Community Health Systems (CYH)
Q2 2011 Earnings Call
July 29, 2011 11:00 am ET
Lizbeth Schuler - Vice President of Investor Relations
Wayne Smith - Chairman, Chief Executive Officer and President
W. Cash - Chief Financial Officer, Executive Vice President and Director
Gary Lieberman - Wells Fargo Securities, LLC
Whit Mayo - Robert W. Baird & Co. Incorporated
Albert Rice - Susquehanna Financial Group, LLLP
Thomas Gallucci - Lazard Capital Markets LLC
Matthew Borsch - Goldman Sachs Group Inc.
Gary Taylor - Citigroup Inc
Kevin Fischbeck - BofA Merrill Lynch
Previous Statements by CYH
» Community Health Systems, Inc., Q4 2008 Earnings Call Transcript
» Community Health Systems Inc. Q3 2008 Earnings Conference Call Transcript
» Community Health Systems, Inc. Q2 2008 Earnings Call
Good morning. My name is Amanda, and I will be your conference operator today. At this time, I would like to welcome everyone to the Community Health Systems Second Quarter Conference Call. [Operator Instructions] Thank you. Lizbeth Schuler, Vice President of Investor Relations, please begin.
Thank you, Amanda. Good morning, and welcome to Community Health Systems Second Quarter Conference Call.
Before we begin the call, I would like to read the following disclosure statements. This presentation may contain certain forward-looking statements provided by company management. These statements are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements that do not relate solely to historical or current facts, including statements regarding future operations, financial results, cash flows, cost and cost management initiatives and can also be identified by the use of words like may, believe , will, would, expect, project, target, estimates, guidance, anticipate, intend, plan, initiative, continue, or words and phrases of similar meaning.
These forward-looking statements speak only as of the date hereof and are based on our current plans and expectations, and are subject to a number of known and unknown uncertainties and risk, many of which are beyond our control. These risks and uncertainties are described in heading such as risk factors in our annual report on Form 10-K and other reports filed with the Securities and Exchange Commission.
As a consequence, current plans, anticipated actions and future financial position and results of operations may differ significantly from those expressed in these forward-looking statements in today's presentation. You are cautioned not to rely unduly on such forward-looking statements when evaluating the information presented, and we do not have any obligation to and do not intend to update any of these forward-looking statements.
The presentation also contains certain and non-GAAP financial measures. This presentation and the company's earnings releases for the quarter and year ended December 31, 2010, and the quarter and year-to-date ended June 30, 2011, located on the company's Investor Relations page at www.chs.net, include a reconciliation of the difference between certain non-GAAP financial measures with the most directly comparable financial measure calculated in accordance with GAAP.
These non-GAAP financial measure should not be considered an alternative to the GAAP financial measures. References to company or Community Health Systems used herein report first to Community Health Systems, Inc. and its affiliates, unless otherwise stated or indicated by context.
With that said, I would like to turn the call over to Mr. Wayne Smith, Chairman, President and Chief Executive Officer. Mr. Smith?
Thank you, Liz. Good morning, and welcome to our quarterly conference call. Larry Cash, our Executive Vice President and Chief Financial Officer, is on the call with me today. The purpose of the call is to review our financial and operating results for the second quarter and the 6 months ended June 30, 2011.
After the market closed yesterday, we issued an 8-K, including a press release of our financial statements. For those of you listening to live broadcast of this conference call on our website, a slide presentation accompanies our remarks. I'd like to begin the call today with some comments about the quarter, then turn the call over to Larry who will follow up with additional comments on our financial results.
Community Health Systems has delivered another quarter of solid financial and operating results. These results are in spite of the continuing weakness in inpatient volumes and the challenges in the economy. Net operating revenues for the quarter, ended June 30, 2011, totaled $3.4 billion, compared to $3.1 billion over the same period last year, an increase of 11.5%.
Consolidated EBITDA increased 4.7% from $442 million to $462 million. Earnings per share from continuing operation is $0.81 versus $0.76 for the same period a year ago, an increase of 6.6%. Excluding the after-tax expense related to the tenant losses, shareholder losses and governmental investigations, our EPS for the quarter would have been $0.85.
Net operating revenue for the 6 months ended June 30, 2011, was $6.8 billion and EBITDA was $919 million. Earnings per share from continuing operations for the 6 months ended June 30, 2011 was $1.62, compared to $1.51 for the same period a year ago, an increase of 7%.
With that, I'd like to recap a few significant accomplishments for the quarter. Our acquisition of the assets, Mercy Health Partners, was completed on May 1, 2011. The assets included 2 general key care hospitals: Regional Hospital at Scranton, 198 beds; Tyler Memorial Hospital, 48 beds. We also acquired a special care hospital, a 67-bed long-term acute-care facility in Nanticoke, as well as other outpatient and ancillary facilities.
Trail revenue was approximately $200 million with a single-digit margin. We now have 13 facilities in Pennsylvania. We have signed a definitive agreement to purchase the assets in Moses Taylor Health Care System in Scranton, Pennsylvania. The system has 217 beds in Scranton and a 25-bed hospital in Peckville, as well as a Primary Care and Specialty Practice positions health alliance now with 14 locations. This acquisition is still subject to regulatory approval. We continue to look for opportunities and have a very strong and active pipeline. When this acquisition is complete, we will have 15 hospitals in Pennsylvania.