News Details

Provides 2016 Guidance

HCA Holdings, Inc. (NYSE: HCA) today announced financial and operating results for the fourth quarter ended December 31, 2015.

Key fourth quarter metrics (all percentage changes compare 4Q 2015 to 4Q 2014 unless noted):

• Revenues totaled $10.249 billion, an increase of 6.4 percent
• Net income attributable to HCA Holdings, Inc. totaled $582 million, or $1.40 per diluted share, compared to $527 million, or $1.19 per diluted share, in the fourth quarter of 2014
• Adjusted EBITDA totaled $2.131 billion, an increase of 8.9 percent
• Cash flows from operating activities totaled $1.558 billion, compared to $1.627 billion in the prior year’s fourth quarter
• Same facility equivalent admissions increased 2.9 percent, while same facility admissions increased 1.6 percent
• Same facility revenue per equivalent admission increased 2.6 percent

Revenues in the fourth quarter totaled $10.249 billion, compared to $9.636 billion in the fourth quarter of 2014. Fourth quarter 2014 results included a $68 million increase in Medicaid revenues related to the reversal of the Texas Medicaid Waiver Program adjustment to reduce revenues that was recorded in the third quarter of 2014.

Net income attributable to HCA Holdings, Inc. totaled $582 million, or $1.40 per diluted share, compared to $527 million, or $1.19 per diluted share, in the fourth quarter of 2014. Results for the fourth quarter of 2015 include losses on sales of facilities of $7 million, or $0.01 per diluted share, losses on retirement of debt of $10 million, or $0.02 per diluted share, and legal claim costs of $172 million, or $0.26 per diluted share. Results for the fourth quarter of 2014 included gains on sales of facilities of $9 million, or $0.01 per diluted share, and losses on retirement of debt of $109 million, or $0.15 per diluted share.

Adjusted EBITDA for the fourth quarter of 2015 increased 8.9 percent to $2.131 billion compared to $1.956 billion in the prior year period. Adjusted EBITDA is a non-GAAP financial measure. A table providing supplemental information on Adjusted EBITDA and reconciling net income attributable to HCA Holdings, Inc. to Adjusted EBITDA is included in this release.

Fourth quarter revenue growth was driven by solid volume and higher revenue per equivalent admission, as same facility case mix, or acuity, increased 2.1 percent compared to the prior year. Same facility equivalent admissions increased 2.9 percent while same facility admissions increased 1.6 percent in the fourth quarter of 2015 compared to the fourth quarter of 2014. Same facility emergency room visits increased 3.6 percent in the fourth quarter of 2015 compared to the prior year period.

Same facility revenue per equivalent admission increased 2.6 percent in the fourth quarter of 2015. During the fourth quarter same facility inpatient surgeries increased 1.5 percent while same facility outpatient surgeries increased 2.2 percent compared to the prior year period.

The Company’s same facility operating expense per equivalent admission, excluding electronic health record (“EHR”) and equity income, increased 1.2 percent from the prior year’s fourth quarter. During the fourth quarter of 2015, salaries and benefits, supplies and other operating expenses totaled $8.127 billion, or 79.3 percent of revenues, compared to $7.719 billion, or 80.1 percent of revenues, in the fourth quarter of 2014.

Twelve Months Ended December 31, 2015

Revenues for the year ended December 31, 2015 totaled $39.678 billion compared to $36.918 billion for 2014. Net income attributable to HCA Holdings, Inc. for 2015 was $2.129 billion, or $4.99 per diluted share, compared to $1.875 billion, or $4.16 per diluted share, for the year ended December 31, 2014. Results for the year ended December 31, 2015 include losses on retirement of debt of $135 million, or $0.20 per diluted share, and legal claims costs of $249 million, or $0.37 per diluted share. Results for 2014 included gains on sales of facilities of $29 million, or $0.04 per diluted share, losses on retirement of debt of $335 million, or $0.47 per diluted share, and legal claim costs of $78 million, or $0.11 per diluted share. Adjusted EBITDA for 2015 increased to $7.915 billion compared to $7.428 billion in 2014.

Balance Sheet and Cash Flow

As of December 31, 2015, HCA Holdings, Inc.’s balance sheet reflected cash and cash equivalents of $741 million, total debt of $30.488 billion, and total assets of $32.744 billion. During the fourth quarter of 2015, capital expenditures totaled $804 million, excluding acquisitions. During the fourth quarter of 2015, the Company repurchased approximately 14.362 million shares of its common stock, at a cost of $1.011 billion. The Company had approximately $2.603 billion remaining under its $3 billion repurchase authorization at year end. The Company had approximately 398.739 and 420.478 million shares outstanding as of December 31, 2015 and 2014, respectively. Net cash provided by operating activities in the fourth quarter of 2015 totaled $1.558 billion compared to $1.627 billion in the prior year’s fourth quarter.

As of December 31, 2015, HCA operated 168 hospitals and 116 freestanding surgery centers.

2016 Guidance

Today, HCA issued the following estimated guidance for 2016:

The Company’s 2016 guidance contains a number of assumptions, including:

• EHR incentive income of approximately $6 million compared to EHR incentive income of $47 million in 2015; and
• 2016 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.

The Company’s guidance is based on current plans and expectations and is subject to a number of known and unknown uncertainties and risks, including those set forth below in the Company’s “Forward-Looking Statements.”

The Company’s 2016 annual stockholders’ meeting will be held in Nashville, Tennessee on April 28, 2016 at 2:00 p.m. local time for stockholders of record as of March 4, 2016.

Earnings Conference Call

HCA will host a conference call for investors at 9:00 a.m. Central Standard 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=1080621 or through the Company’s Investor Relations web page at 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 or current 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 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; (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 (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.
Investor Contact:
Mark Kimbrough, 615-344-2688
or
Media Contact:
Ed Fishbough, 615-344-2810