HCA Reports First Quarter 2013 Results
HCA Holdings, Inc. (NYSE: HCA) today announced financial and operating results for the first quarter ended March 31, 2013.
(all percentage changes compare 1Q 2013 to 1Q 2012 unless noted):
“This morning the Company reported earnings consistent with our preview of first quarter 2013 results on April 15th. Results for the first quarter reflect a moderation in the rate of growth in admissions and outpatient volumes distributed across our portfolio,” said Richard M. Bracken, Chairman of the Board and Chief Executive Officer of HCA.
Revenues in the first quarter increased to $8.440 billion, compared to $8.405 billion in the first quarter of 2012. Net income attributable to HCA Holdings, Inc. totaled $344 million, or $0.74 per diluted share, compared to $540 million, or $1.18 per diluted share, in the first quarter of 2012. Adjusted EBITDA totaled $1.568 billion compared to $1.823 billion in the first quarter of 2012. Adjusted EBITDA is a non-GAAP financial measure. A table reconciling net income attributable to HCA Holdings, Inc. to Adjusted EBITDA is included in this release.
First quarter 2013 results include pretax losses on sales of facilities of $16 million, or $0.02 per diluted share, and a pretax loss on retirement of debt of $17 million, or $0.03 per diluted share. Results for the first quarter of 2012 include net favorable Medicare adjustments which increased revenues by $188 million, Adjusted EBITDA by $170 million and earnings per diluted share by $0.22.
Same facility revenue per equivalent admission increased 0.8 percent in the first quarter of 2013 compared to the first quarter of 2012. Excluding the net favorable Medicare adjustments in the first quarter of 2012, same facility revenue per equivalent admission increased 3.5 percent in the first quarter of 2013 compared to the adjusted first quarter of 2012.
Patient volume in the first quarter of 2013 reflected moderation in growth trends in our inpatient and outpatient volumes. Same facility equivalent admissions declined 0.7 percent in the first quarter of 2013 compared to the prior year period. Same facility admissions increased 0.1 percent compared to the prior year period. Same facility emergency room visits increased 3.8 percent in the first quarter of 2013, compared to the prior year period. Same facility inpatient surgeries declined 2.6 percent and same facility outpatient surgeries declined 4.3 percent in the first quarter of 2013 compared to the same period of 2012. Adjusted for the extra business day in 2012 due to “leap year”, same facility admissions increased 1.3 percent, same facility equivalent admissions increased 0.4 percent, same facility emergency room visits increased 4.9 percent, same facility inpatient surgeries declined 1.5 percent and outpatient surgeries declined 3.2 percent in the first quarter of 2013 compared to the prior year period.
During the first quarter of 2013, salaries and benefits, supplies and other operating expenses totaled $6.919 billion, or 82.0 percent of revenues, compared to $6.648 billion, or 79.0 percent of revenues, in the first quarter of 2012.
As of March 31, 2013, HCA Holdings, Inc.’s balance sheet reflected cash and cash equivalents of $594 million, total debt of $28.608 billion, and total assets of $27.882 billion. During the first quarter of 2013, capital expenditures totaled $404 million, excluding acquisitions. Cash flows provided by operating activities in the quarter totaled $740 million compared to $797 million in the first quarter of 2012. The $57 million decline in cash flows from operating activities related primarily to the net impact of the $201 million decline in net income and the offsetting $50 million benefit from changes in working capital items and $50 million benefit from income taxes in the first quarter of 2013 compared to the first quarter of 2012.
As of March 31, 2013, HCA’s leverage ratio as measured by Total Debt/Adjusted EBITDA was 4.56x, compared to 4.43x as of December 31, 2012. As of March 31, 2013, HCA operated 162 hospitals and 113 freestanding surgery centers.
The Company today is reaffirming its previously issued guidance ranges for 2013.
HCA will host a conference call for investors at 9:00 a.m. Central Daylight Time today. All interested investors are invited to access a live audio broadcast of the call via webcast. The broadcast also will be available on a replay basis beginning this afternoon. The webcast can be accessed at: or through the Company’s Investor Relations web page, .
This press release contains forward-looking statements within the meaning of the federal securities laws, which involve risks and uncertainties. Forward-looking statements include statements that do not relate solely to historical facts. Forward-looking statements can be identified by the use of words like “may,” “believe,” “will,” “expect,” “project,” “estimate,” “anticipate,” “plan,” “initiative” or “continue.” These forward-looking statements are based on our current plans and expectations and are subject to a number of known and unknown uncertainties and risks, many of which are beyond our control, which could significantly affect current plans and expectations and our future financial position and results of operations. These factors include, but are not limited to, (1) the impact of our substantial indebtedness and the ability to refinance such indebtedness on acceptable terms, (2) the effects related to the enactment and implementation of the Budget Control Act of 2011 (“BCA”) and the outcome of negotiations and legislation related to BCA-mandated spending reductions, which include cuts to Medicare payments, (3) the effects related to the enactment and implementation of the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act (collectively, the “Health Reform Law”), the possible enactment of additional federal or state health care reforms and possible changes to the Health Reform Law and other federal, state or local laws or regulations affecting the health care industry, (4) increases in the amount and risk of collectibility of uninsured accounts and deductibles and copayment amounts for insured accounts, (5) the ability to achieve operating and financial targets, and attain expected levels of patient volumes and control the costs of providing services, (6) possible changes in the Medicare, Medicaid and other state programs, including Medicaid upper payment limit programs or waiver programs, that may impact reimbursements to health care providers and insurers, (7) the highly competitive nature of the health care business, (8) changes in service mix, revenue mix and surgical volumes, including potential declines in the population covered under managed care agreements, the ability to enter into and renew managed care provider agreements on acceptable terms and the impact of consumer driven health plans and physician utilization trends and practices, (9) the efforts of insurers, health care providers and others to contain health care costs, (10) the outcome of our continuing efforts to monitor, maintain and comply with appropriate laws, regulations, policies and procedures, (11) increases in wages and the ability to attract and retain qualified management and personnel, including affiliated physicians, nurses and medical and technical support personnel, (12) the availability and terms of capital to fund the expansion of our business and improvements to our existing facilities, (13) changes in accounting practices, (14) changes in general economic conditions nationally and regionally in our markets, (15) future divestitures which may result in charges and possible impairments of long-lived assets, (16) changes in business strategy or development plans, (17) delays in receiving payments for services provided, (18) the outcome of pending and any future tax audits, appeals and litigation associated with our tax positions, (19) potential adverse impact of known and unknown government investigations, litigation and other claims that may be made against us, (20) our ongoing ability to demonstrate meaningful use of certified electronic health record technology and recognize income for the related Medicare or Medicaid incentive payments, and (21) other risk factors described in our annual report on Form 10-K for the year ended December 31, 2012 and our other filings with the Securities and Exchange Commission. Many of the factors that will determine our future results are beyond our ability to control or predict. In light of the significant uncertainties inherent in the forward-looking statements contained herein, readers should not place undue reliance on forward-looking statements, which reflect management’s views only as of the date hereof. We undertake no obligation to revise or update any forward-looking statements, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.