NOTE 14 — 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 acquired HealthONE operating results have been included in the American Group operating results for periods subsequent to November 1, 2011. Prior to November 1, 2011, the American Group recorded its share of the HealthONE operating results in equity in earnings of affiliates.
At December 31, 2013, the National Group included 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 included 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, gain on acquisition of controlling interest in equity investment, 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 geographic distributions of our revenues, equity in earnings of affiliates, adjusted segment EBITDA, depreciation and amortization, assets and goodwill and other intangible assets are summarized in the following table (dollars in millions):
| For the Years Ended December 31, | ||||||||||||
| 2013 | 2012 | 2011 | ||||||||||
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Revenues: |
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National Group |
$ | 15,968 | $ | 15,505 | $ | 14,741 | ||||||
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American Group |
16,487 | 16,115 | 13,714 | |||||||||
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Corporate and other |
1,727 | 1,393 | 1,227 | |||||||||
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| $ | 34,182 | $ | 33,013 | $ | 29,682 | |||||||
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Equity in earnings of affiliates: |
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National Group |
$ | (9 | ) | $ | (9 | ) | $ | (7 | ) | |||
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American Group |
(24 | ) | (28 | ) | (251 | ) | ||||||
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Corporate and other |
4 | 1 | — | |||||||||
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| $ | (29 | ) | $ | (36 | ) | $ | (258 | ) | ||||
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Adjusted segment EBITDA: |
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National Group |
$ | 3,301 | $ | 3,325 | $ | 3,052 | ||||||
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American Group |
3,662 | 3,575 | 3,141 | |||||||||
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Corporate and other |
(389 | ) | (369 | ) | (132 | ) | ||||||
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| $ | 6,574 | $ | 6,531 | $ | 6,061 | |||||||
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Depreciation and amortization: |
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National Group |
$ | 718 | $ | 694 | $ | 639 | ||||||
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American Group |
835 | 816 | 680 | |||||||||
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Corporate and other |
200 | 169 | 146 | |||||||||
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| $ | 1,753 | $ | 1,679 | $ | 1,465 | |||||||
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| For the Years Ended December 31, | ||||||||||||
| 2013 | 2012 | 2011 | ||||||||||
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Adjusted segment EBITDA |
$ | 6,574 | $ | 6,531 | $ | 6,061 | ||||||
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Depreciation and amortization |
1,753 | 1,679 | 1,465 | |||||||||
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Interest expense |
1,848 | 1,798 | 2,037 | |||||||||
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Losses (gains) on sales of facilities |
10 | (15 | ) | (142 | ) | |||||||
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Losses on retirement of debt |
17 | — | 481 | |||||||||
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Legal claim costs |
— | 175 | — | |||||||||
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Gain on acquisition of controlling interest in equity investment |
— | — | (1,522 | ) | ||||||||
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Termination of management agreement |
— | — | 181 | |||||||||
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Income before income taxes |
$ | 2,946 | $ | 2,894 | $ | 3,561 | ||||||
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| As of December 31, | ||||||||
| 2013 | 2012 | |||||||
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Assets: |
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National Group |
$ | 10,206 | $ | 9,451 | ||||
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American Group |
13,911 | 13,744 | ||||||
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Corporate and other |
4,714 | 4,880 | ||||||
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| $ | 28,831 | $ | 28,075 | |||||
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| National Group |
American Group |
Corporate and Other |
Total | |||||||||||||
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Goodwill and other intangible assets: |
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Balance at December 31, 2012 |
$ | 1,035 | $ | 4,189 | $ | 315 | $ | 5,539 | ||||||||
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Acquisitions |
68 | 13 | 297 | 378 | ||||||||||||
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Dispositions |
— | (1 | ) | — | (1 | ) | ||||||||||
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Foreign currency translation and other |
1 | (11 | ) | (3 | ) | (13 | ) | |||||||||
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Balance at December 31, 2013 |
$ | 1,104 | $ | 4,190 | $ | 609 | $ | 5,903 | ||||||||
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