Segment and Geographic Information

3 Months Ended

Mar. 31, 2019

NOTE 12 — SEGMENT AND GEOGRAPHIC INFORMATION

We operate in one line of business, which is operating hospitals and related health care entities. We operate in

two

geographically organized groups: the National and American Groups. The National Group includes 95 hospitals located in Alaska, California, Florida, southern Georgia, Idaho, Indiana, northern Kentucky, Nevada, New Hampshire, North Carolina, South Carolina, Utah and Virginia, and the American Group includes 84

hospitals located in Colorado, northern Georgia, Kansas, southern Kentucky, Louisiana, Mississippi, Missouri, 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, 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 ended March 31, 2019 and 2018 are summarized in the following table (dollars in millions):


	2019			2018
Revenues:
National Group	$	6,317		$	5,568
American Group		5,595			5,327
Corporate and other		605			528

	$	12,517		$	11,423

Equity in earnings of affiliates:
National Group	$	(2	)	$	(2	)
American Group		(11	)		(9	)
Corporate and other		2			2

	$	(11	)	$	(9	)

Adjusted segment EBITDA:
National Group	$	1,454		$	1,182
American Group		1,141			1,031
Corporate and other		(54	)		(95	)

	$	2,541		$	2,118

Depreciation and amortization:
National Group	$	265		$	225
American Group		281			252
Corporate and other		73			76

	$	619		$	553

Adjusted segment EBITDA	$	2,541		$	2,118
Depreciation and amortization		619			553
Interest expense		461			431
Losses (gains) on sales of facilities		1			(405	)

Income before income taxes	$	1,460		$	1,539