Segment and Geographic Information

9 Months Ended

Sep. 30, 2016

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 84 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, 2016 and 2015 are summarized in the following table (dollars in millions):

	Quarter						Nine Months
	2016			2015			2016			2015
Revenues:
National Group	$	4,882		$	4,580		$	14,780		$	13,928
American Group		4,904			4,772			14,539			13,972
Corporate and other		484			504			1,530			1,529
	$	10,270		$	9,856		$	30,849		$	29,429
Equity in earnings of affiliates:
National Group	$	(13	)	$	(1	)	$	(17	)	$	(8	)
American Group		(9	)		(9	)		(26	)		(25	)
Corporate and other		—			1			(1	)		(5	)
	$	(22	)	$	(9	)	$	(44	)	$	(38	)
Adjusted segment EBITDA:
National Group	$	1,073		$	920		$	3,342		$	3,089
American Group		1,018			1,036			3,005			3,029
Corporate and other		(134	)		(141	)		(335	)		(334	)
	$	1,957		$	1,815		$	6,012		$	5,784
Depreciation and amortization:
National Group	$	204		$	195		$	602		$	572
American Group		230			219			673			662
Corporate and other		61			68			188			190
	$	495		$	482		$	1,463		$	1,424
Adjusted segment EBITDA	$	1,957		$	1,815		$	6,012		$	5,784
Depreciation and amortization		495			482			1,463			1,424
Interest expense		432			411			1,275			1,255
Losses (gains) on sales of facilities		(3	)		2			(8	)		(2	)
Losses on retirement of debt		4			—			4			125
Legal claim costs		11			77			33			77
Income before income taxes	$	1,018		$	843		$	3,245		$	2,905