SEGMENT AND GEOGRAPHIC INFORMATION

6 Months Ended

Jun. 30, 2014

Segment Reporting [Abstract]

SEGMENT AND GEOGRAPHIC INFORMATION

NOTE 11 — SEGMENT AND GEOGRAPHIC INFORMATION

We operate in one line of business, which is operating hospitals and related health care entities. Effective January 1, 2013, we reorganized our operational groups into two geographically organized groups: the National and American Groups. The National Group includes 82 hospitals located in Alaska, California, Florida, southern Georgia, Idaho, Indiana, northern Kentucky, Nevada, New Hampshire, South Carolina, Utah and Virginia, and the American Group includes 77 hospitals located in Colorado, northern Georgia, Kansas, southern Kentucky, Louisiana, Mississippi, Missouri, Oklahoma, Tennessee and Texas. 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, legal claim costs, 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 geographic distributions of our revenues, equity in earnings of affiliates, adjusted segment EBITDA and depreciation and amortization for the quarters and six months ended June 30, 2014 and 2013 are summarized in the following table (dollars in millions):

	Quarter						Six Months
	2014			2013			2014			2013
Revenues:
National Group	$	4,267		$	3,964		$	8,427		$	7,945
American Group		4,447			4,065			8,599			8,099
Corporate and other		516			421			1,036			846
	$	9,230		$	8,450		$	18,062		$	16,890
Equity in earnings of affiliates:
National Group	$	(3	)	$	(3	)	$	(6	)	$	(5	)
American Group		(8	)		(7	)		(15	)		(13	)
Corporate and other		2			(2	)		3			(2	)
	$	(9	)	$	(12	)	$	(18	)	$	(20	)
Adjusted segment EBITDA:
National Group	$	946		$	831		$	1,802		$	1,635
American Group		1,134			916			1,984			1,744
Corporate and other		(80	)		(58	)		(142	)		(122	)
	$	2,000		$	1,689		$	3,644		$	3,257
Depreciation and amortization:
National Group	$	190		$	177		$	377		$	351
American Group		211			202			416			404
Corporate and other		53			46			108			94
	$	454		$	425		$	901		$	849
Adjusted segment EBITDA	$	2,000		$	1,689		$	3,644		$	3,257
Depreciation and amortization		454			425			901			849
Interest expense		427			462			887			934
Losses (gains) on sales of facilities		(11	)		(4	)		(32	)		12
Losses on retirement of debt		226			—			226			17
Legal claim costs		—			—			78			—
Income before income taxes	$	904		$	806		$	1,584		$	1,445