HCA Healthcare Reports Fourth Quarter 2023 Results and Provides 2024 Guidance

Bill Rutherford to Retire and Mike Marks to Become CFO

HCA Healthcare, Inc. (NYSE:HCA) today announced financial and operating results for the fourth quarter ended December 31, 2023.

Key fourth quarter metrics (all percentage changes compare 4Q 2023 to 4Q 2022 unless otherwise noted):

• Revenues totaled $17.303 billion
• Net income attributable to HCA Healthcare, Inc. totaled $1.607 billion, or $5.93 per diluted share
• Adjusted EBITDA totaled $3.618 billion
• Cash flows from operating activities totaled $2.674 billion
• Same facility admissions increased 3.1 percent while same facility equivalent admissions increased 3.9 percent

"In the quarter, we experienced strong demand for services across our diversified portfolio of markets, facilities, and service lines. This growth coupled with improved cost trends drove solid financial performance in the fourth quarter. Once again, our people have delivered positive outcomes for our patients, the communities we serve, and our other stakeholders. I want to thank them for their hard work and everything they do for our company," said Sam Hazen, Chief Executive Officer of HCA Healthcare.

Revenues in the fourth quarter of 2023 totaled $17.303 billion, compared to $15.497 billion in the fourth quarter of 2022. Net income attributable to HCA Healthcare, Inc. totaled $1.607 billion, or $5.93 per diluted share, compared to $2.081 billion, or $7.28 per diluted share, in the fourth quarter of 2022. Results for the fourth quarter of 2023 include gains on sales of facilities of $7 million, or $0.03 per diluted share. Results for the fourth quarter of 2022 include gains on sales of facilities of $1.326 billion, or $2.64 per diluted share, related to sales of our controlling interests in certain healthcare entities.

For the fourth quarter of 2023, Adjusted EBITDA totaled $3.618 billion, compared to $3.179 billion in the fourth quarter of 2022. Adjusted EBITDA is a non-GAAP financial measure. A table providing supplemental information on Adjusted EBITDA and reconciling net income attributable to HCA Healthcare, Inc. to Adjusted EBITDA is included in this release. Same facility admissions increased 3.1 percent while same facility equivalent admissions increased 3.9 percent in the fourth quarter of 2023, compared to the prior year period. Same facility emergency room visits increased 2.1 percent in the fourth quarter of 2023, compared to the prior year period. Same facility inpatient surgeries increased 1.0 percent, and same facility outpatient surgeries increased 0.7 percent in the fourth quarter of 2023, compared to the same period of 2022. Same facility revenue per equivalent admission increased 6.9 percent in the fourth quarter of 2023, compared to the fourth quarter of 2022.

Year Ended December 31, 2023

Revenues for the year ended December 31, 2023 totaled $64.968 billion, compared to $60.233 billion for the year ended December 31, 2022. Net income attributable to HCA Healthcare, Inc. was $5.242 billion, or $18.97 per diluted share, for the year ended December 31, 2023 compared to $5.643 billion, or $19.15 per diluted share, for the year ended December 31, 2022. Results for the year ended December 31, 2023 include losses on sales of facilities of $5 million, or $0.04 per diluted share. Results for the year ended December 31, 2022 include gains on sales of facilities of $1.301 billion, or $2.46 per diluted share, and losses on retirement of debt of $78 million, or $0.20 per diluted share.

For 2023, Adjusted EBITDA totaled $12.726 billion, compared to $12.067 billion in 2022. Adjusted EBITDA is a non-GAAP financial measure. A table providing supplemental information on Adjusted EBITDA and reconciling net income attributable to HCA Healthcare, Inc. to Adjusted EBITDA is included in this release.

Balance Sheet and Cash Flows from Operations

As of December 31, 2023, HCA Healthcare, Inc.'s balance sheet reflected cash and cash equivalents of $935 million, total debt of $39.593 billion, and total assets of $56.211 billion. During the fourth quarter of 2023, capital expenditures totaled $1.159 billion, excluding acquisitions. Cash flows provided by operating activities in the fourth quarter of 2023 totaled $2.674 billion, compared to $2.527 billion in the fourth quarter of 2022.

During the fourth quarter of 2023, the Company repurchased 3.647 million shares of its common stock at a cost of $910 million. The Company had $775 million remaining under its repurchase authorization as of December 31, 2023. As of December 31, 2023, the Company had $6.107 billion of availability under its credit facilities.

Share Repurchase Program

The HCA Healthcare, Inc. Board of Directors has authorized an additional share repurchase program for up to $6 billion of the Company's outstanding common stock. Repurchases will be made in accordance with applicable securities laws and may be made at management's discretion from time to time in the open market, through privately negotiated transactions, or otherwise. The repurchase program has no time limit and may be suspended for periods or discontinued at any time.

Dividend

HCA today announced that its Board of Directors declared a quarterly cash dividend of $0.66 per share on the Company's common stock. The dividend will be paid on March 29, 2024 to stockholders of record at the close of business on March 15, 2024.

The declaration and payment of any future dividend will be subject to the discretion of the Board of Directors and will depend on a variety of factors, including the Company's financial condition, results of operations, and contractual restrictions. Future dividends are expected to be funded by cash balances and future cash flows from operations.

2024 Guidance

Today, the Company issued the following estimated guidance for 2024:

Capital expenditures for 2024, excluding acquisitions, are estimated to be in the range of $5.1 to $5.3 billion.

The Company's 2024 guidance contains a number of assumptions, including, among others, the Company's current expectations regarding patient volumes and payor mix as well as general economic conditions, including inflation, and excludes the impact of items such as, but not limited to, gains or losses on sales of facilities, losses on retirement of debt, legal claims costs and impairment of long-lived assets.

Adjusted EBITDA is a non-GAAP financial measure. A table reconciling forecasted net income attributable to HCA Healthcare, Inc. to forecasted Adjusted EBITDA is included in this release.

The Company's guidance is based on current plans and expectations and is subject to a number of known and unknown uncertainties and risks, including those set forth below in the Company's "Forward-Looking Statements."

CFO Announcement

HCA Healthcare is also announcing today that Bill Rutherford has decided to retire as Executive Vice President and Chief Financial Officer ("CFO") after a 34-year career with the company. Mike Marks, HCA Healthcare's current Senior Vice President, Finance, will succeed Mr. Rutherford as Executive Vice President and CFO, effective May 1, 2024.

"Bill has announced his plan to retire from HCA after 34 years with the company," said Sam Hazen, Chief Executive Officer of HCA Healthcare. "Bill has had a tremendous impact during his ten years as CFO. The impressive operating results and shareholder returns achieved throughout his tenure are a testament to his leadership and disciplined approach to driving profitable growth. Without question, Bill's legacy will endure."

"Bill has also developed an incredibly high-performing finance team, including Mike, who is an accomplished finance professional and respected leader. I am thrilled for Mike to take on the CFO role and couldn't be more confident in his ability to continue to advance our company's success," said Hazen. "I want to thank Bill for his many contributions to HCA and congratulate him on his upcoming retirement. I also want to welcome Mike as the new CFO," said Hazen. "Mike has worked closely with Bill, the senior team, and myself. He will be an exceptional CFO as we continue to deliver on our commitment to the care and improvement of human life while keeping our financial foundation strong."

Mr. Marks joined HCA Healthcare in 1996 and has held a number of positions in accounting and finance, including Senior Vice President — Finance, Vice President — Financial Operations Support, CFO of the National Group and CFO of the West Florida Division.

Annual Stockholders' Meeting

The Company's 2024 annual stockholders' meeting will be held virtually on April 25, 2024 at 2:00 p.m. Central Time for stockholders of record as of February 26, 2024.

Earnings Conference Call

HCA Healthcare will host a conference call for investors at 9:00 a.m. Central Time today. All interested investors are invited to access a live audio broadcast of the call via webcast. The broadcast also will be available on a replay basis beginning this afternoon. The webcast can be accessed through the Company's Investor Relations web page at https://investor.hcahealthcare.com/events-and-presentations/default.aspx.

About the Company

As of December 31, 2023, HCA operated 186 hospitals and approximately 2,400 ambulatory sites of care, including surgery centers, freestanding emergency rooms, urgent care centers and physician clinics, in 20 states and the United Kingdom.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the federal securities laws, which involve risks and uncertainties. Forward-looking statements include the Company's financial guidance for the year ending December 31, 2024, as well as other statements that do not relate solely to historical or current facts. Forward-looking statements can be identified by the use of words like "may," "believe," "will," "expect," "project," "estimate," "anticipate," "plan," "initiative" or "continue." These forward-looking statements are based on our current plans and expectations and are subject to a number of known and unknown uncertainties and risks, many of which are beyond our control, which could significantly affect current plans and expectations and our future financial position and results of operations. These factors include, but are not limited to, (1) changes in or related to general economic conditions nationally and regionally in our markets, including inflation and economic and business conditions (and the impact thereof on the economy, financial markets and banking industry); changes in revenues due to declining patient volumes; changes in payer mix (including increases in uninsured and underinsured patients); potential increased expenses related to labor, supply chain or other expenditures; workforce disruptions; supply shortages and disruptions (including as a result of geopolitical disruptions); and the impact of potential federal government shutdowns, (2) the impact of our significant indebtedness and the ability to refinance such indebtedness on acceptable terms, (3) the impact of current and future federal and state health reform initiatives and possible changes to other federal, state or local laws and regulations affecting the health care industry, including, but not limited to, proposals to expand coverage of federally-funded insurance programs as an alternative to private insurance or establish a single-payer system (such reforms often referred to as "Medicare for All"), (4) the effects related to the implementation of sequestration spending reductions required under the Budget Control Act of 2011, related legislation extending these reductions and those required under the Pay-As-You-Go Act of 2010 as a result of the federal budget deficit impact of the American Rescue Plan Act of 2021, and the potential for future deficit reduction legislation that may alter these spending reductions, which include cuts to Medicare payments, or create additional spending reductions, (5) increases in the amount and risk of collectability of uninsured accounts and deductibles and copayment amounts for insured accounts, (6) the ability to achieve operating and financial targets, attain expected levels of patient volumes and revenues, and control the costs of providing services, (7) possible changes in Medicare, Medicaid and other state programs, including Medicaid supplemental payment programs or Medicaid waiver programs, that may impact reimbursements to health care providers and insurers and the size of the uninsured or underinsured population, (8) personnel-related capacity constraints, increases in wages and the ability to attract, utilize and retain qualified management and other personnel, including affiliated physicians, nurses and medical and technical support personnel, (9) the highly competitive nature of the health care business, (10) changes in service mix, revenue mix and surgical volumes, including potential declines in the population covered under third-party payer agreements, the ability to enter into and renew third-party payer provider agreements on acceptable terms and the impact of consumer-driven health plans and physician utilization trends and practices, (11) the efforts of health insurers, health care providers, large employer groups and others to contain health care costs, (12) the outcome of our continuing efforts to monitor, maintain and comply with appropriate laws, regulations, policies and procedures, (13) the availability and terms of capital to fund the expansion of our business and improvements to our existing facilities, (14) changes in accounting practices, (15) the emergence of and effects related to pandemics, epidemics and outbreaks of infectious diseases or other public health crises, including but not limited to developments related to COVID-19, (16) future divestitures which may result in charges and possible impairments of long-lived assets, (17) changes in business strategy or development plans, (18) delays in receiving payments for services provided, (19) the outcome of pending and any future tax audits, disputes and litigation associated with our tax positions, (20) the impact of known and unknown government investigations, litigation and other claims that may be made against us, (21) the impact of actual and potential cybersecurity incidents or security breaches, including the data security incident disclosed in July 2023, (22) our ongoing ability to demonstrate meaningful use of certified electronic health record technology and the impact of interoperability requirements, (23) the impact of natural disasters, such as hurricanes and floods, physical risks from climate change or similar events beyond our control, (24) changes in U.S. federal, state, or foreign tax laws including interpretive guidance that may be issued by taxing authorities or other standard setting bodies, (25) the results of our efforts to use technology and resilience initiatives to drive efficiencies, better outcomes and an enhanced patient experience, and (26) other risk factors described in our annual report on Form 10-K for the year ended December 31, 2022 and our other filings with the Securities and Exchange Commission. Many of the factors that will determine our future results are beyond our ability to control or predict. In light of the significant uncertainties inherent in the forward-looking statements contained herein, readers should not place undue reliance on forward-looking statements, which reflect management's views only as of the date hereof. We undertake no obligation to revise or update any forward-looking statements, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise. All references to "Company," "HCA" and "HCA Healthcare" as used throughout this release refer to HCA Healthcare, Inc. and its affiliates.

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