Exhibit 99.1
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PRESS RELEASE
FOR IMMEDIATE RELEASE
| | | | |
| | Contact: | | John C. Merriwether Vice President of Financial Relations Health Management Associates, Inc. (239) 598-3131 |
HEALTH MANAGEMENT ASSOCIATES, INC. INCREASES
4TH QUARTER 2009 EARNINGS PER SHARE 71% TO $0.12
AND INCREASES 4TH QUARTER 2009 NET REVENUE 10% TO $1.2 BILLION
NAPLES, FLORIDA (February 22, 2010) Health Management Associates, Inc. (NYSE: HMA)today announced its consolidated financial results for the fourth quarter and year ended December 31, 2009. For the quarter, Health Management reported net revenue of $1,198.8 million and earnings before interest, income taxes, depreciation and amortization, and gains on sales of assets (“EBITDA”) of $170.8 million. During the fourth quarter, income from continuing operations was $36.6 million and net income attributable to Health Management’s common stockholders was $34.1 million, or $0.14 per diluted share. Excluding certain gains and losses on sales of assets, gains on early extinguishment of debt, and investment impairment, as shown in the tables accompanying this press release, diluted earnings per share from continuing operations increased 71.4% to $0.12 as compared to $0.07 per diluted share for the same quarter a year ago. The tables accompanying this press release also include a reconciliation of consolidated net income to all presentations of EBITDA (which is not a GAAP measure) contained in this press release, and such tables also contain other important information regarding how Health Management defines and uses EBITDA. Moreover, the tables accompanying this press release also contain information that reconcile amounts previously reported by Health Management for the three months and year ended December 31, 2008 to those reported in this press release.
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For continuing operations at hospitals owned and operated by Health Management for one year or more, referred to as same hospital continuing operations, compared to the prior year’s fourth quarter, net revenue increased 7.9%, admissions increased 1.5%, adjusted admissions (reflecting total admissions adjusted for outpatient volume) increased 3.9%, emergency room visits increased 6.4% and surgeries increased 0.5%. Same hospital net revenue per adjusted admission grew 3.9% while same hospital EBITDA from continuing operations for the fourth quarter increased 14.9% to $200.3 million, or 17.0% of net revenue, compared to $174.3 million, or 16.0% of net revenue, for the same quarter in the prior year.
“We are very pleased with our strong finish to 2009. We exceeded our expectations, and believe we lead our peer group in same hospital admissions growth throughout the year,” said Gary D. Newsome, Health Management’s President and Chief Executive Officer. “Our performance in 2009 underscored our commitment to three key areas: emergency room operations, physician recruitment and market service development, and we expect additional opportunities for improvement in these areas throughout 2010. As we enter the new year, we will continue our disciplined operating approach, leverage our leadership strengths, and seek to further increase the value of our company through acquisitions.”
Health Management’s provision for doubtful accounts, or bad debt expense, was $147.2 million, or 12.3% of net revenue, for the fourth quarter compared to $125.7 million, or 11.5% of net revenue, for the same quarter a year ago.
Uninsured discounts for the fourth quarter were $163.5 million, compared to $139.9 million for the same period a year ago. Charity/indigent care write-offs for the quarter were $22.1 million, compared to $17.5 million for the same quarter in the prior year. The sum of uninsured discounts, charity/indigent write-offs and bad debt expense, as a percent of the sum of net revenue, uninsured discounts and charity/indigent write-offs, was 24.0% for the fourth quarter, compared to 25.7% for the third quarter ended September 30, 2009, and 22.7% for the same quarter a year ago.
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Cash flow from continuing operating activities for the year ended December 31, 2009 was $442.3 million, after cash interest and cash tax payments aggregating $241.6 million. During the year ended December 31, 2009, Health Management reduced the principal amount of its debt by nearly $192 million, which exceeded its full year 2009 debt repayment goal of $150 million. As a result, Health Management’s total debt-to-EBITDA ratio and interest coverage ratio were 4.40 and 3.11, respectively, at December 31, 2009. These ratios are well within the requirements of Health Management’s credit facilities.
For the year ended December 31, 2009, Health Management reported net revenue of $4,617.1 million and EBITDA of $679.4 million. Likewise, income from continuing operations for the year was $159.4 million and income from continuing operations, excluding certain gains on sales of assets, gains on early extinguishment of debt, and investment impairment attributable to Health Management’s common stockholders was $123.7 million, or $0.50 per diluted share, a 42.9% increase compared to $0.35 per diluted share for the year ended December 31, 2008.
Effective December 1, 2009, Health Management completed its acquisition of the 492-bed Sparks Health System located in Fort Smith, Arkansas. “We couldn’t have re-entered the acquisition landscape with a better hospital or community,” said Mr. Newsome. “Our leadership team at Sparks has hit the ground running and is leveraging the synergies between Sparks and our Summit Medical Center in nearby Van Buren, Arkansas. This acquisition is a great opportunity to expand our services in the greater Fort Smith/Van Buren region. Our acquisition pipeline remains active, and we will remain disciplined in our approach as we believe we will have additional acquisition opportunities with excellent potential in 2010.”
Health Management’s management team will hold a conference call and webcast to discuss the contents of this press release and its consolidated financial results for the fourth quarter and year ended December 31, 2009 on Tuesday, February 23, 2010 at 11:30 a.m. EST. Investors are invited to access the webcast via Health Management’s website at www.HMA.com or via www.streetevents.com. Alternatively, investors may join the conference call by dialing 877-476-3476.
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Health Management will archive a copy of the audio webcast, along with any related information that Health Management may be required to provide pursuant to Securities and Exchange Commission rules, on its website under the heading “Investor Relations,” for a period of 60 days following the conference call.
Health Management’s mission is to deliver compassionate and high quality health care services that improve the quality of life for its patients, physicians, and the communities it serves. Through its subsidiaries, Health Management owns and operates 55 hospitals in non-urban communities in 15 states with approximately 8,400 licensed beds. All references to “Health Management,” “HMA” or the “Company” used in this release refer to Health Management Associates, Inc. and its affiliates.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are subject to risks, uncertainties and assumptions and are identified by words such as “expects,” “estimates,” “projects,” “anticipates,” “believes,” “could” and other similar words. All statements addressing operating performance, events or developments that Health Management Associates, Inc. expects or anticipates will occur in the future, including but not limited to projections of revenue, income or loss, capital expenditures, earnings per share, debt structure, bad debt expense, capital structure, repayment of indebtedness, other financial items, statements regarding the plans and objectives of management for future operations, statements regarding acquisitions, divestitures and other proposed or contemplated transactions, statements of future economic performance, statements of the assumptions underlying or relating to any of the foregoing statements, and other statements which are other than statements of historical fact, are considered to be “forward-looking statements.”
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Because they are forward-looking, such statements should be evaluated in light of important risk factors and uncertainties. These risk factors and uncertainties are more fully described in Health Management Associates, Inc.’s most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Forms 10-Q under the heading entitled “Risk Factors.” Should one or more of these risks or uncertainties materialize, or should any of Health Management Associates, Inc.’s underlying assumptions prove incorrect, actual results could vary materially from those currently anticipated. In addition, undue reliance should not be placed on Health Management Associates, Inc.’s forward-looking statements. Except as required by law, Health Management Associates, Inc. disclaims any obligation to update or publicly announce any revisions to any of the forward-looking statements contained in this press release.
(financial tables follow)
HEALTH MANAGEMENT ASSOCIATES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(unaudited, in thousands except per share amounts)
| | | | | | | | | | | | | | | | |
| | Three Months Ended December 31, | | | Years Ended December 31, | |
| | 2009 | | | 2008 | | | 2009 | | | 2008 | |
| | | | | (as adjusted) | | | | | | (as adjusted) | |
| | | | |
Net revenue | | $ | 1,198,770 | | | $ | 1,089,918 | | | $ | 4,617,143 | | | $ | 4,360,466 | |
| | | | |
Operating expenses: | | | | | | | | | | | | | | | | |
Salaries and benefits | | | 478,285 | | | | 453,419 | | | | 1,810,550 | | | | 1,792,584 | |
Supplies | | | 167,102 | | | | 148,419 | | | | 647,153 | | | | 595,445 | |
Provision for doubtful accounts | | | 147,164 | | | | 125,664 | | | | 567,036 | | | | 490,136 | |
Depreciation and amortization | | | 61,912 | | | | 59,151 | | | | 241,110 | | | | 232,301 | |
Rent expense | | | 28,007 | | | | 23,067 | | | | 103,067 | | | | 89,908 | |
Other operating expenses | | | 207,441 | | | | 194,077 | | | | 809,938 | | | | 767,744 | |
| | | | | | | | | | | | | | | | |
Total operating expenses | | | 1,089,911 | | | | 1,003,797 | | | | 4,178,854 | | | | 3,968,118 | |
| | | | | | | | | | | | | | | | |
Income from operations | | | 108,859 | | | | 86,121 | | | | 438,289 | | | | 392,348 | |
| | | | |
Other income (expense): | | | | | | | | | | | | | | | | |
Gains (losses) on sales of assets, net | | | (692 | ) | | | 474 | | | | 1,244 | | | | 169,614 | |
Interest and other income (expense), net | | | 2,253 | | | | (4,784 | ) | | | 3,752 | | | | 416 | |
Interest expense | | | (54,456 | ) | | | (58,473 | ) | | | (217,941 | ) | | | (245,405 | ) |
Gains on early extinguishment of debt, net | | | — | | | | 15,894 | | | | 16,202 | | | | 15,194 | |
Write-offs of deferred financing costs | | | — | | | | — | | | | (444 | ) | | | (1,497 | ) |
| | | | | | | | | | | | | | | | |
Income from continuing operations before income taxes | | | 55,964 | | | | 39,232 | | | | 241,102 | | | | 330,670 | |
Provision for income taxes | | | (19,355 | ) | | | (12,617 | ) | | | (81,747 | ) | | | (118,580 | ) |
| | | | | | | | | | | | | | | | |
Income from continuing operations | | | 36,609 | | | | 26,615 | | | | 159,355 | | | | 212,090 | |
Income (loss) from discontinued operations, net of income taxes | | | 3,544 | | | | (14,331 | ) | | | 4,586 | | | | (27,933 | ) |
| | | | | | | | | | | | | | | | |
Consolidated net income | | | 40,153 | | | | 12,284 | | | | 163,941 | | | | 184,157 | |
Net income attributable to noncontrolling interests | | | (6,025 | ) | | | (5,254 | ) | | | (25,759 | ) | | | (16,008 | ) |
| | | | | | | | | | | | | | | | |
| | | | |
Net income attributable to Health Management Associates, Inc. | | $ | 34,128 | | | $ | 7,030 | | | $ | 138,182 | | | $ | 168,149 | |
| | | | | | | | | | | | | | | | |
| | | | |
Earnings (loss) per share attributable to Heath Management Associates, Inc. common stockholders: | | | | | | | | | | | | | | | | |
Basic and diluted: | | | | | | | | | | | | | | | | |
Continuing operations | | $ | 0.12 | | | $ | 0.09 | | | $ | 0.54 | | | $ | 0.80 | |
Discontinued operations | | | 0.02 | | | | (0.06 | ) | | | 0.02 | | | | (0.11 | ) |
| | | | | | | | | | | | | | | | |
Net income | | $ | 0.14 | | | $ | 0.03 | | | $ | 0.56 | | | $ | 0.69 | |
| | | | | | | | | | | | | | | | |
Weighted average number of shares outstanding: | | | | | | | | | | | | | | | | |
Basic | | | 246,648 | | | | 243,485 | | | | 245,381 | | | | 243,307 | |
| | | | | | | | | | | | | | | | |
Diluted | | | 249,171 | | | | 244,366 | | | | 246,965 | | | | 244,671 | |
| | | | | | | | | | | | | | | | |
| | | | |
Net income attributable to Health Management Associates, Inc. | | | | | | | | | | | | | | | | |
Income from continuing operations, net of income taxes | | $ | 30,584 | | | $ | 21,294 | | | $ | 134,374 | | | $ | 196,013 | |
Income (loss) from discontinued operations, net of income taxes | | | 3,544 | | | | (14,264 | ) | | | 3,808 | | | | (27,864 | ) |
| | | | | | | | | | | | | | | | |
Net income attributable to Health Management Associates, Inc. | | $ | 34,128 | | | $ | 7,030 | | | $ | 138,182 | | | $ | 168,149 | |
| | | | | | | | | | | | | | | | |
HEALTH MANAGEMENT ASSOCIATES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
| | | | | | | | |
| | Years Ended December 31, | |
| | 2009 | | | 2008 | |
| | | | | (as adjusted) | |
Cash flows from operating activities: | | | | | | |
Consolidated net income | | $ | 163,941 | | | $ | 184,157 | |
Adjustments to reconcile consolidated net income to net cash provided by continuing operating activities: | | | | | | | | |
Depreciation and amortization | | | 247,910 | | | | 246,038 | |
Provision for doubtful accounts | | | 567,036 | | | | 490,136 | |
Stock-based compensation expense | | | 10,867 | | | | 18,226 | |
Gains on sales of assets, net | | | (1,244 | ) | | | (169,614 | ) |
Gains on sales of available-for-sale securities | | | (1,384 | ) | | | — | |
Other than temporary charge for available-for-sale securities | | | — | | | | 6,165 | |
Write-offs of deferred financing costs | | | 444 | | | | 1,497 | |
Gains on early extinguishment of debt, net | | | (16,202 | ) | | | (15,194 | ) |
Long-lived asset impairment charge | | | — | | | | 921 | |
Deferred income tax expense | | | 90,467 | | | | 111,194 | |
Changes in assets and liabilities of continuing operations: | | | | | | | | |
Accounts receivable | | | (606,099 | ) | | | (516,399 | ) |
Supplies, prepaid expenses and other current assets | | | (3,890 | ) | | | (10,747 | ) |
Prepaid and recoverable income taxes | | | (309 | ) | | | 34,759 | |
Deferred charges and other long-term assets | | | (11,282 | ) | | | (4,638 | ) |
Accounts payable, accrued expenses and other liabilities | | | 6,830 | | | | 11,762 | |
Equity compensation excess income tax benefits | | | (218 | ) | | | — | |
(Income) loss from discontinued operations, net of income taxes | | | (4,586 | ) | | | 27,933 | |
| | | | | | | | |
Net cash provided by continuing operating activities | | | 442,281 | | | | 416,196 | |
| | | | | | | | |
| | |
Cash flows from investing activities: | | | | | | | | |
Acquisitions and other | | | (138,764 | ) | | | (8,526 | ) |
Additions to property, plant and equipment | | | (200,063 | ) | | | (211,016 | ) |
Proceeds from sales of assets | | | 5,448 | | | | 17,570 | |
Proceeds from sales of discontinued operations | | | — | | | | 18,166 | |
Purchases of available-for-sale securities | | | (86,527 | ) | | | — | |
Proceeds from sales of available-for-sale securities | | | 50,000 | | | | — | |
Decreases in restricted funds, net | | | 11,590 | | | | 14,510 | |
| | | | | | | | |
Net cash used in continuing investing activities | | | (358,316 | ) | | | (169,296 | ) |
| | | | | | | | |
| | |
Cash flows from financing activities: | | | | | | | | |
Proceeds from long-term debt | | | 38,000 | | | | 244,471 | |
Principal payments on debt and capital lease obligations | | | (194,932 | ) | | | (766,687 | ) |
Proceeds from exercises of stock options | | | 9,699 | | | | — | |
Payments of financing costs | | | — | | | | (350 | ) |
Cash received from noncontrolling shareholders, net | | | 54,796 | | | | 327,655 | |
Cash payments to noncontrolling shareholders | | | (35,377 | ) | | | (4,285 | ) |
Equity compensation excess income tax benefits | | | 218 | | | | — | |
| | | | | | | | |
Net cash used in continuing financing activities | | | (127,596 | ) | | | (199,196 | ) |
| | | | | | | | |
Net increase (decrease) in cash and cash equivalents before discontinued operations | | | (43,631 | ) | | | 47,704 | |
Net increases (decreases) in cash and cash equivalents from discontinued operations: | | | | | | | | |
Operating activities | | | 6,888 | | | | (20,708 | ) |
Investing activities | | | (440 | ) | | | (6,820 | ) |
Financing activities | | | (413 | ) | | | (549 | ) |
| | | | | | | | |
Net increase (decrease) in cash and cash equivalents | | | (37,596 | ) | | | 19,627 | |
Cash and cash equivalents at beginning of the period | | | 143,614 | | | | 123,987 | |
| | | | | | | | |
Cash and cash equivalents at end of the period | | $ | 106,018 | | | $ | 143,614 | |
| | | | | | | | |
HEALTH MANAGEMENT ASSOCIATES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands)
| | | | | | |
| | December 31, 2009 | | December 31, 2008 |
| | | | (as adjusted) |
Assets | | | | | | |
Current Assets: | | | | | | |
Cash and cash equivalents | | $ | 106,018 | | $ | 143,614 |
Available-for-sale securities | | | 36,585 | | | — |
Accounts receivable, net | | | 656,171 | | | 621,505 |
Other current assets | | | 261,394 | | | 253,208 |
Assets of discontinued operations | | | 12,754 | | | 90,633 |
Property, plant and equipment, net | | | 2,498,916 | | | 2,388,070 |
Restricted funds | | | 38,848 | | | 37,117 |
Other assets | | | 993,413 | | | 1,020,085 |
| | | | | | |
Total assets | | $ | 4,604,099 | | $ | 4,554,232 |
| | | | | | |
| | |
Liabilities and Stockholders’ Equity | | | | | | |
Current liabilities | | $ | 525,897 | | $ | 490,452 |
Deferred income taxes | | | 133,451 | | | 94,023 |
Other long-term liabilities | | | 578,459 | | | 539,904 |
Long-term debt | | | 3,004,672 | | | 3,144,042 |
Stockholders’ equity | | | 361,620 | | | 285,811 |
| | | | | | |
Total liabilities and stockholders’ equity | | $ | 4,604,099 | | $ | 4,554,232 |
| | | | | | |
| | | | | | | | | | | | | | | | |
| | Three Months Ended December 31, | | | Years Ended December 31, | |
| | 2009 | | | 2008 | | | 2009 | | | 2008 | |
Continuing Operations | | | | | | | | | | | | | | | | |
Occupancy | | | 44.2 | % | | | 44.7 | % | | | 44.9 | % | | | 45.1 | % |
Patient days | | | 325,249 | | | | 317,953 | | | | 1,302,409 | | | | 1,285,504 | |
| | | | |
Admissions | | | 77,568 | | | | 75,096 | | | | 310,366 | | | | 300,339 | |
Adjusted admissions | | | 137,063 | | | | 129,419 | | | | 542,231 | | | | 519,407 | |
| | | | |
Average length of stay | | | 4.2 | | | | 4.2 | | | | 4.2 | | | | 4.3 | |
Surgeries | | | 67,885 | | | | 66,450 | | | | 268,758 | | | | 269,712 | |
Emergency room visits | | | 341,436 | | | | 316,746 | | | | 1,375,507 | | | | 1,300,216 | |
| | | | |
Net revenue (in 000’s) | | $ | 1,198,770 | | | $ | 1,089,918 | | | $ | 4,617,143 | | | $ | 4,360,466 | |
Total inpatient revenue percentage | | | 49.6 | % | | | 52.7 | % | | | 51.3 | % | | | 52.2 | % |
Total outpatient revenue percentage | | | 50.4 | % | | | 47.3 | % | | | 48.7 | % | | | 47.8 | % |
| | | | |
Same Hospital | | | | | | | | | | | | | | | | |
Occupancy | | | 44.2 | % | | | 44.7 | % | | | 44.9 | % | | | 45.1 | % |
Patient days | | | 318,648 | | | | 317,953 | | | | 1,295,808 | | | | 1,285,504 | |
| | | | |
Admissions | | | 76,207 | | | | 75,096 | | | | 309,005 | | | | 300,339 | |
Adjusted admissions | | | 134,520 | | | | 129,419 | | | | 539,691 | | | | 519,407 | |
| | | | |
Average length of stay | | | 4.2 | | | | 4.2 | | | | 4.2 | | | | 4.3 | |
Surgeries | | | 66,774 | | | | 66,450 | | | | 267,647 | | | | 269,712 | |
Emergency room visits | | | 337,082 | | | | 316,746 | | | | 1,371,153 | | | | 1,300,216 | |
| | | | |
Net revenue (in 000’s) | | $ | 1,176,563 | | | $ | 1,089,918 | | | $ | 4,594,936 | | | $ | 4,360,466 | |
Total inpatient revenue percentage | | | 50.2 | % | | | 52.7 | % | | | 51.5 | % | | | 52.2 | % |
Total outpatient revenue percentage | | | 49.8 | % | | | 47.3 | % | | | 48.5 | % | | | 47.8 | % |
HEALTH MANAGEMENT ASSOCIATES, INC.
SUPPLEMENTAL CONSOLIDATED STATEMENTS OF INCOME INFORMATION
(unaudited, in thousands)
| | | | | | | | | | | | | | | | |
| | Three Months Ended December 31, | | | Years Ended December 31, | |
| | 2009 | | | 2008 | | | 2009 | | | 2008 | |
| | | | |
Net revenue | | $ | 1,198,770 | | | $ | 1,089,918 | | | $ | 4,617,143 | | | $ | 4,360,466 | |
Less acquisitions | | | 22,207 | | | | — | | | | 22,207 | | | | — | |
| | | | | | | | | | | | | | | | |
Same hospital net revenue | | $ | 1,176,563 | | | $ | 1,089,918 | | | $ | 4,594,936 | | | $ | 4,360,466 | |
| | | | | | | | | | | | | | | | |
| | | | |
Consolidated net income | | $ | 40,153 | | | $ | 12,284 | | | $ | 163,941 | | | $ | 184,157 | |
| | | | |
Adjustments: | | | | | | | | | | | | | | | | |
(Income) loss from discontinued operations, net of income taxes | | | (3,544 | ) | | | 14,331 | | | | (4,586 | ) | | | 27,933 | |
Provision for income taxes | | | 19,355 | | | | 12,617 | | | | 81,747 | | | | 118,580 | |
(Gains) losses on sales of assets, net | | | 692 | | | | (474 | ) | | | (1,244 | ) | | | (169,614 | ) |
Interest and other (income) expense, net | | | (2,253 | ) | | | 4,784 | | | | (3,752 | ) | | | (416 | ) |
Interest expense | | | 54,456 | | | | 58,473 | | | | 217,941 | | | | 245,405 | |
Gains on early extinguishment of debt, net | | | — | | | | (15,894 | ) | | | (16,202 | ) | | | (15,194 | ) |
Write-offs of deferred financing costs | | | — | | | | — | | | | 444 | | | | 1,497 | |
Depreciation and amortization | | | 61,912 | | | | 59,151 | | | | 241,110 | | | | 232,301 | |
| | | | | | | | | | | | | | | | |
EBITDA (a) | | | 170,771 | | | | 145,272 | | | | 679,399 | | | | 624,649 | |
| | | | |
Adjustment for acquisitions, corporate and other | | | 29,513 | | | | 28,991 | | | | 110,262 | | | | 99,763 | |
| | | | | | | | | | | | | | | | |
Same hospital operating EBITDA | | $ | 200,284 | | | $ | 174,263 | | | $ | 789,661 | | | $ | 724,412 | |
| | | | | | | | | | | | | | | | |
| | | | |
Same hospital operating EBITDA margins = | | | | | | | | | | | | | | | | |
Same hospital operating EBITDA / Same hospital net revenue (a) | | | 17.0 | % | | | 16.0 | % | | | 17.2 | % | | | 16.6 | % |
| | | | | | | | | | | | | | | | |
(a) | EBITDA is defined as consolidated net income before discontinued operations, net gains on sales of assets, net interest and other income, interest expense, net gains on early extinguishment of debt, write-offs of deferred financing costs, provision for income taxes, and depreciation and amortization. EBITDA margin is defined as EBITDA divided by net revenue. EBITDA does not represent cash flows from operating activities as defined by generally accepted accounting principles in the United States, commonly known as GAAP, and should not be considered as either an alternative to net income or as an indicator of HMA’s operating performance or as an alternative to cash flows as a measure of HMA’s liquidity. Nevertheless, HMA believes that providing non-GAAP information regarding EBITDA is important for investors and other readers of HMA’s financials statements, as it provides a measure of HMA’s liquidity. In addition, EBITDA is commonly used as an analytical indicator within the health care industry and HMA’s debt facilities contain covenants that use EBITDA in their calculations. Because EBITDA is not a measure determined in accordance with GAAP and is thus susceptible to varying calculations, EBITDA, as presented, may not be directly comparable to other similarly titled measures used by other companies. |
HEALTH MANAGEMENT ASSOCIATES, INC.
SUPPLEMENTAL CONSOLIDATED STATEMENTS OF INCOME INFORMATION
(unaudited, in thousands, except per share amounts)
The following tables provide information regarding income from continuing operations attributable to HMA, excluding the impact of the net gains (losses) on sales of assets and of noncontrolling interests, gains on early extinguishment of debt, and investment impairment. These tables are a non-GAAP presentation; nonetheless, HMA believes that providing this detail is beneficial to investors and other readers of HMA’s financial statements due to the significant impact these items had on income from continuing operations attributable to HMA.
Three Months Ended December 31, 2009
| | | | | | | | | | | | |
| | Continuing Operations | | | Losses on Sales of Assets | | | Total, As Reported | |
| | | |
Income from continuing operations before income taxes | | $ | 56,656 | | | $ | (692 | ) | | $ | 55,964 | |
Net income from continuing operations attributable to noncontrolling interests | | | (6,025 | ) | | | — | | | | (6,025 | ) |
| | | | | | | | | | | | |
Income from continuing operations before income taxes attributable to HMA | | | 50,631 | | | | (692 | ) | | | 49,939 | |
Provision for income taxes | | | (19,623 | ) | | | 268 | | | | (19,355 | ) |
| | | | | | | | | | | | |
Income from continuing operations attributable to HMA common stockholders | | $ | 31,008 | | | $ | (424 | ) | | $ | 30,584 | |
| | | | | | | | | | | | |
| | | |
Earnings per share attributable to Health Management Associates, Inc. common stockholders: | | | | | | | | | | | | |
Basic | | $ | 0.12 | | | $ | — | | | $ | 0.12 | |
| | | | | | | | | | | | |
Diluted | | $ | 0.12 | | | $ | — | | | $ | 0.12 | |
| | | | | | | | | | | | |
Three Months Ended December 31, 2008
| | | | | | | | | | | | | | | | | | | | |
| | Continuing Operations | | | Gains on Sales of Assets | | | Gains on Early Extinguishment of Debt | | | Investment Impairment | | | Total, As Reported | |
| | | | | |
Income from continuing operations before income taxes | | $ | 29,029 | | | $ | 474 | | | $ | 15,894 | | | $ | (6,165 | ) | | $ | 39,232 | |
Net income from continuing operations attributable to noncontrolling interests | | | (5,321 | ) | | | — | | | | — | | | | — | | | | (5,321 | ) |
| | | | | | | | | | | | | | | | | | | | |
Income from continuing operations before income taxes attributable to HMA | | | 23,708 | | | | 474 | | | | 15,894 | | | | (6,165 | ) | | | 33,911 | |
Provision for income taxes | | | (8,657 | ) | | | (175 | ) | | | (5,881 | ) | | | 2,096 | | | | (12,617 | ) |
| | | | | | | | | | | | | | | | | | | | |
Income from continuing operations attributable to HMA common stockholders | | $ | 15,051 | | | $ | 299 | | | $ | 10,013 | | | $ | (4,069 | ) | | $ | 21,294 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Earnings per share attributable to Health Management Associates, Inc. common stockholders: | | | | | | | | | | | | | | | | | | | | |
Basic | | $ | 0.07 | | | $ | — | | | $ | 0.04 | | | $ | (0.02 | ) | | $ | 0.09 | |
| | | | | | | | | | | | | | | | | | | | |
Diluted | | $ | 0.07 | | | $ | — | | | $ | 0.04 | | | $ | (0.02 | ) | | $ | 0.09 | |
| | | | | | | | | | | | | | | | | | | | |
-continued-
HEALTH MANAGEMENT ASSOCIATES, INC.
SUPPLEMENTAL CONSOLIDATED STATEMENTS OF INCOME INFORMATION
(unaudited, in thousands, except per share amounts)
Year Ended December 31, 2009
| | | | | | | | | | | | | | | | |
| | Continuing Operations | | | Gains on Sales of Assets | | | Gains on Early Extinguishment of Debt | | | Total, As Reported | |
| | | | |
Income from continuing operations before income taxes | | $ | 223,656 | | | $ | 1,244 | | | $ | 16,202 | | | $ | 241,102 | |
Net income from continuing operations attributable to noncontrolling interests | | | (24,981 | ) | | | — | | | | — | | | | (24,981 | ) |
| | | | | | | | | | | | | | | | |
Income from continuing operations before income taxes attributable to HMA | | | 198,675 | | | | 1,244 | | | | 16,202 | | | | 216,121 | |
Provision for income taxes | | | (74,987 | ) | | | (482 | ) | | | (6,278 | ) | | | (81,747 | ) |
| | | | | | | | | | | | | | | | |
Income from continuing operations attributable to HMA common stockholders | | $ | 123,688 | | | $ | 762 | | | $ | 9,924 | | | $ | 134,374 | |
| | | | | | | | | | | | | | | | |
| | | | |
Earnings per share attributable to Health Management Associates, Inc. common stockholders: | | | | | | | | | | | | | | | | |
Basic | | $ | 0.50 | | | $ | — | | | $ | 0.04 | | | $ | 0.54 | |
| | | | | | | | | | | | | | | | |
Diluted | | $ | 0.50 | | | $ | — | | | $ | 0.04 | | | $ | 0.54 | |
| | | | | | | | | | | | | | | | |
Year Ended December 31, 2008
| | | | | | | | | | | | | | | | | | | | |
| | Continuing Operations | | | Gains on Sales of Assets and Noncontrolling Interests | | | Gains on Early Extinguishment of Debt | | | Investment Impairment | | | Total, As Reported | |
| | | | | |
Income from continuing operations before income taxes | | $ | 152,027 | | | $ | 169,614 | | | $ | 15,194 | | | $ | (6,165 | ) | | $ | 330,670 | |
Net income from continuing operations attributable to noncontrolling interests | | | (16,077 | ) | | | — | | | | — | | | | — | | | | (16,077 | ) |
| | | | | | | | | | | | | | | | | | | | |
Income from continuing operations before income taxes attributable to HMA | | | 135,950 | | | | 169,614 | | | | 15,194 | | | | (6,165 | ) | | | 314,593 | |
Provision for income taxes | | | (51,021 | ) | | | (63,928 | ) | | | (5,727 | ) | | | 2,096 | | | | (118,580 | ) |
| | | | | | | | | | | | | | | | | | | | |
Income from continuing operations attributable to HMA common stockholders | | $ | 84,929 | | | $ | 105,686 | | | $ | 9,467 | | | $ | (4,069 | ) | | $ | 196,013 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Earnings per share attributable to Health Management Associates, Inc. common stockholders: | | | | | | | | | | | | | | | | | | | | |
Basic | | $ | 0.35 | | | $ | 0.43 | | | $ | 0.04 | | | $ | (0.02 | ) | | $ | 0.80 | |
| | | | | | | | | | | | | | | | | | | | |
Diluted | | $ | 0.35 | | | $ | 0.43 | | | $ | 0.04 | | | $ | (0.02 | ) | | $ | 0.80 | |
| | | | | | | | | | | | | | | | | | | | |
HEALTH MANAGEMENT ASSOCIATES, INC.
SUPPLEMENTAL CONSOLIDATED STATEMENTS OF INCOME INFORMATION
(unaudited, in thousands)
The tables below adjust HMA’s historical consolidated statements of income for the impact of new accounting guidance related to noncontrolling interests and convertible debt and reclassifies certain amounts into discontinued operations.
Three Months Ended December 31, 2008
| | | | | | | | | | | | | | | | | | | | |
| | As Reported | | | Effects of the Noncontrolling Interest Guidance | | | Effects of the Convertible Debt Guidance | | | Discontinued Operations and Other Reclassifications | | | As Adjusted | |
| | | | | |
Net revenue | | $ | 1,111,826 | | | $ | — | | | $ | — | | | $ | (21,908 | ) | | $ | 1,089,918 | |
Total operating expenses | | | 1,025,536 | | | | — | | | | — | | | | (21,739 | ) | | | 1,003,797 | |
| | | | | | | | | | | | | | | | | | | | |
Income from operations | | | 86,290 | | | | — | | | | — | | | | (169 | ) | | | 86,121 | |
| | | | | |
Gains on sales of assets, net | | | 347 | | | | — | | | | — | | | | 127 | | | | 474 | |
Interest and other income, net | | | (4,784 | ) | | | — | | | | — | | | | — | | | | (4,784 | ) |
Interest expense | | | (56,462 | ) | | | — | | | | (2,022 | ) | | | 11 | | | | (58,473 | ) |
Gains on early extinguishment of debt, net | | | 26,404 | | | | — | | | | (10,510 | ) | | | — | | | | 15,894 | |
| | | | | | | | | | | | | | | | | | | | |
Income from continuing operations before minority interests and income taxes | | | 51,795 | | | | — | | | | (12,532 | ) | | | (31 | ) | | | 39,232 | |
Minority interests in earnings of consolidated entities | | | (5,254 | ) | | | 5,254 | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | |
Income from continuing operations before income taxes | | | 46,541 | | | | 5,254 | | | | (12,532 | ) | | | (31 | ) | | | 39,232 | |
Provision for income taxes | | | (17,498 | ) | | | — | | | | 5,013 | | | | (132 | ) | | | (12,617 | ) |
| | | | | | | | | | | | | | | | | | | | |
Income from continuing operations | | | 29,043 | | | | 5,254 | | | | (7,519 | ) | | | (163 | ) | | | 26,615 | |
Loss from discontinued operations, net of income taxes | | | (14,494 | ) | | | — | | | | — | | | | 163 | | | | (14,331 | ) |
| | | | | | | | | | | | | | | | | | | | |
Consolidated net income | | | 14,549 | | | | 5,254 | | | | (7,519 | ) | | | — | | | | 12,284 | |
Net income attributable to noncontrolling interests | | | — | | | | (5,254 | ) | | | — | | | | — | | | | (5,254 | ) |
| | | | | | | | | | | | | | | | | | | | |
Net income attributable to Health Management Associates, Inc. | | $ | 14,549 | | | $ | — | | | $ | (7,519 | ) | | $ | — | | | $ | 7,030 | |
| | | | | | | | | | | | | | | | | | | | |
Year Ended December 31, 2008
| | | | | | | | | | | | | | | | | | | | |
| | As Reported | | | Effects of the Noncontrolling Interest Guidance | | | Effects of the Convertible Debt Guidance | | | Discontinued Operations and Other Reclassifications | | | As Adjusted | |
| | | | | |
Net revenue | | $ | 4,451,611 | | | $ | — | | | $ | — | | | $ | (91,145 | ) | | $ | 4,360,466 | |
Total operating expenses | | | 4,055,411 | | | | — | | | | — | | | | (87,293 | ) | | | 3,968,118 | |
| | | | | | | | | | | | | | | | | | | | |
Income from operations | | | 396,200 | | | | — | | | | — | | | | (3,852 | ) | | | 392,348 | |
| | | | | |
Gains on sales of assets, net | | | 211,501 | | | | — | | | | — | | | | (41,887 | ) | | | 169,614 | |
Interest and other income, net | | | 416 | | | | — | | | | — | | | | — | | | | 416 | |
Interest expense | | | (238,749 | ) | | | — | | | | (6,710 | ) | | | 54 | | | | (245,405 | ) |
Gains on early extinguishment of debt, net | | | 6,944 | | | | — | | | | 8,250 | | | | — | | | | 15,194 | |
Write-offs of deferred financing costs | | | (1,497 | ) | | | — | | | | — | | | | — | | | | (1,497 | ) |
| | | | | | | | | | | | | | | | | | | | |
Income from continuing operations before minority interests and income taxes | | | 374,815 | | | | — | | | | 1,540 | | | | (45,685 | ) | | | 330,670 | |
Minority interests in earnings of consolidated entities | | | (16,008 | ) | | | 16,008 | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | |
Income from continuing operations before income taxes | | | 358,807 | | | | 16,008 | | | | 1,540 | | | | (45,685 | ) | | | 330,670 | |
Provision for income taxes | | | (135,505 | ) | | | — | | | | (616 | ) | | | 17,541 | | | | (118,580 | ) |
| | | | | | | | | | | | | | | | | | | | |
Income from continuing operations | | | 223,302 | | | | 16,008 | | | | 924 | | | | (28,144 | ) | | | 212,090 | |
Loss from discontinued operations, net of income taxes | | | (56,077 | ) | | | — | | | | — | | | | 28,144 | | | | (27,933 | ) |
| | | | | | | | | | | | | | | | | | | | |
Consolidated net income | | | 167,225 | | | | 16,008 | | | | 924 | | | | — | | | | 184,157 | |
Net income attributable to noncontrolling interests | | | — | | | | (16,008 | ) | | | — | | | | — | | | | (16,008 | ) |
| | | | | | | | | | | | | | | | | | | | |
Net income attributable to Health Management Associates, Inc. | | $ | 167,225 | | | $ | — | | | $ | 924 | | | $ | — | | | $ | 168,149 | |
| | | | | | | | | | | | | | | | | | | | |
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