Triad Reports Second Quarter Results.PLANO, Texas Plano (IPA: /ˈpleɪnoʊ/) is a wealthy suburb of Dallas, Texas, located to the north, mainly within Collin County, but also extending into Denton County. According to the 2000 U.S. -- Triad Hospitals Triad Hospitals is a Fortune 500 company based in Plano, Texas. It operates 54 hospitals in the United States. In February 2007 it received a merger/buyout offer from another company, and then in March 2007 it received a superior merger/buyout offer from Community Health Systems of , Inc. (the "Company" or "Triad") (NYSE NYSE See: New York Stock Exchange :TRI TRI Toxics Release Inventory (US EPA) TRI Touch Research Institute TRI Taux de Rentabilité Interne (French: internal rate of return) TRI Taux de Rentabilité Interne TRI Tile Roofing Institute ) announced consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: financial results for the three and six months ended June June: see month. 30, 2006. For the three months, the Company reported revenues of $1.4 billion; earnings before interest, taxes, depreciation, amortization, and other items ("adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become ") of $186.7 million; net income of $60.1 million; income from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the of $60.0 million; diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of ("EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. ") of $0.69; and diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. EPS from continuing operations of $0.69. Results for the three months include additional compensation costs of $6.9 million pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern , or $0.05 per diluted share, due to stock compensation expense recorded with the January January: see month. 1, 2006 adoption of Statement of Financial Accounting Standards (SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System ) 123R, "Share-Based Payment." On a same-facility basis compared to the prior year three-month period, inpatient inpatient /in·pa·tient/ (in´pa-shent) a patient who comes to a hospital or other health care facility for diagnosis or treatment that requires an overnight stay. in·pa·tient n. admissions increased 0.2%, adjusted admissions increased 1.5%, and inpatient surgeries increased 3.8%. Patient revenue per adjusted admission increased 8.1%, patient revenues increased 9.7%, and revenues increased 9.6%. Revenue growth rates Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. reflected the impact of the Company's self-pay discount policy; excluding self-pay discounts (which reduced net revenue relative to what it would have been without the discounts), the Company estimates that patient revenue per adjusted admission would have increased 8.6%, patient revenues would have increased 10.2%, and revenues would have increased 10.1%. Same-facility results included facilities owned for the full second quarter of both years. For the three months, the Company reported a provision for doubtful accounts of $128.2 million, or 9.3% of revenue. Excluding the self-pay discounts of $50.2 million (which reduced both provision for doubtful accounts as a percent of net revenue and net revenue relative to what they would have been without the discounts), the Company estimates that the provision for doubtful accounts would have been 12.5% of revenue. For the three months, cash flow from operating activities was $36.7 million, or $185.3 million excluding cash interest payments of $50.4 million and cash tax payments of $98.2 million. During the quarter, the Company spent $115.1 million on capital expenditures plus $12.2 million for the acquisition of an additional 21% interest in Massillon Massillon (măs`ĭlŏn), city (1990 pop. 31,007), Stark co., NE Ohio, on the Tuscarawas River; inc. 1853. A wheat-shipping center on the Ohio & Erie Canal after 1828, it became an industrial city producing steel, steel products, and Community Health System, LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control , a venture in which Triad acquired an interest in February February: see month. 2006. The acquisition increased Triad's ownership interest to 80% from 59%. On June 22, 2006, construction began on Cedar Park Cedar Park could refer to
Relationship between two companies when one company owns substantial interest, but less than a majority of the voting stock of another company, or when two companies are both subsidiaries of a third company. See: Subsidiaries, parent company. of Triad and Seton se·ton n. Material such as thread, wire, or gauze that is passed through subcutaneous tissues or through a cyst in order to form a sinus or fistula. seton 1. a thin woven fabric wick, 6 in × 0. Health System as its partners. On July July: see month. 7, 2006, construction began on a 270-bed replacement hospital for Gateway Medical Center in Clarksville, Tennessee For other uses, see Clarksville (disambiguation). Clarksville is a city in Montgomery County, Tennessee, USA. Clarksville is the county seat of Montgomery County and is Tennessee's fastest growing and fifth largest city. ; an affiliate of Triad acquired an 80% interest in a venture formed to own the existing hospital in February 2006. During the quarter, Triad paid debt principal of $0.3 million and received proceeds of $9.3 million from the issuance of common stock. At June 30, cash and cash equivalents were $276.0 million, and the Company had $577 million available under its $600 million revolving line of credit Revolving line of credit A bank line of credit on which the customer pays a commitment fee and can take and repay funds at will. Normally a revolving LOC involves a firm commitment from the bank for a period of several years. , which was reduced by $23 million of outstanding letters of credit. Long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. outstanding was $1.7 billion, and stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. totaled $3.1 billion. For the six months, the Company reported revenues of $2.7 billion; adjusted EBITDA of $383.7 million; net income of $143.2 million; income from continuing operations of $127.9 million; diluted EPS of $1.65; and diluted EPS from continuing operations of $1.48. Results for the six months include additional compensation costs of $13.7 million pretax, or $0.10 per diluted share, due to stock compensation expense recorded with the January 1, 2006 adoption of SFAS 123R. On a same-facility basis compared to the prior year six-month period, inpatient admissions decreased 0.1%, adjusted admissions increased 0.9%, and inpatient surgeries increased 5.0%. Patient revenue per adjusted admission increased 8.4%, patient revenues increased 9.3%, and revenues increased 9.1%. Revenue growth rates reflected the impact of the Company's self-pay discount policy; excluding self-pay discounts (which reduced net revenue relative to what it would have been without the discounts), the Company estimates that patient revenue per adjusted admission would have increased 9.8%, patient revenues would have increased 10.7%, and revenues would have increased 10.4%. Same-facility results included facilities owned for the full six months of both years. For the six months, the Company reported a provision for doubtful accounts of $248.9 million, or 9.1% of revenue. Excluding the self-pay discounts of $95.4 million (which reduced both provision for doubtful accounts as a percent of net revenue and net revenue relative to what they would have been without the discounts), the Company estimates that the provision for doubtful accounts would have been 12.1% of revenue. For the six months, cash flow from operating activities was $132.9 million, or $308.5 million excluding cash interest payments of $58.0 million and cash tax payments of $117.6 million. The Company spent $233.4 million on capital expenditures and $49.2 million on acquisitions during the six months. The Company paid debt principal of $1.0 million and received proceeds of $21.9 million from the issuance of common stock. For 2006, Triad reiterated its guidance for diluted EPS from continuing operations of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $2.81-2.93, as well as its guidance for diluted EPS from continuing operations excluding stock compensation expense of approximately $2.99-3.11. Because of an increase in the provision for doubtful accounts and information systems conversion costs, the Company expects 2007 diluted EPS to grow approximately 10-13%; however, beyond 2007, the Company expects to return to annual EPS growth in the mid-teens percent range. Triad will conduct a conference call at 9:30 a.m. Eastern Time (8:30 a.m. Central Time) today, August 4, to discuss these results. To listen to the call, please call 877-704-5386, confirmation code 1945442. International participants, please call 913-312-1302, confirmation code 1945442. This conference call will be simulcast Simulcast is a portmanteau of "simultaneous broadcast", and refers to programs or events broadcast across more than one medium, or more than one service on the same medium, at the same time. on the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the via the Triad website at www.triadhospitals.com. A recorded replay of the call will be available for 14 days at 719-457-0820 or 888-203-1112, confirmation code 1945442. Triad, through its affiliates, owns and manages hospitals and ambulatory surgery centers ambulatory surgery center A free-standing center that performs various types of surgery in small cities and selected larger urban markets. The Company currently operates 52 hospitals (including one under construction) and 12 ambulatory surgery centers in 16 states with approximately 9,490 licensed beds. In addition, through its QHR QHR Quorum Health Resources QHR Quality Hours (grading system) QHR Quarter Horse Racing subsidiary, the Company provides hospital management, consulting, and advisory services advisory services advisory services provided to the public, in their capacity as owners and managers of animals, are an important part of veterinary science. They may be provided by government bureaux, by commercial companies who deal in pharmaceuticals or animals or animal to more than 180 independent community hospitals and health systems throughout the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. based on current management expectations. Numerous factors may cause results to differ materially from those anticipated in the forward-looking statements. These factors include, but are not limited to, (1) the highly competitive nature of the healthcare business, (2) the efforts of insurers and other payers, healthcare providers and others to contain healthcare costs, (3) possible changes in Medicare Medicare, national health insurance program in the United States for persons aged 65 and over and the disabled. It was established in 1965 with passage of the Social Security Amendments and is now run by the Centers for Medicare and Medicaid Services. , Medicaid Medicaid, national health insurance program in the United States for low-income persons; established in 1965 with passage of the Social Security Amendments and now run by the Centers for Medicare and Medicaid Services. and other government programs that may limit reimbursements to healthcare providers, (4) changes in Federal, state or local regulations affecting the healthcare industry, (5) the possible enactment of Federal or state healthcare reform, (6) the ability to attract and retain qualified management and personnel, including physicians and nurses, (7) the departure of key executive officers from Triad, (8) the successful implementation of Triad's new information technology system, (9) claims and legal actions relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc professional liabilities and other matters, (10) fluctuations in the market value of Triad common stock, (11) changes in accounting standards, (12) changes in general economic conditions or geopolitical ge·o·pol·i·tics n. (used with a sing. verb) 1. The study of the relationship among politics and geography, demography, and economics, especially with respect to the foreign policy of a nation. 2. a. events, (13) future acquisitions, joint venture developments or divestitures which may result in additional charges, (14) the ability to enter into managed care provider arrangements on acceptable terms, (15) the availability and terms of capital to fund the expansion of Triad's business, (16) changes in business strategy or development plans, (17) the ability to obtain adequate levels of general and professional liability insurance, (18) potential adverse impact of known and unknown government investigations, (19) timeliness of reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. payments received under government programs, and (20) other risk factors described in our Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and other Company filings with the Securities and Exchange Commission. Many of the factors that will determine the Company's future results are beyond the ability of the Company to control or predict. These statements are subject to risks and uncertainties and, therefore, actual results may differ materially. Readers should not place undue reliance on forward-looking statements, which reflect management's views only as of the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" . The Company undertakes no obligation to revise or update any forward-looking statements, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise. This release contains certain financial information not derived de·rive v. de·rived, de·riv·ing, de·rives v.tr. 1. To obtain or receive from a source. 2. in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ), including adjusted EBITDA; the Company believes this information is useful to investors and other interested parties; such information should not be considered as a substitute for any measures derived in accordance with GAAP, and may not be comparable to other similarly titled measures of other companies; reconciliation of this information to the most comparable GAAP measure is included as an attachment See attach a file. to this release. All references to "Company", "Triad", and "Triad Hospitals, Inc." as used throughout this document refer to Triad Hospitals, Inc. and its affiliates.
Triad Hospitals, Inc.
Consolidated Statements of Operations
For the Periods Ended June 30, 2006 and 2005
Unaudited
(Dollars in millions, except for earnings per share)
For the three months ended
---------------------------------------------
2006 2005
---------------------- ----------------------
Amount Percentage Amount Percentage
----------- ---------- ----------- ----------
Revenues $1,378.1 100.0% $1,167.3 100.0%
Salaries and benefits,
including stock
compensation expense of
$6.9 in 2006 553.9 40.2% 482.9 41.4%
Reimbursable expenses 12.3 0.9% 13.0 1.1%
Supplies 234.5 17.0% 196.0 16.8%
Other operating expenses 272.3 19.8% 216.1 18.5%
Provision for doubtful
accounts 128.2 9.3% 90.2 7.7%
Depreciation 55.5 4.0% 52.0 4.5%
Amortization 2.1 0.2% 1.5 0.1%
Interest expense 23.7 1.7% 27.0 2.3%
Refinancing transaction
costs -- 0.0% 8.4 0.7%
ESOP expense 3.1 0.2% 3.9 0.4%
Gain on sales of assets (0.5) 0.0% (0.8) (0.1%)
----------- ---------- ----------- ----------
Total operating expenses 1,285.1 93.3% 1,090.2 93.4%
----------- ---------- ----------- ----------
Income from continuing
operations before
minority interests,
equity in earnings and
income tax provision 93.0 6.7% 77.1 6.6%
Minority interests in
earnings of consolidated
entities (5.2) (0.3%) (2.7) (0.2%)
Equity in earnings of
unconsolidated
affiliates 9.8 0.7% 9.6 0.8%
----------- ---------- ----------- ----------
Income from continuing
operations before income
tax provision 97.6 7.1% 84.0 7.2%
Income tax provision (37.6) (2.7%) (32.8) (2.8%)
----------- ---------- ----------- ----------
Income from continuing
operations 60.0 4.4% 51.2 4.4%
Income from discontinued
operations, net of tax 0.1 0.0% 7.7 0.6%
----------- ---------- ----------- ----------
Net income $60.1 4.4% $58.9 5.0%
=========== ========== =========== ==========
Basic income per common
share:
Continuing operations $0.70 $0.64
Discontinued operations $-- $0.10
----------- -----------
Net $0.70 $0.74
=========== ===========
Diluted income per common
share:
Continuing operations $0.69 $0.62
Discontinued operations $-- $0.10
----------- -----------
Net $0.69 $0.72
=========== ===========
Shares used in earnings
per share calculations 86,146,846 79,936,308
Shares used in diluted
earnings per share
calculations 86,994,726 81,947,276
Triad Hospitals, Inc.
Reconciliation of Non-GAAP Financial Information
For the Periods Ended June 30, 2006 and 2005
Unaudited
(Dollars in millions)
For the three months ended
-----------------------------------------
2006 2005
-------------------- --------------------
Amount Percentage Amount Percentage
--------- ---------- --------- ----------
Revenues $1,378.1 100.0% $1,167.3 100.0%
Salaries and benefits 553.9 40.2% 482.9 41.4%
Reimbursable expenses 12.3 0.9% 13.0 1.1%
Supplies 234.5 17.0% 196.0 16.8%
Other operating expenses 272.3 19.8% 216.1 18.5%
Provision for doubtful
accounts 128.2 9.3% 90.2 7.7%
Equity in earnings of
unconsolidated affiliates (9.8) (0.7%) (9.6) (0.8%)
--------- ---------- --------- ----------
1,191.4 86.5% 988.6 84.7%
--------- ---------- --------- ----------
Adjusted EBITDA (1) 186.7 13.5% 178.7 15.3%
Depreciation 55.5 4.0% 52.0 4.5%
Amortization 2.1 0.2% 1.5 0.1%
Interest expense 23.7 1.7% 27.0 2.3%
Refinancing transaction costs -- 0.0% 8.4 0.7%
ESOP expense 3.1 0.2% 3.9 0.4%
Gain on sales of assets (0.5) 0.0% (0.8) (0.1%)
Minority interests in
earnings of consolidated
entities 5.2 0.3% 2.7 0.2%
--------- ---------- --------- ----------
89.1 6.4% 94.7 8.1%
--------- ---------- --------- ----------
Income from continuing
operations before income tax
provision 97.6 7.1% 84.0 7.2%
Income tax provision (37.6) (2.7%) (32.8) (2.8%)
--------- ---------- --------- ----------
Income from continuing
operations 60.0 4.4% 51.2 4.4%
Income from discontinued
operations, net of tax 0.1 0.0% 7.7 0.6%
--------- ---------- --------- ----------
Net income $60.1 4.4% $58.9 5.0%
========= ========== ========= ==========
Basic income per common
share:
Continuing operations $0.70 $0.64
Discontinued operations $-- $0.10
--------- ---------
Net $0.70 $0.74
========= =========
Diluted income per common
share:
Continuing operations $0.69 $0.62
Discontinued operations $-- $0.10
--------- ---------
Net $0.69 $0.72
========= =========
Other data
Gross patient revenues $4,071.0 $3,280.7
Revenue deductions 2,748.2 2,162.9
--------- ---------
Net patient revenues 1,322.8 1,117.8
Non-patient revenues 55.3 49.5
--------- ---------
Revenues $1,378.1 $1,167.3
(1) Adjusted EBITDA is defined as earnings before interest expense,
income taxes, depreciation, amortization, ESOP expense, gain on
sales of assets, refinancing transaction costs, minority
interests, and discontinued operations. Adjusted EBITDA is
commonly used by lenders and investors to assess leverage
capacity, debt service ability and liquidity. Many of Triad's debt
covenants use adjusted EBITDA, or a modification of adjusted
EBITDA, in financial covenant calculations. Adjusted EBITDA is
used by management to evaluate financial performance and resource
allocation for each facility and for Triad as a whole. Adjusted
EBITDA should not be considered as a measure of financial
performance under generally accepted accounting principles, and
items excluded from adjusted EBITDA are significant components in
understanding and assessing financial performance. Adjusted EBITDA
should not be considered in isolation or as an alternative to net
income, cash flows generated by operating, investing, or financing
activities or other financial statement data presented in the
consolidated financial statements as an indicator of financial
performance or liquidity. Because adjusted EBITDA is not a
measurement determined in accordance with generally accepted
accounting principles and is thus susceptible to varying
calculations, adjusted EBITDA as presented may not be comparable
to other similarly titled measures of other companies.
Triad Hospitals, Inc.
Consolidated Statements of Operations
For the Periods Ended June 30, 2006 and 2005
Unaudited
(Dollars in millions, except for earnings per share)
For the six months ended
---------------------------------------------
2006 2005
---------------------- ----------------------
Amount Percentage Amount Percentage
----------- ---------- ----------- ----------
Revenues $2,747.3 100.0% $2,320.4 100.0%
Salaries and benefits,
including stock
compensation expense of
$13.7 in 2006 1,111.4 40.5% 942.2 40.6%
Reimbursable expenses 26.0 0.9% 26.6 1.2%
Supplies 471.7 17.2% 386.1 16.6%
Other operating expenses 525.4 19.1% 424.8 18.3%
Provision for doubtful
accounts 248.9 9.1% 195.9 8.4%
Depreciation 108.8 4.0% 99.1 4.3%
Amortization 3.6 0.1% 3.0 0.1%
Interest expense 47.4 1.7% 53.5 2.3%
Refinancing transaction
costs -- 0.0% 8.4 0.4%
ESOP expense 6.1 0.2% 7.2 0.3%
Gain on sales of assets (0.6) 0.0% (0.5) 0.0%
----------- ---------- ----------- ----------
Total operating expenses 2,548.7 92.8% 2,146.3 92.5%
----------- ---------- ----------- ----------
Income from continuing
operations before
minority interests,
equity in earnings
and income tax provision 198.6 7.2% 174.1 7.5%
Minority interests in
earnings of consolidated
entities (10.0) (0.4%) (6.3) (0.2%)
Equity in earnings of
unconsolidated
affiliates 19.8 0.8% 19.7 0.8%
----------- ---------- ----------- ----------
Income from continuing
operations before income
tax provision 208.4 7.6% 187.5 8.1%
Income tax provision (80.5) (2.9%) (72.4) (3.1%)
----------- ---------- ----------- ----------
Income from continuing
operations 127.9 4.7% 115.1 5.0%
Income from discontinued
operations, net of tax 15.3 0.5% 10.0 0.4%
----------- ---------- ----------- ----------
Net income $143.2 5.2% $125.1 5.4%
=========== ========== =========== ==========
Basic income per common
share:
Continuing operations $1.49 $1.46
Discontinued operations $0.18 $0.13
----------- -----------
Net $1.67 $1.59
=========== ===========
Diluted income per common
share:
Continuing operations $1.48 $1.43
Discontinued operations $0.17 $0.12
----------- -----------
Net $1.65 $1.55
=========== ===========
Shares used in earnings
per share calculations 85,958,229 78,921,143
Shares used in diluted
earnings per share
calculations 86,665,173 80,690,327
Triad Hospitals, Inc.
Reconciliation of Non-GAAP Financial Information
For the Periods Ended June 30, 2006 and 2005
Unaudited
(Dollars in millions)
For the six months ended
-----------------------------------------
2006 2005
-------------------- --------------------
Amount Percentage Amount Percentage
--------- ---------- --------- ----------
Revenues $2,747.3 100.0% $2,320.4 100.0%
Salaries and benefits 1,111.4 40.5% 942.2 40.6%
Reimbursable expenses 26.0 0.9% 26.6 1.2%
Supplies 471.7 17.2% 386.1 16.6%
Other operating expenses 525.4 19.1% 424.8 18.3%
Provision for doubtful
accounts 248.9 9.1% 195.9 8.4%
Equity in earnings of
unconsolidated affiliates (19.8) (0.8%) (19.7) (0.8%)
--------- ---------- --------- ----------
2,363.6 86.0% 1,955.9 84.3%
--------- ---------- --------- ----------
Adjusted EBITDA (1) 383.7 14.0% 364.5 15.7%
Depreciation 108.8 4.0% 99.1 4.3%
Amortization 3.6 0.1% 3.0 0.1%
Interest expense 47.4 1.7% 53.5 2.3%
Refinancing transaction costs -- 0.0% 8.4 0.4%
ESOP expense 6.1 0.2% 7.2 0.3%
Gain on sales of assets (0.6) 0.0% (0.5) 0.0%
Minority interests in
earnings of consolidated
entities 10.0 0.4% 6.3 0.2%
--------- ---------- --------- ----------
175.3 6.4% 177.0 7.6%
--------- ---------- --------- ----------
Income from continuing
operations before income tax
provision 208.4 7.6% 187.5 8.1%
Income tax provision (80.5) (2.9%) (72.4) (3.1%)
--------- ---------- --------- ----------
Income from continuing
operations 127.9 4.7% 115.1 5.0%
Income from discontinued
operations, net of tax 15.3 0.5% 10.0 0.4%
--------- ---------- --------- ----------
Net income $143.2 5.2% $125.1 5.4%
========= ========== ========= ==========
Basic income per common
share:
Continuing operations $1.49 $1.46
Discontinued operations $0.18 $0.13
--------- ---------
Net $1.67 $1.59
========= =========
Diluted income per common
share:
Continuing operations $1.48 $1.43
Discontinued operations $0.17 $0.12
--------- ---------
Net $1.65 $1.55
========= =========
Other data
Gross patient revenues $8,149.8 $6,502.2
Revenue deductions 5,513.5 4,284.3
--------- ---------
Net patient revenues 2,636.3 2,217.9
Non-patient revenues 111.0 102.5
--------- ---------
Revenues $2,747.3 $2,320.4
(1) Adjusted EBITDA is defined as earnings before interest expense,
income taxes, depreciation, amortization, ESOP expense, gain on
sales of assets, refinancing transaction costs, minority
interests, and discontinued operations. Adjusted EBITDA is
commonly used by lenders and investors to assess leverage
capacity, debt service ability and liquidity. Many of Triad's debt
covenants use adjusted EBITDA, or a modification of adjusted
EBITDA, in financial covenant calculations. Adjusted EBITDA is
used by management to evaluate financial performance and resource
allocation for each facility and for Triad as a whole. Adjusted
EBITDA should not be considered as a measure of financial
performance under generally accepted accounting principles, and
items excluded from adjusted EBITDA are significant components in
understanding and assessing financial performance. Adjusted EBITDA
should not be considered in isolation or as an alternative to net
income, cash flows generated by operating, investing, or financing
activities or other financial statement data presented in the
consolidated financial statements as an indicator of financial
performance or liquidity. Because adjusted EBITDA is not a
measurement determined in accordance with generally accepted
accounting principles and is thus susceptible to varying
calculations, adjusted EBITDA as presented may not be comparable
to other similarly titled measures of other companies.
Triad Hospitals, Inc.
Consolidated Balance Sheets
Unaudited
(Dollars in millions)
June 30, December 31,
2006 2005
------------- -------------
Assets
Current assets
Cash and cash equivalents $276.0 $310.2
Accounts receivable less allowances for
doubtful accounts of $338.4 at June 30,
2006 and $292.8 at December 31, 2005 888.1 800.2
Inventories 140.0 130.0
Deferred income taxes 33.4 31.8
Prepaid expenses 39.1 41.1
Discontinued operations assets -- 67.6
Other 106.3 93.0
------------- -------------
1,482.9 1,473.9
Property and equipment, at cost:
Land 198.1 182.3
Buildings and improvements 1,908.2 1,739.3
Equipment 1,590.2 1,449.1
Construction in progress 188.6 226.3
------------- -------------
3,885.1 3,597.0
Accumulated depreciation (1,115.5) (1,012.8)
------------- -------------
2,769.6 2,584.2
Goodwill 1,330.0 1,301.6
Intangible assets, net of accumulated
amortization 72.4 71.7
Investment in and advances to
unconsolidated affiliates 235.4 204.8
Other 107.2 100.7
------------- -------------
Total assets $5,997.5 $5,736.9
============= =============
Liabilities and Equity
Current liabilities
Accounts payable $206.8 $197.5
Accrued salaries 131.3 126.8
Current portion of long-term debt 13.8 7.7
Current income taxes payable 7.1 17.1
Discontinued operations liabilities -- 3.1
Other current liabilities 183.4 163.1
------------- -------------
542.4 515.3
Long-term debt 1,693.7 1,695.8
Other liabilities 173.3 167.8
Deferred taxes 184.1 201.9
Minority interests in equity of
consolidated entities 288.1 228.4
Stockholders' equity
Common stock 0.9 0.9
Additional paid-in capital 2,374.8 2,331.6
Accumulated other comprehensive loss (1.6) (1.6)
Unearned ESOP compensation (8.6) (10.4)
Accumulated earnings 750.4 607.2
------------- -------------
Total stockholders' equity 3,115.9 2,927.7
------------- -------------
Total liabilities and stockholders' equity $5,997.5 $5,736.9
============= =============
Triad Hospitals, Inc.
Consolidated Statements of Cash Flows
For the Periods Ended June 30, 2006 and 2005
Unaudited
(Dollars in millions)
For the three For the six
months ended months ended
--------------- ----------------
2006 2005 2006 2005
------- ------- ------- --------
Cash flows from operating activities
Net income $60.1 $58.9 $143.2 $125.1
Adjustments to reconcile net income
to net cash provided by
operating activities:
Income from discontinued operations,
net of tax (0.1) (7.7) (15.3) (10.0)
Provision for doubtful accounts 128.2 90.2 248.9 195.9
Depreciation and amortization 57.6 53.5 112.4 102.1
ESOP expense 3.1 3.9 6.1 7.2
Minority interests 5.2 2.7 10.0 6.3
Equity in earnings of unconsolidated
affiliates (9.8) (9.6) (19.8) (19.7)
Gain on sales of assets (0.5) (0.8) (0.6) (0.5)
Deferred income tax provision
(benefit) (6.0) 11.2 (11.7) 4.9
Refinancing transaction costs -- 8.4 -- 8.4
Non-cash interest expense 0.8 1.1 1.6 2.3
Non-cash stock compensation expense 6.9 0.4 13.7 0.6
Excess tax benefits on stock
compensation (0.2) -- (1.2) --
Increase (decrease) in cash from
operating assets and liabilities
Accounts receivable (137.5) (91.1) (321.7) (255.5)
Inventories and other assets (12.0) 14.8 (22.5) 25.6
Accounts payable and other
current liabilities (71.3) (36.4) (31.9) 17.6
Other 12.2 0.8 21.7 16.1
------- ------- ------- --------
Net cash provided by operating
activities 36.7 100.3 132.9 226.4
Cash flows from investing activities
Purchases of property and equipment (115.1) (88.3) (233.4) (188.6)
Distributions and advances (to) from
unconsolidated affiliates, net (3.6) 8.7 (9.6) 12.8
Proceeds received on disposals of
assets 11.9 35.9 102.6 36.5
Acquisitions, net of cash acquired (12.2) (155.3) (49.2) (155.3)
Other -- -- (0.1) --
------- ------- ------- --------
Net cash used in investing
activities (119.0) (199.0) (189.7) (294.6)
Cash flows from financing activities
Payments of long-term debt (0.3) (462.9) (1.0) (483.8)
Proceeds from issuance of long-term
debt -- 520.0 -- 520.0
Payment of debt issue costs -- (6.4) -- (6.4)
Proceeds from issuance of common
stock 9.3 29.6 21.9 89.8
Excess tax benefits on stock
compensation 0.2 -- 1.2 --
Contributions from (distributions to)
minority partners, net 0.5 0.8 0.5 (0.7)
------- ------- ------- --------
Net cash provided by financing
activities 9.7 81.1 22.6 118.9
------- ------- ------- --------
Change in cash and cash equivalents (72.6) (17.6) (34.2) 50.7
Cash and cash equivalents at beginning
of period 348.6 124.9 310.2 56.6
------- ------- ------- --------
Cash and cash equivalents at end of
period $276.0 $107.3 $276.0 $107.3
======= ======= ======= ========
Interest payments 50.4 48.0 58.0 54.9
Income tax payments 98.2 56.8 117.6 59.8
Triad Hospitals, Inc.
Operating Data - Same-Facility (1)
Unaudited
For the three months ended
June 30,
----------------------------
2006 2005 Change
---------- ---------- ------
Volume Statistics (2)
------------------------------------------
Number of hospitals 47 47 --
Licensed beds 8,216 8,048 168
Admissions 78,612 78,417 0.2%
Average length of stay (days) 4.7 4.7 0.0%
Inpatient surgeries 32,124 30,950 3.8%
Outpatient surgeries 72,117 70,373 2.5%
Outpatient visits (excluding outpatient
surgeries) 980,348 953,568 2.8%
Outpatient visits (including outpatient
surgeries) 1,052,465 1,023,941 2.8%
Adjusted patient days 634,504 627,069 1.2%
Adjusted admissions 136,120 134,144 1.5%
Rate Statistics (2)
------------------------------------------
Patient revenue per adjusted patient day $1,933.0 $1,782.5 8.4%
Patient revenue per adjusted admission $9,010.2 $8,332.7 8.1%
Revenues (millions)
------------------------------------------
Inpatient % of patient revenues (2) 54% 54% 0.0%
Outpatient % of patient revenues (2) 46% 46% 0.0%
Patient revenues (2) $1,226.5 $1,117.8 9.7%
Non-patient revenues (3) $53.1 $49.5 7.3%
Revenues $1,279.6 $1,167.3 9.6%
(1) Same-facility operating data include facilities owned and operated
in the full second quarter of both years. They:
-- Include Deaconess Hospital (322 beds), acquired April 2005;
-- Exclude Medical Center of South Arkansas (166 beds), owned 50% and
reported on an equity (non-consolidated) basis;
-- Exclude Trinity Medical Center (560 beds), acquired October 2005;
-- Exclude Gateway Medical Center (206 beds), acquired February 2006;
-- Exclude Massillon Community Hospital (268 beds), acquired February
2006;
-- Exclude facilities reclassified to discontinued operations.
(2) Volume statistics, rate statistics, and patient revenues:
-- Exclude the QHR hospital management, consulting, and advisory
services subsidiary.
(3) Non-patient revenues:
-- Include the QHR hospital management, consulting, and advisory
services subsidiary;
-- Include other sources.
Triad Hospitals, Inc.
Operating Data - Same-Facility (1)
Unaudited
For the six months ended
June 30,
----------------------------
2006 2005 Change
---------- ---------- ------
Volume Statistics (2)
------------------------------------------
Number of hospitals 46 46 --
Licensed beds 7,894 7,735 159
Admissions 154,763 154,983 (0.1%)
Average length of stay (days) 4.7 4.7 0.0%
Inpatient surgeries 62,032 59,051 5.0%
Outpatient surgeries 138,565 134,183 3.3%
Outpatient visits (excluding outpatient
surgeries) 1,898,156 1,852,313 2.5%
Outpatient visits (including outpatient
surgeries) 2,036,721 1,986,496 2.5%
Adjusted patient days 1,237,615 1,226,461 0.9%
Adjusted admissions 264,391 262,162 0.9%
Rate Statistics (2)
------------------------------------------
Patient revenue per adjusted patient day $1,925.5 $1,777.2 8.3%
Patient revenue per adjusted admission $9,013.2 $8,314.4 8.4%
Revenues (millions)
------------------------------------------
Inpatient % of patient revenues (2) 54% 54% 0.0%
Outpatient % of patient revenues (2) 46% 46% 0.0%
Patient revenues (2) $2,383.0 $2,179.7 9.3%
Non-patient revenues (3) $105.6 $101.6 3.9%
Revenues $2,488.6 $2,281.3 9.1%
(1) Same-facility operating data include facilities owned and operated
in the full six months of both years. They:
-- Exclude Deaconess Hospital (322 beds), acquired April 2005;
-- Exclude Medical Center of South Arkansas (166 beds), owned 50% and
reported on an equity (non-consolidated) basis;
-- Exclude Trinity Medical Center (560 beds), acquired October 2005;
-- Exclude Gateway Medical Center (206 beds), acquired February 2006;
-- Exclude Massillon Community Hospital (268 beds), acquired February
2006;
-- Exclude facilities reclassified to discontinued operations.
(2) Volume statistics, rate statistics, and patient revenues:
-- Exclude the QHR hospital management, consulting, and advisory
services subsidiary.
(3) Non-patient revenues:
-- Include the QHR hospital management, consulting, and advisory
services subsidiary;
-- Include other sources.
Triad Hospitals, Inc.
Operating Data - Pro Forma for Acquisitions & Divestitures (1)
Unaudited
For the three months ended
June 30,
----------------------------
2006 2005 Change
---------- ---------- ------
Volume Statistics (2)
------------------------------------------
Number of hospitals 50 50 --
Licensed beds 9,250 9,082 168
Admissions 85,818 86,261 (0.5%)
Average length of stay (days) 4.7 4.7 0.0%
Inpatient surgeries 34,963 33,467 4.5%
Outpatient surgeries 77,378 74,870 3.3%
Outpatient visits (excluding outpatient
surgeries) 1,097,537 1,084,924 1.2%
Outpatient visits (including outpatient
surgeries) 1,174,915 1,159,794 1.3%
Adjusted patient days 691,271 687,588 0.5%
Adjusted admissions 147,448 146,647 0.5%
Rate Statistics (2)
------------------------------------------
Patient revenue per adjusted patient day $1,913.5 $1,759.3 8.8%
Patient revenue per adjusted admission $8,971.1 $8,248.7 8.8%
Revenues (millions)
------------------------------------------
Inpatient % of patient revenues (2) 54% 54% 0.0%
Outpatient % of patient revenues (2) 46% 46% 0.0%
Patient revenues (2) $1,322.8 $1,209.6 9.4%
Non-patient revenues (3) $55.3 $51.5 7.4%
Revenues $1,378.1 $1,261.1 9.3%
(1) Pro forma operating data:
-- Include Deaconess Hospital (322 beds), acquired April 2005;
-- Include Trinity Medical Center (560 beds), acquired October 2005,
on a pro forma basis as if owned since January 1, 2005;
-- Include Gateway Medical Center (206 beds), acquired February 2006,
on a pro forma basis as if owned since January 1, 2005;
-- Include Massillon Community Hospital (268 beds), acquired February
2006, on a pro forma basis as if owned since January 1, 2005;
-- Exclude Medical Center of South Arkansas (166 beds), owned 50% and
reported on an equity (non-consolidated) basis;
-- Exclude facilities reclassified to discontinued operations.
(2) Volume statistics, rate statistics, and patient revenues:
-- Exclude the QHR hospital management, consulting, and advisory
services subsidiary.
(3) Non-patient revenues:
-- Include the QHR hospital management, consulting, and advisory
services subsidiary;
-- Include other sources.
Triad Hospitals, Inc.
Operating Data - Pro Forma for Acquisitions & Divestitures (1)
Unaudited
For the six months ended
June 30,
----------------------------
2006 2005 Change
---------- ---------- ------
Volume Statistics (2)
------------------------------------------
Number of hospitals 50 50 --
Licensed beds 9,250 9,082 168
Admissions 175,569 177,706 (1.2%)
Average length of stay (days) 4.7 4.7 0.0%
Inpatient surgeries 69,632 66,249 5.1%
Outpatient surgeries 152,598 146,370 4.3%
Outpatient visits (excluding outpatient
surgeries) 2,194,896 2,175,980 0.9%
Outpatient visits (including outpatient
surgeries) 2,347,494 2,322,350 1.1%
Adjusted patient days 1,412,661 1,405,749 0.5%
Adjusted admissions 298,217 298,072 0.0%
Rate Statistics (2)
------------------------------------------
Patient revenue per adjusted patient day $1,875.5 $1,738.6 7.9%
Patient revenue per adjusted admission $8,884.2 $8,199.5 8.4%
Revenues (millions)
------------------------------------------
Inpatient % of patient revenues (2) 55% 54% 1.0%
Outpatient % of patient revenues (2) 45% 46% (1.0%)
Patient revenues (2) $2,649.4 $2,444.0 8.4%
Non-patient revenues (3) $111.3 $107.2 3.8%
Revenues $2,760.7 $2,551.2 8.2%
(1) Pro forma operating data:
-- Include Deaconess Hospital (322 beds), acquired April 2005, on a
pro forma basis as if owned since January 1, 2005;
-- Include Trinity Medical Center (560 beds), acquired October 2005,
on a pro forma basis as if owned since January 1, 2005;
-- Include Gateway Medical Center (206 beds), acquired February 2006,
on a pro forma basis as if owned since January 1, 2005;
-- Include Massillon Community Hospital (268 beds), acquired February
2006, on a pro forma basis as if owned since January 1, 2005;
-- Exclude Medical Center of South Arkansas (166 beds), owned 50% and
reported on an equity (non-consolidated) basis;
-- Exclude facilities reclassified to discontinued operations.
(2) Volume statistics, rate statistics, and patient revenues:
-- Exclude the QHR hospital management, consulting, and advisory
services subsidiary.
(3) Non-patient revenues:
-- Include the QHR hospital management, consulting, and advisory
services subsidiary;
-- Include other sources.
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