HCA Holdings, Inc. (NYSE: HCA) today announced preliminary financial and
operating results for its second quarter ended June 30, 2015. The
financial results are subject to finalization of the Company’s quarterly
financial and accounting procedures.
HCA anticipates revenues for the second quarter of 2015 should
approximate $9.897 billion compared to $9.230 billion in the second
quarter of 2014. Income before income taxes for the second quarter is
expected to approximate $984 million compared to $904 million in the
prior year period. Net income per diluted share for the second quarter
of 2015 is expected to be approximately $1.18 per diluted share compared
to $1.07 per diluted share for the second quarter of 2014. Adjusted
EBITDA for the second quarter of 2015 is expected to be approximately
$2.008 billion compared to $2.000 billion in the previous year’s second
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.
The second quarter 2015 results are expected to include losses on
retirement of debt of approximately $125 million, or $0.18 per diluted
share, and losses on sales of facilities of approximately $5 million, or
$0.01 per diluted share. The second quarter 2014 results include a $142
million, or $0.20 per diluted share, adjustment to increase Medicaid
revenues related to the receipt of reimbursements in excess of our
estimates for the indigent care component of the Texas Medicaid Waiver
Program for the program year ended September 30, 2013. Second quarter
2014 results also include losses on retirement of debt of $226 million,
or $0.32 per diluted share, and gains on sales of facilities of $11
million, or $0.02 per diluted share.
Same facility admissions for the second quarter of 2015 increased 4.1
percent, while same facility equivalent admissions increased 4.9
percent. Same facility emergency room visits for the second quarter of
2015 increased 7.4 percent from the prior year’s second quarter.
Same facility revenue per equivalent admission is expected to increase
approximately 2.8 percent in the second quarter of 2015 compared to the
prior year’s second quarter, after adjusting second quarter 2014
revenues to exclude the impact of the $142 million adjustment to
increase revenues related to the Texas Medicaid Waiver Program.
The Company now anticipates its Adjusted EBITDA for the year ending
December 31, 2015 to be near the high-end of its previously issued
guidance range of $7.55 to $7.85 billion.
HCA anticipates reporting its complete financial results for the second
quarter of 2015 on, or about, August 5, 2015.
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 or current facts and are subject to
finalization of the Company’s second quarter financial and accounting
procedures. 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 Patient Protection and Affordable Care Act,
as amended by the Health Care and Education Reconciliation Act
(collectively, the “Health Reform Law”), possible delays in or
complications related to implementation of the Health Reform Law, court
challenges, 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, (3) the effects related to the continued implementation of the
sequestration spending reductions required under the Budget Control Act
of 2011 (the “BCA”), and related legislation extending these reductions,
and the potential for future deficit reduction legislation that may
alter these spending reductions, which include cuts to Medicare
payments, or create additional spending reductions, (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 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) the emergence and effects related to infectious diseases, including
Ebola; (16) future divestitures which may result in charges and possible
impairments of long-lived assets, (17) changes in business strategy or
development plans, (18) delays in receiving payments for services
provided, (19) the outcome of pending and any future tax audits,
disputes and litigation associated with our tax positions, (20)
potential adverse impact of known and unknown government investigations,
litigation and other claims that may be made against us, (21) 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 (22) other risk factors described in
our annual report on Form 10-K for the year ended December 31, 2014 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.
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HCA Holdings, Inc.
Supplemental Operating Results Summary
(Dollars in millions)
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Second Quarter
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2015
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2014
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(Preliminary
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Estimates)
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Income before income taxes
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$
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984
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$
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904
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Depreciation and amortization
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469
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454
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Interest expense
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425
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427
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Losses (gains) on sales of facilities
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5
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(11
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Losses on retirement of debt
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125
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226
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Adjusted EBITDA (a)
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$
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2,008
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$
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2,000
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__________________
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(a)
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Adjusted EBITDA should not be considered a measure of financial
performance under generally accepted accounting principles (“GAAP”).
We believe that Adjusted EBITDA is an important measure that
supplements discussions and analysis of our results of operations.
We believe that it is useful to investors to provide disclosures of
our results of operations on the same basis as that used by
management. Management relies upon Adjusted EBITDA as a primary
measure to review and assess operating performance of its hospital
facilities and their management teams.
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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 losses on retirement of debt 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.
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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.
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HCA Holdings, Inc.
Investor Contact:
Mark Kimbrough, 615-344-2688
or
Media Contact:
Ed Fishbough, 615-344-2810