EXHIBIT 20
[HCA LOGO]
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FOR IMMEDIATE RELEASE
INVESTOR CONTACT MEDIA CONTACT
Mark Kimbrough: 615-344-2688 Jeff Prescott: 615-344-5708
HCA REPORTS 2001 RESULTS
EPS INCREASES 21% FOR THE YEAR TO $1.94 FROM $1.61
EPS FOR THE FOURTH QUARTER INCREASES 26% TO $0.44 PER SHARE
EXCLUDING GAINS, IMPAIRMENTS, RESTRUCTURING, INVESTIGATION AND
SETTLEMENT RELATED AND EXTRAORDINARY CHARGES
Nashville, Tenn., February 5, 2002 - HCA (NYSE: HCA) today announced
operating results for the fourth quarter and year ended December 31, 2001. "HCA
completed another successful year culminated by solid fourth quarter financial
results," stated Jack O. Bovender, Jr., HCA's Chairman and Chief Executive
Officer. "The quality of our assets, strong demographic trends in our markets
and a focused operational strategy are key to our current, as well as, our
future success."
During the fourth quarter, revenues increased 8.7 percent to $4.5 billion
compared to $4.2 billion for the same period in 2000. Same-facility revenues
increased 12.5 percent during the quarter. Net income before extraordinary
charge, excluding gains and losses on sales of facilities, impairment of
long-lived assets, restructuring, investigation and settlement related costs
totaled $232 million or $0.44 per diluted share compared to $198 million or
$0.35 per diluted share in the fourth quarter of 2000. Net income totaled $206
million or $0.39 per diluted share versus $21 million or $0.04 per diluted share
in 2000.
1
In the quarter, the Company recorded an extraordinary charge of $17
million net of tax, or $0.03 per diluted share related to the early
extinguishment of debt.
The quarterly results were driven by continued strength in same-facility
inpatient revenue per admission, which increased 9.8 percent and same-facility
revenue per equivalent admission, which increased 9.4 percent during the
quarter. Same-facility admissions increased 1.8 percent in the fourth quarter.
Same-facility equivalent admissions grew 2.8 percent, reflecting strong
outpatient volumes during the quarter.
For the year ended December 31, 2001, revenues increased to $18.0 billion,
up 7.7 percent, compared to $16.7 billion for 2000. Net income, excluding gains,
impairments, restructuring, investigation and settlement related and
extraordinary charges, totaled $1.043 billion or $1.94 per diluted share for the
year, compared to $913 million or $1.61 per diluted share for 2000. Net income,
including gains, impairments, restructuring, investigation and settlement
related and extraordinary charges, totaled $1.051 billion or $1.95 per diluted
share versus $219 million or $0.39 per diluted share last year.
During 2001, the Company recognized gains on sales of facilities of $76
million net of tax, or $0.14 per diluted share; impairments of long-lived assets
of $10 million net of tax, or $0.02 per diluted share; restructuring of
operations and investigation related costs of $40 million net of tax, or $0.08
per diluted share; and an extraordinary charge related to the early
extinguishment of debt of $17 million net of tax, or $0.03 per diluted share.
Same-facility revenues increased 10.2 percent for the year. Same-facility
inpatient revenue per admission and same-facility revenue per equivalent
admission increased 9.0 percent and 7.4 percent, respectively in 2001.
Same-facility admissions and equivalent admissions increased 2.7 percent and 2.6
percent, respectively.
2
As previously announced, during 2000, the Company and its affiliates
reached agreements with the Department of Justice (DOJ) and U.S. attorney's
offices to resolve all pending federal criminal issues against the Company and
certain civil issues related to the Government's investigation of the Company.
Terms of the agreements resulted in the Company recording, during 2000, an
after-tax charge of $95 million, or $0.17 per diluted share, related to the
criminal settlement and an after-tax charge of $498 million, $0.89 per diluted
share, in connection with its civil settlement of certain issues with the DOJ.
The Company paid these settlement amounts during 2001.
Net income, excluding amortization of goodwill and excluding gains,
impairments, restructuring, investigation and settlement related and
extraordinary charges, was $1.112 billion or $2.07 per diluted share in 2001,
compared to $986 million or $1.74 per diluted share in 2000. The Company plans
to adopt SFAS 142, "Goodwill and Other Intangible Assets," beginning in the
first quarter of 2002. Under provisions of SFAS 142, goodwill will no longer be
amortized, but will be subject to annual impairment tests. Application of the
non-amortization provisions of SFAS 142 is expected to result in an increase in
net income of approximately $67 million, or $0.12 per diluted share for 2002.
Had SFAS 142 been in effect during 2001, the Company's quarterly earnings per
share, excluding certain non-operating items, would have been as follows:
1Q - $0.63; 2Q - $0.54; 3Q - $0.43; 4Q - $0.48.
At December 31, 2001, the Company's balance sheet reflected total debt of
$7.4 billion; stockholders' equity (including common, temporary and minority
equity) of $5.9 billion; return on stockholders' equity was 19.9 percent; and
total assets of $17.6 billion. The Company's ratio of debt to debt plus
shareholders' equity was 55.5 percent at December 31, 2001 and the ratio of debt
to EBITDA was 2.15 times, both consistent with the Company's financial targets.
For 2001, cash flow from operations was $1.413 billion. Excluding
government settlements, cash flow from operations would have been $2.042
billion, compared to $1.547 billion in 2000. Cash flow from operations in the
fourth quarter totaled $592 million, up 37 percent from $433 million in the
previous year.
3
During 2001, HCA made significant investments in its hospitals and
communities. HCA's capital investments totaled $1.370 billion in 2001, up from
$1.155 billion in the prior year. Additionally, the Company's acquisition
expenditures in 2001 totaled $239 million, reflecting acquisition of one
hospital and the purchase of additional partnership interests in four hospitals.
Proceeds from the Company's asset sales during 2001 totaled $519 million.
During 2001, the Company repurchased 42.9 million shares of its common
stock at a total cost of $1.5 billion (average cost of $35.08 per share). In
October 2001, the Company's Board of Directors authorized a $250 million share
repurchase program. The Company completed this share repurchase authorization in
December 2001, repurchasing 6.4 million shares. Total shares outstanding at
December 31, 2001 were 509 million compared to 543 million at December 31, 2000.
As of December 31, 2001, the Company operated 184 hospitals and 79
ambulatory surgery centers (including 6 hospitals and 3 ambulatory surgery
centers owned through 50/50 equity joint ventures), compared to 196 hospitals
and 78 ambulatory surgery centers (including 9 hospitals and 3 ambulatory
surgery centers owned through 50/50 equity joint ventures) at December 31, 2000.
"Part of the Company's future planning includes an effort to ensure a
ready healthcare workforce. In response to the tragedies of September 11, HCA
developed the HCA Cares scholarship program," said Bovender. "This program
provides a total of $10 million in funding, half of which comes from HCA and
half of which is in the form of matching grants from the U.S. Department of
Labor, to re-train displaced workers from other industries into healthcare
fields," he added. "Additionally, in January 2002, HCA in partnership with the
U.S. Army launched the ArmyPaYS program which is designed to transition active
duty soldiers into healthcare careers after their military service," Bovender
stated.
The Company's annual shareholder meeting will be held in Nashville,
Tennessee on May 23rd at 1:30 p.m. local time for shareholders of record as of
April 1, 2002.
4
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 Web cast. 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=2803 or
via the Investor Relations page at www.hcahealthcare.com.
* * *
This press release contains forward-looking statements based on current
management expectations. Numerous risks, uncertainties and other factors may
cause actual results to differ materially from those anticipated in the forward
looking statement, 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 limit reimbursements to health care providers and
insurers, (v) changes in Federal, state or local regulations 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) changes
in accounting practices, (xi) changes in general economic conditions, (xii)
future divestitures which may result in additional charges, (xiii) changes in
revenue mix and the ability to enter into and renew managed care provider
arrangements on acceptable terms, (xiv) the availability and terms of capital to
fund the expansion of the Company's business, (xv) changes in business strategy
or development plans, (xvi) slowness of reimbursement, (xvii) the ability to
implement the Company's shared services and other initiatives and realize
decreases in administrative, supply and infrastructure costs, (xviii) the
outcome of pending and any future tax audits and litigation associated with the
Company's tax positions, (xix) 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,
(xx) increased reviews of the Company's cost reports, (xxi) the ability to
maintain and increase patient volumes and control the costs of providing
services, and (xxii) other risk factors detailed 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.
5
HCA INC.
CONSOLIDATED OPERATING RESULTS SUMMARY
(Dollars in millions, except per share amounts)
FOR THE TWELVE MONTHS
FOURTH QUARTER ENDED DECEMBER 31,
------------------------ ------------------------
2001 2000 2001 2000
---- ---- ---- ----
Revenues .......................................................... $ 4,538 $ 4,173 $ 17,953 $ 16,670
EBITDA (a) ........................................................ $ 803 $ 736 $ 3,421 $ 3,177
Net income:
Income before extraordinary charge, excluding settlement
with Federal government, gains and losses on sales of
facilities, impairment of long-lived assets and
restructuring of operations and investigation
related costs ........................................... $ 232 $ 198 $ 1,043 $ 913
Settlement with Federal government (net of tax) ........... -- (95) (1) (593)
Gains and losses on sales of facilities (net of tax) ...... 4 (2) 76 16
Impairment of long-lived assets (net of tax) .............. -- (68) (10) (80)
Restructuring of operations and investigation related costs
(net of tax) ............................................ (13) (12) (40) (37)
Extraordinary charge on extinguishment of debt (net of tax) (17) -- (17) --
--------- --------- --------- ---------
Net income ................................................ $ 206 $ 21 $ 1,051 $ 219
========= ========= ========= =========
Diluted earnings per share:
Income before extraordinary charge, excluding settlement
with Federal government, gains and losses on sales of
facilities, impairment of long-lived assets and
restructuring of operations and investigation
related costs ........................................... $ 0.44 $ 0.35 $ 1.94 $ 1.61
Settlement with Federal government ........................ -- (0.17) -- (1.05)
Gains and losses on sales of facilities ................... 0.01 -- 0.14 0.03
Impairment of long-lived assets ........................... -- (0.12) (0.02) (0.14)
Restructuring of operations and investigation related costs (0.03) (0.02) (0.08) (0.06)
Extraordinary charge on extinguishment of debt ............ (0.03) -- (0.03) --
--------- --------- --------- ---------
Net income ................................................ $ 0.39 $ 0.04 $ 1.95 $ 0.39
========= ========= ========= =========
Shares used in computing diluted earnings per share (000) ......... 523,042 566,128 538,177 567,685
- ----------
(a) EBITDA is defined as income before depreciation and amortization, interest
expense, settlement with Federal government, gains and losses on sales of
facilities, impairment of long-lived assets, restructuring of operations
and investigation related costs, minority interests, income taxes and
extraordinary charge.
6
HCA INC.
CONSOLIDATED INCOME STATEMENTS
FOURTH QUARTER
(DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
2001 2000
-------------------- --------------------
AMOUNT RATIO Amount Ratio
------ ----- ------ -----
Revenues .................................................. $ 4,538 100.0 % $ 4,173 100.0 %
Salaries and benefits ..................................... 1,867 41.1 1,683 40.3
Supplies .................................................. 724 16.0 669 16.0
Other operating expenses .................................. 794 17.5 797 19.2
Provision for doubtful accounts ........................... 386 8.5 321 7.7
Equity in earnings of affiliates .......................... (36) (0.8) (33) (0.8)
------- ------- ------- -------
3,735 82.3 3,437 82.4
------- ------- ------- -------
EBITDA ................................................ 803 17.7 736 17.6
Depreciation and amortization ............................. 274 6.0 255 6.0
Interest expense .......................................... 118 2.6 157 3.8
Settlement with Federal government ........................ -- -- 95 2.3
Gains and losses on sales of facilities ................... (6) (0.1) 4 0.1
Impairment of long-lived assets ........................... -- -- 100 2.4
Restructuring of operations and investigation related costs 21 0.5 21 0.5
------- ------- ------- -------
Income before minority interests and income taxes ......... 396 8.7 104 2.5
Minority interests in earnings of consolidated entities ... 27 0.6 3 0.1
------- ------- ------- -------
Income before income taxes ................................ 369 8.1 101 2.4
Provision for income taxes ................................ 146 3.2 80 1.9
------- ------- ------- -------
Income before extraordinary charge ........................ 223 4.9 21 0.5
Extraordinary charge on extinguishment of debt, net of tax 17 0.4 -- --
------- ------- ------- -------
Net income ............................................ $ 206 4.5 $ 21 0.5
======= ======= ======= =======
Diluted earnings per share:
Income before extraordinary charge, excluding
settlement with Federal government, gains
and losses on sales of facilities, impairment
of long-lived assets and restructuring of
operations and investigation related costs .......... $ 0.44 $ 0.35
Settlement with Federal government .................... -- (0.17)
Gains and losses on sales of facilities ............... 0.01 --
Impairment of long-lived assets ....................... -- (0.12)
Restructuring of operations and investigation
related costs ....................................... (0.03) (0.02)
Extraordinary charge on extinguishment of debt ........ (0.03) --
------- -------
Net income ............................................ $ 0.39 $ 0.04
======= =======
Shares used in computing diluted earnings per share (000).. 523,042 566,128
7
HCA INC.
CONSOLIDATED INCOME STATEMENTS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2001 AND 2000
(DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
2001 2000
---------------------------- ----------------------------
AMOUNT RATIO Amount Ratio
------ ----- ------ -----
Revenues .................................................. $ 17,953 100.0 % $ 16,670 100.0 %
Salaries and benefits ..................................... 7,279 40.5 6,639 39.8
Supplies .................................................. 2,860 15.9 2,640 15.8
Other operating expenses .................................. 3,175 17.7 3,085 18.6
Provision for doubtful accounts ........................... 1,376 7.7 1,255 7.5
Equity in earnings of affiliates .......................... (158) (0.9) (126) (0.8)
----------- ----------- ----------- -----------
14,532 80.9 13,493 80.9
----------- ----------- ----------- -----------
EBITDA ................................................ 3,421 19.1 3,177 19.1
Depreciation and amortization ............................. 1,048 5.8 1,033 6.2
Interest expense .......................................... 536 3.0 559 3.4
Settlement with Federal government ........................ 2 -- 840 5.0
Gains on sales of facilities .............................. (131) (0.7) (34) (0.2)
Impairment of long-lived assets ........................... 17 0.1 117 0.7
Restructuring of operations and investigation related costs 65 0.4 62 0.4
----------- ----------- ----------- -----------
Income before minority interests and income taxes ......... 1,884 10.5 600 3.6
Minority interests in earnings of consolidated entities ... 119 0.7 84 0.5
----------- ----------- ----------- -----------
Income before income taxes ................................ 1,765 9.8 516 3.1
Provision for income taxes ................................ 697 3.9 297 1.8
----------- ----------- ----------- -----------
Income before extraordinary charge ........................ 1,068 5.9 219 1.3
Extraordinary charge on extinguishment of debt, net of tax 17 -- -- --
----------- ----------- ----------- -----------
Net income ............................................ $ 1,051 5.9 $ 219 1.3
=========== =========== =========== ===========
Diluted earnings per share:
Income before extraordinary charge, excluding
settlement with Federal government, gains
on sales of facilities, impairment of
long-lived assets and restructuring of
operations and investigation related costs .......... $ 1.94 $ 1.61
Settlement with Federal government .................... -- (1.05)
Gains on sales of facilities .......................... 0.14 0.03
Impairment of long-lived assets ....................... (0.02) (0.14)
Restructuring of operations and investigation
related costs ....................................... (0.08) (0.06)
Extraordinary charge on extinguishment of debt ........ (0.03) --
----------- -----------
Net income ............................................ $ 1.95 $ 0.39
=========== ===========
Shares used in computing diluted earnings per share (000).. 538,177 567,685
8
HCA INC.
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN MILLIONS)
DECEMBER 31, SEPTEMBER 30, DECEMBER 31,
2001 2001 2000
---- ---- ----
ASSETS
Current assets:
Cash and cash equivalents ...................... $ 85 $ 74 $ 314
Accounts receivable, net ....................... 2,430 2,398 2,211
Other .......................................... 1,541 1,769 1,928
----------- ----------- -----------
Total current assets ...................... 4,056 4,241 4,453
Property and equipment, at cost ..................... 15,222 14,984 14,290
Accumulated depreciation ............................ (6,303) (6,280) (5,810)
----------- ----------- -----------
8,919 8,704 8,480
Investments of insurance subsidiary ................. 1,453 1,408 1,371
Investments in and advances to affiliates ........... 680 698 779
Intangible assets, net of accumulated amortization .. 2,051 2,032 2,155
Other ............................................... 486 414 330
----------- ----------- -----------
$ 17,645 $ 17,497 $ 17,568
=========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable ............................... $ 755 $ 680 $ 693
Other current liabilities ...................... 1,372 1,338 1,487
Government settlement accrual .................. -- -- 840
Long-term debt due within one year ............. 807 795 1,121
----------- ----------- -----------
Total current liabilities ................. 2,934 2,813 4,141
Long-term debt ...................................... 6,553 6,312 5,631
Professional liability risks, deferred taxes and
other liabilities .............................. 2,268 2,354 2,050
Minority interests in equity of consolidated entities 563 603 572
Company-obligated mandatorily redeemable securities
of affiliate holding solely Company obligations ... 400 500 --
Forward purchase contracts and put options .......... -- -- 769
Stockholders' equity ................................ 4,927 4,915 4,405
----------- ----------- -----------
$ 17,645 $ 17,497 $ 17,568
=========== =========== ===========
Current ratio ....................................... 1.38 1.51 1.08
Ratio of debt to debt plus common, temporary and
minority equity ................................... 55.5% 54.1% 54.0%
Shares outstanding (thousands) ...................... 509,297 514,845 542,992
9
HCA INC.
OPERATING STATISTICS
FOR THE TWELVE MONTHS
FOURTH QUARTER ENDED DECEMBER 31,
---------------------------- ----------------------------
2001 2000 2001 2000
---- ---- ---- ----
CONSOLIDATED HOSPITALS:
Number of Hospitals 178 187 178 187
Weighted Average Licensed Beds 40,329 41,128 40,645 41,659
Licensed Beds at End of Period 40,112 41,009 40,112 41,009
Admissions 382,800 383,600 1,564,100 1,553,500
Same Facility % Change 1.8% 2.7%
Equivalent Admissions 570,400 565,800 2,311,700 2,300,800
Same Facility % Change 2.8% 2.6%
Revenue per Equivalent Admission $ 7,956 $ 7,377 $ 7,766 $ 7,246
Same Facility % Change 9.4% 7.4%
Inpatient Revenue per Admission $ 7,270 $ 6,632 $ 7,023 $ 6,441
Same Facility % Change 9.8% 9.0%
Patient Days 1,871,900 1,892,600 7,723,300 7,668,400
Equivalent Patient Days 2,790,000 2,791,400 11,415,000 11,356,900
Emergency Room Visits 1,165,500 1,123,000 4,676,800 4,534,400
Same Facility % Change 5.4% 6.1%
Outpatient Revenues as a
Percentage of Patient Revenues 37.3% 36.7% 37.1% 37.4%
Average Length of Stay 4.9 4.9 4.9 4.9
Occupancy 50.5% 50.0% 52.1% 50.3%
Equivalent Occupancy 75.1% 73.7% 77.0% 74.5%
NUMBER OF CONSOLIDATED AND
NON-CONSOLIDATED (50/50 EQUITY
JOINT VENTURES) HOSPITALS:
Consolidated 178 187 178 187
Non-Consolidated (50/50 Equity
Joint Ventures) 6 9 6 9
----------- ----------- ----------- -----------
Total Number of Hospitals 184 196 184 196
=========== =========== =========== ===========
10