HCA Reports Third Quarter 2012 Results

All references to “Company” and “HCA” as used throughout this release refer to HCA Holdings, Inc. and its affiliates.

HCA Holdings, Inc.
Condensed Consolidated Comprehensive Income Statements
Third Quarter
(Dollars in millions, except per share amounts)
			2012				2011
			Amount	Ratio			Amount	Ratio
Revenues before provision for doubtful accounts			$8,893				$7,998
Provision for doubtful accounts			831				740
Revenues			8,062	100.0	%		7,258	100.0	%
Salaries and benefits			3,781	46.9			3,333	45.9
Supplies			1,375	17.1			1,263	17.4
Other operating expenses			1,510	18.7			1,369	18.8
Electronic health record incentive income			(131)	(1.6)			(51)	(0.7)
Equity in earnings of affiliates			(6)	(0.1)			(68)	(0.9)
Depreciation and amortization			417	5.2			362	5.0
Interest expense			446	5.5			519	7.2
Losses (gains) on sales of facilities			(7)	(0.1)			2	-
Losses on retirement of debt			-	-			406	5.6
			7,385	91.6			7,135	98.3
Income before income taxes			677	8.4			123	1.7
Provision (benefit) for income taxes			222	2.8			(23)	(0.3)
Net income			455	5.6			146	2.0
Net income attributable to noncontrolling interests			95	1.1			85	1.2
Net income attributable to HCA Holdings, Inc.			$360	4.5			$61	0.8
Diluted earnings per share			$0.78				$0.11
Shares used in computing diluted earnings per share (000)			459,515				527,515
Comprehensive income (loss) attributable to HCA Holdings, Inc.			$369				($24)

HCA Holdings, Inc.
Condensed Consolidated Comprehensive Income Statements
For the Nine Months Ended September 30, 2012 and 2011
(Dollars in millions, except per share amounts)
			2012						2011
			Amount			Ratio			Amount			Ratio
Revenues before provision for doubtful accounts			$	27,245					$	24,077
Provision for doubtful accounts				2,666						2,164
Revenues				24,579		100.0		%		21,913		100.0		%
Salaries and benefits				11,224		45.7				9,948		45.4
Supplies				4,216		17.2				3,833		17.5
Other operating expenses				4,496		18.2				4,017		18.3
Electronic health record incentive income				(256	)	(1.0	)			(90	)	(0.4	)
Equity in earnings of affiliates				(26	)	(0.1	)			(217	)	(1.0	)
Depreciation and amortization				1,254		5.1				1,078		4.9
Interest expense				1,336		5.4				1,572		7.2
Losses (gains) on sales of facilities				(4	)	-				3		-
Losses on retirement of debt				-		-				481		2.2
Termination of management agreement				-		-				181		0.8
				22,240		90.5				20,806		94.9
Income before income taxes				2,339		9.5				1,107		5.1
Provision for income taxes				760		3.1				307		1.5
Net income				1,579		6.4				800		3.6
Net income attributable to noncontrolling interests				288		1.1				270		1.2
Net income attributable to HCA Holdings, Inc.			$	1,291		5.3			$	530		2.4
Diluted earnings per share			$	2.81					$	1.04
Shares used in computing diluted earnings per share (000)				458,822						509,583
Comprehensive income attributable to HCA Holdings, Inc.			$	1,291					$	534

HCA Holdings, Inc.
Supplemental Non-GAAP Disclosures
Operating Results Summary
(Dollars in millions, except per share amounts)
									For the Nine Months
		Third Quarter							Ended September 30,
			2012				2011			2012				2011
Revenues		$	8,062			$	7,258			24,579			$	21,913
Net income attributable to HCA Holdings, Inc.		$	360			$	61		$	1,291			$	530
Losses (gains) on sales of facilities (net of tax)			(5	)			1			(3	)			4
Losses on retirement of debt (net of tax)			-				256			-				303
Termination of management agreement (net of tax)			-				-			-				149
Net income attributable to HCA Holdings, Inc., excluding losses (gains) on sales of facilities, losses on retirement of debt and termination of management agreement (a)			355				318			1,288				986
Depreciation and amortization			417				362			1,254				1,078
Interest expense			446				519			1,336				1,572
Provision for income taxes			220				128			759				516
Net income attributable to noncontrolling interests			95				85			288				270
Adjusted EBITDA (a)		$	1,533			$	1,412		$	4,925			$	4,422
Diluted earnings per share:
Net income attributable to HCA Holdings, Inc.		$	0.78			$	0.11		$	2.81			$	1.04
Losses (gains) on sales of facilities			(0.01	)			-			-				0.01
Losses on retirement of debt			-				0.49			-				0.60
Termination of management agreement			-				-			-				0.29
Net income attributable to HCA Holdings, Inc., excluding losses (gains) on sales of facilities, losses on retirement of debt and termination of management agreement (a)		$	0.77			$	0.60		$	2.81			$	1.94
Shares used in computing diluted earnings per share (000)			459,515				527,515			458,822				509,583
(a) Net income attributable to HCA Holdings, Inc., excluding losses (gains) on sales of facilities, losses on retirement of debt and termination of management agreement and Adjusted EBITDA should not be considered as measures of financial performance under generally accepted accounting principles ("GAAP"). We believe net income attributable to HCA Holdings, Inc., excluding losses (gains) on sales of facilities, losses on retirement of debt and termination of management agreement and Adjusted EBITDA are important measures that supplement discussions and analysis of our results of operations. We believe it is useful to investors to provide disclosures of our results of operations on the same basis used by management. Management relies upon net income attributable to HCA Holdings, Inc., excluding losses (gains) on sales of facilities, losses on retirement of debt and termination of management agreement and Adjusted EBITDA as the primary measures to review and assess operating performance of its hospital facilities and their management teams.
Management and investors review both the overall performance (including; net income attributable to HCA Holdings, Inc., excluding losses (gains) on sales of facilities, losses on retirement of debt and termination of management agreement and GAAP net income attributable to HCA Holdings, Inc.) and operating performance (Adjusted EBITDA) of our health care facilities. Adjusted EBITDA and the Adjusted EBITDA margin (Adjusted EBITDA divided by revenues) are utilized by management and investors to compare our current operating results with the corresponding periods during the previous year and to compare our operating results with other companies in the health care industry. It is reasonable to expect that losses (gains) on sales of facilities and losses on retirement of debt will occur in future periods, but the amounts recognized can vary significantly from period to period, do not directly relate to the ongoing operations of our health care facilities and complicate period comparisons of our results of operations and operations comparisons with other health care companies.
Net income attributable to HCA Holdings, Inc., excluding losses (gains) on sales of facilities, losses on retirement of debt and termination of management agreement and Adjusted EBITDA are not measures of financial performance under GAAP, and should not be considered as alternatives to net income attributable to HCA Holdings, Inc. as a measure of operating performance or cash flows from operating, investing and financing activities as a measure of liquidity. Because net income attributable to HCA Holdings, Inc., excluding losses (gains) on sales of facilities, losses on retirement of debt and termination of management agreement and Adjusted EBITDA are not measurements determined in accordance with GAAP and are susceptible to varying calculations, net income attributable to HCA Holdings, Inc., excluding losses (gains) on sales of facilities, losses on retirement of debt and termination of management agreement and Adjusted EBITDA, as presented, may not be comparable to other similarly titled measures presented by other companies.

HCA Holdings, Inc.
Condensed Consolidated Balance Sheets
(Dollars in millions)
													September 30,				June 30,				December 31,
														2012				2012				2011
ASSETS
Current assets:
Cash and cash equivalents													$	472			$	518			$	373
Accounts receivable, net														4,598				4,485				4,533
Inventories														1,052				1,055				1,054
Deferred income taxes														322				323				594
Other														828				756				679
Total current assets														7,272				7,137				7,233
Property and equipment, at cost														29,145				28,742				28,075
Accumulated depreciation														(16,185	)			(15,896	)			(15,241	)
														12,960				12,846				12,834
Investments of insurance subsidiaries														473				495				548
Investments in and advances to affiliates														103				102				101
Goodwill and other intangible assets														5,460				5,431				5,251
Deferred loan costs														266				281				290
Other														768				840				641
													$	27,302			$	27,132			$	26,898
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable													$	1,585			$	1,517			$	1,597
Accrued salaries														1,027				970				965
Other accrued expenses														1,498				1,651				1,585
Long-term debt due within one year														1,751				1,309				1,407
Total current liabilities														5,861				5,447				5,554
Long-term debt														25,182				25,732				25,645
Professional liability risks														962				1,039				993
Income taxes and other liabilities														1,860				1,857				1,720
EQUITY (DEFICIT)
Stockholders' deficit attributable to HCA Holdings, Inc.														(7,859	)			(8,243	)			(8,258	)
Noncontrolling interests														1,296				1,300				1,244
Total deficit														(6,563	)			(6,943	)			(7,014	)
													$	27,302			$	27,132			$	26,898

HCA Holdings, Inc.
Condensed Consolidated Statements of Cash Flows
For the Nine Months Ended September 30, 2012 and 2011
(Dollars in millions)
			2012				2011
Cash flows from operating activities:
Net income		$	1,579			$	800
Adjustments to reconcile net income to net cash provided by operating activities:
Changes in operating assets and liabilities			(2,923	)			(2,336	)
Provision for doubtful accounts			2,666				2,164
Depreciation and amortization			1,254				1,078
Income taxes			250				348
Losses (gains) sales of facilities			(4	)			3
Losses on retirement of debt			-				481
Amortization of deferred loan costs			44				56
Share-based compensation			39				24
Pay-in-kind interest			-				(78	)
Other			7				6
Net cash provided by operating activities			2,912				2,546
Cash flows from investing activities:
Purchase of property and equipment			(1,268	)			(1,170	)
Acquisition of hospitals and health care entities			(167	)			(209	)
Disposition of hospitals and health care entities			17				55
Change in investments			73				80
Other			5				4
Net cash used in investing activities			(1,340	)			(1,240	)
Cash flows from financing activities:
Issuance of long-term debt			1,350				5,000
Net change in revolving credit facilities			(875	)			(414	)
Repayment of long-term debt			(689	)			(6,583	)
Distributions to noncontrolling interests			(303	)			(281	)
Payment of debt issuance costs			(20	)			(84	)
Issuance of common stock			-				2,506
Distributions to stockholders			(983	)			(31	)
Repurchase of common stock			-				(1,503	)
Income tax benefits			82				54
Other			(35	)			(22	)
Net cash used in financing activities			(1,473	)			(1,358	)
Change in cash and cash equivalents			99				(52	)
Cash and cash equivalents at beginning of period			373				411
Cash and cash equivalents at end of period		$	472			$	359
Interest payments		$	1,404			$	1,635
Income tax payments (refunds), net		$	428			$	(95	)

HCA Holdings, Inc.
Operating Statistics
										For the Nine Months
		Third Quarter								Ended September 30,
			2012				2011				2012				2011
Operations:
Number of Hospitals			162				157				162				157
Number of Freestanding Outpatient Surgery Centers			112				98				112				98
Licensed Beds at End of Period			41,884				39,526				41,884				39,526
Weighted Average Licensed Beds			41,873				39,509				41,801				39,310
Reported:
Admissions			430,500				402,300				1,302,000				1,206,700
% Change			7.0	%							7.9	%
Equivalent Admissions			705,200				650,900				2,117,100				1,928,200
% Change			8.3	%							9.8	%
Revenue per Equivalent Admission		$	11,432			$	11,151			$	11,610			$	11,364
% Change			2.5	%							2.2	%
Inpatient Revenue per Admission		$	11,296			$	11,085			$	11,477			$	11,268
% Change			1.9	%							1.9	%
Patient Days			2,035,200				1,888,500				6,166,400				5,758,300
% Change			7.8	%							7.1	%
Equivalent Patient Days			3,334,000				3,056,600				10,026,500				9,201,800
% Change			9.1	%							9.0	%
Inpatient Surgery Cases			124,700				121,100				379,700				361,000
% Change			3.0	%							5.2	%
Outpatient Surgery Cases			212,300				194,300				649,600				586,400
% Change			9.3	%							10.8	%
Emergency Room Visits			1,724,000				1,539,500				5,126,600				4,579,100
% Change			12.0	%							12.0	%
Outpatient Revenues as a Percentage of Patient Revenues			38.4	%			37.4	%			38.0	%			36.8	%
Average Length of Stay			4.7				4.7				4.7				4.8
Occupancy			52.8	%			52.0	%			53.8	%			53.7	%
Equivalent Occupancy			86.4	%			84.1	%			87.5	%			85.8	%
Same Facility:
Admissions			405,800				397,300				1,228,400				1,197,100
% Change			2.1	%							2.6	%
Equivalent Admissions			658,600				642,100				1,981,400				1,909,300
% Change			2.6	%							3.8	%
Revenue per Equivalent Admission		$	11,210			$	11,130			$	11,385			$	11,351
% Change			0.7	%							0.3	%
Inpatient Revenue per Admission		$	11,148			$	11,106			$	11,325			$	11,278
% Change			0.4	%							0.4	%
Inpatient Surgery Cases			117,000				119,600				355,100				356,400
% Change			-2.1	%							-0.4	%
Outpatient Surgery Cases			189,600				191,100				581,100				577,600
% Change			-0.8	%							0.6	%
Emergency Room Visits			1,626,100				1,514,500				4,841,800				4,517,500
% Change			7.4	%							7.2	%

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