc.
|
$ | 293 | $ | 544 | $ | 201 | $ | (745 | ) | $ | 293 | |||||||||
21
NOTE 12 | SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION (continued) |
HCA |
Subsidiary |
|||||||||||||||||||||||
Holdings, Inc. |
HCA Inc. |
Subsidiary |
Non- |
Condensed |
||||||||||||||||||||
Issuer | Issuer | Guarantors | Guarantors | Eliminations | Consolidated | |||||||||||||||||||
Revenues
|
$ | | $ | | $ | 9,093 | $ | 7,025 | $ | | $ | 16,118 | ||||||||||||
Salaries and benefits
|
| | 3,768 | 2,847 | | 6,615 | ||||||||||||||||||
Supplies
|
| | 1,431 | 1,139 | | 2,570 | ||||||||||||||||||
Other operating expenses
|
| 4 | 1,367 | 1,277 | | 2,648 | ||||||||||||||||||
Provision for doubtful accounts
|
| | 874 | 550 | | 1,424 | ||||||||||||||||||
Equity in earnings of affiliates
|
(504 | ) | | (60 | ) | (89 | ) | 504 | (149 | ) | ||||||||||||||
Depreciation and amortization
|
| | 389 | 327 | | 716 | ||||||||||||||||||
Interest expense
|
60 | 1,432 | (316 | ) | (123 | ) | | 1,053 | ||||||||||||||||
Losses (gains) on sales of facilities
|
| | 16 | (15 | ) | | 1 | |||||||||||||||||
Loss on retirement of debt
|
| 75 | | | | 75 | ||||||||||||||||||
Termination of management agreement
|
| 181 | | | | 181 | ||||||||||||||||||
Management fees
|
| | (253 | ) | 253 | | | |||||||||||||||||
(444 | ) | 1,692 | 7,216 | 6,166 | 504 | 15,134 | ||||||||||||||||||
Income (loss) before income taxes
|
444 | (1,692 | ) | 1,877 | 859 | (504 | ) | 984 | ||||||||||||||||
Provision for income taxes
|
(25 | ) | (698 | ) | 762 | 291 | | 330 | ||||||||||||||||
Net income (loss)
|
469 | (994 | ) | 1,115 | 568 | (504 | ) | 654 | ||||||||||||||||
Net income attributable to noncontrolling interests
|
| | 31 | 154 | | 185 | ||||||||||||||||||
Net income (loss) attributable to HCA Holdings, Inc.
|
$ | 469 | $ | (994 | ) | $ | 1,084 | $ | 414 | $ | (504 | ) | $ | 469 | ||||||||||
22
NOTE 12 | SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION (continued) |
Subsidiary |
||||||||||||||||||||
HCA Inc. |
Subsidiary |
Non- |
Condensed |
|||||||||||||||||
Issuer | Guarantors | Guarantors | Eliminations | Consolidated | ||||||||||||||||
Revenues
|
$ | | $ | 8,853 | $ | 6,447 | $ | | $ | 15,300 | ||||||||||
Salaries and benefits
|
| 3,635 | 2,513 | | 6,148 | |||||||||||||||
Supplies
|
| 1,414 | 1,037 | | 2,451 | |||||||||||||||
Other operating expenses
|
3 | 1,303 | 1,122 | | 2,428 | |||||||||||||||
Provision for doubtful accounts
|
| 857 | 495 | | 1,352 | |||||||||||||||
Equity in earnings of affiliates
|
(1,556 | ) | (55 | ) | (88 | ) | 1,556 | (143 | ) | |||||||||||
Depreciation and amortization
|
| 392 | 318 | | 710 | |||||||||||||||
Interest expense
|
1,316 | (237 | ) | (33 | ) | | 1,046 | |||||||||||||
Impairments of long-lived assets
|
| 53 | 56 | | 109 | |||||||||||||||
Management fees
|
| (238 | ) | 238 | | | ||||||||||||||
(237 | ) | 7,124 | 5,658 | 1,556 | 14,101 | |||||||||||||||
Income before income taxes
|
237 | 1,729 | 789 | (1,556 | ) | 1,199 | ||||||||||||||
Provision for income taxes
|
(444 | ) | 572 | 217 | | 345 | ||||||||||||||
Net income
|
681 | 1,157 | 572 | (1,556 | ) | 854 | ||||||||||||||
Net income attributable to noncontrolling interests
|
| 29 | 144 | | 173 | |||||||||||||||
Net income attributable to HCA Holdings, Inc.
|
$ | 681 | $ | 1,128 | $ | 428 | $ | (1,556 | ) | $ | 681 | |||||||||
23
NOTE 12 | SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION (continued) |
HCA |
Subsidiary |
|||||||||||||||||||||||
Holdings, Inc. |
HCA Inc. |
Subsidiary |
Non- |
Condensed |
||||||||||||||||||||
Issuer | Issuer | Guarantors | Guarantors | Eliminations | Consolidated | |||||||||||||||||||
ASSETS
|
||||||||||||||||||||||||
Current assets:
|
||||||||||||||||||||||||
Cash and cash equivalents
|
$ | | $ | | $ | 131 | $ | 408 | $ | | $ | 539 | ||||||||||||
Accounts receivable, net
|
| | 2,235 | 1,711 | | 3,946 | ||||||||||||||||||
Inventories
|
| | 545 | 342 | | 887 | ||||||||||||||||||
Deferred income taxes
|
894 | | | | | 894 | ||||||||||||||||||
Other
|
| | 182 | 443 | | 625 | ||||||||||||||||||
894 | | 3,093 | 2,904 | | 6,891 | |||||||||||||||||||
Property and equipment, net
|
| | 6,953 | 4,631 | | 11,584 | ||||||||||||||||||
Investments of insurance subsidiary
|
| | | 515 | | 515 | ||||||||||||||||||
Investments in and advances to affiliates
|
| | 222 | 621 | | 843 | ||||||||||||||||||
Goodwill
|
| | 1,609 | 1,110 | | 2,719 | ||||||||||||||||||
Deferred loan costs
|
23 | 309 | | | | 332 | ||||||||||||||||||
Investments in and advances to subsidiaries
|
14,786 | | | | (14,786 | ) | | |||||||||||||||||
Other
|
668 | 92 | 29 | 204 | | 993 | ||||||||||||||||||
$ | 16,371 | $ | 401 | $ | 11,906 | $ | 9,985 | $ | (14,786 | ) | $ | 23,877 | ||||||||||||
LIABILITIES AND STOCKHOLDERS (DEFICIT) EQUITY
|
||||||||||||||||||||||||
Current liabilities:
|
||||||||||||||||||||||||
Accounts payable
|
$ | | $ | | $ | 751 | $ | 546 | $ | | $ | 1,297 | ||||||||||||
Accrued salaries
|
| | 628 | 381 | | 1,009 | ||||||||||||||||||
Other accrued expenses
|
50 | 271 | 318 | 644 | | 1,283 | ||||||||||||||||||
Long-term debt due within one year
|
| 651 | 14 | 24 | | 689 | ||||||||||||||||||
50 | 922 | 1,711 | 1,595 | | 4,278 | |||||||||||||||||||
Long-term debt
|
1,525 | 22,437 | 82 | 587 | | 24,631 | ||||||||||||||||||
Intercompany balances
|
23,040 | (11,785 | ) | (13,775 | ) | 2,520 | | | ||||||||||||||||
Professional liability risks
|
| | | 987 | | 987 | ||||||||||||||||||
Income taxes and other liabilities
|
437 | 334 | 535 | 209 | | 1,515 | ||||||||||||||||||
25,052 | 11,908 | (11,447 | ) | 5,898 | | 31,411 | ||||||||||||||||||
Stockholders (deficit) equity attributable to HCA
Holdings, Inc.
|
(8,681 | ) | (11,507 | ) | 23,251 | 3,042 | (14,786 | ) | (8,681 | ) | ||||||||||||||
Noncontrolling interests
|
| | 102 | 1,045 | | 1,147 | ||||||||||||||||||
(8,681 | ) | (11,507 | ) | 23,353 | 4,087 | (14,786 | ) | (7,534 | ) | |||||||||||||||
$ | 16,371 | $ | 401 | $ | 11,906 | $ | 9,985 | $ | (14,786 | ) | $ | 23,877 | ||||||||||||
24
NOTE 12 | SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION (continued) |
HCA |
Subsidiary |
|||||||||||||||||||||||
Holdings, Inc. |
HCA Inc. |
Subsidiary |
Non- |
Condensed |
||||||||||||||||||||
Issuer | Issuer | Guarantors | Guarantors | Eliminations | Consolidated | |||||||||||||||||||
ASSETS
|
||||||||||||||||||||||||
Current assets:
|
||||||||||||||||||||||||
Cash and cash equivalents
|
$ | 6 | $ | | $ | 156 | $ | 249 | $ | | $ | 411 | ||||||||||||
Accounts receivable, net
|
| | 2,214 | 1,618 | | 3,832 | ||||||||||||||||||
Inventories
|
| | 547 | 350 | | 897 | ||||||||||||||||||
Deferred income taxes
|
931 | | | | | 931 | ||||||||||||||||||
Other
|
202 | | 223 | 423 | | 848 | ||||||||||||||||||
1,139 | | 3,140 | 2,640 | | 6,919 | |||||||||||||||||||
Property and equipment, net
|
| | 6,817 | 4,535 | | 11,352 | ||||||||||||||||||
Investments of insurance subsidiary
|
| | | 642 | | 642 | ||||||||||||||||||
Investments in and advances to affiliates
|
| | 248 | 621 | | 869 | ||||||||||||||||||
Goodwill
|
| | 1,635 | 1,058 | | 2,693 | ||||||||||||||||||
Deferred loan costs
|
23 | 351 | | | | 374 | ||||||||||||||||||
Investments in and advances to subsidiaries
|
14,282 | | | | (14,282 | ) | | |||||||||||||||||
Other
|
776 | 39 | 21 | 167 | | 1,003 | ||||||||||||||||||
$ | 16,220 | $ | 390 | $ | 11,861 | $ | 9,663 | $ | (14,282 | ) | $ | 23,852 | ||||||||||||
LIABILITIES AND STOCKHOLDERS (DEFICIT) EQUITY
|
||||||||||||||||||||||||
Current liabilities:
|
||||||||||||||||||||||||
Accounts payable
|
$ | | $ | | $ | 919 | $ | 618 | $ | | $ | 1,537 | ||||||||||||
Accrued salaries
|
| | 556 | 339 | | 895 | ||||||||||||||||||
Other accrued expenses
|
12 | 296 | 328 | 609 | | 1,245 | ||||||||||||||||||
Long-term debt due within one year
|
| 554 | 12 | 26 | | 592 | ||||||||||||||||||
12 | 850 | 1,815 | 1,592 | | 4,269 | |||||||||||||||||||
Long-term debt
|
1,525 | 25,758 | 95 | 255 | | 27,633 | ||||||||||||||||||
Intercompany balances
|
25,985 | (16,130 | ) | (12,833 | ) | 2,978 | | | ||||||||||||||||
Professional liability risks
|
| | | 995 | | 995 | ||||||||||||||||||
Income taxes and other liabilities
|
483 | 425 | 505 | 195 | | 1,608 | ||||||||||||||||||
28,005 | 10,903 | (10,418 | ) | 6,015 | | 34,505 | ||||||||||||||||||
Equity securities with contingent redemption rights
|
141 | | | | | 141 | ||||||||||||||||||
Stockholders (deficit) equity attributable to HCA
Holdings, Inc.
|
(11,926 | ) | (10,513 | ) | 22,167 | 2,628 | (14,282 | ) | (11,926 | ) | ||||||||||||||
Noncontrolling interests
|
| | 112 | 1,020 | | 1,132 | ||||||||||||||||||
(11,926 | ) | (10,513 | ) | 22,279 | 3,648 | (14,282 | ) | (10,794 | ) | |||||||||||||||
$ | 16,220 | $ | 390 | $ | 11,861 | $ | 9,663 | $ | (14,282 | ) | $ | 23,852 | ||||||||||||
25
NOTE 12 | SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION (continued) |
HCA |
Subsidiary |
|||||||||||||||||||||||
Holdings, Inc. |
HCA Inc. |
Subsidiary |
Non- |
Condensed |
||||||||||||||||||||
Issuer | Issuer | Guarantors | Guarantors | Eliminations | Consolidated | |||||||||||||||||||
Cash flows from operating activities:
|
||||||||||||||||||||||||
Net income
|
$ | 469 | $ | (994 | ) | $ | 1,115 | $ | 568 | $ | (504 | ) | $ | 654 | ||||||||||
Adjustments to reconcile net income to net cash provided by
(used in) operating activities:
|
||||||||||||||||||||||||
Changes in operating assets and liabilities
|
4 | (24 | ) | (916 | ) | (640 | ) | | (1,576 | ) | ||||||||||||||
Provision for doubtful accounts
|
| | 874 | 550 | | 1,424 | ||||||||||||||||||
Depreciation and amortization
|
| | 389 | 327 | | 716 | ||||||||||||||||||
Income taxes
|
317 | | | | | 317 | ||||||||||||||||||
Losses (gains) on sales of facilities
|
| | 15 | (14 | ) | | 1 | |||||||||||||||||
Loss on retirement of debt
|
| 75 | | | | 75 | ||||||||||||||||||
Amortization of deferred loan costs
|
| 39 | | | | 39 | ||||||||||||||||||
Share-based compensation
|
16 | | | | | 16 | ||||||||||||||||||
Equity in earnings of affiliates
|
(504 | ) | | | | 504 | | |||||||||||||||||
Other
|
| 6 | | (6 | ) | | | |||||||||||||||||
Net cash provided by (used in) operating activities
|
302 | (898 | ) | 1,477 | 785 | | 1,666 | |||||||||||||||||
Cash flows from investing activities:
|
||||||||||||||||||||||||
Purchase of property and equipment
|
| | (389 | ) | (387 | ) | | (776 | ) | |||||||||||||||
Acquisition of hospitals and health care entities
|
| | (136 | ) | (32 | ) | | (168 | ) | |||||||||||||||
Disposition of hospitals and health care entities
|
| | 1 | 53 | | 54 | ||||||||||||||||||
Change in investments
|
| | 24 | 52 | | 76 | ||||||||||||||||||
Other
|
| | | 2 | | 2 | ||||||||||||||||||
Net cash used in investing activities
|
| | (500 | ) | (312 | ) | | (812 | ) | |||||||||||||||
Cash flows from financing activities:
|
||||||||||||||||||||||||
Net change in revolving bank credit facilities
|
| (1,524 | ) | | | | (1,524 | ) | ||||||||||||||||
Repayment of long-term debt
|
| (1,456 | ) | (6 | ) | (46 | ) | | (1,508 | ) | ||||||||||||||
Distributions to noncontrolling interests
|
| | (41 | ) | (144 | ) | | (185 | ) | |||||||||||||||
Distributions to stockholders
|
(30 | ) | | | | | (30 | ) | ||||||||||||||||
Changes in intercompany balances with affiliates, net
|
(2,805 | ) | 3,890 | (955 | ) | (130 | ) | | | |||||||||||||||
Payment of debt issuance costs
|
| (12 | ) | | | | (12 | ) | ||||||||||||||||
Issuances of common stock
|
2,506 | | | | | 2,506 | ||||||||||||||||||
Income tax benefits
|
49 | | | | | 49 | ||||||||||||||||||
Other
|
(28 | ) | | | 6 | | (22 | ) | ||||||||||||||||
Net cash (used in) provided by financing activities
|
(308 | ) | 898 | (1,002 | ) | (314 | ) | | (726 | ) | ||||||||||||||
Change in cash and cash equivalents
|
(6 | ) | | (25 | ) | 159 | | 128 | ||||||||||||||||
Cash and cash equivalents at beginning of period
|
6 | | 156 | 249 | | 411 | ||||||||||||||||||
Cash and cash equivalents at end of period
|
$ | | $ | | $ | 131 | $ | 408 | $ | | $ | 539 | ||||||||||||
26
NOTE 12 | SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION (continued) |
Subsidiary |
||||||||||||||||||||||||
HCA Inc. |
Subsidiary |
Non- |
Condensed |
|||||||||||||||||||||
Issuer | Guarantors | Guarantors | Eliminations | Consolidated | ||||||||||||||||||||
Cash flows from operating activities:
|
||||||||||||||||||||||||
Net income
|
$ | 681 | $ | 1,157 | $ | 572 | $ | (1,556 | ) | $ | 854 | |||||||||||||
Adjustments to reconcile net income to net cash (used in)
provided by operating activities:
|
||||||||||||||||||||||||
Changes in operating assets and liabilities
|
31 | (1,057 | ) | (672 | ) | | (1,698 | ) | ||||||||||||||||
Provision for doubtful accounts
|
| 857 | 495 | | 1,352 | |||||||||||||||||||
Depreciation and amortization
|
| 392 | 318 | | 710 | |||||||||||||||||||
Income taxes
|
(111 | ) | | | | (111 | ) | |||||||||||||||||
Impairments of long-lived assets
|
| 48 | 61 | | 109 | |||||||||||||||||||
Amortization of deferred loan costs
|
40 | | | | 40 | |||||||||||||||||||
Share-based compensation
|
16 | | | | 16 | |||||||||||||||||||
Equity in earnings of affiliates
|
(1,556 | ) | | | 1,556 | | ||||||||||||||||||
Other
|
23 | | | | 23 | |||||||||||||||||||
Net cash (used in) provided by operating activities
|
(876 | ) | 1,397 | 774 | | 1,295 | ||||||||||||||||||
Cash flows from investing activities:
|
||||||||||||||||||||||||
Purchase of property and equipment
|
| (225 | ) | (311 | ) | | (536 | ) | ||||||||||||||||
Acquisition of hospitals and health care entities
|
| (21 | ) | (10 | ) | | (31 | ) | ||||||||||||||||
Disposition of hospitals and health care entities
|
| 24 | 1 | | 25 | |||||||||||||||||||
Change in investments
|
| 10 | 492 | | 502 | |||||||||||||||||||
Other
|
| (1 | ) | (10 | ) | | (11 | ) | ||||||||||||||||
Net cash (used in) provided by investing activities
|
| (213 | ) | 162 | | (51 | ) | |||||||||||||||||
Cash flows from financing activities:
|
||||||||||||||||||||||||
Issuance of long-term debt
|
1,387 | | | | 1,387 | |||||||||||||||||||
Net change in revolving credit facilities
|
1,329 | | | | 1,329 | |||||||||||||||||||
Repayment of long-term debt
|
(1,508 | ) | (11 | ) | (10 | ) | | (1,529 | ) | |||||||||||||||
Distributions to noncontrolling interests
|
| (41 | ) | (135 | ) | | (176 | ) | ||||||||||||||||
Distributions to stockholders
|
(2,251 | ) | | | | (2,251 | ) | |||||||||||||||||
Changes in intercompany balances with affiliates, net
|
1,893 | (1,119 | ) | (774 | ) | | | |||||||||||||||||
Payment of debt issuance costs
|
(25 | ) | | | | (25 | ) | |||||||||||||||||
Income tax benefits
|
56 | | | | 56 | |||||||||||||||||||
Other
|
(5 | ) | | 8 | | 3 | ||||||||||||||||||
Net cash provided by (used in) financing activities
|
876 | (1,171 | ) | (911 | ) | | (1,206 | ) | ||||||||||||||||
Change in cash and cash equivalents
|
| 13 | 25 | | 38 | |||||||||||||||||||
Cash and cash equivalents at beginning of period
|
| 95 | 217 | | 312 | |||||||||||||||||||
Cash and cash equivalents at end of period
|
$ | | $ | 108 | $ | 242 | $ | | $ | 350 | ||||||||||||||
27
NOTE 13 | SUBSEQUENT EVENTS |
28
30
Quarter | ||||||||||||||||
2011 | Ratio | 2010 | Ratio | |||||||||||||
Medicare
|
$ | 1,871 | 23.2 | % | $ | 1,824 | 23.5 | % | ||||||||
Managed Medicare
|
584 | 7.3 | 549 | 7.1 | ||||||||||||
Medicaid
|
479 | 5.9 | 511 | 6.6 | ||||||||||||
Managed Medicaid
|
316 | 3.9 | 281 | 3.6 | ||||||||||||
Managed care and other insurers
|
3,916 | 48.6 | 3,733 | 48.2 | ||||||||||||
International (managed care and other insurers)
|
233 | 2.9 | 193 | 2.5 | ||||||||||||
7,399 | 91.8 | 7,091 | 91.5 | |||||||||||||
Uninsured
|
492 | 6.1 | 523 | 6.7 | ||||||||||||
Other
|
172 | 2.1 | 142 | 1.8 | ||||||||||||
Revenues
|
$ | 8,063 | 100.0 | % | $ | 7,756 | 100.0 | % | ||||||||
Six Months | ||||||||||||||||
2011 | Ratio | 2010 | Ratio | |||||||||||||
Medicare
|
$ | 3,871 | 24.0 | % | $ | 3,675 | 24.0 | % | ||||||||
Managed Medicare
|
1,196 | 7.4 | 1,099 | 7.2 | ||||||||||||
Medicaid
|
987 | 6.1 | 989 | 6.5 | ||||||||||||
Managed Medicaid
|
635 | 3.9 | 578 | 3.8 | ||||||||||||
Managed care and other insurers
|
7,772 | 48.2 | 7,445 | 48.7 | ||||||||||||
International (managed care and other insurers)
|
466 | 2.9 | 382 | 2.5 | ||||||||||||
14,927 | 92.5 | 14,168 | 92.7 | |||||||||||||
Uninsured
|
882 | 5.5 | 870 | 5.7 | ||||||||||||
Other
|
309 | 2.0 | 262 | 1.6 | ||||||||||||
Revenues
|
$ | 16,118 | 100.0 | % | $ | 15,300 | 100.0 | % | ||||||||
31
Quarter | Six Months | |||||||||||||||||||||||||||||||
2011 | Ratio | 2010 | Ratio | 2011 | Ratio | 2010 | Ratio | |||||||||||||||||||||||||
Provision for doubtful accounts
|
$ | 775 | 28 | % | $ | 788 | 32 | % | $ | 1,424 | 27 | % | $ | 1,352 | 29 | % | ||||||||||||||||
Uninsured discounts
|
1,342 | 48 | 1,072 | 44 | 2,615 | 49 | 2,107 | 46 | ||||||||||||||||||||||||
Charity care
|
657 | 24 | 599 | 24 | 1,292 | 24 | 1,144 | 25 | ||||||||||||||||||||||||
Totals
|
$ | 2,774 | 100 | % | $ | 2,459 | 100 | % | $ | 5,331 | 100 | % | $ | 4,603 | 100 | % | ||||||||||||||||
Quarter | Six Months | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Medicare
|
35 | % | 34 | % | 35 | % | 35 | % | ||||||||
Managed Medicare
|
11 | 10 | 11 | 10 | ||||||||||||
Medicaid
|
9 | 9 | 9 | 9 | ||||||||||||
Managed Medicaid
|
7 | 7 | 7 | 7 | ||||||||||||
Managed care and other insurers
|
31 | 33 | 31 | 32 | ||||||||||||
Uninsured
|
7 | 7 | 7 | 7 | ||||||||||||
100 | % | 100 | % | 100 | % | 100 | % | |||||||||
32
Quarter | Six Months | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Medicare
|
31 | % | 31 | % | 32 | % | 32 | % | ||||||||
Managed Medicare
|
9 | 9 | 9 | 9 | ||||||||||||
Medicaid
|
9 | 9 | 9 | 9 | ||||||||||||
Managed Medicaid
|
4 | 4 | 4 | 4 | ||||||||||||
Managed care and other insurers
|
44 | 43 | 44 | 43 | ||||||||||||
Uninsured
|
3 | 4 | 2 | 3 | ||||||||||||
100 | % | 100 | % | 100 | % | 100 | % | |||||||||
33
34
Quarter | ||||||||||||||||
2011 | 2010 | |||||||||||||||
Amount | Ratio | Amount | Ratio | |||||||||||||
Revenues
|
$ | 8,063 | 100.0 | $ | 7,756 | 100.0 | ||||||||||
Salaries and benefits
|
3,320 | 41.2 | 3,076 | 39.6 | ||||||||||||
Supplies
|
1,295 | 16.1 | 1,251 | 16.1 | ||||||||||||
Other operating expenses
|
1,326 | 16.4 | 1,226 | 15.9 | ||||||||||||
Provision for doubtful accounts
|
775 | 9.6 | 788 | 10.2 | ||||||||||||
Equity in earnings of affiliates
|
(73 | ) | (0.9 | ) | (75 | ) | (1.0 | ) | ||||||||
Depreciation and amortization
|
358 | 4.5 | 355 | 4.6 | ||||||||||||
Interest expense
|
520 | 6.4 | 530 | 6.8 | ||||||||||||
Impairments of long-lived assets
|
| | 91 | 1.2 | ||||||||||||
Loss on retirement of debt
|
75 | 0.9 | | | ||||||||||||
7,596 | 94.2 | 7,242 | 93.4 | |||||||||||||
Income before income taxes
|
467 | 5.8 | 514 | 6.6 | ||||||||||||
Provision for income taxes
|
147 | 1.8 | 136 | 1.7 | ||||||||||||
Net income
|
320 | 4.0 | 378 | 4.9 | ||||||||||||
Net income attributable to noncontrolling interests
|
91 | 1.2 | 85 | 1.1 | ||||||||||||
Net income attributable to HCA Holdings, Inc.
|
$ | 229 | 2.8 | $ | 293 | 3.8 | ||||||||||
% changes from prior year:
|
||||||||||||||||
Revenues
|
4.0 | % | 3.7 | % | ||||||||||||
Income before income taxes
|
(9.2 | ) | (2.2 | ) | ||||||||||||
Net income attributable to HCA Holdings, Inc.
|
(21.5 | ) | 3.4 | |||||||||||||
Admissions(a)
|
3.2 | (0.6 | ) | |||||||||||||
Equivalent admissions(b)
|
3.4 | 1.3 | ||||||||||||||
Revenue per equivalent admission
|
0.5 | 2.3 | ||||||||||||||
Same facility % changes from prior year(c):
|
||||||||||||||||
Revenues
|
2.4 | 3.8 | ||||||||||||||
Admissions(a)
|
1.8 | (0.3 | ) | |||||||||||||
Equivalent admissions(b)
|
1.9 | 1.6 | ||||||||||||||
Revenue per equivalent admission
|
0.5 | 2.2 |
35
Six Months | ||||||||||||||||
2011 | 2010 | |||||||||||||||
Amount | Ratio | Amount | Ratio | |||||||||||||
Revenues
|
$ | 16,118 | 100.0 | $ | 15,300 | 100.0 | ||||||||||
Salaries and benefits
|
6,615 | 41.0 | 6,148 | 40.2 | ||||||||||||
Supplies
|
2,570 | 15.9 | 2,451 | 16.0 | ||||||||||||
Other operating expenses
|
2,648 | 16.5 | 2,428 | 15.9 | ||||||||||||
Provision for doubtful accounts
|
1,424 | 8.8 | 1,352 | 8.8 | ||||||||||||
Equity in earnings of affiliates
|
(149 | ) | (0.9 | ) | (143 | ) | (0.9 | ) | ||||||||
Depreciation and amortization
|
716 | 4.5 | 710 | 4.7 | ||||||||||||
Interest expense
|
1,053 | 6.5 | 1,046 | 6.8 | ||||||||||||
Losses on sales of facilities
|
1 | | | | ||||||||||||
Impairments of long-lived assets
|
| | 109 | 0.7 | ||||||||||||
Loss on retirement of debt
|
75 | 0.5 | | | ||||||||||||
Termination of management agreement
|
181 | 1.1 | | | ||||||||||||
15,134 | 93.9 | 14,101 | 92.2 | |||||||||||||
Income before income taxes
|
984 | 6.1 | 1,199 | 7.8 | ||||||||||||
Provision for income taxes
|
330 | 2.0 | 345 | 2.2 | ||||||||||||
Net income
|
654 | 4.1 | 854 | 5.6 | ||||||||||||
Net income attributable to noncontrolling interests
|
185 | 1.2 | 173 | 1.1 | ||||||||||||
Net income attributable to HCA Holdings, Inc.
|
$ | 469 | 2.9 | $ | 681 | 4.5 | ||||||||||
% changes from prior year:
|
||||||||||||||||
Revenues
|
5.3 | % | 2.6 | % | ||||||||||||
Income before income taxes
|
(18.0 | ) | 4.7 | |||||||||||||
Net income attributable to HCA Holdings, Inc.
|
(31.1 | ) | 6.0 | |||||||||||||
Admissions(a)
|
2.6 | 0.1 | ||||||||||||||
Equivalent admissions(b)
|
3.6 | 1.1 | ||||||||||||||
Revenue per equivalent admission
|
1.7 | 1.5 | ||||||||||||||
Same facility % changes from prior year(c):
|
||||||||||||||||
Revenues
|
4.1 | 2.7 | ||||||||||||||
Admissions(a)
|
1.7 | 0.3 | ||||||||||||||
Equivalent admissions(b)
|
2.6 | 1.3 | ||||||||||||||
Revenue per equivalent admission
|
1.5 | 1.3 |
(a) | Represents the total number of patients admitted to our hospitals and is used by management and certain investors as a general measure of inpatient volume. | |
(b) | Equivalent admissions are used by management and certain investors as a general measure of combined inpatient and outpatient volume. Equivalent admissions are computed by multiplying admissions (inpatient volume) by the sum of gross inpatient revenues and gross outpatient revenues and then dividing the resulting amount by gross inpatient revenues. The equivalent admissions computation equates outpatient revenues to the volume measure (admissions) used to measure inpatient volume, resulting in a general measure of combined inpatient and outpatient volume. | |
(c) | Same facility information excludes the operations of hospitals and their related facilities which were either acquired or divested during the current and prior period. |
36
Quarter | ||||||||||||||||||||||||
2011 | 2010 | |||||||||||||||||||||||
Non-GAAP % of |
GAAP % of |
Non-GAAP % of |
GAAP % of |
|||||||||||||||||||||
Cash Revenues |
Revenues |
Cash Revenues |
Revenues |
|||||||||||||||||||||
Amount | Ratios(b) | Ratios(b) | Amount | Ratios(b) | Ratios(b) | |||||||||||||||||||
Revenues
|
$ | 8,063 | 100.0 | $ | 7,756 | 100.0 | ||||||||||||||||||
Provision for doubtful accounts
|
775 | 788 | ||||||||||||||||||||||
Cash revenues(a)
|
7,288 | 100.0 | 6,968 | 100.0 | ||||||||||||||||||||
Salaries and benefits
|
3,320 | 45.5 | 41.2 | 3,076 | 44.1 | 39.6 | ||||||||||||||||||
Supplies
|
1,295 | 17.8 | 16.1 | 1,251 | 17.9 | 16.1 | ||||||||||||||||||
Other operating expenses
|
1,326 | 18.2 | 16.4 | 1,226 | 17.7 | 15.9 | ||||||||||||||||||
% changes from prior year:
|
||||||||||||||||||||||||
Revenues
|
4.0 | % | 3.7 | % | ||||||||||||||||||||
Cash revenues
|
4.6 | 5.3 | ||||||||||||||||||||||
Revenue per equivalent admission
|
0.5 | 2.3 | ||||||||||||||||||||||
Cash revenue per equivalent admission
|
1.1 | 4.0 |
Six Months | ||||||||||||||||||||||||
2011 | 2010 | |||||||||||||||||||||||
Non-GAAP % of |
GAAP % of |
Non-GAAP % of |
GAAP % of |
|||||||||||||||||||||
Cash Revenues |
Revenues |
Cash Revenues |
Revenues |
|||||||||||||||||||||
Amount | Ratios(b) | Ratios(b) | Amount | Ratios(b) | Ratios(b) | |||||||||||||||||||
Revenues
|
$ | 16,118 | 100.0 | $ | 15,300 | 100.0 | ||||||||||||||||||
Provision for doubtful accounts
|
1,424 | 1,352 | ||||||||||||||||||||||
Cash revenues(a)
|
14,694 | 100.0 | 13,948 | 100.0 | ||||||||||||||||||||
Salaries and benefits
|
6,615 | 45.0 | 41.0 | 6,148 | 44.1 | 40.2 | ||||||||||||||||||
Supplies
|
2,570 | 17.5 | 15.9 | 2,451 | 17.6 | 16.0 | ||||||||||||||||||
Other operating expenses
|
2,648 | 18.0 | 16.5 | 2,428 | 17.3 | 15.9 | ||||||||||||||||||
% changes from prior year:
|
||||||||||||||||||||||||
Revenues
|
5.3 | % | 2.6 | % | ||||||||||||||||||||
Cash revenues
|
5.3 | 5.3 | ||||||||||||||||||||||
Revenue per equivalent admission
|
1.7 | 1.5 | ||||||||||||||||||||||
Cash revenue per equivalent admission
|
1.7 | 4.2 |
(a) | Cash revenues is defined as reported revenues less the provision for doubtful accounts. We use cash revenues as an analytical indicator for purposes of assessing the effect of uninsured patient volumes, adjusted for the effect of both the revenue deductions related to uninsured accounts (charity care and uninsured discounts) and the provision for doubtful accounts (which relates primarily to uninsured accounts), on our revenues and certain operating expenses, as a percentage of cash revenues. During the second quarter and first six months of 2011, uninsured discounts increased $270 million and $508 million, respectively, charity care increased $58 million and $148 million, respectively, and the provision for doubtful accounts declined $13 million and increased $72 million, respectively, compared to the same periods for 2010. Cash revenues is commonly used as an analytical indicator within the health care industry. Cash revenues should not be considered as a measure of financial performance under generally accepted accounting principles (GAAP). Because cash revenues is not a measurement determined in accordance with GAAP and is thus susceptible to varying calculations, cash revenues, as presented, may not be comparable to other similarly titled measures of other health care companies. | |
(b) | Salaries and benefits, supplies and other operating expenses, as a percentage of cash revenues (a non-GAAP financial measure), present the impact on these ratios due to the adjustment of deducting the provision for doubtful accounts from reported revenues and results in these ratios being non-GAAP financial measures. We believe these non-GAAP financial measures are useful to investors to provide disclosures of our results of operations on the same basis as that used by management. Management uses this information to compare certain operating expense categories as a percentage of cash revenues. Management finds this information useful to evaluate certain expense category trends without the influence of whether adjustments related to revenues for uninsured accounts are recorded as revenue adjustments (charity care and uninsured discounts) or operating expenses (provision for doubtful accounts), and thus the expense category trends are generally analyzed as a percentage of cash revenues. These non-GAAP financial measures should not be considered alternatives to GAAP financial measures. We believe this supplemental information provides management and the users of our financial statements with useful information for period-to-period comparisons. Investors are encouraged to use GAAP measures when evaluating our overall financial performance. |
37
38
39
40
41
42
43
44
2011 | 2010 | |||||||
CONSOLIDATING
|
||||||||
Number of hospitals in operation at:
|
||||||||
March 31
|
156 | 154 | ||||||
June 30
|
157 | 154 | ||||||
September 30
|
154 | |||||||
December 31
|
156 | |||||||
Number of freestanding outpatient surgical centers in operation
at:
|
||||||||
March 31
|
98 | 98 | ||||||
June 30
|
98 | 98 | ||||||
September 30
|
96 | |||||||
December 31
|
97 | |||||||
Licensed hospital beds at(a):
|
||||||||
March 31
|
39,075 | 38,719 | ||||||
June 30
|
39,472 | 38,636 | ||||||
September 30
|
38,636 | |||||||
December 31
|
38,827 | |||||||
Weighted average licensed beds(b):
|
||||||||
Quarter:
|
||||||||
First
|
39,061 | 38,687 | ||||||
Second
|
39,356 | 38,607 | ||||||
Third
|
38,645 | |||||||
Fourth
|
38,680 | |||||||
Year
|
38,655 | |||||||
Average daily census(c):
|
||||||||
Quarter:
|
||||||||
First
|
22,002 | 21,696 | ||||||
Second
|
20,764 | 20,418 | ||||||
Third
|
19,848 | |||||||
Fourth
|
20,155 | |||||||
Year
|
20,523 | |||||||
Admissions(d):
|
||||||||
Quarter:
|
||||||||
First
|
406,900 | 398,900 | ||||||
Second
|
397,500 | 385,200 | ||||||
Third
|
383,800 | |||||||
Fourth
|
386,500 | |||||||
Year
|
1,554,400 | |||||||
Equivalent admissions(e):
|
||||||||
Quarter:
|
||||||||
First
|
638,400 | 615,500 | ||||||
Second
|
638,900 | 617,900 | ||||||
Third
|
617,700 | |||||||
Fourth
|
617,300 | |||||||
Year
|
2,468,400 |
45
2011 | 2010 | |||||||
Average length of stay (days)(f):
|
||||||||
Quarter:
|
||||||||
First
|
4.9 | 4.9 | ||||||
Second
|
4.8 | 4.8 | ||||||
Third
|
4.8 | |||||||
Fourth
|
4.8 | |||||||
Year
|
4.8 | |||||||
Emergency room visits(g):
|
||||||||
Quarter:
|
||||||||
First
|
1,527,600 | 1,367,100 | ||||||
Second
|
1,512,000 | 1,436,200 | ||||||
Third
|
1,457,100 | |||||||
Fourth
|
1,445,800 | |||||||
Year
|
5,706,200 | |||||||
Outpatient surgeries(h):
|
||||||||
Quarter:
|
||||||||
First
|
193,000 | 190,700 | ||||||
Second
|
199,100 | 198,600 | ||||||
Third
|
194,100 | |||||||
Fourth
|
200,200 | |||||||
Year
|
783,600 | |||||||
Inpatient surgeries(i):
|
||||||||
Quarter:
|
||||||||
First
|
119,700 | 122,500 | ||||||
Second
|
120,200 | 121,800 | ||||||
Third
|
121,600 | |||||||
Fourth
|
121,200 | |||||||
Year
|
487,100 | |||||||
Days revenues in accounts receivable(j):
|
||||||||
Quarter:
|
||||||||
First
|
45 | 46 | ||||||
Second
|
45 | 44 | ||||||
Third
|
44 | |||||||
Fourth
|
46 | |||||||
Year
|
46 | |||||||
Gross patient revenues(k) (dollars in millions):
|
||||||||
Quarter:
|
||||||||
First
|
$ | 34,764 | $ | 31,054 | ||||
Second
|
34,242 | 30,731 | ||||||
Third
|
30,647 | |||||||
Fourth
|
33,208 | |||||||
Year
|
125,640 |
46
2011 | 2010 | |||||||
Outpatient revenues as a % of patient revenues(l):
|
||||||||
Quarter:
|
||||||||
First
|
38 | % | 36 | % | ||||
Second
|
39 | % | 38 | % | ||||
Third
|
38 | % | ||||||
Fourth
|
38 | % | ||||||
Year
|
38 | % | ||||||
NONCONSOLIDATING(m)
|
||||||||
Number of hospitals in operation at:
|
||||||||
March 31
|
7 | 8 | ||||||
June 30
|
7 | 8 | ||||||
September 30
|
8 | |||||||
December 31
|
8 | |||||||
Number of freestanding outpatient surgical centers in operation
at:
|
||||||||
March 31
|
9 | 8 | ||||||
June 30
|
13 | 8 | ||||||
September 30
|
8 | |||||||
December 31
|
9 | |||||||
Licensed hospital beds at:
|
||||||||
March 31
|
2,259 | 2,369 | ||||||
June 30
|
2,259 | 2,369 | ||||||
September 30
|
2,369 | |||||||
December 31
|
2,369 |
47
% of Accounts Receivable | ||||||||||||
Under 91 Days | 91 180 Days | Over 180 Days | ||||||||||
Accounts receivable aging at June 30, 2011(n):
|
||||||||||||
Medicare and Medicaid
|
12 | % | 1 | % | 1 | % | ||||||
Managed care and other discounted
|
23 | 5 | 4 | |||||||||
Uninsured
|
17 | 7 | 30 | |||||||||
Total
|
52 | % | 13 | % | 35 | % | ||||||
(a) | Licensed beds are those beds for which a facility has been granted approval to operate from the applicable state licensing agency. | |
(b) | Represents the average number of licensed beds, weighted based on periods owned. | |
(c) | Represents the average number of patients in our hospital beds each day. | |
(d) | Represents the total number of patients admitted to our hospitals and is used by management and certain investors as a general measure of inpatient volume. | |
(e) | Equivalent admissions are used by management and certain investors as a general measure of combined inpatient and outpatient volume. Equivalent admissions are computed by multiplying admissions (inpatient volume) by the sum of gross inpatient revenues and gross outpatient revenues and then dividing the resulting amount by gross inpatient revenues. The equivalent admissions computation equates outpatient revenues to the volume measure (admissions) used to measure inpatient volume resulting in a general measure of combined inpatient and outpatient volume. | |
(f) | Represents the average number of days admitted patients stay in our hospitals. | |
(g) | Represents the number of patients treated in our emergency rooms. | |
(h) | Represents the number of surgeries performed on patients who were not admitted to our hospitals. Pain management and endoscopy procedures are not included in outpatient surgeries. | |
(i) | Represents the number of surgeries performed on patients who have been admitted to our hospitals. Pain management and endoscopy procedures are not included in inpatient surgeries. | |
(j) | Revenues per day is calculated by dividing the revenues for the period by the days in the period. Days revenues in accounts receivable is then calculated as accounts receivable, net of allowance for doubtful accounts, at the end of the period divided by the revenues per day. | |
(k) | Gross patient revenues are based upon our standard charge listing. Gross charges/revenues typically do not reflect what our hospital facilities are paid. Gross charges/revenues are reduced by contractual adjustments, discounts and charity care to determine reported revenues. | |
(l) | Represents the percentage of patient revenues related to patients who are not admitted to our hospitals. | |
(m) | The nonconsolidating facilities include facilities operated through 50/50 joint ventures which we do not control and are accounted for using the equity method of accounting. | |
(n) | Accounts receivable aging data is based upon consolidated gross accounts receivable of $7.901 billion (each 1% is equivalent to approximately $79 million of gross accounts receivable). |
48
ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
ITEM 4. | CONTROLS AND PROCEDURES |
Item 1: | Legal Proceedings |
49
Item 1A: | Risk Factors |
50
Item 5: | Other Information |
51
Item 6: | Exhibits |
2.1
|
| Membership Interest Purchase Agreement by and between HealthONE, D/B/A The Colorado Health Foundation, and HealthONE of Denver, Inc., dated August 2, 2011. (Registrant agrees to furnish supplementally a copy of any omitted schedule to the Securities and Exchange Commission upon request). | ||
10.1
|
| First Amendment to 2006 Stock Incentive Plan for Key Employees of HCA Holdings, Inc. and its Affiliates, as amended and restated.* | ||
31.1
|
| Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||
31.2
|
| Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||
32
|
| Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of Sarbanes-Oxley Act of 2002. | ||
101
|
| The following financial information from our quarterly report on Form 10-Q for the quarter ended June 30, 2011, filed with the SEC on August 5, 2011, formatted in Extensible Business Reporting Language (XBRL): (i) the condensed consolidated balance sheets at June 30, 2011 and December 31, 2010, (ii) the condensed consolidated income statements for the quarters and six months ended June 30, 2011 and 2010, (iii) the condensed consolidated statements of cash flows for the six months ended June 30, 2011 and 2010, and (iv) the notes to condensed consolidated financial statements (tagged as blocks of text).(1) |
(1) | The XBRL related information in Exhibit 101 to this quarterly report on Form 10-Q shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that section and shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document. | |
* | Management compensatory plan or arrangement. |
52
By: |
/s/ R.
Milton Johnson
|
53
Page | ||||
I. REDEMPTION, PURCHASE AND SALE OF THE LLC INTEREST |
2 | |||
1.1 Partial Redemption of LLC Interest |
2 | |||
1.2 Sale and Purchase of the LLC Interest |
2 | |||
1.3 Purchase Price |
2 | |||
1.4 LLC Distribution |
2 | |||
II. CLOSING |
3 | |||
2.1 Closing |
3 | |||
2.2 Actions of Seller at Closing |
3 | |||
2.3 Actions of Buyer at Closing |
4 | |||
III. REPRESENTATIONS AND WARRANTIES OF SELLER |
5 | |||
3.1 Corporate Capacity |
5 | |||
3.2 Corporate Powers; Consents; Absence of Conflicts With Other Agreements |
5 | |||
3.3 Binding Effect |
6 | |||
3.4 Ownership of the LLC Interest |
6 | |||
3.5 Action of Seller |
6 | |||
3.6 Compliance with Agreements |
6 | |||
3.7 Brokers and Finders |
6 | |||
3.8 No Affiliates |
6 | |||
IV. REPRESENTATIONS AND WARRANTIES OF BUYER |
6 | |||
4.1 Corporate Capacity |
7 | |||
4.2 Corporate Powers; Consents; Absence of Conflicts With Other Agreements |
7 | |||
4.3 Binding Effect |
7 | |||
4.4 Compliance with Agreements |
7 | |||
4.5 Brokers and Finders |
8 | |||
4.6 Acquisition for Investment |
8 | |||
4.7 Action of Buyer |
8 | |||
V. NON-COMPETITION COVENANT |
8 | |||
5.1 Non-Competition Covenant |
8 | |||
5.2 Remedy for Breach |
8 | |||
VI. ADDITIONAL AGREEMENTS |
9 | |||
6.1 Waiver and Release of Claims by Seller |
9 | |||
6.2 Waiver and Release of Claims by Buyer |
9 | |||
6.3 Board of Trustees |
9 | |||
6.4 Community Benefit Program |
10 | |||
6.5 Indigent/Charity Care |
10 | |||
Page | ||||
6.6 Academic Affiliation Agreement |
10 | |||
6.7 Medicare Participation |
10 | |||
6.8 Medicaid Participation |
11 | |||
6.9 License of HealthONE Name |
12 | |||
6.10 LLC Operating Agreement |
12 | |||
6.11 Continuation of Covenants |
12 | |||
6.12 Further Acts and Assurances |
12 | |||
6.13 Compliance with Covenants Report |
13 | |||
6.14 Post-Closing Cooperation of LLC |
13 | |||
6.15 Exclusivity |
13 | |||
6.16 Termination Prior to Closing |
13 | |||
6.17 Monthly Distributions |
14 | |||
6.18 Ordinary Course |
14 | |||
VII. CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER |
14 | |||
7.1 Representations/Warranties |
14 | |||
7.2 Attorney General Approval |
14 | |||
7.3 Action/Proceeding |
14 | |||
7.4 Closing Documents |
15 | |||
7.5 No Change in Law |
15 | |||
7.6 Catastrophic Event |
15 | |||
VIII. CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER |
15 | |||
8.1 Representations/Warranties |
15 | |||
8.2 Attorney General Approval |
15 | |||
8.3 Action/Proceeding |
15 | |||
8.4 Purchase Price/Closing Documents |
15 | |||
8.5 No Change in Law |
15 | |||
IX. INDEMNIFICATION |
16 | |||
9.1 Indemnification by Seller |
16 | |||
9.2 Indemnification by Buyer |
16 | |||
9.3 Notice and Procedure |
16 | |||
9.4 Limitation of Liabilities for Certain Breaches |
17 | |||
9.5 Survival |
17 | |||
9.6 Interest |
17 | |||
X. GENERAL |
17 | |||
10.1 Consents and Discretion |
17 | |||
10.2 Expenses; Legal Fees and Costs |
17 | |||
10.3 Choice of Law |
18 | |||
10.4 Remedies for Breach of Covenants |
18 | |||
10.5 Benefit/Assignment |
18 | |||
10.6 Accounting Date |
18 | |||
10.7 No Third Party Beneficiary |
18 | |||
10.8 Waiver of Breach |
18 | |||
10.9 Notices |
18 | |||
ii
Page | ||||
10.10 Severability |
19 | |||
10.11 Gender and Number |
20 | |||
10.12 Divisions and Headings |
20 | |||
10.13 Time of Essence |
20 | |||
10.14 Confidentiality |
20 | |||
10.15 Drafting |
20 | |||
10.16 Interpretation |
20 | |||
10.17 Definitions |
21 | |||
10.18 Multiple Counterparts |
22 | |||
10.19 Entire Agreement/Amendment |
23 |
iii
Schedule 3.6
|
Sellers Knowledge Individuals | |
Schedule 4.4
|
Buyers Knowledge Individuals | |
Schedule 5.1
|
Graduate Medical Education Support | |
Schedule 6.4
|
2010 Annual Report to the Community | |
Schedule 6.5
|
Charity Care/Uninsured Discount Policies | |
Schedule 6.7
|
Medicare Participating Facilities | |
Schedule 6.8
|
Medicaid Participating Facilities | |
Schedule 6.17
|
Distribution Guidelines |
Exhibit A
|
Sellers Waiver and Release | |
Exhibit B
|
Buyers Waiver and Release | |
Exhibit C
|
Board of Trustees Bylaws | |
Exhibit D
|
Amendment to Academic Affiliation Agreement | |
Exhibit E
|
Amended and Restated Trademark License Agreements |
iv
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
If to Seller: | HealthOne, d/b/a The Colorado Health Foundation 501 South Cherry Street Suite 1100 Denver, Colorado 80246-1325 Attn: President and CEO Facsimile: (303) 322-4176 |
With simultaneous copy (which shall not constitute notice) to: If to Buyer: |
Proskauer Three First National Plaza 70 West Madison Chicago, Illinois 60602-4342 Attn: Monte Dube Facsimile: (312) 962-3551 c/o HCA Inc. One Park Plaza Nashville, Tennessee 37203 Attn: Senior Vice-President Development Facsimile: (615) 344-2086 |
With simultaneous copy (which shall not constitute notice) to: |
HCA Inc. One Park Plaza Nashville, Tennessee 37203 Attn: General Counsel Facsimile: (615) 344-2898 |
19
20
21
Term | Section | |||
AAA |
3.6 | |||
affiliate |
10.16.12 | |||
Agreement |
Opening Paragraph | |||
Attorney General |
3.2.2 | |||
Board |
6.3 | |||
Buyer |
Opening Paragraph | |||
Buyers Indemnified Persons |
9.1 | |||
Bylaws |
6.3 | |||
Closing |
2.1 | |||
Closing Date |
2.1 | |||
Confidentiality Agreement |
10.14 | |||
control |
10.16.12 | |||
CPI |
6.7 | |||
date hereof |
10.16.7 | |||
HCA |
2.3.6 | |||
hereby |
10.16.6 | |||
herein |
10.16.6 | |||
hereof |
10.16.6 | |||
Hospitals |
Recitals | |||
including |
10.16.10 | |||
Indemnified Party |
9.3.1 | |||
Indemnifying Party |
9.3 | |||
Indemnity Notice |
9.3.3 | |||
LLC |
Recitals | |||
LLC Interest |
Recitals | |||
Losses |
9.1 | |||
Management Services Agreement |
3.6 | |||
Medicaid Participating Facilities |
6.9 | |||
Medicare Participating Facilities |
6.7 | |||
Operating Agreement |
Recitals | |||
Parties |
Opening Paragraph | |||
Party |
Opening Paragraph | |||
Person |
10.16.5 | |||
Purchase Price |
1.3 | |||
Redeemed Units |
1.1 | |||
Redemption Price |
1.1 | |||
Seller |
Opening Paragraph | |||
Seller Indemnified Persons |
9.2 | |||
Sellers Board |
Recitals | |||
Super Majority Approval |
6.4 |
22
23
SELLER: | HEALTHONE D/B/A THE COLORADO HEALTH FOUNDATION | |||||
By: | /s/ Anne Warhover | |||||
BUYER: | HEALTHONE OF DENVER, INC. | |||||
By: | /s/ Joe A. Sowell III | |||||
24
HCA HEALTHONE, LLC |
||||
By: | HealthONE of Denver, Inc., Manager | |||
By: /s/ Samuel N. Hazen Samuel N. Hazen, President | ||||
HCA HOLDINGS, INC. |
||||
By: | /s/ Samuel N. Hazen | |||
Samuel N. Hazen, | ||||
President of Operations | ||||
25
Except as otherwise provided in a Grant Agreement at or after Grant, |
By: | /s/ Richard M. Bracken | |||||
Chairman of the Board and Chief Executive Officer |
By: | /s/ R. Milton Johnson | |||||
President and Chief Financial Officer |
By: | /s/ Richard M. Bracken | |||||
Chairman of the Board and Chief Executive Officer |
By: | /s/ R. Milton Johnson | |||||
President and Chief Financial Officer |
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $)
In Millions, except Share data |
Jun. 30, 2011
|
Dec. 31, 2010
|
---|---|---|
Current assets: | Â | Â |
Allowance for accounts receivable | $ 3,955 | $ 3,939 |
Stockholders' deficit: | Â | Â |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 1,800,000,000 | 1,800,000,000 |
Common stock, shares outstanding | 517,094,100 | 427,458,800 |
Document and Entity Information
|
6 Months Ended | |
---|---|---|
Jun. 30, 2011
|
Jul. 31, 2011
|
|
Document and Entity Information [Abstract] | Â | Â |
Entity Registrant Name | HCA Holdings, Inc. | Â |
Entity Central Index Key | 0000860730 | Â |
Document Type | 10-Q | Â |
Document Period End Date | Jun. 30, 2011 | |
Amendment Flag | false | Â |
Document Fiscal Year Focus | 2011 | Â |
Document Fiscal Period Focus | Q2 | Â |
Current Fiscal Year End Date | --12-31 | Â |
Entity Well-known Seasoned Issuer | Yes | Â |
Entity Voluntary Filers | No | Â |
Entity Current Reporting Status | Yes | Â |
Entity Filer Category | Non-accelerated Filer | Â |
Entity Common Stock, Shares Outstanding | Â | 517,179,600 |
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Assets and Liabilities Measured at Fair Value
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
|
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Assets and Liabilities Measured at Fair Value [Abstract] | Â | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ASSETS AND LIABILITIES MEASURED AT FAIR VALUE |
Accounting Standards Codification (“ASC”) 820, Fair
Value Measurements and Disclosures (“ASC 820”)
defines fair value, establishes a framework for measuring fair
value, and expands disclosures about fair value measurements.
ASC 820 applies to reported balances that are required or
permitted to be measured at fair value under existing accounting
pronouncements.
ASC 820 emphasizes fair value is a market-based measurement, not
an entity-specific measurement. Therefore, a fair value
measurement should be determined based on the assumptions market
participants would use in pricing the asset or liability. As a
basis for considering market participant assumptions in fair
value measurements, ASC 820 establishes a fair value
hierarchy that distinguishes between market participant
assumptions based on market data obtained from sources
independent of the reporting entity (observable inputs
classified within Levels 1 and 2 of the hierarchy) and the
reporting entity’s own assumptions about market participant
assumptions (unobservable inputs classified within Level 3
of the hierarchy).
Level 1 inputs utilize quoted prices (unadjusted) in active
markets for identical assets or liabilities. Level 2 inputs
are inputs other than quoted prices included in Level 1
that are observable for the asset or liability, either directly
or indirectly. Level 2 inputs may include quoted prices for
similar assets and liabilities in active markets, as well as
inputs observable for the asset or liability (other than quoted
prices), such as interest rates, foreign exchange rates, and
yield curves observable at commonly quoted intervals.
Level 3 inputs are unobservable inputs for the asset or
liability, which are typically based on an entity’s own
assumptions, as there is little, if any, related market
activity. In instances where the determination of the fair value
measurement is based on inputs from different levels of the fair
value hierarchy, the level in the fair value hierarchy within
which the entire fair value measurement falls is based on the
lowest level input significant to the fair value measurement in
its entirety. Our assessment of the significance of a particular
input to the fair value measurement in its entirety requires
judgment, and considers factors specific to the asset or
liability.
Cash
Traded Investments
Our cash traded investments are generally classified within
Level 1 or Level 2 of the fair value hierarchy because
they are valued using quoted market prices, broker or dealer
quotations, or alternative pricing sources with reasonable
levels of price transparency. Certain types of cash traded
instruments are classified within Level 3 of the fair value
hierarchy because they trade infrequently and therefore have
little or no price transparency. Such instruments include
auction rate securities (“ARS”) and limited
partnership investments. The transaction price is initially used
as the best estimate of fair value.
Our wholly-owned insurance subsidiary had investments in
tax-exempt ARS, which are backed by student loans substantially
guaranteed by the federal government, of $149 million
($152 million par value) at June 30, 2011. We do not
currently intend to attempt to sell the ARS as the liquidity
needs of our insurance subsidiary are expected to be met by
other investments in its investment portfolio. During 2010 and
the first six months of 2011, certain issuers and their
broker/dealers redeemed or repurchased $150 million and
$99 million, respectively, of our ARS at par value. The
valuation of these securities involved management’s
judgment, after consideration of market factors and the absence
of market transparency, market liquidity and observable inputs.
Our valuation models derived a fair market value compared to
tax-equivalent yields of other student loan backed variable rate
securities of similar credit worthiness and similar effective
maturities.
Derivative
Financial Instruments
We have entered into interest rate and cross currency swap
agreements to manage our exposure to fluctuations in interest
rates and foreign currency risks. The valuation of these
instruments is determined using widely accepted valuation
techniques, including discounted cash flow analysis on the
expected cash flows of each derivative. This analysis reflects
the contractual terms of the derivatives, including the period
to maturity, and uses observable market-based inputs, including
interest rate curves, foreign exchange rates and implied
volatilities. To comply with the provisions of ASC 820, we
incorporate credit valuation adjustments to reflect both our own
nonperformance risk and the respective counterparty’s
nonperformance risk in the fair value measurements.
Although we determined the majority of the inputs used to value
our derivatives fall within Level 2 of the fair value
hierarchy, the credit valuation adjustments associated with our
derivatives utilize Level 3 inputs, such as estimates of
current credit spreads to evaluate the likelihood of default by
us and our counterparties. We assessed the significance of the
impact of the credit valuation adjustments on the overall
valuation of our derivative positions and at June 30, 2011
and December 31, 2010, we determined the credit valuation
adjustments were not significant to the overall valuation of our
derivatives.
Fair
Value Summary
The following table summarizes our assets and liabilities
measured at fair value on a recurring basis as of June 30,
2011 and December 31, 2010, aggregated by the level in the
fair value hierarchy within which those measurements fall
(dollars in millions):
The following table summarizes the activity related to the
auction rate and equity securities investments of our insurance
subsidiary, which have fair value measurements based on
significant unobservable inputs (Level 3), during the six
months ended June 30, 2011 (dollars in millions):
The estimated fair value of our long-term debt was
$26.060 billion and $28.738 billion at June 30,
2011 and December 31, 2010, respectively, compared to
carrying amounts aggregating $25.320 billion and
$28.225 billion, respectively. The estimates of fair value
are generally based upon the quoted market prices or quoted
market prices for similar issues of long-term debt with the same
maturities.
|
Supplemental Condensed Consolidating Financial Information
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
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Supplemental Condensed Consolidating Financial Information [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION |
On November 22, 2010, HCA Inc. reorganized by creating a
new holding company structure. HCA Holdings, Inc. became the new
parent company, and HCA Inc. is now HCA Holdings, Inc.’s
wholly-owned direct subsidiary. On November 23, 2010, HCA
Holdings, Inc. issued $1.525 billion aggregate principal
amount of
73/4% senior
unsecured notes due 2021. These notes are senior unsecured
obligations and are not guaranteed by any of our subsidiaries.
Our senior secured credit facilities and senior secured notes
are fully and unconditionally guaranteed by substantially all
existing and future, direct and indirect, wholly-owned material
domestic subsidiaries that are “Unrestricted
Subsidiaries” under our Indenture dated December 16,
1993 (except for certain special purpose subsidiaries that only
guarantee and pledge their assets under our senior secured
asset-based revolving credit facility).
Our summarized condensed consolidating balance sheets at
June 30, 2011 and December 31, 2010, condensed
consolidating statements of income for the quarters and six
months ended June 30, 2011 and 2010 and condensed
consolidating statements of cash flows for the six months ended
June 30, 2011 and 2010, segregating HCA Holdings, Inc.
issuer, HCA Inc. issuer, the subsidiary guarantors, the
subsidiary non-guarantors and eliminations, follow:
HCA
HOLDINGS, INC.
CONDENSED CONSOLIDATING INCOME STATEMENT FOR THE QUARTER ENDED JUNE 30, 2011 (Dollars in millions)
HCA
HOLDINGS, INC.
CONDENSED CONSOLIDATING INCOME STATEMENT FOR THE QUARTER ENDED JUNE 30, 2010 (Dollars in millions)
HCA
HOLDINGS, INC.
CONDENSED CONSOLIDATING INCOME STATEMENT FOR THE SIX MONTHS ENDED JUNE 30, 2011 (Dollars in millions)
HCA
HOLDINGS, INC.
CONDENSED CONSOLIDATING INCOME STATEMENT FOR THE SIX MONTHS ENDED JUNE 30, 2010 (Dollars in millions)
HCA
HOLDINGS, INC.
CONDENSED CONSOLIDATING BALANCE SHEET JUNE 30, 2011 (Dollars in millions)
HCA
HOLDINGS, INC.
CONDENSED CONSOLIDATING BALANCE SHEET DECEMBER 31, 2010 (Dollars in millions)
HCA
HOLDINGS, INC.
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2011 (Dollars in millions)
HCA
HOLDINGS, INC.
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2010 (Dollars in millions)
|
Earnings Per Share
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
|
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Earnings Per Share [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS PER SHARE |
We compute basic earnings per share using the weighted average
number of common shares outstanding. We compute diluted earnings
per share using the weighted average number of common shares
outstanding, plus the dilutive effect of outstanding stock
options and restricted share units, computed using the treasury
stock method.
The following table sets forth the computation of basic and
diluted earnings per share for the quarters and six months ended
June 30, 2011 and 2010 (dollars in millions, except per
share amounts, and shares in thousands):
|
Comprehensive Income and Capital Structure
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
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Comprehensive Income and Capital Structure [Abstract] | Â | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COMPREHENSIVE INCOME AND CAPITAL STRUCTURE |
The components of comprehensive income, net of related taxes,
for the quarters and six months ended June 30, 2011 and
2010 are only attributable to HCA Holdings, Inc. and are as
follows (dollars in millions):
The components of accumulated other comprehensive loss, net of
related taxes, are as follows (dollars in millions):
The changes in stockholders’ deficit, including changes in
stockholders’ deficit attributable to HCA Holdings, Inc.
and changes in equity attributable to noncontrolling interests
are as follows (dollars in millions):
During February 2011, our Board of Directors approved an
increase in the number of our authorized shares to
1,800,000,000 shares of common stock and a 4.505-to-one
split of our issued and outstanding commons shares. During March
2011, we completed the initial public offering of
87,719,300 shares of our common stock at a price of $30.00
per share and realized net proceeds (after costs of the
offering) of $2.506 billion.
Prior to the consummation of the initial public offering of our
common stock, certain employees could elect to have the Company
redeem their common stock and vested options in the event of
death or permanent disability, pursuant to the terms of their
management stockholder agreements. The consummation of the
initial public offering of our common stock effectively
terminated the contingent redemption rights and the applicable
amounts have been reclassified to stockholders’ equity.
|
Segment and Geographic Information
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
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Segment and Geographic Information [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT AND GEOGRAPHIC INFORMATION |
We operate in one line of business, which is operating hospitals
and related health care entities. During the quarters ended
June 30, 2011 and 2010, 23.2% and 23.5%, respectively, of
our revenues related to patients participating in the
fee-for-service
Medicare program. During each of the six months ended
June 30, 2011 and 2010, 24.0% of our revenues related to
patients participating in the
fee-for-service
Medicare program.
Our operations are structured into three geographically
organized groups: the National, Southwest and Central Groups.
During February 2011, we reorganized our operational groups and
have restated the prior period amounts to reflect this
reorganization. The National Group includes 65 consolidating
hospitals located in Florida, South Carolina, southern Georgia,
Alaska, California, Nevada, Utah and Idaho, The Southwest Group
includes 39 consolidating hospitals located in Texas, Oklahoma
and the Wichita, Kansas market, and the Central Group includes
47 consolidating hospitals located in Louisiana, Indiana,
Kentucky, Tennessee, Virginia, New Hampshire, northern Georgia
and the Kansas City market. We also operate six consolidating
hospitals in England, and these facilities are included in the
Corporate and other Group.
Adjusted segment EBITDA is defined as income before depreciation
and amortization, interest expense, losses on sales of
facilities, impairments of long-lived assets, loss on retirement
of debt, termination of management agreement, income taxes and
net income attributable to noncontrolling interests. We use
adjusted segment EBITDA as an analytical indicator for purposes
of allocating resources to geographic areas and assessing their
performance. Adjusted segment EBITDA is commonly used as an
analytical indicator within the health care industry, and also
serves as a measure of leverage capacity and debt service
ability. Adjusted segment EBITDA should not be considered as a
measure of financial performance under generally accepted
accounting principles, and the items excluded from adjusted
segment EBITDA are significant components in understanding and
assessing financial performance. Because adjusted segment EBITDA
is not a measurement determined in accordance with generally
accepted accounting principles and is thus susceptible to
varying calculations, adjusted segment EBITDA, as presented, may
not be comparable to other similarly titled measures of other
companies. The geographic distributions of our revenues, equity
in earnings of affiliates, adjusted segment EBITDA, and
depreciation and amortization for the quarters and six months
ended June 30, 2011 and 2010 are summarized in the
following table (dollars in millions):
|
Contingencies
|
6 Months Ended | ||||
---|---|---|---|---|---|
Jun. 30, 2011
|
|||||
Contingencies [Abstract] | Â | ||||
CONTINGENCIES |
We operate in a highly regulated and litigious industry. As a
result, various lawsuits, claims and legal and regulatory
proceedings have been and can be expected to be instituted or
asserted against us. The resolution of any such lawsuits, claims
or legal and regulatory proceedings could have a material,
adverse effect on our results of operations or financial
position in a given period.
Health care companies are subject to numerous investigations by
various governmental agencies. Under the federal False Claims
Act private parties have the right to bring qui tam, or
“whistleblower,” suits against companies that submit
false claims for payments to, or improperly retain overpayments
from, the government. Some states have adopted similar state
whistleblower and false claims provisions. Certain of our
individual facilities have received government inquiries from
federal and state agencies and our facilities may receive such
inquiries in future periods. Depending on whether the underlying
conduct in these or future inquiries or investigations could be
considered systemic, their resolution could have a material,
adverse effect on our results of operations or financial
position.
We are subject to claims and suits arising in the ordinary
course of business, including claims for personal injuries or
wrongful restriction of, or interference with, physicians’
staff privileges. In certain of these actions the claimants may
seek punitive damages against us which may not be covered by
insurance. It is management’s opinion that the ultimate
resolution of these pending claims and legal proceedings will
not have a material, adverse effect on our results of operations
or financial position.
The Civil Division of the Department of Justice
(“DOJ”) has contacted the Company in connection with
its nationwide review of whether, in certain cases, hospital
charges to the federal government relating to implantable
cardio-defibrillators (“ICDs”) met the Centers for
Medicare & Medicaid Services criteria. In connection
with this nationwide review, the DOJ has indicated that it will
be reviewing certain ICD billing and medical records at 95 HCA
hospitals; the review covers the period from October 2003 to the
present. The review could potentially give rise to claims
against the Company under the federal False Claims Act or other
statutes, regulations or laws. At this time, we cannot predict
what effect, if any, this review or any resulting claims could
have on the Company.
|
Interim Condensed Consolidated Financial Statements
|
6 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
|||||||||
Interim Condensed Consolidated Financial Statements [Abstract] | Â | ||||||||
INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS |
Reporting
Entity
On November 17, 2006, HCA Inc. completed its merger with
Hercules Acquisition Corporation, pursuant to which the Company
was acquired by Hercules Holding II, LLC, a Delaware limited
liability company owned by a private investor group comprised of
affiliates of Bain Capital Partners, Kohlberg Kravis
Roberts & Co., BAML Capital Partners (formerly Merrill
Lynch Global Private Equity) (each a “Sponsor”),
affiliates of Citigroup Inc. and Bank of America Corporation
(the “Sponsor Assignees”) and affiliates of HCA
founder, Dr. Thomas F. Frist Jr., (the “Frist
Entities,” and together with the Sponsors and the Sponsor
Assignees, the “Investors”) and by members of
management and certain other investors.
On November 22, 2010, HCA Inc. reorganized by creating a
new holding company structure (the “Corporate
Reorganization”). HCA Holdings, Inc. became the new parent
company, and HCA Inc. is a wholly-owned direct subsidiary of HCA
Holdings, Inc. As part of the Corporate Reorganization, HCA
Inc.’s outstanding shares of capital stock were
automatically converted, on a share for share basis, into
identical shares of our common stock. Immediately following the
Corporate Reorganization, our amended and restated certificate
of incorporation, amended and restated bylaws, executive
officers and board of directors were the same as HCA Inc.’s
in effect immediately prior to the Corporate Reorganization, and
the rights, privileges and interests of HCA Inc.’s
stockholders remained the same with respect to us as the new
holding company.
During February 2011, our Board of Directors approved an
increase in the number of our authorized shares to
1,800,000,000 shares of common stock and a 4.505-to-one
split of our issued and outstanding common shares. All common
share and per common share amounts in these condensed
consolidated financial statements and notes to condensed
consolidated financial statements reflect the 4.505-to-one
split. During March 2011, we completed the initial public
offering of 87,719,300 shares of our common stock at a
price of $30.00 per share (before deducting underwriter
discounts, commissions and other related offering expenses).
Certain of our stockholders also sold 57,410,700 shares of
our common stock in this offering. We did not receive any
proceeds from the shares sold by the selling stockholders. Our
common stock is now traded on the New York Stock Exchange
(symbol “HCA”).
The Investors have provided management and advisory services to
the Company pursuant to a management agreement among HCA Inc.
and the Investors executed in connection with the
Investors’ acquisition of HCA Inc. in November 2006. The
management agreement was terminated pursuant to its terms upon
completion of the initial public offering of our common stock,
and the Company paid the Investors a final fee of
$181 million. The management agreement also provided that
the Company pay a 1% fee in connection with certain financing,
acquisition, divestiture and change of control transactions. The
Company paid the Investors a fee of $26 million related to
the initial public offering of our common stock, and this fee
was recorded as a cost of the stock offering.
HCA Holdings, Inc. is a holding company whose affiliates own and
operate hospitals and related health care entities. The term
“affiliates” includes direct and indirect subsidiaries
of HCA Holdings, Inc. and partnerships and joint ventures in
which such subsidiaries are partners. At June 30, 2011,
these affiliates owned and operated 157 hospitals, 98
freestanding surgery centers and facilities which provided
extensive outpatient and ancillary services. Affiliates of HCA
Holdings, Inc. are also partners in joint ventures that own and
operate seven hospitals and 13 freestanding surgery centers,
which are accounted for using the equity method. HCA Holdings,
Inc.’s facilities are located in 20 states and
England. The terms “Company,” “HCA,”
“we,” “our” or “us,” as used
herein and unless otherwise stated or indicated by context,
refer to HCA Inc. and its affiliates prior to the Corporate
Reorganization and to HCA Holdings, Inc. and its affiliates
after the Corporate Reorganization. The terms
“facilities” or “hospitals” refer to
entities owned and operated by affiliates of HCA and the term
“employees” refers to employees of affiliates of HCA.
Basis of
Presentation
The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with generally
accepted accounting principles for interim financial information
and with the instructions to
Form 10-Q
and Article 10 of
Regulation S-X.
Accordingly, they do not include all the information and
footnotes required by generally accepted accounting principles
for complete consolidated financial statements. In the opinion
of management, all adjustments considered necessary for a fair
presentation have been included and are of a normal and
recurring nature.
The majority of our expenses are “cost of revenue”
items. Costs that could be classified as general and
administrative would include our corporate office costs, which
were $55 million and $44 million for the quarters
ended June 30, 2011 and 2010, respectively, and
$109 million and $84 million for the six months ended
June 30, 2011 and 2010, respectively. Operating results for
the quarter and six months ended June 30, 2011 are not
necessarily indicative of the results that may be expected for
the year ending December 31, 2011. For further information,
refer to the consolidated financial statements and footnotes
thereto included in our annual report on
Form 10-K
for the year ended December 31, 2010.
Certain prior year amounts have been reclassified to conform to
the current year presentation.
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Investments of Insurance Subsidiary
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Jun. 30, 2011
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Investments of Insurance Subsidiary [Abstract] | Â | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVESTMENTS OF INSURANCE SUBSIDIARY |
A summary of our insurance subsidiary’s investments at
June 30, 2011 and December 31, 2010 follows
(dollars in millions):
At June 30, 2011 and December 31, 2010, the
investments of our insurance subsidiary were classified as
“available-for-sale.”
Changes in temporary unrealized gains and losses are recorded as
adjustments to other comprehensive income. At June 30, 2011
and December 31, 2010, $19 million and
$92 million, respectively, of our investments were subject
to restrictions included in insurance bond collateralization and
assumed reinsurance contracts.
Scheduled maturities of investments in debt securities at
June 30, 2011 were as follows (dollars in millions):
The average expected maturity of the investments in debt
securities at June 30, 2011 was 2.6 years, compared to
the average scheduled maturity of 8.6 years. Expected and
scheduled maturities may differ because the issuers of certain
securities have the right to call, prepay or otherwise redeem
such obligations prior to the scheduled maturity date. The
average expected maturities for our auction rate and
asset-backed securities were derived from valuation models of
expected cash flows and involved management’s judgment. At
June 30, 2011, the average expected maturities for our
auction rate and asset-backed securities were 4.4 years and
5.1 years, respectively, compared to average scheduled
maturities of 25.2 years and 25.1 years, respectively.
|
Long-Term Debt
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
|
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Long-Term Debt [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LONG-TERM DEBT |
A summary of long-term debt at June 30, 2011 and
December 31, 2010, including related interest rates at
June 30, 2011, follows (dollars in millions):
During March 2011, pending permanent application, we used the
net proceeds of $2.506 billion from the initial public
offering of our common stock to reduce amounts outstanding under
our revolving credit facilities.
On May 4, 2011, we completed amendments to our senior
secured credit agreement and senior secured asset-based
revolving credit agreement, as well as extensions of certain of
our term loans. The amendments extend approximately
$594 million of our term loan
A-1 facility
with a final maturity of November 2012 to a final maturity of
May 2016 and approximately $2.373 billion of our term loan
A-1 and term
loan B-1 facilities with final maturities of November 2012 and
November 2013, respectively, to a final maturity of May 2018.
On June 2, 2011, we redeemed all $1.000 billion
aggregate principal amount of our
91/8% Senior
Secured Notes due 2014, at a redemption price of 104.563% of the
principal amount, and $108 million aggregate principal
amount of our
97/8% Senior
Secured Notes due 2017, at a redemption price of 109.875% of the
principal amount. The pretax loss on retirement of debt related
to these redemptions was $75 million.
|
Subsequent Events
|
6 Months Ended | ||||
---|---|---|---|---|---|
Jun. 30, 2011
|
|||||
Subsequent Events [Abstract] | Â | ||||
SUBSEQUENT EVENTS |
On August 1, 2011, we issued $5.000 billion aggregate
principal amount of notes, comprised of $3.000 billion of
61/2% senior
secured first lien notes due 2020 and $2.000 billion of
71/2% senior
unsecured notes due 2022. After the payment of related fees and
expenses, we intend to use the net proceeds from these debt
issuances to redeem all of our outstanding $1.578 billion
95/8%/103/8%
second lien toggle notes due 2016 and all of our outstanding
$3.200 billion
91/4%
second lien notes due 2016. The pretax debt retirement charge
related to these redemptions is expected to be approximately
$396 million.
On August 2, 2011, we entered into a definitive Membership
Interest Purchase Agreement with The Colorado Health Foundation
for the purchase (or redemption) of the Foundation’s
remaining ownership interest in HCA-HealthONE LLC for
$1.45 billion. Subject to regulatory review, the
transaction is expected to close in the third quarter of 2011.
We intend to fund the purchase price at the closing of the
acquisition through amounts available under our revolving credit
facility.
|
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