HCA Reports Second Quarter 2013 Results

HCA Reports Second Quarter 2013 Results

NASHVILLE, Tenn.--(BUSINESS WIRE)-- HCA Holdings, Inc. (NYS: HCA) today announced financial and operating results for the second quarter ended June 30, 2013.

Key second quarter metrics (all percentage changes compare 2Q 2013 to 2Q 2012 unless noted):

• Revenues increased 4.2 percent to $8.450 billion

• Net income attributable to HCA Holdings, Inc. totaled $423 million, or $0.91 per diluted share

• Adjusted EBITDA increased 7.6 percent to $1.689 billion

• Cash flows from operations totaled $814 million

• Same facility equivalent admissions increased 1.1 percent while same facility admissions increased 1.3 percent

• Same facility revenue per equivalent admission increased 2.9 percent

"We are pleased with the second quarter results, produced through volume growth, increasing acuity and favorable expense management by our operating teams," stated Richard M. Bracken, HCA Chairman and CEO. "Our operating teams are doing an excellent job providing cost efficient and quality care," concluded Bracken.

Revenue growth in the second quarter was reflective of increased patient volumes and improved revenue per equivalent admission. Revenue in the second quarter of 2013 increased to $8.450 billion, from $8.112 billion in the second quarter of 2012.

Same facility equivalent admissions increased 1.1 percent in the second quarter of 2013 compared to the prior year period, while same facility admissions increased 1.3 percent. On a same facility basis, emergency room visits increased 0.8 percent in the second quarter of 2013, compared to the prior year period.

Net income attributable to HCA Holdings, Inc. totaled $423 million, or $0.91 per diluted share, compared to $391 million, or $0.85 per diluted share, in the second quarter of 2012. Results for the second quarter of 2013 include gains on sales of facilities of $4 million, compared to losses on sales of facilities of $2 million in the second quarter of 2012.

Adjusted EBITDA increased to $1.689 billion compared to $1.569 billion in the second quarter of 2012. Adjusted EBITDA is a non-GAAP financial measure. Tables providing supplemental information on Adjusted EBITDA and reconciling net income attributable to HCA Holdings, Inc. to Adjusted EBITDA are included in this release.

During the second quarter of 2013, salaries and benefits, supplies and other operating expenses totaled $6.825 billion, or 80.7 percent of revenues, compared to $6.622 billion, or 81.7 percent of revenues, in the second quarter of 2012.

Six Months Ended June 30, 2013

Revenues for the six months ended June 30, 2013 totaled $16.890 billion compared to $16.517 billion in the same period of 2012. Net income attributable to HCA Holdings, Inc. was $767 million, or $1.66 per diluted share, compared to $931 million, or $2.03 per diluted share, for the first six months of 2012. Results for the six months ended June 30, 2013 include a loss on retirement of debt of $17 million, or $0.02 per diluted share, and losses on sales of facilities of $12 million, or $0.02 per diluted share. Results for the six months ended June 30, 2012 include net favorable Medicare adjustments which increased revenues by $188 million, Adjusted EBITDA by $170 million and diluted earnings per share by $0.22.

Balance Sheet and Cash Flows from Operations

As of June 30, 2013, HCA Holdings, Inc.'s balance sheet reflected cash and cash equivalents of $462 million, total debt of $28.200 billion and total assets of $27.934 billion. Total debt outstanding declined by $408 million from the first quarter of 2013. During the second quarter of 2013, capital expenditures totaled $492 million, excluding acquisitions. Net cash provided by operating activities in the second quarter of 2013 totaled $814 million compared to $1.460 billion in the prior year's second quarter. The decline in cash flows from operating activities was primarily due to favorable changes in operating assets and liabilities during the second quarter of 2012. Accounts receivable declined $390 million during the second quarter of 2012, which included the receipt of the rural floor Medicare settlement of $271 million.

As of June 30, 2013, HCA operated 161 hospitals and 114 freestanding surgery centers.

Guidance

The Company today is reaffirming its previously issued guidance ranges for 2013.

Earnings Conference Call

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: https://event.webcasts.com/starthere.jsp?ei=1019699 or through the Company's Investor Relations web page, www.hcahealthcare.com.

Forward-Looking Statements

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 implementation of the Budget Control Act of 2011 ("BCA") and the potential for future deficit reduction legislation that may alter BCA-mandated spending reductions, which include cuts to Medicare payments, or create additional spending reductions, (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 collectability 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.

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