Income Taxes

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 4 — INCOME TAXES

The provision for income taxes consists of the following (dollars in millions):

	2023		2022		2021
Current:
Federal	$	1,118	$	1,222	$	1,769
State		213		206		311
Foreign		3		18		15
Deferred:
Federal		241		261		24
State		21		27		(18	)
Foreign		19		12		11
	$	1,615	$	1,746	$	2,112

Our provision for income taxes for the years ended December 31, 2023, 2022 and 2021 included tax benefits of $93 million, $77 million and $119 million, respectively, related to the settlement of employee equity awards. Our foreign pretax income was $85 million, $66 million and $64 million for the years ended December 31, 2023, 2022 and 2021, respectively.

NOTE 4 — INCOME TAXES (continued)

A reconciliation of the federal statutory rate to the effective income tax rate follows:

	2023			2022			2021
Federal statutory rate		21.0	%		21.0	%		21.0	%
State income taxes, net of federal tax benefit		2.6			2.3			2.0
Change in liability for uncertain tax positions		0.4			0.7			0.7
Tax benefit from settlements of employee equity awards		(1.2	)		(0.9	)		(1.2	)
Other items, net		0.8			0.5			0.8
Effective income tax rate on income attributable to HCA Healthcare, Inc.		23.6			23.6			23.3
Income attributable to noncontrolling interests from consolidated partnerships		(2.6	)		(3.3	)		(1.8	)
Effective income tax rate on income before income taxes		21.0	%		20.3	%		21.5	%

A summary of the items comprising our deferred tax assets and liabilities at December 31 follows (dollars in millions):

	2023				2022
	Assets		Liabilities		Assets		Liabilities
Depreciation and fixed asset basis differences	$	—	$	1,048	$	—	$	938
Allowances for professional liability and other risks		452		—		430		—
Accounts receivable		363		—		368		—
Compensation		308		—		402		—
Right-of-use lease assets and obligations		506		492		451		438
Other		592		860		536		698
	$	2,221	$	2,400	$	2,187	$	2,074

At December 31, 2023, federal and state net operating loss carryforwards (expiring in years 2024 through 2042) available to offset future taxable income approximated $28 million and $189 million, respectively. Utilization of net operating loss carryforwards in any one year may be limited.

The following table summarizes the activity related to our gross unrecognized tax benefits, excluding accrued interest of $177 million and $129 million as of December 31, 2023 and 2022, respectively (dollars in millions):

	2023			2022
Balance at January 1	$	639		$	576
Additions based on tax positions related to the current year		30			25
Additions for tax positions of prior years		4			50
Reductions for tax positions of prior years		(10	)		(4	)
Settlements		—			(1	)
Lapse of applicable statutes of limitations		(24	)		(7	)
Balance at December 31	$	639		$	639

Unrecognized tax benefits of $320 million as of December 31, 2023 ($278 million as of December 31, 2022) would affect the effective rate, if recognized.

At December 31, 2023, the Internal Revenue Service (“IRS”) was conducting examinations of the Company’s 2016, 2017 and 2018 federal income tax returns and the 2019 returns of certain affiliates. We are also subject to examination by the IRS for tax years after 2019 as well as by state and foreign taxing authorities. Depending on the resolution of any federal, state and foreign tax disputes, the completion of examinations by federal, state or foreign taxing authorities, or the expiration of statutes of limitation for specific taxing jurisdictions, we believe it is reasonably possible that our liability for unrecognized tax benefits may significantly increase or decrease within the next 12 months. However, we are currently unable to estimate the range of any possible change.