HCA Holdings Q1 2014 revenues up 4.6%

HCA Holdings, Inc. (NYSE: HCA) today announced financial and operating results for the first quarter ended March 31, 2014.

Key first quarter metrics (all percentage changes compare 1Q 2014 to 1Q 2013 unless noted):

• Revenues increased 4.6 percent to $8.832 billion
• Net income attributable to HCA Holdings, Inc. totaled $347 million, or $0.76 per diluted share
• Adjusted EBITDA increased 4.8 percent to $1.644 billion
• Cash flows from operations declined 40.1 percent to $443 million
• Same facility equivalent admissions declined 0.3 percent while same facility admissions declined 0.6 percent
• Same facility revenue per equivalent admission increased 3.7 percent

"We are pleased with results for the first quarter. As expected, healthcare reform had minimal impact on the Company's first quarter results, however, we remain optimistic regarding the potential long-term benefits," said R. Milton Johnson, President and Chief Executive Officer of HCA.

Revenues in the first quarter increased to $8.832 billion, compared to $8.440 billion in the first quarter of 2013. Net income attributable to HCA Holdings, Inc. totaled $347 million, or $0.76 per diluted share, compared to $344 million, or $0.74 per diluted share, in the first quarter of 2013. Adjusted EBITDA totaled $1.644 billion compared to $1.568 billion in the first quarter of 2013. Adjusted EBITDA is a non-GAAP financial measure. A table reconciling net income attributable to HCA Holdings, Inc. to Adjusted EBITDA is included in this release.

First quarter 2014 results include gains on sales of facilities of $21 million, or $0.03 per diluted share, and also include legal claim costs of $78 million, or $0.11 per diluted share, for an increase in the estimate of our legal liability in the previously disclosed lawsuit alleging HCA did not make the full level of capital expenditures and uncompensated care agreed to in connection with the purchase of hospitals from Health Midwest in 2003. Results for the first quarter of 2013 include losses on sales of facilities of $16 million, or $0.02 per diluted share, and a loss on retirement of debt of $17 million, or $0.03 per diluted share.

Same facility revenue per equivalent admission increased 3.7 percent in the first quarter of 2014 compared to the first quarter of 2013, reflecting growth in case mix, or acuity, of 2.2 percent on a same facility basis in the quarter.

Same facility equivalent admissions declined 0.3 percent in the first quarter of 2014 compared to the prior year period. Same facility admissions declined 0.6 percent compared to the prior year period. Same facility emergency room visits declined 0.1 percent in the first quarter of 2014, compared to the prior year period. Same facility inpatient surgeries increased 0.9 percent while same facility outpatient surgeries declined 1.7 percent in the first quarter of 2014 compared to the same period of 2013.

During the first quarter of 2014, salaries and benefits, supplies and other operating expenses totaled $7.227 billion, or 81.8 percent of revenues, compared to $6.919 billion, or 82.0 percent of revenues, in the first quarter of 2013.

As of March 31, 2014, HCA Holdings, Inc.'s balance sheet reflected cash and cash equivalents of $850 million, total debt of $28.924 billion, and total assets of $29.809 billion. During the first quarter of 2014, capital expenditures totaled $400 million, excluding acquisitions. Cash flows provided by operating activities in the quarter totaled $443 million compared to $740 million in the first quarter of 2013. The $297 million decline in cash flows from operating activities related primarily to the combined impact of a $170 million decline from changes in working capital items and a $206 million decline from income taxes in the first quarter of 2014 compared to the first quarter of 2013.

As of March 31, 2014, HCA's leverage ratio as measured by Total Debt/Adjusted EBITDA was 4.35x, compared to 4.32x as of December 31, 2013. As of March 31, 2014, HCA operated 165 hospitals and 115 freestanding surgery centers.

The Company today is reaffirming its previously issued financial guidance ranges for 2014.