HCA Reports Increase in 2009 Third Quarter Earnings

 

Nashville, Tenn., November 5, 2009 - HCA Inc. today announced financial and operating results for its third quarter ended September 30, 2009.

 

 

Third Quarter Summary: 

  1. Revenues increased 7.6 percent to $7.533 billion from $7.002 billion in the third quarter of 2008.  
  2. Net income attributable to HCA Inc. totaled $196 million, compared to $86 million in the prior year's third quarter. 
  3. Adjusted EBITDA totaled $1.273 billion, compared to $1.053 billion in the third quarter of 2008. 
  4. Provision for doubtful accounts totaled $910 million, compared to $819 million in the prior year.  
  5. Interest expense increased to $510 million from $497 million in the prior year's third quarter.
  6. Same facility equivalent admissions increased 4.8 percent, while same facility admissions increased 2.7 percent in the third quarter compared to the same period last year.  
  7. Same facility revenue per equivalent admission increased 2.8 percent. Revenue per equivalent patient day, on a same facility basis, increased 4.6 percent.  
  8. Total surgeries, on a same facility basis, increased 1.2 percent from the prior year's third quarter.  
  9. Same facility emergency department visits increased 11.1% compared to the third quarter of 2008.  

Driven by strong inpatient, outpatient and emergency department volumes, HCA's revenues for the third quarter totaled $7.533 billion, compared to $7.002 billion in the third quarter of 2008. Net income attributable to HCA Inc. for the third quarter of 2009 totaled $196 million, compared to $86 million in the prior year's third quarter. Adjusted EBITDA in the quarter totaled $1.273 billion, compared to $1.053 billion in the previous year's third quarter. A table describing adjusted EBITDA and reconciling net income attributable to HCA Inc. to adjusted EBITDA for these periods is included in this release. Results for the third quarter of 2009 include impairments of long-lived assets of $3 million. Third quarter 2008 results include a $44 million charge for impairments of long-lived assets and gains on sales of facilities of $50 million.

The provision for doubtful accounts increased to $910 million, or 12.1 percent of revenues, in the third quarter of 2009 from $819 million, or 11.7 percent of revenues, in the third quarter of 2008. Charity care and uninsured discounts totaled $1.288 billion in the third quarter of 2009 compared to $920 million in the third quarter of 2008. Same facility uninsured admissions increased 8.2 percent in the third quarter of 2009 compared to the prior year's third quarter. Same facility uninsured admissions comprised 7.0 percent of total admissions in the third quarter of 2009 compared to 6.6 percent in the third quarter of 2008.

During the third quarter of 2009, salaries and benefits, supply expense and other operating expenses totaled $5.403 billion compared to $5.171 billion in the third quarter of 2008. These expenses, as a percent of revenues, declined 2.2% in the third quarter of 2009 compared to the third quarter of 2008.

Interest expense increased to $510 million in the third quarter of 2009, compared to $497 million in the same period of 2008.

Same facility admissions increased 2.7 percent and same facility equivalent admissions increased 4.8 percent in the third quarter of 2009 compared to the prior year's third quarter. Same facility inpatient surgeries increased 1.9 percent and same facility outpatient surgeries increased 0.8 percent in the third quarter. Same facility revenue per equivalent admission increased 2.8 percent in the third quarter of 2009 compared to the third quarter of 2008.

Revenues for the nine months ended September 30, 2009 totaled $22.447 billion compared to $21.109 billion for the same period of 2008. Net income attributable to HCA Inc. was $838 million for the nine months ended September 30, 2009 compared to $397 million in the same period of the prior year. Adjusted EBITDA totaled $4.129 billion for the first nine months of 2009 compared to $3.337 billion for the same period of 2008. Results for the nine months ended September 30, 2009 include losses on sales of facilities of $8 million and impairments of long-lived assets of $16 million compared to gains on sales of facilities of $90 million and impairments of long-lived assets of $53 million in the first nine months of 2008.

Cash flows from operating activities increased $900 million, from $1.415 billion for the nine months ended September 30, 2008 to $2.315 billion for the nine months ended September 30, 2009. The increase was due primarily to the $513 million increase in net income and $347 million improvement from changes in operating assets and liabilities and the provision for doubtful accounts.

As of September 30, 2009, HCA's balance sheet reflected cash and cash equivalents of $443 million, total debt of $25.914 billion, and total assets of $24.120 billion. During the third quarter of 2009, capital expenditures totaled $296 million, excluding acquisitions. For the nine months ended September 30, 2009, capital expenditures totaled $915 million, excluding acquisitions.

During 2009, HCA issued $3.060 billion aggregate principal amount of first and second lien notes. The net proceeds from the debt issuances were used to repay outstanding indebtedness under the Company's senior secured term loan facilities.

As of September 30, 2009, HCA operated 163 hospitals and 105 freestanding surgery centers (including eight hospitals and eight freestanding surgery centers operated through equity method joint ventures).

 

HCA will host a conference call for investors at 9:00 a.m. Central Time today. A live audio broadcast of the call via webcast will also be available to investors. The broadcast will be available on a replay basis beginning this afternoon. The webcast can be accessed at: http://www.videonewswire.com/event.asp?id=63265 or through the Company's Investor Relations web page, www.hcahealthcare.com.

Cautionary Statement about Preliminary Results and Other Forward-Looking Information

This press release contains forward-looking statements based on current management expectations. Those forward-looking statements include all statements other than those made solely with respect to historical fact. Numerous risks, uncertainties and other factors may cause actual results to differ materially from those expressed in any forward-looking statements. These factors include, but are not limited to, (1) the ability to recognize the benefits of the Recapitalization, (2) the impact of the substantial indebtedness incurred to finance the Recapitalization and the ability to refinance such indebtedness on acceptable terms, (3) the possible enactment of federal or state health care reform and changes in federal, state or local laws or regulations affecting the health care industry, (4) increases, particularly in the current economic downturn, 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 supplemental payments pursuant to upper payment limit ("UPL") programs, that may impact reimbursements to health care providers and insurers, (7) the highly competitive nature of the health care business, (8) changes in revenue mix, including potential declines in the population covered under managed care agreements due to the current economic downturn and the ability to enter into and renew managed care provider agreements on acceptable terms, (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, (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 liabilities and other claims that may be asserted against us, and (20) other risk factors described in our annual report on Form 10-K for the year ended December 31, 2008 and 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.

Earnings Conference Call

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