EX-20 2 g70653ex20.txt PRESS RELEASE 1 EXHIBIT 20 HCA NEWS ------------------------------------------------------------------------------- FOR IMMEDIATE RELEASE INVESTOR CONTACT MEDIA CONTACT Mark Kimbrough: 615-344-2688 Jeff Prescott: 615-344-5708 HCA REPORTS SECOND QUARTER 2001 EPS INCREASES 25% TO $0.50 VS. $0.40 IN THE PRIOR YEAR EXCLUDING GAINS AND RESTRUCTURING, INVESTIGATION AND SETTLEMENT RELATED COSTS NASHVILLE, TENN., JULY 23, 2001 - HCA (NYSE: HCA) today announced operating results for the second quarter and six months ended June 30, 2001. "Strong patient volume and revenue growth contributed to another extremely successful quarter," stated Jack O. Bovender, Jr., CEO and President of HCA. "The strong demographics in our markets continue to provide the Company with significant opportunities to invest in new services and capacity to meet the needs of our local communities." For the second quarter of 2001, revenues rose 8.3 percent to $4.5 billion, compared to $4.1 billion in the second quarter of 2000. Net income, excluding gains on sales of facilities and restructuring of operations and investigation and settlement related costs, totaled $271 million or $0.50 per diluted share for the second quarter of 2001, compared to $223 million or $0.40 per diluted share in the second quarter of 2000. The net income and earnings per share increases were 21 percent and 25 percent, respectively. Considering all gains and investigation and settlement related costs, the Company reported net income in the second quarter of $263 million or $0.48 per diluted share, compared to a net loss of $272 million or a loss of $0.49 per diluted share in the second quarter of 2000. During the second quarter of 2000, the Company recorded an after-tax charge of $498 million, or $0.90 per diluted share, in connection with its civil settlement of certain issues with the Department of Justice. 1 2 For the quarter ended June 30, 2001, same facility revenues increased 10.6 percent compared to the prior year's quarter. Same facility admissions for the Company's hospitals increased by 4.2 percent during the quarter. Same facility revenue per inpatient admission increased 10.9 percent for the quarter and same facility revenue per equivalent admission increased 6.9 percent. Last year's second quarter results reflect certain insurance subsidiary funds which were reallocated among investment managers, resulting in the recognition of previously unrealized gains that decreased other operating expenses and increased pretax income by $27 million, or $0.03 per share. Excluding the amortization of goodwill, net income (excluding gains on sales of facilities, impairment of long-lived assets, restructuring of operations and investigation and settlement related costs) was $289 million or $0.54 per diluted share in the second quarter of 2001 compared to $244 million or $0.44 per diluted share for the second quarter of 2000. Revenues for the six months ended June 30, 2001, rose 6.8 percent to $9.0 billion, compared to $8.4 billion in the first six months of 2000. Net income, excluding gains on sales of facilities and restructuring and investigation and settlement related costs, totaled $602 million or $1.09 per diluted share in the first half of 2001, compared to $529 million or $0.93 per diluted share for the six months ended June 30, 2000. Including all such gains, impairments and charges for both periods, the Company reported net income of $589 million or $1.07 per diluted share in 2001, versus net income of $24 million or $0.04 per diluted share in 2000. For the six months ended June 30, 2001, same facility revenues increased 8.6 percent and same facility admissions increased 3.2 percent. Same facility revenue per inpatient admission increased 8.9 percent and same facility revenue per equivalent admission increased 5.9 percent. As of June 30, 2001, the Company operated 194 hospitals and 78 ambulatory surgery centers (including 9 hospitals and 3 ASCs owned through joint ventures accounted for using the equity method), compared to 204 hospitals and 83 ambulatory surgery centers (including 9 hospitals and 3 ASCs owned through joint ventures accounted for using the equity method) at June 30, 2000. 2 3 At June 30, 2001, the Company's balance sheet reflected total debt of $7.1 billion, common, temporary and minority equity of $5.8 billion and total assets of $17.9 billion. Capital expenditures for the quarter totaled $318 million. The Company's total debt-to-capital ratio was 55 percent at June 30, 2001, compared to 53 percent at June 30, 2000. "While I am very pleased with the operating and financial results that we are reporting today, I take even greater pleasure with our recent Gallup survey results indicating that satisfaction levels for patients, physicians and employees in the HCA family continue to remain consistently high," said Bovender. " Employee satisfaction scores have risen significantly over the last year for HCA facilities across the country. In fact, our St. Lucie Medical Center in Port St. Lucie, Florida attained not only HCA's highest employee satisfaction levels, but also, the highest satisfaction ratings of any organization currently surveyed by Gallup nationwide." HCA will host a conference call for investors at 8:30 a.m. Central Daylight Time today. All interested investors are invited to access a live audio broadcast of the call, via web cast. The broadcast also will be available on a replay basis beginning this afternoon and throughout the next 30 days. The web cast can be accessed at http://www.videonewswire.com/event.asp?id=176 or via the Investor Relations site at www.hcahealthcare.com. * * * This press release contains forward-looking statements based on current management expectations. Those forward looking statements include statements other than those made solely with respect to historical fact. Numerous risks, uncertainties and other factors may cause actual results to differ materially from those expressed in any forward-looking statements. These factors include, but are not limited to, (i) the outcome of the known and unknown governmental investigations and litigation involving the Company's business practices, including the ability to negotiate, execute and timely consummate definitive settlement agreements in the government's civil cases and to obtain court approval thereof, (ii) the highly competitive nature of the health care business, (iii) the efforts of insurers, health care providers and others to contain health care costs, (iv) possible changes in the Medicare and Medicaid programs that may impact reimbursements to health care providers and insurers, (v) changes in Federal, state or local regulation affecting the health care industry, (vi) the possible enactment of Federal or state health care reform, (vii) the ability to attract and retain qualified management and personnel, including affiliated physicians, nurses and medical support personnel, (viii) liabilities and other claims asserted against the Company, (ix) fluctuations in the market value of the Company's common stock, (x) ability to complete the share repurchase program and to settle related forward purchase contracts, (xi) changes in accounting practices, (xii) changes in general economic conditions, (xiii) future divestitures which may result in additional charges, (xiv) changes in revenue mix and the ability to enter into and renew managed care provider arrangements on acceptable terms, (xv) the availability and terms of capital to fund the expansion of the Company's business, (xvi) changes in business strategy or development plans, (xvii) slowness of reimbursement, (xviii) the ability to implement the Company's shared services and other initiatives and realize a decrease in administrative, supply and infrastructure costs, (xix) the outcome of pending and any future tax audits and litigation associated with the Company's tax positions, (xx) the outcome of the Company's continuing efforts to monitor, maintain and comply with appropriate laws, regulations, policies and procedures and the Company's corporate integrity agreement with the government, (xxi) increased reviews of the Company's cost reports, (xxii) the ability to maintain and increase patient volumes and control the costs of providing services, and (xxiii) other risk factors detailed 3 4 from time to time in the Company's filings with the SEC. Many of the factors that will determine the Company's future results are beyond the ability of the Company to control or predict. Readers should not place undue reliance on forward-looking statements, which reflect management's views only as of the date hereof. The Company undertakes no obligation to revise or update any forward-looking statements, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise. ALL REFERENCES TO "COMPANY" AND "HCA" AS USED THROUGHOUT THIS DOCUMENT REFER TO HCA INC. AND ITS AFFILIATES. 4 5 HCA INC. CONSOLIDATED OPERATING RESULTS SUMMARY (Dollars in millions, except per share amounts)
FOR THE SIX MONTHS SECOND QUARTER ENDED JUNE 30, ------------------------- ------------------------- 2001 2000 2001 2000 --------- --------- --------- --------- Revenues.......................................................... $ 4,476 $ 4,133 $ 8,977 $ 8,404 EBITDA(a)......................................................... $ 876 $ 799 $ 1,848 $ 1,705 Net income (loss): Excluding settlement with Federal government, gains on sales of facilities and restructuring of operations and investigation related costs............. $ 271 $ 223 $ 602 $ 529 Settlement with Federal government (net of tax)............ (1) (498) (1) (498) Gains on sales of facilities (net of tax).................. -- 9 4 9 Restructuring of operations and investigation related costs (net of tax)........................................... (7) (6) (16) (16) --------- --------- --------- --------- Net income (loss).......................................... $ 263 $ (272) $ 589 $ 24 ========= ========= ========= ========= Diluted earnings (loss) per share: Excluding settlement with Federal government, gains on sales of facilities and restructuring of operations and investigation related costs........................ $ 0.50 $ 0.40 $ 1.09 $ 0.93 Settlement with Federal government......................... -- (0.90) -- (0.88) Gains on sales of facilities............................... -- 0.02 0.01 0.01 Restructuring of operations and investigation related costs (0.02) (0.01) (0.03) (0.02 --------- --------- --------- --------- Net income (loss).......................................... $ 0.48 $ (0.49) $ 1.07 $ 0.04 ========= ========= ========= ========= Shares used in computing diluted earnings (loss) per share (000).. 545,815 554,759 550,290 569,109
--------- (a) EBITDA is defined as income before depreciation and amortization, interest expense, settlement with Federal government, gains on sales of facilities, restructuring of operations and investigation related costs, minority interests and income taxes. 5 6 HCA INC. CONSOLIDATED STATEMENTS OF OPERATIONS SECOND QUARTER (DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
2001 2000 --------------------- --------------------- AMOUNT RATIO Amount Ratio -------- ----- -------- ----- Revenues ....................................................... $ 4,476 100.0% $ 4,133 100.0% Salaries and benefits .......................................... 1,822 40.7 1,645 39.8 Supplies ....................................................... 713 15.9 655 15.9 Other operating expenses ....................................... 800 17.9 768 18.6 Provision for doubtful accounts ................................ 301 6.7 299 7.2 Equity in earnings of affiliates ............................... (36) (0.8) (33) (0.8) -------- ----- -------- ----- 3,600 80.4 3,334 80.7 -------- ----- -------- ----- EBITDA ..................................................... 876 19.6 799 19.3 Depreciation and amortization .................................. 262 5.9 265 6.3 Interest expense ............................................... 139 3.1 136 3.3 Settlement with Federal government ............................. 2 -- 745 18.0 Gains on sales of facilities ................................... -- -- (18) (0.4) Restructuring of operations and investigation related costs .... 13 0.3 12 0.3 -------- ----- -------- ----- Income (loss) before minority interests and income taxes ....... 460 10.3 (341) (8.2) Minority interests in earnings of consolidated entities ........ 29 0.7 29 0.8 -------- ----- -------- ----- Income (loss) before income taxes .............................. 431 9.6 (370) (9.0) Provision (benefit) for income taxes ........................... 168 3.7 (98) (2.4) -------- ----- -------- ----- Net income (loss) .......................................... $ 263 5.9 $ (272) (6.6) ======== ===== ======== ===== Diluted earnings (loss) per share: Excluding settlement with Federal government, gains on sales of facilities and restructuring of operations and investigation related costs ...................... $ 0.50 $ 0.40 Settlement with Federal government ......................... -- (0.90) Gains on sales of facilities ............................... -- 0.02 Restructuring of operations and investigation related costs (0.02) (0.01) -------- -------- Net income (loss) .......................................... $ 0.48 $ (0.49) ======== ======== Shares used in computing diluted earnings (loss) per share (000) 545,815 554,759
6 7 HCA INC. CONSOLIDATED INCOME STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 2001 AND 2000 (DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
2001 2000 ----------------------- ----------------------- AMOUNT RATIO Amount Ratio --------- ----- --------- ----- Revenues ...................................................... $ 8,977 100.0% $ 8,404 100.0% Salaries and benefits ......................................... 3,604 40.1 3,306 39.3 Supplies ...................................................... 1,424 15.9 1,325 15.8 Other operating expenses ...................................... 1,557 17.3 1,532 18.2 Provision for doubtful accounts ............................... 626 7.0 601 7.2 Equity in earnings of affiliates .............................. (82) (0.9) (65) (0.8) --------- ----- --------- ----- 7,129 79.4 6,699 79.7 --------- ----- --------- ----- EBITDA .................................................... 1,848 20.6 1,705 20.3 Depreciation and amortization ................................. 519 5.8 521 6.2 Interest expense .............................................. 281 3.1 255 3.0 Settlement with Federal government ............................ 2 -- 745 8.9 Gains on sales of facilities .................................. (13) (0.1) (18) (0.2) Restructuring of operations and investigation related costs ... 27 0.3 25 0.3 --------- ----- --------- ----- Income before minority interests and income taxes ............. 1,032 11.5 177 2.1 Minority interests in earnings of consolidated entities ....... 59 0.7 55 0.7 --------- ----- --------- ----- Income before income taxes .................................... 973 10.8 122 1.4 Provision for income taxes .................................... 384 4.2 98 1.1 --------- ----- --------- ----- Net income ................................................ $ 589 6.6 $ 24 0.3 ========= ===== ========= ===== Diluted earnings per share: Excluding settlement with Federal government, gains on sales of facilities and restructuring of operations and investigation related costs ..................... $ 1.09 $ 0.93 Settlement with Federal government ........................ -- (0.88) Gains on sales of facilities .............................. 0.01 0.01 Restructuring of operations and investigation related costs (0.03) (0.02) --------- --------- Net income ................................................ $ 1.07 $ 0.04 ========= ========= Shares used in computing diluted earnings per share (000) ..... 550,290 569,109
7 8 HCA INC. CONSOLIDATED BALANCE SHEETS (DOLLARS IN MILLIONS)
JUNE 30, MARCH 31, DECEMBER 31, 2001 2001 2000 --------- -------- ----------- ASSETS Current assets: Cash and cash equivalents ...................................... $ 124 $ 188 $ 314 Accounts receivable, net ....................................... 2,364 2,412 2,211 Other .......................................................... 1,891 1,825 1,928 --------- -------- --------- Total current assets ...................................... 4,379 4,425 4,453 Property and equipment, at cost ..................................... 14,695 14,388 14,290 Accumulated depreciation ............................................ (6,130) .(5,943) (5,810) --------- -------- --------- 8,565 8,445 8,480 Investments of insurance subsidiary ................................. 1,529 1,301 1,371 Investments in and advances to affiliates ........................... 831 822 779 Intangible assets, net .............................................. 2,170 2,117 2,155 Other ............................................................... 406 433 330 --------- -------- --------- $ 17,880 $ 17,543 $ 17,568 ========= ======== ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable ............................................... $ 673 $ 691 $ 693 Other current liabilities ...................................... 1,317 1,423 1,487 Government settlement accrual .................................. 745 745 840 Long-term debt due within one year ............................. 218 730 1,121 --------- -------- --------- Total current liabilities ................................. 2,953 3,589 4,141 Long-term debt ...................................................... 6,857 5,926 5,631 Professional liability risks, deferred taxes and other liabilities .............................................. 2,313 2,199 2,050 Minority interests in equity of consolidated entities ............... 596 583 572 Company-obligated mandatorily redeemable securities of affiliate holding solely Company obligations ................... 300 -- -- Forward purchase contracts and put options .......................... -- 747 769 Stockholders' equity ................................................ 4,861 4,499 4,405 --------- -------- --------- $ 17,880 $ 17,543 $ 17,568 ========= ======== ========= Current ratio ....................................................... 1.48 1.23 1.08 Ratio of debt to debt plus common, temporary and minority equity .... 55.1% 53.3% 54.0% Shares outstanding (thousands) ...................................... 518,223 537,222 542,992
8 9 HCA INC. OPERATING STATISTICS
FOR THE SIX MONTHS SECOND QUARTER ENDED JUNE 30, ------------------------------- ------------------------------- 2001 2000 2001 2000 ---------- ---------- ---------- ---------- CONSOLIDATED HOSPITALS: Number of Hospitals 185 195 185 195 Weighted Average Licensed Beds 40,852 41,923 40,901 42,053 Licensed Beds at End of Period 41,032 42,240 41,032 42,240 Admissions 388,500 380,600 800,500 788,700 Same Facility % Change 4.2% 3.2% Equivalent Admissions 576,500 570,600 1,174,300 1,166,500 Same Facility % Change 3.5% 2.6% Revenue per Equivalent Admission $ 7,765 $ 7,243 $ 7,644 $ 7,205 Same Facility % Change 6.9% 5.9% Inpatient Revenue per Admission $ 6,985 $ 6,306 $ 6,864 $ 6,329 Same Facility % Change 10.9% 8.9% Patient Days 1,922,300 1,867,800 3,978,000 3,933,200 Equivalent Patient Days 2,852,800 2,801,700 5,835,700 5,817,200 Emergency Room Visits 1,165,100 1,134,700 2,351,300 2,275,500 Same Facility % Change 6.5% 7.1% Outpatient Revenues as a Percentage of Patient Revenues 37.5% 39.4% 36.9% 38.0% Average Length of Stay 4.9 4.9 5.0 5.0 Occupancy 51.7% 49.0% 53.7% 51.4% Equivalent Occupancy 76.7% 73.5% 78.8% 76.0% NUMBER OF CONSOLIDATED AND NON-CONSOLIDATED (50/50 EQUITY JOINT VENTURES) HOSPITALS: Consolidated 185 195 185 195 Non-Consolidated (50/50 Equity Joint Ventures) 9 9 9 9 ---------- ---------- ---------- ---------- Total Number of Hospitals 194 204 194 204 ========== ========== ========== ==========
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