8-K

FORM 8-K
CURRENT REPORT

Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934.

Date of Report (Date of earliest event reported) July 26, 2004

HCA INC.
(Exact name of registrant as specified in its charter)

DELAWARE
(State of Incorporation)

001-11239 (Commission File Number)	75-2497104 (IRS Employer Identification Number)
One Park Plaza, Nashville, Tennessee (Address of principal executive offices)	37203 (Zip Code)

(615) 344-9551
(Registrant’s telephone number, including area code)

TABLE OF CONTENTS

EX-99.1 PRESS RELEASE

ITEM 9.  REGULATION FD DISCLOSURE

     On July 26, 2004, HCA Inc. issued a press release announcing its results of operations for the second quarter ended June 30, 2004, the text of which is set forth as Exhibit 99.1.

ITEM 12.  RESULTS OF OPERATIONS AND FINANCIAL CONDITION

     On July 26, 2004, HCA Inc. issued a press release announcing its results of operations for the second quarter ended June 30, 2004, the text of which is set forth as Exhibit 99.1.

2

SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

HCA Inc.

By: /s/ R. MILTON JOHNSON

R. Milton Johnson
Executive Vice President and Chief Financial Officer

DATED: July 26, 2004

3 EX-99.1 2 g90063exv99w1.txt EX-99.1 PRESS RELEASE EXHIBIT 99.1 HCA NEWS - -------------------------------------------------------------------------------- FOR IMMEDIATE RELEASE INVESTOR CONTACT: MEDIA CONTACT: Mark Kimbrough Jeff Prescott (615) 344-2688 (615) 344-5708 HCA REPORTS 2004 SECOND QUARTER RESULTS NASHVILLE, TENN., JULY 26, 2004 - HCA (NYSE: HCA) today announced revenues for the quarter ended June 30, 2004 increased 6.7 percent to $5.8 billion from $5.5 billion in the second quarter of 2003. Net income totaled $352 million, or $0.72 per diluted share, compared to $240 million, or $0.47 per diluted share, in 2003. Results for the second quarter of 2004 include a positive $59 million, or $0.07 per diluted share, change in the Company's estimated professional liability insurance reserves. Net income for the second quarter of 2003 includes an increase in the Company's estimated allowance for doubtful accounts of $106 million, or $0.13 per diluted share, and an asset impairment charge of $130 million, or $0.15 per diluted share. The amount of the change to the estimated professional liability insurance reserves was determined based upon the annual, independent actuarial analyses, which noted favorable claim and payment trends, the adoption of tort reform and limitations on losses in certain states, benefits resulting from the Company's patient safety programs and low inflation rates. The adjustment reduces other operating expenses. Same facility revenues rose 6.8 percent in the second quarter of 2004, same facility revenue per equivalent admission increased 5.7 percent, same facility admissions increased 0.4 percent and same facility equivalent admissions increased 1.0 percent, compared to the second quarter of 2003. Same facility surgical volume increased 1.1 percent in the second quarter of 2004. 1 The Company's provision for doubtful accounts in the second quarter totaled $661 million, or 11.3 percent of revenues, compared to $694 million, or 11.7 percent of revenues, in the first quarter of 2004 and $577 million, or 10.6 percent of revenues, in the second quarter of 2003. "The sequential improvement in bad debt expense, while positive, represents just one data point of improvement in the bad debt equation, and many macroeconomic issues remain for the health care industry. However, we have identified many improvements in our internal processes that we feel can help mitigate these costs. We also remain confident that the capital deployed in our facilities and the commitment of our employees to deliver quality health care services continue to enhance our position for the future," stated Jack O. Bovender, Jr., Chairman and Chief Executive Officer of HCA. Revenues for the six months ended June 30, 2004 were $11.8 billion compared to $10.7 billion in 2003. Net income totaled $697 million, or $1.41 per diluted share, compared to $709 million, or $1.37 per diluted share, for the six months ended June 30, 2003. Same facility uninsured emergency room visits rose 16.9 percent in the second quarter of 2004, while same facility uninsured admissions rose 15.2 percent in the second quarter of 2004 compared to the second quarter of 2003. Same facility uninsured emergency room visits accounted for 20.5 percent of total emergency room visits and same facility uninsured admissions accounted for 4.8 percent of total admissions in the second quarter of 2004. The Company's health care facilities provided $232 million of charity care and discounts to the uninsured during the second quarter of 2004, up from $209 million in the second quarter of 2003. Medicare regulatory changes, effective October 1, 2003, resulted in a $35 million ($0.04 per diluted share) reduction in the Company's Medicare operating outlier payments (from $64 million in the second quarter of 2003 to $29 million in the second quarter of 2004). The lower outlier payments resulted in a 60 basis point reduction in the Company's revenue per equivalent admission growth in the quarter. During the second quarter of 2004, same facility outpatient surgeries increased 0.9 percent. Included in this statistic are ambulatory surgery volumes, which increased 4.1 percent, and hospital based outpatient surgeries, which decreased 0.4 percent. Same facility emergency room visits increased 2.4 percent during the second quarter compared to the same period of 2003. 2 The Company's cash flow from operations increased to $682 million for the second quarter of 2004 from $320 million in 2003. During the second quarter of 2004, the Company benefited from lower estimated tax payments, while cash flow for the second quarter of 2003 was reduced by a $250 million settlement payment to the Federal government. Capital expenditures, excluding acquisitions, totaled $397 million in the second quarter of 2004. The Company anticipates capital expenditures, excluding acquisitions, will approximate $1.65 billion in 2004. HCA's ratio of debt-to-debt plus common and minority equity was 55.1 percent at June 30, 2004 compared to 55.8 percent at December 31, 2003. The Company repurchased 5.4 million shares of its common stock at a cost of $217 million (average cost of $39.93 per share) during the second quarter of 2004. The Company repurchased 0.2 million shares at a cost of $8 million in July 2004, completing the Company's $1.5 billion share repurchase authorization. Since 1997, HCA has repurchased approximately 249 million shares at a cost of $7.5 billion (average cost of $30.20 per share). HCA had 482 million shares outstanding at June 30, 2004. At June 30, 2004, the Company operated 190 hospitals and 91 freestanding surgery centers (including 7 hospitals and 9 freestanding surgery centers owned through equity method joint ventures) located in 23 states, London, England and Geneva, Switzerland compared to 190 hospitals and 80 freestanding surgery centers (including 6 hospitals and 4 freestanding surgery centers owned through equity method joint ventures) at June 30, 2003. HCA will host a conference call for investors at 8:30 a.m. CDT (9:30 a.m. EDT) today. All interested investors are invited to access a live audio broadcast of the call via webcast. The broadcast also will be available on a replay basis beginning this afternoon and for the next 30 days. The webcast can be accessed at http://www.firstcallevents.com/service/ajwz399509065gf12.html. -30- This press release contains forward-looking statements based on current management expectations. Those forward-looking statements include all statements other than those made solely with respect to historical fact. Numerous risks, uncertainties and other factors may cause actual results to differ materially from those expressed in any forward-looking statements. These factors include, but are not 3 limited to (i) increases in the amount and risk of collectability of uninsured accounts and deductibles and co-pay amounts for insured accounts, (ii) the ability to achieve operating and financial targets and achieve expected levels of patient volumes and control the costs of providing services, (iii) the highly competitive nature of the health care business, (iv) the efforts of insurers, health care providers and others to contain health care costs, (v) possible changes in the Medicare and Medicaid programs that may impact reimbursements to health care providers and insurers, (vi) the ability to attract and retain qualified management and personnel, including affiliated physicians, nurses and medical support personnel, (vii) potential liabilities and other claims that may be asserted against the Company, (viii) fluctuations in the market value of the Company's common stock, (ix) the impact of the Company's charity care and self-pay discounting policy changes, (x) changes in accounting practices, (xi) changes in general economic conditions, (xii) future divestitures which may result in charges, (xiii) changes in revenue mix and the ability to enter into and renew managed care provider arrangements on acceptable terms, (xiv) the availability and terms of capital to fund the expansion of the Company's business, (xv) changes in business strategy or development plans, (xvi) delays in receiving payments for services provided, (xvii) the possible enactment of Federal or state health care reform, (xviii) the outcome of pending and any future tax audits and litigation associated with the Company's tax positions, (xix) 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, (xx) changes in Federal, state or local regulations affecting the health care industry, (xxi) the ability to successfully integrate the operations of Health Midwest, (xxii) the ability to develop and implement the payroll and human resources information system within the expected time and cost projections and, upon implementation, to realize the expected benefits and efficiencies, and (xxiii) other risk factors detailed 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. In light of the significant uncertainties inherent in the forward-looking statements contained herein, readers should not place undue reliance on forward-looking statements, which reflect management's views only as of the date hereof. 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 HCA INC. CONDENSED CONSOLIDATED INCOME STATEMENTS SECOND QUARTER (DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)

2004 2003 ------------------- ------------------- AMOUNT RATIO Amount Ratio --------- ----- --------- ----- Revenues ................................................. $ 5,833 100.0% $ 5,467 100.0% Salaries and benefits .................................... 2,334 40.0 2,178 39.8 Supplies ................................................. 967 16.6 870 15.9 Other operating expenses ................................. 891 15.3 926 17.0 Provision for doubtful accounts .......................... 661 11.3 577 10.6 (Gains) losses on investments ............................ (18) (0.3) 1 -- Equity in earnings of affiliates ......................... (53) (0.9) (53) (1.0) Depreciation and amortization ............................ 315 5.4 278 5.1 Interest expense ......................................... 136 2.3 123 2.2 Gains on sales of facilities ............................. -- -- (1) -- Impairment of long-lived assets .......................... -- -- 130 2.4 Investigation related costs .............................. -- -- 1 -- --------- ----- --------- ----- 5,233 89.7 5,030 92.0 --------- ----- --------- ----- Income before minority interests and income taxes ........ 600 10.3 437 8.0 Minority interests in earnings of consolidated entities .. 35 0.6 47 0.9 --------- ----- --------- ----- Income before income taxes ............................... 565 9.7 390 7.1 Provision for income taxes ............................... 213 3.7 150 2.7 --------- ----- --------- ----- Net income .......................................... $ 352 6.0 $ 240 4.4 ========= ===== ========= ===== Diluted earnings per share ............................... $ 0.72 $ 0.47 Shares used in computing diluted earnings per share (000) 490,261 514,412

5 HCA INC. CONDENSED CONSOLIDATED INCOME STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 2004 AND 2003 (DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)

2004 2003 ------------------- -------------------- AMOUNT RATIO Amount Ratio --------- ----- --------- ----- Revenues ................................................. $ 11,770 100.0% $ 10,740 100.0% Salaries and benefits .................................... 4,667 39.7 4,274 39.8 Supplies ................................................. 1,947 16.5 1,715 16.0 Other operating expenses ................................. 1,842 15.6 1,779 16.5 Provision for doubtful accounts .......................... 1,355 11.5 1,005 9.4 (Gains) losses on investments ............................ (28) (0.2) 1 -- Equity in earnings of affiliates ......................... (99) (0.8) (111) (1.0) Depreciation and amortization ............................ 618 5.2 539 4.9 Interest expense ......................................... 271 2.3 237 2.2 Gains on sales of facilities ............................. -- -- (75) (0.7) Impairment of long-lived assets .......................... -- -- 130 1.2 Investigation related costs .............................. -- -- 5 0.1 --------- ----- --------- ----- 10,573 89.8 9,499 88.4 --------- ----- --------- ----- Income before minority interests and income taxes ........ 1,197 10.2 1,241 11.6 Minority interests in earnings of consolidated entities .. 73 0.7 86 0.8 --------- ----- --------- ----- Income before income taxes ............................... 1,124 9.5 1,155 10.8 Provision for income taxes ............................... 427 3.6 446 4.2 --------- ----- --------- ----- Net income .......................................... $ 697 5.9 $ 709 6.6 ========= ===== ========= ===== Diluted earnings per share ............................... $ 1.41 $ 1.37 Shares used in computing diluted earnings per share (000) 493,941 518,374

6 HCA INC. SUPPLEMENTAL OPERATING RESULTS INFORMATION (DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)

SECOND QUARTER YEAR TO DATE ---------------------- ---------------------- 2004 2003 2004 2003 --------- --------- --------- --------- Revenues ................................................................... $ 5,833 $ 5,467 $ 11,770 $ 10,740 Net income ................................................................. $ 352 $ 240 $ 697 $ 709 Gains on sales of facilities (net of tax) ............................. -- -- -- (42) Impairment of long-lived assets (net of tax) .......................... -- 79 -- 79 Investigation related costs (net of tax) .............................. -- -- -- 3 --------- --------- --------- --------- Net income, excluding gains on sales of facilities, impairment of long-lived assets and investigation related costs (a) ............................... 352 319 697 749 Depreciation and amortization ......................................... 315 278 618 539 Interest expense ...................................................... 136 123 271 237 Minority interests in earnings of consolidated entities ............... 35 47 73 86 Provision for income taxes ............................................ 213 201 427 466 --------- --------- --------- --------- Adjusted EBITDA (a) ........................................................ $ 1,051 $ 968 $ 2,086 $ 2,077 ========= ========= ========= ========= Diluted earnings per share: Net income ............................................................ $ 0.72 $ 0.47 $ 1.41 $ 1.37 Gains on sales of facilities .......................................... -- -- -- (0.08) Impairment of long-lived assets ....................................... -- 0.15 -- 0.15 --------- --------- --------- --------- Net income, excluding gains on sales of facilities, impairment of long-lived assets and investigation related costs (a) ............ $ 0.72 $ 0.62 $ 1.41 $ 1.44 ========= ========= ========= ========= Shares used in computing diluted earnings per share (000) .................. 490,261 514,412 493,941 518,374

- ------------------------------ (a) Net income, excluding gains on sales of facilities, impairment of long-lived assets and investigation related costs, and adjusted EBITDA are non-GAAP financial measures. The Company believes that net income, excluding certain measures required to be disclosed by GAAP, and adjusted EBITDA are important operating measures that supplement discussions and analysis of the Company's results of operations. The Company believes that it is useful to investors to provide disclosures of its results of operations on the same basis as that used by management. HCA's management relies upon net income, excluding certain measures required to be disclosed by GAAP, and adjusted EBITDA as the primary measures to review and assess operating perfomance of its hospital facilities and their management teams. Management and investors review both the Company's overall performance (including net income, excluding certain measures required to be disclosed by GAAP, GAAP net income and GAAP EPS) and the operating performance of the Company's health care facilities (adjusted EBITDA). Adjusted EBITDA and the adjusted EBITDA margin (adjusted EBITDA divided by revenues) are utilized by management and investors to compare the Company's current operating results with the corresponding periods during the previous year and to compare the Company's operating results with other companies in the health care industry. The Company recorded asset impairment charges during the second quarter and gains on sales of facilities and investigation related costs during the six months ended June 30, 2003. It is reasonable to expect that asset impairment charges and gains on sales of facilities will occur in future periods, but the amounts recognized for these items can vary significantly from quarter to quarter, do not directly relate to the ongoing operations of the Company's health care facilities and complicate quarterly comparisons of the Company's results of operations and operations comparisons with other health care companies. In addition, the Company does not currently expect to incur investigation related costs in future periods and the nature and materiality of these charges have significant effects on the ability of an investor to compare the operating results of the Company's hospital facilities from period to period and to compare the Company's operating results with other companies in the industry. Net income, excluding certain measures required to be disclosed by GAAP, and adjusted EBITDA are not measures of financial performance under accounting principles generally accepted in the United States, and should not be considered as alternatives to net income as a measure of operating performance or to cash flows from operating, investing and financing activities as a measure of liquidity. Because net income, excluding certain measures required to be disclosed by GAAP, and adjusted EBITDA are not measurements determined in accordance with generally accepted accounting principles and are susceptible to varying calculations, net income, excluding certain measures required to to be disclosed by GAAP, and adjusted EBITDA, as presented, may not be comparable to other similarly titled measures presented by other companies. 7 HCA INC. CONDENSED CONSOLIDATED BALANCE SHEETS (DOLLARS IN MILLIONS)

JUNE 30, MARCH 31, DECEMBER 31, 2004 2004 2003 --------- --------- ----------- ASSETS Current assets: Cash and cash equivalents ............................... $ 120 $ 148 $ 115 Accounts receivable, net ................................ 3,113 3,243 3,095 Inventories ............................................. 541 532 520 Deferred income taxes ................................... 573 564 534 Other ................................................... 385 342 558 --------- --------- --------- Total current assets ............................... 4,732 4,829 4,822 Property and equipment, at cost .............................. 19,346 18,969 18,685 Accumulated depreciation ..................................... (8,081) (7,816) (7,620) --------- --------- --------- 11,265 11,153 11,065 Investments of insurance subsidiary .......................... 1,866 1,870 1,790 Investments in and advances to affiliates .................... 508 520 527 Goodwill ..................................................... 2,496 2,499 2,481 Deferred loan costs .......................................... 76 80 75 Other ........................................................ 236 260 303 --------- --------- --------- $ 21,179 $ 21,211 $ 21,063 ========= ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable ........................................ $ 746 $ 809 $ 877 Accrued salaries ........................................ 537 533 510 Other accrued expenses .................................. 1,140 1,169 1,116 Long-term debt due within one year ...................... 710 223 665 --------- --------- --------- Total current liabilities .......................... 3,133 2,734 3,168 Long-term debt ............................................... 7,961 8,530 8,042 Professional liability risks ................................. 1,270 1,306 1,314 Deferred income taxes and other liabilities .................. 1,746 1,718 1,650 Minority interests in equity of consolidated entities ........ 726 713 680 Stockholders' equity ......................................... 6,343 6,210 6,209 --------- --------- --------- $ 21,179 $ 21,211 $ 21,063 ========= ========= ========= Current ratio ................................................ 1.51 1.77 1.52 Ratio of debt to debt plus common and minority equity ........ 55.1% 55.8% 55.8% Shares outstanding (thousands) ............................... 482,095 484,469 490,718

8 HCA INC. CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2004 AND 2003 (DOLLARS IN MILLIONS)

2004 2003 ------- ------- Cash flows from operating activities: Net income .......................................................... $ 697 $ 709 Adjustments to reconcile net income to net cash provided by operating activities: Provision for doubtful accounts .................................. 1,355 1,005 Depreciation and amortization .................................... 618 539 Income taxes ..................................................... 254 (17) Settlement with Federal government ............................... -- (250) Gains on sales of facilities ..................................... -- (75) Impairment of long-lived assets .................................. -- 130 Change in operating assets and liabilities ....................... (1,533) (1,052) Other ............................................................ 63 86 ------- ------- Net cash provided by operating activities ...................... 1,454 1,075 ------- ------- Cash flows from investing activities: Purchase of property and equipment .................................. (787) (920) Acquisition of hospitals and health care entities ................... (30) (884) Disposition of hospitals and health care entities ................... 28 121 Change in investments ............................................... (71) (110) Other ............................................................... 1 (4) ------- ------- Net cash used in investing activities .......................... (859) (1,797) ------- ------- Cash flows from financing activities: Issuance of long-term debt .......................................... 501 509 Net change in revolving bank credit facility ........................ (160) 805 Repayment of long-term debt ......................................... (383) (52) Payment of cash dividends ........................................... (72) (20) Repurchases of common stock ......................................... (592) (542) Issuances of common stock ........................................... 127 51 Other ............................................................... (11) (6) ------- ------- Net cash (used in) provided by financing activities ............ (590) 745 ------- ------- Change in cash and cash equivalents ..................................... 5 23 Cash and cash equivalents at beginning of period ........................ 115 161 ------- ------- Cash and cash equivalents at end of period .............................. $ 120 $ 184 ======= ======= Interest payments ....................................................... $ 258 $ 211 Income tax payments, net of refunds ..................................... $ 173 $ 463

9 HCA INC. OPERATING STATISTICS

FOR THE SIX MONTHS SECOND QUARTER ENDED JUNE 30, ------------------------- ------------------------- 2004 2003 2004 2003 --------- --------- --------- --------- CONSOLIDATED HOSPITALS: Number of Hospitals 183 184 183 184 Weighted Average Licensed Beds 41,962 42,178 41,948 41,074 Licensed Beds at End of Period 41,930 42,152 41,930 42,152 REPORTED: Admissions 410,500 409,000 840,800 813,500 % Change 0.4% 3.4% Equivalent Admissions 611,600 605,300 1,236,800 1,192,600 % Change 1.0% 3.7% Revenue per Equivalent Admission $ 9,536 $ 9,033 $ 9,516 $ 9,006 % Change 5.6% 5.7% Inpatient Revenue per Admission $ 8,667 $ 8,167 $ 8,618 $ 8,200 % Change 6.1% 5.1% Patient Days 2,033,400 2,020,200 4,207,000 4,047,400 Equivalent Patient Days 3,030,300 2,990,200 6,188,500 5,933,600 Emergency Room Visits 1,309,600 1,274,500 2,606,500 2,497,100 % Change 2.8% 4.4% Outpatient Revenues as a Percentage of Patient Revenues 38.1% 37.7% 37.5% 36.8% Average Length of Stay 5.0 4.9 5.0 5.0 Occupancy 53.3% 52.6% 55.1% 54.4% Equivalent Occupancy 79.4% 77.9% 81.1% 79.8% SAME FACILITY: Admissions 408,500 406,800 804,100 792,300 % Change 0.4% 1.5% Equivalent Admissions 608,300 602,100 1,180,500 1,159,900 % Change 1.0% 1.8% Revenue per Equivalent Admission $ 9,519 $ 9,008 $ 9,530 $ 8,979 % Change 5.7% 6.1% Inpatient Revenue per Admission $ 8,675 $ 8,173 $ 8,763 $ 8,267 % Change 6.1% 6.0% Emergency Room Visits 1,293,900 1,263,400 2,483,300 2,425,900 % Change 2.4% 2.4% NUMBER OF CONSOLIDATED AND NON-CONSOLIDATED (50/50 EQUITY JOINT VENTURES) HOSPITALS: Consolidated 183 184 183 184 Non-Consolidated (50/50 Equity Joint Ventures) 7 6 7 6 --------- --------- --------- --------- Total Number of Hospitals 190 190 190 190 ========= ========= ========= =========

10 -----END PRIVACY-ENHANCED MESSAGE-----

EX-99.1

                                                                    EXHIBIT 99.1


HCA                                                                 NEWS
- --------------------------------------------------------------------------------
                                                           FOR IMMEDIATE RELEASE

INVESTOR CONTACT:                                               MEDIA CONTACT:
Mark Kimbrough                                                  Jeff Prescott
(615) 344-2688                                                  (615) 344-5708


                     HCA REPORTS 2004 SECOND QUARTER RESULTS


NASHVILLE, TENN., JULY 26, 2004 - HCA (NYSE: HCA) today announced revenues for
the quarter ended June 30, 2004 increased 6.7 percent to $5.8 billion from $5.5
billion in the second quarter of 2003. Net income totaled $352 million, or $0.72
per diluted share, compared to $240 million, or $0.47 per diluted share, in
2003. Results for the second quarter of 2004 include a positive $59 million, or
$0.07 per diluted share, change in the Company's estimated professional
liability insurance reserves. Net income for the second quarter of 2003 includes
an increase in the Company's estimated allowance for doubtful accounts of $106
million, or $0.13 per diluted share, and an asset impairment charge of $130
million, or $0.15 per diluted share.

The amount of the change to the estimated professional liability insurance
reserves was determined based upon the annual, independent actuarial analyses,
which noted favorable claim and payment trends, the adoption of tort reform and
limitations on losses in certain states, benefits resulting from the Company's
patient safety programs and low inflation rates. The adjustment reduces other
operating expenses.

Same facility revenues rose 6.8 percent in the second quarter of 2004, same
facility revenue per equivalent admission increased 5.7 percent, same facility
admissions increased 0.4 percent and same facility equivalent admissions
increased 1.0 percent, compared to the second quarter of 2003. Same facility
surgical volume increased 1.1 percent in the second quarter of 2004.



                                       1



The Company's provision for doubtful accounts in the second quarter totaled $661
million, or 11.3 percent of revenues, compared to $694 million, or 11.7 percent
of revenues, in the first quarter of 2004 and $577 million, or 10.6 percent of
revenues, in the second quarter of 2003.

"The sequential improvement in bad debt expense, while positive, represents just
one data point of improvement in the bad debt equation, and many macroeconomic
issues remain for the health care industry. However, we have identified many
improvements in our internal processes that we feel can help mitigate these
costs. We also remain confident that the capital deployed in our facilities and
the commitment of our employees to deliver quality health care services continue
to enhance our position for the future," stated Jack O. Bovender, Jr., Chairman
and Chief Executive Officer of HCA.

Revenues for the six months ended June 30, 2004 were $11.8 billion compared to
$10.7 billion in 2003. Net income totaled $697 million, or $1.41 per diluted
share, compared to $709 million, or $1.37 per diluted share, for the six months
ended June 30, 2003.

Same facility uninsured emergency room visits rose 16.9 percent in the second
quarter of 2004, while same facility uninsured admissions rose 15.2 percent in
the second quarter of 2004 compared to the second quarter of 2003. Same facility
uninsured emergency room visits accounted for 20.5 percent of total emergency
room visits and same facility uninsured admissions accounted for 4.8 percent of
total admissions in the second quarter of 2004. The Company's health care
facilities provided $232 million of charity care and discounts to the uninsured
during the second quarter of 2004, up from $209 million in the second quarter of
2003.

Medicare regulatory changes, effective October 1, 2003, resulted in a $35
million ($0.04 per diluted share) reduction in the Company's Medicare operating
outlier payments (from $64 million in the second quarter of 2003 to $29 million
in the second quarter of 2004). The lower outlier payments resulted in a 60
basis point reduction in the Company's revenue per equivalent admission growth
in the quarter.

During the second quarter of 2004, same facility outpatient surgeries increased
0.9 percent. Included in this statistic are ambulatory surgery volumes, which
increased 4.1 percent, and hospital based outpatient surgeries, which decreased
0.4 percent. Same facility emergency room visits increased 2.4 percent during
the second quarter compared to the same period of 2003.


                                       2



The Company's cash flow from operations increased to $682 million for the second
quarter of 2004 from $320 million in 2003. During the second quarter of 2004,
the Company benefited from lower estimated tax payments, while cash flow for the
second quarter of 2003 was reduced by a $250 million settlement payment to the
Federal government. Capital expenditures, excluding acquisitions, totaled $397
million in the second quarter of 2004. The Company anticipates capital
expenditures, excluding acquisitions, will approximate $1.65 billion in 2004.

HCA's ratio of debt-to-debt plus common and minority equity was 55.1 percent at
June 30, 2004 compared to 55.8 percent at December 31, 2003.

The Company repurchased 5.4 million shares of its common stock at a cost of $217
million (average cost of $39.93 per share) during the second quarter of 2004.
The Company repurchased 0.2 million shares at a cost of $8 million in July 2004,
completing the Company's $1.5 billion share repurchase authorization. Since
1997, HCA has repurchased approximately 249 million shares at a cost of $7.5
billion (average cost of $30.20 per share). HCA had 482 million shares
outstanding at June 30, 2004.

At June 30, 2004, the Company operated 190 hospitals and 91 freestanding surgery
centers (including 7 hospitals and 9 freestanding surgery centers owned through
equity method joint ventures) located in 23 states, London, England and Geneva,
Switzerland compared to 190 hospitals and 80 freestanding surgery centers
(including 6 hospitals and 4 freestanding surgery centers owned through equity
method joint ventures) at June 30, 2003.

HCA will host a conference call for investors at 8:30 a.m. CDT (9:30 a.m. EDT)
today. All interested investors are invited to access a live audio broadcast of
the call via webcast. The broadcast also will be available on a replay basis
beginning this afternoon and for the next 30 days. The webcast can be accessed
at http://www.firstcallevents.com/service/ajwz399509065gf12.html.


                                      -30-

This press release contains forward-looking statements based on current
management expectations. Those forward-looking statements include all statements
other than those made solely with respect to historical fact. Numerous risks,
uncertainties and other factors may cause actual results to differ materially
from those expressed in any forward-looking statements. These factors include,
but are not



                                       3


limited to (i) increases in the amount and risk of collectability of uninsured
accounts and deductibles and co-pay amounts for insured accounts, (ii) the
ability to achieve operating and financial targets and achieve expected levels
of patient volumes and control the costs of providing services, (iii) the highly
competitive nature of the health care business, (iv) the efforts of insurers,
health care providers and others to contain health care costs, (v) possible
changes in the Medicare and Medicaid programs that may impact reimbursements to
health care providers and insurers, (vi) the ability to attract and retain
qualified management and personnel, including affiliated physicians, nurses and
medical support personnel, (vii) potential liabilities and other claims that may
be asserted against the Company, (viii) fluctuations in the market value of the
Company's common stock, (ix) the impact of the Company's charity care and
self-pay discounting policy changes, (x) changes in accounting practices, (xi)
changes in general economic conditions, (xii) future divestitures which may
result in charges, (xiii) changes in revenue mix and the ability to enter into
and renew managed care provider arrangements on acceptable terms, (xiv) the
availability and terms of capital to fund the expansion of the Company's
business, (xv) changes in business strategy or development plans, (xvi) delays
in receiving payments for services provided, (xvii) the possible enactment of
Federal or state health care reform, (xviii) the outcome of pending and any
future tax audits and litigation associated with the Company's tax positions,
(xix) 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, (xx) changes in
Federal, state or local regulations affecting the health care industry, (xxi)
the ability to successfully integrate the operations of Health Midwest, (xxii)
the ability to develop and implement the payroll and human resources information
system within the expected time and cost projections and, upon implementation,
to realize the expected benefits and efficiencies, and (xxiii) other risk
factors detailed 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. In light of the significant uncertainties
inherent in the forward-looking statements contained herein, readers should not
place undue reliance on forward-looking statements, which reflect management's
views only as of the date hereof. 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


                                    HCA INC.
                    CONDENSED CONSOLIDATED INCOME STATEMENTS
                                 SECOND QUARTER
                 (DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)





                                                                      2004                        2003
                                                              -------------------          -------------------
                                                               AMOUNT       RATIO           Amount       Ratio
                                                              ---------     -----          ---------     -----
                                                                                             
Revenues .................................................    $   5,833     100.0%         $   5,467     100.0%

Salaries and benefits ....................................        2,334      40.0              2,178      39.8
Supplies .................................................          967      16.6                870      15.9
Other operating expenses .................................          891      15.3                926      17.0
Provision for doubtful accounts ..........................          661      11.3                577      10.6
(Gains) losses on investments ............................          (18)     (0.3)                 1        --
Equity in earnings of affiliates .........................          (53)     (0.9)               (53)     (1.0)
Depreciation and amortization ............................          315       5.4                278       5.1
Interest expense .........................................          136       2.3                123       2.2
Gains on sales of facilities .............................           --        --                 (1)       --
Impairment of long-lived assets ..........................           --        --                130       2.4
Investigation related costs ..............................           --        --                  1        --
                                                              ---------     -----          ---------     -----

                                                                  5,233      89.7              5,030      92.0
                                                              ---------     -----          ---------     -----

Income before minority interests and income taxes ........          600      10.3                437       8.0

Minority interests in earnings of consolidated entities ..           35       0.6                 47       0.9
                                                              ---------     -----          ---------     -----

Income before income taxes ...............................          565       9.7                390       7.1

Provision for income taxes ...............................          213       3.7                150       2.7
                                                              ---------     -----          ---------     -----

     Net income ..........................................    $     352       6.0          $     240       4.4
                                                              =========     =====          =========     =====

Diluted earnings per share ...............................    $    0.72                    $    0.47

Shares used in computing diluted earnings per share (000)       490,261                      514,412







                                       5


                                    HCA INC.
                    CONDENSED CONSOLIDATED INCOME STATEMENTS
                 FOR THE SIX MONTHS ENDED JUNE 30, 2004 AND 2003
                 (DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)





                                                                     2004                           2003
                                                              -------------------          --------------------
                                                                AMOUNT      RATIO           Amount        Ratio
                                                              ---------     -----          ---------      -----

                                                                                              
Revenues .................................................    $  11,770     100.0%         $  10,740      100.0%

Salaries and benefits ....................................        4,667      39.7              4,274       39.8
Supplies .................................................        1,947      16.5              1,715       16.0
Other operating expenses .................................        1,842      15.6              1,779       16.5
Provision for doubtful accounts ..........................        1,355      11.5              1,005        9.4
(Gains) losses on investments ............................          (28)     (0.2)                 1         --
Equity in earnings of affiliates .........................          (99)     (0.8)              (111)      (1.0)
Depreciation and amortization ............................          618       5.2                539        4.9
Interest expense .........................................          271       2.3                237        2.2
Gains on sales of facilities .............................           --        --                (75)      (0.7)
Impairment of long-lived assets ..........................           --        --                130        1.2
Investigation related costs ..............................           --        --                  5        0.1
                                                              ---------     -----          ---------      -----

                                                                 10,573      89.8              9,499       88.4
                                                              ---------     -----          ---------      -----

Income before minority interests and income taxes ........        1,197      10.2              1,241       11.6

Minority interests in earnings of consolidated entities ..           73       0.7                 86        0.8
                                                              ---------     -----          ---------      -----

Income before income taxes ...............................        1,124       9.5              1,155       10.8

Provision for income taxes ...............................          427       3.6                446        4.2
                                                              ---------     -----          ---------      -----

     Net income ..........................................    $     697       5.9          $     709        6.6
                                                              =========     =====          =========      =====

Diluted earnings per share ...............................    $    1.41                    $    1.37

Shares used in computing diluted earnings per share (000)       493,941                      518,374





                                       6

                                    HCA INC.
                   SUPPLEMENTAL OPERATING RESULTS INFORMATION
                 (DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)





                                                                                   SECOND QUARTER             YEAR TO DATE
                                                                                ----------------------    ----------------------
                                                                                  2004         2003          2004        2003
                                                                                ---------    ---------    ---------    ---------
                                                                                                           
Revenues ...................................................................    $   5,833    $   5,467    $  11,770    $  10,740

Net income .................................................................    $     352    $     240    $     697    $     709
     Gains on sales of facilities (net of tax) .............................           --           --           --          (42)
     Impairment of long-lived assets (net of tax) ..........................           --           79           --           79
     Investigation related costs (net of tax) ..............................           --           --           --            3
                                                                                ---------    ---------    ---------    ---------
Net income, excluding gains on sales of facilities, impairment of long-lived
  assets and investigation related costs (a) ...............................          352          319          697          749
     Depreciation and amortization .........................................          315          278          618          539
     Interest expense ......................................................          136          123          271          237
     Minority interests in earnings of consolidated entities ...............           35           47           73           86
     Provision for income taxes ............................................          213          201          427          466
                                                                                ---------    ---------    ---------    ---------

Adjusted EBITDA (a) ........................................................    $   1,051    $     968    $   2,086    $   2,077
                                                                                =========    =========    =========    =========


Diluted earnings per share:
     Net income ............................................................    $    0.72    $    0.47    $    1.41    $    1.37
     Gains on sales of facilities ..........................................           --           --           --        (0.08)
     Impairment of long-lived assets .......................................           --         0.15           --         0.15
                                                                                ---------    ---------    ---------    ---------
        Net income, excluding gains on sales of facilities, impairment of
          long-lived assets and investigation related costs (a) ............    $    0.72    $    0.62    $    1.41    $    1.44
                                                                                =========    =========    =========    =========

Shares used in computing diluted earnings per share (000) ..................      490,261      514,412      493,941      518,374



- ------------------------------

(a)  Net income, excluding gains on sales of facilities, impairment of
     long-lived assets and investigation related costs, and adjusted EBITDA are
     non-GAAP financial measures. The Company believes that net income,
     excluding certain measures required to be disclosed by GAAP, and adjusted
     EBITDA are important operating measures that supplement discussions and
     analysis of the Company's results of operations. The Company believes that
     it is useful to investors to provide disclosures of its results of
     operations on the same basis as that used by management. HCA's management
     relies upon net income, excluding certain measures required to be disclosed
     by GAAP, and adjusted EBITDA as the primary measures to review and assess
     operating perfomance of its hospital facilities and their management teams.

     Management and investors review both the Company's overall performance
     (including net income, excluding certain measures required to be disclosed
     by GAAP, GAAP net income and GAAP EPS) and the operating performance of the
     Company's health care facilities (adjusted EBITDA). Adjusted EBITDA and the
     adjusted EBITDA margin (adjusted EBITDA divided by revenues) are utilized
     by management and investors to compare the Company's current operating
     results with the corresponding periods during the previous year and to
     compare the Company's operating results with other companies in the health
     care industry. The Company recorded asset impairment charges during the
     second quarter and gains on sales of facilities and investigation related
     costs during the six months ended June 30, 2003. It is reasonable to expect
     that asset impairment charges and gains on sales of facilities will occur
     in future periods, but the amounts recognized for these items can vary
     significantly from quarter to quarter, do not directly relate to the
     ongoing operations of the Company's health care facilities and complicate
     quarterly comparisons of the Company's results of operations and operations
     comparisons with other health care companies. In addition, the Company does
     not currently expect to incur investigation related costs in future periods
     and the nature and materiality of these charges have significant effects on
     the ability of an investor to compare the operating results of the
     Company's hospital facilities from period to period and to compare the
     Company's operating results with other companies in the industry.

     Net income, excluding certain measures required to be disclosed by GAAP,
     and adjusted EBITDA are not measures of financial performance under
     accounting principles generally accepted in the United States, and should
     not be considered as alternatives to net income as a measure of operating
     performance or to cash flows from operating, investing and financing
     activities as a measure of liquidity. Because net income, excluding certain
     measures required to be disclosed by GAAP, and adjusted EBITDA are not
     measurements determined in accordance with generally accepted accounting
     principles and are susceptible to varying calculations, net income,
     excluding certain measures required to to be disclosed by GAAP, and
     adjusted EBITDA, as presented, may not be comparable to other similarly
     titled measures presented by other companies.





                                       7

                                    HCA INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                              (DOLLARS IN MILLIONS)



                                                                  JUNE 30,       MARCH 31,     DECEMBER 31,
                                                                    2004           2004           2003
                                                                  ---------      ---------     -----------
                                                                                       
                                         ASSETS
Current assets:
     Cash and cash equivalents ...............................    $     120      $     148      $     115
     Accounts receivable, net ................................        3,113          3,243          3,095
     Inventories .............................................          541            532            520
     Deferred income taxes ...................................          573            564            534
     Other ...................................................          385            342            558
                                                                  ---------      ---------      ---------

          Total current assets ...............................        4,732          4,829          4,822

Property and equipment, at cost ..............................       19,346         18,969         18,685
Accumulated depreciation .....................................       (8,081)        (7,816)        (7,620)
                                                                  ---------      ---------      ---------
                                                                     11,265         11,153         11,065

Investments of insurance subsidiary ..........................        1,866          1,870          1,790
Investments in and advances to affiliates ....................          508            520            527
Goodwill .....................................................        2,496          2,499          2,481
Deferred loan costs ..........................................           76             80             75
Other ........................................................          236            260            303
                                                                  ---------      ---------      ---------

                                                                  $  21,179      $  21,211      $  21,063
                                                                  =========      =========      =========

                          LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
     Accounts payable ........................................    $     746      $     809      $     877
     Accrued salaries ........................................          537            533            510
     Other accrued expenses ..................................        1,140          1,169          1,116
     Long-term debt due within one year ......................          710            223            665
                                                                  ---------      ---------      ---------

          Total current liabilities ..........................        3,133          2,734          3,168

Long-term debt ...............................................        7,961          8,530          8,042
Professional liability risks .................................        1,270          1,306          1,314
Deferred income taxes and other liabilities ..................        1,746          1,718          1,650
Minority interests in equity of consolidated entities ........          726            713            680

Stockholders' equity .........................................        6,343          6,210          6,209
                                                                  ---------      ---------      ---------

                                                                  $  21,179      $  21,211      $  21,063
                                                                  =========      =========      =========

Current ratio ................................................         1.51           1.77           1.52
Ratio of debt to debt plus common and minority equity ........         55.1%          55.8%          55.8%
Shares outstanding (thousands) ...............................      482,095        484,469        490,718






                                       8

                                    HCA INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 FOR THE SIX MONTHS ENDED JUNE 30, 2004 AND 2003
                              (DOLLARS IN MILLIONS)





                                                                              2004        2003
                                                                             -------     -------
                                                                                   
Cash flows from operating activities:
    Net income ..........................................................    $   697     $   709
    Adjustments to reconcile net income to net cash provided by operating
     activities:
       Provision for doubtful accounts ..................................      1,355       1,005
       Depreciation and amortization ....................................        618         539
       Income taxes .....................................................        254         (17)
       Settlement with Federal government ...............................         --        (250)
       Gains on sales of facilities .....................................         --         (75)
       Impairment of long-lived assets ..................................         --         130
       Change in operating assets and liabilities .......................     (1,533)     (1,052)
       Other ............................................................         63          86
                                                                             -------     -------

         Net cash provided by operating activities ......................      1,454       1,075
                                                                             -------     -------


Cash flows from investing activities:
    Purchase of property and equipment ..................................       (787)       (920)
    Acquisition of hospitals and health care entities ...................        (30)       (884)
    Disposition of hospitals and health care entities ...................         28         121
    Change in investments ...............................................        (71)       (110)
    Other ...............................................................          1          (4)
                                                                             -------     -------

         Net cash used in investing activities ..........................       (859)     (1,797)
                                                                             -------     -------


Cash flows from financing activities:
    Issuance of long-term debt ..........................................        501         509
    Net change in revolving bank credit facility ........................       (160)        805
    Repayment of long-term debt .........................................       (383)        (52)
    Payment of cash dividends ...........................................        (72)        (20)
    Repurchases of common stock .........................................       (592)       (542)
    Issuances of common stock ...........................................        127          51
    Other ...............................................................        (11)         (6)
                                                                             -------     -------

         Net cash (used in) provided by financing activities ............       (590)        745
                                                                             -------     -------


Change in cash and cash equivalents .....................................          5          23
Cash and cash equivalents at beginning of period ........................        115         161
                                                                             -------     -------


Cash and cash equivalents at end of period ..............................    $   120     $   184
                                                                             =======     =======



Interest payments .......................................................    $   258     $   211
Income tax payments, net of refunds .....................................    $   173     $   463




                                       9

                                    HCA INC.
                              OPERATING STATISTICS



                                                                                        FOR THE SIX MONTHS
                                                         SECOND QUARTER                    ENDED JUNE 30,
                                                    -------------------------        -------------------------
                                                      2004             2003            2004             2003
                                                    ---------       ---------        ---------       ---------
                                                                                         
CONSOLIDATED HOSPITALS:

       Number of Hospitals                                183             184              183             184
       Weighted Average Licensed Beds                  41,962          42,178           41,948          41,074
       Licensed Beds at End of Period                  41,930          42,152           41,930          42,152

    REPORTED:
       Admissions                                     410,500         409,000          840,800         813,500
             % Change                                    0.4%                             3.4%
       Equivalent Admissions                          611,600         605,300        1,236,800       1,192,600
             % Change                                    1.0%                             3.7%
       Revenue per Equivalent Admission               $ 9,536         $ 9,033          $ 9,516         $ 9,006
             % Change                                    5.6%                             5.7%
       Inpatient Revenue per Admission                $ 8,667         $ 8,167          $ 8,618         $ 8,200
             % Change                                    6.1%                             5.1%

       Patient Days                                 2,033,400       2,020,200        4,207,000       4,047,400
       Equivalent Patient Days                      3,030,300       2,990,200        6,188,500       5,933,600

       Emergency Room Visits                        1,309,600       1,274,500        2,606,500       2,497,100
             % Change                                    2.8%                             4.4%

       Outpatient Revenues as a
           Percentage of Patient Revenues               38.1%           37.7%            37.5%           36.8%

       Average Length of Stay                             5.0             4.9              5.0             5.0

       Occupancy                                        53.3%           52.6%            55.1%           54.4%
       Equivalent Occupancy                             79.4%           77.9%            81.1%           79.8%

    SAME FACILITY:
       Admissions                                     408,500         406,800          804,100         792,300
             % Change                                    0.4%                             1.5%
       Equivalent Admissions                          608,300         602,100        1,180,500       1,159,900
             % Change                                    1.0%                             1.8%
       Revenue per Equivalent Admission               $ 9,519         $ 9,008          $ 9,530         $ 8,979
             % Change                                    5.7%                             6.1%
       Inpatient Revenue per Admission                $ 8,675         $ 8,173          $ 8,763         $ 8,267
             % Change                                    6.1%                             6.0%

       Emergency Room Visits                        1,293,900       1,263,400        2,483,300       2,425,900
             % Change                                    2.4%                             2.4%

NUMBER OF CONSOLIDATED AND
NON-CONSOLIDATED (50/50 EQUITY
JOINT VENTURES) HOSPITALS:

       Consolidated                                       183             184              183             184
       Non-Consolidated (50/50 Equity
           Joint Ventures)                                  7               6                7               6
                                                    ---------       ---------        ---------       ---------
       Total Number of Hospitals                          190             190              190             190
                                                    =========       =========        =========       =========




                                       10