8-K
HCA Healthcare, Inc. (HCA)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): October 22, 2021
HCA HEALTHCARE, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 001-11239 | 27-3865930 |
|---|---|---|
| (State or other jurisdiction<br> <br>of incorporation) | (Commission<br> <br>File Number) | (IRS Employer<br> <br>Identification No.) |
| One Park Plaza, Nashville,<br> <br>Tennessee | 37203 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (615) 344-9551
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each Class | Trading<br> <br>Symbol(s) | Name of each exchange<br> <br>on which registered |
|---|---|---|
| Common Stock, $.01 par value per share | HCA | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On October 22, 2021, HCA Healthcare, Inc. (the “Company”) issued a press release announcing, among other matters, its results of operations for the third quarter ended September 30, 2021, the text of which is set forth as Exhibit 99.1.
Item 7.01. Regulation FD Disclosure.
On October 22, 2021, the Company issued a press release announcing, among other matters, its results of operations for the third quarter ended September 30, 2021, the text of which is set forth as Exhibit 99.1.
Item 8.01. Other Events.
On October 22, 2021, the Company announced that its Board of Directors had declared a quarterly cash dividend of $0.48 per share of the Company’s common stock. The dividend will be paid on December 29, 2021 to stockholders of record at the close of business on December 14, 2021.
Item 9.01. Financial Statements and Exhibits.
| (d) | Exhibits: |
|---|---|
| Exhibit 99.1 | Press Release, dated October 22, 2021 |
| --- | --- |
| Exhibit 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| HCA HEALTHCARE, INC. | |
|---|---|
| /s/ William B. Rutherford | |
| William B. Rutherford<br> <br>Executive Vice President and Chief Financial Officer |
Date: October 22, 2021
EX-99.1
Exhibit 99.1
| FOR IMMEDIATE RELEASE | |
|---|---|
| INVESTOR CONTACT: | MEDIA CONTACT: |
| Mark Kimbrough | Harlow Sumerford |
| 615-344-2688 | 615-344-1851 |
HCA Healthcare Reports Third Quarter 2021 Results;
Revises 2021 Guidance
Nashville,Tenn., October 22, 2021 – HCA Healthcare, Inc. (NYSE: HCA) today announced financial and operating results for the third quarter ended September 30, 2021.
Key third quarter metrics (all percentage changes compare 3Q 2021 to 3Q 2020 unless otherwise noted):
| • | Revenues totaled $15.276 billion |
|---|---|
| • | Net income attributable to HCA Healthcare, Inc. totaled $2.269 billion, or $7.00 perdiluted share |
| --- | --- |
| • | Adjusted EBITDA totaled $3.224 billion |
| --- | --- |
| • | Cash flows from operating activities totaled $2.277 billion |
| --- | --- |
| • | Same facility admissions and same facility equivalent admissions increased 6.8 percent and9.3 percent, respectively |
| --- | --- |
“During the third quarter we experienced the most intense surge yet of the pandemic, and our colleagues and physicians delivered record levels of patient care to meet the demand caused by the Delta variant,” said Sam Hazen, Chief Executive Officer of HCA Healthcare. “Once again, the disciplined operating culture and strong execution by our teams were on display. I want to thank them for their tremendous work and dedication to serving others.”
Revenues in the third quarter of 2021 increased to $15.276 billion, compared to $13.311 billion in the third quarter of 2020. Net income attributable to HCA Healthcare, Inc. totaled $2.269 billion, or $7.00 per diluted share, compared to $668 million, or $1.95 per diluted share, in the third quarter of 2020. Results for the third quarter of 2021 include gains on sales of facilities of $1.047 billion, or $2.43 per diluted share, related to the sale of four hospitals in Georgia and other health care entity investments. Results for the third quarter of 2020 included a reversal of $822 million, or $1.72 per diluted share, in government stimulus income recorded in the second quarter of 2020 related to general distribution funds received from the Provider Relief Fund established by the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act and $14 million, or $0.03 per diluted share, of gains on sales of facilities.
1
For the third quarter of 2021, Adjusted EBITDA totaled $3.224 billion, compared to $2.053 billion in the third quarter of 2020. 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 and equivalent admissions increased 6.8 percent and 9.3 percent, respectively, in the third quarter of 2021, compared to the prior year period. Same facility emergency room visits increased 31.2 percent in the third quarter of 2021, compared to the prior year period. Same facility inpatient surgeries declined 4.9 percent, and same facility outpatient surgeries increased 6.4 percent in the third quarter of 2021, compared to the same period of 2020. Same facility revenue per equivalent admission increased 5.2 percent in the third quarter of 2021, compared to the third quarter of 2020, due to increases in acuity of patients treated and favorable payer mix in the quarter.
Because of the pandemic-related impact on volumes in the third quarter of 2020, the Company believes a comparison of volume statistics to the comparable period in 2019 provides additional context to the improvement in operations during 2021. The following table provides a summary of statistical measures for the third quarter of 2021 compared to the same period in 2019 on a same facility basis.
| Third Quarter | |||||||
|---|---|---|---|---|---|---|---|
| 2021 | 2019 | % Change | |||||
| Same Facility: | |||||||
| Admissions | **** | 531,032 | 517,151 | 2.7 | % | ||
| Equivalent Admissions | **** | 892,665 | 897,774 | -0.6 | % | ||
| Patient Days | **** | 2,836,248 | 2,482,756 | 14.2 | % | ||
| Equivalent Patient Days | **** | 4,767,733 | 4,310,064 | 10.6 | % | ||
| Inpatient Surgery Cases | **** | 125,533 | 141,313 | -11.2 | % | ||
| Outpatient Surgery Cases | **** | 242,450 | 241,019 | 0.6 | % | ||
| Emergency Room Visits | **** | 2,301,968 | 2,198,357 | 4.7 | % |
Nine Months Ended September 30, 2021
Revenues for the nine months ended September 30, 2021 totaled $43.688 billion, compared to $37.240 billion in the same period of 2020. Net income attributable to HCA Healthcare, Inc. was $5.142 billion, or $15.43 per diluted share, compared to $2.328 billion, or $6.79 per diluted share, for the first nine months of 2020. Results through September 2021 include gains on sales of facilities of $1.057 billion, or $2.39 per diluted share, and losses on retirement of debt of $12 million, or $0.03 per diluted share. Results for the nine months ended September 30, 2020 included losses on sales of facilities of $6 million, or $0.03 per diluted share, and losses on retirement of debt of $295 million, or $0.66 per diluted share.
Balance Sheet and CashFlows from Operations
As of September 30, 2021, HCA Healthcare, Inc.’s balance sheet reflected cash and cash equivalents of $1.027 billion, total debt of $32.299 billion, and total assets of $49.562 billion. During the third quarter of 2021, capital expenditures totaled $889 million, excluding acquisitions. Cash flows provided by operating activities in the third quarter totaled $2.277 billion, compared to $2.717 billion in the third quarter of 2020.
2
During the third quarter of 2021, the Company repurchased 9.605 million shares of its common stock at a cost of $2.329 billion. The Company had $2.658 billion remaining under its repurchase authorization as of September 30, 2021. As of September 30, 2021, the Company had $5.920 billion of availability under its credit facilities.
Dividend
HCA today announced that its Board of Directors declared a quarterly cash dividend of $0.48 per share on the Company’s common stock. The dividend will be paid on December 29, 2021 to stockholders of record at the close of business on December 14, 2021.
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.
2021 Revised Guidance
The 2021 guidance ranges for the year have been revised from our second quarter release and are as follows:
| 2021 Guidance Range | |
|---|---|
| Revenues | $58.7 to $59.3 billion |
| Adjusted EBITDA | $12.50 to $12.80 billion |
| EPS (diluted) | $17.20 to $17.80 per diluted share |
| Capital Expenditures | Approximately $3.7 billion |
The Company’s 2021 guidance contains a number of assumptions, including, among others, the Company’s current expectations regarding the impact of the COVID-19 pandemic and related government legislation, 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 at: https://investor.hcahealthcare.com/events-and-presentations.
3
About the Company
As of September 30, 2021, HCA Healthcare operated 183 hospitals and approximately 2,000 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, 2021, 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) developments related to COVID-19, including, without limitation, the length and severity of the pandemic and the spread of virus strains with new epidemiological characteristics; the volume of canceled or rescheduled procedures and the volume of COVID-19 patients cared for across our health systems; measures we are taking to respond to the COVID-19 pandemic; the impact and terms of government and administrative regulation and stimulus (including the Families First Coronavirus Response Act, the CARES Act, the Paycheck Protection Program and Health Care Enhancement Act, the Consolidated Appropriations Act, 2021, the American Rescue Plan Act of 2021 and other enacted and potential future legislation); changes in revenues due to declining patient volumes, changes in payer mix and deteriorating macroeconomic conditions (including increases in uninsured and underinsured patients); potential increased expenses related to labor, supply chain or other expenditures; workforce disruptions; supply shortages and disruptions; and the timing, availability and adoption of effective medical treatments and vaccines, (2) the impact of our substantial indebtedness and the ability to refinance such indebtedness on acceptable terms, as well as risks associated with disruptions in the financial markets and the business of financial institutions as the result of the COVID-19 pandemic which could impact us from a financial perspective, (3) the impact of the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (collectively, the “Affordable Care Act”), including the effects of changes or court challenges to the Affordable Care Act or additional changes to its implementation, the possible enactment of additional federal or state health care reforms and possible changes to other federal, state or local laws or regulations affecting the health care industry, including 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”), and also including any such laws or governmental regulations which are adopted in response to the COVID-19 pandemic, (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 (“PAYGO Act”) 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
4
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) the highly competitive nature of the health care business, (9) 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, (10) the efforts of health insurers, health care providers, large employer groups and others to contain health care costs, (11) the outcome of our continuing efforts to monitor, maintain and comply with appropriate laws, regulations, policies and procedures, (12) increases in wages and the ability to attract and retain qualified management and personnel, including affiliated physicians, nurses and medical and technical support personnel, (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) changes in general economic conditions nationally and regionally in our markets, including economic and business conditions (and the impact thereof on the economy, financial markets and banking industry) resulting from the COVID-19 pandemic, (16) the emergence of and effects related to other 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) potential adverse impact of known and unknown government investigations, litigation and other claims that may be made against us, (22) the impact of potential cybersecurity incidents or security breaches, (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, or similar events beyond our control, (25) changes in the 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, 2020 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” and “HCA Healthcare” as used throughout this release refer to HCA Healthcare, Inc. and its affiliates.
5
HCA Healthcare, Inc.
Condensed Consolidated Comprehensive Income Statements
Third Quarter
(Dollars in millions, except per share amounts)
| 2021 | 2020 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Amount | Ratio | Amount | Ratio | |||||||||
| Revenues | $ | 15,276 | **** | **** | 100.0 | % | $ | 13,311 | 100.0 | % | ||
| Salaries and benefits | **** | 7,094 | **** | **** | 46.4 | **** | 6,097 | 45.8 | ||||
| Supplies | **** | 2,463 | **** | **** | 16.1 | **** | 2,128 | 16.0 | ||||
| Other operating expenses | **** | 2,530 | **** | **** | 16.6 | **** | 2,251 | 16.9 | ||||
| Government stimulus income reversal | **** | — | **** | **** | — | **** | 822 | 6.2 | ||||
| Equity in earnings of affiliates | **** | (35 | ) | **** | (0.2 | ) | (40 | ) | (0.3 | ) | ||
| Depreciation and amortization | **** | 716 | **** | **** | 4.7 | **** | 694 | 5.2 | ||||
| Interest expense | **** | 398 | **** | **** | 2.6 | **** | 385 | 2.9 | ||||
| Gains on sales of facilities | **** | (1,047 | ) | **** | (6.9 | ) | (14 | ) | (0.1 | ) | ||
| **** | 12,119 | **** | **** | 79.3 | **** | 12,323 | 92.6 | |||||
| Income before income taxes | **** | 3,157 | **** | **** | 20.7 | **** | 988 | 7.4 | ||||
| Provision for income taxes | **** | 685 | **** | **** | 4.5 | **** | 209 | 1.5 | ||||
| Net income | **** | 2,472 | **** | **** | 16.2 | **** | 779 | 5.9 | ||||
| Net income attributable to noncontrolling interests | **** | 203 | **** | **** | 1.3 | **** | 111 | 0.9 | ||||
| Net income attributable to HCA Healthcare, Inc. | $ | 2,269 | **** | **** | 14.9 | **** | $ | 668 | 5.0 | |||
| Diluted earnings per share | $ | 7.00 | **** | $ | 1.95 | |||||||
| Shares used in computing diluted earnings per share (millions) | **** | 324.029 | **** | 343.346 | ||||||||
| Comprehensive income attributable to HCA Healthcare, Inc. | $ | 2,252 | **** | $ | 715 |
6
HCA Healthcare, Inc.
Condensed Consolidated Comprehensive Income Statements
For the Nine Months Ended September 30, 2021 and 2020
(Dollars in millions, except per share amounts)
| 2021 | 2020 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Amount | Ratio | Amount | Ratio | |||||||||
| Revenues | $ | 43,688 | **** | **** | 100.0 | % | $ | 37,240 | 100.0 | % | ||
| Salaries and benefits | **** | 19,780 | **** | **** | 45.3 | **** | 17,545 | 47.1 | ||||
| Supplies | **** | 7,067 | **** | **** | 16.2 | **** | 5,999 | 16.1 | ||||
| Other operating expenses | **** | 7,424 | **** | **** | 17.0 | **** | 6,825 | 18.3 | ||||
| Equity in earnings of affiliates | **** | (78 | ) | **** | (0.2 | ) | (48 | ) | (0.1 | ) | ||
| Depreciation and amortization | **** | 2,125 | **** | **** | 4.8 | **** | 2,059 | 5.6 | ||||
| Interest expense | **** | 1,168 | **** | **** | 2.7 | **** | 1,201 | 3.2 | ||||
| Losses (gains) on sales of facilities | **** | (1,057 | ) | **** | (2.4 | ) | 6 | — | ||||
| Losses on retirement of debt | **** | 12 | **** | **** | — | **** | 295 | 0.8 | ||||
| **** | 36,441 | **** | **** | 83.4 | **** | 33,882 | 91.0 | |||||
| Income before income taxes | **** | 7,247 | **** | **** | 16.6 | **** | 3,358 | 9.0 | ||||
| Provision for income taxes | **** | 1,531 | **** | **** | 3.5 | **** | 665 | 1.8 | ||||
| Net income | **** | 5,716 | **** | **** | 13.1 | **** | 2,693 | 7.2 | ||||
| Net income attributable to noncontrolling interests | **** | 574 | **** | **** | 1.3 | **** | 365 | 0.9 | ||||
| Net income attributable to HCA Healthcare, Inc. | $ | 5,142 | **** | **** | 11.8 | **** | $ | 2,328 | 6.3 | |||
| Diluted earnings per share | $ | 15.43 | **** | $ | 6.79 | |||||||
| Shares used in computing diluted earnings per share (millions) | **** | 333.248 | **** | 343.014 | ||||||||
| Comprehensive income attributable to HCA Healthcare, Inc. | $ | 5,152 | **** | $ | 2,273 |
7
HCA Healthcare, Inc.
Condensed Consolidated Balance Sheets
(Dollars in millions)
| June 30, | December 31, | |||||||
|---|---|---|---|---|---|---|---|---|
| 2021 | 2020 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | 1,027 | **** | $ | 1,120 | $ | 1,793 | ||
| Accounts receivable | 8,433 | **** | 7,636 | 7,051 | ||||
| Inventories | 2,019 | **** | 2,027 | 2,025 | ||||
| Other | 1,769 | **** | 1,692 | 1,464 | ||||
| 13,248 | **** | 12,475 | 12,333 | |||||
| Property and equipment, at cost | 50,695 | **** | 50,698 | 49,317 | ||||
| Accumulated depreciation | (27,148 | ) | (27,227 | ) | (26,118 | ) | ||
| 23,547 | **** | 23,471 | 23,199 | |||||
| Investments of insurance subsidiaries | 418 | **** | 410 | 388 | ||||
| Investments in and advances to affiliates | 412 | **** | 382 | 422 | ||||
| Goodwill and other intangible assets | 9,153 | **** | 8,680 | 8,578 | ||||
| Right-of-use<br>operating lease assets | 2,099 | **** | 2,118 | 2,024 | ||||
| Other | 685 | **** | 628 | 546 | ||||
| 49,562 | **** | $ | 48,164 | $ | 47,490 | |||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | 3,759 | **** | $ | 3,531 | $ | 3,535 | ||
| Accrued salaries | 2,134 | **** | 1,896 | 1,720 | ||||
| Other accrued expenses | 3,481 | **** | 2,935 | 3,240 | ||||
| Long-term debt due within one year | 250 | **** | 253 | 209 | ||||
| 9,624 | **** | 8,615 | 8,704 | |||||
| Long-term debt, less debt issuance costs and discounts of 253, 255 and 236 | 32,049 | **** | 32,319 | 30,795 | ||||
| Professional liability risks | 1,522 | **** | 1,585 | 1,486 | ||||
| Right-of-use<br>operating lease obligations | 1,742 | **** | 1,767 | 1,673 | ||||
| Income taxes and other liabilities | 2,800 | **** | 2,088 | 1,940 | ||||
| Stockholders’ equity: | ||||||||
| Stockholders’ (deficit) equity attributable to HCA Healthcare, Inc. | (695 | ) | (593 | ) | 572 | |||
| Noncontrolling interests | 2,520 | 2,383 | 2,320 | |||||
| 1,825 | **** | 1,790 | 2,892 | |||||
| 49,562 | **** | $ | 48,164 | $ | 47,490 |
All values are in US Dollars.
8
HCA Healthcare, Inc.
Condensed Consolidated Statements of Cash Flows
For the Nine Months Ended September 30, 2021 and 2020
(Dollars in millions)
| 2021 | 2020 | |||||
|---|---|---|---|---|---|---|
| Cash flows from operating activities: | ||||||
| Net income | $ | 5,716 | **** | $ | 2,693 | |
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||
| Increase (decrease) in cash from operating assets and liabilities: | ||||||
| Accounts receivable | **** | (1,312 | ) | 930 | ||
| Inventories and other assets | **** | (333 | ) | (36 | ) | |
| Accounts payable and accrued expenses | **** | 731 | **** | 542 | ||
| Government stimulus refund liability | **** | — | **** | 6,123 | ||
| Depreciation and amortization | **** | 2,125 | **** | 2,059 | ||
| Income taxes | **** | 185 | **** | (114 | ) | |
| Losses (gains) on sales of facilities | **** | (1,057 | ) | 6 | ||
| Losses on retirement of debt | **** | 12 | **** | 295 | ||
| Amortization of debt issuance costs and discounts | **** | 21 | **** | 22 | ||
| Share-based compensation | **** | 341 | **** | 229 | ||
| Other | **** | 87 | **** | 66 | ||
| Net cash provided by operating activities | **** | 6,516 | **** | 12,815 | ||
| Cash flows from investing activities: | ||||||
| Purchase of property and equipment | **** | (2,385 | ) | (2,087 | ) | |
| Acquisition of hospitals and health care entities | **** | (488 | ) | (380 | ) | |
| Sales of hospitals and health care entities | **** | 1,980 | **** | 68 | ||
| Change in investments | **** | (38 | ) | (40 | ) | |
| Other | **** | 2 | **** | (44 | ) | |
| Net cash used in investing activities | **** | (929 | ) | (2,483 | ) | |
| Cash flows from financing activities: | ||||||
| Issuances of long-term debt | **** | 4,337 | **** | 2,700 | ||
| Net change in revolving credit facilities | **** | 500 | **** | (2,480 | ) | |
| Repayment of long-term debt | **** | (3,787 | ) | (3,403 | ) | |
| Distributions to noncontrolling interests | **** | (501 | ) | (393 | ) | |
| Payment of debt issuance costs | **** | (38 | ) | (35 | ) | |
| Payment of dividends | **** | (476 | ) | (153 | ) | |
| Repurchase of common stock | **** | (6,143 | ) | (441 | ) | |
| Other | **** | (241 | ) | (156 | ) | |
| Net cash used in financing activities | **** | (6,349 | ) | (4,361 | ) | |
| Effect of exchange rate changes on cash and cash equivalents | **** | (4 | ) | (4 | ) | |
| Change in cash and cash equivalents | **** | (766 | ) | 5,967 | ||
| Cash and cash equivalents at beginning of period | **** | 1,793 | **** | 621 | ||
| Cash and cash equivalents at end of period | $ | 1,027 | **** | $ | 6,588 | |
| Interest payments | $ | 1,127 | **** | $ | 1,230 | |
| Income tax payments, net | $ | 1,346 | **** | $ | 779 |
9
HCA Healthcare, Inc.
Operating Statistics
| For the Nine Months | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Third Quarter | Ended September 30, | |||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||
| Operations: | ||||||||||||
| Number of Hospitals | **** | 183 | **** | 187 | **** | 183 | **** | 187 | ||||
| Number of Freestanding Outpatient Surgery Centers* | **** | 123 | **** | 121 | **** | 123 | **** | 121 | ||||
| Licensed Beds at End of Period | **** | 48,950 | **** | 49,473 | **** | 48,950 | **** | 49,473 | ||||
| Weighted Average Beds in Service | **** | 42,088 | **** | 42,426 | **** | 42,304 | **** | 42,304 | ||||
| Reported: | ||||||||||||
| Admissions | **** | 536,848 | **** | 506,756 | **** | 1,575,269 | **** | 1,487,992 | ||||
| % Change | **** | 5.9 | % | **** | 5.9 | % | ||||||
| Equivalent Admissions | **** | 905,627 | **** | 835,576 | **** | 2,654,328 | **** | 2,447,747 | ||||
| % Change | **** | 8.4 | % | **** | 8.4 | % | ||||||
| Revenue per Equivalent Admission | $ | 16,868 | **** | $ | 15,930 | $ | 16,459 | **** | $ | 15,214 | ||
| % Change | **** | 5.9 | % | **** | 8.2 | % | ||||||
| Inpatient Revenue per Admission | $ | 18,102 | **** | $ | 16,265 | $ | 17,115 | **** | $ | 15,531 | ||
| % Change | **** | 11.3 | % | **** | 10.2 | % | ||||||
| Patient Days | **** | 2,865,220 | **** | 2,593,139 | **** | 8,166,211 | **** | 7,476,794 | ||||
| % Change | **** | 10.5 | % | **** | 9.2 | % | ||||||
| Equivalent Patient Days | **** | 4,833,197 | **** | 4,275,481 | **** | 13,760,066 | **** | 12,299,326 | ||||
| % Change | **** | 13.0 | % | **** | 11.9 | % | ||||||
| Inpatient Surgery Cases | **** | 126,436 | **** | 133,492 | **** | 390,486 | **** | 387,228 | ||||
| % Change | **** | -5.3 | % | **** | 0.8 | % | ||||||
| Outpatient Surgery Cases | **** | 249,192 | **** | 232,493 | **** | 742,527 | **** | 629,723 | ||||
| % Change | **** | 7.2 | % | **** | 17.9 | % | ||||||
| Emergency Room Visits | **** | 2,338,180 | **** | 1,813,661 | **** | 6,308,386 | **** | 5,594,484 | ||||
| % Change | **** | 28.9 | % | **** | 12.8 | % | ||||||
| Outpatient Revenues as a Percentage of Patient Revenues | **** | 34.1 | % | 35.5 | % | **** | 36.0 | % | 35.0 | % | ||
| Average Length of Stay (days) | **** | 5.337 | **** | 5.117 | **** | 5.184 | **** | 5.025 | ||||
| Occupancy (weighted average beds in service) | **** | 74.0 | % | 66.4 | % | **** | 70.7 | % | 64.5 | % | ||
| Same Facility: | ||||||||||||
| Admissions | **** | 531,032 | **** | 497,309 | **** | 1,549,732 | **** | 1,458,609 | ||||
| % Change | **** | 6.8 | % | **** | 6.2 | % | ||||||
| Equivalent Admissions | **** | 892,665 | **** | 817,079 | **** | 2,603,550 | **** | 2,392,119 | ||||
| % Change | **** | 9.3 | % | **** | 8.8 | % | ||||||
| Revenue per Equivalent Admission | $ | 16,799 | **** | $ | 15,962 | $ | 16,456 | **** | $ | 15,247 | ||
| % Change | **** | 5.2 | % | **** | 7.9 | % | ||||||
| Inpatient Revenue per Admission | $ | 18,055 | **** | $ | 16,323 | $ | 17,148 | **** | $ | 15,610 | ||
| % Change | **** | 10.6 | % | **** | 9.9 | % | ||||||
| Inpatient Surgery Cases | **** | 125,533 | **** | 131,957 | **** | 386,190 | **** | 382,121 | ||||
| % Change | **** | -4.9 | % | **** | 1.1 | % | ||||||
| Outpatient Surgery Cases | **** | 242,450 | **** | 227,918 | **** | 724,914 | **** | 616,082 | ||||
| % Change | **** | 6.4 | % | **** | 17.7 | % | ||||||
| Emergency Room Visits | **** | 2,301,968 | **** | 1,753,887 | **** | 6,162,206 | **** | 5,419,887 | ||||
| % Change | **** | 31.2 | % | **** | 13.7 | % | ||||||
| * | Excludes freestanding endoscopy centers (21 centers at both September 30, 2021 and September 30,<br>2020). | |||||||||||
| --- | --- |
10
HCA Healthcare, Inc.
Supplemental Non-GAAP Disclosures
Operating Results Summary
(Dollars in millions, except per share amounts)
| For the Nine Months | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Third Quarter | Ended September 30, | |||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||
| Revenues | $ | 15,276 | **** | $ | 13,311 | $ | 43,688 | **** | $ | 37,240 | ||
| Net income attributable to HCA Healthcare, Inc. | $ | 2,269 | **** | $ | 668 | $ | 5,142 | **** | $ | 2,328 | ||
| Losses (gains) on sales of facilities (net of tax) | **** | (788 | ) | (10 | ) | **** | (795 | ) | 9 | |||
| Losses on retirement of debt (net of tax) | **** | — | **** | — | **** | 9 | **** | 227 | ||||
| Net income attributable to HCA Healthcare, Inc., excluding losses (gains) on sales of facilities<br>and losses on retirement of debt (a) | **** | 1,481 | **** | 658 | **** | 4,356 | **** | 2,564 | ||||
| Depreciation and amortization | **** | 716 | **** | 694 | **** | 2,125 | **** | 2,059 | ||||
| Interest expense | **** | 398 | **** | 385 | **** | 1,168 | **** | 1,201 | ||||
| Provision for income taxes | **** | 426 | **** | 205 | **** | 1,272 | **** | 730 | ||||
| Net income attributable to noncontrolling interests | **** | 203 | **** | 111 | **** | 574 | **** | 365 | ||||
| Adjusted EBITDA (a) | $ | 3,224 | **** | $ | 2,053 | $ | 9,495 | **** | $ | 6,919 | ||
| Adjusted EBITDA margin (a) | **** | 21.1 | % | 15.4 | % | **** | 21.7 | % | 18.6 | % | ||
| Diluted earnings per share: | ||||||||||||
| Net income attributable to HCA Healthcare, Inc. | $ | 7.00 | **** | $ | 1.95 | $ | 15.43 | **** | $ | 6.79 | ||
| Losses (gains) on sales of facilities | **** | (2.43 | ) | (0.03 | ) | **** | (2.39 | ) | 0.03 | |||
| Losses on retirement of debt | **** | — | **** | — | **** | 0.03 | **** | 0.66 | ||||
| Net income attributable to HCA Healthcare, Inc., excluding losses (gains) on sales of<br>facilities and losses on retirement of debt (a) | $ | 4.57 | **** | $ | 1.92 | $ | 13.07 | **** | $ | 7.48 | ||
| Shares used in computing diluted earnings per share (millions) | **** | 324.029 | **** | 343.346 | **** | 333.248 | **** | 343.014 | ||||
| (a) | Net income attributable to HCA Healthcare, Inc., excluding losses (gains) on sales of facilities and losses on<br>retirement of debt, and Adjusted EBITDA should not be considered as measures of financial performance under generally accepted accounting principles (“GAAP”). We believe net income attributable to HCA Healthcare, Inc., excluding losses<br>(gains) on sales of facilities and losses on retirement of debt, and Adjusted EBITDA are important measures that supplement discussions and analysis of our results of operations. We believe it is useful to investors to provide disclosures of our<br>results of operations on the same basis used by management. Management relies upon net income attributable to HCA Healthcare, Inc., excluding losses (gains) on sales of facilities and losses on retirement of debt, and Adjusted EBITDA as the primary<br>measures to review and assess operating performance of its health care facilities and their management teams. | |||||||||||
| --- | --- |
Management and investors review both the overall performance (including net income attributable to HCA Healthcare, Inc., excluding losses (gains) on sales of facilities and losses on retirement of debt, and GAAP net income attributable to HCA Healthcare, Inc.) and operating performance (Adjusted EBITDA) of our health care facilities. Adjusted EBITDA and the Adjusted EBITDA margin (Adjusted EBITDA divided by revenues) are utilized by management and investors to compare our current operating results with the corresponding periods during the previous year and to compare our operating results with other companies in the health care industry. It is reasonable to expect that losses (gains) on sales of facilities and losses on retirement of debt will occur in future periods, but the amounts recognized can vary significantly from period to period, do not directly relate to the ongoing operations of our health care facilities and complicate period comparisons of our results of operations and operations comparisons with other health care companies.
Net income attributable to HCA Healthcare, Inc., excluding losses (gains) on sales of facilities and losses on retirement of debt, and Adjusted EBITDA are not measures of financial performance under GAAP, and should not be considered as alternatives to net income attributable to HCA Healthcare, Inc. as a measure of operating performance or cash flows from operating, investing and financing activities as a measure of liquidity. Because net income attributable to HCA Healthcare, Inc., excluding losses (gains) on sales of facilities and losses on retirement of debt, and Adjusted EBITDA are not measurements determined in accordance with GAAP and are susceptible to varying calculations, net income attributable to HCA Healthcare, Inc., excluding losses (gains) on sales of facilities and losses on retirement of debt, and Adjusted EBITDA, as presented, may not be comparable to other similarly titled measures presented by other companies.
11
HCA Healthcare, Inc.
Supplemental Non-GAAP Disclosures
2021 Operating Results Forecast
(Dollars in millions, except per share amounts)
| For the Year EndingDecember 31, 2021 | ||||
|---|---|---|---|---|
| Low | High | |||
| Revenues | $ | 58,700 | $ | 59,300 |
| Net income attributable to HCA Healthcare, Inc. (a) | $ | 5,650 | $ | 5,830 |
| Depreciation and amortization | **** | 2,840 | **** | 2,860 |
| Interest expense | **** | 1,560 | **** | 1,580 |
| Provision for income taxes | **** | 1,700 | **** | 1,750 |
| Net income attributable to noncontrolling interests | **** | 750 | **** | 780 |
| Adjusted EBITDA (a) (b) | $ | 12,500 | $ | 12,800 |
| Diluted earnings per share: | ||||
| Net income attributable to HCA Healthcare, Inc. | $ | 17.20 | $ | 17.80 |
| Shares used in computing diluted earnings per share (millions) | **** | 329.000 | **** | 329.000 |
The Company’s forecasted guidance range is based on current plans and expectations and is subject to a number of known and unknown uncertainties and risks.
| (a) | The Company does not forecast the impact of items such as, but not limited to, losses (gains) on sales of<br>facilities, losses on retirement of debt, legal claim costs (benefits) and impairments of long-lived assets because the Company does not believe that it can forecast these items with sufficient accuracy. |
|---|---|
| (b) | Adjusted EBITDA should not be considered a measure of financial performance under generally accepted accounting<br>principles (“GAAP”). We believe Adjusted EBITDA is an important measure that supplements discussions and analysis of our results of operations. We believe it is useful to investors to provide disclosures of our results of operations on the<br>same basis used by management. Management relies upon Adjusted EBITDA as a primary measure to review and assess operating performance of its health care facilities and their management teams. |
| --- | --- |
Management and investors review both the overall performance (including net income attributable to HCA Healthcare, Inc.) and operating performance (Adjusted EBITDA) of our health care facilities. Adjusted EBITDA and the Adjusted EBITDA margin (Adjusted EBITDA divided by revenues) are utilized by management and investors to compare our current operating results with the corresponding periods during the previous year and to compare our operating results with other companies in the health care industry.
Adjusted EBITDA is not a measure of financial performance under GAAP and should not be considered as an alternative to net income attributable to HCA Healthcare, Inc. as a measure of operating performance or cash flows from operating, investing and financing activities as a measure of liquidity. Because Adjusted EBITDA is not a measurement determined in accordance with GAAP and is susceptible to varying calculations, Adjusted EBITDA, as presented, may not be comparable to other similarly titled measures presented by other companies.
12