Health Management Associates, Inc. (NYSE: HMA) (“HMA”)
today announced its consolidated financial results for the third
quarter ended September 30, 2013 and the completion of the
previously announced restatements.
Key metrics from continuing operations for the third quarter
(all percentage changes in the bullet points below compare the
third quarter of 2013 to the third quarter of 2012) include:
- Diluted earnings per share (“EPS”) from
continuing operations was $(0.37). Excluding the impact of
approximately $18.9 million, or $0.04 per diluted share, of
interest rate swap accounting and mark-to-market adjustments on the
swap and approximately $102.9 million, or $0.32 per diluted share,
of change of control, severance and merger related costs, diluted
earnings per share from continuing operations was a loss of $0.01
per diluted share, as compared to earnings of $0.22 per diluted
share in the prior year;
- Net revenue was $1.421 billion;
- Adjusted EBITDA was $135.0 million
compared to $234.8 million for the same quarter last year. Adjusted
EBITDA for the 2013 third quarter includes approximately $2.0
million of Medicare and Medicaid Healthcare Information Technology
(“HCIT”) incentives payments, while 2012 third quarter EBITDA
includes approximately $24.2 million of HCIT payments. Excluding
the HCIT impact in the third quarter of 2013 and 2012, Adjusted
EBITDA for the third quarter 2013 was $133.0 million compared to
$210.6 million for the same quarter a year ago;
- Same hospital net revenue was $1.354
billion;
- Same hospital net revenue per adjusted
admission decreased by 3.1%;
- Same hospital Adjusted EBITDA was
$200.8 million, representing an EBITDA margin of 14.8% and;
- Same hospital surgeries decreased by
2.1% and emergency room visits decreased by 2.2%.
The tables accompanying this press release include
reconciliations of consolidated net income to all presentations of
Adjusted EBITDA (which is not a GAAP measure) contained in this
press release. Those tables also reconcile earnings per share on a
GAAP basis to those amounts presented in this press release and
contain disclaimers and other important information regarding how
HMA defines and uses Adjusted EBITDA.
During the third quarter, the Company incurred approximately
$102.9 million of expenses related to change of control, severance
and merger related costs. On August 16, 2013, the Company disclosed
that shareholders holding a majority of the outstanding shares of
the Company’s common stock voted to replace the incumbent board
members with the current board members, triggering a change in
control pursuant to HMA’s incentive compensation plans. As a
result, all of the outstanding and unvested equity and performance
cash awards, stock options and stock awards became vested. This
vesting resulted in the recognition of approximately $85.1 million
of incremental compensation expense. These expenses are not
expected to recur. In addition, the Company has incurred
approximately $17.7 million of costs associated with retention and
severance agreements with key personnel and the engagement of
various advisors related to the merger agreement with Community
Health Systems, Inc. (NYSE:CYH) (“CHS”) previously announced on
July 30, 2013 and the consent solicitation process to replace the
board.
Compared to the same period a year ago, same hospital admissions
and adjusted admissions for the third quarter ended September 30,
2013 decreased by 6.8% and 2.9%, respectively.
For the third quarter, HMA’s provision for doubtful accounts was
$255.4 million, or 15.2% of net revenue before the provision for
doubtful accounts, compared to $224.1 million, or 13.5% of net
revenue before the provision of doubtful accounts, for the same
quarter a year ago.
Uninsured self-pay patient discounts for the third quarter were
$387.7 million, compared to $334.7 million for the same quarter a
year ago. Charity/indigent care write-offs were $26.8 million for
the third quarter, compared to $28.1 million for the same quarter a
year ago.
The sum of uninsured discounts, charity/indigent write-offs and
the provision for doubtful accounts, as a percent of the sum of net
revenue before the provision for doubtful accounts, uninsured
discounts and charity/indigent write-offs (which HMA refers to as
its Uncompensated Patient Care Percentage) was 32.0% for the third
quarter, compared to 29.0% for the third quarter a year ago, and
30.3% for the quarter ended June 30, 2013. Health Management
believes that its Uncompensated Patient Care Percentage provides
key information regarding the aggregate level of patient care for
which it does not receive payment.
Cash flow from continuing operating activities for the third
quarter was ($7.3) million, after cash interest and cash tax
payments aggregating $79.6 million. During the third quarter, as a
result of a change in control of the Company’s board, the Company
paid approximately $40 million in cash related to the vesting of
certain cash awards under the Company’s incentive compensation
programs and approximately $35 million in cash for the
corresponding payroll taxes associated with the vesting of stock
awards. In addition, cash flow from operations for the quarter was
impacted by an increase of approximately $50 million in accounts
receivable related to the previously announced joint venture with
Bayfront Health Systems. Medicare and Medicaid tie-in notices for
Bayfront were received late in the third quarter, and the Company
expects to bill and collect these accounts receivable in the fourth
quarter. As of September 30, 2013, HMA’s total leverage ratio was
4.8 and interest coverage ratio was 3.6 both ratios within its debt
covenant requirements.
For the nine months ended September 30, 2013, HMA reported net
revenue of $4.371 billion, Adjusted EBITDA of $522.1 million, and
consolidated diluted EPS from continuing operations of $(0.28).
Excluding the impact of approximately $57.7 million, or $0.14 per
diluted share, for interest rate swap accounting as well as
mark-to-market adjustments on the swap due to interest rate
conditions, and $112.0 million, or $0.35 per diluted share, for
change of control, severance and merger related costs, diluted
earnings per share from continuing operations was $0.21 for the
nine months ended September 30, 2013.
The Company has completed its previously announced restatement
to correct the accounting treatment of approximately $31.0 million
of Medicare and Medicaid HCIT incentive payments which were
recognized as income by the Company between July 1, 2011 and June
30, 2013 for 11 hospitals that did not meet “meaningful use”
criteria. Earlier today the Company filed amendments to its Annual
Report on Form 10-K for the fiscal year ended December 31, 2012 and
its Quarterly Reports on Form 10-Q for the fiscal quarters ended
March 31, 2013 and June 30, 2013 containing restated financial
statements. The restatements also reflect certain immaterial
unrelated adjustments. The Company has corrected its accounting
treatment and is in the process of implementing new controls to
remediate a material weakness in internal control over financial
reporting that existed at those dates and at September 30, 2013
related to the administration, oversight and accounting for the
Company’s electronic health records enrollment process. As
previously reported, the Company has repaid the majority of the
$31.0 million, and is in the process of repaying the balance, to
the governmental agencies responsible for the HCIT programs and
expects to re-enroll the hospitals in the HCIT programs and may be
able to recoup some portion of the amount repaid.
As reflected in the tables accompanying this press release, the
Company is updating its 2013 annual guidance. For the fiscal year
ended December 31, 2013, the Company expects net revenue, before
the provision for doubtful accounts, to be between $6.84 billion
and $6.86 billion, Adjusted EBITDA to be between $790 million and
$800 million, and diluted EPS to be between $0.48 and $0.50. This
guidance reflects our third quarter results, and assumes continued
admission softness and net revenue pressure for the balance of the
year. In addition, these estimates include approximately $60
million to $65 million of expected HCIT incentive payments in the
fourth quarter, and approximately $10 million to $15 million of
anticipated fourth quarter negative impact related to Blue
Cross/Blue Shield relations in Mississippi.
As previously announced, CHS and HMA have entered into a
definitive merger agreement under which CHS will acquire each
outstanding share of HMA common stock for $10.50 in cash, 0.06942
of a share of CHS common stock and a Contingent Value Right, which
could yield additional cash consideration of up to $1.00 per share,
depending on certain matters described in the Registration
Statement on Form S-4 filed by CHS. On July 30, 2013, the cash and
stock portion of the consideration was valued at $13.78 per HMA
share and as of November 11, 2013, the consideration has a value of
approximately $13.42, in each case, plus the Contingent Value
Right. As previously disclosed, the parties expect to close the
transaction during the first quarter of 2014. The merger is subject
to satisfaction of customary closing conditions, including approval
by HMA’s stockholders holding 70 percent of HMA’s outstanding
shares, antitrust clearance, receipt of other regulatory approvals
and the absence of certain adverse developments. HMA will host a
listen-only conference call and webcast to discuss the contents of
this press release and HMA’s consolidated financial results for the
three and nine months ended September 30, 2013 later today,
November 13, 2013 at 10:00 a.m. ET. Investors are invited to access
the webcast via HMA’s website at www.HMA.com or via
www.streetevents.com. Alternatively, investors may listen to the
conference call by dialing US: (800) 585-8367 / International:
(404) 537-3406, Conference ID: 99225973.
HMA will archive a copy of the audio webcast of the conference
call, along with any related information that HMA may be required
to provide pursuant to Securities and Exchange Commission rules, on
its website under the heading “Investor Relations” for a period of
60 days following the conference call and webcast.
About HMA
Health Management Associates, Inc., through its affiliates, owns
and manages hospitals and ambulatory surgery centers in small
cities and selected larger urban markets. HMA currently operates 71
hospitals in 15 states with approximately 11,000 licensed beds.
Shares in Health Management Associates are traded on the New York
Stock Exchange under the symbol “HMA.”
Important Information and Where to Find It
In connection with the proposed transaction, CHS has filed with
the Securities and Exchange Commission (the “SEC”) a registration
statement on Form S-4 that includes a preliminary proxy statement
of HMA and a preliminary prospectus of CHS. CHS and HMA plan to
file a definitive proxy statement/prospectus and other relevant
documents with the SEC regarding the proposed transaction.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION
STATEMENT AND DEFINITIVE PROXY STATEMENT/PROSPECTUS AND ANY OTHER
RELEVANT DOCUMENTS WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT CHS, HMA AND THE MERGER. When
completed and available, the definitive proxy statement/prospectus
and a form of proxy will be mailed to stockholders of HMA. These
materials and other documents filed with the SEC will be available
at no charge at the SEC’s website at www.sec.gov. In addition,
stockholders will be able to obtain copies of the definitive proxy
statement/prospectus (when they become available) and other
documents filed with the SEC from CHS’s website at www.chs.net or
and HMA’s website at www.hma.com or by directing such request to
CHS at 4000 Meridian Boulevard, Franklin, Tennessee 37067,
Attention: Investor Relations, or to HMA at 5811 Pelican Bay
Boulevard, Naples, Florida 34108, Attention: Investor
Relations.
CHS, HMA and certain of their respective directors, executive
officers and other persons may be deemed to be participants in the
solicitation of proxies in respect of the merger. Information
regarding CHS’s directors and executive officers is available in
CHS’s proxy statement filed with the SEC on April 5, 2013 in
connection with its 2013 annual meeting of stockholders, and
information regarding HMA’s directors and executive officers is
available in HMA’s preliminary proxy statement contained in the
registration statement on Form S-4 filed by CHS with SEC on
September 24, 2013, as may be amended.
This communication shall not constitute an offer to sell or the
solicitation of an offer to sell or the solicitation of an offer to
buy any securities, nor shall there be any sale of securities in
any jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offer of securities
shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as
amended.
Forward-Looking Statements
Certain statements contained in this communication may
constitute “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995. Forward-looking
statements are subject to risks, uncertainties and assumptions and
are identified by words such as “expects,” “estimates,” “projects,”
“anticipates,” “believes,” “intends,” “plans,” “may,” “pending,”
“continues,” “should,” “could” and other similar words. All
statements addressing operating performance, events or developments
that Health Management Associates, Inc. expects or anticipates will
occur in the future, including but not limited to projections of
revenue, provisions for doubtful accounts, income or loss, capital
expenditures, debt structure, principal payments on debt, capital
structure, the amount and timing of funds under the meaningful use
measurement standard of various Healthcare Information Technology
incentive programs, other financial items and operating statistics,
statements regarding our plans and objectives for future
operations, the impact of changes in observation stays, our ability
to achieve process efficiencies, factors we believe may have an
impact on our deductibles and co-pays, acquisitions, acquisition
financing, divestitures, joint ventures, market service development
and other transactions, statements of future economic performance,
statements regarding our legal proceedings and other loss
contingencies (including, but not limited to, the timing and
estimated costs of such matters), statements regarding market risk
exposures, statements regarding our ability to achieve cost
efficiencies and/or reductions, statements regarding the effects
and/or interpretations of recently enacted or future health care
laws and regulations, statements regarding the potential impact of
health care exchanges, remediation of the related material weakness
in internal control over financial reporting, statements of the
beliefs or assumptions underlying or relating to any of the
foregoing statements, and statements that are other than statements
of historical fact, are considered to be “forward-looking
statements.” These statements also include, but are not limited to,
statements regarding the expected timing of the completion of the
merger with CHS, the benefits of the merger, including future
financial and operating results, the combined company’s plans,
objectives, expectations and other statements that are not
historical facts. Such statements are based on the views and
assumptions of the management of CHS and HMA and are subject to
significant risks and uncertainties. Actual future events or
results may differ materially from these statements. Such
differences may result from the following factors: the ability to
close the transaction on the proposed terms and within the
anticipated time period, or at all, which is dependent on the
parties’ ability to satisfy certain closing conditions, including
the receipt of governmental approvals; the risk that the benefits
of the transaction, including cost savings and other synergies may
not be fully realized or may take longer to realize than expected;
the impact of the transaction on third-party relationships; actions
taken by either of the companies; changes in regulatory, social and
political conditions, as well as general economic conditions.
Additional risks and factors that may affect results are set forth
in HMA’s and CHS’s filings with the Securities and Exchange
Commission, including each company’s Annual Report on Form 10-K/A
for the fiscal year ending December 31, 2012, as may be amended or
supplemented.
The forward-looking statements speak only as of the date of this
communication. Except as required by law, HMA does not undertake
any obligation to update these statements.
(financial tables follow)
HEALTH MANAGEMENT ASSOCIATES, INC. CONSOLIDATED
STATEMENTS OF INCOME (unaudited, in thousands, except per
share amounts) Three
Months Ended Nine Months Ended
September 30, September 30, 2013
2012 2013 2012 (Restated)
(Restated) Net revenue before the provision for
doubtful accounts $ 1,676,679 $ 1,662,937 $ 5,100,474 $ 5,033,496
Provision for doubtful accounts (255,436 ) (224,078 )
(729,695 ) (639,902 ) Net revenue 1,421,243
1,438,859 4,370,779
4,393,594 Salaries and benefits 655,839 637,305
2,013,515 1,941,475 Supplies 220,522 216,819 689,034 677,416 Rent
expense 40,493 41,807 125,706 130,521 Other operating expenses
371,392 332,356 1,043,982 970,613 Medicare and Medicaid HCIT
incentive payments (2,015 ) (24,224 ) (23,607 ) (29,875 ) Change in
control and other related expense 102,886 - 112,026 - Depreciation
and amortization 99,351 91,563 289,595 255,575 Interest expense
70,747 76,916 212,352 241,049 Other 884 (2,363
) (2,848 ) (1,745 ) 1,560,099
1,370,179 4,459,755 4,185,029
Income (loss) from continuing operations before income taxes
(138,856 ) 68,680 (88,976 ) 208,565 Income tax benefit (provision)
65,509 (19,663 ) 48,796
(66,806 ) Income (loss) from continuing operations (73,347 ) 49,017
(40,180 ) 141,759 Loss from discontinued operations, net of income
taxes - (1,389 ) - (5,805
) Consolidated net income (loss) (73,347 ) 47,628 (40,180 ) 135,954
Net income attributable to noncontrolling interests (3,485 ) (6,685
) (12,804 ) (21,757 ) Accretion of redeemable equity securities
(19,813 ) - (19,813 ) -
Net income (loss) attributable to Health
Management Associates, Inc. common stockholders
$ (96,645 ) $ 40,943 $ (72,797 ) $ 114,197
Earnings (loss) per share attributable to
Heath Management Associates, Inc. common stockholders:
Basic: Continuing operations $ (0.37 ) $ 0.16 $ (0.28 ) $ 0.47
Discontinued operations - - -
(0.02 ) Net income (loss) $ (0.37 ) $ 0.16 $
(0.28 ) $ 0.45 Diluted: Continuing operations $ (0.37
) $ 0.16 $ (0.28 ) $ 0.47 Discontinued operations -
- - (0.02 ) Net income (loss) $
(0.37 ) $ 0.16 $ (0.28 ) $ 0.45 Weighted
average number of shares outstanding: Basic 261,927
254,416 258,911 254,111
Diluted 261,927 256,784 258,911
256,172 Net income (loss) attributable
to Health Management Associates, Inc. Income (loss) from continuing
operations, net of income taxes $ (76,832 ) $ 42,332 $ (52,984 ) $
120,002 Loss from discontinued operations, net of income taxes
- (1,389 ) - (5,805 ) Net
income (loss) attributable to Health Management Associates, Inc. $
(76,832 ) $ 40,943 $ (52,984 ) $ 114,197
HEALTH MANAGEMENT ASSOCIATES, INC. CONSOLIDATED
STATEMENTS OF CASH FLOWS (unaudited, in thousands)
Nine Months Ended
September 30, 2013 2012
(Restated) Cash flows from operating activities:
Consolidated net income (loss) $ (40,180 ) $ 135,954
Adjustments to reconcile consolidated net
income (loss) to net cash provided by continuing operating
activities:
Depreciation and amortization 298,537 263,819 Amortization related
to interest rate swap contract 53,515 59,937 Fair value adjustment
related to interest rate swap contract 2,312 22,965 Provision for
doubtful accounts 729,695 639,902 Stock-based compensation expense
58,850 19,492 (Gains) losses on sales of assets, net (1,141 ) 2,114
Gains on sales of available-for-sale securities, net (1,478 )
(2,350 ) Write-offs of deferred debt issuance costs 584 - Deferred
income tax (benefit) expense 45,105 (22,068 )
Changes in assets and liabilities of
continuing operations, net of the effects of acquisitions:
Accounts receivable (784,618 ) (716,046 ) Supplies, prepaid
expenses and other current assets 1,771 (1,962 ) Prepaid and
recoverable income taxes (102,173 ) 51,690 Deferred charges and
other long-term assets (5,186 ) (1,839 ) Accounts payable, accrued
expenses and other liabilities (116,329 ) 2,096 Equity compensation
excess income tax benefits (19,056 ) (1,444 ) Loss from
discontinued operations, net of income taxes -
5,805 Net cash provided by continuing operating activities
120,208 458,065
Cash flows
from investing activities: Additions to property, plant and
equipment (207,652 ) (282,343 ) Acquisitions of hospitals and other
(173,653 ) (71,475 ) Proceeds from sales of assets and insurance
recoveries 5,992 1,932 Proceeds from sales of discontinued
operations - 1,392 Purchases of available-for-sale securities
(471,915 ) (1,431,548 ) Proceeds from sales of available-for-sale
securities 530,199 1,412,580 Increase in restricted funds
(692 ) (18,723 ) Net cash used in continuing investing
activities (317,721 ) (388,185 )
Cash flows
from financing activities: Principal payments on debt and
capital lease obligations (358,511 ) (87,927 ) Proceeds from
long-term borrowings 476,900 17,000 Proceeds from exercise of stock
options 27,949 - Cash payments to noncontrolling shareholders
(24,175 ) (30,815 ) Payments for debt issuance costs (1,588 ) (636
) Cash received from noncontrolling shareholders - 3,591 Equity
compensation excess income tax benefits 19,056
1,444 Net cash provided by (used in) continuing financing
activities 139,631 (97,343 )
Net decrease in cash and cash equivalents
before discontinued operations
(57,882 ) (27,463 )
Net decreases in cash and cash
equivalents from discontinued operations:
Operating activities - (1,327 ) Investing activities -
(135 ) Net decrease in cash and cash equivalents
(57,882 ) (28,925 ) Cash and cash equivalents at the beginning of
the period 59,173 64,143 Cash and cash
equivalents at the end of the period $ 1,291 $ 35,218
HEALTH MANAGEMENT ASSOCIATES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS AND STATISTICS
September 30, December
31,
(unaudited, dollars in thousands)
2013 2012 (Restated) Assets Current
assets: Cash and cash equivalents $ 1,291 $ 59,173
Available-for-sale securities 62,961 121,106 Accounts receivable,
net 970,132 957,918 Other current assets 422,022 307,847 Assets of
discontinued operations 6,250 6,250 Property, plant and equipment,
net 3,590,832 3,465,890 Restricted funds 125,042 125,532 Other
assets 1,446,373 1,342,638 Total assets $ 6,624,903 $
6,386,354
Liabilities and Stockholders' Equity
Current liabilities $ 852,294 $ 976,407 Deferred income taxes
386,543 301,237 Other long-term liabilities 741,525 673,344
Long-term debt 3,636,948 3,440,353 Stockholders' equity
1,007,593 995,013 Total liabilities and stockholders' equity
$ 6,624,903 $ 6,386,354
Three Months Ended September 30, Nine
Months Ended September 30, 2013
2012 % Change 2013
2012 % Change (Restated)
(Restated) Continuing Operations Occupancy
35.6 % 38.9 % 38.1 % 40.5 % Patient days 348,812 357,094 -2.3 %
1,089,642 1,120,123 -2.7 % Admissions 82,936 84,704 -2.1 %
253,677 264,548 -4.1 % Adjusted admissions 171,215 171,206 0.0 %
514,397 521,459 -1.4 % Average length of stay 4.2 4.2 4.3
4.2 Surgeries 97,603 97,253 0.4 % 293,598 297,177 -1.2 % Emergency
room visits 444,105 441,805 0.5 % 1,352,418 1,338,884 1.0 %
Net revenue (in thousands) $ 1,421,243 $ 1,438,859 -1.2 % $
4,370,779 $ 4,393,594 -0.5 % Net revenue per adjusted admission $
8,301 $ 8,404 -1.2 % $ 8,497 $ 8,426 0.8 % Total inpatient revenue
percentage 43.7 % 44.6 % 43.6 % 45.6 % Total outpatient revenue
percentage 56.3 % 55.4 % 56.4 % 54.4 %
Same Hospitals
Occupancy 35.1 % 38.9 % 38.0 % 40.5 % Patient days 328,484 357,094
-8.0 % 1,046,486 1,120,123 -6.6 % Admissions 78,951 84,704
-6.8 % 244,791 264,548 -7.5 % Adjusted admissions 166,284 171,206
-2.9 % 501,789 521,459 -3.8 % Average length of stay 4.2 4.2
4.3 4.2 Surgeries 95,169 97,253 -2.1 % 287,748 297,177 -3.2 %
Emergency room visits 432,204 441,805 -2.2 % 1,315,411 1,338,884
-1.8 % Net revenue (in thousands) $ 1,354,030 $ 1,438,859
-5.9 % $ 4,224,379 $ 4,393,594 -3.9 % Net revenue per adjusted
admission $ 8,143 $ 8,404 -3.1 % $ 8,419 $ 8,426 -0.1 % Total
inpatient revenue percentage 42.9 % 44.6 % 43.2 % 45.6 % Total
outpatient revenue percentage 57.1 % 55.4 % 56.8 % 54.4 %
HEALTH MANAGEMENT ASSOCIATES, INC. SUPPLEMENTAL
CONSOLIDATED STATEMENTS OF INCOME INFORMATION (unaudited,
dollars in thousands)
Three Months Ended Nine Months Ended
September 30, September 30, 2013
2012 2013 2012 (Restated)
(Restated) Net revenue $ 1,421,243 $ 1,438,859 $
4,370,779 $ 4,393,594 Less acquisitions 67,213
- 146,400 - Same hospital net
revenue $ 1,354,030 $ 1,438,859 $ 4,224,379 $
4,393,594 Consolidated net income (loss) $
(73,347 ) $ 47,628 $ (40,180 ) $ 135,954 Adjustments: Loss
from discontinued operations, net of income taxes - 1,389 - 5,805
Income tax provision (benefit) (65,509 ) 19,663 (48,796 ) 66,806
Losses (gains) on sales of assets, net 118 (77 ) (1,141 ) 2,114
Change in control and other related expense 102,886 - 112,026 -
Interest and other income, net 766 (2,286 ) (1,707 ) (3,859 )
Interest expense 70,747 76,916 212,352 241,049 Depreciation and
amortization 99,351 91,563
289,595 255,575 Adjusted EBITDA (a) 135,012
234,796 522,149 703,444 Adjustment for acquisitions,
corporate and other 65,793 55,129
202,701 170,718 Same hospital operating
Adjusted EBITDA (a) $ 200,805 $ 289,925 $ 724,850
$ 874,162 Same hospital operating Adjusted
EBITDA margins = Same hospital operating Adjusted EBITDA / Same
hospital net revenue (a) 14.8 % 20.1 % 17.2 %
19.9 %
(a) Adjusted EBITDA is defined as
consolidated net (loss) income before discontinued operations, net
(gains) losses on sales of assets, change in control and other
related expenses, net interest and other income, interest expense,
income taxes and depreciation and amortization. Adjusted EBITDA
margin is defined as Adjusted EBITDA divided by net revenue.
Adjusted EBITDA is not a measure determined in accordance with
generally accepted accounting principles in the United States,
commonly known as GAAP. Nevertheless, Health Management believes
that providing non-GAAP information such as Adjusted EBITDA is
important for investors and other readers of HMA's consolidated
financial statements, as it is commonly used as an analytical
indicator within the health care industry and HMA's debt facilities
contain covenants that use Adjusted EBITDA in their calculations.
Because Adjusted EBITDA is a non-GAAP measure and is thus
susceptible to varying calculations, Adjusted EBITDA, as presented,
may not be directly comparable to other similarly titled measures
used by other companies.
HEALTH MANAGEMENT ASSOCIATES,
INC.
SUPPLEMENTAL CONSOLIDATED STATEMENTS OF
INCOME INFORMATION
(unaudited, in thousands, except per
share amounts)
The following tables provide information
regarding income from continuing operations attributable to HMA,
excluding the impact of the interest rate swap amortization and
mark-to-market adjustments and change in control and other related
costs. This table is a non-GAAP presentation; nonetheless, HMA
believes that providing this detail is beneficial to investors and
other readers of HMA's financial statements due to the significant
impact these items had on income from continuing operations
attributable to HMA.
Three Months Ended September 30, 2013
ContinuingOperations
Interest Rate SwapAmortization
andMark-To-MarketAdjustments
Change in Controland
OtherRelated Costs
Total, AsReported
Loss from continuing operations before income taxes $
(17,115 ) $ (18,855 ) $ (102,886 ) $ (138,856 ) Net income from
continuing operations attributable to noncontrolling interests
(3,485 ) - - (3,485 )
Loss from continuing operations before
income taxes attributable to Health Management Associates, Inc.
(20,600 ) (18,855 ) (102,886 ) (142,341 ) Income tax benefit
18,335 7,306 39,868
65,509
Loss from continuing operations
attributable to Health Management Associates, Inc. common
stockholders
(2,265 ) (11,549 ) (63,018 ) (76,832 ) Accretion of redeemable
equity securities - - (19,813 )
(19,813 )
Net loss attributable to Health Management
Associates, Inc. common stockholders
$ (2,265 ) $ (11,549 ) $ (82,831 ) $ (96,645 )
Earnings (loss) per share from continuing
operations attributable to Health Management Associates, Inc.
common stockholders:
Basic $ (0.01 ) $ (0.04 ) $ (0.32 ) $ (0.37 ) Diluted $ (0.01 ) $
(0.04 ) $ (0.32 ) $ (0.37 )
Three Months
Ended September 30, 2012 (Restated)
ContinuingOperations
Interest Rate SwapAmortization
andMark-To-MarketAdjustments
Total, AsReported
Income from continuing operations before income taxes $
92,601 $ (23,921 ) $ 68,680 Net income from continuing operations
attributable to noncontrolling interests (6,685 ) -
(6,685 )
Income from continuing operations before
income taxes attributable to Health Management Associates, Inc.
85,916 (23,921 ) 61,995 Income tax provision (27,523 )
7,860 (19,663 )
Income from continuing operations
attributable to Health Management Associates, Inc. common
stockholders
$ 58,393 $ (16,061 ) $ 42,332
Earnings per share from continuing
operations attributable to Health Management Associates, Inc.
common stockholders:
Basic $ 0.22 $ (0.06 ) $ 0.16 Diluted $ 0.22 $
(0.06 ) $ 0.16
HEALTH MANAGEMENT
ASSOCIATES, INC. SUPPLEMENTAL CONSOLIDATED STATEMENTS OF
INCOME INFORMATION (unaudited, in thousands, except per
share amounts) Nine Months Ended September 30,
2013
ContinuingOperations
Interest Rate SwapAmortization
andMark-To-MarketAdjustments
Change in Controland
OtherRelated Costs
Total, AsReported
Income (loss) from continuing operations before income taxes
$ 80,761 $ (57,711 ) $ (112,026 ) $ (88,976 ) Net income from
continuing operations attributable to noncontrolling interests
(12,804 ) - - (12,804 )
Income (loss) from continuing operations
before income taxes attributable to Health Management Associates,
Inc.
67,957 (57,711 ) (112,026 ) (101,780 ) Income tax benefit
(provision) (16,977 ) 22,363 43,410
48,796
Income (loss) from continuing operations
attributable to Health Management Associates, Inc. common
stockholders
50,980 (35,348 ) (68,616 ) (52,984 ) Accretion of redeemable equity
securities - - (19,813 )
(19,813 )
Net income (loss) attributable to Health
Management Associates, Inc. common stockholders
$ 50,980 $ (35,348 ) $ (88,429 ) $ (72,797 )
Earnings (loss) per share from continuing
operations attributable to Health Management Associates, Inc.
common stockholders:
Basic $ 0.21 $ (0.14 ) $ (0.35 ) $ (0.28 ) Diluted $ 0.21
$ (0.14 ) $ (0.35 ) $ (0.28 )
Nine
Months Ended September 30, 2012 (Restated)
ContinuingOperations
Interest Rate SwapAmortization
andMark-To-MarketAdjustments
Total, AsReported
Income from continuing operations before income taxes $
291,467 $ (82,902 ) $ 208,565 Net income from continuing operations
attributable to noncontrolling interests (21,757 ) -
(21,757 )
Income from continuing operations before
income taxes attributable to Health Management Associates, Inc.
269,710 (82,902 ) 186,808 Income tax provision (97,314 )
30,508 (66,806 )
Income from continuing operations
attributable to Health Management Associates, Inc. common
stockholders
$ 172,396 $ (52,394 ) $ 120,002
Earnings per share from continuing
operations attributable to Health Management Associates, Inc.
common stockholders:
Basic $ 0.68 $ (0.21 ) $ 0.47 Diluted $ 0.67 $
(0.20 ) $ 0.47
HEALTH MANAGEMENT
ASSOCIATES, INC. SUPPLEMENTAL CONSOLIDATED INFORMATION
The following table updates selected
information concerning HMA’s previously announced objectives for
the year ending December 31, 2013. These objectives are based on
HMA’s historical operating performance, current trends and other
assumptions that management believes are reasonable at this time.
These objectives exclude any potential future hospital partnerships
and acquisitions that may be completed during the rest of 2013.
2013 Objective Range
Adjusted Admissions growth (same hospital)
(4.5 %) to (3.0 %) Net revenue, including Bayfront (in
millions, before bad debt expense) $ 6,840 to $ 6,860
Provision for doubtful accounts as a percentage of net revenue 14.0
% to 15.0 %
Adjusted EBITDA (in millions) (a)
$ 790 to $ 800 Interest expense, net (in millions) $ 195 to
$ 205
Income from continuing operations
attributable to Health Management Associates, Inc. per share –
diluted (b)
$ 0.48 to $ 0.50 Net income attributable to noncontrolling
interests (in millions) $ 17 to $ 19 Capital expenditures as
a percentage of net revenue, after bad debt expense 5.0 % to 5.5 %
Included in above: HCIT meaningful use reimbursement,
net, in adjusted EBITDA (in millions) $ 85 to $ 90
Not
included in above: Interest rate swap interest expense (in
millions) $ 75 to $ 85
(a) Adjusted EBITDA is defined as
consolidated net income before discontinued operations, net (gains)
losses on sales of assets, change in control and other related
expenses, net interest and other income, interest expense, income
taxes and depreciation and amortization. Adjusted EBITDA margin is
defined as Adjusted EBITDA divided by net revenue. Adjusted EBITDA
is not a measure determined in accordance with generally accepted
accounting principles in the United States, commonly known as GAAP.
Nevertheless, HMA believes that providing non-GAAP information such
as Adjusted EBITDA is important for investors and other readers of
HMA's consolidated financial statements, as it is commonly used as
an analytical indicator within the health care industry and HMA's
debt facilities contain covenants that use Adjusted EBITDA in their
calculations. Because Adjusted EBITDA is a non-GAAP measure and is
thus susceptible to varying calculations, Adjusted EBITDA, as
presented, may not be directly comparable to other similarly titled
measures used by other companies.
(b) Excludes change of control and other
related expenses.
Health Management Associates, Inc.Investor Contact:John
Merriwether, 239-598-3131Vice President of Investor Relations
Heartland Media Acquisit... (NYSE:HMA)
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