HCA Holdings, Inc. (NYSE: HCA) today announced preliminary financial and
operating results for its third quarter ended September 30, 2015. The
financial results are subject to finalization of the Company’s quarterly
financial and accounting procedures.
HCA anticipates revenues for the third quarter of 2015 should
approximate $9.856 billion compared to $9.220 billion in the third
quarter of 2014. Income before income taxes for the third quarter is
expected to approximate $921 million compared to $929 million in the
prior year period. Net income per diluted share for the third quarter of
2015 is expected to be approximately $1.17 per diluted share compared to
$1.16 per diluted share for the third quarter of 2014. Adjusted EBITDA
for the third quarter of 2015 is expected to be approximately $1.815
billion compared to $1.828 billion in the previous year’s third 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.
Consistent with recent trends, volume remained strong in the third
quarter. Same facility admissions for the third quarter of 2015
increased 2.9 percent, while same facility equivalent admissions
increased 3.6 percent when compared to the third quarter of 2014. Same
facility emergency room visits for the third quarter of 2015 increased
5.8 percent from the prior year’s third quarter.
Operating margins declined in the quarter as a result of increased labor
costs and a less favorable payer mix. Labor costs increased as a percent
of revenues to 46.9 percent compared to 45.7 percent in last year’s
third quarter. This increase was driven primarily by less productivity
and a greater use of contract labor to fill staffing needs.
Same facility uninsured admissions comprised 8.0 percent of total
admissions in the third quarter compared to 7.3 percent in last year’s
third quarter. Same facility managed care/other admissions comprised
28.5 percent of admissions as compared to 28.9 percent in the prior year.
The third quarter 2015 results are expected to include losses on sales
of facilities of approximately $2 million. The third quarter 2014
results included losses on sales of facilities of $12 million, or $0.02
per diluted share.
Same facility revenue per equivalent admission is expected to increase
approximately 1.9 percent in the third quarter of 2015 compared to the
prior year’s third quarter.
The Company’s guidance for Adjusted EBITDA for the year ending December
31, 2015, is now expected to be approximately $7.8 billion and Adjusted
earnings per diluted share is expected to be in the range of $5.20 to
$5.25 per share. The assumptions to 2015 guidance previously disclosed
in conjunction with the Company’s second quarter earnings remain
unchanged.
HCA anticipates reporting its complete financial results for the third
quarter of 2015 on, or about, October 27, 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 third 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.
|
|
|
HCA Holdings, Inc.
|
|
Supplemental Operating Results Summary
|
|
(Dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
(Preliminary
|
|
|
|
|
|
|
|
|
|
Estimates)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
|
|
$
|
921
|
|
|
$
|
|
|
|
|
|
929
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
|
481
|
|
|
|
|
|
|
|
|
460
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
|
|
411
|
|
|
|
|
|
|
|
|
427
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Losses on sales of facilities
|
|
|
|
|
|
2
|
|
|
|
|
|
|
|
|
12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA (a)
|
|
|
|
|
$
|
1,815
|
|
|
$
|
|
|
|
|
|
1,828
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
_______________
|
|
|
|
(a)
|
|
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.
|
|
|
|
|
|
|
|
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 on
sales of facilities 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.
|
HCA Holdings, Inc.
Investor Contact:
Mark Kimbrough, 615-344-2688
or
Media Contact:
Ed Fishbough, 615-344-2810