SEGMENT AND GEOGRAPHIC INFORMATION

9 Months Ended

Sep. 30, 2012

SEGMENT AND GEOGRAPHIC INFORMATION

NOTE 10 — SEGMENT AND GEOGRAPHIC INFORMATION

We operate in one line of business, which is operating hospitals and related health care entities. Our operations are structured into three geographically organized groups: the National, Southwest and Central Groups. At September 30, 2012, the National Group includes 63 hospitals located in Florida, South Carolina, southern Georgia, Alaska, California, Nevada, Utah and Idaho, the Southwest Group includes 47 hospitals located in Colorado, Texas, Oklahoma and the Wichita, Kansas market, and the Central Group includes 46 hospitals located in Louisiana, Indiana, Kentucky, Tennessee, Virginia, New Hampshire, northern Georgia and the Kansas City market. We also operate six hospitals in England, and these facilities are included in the Corporate and other group.

Adjusted segment EBITDA is defined as income before depreciation and amortization, interest expense, losses (gains) on sales of facilities, losses on retirement of debt, termination of management agreement, income taxes and net income attributable to noncontrolling interests. We use adjusted segment EBITDA as an analytical indicator for purposes of allocating resources to geographic areas and assessing their performance. Adjusted segment EBITDA is commonly used as an analytical indicator within the health care industry, and also serves as a measure of leverage capacity and debt service ability. Adjusted segment EBITDA should not be considered as a measure of financial performance under generally accepted accounting principles, and the items excluded from adjusted segment EBITDA are significant components in understanding and assessing financial performance. Because adjusted segment EBITDA is not a measurement determined in accordance with generally accepted accounting principles and is thus susceptible to varying calculations, adjusted segment EBITDA, as presented, may not be comparable to other similarly titled measures of other companies. The Southwest Group’s increases in revenues, adjusted segment EBITDA and depreciation and amortization, and the declines in equity in earnings of affiliates, for the quarter and nine months ended September 30, 2012 compared to the quarter and nine months ended September 30, 2011 are primarily attributable to the financial consolidation of our 2011 acquisition of our partner’s interest in the HCA-HealthONE LLC venture for periods subsequent to our acquisition of controlling interests during October 2011. The geographic distributions of our revenues, equity in earnings of affiliates, adjusted segment EBITDA and depreciation and amortization for the quarters and nine months ended September 30, 2012 and 2011 are summarized in the following table (dollars in millions):

	Quarter						Nine Months
	2012			2011			2012			2011
Revenues:
National Group	$	3,108		$	3,002		$	9,539		$	9,119
Southwest Group		2,864			2,239			8,618			6,724
Central Group		1,765			1,730			5,429			5,216
Corporate and other		325			287			993			854
	$	8,062		$	7,258		$	24,579		$	21,913
Equity in earnings of affiliates:
National Group	$	1		$	(3	)	$	(6	)	$	(5	)
Southwest Group		(6	)		(64	)		(20	)		(212	)
Central Group		—			—			(1	)		—
Corporate and other		(1	)		(1	)		1			—
	$	(6	)	$	(68	)	$	(26	)	$	(217	)
Adjusted segment EBITDA:
National Group	$	630		$	587		$	2,031		$	1,835
Southwest Group		656			552			2,049			1,714
Central Group		323			298			1,052			949
Corporate and other		(76	)		(25	)		(207	)		(76	)
	$	1,533		$	1,412		$	4,925		$	4,422
Depreciation and amortization:
National Group	$	136		$	129		$	419		$	381
Southwest Group		151			111			447			332
Central Group		90			86			265			263
Corporate and other		40			36			123			102
	$	417		$	362		$	1,254		$	1,078
Adjusted segment EBITDA	$	1,533		$	1,412		$	4,925		$	4,422
Depreciation and amortization		417			362			1,254			1,078
Interest expense		446			519			1,336			1,572
Losses (gains) on sales of facilities		(7	)		2			(4	)		3
Losses on retirement of debt		—			406			—			481
Termination of management agreement		—			—			—			181
Income before income taxes	$	677		$	123		$	2,339		$	1,107