HCA Healthcare Reports Second Quarter 2023 Results

Raises 2023 Guidance

HCA Healthcare, Inc. (NYSE:HCA), today announced financial and operating results for the second quarter ended June 30, 2023.

Key second quarter metrics (all percentage changes compare 2Q 2023 to 2Q 2022 unless otherwise noted):

• Revenues totaled $15.861 billion
• Net income attributable to HCA Healthcare, Inc. totaled $1.193 billion, or $4.29 per diluted share
• Adjusted EBITDA totaled $3.056 billion
• Cash flows from operating activities totaled $2.475 billion
• Same facility admissions increased 2.2 percent and same facility equivalent admissions increased 3.7 percent

"The company produced solid results in the second quarter driven by continued strong demand for our services and good execution by our teams. I want to thank our colleagues for their dedication and great work," said Sam Hazen, Chief Executive Officer of HCA Healthcare.

Revenues in the second quarter of 2023 increased to $15.861 billion, compared to $14.820 billion in the second quarter of 2022. Net income attributable to HCA Healthcare, Inc. totaled $1.193 billion, or $4.29 per diluted share, compared to $1.155 billion, or $3.90 per diluted share, in the second quarter of 2022. The second quarter of 2022 results included losses on sales of facilities of $32 million, or $0.11 per diluted share, and losses on retirement of debt of $78 million, or $0.20 per diluted share.

For the second quarter of 2023, Adjusted EBITDA totaled $3.056 billion, compared to $3.042 billion in the second 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 2.2 percent and same facility equivalent admissions increased 3.7 percent in the second quarter of 2023, compared to the prior year period. Same facility emergency room visits increased 3.7 percent in the second quarter of 2023, compared to the prior year period. Same facility inpatient surgeries increased 1.8 percent while same facility outpatient surgeries increased 3.3 percent in the second quarter of 2023, compared to the same period of 2022. Same facility revenue per equivalent admission increased 2.4 percent in the second quarter of 2023, compared to the second quarter of 2022.

Six Months Ended June 30, 2023

Revenues for the six months ended June 30, 2023 totaled $31.452 billion, compared to $29.765 billion in the same period of 2022. Net income attributable to HCA Healthcare, Inc. was $2.556 billion, or $9.14 per diluted share, compared to $2.428 billion, or $8.05 per diluted share, for the first six months of 2022. Results for the six months ended June 30, 2023 include losses on sales of facilities of $14 million, or $0.08 per diluted share. Results for the six months ended June 30, 2022 included losses on sales of facilities of $22 million, or $0.08 per diluted share, and losses on retirement of debt of $78 million, or $0.20 per diluted share.

Balance Sheet and Cash Flows from Operations

As of June 30, 2023, HCA Healthcare, Inc.'s balance sheet reflected cash and cash equivalents of $862 million, total debt of $38.932 billion, and total assets of $53.594 billion. During the second quarter of 2023, capital expenditures totaled $1.241 billion, excluding acquisitions. Cash flows provided by operating activities in the second quarter totaled $2.475 billion, compared to $1.630 billion in the second quarter of 2022.

During the second quarter of 2023, the Company repurchased 3.3 million shares of its common stock at a cost of $915 million. The Company had $2.825 billion remaining under its repurchase authorization as of June 30, 2023. As of June 30, 2023, the Company had $6.875 billion of availability under its credit facilities.

Dividend

HCA today announced that its Board of Directors declared a quarterly cash dividend of $0.60 per share on the Company's common stock. The dividend will be paid on September 29, 2023 to stockholders of record at the close of business on September 15, 2023.

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 and results of operations and contractual restrictions. Future dividends are expected to be funded by cash balances and future cash flows from operations.

2023 Revised Guidance

The 2023 guidance ranges for the year have been revised from our first quarter release as follows:

Capital expenditures for 2023, excluding acquisitions, are estimated to be approximately $4.7 billion compared to $4.6 billion previously.

The Company's 2023 guidance contains a number of assumptions, including, among others, the Company's current expectations regarding the impact of the COVID-19 pandemic, 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."

Earnings Conference Call

HCA Healthcare will host a conference call for investors at 9:00 a.m. Central Daylight 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 June 30, 2023, HCA operated 182 hospitals and approximately 2,300 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 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; and supply shortages and disruptions, (2) the impact of our substantial 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, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (collectively, the "Affordable Care Act"), additional changes to the Affordable Care Act, its implementation, or interpretation (including through executive orders and court challenges), and 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, and attain expected levels of patient volumes 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) developments related to COVID-19, including, without limitation, the length and severity of COVID-19-related impacts and the spread of virus strains with new epidemiological characteristics; the volume of canceled or rescheduled procedures and the volume and acuity of COVID-19 patients cared for across our health systems; and measures we are taking to respond to COVID-19, (16) the emergence of and effects related to pandemics, epidemics and infectious diseases, (17) future divestitures which may result in charges and possible impairments of long-lived assets, (18) changes in business strategy or development plans, (19) delays in receiving payments for services provided, (20) the outcome of pending and any future tax audits, disputes and litigation associated with our tax positions, (21) the impact of known and unknown government investigations, litigation and other claims that may be made against us, (22) the impact of actual and potential cybersecurity incidents or security breaches, including the data security incident disclosed in July 2023, (23) our ongoing ability to demonstrate meaningful use of certified electronic health record ("EHR") technology and the impact of interoperability requirements, (24) the impact of natural disasters, such as hurricanes and floods, physical risks from climate change or similar events beyond our control, (25) 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, 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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