Segment and Geographic Information

9 Months Ended

Sep. 30, 2014

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 81 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 77 hospitals located in Colorado, northern Georgia, Kansas, southern Kentucky, Louisiana, Mississippi, Missouri, Oklahoma, Tennessee and Texas. We also operate seven 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, losses on retirement of debt, legal claim costs, 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, 2014 and 2013 are summarized in the following table (dollars in millions):

	Quarter						Nine Months
	2014			2013			2014			2013
Revenues:
National Group	$	4,387		$	3,930		$	12,814		$	11,875
American Group		4,319			4,082			12,918			12,181
Corporate and other		514			444			1,550			1,290
	$	9,220		$	8,456		$	27,282		$	25,346
Equity in earnings of affiliates:
National Group	$	(6	)	$	(3	)	$	(12	)	$	(8	)
American Group		(8	)		(6	)		(23	)		(19	)
Corporate and other		—			—			3			(2	)
	$	(14	)	$	(9	)	$	(32	)	$	(29	)
Adjusted segment EBITDA:
National Group	$	1,008		$	805		$	2,810		$	2,440
American Group		927			910			2,911			2,654
Corporate and other		(107	)		(112	)		(249	)		(234	)
	$	1,828		$	1,603		$	5,472		$	4,860
Depreciation and amortization:
National Group	$	187		$	181		$	564		$	532
American Group		210			206			626			610
Corporate and other		63			56			171			150
	$	460		$	443		$	1,361		$	1,292
Adjusted segment EBITDA	$	1,828		$	1,603		$	5,472		$	4,860
Depreciation and amortization		460			443			1,361			1,292
Interest expense		427			458			1,314			1,392
Losses (gains) on sales of facilities		12			1			(20	)		13
Losses on retirement of debt		—			—			226			17
Legal claim costs		—			—			78			—
Income before income taxes	$	929		$	701		$	2,513		$	2,146