Transcript Slide 1
Bank of America High Yield Conference
December 5, 2006
HCA
Milton Johnson, CFO
David Anderson, SVP Finance
Vic Campbell, SVP
Mark Kimbrough, VP Investor Relations
Introduction to HCA Today
Western Group
Anchorage
International
Geneva
Central Group
C Northeast
IdahoFalls
Falls
W Idaho
Kansas City
W
Utah
Utah
W
Denver
San
Jose
San
Jose
W
W
Southern
California
Wichita
Kansas City
Wichita
W
Las Vegas
Central
Group
22%
Western
Group
41%
International
and Other
3%
Eastern
Group
34%
Accounted for approximately 5%
of inpatient admissions in U.S. last
year
Company operates 179
hospitals(1) and 104 freestanding
surgery centers(1) in 21 states,
England and Switzerland
Pro forma LTM September 30,
2006 revenues and Adjusted
EBITDA(2) of $25.2 and $4.4
billion, respectively
~ 190,000 employees
~ 35,000 affiliated physicians
More than 40,000 licensed beds
No. VA
Terre Haute
C
Terre
Haute
C
Frankfort
Frankfort
Chattanooga
C C Richmond
SWSW
VA VA
C
W
Nashville
Augusta Grand Strand
Oklahoma
City
Oklahoma
City NW
NW
GA
GA
Central
Atlanta
Trident/Charleston
Louisiana Atlanta
E
El Paso Dallas/FtW
Columbus
Middle GA
Dallas/FW
W
Columbus
Palmyra
E
Austin
Jacksonville
W
Panhandle**
Austin
Houston
W
San San
Antonio
North Central Florida
Houston
Antonio
Panhandle
W
W
Treasure Coast
Tallahassee
Lafayette
Palm Beach
W Corpus Christi
Tampa
McAllen W
Broward
New OrleansFt. Myers
Brownsville
Dade
REVENUE BY
GEOGRAPHY
Leading investor-owned provider
of acute care services, primarily
focused in urban and suburban
settings (~2.4x next largest
investor-owned provider)
Central
London
Eastern Group
Western
Western
W
Idaho
Idaho
REVENUE BY
PATIENT MIX
International
and Other
Central
2%
Group
Outpatient
20%
36%
Western
Eastern
Inpatient
Group
Group
64%
47%
31%
(1) Includes 7 nonconsolidated hospitals and 9 nonconsolidated surgery centers managed under joint ventures
(2) See reconciliation of pro forma adjusted EBITDA to net income
1
Stability of U.S. Hospital Industry Margins
While experiencing some periodic cyclicality, overall hospital profit margins have stayed within a fairly tight band
over the past two decades
The annual change in margin rarely exceeding +/- 100 basis pts
ANNUAL CHANGE IN OPERATING MARGIN (U.S. HOSPITAL INDUSTRY)
10%
Annual Change in Operating Margin
8
6
4
2
0.9%
0.6%
0.0%
0.4%
0.9%
0.5%
0.5%
0.6%
0.0%
0.6%
1.0%
0.2%
0
(0.4%)
-2
(0.3%)
(1.0%) (1.0%)
(0.4%)
(0.3%)
(1.0%)
(1.0%)
-4
-6
-8
-10
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
Source: AHA TrendWatch Chartbook 2006; AHA 2006 Chartbook did not track aggregate operating margins in years 1980 to 1989, so figures were estimated by subtracting “non operating gains %” from
“aggregate total hospital margins”; for reference, applying the same methodology to years 1990 to 2004 results in variations which average only 6 basis pts (0.06%) over the 15 years
2
Beneficial Industry Structure
The U.S. hospital industry is largely comprised of not-for-profits and government / community hospitals
(~85% of all hospitals)
npatient Admissions
87.5
4.3
8.1
4.15%
6.81%of not-for-profits
8.81%
Average investor-owned hospital margins are typically higher
than those
and government /
(0.8%)
(2.6%)
community hospital competitors
100
HCA represents approximately 1/3 of the investor-owned industry
MARKET SHARE (1)
100%
URBAN ACUTE CARE EBT MARGINS (1)
100%
100%
$36.9 M
100%
10.0%
8.1%
4.3%
8.8%
100%
8.0
6.8%
80
6.0
4.1%
60
4.0
87.5%
40
2.0
GIFTS
8.8%
6.7%
3.0%
0.0
20
80
(0.8%)
US Hospital Inpatient Admissions
80
80
0
US Hospital Inpatient Admissions
Other Investor-Owned
US Hospital Inpatient Admissions
US Hospital Inpatient
Admissions
Other Investor-Owned
HCA
Other Investor-Owned
HCA
Government / Not for Profit
Other Investor-Ow ned
HCA
HCA
Government / Not for Profit
Government / Government
Not for Profit/ Not for Profit
(1) Source: AHA, AHD
-2.0
(2.6%)
-4.0
80
Govt/ Not For Profit Total Investor-Ow ned
US HospitalHCA
Inpatient Admissions
Bottom Quartile
Other Investor-Ow ned
HCA
Government / Not for Profit
3
Favorable Demographics Provide Growth Tailwind
Aging U.S. population is expected to increase the Medicare eligible population and drive favorable
demographics for the hospital industry
The number of Americans aged 65 or older is expected to increase to approximately 40 million by
2010 and approximately 47 million by 2015
HCA’s market-weighted population growth outlook is higher than the U.S. average
60 bps higher growth in the total population
90 bps higher growth in 65 and over population
TOTAL POPULATION
65 AND OVER POPULATION
(# in millions)
(# in millions)
350
60
321.8
308.9
50
46.9
293.6
40.2
40
250
36.2
30
20
10
150
0
2004
2010
(1) Source: U.S. Census; Health, United States, 2005
2015
2004
2010
2015
4
Local Market Leadership with Extensive Geographic Diversity
HCA maintains the #1 or #2 inpatient market position with 25% to 40% market share in most
geographies, which provides additional negotiating leverage
Geographically diverse portfolio of markets insulates the company from market-level fluctuations
Dallas/Ft.
Dallas/Ft.
Worth
Worth
1,4
20.4%1,4
20.4%
International
El Paso
Paso
El
2,5
32.0%2,5
32.0%
Austin
Austin
2,5
47.2%2,5
47.2%
Western W
Idaho
C
Denver
Denver
1,9
32.5%1,9
32.5%
Utah
Utah
2,6
20.1%2,6
20.1%
Kansas City
City
Kansas
1,6
24.7%1,6
24.7%
W
Kansas City
San Jose
W
W
W
C
Frankfort
Wichita W
Las Vegas
Vegas
Las
1,7
32.2%1,7
32.2%
C
C
SW VA
Richmond
Richmond
3,6
44.0%3,6
44.0%
Nashville
Nashville
1,6
30.1%1,6
30.1%
C
W
E
Charleston
Charleston
2,10
28.0%2,10
28.0%
TampaBay
Bay
Tampa
2,3
27.7%2,3
27.7%
Western Group
Central Group
Notes:
1.
2005 data
2.
2004 data
3.
2005 3rd qtr
4.
2005 2nd qtr
5.
Southern California Market comprised of HCA facilities PSA
Ft.Pierce
Pierce
Ft.
2,3
54.1%2,3
54.1%
NCFlorida
Florida
NC
2,3
34.9%2,3
34.9%
E
Eastern Group
Jacksonville
Jacksonville
2,3
23.0%2,3
23.0%
Panhandle
Panhandle
2,3
34.7%2,3
34.7%
Oklahoma City
Oklahoma City
City
Oklahoma
2,6
19.7%2,6
19.7%
Southern
Southern
California
California
2,5,8
19.1%2,5,8
19.1%
Houston
Houston
1,5
20.0%1,5
20.0%
Terre Haute
C
Utah
W
San
San
Antonio
Antonio
1,5
34.6%1,5
34.6%
W Idaho Falls
Broward
Broward
2,3
23.1%2,3
23.1%
Source:
6.
7.
8.
9.
10.
Medstat
Division - Intellimed
Division - OSHPD
Division - Capital Healthcare Planning/Solucient
South Carolina Office of research & Statistics
(1) Includes 7 hospitals managed under joint ventures and 9 surgery centers managed under joint ventures
Notes:
1.
2.
2005 data
2005 3rd qtr data
Source:
3.
4.
5.
Dade
Dade
2,3
15.6%2,3
15.6%
Medstat
Division – DFW Healthcare Council
Division – THA/Solucient
5
Leading Provider of Outpatient Services
Integrated delivery model created through establishing leading outpatient services in local markets
Among the largest
outpatient surgery
businesses in the
industry with 104
freestanding ambulatory
surgery centers (1)
Other outpatient facilities
include 49 freestanding
diagnostic treatment
facilities, 74 provider
based imaging facilities
and 3 oncology centers
HCA Surgery Centers
(1) Includes 9 nonconsolidated surgery centers managed under joint ventures
6
Dallas/Ft. Worth Service Area
Texas
Denton Regional Medical Center
North Hills Hospital
Plaza Medical Center
of Fort Worth
Medical Center of Lewisville
Las Colinas Medical Center
Medical Center of McKinney
Fort Worth
Medical Center
of Arlington
Medical Center of Plano
Green Oaks Hospital
Medical City Dallas Hospital
Dallas
Waxahachie
Hillsboro
Projected 2005 to 2010
Population Growth
3%+
2% to 3%
1% to 2%
0% to 1%
Less than 0%
Legend
HCA Hospitals
HCA Surgery
Centers
Competitor
Hospitals
TENET Healthcare
Corp
Texas Health
Resources
Baylor Health Care
System
Sources: InterStudy, 2005; AHA, 2005; Claritas, 2005; ChapterHouse Analysis
7
Medical City Dallas Hospital
Denton Regional Medical Center
Medical Center of Plano
North Hills Hospital
Plaza Medical Center of Ft. Worth
Medical Center of McKinney
DFW Market
Market Overview
Demographics
Population
Key Assets
HCA
Market
Acute Care Hospitals
9
56
Psychiatric Hospitals
1
7
Ambulatory Surgery Centers
9
78
Total Population
Population Growth (2005-2010) per year
U.S. Benchmark
Uninsured/Employment Rate
Uninsured
Unemployment Rate
Management Team
30%
Percent of Households
Jim Scoggin
Tom Corley
22.0%
4.6%
Age Mix
28%
25%
25%
Current Years with Years in Current
Position Company
Position
President
20
1
CFO
17
9
5.8M
2.3%
0.98%
24%
23%
Dallas/Ft Worth
US Benchmark
22%
20%
15%
17%
13%
8%
10%
0%
18-34
0-17
35-49
50-64
65+
65+ Population Growth
U.S. Benchmark
HCA Inpatient Market Share
Baylor Health System
Texas Health Resources
Tenet
Total Market Admits
Source: Division; DFW Healthcare Council
Percent of Households
Total HCA
2005
20.4%
19.7%
23.1%
3.9%
502,148
Household Income
36%
40%
4.8%
2.4%
33%
30%
31%
Dallas/Ft Worth
US Benchmark
30%
16%
20%
16%
13%
11%
8%
10%
6%
0%
Households w ith
Incomes <$35K
Households w ith
Incomes $35-$49K
Households w ith
Income $50-$99K
Median Household Income
U.S. Benchmark
Households w ith
Incomes $100$149K
Households w ith
Incomes >$150K
$57,822
$51,044
Source: InterStudy 2005, Claritas 2005, U.S. Census Bureau 2005).
9
Denver Service Area
Colorado
Boulder
Rose Medical Center
Golden
North Suburban Medical Center
DENVER
Presbyterian/
St. Luke's Medical Center
Swedish Medical Center
Aurora
The Medical Center of Aurora
Spalding Rehabilitation Hospital
Skyridge Medical Center
Projected 2005 to 2010
Population Growth
3%+
2% to 3%
1% to 2%
0% to 1%
Less than 0%
Legend
HCA Hospitals
HCA Surgery
Centers
Competitor
Hospitals
Adventist Health
System Sunbelt
Exempla
Healthcare, Inc.
Catholic Health
Initiatives
Denver Health
Medical Center
Sources: InterStudy, 2005; AHA, 2005; Claritas, 2005; ChapterHouse Analysis
10
Rose Medical Center
North Suburban Medical Center
Presbyterian/St. Luke’s Medical Center
Sky Ridge Medical Center
Swedish Medical Center
Medical Center of Aurora
Market Overview
Denver Market
Demographics
Key Assets
HCA
Acute Care Hospitals
7
18
Psychiatric Hospitals
0
4
10
28
Ambulatory Surgery Centers
Population
Market
Total Population
Population Growth (2005-2010) per year
U.S. Benchmark
2.3M
1.4%
0.98%
Uninsured/Employment Rate
Uninsured
Unemployment Rate
Management Team
Age Mix
30%
26%
Percent of Households
Current Years with Years in Current
Position Company
Position
Jeff Dorsey
President
16
12
Greg D’Argonne CFO
22
5
15.2%
3.8%
25%
25%
Denver
US Benchmark
24%
23%
22%
20%
16%
17%
13%
9%
10%
0%
0-17
18-34
HCA Inpatient Market Share
Total Market Admits
207,559
Source: Division; Capital Healthcare Planning/Solucient
40%
65+
3.4%
2.4%
36%
35%
Denver
US Benchmark
31%
Percent of Households
Centura
Exempla
Denver Health
32.50%
22.80%
22.30%
7.80%
50-64
Household Income
2005
Total HCA
35-49
65+ Population Growth
U.S. Benchmark
30%
26%
20%
15%
16%
15%
11%
9%
10%
6%
0%
Households w ith
Incomes <$35K
Households w ith
Incomes $35-$49K
Households w ith
Income $50-$99K
Median Household Income
U.S. Benchmark
Households w ith
Incomes $100$149K
Households w ith
Incomes >$150K
$63,616
$51,044
Source: InterStudy 2005, Claritas 2005, U.S. Census Bureau 2005).
12
Capex Discipline and Flexibility
Portfolio of hospitals is well-capitalized
Portions of both “routine capital” as well as “new” and “expansion / renovation” capital could be delayed to
increase cash flow if needed
CAPITAL EXPENDITURES
($ in billions)
$2.0
$1.9
$1.8
$1.5
New and Replacement
Facilities
$1.6
1.5
Facility Expansion /
Renovation
1.0
IT&S and Patient
Safety
0.5
Routine
0.0
2003
Routine
2004
IT&S and Patient Safety
2005
Facility Expansion / Renovation
LTM 9/30/06
New & Replacement Facilities
13
Historical Financials
HISTORICAL CASH REVENUE (2)
HISTORICAL NET REVENUE
($ in billions)
($ in billions)
$30.0
$6.0
GR = 8.9%
'01 - '05 CA
$30.0
4.0
25.0
$3.9
20.0
4.0
$3.4
15.0
10.0
= 7.5%
CAGR
'01 - '05
$4.3
$4.3
$20.8
$4.0
$19.6
$18.1
(1)
$25.2
25.0
20.0
$6.0
$3.9
$16.6
$22.1
$22.6
2005
LTM
9/30/06
15.0
$18.0
2.0
$19.7
$21.8
$23.5
$24.5
$25.2
2.0
10.0
5.0
5.0
0.0
2001
0.0
2002
2001
2003
2002
2004
2003
2005
2004
LTM
9/30/06
0.0
2005
2001
LTM
9/30/06
0.0
2002
2001
2003
2002
2004
2003
2005
2004
LTM
9/30/06
HISTORICAL ADJUSTED EBITDA
($ in billions)
$30.0
$6.0
$30.0
'01 - '05 CAGR =
25.0
20.0
4.0
$3.9
$3.9
5.9%
$4.0
$4.3
$4.3
25.0
20.0
$3.4
15.0
$16.6
$18.1
$19.6
$20.8
$22.1
$
15.0
2.0
10.0
10.0
5.0
5.0
0.0
0.0
2001
2002
2003
2004
2005
LTM
9/30/06
0.0
2001
2002
2003
2004 (3)
2005 (3)
LTM (3)
9/30/06
2001
2002
2003
2004
2005
9
(1) Adjusting for the effect of the uninsured discount policy implemented on 1/1/2005, Net Revenue would have been $25.2 million in 2005
(2) Cash Revenue equals Net Revenue less Bad Debt Expense
(3) See reconciliation of adjusted EBTIDA to net income
14
Historical Revenue Drivers
REVENUE / ADJUSTED ADMISSION
ADJUSTED ADMISSIONS
(in millions of patients)
3.0
3.0
2.31
2.0
'01 - '05 CAGR =
2.34
2.41
$12,000$12,000
1.7%
2.45
2.48
2.44
2.0
A
'01 - '05 C
GR = 6.2%
$10,333$10,333
$9,874 $9,874
$9,577 $9,577
$9,066 $9,066
$8,433 $8,433
9,000 9,000
$7,766 $7,766
6,000 6,000
1.0
1.0
3,000 3,000
0.0
0.0
2001
0
2001
2002
2002
2003
2003
2004
2004
2005
2005
LTM LTM
9/30/069/30/06
0
2001
2001
2002
2002
2003
2003
2004
2004
2005
2005
LTM LTM
9/30/069/30/06
15
Historical Expense Trends
SALARIES & BENEFITS EXPENSE / ADJUSTED ADMISSION
$5,000
50%
4,000
$3,399
$3,149
3,000
2,000
$3,609
$3,838
SUPPLIES EXPENSE / ADJUSTED ADMISSSION
$2,000
$4,009
$1,590
1500
41.1%
40.3% 39.8% 40.1% 40.6%
40
40.5%
20%
$4,251
1000
39.4% 39.5%
$1,237
$1,350
$1,666
$1,464
16.9% 17.0%
16.2%
15.9% 16.0%
16.6% 16.4%
16.3% 16
500
1,000
0
30
2001
2002
2003
2004
2005
0
(1)
12
2001
LTM
9/30/06
2002
OTHER EXPENSES / ADJUSTED ADMISSION
$2,000
$1,528
(1)
LTM
9/30/06
1,478
1000
16.5% 16.5%
16.9% 16.8%
16.0% 15.9% 15.8% 15
500
2003
10
0
2004
2005
Net Revenue Margin
(1)
LTM
9/30/06
10.1%
8.0%
2001
2002
13.7%
12.4%
$676
7.7%
$1,057
$952
$918
$595
500
0
20%
1,263
$1,088
18.1%
2002
2005
$1,500
$1,694
$1,547 $1,631
20
2001
2004
BAD DEBT EXPENSE / ADJUSTED ADMISSION
25%
1500 $1,401 $1,428
2003
Net Revenue Margin
Net Revenue Margin
1000
$1,755
11.4%
9.6%
10.2%
10
0
2003
2004
2005
(1)
LTM
9/30/06
Net Revenue Margin
Note: Light blue lines in graphs above reflect numbers normalized for the uninsured discount
•
Adjusting for the effect of the uninsured discount policy implemented on 1/1/2005, as a percentage of revenue in 2005 and for LTM 9/30/06, Salaries and Benefits Expense would be 39.4% and 39.5%,
respectively, Supplies Expense would be 16.4% and 16.3%, respectively, Other Expenses would be 15.9% and 15.8%, respectively, and Bad Debt Expense would be 12.4% and 13.7%, respectively
16
Successfully Addressing Uninsured and Self-Pay Patients
HCA is taking aggressive measures to reduce bad debt expense
HCA actively screens all uninsured patients to deem proper course of action to ensure proper
service delivery while reducing the potential for bad debt
HCA has been successful in increasing its upfront collections from Co-Pay and Deductible patients
CARE PROVIDED TO UNINSURED PATIENTS
UPFRONT COLLECTIONS
($ in millions)
ER Visits
36%
$300
Outpatient
Services
10%
Direct
Admissions
11%
$187
200
38.0%
$133
46.0%
40
$147
30
$102
100
0
Note: Charts are reflective of all U.S. hospitals excluding Denver
50%
$255
20
$75
19.5%
10.2%
11.6%
13.4%
2001
2002
2003
10
0
2004
2005
% Collected from available
Co-pay & Deductible
Admissions
through ER
43%
YTD June
17
Leverage the Scale of the Company
Group
Purchasing
Organization
Revenue
Cycle
Management
Currently serves over 1,600 members, including more than 750 acute care hospitals
Over $7 billion in annual purchasing volume with expected 15% growth over prior year
Generates significant annual profits from administrative fees from suppliers for performing GPO services;
significantly lowered the Company's supply costs
Per-unit cost advantage over competitors
Invested $100 million to build regional service centers
Creates efficiencies in billing and collection process, particularly re payment disputes with managed care
Results: incremental cash collections annually, compared to baseline, as well as a reduction in operating costs
OVERALL SETTLED CLAIMS – PER 1,000 OCCUPIED BED
EQUIVALENTS
Captive
Insurance
Subsidiary
Captive insurance subsidiary to address lack of
reasonably-priced medical malpractice insurance
Intense focus on patient safety and tort reform have
significantly reduced settled claims
16
14.4
14.6
14.1
14
13.6
13.0
12.1
12.4
12.0
12
9.7
10
8.7
8
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
18
Financial Policies & Objectives
Operations – Focus on core operations
Physician recruitment and service line expansion
Maintain target managed care mid- to high-single digit rate increase
Manage operating expenses by leveraging scale and systems
Consider divesting non-core assets, where appropriate
$108 million of expected cost savings
HCI malpractice funding cash flow benefits
Leverage
Goal to reduce debt and improve credit quality over time
Eliminate cash pay dividend (approximately $268 million for twelve months ended 9/30/06)
Manage floating rate interest exposure ($8 billion in 5-yr interest rate hedges)
Capital Expenditures – Maintain disciplined approach to deploying capital
Only target high ROIC investments
Deploy capital to enhance operations, competitive position and market share
Manage discretionary capex based on strength of cash flows
19
Conclusion
Favorable Industry Fundamentals
Well-Capitalized Assets With Leading Market Positions in High Growth Markets
Management Team’s Experience, Discipline and Industry Leadership
Financial Structure that Provides Significant Liquidity and Flexibility
Disciplined Approach to Capital Deployment
Significant Cash Flow From Operations
Significant Equity Commitment by Sponsors and Management
20
EBITDA, a measure used by management to evaluate operating performance, is defined as net income plus (i) provision for income taxes, (ii) interest expense and (iii) depreciation and amortization. EBITDA is not a
recognized term under generally accepted accounting principles (“GAAP”) and does not purport to be an alternative to net income as a measure of operating performance or to cash flows from operating activities as a measure
of liquidity. Additionally, EBITDA is not intended to be a measure of free cash flow available for management’s discretionary use, as it does not consider certain cash requirements such as interest payments, tax payments and
other debt service requirements. Management believes EBITDA is helpful in highlighting trends because EBITDA excludes the results of decisions that are outside the control of operating management and that can differ
significantly from company to company depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which companies operate and capital investments. In addition, EBITDA provides more
comparability between our historical results and results that reflect the new capital structure. Management compensates for the limitations of using non-GAAP financial measures by using them to supplement GAAP results to
provide a more complete understanding of the factors and trends affecting the business than GAAP results alone. Because not all companies use identical calculations, our presentation of EBITDA may not be comparable to
similarly titled measures of other companies.
Adjusted EBITDA is defined as EBITDA adjusted to exclude noncash items, unusual items and other adjustments permitted in calculating covenant compliance under the indenture governing the notes offered hereby
and under our senior secured credit facilities. We believe that the inclusion of supplementary adjustments to EBITDA applied in presenting Adjusted EBITDA are appropriate to provide additional information to investors about
how the covenants in those agreements will operate and about certain noncash items, unusual items that we do not expect to continue at the same level in the future and other items. Such supplementary adjustments to EBITDA
may not be in accordance with current practices of the United States Securities and Exchange Commission (the “SEC”) or with regulations adopted by the SEC that apply to registration statements filed under the Securities Act of
1933, as amended, and periodic reports under the Securities Exchange Act of 1934, as amended. Accordingly, the SEC may require that Adjusted EBITDA be presented differently in filings made with the SEC or not be presented
at all.
Pro forma EBITDA and Adjusted EBITDA are calculated as follows:
Pro Forma Twelve Months Ended September
30, 2006 Unaudited
(Dollars in millions)
Net income
$
Provision for income taxes
258
124
Interest expense
2,294
Depreciation and amortization
1,381
EBITDA
4,057
Minority interests in earnings of consolidated entities (i)
191
Gains on sales of facilities (ii)
(95)
—
Impairment of long-lived assets (iii)
Government settlement and investigation-related costs (iv)
—
Noncash share-based compensation (v)
78
Transaction costs (vi)
9
Cost saving initiatives (vii)
108
Sponsor fee (viii)
Adjusted EBITDA
(i)
(ii)
(iii)
(iv)
15
$
4,363
Represents the add-back of minority interests in earnings of consolidated entities.
Represents the elimination of gains on sales of facilities.
Represents the add-back of impairment of long-lived assets.
Represents the elimination of the out-of-period benefit from the reversal of government settlement and
investigation accruals.
(v) Represents the add-back of noncash compensation expense for stock options and restricted stock grants.
(vi) Represents the nonrecurring costs incurred in connection with the recapitalization of HCA Inc.
(vii) Represents cost savings from reductions in force, staffing reconfigurations and reductions in variable
marketing and advertising expenses. All of these actions have been initiated.
(viii) Represents the add-back of the new annual sponsor fee to be paid to affiliates of our sponsors.