Community Health Systems, Inc. Announces Third Quarter Ended September 30, 2022 Results
10/26/22
The following highlights the financial and operating results for the three months ended
-
Net operating revenues totaled
$3.025 billion . -
Net loss attributable to
Community Health Systems, Inc. stockholders was$(42) million , or$(0.32) per share (diluted), compared to net income of$111 million , or$0.85 per share (diluted), for the same period in 2021. Excluding the adjusting items as presented in the table in footnote (e) on page 15, net loss attributable toCommunity Health Systems, Inc. stockholders was$(0.52) per share (diluted), compared to net income of$0.69 per share (diluted) for the same period in 2021. -
Adjusted EBITDA was
$400 million , including$115 million of pandemic relief funds. -
Net cash provided by operating activities was
$137 million for the three months endedSeptember 30, 2022 , compared to$121 million for the same period in 2021. -
Approximately
$267 million principal amount of notes outstanding were extinguished through open market repurchases during the three months endedSeptember 30, 2022 . - On a same-store basis, admissions decreased 2.2 percent and adjusted admissions increased 5.2 percent, compared to the same period in 2021.
-
Hurricane Ian in
Florida impacted the results of operations for the three months endedSeptember 30, 2022 , resulting in a loss of net operating revenues together with incremental expenses currently estimated at approximately$10 million in the aggregate on a pre-tax basis. This amount does not include any insurance recoveries that the Company may receive.
Commenting on the results,
Hingtgen went on to say, “Against a continued backdrop of challenging industry and environmental factors in the third quarter, we focused our efforts on making important sequential progress in key areas. We were successful at driving stronger surgical volumes and also saw other volume indicators rebound midway through the quarter. Likewise, strong expense management programs, a significant reduction in contract labor, and other operational adjustments helped mitigate inflationary costs pressures. As these trends continue and we aggressively pursue our best strategic opportunities, we expect to drive incremental growth moving forward.”
Three Months Ended
Net operating revenues for the three months ended
Net loss attributable to
Adjusted EBITDA for the three months ended
The net loss attributable to
Nine Months Ended
Net operating revenues for the nine months ended
Net loss attributable to
Adjusted EBITDA for the nine months ended
The net loss attributable to
Open Market Note Repurchases
During August and September of 2022, the Company extinguished approximately
Pandemic Relief Funds
The Company received (returned) pandemic relief fund payments through various federal, state and local programs of approximately
Other
Certain of the Company’s facilities in
The Company completed the divestiture of one hospital on
Effective
Information About Non-GAAP Financial Measures
This press release presents Adjusted EBITDA, a non-GAAP financial measure, which is EBITDA adjusted to add back net income attributable to noncontrolling interests and to exclude loss (gain) from early extinguishment of debt, impairment and (gain) loss on sale of businesses, gain on sale of equity interests in
The non-GAAP financial measures set forth above are not measurements of financial performance under
The Company’s annual earnings guidance for 2022, as provided on
The Company’s headquarters are located in
Financial Highlights (a)(b) | ||||||||||||
(In millions, except per share amounts) | ||||||||||||
(Unaudited) | ||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||
Net operating revenues | $ |
3,025 |
$ |
3,115 |
$ |
9,069 |
$ |
9,135 |
||||
Net income (loss) (f) |
- |
144 |
(267) |
146 |
||||||||
Net (loss) income attributable to |
||||||||||||
(42) |
111 |
(369) |
52 |
|||||||||
Adjusted EBITDA (c) |
400 |
482 |
1,062 |
1,429 |
||||||||
Net cash provided by operating activities |
137 |
121 |
291 |
400 |
||||||||
(Loss) earnings per share attributable to Community | ||||||||||||
Basic (f) | $ |
(0.32) |
$ |
0.87 |
$ |
(2.86) |
$ |
0.41 |
||||
Diluted (e), (f) |
(0.32) |
0.85 |
(2.86) |
0.40 |
||||||||
Weighted-average number of shares outstanding (d): | ||||||||||||
Basic |
129 |
127 |
129 |
127 |
||||||||
Diluted |
129 |
131 |
129 |
130 |
||||||||
____
For footnotes, see pages 13, 14 and 15.
|
|||||||||||
Condensed Consolidated Statements of (Loss) Income (a)(b) | |||||||||||
(In millions, except per share amounts) | |||||||||||
(Unaudited) | |||||||||||
Three Months Ended |
|||||||||||
2022 |
2021 |
||||||||||
% of Net | % of Net | ||||||||||
Operating | Operating | ||||||||||
Amount | Revenues | Amount | Revenues | ||||||||
Net operating revenues | $ |
3,025 |
100.0 |
% |
$ |
3,115 |
100.0 |
% |
|||
Operating costs and expenses: | |||||||||||
Salaries and benefits |
1,352 |
44.7 |
% |
1,336 |
42.9 |
% |
|||||
Supplies |
492 |
16.3 |
% |
529 |
17.0 |
% |
|||||
Other operating expenses |
828 |
27.4 |
% |
716 |
23.0 |
% |
|||||
Lease cost and rent |
80 |
2.6 |
% |
75 |
2.4 |
% |
|||||
Pandemic relief funds |
(115) |
(3.8) |
% |
(19) |
(0.6) |
% |
|||||
Depreciation and amortization |
137 |
4.5 |
% |
137 |
4.4 |
% |
|||||
Impairment and (gain) loss on sale of businesses, net (f) |
47 |
1.6 |
% |
1 |
0.0 |
% |
|||||
Total operating costs and expenses |
2,821 |
93.3 |
% |
2,775 |
89.1 |
% |
|||||
Income from operations (f) |
204 |
6.7 |
% |
340 |
10.9 |
% |
|||||
Interest expense, net |
217 |
7.2 |
% |
216 |
6.9 |
% |
|||||
Gain from early extinguishment of debt |
(78) |
(2.6) |
% |
- |
- |
% |
|||||
Gain on sale of equity interests in |
- |
- |
% |
(26) |
(0.8) |
% |
|||||
Equity in earnings of unconsolidated affiliates |
(5) |
(0.2) |
% |
(4) |
(0.1) |
% |
|||||
Income before income taxes |
70 |
2.3 |
% |
154 |
4.9 |
% |
|||||
Provision for income taxes |
70 |
2.3 |
% |
10 |
0.3 |
% |
|||||
Net income (f) |
- |
- |
% |
144 |
4.6 |
% |
|||||
Less: Net income attributable to noncontrolling interests |
42 |
1.4 |
% |
33 |
1.0 |
% |
|||||
Net (loss) income attributable to |
|||||||||||
Inc. stockholders | $ |
(42) |
(1.4) |
% |
$ |
111 |
3.6 |
% |
|||
(Loss) earnings per share attributable to Community | |||||||||||
Basic (f) | $ |
(0.32) |
$ |
0.87 |
|||||||
Diluted (e), (f) | $ |
(0.32) |
$ |
0.85 |
|||||||
Weighted-average number of shares outstanding (d): | |||||||||||
Basic |
129 |
127 |
|||||||||
Diluted |
129 |
131 |
|||||||||
|
|||||||||||
____
For footnotes, see pages 13, 14 and 15.
Condensed Consolidated Statements of (Loss) Income (a)(b) | |||||||||||
(In millions, except per share amounts) | |||||||||||
(Unaudited) | |||||||||||
Nine Months Ended |
|||||||||||
2022 |
2021 |
||||||||||
% of Net | % of Net | ||||||||||
Operating | Operating | ||||||||||
Amount | Revenues | Amount | Revenues | ||||||||
Net operating revenues | $ |
9,069 |
100.0 |
% |
$ |
9,135 |
100.0 |
% |
|||
Operating costs and expenses: | |||||||||||
Salaries and benefits |
3,972 |
43.8 |
% |
3,905 |
42.7 |
% |
|||||
Supplies |
1,477 |
16.3 |
% |
1,521 |
16.7 |
% |
|||||
Other operating expenses |
2,511 |
27.7 |
% |
2,170 |
23.7 |
% |
|||||
Lease cost and rent |
236 |
2.6 |
% |
231 |
2.5 |
% |
|||||
Pandemic relief funds |
(171) |
(1.9) |
% |
(102) |
(1.1) |
% |
|||||
Depreciation and amortization |
398 |
4.4 |
% |
408 |
4.5 |
% |
|||||
Impairment and (gain) loss on sale of businesses, net (f) |
54 |
0.6 |
% |
24 |
0.3 |
% |
|||||
Total operating costs and expenses |
8,477 |
93.5 |
% |
8,157 |
89.3 |
% |
|||||
Income from operations (f) |
592 |
6.5 |
% |
978 |
10.7 |
% |
|||||
Interest expense, net |
652 |
7.1 |
% |
666 |
7.3 |
% |
|||||
(Gain) loss from early extinguishment of debt |
(73) |
(0.8) |
% |
79 |
0.9 |
% |
|||||
Gain on sale of equity interests in |
- |
- |
% |
(26) |
(0.3) |
% |
|||||
Equity in earnings of unconsolidated affiliates |
(11) |
(0.1) |
% |
(19) |
(0.2) |
% |
|||||
Income before income taxes |
24 |
0.3 |
% |
278 |
3.0 |
% |
|||||
Provision for income taxes |
291 |
3.2 |
% |
132 |
1.4 |
% |
|||||
Net (loss) income (f) |
(267) |
(2.9) |
% |
146 |
1.6 |
% |
|||||
Less: Net income attributable to noncontrolling interests |
102 |
1.2 |
% |
94 |
1.0 |
% |
|||||
Net (loss) income attributable to |
|||||||||||
Inc. stockholders | $ |
(369) |
(4.1) |
% |
$ |
52 |
0.6 |
% |
|||
(Loss) earnings per share attributable to Community | |||||||||||
Basic (f) | $ |
(2.86) |
$ |
0.41 |
|||||||
Diluted (e), (f) | $ |
(2.86) |
$ |
0.40 |
|||||||
Weighted-average number of shares outstanding (d): | |||||||||||
Basic |
129 |
127 |
|||||||||
Diluted |
129 |
130 |
|||||||||
____
For footnotes, see pages 13, 14 and 15.
Condensed Consolidated Statements of Comprehensive (Loss) Income | |||||||||||
(In millions) | |||||||||||
(Unaudited) | |||||||||||
Three Months Ended | Nine Months Ended | ||||||||||
2022 |
2021 |
2022 |
2021 |
||||||||
Net income (loss) | $ |
- |
$ |
144 |
$ |
(267) |
$ |
146 |
|||
Other comprehensive (loss) income, net of income taxes: | |||||||||||
Net change in fair value of available-for-sale debt | |||||||||||
securities, net of tax |
(6) |
(1) |
(20) |
(4) |
|||||||
Amortization and recognition of unrecognized pension cost | |||||||||||
components, net of tax |
- |
2 |
1 |
3 |
|||||||
Other comprehensive (loss) income |
(6) |
1 |
(19) |
(1) |
|||||||
Comprehensive (loss) income |
(6) |
145 |
(286) |
145 |
|||||||
Less: Comprehensive income attributable to noncontrolling interests |
42 |
33 |
102 |
94 |
|||||||
Comprehensive (loss) income attributable to |
|||||||||||
$ |
(48) |
$ |
112 |
$ |
(388) |
$ |
51 |
||||
____
For footnotes, see pages 13, 14 and 15.
Selected Operating Data (a) | |||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||
Three Months Ended |
|||||||||||||||||||||
Consolidated | Same-Store | ||||||||||||||||||||
|
2022 |
|
|
2021 |
|
% Change |
|
2022 |
|
|
2021 |
|
%Change |
||||||||
Number of hospitals (at end of period) |
|
81 |
|
|
84 |
|
|
80 |
|
|
80 |
|
|||||||||
Licensed beds (at end of period) |
|
13,309 |
|
|
13,229 |
|
|
12,796 |
|
|
12,692 |
|
|||||||||
Beds in service (at end of period) |
|
11,559 |
|
|
11,556 |
|
|
11,046 |
|
|
11,019 |
|
|||||||||
Admissions |
|
108,509 |
|
|
112,636 |
|
-3.7 |
% |
|
107,015 |
|
|
109,396 |
|
-2.2 |
% |
|||||
Adjusted admissions |
|
248,950 |
|
|
239,908 |
|
3.8 |
% |
|
244,861 |
|
|
232,868 |
|
5.2 |
% |
|||||
Patient days |
|
497,034 |
|
|
575,401 |
|
|
490,094 |
|
|
556,128 |
|
|||||||||
Average length of stay (days) |
|
4.6 |
|
|
5.1 |
|
|
4.6 |
|
|
5.1 |
|
|||||||||
Occupancy rate (average beds in service) |
|
46.7 |
% |
|
53.5 |
% |
|
48.2 |
% |
|
54.2 |
% |
|||||||||
Net operating revenues |
$ |
3,025 |
|
$ |
3,115 |
|
-2.9 |
% |
$ |
2,980 |
|
$ |
3,049 |
|
-2.3 |
% |
|||||
Net inpatient revenues as a % of net operating | |||||||||||||||||||||
revenues |
|
46.3 |
% |
|
48.7 |
% |
|
46.4 |
% |
|
48.7 |
% |
|||||||||
Net outpatient revenues as a % of net operating | |||||||||||||||||||||
revenues |
|
53.7 |
% |
|
51.3 |
% |
|
53.6 |
% |
|
51.3 |
% |
|||||||||
Income from operations (f) |
$ |
204 |
|
$ |
340 |
|
-40.0 |
% |
|||||||||||||
Income from operations as a % | |||||||||||||||||||||
of net operating revenues |
|
6.7 |
% |
|
10.9 |
% |
|||||||||||||||
Depreciation and amortization |
$ |
137 |
|
$ |
137 |
|
|||||||||||||||
Equity in earnings of unconsolidated affiliates |
$ |
(5 |
) |
$ |
(4 |
) |
|||||||||||||||
Net (loss) income attributable to |
|||||||||||||||||||||
$ |
(42 |
) |
$ |
111 |
|
-137.8 |
% |
||||||||||||||
Net (loss) income attributable to |
|||||||||||||||||||||
operating revenues |
|
-1.4 |
% |
|
3.6 |
% |
|||||||||||||||
Adjusted EBITDA (c) |
$ |
400 |
|
$ |
482 |
|
-17.0 |
% |
|||||||||||||
Adjusted EBITDA as a % of net | |||||||||||||||||||||
operating revenues |
|
13.2 |
% |
|
15.5 |
% |
|||||||||||||||
Net cash provided by operating activities |
$ |
137 |
|
$ |
121 |
|
13.2 |
% |
|||||||||||||
____
For footnotes, see pages 13, 14 and 15.
Selected Operating Data (a) | |||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||
Nine Months Ended |
|||||||||||||||||||||
Consolidated | Same-Store | ||||||||||||||||||||
|
2022 |
|
|
2021 |
|
% Change |
|
2022 |
|
|
2021 |
|
% Change |
||||||||
Number of hospitals (at end of period) |
|
81 |
|
|
84 |
|
|
80 |
|
|
80 |
|
|||||||||
Licensed beds (at end of period) |
|
13,309 |
|
|
13,229 |
|
|
12,796 |
|
|
12,692 |
|
|||||||||
Beds in service (at end of period) |
|
11,559 |
|
|
11,556 |
|
|
11,046 |
|
|
11,019 |
|
|||||||||
Admissions |
|
324,681 |
|
|
334,447 |
|
-2.9 |
% |
|
318,520 |
|
|
322,571 |
|
-1.3 |
% |
|||||
Adjusted admissions |
|
727,677 |
|
|
714,828 |
|
1.8 |
% |
|
712,399 |
|
|
690,824 |
|
3.1 |
% |
|||||
Patient days |
|
1,546,477 |
|
|
1,642,681 |
|
|
1,510,713 |
|
|
1,575,038 |
|
|||||||||
Average length of stay (days) |
|
4.8 |
|
|
4.9 |
|
|
4.7 |
|
|
4.9 |
|
|||||||||
Occupancy rate (average beds in service) |
|
49.0 |
% |
|
50.9 |
% |
|
50.0 |
% |
|
51.6 |
% |
|||||||||
Net operating revenues |
$ |
9,069 |
|
$ |
9,135 |
|
-0.7 |
% |
$ |
8,915 |
|
$ |
8,902 |
|
0.1 |
% |
|||||
Net inpatient revenues as a % of net operating | |||||||||||||||||||||
revenues |
|
46.9 |
% |
|
48.2 |
% |
|
47.0 |
% |
|
48.1 |
% |
|||||||||
Net outpatient revenues as a % of net operating | |||||||||||||||||||||
revenues |
|
53.1 |
% |
|
51.8 |
% |
|
53.0 |
% |
|
51.9 |
% |
|||||||||
Income from operations (f) |
$ |
592 |
|
$ |
978 |
|
-39.5 |
% |
|||||||||||||
Income from operations as a % of net | |||||||||||||||||||||
operating revenues |
|
6.5 |
% |
|
10.7 |
% |
|||||||||||||||
Depreciation and amortization |
$ |
398 |
|
$ |
408 |
|
|||||||||||||||
Equity in earnings of unconsolidated affiliates |
$ |
(11 |
) |
$ |
(19 |
) |
|||||||||||||||
Net (loss) income attributable to Community | |||||||||||||||||||||
$ |
(369 |
) |
$ |
52 |
|
-809.6 |
% |
||||||||||||||
Net (loss) income attributable to Community | |||||||||||||||||||||
of net operating revenues |
|
-4.1 |
% |
|
0.6 |
% |
|||||||||||||||
Adjusted EBITDA (c) |
$ |
1,062 |
|
$ |
1,429 |
|
-25.7 |
% |
|||||||||||||
Adjusted EBITDA as a % of net | |||||||||||||||||||||
operating revenues |
|
11.7 |
% |
|
15.6 |
% |
|||||||||||||||
Net cash provided by operating activities |
$ |
291 |
|
$ |
400 |
|
-27.3 |
% |
|||||||||||||
____
For footnotes, see pages 13, 14 and 15.
Condensed Consolidated Balance Sheets | ||||||
(In millions, except share data) | ||||||
(Unaudited) | ||||||
ASSETS | ||||||
Current assets | ||||||
Cash and cash equivalents | $ |
300 |
$ |
507 |
||
Patient accounts receivable |
1,969 |
2,062 |
||||
Supplies |
355 |
355 |
||||
Prepaid income taxes |
98 |
94 |
||||
Prepaid expenses and taxes |
246 |
192 |
||||
Other current assets |
301 |
269 |
||||
Total current assets |
3,269 |
3,479 |
||||
Property and equipment |
9,727 |
9,757 |
||||
Less accumulated depreciation and amortization |
(4,277) |
(4,204) |
||||
Property and equipment, net |
5,450 |
5,553 |
||||
4,201 |
4,219 |
|||||
Deferred income taxes |
53 |
53 |
||||
Other assets, net |
1,941 |
1,913 |
||||
Total assets | $ |
14,914 |
$ |
15,217 |
||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||
Current liabilities | ||||||
Current maturities of long-term debt | $ |
21 |
$ |
31 |
||
Current operating lease liabilities |
151 |
147 |
||||
Accounts payable |
820 |
830 |
||||
Accrued liabilities: | ||||||
Employee compensation |
601 |
655 |
||||
Accrued interest |
218 |
225 |
||||
Other |
572 |
476 |
||||
Total current liabilities |
2,383 |
2,364 |
||||
Long-term debt (g) |
11,943 |
12,109 |
||||
Deferred income taxes |
477 |
192 |
||||
Long-term operating lease liabilities |
563 |
535 |
||||
Other long-term liabilities |
726 |
827 |
||||
Total liabilities |
16,092 |
16,027 |
||||
Redeemable noncontrolling interests in equity of consolidated subsidiaries |
516 |
480 |
||||
STOCKHOLDERS’ DEFICIT | ||||||
Preferred stock, |
- |
- |
||||
Common stock, |
||||||
shares issued and outstanding at |
||||||
issued and outstanding at |
1 |
1 |
||||
Additional paid-in capital |
2,091 |
2,118 |
||||
Accumulated other comprehensive loss |
(33) |
(14) |
||||
Accumulated deficit |
(3,845) |
(3,477) |
||||
(1,786) |
(1,372) |
|||||
Noncontrolling interests in equity of consolidated subsidiaries |
92 |
82 |
||||
Total stockholders’ deficit |
(1,694) |
(1,290) |
||||
Total liabilities and stockholders’ deficit | $ |
14,914 |
$ |
15,217 |
||
____
For footnotes, see pages 13, 14 and 15.
Condensed Consolidated Statements of Cash Flows | |||||
(In millions) | |||||
(Unaudited) | |||||
Nine Months Ended |
|||||
2022 |
2021 |
||||
Cash flows from operating activities | |||||
Net (loss) income | $ |
(267) |
$ |
146 |
|
Adjustments to reconcile net (loss) income to net cash provided by | |||||
operating activities: | |||||
Depreciation and amortization |
398 |
408 |
|||
Deferred income taxes |
290 |
123 |
|||
Stock-based compensation expense |
14 |
18 |
|||
Impairment and (gain) loss on sale of businesses, net (f) |
54 |
24 |
|||
(Gain) loss from early extinguishment of debt |
(73) |
79 |
|||
Gain on sale of equity interests in |
- |
(26) |
|||
Other non-cash expenses, net |
140 |
22 |
|||
Changes in operating assets and liabilities, net of effects of | |||||
acquisitions and divestitures: | |||||
Patient accounts receivable |
93 |
(99) |
|||
Supplies, prepaid expenses and other current assets |
(94) |
14 |
|||
Repayment/derecognition of Medicare accelerated payments |
- |
(267) |
|||
Accounts payable, accrued liabilities and income taxes |
(90) |
85 |
|||
Other |
(174) |
(127) |
|||
Net cash provided by operating activities |
291 |
400 |
|||
Cash flows from investing activities | |||||
Acquisitions of facilities and other related businesses |
(9) |
(3) |
|||
Purchases of property and equipment |
(284) |
(334) |
|||
Proceeds from disposition of hospitals and other ancillary operations |
3 |
17 |
|||
Proceeds from sale of property and equipment |
30 |
7 |
|||
Purchases of available-for-sale debt securities and equity securities |
(73) |
(135) |
|||
Proceeds from sales of available-for-sale debt securities and equity securities |
62 |
86 |
|||
Proceeds from sale of equity interests in |
- |
110 |
|||
Distribution of CoreTrust proceeds |
121 |
- |
|||
Purchases of investments in unconsolidated affiliates |
(18) |
(4) |
|||
Increase in other investments |
(39) |
(57) |
|||
Net cash used in investing activities |
(207) |
(313) |
|||
Cash flows from financing activities | |||||
Repurchase of restricted stock shares for payroll tax withholding requirements |
(8) |
(5) |
|||
Deferred financing costs and other debt-related costs |
(73) |
(310) |
|||
Proceeds from noncontrolling investors in joint ventures |
10 |
1 |
|||
Redemption of noncontrolling investments in joint ventures |
(2) |
(5) |
|||
Distributions to noncontrolling investors in joint ventures |
(105) |
(95) |
|||
Other borrowings |
35 |
50 |
|||
Issuance of long-term debt |
1,535 |
4,310 |
|||
Repayments of long-term indebtedness |
(1,683) |
(4,415) |
|||
Net cash used in financing activities |
(291) |
(469) |
|||
Net change in cash and cash equivalents |
(207) |
(382) |
|||
Cash and cash equivalents at beginning of period |
507 |
1,676 |
|||
Cash and cash equivalents at end of period | $ |
300 |
$ |
1,294 |
|
For footnotes, see pages 13, 14 and 15.
____
Footnotes to Financial Highlights, Financial Statements and Selected Operating Data
(a) |
Both financial and statistical results include the operating results of divested or closed businesses for the periods prior to the consummation of the respective divestiture or closing. Same-store operating results and statistical information exclude businesses divested in 2021 and 2022, businesses closed or substantially closed in 2022 and one hospital opened in 2022. There were no discontinued operations reported for 2022 and 2021. |
|
(b) |
The following table provides information needed to calculate loss per share, which is adjusted for income attributable to noncontrolling interests (in millions): |
Three Months Ended | Nine Months Ended | |||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||
Net (loss) income attributable to |
||||||||||||
Inc. stockholders: | ||||||||||||
Net income (loss) | $ |
- |
$ |
144 |
$ |
(267) |
$ |
146 |
||||
Less: Income attributable to noncontrolling interests, net of taxes |
42 |
33 |
102 |
94 |
||||||||
Net (loss) income attributable to |
||||||||||||
Inc. stockholders — basic and diluted | $ |
(42) |
$ |
111 |
$ |
(369) |
$ |
52 |
||||
(c) |
EBITDA is a non-GAAP financial measure which consists of net (loss) income attributable to |
Footnotes to Financial Highlights, Financial Statements and Selected Operating Data (Continued)
Adjusted EBITDA is not a measurement of financial performance under |
The following table reflects the reconciliation of Adjusted EBITDA, as defined, to net (loss) income attributable to |
Three Months Ended | Nine Months Ended | ||||||||||||
2022 |
2021 |
2022 |
2021 |
||||||||||
Net (loss) income attributable to |
|||||||||||||
$ |
(42) |
$ |
111 |
$ |
(369) |
$ |
52 |
||||||
Adjustments: | |||||||||||||
Provision for income taxes |
70 |
10 |
291 |
132 |
|||||||||
Depreciation and amortization |
137 |
137 |
398 |
408 |
|||||||||
Net income attributable to noncontrolling interests |
42 |
33 |
102 |
94 |
|||||||||
Interest expense, net |
217 |
216 |
652 |
666 |
|||||||||
(Gain) loss from early extinguishment of debt |
(78) |
- |
(73) |
79 |
|||||||||
Impairment and (gain) loss on sale of businesses, net |
47 |
1 |
54 |
24 |
|||||||||
Expense from government and other legal matters | |||||||||||||
and related costs |
5 |
- |
5 |
- |
|||||||||
Expense related to employee termination benefits | |||||||||||||
and other restructuring charges |
2 |
- |
2 |
- |
|||||||||
Gain on sale of equity interests in |
- |
(26) |
- |
(26) |
|||||||||
Adjusted EBITDA | $ |
400 |
$ |
482 |
$ |
1,062 |
$ |
1,429 |
|||||
(d) |
The following table sets forth components reconciling the basic weighted-average number of shares to the diluted weighted-average number of shares (in millions): |
Three Months Ended | Nine Months Ended | |||||||
2022 |
2021 |
2022 |
2021 |
|||||
Weighted-average number of shares outstanding - basic |
129 |
127 |
129 |
127 |
||||
Add effect of dilutive securities: | ||||||||
Stock awards and options |
- |
4 |
- |
3 |
||||
Weighted-average number of shares outstanding - diluted |
129 |
131 |
129 |
130 |
||||
The Company generated a net loss attributable to |
Footnotes to Financial Highlights, Financial Statements and Selected Operating Data (Continued)
(e) |
The following supplemental table reconciles net (loss) income attributable to |
Three Months Ended | Nine Months Ended | |||||||||||||||
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|||||
Net (loss) income per share (diluted), as reported |
$ |
(0.32 |
) |
$ |
0.85 |
|
$ |
(2.86 |
) |
$ |
0.40 |
|
||||
Adjustments: | ||||||||||||||||
(Gain) loss from early extinguishment of debt |
|
(0.53 |
) |
|
- |
|
|
(0.42 |
) |
|
0.89 |
|
||||
Impairment and (gain) loss on sale of businesses, net |
|
0.28 |
|
|
0.01 |
|
|
0.33 |
|
|
0.15 |
|
||||
Expense from government and other legal matters and related costs |
|
0.03 |
|
|
- |
|
|
0.03 |
|
|
- |
|
||||
Expense related to employee termination benefits | ||||||||||||||||
and other restructuring charges |
|
0.01 |
|
|
- |
|
|
0.01 |
|
|
- |
|
||||
Gain on sale of equity interests in |
|
- |
|
|
(0.16 |
) |
|
- |
|
|
(0.16 |
) |
||||
Net (loss) income per share (diluted), excluding adjustments |
$ |
(0.52 |
) |
$ |
0.69 |
|
$ |
(2.92 |
) |
$ |
1.29 |
|
||||
(f) |
Both income from operations and net (loss) income included a net non-cash expense of |
(g) |
The maximum aggregate principal amount under the ABL Facility is |
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995 that involve risk and uncertainties. All statements in this press release other than statements of historical fact, including statements regarding projections, expected operating results, and other events that depend upon or refer to future events or conditions or that include words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates,” “thinks,” and similar expressions, are forward-looking statements. Although the Company believes that these forward-looking statements are based on reasonable assumptions, these assumptions are inherently subject to significant economic and competitive uncertainties and contingencies, which are difficult or impossible to predict accurately and may be beyond the control of the Company. Accordingly, the Company cannot give any assurance that its expectations will in fact occur and cautions that actual results may differ materially from those in the forward-looking statements. A number of factors could affect the future results of the Company or the healthcare industry generally and could cause the Company’s expected results to differ materially from those expressed in this press release.
These factors include, among other things:
• developments related to COVID-19, including, without limitation, related to the length and severity of the pandemic; the volume of canceled or rescheduled procedures; and the spread of potentially more contagious and/or virulent forms of the virus, including variants of the virus for which currently available vaccines, treatments and tests may not be effective or authorized;
• uncertainty regarding the magnitude and timing of any future payments or benefits we may receive or realize under the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), the Paycheck Protection Program and Health Care Enhancement Act (the “PPPHCE Act”), the Consolidated Appropriations Act, 2021 (the “CAA”), the American Rescue Plan Act of 2021 (the “ARPA”) and any other future stimulus measures related to COVID-19;
• general economic and business conditions, both nationally and in the regions in which we operate, including ongoing inflationary pressures that have significantly increased and may continue to significantly increase our expenses, the extremely competitive labor market and labor shortages, and supply chain shortages and disruptions, as well as the current and/or potential future adverse impact of such economic conditions and other factors on our net operating revenues (including our service mix, revenue mix, payor mix and/or patient volumes) and our ability to collect outstanding receivables;
• the impact of current or future federal and state health reform initiatives, including the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (the “Affordable Care Act”), and the potential for changes to the Affordable Care Act, its implementation or its interpretation (including through executive orders and court challenges);
• the extent to and manner in which states support increases, decreases or changes in Medicaid programs, implement health insurance exchanges or alter the provision of healthcare to state residents through legislation, regulation or otherwise;
• the future and long-term viability of health insurance exchanges and potential changes to the beneficiary enrollment process;
• risks associated with our substantial indebtedness, leverage and debt service obligations, including our ability to refinance such indebtedness on acceptable terms or to incur additional indebtedness, and our ability to remain in compliance with debt covenants;
• demographic changes;
• changes in, or the failure to comply with, federal, state or local laws or governmental regulations affecting our business, including any such laws or governmental regulations adopted in connection with the COVID-19 pandemic;
• potential adverse impact of known and unknown legal, regulatory and governmental proceedings and other loss contingencies, including governmental investigations and audits, and federal and state false claims act litigation;
• our ability, where appropriate, to enter into and maintain provider arrangements with payors and the terms of these arrangements, which may be further affected by the increasing consolidation of health insurers and managed care companies and vertical integration efforts involving payors and healthcare providers;
• changes in, or the failure to comply with, contract terms with payors and changes in reimbursement policies or rates paid by federal or state healthcare programs or commercial payors;
• any security breaches, cyber-attacks, loss of data, other cybersecurity threats or incidents, and any actual or perceived failures to comply with legal requirements governing the privacy and security of health information or other regulated, sensitive or confidential information, or legal requirements regarding data privacy or data protection;
• any potential impairments in the carrying value of goodwill, other intangible assets, or other long-lived assets, or changes in the useful lives of other intangible assets;
• changes in inpatient or outpatient Medicare and Medicaid payment levels and methodologies;
• the effects related to the implementation of the sequestration spending reductions pursuant to both the Budget Control Act of 2011 and the Pay-As-You-Go Act of 2010 and the potential for future deficit reduction legislation;
• increases in the amount and risk of collectability of patient accounts receivable, including decreases in collectability which may result from, among other things, self-pay growth and difficulties in recovering payments for which patients are responsible, including co-pays and deductibles;
• the efforts of insurers, healthcare providers, large employer groups and others to contain healthcare costs, including the trend toward value-based purchasing;
• the impact of competitive labor market conditions and the shortage of experienced nurses, including in connection with our ability to hire and retain qualified nurses, physicians, other medical personnel and key management, and increased labor expenses as a result of such competitive labor market conditions, inflation and competition for such positions;
• any failure to obtain medical supplies or pharmaceuticals at favorable prices;
• liabilities and other claims asserted against us, including self-insured malpractice claims;
• competition;
• trends toward treatment of patients in less acute or specialty healthcare settings, including ambulatory surgery centers or specialty hospitals or via telehealth;
• changes in medical or other technology;
• changes in
• the availability and terms of capital to fund any additional acquisitions or replacement facilities or other capital expenditures;
• our ability to successfully make acquisitions or complete divestitures, our ability to complete any such acquisitions or divestitures on desired terms or at all, the timing of the completion of any such acquisitions or divestitures, and our ability to realize the intended benefits from any such acquisitions or divestitures;
• the impact that changes in our relationships with joint venture or syndication partners could have on effectively operating our hospitals or ancillary services or in advancing strategic opportunities;
• our ability to successfully integrate any acquired hospitals and/or outpatient facilities, or to recognize expected synergies from acquisitions;
• the impact of severe weather conditions and climate change, as well as the timing and amount of insurance recoveries in relation to severe weather events;
• our ability to obtain adequate levels of insurance, including cyber, general liability, professional liability, and directors and officers liability insurance;
• timeliness of reimbursement payments received under government programs;
• effects related to pandemics, epidemics, or outbreaks of infectious diseases, including the coronavirus causing the disease known as COVID-19;
• any failure to comply with our obligations under license or technology agreements;
• challenging economic conditions in non-urban communities in which we operate;
• any developments with respect to the final auditing and reporting requirements of, or other adverse developments with respect to, the Corporate Integrity Agreement to which we are subject;
• the concentration of our revenue in a small number of states;
• our ability to realize anticipated cost savings and other benefits from our current strategic and operational cost savings initiatives;
• any changes in or interpretations of income tax laws and regulations; and
• the risk factors set forth in our Annual Report on Form 10-K for the year ended
The consolidated operating results for the three and nine months ended
View source version on businesswire.com: https://www.businesswire.com/news/home/20221026005859/en/
Investor Contact:
President and
Chief Financial Officer
(615) 465-7000
Source: