HCA (NYSE: HCA) today announced that preliminary results for its second
quarter ended June 30, 2005 indicate that net income is expected to be
in the range of $0.88 to $0.92 per diluted share, compared to $0.72 per
diluted share for the prior year's second quarter. The Company's
operating results for the second quarter are expected to include the
following:
- favorable tax settlement related to the Company's divesture of certain
non-core business units in 1998 and 2001 of approximately $48 million,
or $0.11 per diluted share;
- recognition of a previously deferred gain on the Company's sale of
certain medical office buildings (the MedCap properties) of
approximately $29 million pretax, or $0.04 per diluted share; and
- additional depreciation expense of approximately $30 million, or $0.04
per diluted share, to correct accumulated depreciation and assure a
consistent application of the Company's accounting policy relative to
certain short-lived medical equipment.
Also, the Company recognized a reduction in its estimated professional
liability insurance reserves of approximately $36 million pretax, or
$0.05 per diluted share, during the second quarter of 2005. Results for
the second quarter of 2004 included a reduction in its estimated
professional liability reserves of approximately $59 million pretax, or
$0.07 per diluted share.
For the second quarter of 2005, same facility admissions are expected to
reflect a decrease of approximately 0.3 percent, while same facility
equivalent admissions are expected to reflect an increase of
approximately 1.2 percent compared to the second quarter of 2004.
Preliminary results indicate same facility revenues are expected to
increase approximately 4.3 percent to approximately $6.0 billion and
same facility net revenue per equivalent admission is expected to
increase approximately 3.1 percent in the second quarter of 2005
compared to the second quarter of 2004. Adjusting for the effect of
approximately $183 million of discounts provided to the uninsured during
the second quarter of 2005, same facility revenues are expected to
increase approximately 7.5 percent and same facility net revenue per
equivalent admission is expected to increase approximately 6.2 percent
in the second quarter of 2005 compared to the second quarter of 2004.
The provision for doubtful accounts for the second quarter is expected
to approximate $541 million, or 8.9 percent of revenues, compared to
$661 million, or 11.3 percent of revenues in the second quarter of 2004.
Adjusting for the effect of the uninsured discounts, the expected
provision for doubtful accounts for the second quarter of 2005 would be
$725 million, or 11.6 percent of revenues. Uninsured patient admissions
increased approximately 5 percent in the second quarter compared to the
prior year period. The Company's uninsured discount policy, which became
effective January 1, 2005, lowers revenues and the provision for
doubtful accounts by generally corresponding amounts.
The Company's common shares used to compute diluted earnings per share
for the second quarter of 2005 approximated 451.7 million, compared to
490.3 million shares in the prior year's second quarter and 435.7
million shares for the first quarter of 2005.
With today's announcement, the Company is reaffirming its earnings
guidance for 2005 of $3.05 to $3.20 per diluted share, excluding gains
on sales of assets, impairments and tax settlements.
The Company plans to report its final second quarter and six months
results for the periods ended June 30, 2005 on July 27th and will hold a
conference call and web-cast to discuss the quarter and six months
results at that time.
CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS
This press release contains forward-looking statements based on current
management expectations. Those forward-looking statements include all
statements regarding our estimated results of operations including those
relating to the Company's preliminary results for the second quarter of
2005, estimated results for future periods and 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, (i) the finalization of the
Company's financial statements for the second quarter, (ii) increases in
the amount and risk of collectability of uninsured accounts and
deductibles and co-pay amounts for insured accounts, (iii) the ability
to achieve operating and financial targets, achieve expected levels of
patient volumes and control the costs of providing services, (iv) the
highly competitive nature of the health care business, (v) the efforts
of insurers, health care providers and others to contain health care
costs, (vi) possible changes in the Medicare, Medicaid and other state
programs that may impact reimbursements to health care providers and
insurers, (vii) the ability to attract and retain qualified management
and other personnel, including affiliated physicians, nurses and medical
support personnel, (viii) potential liabilities and other claims that
may be asserted against the Company, (ix) fluctuations in the market
value of the Company's common stock, (x) the impact of the Company's
charity care and uninsured discounting policy changes, (xi) changes in
accounting practices, (xii) changes in general economic conditions,
(xiii) future divestitures which may result in charges, (xiv) changes in
revenue mix and the ability to enter into and renew managed care
provider arrangements on acceptable terms, (xv) the availability and
terms of capital to fund the expansion of the Company's business, (xvi)
changes in business strategy or development plans, (xvii) delays in
receiving payments for services provided, (xviii) the possible enactment
of Federal or state health care reform, (xix) the outcome of pending and
any future tax audits, appeals and litigation associated with the
Company's tax positions, (xx) the outcome of the Company's continuing
efforts to monitor, maintain and comply with appropriate laws,
regulations, policies and procedures and the Company's corporate
integrity agreement with the government, (xxi) changes in Federal, state
or local regulations affecting the health care industry, (xxii) the
ability to develop and implement the payroll and human resources
information systems within the expected time and cost projections and,
upon implementation, to realize the expected benefits and efficiencies,
(xxiii) maintaining the increased quarterly cash dividend rate for the
entire fiscal year, and (xxiv) other risk factors detailed in the
Company's filings with the SEC. Many of the factors that will determine
the Company's future results are beyond the ability of the Company 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. The Company undertakes 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 document
refer to HCA Inc. and its affiliates.
"Safe Harbor" Statement under the Private Securities Litigation Reform
Act of 1995: Statements in this press release regarding HCA's business
which are not historical facts are "forward-looking statements" that
involve risks and uncertainties. For a discussion of such risks and
uncertainties, which could cause actual results to differ from those
contained in the forward-looking statements, see "Risk Factors" in the
Company's Annual Report or Form 10-K for the most recently ended fiscal
year.
Investor, Mark Kimbrough, +1-615-344-2688,
or Media, Jeff Prescott, +1-615-344-5708,
both of HCA