0001193125-19-281996.txt : 20191101 0001193125-19-281996.hdr.sgml : 20191101 20191101163304 ACCESSION NUMBER: 0001193125-19-281996 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 78 CONFORMED PERIOD OF REPORT: 20190930 FILED AS OF DATE: 20191101 DATE AS OF CHANGE: 20191101 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HCA Healthcare, Inc. CENTRAL INDEX KEY: 0000860730 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-GENERAL MEDICAL & SURGICAL HOSPITALS, NEC [8062] IRS NUMBER: 273865930 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-11239 FILM NUMBER: 191187170 BUSINESS ADDRESS: STREET 1: ONE PARK PLZ CITY: NASHVILLE STATE: TN ZIP: 37203 BUSINESS PHONE: 6153449551 MAIL ADDRESS: STREET 1: ONE PARK PLAZA CITY: NASHVILLE STATE: TN ZIP: 37203 FORMER COMPANY: FORMER CONFORMED NAME: HCA Holdings, Inc. DATE OF NAME CHANGE: 20101126 FORMER COMPANY: FORMER CONFORMED NAME: HCA INC/TN DATE OF NAME CHANGE: 20010627 FORMER COMPANY: FORMER CONFORMED NAME: HCA THE HEALTHCARE CO DATE OF NAME CHANGE: 20010419 10-Q 1 d780498d10q.htm FORM 10-Q Form 10-Q
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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, 2019
Or
☐
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 31, 2019
Voting common stock, $.01 par value
 
339,178,300 shares
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
HCA HEALTHCARE, INC.
Form
 10-Q
September 30, 2019
             
 
 
Page of
Form
 10-Q
 
Part I.
 
Financial Information
 
 
 
 
 
 
 
 
 
 
Item 1.
 
Financial Statements (Unaudited):
 
 
 
 
 
 
 
 
 
 
 
 
 
2
 
 
 
 
 
 
 
 
 
 
 
3
 
 
 
 
 
 
 
 
 
 
 
4
 
 
 
 
 
 
 
 
 
 
 
5
 
 
 
 
 
 
 
 
 
 
 
6
 
 
 
 
 
 
 
 
 
 
 
7
 
 
 
 
 
 
 
 
Item 2.
 
 
 
29
 
 
 
 
 
 
 
 
Item 3.
 
 
 
45
 
 
 
 
 
 
 
 
Item 4.
 
 
 
45
 
 
 
 
 
 
 
 
Part II.
 
Other Information
 
 
 
 
 
 
 
 
 
 
Item 1.
 
 
 
45
 
 
 
 
 
 
 
 
Item 1A.
 
 
 
46
 
 
 
 
 
 
 
 
Item 2.
 
 
 
46
 
 
 
 
 
 
 
 
Item 6.
 
 
 
47
 
 
 
 
 
 
 
 
48
 
 
 
 
1
 
HCA HEALTHCARE, INC.
CONDENSED CONSOLIDATED INCOME STATEMENTS
FOR THE QUARTERS AND NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018
Unaudited
(Dollars in millions, except per share amounts)
                                 
 
Quarter
   
Nine Months
 
 
2019
 
  
2018
 
  
2019
 
  
2018
 
Revenues
 
$
12,694
 
   $
11,451
   
$
37,813
 
   $
34,403
 
                                 
Salaries and benefits
 
 
5,971
 
    
5,377
   
 
17,455
 
    
15,940
 
Supplies
 
 
2,090
 
    
1,890
   
 
6,249
 
    
5,722
 
Other operating expenses
 
 
2,352
 
    
2,097
   
 
7,013
 
    
6,325
 
Equity in earnings of affiliates
 
 
(4
)
   
(9
 )  
 
(23
)
   
(25
 )
Depreciation and amortization
 
 
647
 
    
582
   
 
1,902
 
    
1,697
 
Interest expense
 
 
448
 
    
442
   
 
1,386
 
    
1,309
 
Gains on sales of facilities
 
 
—
 
    
(6
 )  
 
(17
)
   
(420
 )
Losses on retirement of debt
 
 
211
 
    
9
   
 
211
 
    
9
 
                                 
 
 
11,715
 
    
10,382
   
 
34,176
 
    
30,557
 
                                 
Income before income taxes
 
 
979
 
    
1,069
   
 
3,637
 
    
3,846
 
Provision for income taxes
 
 
215
 
    
173
   
 
765
 
    
702
 
                                 
Net income
 
 
764
 
    
896
   
 
2,872
 
    
3,144
 
Net income attributable to noncontrolling interests
 
 
152
 
    
137
   
 
438
 
    
421
 
                                 
Net income attributable to HCA Healthcare, Inc.
 
$
612
 
   $
759
   
$
2,434
 
   $
2,723
 
                                 
Per share data:
 
 
 
    
   
 
 
    
 
Basic earnings
 
$
1.80
 
   $
2.20
   
$
7.12
 
   $
7.82
 
Diluted earnings
 
$
1.76
 
   $
2.15
   
$
6.98
 
   $
7.65
 
Shares used in earnings per share calculations (in millions):
 
 
 
    
   
 
 
    
 
Basic
 
 
340.789
 
    
345.823
   
 
341.932
 
    
348.411
 
Diluted
 
 
347.487
 
    
353.639
   
 
348.712
 
    
356.124
 
 
 
 
 
 
 
 
The accompanying notes are an integral part of the condensed consolidated financial statements.
 
2
 
HCA HEALTHCARE, INC.
CONDENSED CONSOLIDATED COMPREHENSIVE INCOME STATEMENTS
FOR THE QUARTERS AND NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018
Unaudited
(Dollars in millions)
                                 
 
Quarter
   
Nine Months
 
 
2019
 
  
2018
 
  
2019
 
  
2018
 
Net income
 
$
764
 
   $
896
   
$
2,872
 
   $
3,144
 
Other comprehensive income (loss) before taxes:
 
 
 
    
   
 
 
    
 
Foreign currency translation
 
 
(30
)
   
(13
 )  
 
(48
)
   
(35
 )
                                 
Unrealized gains (losses) on
available-for-sale
securities
  
 
2
 
    
(2
 )  
 
16
 
    
(8
 )
                                 
Defined benefit plans
 
 
—
 
    
—
   
 
—
 
    
—
 
Pension costs included in salaries and benefits
 
 
3
 
    
5
   
 
10
 
    
15
 
                                 
 
 
3
 
    
5
   
 
10
 
    
15
 
                                 
Change in fair value of derivative financial instruments
 
 
(7
)
   
10
   
 
(59
)
   
60
 
Interest benefits included in interest expense
 
 
(4
)
   
(3
 )  
 
(15
)
   
(5
 )
                                 
 
 
(11
)
   
7
   
 
(74
)
   
55
 
                                 
Other comprehensive (loss) income before taxes
 
 
(36
)
   
(3
 )  
 
(96
)
   
27
 
Income taxes (benefits) related to other comprehensive income items
 
 
(6
)
   
2
   
 
(16
)
   
15
 
                                 
Other comprehensive (loss) income
 
 
(30
)
   
(5
 )  
 
(80
)
   
12
 
                                 
Comprehensive income
 
 
734
 
    
891
   
 
2,792
 
    
3,156
 
Comprehensive income attributable to noncontrolling interests
 
 
152
 
    
137
   
 
438
 
    
421
 
                                 
Comprehensive income attributable to HCA Healthcare, Inc.
 
$
582
 
   $
754
   
$
2,354
 
   $
2,735
 
                                 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The accompanying notes are an integral part of the condensed consolidated financial statements.
 
3
 
 
HCA HEALTHCARE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
Unaudited
(Dollars in millions)
                 
 
September 30,
2019
 
  
December 31,
2018
 
ASSETS
 
 
 
  
 
 
Current assets:
   
     
 
Cash and cash equivalents
 
$
559
 
   $
502
 
Accounts receivable
 
 
7,131
 
    
6,789
 
Inventories
 
 
1,769
 
    
1,732
 
Other
 
 
1,310
 
    
1,190
 
                 
 
 
10,769
 
    
10,213
 
                 
Property and equipment, at cost
 
 
46,295
 
    
42,965
 
Accumulated depreciation
 
 
(24,293
)
   
(23,208
 )
                 
 
 
22,002
 
    
19,757
 
                 
Investments of insurance subsidiaries
 
 
357
 
    
362
 
Investments in and advances to affiliates
 
 
243
 
    
232
 
Goodwill and other intangible assets
 
 
8,160
 
    
7,953
 
Right-of-use
operating lease assets
  
 
1,770
 
    
—
 
Other
 
 
611
 
    
690
 
                 
 
$
43,912
 
   $
39,207
 
                 
LIABILITIES AND STOCKHOLDERS’ DEFICIT
 
 
 
  
 
 
Current liabilities:
 
 
 
    
 
Accounts payable
 
$
2,610
 
   $
2,577
 
Accrued salaries
 
 
1,669
 
    
1,580
 
Other accrued expenses
 
 
2,697
 
    
2,624
 
Long-term debt due within one year
 
 
148
 
    
788
 
                 
 
 
7,124
 
    
7,569
 
                 
Long-term debt, less debt issuance costs and discounts of $244 and $157
 
 
34,097
 
    
32,033
 
Professional liability risks
 
 
1,349
 
    
1,275
 
Right-of-use
operating lease obligations
  
 
1,440
 
    
—
 
Income taxes and other liabilities
 
 
1,349
 
    
1,248
 
                 
Stockholders’ deficit:
 
 
 
    
 
Common stock $0.01 par; authorized 1,800,000,000 shares; outstanding 340,053,100 shares in 2019 and 342,895,200 shares in 2018
 
 
3
 
    
3
 
Accumulated other comprehensive loss
 
 
(461
)
   
(381
 )
Retained deficit
 
 
(3,107
)
   
(4,572
 )
                 
Stockholders’ deficit attributable to HCA Healthcare, Inc.
 
 
(3,565
)
   
(4,950
 )
Noncontrolling interests
 
 
2,118
 
    
2,032
 
                 
 
 
(1,447
)
   
(2,918
 )
                 
 
$
43,912
 
   $
39,207
 
                 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The accompanying notes are an integral part of the condensed consolidated financial statements.
 
4
 
 
HCA HEALTHCARE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
FOR THE QUARTERS AND NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018
Unaudited
(Dollars in millions)
                                                         
 
Equity (Deficit) Attributable to HCA Healthcare, Inc.
   
Equity
Attributable to
Noncontrolling
Interests
 
  
Total
 
 
Common Stock
   
Capital in
Excess of
Par
Value
 
  
Accumulated
Other
Comprehensive
Loss
 
  
Retained
Deficit
 
 
Shares
(in millions)
 
  
Par
Value
 
Balances, December 31, 2017
   
350.092
    $
4
    $
—
    $
(278
 )   $
(6,532
 )   $
1,811
    $
(4,995
 )
Comprehensive income
   
     
     
     
81
     
1,144
     
138
     
1,363
 
Repurchase of common stock
   
(4.370
 )    
     
114
     
     
(537
 )    
     
(423
 )
Share-based benefit plans
   
5.265
     
     
(114
 )    
     
     
     
(114
 )
Cash dividends declared ($0.35 per share)
   
     
     
     
     
(126
 )    
     
(126
 )
Distributions
   
     
     
     
     
     
(92
 )    
(92
 )
Other
   
     
     
     
     
     
(47
 )    
(47
 )
                                                         
Balances, March 31, 2018
   
350.987
     
4
     
—
     
(197
 )    
(6,051
 )    
1,810
     
(4,434
 )
Comprehensive income
   
     
     
     
(64
 )    
820
     
146
     
902
 
Repurchase of common stock
   
(4.670
 )    
(1
 )    
(93
 )    
     
(376
 )    
     
(470
 )
Share-based benefit plans
   
0.443
     
     
96
     
     
     
     
96
 
Cash dividends declared ($0.35 per share)
   
     
     
     
     
(124
 )    
     
(124
 )
Distributions
   
     
     
     
     
     
(93
 )    
(93
 )
Other
   
     
     
(3
 )    
     
     
1
     
(2
 )
                                                         
Balances, June 30, 2018
   
346.760
     
3
     
—
     
(261
 )    
(5,731
 )    
1,864
     
(4,125
 )
Comprehensive income
   
     
     
     
(5
 )    
759
     
137
     
891
 
Repurchase of common stock
   
(2.518
 )    
     
(55
 )    
     
(247
 )    
     
(302
 )
Share-based benefit plans
   
0.844
     
     
54
     
     
     
     
54
 
Cash dividends declared ($0.35 per share)
   
     
     
     
     
(123
 )    
     
(123
 )
Distributions
   
     
     
     
     
     
(130
 )    
(130
 )
Other
   
     
     
1
     
     
     
4
     
5
 
                                                         
Balances, September 30, 2018
   
345.086
     
3
     
—
     
(266
 )    
(5,342
 )    
1,875
     
(3,730
 )
Comprehensive income
   
     
     
     
(20
 )    
1,064
     
181
     
1,225
 
Repurchase of common stock
   
(2.512
 )    
     
(69
 )    
     
(266
 )    
     
(335
 )
Share-based benefit plans
   
0.321
     
     
79
     
     
     
     
79
 
Cash dividends declared ($0.35 per share)
   
     
     
     
     
(123
 )    
     
(123
 )
Distributions
   
     
     
     
     
     
(126
 )    
(126
 )
Other
   
     
     
(10
 )    
(95
 )    
95
     
102
     
92
 
                                                         
Balances, December 31, 2018
   
342.895
     
3
     
—
     
(381
 )    
(4,572
 )    
2,032
     
(2,918
 )
Comprehensive income
   
     
     
     
7
     
1,039
     
142
     
1,188
 
Repurchase of common stock
   
(2.106
 )    
     
32
     
     
(310
 )    
     
(278
 )
Share-based benefit plans
   
2.242
     
     
(29
 )    
     
     
     
(29
 )
Cash dividends declared ($0.40 per share)
   
     
     
     
     
(140
 )    
     
(140
 )
Distributions
   
     
     
     
     
     
(136
 )    
(136
 )
Other
   
     
     
(3
 )    
     
     
61
     
58
 
                                                         
Balances, March 31, 2019
   
343.031
     
3
     
—
     
(374
 )    
(3,983
 )    
2,099
     
(2,255
 )
Comprehensive income
   
     
     
     
(57
 )    
783
     
144
     
870
 
Repurchase of common stock
   
(1.928
 )    
     
(107
 )    
     
(135
 )    
     
(242
 )
Share-based benefit plans
   
0.414
     
     
118
     
     
     
     
118
 
Cash dividends declared ($0.40 per share)
   
     
     
     
     
(139
 )    
     
(139
 )
Distributions
   
     
     
     
     
     
(111
 )    
(111
 )
Other
   
     
     
(11
 )    
     
     
     
(11
 )
                                                         
Balances, June 30, 2019
   
341.517
     
3
     
—
     
(431
 )    
(3,474
 )    
2,132
     
(1,770
 )
Comprehensive income
 
 
 
  
 
 
  
 
 
  
 
(30
)
 
 
612
 
  
 
152
 
  
 
734
 
Repurchase of common stock
 
 
(1.846
)
 
 
 
  
 
(132
)
 
 
 
  
 
(107
)
 
 
 
  
 
(239
)
Share-based benefit plans
 
 
0.382
 
  
 
 
  
 
128
 
  
 
 
  
 
 
  
 
 
  
 
128
 
Cash dividends declared ($0.40 per share)
 
 
 
  
 
 
  
 
 
  
 
 
  
 
(138
)
 
 
 
  
 
(138
)
Distributions
 
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
(157
)
 
 
(157
)
Other
 
 
 
  
 
 
  
 
4
 
  
 
 
  
 
 
  
 
(9
)
 
 
(5
)
                                                         
Balances, September 30, 2019
 
 
340.053
 
  
$
3
 
  
$
—
 
  
$
(461
)
 
$
(3,107
)
 
$
2,118
 
  
$
(1,447
)
                                                         
 
 
 
 
 
 
 
 
 
 
 
 
The accompanying notes are an integral part of the condensed consolidated financial statements.
 
5
 
HCA HEALTHCARE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018
Unaudited
(Dollars in millions)
                 
 
2019
 
  
2018
 
Cash flows from operating activities:
 
 
 
  
 
 
Net income
 
$
2,872
 
   $
3,144
 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
    
 
Increase (decrease) in cash from operating assets and liabilities:
 
 
 
    
 
Accounts receivable
 
 
(93
)
   
(161
 )
Inventories and other assets
 
 
(95
)
   
(136
 )
Accounts payable and accrued expenses
 
 
(118
)
   
150
 
Depreciation and amortization
 
 
1,902
 
    
1,697
 
Income taxes
 
 
51
 
    
—
 
Gains on sales of facilities
 
 
(17
)
   
(420
 )
Losses on retirement of debt
 
 
211
 
    
9
 
Amortization of debt issuance costs and discounts
 
 
23
 
    
23
 
Share-based compensation
 
 
263
 
    
204
 
Other
 
 
98