☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
2019
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware 27-3865930 37203
(615) (
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 ofRegulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of thisForm 10-K or any amendment to thisForm 10-K. ☒
Large accelerated filer | ☒ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☐ | Smaller reporting company | ☐ | |||
Emerging growth company | ☐ |
Page Reference | ||||||||
Part I | ||||||||
Item 1. | 3 | |||||||
Item 1A. | 30 | |||||||
Item 1B. | 47 | |||||||
Item 2. | 4 7 | |||||||
Item 3. | 48 | |||||||
Item 4. | 4 8 | |||||||
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Item | 5 1 | |||||||
Item 7. | 5 3 | |||||||
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Item 7A. | 7 3 | |||||||
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Item 8. | 7 3 | |||||||
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Item 9. | 7 3 | |||||||
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Item 9A. | 7 3 | |||||||
Item 9B. | 7 5 | |||||||
Part III | ||||||||
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Item 10. | 7 5 | |||||||
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Item | 7 5 | |||||||
Item 12. | 7 6 | |||||||
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Item 13. | 7 6 | |||||||
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Item 14. | 7 6 | |||||||
Part IV | ||||||||
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Item 15. | 7 7 | |||||||
Item 16. | 9 0 | |||||||
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9 1 |
Item 1. |
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Years Ended December 31, | ||||||||||||||||||||||||
2017 | Ratio | 2016 | Ratio | 2015 | Ratio | |||||||||||||||||||
Medicare | $ | 9,483 | 21.7 | % | $ | 8,895 | 21.4 | % | $ | 8,654 | 21.8 | % | ||||||||||||
Managed Medicare | 4,788 | 11.0 | 4,355 | 10.5 | 4,133 | 10.4 | ||||||||||||||||||
Medicaid | 1,631 | 3.7 | 1,597 | 3.8 | 1,705 | 4.3 | ||||||||||||||||||
Managed Medicaid | 2,349 | 5.4 | 2,478 | 6.0 | 2,234 | 5.6 | ||||||||||||||||||
Managed care and other insurers | 24,813 | 56.9 | 23,441 | 56.5 | 21,882 | 55.2 | ||||||||||||||||||
International (managed care and other insurers) | 1,097 | 2.5 | 1,195 | 2.9 | 1,295 | 3.3 | ||||||||||||||||||
Other | 3,492 | 8.0 | 2,786 | 6.7 | 3,688 | 9.3 | ||||||||||||||||||
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Revenues before provision for doubtful accounts | 47,653 | 109.2 | 44,747 | 107.8 | 43,591 | 109.9 | ||||||||||||||||||
Provision for doubtful accounts | (4,039 | ) | (9.2 | ) | (3,257 | ) | (7.8 | ) | (3,913 | ) | (9.9 | ) | ||||||||||||
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Revenues | $ | 43,614 | 100.0 | % | $ | 41,490 | 100.0 | % | $ | 39,678 | 100.0 | % | ||||||||||||
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Years Ended December 31, | ||||||||||||||||||||||||
2019 | Ratio | 2018 | Ratio | 2017 | Ratio | |||||||||||||||||||
Medicare | $ | 10,798 | 21.0 | % | $ | 9,831 | 21.1 | % | $ | 9,285 | 21.3 | % | ||||||||||||
Managed Medicare | 6,452 | 12.6 | 5,497 | 11.8 | 4,680 | 10.7 | ||||||||||||||||||
Medicaid | 1,572 | 3.1 | 1,358 | 2.9 | 1,316 | 3.0 | ||||||||||||||||||
Managed Medicaid | 2,450 | 4.8 | 2,403 | 5.1 | 2,165 | 5.0 | ||||||||||||||||||
Managed care and other insurers | 26,544 | 51.6 | 24,467 | 52.4 | 23,342 | 53.5 | ||||||||||||||||||
International (managed care and other insurers) | 1,162 | 2.3 | 1,156 | 2.5 | 1,097 | 2.5 | ||||||||||||||||||
Other | 2,358 | 4.6 | 1,965 | 4.2 | 1,729 | 4.0 | ||||||||||||||||||
Revenues | $ | 51,336 | 100.0 | % | $ | 46,677 | 100.0 | % | $ | 43,614 | 100.0 | % | ||||||||||||
2018, hospice care.
as though the secondary diagnosis was not present. There are currently 14 categories of conditions on the list of HACs. Pursuant to the Health Reform Law,In addition, the 25% of hospitals with the worst risk-adjusted HAC ratesscores in the designated performance period receive a 1% reduction in their inpatient PPS Medicare payments. CMS has also established three National Coverage Determinations that prohibit Medicare reimbursement for erroneous surgical procedures performed on an inpatient or outpatient basis.
The Health Reform Law
The Health Reform Law additionally establishes a hospital value-based purchasing program to further link payments to quality and efficiency. For federal fiscal year 2017 and subsequent years,
Hospital Value-Based Purchasing Program.
In calendar year 2019, CMS began a
estimated 1.4%2.6%. This increase reflects a market basket increase of 2.7% adjusted by the following3.0% with a negative 0.4 percentage points: a positive 0.6point productivity adjustment and negative 0.75 adjustment required by the Health Reform Law, alongadjustment. Together with other policy changes.changes, CMS estimates that the calendar year 2020 rates will increase Medicare outpatient PPS payments by 1.3%. CMS requires hospitals to submit quality data relating to outpatient care to avoid receiving a 2.0 percentage point reduction toin the market basketannual payment update under the outpatient PPS.
CMS has indicated that it is working toward a unified payment system for post-acute care services, including those provided by IRFs.
In addition, MACRA required the establishment of the Quality Payment Program (“QPP”), a payment methodology intended to reward high-quality patient care. Beginning in 2017, physiciansPhysicians and certain other health care clinicians are required to participate in of one of two QPP tracks. Under both tracks, performance data collected in 2017each performance year will affect Medicare payments in 2019, and performance data collected in 2018 will affect Medicare payments in 2020.two years later. CMS expects to transition increasing financial risk to providers as the QPP evolves. The Advanced Alternative Payment Model (“APM”) track makes incentive payments available for participation in specific innovative payment models approved by CMS. Providers may earn a 5% Medicare incentive payment between 2019 and 2024 and will be exempt from the reporting
2020.
flows.
CMS is transitioning some of its other integrity programs to a consolidated model by engaging Unified Program Integrity Contractors (“UPICs”) to perform audits, investigations and other integrity activities.
of services. Promoting accountability and coordination of care, ACOs are intended to produce savings as a result of improved quality and operational efficiency. ACOs that achieve quality performance standards established by HHS are eligible to share in a portion of the amounts saved by the Medicare program. There are several types of ACO programs, including the Medicare Shared Savings Program, (“MSSP”), which was established pursuant to the Health Reform Law,Affordable Care Act, and the Next Generation ACO Model.
procedures, which is scheduled to run through December 2020. HHS has indicated that it plans to implement additional bundled payment programs, some of which will be mandatory.
The Health Reform Law reduced Medicare CMS also distributes a payment to each DSH hospital that is allocated according to the hospital’s proportion of uncompensated care costs relative to the uncompensated care amount of other DSH hospitals.
Hospitals that provide care to a disproportionately high number oflow-income patients may receive Medicaid DSH payments. The federal government distributes federal Medicaid DSH funds to each state based on a statutory formula. The states then distribute the DSH funding among qualifying hospitals. States have broad discretion to define which hospitals qualify for Medicaid DSH payments and the amount of such payments. The Health Reform LawAffordable Care Act and subsequent legislation provide for reductions to the Medicaid DSH hospital program. However, Congress has delayed the implementation of these reductions until 2020. Under the budget bill signed into law in February 2018, Medicaid DSH payments will be reduced by $4 billion in 2020 and by $8 billion per year from 2021 through 2025.
However, Congress has delayed the implementation of these reductions until May 23, 2020.
PPS. For outpatient services, TRICARE reimburses hospitals based on a PPS that is similar to that utilized for services furnished to Medicare beneficiaries.
Years Ended December 31, | ||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||||
Number of hospitals at end of period | 179 | 170 | 168 | 166 | 165 | |||||||||||||||
Number of freestanding outpatient surgery centers at end of period | 120 | 118 | 116 | 113 | 115 | |||||||||||||||
Number of licensed beds at end of period(a) | 46,738 | 44,290 | 43,771 | 43,356 | 42,896 | |||||||||||||||
Weighted average licensed beds(b) | 45,380 | 44,077 | 43,620 | 43,132 | 42,133 | |||||||||||||||
Admissions(c) | 1,936,613 | 1,891,831 | 1,868,789 | 1,795,312 | 1,744,126 | |||||||||||||||
Equivalent admissions(d) | 3,286,432 | 3,191,519 | 3,122,746 | 2,958,674 | 2,844,670 | |||||||||||||||
Average length of stay (days)(e) | 4.9 | 4.9 | 4.9 | 4.8 | 4.8 | |||||||||||||||
Average daily census(f) | 26,000 | 25,340 | 25,084 | 23,835 | 22,853 | |||||||||||||||
Occupancy rate(g) | 57 | % | 58 | % | 58 | % | 55 | % | 54 | % | ||||||||||
Emergency room visits(h) | 8,624,137 | 8,378,340 | 8,050,159 | 7,450,748 | 6,968,115 | |||||||||||||||
Outpatient surgeries(i) | 935,307 | 932,213 | 909,386 | 891,633 | 881,883 | |||||||||||||||
Inpatient surgeries(j) | 546,228 | 537,306 | 529,900 | 518,881 | 508,793 |
Years Ended December 31, | ||||||||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||
Number of hospitals at end of period | 184 | 179 | 179 | 170 | 168 | |||||||||||||||
Number of freestanding outpatient surgery centers at end of period | 123 | 123 | 120 | 118 | 116 | |||||||||||||||
Number of licensed beds at end of period(a) | 49,035 | 47,199 | 46,738 | 44,290 | 43,771 | |||||||||||||||
Weighted average licensed beds(b) | 48,480 | 46,857 | 45,380 | 44,077 | 43,620 | |||||||||||||||
Admissions(c) | 2,108,927 | 2,003,753 | 1,936,613 | 1,891,831 | 1,868,789 | |||||||||||||||
Equivalent admissions(d) | 3,646,335 | 3,420,406 | 3,286,432 | 3,191,519 | 3,122,746 | |||||||||||||||
Average length of stay (days)(e) | 4.9 | 4.9 | 4.9 | 4.9 | 4.9 | |||||||||||||||
Average daily census(f) | 28,134 | 26,663 | 26,000 | 25,340 | 25,084 | |||||||||||||||
Occupancy rate(g) | 58 | % | 57 | % | 57 | % | 58 | % | 58 | % | ||||||||||
Emergency room visits(h) | 9,161,129 | 8,764,431 | 8,624,137 | 8,378,340 | 8,050,159 | |||||||||||||||
Outpatient surgeries(i) | 1,009,947 | 971,537 | 941,231 | 932,213 | 909,386 | |||||||||||||||
Inpatient surgeries(j) | 566,635 | 548,220 | 540,304 | 537,306 | 529,900 |
(a) | Licensed beds are those beds for which a facility has been granted approval to operate from the applicable state licensing agency. |
(b) | Represents the average number of licensed beds, weighted based on periods owned. |
(c) | Represents the total number of patients admitted to our hospitals and is used by management and certain investors as a general measure of inpatient volume. |
(d) | Equivalent admissions are used by management and certain investors as a general measure of combined inpatient and outpatient volume. Equivalent admissions are computed by multiplying admissions (inpatient volume) by the sum of gross inpatient revenue and gross outpatient revenue and then dividing the resulting amount by gross inpatient revenue. The equivalent admissions computation “equates” outpatient revenue to the volume measure (admissions) used to measure inpatient volume, resulting in a general measure of combined inpatient and outpatient volume. |
(e) | Represents the average number of days admitted patients stay in our hospitals. |
(f) | Represents the average number of patients in our hospital beds each day. |
(g) | Represents the percentage of hospital licensed beds occupied by patients. Both average daily census and occupancy rate provide measures of the utilization of inpatient rooms. |
(h) | Represents the number of patients treated in our emergency rooms. |
(i) | Represents the number of surgeries performed on patients who were not admitted to our hospitals. Pain management and endoscopy procedures are not included in outpatient surgeries. |
(j) | Represents the number of surgeries performed on patients who have been admitted to our hospitals. Pain management and endoscopy procedures are not included in inpatient surgeries. |
Psychiatric hospitals frequently attract patients from areas outside their immediate locale and, therefore, our psychiatric hospitals and units compete with both local and regional hospitals, including the psychiatric units of general, acute care hospitals.
efforts, such as the Health Reform Law’s creation of the Exchanges andAffordable Care Act’s limitations on rescissions of coverage andMost of the healthHealth plans offered through the Exchanges provide forincreasingly utilize narrow networks that restrict the number of participating providers or tiered networks that impose significantly higher cost sharing obligations on patients that obtain services from providers in a disfavored tier. These trends may continue regardless of potential repeal or replacement of, or changes to, the Health Reform Law.
services, (d) free training for a physician’s office staff in areas such as management techniques and laboratory techniques, (e) guarantees which provide, if the physician’s income fails to reach a predetermined level, the hospital will pay any portion of the remainder,(f)
regulatory authorities enforcing these laws will determine these financial arrangements comply with the Anti-kickback Statute or other applicable laws. An adverse determination could subject us to liabilities under the Social Security Act and other laws, including criminal penalties, civil monetary penalties and exclusion from participation in Medicare, Medicaid or other federal health care programs.
The Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) broadened the scope of certain
benefit programs.programs and provide for criminal penalties. The Social Security Act also imposes criminal and civil penalties for making false claims and statements to Medicare and Medicaid. False claims include, but are not limited to, billing for services not rendered or for misrepresenting actual services rendered in order to obtain higher reimbursement, billing for unnecessary goods and services and cost report fraud. Federal enforcement officials have the ability to exclude from Medicare and Medicaid any business entities and any investors, officers and managing employees associated with business entities that have committed health care fraud, even if the officer or managing employee had no knowledge of the fraud. Criminal and civil penalties may be imposed for a number of other prohibited activities, including failure
and improper failure to report and refund amounts owed to the government in a timely manner following identification of an overpayment. An overpayment is deemed to be identified when a person has, or should have through reasonable diligence, determined that an overpayment was received and quantified the overpayment.
There are numerous other laws and legislative and regulatory initiatives at the federal and state levels addressing privacy and security concerns. Our facilities remain subject to any federal or state privacy-related laws that are more restrictive than the privacy regulations issued under HIPAA. These laws vary and could impose additional penalties. For example, the Federal Trade Commission uses its consumer protection authority to initiate enforcement actions in response to data breaches.
The California Consumer Privacy Act of 2018 (the “CCPA”) affords consumers expanded privacy protections effective January 1, 2020. The potential effects of this legislation are
Effective January 1, 2019, the penalty associated with the individual mandate to maintain health insurance was eliminated. As a result of this change, in December 2018, the United States District Court for the North District of Texas found the individual mandate to be unconstitutional and determined that the rest of the Affordable Care Act was, therefore, invalid. In December 2019, the Fifth Circuit Court of Appeals upheld this decision with respect to the individual mandate, but remanded for further consideration of how this affects the rest of the law. Pending the appeals process, the law remains in place. The elimination of the individual mandate penalty and other changes may impact the number of individuals that elect to obtain public or private health insurance or the scope of such coverage, if purchased.
The expansion of In addition, some states are proposing or have implemented various health coverage throughreform initiatives at the private sector as a result of the Health Reform Law has been driven by new requirements applicable to health insurers, employers and individuals.state level. For example, health insurers are prohibited from imposing annual coverage limits, dropping coverage, excluding persons based uponpre-existing conditions or denying coverage for any individual who is willing to pay the premiums for such coverage. Large employers are required to providesome states have proposed public health insurance benefitsoptions, and some states have passed or are considering legislation to their full time employees or pay a penalty if an employee obtains government-subsidized coverage through an Exchange. Although individuals are required to maintain health insurance for a minimum defined set of benefits, elimination of the penalty associated with this mandate may impact the number of individuals who elect to purchase health insurance.
Health insurers participating in an Exchange must offer a set of minimum benefits, as defined by HHS, and may offer more benefits. For individuals and families below 400% of the federal poverty level, the cost of obtaining health insurance through the Exchanges is subsidized by the federal government. However, several health insurers have limited or ended their participation in these marketplaces, creating uncertainty regarding the long-term viability of the Exchanges.
As discussed in Item 1, “Business — Sources of Revenue,” the Health Reform Law provides for spending reductions for Medicare, Medicaid and other federal health care programs. It also increasingly ties payment for services to quality outcomes, provides for the creation of ACOs and creates incentives and other initiatives to better coordinate patient care across settings and over time.
address
The Health Reform LawAffordable Care Act has had a net positive effect on the Company to date, before considering the impact of Medicare reductions that began in 2010, and it is expected that the law, as presently implemented, will continue to have a meaningfulpositive contribution to the Company’s results of operations. However, there is uncertainty regarding the Company could be affected byongoing net effect of the Affordable Care Act due to efforts to change, repeal or replace the Health Reform LawAffordable Care Act, court challenges, and the development of agency guidance, among other factors. There is also uncertainty regarding the potential instabilityimpact of other reform efforts at the Exchanges,federal and state levels. For example, some presidential candidates and members of Congress have proposed measures that would expand government-sponsored coverage, including single-payer proposals (often referred to as “Medicare for All”), and some states are considering similar measures. Other initiatives and proposals, including those aimed at price transparency and
day by phone and internet portal.
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Name | Age | Position(s) | ||
Samuel N. Hazen | 59 | Chief Executive Officer and Director | ||
Jennifer L. | 49 | Senior Vice President and Chief Human Resource Officer | ||
Phillip G. Billington | 52 | Senior Vice President — | ||
Jeff E. Cohen | 48 | Senior Vice President — Government Relations | ||
Michael S. Cuffe, M.D. | 54 | President — Physician Services Group | ||
Jane D. Englebright | 62 | Senior Vice President and Chief Nursing Officer | ||
Jon M. Foster | 58 | President — American Group | ||
Charles J. Hall | 66 | President — National Group | ||
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A. Bruce Moore, Jr. | 59 | President — Service Line and Operations Integration | ||
Sandra L. Morgan | 57 | Senior Vice President — Provider Relations | ||
J. William B. Morrow | 49 | Senior Vice President — Finance and Treasurer | ||
P. Martin Paslick | 60 | Senior Vice President and Chief Information Officer | ||
Jonathan B. Perlin, M.D. | 58 | President — Clinical Services Group and Chief Medical Officer | ||
Deborah M. Reiner | 58 | Senior Vice President — Marketing and Communications | ||
William B. Rutherford | 56 | Executive Vice President and Chief Financial Officer | ||
Joseph A. Sowell, III | 63 | Senior Vice President and Chief Development Officer | ||
Kathryn A. Torres | 56 | |||
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| Senior Vice President — Payer Contracting and Alignment | |||
Robert A. Waterman | 66 | Senior Vice President and General Counsel | ||
Kathleen M. Whalen | 56 | |||
| Senior Vice President and Chief Ethics and Compliance Officer | |||
Christopher F. Wyatt | 42 | Senior Vice President and Controller |
R. Milton Johnson
Victorand Galen Health Care, Inc.
Dr. Ravi S. Chari— Human Resources from April 2013 through October 2019.
Dr.Michael S. Cuffe
Samuel N. Hazenwas appointed President and Chief Operating Officer in November 2016. Prior to that time, he had served as Chief Operating Officer since January 2015. Mr. Hazen served as President — Operations of the Company from February 2011 to January 2015. Mr. Hazen served as President — Western Group from July 2001 to February 2011 and as Chief Financial Officer — Western Group of the Company from August 1995 to July 2001. Mr. Hazen served as Chief Financial Officer — North Texas Division of the Company from February 1994 to July 1995. Prior to that time, Mr. Hazen served in various hospital and regional Chief Financial Officer positions with Humana Inc. and Galen Health Care, Inc.
From 2011 to 2016, Mr. Morrow served the Company as Vice President — Development/Special Assets. Mr. Morrow served as a partner in the law firm of Waller Lansden Dortch & Davis from 2006 to October 2011. Prior to becoming a partner, Mr. Morrow was an associate at Waller Lansden Dortch & Davis and at Cleary Gottlieb Steen & Hamilton.
Joseph N. Steakleyhas served as Senior Vice President — Internal Audit Services of the Company since July 1999. Mr. Steakley served as Vice President — Internal Audit Services from November 1997 to July 1999. From October 1989 until October 1997, Mr. Steakley was a partner with Ernst & Young LLP.
John M. Steelehas served as Senior Vice President and Chief Human Resource Officer since July 2017. Prior to that time, he served as Senior Vice President — Human Resources of the Company from November 2003 to July 2017. Mr. Steele served as Vice President — Compensation and Recruitment of the Company from November 1997 to October 2003. From March 1995 to November 1997, Mr. Steele served as Assistant Vice President — Recruitment.
Alan R. Yuspehhas served as Senior Vice President and Chief Ethics and Compliance Officer of the Company since May 2007. From October 1997 to May 2007, Mr. Yuspeh served as Senior Vice President — Ethics, Compliance and Corporate Responsibility of the Company. From September 1991 until October 1997, Mr. Yuspeh was a partner with the law firm of Howrey & Simon. As a part of his law practice, Mr. Yuspeh served from 1987 to 1997 as Coordinator of the Defense Industry Initiative on Business Ethics and Conduct.
Item 1A. |
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permitted to, make distributions to enable us to make payments in respect of our indebtedness. Each subsidiary is a distinct legal entity, and, under certain circumstances, legal and contractual restrictions may limit our ability to obtain cash from our subsidiaries.
event of default under these senior secured credit facilities, the lenders thereunder could elect to declare all amounts outstanding under the senior secured credit facilities to be immediately due and payable and terminate all commitments to extend further credit, which would also result in an event of default under a significant portion of our other outstanding indebtedness. If we were unable to repay those amounts, the lenders under the senior secured credit facilities could proceed against the collateral granted to them to secure such indebtedness. We have pledged a significant portion of our assets under our senior secured credit facilities and that collateral is also pledged as collateral under our first lien notes. If any of the lenders under the senior secured credit facilities accelerate the repayment of borrowings, there can be no assurance there will be sufficient assets to repay the senior secured credit facilities, the first lien notes and our other indebtedness.
Thereform efforts, including court challenges to, and efforts to repeal, replace or otherwise significantly change the Affordable Care Act. We are unable to predict what, if any, and when such changes will be made in the future.
In addition, the number of freestanding specialty hospitals, surgery centers, emergency departments, urgent care centers and diagnostic and imaging centers in the geographic areas in which we operate has increased. As a result, most of our hospitals operate in a highly competitive environment, which may put pressure on our pricing as high margin services transition to outpatient facilities and may also place pressure on the Company’s strategy for volume growth. Some of the facilities that compete with our hospitals are physician-owned or are owned by governmental agencies ornot-for-profit corporations supported by endowments, charitable contributions and/or tax revenues and can finance capital expenditures and operations on atax-exempt basis. Recent consolidations ofnot-for-profit hospital entities may intensify this competitive pressure. There is also increasing consolidation in the third-party payer industry, including vertical integration efforts among third-party payers and health care providers. Health care industry participants are increasingly implementing physician alignment strategies, such as employing physicians, acquiring physician practice groups and participating in ACOs or other clinical integration models. Other industry participants, such as large employer groups and their affiliates, may intensify competitive pressure and affect the industry in ways that are difficult to predict.
Our hospitals compete with specialty hospitals and with both our own and unaffiliated freestanding surgery centers for market share in certain high margin services and for quality physicians and personnel. If ASCs are better able to compete in this environment than our hospitals, our hospitals may experience a decline in patient volume, and we may experience a decrease in margin, even if those patients use our ASCs. In states that do not require a CON or other type of approval for the purchase, construction or expansion of health care facilities or services, competition in the form of new services, facilities and capital spending is more prevalent. Further, if our competitors are better able to attract patients, make capital expenditures and maintain modern and technologically upgraded facilities and equipment, recruit physicians, expand services or obtain favorable third-party payer contracts at their facilities than our hospitals and ASCs, we may experience an overall decline in patient volume. See Item 1, “Business — Competition.”
A deterioration in the collectability of uninsured and patient due accounts could adversely affect our results of operations.
The primary collection risks for our accounts receivable relate to the uninsured patient accounts and patient accounts for which the primary third-party payer has paid the amounts covered by the applicable agreement, but patient responsibility amounts (exclusions, deductibles and copayments) remain outstanding. The provision for doubtful accounts relates primarily to amounts due directly from patients. Medicare reimburses hospitals for 65% of eligible Medicare bad debts. To be eligible for reimbursement, the amounts claimed must meet certain criteria, including that the debt is related to unpaid deductible or coinsurance amounts and that the hospital first attempted to collect the fees from the Medicare beneficiary.
The amount of the provision for doubtful accounts is based upon management’s assessment of historical write-offs and expected net collections, business and economic conditions, trends in federal and state governmental and private employer health care coverage, the rate of growth in uninsured patient admissions and other collection indicators. At December 31, 2017, our allowance for doubtful accounts represented 100% of the $5.488 billion patient due accounts receivable balance. The sum of the provision for doubtful accounts, uninsured discounts and charity care increased from $18.287 billion for 2015 to $20.455 billion for 2016 and to $23.420 billion for 2017.
Any increase in the amount or deterioration in the collectability of uninsured accounts receivable will adversely affect our cash flows and results of operations. Our facilities may experience growth in bad debts, uninsured discounts and charity care as a result of a number of factors, including conditions impacting the overall economy and high unemployment. In 2017, Congress eliminated the financial penalty associated with the Health Reform Law’s individual mandate, effective January 1, 2019, which may result in fewer individuals electing to purchase health insurance.court challenges. The presidential administration and a number of members of Congress continue to make other effortshave stated their intent to repeal or significantly changemake additional significant changes to the Health Reform Law. Even ifAffordable Care Act, its implementation or interpretation. For example, final rules issued in 2018 expand the Health Reform Law remainsavailability of association health plans and allow the sale of short-term, limited-duration health plans, neither of which are required to cover all of the essential health benefits mandated by the Affordable Care Act. Further, the President of the United States signed an executive order that directs agencies to minimize “economic and regulatory burdens” of the Affordable Care Act, which may result in effect, we will continueadditional changes in how the law is implemented.
liquidity.
which may result in reduced Medicare payments. For example, under a site neutrality policy, certain items andclinic visit services provided byexceptions.
exceptions that are being phased out through calendar years 2019 and 2020. Although a federal judge invalidated the expansion of the policy for calendar year 2019, in a decision that CMS is appealing, CMS issued a final rule implementing year two of the policy
CMS has announced its intent to introduce additional flexibilities for Medicaid program operation, including block grants and increased use of value-based care models.
The Health Reform Law represents”
In addition, the presidential administrationour controls, processes and practices designed to protect our facilities, information systems and data from attack, damage or unauthorized access remain a number of members of Congresspriority for us. As cyber threats continue to attemptevolve, we may be required to repeal, amendexpend significant additional resources to continue to modify or replace the law,enhance our protective measures or make significant changes to its implementation. In 2017, Congress eliminated the financial penalty associated with the individual mandate, effective January 1, 2019. It is difficult to predict the impactinvestigate and remediate any cybersecurity vulnerabilities or incidents. The occurrence of this change, but it mayany of these events could result in fewer individuals electing(i) harm to purchase health insurance. Further,patients; (ii) business interruptions and delays; (iii) the Presidentloss, misappropriation, corruption or unauthorized access of the United States has also signed an executive order that directs agencies to minimize “economicdata; (iv) litigation and regulatory burdens”potential liability under privacy, security, breach notification and consumer protection laws, common law theories or other applicable laws; (v) reputational damage and (vi) foreign, federal and state governmental inquiries, any of the Health Reform Law, which may result in additional changes in how the law is implemented. CMS has indicated that it intends to increase flexibility in state Medicaid programs, including by expanding the scope of waivers under which states may implement Medicaid expansion provisions, impose different eligibility or enrollment restrictions, or otherwise implement programs that vary from federal standards. There is uncertainty regarding whether, when, and how the Health Reform Law may be further changed. Changes by Congress or government agencies could eliminate or alter provisions beneficial to us, and it is difficult to predict the impact of changes on other health care industry participants. Government efforts to repeal or change the Health Reform Law may have ana material, adverse effect on our business,financial position and results of operations cash flow, capital resources, and liquidity.
Our performance depends on our ability to recruit and retain quality physicians.
The success of our hospitals depends in part on the number and quality of the physicians on the medical staffs of our hospitals, the admitting and utilization practices of those physicians, maintaining good relations with those physicians and controlling costs related to the employment of physicians. Although we employ some physicians, physicians are often not employees of the hospitals at which they practice, and, in many of the markets we serve, most physicians have admitting privileges at other hospitals in addition to our hospitals. Such physicians may terminate their affiliation with our hospitals at any time. We may face increased challenges in this area as the physician population reaches retirement age, especially if there is a shortage of physicians willing and able to provide comparable services. If we are unable to provide adequate support personnel or technologically advanced equipment and hospital facilities that meet the needs of those physicians and their patients, they may be discouraged from referring patients to our facilities, admissions may decrease and our operating performance may decline.
Our hospitals face competition for staffing, which may increase labor costs and reduce profitability.
Our operations are dependent on the efforts, abilities and experience of our management and medical support personnel, such as nurses, pharmacists and lab technicians, as well as our physicians. We compete with other health care providers in recruiting and retaining qualified management and support personnel responsible for the daily operations of each of our hospitals, including nurses and other nonphysician health care professionals. In some markets, the availability of nurses and other medical support personnel has been a
significant operating issue to health care providers. We may be required to continue to enhance wages and benefits to recruit and retain nurses and other medical support personnel or to hire more expensive temporary or contract personnel. As a result, our labor costs could increase. We also depend on the available labor pool of semi-skilled and unskilled employees in each of the markets in which we operate. Certain proposed changes in federal labor laws and the NLRB’s modification of its election procedures could increase the likelihood of employee unionization attempts. To the extent a significant portion of our employee base unionizes, it is possible our labor costs could increase materially. When negotiating collective bargaining agreements with unions, whether such agreements are renewals or first contracts, there is the possibility that strikes could occur during the negotiation process, and our continued operation during any strikes could increase our labor costs. In addition, the states in which we operate could adopt mandatory nurse-staffing ratios or could reduce mandatory nurse staffing ratios already in place. State-mandated nurse-staffing ratios could significantly affect labor costs and have an adverse impact on revenues if we are required to limit admissions in order to meet the required ratios. If our labor costs increase, we may not be able to raise rates to offset these increased costs. Because a significant percentage of our revenues consists of fixed, prospective payments, our ability to pass along increased labor costs is constrained. Our failure to recruit and retain qualified management, nurses and other medical support personnel, or to control labor costs, could have a material, adverse effect on our results of operations.
We may be unable to attract, hire, and retain a highly qualified and diverse workforce, including key management.
The talents and efforts of our employees, particularly our key management, are vital to our success. Our management team has significant industry experience and would be difficult to replace. In addition, institutional knowledge may be lost in any potential managerial transition. We may be unable to retain them or to attract other highly qualified employees, particularly if we do not offer employment terms that are competitive with the rest of the labor market. Failure to attract, hire, develop, motivate, and retain highly qualified and diverse employee talent, or failure to develop and implement an adequate succession plan for the management team, could disrupt our operations and adversely affect our business and our future success.
have the authority to levy a fine in an amount that is up to the greater of €20 million or 4% of global annual turnover in the prior year. If it is determined that non-compliance is related to a non-material provision (such as failure to comply with technical measures), regulators may impose a fine in an amount that is up to the greater of €10 million or 2% of the global annual turnover from the prior year. These administrative fines are discretionary and based, in each case, on a multi-factored approach. We may also face audits or investigations by one or more domestic or foreign government agencies relating to our compliance with these regulations. An adverse outcome under any such investigation or audit could result in liability, result in adverse publicity, and adversely affect our business.
We engage in consumer debt collection for HCA-affiliated hospitals and certainnon-affiliated hospitals. The federal Fair Debt Collection Practices Act and Telephone Consumer Protection Act restrict the methods that companies may use to contact and seek payment from consumer debtors regarding past due accounts. Many states impose additional requirements on debt collection practices, and some of those requirements may be more stringent than the federal requirements.
If we fail to comply with these or other applicable laws and regulations, we could be subject to liabilities, including civil penalties, the loss of our licenses to operate one or more facilities, exclusion of one or more facilities from participation in the Medicare, Medicaid and other federal and state health care programs and criminal penalties.
We have been and could become the subject of government investigations, claims and litigation.
Health care companies are subject to numerous investigations by various government agencies. Further, under the FCA, private parties have the right to bringqui tam, or “whistleblower,” suits against companies that submit false claims for payments to, or improperly retain overpayments from, the government. Some states have adopted similar state whistleblower and false claims provisions. Certain of our individual facilities have received, and other facilities may receive, government inquiries from, and may be subject to investigation by, federal and state agencies. Depending on whether the underlying conduct in these or future inquiries or investigations could be considered systemic, their resolution could have a material, adverse effect on our financial position, results of operations and liquidity.
Government agencies and their agents, such as the MACs, fiscal intermediaries and carriers, as well as the OIG, CMS and state Medicaid programs, conduct audits of our health care operations. Private third-party payers may conduct similar post-payment audits, and we also perform internal audits and monitoring. Depending on the nature of the conduct found in such audits and whether the underlying conduct could be considered systemic, the resolution of these audits could have a material, adverse effect on our financial position, results of operations and liquidity.
CMS contracts with RACs on a contingency fee basis to conduct post-payment reviews to detect and correct improper payments in thefee-for-service Medicare program. The Health Reform Law expanded the RAC program’s scope to include managed Medicare plans and Medicaid claims. RAC denials are appealable; however, there are currently significant delays in the assignment of new Medicare appeals to Administrative Law
Judges, which negatively impacts our ability to appeal RAC payment denials. In addition, CMS employs MICs to perform post-payment audits of Medicaid claims and identify overpayments, and state Medicaid agencies and other contractors have increased their review activities.
Should we be found out of compliance with any of these laws, regulations or programs, depending on the nature of the findings, our business, our financial position and our results of operations could be negatively impacted.
Medicare does not reimburse for care related to certain preventable adverse events (also called “never events”). The Health Reform LawAffordable Care Act also prohibits the use of federal funds under the Medicaid program to reimburse providers for medical assistance provided to treat HACs. The 25% of hospitals with the worst risk-adjusted HAC ratesscores in the designated performance period receive a 1% reduction in their inpatient PPS Medicare payments.
Many
Our operationsindividual facilities and/or affiliates have received, and other facilities and/or affiliates may receive, government inquiries from, and may be subject to investigation by, federal and state agencies. Depending on whether the underlying conduct in these or future inquiries or investigations could be impaired by a failure of our information systems.
The performance of our information systems is critical to our business operations. In addition to our shared services initiatives, our information systems are essential to a number of critical areas of our operations, including:
accounting and financial reporting;
billing and collecting accounts;
coding and compliance;
clinical systems;
medical records and document storage;
inventory management;
negotiating, pricing and administering managed care contracts and supply contracts; and
monitoring quality of care and collecting data on quality measures necessary for full Medicare payment updates.
Information systems may be vulnerable to damage from a variety of sources, including telecommunications or network failures, human acts and natural disasters. We have taken precautionary measures to prevent unanticipated problems that could affect our information systems. Nevertheless, we may experience system failures. The occurrence of any system failure could result in interruptions, delays, the loss or corruption of data and cessations or interruptions in the availability of systems, all of whichconsidered systemic, their resolution could have a material, adverse effect on our financial position, and results of operations and harmliquidity.
A cybersecurity incident could resulthealth care operations. CMS and state Medicaid agencies contract with RACs and other contractors on a contingency fee basis to conduct post-payment reviews to detect and correct improper payments in the compromise of a facility, confidential data or critical data systems and give rise to potential harm to patients, remediation and other expenses, expose us to liability under HIPAA, consumer protection laws, or other common law theories, subject us to litigation and foreign, federal and state governmental inquiries, damage our reputation, and otherwise be disruptive to our business.
We, independently and through third-party vendors, collect and store on our networks sensitive information,Medicare program, including intellectual property, proprietary business information and personally identifiable information of our patients and employees. In addition, we have made significant investments in technology to adopt and utilize EHR and to become meaningful users of health information technology. The secure maintenance of this information and technology is critical to our business operations. We have implemented multiple layers of security measures to protect the confidentiality, integrity and availability of this datamanaged Medicare plans, and the systems and devices that store and transmit such data. We utilize current security technologies, and our defensesMedicaid programs. RAC denials are monitored and routinely tested internally and by external parties. Despite these efforts, threats from malicious persons and groups, new vulnerabilities and advanced new attacks against information systems create risk of cybersecurity incidents. Weappealable; however, there are regularlycurrently significant delays in the target of attempted cybersecurity and other threats that could have a security impact. There can be no assurance that we or our third-party vendors will not be subject to cybersecurity incidents that bypass our security measures, impact the integrity, availability or privacy of personal health information or other data subject to privacy laws or disrupt our information systems, devices or business, includingMedicare appeals process, which negatively impacts our ability to provide various health care services. As a result, cybersecurity, physical securityappeal RAC payment denials. Private third-party payers may conduct similar post-payment audits, and we also perform internal audits and monitoring. Depending on the continued developmentnature of the conduct found in such audits and enhancement of our controls, processes and practices designed to protect our facilities, information systems and data from attack, damage or unauthorized access remain a priority for us. As cyber threats continue to evolve, we maywhether the underlying conduct could be required to expend significant additional resources to continue to modify or enhance our protective measures or to investigate and remediate any cybersecurity vulnerabilities. The occurrence of anyconsidered systemic, the resolution of these events could result in (i) harm to patients; (ii) business interruptions and delays; (iii) the loss, misappropriation, corruption or unauthorized access of data; (iv) litigation and potential liability under privacy, security and consumer protection laws or other applicable laws; (v) reputational damage and (vi) foreign, federal and state governmental inquiries, any of whichaudits could have a material, adverse effect on our financial position, and results of operations and harmliquidity.
If we failour financial position and our results of operations could be negatively impacted.
EHR technology through its Promoting Interoperability Programs. Eligible hospitals and eligible professionals, thatincluding our hospitals and employed professionals, are subject to reduced payments from Medicare if they fail to demonstrate meaningful use of certified EHR technology. As these technologies have become widespread, the focus has shifted to increasing patient access to health care data and interoperability. The 21
patient engagement.
in health care facilities, especially hospitals that fail to accurately or timely diagnose, or are treating (or have treated) patients affected by infectious diseases. If any of our facilities were involved, or perceived as being involved, in treating patients from such an infectious disease, patients might cancel elective procedures or fail to seek needed care at our facilities.facilities, and our reputation may be negatively affected. Further, a pandemic, epidemic or outbreak might adversely affect our operations by causing a temporary shutdown or diversion of patients, by disrupting or delaying production and delivery of materials and products in the supply chain or by causing staffing shortages in our facilities. We have disaster plans in place and operate pursuant to infectious disease protocols, but the potential emergence of a pandemic, epidemic or outbreak is difficult to predict and could adversely affect our operations.
notional principal amounts and maturity dates. The notional amounts of the swap agreements represent balances used to calculate the exchange of cash flows and are not our assets or liabilities.
Uncertainties in the interpretation and application
Item 1B. |
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Item 2. |
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State | Hospitals | Beds | ||||||
Alaska | 1 | 250 | ||||||
California | 5 | 1,838 | ||||||
Colorado | 7 | 2,411 | ||||||
Florida | 45 | 11,980 | ||||||
Georgia | 8 | 1,847 | ||||||
Idaho | 2 | 468 | ||||||
Indiana | 1 | 278 | ||||||
Kansas | 4 | 1,374 | ||||||
Kentucky | 2 | 384 | ||||||
Louisiana | 4 | 1,066 | ||||||
Mississippi | 1 | 130 | ||||||
Missouri | 5 | 1,014 | ||||||
Nevada | 3 | 1,217 | ||||||
New Hampshire | 2 | 295 | ||||||
Oklahoma | 2 | 756 | ||||||
South Carolina | 3 | 867 | ||||||
Tennessee | 13 | 2,450 | ||||||
Texas | 46 | 12,980 | ||||||
Utah | 8 | 1,011 | ||||||
Virginia | 11 | 3,271 | ||||||
International | ||||||||
England | 6 | 851 | ||||||
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179 | 46,738 | |||||||
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2019:
State | Hospitals | Beds | ||||||
Alaska | 1 | 250 | ||||||
California | 5 | 1,858 | ||||||
Colorado | 7 | 2,411 | ||||||
Florida | 45 | 12,410 | ||||||
Georgia | 9 | 2,469 | ||||||
Idaho | 2 | 468 | ||||||
Indiana | 1 | 278 | ||||||
Kansas | 4 | 1,374 | ||||||
Kentucky | 2 | 384 | ||||||
Louisiana | 3 | 914 | ||||||
Mississippi | 1 | 130 | ||||||
Missouri | 5 | 1,058 | ||||||
Nevada | 3 | 1,421 | ||||||
New Hampshire | 2 | 306 | ||||||
North Carolina | 7 | 1,181 | ||||||
South Carolina | 3 | 949 | ||||||
Tennessee | 13 | 2,576 | ||||||
Texas | 46 | 13,395 | ||||||
Utah | 8 | 1,011 | ||||||
Virginia | 11 | 3,300 | ||||||
International | ||||||||
England | 6 | 892 | ||||||
184 | 49,035 | |||||||
Item 3. |
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punitive damages against us which may not be covered by insurance. We are also subject to claims by various taxing authorities for additional taxes and related interest and penalties. The resolution of any such lawsuits, claims or legal and regulatory proceedings could have a material, adverse effect on our results of operations, financial position or liquidity.
Item 4. |
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Item 5. |
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Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares That May Yet Be Purchased Under Publicly Announced Plans or Programs | ||||||||||||
October 1, 2017 through October 31, 2017 | 2,953,476 | $ | 77.40 | 2,953,476 | $ | 2,150 | ||||||||||
November 1, 2017 through November 30, 2017 | 2,264,878 | $ | 76.74 | 2,264,878 | $ | 1,976 | ||||||||||
December 1, 2017 through December 31, 2017 | 2,026,500 | $ | 85.83 | 2,026,500 | $ | 1,802 | ||||||||||
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Total for Fourth Quarter 2017 | 7,244,854 | $ | 79.55 | 7,244,854 | $ | 1,802 | ||||||||||
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Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares That May Yet Be Purchased Under Publicly Announced Plans or Programs | ||||||||||||
October 1, 2019 through October 31, 2019 | 898,323 | $ | 120.23 | 898,323 | $ | 1,405 | ||||||||||
November 1, 2019 through November 30, 2019 | 585,739 | $ | 136.44 | 585,739 | $ | 1,325 | ||||||||||
December 1, 2019 through December 31, 2019 | 585,429 | $ | 143.49 | 585,429 | $ | 1,241 | ||||||||||
Total for Fourth Quarter 2019 | 2,069,491 | $ | 131.40 | 2,069,491 | $ | 1,241 | ||||||||||
The table below sets forth, for the calendar quarters indicated, the high and low sales prices During 2019, our Board of Directors declared four quarterly dividends of $0.40 per share, reportedor $1.60 per share in the aggregate, on the NYSE for our common stock.
Sales Price | ||||||||
High | Low | |||||||
2017 | ||||||||
First Quarter | $ | 91.03 | $ | 73.52 | ||||
Second Quarter | 89.80 | 81.10 | ||||||
Third Quarter | 87.99 | 75.56 | ||||||
Fourth Quarter | 90.29 | 71.18 | ||||||
2016 | ||||||||
First Quarter | $ | 79.00 | $ | 60.07 | ||||
Second Quarter | 83.69 | 73.82 | ||||||
Third Quarter | 81.79 | 73.24 | ||||||
Fourth Quarter | 82.37 | 67.00 |
At the close of business on February 9, 2018,7, 2020, there were approximately 340390 holders of record of our common stock.
12/31/2012 | 12/31/2013 | 12/31/2014 | 12/31/2015 | 12/31/2016 | 12/31/2017 | |||||||||||||||||||
HCA Healthcare, Inc. | 100.00 | 158.14 | 243.25 | 224.16 | 245.34 | 291.15 | ||||||||||||||||||
S&P 500 | 100.00 | 132.39 | 150.51 | 152.59 | 170.84 | 208.14 | ||||||||||||||||||
S&P Health Care | 100.00 | 141.46 | 177.30 | 189.52 | 184.42 | 225.13 |
12/31/2014 | 12/31/2015 | 12/31/2016 | 12/31/2017 | 12/31/2018 | 12/31/2019 | |||||||||||||||||||
HCA Healthcare, Inc. | $ | 100.00 | $ | 92.15 | $ | 100.86 | $ | 119.69 | $ | 171.61 | $ | 206.36 | ||||||||||||
S&P 500 | 100.00 | 101.38 | 113.51 | 138.29 | 132.23 | 173.86 | ||||||||||||||||||
S&P Health Care | 100.00 | 106.89 | 104.01 | 126.98 | 135.19 | 163.34 |
Item 6. |
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2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||||
Summary of Operations: | ||||||||||||||||||||
Revenues before provision for doubtful accounts | $ | 47,653 | $ | 44,747 | $ | 43,591 | $ | 40,087 | $ | 38,040 | ||||||||||
Provision for doubtful accounts | 4,039 | 3,257 | 3,913 | 3,169 | 3,858 | |||||||||||||||
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Revenues | 43,614 | 41,490 | 39,678 | 36,918 | 34,182 | |||||||||||||||
Salaries and benefits | 20,059 | 18,897 | 18,115 | 16,641 | 15,646 | |||||||||||||||
Supplies | 7,316 | 6,933 | 6,638 | 6,262 | 5,970 | |||||||||||||||
Other operating expenses | 8,051 | 7,496 | 7,056 | 6,630 | 6,021 | |||||||||||||||
Equity in earnings of affiliates | (45 | ) | (54 | ) | (46 | ) | (43 | ) | (29 | ) | ||||||||||
Depreciation and amortization | 2,131 | 1,966 | 1,904 | 1,820 | 1,753 | |||||||||||||||
Interest expense | 1,690 | 1,707 | 1,665 | 1,743 | 1,848 | |||||||||||||||
Losses (gains) on sales of facilities | (8 | ) | (23 | ) | 5 | (29 | ) | 10 | ||||||||||||
Losses on retirement of debt | 39 | 4 | 135 | 335 | 17 | |||||||||||||||
Legal claim costs (benefits) | — | (246 | ) | 249 | 78 | — | ||||||||||||||
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39,233 | 36,680 | 35,721 | 33,437 | 31,236 | ||||||||||||||||
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Income before income taxes | 4,381 | 4,810 | 3,957 | 3,481 | 2,946 | |||||||||||||||
Provision for income taxes | 1,638 | 1,378 | 1,261 | 1,108 | 950 | |||||||||||||||
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Net income | 2,743 | 3,432 | 2,696 | 2,373 | 1,996 | |||||||||||||||
Net income attributable to noncontrolling interests | 527 | 542 | 567 | 498 | 440 | |||||||||||||||
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Net income attributable to HCA Healthcare, Inc. | $ | 2,216 | $ | 2,890 | $ | 2,129 | $ | 1,875 | $ | 1,556 | ||||||||||
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Per common share data: | ||||||||||||||||||||
Basic earnings per share | $ | 6.12 | $ | 7.53 | $ | 5.14 | $ | 4.30 | $ | 3.50 | ||||||||||
Diluted earnings per share | $ | 5.95 | $ | 7.30 | $ | 4.99 | $ | 4.16 | $ | 3.37 | ||||||||||
Financial Position: | ||||||||||||||||||||
Assets | $ | 36,593 | $ | 33,758 | $ | 32,744 | $ | 30,980 | $ | 28,594 | ||||||||||
Working capital | 3,819 | 3,252 | 3,716 | 3,450 | 2,342 | |||||||||||||||
Long-term debt, net, including amounts due within one year | 33,058 | 31,376 | 30,488 | 29,426 | 28,139 | |||||||||||||||
Noncontrolling interests | 1,811 | 1,669 | 1,553 | 1,396 | 1,342 | |||||||||||||||
Stockholders’ deficit | (4,995 | ) | (5,633 | ) | (6,046 | ) | (6,498 | ) | (6,928 | ) | ||||||||||
Cash Flow Data: | ||||||||||||||||||||
Cash provided by operating activities | $ | 5,426 | $ | 5,653 | $ | 4,734 | $ | 4,448 | $ | 3,680 | ||||||||||
Cash used in investing activities | (4,279 | ) | (3,240 | ) | (2,583 | ) | (2,918 | ) | (2,346 | ) | ||||||||||
Purchase of property and equipment | (3,015 | ) | (2,760 | ) | (2,375 | ) | (2,176 | ) | (1,943 | ) | ||||||||||
Cash used in financing activities | (1,061 | ) | (2,508 | ) | (1,976 | ) | (1,378 | ) | (1,625 | ) |
2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||
Summary of Operations: | ||||||||||||||||||||
Revenues | $ | 51,336 | $ | 46,677 | $ | 43,614 | $ | 41,490 | $ | 39,678 | ||||||||||
Salaries and benefits | 23,560 | 21,425 | 20,059 | 18,897 | 18,115 | |||||||||||||||
Supplies | 8,481 | 7,724 | 7,316 | 6,933 | 6,638 | |||||||||||||||
Other operating expenses | 9,481 | 8,608 | 8,051 | 7,496 | 7,056 | |||||||||||||||
Equity in earnings of affiliates | (43 | ) | (29 | ) | (45 | ) | (54 | ) | (46 | ) | ||||||||||
Depreciation and amortization | 2,596 | 2,278 | 2,131 | 1,966 | 1,904 | |||||||||||||||
Interest expense | 1,824 | 1,755 | 1,690 | 1,707 | 1,665 | |||||||||||||||
Losses (gains) on sales of facilities | (18 | ) | (428 | ) | (8 | ) | (23 | ) | 5 | |||||||||||
Losses on retirement of debt | 211 | 9 | 39 | 4 | 135 | |||||||||||||||
Legal claim (benefits) costs | — | — | — | (246 | ) | 249 | ||||||||||||||
46,092 | 41,342 | 39,233 | 36,680 | 35,721 | ||||||||||||||||
Income before income taxes | 5,244 | 5,335 | 4,381 | 4,810 | 3,957 | |||||||||||||||
Provision for income taxes | 1,099 | 946 | 1,638 | 1,378 | 1,261 | |||||||||||||||
Net income | 4,145 | 4,389 | 2,743 | 3,432 | 2,696 | |||||||||||||||
Net income attributable to noncontrolling interests | 640 | 602 | 527 | 542 | 567 | |||||||||||||||
Net income attributable to HCA Healthcare, Inc. | $ | 3,505 | $ | 3,787 | $ | 2,216 | $ | 2,890 | $ | 2,129 | ||||||||||
Per common share data: | ||||||||||||||||||||
Basic earnings per share | $ | 10.27 | $ | 10.90 | $ | 6.12 | $ | 7.53 | $ | 5.14 | ||||||||||
Diluted earnings per share | $ | 10.07 | $ | 10.66 | $ | 5.95 | $ | 7.30 | $ | 4.99 | ||||||||||
Cash dividends declared per share | $ | 1.60 | $ | 1.40 | — | — | — | |||||||||||||
Financial Position: | ||||||||||||||||||||
Assets | $ | 45,058 | $ | 39,207 | $ | 36,593 | $ | 33,758 | $ | 32,744 | ||||||||||
Working capital | 3,439 | 2,644 | 3,819 | 3,252 | 3,716 | |||||||||||||||
Long-term debt, net, including amounts due within one year | 33,722 | 32,821 | 33,058 | 31,376 | 30,488 | |||||||||||||||
Noncontrolling interests | 2,243 | 2,032 | 1,811 | 1,669 | 1,553 | |||||||||||||||
Stockholders’ deficit | (565 | ) | (2,918 | ) | (4,995 | ) | (5,633 | ) | (6,046 | ) | ||||||||||
Cash Flow Data: | ||||||||||||||||||||
Cash provided by operating activities | $ | 7,602 | $ | 6,761 | $ | 5,426 | $ | 5,653 | $ | 4,734 | ||||||||||
Cash used in investing activities | (5,720 | ) | (3,901 | ) | (4,279 | ) | (3,240 | ) | (2,583 | ) | ||||||||||
Purchase of property and equipment | (4,158 | ) | (3,573 | ) | (3,015 | ) | (2,760 | ) | (2,375 | ) | ||||||||||
Cash used in financing activities | (1,771 | ) | (3,075 | ) | (1,061 | ) | (2,508 | ) | (1,976 | ) |
2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||||
Operating Data: | ||||||||||||||||||||
Number of hospitals at end of period | 179 | 170 | 168 | 166 | 165 | |||||||||||||||
Number of freestanding outpatient surgical centers at end of period | 120 | 118 | 116 | 113 | 115 | |||||||||||||||
Number of licensed beds at end of period(a) | 46,738 | 44,290 | 43,771 | 43,356 | 42,896 | |||||||||||||||
Weighted average licensed beds(b) | 45,380 | 44,077 | 43,620 | 43,132 | 42,133 | |||||||||||||||
Admissions(c) | 1,936,613 | 1,891,831 | 1,868,789 | 1,795,312 | 1,744,126 | |||||||||||||||
Equivalent admissions(d) | 3,286,432 | 3,191,519 | 3,122,746 | 2,958,674 | 2,844,670 | |||||||||||||||
Average length of stay (days)(e) | 4.9 | 4.9 | 4.9 | 4.8 | 4.8 | |||||||||||||||
Average daily census(f) | 26,000 | 25,340 | 25,084 | 23,835 | 22,853 | |||||||||||||||
Occupancy(g) | 57 | % | 58 | % | 58 | % | 55 | % | 54 | % | ||||||||||
Emergency room visits(h) | 8,624,137 | 8,378,340 | 8,050,159 | 7,450,748 | 6,968,115 | |||||||||||||||
Outpatient surgeries(i) | 935,307 | 932,213 | 909,386 | 891,633 | 881,883 | |||||||||||||||
Inpatient surgeries(j) | 546,228 | 537,306 | 529,900 | 518,881 | 508,793 | |||||||||||||||
Days revenues in accounts receivable(k) | 52 | 50 | 53 | 54 | 54 | |||||||||||||||
Outpatient revenues as a % of patient revenues(l) | 38 | % | 38 | % | 40 | % | 38 | % | 38 | % |
2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||
Operating Data: | ||||||||||||||||||||
Number of hospitals at end of period | 184 | 179 | 179 | 170 | 168 | |||||||||||||||
Number of freestanding outpatient surgical centers at end of period | 123 | 123 | 120 | 118 | 116 | |||||||||||||||
Number of licensed beds at end of period(a) | 49,035 | 47,199 | 46,738 | 44,290 | 43,771 | |||||||||||||||
Weighted average licensed beds(b) | 48,480 | 46,857 | 45,380 | 44,077 | 43,620 | |||||||||||||||
Admissions(c) | 2,108,927 | 2,003,753 | 1,936,613 | 1,891,831 | 1,868,789 | |||||||||||||||
Equivalent admissions(d) | 3,646,335 | 3,420,406 | 3,286,432 | 3,191,519 | 3,122,746 | |||||||||||||||
Average length of stay (days)(e) | 4.9 | 4.9 | 4.9 | 4.9 | 4.9 | |||||||||||||||
Average daily census(f) | 28,134 | 26,663 | 26,000 | 25,340 | 25,084 | |||||||||||||||
Occupancy(g) | 58 | % | 57 | % | 57 | % | 58 | % | 58 | % | ||||||||||
Emergency room visits(h) | 9,161,129 | 8,764,431 | 8,624,137 | 8,378,340 | 8,050,159 | |||||||||||||||
Outpatient surgeries(i) | 1,009,947 | 971,537 | 941,231 | 932,213 | 909,386 | |||||||||||||||
Inpatient surgeries(j) | 566,635 | 548,220 | 540,304 | 537,306 | 529,900 | |||||||||||||||
Days revenues in accounts receivable(k) | 50 | 51 | 52 | 50 | 53 | |||||||||||||||
Outpatient revenues as a % of patient revenues(l) | 39 | % | 38 | % | 38 | % | 38 | % | 40 | % |
(a) | Licensed beds are those beds for which a facility has been granted approval to operate from the applicable state licensing agency. |
(b) | Represents the average number of licensed beds, weighted based on periods owned. |
(c) | Represents the total number of patients admitted to our hospitals and is used by management and certain investors as a general measure of inpatient volume. |
(d) | Equivalent admissions are used by management and certain investors as a general measure of combined inpatient and outpatient volume. Equivalent admissions are computed by multiplying admissions (inpatient volume) by the sum of gross inpatient revenue and gross outpatient revenue and then dividing the resulting amount by gross inpatient revenue. The equivalent admissions computation “equates” outpatient revenue to the volume measure (admissions) used to measure inpatient volume, resulting in a general measure of combined inpatient and outpatient volume. |
(e) | Represents the average number of days admitted patients stay in our hospitals. |
(f) | Represents the average number of patients in our hospital beds each day. |
(g) | Represents the percentage of hospital licensed beds occupied by patients. Both average daily census and occupancy rate provide measures of the utilization of inpatient rooms. |
(h) | Represents the number of patients treated in our emergency rooms. |
(i) | Represents the number of surgeries performed on patients who were not admitted to our hospitals. Pain management and endoscopy procedures are not included in outpatient surgeries. |
(j) | Represents the number of surgeries performed on patients who have been admitted to our hospitals. Pain management and endoscopy procedures are not included in inpatient surgeries. |
(k) | Revenues per day is calculated by dividing the revenues for the fourth quarter of each year by the days in the |
(l) | Represents the percentage of patient revenues related to patients who are not admitted to our hospitals. |
Item 7. |
|
HCA HEALTHCARE, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
Forward-Looking Statements (continued)
certified electronic health record (“EHR”) technology and the impact of interoperability requirements, (23) the impact of natural disasters, such as hurricanes and floods, or similar events beyond our control, (24) changes in interpretations, assumptions and expectations regarding the 2017 Tax Cuts and Jobs Act,U.S. federal, state, or foreign tax laws including additionalinterpretive guidance that may be issued by federal and state taxing authorities or other standard-settingstandard setting bodies, and (25) other risk factors described in this annual report on Form
2017
For 2017, the provision for doubtful accounts increased $782 million, compared to 2016. Theself-pay revenue deductions for charity care and uninsured discounts increased $710 million and $1.473 billion, respectively, for 2017, compared to 2016. The sum
2017(Continued)
2018.
debt balance.
imaging centers.
(Continued)
HCA HEALTHCARE, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
Critical Accounting Policies and Estimates (continued)
Revenues (continued)
hospital’s emergency room for treatment and, if the individual is suffering from an emergency medical condition,
We
uninsured discount is applied.
Provision for Doubtful Accounts and the Allowance for Doubtful Accounts
The amount of the provision for doubtful accounts is based upon management’s assessment of historical writeoffs and expected net collections, business and economic conditions, trends in federal, state and private
HCA HEALTHCARE, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
Critical Accounting Policies and Estimates (continued)
Provision for Doubtful Accounts and the Allowance for Doubtful Accounts (continued)
employer health care coverage and other collection indicators. Management relies on the results of detailed reviews of historical writeoffs and recoveriescollections at facilities that represent a majority of our revenues and accounts receivable (the “hindsight analysis”) as a primary source of information in estimating the collectibilitycollectability of our accounts receivable. We perform the hindsight analysis quarterly, utilizing rolling twelve-months accounts receivable collection and writeoff data. We believe our quarterly updates to the estimated allowance for doubtful accountsimplicit price
amounts we expect to collect.
2017 | 2016 | 2015 | ||||||||||
Charity care | $ | 4,861 | $ | 4,151 | $ | 3,682 | ||||||
Uninsured discounts | 14,520 | 13,047 | 10,692 | |||||||||
Provision for doubtful accounts | 4,039 | 3,257 | 3,913 | |||||||||
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Totals | $ | 23,420 | $ | 20,455 | $ | 18,287 | ||||||
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implicit price concessions. A summary of the estimated cost of total uncompensated care for the years ended December 31, follows (dollars in millions):
2017 | 2016 | 2015 | ||||||||||
Patient care costs (salaries and benefits, supplies, other operating expenses and depreciation and amortization) | $ | 37,557 | $ | 35,304 | $ | 33,760 | ||||||
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Cost-to-charges ratio (patient care costs as percentage of gross patient charges) | 12.9 | % | 13.5 | % | 14.5 | % | ||||||
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Total uncompensated care | $ | 23,420 | $ | 20,455 | $ | 18,287 | ||||||
Multiply by thecost-to-charges ratio | 12.9 | % | 13.5 | % | 14.5 | % | ||||||
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Estimated cost of total uncompensated care | $ | 3,021 | $ | 2,761 | $ | 2,652 | ||||||
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The sum of the provision for doubtful accounts, uninsured discounts and charity care, as a percentage of the sum of revenues, the provision for doubtful accounts, uninsured discounts and charity care was 34.9% for 2017, 33.0% for 2016 and 31.5% for 2015.
2019 | 2018 | 2017 | ||||||||||
Patient care costs (salaries and benefits, supplies, other operating expenses and depreciation and amortization) | $ | 44,118 | $ | 40,035 | $ | 37,557 | ||||||
Cost-to-charges ratio (patient care costs as percentage of gross patient charges) | 12.0 | % | 12.4 | % | 12.9 | % | ||||||
Total uncompensated care | $ | 31,105 | $ | 26,757 | $ | 23,420 | ||||||
Multiply by the cost-to-charges ratio | 12.0 | % | 12.4 | % | 12.9 | % | ||||||
Estimated cost of total uncompensated care | $ | 3,733 | $ | 3,318 | $ | 3,021 | ||||||
HCA HEALTHCARE, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
Critical Accounting Policies and Estimates (continued)
Provision for Doubtful Accounts and the Allowance for Doubtful Accounts (continued)
economic conditions, patient accounting service center operations, payer mix, or trends in federal, state, and private employer health care coverage could affect the collection of accounts receivable, cash flows and results of operations.
The approximate breakdown of accounts receivable by payer classification as of December 31, 2017 and 2016 is set forth in the following table:
% of Accounts Receivable | ||||||||||||
Under 91 Days | 91 — 180 Days | Over 180 Days | ||||||||||
Accounts receivable aging at December 31, 2017: | ||||||||||||
Medicare and Medicaid | 11 | % | 1 | % | 1 | % | ||||||
Managed care and other insurers | 31 | 5 | 5 | |||||||||
Uninsured | 19 | 6 | 21 | |||||||||
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Total | 61 | % | 12 | % | 27 | % | ||||||
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Accounts receivable aging at December 31, 2016: | ||||||||||||
Medicare and Medicaid | 11 | % | 1 | % | 1 | % | ||||||
Managed care and other insurers | 30 | 5 | 5 | |||||||||
Uninsured | 17 | 7 | 23 | |||||||||
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Total | 58 | % | 13 | % | 29 | % | ||||||
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2018, we recorded reductions to the provision for professional liability risks of $50 million and $70 million, respectively, due to the receipt of updated actuarial information.
HCA HEALTHCARE, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
Critical Accounting Policies and Estimates (continued)
Professional Liability Claims (continued)
of claims) and ultimate average severity (cost per claim); and Bornhuetter-Ferguson methods which add expected development to actual paid or incurred experience to estimate ultimate losses. These methods use our company-specific historical claims data and other information. Company-specific claim reporting and payment data collected over an approximate
HCA HEALTHCARE, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
Critical Accounting Policies and Estimates (continued)
Professional Liability Claims (continued)
2017 | 2016 | 2015 | ||||||||||
Net reserves for professional liability claims, January 1 | $ | 1,494 | $ | 1,421 | $ | 1,382 | ||||||
Provision for current year claims | 467 | 428 | 408 | |||||||||
Unfavorable (favorable) development related to prior years’ claims | (1 | ) | 2 | (64 | ) | |||||||
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Total provision | 466 | 430 | 344 | |||||||||
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Payments for current year claims | 7 | 9 | 7 | |||||||||
Payments for prior years’ claims | 350 | 348 | 298 | |||||||||
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Total claim payments | 357 | 357 | 305 | |||||||||
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Net reserves for professional liability claims, December 31 | $ | 1,603 | $ | 1,494 | $ | 1,421 | ||||||
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2019 | 2018 | 2017 | ||||||||||
Net reserves for professional liability claims, January 1 | $ | 1,692 | $ | 1,603 | $ | 1,494 | ||||||
Provision for current year claims | 499 | 486 | 467 | |||||||||
Favorable development related to prior years’ claims | (2 | ) | (39 | ) | (1 | ) | ||||||
Total provision | 497 | 447 | 466 | |||||||||
Payments for current year claims | 8 | 3 | 7 | |||||||||
Payments for prior years’ claims | 400 | 355 | 350 | |||||||||
Total claim payments | 408 | 358 | 357 | |||||||||
Net reserves for professional liability claims, December 31 | $ | 1,781 | $ | 1,692 | $ | 1,603 | ||||||
Interest and penalties payable to taxing authorities are included as a component of our provision for income taxes. We have elected to treat taxes incurred on global intangible
HCA HEALTHCARE, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
Results of Operations (continued)
Revenue/Volume Trends (continued)
Same facility revenues increased 3.8% for the year ended December 31, 2017 compared to the year ended December 31, 2016 and increased 4.1% for the year ended December 31, 2016 compared to the year ended December 31, 2015.admissions. The 3.8%6.5% increase for 20172018 can be primarily attributed to the combined impact of a 2.2%3.9% increase in same facility revenue per equivalent admission and a 1.5%2.5% increase in same facility equivalent admissions. The 4.1% increase for 2016 can be attributed to the combined impact of a 2.2% increase in same facility revenue per equivalent admission and a 1.9% increase in same facility equivalent admissions.
2017.
2017.
2017.
Years Ended December 31, | ||||||||||||
2017 | 2016 | 2015 | ||||||||||
Medicare | 30 | % | 31 | % | 30 | % | ||||||
Managed Medicare | 16 | 15 | 15 | |||||||||
Medicaid | 6 | 6 | 6 | |||||||||
Managed Medicaid | 12 | 12 | 12 | |||||||||
Managed care and other insurers | 28 | 29 | 30 | |||||||||
Uninsured | 8 | 7 | 7 | |||||||||
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100 | % | 100 | % | 100 | % | |||||||
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Years Ended December 31, | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Medicare | 29 | % | 30 | % | 30 | % | ||||||
Managed Medicare | 18 | 17 | 16 | |||||||||
Medicaid | 5 | 5 | 6 | |||||||||
Managed Medicaid | 12 | 12 | 12 | |||||||||
Managed care and insurers | 28 | 28 | 28 | |||||||||
Uninsured | 8 | 8 | 8 | |||||||||
100 | % | 100 | % | 100 | % | |||||||
HCA HEALTHCARE, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
Results of Operations (continued)
Revenue/Volume Trends (continued)
Years Ended December 31, | ||||||||||||
2017 | 2016 | 2015 | ||||||||||
Medicare | 27 | % | 28 | % | 28 | % | ||||||
Managed Medicare | 12 | 12 | 12 | |||||||||
Medicaid | 5 | 5 | 6 | |||||||||
Managed Medicaid | 6 | 6 | 5 | |||||||||
Managed care and other insurers | 48 | 49 | 47 | |||||||||
Uninsured | 2 | — | 2 | |||||||||
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100 | % | 100 | % | 100 | % | |||||||
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Years Ended December 31, | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Medicare | 28 | % | 28 | % | 28 | % | ||||||
Managed Medicare | 15 | 14 | 13 | |||||||||
Medicaid | 5 | 4 | 5 | |||||||||
Managed Medicaid | 5 | 6 | 5 | |||||||||
Managed care and insurers | 47 | 48 | 49 | |||||||||
100 | % | 100 | % | 100 | % | |||||||
Act. Texas currently operates its Healthcare Transformation and Quality Improvement Program pursuant to a Medicaid waiver (the “Texas Waiver Program”).waiver. In December 2017, CMS approved an extension of this waiver through September 30, 2022, but
HCA HEALTHCARE, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
Results of Operations (continued)
Revenue/Volume Trends (continued)
it is presently unclear whether our share of the pool and its corresponding uncompensated care payments will increase or decrease. We provide charity care services directly to patients in several communities in the state of Texas, in affiliation with other hospitals. As a result of additional charitable care being provided directly to patients by private hospitals, public hospital districts or counties in Texas have available funds that were previously devoted to indigent care. The public hospital districts or counties are under no contractual or legal obligation to provide such indigent care. The public hospital districts or counties have elected to transfer some portion of these available funds to the state’s Medicaid program. Such action is at the sole discretion of the public hospital districts or counties. It is anticipated that these contributions to the state will be matched with federal Medicaid funds, as they have been for the past twelve years in Texas. The state then may make supplemental payments to hospitals in the state for Medicaid services rendered. Hospitals receiving Medicaid supplemental payments may include those that are providing additional indigent care services.
Our Texas Medicaid revenues included $351 million ($108 million DSRIP related and $243 million uncompensated care related), $370 million ($101 million DSRIP related and $269 million uncompensated care related) and $347 million ($95 million DSRIP related and $252 million uncompensated care related) during 2017, 2016 and 2015, respectively, of Medicaid supplemental waiver payments. We cannot predict whether the Texas Medicaid Waiver Program will be further extended or revised beyond September 30, 2022.
payments of $416 million, $450 million and $351 million during 2019, 2018 and 2017, respectively.
(Continued)
2017 | 2016 | 2015 | ||||||||||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||||||||||
Revenues before provision for doubtful accounts | $ | 47,653 | $ | 44,747 | $ | 43,591 | ||||||||||||||||||
Provision for doubtful accounts | 4,039 | 3,257 | 3,913 | |||||||||||||||||||||
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Revenues | 43,614 | 100.0 | 41,490 | 100.0 | 39,678 | 100.0 | ||||||||||||||||||
Salaries and benefits | 20,059 | 46.0 | 18,897 | 45.5 | 18,115 | 45.7 | ||||||||||||||||||
Supplies | 7,316 | 16.8 | 6,933 | 16.7 | 6,638 | 16.7 | ||||||||||||||||||
Other operating expenses | 8,051 | 18.4 | 7,496 | 18.1 | 7,056 | 17.8 | ||||||||||||||||||
Equity in earnings of affiliates | (45 | ) | (0.1 | ) | (54 | ) | (0.1 | ) | (46 | ) | (0.1 | ) | ||||||||||||
Depreciation and amortization | 2,131 | 4.9 | 1,966 | 4.8 | 1,904 | 4.8 | ||||||||||||||||||
Interest expense | 1,690 | 3.9 | 1,707 | 4.1 | 1,665 | 4.2 | ||||||||||||||||||
Losses (gains) on sales of facilities | (8 | ) | — | (23 | ) | (0.1 | ) | 5 | — | |||||||||||||||
Losses on retirement of debt | 39 | 0.1 | 4 | — | 135 | 0.3 | ||||||||||||||||||
Legal claim costs (benefits) | — | — | (246 | ) | (0.6 | ) | 249 | 0.6 | ||||||||||||||||
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39,233 | 90.0 | 36,680 | 88.4 | 35,721 | 90.0 | |||||||||||||||||||
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Income before income taxes | 4,381 | 10.0 | 4,810 | 11.6 | 3,957 | 10.0 | ||||||||||||||||||
Provision for income taxes | 1,638 | 3.7 | 1,378 | 3.3 | 1,261 | 3.2 | ||||||||||||||||||
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Net income | 2,743 | 6.3 | 3,432 | 8.3 | 2,696 | 6.8 | ||||||||||||||||||
Net income attributable to noncontrolling interests | 527 | 1.2 | 542 | 1.3 | 567 | 1.4 | ||||||||||||||||||
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Net income attributable to HCA Healthcare, Inc. | $ | 2,216 | 5.1 | $ | 2,890 | 7.0 | $ | 2,129 | 5.4 | |||||||||||||||
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% changes from prior year: | ||||||||||||||||||||||||
Revenues | 5.1 | % | 4.6 | % | 7.5 | % | ||||||||||||||||||
Income before income taxes | (8.9 | ) | 21.6 | 13.7 | ||||||||||||||||||||
Net income attributable to HCA Healthcare, Inc. | (23.3 | ) | 35.8 | 13.6 | ||||||||||||||||||||
Admissions(a) | 2.4 | 1.2 | 4.1 | |||||||||||||||||||||
Equivalent admissions(b) | 3.0 | 2.2 | 5.5 | |||||||||||||||||||||
Revenue per equivalent admission | 2.1 | 2.3 | 1.8 | |||||||||||||||||||||
Same facility % changes from prior year(c): | ||||||||||||||||||||||||
Revenues | 3.8 | 4.1 | 6.4 | |||||||||||||||||||||
Admissions(a) | 1.1 | 1.1 | 3.4 | |||||||||||||||||||||
Equivalent admissions(b) | 1.5 | 1.9 | 4.6 | |||||||||||||||||||||
Revenue per equivalent admission | 2.2 | 2.2 | 1.7 |
2019 | 2018 | 2017 | ||||||||||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||||||||||
Revenues | $ | 51,336 | 100.0 | $ | 46,677 | 100.0 | $ | 43,614 | 100.0 | |||||||||||||||
Salaries and benefits | 23,560 | 45.9 | 21,425 | 45.9 | 20,059 | 46.0 | ||||||||||||||||||
Supplies | 8,481 | 16.5 | 7,724 | 16.5 | 7,316 | 16.8 | ||||||||||||||||||
Other operating expenses | 9,481 | 18.5 | 8,608 | 18.5 | 8,051 | 18.4 | ||||||||||||||||||
Equity in earnings of affiliates | (43 | ) | (0.1 | ) | (29 | ) | (0.1 | ) | (45 | ) | (0.1 | ) | ||||||||||||
Depreciation and amortization | 2,596 | 5.0 | 2,278 | 4.9 | 2,131 | 4.9 | ||||||||||||||||||
Interest expense | 1,824 | 3.6 | 1,755 | 3.8 | 1,690 | 3.9 | ||||||||||||||||||
Gain on sales of facilities | (18 | ) | — | (428 | ) | (0.9 | ) | (8 | ) | — | ||||||||||||||
Losses on retirement of debt | 211 | 0.4 | 9 | — | 39 | 0.1 | ||||||||||||||||||
46,092 | 89.8 | 41,342 | 88.6 | 39,233 | 90.0 | |||||||||||||||||||
Income before income taxes | 5,244 | 10.2 | 5,335 | 11.4 | 4,381 | 10.0 | ||||||||||||||||||
Provision for income taxes | 1,099 | 2.1 | 946 | 2.0 | 1,638 | 3.7 | ||||||||||||||||||
Net income | 4,145 | 8.1 | 4,389 | 9.4 | 2,743 | 6.3 | ||||||||||||||||||
Net income attributable to noncontrolling interests | 640 | 1.3 | 602 | 1.3 | 527 | 1.2 | ||||||||||||||||||
Net income attributable to HCA Healthcare, Inc. | $ | 3,505 | 6.8 | $ | 3,787 | 8.1 | $ | 2,216 | 5.1 | |||||||||||||||
% changes from prior year: | ||||||||||||||||||||||||
Revenues | 10.0 | % | 7.0 | % | 5.1 | % | ||||||||||||||||||
Income before income taxes | (1.7 | ) | 21.8 | (8.9 | ) | |||||||||||||||||||
Net income attributable to HCA Healthcare, Inc. | (7.4 | ) | 70.9 | (23.3 | ) | |||||||||||||||||||
Admissions(a) | 5.2 | 3.5 | 2.4 | |||||||||||||||||||||
Equivalent admissions(b) | 6.6 | 4.1 | 3.0 | |||||||||||||||||||||
Revenue per equivalent admission | 3.2 | 2.8 | 2.1 | |||||||||||||||||||||
Same facility % changes from prior year(c): | ||||||||||||||||||||||||
Revenues | 5.9 | 6.5 | 3.8 | |||||||||||||||||||||
Admissions(a) | 2.8 | 2.5 | 1.1 | |||||||||||||||||||||
Equivalent admissions(b) | 3.5 | 2.5 | 1.5 | |||||||||||||||||||||
Revenue per equivalent admission | 2.3 | 3.9 | 2.2 |
(a) | Represents the total number of patients admitted to our hospitals and is used by management and certain investors as a general measure of inpatient volume. |
(b) | Equivalent admissions are used by management and certain investors as a general measure of combined inpatient and outpatient volume. Equivalent admissions are computed by multiplying admissions (inpatient volume) by the sum of gross inpatient revenue and gross outpatient revenue and then dividing the resulting amount by gross inpatient revenue. The equivalent admissions computation “equates” outpatient revenue to the volume measure (admissions) used to measure inpatient volume, resulting in a general measure of combined inpatient and outpatient volume. |
(c) | Same facility information excludes the operations of hospitals and their related facilities that were either acquired, divested or removed from service during the current and prior year. |
(Continued)
2018
2018.
Revenues increased 5.1% to $43.614 billion for 2017 from $41.490 billion for 2016.2018. The increase in revenues was primarily due to the combined impact of a 2.1%3.2% increase in revenue per equivalent admission and a 3.0%6.6% increase in equivalent admissions compared to 2016.2018. Same facility revenues increased 3.8%5.9% due primarily to the combined impact of a 2.2%2.3% increase in same facility revenue per equivalent admission and a 1.5%3.5% increase in same facility equivalent admissions compared to 2016.
2018.
HCA HEALTHCARE, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
Results of Operations (continued)
Years Ended December 31, 2017 and 2016 (continued)
averaged 3.0%2.7% for 20172019 compared to 2016.2018. Share-based compensation expense increased from $251was $347 million in 2016 to $2702019 and $268 million in 2017.
2018.
2018. Same facility supply costs per equivalent admission increased 1.6% for medical devices and 2.2% for general medical and surgical items and declined 2.1% for pharmacy supplies in 2019 compared to 2018.
2018.
2018, and the $317 million increase was due to both acquisitions and increased capital expenditures in 2019 (same facility depreciation amortization increased $154 million).
Netboth 2019 and 2018.
The gains on sales of facilities for 2018 related primarily to the sale of the two hospital facilities in our Oklahoma market.
(Continued)
Years Endedmarkets and the operations of our surgery center partnerships.
Net income attributable2017, refer to HCA Healthcare, Inc. totaled $2.890 billion, or $7.30 per diluted share, for 2016, compared to $2.129 billion, or $4.99 per diluted share, for 2015.our annual report on Form
During 2016, consolidated admissions increased 1.2% and same facility admissions increased 1.1% compared to 2015. Consolidated and same facility inpatient surgeries each increased 1.4% during 2016 compared to 2015. Consolidated outpatient surgeries increased 2.5%, and same facility outpatient surgeries increased 1.2% during 2016 compared to 2015. Emergency room visits increased 4.1% on a consolidated basis and increased 3.8% on a same facility basis during 2016 compared to 2015.
Revenues before provision for doubtful accounts increased 2.7% to $44.747 billion for 2016 from $43.591 billion for 2015. The provision for doubtful accounts declined $656 million from $3.913 billion in 2015 to $3.257 billion in 2016. The provision for doubtful accounts and the allowance for doubtful accounts relate primarily to uninsured amounts due directly from patients, including copayment and deductible amounts for patients who have health care coverage. Theself-pay revenue deductions for charity care and uninsured discounts increased $469 million and $2.355 billion, respectively, during 2016 compared to 2015. The sum of the provision for doubtful accounts, uninsured discounts and charity care, as a percentage of the sum of revenues, the provision for doubtful accounts, uninsured discounts and charity care, was 33.0% for 2016 compared to 31.5% for 2015. At December 31, 2016, our allowance for doubtful accounts represented approximately 97.5% of the $5.116 billion total patient due accounts receivable balance, including accounts, net of estimated contractual discounts, related to patients for which eligibility for Medicaid coverage or uninsured discounts was being evaluated.
Revenues increased 4.6% to $41.490 billion for 2016 from $39.678 billion for 2015. The increase in revenues was due primarily to the combined impact of a 2.3% increase in revenue per equivalent admission and a 2.2% increase in equivalent admissions compared to 2015. Same facility revenues increased 4.1% due to the combined impact of a 2.2% increase in same facility revenue per equivalent admission and a 1.9% increase in same facility equivalent admissions compared to 2015.
Salaries and benefits, as a percentage of revenues, were 45.5% in 2016 and 45.7% in 2015. Salaries and benefits per equivalent admission increased 2.1% in 2016 compared to 2015. Same facility labor rate increases averaged 1.9% for 2016 compared to 2015. Share-based compensation expense increased from $239 million in 2015 to $251 million in 2016.
HCA HEALTHCARE, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
Results of Operations (continued)
Years Ended December 31, 2016 and 2015 (continued)
Supplies, as a percentage of revenues, were 16.7% in both 2016 and 2015. Supply costs per equivalent admission increased 2.2% in 2016 compared to 2015. Supply costs per equivalent admission increased 4.6% for medical devices and 3.4% for pharmacy supplies and declined 0.1% for general medical and surgical items in 2016 compared to 2015.
Other operating expenses, as a percentage of revenues, was 18.1% in 2016 and 17.8% in 2015. Other operating expenses are primarily comprised of contract services, professional fees, repairs and maintenance, rents and leases, utilities, insurance (including professional liability insurance) and nonincome taxes. Provisions for losses related to professional liability risks were $430 million and $344 million for 2016 and 2015, respectively. The increase in provision for losses related to professional liability risks for 2016 compared to 2015 was primarily due to $64 million of favorable development related to prior years’ claims recorded in 2015.
Equity in earnings of affiliates was $54 million for 2016 and $46 million for 2015.
Depreciation and amortization, as a percentage of revenues, was 4.8% in both 2016 and 2015. Depreciation expense was $1.946 billion for 2016 and $1.880 billion for 2015.
Interest expense increased to $1.707 billion for 2016 from $1.665 billion for 2015. The increase in interest expense was due to an increase in the average debt balance. Our average debt balance was $31.048 billion for 2016 compared to $29.718 billion for 2015. The average interest rate for our long-term debt declined from 5.6% for 2015 to 5.5% for 2016.
Net gains on sales of facilities were $23 million for 2016 and related to sales of real estate and other investments. Net losses on sales of facilities were $5 million for 2015 and related to sales of real estate and other investments.
During 2016, we issued $1.200 billion aggregate principal amount of 4.500% senior secured notes due 2027. We used the net proceeds for general corporate purposes and to retire a portion of one of our senior secured term loans. We also entered into a joinder agreement to retire the remaining portion of this senior secured term loan using proceeds from a new $1.200 billion senior secured term loan facility maturing in February 2024. The pretax loss on retirement of debt was $4 million. During 2015, we redeemed all $1.525 billion aggregate principal amount of 7 3⁄4 % senior notes due 2021 and all $1.000 billion aggregate principal amount of our outstanding 6.500% senior notes due 2016. We also entered into a joinder agreement to retire certain of our existing senior secured term loans. The pretax losses on retirement of debt related to these redemptions were $135 million.
We reached a settlement agreement2018, filed with the Health Care Foundation of Greater Kansas City related to a previously disclosed contractual dispute regarding our obligation to fund certain capital expenditures in connection with our purchase of hospitals from Health Midwest in 2003. The settlement agreement enabled us to reduce the accrual for this claim by $290 millionSecurities and resulted in the recognition of net legal claim benefits of $246 million related to this litigation for 2016. We recorded $129 million of legal claim costs during 2015 related to this matter. We also recorded $120 million of legal claim costs during 2015 to settle a securities class action lawsuit and related derivative actions.
The effective tax rates were 32.3% and 37.2% for 2016 and 2015, respectively. The effective tax rate computations exclude net income attributable to noncontrolling interests as it relates to consolidated partnerships.
HCA HEALTHCARE, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
Results of Operations (continued)
Years Ended December 31, 2016 and 2015 (continued)
Our provision for income taxes for 2016 included tax benefits of $51 million primarily related to the resolution of federal income tax issues for our 2011 and 2012 tax years and $162 million related to excess tax benefits from employee equity award settlements. Excluding the effect of these adjustments, the effective tax rate for 2016 would have been 37.3%.
Net income attributable to noncontrolling interests declined from $567 million for 2015 to $542 million for 2016. The decline in net income attributable to noncontrolling interests related primarily to joint ventures in our United Kingdom market, a Texas market and an Oklahoma market.
2017.
Cash received from sales of hospitals and health care entities declined $747 million for 2019 compared to 2018 primarily related to the receipt during 2018 of $758 million from the sale of the two hospitals in our Oklahoma market.
HCA HEALTHCARE, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
Liquidity and Capital Resources (continued)
repurchase of debt or equity securities have, and are expected to, come primarily from cash generated from operations and borrowed funds. On January 30, 2018,27, 2020, our Board of Directors initiated and declared a quarterly dividend of $0.35$0.43 per share on our common stock payable on March 30, 201831, 2020 to stockholders of record at the close of business on March 1, 2018.2, 2020. During 2019, our Board of Directors declared four quarterly dividends of $0.40 per share, or $1.60 per share in the aggregate, on our common stock. The timing and amount of future cash dividends will vary based on a number of factors, including future capital requirements for strategic transactions, share repurchases and investing in our existing markets, the availability of financing on acceptable terms, debt service requirements, changes to applicable tax laws or corporate laws, changes to our business model and periodic determinations by our Board of Directors that cash dividends are in the best interest of stockholders and are in compliance with all applicable laws and agreements of the Company.
2018.
During August 2016, we issued $1.200 billion aggregate principal amount of 4.500%our existing 3.750% senior secured notes due 2027. We used the net proceeds for general corporate purposes and to retire a portion of one of our senior secured term loans. We also entered into a joinder agreement to retire the remaining portion of this senior secured term loan using proceeds from a new $1.200 billion senior secured term loan facility maturing in February 2024. The pretax loss on retirement of debt was $4 million.
March 2019.
HCA HEALTHCARE, INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
Liquidity and Capital Resources (continued)
notes comprised of $2.000 billion aggregate principal amount of 4 1/8% notes due 2029, $1.000 billion aggregate principal amount of 5 1/8% notes due 2039 and $2.000 billion aggregate principal amount of 5 1/4% notes due 2049. During July 2019, we redeemed all $600 million outstanding aggregate principal amount of 4.25% senior secured notes due 2019, all $3.000 billion outstanding aggregate principal amount of 6.50% senior secured notes due 2020 and all $1.350 billion outstanding aggregate principal amount of 5.875% senior secured notes due 2022.
(Continued)
Payments Due by Period | ||||||||||||||||||||
Contractual Obligations(a) | Total | Current | 2-3 Years | 4-5 Years | After 5 Years | |||||||||||||||
Long-term debt including interest, excluding the senior secured credit facilities(b) | $ | 36,937 | $ | 1,577 | $ | 7,877 | $ | 6,509 | $ | 20,974 | ||||||||||
Loans outstanding under the senior secured credit facilities, including interest(b) | 8,806 | 363 | 1,720 | 4,126 | 2,597 | |||||||||||||||
Professional liability claims(c) | 1,627 | 429 | 693 | 357 | 148 | |||||||||||||||
Operating leases(d) | 2,279 | 289 | 517 | 355 | 1,118 | |||||||||||||||
Purchase and other obligations(d) | 29 | 19 | 6 | 2 | 2 | |||||||||||||||
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Total contractual obligations | $ | 49,678 | $ | 2,677 | $ | 10,813 | $ | 11,349 | $ | 24,839 | ||||||||||
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Commitment Expiration by Period | ||||||||||||||||||||
Other Commercial Commitments Not Recorded on the Consolidated Balance Sheet | Total | Current | 2-3 Years | 4-5 Years | After 5 Years | |||||||||||||||
Surety bonds(e) | $ | 40 | $ | 37 | $ | 3 | $ | — | $ | — | ||||||||||
Letters of credit(e) | 23 | 18 | 5 | — | — | |||||||||||||||
Physician commitments(f) | 32 | 25 | 7 | — | — | |||||||||||||||
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Total commercial commitments | $ | 95 | $ | 80 | $ | 15 | $ | — | $ | — | ||||||||||
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Payments Due by Period | ||||||||||||||||||||
Contractual Obligations(a) | Total | Current | 2-3 Years | 4-5 Years | After 5 Years | |||||||||||||||
Long-term debt including interest, excluding the senior secured credit facilities(b) | $ | 42,756 | $ | 1,667 | $ | 6,061 | $ | 7,227 | $ | 27,801 | ||||||||||
Loans outstanding under the senior secured credit facilities, including interest(b) | 7,132 | 266 | 3,031 | 1,284 | 2,551 | |||||||||||||||
Professional liability risks(c) | 1,827 | 457 | 774 | 399 | 197 | |||||||||||||||
Right-of-use operating lease obligations | 2,530 | 411 | 635 | 410 | 1,074 | |||||||||||||||
Other obligations(d) | 25 | 22 | 2 | 1 | — | |||||||||||||||
Total contractual obligations | $ | 54,270 | $ | 2,823 | $ | 10,503 | $ | 9,321 | $ | 31,623 | ||||||||||
Commitment Expiration by Period | ||||||||||||||||||||
Other Commercial Commitments Not Recorded on the Consolidated Balance Sheet | Total | Current | 2-3 Years | 4-5 Years | After 5 Years | |||||||||||||||
Surety bonds(e) | $ | 60 | $ | 59 | $ | 1 | $ | — | $ | — | ||||||||||
Letters of credit(e) | 33 | 18 | 15 | — | — | |||||||||||||||
Physician commitments(f) | 37 | 30 | 7 | — | — | |||||||||||||||
Total commercial commitments | $ | 130 | $ | 107 | $ | 23 | $ | — | $ | — | ||||||||||
(a) | We have not included obligations related to unrecognized tax benefits of |
(b) | Estimates of interest payments assume that interest rates and borrowing spreads at December 31, |
(c) | The estimation of the timing of payments for professional liability |
(d) | Amounts |
(e) | Amounts relate primarily to instances in which we have agreed to indemnify various commercial insurers and lenders who have provided surety bonds and letters of credit to cover damages for legal cases which were awarded to plaintiffs by the courts, Medicaid provider bonds, educational administrative bonds and utility and construction |
(f) | In consideration for physicians relocating to the communities in which our hospitals are located and agreeing to engage in private practice for the benefit of the respective communities, we make advances to physicians |
(Continued)
both 2019 and 2018, respectively.
(Continued)
During
Management believes HCA Healthcare, Inc., its predecessors, subsidiaries and affiliates properly reported taxable income and paid taxes in accordance with applicable laws and agreements established with the IRS, state and foreign taxing authorities, and final resolution of any disputes will not have a material, adverse effect on our results of operations or financial position. However, if payments due upon final resolution of any issues exceed our recorded estimates, such resolutions could have a material, adverse effect on our results of operations or financial position.
Item 7A. |
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Item 8. |
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Item 9. |
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Item 9A. |
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2019.
Item 9B. |
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Item 10. |
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Item 11. |
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Item 12. |
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(a) | (b) | (c) | ||||||||||
Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column(a) ) | ||||||||||
Equity compensation plans approved by | 22,996,400 | (1) | $ | 43.47 | (1) | 31,437,200 | (2) | |||||
Equity compensation plans not approved by | — | — | — | |||||||||
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Total | 22,996,400 | $ | 43.47 | 31,437,200 | ||||||||
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Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column(a)) | ||||||||||
Equity compensation plans approved by security holders | 16.849 | (1) | $ | 71.79 | (1) | 27.211 | (2) | |||||
Equity compensation plans not approved by security holders | — | — | — | |||||||||
Total | 16.849 | $ | 71.79 | 27.211 | ||||||||
(1) | Includes |
(2) | Includes |
* | For additional information concerning our equity compensation plans, see the discussion in Note 2 — Share-Based Compensation in the notes to the consolidated financial statements. |
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Item 15. |
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2.1 — 2.2 — 3.1 — 3.2 — 4.1�� — 4.2 — 4.3 — 4.4(a) —
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101 | — | The following financial information from our annual report onForm 10-K for the year ended December 31, | ||||
104 | — | The cover page from the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, formatted in Inline XBRL (included in Exhibit 101). |
* | Management compensatory plan or arrangement. |
Item 16. |
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HCA HEALTHCARE, INC. | ||
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By: | /s/ Samuel N. Hazen | |
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20, 2020
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HCA HEALTHCARE, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
/s/ Samuel N. Hazen Samuel N. Hazen | Chief Executive Officer and Director (Principal Executive Officer) | February 20, 2020 | ||
/s/ William B. Rutherford William B. Rutherford | Executive Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | February 20, 2020 | ||
/s/ Thomas F. Frist III Thomas F. Frist III | Chairman and Director | February 20, 2020 | ||
/s/ Meg G. Crofton Meg G. Crofton | Director | February 20, 2020 | ||
/s/ Robert J. Dennis Robert J. Dennis | Director | February 20, 2020 | ||
/s/ Nancy-Ann DeParle Nancy-Ann DeParle | Director | February 20, 2020 | ||
/s/ William R. Frist William R. Frist | Director | February 20, 2020 | ||
/s/ Charles O. Holliday, Jr. Charles O. Holliday, Jr. | Director | February 20, 2020 | ||
/s/ Geoffrey G. Meyers Geoffrey G. Meyers | Director | February 20, 2020 | ||
/s/ Michael W. Michelson Michael W. Michelson | Director | February 20, 2020 | ||
/s/ Wayne J. Riley Wayne J. Riley | Director | February 20, 2020 | ||
/s/ John W. Rowe John W. Rowe | Director | February 20, 2020 |
Page | |||||
F- 2 | |||||
Consolidated Financial Statements: | |||||
F- 5 | |||||
F- 6 | |||||
F- 7 | |||||
F- 8 | |||||
F- 9 | |||||
F- 10 | |||||
F- 46 |
Revenue Recognition | ||
Description of the Matter | For the year ended December 31, 2019, the Company’s revenues were $51.336 billion. As discussed in Note 1 to the consolidated financial statements, revenues are based upon the estimated amounts the Company expects to be entitled to receive from patients and third-party payers. Estimates of contractual allowances under managed care, commercial, and governmental insurance plans are based upon the payment terms specified in the related contractual agreements or as mandated under government payer programs. Management continually reviews the contractual allowances estimation process to consider and incorporate updates to laws and regulations and the frequent changes in managed care contractual terms resulting from contract renegotiations and renewals. Revenues related to uninsured patients and uninsured copayment and deductible amounts for patients who have health care insurance coverage may have discounts applied (uninsured discounts and contractual discounts). The Company also records estimated implicit price concessions (based primarily on historical collection experience) related to uninsured accounts to record these revenues and accounts receivable at the estimated amounts the Company expects to collect. The primary collection risks relate to uninsured patient accounts, including amounts owed from patients after insurance has paid the amounts covered by the applicable agreement. Implicit price concessions relate primarily to amounts due directly from patients and are based upon management’s assessment of historical write-offs and expected net collections, business and economic conditions, trends in federal, state and private employer health care coverage and other collection indicators. Auditing management’s estimates of contractual allowances and implicit price concessions was complex and judgmental due to the significant data inputs and subjective assumptions utilized in determining related amounts. | |
How We Addressed the Matter in Our Audit | We tested internal controls that address the risks of material misstatement related to the measurement and valuation of revenues, including estimation of contractual allowances and implicit price concessions. For example, we tested management’s internal controls over the key data inputs to the contractual allowances and implicit price concessions models, significant assumptions underlying management’s models, and management’s internal controls over retrospective hindsight reviews of historical reserve accuracy. To test the estimated contractual allowances and implicit price concessions, we performed audit procedures that included, among others, assessing methodologies and evaluating the significant assumptions discussed above and testing the completeness and accuracy of the underlying data used by the Company in its estimates. We compared the significant assumptions used by management to current industry and economic trends and considered changes, if any, to the Company’s business and other relevant factors. We also assessed the historical accuracy of management’s estimates as a source of potential corroborative or contrary evidence. | |
Professional Liability Claims | ||
Description of the Matter | At December 31, 2019, the Company’s reserves for professional liability risks were $1.827 billion and the Company’s related provision for losses for the year ended December 31, 2019 was $497 million. As discussed in Note 1 to the consolidated financial statements, reserves for professional liability risks represent the estimated ultimate cost of all reported and unreported losses incurred and unpaid as of the |
consolidated balance sheet date. Management determines professional liability reserves and provisions for losses using individual case-basis valuations and actuarial analyses. Trends in the average frequency (number of claims) and ultimate average severity (cost per claim) of claims are significant assumptions in estimating the reserves. Auditing management’s professional liability claims reserves was complex and judgmental due to the significant estimations required in determining the reserves, particularly the actuarial methodology and assumptions related to the severity and frequency of claims. | ||
How We Addressed the Matter in Our Audit | We tested management’s internal controls that address the risks of material misstatement over the Company’s professional liability claims reserve estimation process. For example, we tested internal controls over management’s review of the actuarial methodology and significant assumptions, and the completeness and accuracy of claims data supporting the recorded reserves. To test the Company’s determination of the estimated professional liability expense and reserves, we performed audit procedures that included, among others, testing the completeness and accuracy of underlying claims data used by the Company and its actuaries in its determination of reserves and reviewing the Company’s insurance contracts to assess self-insured limits, deductibles and coverage limits. Additionally, with the involvement of our actuarial specialists, we performed audit procedures that included, among others, assessing the actuarial valuation methodologies utilized by management and its actuaries, testing the significant assumptions, including consideration of Company-specific claim reporting and payment data, assessing the accuracy of management’s historical reserve estimates, and developing an independent range of reserves for comparison to the Company’s recorded amounts. |
2017
2017 | 2016 | 2015 | ||||||||||
Revenues before provision for doubtful accounts | $ | 47,653 | $ | 44,747 | $ | 43,591 | ||||||
Provision for doubtful accounts | 4,039 | 3,257 | 3,913 | |||||||||
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Revenues | 43,614 | 41,490 | 39,678 | |||||||||
Salaries and benefits | 20,059 | 18,897 | 18,115 | |||||||||
Supplies | 7,316 | 6,933 | 6,638 | |||||||||
Other operating expenses | 8,051 | 7,496 | 7,056 | |||||||||
Equity in earnings of affiliates | (45 | ) | (54 | ) | (46 | ) | ||||||
Depreciation and amortization | 2,131 | 1,966 | 1,904 | |||||||||
Interest expense | 1,690 | 1,707 | 1,665 | |||||||||
Losses (gains) on sales of facilities | (8 | ) | (23 | ) | 5 | |||||||
Losses on retirement of debt | 39 | 4 | 135 | |||||||||
Legal claim costs (benefits) | — | (246 | ) | 249 | ||||||||
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39,233 | 36,680 | 35,721 | ||||||||||
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Income before income taxes | 4,381 | 4,810 | 3,957 | |||||||||
Provision for income taxes | 1,638 | 1,378 | 1,261 | |||||||||
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Net income | 2,743 | 3,432 | 2,696 | |||||||||
Net income attributable to noncontrolling interests | 527 | 542 | 567 | |||||||||
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Net income attributable to HCA Healthcare, Inc. | $ | 2,216 | $ | 2,890 | $ | 2,129 | ||||||
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Per share data: | ||||||||||||
Basic earnings per share | $ | 6.12 | $ | 7.53 | $ | 5.14 | ||||||
Diluted earnings per share | $ | 5.95 | $ | 7.30 | $ | 4.99 | ||||||
Shares used in earnings per share calculations (in millions): | ||||||||||||
Basic | 362.305 | 383.591 | 414.193 | |||||||||
Diluted | 372.221 | 395.851 | 426.721 |
2019 | 2018 | 2017 | ||||||||||
Revenues | $ | 51,336 | $ | 46,677 | $ | 43,614 | ||||||
Salaries and benefits | 23,560 | 21,425 | 20,059 | |||||||||
Supplies | 8,481 | 7,724 | 7,316 | |||||||||
Other operating expenses | 9,481 | 8,608 | 8,051 | |||||||||
Equity in earnings of affiliates | (43 | ) | (29 | ) | (45 | ) | ||||||
Depreciation and amortization | 2,596 | 2,278 | 2,131 | |||||||||
Interest expense | 1,824 | 1,755 | 1,690 | |||||||||
Gains on sales of facilities | (18 | ) | (428 | ) | (8 | ) | ||||||
Losses on retirement of debt | 211 | 9 | 39 | |||||||||
46,092 | 41,342 | 39,233 | ||||||||||
Income before income taxes | 5,244 | 5,335 | 4,381 | |||||||||
Provision for income taxes | 1,099 | 946 | 1,638 | |||||||||
Net income | 4,145 | 4,389 | 2,743 | |||||||||
Net income attributable to noncontrolling interests | 640 | 602 | 527 | |||||||||
Net income attributable to HCA Healthcare, Inc. | $ | 3,505 | $ | 3,787 | $ | 2,216 | ||||||
Per share data: | ||||||||||||
Basic earnings per share | $ | 10.27 | $ | 10.90 | $ | 6.12 | ||||||
Diluted earnings per share | $ | 10.07 | $ | 10.66 | $ | 5.95 | ||||||
Shares used in earnings per share calculations (in millions): | ||||||||||||
Basic | 341.210 | 347.297 | 362.305 | |||||||||
Diluted | 348.226 | 355.303 | 372.221 |
2017
2017 | 2016 | 2015 | ||||||||||
Net income | $ | 2,743 | $ | 3,432 | $ | 2,696 | ||||||
Other comprehensive income (loss) before taxes: | ||||||||||||
Foreign currency translation | 97 | (224 | ) | (63 | ) | |||||||
Unrealized gains (losses) onavailable-for-sale securities | 1 | (9 | ) | 1 | ||||||||
Realized gains included in other operating expenses | (2 | ) | — | — | ||||||||
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(1 | ) | (9 | ) | 1 | ||||||||
Defined benefit plans | (43 | ) | (35 | ) | 30 | |||||||
Pension costs included in salaries and benefits | 18 | 18 | 32 | |||||||||
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(25 | ) | (17 | ) | 62 | ||||||||
Change in fair value of derivative financial instruments | 11 | 20 | (36 | ) | ||||||||
Interest costs included in interest expense | 20 | 109 | 125 | |||||||||
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31 | 129 | 89 | ||||||||||
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Other comprehensive income (loss) before taxes | 102 | (121 | ) | 89 | ||||||||
Income taxes (benefits) related to other comprehensive income items | 42 | (48 | ) | 31 | ||||||||
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Other comprehensive income (loss) | 60 | (73 | ) | 58 | ||||||||
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| |||||||
Comprehensive income | 2,803 | 3,359 | 2,754 | |||||||||
Comprehensive income attributable to noncontrolling interests | 527 | 542 | 567 | |||||||||
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Comprehensive income attributable to HCA Healthcare, Inc. | $ | 2,276 | $ | 2,817 | $ | 2,187 | ||||||
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2019 | 2018 | 2017 | ||||||||||
Net income | $ | 4,145 | $ | 4,389 | $ | 2,743 | ||||||
Other comprehensive income (loss) before taxes: | ||||||||||||
Foreign currency translation | 5 | (71 | ) | 97 | ||||||||
Unrealized gains (losses) on available-for-sale securities | 15 | (7 | ) | 1 | ||||||||
Realized gains included in other operating expenses | — | — | (2 | ) | ||||||||
15 | (7 | ) | (1 | ) | ||||||||
Defined benefit plans | (63 | ) | 44 | (43 | ) | |||||||
Pension costs included in salaries and benefits | 13 | 21 | 18 | |||||||||
(50 | ) | 65 | (25 | ) | ||||||||
Change in fair value of derivative financial instruments | (50 | ) | 23 | 11 | ||||||||
Interest (benefits) costs included in interest expense | (17 | ) | (10 | ) | 20 | |||||||
(67 | ) | 13 | 31 | |||||||||
Other comprehensive (loss) income before taxes | (97 | ) | — | 102 | ||||||||
Income taxes (benefits) related to other comprehensive income items | (18 | ) | 8 | 42 | ||||||||
Other comprehensive (loss) income | (79 | ) | (8 | ) | 60 | |||||||
Comprehensive income | 4,066 | 4,381 | 2,803 | |||||||||
Comprehensive income attributable to noncontrolling interests | 640 | 602 | 527 | |||||||||
Comprehensive income attributable to HCA Healthcare, Inc. | $ | 3,426 | $ | 3,779 | $ | 2,276 | ||||||
2018
2017 | 2016 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 732 | $ | 646 | ||||
Accounts receivable, less allowance for doubtful accounts of $5,488 and $4,988 | 6,501 | 5,826 | ||||||
Inventories | 1,573 | 1,503 | ||||||
Other | 1,171 | 1,111 | ||||||
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9,977 | 9,086 | |||||||
Property and equipment, at cost: | ||||||||
Land | 1,746 | 1,611 | ||||||
Buildings | 14,249 | 13,546 | ||||||
Equipment | 22,168 | 20,580 | ||||||
Construction in progress | 1,921 | 1,318 | ||||||
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40,084 | 37,055 | |||||||
Accumulated depreciation | (22,189 | ) | (20,703 | ) | ||||
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| |||||
17,895 | 16,352 | |||||||
Investments of insurance subsidiaries | 418 | 336 | ||||||
Investments in and advances to affiliates | 199 | 206 | ||||||
Goodwill and other intangible assets | 7,394 | 6,704 | ||||||
Other | 710 | 1,074 | ||||||
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| |||||
$ | 36,593 | $ | 33,758 | |||||
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LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 2,606 | $ | 2,318 | ||||
Accrued salaries | 1,369 | 1,265 | ||||||
Other accrued expenses | 1,983 | 2,035 | ||||||
Long-term debt due within one year | 200 | 216 | ||||||
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| |||||
6,158 | 5,834 | |||||||
Long-term debt, less net debt issuance costs of $164 and $170 | 32,858 | 31,160 | ||||||
Professional liability risks | 1,198 | 1,148 | ||||||
Income taxes and other liabilities | 1,374 | 1,249 | ||||||
Stockholders’ deficit: | ||||||||
Common stock $0.01 par; authorized 1,800,000,000 shares; outstanding 350,091,600 shares—2017 and 370,535,900 shares—2016 | 4 | 4 | ||||||
Accumulated other comprehensive loss | (278 | ) | (338 | ) | ||||
Retained deficit | (6,532 | ) | (6,968 | ) | ||||
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| |||||
Stockholders’ deficit attributable to HCA Healthcare, Inc. | (6,806 | ) | (7,302 | ) | ||||
Noncontrolling interests | 1,811 | 1,669 | ||||||
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| |||||
(4,995 | ) | (5,633 | ) | |||||
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$ | 36,593 | $ | 33,758 | |||||
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|
2019 | 2018 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 621 | $ | 502 | ||||
Accounts receivable | 7,380 | 6,789 | ||||||
Inventories | 1,849 | 1,732 | ||||||
Other | 1,346 | 1,190 | ||||||
11,196 | 10,213 | |||||||
Property and equipment, at cost: | ||||||||
Land | 2,178 | 1,944 | ||||||
Buildings | 17,669 | 15,659 | ||||||
Equipment | 25,756 | 23,577 | ||||||
Construction in progress | 1,632 | 1,785 | ||||||
47,235 | 42,965 | |||||||
Accumulated depreciation | (24,520 | ) | (23,208 | ) | ||||
22,715 | 19,757 | |||||||
Investments of insurance subsidiaries | 315 | 362 | ||||||
Investments in and advances to affiliates | 249 | 232 | ||||||
Goodwill and other intangible assets | 8,269 | 7,953 | ||||||
Right-of-use operating lease assets | 1,834 | — | ||||||
Other | 480 | 690 | ||||||
$ | 45,058 | $ | 39,207 | |||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 2,905 | $ | 2,577 | ||||
Accrued salaries | 1,775 | 1,580 | ||||||
Other accrued expenses | 2,932 | 2,624 | ||||||
Long-term debt due within one year | 145 | 788 | ||||||
7,757 | 7,569 | |||||||
Long-term debt, less debt issuance costs and discounts of $ 239 and $157 | 33,577 | 32,033 | ||||||
Professional liability risks | 1,370 | 1,275 | ||||||
Right-of-use operating lease obligations | 1,499 | — | ||||||
Income taxes and other liabilities | 1,420 | 1,248 | ||||||
Stockholders’ deficit: | ||||||||
Common stock $ 0.01 par; authorized1,800,000,000 338,445,600 shares — 2019 and342,895,200 shares — 2018 | 3 | 3 | ||||||
Accumulated other comprehensive loss | (460 | ) | (381 | ) | ||||
Retained deficit | (2,351 | ) | (4,572 | ) | ||||
Stockholders’ deficit attributable to HCA Healthcare, Inc. | (2,808 | ) | (4,950 | ) | ||||
Noncontrolling interests | 2,243 | 2,032 | ||||||
(565 | ) | (2,918 | ) | |||||
$ | 45,058 | $ | 39,207 | |||||
2017
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, 2014 | 420.478 | $ | 4 | $ | — | $ | (323 | ) | $ | (7,575 | ) | $ | 1,396 | $ | (6,498 | ) | ||||||||||||
Comprehensive income | 58 | 2,129 | 567 | 2,754 | ||||||||||||||||||||||||
Repurchase of common stock | (31.991 | ) | (505 | ) | (1,892 | ) | (2,397 | ) | ||||||||||||||||||||
Share-based benefit plans | 10.252 | 523 | 523 | |||||||||||||||||||||||||
Distributions | (495 | ) | (495 | ) | ||||||||||||||||||||||||
Acquisition of entities with noncontrolling interests | 85 | 85 | ||||||||||||||||||||||||||
Other | (18 | ) | (18 | ) | ||||||||||||||||||||||||
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Balances, December 31, 2015 | 398.739 | 4 | — | (265 | ) | (7,338 | ) | 1,553 | (6,046 | ) | ||||||||||||||||||
Comprehensive income (loss) | (73 | ) | 2,890 | 542 | 3,359 | |||||||||||||||||||||||
Repurchase of common stock | (36.325 | ) | (231 | ) | (2,520 | ) | (2,751 | ) | ||||||||||||||||||||
Share-based benefit plans | 8.122 | 233 | 233 | |||||||||||||||||||||||||
Distributions | (434 | ) | (434 | ) | ||||||||||||||||||||||||
Other | (2 | ) | 8 | 6 | ||||||||||||||||||||||||
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Balances, December 31, 2016 | 370.536 | 4 | — | (338 | ) | (6,968 | ) | 1,669 | (5,633 | ) | ||||||||||||||||||
Comprehensive income | 60 | 2,216 | 527 | 2,803 | ||||||||||||||||||||||||
Repurchase of common stock | (25.092 | ) | (271 | ) | (1,780 | ) | (2,051 | ) | ||||||||||||||||||||
Share-based benefit plans | 4.648 | 281 | 281 | |||||||||||||||||||||||||
Distributions | (448 | ) | (448 | ) | ||||||||||||||||||||||||
Acquisition of entities with noncontrolling interests | 63 | 63 | ||||||||||||||||||||||||||
Other | (10 | ) | (10 | ) | ||||||||||||||||||||||||
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Balances, December 31, 2017 | 350.092 | $ | 4 | $ | — | $ | (278 | ) | $ | (6,532 | ) | $ | 1,811 | $ | (4,995 | ) | ||||||||||||
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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, 2016 | 370.536 | $ | 4 | $ | — | $ | (338 | ) | $ | (6,968 | ) | $ | 1,669 | $ | (5,633 | ) | ||||||||||||
Comprehensive income | 60 | 2,216 | 527 | 2,803 | ||||||||||||||||||||||||
Repurchase of common stock | (25.092 | ) | (271 | ) | (1,780 | ) | (2,051 | ) | ||||||||||||||||||||
Share-based benefit plans | 4.648 | 281 | 281 | |||||||||||||||||||||||||
Distributions | (448 | ) | (448 | ) | ||||||||||||||||||||||||
Other | (10 | ) | 63 | 53 | ||||||||||||||||||||||||
Balances, December 31, 2017 | 350.092 | 4 | — | (278 | ) | (6,532 | ) | 1,811 | (4,995 | ) | ||||||||||||||||||
Comprehensive income (loss) | (8 | ) | 3,787 | 602 | 4,381 | |||||||||||||||||||||||
Repurchase of common stock | (14.070 | ) | (1 | ) | (103 | ) | (1,426 | ) | (1,530 | ) | ||||||||||||||||||
Share-based benefit plans | 6.873 | 115 | 115 | |||||||||||||||||||||||||
Cash dividends declared ($ 1.40 share) | (496 | ) | (496 | ) | ||||||||||||||||||||||||
Distributions | (441 | ) | (441 | ) | ||||||||||||||||||||||||
Reclassification of stranded tax effects | (95 | ) | 95 | — | ||||||||||||||||||||||||
Other | (12 | ) | 60 | 48 | ||||||||||||||||||||||||
Balances, December 31, 2018 | 342.895 | 3 | — | (381 | ) | (4,572 | ) | 2,032 | (2,918 | ) | ||||||||||||||||||
Comprehensive income (loss) | (79 | ) | 3,505 | 640 | 4,066 | |||||||||||||||||||||||
Repurchase of common stock | (7.949 | ) | (302 | ) | (729 | ) | (1,031 | ) | ||||||||||||||||||||
Share-based benefit plans | 3.500 | 313 | 313 | |||||||||||||||||||||||||
Cash dividends declared ($ 1.60 share) | (555 | ) | (555 | ) | ||||||||||||||||||||||||
Distributions | (542 | ) | (542 | ) | ||||||||||||||||||||||||
Other | (11 | ) | 113 | 102 | ||||||||||||||||||||||||
Balances, December 31, 2019 | 338.446 | $ | 3 | $ | — | $ | (460 | ) | $ | (2,351 | ) | $ | 2,243 | $ | (565 | ) | ||||||||||||
2017
2017 | 2016 | 2015 | ||||||||||
Cash flows from operating activities: | ||||||||||||
Net income | $ | 2,743 | $ | 3,432 | $ | 2,696 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Increase (decrease) in cash from operating assets and liabilities: | ||||||||||||
Accounts receivable | (4,640 | ) | (3,247 | ) | (4,114 | ) | ||||||
Provision for doubtful accounts | 4,039 | 3,257 | 3,913 | |||||||||
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Accounts receivable, net | (601 | ) | 10 | (201 | ) | |||||||
Inventories and other assets | (69 | ) | (112 | ) | (314 | ) | ||||||
Accounts payable and accrued expenses | 374 | 144 | 192 | |||||||||
Depreciation and amortization | 2,131 | 1,966 | 1,904 | |||||||||
Income taxes | 433 | 123 | (160 | ) | ||||||||
Losses (gains) on sales of facilities | (8 | ) | (23 | ) | 5 | |||||||
Losses on retirement of debt | 39 | 4 | 135 | |||||||||
Legal claim costs (benefits) | — | (246 | ) | 149 | ||||||||
Amortization of debt issuance costs | 31 | 34 | 35 | |||||||||
Share-based compensation | 270 | 251 | 239 | |||||||||
Other | 83 | 70 | 54 | |||||||||
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Net cash provided by operating activities | 5,426 | 5,653 | 4,734 | |||||||||
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Cash flows from investing activities: | ||||||||||||
Purchase of property and equipment | (3,015 | ) | (2,760 | ) | (2,375 | ) | ||||||
Acquisition of hospitals and health care entities | (1,212 | ) | (576 | ) | (351 | ) | ||||||
Disposal of hospitals and health care entities | 25 | 26 | 73 | |||||||||
Change in investments | (73 | ) | 64 | 63 | ||||||||
Other | (4 | ) | 6 | 7 | ||||||||
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Net cash used in investing activities | (4,279 | ) | (3,240 | ) | (2,583 | ) | ||||||
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Cash flows from financing activities: | ||||||||||||
Issuances of long-term debt | 1,502 | 5,400 | 5,548 | |||||||||
Net change in revolving bank credit facilities | 760 | (110 | ) | 150 | ||||||||
Repayment of long-term debt | (753 | ) | (4,475 | ) | (4,920 | ) | ||||||
Distributions to noncontrolling interests | (448 | ) | (434 | ) | (495 | ) | ||||||
Payment of debt issuance costs | (26 | ) | (40 | ) | (50 | ) | ||||||
Repurchases of common stock | (2,051 | ) | (2,751 | ) | (2,397 | ) | ||||||
Other | (45 | ) | (98 | ) | 188 | |||||||
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Net cash used in financing activities | (1,061 | ) | (2,508 | ) | (1,976 | ) | ||||||
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Change in cash and cash equivalents | 86 | (95 | ) | 175 | ||||||||
Cash and cash equivalents at beginning of period | 646 | 741 | 566 | |||||||||
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Cash and cash equivalents at end of period | $ | 732 | $ | 646 | $ | 741 | ||||||
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Interest payments | $ | 1,700 | $ | 1,666 | $ | 1,650 | ||||||
Income tax payments, net | $ | 1,205 | $ | 1,255 | $ | 1,186 |
2019 | 2018 | 2017 | ||||||||||
Cash flows from operating activities: | ||||||||||||
Net income | $ | 4,145 | $ | 4,389 | $ | 2,743 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Increase (decrease) in cash from operating assets and liabilities: | ||||||||||||
Accounts receivable | (326 | ) | (423 | ) | (601 | ) | ||||||
Inventories and other assets | (158 | ) | (242 | ) | (69 | ) | ||||||
Accounts payable and accrued expenses | 396 | 698 | 374 | |||||||||
Depreciation and amortization | 2,596 | 2,278 | 2,131 | |||||||||
Income taxes | 250 | 74 | 433 | |||||||||
Gains on sales of facilities | (18 | ) | (428 | ) | (8 | ) | ||||||
Losses on retirement of debt | 211 | 9 | 39 | |||||||||
Amortization of debt issuance costs | 30 | 31 | 31 | |||||||||
Share-based compensation | 347 | 268 | 270 | |||||||||
Other | 129 | 107 | 83 | |||||||||
Net cash provided by operating activities | 7,602 | 6,761 | 5,426 | |||||||||
Cash flows from investing activities: | ||||||||||||
Purchase of property and equipment | (4,158 | ) | (3,573 | ) | (3,015 | ) | ||||||
Acquisition of hospitals and health care entities | (1,682 | ) | (1,253 | ) | (1,212 | ) | ||||||
Sales of hospitals and health care entities | 61 | 808 | 25 | |||||||||
Change in investments | 25 | 57 | (73 | ) | ||||||||
Other | 34 | 60 | (4 | ) | ||||||||
Net cash used in investing activities | (5,720 | ) | (3,901 | ) | (4,279 | ) | ||||||
Cash flows from financing activities: | ||||||||||||
Issuances of long-term debt | 6,451 | 2,000 | 1,502 | |||||||||
Net change in revolving bank credit facilities | (560 | ) | (640 | ) | 760 | |||||||
Repayment of long-term debt | (5,324 | ) | (1,704 | ) | (753 | ) | ||||||
Distributions to noncontrolling interests | (542 | ) | (441 | ) | (448 | ) | ||||||
Payment of debt issuance costs | (73 | ) | (25 | ) | (26 | ) | ||||||
Payment of dividends | (550 | ) | (487 | ) | — | |||||||
Repurchases of common stock | (1,031 | ) | (1,530 | ) | (2,051 | ) | ||||||
Other | (142 | ) | (248 | ) | (45 | ) | ||||||
Net cash used in financing activities | (1,771 | ) | (3,075 | ) | (1,061 | ) | ||||||
Effect of exchange rate changes on cash and cash equivalents | 8 | (15 | ) | — | ||||||||
Change in cash and cash equivalents | 119 | (230 | ) | 86 | ||||||||
Cash and cash equivalents at beginning of period | 502 | 732 | 646 | |||||||||
Cash and cash equivalents at end of period | $ | 621 | $ | 502 | $ | 732 | ||||||
Interest payments | $ | 1,914 | $ | 1,744 | $ | 1,700 | ||||||
Income tax payments, net | $ | 849 | $ | 872 | $ | 1,205 |
HCA HEALTHCARE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 1 — ACCOUNTING POLICIES (continued)
Revenues consist primarily of net patient service
Years Ended December 31, | ||||||||||||||||||||||||
2017 | Ratio | 2016 | Ratio | 2015 | Ratio | |||||||||||||||||||
Medicare | $ | 9,483 | 21.7 | % | $ | 8,895 | 21.4 | % | $ | 8,654 | 21.8 | % | ||||||||||||
Managed Medicare | 4,788 | 11.0 | 4,355 | 10.5 | 4,133 | 10.4 | ||||||||||||||||||
Medicaid | 1,631 | 3.7 | 1,597 | 3.8 | 1,705 | 4.3 | ||||||||||||||||||
Managed Medicaid | 2,349 | 5.4 | 2,478 | 6.0 | 2,234 | 5.6 | ||||||||||||||||||
Managed care and other insurers | 24,813 | 56.9 | 23,441 | 56.5 | 21,882 | 55.2 | ||||||||||||||||||
International (managed care and other insurers) | 1,097 | 2.5 | 1,195 | 2.9 | 1,295 | 3.3 | ||||||||||||||||||
Other | 3,492 | 8.0 | 2,786 | 6.7 | 3,688 | 9.3 | ||||||||||||||||||
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Revenues before provision for doubtful accounts | 47,653 | 109.2 | 44,747 | 107.8 | 43,591 | 109.9 | ||||||||||||||||||
Provision for doubtful accounts | (4,039 | ) | (9.2 | ) | (3,257 | ) | (7.8 | ) | (3,913 | ) | (9.9 | ) | ||||||||||||
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Revenues | $ | 43,614 | 100.0 | % | $ | 41,490 | 100.0 | % | $ | 39,678 | 100.0 | % | ||||||||||||
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Years Ended December 31, | ||||||||||||||||||||||||
2019 | Ratio | 2018 | Ratio | 2017 | Ratio | |||||||||||||||||||
Medicare | $ | 10,798 | 21.0 | % | $ | 9,831 | 21.1 | % | $ | 9,285 | 21.3 | % | ||||||||||||
Managed Medicare | 6,452 | 12.6 | 5,497 | 11.8 | 4,680 | 10.7 | ||||||||||||||||||
Medicaid | 1,572 | 3.1 | 1,358 | 2.9 | 1,316 | 3.0 | ||||||||||||||||||
Managed Medicaid | 2,450 | 4.8 | 2,403 | 5.1 | 2,165 | 5.0 | ||||||||||||||||||
Managed care and other insurers | 26,544 | 51.6 | 24,467 | 52.4 | 23,342 | 53.5 | ||||||||||||||||||
International (managed care and other | 1,162 | 2.3 | 1,156 | 2.5 | 1,097 | 2.5 | ||||||||||||||||||
Other | 2,358 | 4.6 | 1,965 | 4.2 | 1,729 | 4.0 | ||||||||||||||||||
Revenues | $ | 51,336 | 100.0 | % | $ | 46,677 | 100.0 | % | $ | 43,614 | 100.0 | % | ||||||||||||
HCA HEALTHCARE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 1 — ACCOUNTING POLICIES (continued)
Revenues (continued)
individual’s ability to pay for treatment. Federal and state laws and regulations require, and our commitment to providing quality patient care encourages, us to provide services to patients who are financially unable to pay for the health care services they receive. Prior
2017 | Ratio | 2016 | Ratio | 2015 | Ratio | |||||||||||||||||||
Charity care | $ | 4,861 | 21 | % | $ | 4,151 | 20 | % | $ | 3,682 | 20 | % | ||||||||||||
Uninsured discounts | 14,520 | 62 | 13,047 | 64 | 10,692 | 59 | ||||||||||||||||||
Provision for doubtful accounts | 4,039 | 17 | 3,257 | 16 | 3,913 | 21 | ||||||||||||||||||
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Total uncompensated care | $ | 23,420 | 100 | % | $ | 20,455 | 100 | % | $ | 18,287 | 100 | % | ||||||||||||
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implicit price concessions. A summary of the estimated cost of total uncompensated care for the years ended December 31, follows (dollars in millions):
2017 | 2016 | 2015 | ||||||||||
Patient care costs (salaries and benefits, supplies, other operating expenses and depreciation and amortization) | $ | 37,557 | $ | 35,304 | $ | 33,760 | ||||||
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Cost-to-charges ratio (patient care costs as percentage of gross patient charges) | 12.9 | % | 13.5 | % | 14.5 | % | ||||||
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Total uncompensated care | $ | 23,420 | $ | 20,455 | $ | 18,287 | ||||||
Multiply by thecost-to-charges ratio | 12.9 | % | 13.5 | % | 14.5 | % | ||||||
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Estimated cost of total uncompensated care | $ | 3,021 | $ | 2,761 | $ | 2,652 | ||||||
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2019 | 2018 | 2017 | ||||||||||
Patient care costs (salaries and benefits, supplies, other operating expenses and depreciation and amortization) | $ | 44,118 | $ | 40,035 | $ | 37,557 | ||||||
Cost-to-charges ratio (patient care costs as percentage of gross patient charges) | 12.0 | % | 12.4 | % | 12.9 | % | ||||||
Total uncompensated care | $ | 31,105 | $ | 26,757 | $ | 23,420 | ||||||
Multiply by the cost-to-charges ratio | 12.0 | % | 12.4 | % | 12.9 | % | ||||||
Estimated cost of total uncompensated care | $ | 3,733 | $ | 3,318 | $ | 3,021 | ||||||
HCA HEALTHCARE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTE 1 — ACCOUNTING POLICIES (continued)
Recent Pronouncements
In May 2014, the Financial Accounting Standards Board (“FASB”) and the International Accounting Standards Board issued a final, converged, principles-based standard on revenue recognition. Companies across all industries will use a five-step model to recognize revenue from customer contracts. The new standard, which replaces nearly all existing revenue recognition guidance, will require significant management judgments and change the way many companies recognize revenue in their financial statements. In July 2015, the FASB decided to defer the effective date of the new revenue standard by one year to annual and interim periods beginning after December 15, 2017 for public entities and permit entities to adopt one year earlier if they choose. We believe the most significant impact of adopting the new standard will be to the presentation of our income statement where the provision for doubtful accounts will be recorded as a direct reduction to revenues and will not be presented as a separate line item. We expect to adopt the new standard using the full retrospective application, and we do not believe the adoption will have a significant impact on our recognition of net revenues or related disclosures for any period.
In February 2016, the FASB issued Accounting Standards Update2016-02,Leases (“ASU2016-02”), which requires lessees to recognize assets and liabilities for most leases. ASU2016-02 is effective for public business entities for annual and interim periods beginning after December 15, 2018. Early adoption is permitted. We are continuing to evaluate the provisions of ASU2016-02 (and developments concerning its transition provision options) to determine how our financial statements will be affected, and we believe the primary effect of adopting the new standard will be to recordright-of-use assets and obligations for our leases currently classified as operating leases.
HCA HEALTHCARE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 1 — ACCOUNTING POLICIES (continued)
Accounts Receivable (continued)
Additions to the allowance for doubtful accounts are made by means of the provision for doubtful accounts. Accounts written off as uncollectible are deducted from the allowance for doubtful accounts and subsequent recoveries are added. The amount of the provision for doubtful accounts is based upon management’s assessment of historical and expected net collections, business and economic conditions, trends in federal, state and private employer health care coverage and other collection indicators. The provision for doubtful accounts and the allowance for doubtful accounts relate to “uninsured” amounts due directly from patients (including copayment and deductible amounts from patients who have health care coverage). Accounts are written off when all reasonable internal and external collection efforts have been performed. We consider the return of an account from the secondary collection agency to be the culmination of our reasonable collection efforts and the timing basis for writing off the account balance. Writeoffs are based upon specific identification and the writeoff process requires a writeoff adjustment entry to the patient accounting system. Management relies on the results of detailed reviews of historical writeoffs and recoveries at facilities that represent a majority of our revenues and accounts receivable (the “hindsight analysis”) as a primary source of information to utilize in estimating the collectibility of our accounts receivable. We perform the hindsight analysis quarterly, utilizing rolling twelve-months accounts receivable collection and writeoff data. At December 31, 2017 and 2016, the allowance for doubtful accounts represented 100% and 98%, respectively, of the $5.488 billion and $5.116 billion, respectively, patient due accounts receivable balance. The patient due accounts receivable balance represents the estimated uninsured portion of our accounts receivable. The estimated uninsured portion of Medicaid pending and uninsured discount pending accounts is included in our patient due accounts receivable balance. Days revenues in accounts receivable were 52 days, 50 days, 51 days and 5352 days at December 31, 2017, 20162019, 2018 and 2015,2017, respectively. Changes in general economic conditions, patient accounting service center operations, payer mix, or federal or state governmental health care coverage could affect our collection of accounts receivable, cash flows and results of operations.
HCA HEALTHCARE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 1 — ACCOUNTING POLICIES (continued)
2019, 2018 or 2017.
HCA HEALTHCARE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 1 — ACCOUNTING POLICIES (continued)
and Discounts
HCA HEALTHCARE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 1 — ACCOUNTING POLICIES (continued)
Financial Instruments (continued)
sheets at fair value. Changes in the fair value of derivatives are recognized periodically in stockholders’ equity, as a component of other comprehensive income (loss), provided the derivative financial instrument qualifies for hedge accounting. Gains and losses on derivatives designated as cash flow hedges, to the extent they are effective, are recorded in other comprehensive income (loss), and subsequently reclassified to earnings to offset the impact of the forecasted transactions when they occur. In the event the forecasted transaction to which a cash flow hedge relates is no longer likely, the amount in other comprehensive income (loss) is recognized in earnings and generally the derivative is terminated.
HCA HEALTHCARE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 2 — SHARE-BASED COMPENSATION (continued)
2017 | 2016 | 2015 | ||||||||||
Risk-free interest rate | 2.13 | % | 1.70 | % | 1.59 | % | ||||||
Expected volatility | 31 | % | 36 | % | 36 | % | ||||||
Expected life, in years | 6.17 | 6.25 | 6.25 | |||||||||
Expected dividend yield | — | — | — |
2019 | 2018 | 2017 | ||||||||||
Risk-free interest rate | 2.50 | % | 2.62 | % | 2.13 | % | ||||||
Expected volatility | 27 | % | 29 | % | 31 | % | ||||||
Expected life, in years | 6.18 | 6.15 | 6.17 | |||||||||
Expected dividend yield | 1.16 | % | 1.37 | % | — |
Time Stock Options and SARs | Performance Stock Options and SARs | Total Stock Options and SARs | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term | Aggregate Intrinsic Value (dollars in millions) | |||||||||||||||||||
Options and SARs outstanding, December 31, 2014 | 15,051 | 14,744 | 29,795 | $ | 21.39 | |||||||||||||||||||
Granted | 1,746 | — | 1,746 | 69.16 | ||||||||||||||||||||
Exercised | (4,093 | ) | (3,988 | ) | (8,081 | ) | 12.77 | |||||||||||||||||
Cancelled | (539 | ) | (329 | ) | (868 | ) | 32.59 | |||||||||||||||||
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Options and SARs outstanding, December 31, 2015 | 12,165 | 10,427 | 22,592 | 27.73 | ||||||||||||||||||||
Granted | 1,601 | — | 1,601 | 69.96 | ||||||||||||||||||||
Exercised | (2,521 | ) | (4,171 | ) | (6,692 | ) | 15.85 | |||||||||||||||||
Cancelled | (309 | ) | (126 | ) | (435 | ) | 55.17 | |||||||||||||||||
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Options and SARs outstanding, December 31, 2016 | 10,936 | 6,130 | 17,066 | 35.65 | ||||||||||||||||||||
Granted | 1,879 | — | 1,879 | 81.83 | ||||||||||||||||||||
Exercised | (1,549 | ) | (1,366 | ) | (2,915 | ) | 21.49 | |||||||||||||||||
Cancelled | (110 | ) | (178 | ) | (288 | ) | 52.92 | |||||||||||||||||
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Options and SARs outstanding, December 31, 2017 | 11,156 | 4,586 | 15,742 | 43.47 | 5.4 years | $ | 699 | |||||||||||||||||
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Options and SARs exercisable, December 31, 2017 | 7,060 | 4,224 | 11,284 | $ | 32.49 | 4.4 years | $ | 625 |
Time Stock Options and SARs | Performance Stock Options and SARs | Total Stock Options and SARs | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term | Aggregate Intrinsic Value (dollars in millions) | |||||||||||||||||||
Options and SARs outstanding, December 31, 2016 | 10,936 | 6,130 | 17,066 | $ | 35.65 | |||||||||||||||||||
Granted | 1,879 | — | 1,879 | 81.83 | ||||||||||||||||||||
Exercised | (1,549 | ) | (1,366 | ) | (2,915 | ) | 21.49 | |||||||||||||||||
Cancelled | (110 | ) | (178 | ) | (288 | ) | 52.92 | |||||||||||||||||
Options and SARs outstanding, December 31, 2017 | 11,156 | 4,586 | 15,742 | 43.47 | ||||||||||||||||||||
Granted | 2,342 | — | 2,342 | 101.96 | ||||||||||||||||||||
Exercised | (3,917 | ) | (1,774 | ) | (5,691 | ) | 27.86 | |||||||||||||||||
Cancelled | (221 | ) | (145 | ) | (366 | ) | 68.43 | |||||||||||||||||
Options and SARs outstanding, December 31, 2018 | 9,360 | 2,667 | 12,027 | 61.49 | ||||||||||||||||||||
Granted | 1,349 | — | 1,349 | 138.31 | ||||||||||||||||||||
Exercised | (1,137 | ) | (523 | ) | (1,660 | ) | 44.45 | |||||||||||||||||
Cancelled | (522 | ) | — | (522 | ) | 93.26 | ||||||||||||||||||
Options and SARs outstanding, December 31, 2019 | 9,050 | 2,144 | 11,194 | $ | 71.79 | 5.7 y ears | $ | 851 | ||||||||||||||||
Options and SARs exercisable, December 31, 2019 | 5,273 | 2,144 | 7,417 | $ | 53.09 | 4.4 years | $ | 703 |
Time RSUs | Performance RSUs | PSUs | Total RSUs and PSUs | Weighted Average Grant Date Fair Value | ||||||||||||||||
RSUs and PSUs outstanding, December 31, 2014 | 5,895 | 2,781 | — | 8,676 | $ | 39.89 | ||||||||||||||
Granted | 1,694 | — | 1,411 | 3,105 | 69.43 | |||||||||||||||
Vested | (1,953 | ) | (928 | ) | — | (2,881 | ) | 37.61 | ||||||||||||
Cancelled | (334 | ) | (113 | ) | (40 | ) | (487 | ) | 47.26 | |||||||||||
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RSUs and PSUs outstanding, December 31, 2015 | 5,302 | 1,740 | 1,371 | 8,413 | 51.15 | |||||||||||||||
Granted | 1,450 | — | 1,178 | 2,628 | 69.95 | |||||||||||||||
Vested | (2,242 | ) | (870 | ) | — | (3,112 | ) | 41.71 | ||||||||||||
Cancelled | (399 | ) | (80 | ) | (163 | ) | (642 | ) | 59.66 | |||||||||||
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RSUs and PSUs outstanding, December 31, 2016 | 4,111 | 790 | 2,386 | 7,287 | 61.21 | |||||||||||||||
Granted | 1,484 | — | 1,304 | 2,788 | 81.90 | |||||||||||||||
Vested | (1,824 | ) | (430 | ) | — | (2,254 | ) | 51.20 | ||||||||||||
Cancelled | (306 | ) | (133 | ) | (128 | ) | (567 | ) | 64.06 | |||||||||||
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RSUs and PSUs outstanding, December 31, 2017 | 3,465 | 227 | 3,562 | 7,254 | 72.05 | |||||||||||||||
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Time RSUs | Performance RSUs | PSUs | Total RSUs and PSUs | Weighted Average Grant Date Fair Value | ||||||||||||||||
RSUs and PSUs outstanding, December 31, 2016 | 4,111 | 790 | 2,386 | 7,287 | $ | 61.21 | ||||||||||||||
Granted | 1,484 | — | 1,304 | 2,788 | 81.90 | |||||||||||||||
Vested | (1,824 | ) | (430 | ) | — | (2,254 | ) | 51.20 | ||||||||||||
Cancelled | (306 | ) | (133 | ) | (128 | ) | (567 | ) | 64.06 | |||||||||||
RSUs and PSUs outstanding, December 31, 2017 | 3,465 | 227 | 3,562 | 7,254 | 72.05 | |||||||||||||||
Granted | 1,464 | — | 1,261 | 2,725 | 101.85 | |||||||||||||||
Performance adjustment | — | — | 1,250 | 1,250 | 69.27 | |||||||||||||||
Vested | (1,487 | ) | (136 | ) | (2,500 | ) | (4,123 | ) | 67.33 | |||||||||||
Cancelled | (319 | ) | (91 | ) | (151 | ) | (561 | ) | 78.82 | |||||||||||
RSUs and PSUs outstanding, December 31, 2018 | 3,123 | — | 3,422 | 6,545 | 86.32 | |||||||||||||||
Granted | 973 | — | 796 | 1,769 | 138.45 | |||||||||||||||
Performance adjustment | — | — | 227 | 227 | 69.94 | |||||||||||||||
Vested | (1,216 | ) | — | (1,251 | ) | (2,467 | ) | 75.97 | ||||||||||||
Cancelled | (260 | ) | — | (159 | ) | (419 | ) | 103.27 | ||||||||||||
RSUs and PSUs outstanding, December 31, 2019 | 2,620 | — | 3,035 | 5,655 | $ | 105.23 | ||||||||||||||
HCA HEALTHCARE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2017 | 2016 | 2015 | ||||||||||
Current: | ||||||||||||
Federal | $ | 1,067 | $ | 1,129 | $ | 1,259 | ||||||
State | 120 | 125 | 119 | |||||||||
Foreign | 19 | 37 | 40 | |||||||||
Deferred: | ||||||||||||
Federal | 423 | 75 | (163 | ) | ||||||||
State | 3 | (5 | ) | (27 | ) | |||||||
Foreign | 6 | 17 | 33 | |||||||||
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$ | 1,638 | $ | 1,378 | $ | 1,261 | |||||||
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Our provision for income taxes for the year ended December 31, 2017 included an increase of $301 million related to the estimated impact of tax rate changes under the
2019 | 2018 | 2017 | ||||||||||
Current: | ||||||||||||
Federal | $ | 670 | $ | 759 | $ | 1,067 | ||||||
State | 134 | 149 | 120 | |||||||||
Foreign | 17 | 23 | 19 | |||||||||
Deferred: | ||||||||||||
Federal | 254 | 9 | 423 | |||||||||
State | 29 | 13 | 3 | |||||||||
Foreign | (5 | ) | (7 | ) | 6 | |||||||
$ | 1,099 | $ | 946 | $ | 1,638 | |||||||
The Tax Act was enacted on December 22, 2017. The Tax Act significantly revisesrevised U.S. corporate income taxes, including lowering the statutory corporate tax rate from 35% to 21% beginning in 2018, and imposing a mandatory
A2017, a provisional amount of $301 million related to the remeasurement of our deferred tax assets and liabilities primarily based on the lower tax rates atfor which they are expectedwe were then able to reverse in the future,make reasonable estimates was recorded as a component of our provision for income taxes for the year ended December 31, 2017.
Wetaxes. During 2017 we also reclassified a provisional amount of $127 million from our deferred tax liabilities for the
As we complete our analysis of the Tax Act, collect and prepare necessary data, and interpret any additional guidance issued by federal and state taxing authorities or other standard-setting bodies, we may make adjustments Adjustments during 2018 to the provisional amounts and record additional amounts for those federal, state, and foreign tax assets and liabilities for whichrecorded in 2017 were not significant.
2017 | 2016 | 2015 | ||||||||||
Federal statutory rate | 35.0 | % | 35.0 | % | 35.0 | % | ||||||
State income taxes, net of federal tax benefit | 2.2 | 2.1 | 1.6 | |||||||||
Change in liability for uncertain tax positions | — | (1.0 | ) | 0.2 | ||||||||
Tax benefit from settlements of employee equity awards | (2.0 | ) | (3.6 | ) | — | |||||||
Impact of rate change on deferred tax balances | 7.8 | — | — | |||||||||
Other items, net | (0.5 | ) | (0.2 | ) | 0.4 | |||||||
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Effective income tax rate on income applicable to HCA Healthcare, Inc. | 42.5 | 32.3 | 37.2 | |||||||||
Income attributable to noncontrolling interests from consolidated partnerships | (5.1 | ) | (3.6 | ) | (5.3 | ) | ||||||
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Effective income tax rate on income before income taxes | 37.4 | % | 28.7 | % | 31.9 | % | ||||||
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2019 | 2018 | 2017 | ||||||||||
Federal statutory rate | 21.0 | % | 21.0 | % | 35.0 | % | ||||||
State income taxes, net of federal tax benefit | 2.7 | 2.9 | 2.2 | |||||||||
Change in liability for uncertain tax positions | 0.4 | (0.1 | ) | — | ||||||||
Tax benefit from settlements of employee equity awards | (1.3 | ) | (2.4 | ) | (2.0 | ) | ||||||
Impact of Tax Act on deferred tax balances | — | (1.6 | ) | 7.8 | ||||||||
Other items, net | 1.1 | 0.2 | (0.5 | ) | ||||||||
Effective income tax rate on income attributable to HCA Healthcare, Inc. | 23.9 | 20.0 | 42.5 | |||||||||
Income attributable to noncontrolling interests from consolidated partnerships | (2.9 | ) | (2.3 | ) | (5.1 | ) | ||||||
Effective income tax rate on income before income taxes | 21.0 | % | 17.7 | % | 37.4 | % | ||||||
2017 | 2016 | |||||||||||||||
Assets | Liabilities | Assets | Liabilities | |||||||||||||
Depreciation and fixed asset basis differences | $ | — | $ | 260 | $ | — | $ | 235 | ||||||||
Allowances for professional liability and other risks | 345 | — | 495 | — | ||||||||||||
Accounts receivable | 243 | — | 351 | — | ||||||||||||
Compensation | 263 | — | 359 | — | ||||||||||||
Other | 420 | 501 | 794 | 918 | ||||||||||||
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$ | 1,271 | $ | 761 | $ | 1,999 | $ | 1,153 | |||||||||
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|
|
|
|
2019 | 2018 | |||||||||||||||
Assets | Liabilities | Assets | Liabilities | |||||||||||||
Depreciation and fixed asset basis differences | $ | — | $ | 601 | $ | — | $ | 340 | ||||||||
Allowances for professional liability and other risks | 376 | — | 355 | — | ||||||||||||
Accounts receivable | 307 | — | 274 | — | ||||||||||||
Compensation | 292 | — | 256 | — | ||||||||||||
Right-of-use lease assets and obligations | 369 | 366 | — | — | ||||||||||||
Other | 461 | 538 | 424 | 491 | ||||||||||||
$ | 1,805 | $ | 1,505 | $ | 1,309 | $ | 831 | |||||||||
2017 | 2016 | |||||||
Balance at January 1 | $ | 377 | $ | 487 | ||||
Additions based on tax positions related to the current year | 40 | 11 | ||||||
Additions for tax positions of prior years | 11 | 8 | ||||||
Reductions for tax positions of prior years | (13 | ) | (18 | ) | ||||
Settlements | — | (101 | ) | |||||
Lapse of applicable statutes of limitations | (16 | ) | (10 | ) | ||||
|
|
|
| |||||
Balance at December 31 | $ | 399 | $ | 377 | ||||
|
|
|
|
2019 | 2018 | |||||||
Balance at January 1 | $ | 390 | $ | 399 | ||||
Additions based on tax positions related to the current year | 29 | 22 | ||||||
Additions for tax positions of prior years | 119 | 10 | ||||||
Reductions for tax positions of prior years | (3 | ) | (14 | ) | ||||
Settlements | — | (2 | ) | |||||
Lapse of applicable statutes of limitations | (13 | ) | (25 | ) | ||||
Balance at December 31 | $ | 522 | $ | 390 | ||||
2017 | 2016 | 2015 | ||||||||||
Net income attributable to HCA Healthcare, Inc. | $ | 2,216 | $ | 2,890 | $ | 2,129 | ||||||
Weighted average common shares outstanding | 362.305 | 383.591 | 414.193 | |||||||||
Effect of dilutive incremental shares | 9.916 | 12.260 | 12.528 | |||||||||
|
|
|
|
|
| |||||||
Shares used for diluted earnings per share | 372.221 | 395.851 | 426.721 | |||||||||
|
|
|
|
|
| |||||||
Earnings per share: | ||||||||||||
Basic earnings per share | $ | 6.12 | $ | 7.53 | $ | 5.14 | ||||||
Diluted earnings per share | $ | 5.95 | $ | 7.30 | $ | 4.99 |
2019 | 2018 | 2017 | ||||||||||
Net income attributable to HCA Healthcare, Inc. | $ | 3,505 | $ | 3,787 | $ | 2,216 | ||||||
Weighted average common shares outstanding | 341.210 | 347.297 | 362.305 | |||||||||
Effect of dilutive incremental shares | 7.016 | 8.006 | 9.916 | |||||||||
Shares used for diluted earnings per share | 348.226 | 355.303 | 372.221 | |||||||||
Earnings per share: | ||||||||||||
Basic earnings per share | $ | 10.27 | $ | 10.90 | $ | 6.12 | ||||||
Diluted earnings per share | $ | 10.07 | $ | 10.66 | $ | 5.95 |
2017 | ||||||||||||||||
Amortized Cost | Unrealized Amounts | Fair Value | ||||||||||||||
Gains | Losses | |||||||||||||||
States and municipalities debt securities | $ | 361 | $ | 10 | $ | — | $ | 371 | ||||||||
Money market funds and other | 101 | — | — | 101 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 462 | $ | 10 | $ | — | 472 | ||||||||||
|
|
|
|
|
| |||||||||||
Amounts classified as current assets | (54 | ) | ||||||||||||||
|
| |||||||||||||||
Investment carrying value | $ | 418 | ||||||||||||||
|
|
2019 | ||||||||||||||||
Amortized Cost | Unrealized Amounts | Fair Value | ||||||||||||||
Gains | Losses | |||||||||||||||
Debt securities | $ | 359 | $ | 18 | $ | — | $ | 377 | ||||||||
Money market funds and other | 85 | — | — | 85 | ||||||||||||
$ | 444 | $ | 18 | $ | — | 462 | ||||||||||
Amounts classified as current assets | (147 | ) | ||||||||||||||
Investment carrying value | $ | 315 | ||||||||||||||
2016 | ||||||||||||||||
Amortized Cost | Unrealized Amounts | Fair Value | ||||||||||||||
Gains | Losses | |||||||||||||||
States and municipalities debt securities | $ | 345 | $ | 9 | $ | (1 | ) | $ | 353 | |||||||
Money market funds and other | 29 | 3 | — | 32 | ||||||||||||
|
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|
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|
| |||||||||
$ | 374 | $ | 12 | $ | (1 | ) | 385 | |||||||||
|
|
|
|
|
| |||||||||||
Amounts classified as current assets | (49 | ) | ||||||||||||||
|
| |||||||||||||||
Investment carrying value | $ | 336 | ||||||||||||||
|
|
2018 | ||||||||||||||||
Amortized Cost | Unrealized Amounts | Fair Value | ||||||||||||||
Gains | Losses | |||||||||||||||
Debt securities | $ | 338 | $ | 5 | $ | (2 | ) | $ | 341 | |||||||
Money market funds and other | 68 | — | — | 68 | ||||||||||||
$ | 406 | $ | 5 | $ | (2 | ) | 409 | |||||||||
Amounts classified as current assets | (47 | ) | ||||||||||||||
Investment carrying value | $ | 362 | ||||||||||||||
Amortized Cost | Fair Value | |||||||
Due in one year or less | $ | 31 | $ | 31 | ||||
Due after one year through five years | 84 | 86 | ||||||
Due after five years through ten years | 187 | 194 | ||||||
Due after ten years | 59 | 60 | ||||||
|
|
|
| |||||
$ | 361 | $ | 371 | |||||
|
|
|
|
Amortized Cost | Fair Value | |||||||
Due in one year or less | $ | 9 | $ | 9 | ||||
Due after one year through five years | 85 | 88 | ||||||
Due after five years through ten years | 190 | 202 | ||||||
Due after ten years | 75 | 78 | ||||||
$ | 359 | $ | 377 | |||||
Notional Amount | Maturity Date | Fair Value | ||||||||||
Pay-fixed interest rate swaps | $ | 2,000 | December 2021 | $ | 48 | |||||||
Pay-fixed interest rate swaps | 500 | December 2022 | 2 |
Notional Amount | Maturity Date | Fair Value | ||||||||||
Pay-fixed interest rate swaps | $ | 2,000 | December 2021 | $ | 3 | |||||||
Pay-fixed interest rate swaps | 500 | December 2022 | (7 | ) |
Derivatives in Cash Flow Hedging | Amount of Gain Recognized in OCI on Derivatives, Net of Tax | Location of Loss Reclassified from Accumulated OCI into Operations | Amount of Loss Reclassified from Accumulated OCI into Operations | |||||||||
Interest rate swaps | $ | 7 | Interest expense | $ | 20 |
Derivatives in Cash Flow Hedging Relationships | Amount of Loss Recognized in OCI on Derivatives, Net of Tax | Location of Gain Reclassified from Accumulated OCI into Operations | Amount of Gain Reclassified from Accumulated OCI into Operations | |||||||||
Interest rate swaps | $ | 37 | Interest expense | $ | 17 |
HCA HEALTHCARE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTE 8 — ASSETS AND LIABILITIES MEASURED AT FAIR VALUE (continued)
Although we determined the majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with our derivatives utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by us and our counterparties. We assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions, and at December 31, 2017 and 2016, we determined the credit valuation adjustments were not significant to the overall valuation of our derivatives.
December 31, 2017 | ||||||||||||||||
Fair Value | Fair Value Measurements Using | |||||||||||||||
Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||
Assets: | ||||||||||||||||
Investments of insurance subsidiaries: | ||||||||||||||||
States and municipalities debt securities | $ | 371 | $ | — | $ | 371 | $ | — | ||||||||
Money market funds and other | 101 | 101 | — | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Investments of insurance subsidiaries | 472 | 101 | 371 | — | ||||||||||||
Less amounts classified as current assets | (54 | ) | (54 | ) | — | — | ||||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 418 | $ | 47 | $ | 371 | $ | — | |||||||||
|
|
|
|
|
|
|
| |||||||||
Interest rate swaps (Other) | $ | 50 | $ | — | $ | 50 | $ | — |
December 31, 2019 | ||||||||||||||||
Fair Value | Fair Value Measurements Using | |||||||||||||||
Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||
Assets: | ||||||||||||||||
Investments of insurance subsidiaries: | ||||||||||||||||
Debt securities | $ | 377 | $ | — | $ | 377 | $ | — | ||||||||
Money market funds and other | 85 | 85 | — | — | ||||||||||||
Investments of insurance subsidiaries | 462 | 85 | 377 | — | ||||||||||||
Less amounts classified as current assets | (147 | ) | (83 | ) | (64 | ) | — | |||||||||
$ | 315 | 2 | $ | 313 | $ | — | ||||||||||
Interest rate swaps (Other) | $ | 3 | $ | — | $ | 3 | $ | — | ||||||||
Liabilities: | ||||||||||||||||
Interest rate swaps (Income taxes and other liabilities) | $ | 7 | $ | — | $ | 7 | $ | — |
December 31, 2016 | ||||||||||||||||
Fair Value | Fair Value Measurements Using | |||||||||||||||
Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||
Assets: | ||||||||||||||||
Investments of insurance subsidiaries: | ||||||||||||||||
States and municipalities debt securities | $ | 353 | $ | — | $ | 347 | $ | 6 | ||||||||
Money market funds and other | 32 | 32 | — | — | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Investments of insurance subsidiaries | 385 | 32 | 347 | 6 | ||||||||||||
Less amounts classified as current assets | (49 | ) | (28 | ) | (21 | ) | — | |||||||||
|
|
|
|
|
|
|
| |||||||||
$ | 336 | $ | 4 | $ | 326 | $ | 6 | |||||||||
|
|
|
|
|
|
|
| |||||||||
Interest rate swaps (Other) | $ | 31 | $ | — | $ | 31 | $ | — | ||||||||
Liabilities: | ||||||||||||||||
Interest rate swaps (Income taxes and other liabilities) | $ | 12 | $ | — | $ | 12 | $ | — |
The $6 million reduction in the Level 3 investments of our insurance subsidiaries during 2017 resulted from settlements.
December 31, 2018 | ||||||||||||||||
Fair Value | Fair Value Measurements Using | |||||||||||||||
Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||
Assets: | ||||||||||||||||
Investments of insurance subsidiaries: | ||||||||||||||||
Debt securities | $ | 341 | $ | — | $ | 341 | $ | — | ||||||||
Money market funds and other | 68 | 68 | — | — | ||||||||||||
Investments of insurance subsidiaries | 409 | 68 | 341 | — | ||||||||||||
Less amounts classified as current assets | (47 | ) | (47 | ) | — | — | ||||||||||
$ | 362 | $ | 21 | $ | 341 | $ | — | |||||||||
Interest rate swaps (Other) | $ | 63 | $ | — | $ | 63 | $ | — |
2017 | 2016 | |||||||
Senior secured asset-based revolving credit facility (effective interest rate of 3.0%) | $ | 3,680 | $ | 2,920 | ||||
Senior secured revolving credit facility | — | — | ||||||
Senior secured term loan facilities (effective interest rate of 3.5%) | 3,891 | 3,981 | ||||||
Senior secured notes (effective interest rate of 5.4%) | 15,300 | 13,800 | ||||||
Other senior secured debt (effective interest rate of 5.7%) | 599 | 593 | ||||||
|
|
|
| |||||
Senior secured debt | 23,470 | 21,294 | ||||||
Senior unsecured notes (effective interest rate of 6.4%) | 9,752 | 10,252 | ||||||
Net debt issuance costs | (164 | ) | (170 | ) | ||||
|
|
|
| |||||
Total debt (average life of 6.8 years, rates averaging 5.2%) | 33,058 | 31,376 | ||||||
Less amounts due within one year | 200 | 216 | ||||||
|
|
|
| |||||
$ | 32,858 | $ | 31,160 | |||||
|
|
|
|
2019 | 2018 | |||||||
Senior secured asset-based revolving credit facility (effective interest rate of 3.0%) | $ | 2,480 | $ | 3,040 | ||||
Senior secured revolving credit facility | — | — | ||||||
Senior secured term loan facilities (effective interest rate of 3.3%) | 3,725 | 3,801 | ||||||
Senior secured notes (effective interest rate of 5.1%) | 13,850 | 13,800 | ||||||
Other senior secured debt (effective interest rate of 5.4%) | 654 | 585 | ||||||
Senior secured debt | 20,709 | 21,226 | ||||||
Senior unsecured notes (effective interest rate of 6.3%) | 13,252 | 11,752 | ||||||
Net debt issuance costs | (239 | ) | (157 | ) | ||||
Total debt (average life of 8.6 years, rates averaging5.2 %) | 33,722 | 32,821 | ||||||
Less amounts due within one year | 145 | 788 | ||||||
$ | 33,577 | $ | 32,033 | |||||
2017 Activity
During June 2017, we amended our senior secured revolving credit facilities by (i) increasing the commitments under the senior secured asset-based revolving credit facility to $3.750 billion, (ii) extending the maturity date of the revolving credit commitments to June 28, 2022, (iii) amending the incremental facility provisions to permit the incurrence of additional incremental credit facilities in an aggregate principal amount of $1.5 billion and (iv) providing that the commitment fee for unutilized commitments under the senior secured asset-based revolving credit facility shall be 0.250% per annum.
HCA HEALTHCARE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 9 — LONG-TERM DEBT (continued)
Senior Secured Credit Facilities And Other Senior Secured Debt (continued)
principal amount of 5.25% first lien notes due 2025; (viii)(iv) $1.500 billion aggregate principal amount of 5.25% first lien notes due 2026; (ix)(v) $1.200 billion aggregate principal amount of 4.50% first lien notes due 2027; and (x)(vi) $
2019.
2095.
HCA HEALTHCARE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 9 — LONG-TERM DEBT (continued)
General Debt Information (continued)
Balance Sheet Classification | December 31, 2019 | |||||
Assets: | ||||||
Operating leases | Right-of-use operating lease assets | $ | 1,834 | |||
Finance leases | Property and equipment | 520 | ||||
Total lease assets | $ | 2,354 | ||||
Liabilities: | ||||||
Current: | ||||||
Operating leases | Other accrued expenses | $ | 350 | |||
Finance leases | Long-term debt due within one year | 87 | ||||
Noncurrent: | ||||||
Operating leases | Right-of-use operating lease obligations | 1,499 | ||||
Finance leases | Long-term debt | 470 | ||||
Total lease liabilities | $ | 2,406 | ||||
Weighted-average remaining term: | ||||||
Operating leases | 10.8 years | |||||
Finance leases | 12.0 years | |||||
Weighted-average discount rate: | ||||||
Operating leases(1) | 5.3 | % | ||||
Finance leases | 6.0 | % |
(1) | Upon adoption of the new lease standard, discount rates used for existing leases were established at January 1, 2019. |
Year Ended December 31, 2019 | ||||
Finance lease expense: | ||||
Amortization of leased assets | $ | 93 | ||
Interest on lease liabilities | 32 | |||
Operating leases(2) | 389 | |||
Short-term lease expense(2) | 316 | |||
Variable lease expense(2) | 150 | |||
$ | 980 | |||
(2) | Expenses are included in “other operating expenses” in our consolidated income statements. |
2019 | ||||
Cash paid for amounts included in the measurement of lease liabilities: | ||||
Operating cash flows for operating leases | $ | 404 | ||
Operating cash flows for finance leases | 32 | |||
Financing cash flows for finance leases | 79 |
Operating Leases | Finance Leases | |||||||
Year 1 | $ | 411 | $ | 110 | ||||
Year 2 | 350 | 105 | ||||||
Year 3 | 285 | 99 | ||||||
Year 4 | 228 | 58 | ||||||
Year 5 | 182 | 60 | ||||||
Thereafter | 1,074 | 368 | ||||||
Total minimum lease payments | 2,530 | 800 | ||||||
Less: amount of lease payments representing interest | (681 | ) | (243 | ) | ||||
Present value of future minimum lease payments | 1,849 | 557 | ||||||
Less: current lease obligations | (350 | ) | (87 | ) | ||||
Long-term lease obligations | $ | 1,499 | $ | 470 | ||||
NOTE 11 — LEASES
We lease medical office buildings and certain equipment
For the Year Ended December 31, | ||||
2018 | $ | 289 | ||
2019 | 278 | |||
2020 | 239 | |||
2021 | 198 | |||
2022 | 157 | |||
Thereafter | 1,118 | |||
|
| |||
2,279 | ||||
Less sublease income | (11 | ) | ||
|
| |||
$ | 2,268 | |||
|
|
HCA HEALTHCARE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
During November 2016, our board of directors authorized a share repurchase program for up to $2 billion of our outstanding common stock. During May 2016, the Company repurchased 9.361 million shares of its common stock beneficially owned by affiliates of Kohlberg Kravis Roberts & Co. at a purchase price of $80.12 per share, the closing price of the Company’s common stock on the New York Stock Exchange on May 10, 2016, less a discount of 1%. During 2016, we also repurchased 26.964 million shares of our common stock at an average price of $74.20 per share through market purchases, resulting in total repurchases of 36.325 million shares of our common stock at an average price of $75.72 per share for the year ended December 31, 2016 pursuant to the $3 billion October 2015 (which was completed during the fourth quarter of 2016) and the $2 billion November 2016 share repurchase programs. At December 31, 2016, we had $1.853 billion of repurchase authorization available under the November 2016 authorization.
During October 2015, May 2015 and February 2015, our board of directors authorized share repurchase programs for up to $3 billion, $1 billion and $1 billion, respectively, of our outstanding common stock. During April 2015, the Company entered into an agreement to repurchase 3.806 million shares of its common stock beneficially owned by affiliates of Bain Capital Investors, LLC (the “Bain Entities”) and certain charitable organizations that received shares of common stock as charitable contributions from certain partners and other employees of the Bain Entities at a purchase price of $77.26 per share, the closing price of the Company’s common stock on the New York Stock Exchange on April 17, 2015, less a discount of 1%. During 2015, we also repurchased 28.185 million shares of our common stock at an average price of $74.62 per share through market purchases, resulting in total repurchases pursuant to the October 2015, May 2015 and February 2015 authorizations of 31.991 million shares of our common stock at an average price of $74.93 per share. At December 31, 2015, we had $2.603 billion of repurchase authorization available under the $3.0 billion October 2015 authorization.
HCA HEALTHCARE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 13 — EMPLOYEE BENEFIT PLANS (continued)
compensation, years of vesting service and certain IRS limitations related to the HCA 401(k) plan.limitations. Benefits expense under this plan was $44 million for 2019, $22 million for 2018 and $40 million for 2017, $20 million for 2016 and $20 million for 2015.2017. Accrued benefits liabilities under this plan totaled $201$227 million at December 31, 20172019 and $175$205 million at December 31, 2016.
2018.
2018.
2018.
For the Years Ended December 31, | ||||||||||||
2017 | 2016 | 2015 | ||||||||||
Revenues: | ||||||||||||
National Group | $ | 20,772 | $ | 19,845 | $ | 18,756 | ||||||
American Group | 20,912 | 19,670 | 18,875 | |||||||||
Corporate and other | 1,930 | 1,975 | 2,047 | |||||||||
|
|
|
|
|
| |||||||
$ | 43,614 | $ | 41,490 | $ | 39,678 | |||||||
|
|
|
|
|
| |||||||
Equity in earnings of affiliates: | ||||||||||||
National Group | $ | (21 | ) | $ | (20 | ) | $ | (7 | ) | |||
American Group | (37 | ) | (38 | ) | (32 | ) | ||||||
Corporate and other | 13 | 4 | (7 | ) | ||||||||
|
|
|
|
|
| |||||||
$ | (45 | ) | $ | (54 | ) | $ | (46 | ) | ||||
|
|
|
|
|
| |||||||
Adjusted segment EBITDA: | ||||||||||||
National Group | $ | 4,600 | $ | 4,565 | $ | 4,271 | ||||||
American Group | 4,231 | 4,173 | 4,207 | |||||||||
Corporate and other | (598 | ) | (520 | ) | (563 | ) | ||||||
|
|
|
|
|
| |||||||
$ | 8,233 | $ | 8,218 | $ | 7,915 | |||||||
|
|
|
|
|
| |||||||
Depreciation and amortization: | ||||||||||||
National Group | $ | 867 | $ | 806 | $ | 769 | ||||||
American Group | 986 | 908 | 885 | |||||||||
Corporate and other | 278 | 252 | 250 | |||||||||
|
|
|
|
|
| |||||||
$ | 2,131 | $ | 1,966 | $ | 1,904 | |||||||
|
|
|
|
|
|
For the Years Ended December 31, | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Revenues: | ||||||||||||
National Group | $ | 25,913 | $ | 22,581 | $ | 20,772 | ||||||
American Group | 23,173 | 21,959 | 20,912 | |||||||||
Corporate and other | 2,250 | 2,137 | 1,930 | |||||||||
$ | 51,336 | $ | 46,677 | $ | 43,614 | |||||||
Equity in earnings of affiliates: | ||||||||||||
National Group | $ | (2 | ) | $ | (4 | ) | $ | (21 | ) | |||
American Group | (44 | ) | (40 | ) | (37 | ) | ||||||
Corporate and other | 3 | 15 | 13 | |||||||||
$ | (43 | ) | $ | (29 | ) | $ | (45 | ) | ||||
Adjusted segment EBITDA: | ||||||||||||
National Group | $ | 5,634 | $ | 4,980 | $ | 4,600 | ||||||
American Group | 4,904 | 4,593 | 4,231 | |||||||||
Corporate and other | (681 | ) | (624 | ) | (598 | ) | ||||||
$ | 9,857 | $ | 8,949 | $ | 8,233 | |||||||
Depreciation and amortization: | ||||||||||||
National Group | $ | 1,161 | $ | 946 | $ | 867 | ||||||
American Group | 1,117 | 1,027 | 986 | |||||||||
Corporate and other | 318 | 305 | 278 | |||||||||
$ | 2,596 | $ | 2,278 | $ | 2,131 | |||||||
For the Years Ended December 31, | ||||||||||||
2017 | 2016 | 2015 | ||||||||||
Adjusted segment EBITDA | $ | 8,233 | $ | 8,218 | $ | 7,915 | ||||||
Depreciation and amortization | 2,131 | 1,966 | 1,904 | |||||||||
Interest expense | 1,690 | 1,707 | 1,665 | |||||||||
Losses (gains) on sales of facilities | (8 | ) | (23 | ) | 5 | |||||||
Losses on retirement of debt | 39 | 4 | 135 | |||||||||
Legal claim costs (benefits) | — | (246 | ) | 249 | ||||||||
|
|
|
|
|
| |||||||
Income before income taxes | $ | 4,381 | $ | 4,810 | $ | 3,957 | ||||||
|
|
|
|
|
| |||||||
December 31, | ||||||||||||
2017 | 2016 | 2015 | ||||||||||
Assets: | ||||||||||||
National Group | $ | 13,097 | $ | 12,320 | $ | 11,332 | ||||||
American Group | 18,136 | 16,208 | 15,240 | |||||||||
Corporate and other | 5,360 | 5,230 | 6,172 | |||||||||
|
|
|
|
|
| |||||||
$ | 36,593 | $ | 33,758 | $ | 32,744 | |||||||
|
|
|
|
|
|
National Group | American Group | Corporate and Other | Total | |||||||||||||
Goodwill and other intangible assets: | ||||||||||||||||
Balance at December 31, 2014 | $ | 1,170 | $ | 4,614 | $ | 632 | $ | 6,416 | ||||||||
Acquisitions | 318 | 27 | — | 345 | ||||||||||||
Foreign currency translation, amortization and other | (7 | ) | (3 | ) | (20 | ) | (30 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Balance at December 31, 2015 | 1,481 | 4,638 | 612 | 6,731 | ||||||||||||
Acquisitions | — | 33 | 8 | 41 | ||||||||||||
Foreign currency translation, amortization and other | (23 | ) | (10 | ) | (35 | ) | (68 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Balance at December 31, 2016 | 1,458 | 4,661 | 585 | 6,704 | ||||||||||||
Acquisitions | 19 | 612 | 62 | 693 | ||||||||||||
Foreign currency translation, amortization and other | (3 | ) | (8 | ) | 8 | (3 | ) | |||||||||
|
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|
|
|
|
|
| |||||||||
Balance at December 31, 2017 | $ | 1,474 | $ | 5,265 | $ | 655 | $ | 7,394 | ||||||||
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For the Years Ended December 31, | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Adjusted segment EBITDA | $ | 9,857 | $ | 8,949 | $ | 8,233 | ||||||
Depreciation and amortization | 2,596 | 2,278 | 2,131 | |||||||||
Interest expense | 1,824 | 1,755 | 1,690 | |||||||||
Gains on sales of facilities | (18 | ) | (428 | ) | (8 | ) | ||||||
Losses on retirement of debt | 211 | 9 | 39 | |||||||||
Income before income taxes | $ | 5,244 | $ | 5,335 | $ | 4,381 | ||||||
December 31, | ||||||||||||
2019 | 2018 | 2017 | ||||||||||
Assets: | ||||||||||||
National Group | $ | 18,290 | $ | 14,839 | $ | 13,097 | ||||||
American Group | 20,608 | 19,122 | 18,136 | |||||||||
Corporate and other | 6,160 | 5,246 | 5,360 | |||||||||
$ | 45,058 | $ | 39,207 | $ | 36,593 | |||||||
National Group | American Group | Corporate and Other | Total | |||||||||||||
Goodwill and other intangible assets: | ||||||||||||||||
Balance at December 31, 2016 | $ | 1,458 | $ | 4,661 | $ | 585 | $ | 6,704 | ||||||||
Acquisitions | 19 | 612 | 62 | 693 | ||||||||||||
Foreign currency translation, amortization and other | (3 | ) | (8 | ) | 8 | (3 | ) | |||||||||
Balance at December 31, 2017 | 1,474 | 5,265 | 655 | 7,394 | ||||||||||||
Acquisitions | 132 | 504 | — | 636 | ||||||||||||
Foreign currency translation, amortization and other | (9 | ) | (40 | ) | (28 | ) | (77 | ) | ||||||||
Balance at December 31, 2018 | 1,597 | 5,729 | 627 | 7,953 | ||||||||||||
Acquisitions | 155 | 39 | 138 | 332 | ||||||||||||
F oreign currency translation, amortization and other | (13 | ) | (3 | ) | — | (16 | ) | |||||||||
Balance at December 31, 2019 | $ | 1,739 | $ | 5,765 | $ | 765 | $ | 8,269 | ||||||||
Unrealized Gains on Available- for-Sale Securities | Foreign Currency Translation Adjustments | Defined Benefit Plans | Change in Fair Value of Derivative Instruments | Total | ||||||||||||||||
Balances at December 31, 2014 | $ | 13 | $ | (36 | ) | $ | (174 | ) | $ | (126 | ) | $ | (323 | ) | ||||||
Unrealized gains onavailable-for-sale securities, net of $1 of income taxes | — | — | — | — | — | |||||||||||||||
Foreign currency translation adjustments, net of $25 income tax benefit | — | (38 | ) | — | — | (38 | ) | |||||||||||||
Defined benefit plans, net of $11 of income taxes | — | — | 19 | — | 19 | |||||||||||||||
Change in fair value of derivative instruments, net of $14 income tax benefit | — | — | — | (22 | ) | (22 | ) | |||||||||||||
Expense reclassified into operations from other comprehensive income, net of $12 and $46, respectively, income tax benefits | — | — | 20 | 79 | 99 | |||||||||||||||
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Balances at December 31, 2015 | 13 | (74 | ) | (135 | ) | (69 | ) | (265 | ) | |||||||||||
Unrealized losses onavailable-for-sale securities, net of $3 income tax benefit | (6 | ) | — | — | — | (6 | ) | |||||||||||||
Foreign currency translation adjustments, net of $87 income tax benefit | — | (137 | ) | — | — | (137 | ) | |||||||||||||
Defined benefit plans, net of $13 income tax benefit | — | — | (22 | ) | — | (22 | ) | |||||||||||||
Change in fair value of derivative instruments, net of $8 of income taxes | — | — | — | 12 | 12 | |||||||||||||||
Expense reclassified into operations from other comprehensive income, net of $7 and $40, respectively, income tax benefits | — | — | 11 | 69 | 80 | |||||||||||||||
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| |||||||||||
Balances at December 31, 2016 | 7 | (211 | ) | (146 | ) | 12 | (338 | ) | ||||||||||||
Unrealized gains onavailable-for-sale securities | 1 | — | — | — | 1 | |||||||||||||||
Foreign currency translation adjustments, net of $35 of income taxes | — | 62 | — | — | 62 | |||||||||||||||
Defined benefit plans, net of $10 income tax benefit | — | — | (33 | ) | — | (33 | ) | |||||||||||||
Change in fair value of derivative instruments, net of $4 of income taxes | — | — | — | 7 | 7 | |||||||||||||||
Expense (income) reclassified into operations from other comprehensive income, net of $1 of income taxes and $7 and $7 income tax benefits, respectively | (1 | ) | — | 11 | 13 | 23 | ||||||||||||||
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Balances at December 31, 2017 | $ | 7 | $ | (149 | ) | $ | (168 | ) | $ | 32 | $ | (278 | ) | |||||||
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Unrealized Gains on Available- for-Sale Securities | Foreign Currency Translation Adjustments | Defined Benefit Plans | Change in Fair Value of Derivative Instruments | Total | ||||||||||||||||
Balances at December 31, 2016 | $ | 7 | $ | (211 | ) | $ | (146 | ) | $ | 12 | $ | (338 | ) | |||||||
Unrealized gains on available-for-sale securities | 1 | — | — | — | 1 | |||||||||||||||
Foreign currency translation adjustments, net of $35 of income taxes | — | 62 | — | — | 62 | |||||||||||||||
Defined benefit plans, net of $10 income tax benefit | — | — | (33 | ) | — | (33 | ) | |||||||||||||
Change in fair value of derivative instruments, net of $4 of income taxes | — | — | — | 7 | 7 | |||||||||||||||
Expense (income) reclassified into operations from other comprehensive income, net of $1 of income taxes and $7 and $7 income tax benefits, respectively | (1 | ) | — | 11 | 13 | 23 | ||||||||||||||
Balances at December 31, 2017 | 7 | (149 | ) | (168 | ) | 32 | (278 | ) | ||||||||||||
Unrealized losses on available-for-sale securities, net of $2 income tax benefit | (5 | ) | — | — | — | (5 | ) | |||||||||||||
Foreign currency translation adjustments, net of $8 income tax benefit | — | (63 | ) | — | — | (63 | ) | |||||||||||||
Defined benefit plans, net of $10 of income taxes | — | — | 34 | — | 34 | |||||||||||||||
Change in fair value of derivative instruments, net of $5 of income taxes | — | — | — | 18 | 18 | |||||||||||||||
Expense (income) reclassified into operations from other comprehensive income, net of $5 income tax benefit and $2 of income taxes, respectively | — | — | 16 | (8 | ) | 8 | ||||||||||||||
Reclassification of stranded tax effects | 1 | (71 | ) | (30 | ) | 5 | (95 | ) | ||||||||||||
Balances at December 31, 2018 | 3 | (283 | ) | (148 | ) | 47 | (381 | ) | ||||||||||||
Unrealized gains onavailable-for-sale securities, net of $4 of income taxes | 11 | — | — | — | 11 | |||||||||||||||
Foreign currency translation adjustments, net of $5 of income taxes | — | — | — | — | — | |||||||||||||||
Defined benefit plans, net of $14 income tax benefit | — | — | (49 | ) | — | (49 | ) | |||||||||||||
Change in fair value of derivative instruments, net of $13 income tax benefit | — | — | — | (37 | ) | (37 | ) | |||||||||||||
Expense (income) reclassified into operations from other comprehensive income, net of $3 income tax benefit and $3 of income taxes, respectively | — | — | 10 | (14 | ) | (4 | ) | |||||||||||||
Balances at December 31, 2019 | $ | 14 | $ | (283 | ) | $ | (187 | ) | $ | (4 | ) | $ | (460 | ) | ||||||
2017 | 2016 | |||||||
Professional liability risks | $ | 429 | $ | 391 | ||||
Interest | 406 | 409 | ||||||
Taxes other than income | 299 | 283 | ||||||
Other | 849 | 952 | ||||||
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| |||||
$ | 1,983 | $ | 2,035 | |||||
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A summary of activity for the allowance of doubtful accounts follows (dollars in millions):
Balance at Beginning of Year | Provision for Doubtful Accounts | Accounts Written off, Net of Recoveries | Balance at End of Year | |||||||||||||
Allowance for doubtful accounts: | ||||||||||||||||
Year ended December 31, 2015 | $ | 5,011 | $ | 3,913 | $ | (3,598 | ) | $ | 5,326 | |||||||
Year ended December 31, 2016 | 5,326 | 3,257 | (3,595 | ) | 4,988 | |||||||||||
Year ended December 31, 2017 | 4,988 | 4,039 | (3,539 | ) | 5,488 |
2019 | 2018 | |||||||
Professional liability risks | $ | 457 | $ | 466 | ||||
Defined contribution benefit plan | 528 | 459 | ||||||
Interest | 368 | 429 | ||||||
Right-of-use operating lease | 350 | — | ||||||
Taxes other than income | 325 | 308 | ||||||
Other | 904 | 962 | ||||||
$ | 2,932 | $ | 2,624 | |||||
2019
HCA Healthcare, Inc. Issuer | HCA Inc. Issuer | Subsidiary Guarantors | Subsidiary Non- Guarantors | Eliminations | Condensed Consolidated | |||||||||||||||||||
Revenues before provision for doubtful accounts | $ | — | $ | — | $ | 27,992 | $ | 19,661 | $ | — | $ | 47,653 | ||||||||||||
Provision for doubtful accounts | — | — | 2,218 | 1,821 | — | 4,039 | ||||||||||||||||||
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Revenues | — | — | 25,774 | 17,840 | — | 43,614 | ||||||||||||||||||
Salaries and benefits | — | — | 11,619 | 8,440 | — | 20,059 | ||||||||||||||||||
Supplies | — | — | 4,286 | 3,030 | — | 7,316 | ||||||||||||||||||
Other operating expenses | 6 | — | 4,249 | 3,796 | — | 8,051 | ||||||||||||||||||
Equity in earnings of affiliates | (2,476 | ) | — | (6 | ) | (39 | ) | 2,476 | (45 | ) | ||||||||||||||
Depreciation and amortization | — | — | 1,237 | 894 | — | 2,131 | ||||||||||||||||||
Interest expense | 64 | 3,088 | (1,309 | ) | (153 | ) | — | 1,690 | ||||||||||||||||
Gains on sales of facilities | — | — | (2 | ) | (6 | ) | — | (8 | ) | |||||||||||||||
Losses on retirement of debt | — | 39 | — | — | — | 39 | ||||||||||||||||||
Management fees | — | — | (621 | ) | 621 | — | — | |||||||||||||||||
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(2,406 | ) | 3,127 | 19,453 | 16,583 | 2,476 | 39,233 | ||||||||||||||||||
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Income (loss) before income taxes | 2,406 | (3,127 | ) | 6,321 | 1,257 | (2,476 | ) | 4,381 | ||||||||||||||||
Provision (benefit) for income taxes | 190 | (1,154 | ) | 2,293 | 309 | — | 1,638 | |||||||||||||||||
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Net income (loss) | 2,216 | (1,973 | ) | 4,028 | 948 | (2,476 | ) | 2,743 | ||||||||||||||||
Net income attributable to noncontrolling interests | — | — | 108 | 419 | — | 527 | ||||||||||||||||||
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Net income (loss) attributable to HCA Healthcare, Inc. | $ | 2,216 | $ | (1,973 | ) | $ | 3,920 | $ | 529 | $ | (2,476 | ) | $ | 2,216 | ||||||||||
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Comprehensive income (loss) attributable to HCA Healthcare, Inc. | $ | 2,276 | $ | (1,953 | ) | $ | 3,898 | $ | 591 | $ | (2,536 | ) | $ | 2,276 | ||||||||||
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HCA Healthcare, Inc. Issuer | HCA Inc. Issuer | Subsidiary Guarantors | Subsidiary Non- Guarantors | Eliminations | Condensed Consolidated | |||||||||||||||||||
Revenues | $ | — | $ | — | $ | 29,220 | $ | 22,116 | $ | — | $ | 51,336 | ||||||||||||
Salaries and benefits | — | — | 12,898 | 10,662 | — | 23,560 | ||||||||||||||||||
Supplies | — | — | 4,802 | 3,679 | — | 8,481 | ||||||||||||||||||
Other operating expenses | 7 | — | 4,643 | 4,831 | — | 9,481 | ||||||||||||||||||
Equity in earnings of affiliates | (3,597 | ) | — | (6 | ) | (37 | ) | 3,597 | (43 | ) | ||||||||||||||
Depreciation and amortization | — | — | 1,447 | 1,149 | — | 2,596 | ||||||||||||||||||
Interest expense (income) | 64 | 4,025 | (2,001 | ) | (264 | ) | — | 1,824 | ||||||||||||||||
Gains on sales of facilities | — | — | (14 | ) | (4 | ) | — | (18 | ) | |||||||||||||||
Losses on retirement of debt | — | 211 | — | — | — | 211 | ||||||||||||||||||
Management fees | — | — | (768 | ) | 768 | — | — | |||||||||||||||||
(3,526 | ) | 4,236 | 21,001 | 20,784 | 3,597 | 46,092 | ||||||||||||||||||
Income (loss) before income taxes | 3,526 | (4,236 | ) | 8,219 | 1,332 | (3,597 | ) | 5,244 | ||||||||||||||||
Provision (benefit) for income taxes | 21 | (976 | ) | 1,874 | 180 | — | 1,099 | |||||||||||||||||
Net income (loss) | 3,505 | (3,260 | ) | 6,345 | 1,152 | (3,597 | ) | 4,145 | ||||||||||||||||
Net income attributable to noncontrolling interests | — | — | 91 | 549 | — | 640 | ||||||||||||||||||
Net income (loss) attributable to HCA Healthcare, Inc. | $ | 3,505 | $ | (3,260 | ) | $ | 6,254 | $ | 603 | $ | (3,597 | ) | $ | 3,505 | ||||||||||
Comprehensive income (loss) attributable to HCA Healthcare, Inc. | $ | 3,426 | $ | (3,311 | ) | $ | 6,215 | $ | 614 | $ | (3,518 | ) | $ | 3,426 | ||||||||||
2018
HCA Healthcare, Inc. Issuer | HCA Inc. Issuer | Subsidiary Guarantors (as adjusted) | Subsidiary Non- Guarantors (as adjusted) | Eliminations | Condensed Consolidated | |||||||||||||||||||
Revenues before provision for doubtful accounts | $ | — | $ | — | $ | 26,468 | $ | 18,279 | $ | — | $ | 44,747 | ||||||||||||
Provision for doubtful accounts | — | — | 2,041 | 1,216 | — | 3,257 | ||||||||||||||||||
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Revenues | — | — | 24,427 | 17,063 | — | 41,490 | ||||||||||||||||||
Salaries and benefits | — | — | 10,971 | 7,926 | — | 18,897 | ||||||||||||||||||
Supplies | — | — | 4,090 | 2,843 | — | 6,933 | ||||||||||||||||||
Other operating expenses | 6 | — | 3,912 | 3,578 | — | 7,496 | ||||||||||||||||||
Equity in earnings of affiliates | (2,738 | ) | — | (7 | ) | (47 | ) | 2,738 | (54 | ) | ||||||||||||||
Depreciation and amortization | — | — | 1,141 | 825 | — | 1,966 | ||||||||||||||||||
Interest expense | 64 | 2,756 | (970 | ) | (143 | ) | — | 1,707 | ||||||||||||||||
Losses (gains) on sales of facilities | — | — | 4 | (27 | ) | — | (23 | ) | ||||||||||||||||
Losses on retirement of debt | — | 4 | — | — | — | 4 | ||||||||||||||||||
Legal claim benefits | — | (246 | ) | — | — | — | (246 | ) | ||||||||||||||||
Management fees | — | — | (588 | ) | 588 | — | — | |||||||||||||||||
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(2,668 | ) | 2,514 | 18,553 | 15,543 | 2,738 | 36,680 | ||||||||||||||||||
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Income (loss) before income taxes | 2,668 | (2,514 | ) | 5,874 | 1,520 | (2,738 | ) | 4,810 | ||||||||||||||||
Provision (benefit) for income taxes | (222 | ) | (928 | ) | 2,133 | 395 | — | 1,378 | ||||||||||||||||
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Net income (loss) | 2,890 | (1,586 | ) | 3,741 | 1,125 | (2,738 | ) | 3,432 | ||||||||||||||||
Net income attributable to noncontrolling interests | — | — | 93 | 449 | — | 542 | ||||||||||||||||||
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Net income (loss) attributable to HCA Healthcare, Inc. | $ | 2,890 | $ | (1,586 | ) | $ | 3,648 | $ | 676 | $ | (2,738 | ) | $ | 2,890 | ||||||||||
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Comprehensive income (loss) attributable to HCA Healthcare, Inc. | $ | 2,817 | $ | (1,505 | ) | $ | 3,637 | $ | 533 | $ | (2,665 | ) | $ | 2,817 | ||||||||||
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HCA Healthcare, Inc. Issuer | HCA Inc. Issuer | Subsidiary Guarantors | Subsidiary Non- Guarantors | Eliminations | Condensed Consolidated | |||||||||||||||||||
Revenues | $ | — | $ | — | $ | 27,482 | $ | 19,195 | $ | — | $ | 46,677 | ||||||||||||
Salaries and benefits | — | — | 12,287 | 9,138 | — | 21,425 | ||||||||||||||||||
Supplies | — | — | 4,560 | 3,164 | — | 7,724 | ||||||||||||||||||
Other operating expenses | 8 | — | 4,463 | 4,137 | — | 8,608 | ||||||||||||||||||
Equity in earnings of affiliates | (3,688 | ) | — | (7 | ) | (22 | ) | 3,688 | (29 | ) | ||||||||||||||
Depreciation and amortization | — | — | 1,335 | 943 | — | 2,278 | ||||||||||||||||||
Interest expense (income) | 64 | 3,580 | (1,635 | ) | (254 | ) | — | 1,755 | ||||||||||||||||
Gains on sales of facilities | — | — | (357 | ) | (71 | ) | — | (428 | ) | |||||||||||||||
Losses on retirement of debt | — | 9 | — | — | — | 9 | ||||||||||||||||||
Management fees | — | — | (639 | ) | 639 | — | — | |||||||||||||||||
(3,616 | ) | 3,589 | 20,007 | 17,674 | 3,688 | 41,342 | ||||||||||||||||||
Income (loss) before income taxes | 3,616 | (3,589 | ) | 7,475 | 1,521 | (3,688 | ) | 5,335 | ||||||||||||||||
Provision (benefit) for income taxes | (171 | ) | (834 | ) | 1,714 | 237 | — | 946 | ||||||||||||||||
Net income (loss) | 3,787 | (2,755 | ) | 5,761 | 1,284 | (3,688 | ) | 4,389 | ||||||||||||||||
Net income attributable to noncontrolling interests | — | — | 99 | 503 | — | 602 | ||||||||||||||||||
Net income (loss) attributable to HCA Healthcare, Inc. | $ | 3,787 | $ | (2,755 | ) | $ | 5,662 | $ | 781 | $ | (3,688 | ) | $ | 3,787 | ||||||||||
Comprehensive income (loss) attributable to HCA Healthcare, Inc. | $ | 3,779 | $ | (2,745 | ) | $ | 5,712 | $ | 713 | $ | (3,680 | ) | $ | 3,779 | ||||||||||
2017
HCA Healthcare, Inc. Issuer | HCA Inc. Issuer | Subsidiary Guarantors (as adjusted) | Subsidiary Non- Guarantors (as adjusted) | Eliminations | Condensed Consolidated | |||||||||||||||||||
Revenues before provision for doubtful accounts | $ | — | $ | — | $ | 25,711 | $ | 17,880 | $ | — | $ | 43,591 | ||||||||||||
Provision for doubtful accounts | — | — | 2,329 | 1,584 | — | 3,913 | ||||||||||||||||||
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Revenues | — | — | 23,382 | 16,296 | — | 39,678 | ||||||||||||||||||
Salaries and benefits | — | — | 10,593 | 7,522 | — | 18,115 | ||||||||||||||||||
Supplies | — | — | 3,933 | 2,705 | — | 6,638 | ||||||||||||||||||
Other operating expenses | (2 | ) | — | 3,685 | 3,373 | — | 7,056 | |||||||||||||||||
Equity in earnings of affiliates | (2,352 | ) | — | (8 | ) | (38 | ) | 2,352 | (46 | ) | ||||||||||||||
Depreciation and amortization | — | — | 1,085 | 819 | — | 1,904 | ||||||||||||||||||
Interest expense | 115 | 2,445 | (816 | ) | (79 | ) | — | 1,665 | ||||||||||||||||
Losses on sales of facilities | — | — | — | 5 | — | 5 | ||||||||||||||||||
Losses on retirement of debt | 122 | 13 | — | — | — | 135 | ||||||||||||||||||
Legal claim costs | 120 | 129 | — | — | — | 249 | ||||||||||||||||||
Management fees | — | — | (515 | ) | 515 | — | — | |||||||||||||||||
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(1,997 | ) | 2,587 | 17,957 | 14,822 | 2,352 | 35,721 | ||||||||||||||||||
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Income (loss) before income taxes | 1,997 | (2,587 | ) | 5,425 | 1,474 | (2,352 | ) | 3,957 | ||||||||||||||||
Provision (benefit) for income taxes | (132 | ) | (962 | ) | 1,983 | 372 | — | 1,261 | ||||||||||||||||
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Net income (loss) | 2,129 | (1,625 | ) | 3,442 | 1,102 | (2,352 | ) | 2,696 | ||||||||||||||||
Net income attributable to noncontrolling interests | — | — | 92 | 475 | — | 567 | ||||||||||||||||||
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Net income (loss) attributable to HCA Healthcare, Inc. | $ | 2,129 | $ | (1,625 | ) | $ | 3,350 | $ | 627 | $ | (2,352 | ) | $ | 2,129 | ||||||||||
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Comprehensive income (loss) attributable to HCA Healthcare, Inc. | $ | 2,187 | $ | (1,568 | ) | $ | 3,389 | $ | 589 | $ | (2,410 | ) | $ | 2,187 | ||||||||||
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HCA Healthcare, Inc. Issuer | HCA Inc. Issuer | Subsidiary Guarantors | Subsidiary Non- Guarantors | Eliminations | Condensed Consolidated | |||||||||||||||||||
Revenues | $ | — | $ | — | $ | 25,774 | $ | 17,840 | $ | — | $ | 43,614 | ||||||||||||
Salaries and benefits | — | — | 11,619 | 8,440 | — | 20,059 | ||||||||||||||||||
Supplies | — | — | 4,286 | 3,030 | — | 7,316 | ||||||||||||||||||
Other operating expenses | 6 | — | 4,249 | 3,796 | — | 8,051 | ||||||||||||||||||
Equity in earnings of affiliates | (2,476 | ) | — | (6 | ) | (39 | ) | 2,476 | (45 | ) | ||||||||||||||
Depreciation and amortization | — | — | 1,237 | 894 | — | 2,131 | ||||||||||||||||||
Interest expense (income) | 64 | 3,088 | (1,309 | ) | (153 | ) | — | 1,690 | ||||||||||||||||
Gains on sales of facilities | — | — | (2 | ) | (6 | ) | — | (8 | ) | |||||||||||||||
Losses on retirement of debt | — | 39 | — | — | — | 39 | ||||||||||||||||||
Management fees | — | — | (621 | ) | 621 | — | — | |||||||||||||||||
(2,406 | ) | 3,127 | 19,453 | 16,583 | 2,476 | 39,233 | ||||||||||||||||||
Income (loss) before income taxes | 2,406 | (3,127 | ) | 6,321 | 1,257 | (2,476 | ) | 4,381 | ||||||||||||||||
Provision (benefit) for income taxes | 190 | (1,154 | ) | 2,293 | 309 | — | 1,638 | |||||||||||||||||
Net income (loss) | 2,216 | (1,973 | ) | 4,028 | 948 | (2,476 | ) | 2,743 | ||||||||||||||||
Net income attributable to noncontrolling interests | — | — | 108 | 419 | — | 527 | ||||||||||||||||||
Net income (loss) attributable to HCA Healthcare, Inc. | $ | 2,216 | $ | (1,973 | ) | $ | 3,920 | $ | 529 | $ | (2,476 | ) | $ | 2,216 | ||||||||||
Comprehensive income (loss) attributable to HCA Healthcare, Inc. | $ | 2,276 | $ | (1,953 | ) | $ | 3,898 | $ | 591 | $ | (2,536 | ) | $ | 2,276 | ||||||||||
2019
HCA Healthcare, Inc. Issuer | HCA Inc. Issuer | Subsidiary Guarantors | Subsidiary Non- Guarantors | Eliminations | Condensed Consolidated | |||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
Current assets: | ||||||||||||||||||||||||
Cash and cash equivalents | $ | 1 | $ | — | $ | 112 | $ | 619 | $ | — | $ | 732 | ||||||||||||
Accounts receivable, net | — | — | 3,693 | 2,808 | — | 6,501 | ||||||||||||||||||
Inventories | — | — | 1,030 | 543 | — | 1,573 | ||||||||||||||||||
Other | — | — | 663 | 508 | — | 1,171 | ||||||||||||||||||
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|
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|
|
|
|
|
|
|
|
| |||||||||||||
1 | — | 5,498 | 4,478 | — | 9,977 | |||||||||||||||||||
Property and equipment, net | — | — | 11,110 | 6,785 | — | 17,895 | ||||||||||||||||||
Investments of insurance subsidiaries | — | — | — | 418 | — | 418 | ||||||||||||||||||
Investments in and advances to affiliates | 29,581 | — | 22 | 177 | (29,581 | ) | 199 | |||||||||||||||||
Goodwill and other intangible assets | — | — | 4,893 | 2,501 | — | 7,394 | ||||||||||||||||||
Other | 510 | 50 | 47 | 103 | — | 710 | ||||||||||||||||||
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|
| |||||||||||||
$ | 30,092 | $ | 50 | $ | 21,570 | $ | 14,462 | $ | (29,581 | ) | $ | 36,593 | ||||||||||||
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|
|
|
|
|
|
| |||||||||||||
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) | ||||||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||||||
Accounts payable | $ | — | $ | — | $ | 1,793 | $ | 813 | $ | — | $ | 2,606 | ||||||||||||
Accrued salaries | — | — | 862 | 507 | — | 1,369 | ||||||||||||||||||
Other accrued expenses | 29 | 378 | 536 | 1,040 | — | 1,983 | ||||||||||||||||||
Long-term debt due within one year | — | 97 | 64 | 39 | — | 200 | ||||||||||||||||||
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|
| |||||||||||||
29 | 475 | 3,255 | 2,399 | — | 6,158 | |||||||||||||||||||
Long-term debt, net | 995 | 31,367 | 307 | 189 | — | 32,858 | ||||||||||||||||||
Intercompany balances | 35,322 | (9,742 | ) | (25,228 | ) | (352 | ) | — | — | |||||||||||||||
Professional liability risks | — | — | — | 1,198 | — | 1,198 | ||||||||||||||||||
Income taxes and other liabilities | 552 | — | 357 | 465 | — | 1,374 | ||||||||||||||||||
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| |||||||||||||
36,898 | 22,100 | (21,309 | ) | 3,899 | — | 41,588 | ||||||||||||||||||
Stockholders’ (deficit) equity attributable to HCA Healthcare, Inc. | (6,806 | ) | (22,050 | ) | 42,755 | 8,876 | (29,581 | ) | (6,806 | ) | ||||||||||||||
Noncontrolling interests | — | — | 124 | 1,687 | — | 1,811 | ||||||||||||||||||
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| |||||||||||||
(6,806 | ) | (22,050 | ) | 42,879 | 10,563 | (29,581 | ) | (4,995 | ) | |||||||||||||||
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| |||||||||||||
$ | 30,092 | $ | 50 | $ | 21,570 | $ | 14,462 | $ | (29,581 | ) | $ | 36,593 | ||||||||||||
|
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|
HCA Healthcare, Inc. Issuer | HCA Inc. Issuer | Subsidiary Guarantors | Subsidiary Non- Guarantors | Eliminations | Condensed Consolidated | |||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
Current assets: | ||||||||||||||||||||||||
Cash and cash equivalents | $ | — | $ | — | $ | 118 | $ | 503 | $ | — | $ | 621 | ||||||||||||
Accounts receivable, net | — | — | 4,037 | 3,343 | — | 7,380 | ||||||||||||||||||
Inventories | — | — | 1,208 | 641 | — | 1,849 | ||||||||||||||||||
Other | — | — | 727 | 619 | — | 1,346 | ||||||||||||||||||
— | — | 6,090 | 5,106 | — | 11,196 | |||||||||||||||||||
Property and equipment, net | — | — | 13,418 | 9,297 | — | 22,715 | ||||||||||||||||||
Investments of insurance subsidiaries | — | — | — | 315 | — | 315 | ||||||||||||||||||
Investments in and advances to affiliates | 36,684 | — | 29 | 220 | (36,684 | ) | 249 | |||||||||||||||||
Goodwill and other intangible assets | — | — | 5,743 | 2,526 | — | 8,269 | ||||||||||||||||||
Right-of-use operating lease assets | — | — | 455 | 1,379 | — | 1,834 | ||||||||||||||||||
Other | 300 | 3 | 29 | 148 | — | 480 | ||||||||||||||||||
$ | 36,984 | $ | 3 | $ | 25,764 | $ | 18,991 | $ | (36,684 | ) | $ | 45,058 | ||||||||||||
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY | ||||||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||||||
Accounts payable | $ | — | $ | — | $ | 1,903 | $ | 1,002 | $ | — | $ | 2,905 | ||||||||||||
Accrued salaries | — | — | 1,070 | 705 | — | 1,775 | ||||||||||||||||||
Other accrued expenses | 85 | 341 | 1,001 | 1,505 | — | 2,932 | ||||||||||||||||||
Long-term debt due within one year | — | 54 | 50 | 41 | — | 145 | ||||||||||||||||||
85 | 395 | 4,024 | 3,253 | — | 7,757 | |||||||||||||||||||
Long-term debt, net | 998 | 32,016 | 213 | 350 | — | 33,577 | ||||||||||||||||||
Intercompany balances | 38,089 | (4,314 | ) | (33,828 | ) | 53 | — | — | ||||||||||||||||
Professional liability risks | — | — | — | 1,370 | — | 1,370 | ||||||||||||||||||
Right-of-use operating lease obligations | — | — | 345 | 1,154 | — | 1,499 | ||||||||||||||||||
Income taxes and other liabilities | 620 | 7 | 252 | 541 | — | 1,420 | ||||||||||||||||||
39,792 | 28,104 | (28,994 | ) | 6,721 | — | 45,623 | ||||||||||||||||||
Stockholders’ (deficit) equity attributable to HCA Healthcare, Inc. | (2,808 | ) | (28,101 | ) | 54,652 | 10,133 | (36,684 | ) | (2,808 | ) | ||||||||||||||
Noncontrolling interests | — | — | 106 | 2,137 | — | 2,243 | ||||||||||||||||||
(2,808 | ) | (28,101 | ) | 54,758 | 12,270 | (36,684 | ) | (565 | ) | |||||||||||||||
$ | 36,984 | $ | 3 | $ | 25,764 | $ | 18,991 | $ | (36,684 | ) | $ | 45,058 | ||||||||||||
HCA Healthcare, Inc. Issuer | HCA Inc. Issuer | Subsidiary Guarantors | Subsidiary Non- Guarantors | Eliminations | Condensed Consolidated | |||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
Current assets: | ||||||||||||||||||||||||
Cash and cash equivalents | $ | — | $ | — | $ | 174 | $ | 328 | $ | — | $ | 502 | ||||||||||||
Accounts receivable, net | — | — | 3,964 | 2,825 | — | 6,789 | ||||||||||||||||||
Inventories | — | — | 1,178 | 554 | — | 1,732 | ||||||||||||||||||
Other | — | — | 669 | 521 | — | 1,190 | ||||||||||||||||||
— | — | 5,985 | 4,228 | — | 10,213 | |||||||||||||||||||
Property and equipment, net | — | — | 12,450 | 7,307 | — | 19,757 | ||||||||||||||||||
Investments of insurance subsidiaries | — | — | — | 362 | — | 362 | ||||||||||||||||||
Investments in and advances to affiliates | 33,166 | — | 29 | 203 | (33,166 | ) | 232 | |||||||||||||||||
Goodwill and other intangible assets | — | — | 5,724 | 2,229 | — | 7,953 | ||||||||||||||||||
Other | 478 | 64 | 35 | 113 | — | 690 | ||||||||||||||||||
$ | 33,644 | $ | 64 | $ | 24,223 | $ | 14,442 | $ | (33,166 | ) | $ | 39,207 | ||||||||||||
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY | ||||||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||||||
Accounts payable | $ | — | $ | — | $ | 1,721 | $ | 856 | $ | — | $ | 2,577 | ||||||||||||
Accrued salaries | — | — | 998 | 582 | — | 1,580 | ||||||||||||||||||
Other accrued expenses | 142 | 403 | 905 | 1,174 | — | 2,624 | ||||||||||||||||||
Long-term debt due within one year | — | 696 | 55 | 37 | — | 788 | ||||||||||||||||||
142 | 1,099 | 3,679 | 2,649 | — | 7,569 | |||||||||||||||||||
Long-term debt, net | 996 | 30,544 | 212 | 281 | — | 32,033 | ||||||||||||||||||
Intercompany balances | 36,951 | (6,789 | ) | (28,415 | ) | (1,747 | ) | — | — | |||||||||||||||
Professional liability risks | — | — | — | 1,275 | — | 1,275 | ||||||||||||||||||
Income taxes and other liabilities | 505 | — | 223 | 520 | — | 1,248 | ||||||||||||||||||
38,594 | 24,854 | (24,301 | ) | 2,978 | — | 42,125 | ||||||||||||||||||
Stockholders’ (deficit) equity attributable to HCA Healthcare, Inc. | (4,950 | ) | (24,790 | ) | 48,437 | 9,519 | (33,166 | ) | (4,950 | ) | ||||||||||||||
Noncontrolling interests | — | — | 87 | 1,945 | — | 2,032 | ||||||||||||||||||
(4,950 | ) | (24,790 | ) | 48,524 | 11,464 | (33,166 | ) | (2,918 | ) | |||||||||||||||
$ | 33,644 | $ | 64 | $ | 24,223 | $ | 14,442 | $ | (33,166 | ) | $ | 39,207 | ||||||||||||
STATEMENT OF CASH FLOWS
2019
HCA Healthcare, Inc. Issuer | HCA Inc. Issuer | Subsidiary Guarantors (as adjusted) | Subsidiary Non- Guarantors (as adjusted) | Eliminations | Condensed Consolidated | |||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
Current assets: | ||||||||||||||||||||||||
Cash and cash equivalents | $ | — | $ | — | $ | 113 | $ | 533 | $ | — | $ | 646 | ||||||||||||
Accounts receivable, net | — | — | 3,388 | 2,438 | — | 5,826 | ||||||||||||||||||
Inventories | — | — | 1,001 | 502 | — | 1,503 | ||||||||||||||||||
Other | — | — | 592 | 519 | — | 1,111 | ||||||||||||||||||
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|
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|
|
| |||||||||||||
— | — | 5,094 | 3,992 | — | 9,086 | |||||||||||||||||||
Property and equipment, net | — | — | 10,464 | 5,888 | — | 16,352 | ||||||||||||||||||
Investments of insurance subsidiaries | — | — | — | 336 | — | 336 | ||||||||||||||||||
Investments in and advances to affiliates | 27,045 | — | 24 | 182 | (27,045 | ) | 206 | |||||||||||||||||
Goodwill and other intangible assets | — | — | 4,612 | 2,092 | — | 6,704 | ||||||||||||||||||
Other | 877 | — | 43 | 154 | — | 1,074 | ||||||||||||||||||
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| |||||||||||||
$ | 27,922 | $ | — | $ | 20,237 | $ | 12,644 | $ | (27,045 | ) | $ | 33,758 | ||||||||||||
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| |||||||||||||
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) | ||||||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||||||
Accounts payable | $ | — | $ | — | $ | 1,607 | $ | 711 | $ | — | $ | 2,318 | ||||||||||||
Accrued salaries | — | — | 811 | 454 | — | 1,265 | ||||||||||||||||||
Other accrued expenses | 29 | 572 | 528 | 906 | — | 2,035 | ||||||||||||||||||
Long-term debt due within one year | — | 97 | 72 | 47 | — | 216 | ||||||||||||||||||
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|
|
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|
| |||||||||||||
29 | 669 | 3,018 | 2,118 | — | 5,834 | |||||||||||||||||||
Long-term debt, net | 993 | 29,693 | 304 | 170 | — | 31,160 | ||||||||||||||||||
Intercompany balances | 33,784 | (10,277 | ) | (22,495 | ) | (1,012 | ) | — | — | |||||||||||||||
Professional liability risks | — | — | — | 1,148 | — | 1,148 | ||||||||||||||||||
Income taxes and other liabilities | 418 | 12 | 397 | 422 | — | 1,249 | ||||||||||||||||||
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|
|
|
|
|
| |||||||||||||
35,224 | 20,097 | (18,776 | ) | 2,846 | — | 39,391 | ||||||||||||||||||
Stockholders’ (deficit) equity attributable to HCA Healthcare, Inc. | (7,302 | ) | (20,097 | ) | 38,857 | 8,285 | (27,045 | ) | (7,302 | ) | ||||||||||||||
Noncontrolling interests | — | — | 156 | 1,513 | — | 1,669 | ||||||||||||||||||
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|
|
|
|
|
|
| |||||||||||||
(7,302 | ) | (20,097 | ) | 39,013 | 9,798 | (27,045 | ) | (5,633 | ) | |||||||||||||||
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| |||||||||||||
$ | 27,922 | $ | — | $ | 20,237 | $ | 12,644 | $ | (27,045 | ) | $ | 33,758 | ||||||||||||
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|
|
HCA Healthcare, Inc. Issuer | HCA Inc. Issuer | Subsidiary Guarantors | Subsidiary Non- Guarantors | Eliminations | Condensed Consolidated | |||||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||||||
Net income (loss) | $ | 3,505 | $ | (3,260 | ) | $ | 6,345 | $ | 1,152 | $ | (3,597 | ) | $ | 4,145 | ||||||||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||||||||||||||||||
Change in operating assets and liabilities | — | (62 | ) | 17 | (43 | ) | — | (88 | ) | |||||||||||||||
Depreciation and amortization | — | — | 1,447 | 1,149 | — | 2,596 | ||||||||||||||||||
Income taxes | 250 | — | — | — | — | 250 | ||||||||||||||||||
Gains on sales of facilities | — | — | (14 | ) | (4 | ) | — | (18 | ) | |||||||||||||||
Losses on retirement of debt | — | 211 | — | — | — | 211 | ||||||||||||||||||
Amortization of debt issuance costs | — | 30 | — | — | — | 30 | ||||||||||||||||||
Share-based compensation | — | — | 347 | — | — | 347 | ||||||||||||||||||
Equity in earnings of affiliates | (3,597 | ) | — | — | — | 3,597 | — | |||||||||||||||||
Other | 109 | — | 23 | (3 | ) | — | 129 | |||||||||||||||||
Net cash provided by (used in) operating activities | 267 | (3,081 | ) | 8,165 | 2,251 | — | 7,602 | |||||||||||||||||
Cash flows from investing activities: | ||||||||||||||||||||||||
Purchase of property and equipment | — | — | (2,342 | ) | (1,816 | ) | — | (4,158 | ) | |||||||||||||||
Acquisition of hospitals and health care entities | — | — | (43 | ) | (1,639 | ) | — | (1,682 | ) | |||||||||||||||
Sales of hospitals and health care entities | — | — | 42 | 19 | — | 61 | ||||||||||||||||||
Change in investments | — | — | 6 | 19 | — | 25 | ||||||||||||||||||
Other | — | — | (7 | ) | 41 | — | 34 | |||||||||||||||||
Net cash used in investing activities | — | — | (2,344 | ) | (3,376 | ) | — | (5,720 | ) | |||||||||||||||
Cash flows from financing activities: | ||||||||||||||||||||||||
Issuance of long-term debt | — | 6,451 | — | — | — | 6,451 | ||||||||||||||||||
Net change in revolving bank credit facilities | — | (560 | ) | — | — | — | (560 | ) | ||||||||||||||||
Repayment of long-term debt | — | (5,227 | ) | (59 | ) | (38 | ) | — | (5,324 | ) | ||||||||||||||
Distributions to noncontrolling interests | — | — | (104 | ) | (438 | ) | — | (542 | ) | |||||||||||||||
Payment of debt issuance costs | — | (73 | ) | — | — | — | (73 | ) | ||||||||||||||||
Payment of dividends | (550 | ) | — | — | — | — | (550 | ) | ||||||||||||||||
Repurchases of common stock | (1,031 | ) | — | — | — | — | (1,031 | ) | ||||||||||||||||
Changes in intercompany balances with affiliates, net | 1,457 | 2,490 | (5,714 | ) | 1,767 | — | — | |||||||||||||||||
Other | (143 | ) | �� | — | — | 1 | — | (142 | ) | |||||||||||||||
Net cash (used in) provided by financing activities | (267 | ) | 3,081 | (5,877 | ) | 1,292 | — | (1,771 | ) | |||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | — | — | — | 8 | — | 8 | ||||||||||||||||||
Change in cash and cash equivalents | — | — | (56 | ) | 175 | — | 119 | |||||||||||||||||
Cash and cash equivalents at beginning of period | — | — | 174 | 328 | — | 502 | ||||||||||||||||||
Cash and cash equivalents at end of period | $ | — | $ | — | $ | 118 | $ | 503 | $ | — | $ | 621 | ||||||||||||
2018
HCA Healthcare, Inc. Issuer | HCA Inc. Issuer | Subsidiary Guarantors | Subsidiary Non- Guarantors | Eliminations | Condensed Consolidated | |||||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||||||
Net income (loss) | $ | 2,216 | $ | (1,973 | ) | $ | 4,028 | $ | 948 | $ | (2,476 | ) | $ | 2,743 | ||||||||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||||||||||||||||||
Change in operating assets and liabilities | — | (193 | ) | (2,437 | ) | (1,705 | ) | — | (4,335 | ) | ||||||||||||||
Provision for doubtful accounts | — | — | 2,218 | 1,821 | — | 4,039 | ||||||||||||||||||
Depreciation and amortization | — | — | 1,237 | 894 | — | 2,131 | ||||||||||||||||||
Income taxes | 433 | — | — | — | — | 433 | ||||||||||||||||||
Gains on sales of facilities | — | — | (2 | ) | (6 | ) | — | (8 | ) | |||||||||||||||
Losses on retirement of debt | — | 39 | — | — | — | 39 | ||||||||||||||||||
Amortization of debt issuance costs | — | 31 | — | — | — | 31 | ||||||||||||||||||
Share-based compensation | — | — | 270 | — | — | 270 | ||||||||||||||||||
Equity in earnings of affiliates | (2,476 | ) | — | — | — | 2,476 | — | |||||||||||||||||
Other | 78 | — | — | 5 | — | 83 | ||||||||||||||||||
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|
|
|
|
| |||||||||||||
Net cash provided by (used in) operating activities | 251 | (2,096 | ) | 5,314 | 1,957 | — | 5,426 | |||||||||||||||||
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|
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|
|
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|
|
| |||||||||||||
Cash flows from investing activities: | ||||||||||||||||||||||||
Purchase of property and equipment | — | — | (1,681 | ) | (1,334 | ) | — | (3,015 | ) | |||||||||||||||
Acquisition of hospitals and health care entities | — | — | (26 | ) | (1,186 | ) | — | (1,212 | ) | |||||||||||||||
Disposal of hospitals and health care entities | — | — | 14 | 11 | — | 25 | ||||||||||||||||||
Change in investments | — | — | (1 | ) | (72 | ) | — | (73 | ) | |||||||||||||||
Other | — | — | — | (4 | ) | — | (4 | ) | ||||||||||||||||
|
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|
|
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|
|
|
|
| |||||||||||||
Net cash used in investing activities | — | — | (1,694 | ) | (2,585 | ) | — | (4,279 | ) | |||||||||||||||
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|
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|
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| |||||||||||||
Cash flows from financing activities: | ||||||||||||||||||||||||
Issuance of long-term debt | — | 1,500 | — | 2 | — | 1,502 | ||||||||||||||||||
Net change in revolving bank credit facilities | — | 760 | — | — | — | 760 | ||||||||||||||||||
Repayment of long-term debt | — | (628 | ) | (77 | ) | (48 | ) | — | (753 | ) | ||||||||||||||
Distributions to noncontrolling interests | — | — | (140 | ) | (308 | ) | — | (448 | ) | |||||||||||||||
Payment of debt issuance costs | — | (26 | ) | — | — | — | (26 | ) | ||||||||||||||||
Repurchases of common stock | (2,051 | ) | — | — | — | — | (2,051 | ) | ||||||||||||||||
Changes in intercompany balances with affiliates, net | 1,867 | 490 | (3,404 | ) | 1,047 | — | — | |||||||||||||||||
Other | (66 | ) | — | — | 21 | — | (45 | ) | ||||||||||||||||
|
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|
|
| |||||||||||||
Net cash (used in) provided by financing activities | (250 | ) | 2,096 | (3,621 | ) | 714 | — | (1,061 | ) | |||||||||||||||
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|
| |||||||||||||
Change in cash and cash equivalents | 1 | — | (1 | ) | 86 | — | 86 | |||||||||||||||||
Cash and cash equivalents at beginning of period | — | — | 113 | 533 | — | 646 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Cash and cash equivalents at end of period | $ | 1 | $ | — | $ | 112 | $ | 619 | $ | — | $ | 732 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
HCA Healthcare, Inc. Issuer | HCA Inc. Issuer | Subsidiary Guarantors | Subsidiary Non- Guarantors | Eliminations | Condensed Consolidated | |||||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||||||
Net income (loss) | $ | 3,787 | $ | (2,755 | ) | $ | 5,761 | $ | 1,284 | $ | (3,688 | ) | $ | 4,389 | ||||||||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||||||||||||||||||
Change in operating assets and liabilities | — | 23 | (178 | ) | 188 | — | 33 | |||||||||||||||||
Depreciation and amortization | — | — | 1,335 | 943 | — | 2,278 | ||||||||||||||||||
Income taxes | 74 | — | — | — | — | 74 | ||||||||||||||||||
Gains on sales of facilities | — | — | (357 | ) | (71 | ) | — | (428 | ) | |||||||||||||||
Losses on retirement of debt | — | 9 | — | — | — | 9 | ||||||||||||||||||
Amortization of debt issuance costs | — | 31 | — | — | — | 31 | ||||||||||||||||||
Share-based compensation | — | — | 268 | — | — | 268 | ||||||||||||||||||
Equity in earnings of affiliates | (3,688 | ) | — | — | — | 3,688 | — | |||||||||||||||||
Other | 91 | — | 25 | (9 | ) | — | 107 | |||||||||||||||||
Net cash provided by (used in) operating activities | 264 | (2,692 | ) | 6,854 | 2,335 | — | 6,761 | |||||||||||||||||
Cash flows from investing activities: | ||||||||||||||||||||||||
Purchase of property and equipment | — | — | (2,008 | ) | (1,565 | ) | — | (3,573 | ) | |||||||||||||||
Acquisition of hospitals and health care entities | — | — | (897 | ) | (356 | ) | — | (1,253 | ) | |||||||||||||||
Sales of hospitals and health care entities | — | — | 770 | 38 | — | 808 | ||||||||||||||||||
Change in investments | — | — | 12 | 45 | — | 57 | ||||||||||||||||||
Other | — | — | (9 | ) | 69 | — | 60 | |||||||||||||||||
Net cash used in investing activities | — | — | (2,132 | ) | (1,769 | ) | — | (3,901 | ) | |||||||||||||||
Cash flows from financing activities: | ||||||||||||||||||||||||
Issuance of long-term debt | — | 2,000 | — | — | — | 2,000 | ||||||||||||||||||
Net change in revolving bank credit facilities | — | (640 | ) | — | — | — | (640 | ) | ||||||||||||||||
Repayment of long-term debt | — | (1,590 | ) | (72 | ) | (42 | ) | — | (1,704 | ) | ||||||||||||||
Distributions to noncontrolling interests | — | — | (83 | ) | (358 | ) | — | (441 | ) | |||||||||||||||
Payment of debt issuance costs | — | (25 | ) | — | — | — | (25 | ) | ||||||||||||||||
Payment of dividends | (487 | ) | — | — | — | — | (487 | ) | ||||||||||||||||
Repurchases of common stock | (1,530 | ) | — | — | — | — | (1,530 | ) | ||||||||||||||||
Changes in intercompany balances with affiliates, net | 2,004 | 2,947 | (4,505 | ) | (446 | ) | — | — | ||||||||||||||||
Other | (252 | ) | — | — | 4 | — | (248 | ) | ||||||||||||||||
Net cash (used in) provided by financing activities | (265 | ) | 2,692 | (4,660 | ) | (842 | ) | — | (3,075 | ) | ||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | — | — | — | (15 | ) | — | (15 | ) | ||||||||||||||||
Change in cash and cash equivalents | (1 | ) | — | 62 | (291 | ) | — | (230 | ) | |||||||||||||||
Cash and cash equivalents at beginning of period | 1 | — | 112 | 619 | — | 732 | ||||||||||||||||||
Cash and cash equivalents at end of period | $ | — | $ | — | $ | 174 | $ | 328 | $ | — | $ | 502 | ||||||||||||
2017
HCA Healthcare, Inc. Issuer | HCA Inc. Issuer | Subsidiary Guarantors (as adjusted) | Subsidiary Non- Guarantors (as adjusted) | Eliminations | Condensed Consolidated | |||||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||||||
Net income (loss) | $ | 2,890 | $ | (1,586 | ) | $ | 3,741 | $ | 1,125 | $ | (2,738 | ) | $ | 3,432 | ||||||||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||||||||||||||||||
Change in operating assets and liabilities | (25 | ) | 39 | (2,180 | ) | (1,049 | ) | — | (3,215 | ) | ||||||||||||||
Provision for doubtful accounts | — | — | 2,041 | 1,216 | — | 3,257 | ||||||||||||||||||
Depreciation and amortization | — | — | 1,141 | 825 | — | 1,966 | ||||||||||||||||||
Income taxes | 123 | — | — | — | — | 123 | ||||||||||||||||||
Losses (gains) on sales of facilities | — | — | 4 | (27 | ) | — | (23 | ) | ||||||||||||||||
Losses on retirement of debt | — | 4 | — | — | — | 4 | ||||||||||||||||||
Legal claim benefits | — | (246 | ) | — | — | — | (246 | ) | ||||||||||||||||
Amortization of debt issuance costs | 1 | 33 | — | — | — | 34 | ||||||||||||||||||
Share-based compensation | — | — | 251 | — | — | 251 | ||||||||||||||||||
Equity in earnings of affiliates | (2,738 | ) | — | — | — | 2,738 | — | |||||||||||||||||
Other | 71 | — | — | (1 | ) | — | 70 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net cash provided by (used in) operating activities | 322 | (1,756 | ) | 4,998 | 2,089 | — | 5,653 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Cash flows from investing activities: | ||||||||||||||||||||||||
Purchase of property and equipment | — | — | (1,554 | ) | (1,206 | ) | — | (2,760 | ) | |||||||||||||||
Acquisition of hospitals and health care entities | — | — | (199 | ) | (377 | ) | — | (576 | ) | |||||||||||||||
Disposal of hospitals and health care entities | — | — | 10 | 16 | — | 26 | ||||||||||||||||||
Change in investments | — | — | (15 | ) | 79 | — | 64 | |||||||||||||||||
Other | — | — | — | 6 | — | 6 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net cash used in investing activities | — | — | (1,758 | ) | (1,482 | ) | — | (3,240 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Cash flows from financing activities: | ||||||||||||||||||||||||
Issuance of long-term debt | — | 5,400 | — | — | — | 5,400 | ||||||||||||||||||
Net change in revolving bank credit facilities | — | (110 | ) | — | — | — | (110 | ) | ||||||||||||||||
Repayment of long-term debt | — | (4,358 | ) | (74 | ) | (43 | ) | — | (4,475 | ) | ||||||||||||||
Distributions to noncontrolling interests | — | — | (64 | ) | (370 | ) | — | (434 | ) | |||||||||||||||
Payment of debt issuance costs | — | (40 | ) | — | — | — | (40 | ) | ||||||||||||||||
Repurchases of common stock | (2,751 | ) | — | — | — | — | (2,751 | ) | ||||||||||||||||
Changes in intercompany balances with affiliates, net | 2,532 | 864 | (3,149 | ) | (247 | ) | — | — | ||||||||||||||||
Other | (103 | ) | — | — | 5 | — | (98 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net cash (used in) provided by financing activities | (322 | ) | 1,756 | (3,287 | ) | (655 | ) | — | (2,508 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Change in cash and cash equivalents | — | — | (47 | ) | (48 | ) | — | (95 | ) | |||||||||||||||
Cash and cash equivalents at beginning of period | — | — | 160 | 581 | — | 741 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Cash and cash equivalents at end of period | $ | — | $ | — | $ | 113 | $ | 533 | $ | — | $ | 646 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
HCA Healthcare, Inc. Issuer | HCA Inc. Issuer | Subsidiary Guarantors | Subsidiary Non- Guarantors | Eliminations | Condensed Consolidated | |||||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||||||
Net income (loss) | $ | 2,216 | $ | (1,973 | ) | $ | 4,028 | $ | 948 | $ | (2,476 | ) | $ | 2,743 | ||||||||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||||||||||||||||||
Change in operating assets and liabilities | — | (193 | ) | (219 | ) | 116 | — | (296 | ) | |||||||||||||||
Depreciation and amortization | — | — | 1,237 | 894 | — | 2,131 | ||||||||||||||||||
Income taxes | 433 | — | — | — | — | 433 | ||||||||||||||||||
Gains on sales of facilities | — | — | (2 | ) | (6 | ) | — | (8 | ) | |||||||||||||||
Losses on retirement of debt | — | 39 | — | — | — | 39 | ||||||||||||||||||
Amortization of debt issuance costs | — | 31 | — | — | — | 31 | ||||||||||||||||||
Share-based compensation | — | — | 270 | — | — | 270 | ||||||||||||||||||
Equity in earnings of affiliates | (2,476 | ) | — | — | — | 2,476 | — | |||||||||||||||||
Other | 78 | — | — | 5 | — | 83 | ||||||||||||||||||
Net cash provided by (used in) operating activities | 251 | (2,096 | ) | 5,314 | 1,957 | — | 5,426 | |||||||||||||||||
Cash flows from investing activities: | ||||||||||||||||||||||||
Purchase of property and equipment | — | — | (1,681 | ) | (1,334 | ) | — | (3,015 | ) | |||||||||||||||
Acquisition of hospitals and health care entities | — | — | (26 | ) | (1,186 | ) | — | (1,212 | ) | |||||||||||||||
Sales of hospitals and health care entities | — | — | 14 | 11 | — | 25 | ||||||||||||||||||
Change in investments | — | — | (1 | ) | (72 | ) | — | (73 | ) | |||||||||||||||
Other | — | — | — | (4 | ) | — | (4 | ) | ||||||||||||||||
Net cash used in investing activities | — | — | (1,694 | ) | (2,585 | ) | — | (4,279 | ) | |||||||||||||||
Cash flows from financing activities: | ||||||||||||||||||||||||
Issuance of long-term debt | — | 1,500 | — | 2 | — | 1,502 | ||||||||||||||||||
Net change in revolving bank credit facilities | — | 760 | — | — | — | 760 | ||||||||||||||||||
Repayment of long-term debt | — | (628 | ) | (77 | ) | (48 | ) | — | (753 | ) | ||||||||||||||
Distributions to noncontrolling interests | — | — | (140 | ) | (308 | ) | — | (448 | ) | |||||||||||||||
Payment of debt issuance costs | — | (26 | ) | — | — | — | (26 | ) | ||||||||||||||||
Repurchases of common stock | (2,051 | ) | — | — | — | — | (2,051 | ) | ||||||||||||||||
Changes in intercompany balances with affiliates, net | 1,867 | 490 | (3,404 | ) | 1,047 | — | — | |||||||||||||||||
Other | (66 | ) | — | — | 21 | — | (45 | ) | ||||||||||||||||
Net cash (used in) provided by financing activities | (250 | ) | 2,096 | (3,621 | ) | 714 | — | (1,061 | ) | |||||||||||||||
Change in cash and cash equivalents | 1 | — | (1 | ) | 86 | — | 86 | |||||||||||||||||
Cash and cash equivalents at beginning of period | — | — | 113 | 533 | — | 646 | ||||||||||||||||||
Cash and cash equivalents at end of period | $ | 1 | $ | — | $ | 112 | $ | 619 | $ | — | $ | 732 | ||||||||||||
HCA HEALTHCARE, INC.
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2015
(Dollars in millions)
HCA Healthcare, Inc. Issuer | HCA Inc. Issuer | Subsidiary Guarantors (as adjusted) | Subsidiary Non- Guarantors (as adjusted) | Eliminations | Condensed Consolidated | |||||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||||||
Net income (loss) | $ | 2,129 | $ | (1,625 | ) | $ | 3,442 | $ | 1,102 | $ | (2,352 | ) | $ | 2,696 | ||||||||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||||||||||||||||||
Change in operating assets and liabilities | (12 | ) | 44 | (2,786 | ) | (1,482 | ) | — | (4,236 | ) | ||||||||||||||
Provision for doubtful accounts | — | — | 2,329 | 1,584 | — | 3,913 | ||||||||||||||||||
Depreciation and amortization | — | — | 1,085 | 819 | — | 1,904 | ||||||||||||||||||
Income taxes | (160 | ) | — | — | — | — | (160 | ) | ||||||||||||||||
Losses on sales of facilities | — | — | — | 5 | — | 5 | ||||||||||||||||||
Losses on retirement of debt | 122 | 13 | — | — | — | 135 | ||||||||||||||||||
Legal claim costs | 20 | 129 | — | — | — | 149 | ||||||||||||||||||
Amortization of debt issuance costs | 3 | 32 | — | — | — | 35 | ||||||||||||||||||
Share-based compensation | — | — | 239 | — | — | 239 | ||||||||||||||||||
Equity in earnings of affiliates | (2,352 | ) | — | — | — | 2,352 | — | |||||||||||||||||
Other | 66 | 3 | (5 | ) | (10 | ) | — | 54 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net cash (used in) provided by operating activities | (184 | ) | (1,404 | ) | 4,304 | 2,018 | — | 4,734 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Cash flows from investing activities: | ||||||||||||||||||||||||
Purchase of property and equipment | — | — | (1,560 | ) | (815 | ) | — | (2,375 | ) | |||||||||||||||
Acquisition of hospitals and health care entities | — | — | (51 | ) | (300 | ) | — | (351 | ) | |||||||||||||||
Disposal of hospitals and health care entities | — | — | 48 | 25 | — | 73 | ||||||||||||||||||
Change in investments | — | — | 7 | 56 | — | 63 | ||||||||||||||||||
Other | — | — | (6 | ) | 13 | — | 7 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net cash used in investing activities | — | — | (1,562 | ) | (1,021 | ) | — | (2,583 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Cash flows from financing activities: | ||||||||||||||||||||||||
Issuance of long-term debt | — | 5,548 | — | — | — | 5,548 | ||||||||||||||||||
Net change in revolving bank credit facilities | — | 150 | — | — | — | 150 | ||||||||||||||||||
Repayment of long-term debt | (1,632 | ) | (3,189 | ) | (60 | ) | (39 | ) | — | (4,920 | ) | |||||||||||||
Distributions to noncontrolling interests | — | — | (85 | ) | (410 | ) | — | (495 | ) | |||||||||||||||
Payment of debt issuance costs | — | (50 | ) | — | — | — | (50 | ) | ||||||||||||||||
Repurchases of common stock | (2,397 | ) | — | — | — | — | (2,397 | ) | ||||||||||||||||
Changes in intercompany balances with affiliates, net | 4,006 | (1,055 | ) | (2,526 | ) | (425 | ) | — | — | |||||||||||||||
Other | 207 | — | — | (19 | ) | — | 188 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Net cash provided by (used in) financing activities | 184 | 1,404 | (2,671 | ) | (893 | ) | — | (1,976 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Change in cash and cash equivalents | — | — | 71 | 104 | — | 175 | ||||||||||||||||||
Cash and cash equivalents at beginning of period | — | — | 89 | 477 | — | 566 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Cash and cash equivalents at end of period | $ | — | $ | — | $ | 160 | $ | 581 | $ | — | $ | 741 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
HCA HEALTHCARE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 17 — SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION AND OTHER COLLATERAL-RELATED INFORMATION (continued)
The above supplemental condensed consolidating financial information as of December 31, 2016, and for the years ended December 31, 2016 and 2015, has been adjusted to properly record the impact of certain subsidiaries that werenon-guarantors becoming guarantors, primarily related to the Company acquiring previous noncontrolling interests ofnon-guarantor subsidiaries that then became guarantor subsidiaries. We believe the impact of these adjustments was immaterial as they had no impact to our consolidated income statements, balance sheets or statements of cash flows, had no impact on any liquidity measures of the Company, nor did they impact any financial ratios based on our consolidated balance sheets or income statements. There was also no impact to our loan covenant reporting or compliance. The impact of the adjustments was limited to reclassifications between the Subsidiary Guarantors and SubsidiaryNon-Guarantors columns of the condensed consolidating financial statements. The application of these adjustments to the consolidating information for 2016 and 2015 is summarized as follows (dollars in millions):
As Previously Reported | Adjustment | As Adjusted | ||||||||||
Year ended December 31, 2016 | ||||||||||||
Net income (loss) attributable to HCA Healthcare, Inc.: | ||||||||||||
HCA Healthcare, Inc. Issuer | $ | 2,890 | $ | — | $ | 2,890 | ||||||
HCA Inc. Issuer | (1,586 | ) | — | (1,586 | ) | |||||||
Subsidiary Guarantors | 3,235 | 413 | 3,648 | |||||||||
SubsidiaryNon-Guarantors | 1,089 | (413 | ) | 676 | ||||||||
Eliminations | (2,738 | ) | — | (2,738 | ) | |||||||
|
|
|
|
|
| |||||||
Condensed Consolidated | $ | 2,890 | $ | — | $ | 2,890 | ||||||
|
|
|
|
|
|
As Previously Reported | Adjustment | As Adjusted | ||||||||||
December 31, 2016 | ||||||||||||
Total assets: | ||||||||||||
HCA Healthcare, Inc. Issuer | $ | 27,922 | $ | — | $ | 27,922 | ||||||
HCA Inc. Issuer | — | — | — | |||||||||
Subsidiary Guarantors | 14,714 | 5,523 | (a) | 20,237 | ||||||||
SubsidiaryNon-Guarantors | 18,167 | (5,523 | )(a) | 12,644 | ||||||||
Eliminations | (27,045 | ) | — | (27,045 | ) | |||||||
|
|
|
|
|
| |||||||
Condensed Consolidated | $ | 33,758 | $ | — | $ | 33,758 | ||||||
|
|
|
|
|
|
HCA HEALTHCARE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 17 — SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION AND OTHER COLLATERAL-RELATED INFORMATION (continued)
As Previously Reported | Adjustment | As Adjusted | ||||||||||
December 31, 2016 | ||||||||||||
Total liabilities: | ||||||||||||
HCA Healthcare, Inc. Issuer | $ | 35,224 | $ | — | $ | 35,224 | ||||||
HCA Inc. Issuer | 20,097 | — | 20,097 | |||||||||
Subsidiary Guarantors | (23,194 | ) | 4,418 | (b) | (18,776 | ) | ||||||
SubsidiaryNon-Guarantors | 7,264 | (4,418 | )(b) | 2,846 | ||||||||
Eliminations | — | — | — | |||||||||
|
|
|
|
|
| |||||||
Condensed Consolidated | $ | 39,391 | $ | — | $ | 39,391 | ||||||
|
|
|
|
|
|
As Previously Reported | Adjustment | As Adjusted | ||||||||||
Year ended December 31, 2016 | ||||||||||||
Net cash provided (used in) operating activities: | ||||||||||||
HCA Healthcare, Inc. Issuer | $ | 322 | $ | — | $ | 322 | ||||||
HCA Inc. Issuer | (1,756 | ) | — | (1,756 | ) | |||||||
Subsidiary Guarantors | 4,425 | 573 | 4,998 | |||||||||
SubsidiaryNon-Guarantors | 2,662 | (573 | ) | 2,089 | ||||||||
Eliminations | — | — | — | |||||||||
|
|
|
|
|
| |||||||
Condensed Consolidated | $ | 5,653 | $ | — | $ | 5,653 | ||||||
|
|
|
|
|
|
As Previously Reported | Adjustment | As Adjusted | ||||||||||
Year ended December 31, 2015 | ||||||||||||
Net income (loss) attributable to HCA Healthcare, Inc.: | ||||||||||||
HCA Healthcare, Inc. Issuer | $ | 2,129 | $ | — | $ | 2,129 | ||||||
HCA Inc. Issuer | (1,625 | ) | — | (1,625 | ) | |||||||
Subsidiary Guarantors | 2,970 | 380 | 3,350 | |||||||||
SubsidiaryNon-Guarantors | 1,007 | (380 | ) | 627 | ||||||||
Eliminations | (2,352 | ) | — | (2,352 | ) | |||||||
|
|
|
|
|
| |||||||
Condensed Consolidated | $ | 2,129 | $ | — | $ | 2,129 | ||||||
|
|
|
|
|
|
HCA HEALTHCARE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 17 — SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION AND OTHER COLLATERAL-RELATED INFORMATION (continued)
As Previously Reported | Adjustment | As Adjusted | ||||||||||
Year ended December 31, 2015 | ||||||||||||
Net cash provided (used in) operating activities: | ||||||||||||
HCA Healthcare, Inc. Issuer | $ | (184 | ) | $ | — | $ | (184 | ) | ||||
HCA Inc. Issuer | (1,404 | ) | — | (1,404 | ) | |||||||
Subsidiary Guarantors | 3,772 | 532 | 4,304 | |||||||||
SubsidiaryNon-Guarantors | 2,550 | (532 | ) | 2,018 | ||||||||
Eliminations | — | — | — | |||||||||
|
|
|
|
|
| |||||||
Condensed Consolidated | $ | 4,734 | $ | — | $ | 4,734 | ||||||
|
|
|
|
|
|
Healthtrust, Inc. — The Hospital Company (“Healthtrust”) is the first-tier subsidiary of HCA Inc. The common stock of Healthtrust has been pledged as collateral for the senior secured credit facilities and senior secured notes described in Note 9. Ruledeficit.
deficit and cash flows.
2017 | 2016 | 2015 | ||||||||||
Presentation in HCA Healthcare, Inc. Consolidated Statements of Stockholders’ Deficit: | ||||||||||||
Share-based benefit plans | $ | 281 | $ | 233 | $ | 523 | ||||||
Other | (10 | ) | (2 | ) | (18 | ) | ||||||
|
|
|
|
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Presentation in Healthtrust, Inc. — The Hospital Company Consolidated Statements of Stockholder’s Deficit: | ||||||||||||
Distributions from HCA Healthcare, Inc., net of contributions to HCA Healthcare, Inc. | $ | 271 | $ | 231 | $ | 505 | ||||||
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2019 | 2018 | 2017 | ||||||||||
Presentation in HCA Healthcare, Inc. Consolidated Statements of Stockholders’ Deficit: | ||||||||||||
Repurchases of common stock | $ | (1,031 | ) | $ | (1,530 | ) | $ | (2,051 | ) | |||
Share-based benefit plans | 313 | 115 | 281 | |||||||||
Cash dividends declared ($1.60 per share — 2019 and $1.40 per share — 2018) | (555 | ) | (496 | ) | — | |||||||
Other | (11 | ) | (12 | ) | (10 | ) | ||||||
Presentation in Healthtrust, Inc. — The Hospital Company Consolidated Statements of Stockholder’s Deficit: | ||||||||||||
Distributions to HCA Healthcare, Inc., net of contributions from HCA Healthcare, Inc. | $ | (1,284 | ) | $ | (1,923 | ) | $ | (1,780 | ) | |||
Presentation in HCA Healthcare, Inc. Consolidated Statements of Cash Flows (cash flows from financing activities): | ||||||||||||
Repurchases of common stock | $ | (1,031 | ) | $ | (1,530 | ) | $ | (2,051 | ) | |||
Payment of dividends | (550 | ) | (487 | ) | — | |||||||
Presentation in Healthtrust, Inc. — The Hospital Company Consolidated Statements of Cash Flows (cash flows from financing activities): | ||||||||||||
Cash distributions to HCA Healthcare, Inc. | $ | (1,581 | ) | $ | (2,017 | ) | $ | (2,051 | ) | |||
2017 | ||||||||||||||||
First | Second | Third | Fourth | |||||||||||||
Revenues | $ | 10,623 | $ | 10,733 | $ | 10,696 | $ | 11,562 | ||||||||
Net income | $ | 777 | (a) | $ | 795 | (b) | $ | 530 | (c) | $ | 641 | (d) | ||||
Net income attributable to HCA Healthcare, Inc. | $ | 659 | (a) | $ | 657 | (b) | $ | 426 | (c) | $ | 474 | (d) | ||||
Basic earnings per share | $ | 1.78 | $ | 1.79 | $ | 1.18 | $ | 1.34 | ||||||||
Diluted earnings per share | $ | 1.74 | $ | 1.75 | $ | 1.15 | $ | 1.30 |
2016 | ||||||||||||||||
First | Second | Third | Fourth | |||||||||||||
Revenues | $ | 10,260 | $ | 10,319 | $ | 10,270 | $ | 10,641 | ||||||||
Net income | $ | 811 | (e) | $ | 791 | (f) | $ | 745 | (g) | $ | 1,085 | (h) | ||||
Net income attributable to HCA Healthcare, Inc. | $ | 694 | (e) | $ | 658 | (f) | $ | 618 | (g) | $ | 920 | (h) | ||||
Basic earnings per share | $ | 1.75 | $ | 1.70 | $ | 1.63 | $ | 2.46 | ||||||||
Diluted earnings per share | $ | 1.69 | $ | 1.65 | $ | 1.59 | $ | 2.39 |
2019 | ||||||||||||||||
First | Second | Third | Fourth | |||||||||||||
Revenues | $ | 12,517 | $ | 12,602 | $ | 12,694 | $ | 13,523 | ||||||||
Net income | $ | 1,181 | (a) | $ | 927 | (b) | $ | 764 | (c) | $ | 1,273 | |||||
Net income attributable to HCA Healthcare, Inc. | $ | 1,039 | (a) | $ | 783 | (b) | $ | 612 | (c) | $ | 1,071 | |||||
Basic earnings per share | $ | 3.03 | $ | 2.29 | $ | 1.80 | $ | 3.16 | ||||||||
Diluted earnings per share | $ | 2.97 | $ | 2.25 | $ | 1.76 | $ | 3.09 |
2018 | ||||||||||||||||
First | Second | Third | Fourth | |||||||||||||
Revenues | $ | 11,423 | $ | 11,529 | $ | 11,451 | $ | 12,274 | ||||||||
Net income | $ | 1,282 | ( d ) | $ | 966 | ( e ) | $ | 896 | ( f ) | $ | 1,245 | ( g ) | ||||
Net income attributable to HCA Healthcare, Inc. | $ | 1,144 | ( d ) | $ | 820 | ( e ) | $ | 759 | ( f ) | $ | 1,064 | ( g ) | ||||
Basic earnings per share | $ | 3.26 | $ | 2.35 | $ | 2.20 | $ | 3.09 | ||||||||
Diluted earnings per share | $ | 3.18 | $ | 2.31 | $ | 2.15 | $ | 3.01 |
(a) | First |
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(c) | Third quarter results include $ 162 million of |
F irst quarter results include $305 million of gains on sales of facilities (See Note 3 of the notes to consolidated financial statements). |
( e ) | Second quarter results include |
( f ) | Third quarter results include $ 5 million of gains on sales of facilities (See Note 3 of the notes to consolidated financial statements) and $7 million of |
g ) |
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F-46