EXHIBIT 20
HCA
NEWS
- --------------------------------------------------------------------------------
FOR IMMEDIATE RELEASE
INVESTOR CONTACT MEDIA CONTACT
Mark Kimbrough: 615-344-2688 Jeff Prescott: 615-344-5708
HCA REPORTS 2002 1ST QUARTER RESULTS
EPS INCREASES 21% FOR THE QUARTER TO $0.76 COMPARED TO $0.63
EXCLUDING GOODWILL AMORTIZATION, GAINS AND INVESTIGATION RELATED CHARGES
Nashville, Tenn., April 22, 2002 - HCA (NYSE: HCA) today announced
operating results for the first quarter ended March 31, 2002. "We're extremely
pleased with the results of the quarter. This is the tenth quarter out of the
last eleven the Company has achieved earnings per share growth in excess of 20
percent," stated Jack O. Bovender, Jr., Chairman and CEO. "Strong revenue growth
combined with sound cost management led to another excellent quarter for this
Company and its shareholders."
During the first quarter, revenues increased 8.3 percent to $4.9
billion compared to $4.5 billion during the first quarter of 2001. Same facility
revenues increased 11.1 percent during the quarter. Net income before goodwill
amortization, gains on sales of facilities and investigation related costs
totaled $396 million or $0.76 per diluted share compared to $348 million or
$0.63 per diluted share for the same period of 2001. Net income totaled $385
million or $0.74 per diluted share versus $343 million or $0.62 per diluted
share in the first quarter of 2001.
Solid quarterly performance was driven by continued strength in same
facility inpatient revenue per admission, which increased 10.1 percent, and same
facility revenue per equivalent admission, which increased 9.3 percent. Same
facility equivalent admissions grew 1.7 percent, reflecting strong outpatient
volume during the quarter, in particular, emergency department visits which
increased 4.4 percent. Same facility admissions for the quarter increased 0.9
percent, however, if you factor out a 33 percent reduction in skilled nursing
admissions related to unit closures and conversions; same facility acute care
admissions rose 1.7 percent.
1
As previously announced, the Company adopted SFAS 142, "Goodwill and
Other Intangible Assets," in the first quarter of 2002. The effect of the change
in accounting treatment would have resulted in an increase in net income of $17
million, or $0.03 per diluted share, during the first quarter of 2001.
At March 31, 2002, the Company's balance sheet reflected total debt of
$7.0 billion; stockholders' equity (including common, temporary and minority
equity) of $6.2 billion; and total assets of $18.0 billion. The Company's ratio
of debt-to-debt plus stockholders' equity was 53.1 percent at March 31, 2002
compared to 56.2 percent at December 31, 2001. The ratio of debt-to-EBITDA was
2.01 times at quarter end.
Cash flow from operations during the first quarter was $609 million,
compared to $438 million in the first quarter of 2001. Capital expenditures for
the quarter totaled, $378 million, up 38% from the first quarter of 2001. Return
on stockholders' equity was 21.8 percent and return on invested capital was 12.0
percent at March 31, 2002.
As of March 31, 2002, the Company operated 181 hospitals and 77
ambulatory surgery centers (including 6 hospitals and 3 ASCs owned through 50/50
equity joint ventures), compared to 194 hospitals and 77 ambulatory surgery
centers (including 9 hospitals and 3 ASCs owned through equity joint ventures)
as of March 31, 2001.
The Company's annual shareholders meeting will be held in Nashville,
Tennessee on May 23rd at 1:30 p.m. local time for shareholders of record at
April 1, 2002.
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 webcast. The broadcast also will be available on a
replay basis beginning this afternoon and through the next 30 days. The webcast
can be accessed at www.videonewswire.com/event.asp?id=4128 or via the Investor
Relations site at www.hcahealthcare.com.
***********
THIS PRESS RELEASE CONTAINS FORWARD-LOOKING STATEMENTS BASED ON MANAGEMENT'S
CURRENT EXPECTATIONS. NUMEROUS RISKS, UNCERTAINTIES AND OTHER FACTORS MAY CAUSE
ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE ANTICIPATED IN THE FORWARD
LOOKING STATEMENTS, 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 ABILITY TO CONSUMMATE THE
UNDERSTANDING WITH THE CENTERS FOR MEDICARE AND MEDICAID SERVICES, (III) THE
HIGHLY COMPETITIVE NATURE OF THE HEALTH CARE BUSINESS, (IV) THE EFFORTS OF
INSURERS, HEALTH CARE PROVIDERS AND OTHERS TO CONTAIN HEALTH CARE COSTS, (V)
POSSIBLE CHANGES IN THE MEDICARE AND MEDICAID PROGRAMS THAT MAY LIMIT
REIMBURSEMENTS TO HEALTH CARE PROVIDERS AND INSURERS, (VI) CHANGES IN FEDERAL,
STATE OR LOCAL REGULATIONS AFFECTING THE HEALTH CARE INDUSTRY, (VII) THE
POSSIBLE ENACTMENT OF FEDERAL OR STATE HEALTH CARE REFORM, (VIII) THE ABILITY TO
ATTRACT AND RETAIN QUALIFIED MANAGEMENT AND PERSONNEL, INCLUDING AFFILIATED
PHYSICIANS, NURSES AND MEDICAL SUPPORT PERSONNEL, (IX) LIABILITIES AND OTHER
CLAIMS ASSERTED AGAINST THE COMPANY, (X) FLUCTUATIONS IN THE MARKET VALUE OF THE
COMPANY'S COMMON STOCK, (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
2
MANAGED CARE PROVIDER ARRANGEMENTS ON ACCEPTABLE TERMS, (XV) THE AVAILABILITY,
TERMS AND COST OF CAPITAL, (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, APPEALS 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 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.
3
HCA INC.
CONSOLIDATED OPERATING RESULTS SUMMARY
(Dollars in millions, except per share amounts)
FIRST QUARTER
------------------------
2002 2001
---- ----
Revenues .......................................................................... $ 4,873 $ 4,501
EBITDA (a) ........................................................................ $ 1,043 $ 972
Net income:
Reported net income, excluding gains on sales of facilities and investigation
related costs ........................................................... $ 396 $ 331
Goodwill amortization (net of tax) .......................................... -- 17
------------------------
Adjusted net income, excluding gains on sales of facilities and investigation
related costs ........................................................... 396 348
Gains on sales of facilities (net of tax) ................................... -- 4
Investigation related costs (net of tax) .................................... (11) (9)
------------------------
Adjusted net income ......................................................... $ 385 $ 343
========================
Diluted earnings per share:
Reported net income, excluding gains on sales of facilities and investigation
related costs ........................................................... $ 0.76 $ 0.60
Goodwill amortization ....................................................... -- 0.03
------------------------
Adjusted net income, excluding gains on sales of facilities and investigation
related costs ........................................................... 0.76 0.63
Gains on sales of facilities ................................................ -- 0.01
Investigation related costs ................................................. (0.02) (0.02)
------------------------
Adjusted net income ......................................................... $ 0.74 $ 0.62
========================
Shares used in computing diluted earnings per share (000) ......................... 521,588 554,818
- -----------------------------------------
(a) EBITDA is defined as income before depreciation and amortization, interest
expense, gains on sales of facilities, investigation related costs,
minority interests and income taxes.
4
HCA INC.
CONSOLIDATED INCOME STATEMENTS
FIRST QUARTER
(DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
2002 2001
----------------------- ------------------------
AMOUNT RATIO Amount Ratio
------ ----- ------ -----
Revenues ............................................................... $ 4,873 100.0% $ 4,501 100.0%
Salaries and benefits .................................................. 1,930 39.6 1,782 39.6
Supplies ............................................................... 778 16.0 711 15.8
Other operating expenses ............................................... 800 16.3 787 17.5
Provision for doubtful accounts ........................................ 368 7.6 325 7.2
Insurance subsidiary (gains) losses on sales of investments ............ 5 0.1 (30) (0.7)
Equity in earnings of affiliates ....................................... (51) (1.0) (46) (1.0)
----------------------- ------------------------
3,830 78.6 3,529 78.4
----------------------- ------------------------
EBITDA ............................................................. 1,043 21.4 972 21.6
Depreciation and amortization .......................................... 244 5.0 257 5.7
Interest expense ....................................................... 121 2.5 142 3.2
Gains on sales of facilities ........................................... -- -- (13) (0.3)
Investigation related costs ............................................ 17 0.3 14 0.3
----------------------- ------------------------
Income before minority interests and income taxes ...................... 661 13.6 572 12.7
Minority interests in earnings of consolidated entities ................ 35 0.7 30 0.7
----------------------- ------------------------
Income before income taxes ............................................. 626 12.9 542 12.0
Provision for income taxes ............................................. 241 5.0 216 4.8
----------------------- ------------------------
Reported net income ................................................... 385 7.9 326 7.2
Goodwill amortization, net of taxes ................................... -- -- 17 0.4
----------------------- ------------------------
Adjusted net income .............................................. $ 385 7.9 $ 343 7.6
======================= ========================
Diluted earnings per share:
Reported net income, excluding gains on sales of facilities
and investigation related costs .............................. $ 0.76 $ 0.60
Goodwill amortization .............................................. -- 0.03
--------- ----------
Adjusted net income, excluding gains on sales of facilities
and investigation related costs .............................. 0.76 0.63
Gains on sales of facilities ....................................... -- 0.01
Investigation related costs ........................................ (0.02) (0.02)
--------- ----------
Adjusted net income ................................................ $ 0.74 $ 0.62
========= ==========
Shares used in computing diluted earnings per share (000) .............. 521,588 554,818
5
HCA INC.
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN MILLIONS)
MARCH 31, DECEMBER 31,
2002 2001
--------- ------------
ASSETS
Current assets:
Cash and cash equivalents ......................................... $ 62 $ 85
Accounts receivable, net .......................................... 2,658 2,420
Other ............................................................. 1,550 1,636
--------- ---------
Total current assets ......................................... 4,270 4,141
Property and equipment, at cost ........................................ 15,527 15,222
Accumulated depreciation ............................................... (6,488) (6,303)
--------- ---------
9,039 8,919
Investments of insurance subsidiary .................................... 1,463 1,453
Investments in and advances to affiliates .............................. 673 680
Intangible assets, net ................................................. 2,056 2,051
Other .................................................................. 454 486
--------- ---------
$ 17,955 $ 17,730
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable .................................................. $ 771 $ 755
Other current liabilities ......................................... 1,416 1,372
Government settlement accrual ..................................... 250 250
Long-term debt due within one year ................................ 840 807
--------- ---------
Total current liabilities .................................... 3,277 3,184
Long-term debt ......................................................... 6,172 6,553
Professional liability risks, deferred taxes and
other liabilities ................................................. 2,304 2,268
Minority interests in equity of consolidated entities .................. 576 563
Company-obligated mandatorily redeemable securities of affiliate
holding solely Company obligations ................................ 400 400
Stockholders' equity ................................................... 5,226 4,762
--------- ---------
$ 17,955 $ 17,730
========= =========
Current ratio .......................................................... 1.30 1.30
Ratio of debt to debt plus common, temporary and minority equity ....... 53.1% 56.2%
Shares outstanding (thousands) ......................................... 511,757 509,297
6
HCA INC.
OPERATING STATISTICS
FIRST QUARTER
-------------------------------
2002 2001
---- ----
CONSOLIDATED HOSPITALS:
Number of Hospitals 175 185
Weighted Average Licensed Beds 40,079 40,950
Licensed Beds at End of Period 40,054 40,895
Admissions 407,300 412,000
Same Facility % Change 0.9%
Equivalent Admissions 594,700 597,800
Same Facility % Change 1.7%
Revenue per Equivalent Admission $ 8,193 $ 7,528
Same Facility % Change 9.3%
Inpatient Revenue per Admission $ 7,474 $ 6,749
Same Facility % Change 10.1%
Patient Days 2,060,700 2,055,700
Equivalent Patient Days 3,008,600 2,982,900
Emergency Department Visits 1,206,900 1,186,200
Same Facility % Change 4.4%
Outpatient Revenues as a
Percentage of Patient Revenues 36.3% 36.3%
Average Length of Stay 5.1 5.0
Occupancy 57.1% 55.8%
Equivalent Occupancy 83.4% 81.0%
NUMBER OF CONSOLIDATED AND
NON-CONSOLIDATED (50/50 EQUITY
JOINT VENTURES) HOSPITALS:
Consolidated 175 185
Non-Consolidated (50/50 Equity
Joint Ventures) 6 9
---------- ----------
Total Number of Hospitals 181 194
========== ==========
7