HCA Holdings, Inc. (NYSE: HCA) today announced preliminary financial and operating results for the first quarter ended March 31, 2015. The financial results are subject to finalization of the Company's quarterly financial and accounting procedures. HCA anticipates revenues for the first quarter of 2015 will be approximately $9.675 billion compared to $8.832 billion in the first quarter of 2014. Income before income taxes for the first quarter is expected to approximate $1.075 billion compared to $680 million in the prior year period. Net income per diluted share for the first quarter of 2015 is expected to be approximately $1.35 per diluted share compared to $0.76 for the first quarter of 2014. Adjusted EBITDA for the first quarter is expected to be approximately $1.960 billion compared to $1.644 billion in the previous year's first quarter. Adjusted EBITDA is a non-GAAP financial measure. A table reconciling expected income before income taxes to Adjusted EBITDA is included in this release. "We are very pleased with the results of the first quarter. The majority of the first quarter performance was driven by continued favorable volume and payor trends in our core operations," stated R. Milton Johnson, Chairman and Chief Executive Officer. Same facility admissions for the first quarter of 2015 increased 5.1 percent, while same facility equivalent admissions increased 6.8 percent. Same facility emergency room visits increased 11.5 percent from the prior year's first quarter. Same facility revenue per equivalent admission is expected to increase approximately 1.6 percent in the first quarter of 2015 compared to the prior year's first quarter. 2015 Guidance Today, HCA is updating its guidance ranges for 2015:
|February 2015 Guidance||Revised 2015 Guidance|
|Revenues||$38.5 - $39.5 billion||$39.0 - $40.0 billion|
|Adjusted EBITDA||$7.35 - $7.65 billion||$7.55 - $7.85 billion|
|Adjusted EPS (diluted)||$4.55 - $4.95||$4.90 - $5.30|
|Capital Expenditures||Approximately $2.4 billion||unchanged|
The Company's revised 2015 guidance contains a number of assumptions that remain unchanged from its February 2015 guidance, including:
- The Company estimates approximately 6 to 7 percent of Adjusted EBITDA is attributable to the Patient Protection and Affordable Care Act (Health Reform Law);
- EHR incentive income of $40-$50 million and EHR expenses in a range of $30-$40 million, as compared to EHR incentive income of $125 million and EHR expenses of $112 million in 2014;
- An increase in share-based compensation expense to approximately $224 million from $163 million in 2014;
- 2015 guidance excludes the impact of items such as, but not limited to, gains or losses on sales of facilities, losses on retirement of debt, legal claim costs and impairments of long-lived assets; and
- 2015 guidance does not include any anticipated contribution in 2015 from certain items which positively impacted 2014 Adjusted EBITDA, including: (i) a $142 million increase to Medicaid revenues reflecting payments in excess of our estimates for the indigent care component of the Texas Medicaid Waiver Program for the program year ended September 30, 2013, and recorded in the 2nd quarter of 2014, (ii) $70 million less of Medicaid revenues related to the Texas Medicaid Waiver Program and (iii) $90 million in Medicare revenues recorded in 3Q 2014 in settlement for certain claims denied by Recovery Audit Contractors ("RAC").
All references to "Company" and "HCA" as used throughout this release refer to HCA Holdings, Inc. and its affiliates.
|HCA Holdings, Inc. Supplemental Operating Results Summary (Dollars in millions)|
|Income before income taxes||$||1,075||$||680|
|Depreciation and amortization||474||447|
|Gains on sales of facilities||(9||)||(21||)|
|Legal claim costs||─||78|
|Adjusted EBITDA (a)||$||1,960||$||1,644|
Management and investors review both the overall performance (GAAP income before income taxes) 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 of 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 legal claim costs will occur in future periods, but the amounts recognized can vary significantly from quarter to quarter, do not directly relate to the ongoing operations of our health care facilities and complicate quarterly comparisons of our results of operations and operations comparisons with other health care companies.Adjusted EBITDA is not a measure of financial performance under GAAP and should not be considered as an alternative to income before income taxes as a measure of operating performance or cash flows from operating, investing and financing activities as a measure of liquidity. Because Adjusted EBITDA is not a measurement determined in accordance with GAAP and is susceptible to varying calculations, Adjusted EBITDA, as presented, may not be comparable to other similarly titled measures presented by other companies.