Segment and Geographic Information

9 Months Ended

Sep. 30, 2013

Segment Reporting [Abstract]

Segment and Geographic Information

NOTE 11 — SEGMENT AND GEOGRAPHIC INFORMATION

We operate in one line of business, which is operating hospitals and related health care entities. Effective January 1, 2013, we reorganized our operational groups into two geographically organized groups: the National and American Groups. The National Group includes 77 hospitals located in Alaska, California, Florida, southern Georgia, 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.

Adjusted segment EBITDA is defined as income before depreciation and amortization, interest expense, losses (gains) on sales of facilities, loss on retirement of debt, income taxes and net income attributable to noncontrolling interests. We use adjusted segment EBITDA as an analytical indicator for purposes of allocating resources to geographic areas and assessing their performance. Adjusted segment EBITDA is commonly used as an analytical indicator within the health care industry, and also serves as a measure of leverage capacity and debt service ability. Adjusted segment EBITDA should not be considered as a measure of financial performance under generally accepted accounting principles, and the items excluded from adjusted segment EBITDA are significant components in understanding and assessing financial performance. Because adjusted segment EBITDA is not a measurement determined in accordance with generally accepted accounting principles and is thus susceptible to varying calculations, adjusted segment EBITDA, as presented, may not be comparable to other similarly titled measures of other companies. The geographic distributions of our revenues, equity in earnings of affiliates, adjusted segment EBITDA and depreciation and amortization for the quarters and nine months ended September 30, 2013 and 2012 are summarized in the following table (dollars in millions):

	Quarter						Nine Months
	2013			2012			2013			2012
Revenues:
National Group	$	3,930		$	3,755		$	11,875		$	11,553
American Group		4,082			3,982			12,181			12,033
Corporate and other		444			325			1,290			993
	$	8,456		$	8,062		$	25,346		$	24,579
Equity in earnings of affiliates:
National Group	$	(3	)	$	—		$	(8	)	$	(7	)
American Group		(6	)		(6	)		(19	)		(20	)
Corporate and other		—			—			(2	)		1
	$	(9	)	$	(6	)	$	(29	)	$	(26	)
Adjusted segment EBITDA:
National Group	$	805		$	768		$	2,440		$	2,478
American Group		910			843			2,654			2,657
Corporate and other		(112	)		(78	)		(234	)		(210	)
	$	1,603		$	1,533		$	4,860		$	4,925
Depreciation and amortization:
National Group	$	181		$	171		$	532		$	520
American Group		206			207			610			612
Corporate and other		56			39			150			122
	$	443		$	417		$	1,292		$	1,254
Adjusted segment EBITDA	$	1,603		$	1,533		$	4,860		$	4,925
Depreciation and amortization		443			417			1,292			1,254
Interest expense		458			446			1,392			1,336
Losses (gains) on sales of facilities		1			(7	)		13			(4	)
Loss on retirement of debt		—			—			17			—
Income before income taxes	$	701		$	677		$	2,146		$	2,339