Segment and Geographic Information

6 Months Ended

Jun. 30, 2011

Segment and Geographic Information [Abstract]

SEGMENT AND GEOGRAPHIC INFORMATION

NOTE 10 — 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):

	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
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