Exhibit 20
HCA
NEWS
--------------------------------------------------------------------------------
FOR IMMEDIATE RELEASE
INVESTOR CONTACT MEDIA CONTACT
Mark Kimbrough: 615-344-2688 Jeff Prescott: 615-344-5708
HCA REPORTS THIRD QUARTER 2001
EPS Increases 21% to $0.40 vs $0.33
Excluding Gains, Impairments, Restructuring and Investigation Related Costs
Earnings Growth Driven by Continued Strength
in Volume and Revenue Trends
NASHVILLE, TENN., OCTOBER 24, 2001 - HCA (NYSE: HCA) today announced operating
results for the third quarter and nine months ended September 30, 2001. "The
Company continued to experience strong patient volume and revenue growth during
the third quarter," stated Jack O. Bovender, Jr., HCA's CEO and President. "The
results are particularly impressive considering that we are comparing to a very
strong third quarter of 2000 where same facility admission growth exceeded 4
percent."
During the third quarter of 2001, revenues increased to $4.4 billion,
up 8.4 percent from $4.1 billion in the third quarter of 2000. Net income,
excluding gains on sales of facilities, impairment of long-lived assets,
restructuring of operations and investigation related costs, totaled $209
million or $0.40 per diluted share for the third quarter of 2001, compared to
$186 million or $0.33 per diluted share in the third quarter of 2000. Net income
for the third quarter of 2001 totaled $256 million or $0.48 per diluted share,
compared to $174 million or $0.31 per diluted share in the third quarter of
2000.
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The 2001 third quarter operating results includes a $16 million charge
to Other Operating Expense, or $0.02 per share, for settlement of
non-governmental litigation related to 1997 business matters.
For the quarter ended September 30, 2001, same facility revenues
increased 10.8 percent. Same facility admissions for the Company's hospitals
increased by 2.6 percent during the quarter. Same facility inpatient revenue per
admission increased in the quarter by 8.3 percent and same facility revenue per
equivalent admission increased 8.1 percent.
Excluding the amortization of goodwill, net income (excluding gains on
sales of facilities, impairment of long-lived assets, restructuring of
operations and investigation related costs) was $226 million or $0.43 per
diluted share in the third quarter of 2001 compared to $207 million or $0.36 per
diluted share for the third quarter of 2000.
During the quarter ended September 30, 2001, the Company recorded gains
on sales of facilities totaling $112 million ($68 million net of tax) or $0.13
per diluted share. Also during the quarter, the Company recorded asset
impairment charges of $17 million ($10 million net of tax) or $0.02 per diluted
share.
Revenues for the nine months ended September 30, 2001, totaled $13.4
billion compared to $12.5 billion in the first nine months of 2000. Net income,
before settlement with Federal government, gains on sales of facilities,
impairment of long-lived assets and restructuring of operations and
investigation related costs, totaled $811 million or $1.49 per diluted share in
the first nine months of 2001, compared to $715 million or $1.26 per diluted
share for the nine months ended September 30, 2000. Net income totaled $845
million or $1.56 per diluted share in 2001 versus $198 million or $0.35 per
diluted share in 2000.
For the nine months ended September 30, 2001, HCA recognized gains on
sales of facilities of $125 million ($72 million net of tax) or $0.13 per
diluted share and asset impairment charges of $17 million ($ 10 million net of
tax) or $0.02 per diluted share.
As of September 30, 2001, the Company operated 189 hospitals and 78
outpatient surgery centers (including 7 hospitals and 3 surgery centers owned
through 50/50 equity joint ventures), compared to 198 hospitals and 79
outpatient surgery centers
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(including 9 hospitals and 3 surgery centers owned through equity joint
ventures) at September 30, 2000.
At September 30, 2001, the Company's balance sheet reflected total debt
of $7.1 billion, common, temporary and minority equity of $6.0 billion and total
assets of $17.5 billion. Capital expenditures for the quarter totaled $371
million. The Company's total debt-to-capital ratio was 54 percent at September
30, 2001.
HCA will host a conference call for investors at 8:30 a.m. CST 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 and throughout the next 30 days.
The Webcast can be accessed at www.videonewswire.com/event.asp?id=1445
or via the Investor Relations site at www.hcahealthcare.com.
* * *
This press release contains forward-looking statements based on current
management expectations. Numerous risks, uncertainties and other factors
including: (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 remaining 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, (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 decreases 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
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factors detailed from time to time in the Company's filings with the SEC may
cause actual results to differ materially from these anticipated in the forward
looking statements. 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 Nine
Months Ended
Third Quarter September 30,
---------------- -------------------
2001 2000 2001 2000
------ ------ ------- -------
Revenues ............................................................................ $4,438 $4,093 $13,415 $12,497
EBITDA (a) .......................................................................... $770 $736 $2,618 $2,441
Net income:
Excluding settlement with Federal government, gains on sales of facilities,
impairment of long-lived assets and restructuring of operations and
investigation related costs ................................................. $209 $186 $811 $715
Settlement with Federal government (net of tax) ................................ -- -- (1) (498)
Gains on sales of facilities (net of tax) ...................................... 68 9 72 18
Impairment of long-lived assets (net of tax) ................................... (10) (12) (10) (12)
Restructuring of operations and investigation related costs (net of tax) ....... (11) (9) (27) (25)
------------------ ----------------------
Net income .................................................................... $256 $174 $845 $198
================ ======================
Diluted earnings per share:
Excluding settlement with Federal government, gains on sales of facilities,
impairment of long-lived assets and restructuring of operations and
investigation related costs ................................................. $0.40 $0.33 $1.49 $1.26
Settlement with Federal government ............................................. -- -- -- (0.88)
Gains on sales of facilities ................................................... 0.13 0.02 0.13 0.03
Impairment of long-lived assets ................................................ (0.02) (0.02) (0.02) (0.02)
Restructuring of operations and investigation related costs ................... (0.03) (0.02) (0.04) (0.04)
------------------ ----------------------
Net income ..................................................................... $0.48 $0.31 $1.56 $0.35
================== ======================
Shares used in computing diluted earnings per share (000) ........................... 529,491 566,470 543,274 568,216
--------------------------------
(a) EBITDA is defined as income before depreciation and amortization,
interest expense, settlement with Federal government, gains on sales of
facilities, impairment of long-lived assets, restructuring of
operations and investigation related costs, minority interests and
income taxes.
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HCA INC.
Consolidated Income Statements
Third Quarter
(Dollars in Millions, Except Per Share Amounts)
2001 2000
------------------ -----------------
Amount Ratio Amount Ratio
------ ----- ------ -----
Revenues ............................................................... $4,438 100.0 % $4,093 100.0 %
Salaries and benefits .................................................. 1,808 40.7 1,650 40.3
Supplies ............................................................... 712 16.0 646 15.8
Other operating expenses ............................................... 824 18.6 756 18.5
Provision for doubtful accounts ........................................ 364 8.2 333 8.1
Equity in earnings of affiliates ....................................... (40) (0.9) (28) (0.7)
------------------------ -----------------------
3,668 82.6 3,357 82.0
------------------------ -----------------------
EBITDA ............................................................. 770 17.4 736 18.0
Depreciation and amortization .......................................... 255 5.7 257 6.3
Interest expense ....................................................... 137 3.1 147 3.6
Gains on sales of facilities ........................................... (112) (2.5) (20) (0.5)
Impairment of long-lived assets ........................................ 17 0.4 17 0.4
Restructuring of operations and investigation related costs ............ 17 0.4 16 0.4
------------------------ -----------------------
Income before minority interests and income taxes ...................... 456 10.3 319 7.8
Minority interests in earnings of consolidated entities ................ 33 0.8 26 0.6
------------------------ -----------------------
Income before income taxes ............................................. 423 9.5 293 7.2
Provision for income taxes ............................................. 167 3.7 119 2.9
------------------------ -----------------------
Net income ......................................................... $256 5.8 $174 4.3
======================== =======================
Diluted earnings per share:
Excluding gains on sales of facilities, impairment of
long-lived assets and restructuring of operations
and investigation related costs .............................. $0.40 $0.33
Gains on sales of facilities ....................................... 0.13 0.02
Impairment of long-lived assets .................................... (0.02) (0.02)
Restructuring of operations and investigation related costs ........ (0.03) (0.02)
------------ ------------
Net income ......................................................... $0.48 $0.31
============ ============
Shares used in computing diluted earnings per share (000) .............. 529,491 566,470
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HCA INC.
Consolidated Income Statements
For the Nine Months Ended September 30, 2001 and 2000
(Dollars in Millions, Except Per Share Amounts)
2001 2000
------------------- -------------------
Amount Ratio Amount Ratio
------- ----- ------- -----
Revenues ................................................................ $13,415 100.0 % $12,497 100.0 %
Salaries and benefits ................................................... 5,412 40.3 4,956 39.7
Supplies ................................................................ 2,136 15.9 1,971 15.8
Other operating expenses ................................................ 2,381 17.8 2,288 18.2
Provision for doubtful accounts ......................................... 990 7.4 934 7.5
Equity in earnings of affiliates ........................................ (122) (0.9) (93) (0.7)
------------------- ------------------------
10,797 80.5 10,056 80.5
------------------- ------------------------
EBITDA .............................................................. 2,618 19.5 2,441 19.5
Depreciation and amortization ........................................... 774 5.8 778 6.2
Interest expense ........................................................ 418 3.1 402 3.2
Settlement with Federal government ...................................... 2 -- 745 6.0
Gains on sales of facilities ............................................ (125) (0.9) (38) (0.3)
Impairment of long-lived assets ......................................... 17 0.1 17 0.1
Restructuring of operations and investigation related costs ............. 44 0.3 41 0.3
------------------- ------------------------
Income before minority interests and income taxes ....................... 1,488 11.1 496 4.0
Minority interests in earnings of consolidated entities ................. 92 0.7 81 0.7
------------------- ------------------------
Income before income taxes .............................................. 1,396 10.4 415 3.3
Provision for income taxes .............................................. 551 4.1 217 1.7
------------------- ------------------------
Net income .......................................................... $845 6.3 $198 1.6
=================== ========================
Diluted earnings per share:
Excluding settlement with Federal government, gains on sales of
facilities, impairment of long-lived assets and restructuring
of operations and investigation related costs.................. $1.49 $1.26
Settlement with Federal government .................................. -- (0.88)
Gains on sales of facilities ........................................ 0.13 0.03
Impairment of long-lived assets ..................................... (0.02) (0.02)
Restructuring of operations and investigation related costs ......... (0.04) (0.04)
----------- ------------
Net income .......................................................... $1.56 $0.35
=========== ============
Shares used in computing diluted earnings per share (000) ............... 543,274 568,216
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HCA INC.
Consolidated Balance Sheets
(Dollars in Millions)
September 30, June 30, December 31,
2001 2001 2000
------------- -------- ------------
ASSETS
Current assets:
Cash and cash equivalents ................................. $ 74 $ 124 $ 314
Accounts receivable, net .................................. 2,398 2,364 2,211
Other ..................................................... 1,769 1,891 1,928
--------- --------- ---------
Total current assets ................................. 4,241 4,379 4,453
Property and equipment, at cost ................................ 14,984 14,695 14,290
Accumulated depreciation ....................................... (6,280) (6,130) (5,810)
--------- --------- ---------
8,704 8,565 8,480
Investments of insurance subsidiary ............................ 1,408 1,529 1,371
Investments in and advances to affiliates ...................... 698 831 779
Intangible assets, net of accumulated amortization ............. 2,032 2,170 2,155
Other .......................................................... 414 406 330
--------- --------- ---------
$ 17,497 $ 17,880 $ 17,568
========= ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable .......................................... $ 680 $ 673 $ 693
Other current liabilities ................................. 1,338 1,317 1,487
Government settlement accrual ............................. -- 745 840
Long-term debt due within one year ........................ 795 218 1,121
--------- --------- ---------
Total current liabilities ............................ 2,813 2,953 4,141
Long-term debt ................................................. 6,312 6,857 5,631
Professional liability risks, deferred taxes and
other liabilities ......................................... 2,354 2,313 2,050
Minority interests in equity of consolidated entities .......... 603 596 572
Company-obligated mandatorily redeemable securities of
affiliate holding solely Company securities ............... 500 300 --
Forward purchase contracts and put options ..................... -- -- 769
Stockholders' equity ........................................... 4,915 4,861. 4,405
--------- --------- ---------
$ 17,497 $ 17,880 $ 17,568
========= ========= =========
Current ratio .................................................. 1.51 1.48 1.08
Ratio of debt to debt plus common, temporary and minority equity 54.1% 55.1% 54.0%
Shares outstanding (thousands) ................................. 514,845 518,223 542,992
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HCA INC.
Operating Statistics
For the Nine Months
Third Quarter Ended September 30,
------------------------------- -------------------------------
2001 2000 2001 2000
---------- ---------- ---------- ----------
CONSOLIDATED HOSPITALS:
Number of Hospitals 182 189 182 189
Weighted Average Licensed Beds 40,458 41,409 40,752 41,837
Licensed Beds at End of Period 40,450 41,298 40,450 41,298
Admissions 380,800 381,200 1,181,300 1,169,900
Same Facility % Change 2.6% 3.0%
Equivalent Admissions 567,000 568,500 1,741,300 1,735,000
Same Facility % Change 2.5% 2.6%
Revenue per Equivalent Admission $ 7,827 $ 7,198 $ 7,704 $ 7,203
Same Facility % Change 8.1% 6.7%
Inpatient Revenue per Admission $ 7,109 $ 6,479 $ 6,943 $ 6,378
Same Facility % Change 8.3% 8.7%
Patient Days 1,873,400 1,842,600 5,851,400 5,775,800
Equivalent Patient Days 2,789,300 2,748,300 8,625,000 8,565,500
Emergency Room Visits 1,160,000 1,135,900 3,511,300 3,411,400
Same Facility % Change 5.2% 6.5%
Outpatient Revenues as a
Percentage of Patient Revenues 37.3% 37.0% 37.0% 37.1%
Average Length of Stay 4.9 4.8 5.0 4.9
Occupancy 50.3% 48.4% 52.6% 50.4%
Equivalent Occupancy 74.9% 72.3% 77.5% 74.7%
NUMBER OF CONSOLIDATED AND
NON-CONSOLIDATED (50/50 EQUITY
JOINT VENTURES) HOSPITALS:
Consolidated 182 189 182 189
Non-Consolidated (50/50 Equity
Joint Ventures) 7 9 7 9
---------- ---------- ---------- ----------
Total Number of Hospitals 189 198 189 198
========== ========== ========== ==========
</Table>
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