Cash Flows from Operations Increase to $1.460 Billion

NASHVILLE, Tenn.--(BUSINESS WIRE)-- HCA Holdings, Inc. (NYSE: HCA) today announced financial and operating results for the second quarter ended June 30, 2012.

Key second quarter metrics (all percentage changes compare 2Q 2012 to 2Q 2011 unless noted):

• Revenues increased 11.9 percent to $8.112 billion
• Net income attributable to HCA Holdings, Inc. totaled $391 million, or $0.85 per diluted share
• Adjusted EBITDA increased 10.5 percent to $1.569 billion
• Cash flows from operations increased 95 percent to $1.460 billion
• Same facility equivalent admissions increased 3.9 percent while same facility admissions increased 2.5 percent
• Same facility revenue per equivalent admission declined 0.1 percent

Revenue growth in the second quarter was once again driven by increased patient volume and the consolidation of our HealthONE venture, which was accounted for using the equity method for periods prior to November 2011. Revenue in the second quarter of 2012 increased to $8.112 billion, from $7.249 billion in the second quarter of 2011. On a same facility basis, revenues in the second quarter of 2012 increased 3.8 percent to $7.442 billion.

Same facility equivalent admissions increased 3.9 percent in the second quarter of 2012 compared to the prior year period, while same facility admissions increased 2.5 percent. Emergency room visits increased 8.8 percent in the second quarter of 2012, on a same facility basis, compared to the prior year period.

Net income attributable to HCA Holdings, Inc. totaled $391 million, or $0.85 per diluted share, compared to $229 million, or $0.43 per diluted share, in the second quarter of 2011. Results for the second quarter of 2011 include losses on retirement of debt of $75 million, or $0.08 per diluted share.

Adjusted EBITDA increased to $1.569 billion compared to $1.420 billion in the second quarter of 2011. Adjusted EBITDA is a non-GAAP financial measure. Tables providing supplemental information on Adjusted EBITDA and reconciling net income attributable to HCA Holdings, Inc. to Adjusted EBITDA are included in this release.

During the second quarter of 2012, salaries and benefits, supplies and other operating expenses totaled $6.622 billion, or 81.7 percent of revenues, compared to $5.941 billion, or 81.9 percent of revenues, in the second quarter of 2011.

Six Months Ended June 30, 2012

Revenues for the six months ended June 30, 2012 totaled $16.517 billion compared to $14.655 billion in the same period of 2011. Net income attributable to HCA Holdings, Inc. was $931 million, or $2.03 per diluted share, compared to $469 million, or $0.94 per diluted share, for the first six months of 2011. Results for the six months ended June 30, 2012 include net favorable Medicare adjustments which increased revenues by $188 million, Adjusted EBITDA by $170 million and diluted earnings per share by $0.22. Results for the six months ended June 30, 2011 include losses on retirement of debt of $75 million, or $0.09 per diluted share, and a charge for the termination of a management agreement of $181 million, or $0.30 per diluted share.

Balance Sheet and Cash Flows from Operations

As of June 30, 2012, HCA Holdings, Inc.’s balance sheet reflected cash and cash equivalents of $518 million, total debt of $27.041 billion and total assets of $27.132 billion. Total debt outstanding decreased by $861 million from the first quarter of 2012. During the second quarter of 2012, capital expenditures totaled $449 million, excluding acquisitions. Net cash provided by operating activities in the second quarter of 2012 totaled $1.460 billion compared to $748 million in the prior year’s second quarter. The improvement in cash flows from operating activities was primarily due to increased net income and favorable changes in operating assets and liabilities during the quarter, including our receipt of payment on the first quarter 2012 rural floor Medicare settlement and a reduction of interest payments.

As of June 30, 2012, HCA operated 163 hospitals and 110 freestanding surgery centers.

Guidance

HCA also is affirming its previously issued guidance for the year ending December 31, 2012.

Assumptions:

This guidance range excludes the impact of items, if applicable, that are non-operational in nature. The guidance includes estimated electronic health record (EHR) incentive income assumptions in a range of $325-$350 million and EHR expenses in a range of $90-$115 million (most recent expense range was $125-$150 million). It is also subject to certain conditions including those as set forth below in the Company’s “Cautionary Statement about Preliminary Results and Other Forward-Looking Information”.

Earnings Conference Call

HCA will host a conference call for investors at 8:00 a.m. Central Daylight 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=1007615 or through the Company’s Investor Relations web page, www.hcahealthcare.com.

Cautionary Statement about Preliminary Results and Other Forward-Looking Information

This press release contains forward-looking statements based on current management expectations. Those forward-looking statements include statements regarding estimated EHR incentive income and related EHR operating expenses and all other statements that do not relate solely to historical or current facts. 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 impact of our substantial indebtedness and the ability to refinance such indebtedness on acceptable terms, (2) the effects related to the enactment and implementation of the Budget Control Act of 2011 and the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act (collectively, the “Health Reform Law”), 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) increases in the amount and risk of collectability 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 upper payment limit programs or Waiver Programs, that may impact reimbursements to health care providers and insurers, (6) the highly competitive nature of the health care business, (7) 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, (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, (10) increases in wages and the ability to attract and retain qualified management and personnel, including affiliated physicians, nurses and medical and technical support personnel, (11) the availability and terms of capital to fund the expansion of our business and improvements to our existing facilities, (12) changes in accounting practices, (13) changes in general economic conditions nationally and regionally in our markets, (14) future divestitures which may result in charges and possible impairments of long-lived assets, (15) changes in business strategy or development plans, (16) delays in receiving payments for services provided, (17) the outcome of pending and any future tax audits, appeals and litigation associated with our tax positions, (18) potential adverse impact of known and unknown government investigations, litigation and other claims that may be made against us, (19) 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 (20) other risk factors described in our annual report on Form 10-K for the year ended December 31, 2011 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 release refer to HCA Holdings, Inc. and its affiliates.

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HCA Holdings, Inc.
Investor Contact:
Mark Kimbrough, 615-344-2688
or
Media Contact:
Ed Fishbough, 615-344-2810

Source: HCA Holdings, Inc.