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EXHIBIT 20
HCA
NEWS
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FOR IMMEDIATE RELEASE
INVESTOR CONTACT MEDIA CONTACT
Mark Kimbrough: 615-344-2688 Jeff Prescott: 615-344-5708
HCA REPORTS SECOND QUARTER 2001
EPS INCREASES 25% TO $0.50 VS. $0.40 IN THE PRIOR YEAR
EXCLUDING GAINS AND RESTRUCTURING, INVESTIGATION AND SETTLEMENT RELATED COSTS
NASHVILLE, TENN., JULY 23, 2001 - HCA (NYSE: HCA) today announced operating
results for the second quarter and six months ended June 30, 2001. "Strong
patient volume and revenue growth contributed to another extremely successful
quarter," stated Jack O. Bovender, Jr., CEO and President of HCA. "The strong
demographics in our markets continue to provide the Company with significant
opportunities to invest in new services and capacity to meet the needs of our
local communities."
For the second quarter of 2001, revenues rose 8.3 percent to $4.5
billion, compared to $4.1 billion in the second quarter of 2000. Net income,
excluding gains on sales of facilities and restructuring of operations and
investigation and settlement related costs, totaled $271 million or $0.50 per
diluted share for the second quarter of 2001, compared to $223 million or $0.40
per diluted share in the second quarter of 2000. The net income and earnings
per share increases were 21 percent and 25 percent, respectively.
Considering all gains and investigation and settlement related costs,
the Company reported net income in the second quarter of $263 million or $0.48
per diluted share, compared to a net loss of $272 million or a loss of $0.49
per diluted share in the second quarter of 2000. During the second quarter of
2000, the Company recorded an after-tax charge of $498 million, or $0.90 per
diluted share, in connection with its civil settlement of certain issues with
the Department of Justice.
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For the quarter ended June 30, 2001, same facility revenues increased
10.6 percent compared to the prior year's quarter. Same facility admissions for
the Company's hospitals increased by 4.2 percent during the quarter. Same
facility revenue per inpatient admission increased 10.9 percent for the quarter
and same facility revenue per equivalent admission increased 6.9 percent.
Last year's second quarter results reflect certain insurance
subsidiary funds which were reallocated among investment managers, resulting in
the recognition of previously unrealized gains that decreased other operating
expenses and increased pretax income by $27 million, or $0.03 per share.
Excluding the amortization of goodwill, net income (excluding gains on
sales of facilities, impairment of long-lived assets, restructuring of
operations and investigation and settlement related costs) was $289 million or
$0.54 per diluted share in the second quarter of 2001 compared to $244 million
or $0.44 per diluted share for the second quarter of 2000.
Revenues for the six months ended June 30, 2001, rose 6.8 percent to
$9.0 billion, compared to $8.4 billion in the first six months of 2000. Net
income, excluding gains on sales of facilities and restructuring and
investigation and settlement related costs, totaled $602 million or $1.09 per
diluted share in the first half of 2001, compared to $529 million or $0.93 per
diluted share for the six months ended June 30, 2000. Including all such gains,
impairments and charges for both periods, the Company reported net income of
$589 million or $1.07 per diluted share in 2001, versus net income of $24
million or $0.04 per diluted share in 2000.
For the six months ended June 30, 2001, same facility revenues
increased 8.6 percent and same facility admissions increased 3.2 percent. Same
facility revenue per inpatient admission increased 8.9 percent and same
facility revenue per equivalent admission increased 5.9 percent.
As of June 30, 2001, the Company operated 194 hospitals and 78
ambulatory surgery centers (including 9 hospitals and 3 ASCs owned through
joint ventures accounted for using the equity method), compared to 204
hospitals and 83 ambulatory surgery centers (including 9 hospitals and 3 ASCs
owned through joint ventures accounted for using the equity method) at June 30,
2000.
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At June 30, 2001, the Company's balance sheet reflected total debt of $7.1
billion, common, temporary and minority equity of $5.8 billion and total assets
of $17.9 billion. Capital expenditures for the quarter totaled $318 million.
The Company's total debt-to-capital ratio was 55 percent at June 30, 2001,
compared to 53 percent at June 30, 2000.
"While I am very pleased with the operating and financial results that we
are reporting today, I take even greater pleasure with our recent Gallup survey
results indicating that satisfaction levels for patients, physicians and
employees in the HCA family continue to remain consistently high," said
Bovender. " Employee satisfaction scores have risen significantly over the last
year for HCA facilities across the country. In fact, our St. Lucie Medical
Center in Port St. Lucie, Florida attained not only HCA's highest employee
satisfaction levels, but also, the highest satisfaction ratings of any
organization currently surveyed by Gallup nationwide."
HCA will host a conference call for investors at 8:30 a.m. Central
Daylight Time today. All interested investors are invited to access a live
audio broadcast of the call, via web cast. The broadcast also will be available
on a replay basis beginning this afternoon and throughout the next 30 days. The
web cast can be accessed at http://www.videonewswire.com/event.asp?id=176 or
via the Investor Relations site at www.hcahealthcare.com.
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This press release contains forward-looking statements based on current
management expectations. Those forward looking statements include 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, (i) the outcome of the known and unknown governmental
investigations and litigation involving the Company's business practices,
including the ability to negotiate, execute and timely consummate definitive
settlement agreements in the government's civil cases and to obtain court
approval thereof, (ii) the highly competitive nature of the health care
business, (iii) the efforts of insurers, health care providers and others to
contain health care costs, (iv) possible changes in the Medicare and Medicaid
programs that may impact reimbursements to health care providers and insurers,
(v) changes in Federal, state or local regulation affecting the health care
industry, (vi) the possible enactment of Federal or state health care reform,
(vii) the ability to attract and retain qualified management and personnel,
including affiliated physicians, nurses and medical support personnel, (viii)
liabilities and other claims asserted against the Company, (ix) fluctuations in
the market value of the Company's common stock, (x) ability to complete the
share repurchase program and to settle related forward purchase contracts, (xi)
changes in accounting practices, (xii) changes in general economic conditions,
(xiii) future divestitures which may result in additional charges, (xiv)
changes in revenue mix and the ability to enter into and renew managed care
provider arrangements on acceptable terms, (xv) the availability and terms of
capital to fund the expansion of the Company's business, (xvi) changes in
business strategy or development plans, (xvii) slowness of reimbursement,
(xviii) the ability to implement the Company's shared services and other
initiatives and realize a decrease in administrative, supply and infrastructure
costs, (xix) the outcome of pending and any future tax audits and litigation
associated with the Company's tax positions, (xx) the outcome of the Company's
continuing efforts to monitor, maintain and comply with appropriate laws,
regulations, policies and procedures and the Company's corporate integrity
agreement with the government, (xxi) increased reviews of the Company's cost
reports, (xxii) the ability to maintain and increase patient volumes and
control the costs of providing services, and (xxiii) other risk factors
detailed
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from time to time in the Company's filings with the SEC. Many of the factors
that will determine the Company's future results are beyond the ability of the
Company to control or predict. Readers should not place undue reliance on
forward-looking statements, which reflect management's views only as of the
date hereof. The Company undertakes 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.
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HCA INC.
CONSOLIDATED OPERATING RESULTS SUMMARY
(Dollars in millions, except per share amounts)
FOR THE SIX MONTHS
SECOND QUARTER ENDED JUNE 30,
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2001 2000 2001 2000
--------- --------- --------- ---------
Revenues.......................................................... $ 4,476 $ 4,133 $ 8,977 $ 8,404
EBITDA(a)......................................................... $ 876 $ 799 $ 1,848 $ 1,705
Net income (loss):
Excluding settlement with Federal government, gains
on sales of facilities and restructuring of
operations and investigation related costs............. $ 271 $ 223 $ 602 $ 529
Settlement with Federal government (net of tax)............ (1) (498) (1) (498)
Gains on sales of facilities (net of tax).................. -- 9 4 9
Restructuring of operations and investigation related costs
(net of tax)........................................... (7) (6) (16) (16)
--------- --------- --------- ---------
Net income (loss).......................................... $ 263 $ (272) $ 589 $ 24
========= ========= ========= =========
Diluted earnings (loss) per share:
Excluding settlement with Federal government, gains on
sales of facilities and restructuring of operations
and investigation related costs........................ $ 0.50 $ 0.40 $ 1.09 $ 0.93
Settlement with Federal government......................... -- (0.90) -- (0.88)
Gains on sales of facilities............................... -- 0.02 0.01 0.01
Restructuring of operations and investigation related costs (0.02) (0.01) (0.03) (0.02
--------- --------- --------- ---------
Net income (loss).......................................... $ 0.48 $ (0.49) $ 1.07 $ 0.04
========= ========= ========= =========
Shares used in computing diluted earnings (loss) per share (000).. 545,815 554,759 550,290 569,109
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(a) EBITDA is defined as income before depreciation and amortization,
interest expense, settlement with Federal government, gains on sales of
facilities, restructuring of operations and investigation related costs,
minority interests and income taxes.
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HCA INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
SECOND QUARTER
(DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
2001 2000
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AMOUNT RATIO Amount Ratio
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Revenues ....................................................... $ 4,476 100.0% $ 4,133 100.0%
Salaries and benefits .......................................... 1,822 40.7 1,645 39.8
Supplies ....................................................... 713 15.9 655 15.9
Other operating expenses ....................................... 800 17.9 768 18.6
Provision for doubtful accounts ................................ 301 6.7 299 7.2
Equity in earnings of affiliates ............................... (36) (0.8) (33) (0.8)
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3,600 80.4 3,334 80.7
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EBITDA ..................................................... 876 19.6 799 19.3
Depreciation and amortization .................................. 262 5.9 265 6.3
Interest expense ............................................... 139 3.1 136 3.3
Settlement with Federal government ............................. 2 -- 745 18.0
Gains on sales of facilities ................................... -- -- (18) (0.4)
Restructuring of operations and investigation related costs .... 13 0.3 12 0.3
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Income (loss) before minority interests and income taxes ....... 460 10.3 (341) (8.2)
Minority interests in earnings of consolidated entities ........ 29 0.7 29 0.8
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Income (loss) before income taxes .............................. 431 9.6 (370) (9.0)
Provision (benefit) for income taxes ........................... 168 3.7 (98) (2.4)
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Net income (loss) .......................................... $ 263 5.9 $ (272) (6.6)
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Diluted earnings (loss) per share:
Excluding settlement with Federal government, gains on
sales of facilities and restructuring of operations
and investigation related costs ...................... $ 0.50 $ 0.40
Settlement with Federal government ......................... -- (0.90)
Gains on sales of facilities ............................... -- 0.02
Restructuring of operations and investigation related costs (0.02) (0.01)
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Net income (loss) .......................................... $ 0.48 $ (0.49)
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Shares used in computing diluted earnings (loss) per share (000) 545,815 554,759
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HCA INC.
CONSOLIDATED INCOME STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2001 AND 2000
(DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
2001 2000
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AMOUNT RATIO Amount Ratio
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Revenues ...................................................... $ 8,977 100.0% $ 8,404 100.0%
Salaries and benefits ......................................... 3,604 40.1 3,306 39.3
Supplies ...................................................... 1,424 15.9 1,325 15.8
Other operating expenses ...................................... 1,557 17.3 1,532 18.2
Provision for doubtful accounts ............................... 626 7.0 601 7.2
Equity in earnings of affiliates .............................. (82) (0.9) (65) (0.8)
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7,129 79.4 6,699 79.7
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EBITDA .................................................... 1,848 20.6 1,705 20.3
Depreciation and amortization ................................. 519 5.8 521 6.2
Interest expense .............................................. 281 3.1 255 3.0
Settlement with Federal government ............................ 2 -- 745 8.9
Gains on sales of facilities .................................. (13) (0.1) (18) (0.2)
Restructuring of operations and investigation related costs ... 27 0.3 25 0.3
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Income before minority interests and income taxes ............. 1,032 11.5 177 2.1
Minority interests in earnings of consolidated entities ....... 59 0.7 55 0.7
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Income before income taxes .................................... 973 10.8 122 1.4
Provision for income taxes .................................... 384 4.2 98 1.1
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Net income ................................................ $ 589 6.6 $ 24 0.3
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Diluted earnings per share:
Excluding settlement with Federal government, gains on
sales of facilities and restructuring of operations
and investigation related costs ..................... $ 1.09 $ 0.93
Settlement with Federal government ........................ -- (0.88)
Gains on sales of facilities .............................. 0.01 0.01
Restructuring of operations and investigation related costs (0.03) (0.02)
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Net income ................................................ $ 1.07 $ 0.04
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Shares used in computing diluted earnings per share (000) ..... 550,290 569,109
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HCA INC.
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN MILLIONS)
JUNE 30, MARCH 31, DECEMBER 31,
2001 2001 2000
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ASSETS
Current assets:
Cash and cash equivalents ...................................... $ 124 $ 188 $ 314
Accounts receivable, net ....................................... 2,364 2,412 2,211
Other .......................................................... 1,891 1,825 1,928
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Total current assets ...................................... 4,379 4,425 4,453
Property and equipment, at cost ..................................... 14,695 14,388 14,290
Accumulated depreciation ............................................ (6,130) .(5,943) (5,810)
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8,565 8,445 8,480
Investments of insurance subsidiary ................................. 1,529 1,301 1,371
Investments in and advances to affiliates ........................... 831 822 779
Intangible assets, net .............................................. 2,170 2,117 2,155
Other ............................................................... 406 433 330
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$ 17,880 $ 17,543 $ 17,568
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable ............................................... $ 673 $ 691 $ 693
Other current liabilities ...................................... 1,317 1,423 1,487
Government settlement accrual .................................. 745 745 840
Long-term debt due within one year ............................. 218 730 1,121
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Total current liabilities ................................. 2,953 3,589 4,141
Long-term debt ...................................................... 6,857 5,926 5,631
Professional liability risks, deferred taxes and
other liabilities .............................................. 2,313 2,199 2,050
Minority interests in equity of consolidated entities ............... 596 583 572
Company-obligated mandatorily redeemable securities of
affiliate holding solely Company obligations ................... 300 -- --
Forward purchase contracts and put options .......................... -- 747 769
Stockholders' equity ................................................ 4,861 4,499 4,405
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$ 17,880 $ 17,543 $ 17,568
========= ======== =========
Current ratio ....................................................... 1.48 1.23 1.08
Ratio of debt to debt plus common, temporary and minority equity .... 55.1% 53.3% 54.0%
Shares outstanding (thousands) ...................................... 518,223 537,222 542,992
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HCA INC.
OPERATING STATISTICS
FOR THE SIX MONTHS
SECOND QUARTER ENDED JUNE 30,
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2001 2000 2001 2000
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CONSOLIDATED HOSPITALS:
Number of Hospitals 185 195 185 195
Weighted Average Licensed Beds 40,852 41,923 40,901 42,053
Licensed Beds at End of Period 41,032 42,240 41,032 42,240
Admissions 388,500 380,600 800,500 788,700
Same Facility % Change 4.2% 3.2%
Equivalent Admissions 576,500 570,600 1,174,300 1,166,500
Same Facility % Change 3.5% 2.6%
Revenue per Equivalent Admission $ 7,765 $ 7,243 $ 7,644 $ 7,205
Same Facility % Change 6.9% 5.9%
Inpatient Revenue per Admission $ 6,985 $ 6,306 $ 6,864 $ 6,329
Same Facility % Change 10.9% 8.9%
Patient Days 1,922,300 1,867,800 3,978,000 3,933,200
Equivalent Patient Days 2,852,800 2,801,700 5,835,700 5,817,200
Emergency Room Visits 1,165,100 1,134,700 2,351,300 2,275,500
Same Facility % Change 6.5% 7.1%
Outpatient Revenues as a
Percentage of Patient Revenues 37.5% 39.4% 36.9% 38.0%
Average Length of Stay 4.9 4.9 5.0 5.0
Occupancy 51.7% 49.0% 53.7% 51.4%
Equivalent Occupancy 76.7% 73.5% 78.8% 76.0%
NUMBER OF CONSOLIDATED AND
NON-CONSOLIDATED (50/50 EQUITY
JOINT VENTURES) HOSPITALS:
Consolidated 185 195 185 195
Non-Consolidated (50/50 Equity
Joint Ventures) 9 9 9 9
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Total Number of Hospitals 194 204 194 204
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