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HCA Reports First Quarter 2008 Results
Date:5/6/2008

NASHVILLE, Tenn., May 6 /PRNewswire/ -- HCA today announced financial and operating results for its first quarter ended March 31, 2008.

First Quarter Summary:

-- Revenues increased 6.7 percent to $7.127 billion.

-- Net income totaled $170 million, compared to $180 million in the prior

year's first quarter.

-- Adjusted EBITDA totaled $1.180 billion, compared to $1.276 billion in

the first quarter of 2007.

-- Provision for doubtful accounts increased to $888 million, from $691

million in the prior year.

-- Interest expense decreased to $530 million, from $557 million in the

prior year's first quarter.

-- Same facility admissions increased 0.8 percent, and same facility

equivalent admissions increased 1.1 percent.

-- Same facility revenue per equivalent admission increased 6.9 percent.

-- Surgeries on a same facility basis declined 1.9 percent.

Revenues for the first quarter totaled $7.127 billion, compared to $6.677 billion in the first quarter of 2007. Adjusted EBITDA in the quarter totaled $1.180 billion, compared to $1.276 billion in the previous year's first quarter. A table describing adjusted EBITDA and reconciling net income to adjusted EBITDA for these periods is included in this release. Net income for the first quarter of 2008 totaled $170 million, compared to $180 million in the prior year's first quarter. Results for the first quarter of 2008 include gains on sales of facilities of $51 million compared to $5 million in the first quarter of 2007.

The provision for doubtful accounts increased to $888 million, or 12.5 percent of revenues, in the first quarter of 2008 from $691 million, or 10.3 percent of revenues, in the first quarter of 2007. Same facility uninsured admissions increased 5.3 percent in the first quarter of 2008 compared to the prior year's first quarter.

Interest expense decreased to $530 million in the first change in revolving bank credit facility 650 (450)

Repayment of long-term debt (575) (78)

Issuance of common stock -- 100

Other 3 (6)

Net cash provided by (used in) financing activities 78 (434)

Change in cash and cash equivalents 78 (225)

Cash and cash equivalents at beginning of period 393 634

Cash and cash equivalents at end of period $471 $409

Interest payments $411 $443

Income tax payments, net of refunds $127 $(149)

HCA Inc.

Operating Statistics

First Quarter

2008 2007

Consolidating Hospitals:

Number of Hospitals 161 165

Weighted Average Licensed Beds 38,406 39,269

Licensed Beds at End of Period 38,375 39,269

Reported:

Admissions 401,700 403,800

% Change 0.5%

Equivalent Admissions 601,300 601,200

% Change 0.0%

Revenue per Equivalent Admission $11,852 $11,106

% Change 6.7%

Inpatient Revenue per Admission $11,211 $10,389

% Change 7.9%

Patient Days 2,024,600 2,021,500

Equivalent Patient Days 3,030,800 3,010,000

Inpatient Surgery Cases 125,400 130,500

% Change -4.0%

Outpatient Surgery Cases 196,900 204,200

% Change -3.6%

Emergency Room Visits 1,368,800 1,295,200

% Change 5.7%

Outpatient Revenues as a

Percentage of Patient Revenues 35.8% 36.0%

Average Length of Stay 5.0 5.0

Occupancy 57.9% 57.2%

Equivalent Occupancy 86.7% 85.2%

Same Facility:

Admissions 400,100 396,800

% Change 0.8%

Equivalent Admissions 597,800 591,300

% Change 1.1%

Revenue per Equivalent Admission $11,840 $11,073

% Change 6.9%

Inpatient Revenue per Admission $11,224 $10,387

% Change 8.1%

Inpatient Surgery Cases 124,900 125,800

% Change -0.7%

Outpatient Surgery Cases 195,500 200,800

% Change -2.7%

Emergency Room Visits 1,359,500 1,273,500

% Change 6.8%

Number of Consolidating and Nonconsolidating

(50/50 Equity Joint Ventures) Hospitals:

Consolidated 161 165

Non-Consolidated (50/50 Equity Joint Ventures) 8 8

Total Number of Hospitals 169 173

quarter of 2008, compared to $557 million in the same period of 2007, due primarily to a reduction in debt.

Same facility admissions increased 0.8 percent and same facility equivalent admissions increased 1.1 percent in the first quarter of 2008 compared to the prior year's first quarter. Same facility inpatient surgeries declined 0.7 percent and outpatient surgeries declined 2.7 percent in the first quarter. Same facility revenue per equivalent admission increased 6.9 percent in the first quarter of 2008 compared to the first quarter of 2007. Same facility charity and uninsured discounts totaled $799 million in the first quarter of 2008 compared to $665 million in the first quarter of 2007.

As of March 31, 2008, HCA's balance sheet reflected cash and cash equivalents of $471 million, total debt of $27.489 billion, and total assets of $24.492 billion. During the first quarter, capital expenditures totaled $308 million. HCA now expects capital expenditures to approximate $1.65 billion in 2008 compared to previous guidance of $1.8 billion.

The 2008 gains on sales of facilities primarily reflect the divestiture of one hospital for proceeds totaling $80 million and the recognition of a net pretax gain of $43 million, or $25 million net-of-tax. Proceeds were used to reduce debt.

During November 2006, the Company's shareholders approved a merger with an acquiring consortium led by Bain Capital, Kohlberg Kravis Roberts & Co. and Merrill Lynch Global Private Equity, along with HCA founder, Dr. Thomas F. Frist, Jr. and certain members of his family and HCA management in which a cash payment of $51.00 per share was made for each share of HCA common stock held. The merger was accounted for as a recapitalization transaction.

As of March 31, 2008, HCA operated 169 hospitals and 109 freestanding surgery centers (including eight hospitals and eight freestanding surgery centers operated through equity method joint ventures).

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 http://www.videonewswire.com/event.asp?id=47214 or through the Company's Investor Relations web page, http://www.hcahealthcare.com.

FORWARD LOOKING STATEMENTS

This press release contains forward-looking statements based on current management expectations. Those forward-looking statements include 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, (1) the ability to recognize the benefits of the recapitalization; (2) the impact of the substantial indebtedness incurred to finance the recapitalization; (3) increases in the amount and risk of collectibility of uninsured accounts, and deductibles and copayment amounts for insured accounts; (4) the ability to achieve operating and financial targets, and attain expected levels of patient volumes and control the costs of providing services; (5) possible changes in the Medicare, Medicaid and other state programs, including Medicaid supplemental payments pursuant to upper payment limit programs, that may impact reimbursements to health care providers and insurers; (6) the highly competitive nature of the health care business; (7) changes in revenue mix and the ability to enter into and renew managed care provider agreements on acceptable terms; (8) the efforts of insurers, health care providers and others to contain health care costs; (9) the outcome of our continuing efforts to monitor, maintain and comply with appropriate laws, regulations, policies and procedures and our corporate integrity agreement with the government; (10) changes in federal, state or local laws or regulations affecting the health care industry; (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 possible enactment of federal or state health care reform; (13) the availability and terms of capital to fund the expansion of our business and improvements to our existing facilities; (14) changes in accounting practices; (15) changes in general economic conditions nationally and regionally in our markets; (16) future divestitures which may result in charges; (17) changes in business strategy or development plans; (18) the outcome of pending and any future tax audits, appeals and litigation associated with our tax positions; (19) delays in receiving payment for services provided; (20) potential liabilities and other claims that may be asserted against us; (21) other risk factors described in our Annual Report on Form 10-K and 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 document refer to HCA Inc. and its affiliates.

HCA Inc.

Consolidated Income Statements

First Quarter

(Dollars in millions)

2008 2007

Amount Ratio Amount Ratio

Revenues $7,127 100.0% $6,677 100.0%

Salaries and benefits 2,839 39.8 2,647 39.6

Supplies 1,173 16.5 1,103 16.5

Other operating expenses 1,114 15.5 1,017 15.4

Provision for doubtful

accounts 888 12.5 691 10.3

Equity in earnings of

affiliates (67) (0.9) (57) (0.9)

Depreciation and

amortization 357 5.1 355 5.4

Interest expense 530 7.4 557 8.3

Gains on sales of

facilities (51) (0.7) (5) (0.1)

6,783 95.2 6,308 94.5

Income before minority

interests and income

taxes 344 4.8 369 5.5

Minority interests in

earnings of consolidated

entities 56 0.8 61 0.9

Income before income taxes 288 4.0 308 4.6

Provision for income taxes 118 1.6 128 1.9

Net income $170 2.4 $180 2.7

HCA Inc.

Supplemental Operating Results Summary

(Dollars in millions)

First Quarter

2008 2007

Revenues $7,127 $6,677

Net income $170 $180

Gains on sales of facilities (net of tax) (30) (2)

Net income, excluding gains on sales of facilities 140 178

Depreciation and amortization 357 355

Interest expense 530 557

Minority interests in earnings of consolidated

entities 56 61

Provision for income taxes 97 125

Adjusted EBITDA (a) $1,180 $1,276

(a) Net income, excluding gains on sales of facilities, and adjusted

EBITDA are non-GAAP financial measures. We believe that net income,

excluding gains on sales of facilities, and adjusted EBITDA are

important measures that supplement 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 net income, excluding

gains on sales of facilities, and adjusted EBITDA as the primary

measures to review and assess operating performance of its hospital

facilities and their management teams.

Management and investors review both the overall performance

(including; net income, excluding gains on sales of facilities, and

GAAP net income) 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 during the previous year and to

compare our operating results with other companies in the health care

industry. It is reasonable to expect that gains 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.

Net income, excluding gains on sales of facilities, and adjusted

EBITDA are not measures of financial performance under accounting

principles generally accepted in the United States, and should not be

considered as alternatives to net income as measures of operating

performance or alternatives to cash flows from operating, investing

and financing activities as measures of liquidity. Because net

income, excluding gains on sales of facilities, and adjusted EBITDA

are not measurements determined in accordance with generally accepted

accounting principles and are susceptible to varying calculations, net

income, excluding gains on sales of facilities, and adjusted EBITDA,

as presented, may not be comparable to other similarly titled

measures presented by other companies.

HCA Inc.

Consolidated Balance Sheets

(Dollars in millions)

March 31, December 31,

ASSETS 2008 2007

Current assets:

Cash and cash equivalents $471 $393

Accounts receivable, less allowance for doubtful

accounts 4,134 3,895

Inventories 705 710

Deferred income taxes 693 592

Other 498 615

Total current assets 6,501 6,205

Property and equipment, at cost 22,783 22,579

Accumulated depreciation (11,402) (11,137)

11,381 11,442

Investments of insurance subsidiary 1,634 1,669

Investments in and advances to affiliates 738 688

Goodwill 2,633 2,629

Deferred loan costs 517 539

Other 1,088 853

$24,492 $24,025

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:

Accounts payable $1,272 $1,370

Accrued salaries 732 780

Other accrued expenses 1,422 1,391

Long-term debt due within one year 330 308

Total current liabilities 3,756 3,849

Long-term debt 27,159 27,000

Professional liability risks 1,242 1,233

Deferred taxes and other liabilities 1,745 1,379

Minority interests in equity of consolidated

entities 953 938

Equity securities with contingent redemption rights 163 164

Stockholders' deficit (10,526) (10,538)

$24,492 $24,025

HCA Inc.

Consolidated Statements of Cash Flows

First Quarter

(Dollars in millions)

2008 2007

Cash flows from operating activities:

Net income $170 $180

Adjustments to reconcile net income to net cash

provided by operating activities:

Provision for doubtful accounts 888 691

Depreciation and amortization 357 355

Income taxes (9) 277

Gains on sales of facilities (51) (5)

Change in operating assets and liabilities (1,183) (1,203)

Change in minority interests 6 33

Share-based compensation 7 5

Other 42 19

Net cash provided by operating activities 227 352

Cash flows from investing activities:

Purchase of property and equipment (308) (334)

Acquisition of hospitals and health care entities (24) (10)

Disposal of hospitals and health care entities 107 30

Change in investments (11) 165

Other 9 6

Net cash used in investing activities (227) (143)

Cash flows from financing activities:

Net
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SOURCE HCA
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