SEGMENT AND GEOGRAPHIC INFORMATION

12 Months Ended

Dec. 31, 2012

SEGMENT AND GEOGRAPHIC INFORMATION

NOTE 15 — SEGMENT AND GEOGRAPHIC INFORMATION

We operate in one line of business, which is operating hospitals and related health care entities. Prior to 2013, our operations were structured into three geographically organized groups: the National, Southwest and Central Groups. Effective January 1, 2013, we reorganized our operational groups into two geographically organized groups: the National and American Groups. We are presenting our segment and geographic information under both structures. The acquired HealthONE operating results have been included in the Southwest Group (American Group effective January 1, 2013) operating results for periods subsequent to November 1, 2011. Prior to November 1, 2011, the Southwest Group recorded its share of the HealthONE operating results in equity in earnings of affiliates.

At December 31, 2012, the National Group included 63 hospitals located in Alaska, California, Florida, southern Georgia, Idaho, Nevada, South Carolina and Utah, and the Southwest Group included 47 hospitals located in Colorado, Wichita, Kansas market, Oklahoma and Texas, and the Central Group included 46 hospitals located in northern Georgia, Indiana, Kentucky, Louisiana, New Hampshire, Tennessee, Virginia and the Kansas City market. As of January 1, 2013, the National Group includes 77 hospitals located in Alaska, California, southern Georgia, Florida, Idaho, Indiana, northern Kentucky, Nevada, New Hampshire, South Carolina, Utah and Virginia, and the American Group includes 79 hospitals located in Colorado, northern Georgia, Kansas, southern Kentucky, Louisiana, Mississippi, Missouri, Oklahoma, Tennessee and Texas. We also operate six hospitals in England, and these facilities are included in the Corporate and other group for both presentations.

Adjusted segment EBITDA is defined as income before depreciation and amortization, interest expense, losses (gains) on sales of facilities, legal claim costs, gain on acquisition of controlling interest in equity investment, impairments of long-lived assets, losses on retirement of debt, termination of management agreement, income taxes and net income attributable to noncontrolling interests. We use adjusted segment EBITDA as an analytical indicator for purposes of allocating resources to geographic areas and assessing their performance. Adjusted segment EBITDA is commonly used as an analytical indicator within the health care industry, and also serves as a measure of leverage capacity and debt service ability. Adjusted segment EBITDA should not be considered as a measure of financial performance under generally accepted accounting principles, and the items excluded from adjusted segment EBITDA are significant components in understanding and assessing financial performance. Because adjusted segment EBITDA is not a measurement determined in accordance with generally accepted accounting principles and is thus susceptible to varying calculations, adjusted segment EBITDA, as presented, may not be comparable to other similarly titled measures of other companies. The geographic distributions of our revenues, equity in earnings of affiliates, adjusted segment EBITDA, depreciation and amortization, assets and goodwill and other intangible assets are summarized in the following table (dollars in millions):

	Structure as of December 31, 2012
	For the Years Ended December 31,
	2012			2011			2010
Revenues:
National Group	$	12,809		$	12,224		$	11,624
Southwest Group		11,506			9,311			8,700
Central Group		7,305			6,982			6,727
Corporate and other		1,393			1,165			984
	$	33,013		$	29,682		$	28,035
Equity in earnings of affiliates:
National Group	$	(8	)	$	(7	)	$	(4	)
Southwest Group		(27	)		(251	)		(277	)
Central Group		(2	)		—			(1	)
Corporate and other		1			—			—
	$	(36	)	$	(258	)	$	(282	)
Adjusted segment EBITDA:
National Group	$	2,731		$	2,531		$	2,431
Southwest Group		2,734			2,370			2,254
Central Group		1,431			1,285			1,272
Corporate and other		(365	)		(125	)		(89	)
	$	6,531		$	6,061		$	5,868
Depreciation and amortization:
National Group	$	561		$	512		$	508
Southwest Group		595			464			427
Central Group		354			347			352
Corporate and other		169			142			134
	$	1,679		$	1,465		$	1,421

	Structure as of December 31, 2012
	As of December 31,
	2012		2011
Assets:
National Group	$	7,770	$	7,827
Southwest Group		10,197		9,908
Central Group		5,227		5,187
Corporate and other		4,881		3,976
	$	28,075	$	26,898

	Structure as of December 31, 2012
	National Group			Southwest Group		Central Group		Corporate and Other		Total
Goodwill and other intangible assets:
Balance at December 31, 2011	$	800		$	3,160	$	1,019	$	272	$	5,251
Acquisitions		46			197		5		40		288
Dispositions		(3	)		—		—		—		(3	)
Foreign currency translation and other		(1	)		—		—		4		3
Balance at December 31, 2012	$	842		$	3,357	$	1,024	$	316	$	5,539

	Structure as of January 1, 2013
	For the Years Ended December 31,
	2012			2011			2010
Revenues:
National Group	$	15,505		$	14,741		$	13,964
American Group		16,115			13,714			12,986
Corporate and other		1,393			1,227			1,085
	$	33,013		$	29,682		$	28,035
Equity in earnings of affiliates:
National Group	$	(9	)	$	(7	)	$	(4	)
American Group		(28	)		(251	)		(277	)
Corporate and other		1			—			(1	)
	$	(36	)	$	(258	)	$	(282	)
Adjusted segment EBITDA:
National Group	$	3,325		$	3,052		$	2,890
American Group		3,575			3,141			3,083
Corporate and other		(369	)		(132	)		(105	)
	$	6,531		$	6,061		$	5,868
Depreciation and amortization:
National Group	$	694		$	639		$	624
American Group		816			680			653
Corporate and other		169			146			144
	$	1,679		$	1,465		$	1,421

	Structure as of January 1, 2013
	As of December 31,
	2012		2011
Assets:
National Group	$	9,451	$	9,551
American Group		13,744		13,406
Corporate and other		4,880		3,941
	$	28,075	$	26,898

	Structure as of January 1, 2013
	National Group			American Group		Corporate and Other		Total
Goodwill and other intangible assets:
Balance at December 31, 2011	$	991		$	3,988	$	272	$	5,251
Acquisitions		48			201		39		288
Dispositions		(3	)		—		—		(3	)
Foreign currency translation and other		(1	)		—		4		3
Balance at December 31, 2012	$	1,035		$	4,189	$	315	$	5,539

	For the Years Ended December 31,
	2012			2011			2010
Adjusted segment EBITDA	$	6,531		$	6,061		$	5,868
Depreciation and amortization		1,679			1,465			1,421
Interest expense		1,798			2,037			2,097
Gains on sales of facilities		(15	)		(142	)		(4	)
Legal claim costs		175			—			—
Gain on acquisition of controlling interest in equity investment		—			(1,522	)		—
Impairments of long-lived assets		—			—			123
Losses on retirement of debt		—			481			—
Termination of management agreement		—			181			—
Income before income taxes	$	2,894		$	3,561		$	2,231