Phoenix-based Banner Health has reported total net revenue of $2.67 billion for the six months ended June 30, up 4 percent from $2.57 billion during the first six months of 2013.
Net patient service revenues rose from $2.47 billion during the first half of 2013 to approximately $2.55 billion for the six months ended June 30, 2014. Total expenses also rose roughly 4 percent year-over-year to $2.49 billion, driven by a 7.2 percent increase in salaries and benefits to $1.35 billion. Supply expenses also rose by nearly 6 percent to $422 million. Banner reported operating income of almost $186 million for the first half of 2014, compared with $183.7 million the previous year.
Banner's overall excess of revenues of expenses, however, dropped from $420.4 million during the first six months of 2013 to $238 million in 2014, driven partly by a $67.2 million loss on interest rate swaps.
Earlier this month, Fitch ratings affirmed an "AA-" rating on Banner's outstanding debt. The rating affirmation reflected Banner's market share in the Phoenix area, which increased to 45.1 percent in 2013 from 42.3 percent in 2009. Additionally, Fitch notes the health system has maintained strong operating results: From 2010 to 2013, Banner generated operating margins between 5 percent and 6.1 percent and operating EBITDA margins between 13.1 percent and 14.6 percent.