HCA, Nashville, expects to make a $2 billion distribution to its shareholders in the fourth quarter, according to a company news release. The company also announced that it will offer nearly $1.53 billion in new senior unsecured notes due in 2021 to fund the distribution in part.
HCA plans $2 billion shareholder distribution
The distribution would be the third and largest HCA has made this year to its shareholders. The company announced distributions of $1.75 billion in January and $500 million in May. HCA is able to make these distributions because of increases in earnings and cash flow that have led to improvements in its credit ratios, Richard Bracken, HCA’s chairman and CEO, said during a conference call.
Besides the proceeds from the new notes, HCA will be able to draw funds from its revolving credit line to fund the distribution, Bracken said.
HCA also reported its third-quarter results. The company posted net income of $243 million, up nearly 24% from 2009’s third quarter. Revenue increased 1.5%, to $7.65 billion. The company offset lower inpatient volume with an increase in outpatient services and better cost management, said Milton Johnson, executive vice president and chief financial officer. HCA paid down $785 million in debt during the quarter, Johnson said.
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