10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 1-11239

HCA Healthcare, Inc.

(Exact name of registrant as specified in its charter)



Delaware	27-3865930
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

One Park Plaza Nashville, Tennessee	37203
(Address of principal executive offices)	(Zip Code)

(615) 344-9551

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Voting common stock, $.01 par value	HCA	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.



Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐

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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date.


Class of Common Stock	Outstanding at October 24, 2022
Voting common stock, $.01 par value	282,716,700 shares

HCA HEALTHCARE, INC.

Form 10-Q

September 30, 2022



		Page of Form 10-Q
Part I.	Financial Information

Item 1.	Financial Statements (Unaudited):

	Condensed Consolidated Income Statements — for the quarters and nine months ended September 30, 2022 and 2021	3

	Condensed Consolidated Comprehensive Income Statements — for the quarters and nine months ended September 30, 2022 and 2021	4

	Condensed Consolidated Balance Sheets — September 30, 2022 and December 31, 2021	5

	Condensed Consolidated Statements of Stockholders’ Equity (Deficit) — for the quarters and nine months ended September 30, 2022 and 2021	6

	Condensed Consolidated Statements of Cash Flows — for the nine months ended September 30, 2022 and 2021	7

	Notes to Condensed Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31

Item 4.	Controls and Procedures	31

Part II.	Other Information

Item 1.	Legal Proceedings	31

Item 1A.	Risk Factors	31

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32

Item 6.	Exhibits	33

Signatures		34

HCA HEALTHCARE, INC.

CONDENSED CONSOLIDATED INCOME STATEMENTS

FOR THE QUARTERS AND NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021

Unaudited

(Dollars in millions, except per share amounts)


	Quarter						Nine Months
	2022			2021			2022			2021
Revenues	$	14,971		$	15,276		$	44,736		$	43,688

Salaries and benefits		6,899			7,094			20,630			19,780
Supplies		2,320			2,463			6,942			7,067
Other operating expenses		2,860			2,530			8,305			7,424
Equity in earnings of affiliates		(10	)		(35	)		(29	)		(78	)
Depreciation and amortization		749			716			2,219			2,125
Interest expense		446			398			1,288			1,168
Losses (gains) on sales of facilities		3			(1,047	)		25			(1,057	)
Losses on retirement of debt		—			—			78			12
		13,267			12,119			39,458			36,441
Income before income taxes		1,704			3,157			5,278			7,247
Provision for income taxes		360			685			1,090			1,531
Net income		1,344			2,472			4,188			5,716
Net income attributable to noncontrolling interests		210			203			626			574
Net income attributable to HCA Healthcare, Inc.	$	1,134		$	2,269		$	3,562		$	5,142
Per share data:
Basic earnings	$	3.97		$	7.13		$	12.13		$	15.67
Diluted earnings	$	3.91		$	7.00		$	11.97		$	15.43
Shares used in earnings per share calculations (in millions):
Basic		285.958			318.072			293.583			328.048
Diluted		289.852			324.029			297.702			333.248

The accompanying notes are an integral part of the condensed consolidated financial statements.

HCA HEALTHCARE, INC.

CONDENSED CONSOLIDATED COMPREHENSIVE INCOME STATEMENTS

FOR THE QUARTERS AND NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021

Unaudited

(Dollars in millions)


	Quarter						Nine Months
	2022			2021			2022			2021
Net income	$	1,344		$	2,472		$	4,188		$	5,716
Other comprehensive (loss) income before taxes:
Foreign currency translation		(76	)		(31	)		(181	)		(20	)

Unrealized losses on available-for-sale securities		(16	)		(3	)		(58	)		(12	)
Losses included in other operating expenses		—			—			1			—
		(16	)		(3	)		(57	)		(12	)

Defined benefit plans		—			—			—			—
Pension costs included in salaries and benefits		2			7			7			21
		2			7			7			21

Change in fair value of derivative financial instruments		1			(1	)		6			(1	)
Interest costs included in interest expense		—			10			4			28
		1			9			10			27
Other comprehensive (loss) income before taxes		(89	)		(18	)		(221	)		16
Income taxes (benefits) related to other comprehensive income items		(12	)		(1	)		(33	)		6
Other comprehensive (loss) income		(77	)		(17	)		(188	)		10
Comprehensive income		1,267			2,455			4,000			5,726
Comprehensive income attributable to noncontrolling interests		210			203			626			574
Comprehensive income attributable to HCA Healthcare, Inc.	$	1,057		$	2,252		$	3,374		$	5,152

The accompanying notes are an integral part of the condensed consolidated financial statements.

HCA HEALTHCARE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

Unaudited

(Dollars in millions)


	September 30, 2022			December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	999		$	1,451
Accounts receivable		8,552			8,095
Inventories		2,009			1,986
Other		1,921			2,010
		13,481			13,542

Property and equipment, at cost		53,730			51,350
Accumulated depreciation		(28,752	)		(27,287	)
		24,978			24,063

Investments of insurance subsidiaries		372			438
Investments in and advances to affiliates		444			448
Goodwill and other intangible assets		9,651			9,540
Right-of-use operating lease assets		2,097			2,113
Other		461			598
	$	51,484		$	50,742
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	4,161		$	4,111
Accrued salaries		1,625			1,912
Other accrued expenses		3,780			3,322
Long-term debt due within one year		218			237
		9,784			9,582

Long-term debt, less debt issuance costs and discounts of $309 and $248		37,492			34,342
Professional liability risks		1,510			1,514
Right-of-use operating lease obligations		1,762			1,755
Income taxes and other liabilities		1,714			2,060

Stockholders’ equity (deficit):
Common stock $0.01 par; authorized 1,800,000,000 shares; outstanding 283,903,500 shares — 2022 and 305,476,800 shares — 2021		3			3
Accumulated other comprehensive loss		(592	)		(404	)
Retained deficit		(2,781	)		(532	)
Stockholders’ deficit attributable to HCA Healthcare, Inc.		(3,370	)		(933	)
Noncontrolling interests		2,592			2,422
		(778	)		1,489
	$	51,484		$	50,742

The accompanying notes are an integral part of the condensed consolidated financial statements.

HCA HEALTHCARE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

FOR THE QUARTERS AND NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021

Unaudited

(Dollars in millions)


	Equity (Deficit) Attributable to HCA Healthcare, Inc.
						Capital			Accumulated						Equity
	Common Stock					in Excess			Other			Retained			Attributable to
	Shares			Par		of Par			Comprehensive			Earnings			Noncontrolling
	(in millions)			Value		Value			Loss			(Deficit)			Interests			Total
Balances, December 31, 2020		339.426		$	3	$	294		$	(502	)	$	777		$	2,320		$	2,892
Comprehensive income										11			1,423			157			1,591
Repurchase of common stock		(8.477	)				(225	)					(1,302	)					(1,527	)
Share-based benefit plans		2.765					(75	)											(75	)
Cash dividends declared ($0.48 per share)													(163	)					(163	)
Distributions																(234	)		(234	)
Other							6									(8	)		(2	)
Balances, March 31, 2021		333.714			3		—			(491	)		735			2,235			2,482
Comprehensive income										16			1,450			214			1,680
Repurchase of common stock		(11.261	)				(142	)					(2,145	)					(2,287	)
Share-based benefit plans		0.372					140												140
Cash dividends declared ($0.48 per share)													(161	)					(161	)
Distributions																(123	)		(123	)
Other							2									57			59
Balances, June 30, 2021		322.825			3		—			(475	)		(121	)		2,383			1,790
Comprehensive income										(17	)		2,269			203			2,455
Repurchase of common stock		(9.605	)				(130	)					(