Health Management Associates Inc. (HMA) filed Quarterly Report for the period ended 2011-09-30.

Health Management Associates Inc. Cl A has a market cap of $2.22 billion; its shares were traded at around $8.74 with a P/E ratio of 12.1 and P/S ratio of 0.4. Health Management Associates Inc. Cl A had an annual average earning growth of 27.7% over the past 10 years. GuruFocus rated Health Management Associates Inc. Cl A the business predictability rank of 4-star.

Highlight of Business Operations:

During the three months ended September 30, 2011, which we refer to as the 2011 Three Month Period, we experienced net revenue growth over the three months ended September 30, 2010, which we refer to as the 2010 Three Month Period, of approximately 12.0%. Such growth principally resulted from: (i) our acquisition of two Florida-based general acute care hospitals with a total of 413 licensed beds and certain related health care operations (collectively, “Wuesthoff”) in October 2010; (ii) our acquisition of a 95% equity interest in a Mississippi-based general acute care hospital with a total of 112 licensed beds and certain related health care operations (collectively, “Tri-Lakes”) in May 2011; (iii) increased surgical volume attributable to physician recruitment and market service development (e.g., ambulatory surgical centers, robotic surgical systems, etc.) at certain of our hospitals and other health care facilities; (iv) more emergency room visits, which we believe were attributable, in part, to our dedicated focus on emergency room operations; and (v) improvements in reimbursement rates that resulted primarily from renegotiated agreements with certain commercial health insurance providers. Partially offsetting higher net revenue during the 2011 Three Month Period were increases in our costs for acquisitions and government investigations. Overall, our income from operations increased approximately $10.8 million, or 9.8%, during the 2011 Three Month Period and income from continuing operations increased during the same period by $9.7 million, or 24.2%.

Net revenue during the 2011 Three Month Period was approximately $1,400.2 million as compared to $1,250.4 million during the 2010 Three Month Period. This change represented an increase of $149.8 million, or 12.0%. Our same three month hospitals provided $58.6 million, or 39.1%, of the increase in net revenue as a result of: (i) increased outpatient and surgical volume from, among other things, market service development activities; (ii) an increase in emergency room visits; and (iii) improvements in reimbursement rates. These items were partially offset by a decrease in hospital admissions, which was primarily due to a reduction in admissions of uninsured patients. The remaining 2011 net revenue increase of $91.2 million was due to our acquisitions of Wuesthoff in October 2010 and Tri-Lakes in May 2011.

Net revenue during the 2011 Nine Month Period was approximately $4,222.4 million as compared to $3,745.6 million during the 2010 Nine Month Period. This change represented an increase of $476.8 million, or 12.7%. Our same nine month hospitals provided $171.2 million, or 35.9%, of the increase in net revenue as a result of: (i) increased outpatient and surgical volume from, among other things, market service development activities; (ii) an increase in emergency room visits; and (iii) improvements in reimbursement rates. These items were partially offset by a decrease in hospital admissions, which was primarily due to a reduction in admissions of uninsured patients and certain weather-related disruptions. The remaining 2011 net revenue increase of $305.6 million was due to our acquisitions of: (i) a 60% equity interest in each of three Florida-based general acute care hospitals with a total of 139 licensed beds and certain related health care operations (collectively, “Shands”) in July 2010; (ii) Wuesthoff in October 2010; and (iii) Tri-Lakes in May 2011.

Our provision for doubtful accounts during the 2011 Nine Month Period increased 10 basis points to 12.4% of net revenue as compared to 12.3% of net revenue during the 2010 Nine Month Period. This change was primarily due to amounts considered to be patient responsibility (e.g., deductibles, co-payments, other amounts not covered by insurance, etc.). During the 2011 Nine Month Period and the 2010 Nine Month Period, our Uncompensated Patient Care Percentage, which is described above under the heading “2011 Three Month Period Compared to the 2010 Three Month Period,” was 25.6% and 25.2%, respectively. This 40 basis point increase during the 2011 Nine Month Period primarily reflects greater uninsured self-pay patient revenue discounts, partially offset by a decline in self-pay patients in the mix of patients that we serve (approximately 6.8% and 7.1% of total hospital admissions during the 2011 Nine Month Period and the 2010 Nine Month Period, respectively).

Senior Secured Credit Facilities. Our variable rate senior secured credit facilities (the “Credit Facilities”), which we entered into on February 16, 2007, consist of a seven-year $2.75 billion term loan (the “Term Loan”) and a $500.0 million six-year revolving credit facility (the “Revolving Credit Agreement”). The Term Loan requires (i) quarterly principal payments to amortize approximately 1% of the loan’s face value during each year of the loan’s term and (ii) a balloon payment for the remaining outstanding loan balance at the end of the agreement. We are also required to repay principal under the Term Loan in an amount that can be as much as 50% of our annual Excess Cash Flow, as such term is defined in the Credit Facilities; however, no such payment was required for the year ended December 31, 2010. Our mandatory principal payments under the Credit Facilities for the twelve months ending September 30, 2012 are approximately $25.8 million. Throughout the Revolving Credit Agreement’s six-year term, we are obligated to pay commitment fees based on the amounts available for borrowing. Additionally, the Revolving Credit Agreement has a $75.0 million standby letter of credit limit. During the 2011 Nine Month Period, we did not borrow under the Revolving Credit Agreement. Amounts outstanding under the Credit Facilities may be repaid at our option at any time, in whole or in part, without penalty.

Read the The complete Report