8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

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): October 20, 2006 (October 20, 2006)

HCA INC.

(Exact name of registrant as specified in its charter)

Delaware	001-11239	75-2497104
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer
		Identification No.)

One Park Plaza, Nashville, Tennessee	37203
(Address of principal executive offices)	(Zip Code)

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

Not Applicable

(Former name or former address, if changed since last report)

     Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

     o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

     o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

     o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

     o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

	Item 2.02. Results of Operations and Financial Condition
	Item 7.01. Regulation FD Disclosure
	Item 9.01. Financial Statements and Exhibits
SIGNATURES
EXHIBIT INDEX
Ex-99.1 October 20, 2006 Press Release

Item 2.02. Results of Operations and Financial Condition

     On October 20, 2006, HCA Inc. (the “Company”) issued a press release announcing, among other matters, its results of operations for the third quarter ended September 30, 2006, the text of which is set forth as Exhibit 99.1.

Item 7.01. Regulation FD Disclosure

     On October 20, 2006, the Company issued a press release announcing, among other matters, its results of operations for the third quarter ended September 30, 2006, the text of which is set forth as Exhibit 99.1.

Item 9.01. Financial Statements and Exhibits

(c)

Exhibit
Number	Exhibit Title
99.1	Press Release dated October 20, 2006

SIGNATURES

     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

Date: October 20, 2006

EXHIBIT INDEX

Exhibit
Number	Exhibit Title
99.1	Press Release dated October 20, 2006

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 Third Quarter 2006 Results

Nashville, Tenn., October 20, 2006 — HCA (NYSE: HCA) today announced results for the quarter ended September 30, 2006. Net income for the third quarter of 2006 totaled $240 million, or $0.58 per diluted share, compared to $280 million, or $0.62 per diluted share, in the third quarter of 2005. Results for the third quarter of 2006 include gains on sales of facilities of $41 million, or $0.06 per diluted share, and transaction costs related to the proposed merger of $9 million, or $0.01 per diluted share. Third quarter 2005 results include costs, net of estimated recoveries, of $33 million, or $0.05 per diluted share, related to hurricane damage and business interruption and a tax benefit of $22 million, or $0.05 per diluted share, from the repatriation of foreign earnings.

Third quarter 2006 results include additional compensation costs of $11 million, or $0.02 per diluted share, due to the expensing of stock options and employee stock purchase plan shares associated with the January 1, 2006 adoption of FASB Statement 123 (R), “Share-Based Payment.”

Revenues in the third quarter of 2006 totaled $6.2 billion compared to $6.0 billion in the third quarter of 2005. Same facility revenues increased 5.4 percent compared to the third quarter of 2005. Same facility revenue per equivalent admission increased 6.4 percent in the third quarter of 2006 (6.8 percent increase when adjusted for uninsured discounts) compared to the third quarter of 2005.

Same facility admissions increased 0.1 percent in the third quarter of 2006 compared to the prior year’s third quarter. Same facility equivalent admissions, which take into consideration outpatient volumes, decreased 0.9 percent compared to the third quarter of 2005. Same facility outpatient surgical cases declined 2.8 percent in the third quarter of 2006, due to declines of 4.3 percent in hospital based outpatient surgeries and 0.1 percent in freestanding ambulatory surgical cases compared to the third quarter of 2005.

The provision for doubtful accounts in the third quarter of 2006 totaled $677 million, or 10.9 percent of revenues, compared to $618 million, or 10.3 percent of revenues, in the prior year. Adjusted to reflect uninsured discounts, the provision for doubtful accounts totaled $954 million,

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or 14.7 percent of revenues, in the third quarter of 2006, compared to $859 million, or 13.7 percent of revenues, in the third quarter of 2005.

Uninsured discounts in the third quarters of 2006 and 2005 were $277 million and $241 million, respectively. HCA’s uninsured discount policy, which became effective in the first quarter of 2005, lowers revenues and the provision for doubtful accounts by generally corresponding amounts. Charity care totaled $329 million in the third quarter of 2006, compared to $298 million in the previous year’s third quarter. Same facility uninsured admissions, which include charity patients, increased by 2,257 admissions or 10.1 percent, in the third quarter of 2006 compared to the same period of 2005.

Effective July 1, 2006, we sold four hospitals (three in West Virginia and one in Virginia) to LifePoint Hospitals, Inc. for $256 million. A gain of $32 million pretax, or $0.05 per diluted share, on the sale of the hospital located in Virginia was recognized in the third quarter of 2006. Certificates of Need (“CONs”) are required for the sale of the three West Virginia hospitals included in the transaction. Because filings seeking the revocation of the CONs were pending at the time of the closing, HCA and LifePoint have agreed that under certain circumstances, LifePoint may require us to repurchase the three West Virginia Hospitals. Generally, those circumstances require a final and nonappealable order revoking the CONs or an order requiring LifePoint to divest the hospitals or cease operations. In the event of such a repurchase, the repurchase price would be based upon the original purchase price and adjusted for working capital changes, capital expenditures and other items. Due to the CON proceedings and the repurchase provision, we have deferred the recognition of the gain of approximately $61 million pretax related to the three West Virginia hospitals until the CON appeals are resolved.

Effective October 1, 2006, we sold two hospitals in Florida for $266 million. A pretax gain of approximately $91 million, or $0.09 per diluted share, will be recognized in the fourth quarter of 2006 related to this sale.

Revenues for the nine months ended September 30, 2006 were $19.0 billion compared to $18.3 billion for the first nine months of 2005. Net income totaled $914 million, or $2.23 per diluted share, for the nine months ended September 30, 2006, compared to $1.1 billion, or $2.46 per diluted share, for the first nine months of 2005.

Cash Flow and Balance Sheet

HCA’s cash flows from operations totaled $653 million in the third quarter of 2006 compared to $938 million in the third quarter of 2005. Cash flows from operations during the third quarter of 2006 were negatively affected by the combined impact of lower net income and an increase of $153 million in net accounts receivable during the third quarter of 2006 (primarily due to a delay by CMS in the processing of Medicare claims in September as mandated by provisions of the Deficit Reduction Act) compared to a decrease of $78 million in net accounts receivable during the third quarter of 2005.

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As of September 30, 2006, HCA’s balance sheet reflected total debt of $11.3 billion, stockholders’ equity (including common and minority equity) of $6.0 billion and total assets of $23.1 billion. HCA’s ratio of debt to debt plus common and minority equity was 65.2 percent at September 30, 2006, compared to 64.8 percent at December 31, 2005.

HCA had 409.7 million common shares outstanding at September 30, 2006, compared to 417.5 million shares at December 31, 2005.

Proposed Merger

The Company announced on July 24, 2006 the execution of a definitive merger agreement with an acquiring consortium led by Bain Capital, Kohlberg Kravis Roberts & Co. and Merrill Lynch Global Private Equity, along with HCA founder, Dr. Thomas F. Frist, Jr. and certain members of his family, pursuant to which HCA shareholders will receive $51.00 per share in cash for each share of HCA common stock they hold. The transaction is subject to receipt of stockholder approval and customary regulatory approvals, as well as satisfaction of other customary closing conditions. The transaction is expected to close in the fourth quarter of 2006.

The Company will hold a special meeting of its shareholders to consider the merger. The meeting will be held at HCA’s executive offices at One Park Plaza, Nashville, Tennessee 37203 on November 16, 2006, at 11:00 a.m., local time, for shareholders of record on October 6, 2006.

Important Additional Information Regarding The Merger Has Been Filed With The SEC

In connection with the proposed merger, HCA has filed a definitive proxy statement with the Securities and Exchange Commission. INVESTORS AND SECURITY HOLDERS ARE ADVISED TO READ THE PROXY STATEMENT BECAUSE IT CONTAINS IMPORTANT INFORMATION ABOUT THE MERGER AND THE PARTIES THERETO. Investors and security holders may obtain a free copy of the proxy statement and other documents filed by HCA at the Securities and Exchange Commission’s web site at http://www.sec.gov. The proxy statement and such other documents may also be obtained for free from HCA by directing such request to HCA Inc., Office of Investor Relations, One Park Plaza, Nashville, Tennessee 37203, telephone: (615) 344-2068.

HCA and its directors, executive officers and other members of its management and employees may be deemed to be participants in the solicitation of proxies from its stockholders in connection with the proposed merger. Information concerning the interests of HCA’s participants in the solicitation, which may be different than those of HCA stockholders generally, is set forth in HCA’s proxy statements and Annual Reports on Form 10-K, previously filed with the Securities and Exchange Commission, and in the proxy statement relating to the merger.

Due to the announced merger agreement, the Company will not hold a conference call or webcast regarding its third quarter results.

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Cautionary Note Regarding Forward Looking Statements

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 facts. Numerous risks, uncertainties and other factors may cause actual results to differ materially from those expressed in any forward-looking statements. These factors include, but are not limited to, (1) the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement; (2) the outcome of any legal proceedings instituted against the Company and others in connection with the merger; (3) the inability to complete the merger due to the failure to obtain stockholder approval or the failure to satisfy other conditions to completion of the merger; (4) the failure to obtain the necessary debt financing arrangements set forth in commitment letters received in connection with the merger; (5) risks that the proposed transaction disrupts current plans and operations and the potential difficulties in employee retention as a result of the merger; (6) the ability to recognize the benefits of the merger; (7) the amount of the costs, fees, expenses and charges related to the merger and the actual terms of certain financings that will be obtained for the merger; (8) the impact of the substantial indebtedness incurred to finance the consummation of the merger; (9) the amount of the costs, fees, expenses and charges related to the merger and the actual terms of certain financing that will be outlined for the merger; (10) increases in the amount and risk of collectibility of uninsured accounts, and deductibles and copayment amounts for insured accounts; (11) the ability to achieve operating and financial targets, attain expected levels of patient volumes and control the costs of providing services; (12) possible changes in the Medicare, Medicaid and other state programs that may impact reimbursements to health care providers and insurers; (13) the highly competitive nature of the health care business; (14) changes in revenue mix and the ability to enter into and renew managed care provider agreements on acceptable terms; (15) the efforts of insurers, health care providers and others to contain health care costs; (16) the impact of our charity care and uninsured discounting policies; (17) the outcome of our continuing efforts to monitor, maintain and comply with appropriate laws, regulations, policies and procedures and our corporate integrity agreement with the government; (18) changes in federal, state or local regulations affecting the health care industry; (19) delays in receiving payments for services provided; (20) the ability to attract and retain qualified management and personnel, including affiliated physicians, nurses and medical support personnel; (21) the outcome of governmental investigations by the United States Attorney for the Southern District of New York and the Securities and Exchange Commission (the “SEC”); (22) the outcome of certain class action and derivative litigation filed with respect to us; (23) the possible enactment of federal or state health care reform; (24) the availability and terms of capital to fund the expansion of our business; (25) the continuing impact of hurricanes on our facilities, the ability to obtain recoveries under our insurance policies, and the ability to secure adequate insurance coverage in future periods; (26) the resolution of the CON appeal with respect to the three West Virginia hospitals sold to LifePoint; (27) changes in accounting practices; (28) changes in general economic conditions; (29) future divestitures which may result in charges; (30) changes in business strategy or development plans; (31) the outcome of pending and any future tax audits, appeals and litigation associat ed with our tax positions; (32) potential liabilities and other claims that may be asserted against us, and (33) other risk factors described in our Annual Report on Form 10-K and other filings with the SEC. Many of the factors that will

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determine our future results are beyond our ability to control or predict. In light of the significant uncertainties inherent in the forward-looking statements contained herein, readers should not place undue reliance on forward-looking statements, which reflect management’s views only as of the date hereof. We undertake no obligation to revise or update any forward-looking statements, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.

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HCA Inc.
Consolidated Income Statements
Third Quarter
(Dollars in millions, except per share amounts)

	2006						2005
	Amount			Ratio			Amount			Ratio
Revenues	$	6,213			100.0	%	$	6,025			100.0	%
Salaries and benefits		2,600			41.8			2,484			41.2
Supplies		1,046			16.8			1,009			16.8
Other operating expenses		1,037			16.8			1,030			17.1
Provision for doubtful accounts		677			10.9			618			10.3
Gains on investments		(40	)		(0.7	)		(21	)		(0.4	)
Equity in earnings of affiliates		(43	)		(0.7	)		(44	)		(0.7	)
Depreciation and amortization		348			5.6			337			5.5
Interest expense		200			3.2			160			2.7
Gains on sales of facilities		(41	)		(0.7	)		—			—
LBO transaction costs		9			0.2			—			—
		5,793			93.2			5,573			92.5
Income before minority interests and income taxes		420			6.8			452			7.5
Minority interests in earnings of consolidated entities		44			0.7			43			0.7
Income before income taxes		376			6.1			409			6.8
Provision for income taxes		136			2.2			129			2.1
Net income	$	240			3.9		$	280			4.7
Diluted earnings per share	$	0.58					$	0.62
Shares used in computing diluted earnings per share (000)		411,151						454,878

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HCA Inc.
Consolidated Income Statements
For the Nine Months Ended September 30, 2006 and 2005
(Dollars in millions, except per share amounts)

	2006						2005
	Amount			Ratio			Amount			Ratio
Revenues	$	18,988			100.0	%	$	18,277			100.0	%
Salaries and benefits		7,816			41.2			7,390			40.4
Supplies		3,251			17.1			3,102			17.0
Other operating expenses		3,069			16.1			2,983			16.3
Provision for doubtful accounts		1,950			10.3			1,733			9.5
Gains on investments		(140	)		(0.7	)		(52	)		(0.3	)
Equity in earnings of affiliates		(151	)		(0.8	)		(150	)		(0.8	)
Depreciation and amortization		1,045			5.5			1,038			5.7
Interest expense		582			3.1			489			2.7
Gains on sales of facilities		(46	)		(0.2	)		(29	)		(0.2	)
LBO transaction costs		9			—			—			—
		17,385			91.6			16,504			90.3
Income before minority interests and income taxes		1,603			8.4			1,773			9.7
Minority interests in earnings of consolidated entities		145			0.7			132			0.7
Income before income taxes		1,458			7.7			1,641			9.0
Provision for income taxes		544			2.9			542			3.0
Net income	$	914			4.8		$	1,099			6.0
Diluted earnings per share	$	2.23					$	2.46
Shares used in computing diluted earnings per share (000)		410,205						447,500

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HCA Inc.
Supplemental Operating Results Summary
(Dollars in millions, except per share amounts)

							For the Nine Months
	Third Quarter						Ended September 30,
	2006			2005			2006			2005
Revenues	$	6,213		$	6,025		$	18,988		$	18,277
Net income	$	240		$	280		$	914		$	1,099
Gains on sales of facilities (net of tax)		(25	)		—			(29	)		(18	)
LBO transaction costs (net of tax)		6			—			6			—
Tax settlement and repatriation		—			(22	)		—			(70	)
Net income, excluding gains on sales of facilities, LBO transaction costs and tax settlement and repatriation		221			258			891			1,011
Depreciation and amortization		348			337			1,045			1,038
Interest expense		200			160			582			489
Minority interests in earnings of consolidated entities		44			43			145			132
Provision for income taxes		123			151			530			601
Adjusted EBITDA (a)	$	936		$	949		$	3,193		$	3,271
Diluted earnings per share:
Net income	$	0.58		$	0.62		$	2.23		$	2.46
Gains on sales of facilities		(0.06	)		—			(0.07	)		(0.04	)
LBO transaction costs		0.01			—			0.01			-
Tax settlement and repatriation		—			(0.05	)		—			(0.16	)
Net income, excluding gains on sales of facilities, LBO transaction costs, and tax settlement and repatriation (a)	$	0.53		$	0.57		$	2.17		$	2.26
Shares used in computing diluted earnings per share (000)		411,151			454,878			410,205			447,500

(a)	Net income, excluding gains on sales of facilities, LBO transaction costs and tax settlement and repatriation and adjusted EBITDA are non-GAAP financial measures. We believe that net income, excluding gains on sales of facilities, LBO transaction costs and tax settlement and repatriation and adjusted EBITDA are important measures that supplement discussions and analysis of our results of operations. We believe that it is useful to investors to provide disclosures of our results of operations on the same basis as that used by management. Management relies upon net income, excluding gains on sales of facilities, LBO transaction costs and tax settlement and repatriation and adjusted EBITDA as the primary measures to review and assess operating performance of its hospital facilities and their management teams.
	Management and investors review both the overall performance (including; net income, excluding gains on sales of facilities, LBO transaction costs and tax settlement and repatriation, GAAP net income and GAAP EPS) and operating performance (adjusted EBITDA) of our health care facilities. Adjusted EBITDA and the adjusted EBITDA margin (adjusted EBITDA divided by revenues) are utilized by management and investors to compare our current operating results with the corresponding periods during the previous year and to compare our operating results with other companies in the health care industry. It is reasonable to expect that gains on sales of facilities will occur in future periods, but the amounts recognized can vary significantly from quarter to quarter, do not directly relate to the ongoing operations of our health care facilities and complicate quarterly comparisons of our results of operations and operations comparisons with other health care companies.
	Net income, excluding gains on sales of facilities, LBO transaction costs and tax settlement and repatriation 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 cash flows from operating, investing and financing activities as a measure of liquidity. Because net income, excluding gains on sales of facilities, LBO transaction costs and tax settlement and repatriation and adjusted EBITDA are not measurements determined in accordance with generally accepted accounting principles and are susceptible to varying calculations, net income, excluding gains on sales of facilities, LBO transaction costs and tax settlement and repatriation and adjusted EBITDA, as presented, may not be comparable to other similarly titled measures presented by other companies.

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HCA Inc.
Supplemental Non-GAAP Disclosures
Operating Measures Adjusted for the Impact of Discounts for the Uninsured
Third Quarter 2006
(Dollars in millions, except revenue per equivalent admission)

															Non-
				Uninsured		Non-GAAP			GAAP %						GAAP %
	GAAP			Discounts		Adjusted			of						Adjusted
	Amounts			Adjustment(a)		Amounts(b)			Revenues						Revenues
									2006			2005			2006			2005
Consolidated:
Revenues	$	6,213		$	277	$	6,490			100.0	%		100.0	%		100.0	%		100.0	%
Salaries and benefits		2,600			—		2,600			41.8	%		41.2	%		40.1	%		39.6	%
Supplies		1,046			—		1,046			16.8	%		16.8	%		16.1	%		16.1	%
Other operating expenses		1,037			—		1,037			16.8	%		17.1	%		16.0	%		16.5	%
Provision for doubtful accounts		677			277		954			10.9	%		10.3	%		14.7	%		13.7	%
Admissions		394,700					394,700
Equivalent admissions		594,500					594,500
Revenue per equivalent admission	$	10,453				$	10,919
% change from prior year		6.8	%				7.3	%
Same Facility:
Revenues	$	6,067		$	272	$	6,339
Admissions		389,700					389,700
Equivalent admissions		583,400					583,400
Revenue per equivalent admission	$	10,399				$	10,866
% change from prior year		6.4	%				6.8	%

(a) Represents the impact of the discounts for the uninsured for the period. On January 1, 2005, we modified our policies to provide discounts to uninsured patients who do not qualify for Medicaid or charity care. These discounts are similar to those provided to many local managed care plans. In implementing the discount policy, we first attempt to qualify uninsured patients for Medicaid, other federal or state assistance or charity care. If an uninsured patient does not qualify for these programs, the uninsured discount is applied. On a consolidated basis, we recorded $277 million and $241 million of uninsured discounts during the third quarters of 2006 and 2005, respectively.

(b) Revenues, the provision for doubtful accounts, certain operating expense categories as a percentage of revenues and revenue per equivalent admission have been adjusted to exclude the discounts under our uninsured discount policy (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 revenues, the provision for doubtful accounts, certain operating expense categories as a percentage of revenues and revenue per equivalent admission, adjusted for the impact of the uninsured discount policy. Management finds this information to be useful to enable the evaluation of revenue and certain expense category trends that are influenced by patient volumes and are generally analyzed as a percentage of net revenues. These non-GAAP financial measures should not be considered an alternative to GAAP financial measures. We believe this supplemental information provides management and the users of its financial statements with useful information for period-to-period comparisons. Investors are encouraged to use GAAP measures when evaluating our overall financial performance.

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HCA Inc.
Supplemental Non-GAAP Disclosures
Operating Measures Adjusted for the Impact of Discounts for the Uninsured
Nine Months Ended September 30, 2006
(Dollars in millions, except revenue per equivalent admission)

															Non-
				Uninsured		Non-GAAP			GAAP %						GAAP %
	GAAP			Discounts		Adjusted			of						Adjusted
	Amounts			Adjustment(a)		Amounts(b)			Revenues						Revenues
									2006			2005			2006			2005
Consolidated:
Revenues	$	18,988		$	791	$	19,779			100.0	%		100.0	%		100.0	%		100.0	%
Salaries and benefits		7,816			—		7,816			41.2	%		40.4	%		39.5	%		39.3	%
Supplies		3,251			—		3,251			17.1	%		17.0	%		16.4	%		16.5	%
Other operating expenses		3,069			—		3,069			16.1	%		16.3	%		15.6	%		15.8	%
Provision for doubtful accounts		1,950			791		2,741			10.3	%		9.5	%		13.9	%		12.1	%
Admissions		1,218,600					1,218,600
Equivalent admissions		1,830,400					1,830,400
Revenue per equivalent admission	$	10,374				$	10,806
% change from prior year		6.2	%				7.5	%
Same Facility:
Revenues	$	18,400		$	782	$	19,182
Admissions		1,192,400					1,192,400
Equivalent admissions		1,779,100					1,779,100
Revenue per equivalent admission	$	10,342				$	10,782
% change from prior year		5.6	%				6.9	%

(a) Represents the impact of the discounts for the uninsured for the period. On January 1, 2005, we modified our policies to provide discounts to uninsured patients who do not qualify for Medicaid or charity care. These discounts are similar to those provided to many local managed care plans. In implementing the discount policy, we first attempt to qualify uninsured patients for Medicaid, other federal or state assistance or charity care. If an uninsured patient does not qualify for these programs, the uninsured discount is applied. On a consolidated basis, we recorded $791 million and $534 million of uninsured discounts during the nine months ended September 30, 2006 and 2005, respectively.

(b) Revenues, the provision for doubtful accounts, certain operating expense categories as a percentage of revenues and revenue per equivalent admission have been adjusted to exclude the discounts under our uninsured discount policy (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 revenues, the provision for doubtful accounts, certain operating expense categories as a percentage of revenues and revenue per equivalent admission, adjusted for the impact of the uninsured discount policy. Management finds this information to be useful to enable the evaluation of revenue and certain expense category trends that are influenced by patient volumes and are generally analyzed as a percentage of net revenues. These non-GAAP financial measures should not be considered an alternative to GAAP financial measures. We believe this supplemental information provides management and the users of its financial statements with useful information for period-to-period comparisons. Investors are encouraged to use GAAP measures when evaluating our overall financial performance.

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HCA Inc.
Condensed Consolidated Balance Sheets
(Dollars in millions)

	September 30,			June 30,			December 31,
	2006			2006			2005
ASSETS
Current assets:
Cash and cash equivalents	$	541		$	736		$	336
Accounts receivable, net		3,567			3,414			3,332
Inventories		659			646			616
Deferred income taxes		588			552			372
Other		462			570			559
Total current assets		5,817			5,918			5,215
Property and equipment, at cost		21,957			21,592			20,818
Accumulated depreciation		(10,248	)		(10,014	)		(9,439	)
		11,709			11,578			11,379
Investments of insurance subsidiary		2,105			2,134			2,134
Investments in and advances to affiliates		680			665			627
Goodwill		2,663			2,648			2,626
Deferred loan costs		72			74			85
Other		79			103			159
	$	23,125		$	23,120		$	22,225
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	1,268		$	1,240		$	1,484
Accrued salaries		638			639			561
Other accrued expenses		1,345			1,506			1,264
Long-term debt due within one year		831			659			586
Total current liabilities		4,082			4,044			3,895
Long-term debt		10,512			11,005			9,889
Professional liability risks		1,351			1,315			1,336
Deferred taxes and other liabilities		1,135			1,029			1,414
Minority interests in equity of consolidated entities		919			901			828
Stockholders’ equity		5,126			4,826			4,863
	$	23,125		$	23,120		$	22,225
Current ratio		1.43			1.46			1.34
Ratio of debt to debt plus common and minority equity		65.2	%		67.1	%		64.8	%
Shares outstanding (thousands)		409,680			409,237			417,513

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HCA Inc.
Consolidated Statements of Cash Flows
For the Nine Months Ended September 30, 2006 and 2005
(Dollars in millions)

	2006			2005
Cash flows from operating activities:
Net income	$	914		$	1,099
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for doubtful accounts		1,950			1,733
Depreciation and amortization		1,045			1,038
Income taxes		(399	)		158
Gains on sales of facilities		(46	)		(29	)
Change in operating assets and liabilities		(2,250	)		(1,521	)
Other		210			151
Net cash provided by operating activities		1,424			2,629
Cash flows from investing activities:
Purchase of property and equipment		(1,330	)		(1,048	)
Acquisition of hospitals and health care entities		(103	)		(100	)
Disposal of hospitals and health care entities		328			57
Change in investments		(122	)		(206	)
Other		1			23
Net cash used in investing activities		(1,226	)		(1,274	)
Cash flows from financing activities:
Issuance of long-term debt		1,400			—
Net change in revolving bank credit facility		665			(700	)
Repayment of long-term debt		(1,222	)		(560	)
Repurchase of common stock		(653	)		—
Issuance of common stock		97			947
Payment of cash dividends		(201	)		(191	)
Other		(79	)		(159	)
Net cash provided by (used in) financing activities		7			(663	)
Change in cash and cash equivalents		205			692
Cash and cash equivalents at beginning of period		336			258
Cash and cash equivalents at end of period	$	541		$	950
Interest payments	$	554		$	454
Income tax payments, net of refunds	$	935		$	384

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HCA Inc.
Operating Statistics

							For the Nine Months
	Third Quarter						Ended September 30,
	2006			2005			2006			2005
Consolidated Hospitals:
Number of Hospitals		172			180			172			180
Weighted Average Licensed Beds		40,352			42,089			40,954			41,965
Licensed Beds at End of Period		40,382			42,119			40,382			42,119
Reported:
Admissions		394,700			405,100			1,218,600			1,245,300
% Change		-2.6	%					-2.1	%
Equivalent Admissions		594,500			615,500			1,830,400			1,871,600
% Change		-3.4	%					-2.2	%
Revenue per Equivalent Admission	$	10,453		$	9,788		$	10,374		$	9,765
% Change		6.8	%					6.2	%
Inpatient Revenue per Admission	$	9,815		$	9,310		$	9,723		$	9,178
% Change		5.4	%					5.9	%
Patient Days		1,931,400			1,963,600			5,994,900			6,131,900
Equivalent Patient Days		2,909,000			2,984,600			9,004,300			9,216,200
Inpatient Surgery Cases		133,800			136,300			403,100			408,200
% Change		-1.8	%					-1.2	%
Outpatient Surgery Cases		196,700			206,300			620,300			633,500
% Change		-4.6	%					-2.1	%
Emergency Room Visits		1,289,600			1,357,700			3,947,700			4,095,100
% Change		-5.0	%					-3.6	%
Outpatient Revenues as a Percentage of Patient Revenues		36.4	%		36.1	%		36.3	%		36.4	%
Average Length of Stay		4.9			4.8			4.9			4.9
Occupancy		52.0	%		50.7	%		53.6	%		53.5	%
Equivalent Occupancy		78.3	%		77.2	%		80.5	%		80.4	%
Same Facility:
Admissions		389,700			389,400			1,192,400			1,192,300
% Change		0.1	%					0.0	%
Equivalent Admissions		583,400			588,800			1,779,100			1,782,400
% Change		-0.9	%					-0.2	%
Revenue per Equivalent Admission	$	10,399		$	9,773		$	10,342		$	9,789
% Change		6.4	%					5.6	%
Inpatient Revenue per Admission	$	9,785		$	9,372		$	9,749		$	9,238
% Change		4.4	%					5.5	%
Inpatient Surgery Cases		130,900			130,800			395,500			390,700
% Change		0.1	%					1.2	%
Outpatient Surgery Cases		190,000			195,500			589,700			598,800
% Change		-2.8	%					-1.5	%
Emergency Room Visits		1,273,300			1,292,300			3,853,500			3,829,300
% Change		-1.5	%					-1.0	%
Number of Consolidated and Non-Consolidated (50/50 Equity Joint Ventures) Hospitals:
Consolidated		172			180			172			180
Non-Consoldiated (50/50 Equity Joint Ventures)		7			7			7			7
Total Number of Hospitals		179			187			179			187

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