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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.