Segment and Geographic Information

9 Months Ended

Sep. 30, 2015

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. We operate in two geographically organized groups: the National and American Groups. The National Group includes 83 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, 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, 2015 and 2014 are summarized in the following table (dollars in millions):

	Quarter						Nine Months
	2015			2014			2015			2014
Revenues:
National Group	$	4,580		$	4,334		$	13,928		$	12,766
American Group		4,772			4,350			13,972			12,949
Corporate and other		504			536			1,529			1,567
	$	9,856		$	9,220		$	29,429		$	27,282
Equity in earnings of affiliates:
National Group	$	(1	)	$	(6	)	$	(8	)	$	(12	)
American Group		(9	)		(8	)		(25	)		(23	)
Corporate and other		1			—			(5	)		3
	$	(9	)	$	(14	)	$	(38	)	$	(32	)
Adjusted segment EBITDA:
National Group	$	919		$	952		$	3,084		$	2,755
American Group		1,035			959			3,026			2,942
Corporate and other		(139	)		(83	)		(326	)		(225	)
	$	1,815		$	1,828		$	5,784		$	5,472
Depreciation and amortization:
National Group	$	195		$	187		$	572		$	564
American Group		219			212			662			627
Corporate and other		68			61			190			170
	$	482		$	460		$	1,424		$	1,361
Adjusted segment EBITDA	$	1,815		$	1,828		$	5,784		$	5,472
Depreciation and amortization		482			460			1,424			1,361
Interest expense		411			427			1,255			1,314
Losses (gains) on sales of facilities		2			12			(2	)		(20	)
Losses on retirement of debt		—			—			125			226
Legal claim costs		77			—			77			78
Income before income taxes	$	843		$	929		$	2,905		$	2,513