10-QPeriod: Q1 FY2013

HCA Healthcare, Inc. Quarterly Report for Q1 Ended Mar 31, 2013

Filed May 7, 2013For Securities:HCA

Summary

HCA Healthcare, Inc. reported its first quarter 2013 financial results, showing a slight increase in revenue to $8.44 billion, up from $8.405 billion in the prior year's first quarter. However, net income attributable to HCA Holdings, Inc. saw a significant decrease, falling to $344 million ($0.74 per diluted share) compared to $540 million ($1.18 per diluted share) in the first quarter of 2012. This decline was influenced by several factors, including a loss on debt retirement and sale of facilities in the current quarter, and beneficial Medicare revenue adjustments in the prior year. Operational metrics showed mixed results, with a slight increase in consolidated admissions but a decrease in both inpatient and outpatient surgeries. The company experienced an increase in its provision for doubtful accounts and uninsured discounts, reflecting challenges in patient collections. Despite the lower net income, the company's liquidity remains a focus, with substantial debt levels and ongoing capital expenditure plans. Investors should monitor the company's ability to manage its debt and navigate the evolving healthcare regulatory landscape.

Financial Highlights

43 data points
Beta

Revenue

$8.44B

Net Income

$344.00M

4.1% Net Margin

EPS (Diluted)

$0.74

Total Assets

$27.88B

Cash & Equivalents

$594.00M

Free Cash Flow

$336.00M

Financial Statements
Beta
Revenue$8.44B
Interest Expense$472.00M
Net Income$344.00M
EPS (Basic)$0.77
EPS (Diluted)$0.74
Shares Outstanding (Basic)444.40M
Shares Outstanding (Diluted)462.37M

Key Highlights

  • 1Revenue increased slightly by 0.4% to $8.44 billion in Q1 2013 compared to $8.405 billion in Q1 2012.
  • 2Net income attributable to HCA Holdings, Inc. decreased significantly by 36.3% to $344 million in Q1 2013 from $540 million in Q1 2012.
  • 3Diluted earnings per share decreased to $0.74 in Q1 2013 from $1.18 in Q1 2012.
  • 4The company recognized losses on sales of facilities ($16 million) and a loss on retirement of debt ($17 million) in Q1 2013.
  • 5Q1 2012 benefited from $170 million in income before taxes from Medicare revenue adjustments, which did not recur in Q1 2013.
  • 6Salaries and benefits as a percentage of revenue increased to 46.4% in Q1 2013 from 44.5% in Q1 2012.
  • 7Total debt remained substantial at $28.608 billion as of March 31, 2013.

Frequently Asked Questions

The primary drivers for the decrease in net income were the absence of significant Medicare revenue adjustments that benefited the first quarter of 2012, coupled with the recognition of losses from the sale of facilities and debt retirement in the current quarter. Additionally, an increase in salaries and benefits as a percentage of revenue also impacted profitability.

HCA Healthcare maintains a substantial debt load of approximately $28.6 billion as of March 31, 2013. The company utilizes its operating cash flows, available credit facilities, and access to debt markets to manage its debt service requirements. They also engaged in debt redemption activities, such as the redemption of $201 million in senior secured second lien notes in March 2013.

Consolidated admissions showed a slight increase of 0.2%, but both inpatient and outpatient surgical volumes declined. Emergency department visits saw an increase. The company notes that same-facility revenue per equivalent admission increased, indicating pricing power, but equivalent admissions declined slightly, suggesting a shift in service mix or utilization.

For 2013, HCA estimates EHR incentive income to be between $200 million and $225 million, with related operating expenses projected between $130 million and $150 million. The company recognizes this income when it demonstrates meaningful use of certified EHR technology and has cost report information available.