(615)

344-9551

(Registrant’s telephone number, including area code)

Not Applicable

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

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


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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes

☒

☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of

Regulation

S-T

during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes

☒

☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a

non-accelerated

filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in

Rule

12b-2

of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
~~Non-accelerated~~ ~~filer~~	☐	~~Smaller reporting company~~	☐
~~Emerging growth company~~ Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

☐

Indicate by check mark whether the registrant is a shell company (as defined in

Rule

12b-2

of the Exchange Act). Yes

☐

No ☒

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


Class of Common Stock		Outstanding at April 26, 2021

~~Class of Common Stock~~		~~Outstanding at April 30, 2020~~
Voting common stock, $.01 par value		~~337,618,900~~330,655,500 shares

Table of Contents

HCA HEALTHCARE, INC.

Form

10-Q

March 31, ~~2020~~2021


		Page of Form 10-Q
Part I.	Financial Information


Item 1.	Financial Statements (Unaudited):


	Condensed Consolidated Income Statements — for the quarters ended March 31, ~~2020~~2021 and ~~2019~~2020			2


	Condensed Consolidated Comprehensive Income Statements — for the quarters ended March 31, ~~2020~~2021 and ~~2019~~2020			3


	Condensed Consolidated Balance Sheets — March 31, ~~2020~~2021 and December 31, ~~2019~~2020			4


	Condensed Consolidated Statements of Stockholders’ ~~Deficit~~Equity (Deficit) — for the quarters ended March 31, ~~2020~~2021 and ~~2019~~2020			5


	Condensed Consolidated Statements of Cash Flows — for the quarters ended March 31, ~~2020~~2021 and ~~2019~~2020			6


	Notes to Condensed Consolidated Financial Statements			7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		20	18

Item 3.	Quantitative and Qualitative Disclosures About Market Risk		35		33

Item 4.	Controls and Procedures		35		33

Part II.	Other Information


Item 1.	Legal Proceedings		35		33

Item 1A.	Risk Factors		36		33

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		38		33

Item 6.	Exhibits		40		35

Signatures			42	36

Table of Contents

HCA HEALTHCARE, INC.

CONDENSED CONSOLIDATED INCOME STATEMENTS

FOR THE QUARTERS ENDED MARCH 31, ~~2020~~2021 AND ~~2019~~2020

Unaudited

(Dollars in millions, except per share amounts)

2020

2019

Revenues
$
12,861
$
12,517

Salaries and benefits

6,118

5,647

Supplies

2,123

2,041

Other operating expenses

2,427

2,299

Equity in earnings of affiliates

(7
)
(11
)
Depreciation and amortization

674

619

Interest expense

428

461

Losses (gains) on sales of facilities

(7
)
1

Losses on retirement of debt

295

—

12,051

11,057

Income before income taxes

810

1,460

Provision for income taxes

112

279

Net income

698

1,181

Net income attributable to noncontrolling interests

117

142

Net income attributable to HCA Healthcare, Inc.
$
581
$
1,039

Per share data:

Basic earnings
$
1.72
$
3.03

Diluted earnings
$
1.69
$
2.97

Shares used in earnings per share calculations (in millions):

Basic

338.242

342.876

Diluted

344.096

350.316


	2021			2020
Revenues	$	13,977		$	12,861

Salaries and benefits		6,301			6,118
Supplies		2,224			2,123
Other operating expenses		2,421			2,427
Equity in earnings of affiliates		(21	)		(7	)
Depreciation and amortization		697			674
Interest expense		384			428
Gains on sales of facilities		(2	)		(7	)
Losses on retirement of debt		0			295

	12,004			12,051

Income before income taxes		1,973			810
Provision for income taxes		393			112

Net income		1,580			698
Net income attributable to noncontrolling interests		157			117

Net income attributable to HCA Healthcare, Inc.	$	1,423		$	581

Per share data:
Basic earnings	$	4.21		$	1.72
Diluted earnings	$	4.14		$	1.69
Shares used in earnings per share calculations (in millions):
Basic		338.123			338.242
Diluted		343.321			344.096

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

Table of Contents

HCA HEALTHCARE, INC.

CONDENSED CONSOLIDATED COMPREHENSIVE INCOME STATEMENTS

FOR THE QUARTERS ENDED MARCH 31, ~~2020~~2021 AND ~~2019~~2020

Unaudited

(Dollars in millions)

2020

2019

Net income
$
698
$
1,181

Other comprehensive income (loss) before taxes:

Foreign currency translation

(73
)
20

Unrealized gains (losses) on
available-for-sale
securities

(5
)
8

Defined benefit plans

—

—

Pension costs included in salaries and benefits

4

3

4

3

Change in fair value of derivative financial instruments

(60
)
(18
)
Interest benefits included in interest expense

(1
)
(5
)

(61
)
(23
)

Other comprehensive income (loss) before taxes

(135
)
8

Income taxes (benefits) related to other comprehensive income items

(24
)
1

Other comprehensive income (loss)

(111
)
7

Comprehensive income

587

1,188

Comprehensive income attributable to noncontrolling interests

117

142

Comprehensive income attributable to HCA Healthcare, Inc.
$
470
$
1,046

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

~~Table of Contents~~

~~HCA HEALTHCARE, INC.~~

~~CONDENSED CONSOLIDATED BALANCE SHEETS~~

~~Unaudited~~

~~(Dollars in millions)~~

March 31,
2020

December 31,
2019

ASSETS

Current assets:

Cash and cash equivalents
$
731
$
621

Accounts receivable

6,890

7,380

Inventories

1,953

1,849

Other

1,442

1,346

11,016

11,196

Property and equipment, at cost

47,861

47,235

Accumulated depreciation

(24,876
)
(24,520
)

22,985

22,715

Investments of insurance subsidiaries

325

315

Investments in and advances to affiliates

238

249

Goodwill and other intangible assets

8,587

8,269

Right-of-use
operating lease assets

1,828

1,834

Other

442

480

$
45,421
$
45,058

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current liabilities:

Accounts payable
$
2,750
$
2,905

Accrued salaries

1,560

1,775

Other accrued expenses

2,547

2,932

Long-term debt due within one year

162

145

7,019

7,757

Long-term debt, less debt issuance costs and discounts of $258 and $239

34,699

33,577

Professional liability risks

1,432

1,370

Right-of-use
operating lease obligations

1,497

1,499

Income taxes and other liabilities

1,477

1,420

Stockholders’ deficit:

Common stock $0.01 par; authorized 1,800,000,000 shares; outstanding 337,607,500 shares in 2020 and 338,445,600 shares in 2019

3

3

Accumulated other comprehensive loss

(571
)
(460
)
Retained deficit

(2,394
)
(2,351
)

Stockholders’ deficit attributable to HCA Healthcare, Inc.

(2,962
)
(2,808
)
Noncontrolling interests

2,259

2,243

(703
)
(565
)

$
45,421
$
45,058


	2021			2020
Net income	$	1,580		$	698
Other comprehensive income (loss) before taxes:
Foreign currency translation		8			(73	)

Unrealized losses on available-for-sale securities		(11	)		(5	)

Defined benefit plans		0			0
Pension costs included in salaries and benefits		7			4

	7			4

Change in fair value of derivative financial instruments		1			(60	)
Interest expense (benefits) included in interest expense		9			(1	)

		10			(61	)

Other comprehensive income (loss) before taxes		14			(135	)
Income taxes (benefits) related to other comprehensive income items		3			(24	)

Other comprehensive income (loss)		11			(111	)

Comprehensive income		1,591			587
Comprehensive income attributable to noncontrolling interests		157			117

Comprehensive income attributable to HCA Healthcare, Inc.	$	1,434		$	470

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

Table of Contents

HCA HEALTHCARE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

Unaudited

(Dollars in millions)


	March 31, 2021			December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents	$	1,030		$	1,793
Accounts receivable		7,424			7,051
Inventories		2,068			2,025
Other		1,514			1,464

		12,036			12,333

Property and equipment, at cost		49,877			49,317
Accumulated depreciation		(26,689	)		(26,118	)

		23,188			23,199

Investments of insurance subsidiaries		393			388
Investments in and advances to affiliates		427			422
Goodwill and other intangible assets		8,575			8,578
Right-of-use operating lease assets		2,083			2,024
Other		575			546

	$	47,277		$	47,490

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	3,524		$	3,535
Accrued salaries		1,767			1,720
Other accrued expenses		3,117			3,240
Long-term debt due within one year		234			209

		8,642			8,704

Long-term debt, less debt issuance costs and discounts of $229 and $236		30,838			30,795
Professional liability risks		1,553			1,486
Right-of-use operating lease obligations		1,730			1,673
Income taxes and other liabilities		2,032			1,940

Stockholders’ equity:
Common stock $0.01 par; authorized 1,800,000,000 shares; outstanding 333,714,500 shares — 2021 and 339,425,600 shares — 2020		3			3
Capital in excess of par value		0			294
Accumulated other comprehensive loss		(491	)		(502	)
Retained earnings		735			777

Stockholders’ equity attributable to HCA Healthcare, Inc.		247			572
Noncontrolling interests		2,235			2,320

		2,482			2,892

	$	47,277		$	47,490

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

Table of Contents

HCA HEALTHCARE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

FOR THE QUARTERS ENDED MARCH 31, 2021 AND 2020

Unaudited

(Dollars in millions)


	Equity (Deficit) Attributable to HCA Healthcare, Inc.														Equity Attributable to Noncontrolling Interests			Total
	Common Stock					Capital in Excess of Par Value			Accumulated Other Comprehensive Loss			Retained Earnings (Deficit )
	Shares (in millions)			Par Value		Capital in Excess of Par Value			Accumulated Other Comprehensive Loss			Retained Earnings (Deficit )
Balances, December 31 , 2019		338.446		$	3	$	—		$	(460	)	$	(2,351	)	$	2,243		$	(565	)
Comprehensive income										(111	)		581			117			587
Repurchase of common stock		(3.287	)										(441	)					(441	)
Share-based benefit plans		2.449					2						(35	)					(33	)
Cash dividends declared ($0.43 per share)													(148	)					(148	)
Distributions																(154	)		(154	)
Other							(2	)								53			51

Balances, March 31, 2020		337.608			3		—			(571	)		(2,394	)		2,259			(703	)
Comprehensive income										9			1,079			137			1,225
Share-based benefit plans		0.352					93												93
Distributions																(45	)		(45	)
Other							(5	)								3			(2	)

Balances, June 30, 2020		337.960			3		88			(562	)		(1,315	)		2,354			568
Comprehensive income										47			668			111			826
Share-based benefit plans		0.410					97												97
Distributions																(194	)		(194	)
Other																2			2

Balances, September 30, 2020		338.370			3		185			(515	)		(647	)		2,273			1,299
Comprehensive income										13			1,426			268			1,707
Share-based benefit plans		1.056					108												108
Cash dividends declared ($ 0.43 per share)													(2	)					(2	)
Distributions																(233	)		(233	)
Other							1									12			13

Balances, December 31, 2020		339.426			3		294			(502	)		777			2,320			2,892
Comprehensive income										11			1,423			157			1,591
Repurchase of common stock		(8.477	)				(225	)					(1,302	)					(1,527	)
Share-based benefit plans		2.765					(75	)											(75	)
Cash dividends declared ($0.48 per share)													(163	)					(163	)
Distributions																(234	)		(234	)
Other							6									(8	)		(2	)

Balances, March 31 , 2021		333.714		$	3	$	—		$	(491	)	$	735		$	2,235		$	2,482

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

Table of Contents

HCA HEALTHCARE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF ~~STOCKHOLDERS’ DEFICIT~~CASH FLOWS

FOR THE QUARTERS ENDED MARCH 31, ~~2020~~2021 AND ~~2019~~2020

Unaudited

(Dollars in millions)

Equity (Deficit) Attributable to HCA Healthcare, Inc.

Equity
Attributable to
Noncontrolling
Interests

Total

Common Stock

Capital in
Excess of
Par
Value

Accumulated
Other
Comprehensive
Loss

Retained
Deficit

Shares
(in millions)

Par
Value

Balances, December 31, 2018

342.895
$
3
$
—
$
(381
) $
(4,572
) $
2,032
$
(2,918
)
Comprehensive income

7

1,039

142

1,188

Repurchase of common stock

(2.106
)
32

(310
)
(278
)
Share-based benefit plans

2.242

(29
)
(29
)
Cash dividends declared ($0.40 per share)

(140
)
(140
)
Distributions

(136
)
(136
)
Other

(3
)
61

58

Balances, March 31, 2019

343.031

3

—

(374
)
(3,983
)
2,099

(2,255
)
Comprehensive income

(57
)
783

144

870

Repurchase of common stock

(1.928
)
(107
)
(135
)
(242
)
Share-based benefit plans

0.414

118

118

Cash dividends declared ($0.40 per share)

(139
)
(139
)
Distributions

(111
)
(111
)
Other

(11
)
(11
)

Balances, June 30, 2019

341.517

3

—

(431
)
(3,474
)
2,132

(1,770
)
Comprehensive income

(30
)
612

152

734

Repurchase of common stock

(1.846
)
(132
)
(107
)
(239
)
Share-based benefit plans

0.382

128

128

Cash dividends declared ($0.40 per share)

(138
)
(138
)
Distributions

(157
)
(157
)
Other

4

(9
)
(5
)

Balances, September 30, 2019

340.053

3

—

(461
)
(3,107
)
2,118

(1,447
)
Comprehensive income

1

1,071

202

1,274

Repurchase of common stock

(2.069
)
(95
)
(177
)
(272
)
Share-based benefit plans

0.462

96

96

Cash dividends declared ($0.40 per share)

(138
)
(138
)
Distributions

(138
)
(138
)
Other

(1
)
61

60

Balances, December 31, 2019

338.446

3

—

(460
)
(2,351
)
2,243

(565
)
Comprehensive income

(111
)
581

117

587

Repurchase of common stock

(3.287
)
35

(476
)
(441
)
Share-based benefit plans

2.449

(33
)
(33
)
Cash dividends declared ($0.43 per share)

(148
)
(148
)
Distributions

(154
)
(154
)
Other

(2
)
53

51

Balances, March 31, 2020

337.608
$
3
$
—
$
(571
) $
(2,394
) $
2,259
$
(703
)


	2021			2020
Cash flows from operating activities:
Net income	$	1,580		$	698
Adjustments to reconcile net income to net cash provided by operating activities:
Increase (decrease) in cash from operating assets and liabilities:
Accounts receivable		(371	)		464
Inventories and other assets		(85	)		(196	)
Accounts payable and accrued expenses		(371	)		(784	)
Depreciation and amortization		697			674
Income taxes		406			121
Gains on sales of facilities		(2	)		(7	)
Losses on retirement of debt		0			295
Amortization of debt issuance costs and discounts		8			7
Share-based compensation		97			82
Other		29			21

Net cash provided by operating activities		1,988			1,375

Cash flows from investing activities:
Purchase of property and equipment		(654	)		(853	)
Acquisition of hospitals and health care entities		(22	)		(328	)
Sales of hospitals and health care entities		20			35
Change in investments		(2	)		(1	)
Other		9			2

Net cash used in investing activities		(649	)		(1,145	)

Cash flows from financing activities:
Issuances of long-term debt		0			2,700
Net change in revolving credit facilities		80			1,440
Repayment of long-term debt		(47	)		(3,327	)
Distributions to noncontrolling interests		(234	)		(154	)
Payment of debt issuance costs		0			(34	)
Payment of dividends		(169	)		(152	)
Repurchase of common stock		(1,527	)		(441	)
Other		(207	)		(141	)

Net cash used in financing activities		(2,104	)		(109	)

Effect of exchange rate changes on cash and cash equivalents		2			(11	)

Change in cash and cash equivalents		(763	)		110
Cash and cash equivalents at beginning of period		1,793			621

Cash and cash equivalents at end of period	$	1,030		$	731

Interest payments	$	375		$	468
Income tax refunds, net	$	(13	)	$	(9	)

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

Table of Contents

HCA HEALTHCARE, INC.

~~CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS~~

~~FOR THE QUARTERS ENDED MARCH 31, 2020 AND 2019~~

~~Unaudited~~

~~(Dollars in millions)~~

2020

2019

Cash flows from operating activities:

Net income
$
698
$
1,181

Adjustments to reconcile net income to net cash provided by operating activities:

Increase (decrease) in cash from operating assets and liabilities:

Accounts receivable

464

(369
)
Inventories and other assets

(196
)
(174
)
Accounts payable and accrued expenses

(784
)
(651
)
Depreciation and amortization

674

619

Income taxes

121

269

Losses (gains) on sales of facilities

(7
)
1

Losses on retirement of debt

295

—

Amortization of debt issuance costs and discounts

7

8

Share-based compensation

82

62

Other

21

28

Net cash provided by operating activities

1,375

974

Cash flows from investing activities:

Purchase of property and equipment

(853
)
(781
)
Acquisition of hospitals and health care entities

(328
)
(1,474
)
Sales of hospitals and health care entities

35

30

Change in investments

(1
)
36

Other

2

24

Net cash used in investing activities

(1,145
)
(2,165
)

Cash flows from financing activities:

Issuances of long-term debt

2,700

1,500

Net change in revolving bank credit facilities

1,440

460

Repayment of long-term debt

(3,327
)
(49
)
Distributions to noncontrolling interests

(154
)
(136
)
Payment of debt issuance costs

(34
)
(22
)
Payment of dividends

(152
)
(141
)
Repurchases of common stock

(441
)
(278
)
Other

(141
)
(118
)

Net cash (used in) provided by financing activities

(109
)
1,216

Effect of exchange rate changes on cash and cash equivalents

(11
)
4

Change in cash and cash equivalents

110

29

Cash and cash equivalents at beginning of period

621

502

Cash and cash equivalents at end of period
$
731
$
531

Interest payments
$
468
$
580

Income tax (refunds) payments, net
$
(9
) $
10

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

~~Table of Contents~~

~~HCA HEALTHCARE, INC.~~

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 — BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Reporting Entity

HCA Healthcare, Inc. is a holding company whose affiliates own and operate hospitals and related health care entities. The term “affiliates” includes direct and indirect subsidiaries of HCA Healthcare, Inc. and partnerships and joint ventures in which such subsidiaries are partners. At March 31, ~~2020,~~2021, these affiliates owned and operated 186 hospitals, ~~123~~121 freestanding surgery centers, 21 freestanding endoscopy centers and provided extensive outpatient and ancillary services. HCA Healthcare, Inc.’s facilities are located in 2120 states and England. The terms “Company,” “HCA,” “we,” “our” or “us,” as used herein and unless otherwise stated or indicated by context, refer to HCA Healthcare, Inc. and its affiliates. The terms “facilities” or “hospitals” refer to entities owned and operated by affiliates of HCA and the term “employees” refers to employees of affiliates of HCA.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to

Form

10-Q

and Article 10 of

Regulation

S-X.

Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete consolidated financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included and are of a normal and recurring nature.

The majority of our expenses are “costs of revenues” items. Costs that could be classified as general and administrative would include our corporate office costs, which were ~~$96~~$87 million and ~~$86~~$96 million for the quarters ended March 31, ~~2020~~2021 and ~~2019,~~2020, respectively. Operating results for the quarter ended March 31, ~~2020~~2021 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2020.~~2021. For further information, refer to the consolidated financial statements and footnotes thereto included in our annual report on

Form

10-K

for the year ended December 31, ~~2019.~~2020

COVID-19

Pandemic

On March 11, 2020, the World Health Organization designated

COVID-19

as a global pandemic. Patient volumes and the related revenues for most of our services were significantly impacted induring the ~~last two weeks~~latter portion of the first quarter and the first half of the second quarter of 2020 and have continued to be impacted as various policies were implemented by federal, state and local governments in response to the

COVID-19

pandemic, that have caused many people to remain at home and forced the closure of certain businesses, as well as suspended elective surgical procedures by health care facilities. We expect consolidated patient volumes and revenues to be negatively impacted until the effects of the pandemic begin to subside and the ~~economy begins to stabilize.~~

~~Our response plan has multiple facets and continues to evolve as the pandemic unfolds. As a precautionary measure, we have taken steps to enhance our operational and financial flexibility, and react~~public remains wary of real or perceived opportunities for exposure to the ~~risks the~~

~~COVID-19~~

~~pandemic presents to our business, including the following:~~

~~Implemented certain cost reduction initiatives;~~

~~Suspended our authorized share repurchase program;~~

~~Suspended our quarterly dividend program;~~

~~Reduced certain planned projects and capital expenditures;~~

~~Executed a new $2 billion 364-day term loan facility (which was undrawn at March 31, 2020) to supplement our existing credit facilities;~~

~~and~~

~~Subsequent to March 31, 2020, requested accelerated Medicare payments as provided for in the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act~~

~~Table of Contents~~

~~HCA HEALTHCARE, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~NOTE 1 — BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)~~

~~COVID-19 Pandemic (continued)~~

virus. We believe the extent of the

COVID-19

pandemic’s ~~adverse~~ impact on our operating results and financial condition has been and will continue to be driven by many factors, most of which are beyond our control and ability to forecast. ~~Such factors include, but are not limited to, the scope and duration of~~

~~stay-at-home~~

policies and business closures, continued decreases in patient volumes for an indeterminable length of time, increases in the number of uninsured and underinsured patients as a result of accelerated rates of unemployment, incremental expenses required for supplies and personal protective equipment, and changes in professional and general liability exposure. Because of these ~~and other~~ uncertainties, we cannot estimate ~~the length~~how long or ~~severity of the impact of~~to what extent the pandemic onwill impact our business. Decreases in cash flows and results of operations may have an impact on the inputs and assumptions used in significant accounting estimates, including estimated implicit price concessions related to uninsured patient accounts, professional and general liability reserves, and potential impairments of goodwill and long-lived assets.

operations.

Revenues

Table of Contents

HCA HEALTHCARE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 1 — BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)

Revenues (continued)

through the health insurance exchanges) and the transaction prices for the services provided are dependent upon the terms provided by (Medicare and Medicaid) or negotiated with (managed care health plans and commercial insurance companies) the third-party payers. The payment arrangements with third-party payers for the services we provide to the related patients typically specify payments at amounts less than our standard charges. Medicare generally pays for inpatient and outpatient services at prospectively determined rates based on clinical, diagnostic and other factors. Services provided to patients having Medicaid coverage are generally paid at prospectively determined rates per discharge, per identified service or per covered member. Agreements with commercial insurance carriers, managed care and preferred provider organizations generally provide for payments based upon predetermined rates per diagnosis, per diem rates or discounted

fee-for-service

rates. Our revenues for the ~~quarters~~quarter ended March 31, 2020 ~~and 2019, respectively,~~ include ~~$55~~

million related to the settlement of Medicare outlier calculations for ~~prior periods and $86 million related to the resolution of transaction price differences regarding certain~~

~~out-of-network~~

~~services performed in~~ prior periods. Management continually reviews the contractual 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.

Our revenues are based upon the estimated amounts we expect to be entitled to receive from patients and third-party payers. Estimates of contractual adjustments under managed care and commercial insurance plans are based upon the payment terms specified in the related contractual agreements. Revenues related to uninsured patients and uninsured copayment and deductible amounts for patients who have health care coverage may have discounts applied (uninsured discounts and contractual discounts). We also record estimated implicit price concessions (based primarily on historical collection experience) related to uninsured accounts to record these revenues at the estimated amounts we expect to collect. Patients treated at our hospitals for

non-elective

care, who have income at or below ~~400%~~

400

of the federal poverty level, are eligible for charity care. Because we do not pursue collection of amounts determined to qualify as charity care, they are not reported in revenues.

Our revenues by primary third-party payer classification and other (including uninsured patients) for the quarters ended March 31, 2021 and 2020 are summarized in the following table (dollars in millions):


	2021		Ratio			2020		Ratio
Medicare	$	2,559		18.3	%	$	2,743		21.3	%
Managed Medicare		2,053		14.7			1,826		14.2
Medicaid		527		3.8			414		3.2
Managed Medicaid		725		5.2			666		5.2
Managed care and insurers		6,885		49.1			6,645		51.6
International (managed care and insurers)		333		2.4			292		2.3
Other		895		6.5			275		2.2

Revenues	$	13,977		100.0	%	$	12,861		100.0	%

Table of Contents

HCA HEALTHCARE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 1 — BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)

Revenues (continued)

~~other (including uninsured patients) for the quarters ended March 31, 2020 and 2019 are summarized in the following table (dollars in millions):~~

2020

Ratio

2019

Ratio

Medicare
$
2,743

21.3
% $
2,770

22.1
%
Managed Medicare

1,826

14.2

1,589

12.7

Medicaid

414

3.2

347

2.8

Managed Medicaid

666

5.2

613

4.9

Managed care and insurers

6,645

51.6

6,426

51.4

International (managed care and insurers)

292

2.3

297

2.4

Other

275

2.2

475

3.7

Revenues
$
12,861

100.0
% $
12,517

100.0
%

To quantify the total impact of the trends related to uninsured patient accounts, we believe it is beneficial to view total uncompensated care, which is comprised of charity care, uninsured discounts and implicit price concessions. A summary of the estimated cost of total uncompensated care for the quarters ended March 31, ~~2020~~2021 and ~~2019~~2020 follows (dollars in millions):

2020

2019

Patient care costs (salaries and benefits, supplies, other operating expenses and depreciation and amortization)
$
11,342
$
10,606

Cost-to-charges
ratio (patient care costs as percentage of gross patient charges)

11.9
%
11.8
%
Total uncompensated care
$
7,873
$
7,085

Multiply by the
cost-to-charges
ratio

11.9
%
11.8
%

Estimated cost of total uncompensated care
$
937
$
836


	2021			2020
Patient care costs (salaries and benefits, supplies, other operating expenses and depreciation and amortization)	$	11,643		$	11,342

Cost-to-charges ratio (patient care costs as percentage of gross patient charges)		11.4	%		11.9	%
Total uncompensated care	$	6,821		$	7,873
Multiply by the cost-to-charges ratio		11.4	%		11.9	%
Estimated cost of total uncompensated care	$	778		$	937

The total uncompensated care amounts include charity care of $2.942 billion and $3.735 billion, ~~and $2.905 billion,~~respectively, and the related estimated costs of charity care were ~~$444~~$335 million and ~~$343~~$444 million,

respectively,

for the quarters ended March 31, ~~2020~~2021 and ~~2019, respectively.~~

2020

~~Recent Pronouncements~~

During March 2020, the Securities and Exchange Commission adopted final rules that amend the financial disclosure requirements in Regulation S-X for subsidiary issuers and guarantors of registered debt securities and for affiliates whose securities are pledged as collateral for registered securities. The new rules are effective January 2021, but earlier compliance is permitted, and we have elected to adopt the new rules effective for the quarter ended March 31, 2020. The new rules permit alternative disclosures of summarized financial information, rather than our previous footnote presentation of condensed consolidating financial statements. The summarized financial information for subsidiary issuers and guarantors may be presented on a combined basis and the periods for which the summarized financial information must be provided has been reduced from all periods presented in the Company’s condensed consolidated financial statements to the most recent fiscal year and applicable

~~year-to-date~~

interim period. The new rules permit the summarized financial information and related disclosures to be presented outside of the Company’s condensed consolidated financial statements and accompanying notes.

~~Table of Contents~~

~~HCA HEALTHCARE, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~NOTE 1 — BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)~~

~~Recent Pronouncements (continued)~~

~~We are providing the summarized financial information and related disclosures in management’s discussion and analysis included in Item 2 of this Form 10-Q.~~

The new rules also amend the requirement that a registrant file financial statements of an affiliate whose securities constitute a substantial portion of the collateral for a class of registered securities, and replace it with a requirement to present summarized financial information for the applicable affiliate to the extent material. The new rules provide for the continued application of Rule 3-16 of Regulation S-X for registered securities issued prior to January 4, 2021 where financial statements have not previously been filed under Rule 3-16 for affiliates whose securities are pledged as collateral for such registered securities, including in situations such as ours where the indentures governing such securities include Rule 3-16 collateral release provisions. We are therefore not providing summarized financial information with respect to affiliates whose securities are pledged as collateral for our outstanding senior secured notes..

Reclassifications

Certain prior year amounts have been reclassified to conform to the current year presentation.

NOTE 2 — ACQUISITIONS AND DISPOSITIONS

During the quarter ended March 31, ~~2020,~~2021, we paid ~~$328~~

$22 million

~~million~~ to acquire a ~~hospital in New Hampshire and other~~ nonhospital health care ~~entities~~.entities. Purchase price amounts have been allocated to the related assets acquired and liabilities assumed based upon their respective fair values. ~~The purchase price paid, including the value of the noncontrolling interests, in excess of the fair value of identifiable net assets of these acquired entities aggregated~~

~~296~~

~~million for~~During the quarter ended March 31, ~~2020.~~

~~During the quarter ended March~~

~~2019~~

,2020, we paid

~~1.398~~328 million

~~billion~~ to acquire a

~~-hospital health system~~ hospital in ~~North Carolina~~New Hampshire and $

~~million to acquire other~~ nonhospital health care entities. The consolidated financial statements include the accounts and operations of the acquired entities subsequent to the respective acquisition dates. The pro forma effects of these acquired entities on our results of operations for periods prior to the respective acquisition dates were not significant.

During the quarter ended March 31, 2021, we received proceeds of $20 million and recognized a pretax gain of $2 million related to sales of real estate and other investments. During the quarter ended March 31, 2020, we received proceeds of $35 million and recognized a pretax gain of $7 million related to sales of real estate and other investments. During the quarter ended March 31, 2019, we received proceeds of $25 million and recognized a pretax loss of $1 million related to a sale of a hospital facility in one of our Louisiana markets. During the quarter ended March 31, 2019, we also received proceeds of $5 million related to sales of real estate and other investments.

NOTE 3 — INCOME TAXES

Our ~~provision~~provisions for income taxes for the quarters ended March 31, 2021 and 2020 ~~and 2019 was $112~~were

$393 million and ~~$279~~$112 million, respectively, and the effective tax rates were ~~16.2%~~21.7% and ~~21.2%~~16.2%, respectively.

Our provision for income taxes included tax benefits related to ~~the settlement~~settlements of employee equity awards of ~~$53~~

$74 million and ~~$49~~$53 million for the quarters ended March 31, ~~2020~~2021 and ~~2019,~~2020, respectively.

Our liability for unrecognized tax benefits was ~~$525~~$596 million, including accrued interest of ~~$65~~$88 million, as of March 31, ~~2020~~2021 ($~~550~~508 million and ~~$62~~$73 million, respectively, as of December 31, ~~2019)~~2020). Unrecognized tax benefits of ~~$158~~$179 million ($~~160~~157 million as of December 31, ~~2019)~~2020) would affect the effective rate, if recognized.

109

Table of Contents

HCA HEALTHCARE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 3 — INCOME TAXES (continued)

The Internal Revenue Service was conducting an examination of the Company’s 2016, 2017 and 2018 federal income tax returns at March 31, ~~2020.~~2021. We are also subject to examination by state and foreign taxing authorities. Depending on the resolution of any federal, state and foreign tax disputes, the completion of examinations by federal, state or foreign taxing authorities, or the expiration of statutes of limitation for specific taxing jurisdictions, we believe it is reasonably possible that our liability for unrecognized tax benefits may significantly increase or decrease within the next 12 months. However, we are currently unable to estimate the range of any possible change.

NOTE 4 — EARNINGS PER SHARE

We compute basic earnings per share using the weighted average number of common shares outstanding. We compute diluted earnings per share using the weighted average number of common shares outstanding, plus the dilutive effect of outstanding equity awards, ~~and potential shares,~~ computed using the treasury stock method.

The following table sets forth the computation of basic and diluted earnings per share for the quarters ended March 31, ~~2020~~2021 and ~~2019~~2020 (dollars and shares in millions, except per share amounts):

2020

2019

Net income attributable to HCA Healthcare, Inc.
$
581
$
1,039

Weighted average common shares outstanding

338.242

342.876

Effect of dilutive incremental shares

5.854

7.440

Shares used for diluted earnings per share

344.096

350.316

Earnings per share:

Basic earnings
$
1.72
$
3.03

Diluted earnings
$
1.69
$
2.97


	2021		2020
Net income attributable to HCA Healthcare, Inc.	$	1,423	$	581

Weighted average common shares outstanding		338.123		338.242
Effect of dilutive incremental shares		5.198		5.854
Shares used for diluted earnings per share		343.321		344.096

Earnings per share:
Basic earnings	$	4.21	$	1.72
Diluted earnings	$	4.14	$	1.69

NOTE 5 — INVESTMENTS OF INSURANCE SUBSIDIARIES

A summary of our insurance subsidiaries’ investments at March 31, ~~2020~~2021 and December 31, ~~2019~~2020 follows (dollars in millions):

March 31, 2020

Amortized
Cost

Unrealized
Amounts

Fair
Value

Gains

Losses

Debt securities
$
371
$
15
$
(2
) $
384

Money market funds and other

54

—

—

54

$
425
$
15
$
(2
)
438

Amounts classified as current assets

(113
)

Investment carrying value
$
325


	March 31, 2021
	Amortized Cost		Unrealized Amounts					Fair Value
	Amortized Cost		Gains		Losses			Fair Value
Debt securities	$	376	$	22	$	(1	)	$	397
Money market funds and other		104		—		—			104
	$	480	$	22	$	(1	)		501

Amounts classified as current assets									(108	)
Investment carrying value								$	393

1110

Table of Contents

HCA HEALTHCARE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 5 — INVESTMENTS OF INSURANCE SUBSIDIARIES (continued)

December 31, 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


	December 31, 2020
	Amortized Cost		Unrealized Amounts				Fair Value
	Amortized Cost		Gains		Losses		Fair Value
Debt securities	$	384	$	32	$	—	$	416
Money market funds and other		88		—		—		88
	$	472	$	32	$	—		504

Amounts classified as current assets								(116	)
Investment carrying value							$	388

At March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, the investments in debt securities of our insurance subsidiaries were classified as

“available-for-sale.”

Changes in unrealized gains and losses that are not credit-related are recorded as adjustments to other comprehensive income (loss).

Scheduled maturities of investments in debt securities at March 31, ~~2020~~2021 were as follows (dollars in millions):

Amortized
Cost

Fair
Value

Due in one year or less
$
9
$
9

Due after one year through five years

100

103

Due after five years through ten years

188

195

Due after ten years

74

77

$
371
$
384


	Amortized Cost		Fair Value
Due in one year or less	$	4	$	4
Due after one year through five years		144		152
Due after five years through ten years		157		167
Due after ten years		71		74
	$	376	$	397

The average expected maturity of the investments in debt securities at March 31, ~~2020~~2021 was ~~5.4~~5.0 years, compared to the average scheduled maturity of ~~10.2~~9.2 years. Expected and scheduled maturities may differ because the issuers of certain securities have the right to call, prepay or otherwise redeem such obligations prior to their scheduled maturity date.

NOTE 6 — FINANCIAL INSTRUMENTS

Interest Rate Swap Agreements

We have entered into interest rate swap agreements to manage our exposure to fluctuations in interest rates. These swap agreements involve the exchange of fixed and variable rate interest payments between us and our counterparties based on common notional principal amounts and maturity dates.

Pay-fixed

interest rate swaps effectively convert variable rate obligations to fixed interest rate obligations. The interest payments under these agreements are settled on a net basis. The net interest payments, based on the notional amounts in these agreements, generally match the timing of the related liabilities for the interest rate swap agreements which have been designated as cash flow hedges. The notional amounts of the swap agreements represent amounts used to calculate the exchange of cash flows and are not our assets or liabilities. Our credit risk related to these agreements is considered low because the swap agreements are with creditworthy financial institutions.

Table of Contents

HCA HEALTHCARE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 6 — FINANCIAL INSTRUMENTS (continued)

Interest Rate Swap Agreements (continued)

The following table sets forth our interest rate swap agreements, which have been designated as cash flow hedges, at March 31, ~~2020~~2021 (dollars in millions):

Notional
Amount

Maturity Date

Fair
Value

Pay-fixed
interest rate swaps
$
2,000

December 2021
$
(41
)
Pay-fixed
interest rate swaps

500

December 2022

(24
)


	Notional Amount		Maturity Date		Fair Value
Pay-fixed interest rate swaps	$	2,000		December 2021	$	(20	)
Pay-fixed interest rate swaps		500		December 2022		(16	)

During the next 12 months, we estimate ~~$31~~$30 million will be reclassified from other comprehensive income (“OCI”) and will be included in interest expense.

Derivatives — Results of Operations

The following table presents the effect of our interest rate swaps on our results of operations for the quarter ended March 31, ~~2020~~2021 (dollars in millions):

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
$
46

Interest expense
$
1


Derivatives in Cash Flow Hedging Relationships	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	$	1		Interest expense	$	9

Credit-risk-related Contingent Features

We have agreements with each of our derivative counterparties that contain a provision where we could be declared in default on our derivative obligations if repayment of the underlying indebtedness is accelerated by the lender due to our default on the indebtedness. As of March 31, ~~2020,~~2021, we have not been required to post any collateral related to these agreements. If we had breached these provisions at March 31, ~~2020,~~2021, we would have been required to settle our obligations under the agreements at their aggregate, estimated termination value of ~~$66~~$37 million.

NOTE 7 — ASSETS AND LIABILITIES MEASURED AT FAIR VALUE

Accounting Standards Codification 820,

Fair Value Measurements and Disclosures

(“ASC 820”), emphasizes fair value is a market-based measurement, and fair value measurements should be determined based on the assumptions market participants would use in pricing assets or liabilities. ASC 820 utilizes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).

Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, which are typically based on an entity’s own assumptions, as there is little, if any, related ~~market~~ marke

Table of Contents

HCA HEALTHCARE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 7 — ASSETS AND LIABILITIES MEASURED AT FAIR VALUE (continued)

activity. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair

~~Table of Contents~~

~~HCA HEALTHCARE, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~NOTE 7 — ASSETS AND LIABILITIES MEASURED AT FAIR VALUE (continued)~~

value measurement falls is based on the lowest level input significant to the fair value measurement in its entirety. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment.

Cash Traded Investments

Our cash traded investments are generally classified within Level 1 or Level 2 of the fair value hierarchy because they are valued using quoted market prices, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency.

Derivative Financial Instruments

We have entered into interest rate swap agreements to manage our exposure to fluctuations in interest rates. The valuation of these instruments is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. We incorporate credit valuation adjustments to reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements of these instruments.

The following tables summarize our assets and liabilities measured at fair value on a recurring basis as of March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, aggregated by the level in the fair value hierarchy within which those measurements fall (dollars in millions):

March 31, 2020

Fair Value Measurements Using

Fair Value

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
$
384
$
—
$
384
$
—

Money market funds and other

54

54

—

—

Investments of insurance subsidiaries

438

54

384

—

Less amounts classified as current assets

(113
)
(53
)
(60
)
—

$
325
$
1
$
324
$
—

Liabilities:

Interest rate swaps (Income taxes and other liabilities)
$
65
$
—
$
65
$
—


	March 31, 2021
				Fair Value Measurements Using
	Fair Value			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	$	397		$	—		$	397		$	—
Money market funds and other		104			104			—			—
Investments of insurance subsidiaries		501			104			397			—
Less amounts classified as current assets		(108	)		(101	)		(7	)		—

	$	393		$	3		$	390		$	—

Liabilities:
Interest rate swaps (Income taxes and other liabilities)	$	36		$	—		$	36		$	—

Table of Contents

HCA HEALTHCARE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 7 — ASSETS AND LIABILITIES MEASURED AT FAIR VALUE (continued)

December 31, 2019

Fair Value Measurements Using

Fair Value

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
$
—

Derivative Financial Instruments (continued)


	December 31, 2020
				Fair Value Measurements Using
	Fair Value			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	$	416		$	—		$	416		$	—
Money market funds and other		88			88			—			—
Investments of insurance subsidiaries		504			88			416			—
Less amounts classified as current assets		(116	)		(87	)		(29	)		—
	$	388		$	1		$	387		$	—

Liabilities:
Interest rate swaps (Income taxes and other liabilities)	$	46		$	—		$	46		$	—

The estimated fair value of our long-term debt was ~~$35.548~~$34.872 billion and ~~$37.026~~$35.814 billion at March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively, compared to carrying amounts, excluding debt issuance costs and discounts, aggregating ~~$35.119~~$31.301 billion and ~~$33.961~~$31.240 billion, respectively. The estimates of fair value are generally based upon the quoted market prices or quoted market prices for similar issues of long-term debt with the same maturities.

NOTE 8 — LONG-TERM DEBT

A summary of long-term debt at March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, including related interest rates at March 31, ~~2020,~~2021, follows (dollars in millions):

March 31,
2020

December 31,
2019

Senior secured asset-based revolving credit facility (effective interest rate of 2.1%)
$
3,750
$
2,480

Senior secured revolving credit facility (effective interest rate of 2.2%)

170

—

Senior secured 364-day term loan facility

—

—

Senior secured term loan facilities (effective interest rate of 3.0%)

3,711

3,725

Senior secured notes (effective interest rate of 5.1%)

13,850

13,850

Other senior secured debt (effective interest rate of 5.2%)

686

654

Senior secured debt

22,167

20,709

Senior unsecured notes (effective interest rate of 5.5%)

12,952

13,252

Debt issuance costs and discounts

(258
)
(239
)

Total debt (average life of 8.8 years, rates averaging 4.7%)

34,861

33,722

Less amounts due within one year

162

145

$
34,699
$
33,577


	March 31, 2021			December 31, 2020
Senior secured asset-based revolving credit facility (effective interest rate of 1.4%)	$	80		$	0
Senior secured revolving credit facility		0			0
Senior secured term loan facilities (effective interest rate of 2.8%)		3,657			3,671
Senior secured notes (effective interest rate of 5.1%)		13,850			13,850
Other senior secured debt (effective interest rate of 4.6%)		762			767
Senior secured debt		18,349			18,288
Senior unsecured notes (effective interest rate of 5.5%)		12,952			12,952
Debt issuance costs and discounts		(229	)		(236	)
Total debt (average life of 8.6 years, rates averaging 5.0%)		31,072			31,004
Less amounts due within one year		234			209
	$	30,838		$	30,795

Table of Contents

HCA HEALTHCARE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

~~NOTE 8 — LONG-TERM DEBT (continued)~~

During February 2020, we issued $2.700 billion aggregate principal amount of 3.50% senior notes due 2030. During March 2020, we used the net proceeds for the redemption of all $1.000 billion outstanding aggregate principal amount of HCA Healthcare, Inc.’s 6.25% senior notes due 2021 and, together with available funds, for the redemption of all $2.000 billion outstanding aggregate principal amount of HCA Inc.’s 7.50% senior notes due 2022. The pretax loss on retirement of debt was $295 million.

~~In response to the risks the~~

~~COVID-19~~

~~pandemic presents to our business, during~~

~~March 2020, we entered into a credit agreement that provides for a~~

~~364-day~~

secured term loan facility for an aggregate principal amount of up to $2.000 billion. The facility will mature in March 2021. If drawn, amounts outstanding under the credit agreement will bear interest at either (i) the LIBOR rate plus 2.50% or (ii) an alternate base rate as defined in the credit agreement. As of March 31, 2020

~~there were no amounts outstanding nor draw notices pending under the facility.~~

NOTE 9 — CONTINGENCIES

We operate in a highly regulated and litigious industry. As a result, various lawsuits, claims and legal and regulatory proceedings have been and can be expected to be instituted or asserted against us. We are also subject to claims and suits arising in the ordinary course of business, including claims for personal injuries or wrongful restriction of, or interference with, physicians’ staff privileges. In certain of these actions the claimants may seek 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.

Health care companies are routinely subject to ~~numerous~~ investigations

by various governmental agencies. Under the federal False Claims Act (“FCA”), private parties have the right to bring

qui 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 from time to time, 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 results of operations, financial position or liquidity.

Texas operates a state Medicaid program pursuant to a waiver from ~~CMS~~the Centers for Medicare & Medicaid Services under Section 1115 of the Social Security Act (“Program”). The Program includes uncompensated-care pools; payments from these pools are intended to defray the uncompensated costs of services provided by our and other hospitals to Medicaid eligible or uninsured individuals. Separately, we and other hospitals provide charity care services in several communities in the state. In 2018, the Civil Division of the U.S. Department of Justice and the U.S. Attorney’s Office for the Southern District of Texas requested information about whether the Program, as operated in Harris County, complied with the laws and regulations applicable to provider related donations, and the Company cooperated with that request. On May 21, 2019, a

qui tam

lawsuit asserting violations of the FCA and the Texas Medicaid Fraud Prevention Act related to the Program, as operated in Harris County, was unsealed by the U.S. District Court for the Southern District of Texas. Both the federal and state governments declined to intervene in the

qui tam

lawsuit. The Company believes that our participation is and has been consistent with the requirements of the Program and is vigorously defending against the lawsuit being pursued by the relator. We cannot predict what effect, if any, the

qui tam

lawsuit could have on the Company.

~~Table of Contents~~

~~HCA HEALTHCARE, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

NOTE 10 — SHARE REPURCHASE TRANSACTIONS AND OTHER COMPREHENSIVE LOSS

During January 2020 and 2019, our Board of Directors authorized share repurchase programs for up to $4 billion ($2 billion for each authorization) of our outstanding common stock. During February 2021, our Board of Directors authorized an additional $6 billion for repurchases of our outstanding common stock. During the quarter ended March 31, ~~2020,~~2021, we repurchased ~~3.287~~8.477 million shares of our common stock at an average price of ~~$134.18~~$180.11 per share through market purchases pursuant to the $2.0 billion share repurchase program authorized during January ~~2019.~~2019 (which was completed during the first quarter of 2021) and the January 2020 authorization. At March 31, ~~2020,~~2021, we had ~~$2.800~~$7.274 billion of repurchase authorization available under the January ~~2019~~2020 and ~~2020 authorizations.~~February 2021

authorizations

~~In response to the risks the~~

~~COVID-19~~

~~pandemic presents to our business, during March 2020, we announced the suspension~~

Table of ~~our share repurchase programs and expect to evaluate the resumption of the programs at a future date.~~Contents

HCA HEALTHCARE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 10 — SHARE REPURCHASE TRANSACTIONS AND OTHER COMPREHENSIVE LOSS (continued)

The components of accumulated other comprehensive loss are as follows (dollars in millions):

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, 2019
$
14
$
(283
) $
(187
) $
(4
) $
(460
)
Unrealized losses on
available-for-sale
securities, net of $1 income tax benefit

(4
)
(4
)
Foreign currency translation adjustments, net of $9 income tax benefit

(64
)
(64
)
Change in fair value of derivative instruments, net of $14 income tax benefit

(46
)
(46
)
Expense (income) reclassified into operations from other comprehensive income, net of $1 income tax benefit and $1 of income taxes, respectively

3

—

3

Balances at March 31, 2020
$
10
$
(347
) $
(184
) $
(50
) $
(571
)


	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, 2020	$	25		$	(271	)	$	(220	)	$	(36	)	$	(502	)
Unrealized losses on available-for-sale securities, net of $2 income tax benefit		(9	)											(9	)
Foreign currency translation adjustments, net of $1 of income tax					7									7
Change in fair value of derivative instruments											1			1
Expense reclassified into operations from other comprehensive income, net of $2 and $2 income tax benefits, respectively								5			7			12

Balances at March 31, 2021	$	16		$	(264	)	$	(215	)	$	(28	)	$	(491	)
								��

NOTE 11 — SEGMENT AND GEOGRAPHIC INFORMATION

We operate in one line of business, which is operating hospitals and related health care entities. We operate in 2 geographically organized groups: the National and American Groups. The National Group includes 9697 hospitals located in Alaska, California, Florida, southern Georgia, Idaho, Indiana, northern Kentucky, Nevada, New Hampshire, North Carolina, South Carolina, Utah and Virginia, and the American Group includes 8482 hospitals located in Colorado, northern Georgia, Kansas, southern Kentucky, Louisiana, ~~Mississippi,~~ Missouri, Tennessee and Texas. We also operate 67 hospitals in England, and these facilities are included in the Corporate and

other group.

Adjusted segment EBITDA is defined as income before depreciation and amortization, interest expense, ~~losses (gains)~~gains on sales of facilities, losses on retirement of debt, income taxes and net income attributable to noncontrolling interests. We use adjusted segment EBITDA as an analytical indicator for purposes of allocating

resources to geographic areas and assessing their performance. Adjusted segment EBITDA is commonly used as an analytical indicator within the health care industry, and also serves as a measure of leverage capacity and debt service ability. Adjusted segment EBITDA should not be considered as a measure of financial performance under generally accepted accounting principles, and the items excluded from adjusted segment EBITDA are significant components in understanding and assessing financial performance. Because adjusted segment EBITDA is not a

~~Table of Contents~~

~~HCA HEALTHCARE, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~NOTE 11 — SEGMENT AND GEOGRAPHIC INFORMATION (continued)~~

measurement determined in accordance with generally accepted accounting principles and is thus susceptible to varying calculations, adjusted segment EBITDA, as presented, may not be comparable to other similarly titled measures of other companies.

The geographic distributions of our revenues, equity in earnings of affiliates, adjusted segment EBITDA and depreciation and amortization for the quarters ended March 31, ~~2020~~2021 and ~~2019~~2020 are summarized in the following table (dollars in millions):


	2020			2019			202 1		2020
Revenues:
National Group	$	6,474		$	6,317		$	7,056	$	6,474
American Group		5,744			5,595			6,291		5,744
Corporate and other		643			605			630		643

	$	12,861		$	12,517		$	13,977	$	12,861

Equity in earnings of affiliates:
National Group	$	1		$	(2	)
American Group		(9	)		(11	)
Corporate and other		1			2

	$	(7	)	$	(11	)

Adjusted segment EBITDA:
National Group	$	1,215		$	1,454
American Group		1,115			1,141
Corporate and other		(130	)		(54	)

	$	2,200		$	2,541

Depreciation and amortization:
National Group	$	306		$	265
American Group		287			281
Corporate and other		81			73

	$	674		$	619

Adjusted segment EBITDA	$	2,200		$	2,541
Depreciation and amortization		674			619
Interest expense		428			461
Losses (gains) on sales of facilities		(7	)		1
Losses on retirement of debt		295			—

Income before income taxes	$	810		$	1,460

Table of Contents

HCA HEALTHCARE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 11 — SEGMENT AND GEOGRAPHIC INFORMATION (continued)


		2021			2020
Equity in earnings of affiliates:
National Group	$	(7	)	$	1
American Group		(12	)		(9	)
Corporate and other		(2	)		1
	$	(21	)	$	(7	)

Adjusted segment EBITDA:
National Group	$	1,705		$	1,215
American Group		1,501			1,115
Corporate and other		(154	)		(130	)
	$	3,052		$	2,200

Depreciation and amortization:
National Group	$	323		$	306
American Group		293			287
Corporate and other		81			81
	$	697		$	674

Adjusted segment EBITDA	$	3,052		$	2,200
Depreciation and amortization		697			674
Interest expense		384			428
Gains on sales of facilities		(2	)		(7	)
Losses on retirement of debt		0			295
Income before income taxes	$	1,973		$	810

Table of Contents

~~HCA HEALTHCARE, INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~NOTE 12 — SUBSEQUENT EVENT~~

Subsequent to March 31, 2020, the Company requested accelerated Medicare payments as provided for in the CARES Act, which allows for eligible health care facilities to request up to six months of advance Medicare payments for acute care hospitals or up to three months of advance Medicare payments for other health care providers. After 120 days past receipt of the advance payment, claims for services provided to Medicare beneficiaries will be applied against the advance payment balance. Any unapplied advance payment amounts must be paid in full within one year from receipt of the advance payments for acute care hospitals and within 210 days for other health care providers. During April 2020, the Company received approximately

~~$4.3~~

~~billion from these accelerated Medicare payment requests.~~

~~In April 2020 the Company received~~

~~approximately $900 million~~

~~based on the expected allocation methodology of the first~~

~~$50~~

billion distributed from the CARES Act Provider Relief Fund. Further allocation of the funds provided for in the CARES Act may be received in future periods. However, we are not able to estimate the amount of additional funds we may receive. These government payments are currently expected to be recognized in our operations during the second quarter of 2020 and will not be subject to repayment, provided the Company is able to attest to and comply with the terms and conditions of the funding.

~~Further legislation enacted on April 24, 2020 provides for an additional $75 billion in emergency appropriations to eligible providers for~~

~~COVID-19~~

~~response. Recipients will not be required to repay the government for funds received, provided they comply with terms and conditions, which have not yet been finalized.~~

~~Table of Contents~~

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

This quarterly report on

Form

10-Q

includes certain disclosures which contain “forward-looking statements” within the meaning of the federal securities laws, which involve risks and uncertainties. Forward-looking statements include statements regarding expected share-based compensation expense, expected capital expenditures and expected net claim payments and all other statements that do not relate solely to historical or current facts, and can be identified by the use of words like “may,” “believe,” “will,” “expect,” “project,” “estimate,” “anticipate,” “plan,” “initiative” or “continue.” These forward-looking statements are based on our current plans and expectations and are subject to a number of known and unknown uncertainties and risks, many of which are beyond our control, which could significantly affect current plans and expectations and our future financial position and results of operations. These factors include, but are not limited to, (1) developments related to

COVID-19,

including, without limitation, ~~related to~~ the length and severity of the ~~pandemic;~~pandemic and the spread of virus strains with new epidemiological characteristics; the volume of canceled or rescheduled procedures and the volume of

COVID-19

patients cared for across our health systems; measures we are taking to respond to the

COVID-19

pandemic; the impact and terms of government and administrative regulation and stimulus (including the Families First Coronavirus Response Act, the Coronavirus Aid, Relief and Economic Security (“CARES”) Act, the Paycheck Protection Program and Health Care Enhancement Act, the Consolidated Appropriations Act, 2021, the American Rescue Plan Act of 2021 and other enacted and potential future legislation); changes in revenues due to declining patient volumes, changes in ~~payor~~payer mix and deteriorating macroeconomic conditions (including increases in uninsured and underinsured patients); potential increased expenses related to labor, supply chain or other expenditures; workforce ~~disruptions and~~disruptions; supply shortages and ~~disruptions,~~disruptions; and the timing, availability and adoption of effective medical treatments and vaccines, (2) the impact of our substantial indebtedness and the ability to refinance such indebtedness on acceptable terms, as well as risks associated with disruptions in the financial markets and the business of financial institutions as the result of the

COVID-19

pandemic which could impact us from a financial perspective, (3) the impact of the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (collectively, the “Affordable Care Act”), including the effects of court challenges to, any repeal of, or changes to, the Affordable Care Act or additional changes to its implementation, the possible enactment of additional federal or state health care reforms and possible changes to other federal, state or local laws or regulations affecting the health care industry, including proposals to expand coverage of federally-funded insurance programs as an alternative to private insurance or establish a single-payer ~~proposals (often~~system (such reforms often referred to as “Medicare for All”), and also including any such laws or governmental regulations which are adopted in response to the

COVID-19

pandemic, (4) the effects related to the ~~continued~~ implementation of ~~the~~ sequestration spending reductions required under the Budget Control Act of 2011, ~~and~~ related legislation extending these reductions, and those required under the Pay-As-You-Go Act of 2010 (“PAYGO Act”) as a result of the federal budget deficit impact of the American Rescue Plan Act of 2021, and the potential for future deficit reduction legislation that may alter these spending reductions, which include cuts to Medicare payments, or create additional spending reductions, (5) increases in the amount and risk of collectability of uninsured accounts and deductibles and copayment amounts for insured accounts, (6) the ability to achieve operating and financial targets, and attain expected levels of patient volumes and control the costs of providing services, (7) possible changes in Medicare, Medicaid and other state programs, including Medicaid supplemental payment programs or Medicaid waiver programs, that may impact reimbursements to health care providers and insurers and the size of the uninsured or underinsured population, (8) the highly competitive nature of the health care business, (9) changes in service mix, revenue mix and surgical volumes, including potential declines in the population covered under third-party payer agreements, the ability to enter into and renew third-party payer provider agreements on acceptable terms and the impact of consumer-driven health plans and physician utilization trends and practices, (10) the efforts of health insurers, health care providers, large employer groups and others to contain health care costs, (11) the outcome of our continuing efforts to monitor, maintain and comply with appropriate laws, regulations, policies and procedures, (12) increases in wages and the ability to attract and retain qualified management and personnel, including affiliated physicians, nurses and medical and technical support personnel, (13) the availability and terms of capital to fund the expansion of our business and improvements to our existing

Table of Contents

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Forward-Looking Statements (continued)

facilities, (14) changes in accounting practices, (15) changes in general economic conditions nationally and regionally in our markets, including economic and business conditions (and the impact thereof on the economy, financial markets and banking industry) resulting from the

COVID-19

pandemic, (16) the emergence of and effects related to other pandemics, epidemics and infectious diseases, (17) future divestitures which may result in charges and possible impairments of long-lived assets, (18) changes in business strategy or development plans,

~~Table of Contents~~

~~ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF~~

~~FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)~~

~~Forward-Looking Statements (continued)~~

(19) delays in receiving payments for services provided, (20) the outcome of pending and any future tax audits, disputes and litigation associated with our tax positions, (21) potential adverse impact of known and unknown government investigations, litigation and other claims that may be made against us, (22) the impact of potential cybersecurity incidents or security breaches, (23) our ongoing ability to demonstrate meaningful use of certified electronic health record (“EHR”) technology and the impact of interoperability requirements, (24) the impact of natural disasters, such as hurricanes and floods, or similar events beyond our control, (25) changes in the U.S. federal, state, or foreign tax laws including interpretive guidance that may be issued by taxing authorities or other standard setting bodies, and (26) other risk factors described in our annual report on

Form

10-K

for the year ended December 31, ~~2019~~2020 and our other filings with the Securities and Exchange Commission. As a consequence, current plans, anticipated actions and future financial position and results of operations may differ from those expressed in any forward-looking statements made by or on behalf of HCA. You are cautioned not to unduly rely on such forward-looking statements when evaluating the information presented in this report, which forward-looking statements reflect management’s views only as of the date of this report. We undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise.

COVID-19

Pandemic

On March 11, 2020, the World Health Organization designated

COVID-19

~~COVID-19~~

~~pandemic presents to our business, including the following:~~

~~Implemented certain cost reduction initiatives;~~

~~Suspended our authorized share repurchase program;~~

~~Suspended our quarterly dividend program;~~

~~Reduced certain planned projects and capital expenditures;~~

~~Executed a new $2 billion~~

~~364-day~~

~~term loan facility (which was undrawn at March 31, 2020) to supplement our existing credit facilities; and~~

~~Subsequent to March 31, 2020, requested accelerated Medicare payments as provided for in the CARES Act.~~

virus. We believe the extent of the

COVID-19

~~stay-at-home~~

~~Table of Contents~~

~~ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF~~

~~FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)~~

~~COVID-19~~

~~Pandemic (continued)~~

~~liability exposure.~~ Because of these ~~and other~~ uncertainties, we cannot estimate ~~the length~~how long or ~~severity of the impact of~~to what extent the pandemic onwill impact our business. Decreases in cash flows and results of operations may have an impact on the inputs and assumptions used in significant accounting estimates, including estimated implicit price concessions related to uninsured patient accounts, professional and general liability reserves, and potential impairments of goodwill and long-lived assets.operations.

First Quarter ~~2020~~2021 Operations Summary

Revenues increased to $13.977 billion in the first quarter of 2021 from $12.861 billion in the first quarter of ~~2020 from $12.517 billion in the first quarter of 2019.~~2020. Net income attributable to HCA Healthcare, Inc. totaled $1.423 billion, or $4.14 per diluted share, for the quarter ended March 31, 2021, compared to $581 million, or $1.69 per diluted share, for the quarter ended March 31, ~~2020, compared to $1.039 billion, or $2.97 per diluted share, for the quarter ended March 31, 2019.~~2020. First quarter results for 2020 include losses on retirement of debt of $295 million, or $0.66 per diluted share, and gains on sales of facilities of $7 million, or $0.02 per diluted share. Our revenues for the ~~quarters~~quarter ended March 31, 2020 ~~and 2019, respectively,~~ include $55 million, or $0.12 per diluted share, related to the settlement of Medicare outlier calculations for prior ~~periods and $86 million, or $0.19 per diluted share, related to the resolution of transaction price differences regarding certain~~

~~out-of-network~~

~~services performed in prior~~ periods. Our provisions for income taxes for the first quarters of ~~2020~~2021 and ~~2019~~2020 included tax benefits of ~~$53~~$74 million, or ~~$0.15~~$0.22 per diluted share, and ~~$49~~$53 million, or ~~$0.14~~$0.15 per diluted share, respectively, related to employee equity award settlements. All “per diluted share” disclosures are based upon amounts net of the applicable income taxes. Shares used for diluted earnings per share were 344.096 million shares for the quarter ended March 31, 2020 and 350.316 million shares for the quarter ended March 31, 2019. During 2019 and the first quarter of 2020, we repurchased 7.949 million shares and 3.287 million shares of our common stock, respectively.

~~Due to the~~

~~COVID-19~~

~~pandemic, patient volumes and the related revenues for most of our services, particularly elective surgical procedures, were significantly impacted in the last two weeks of the quarter as various~~

~~COVID-19~~

~~stay-at-home and business closure policies were implemented by federal, state and local governments.~~ Revenues increased ~~2.7%~~8.7% on a consolidated basis and ~~increased 1.2%~~9.0% on a same facility basis for the quarter ended March 31, ~~2020,~~2021, compared to the quarter ended March 31, ~~2019.~~2020. The increase in consolidated revenues can be primarily attributed to the net impact of a ~~2.9%~~16.1% increase in revenue per equivalent admission ~~and~~offset by a ~~0.1%~~6.4% decline in equivalent admissions. The same facility revenues increase primarily resulted from the net impact of a ~~1.6%~~

Table of Contents

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

First Quarter 2021 Operations Summary (continued)

16.6% increase in same facility revenue per equivalent admission ~~and~~offset by a ~~0.4%~~6.5% decline in same facility equivalent admissions.

During the quarter ended March 31, ~~2020,~~2021, consolidated admissions and same facility admissions ~~increased 1.0%~~declined 4.1% and ~~0.6%~~4.2%, respectively, compared to the quarter ended March 31, ~~2019.~~2020. Surgeries declined ~~4.4%~~0.7% on ~~both~~ a consolidated basis and declined 0.6% on a same facility basis during the quarter ended March 31, ~~2020,~~2021, compared to the quarter ended March 31, ~~2019.~~2020. Emergency department visits declined ~~1.0%~~18.7% and 18.4% on ~~both~~ a consolidated basis and on a same facility basis, respectively, during the quarter ended March 31, ~~2020,~~2021, compared to the quarter ended March 31, ~~2019.~~2020. Consolidated and same facility uninsured admissions ~~increased 6.9%~~declined 15.8% and ~~7.1%~~15.7%, respectively, for the quarter ended March 31, ~~2020,~~2021, compared to the quarter ended March 31, ~~2019.~~2020.

Cash flows from operating activities increased ~~$401~~$613 million, from ~~$974 million for the first quarter of 2019 to~~ $1.375 billion for the first quarter of ~~2020.~~2020 to $1.988 billion for the first quarter of 2021. The increase in cash provided by operating activities was primarily related to the net effect of ~~positive changes in working capital of $678 million, primarily from the collection of patient accounts receivable, partially offset by a decline~~an increase in net income, excluding gains on sales of facilities and losses on retirement of debt, of ~~$188 million.~~$659 million and an increase related to income taxes of $218 million, offset by negative changes in working capital of $311 million, primarily related to an increase in accounts receivable.

~~Table of Contents~~

~~ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF~~

~~FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)~~

Results of Operations

Revenue/Volume Trends

Our revenues generally relate to contracts with patients in which our performance obligations are to provide health care services to the patients. Revenues are recorded during the period our obligations to provide health care services are satisfied. Our performance obligations for inpatient services are generally satisfied over periods that average approximately five days, and revenues are recognized based on charges incurred in relation to total expected charges. Our performance obligations for outpatient services are generally satisfied over a period of less than one day. The contractual relationships with patients, in most cases, also involve a third-party payer (Medicare, Medicaid, managed care health plans and commercial insurance companies, including plans offered through the health insurance exchanges) and the transaction prices for the services provided are dependent upon the terms provided by (Medicare and Medicaid) or negotiated with (managed care health plans and commercial insurance companies) the third-party payers. The payment arrangements with third-party payers for the services we provide to the related patients typically specify payments at amounts less than our standard charges. Medicare generally pays for inpatient and outpatient services at prospectively determined rates based on clinical, diagnostic and other factors. Services provided to patients having Medicaid coverage are generally paid at prospectively determined rates per discharge, per identified service or per covered member. Agreements with commercial insurance carriers, managed care and preferred provider organizations generally provide for payments based upon predetermined rates per diagnosis, per diem rates or discounted

fee-for-service

rates. Management continually reviews the contractual 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 increased ~~2.7%~~8.7% from ~~$12.517 billion in the first quarter of 2019 to~~ $12.861 billion in the first quarter of ~~2020.~~2020 to $13.977 billion in the first quarter of 2021. Our revenues are based upon the estimated amounts we expect to be entitled to receive from patients and third-party payers. Estimates of contractual ~~allowances~~adjustments under managed care and commercial insurance plans are based upon the payment terms specified in the related contractual agreements. Revenues related to uninsured patients and uninsured copayment and deductible amounts for patients who have health care coverage may have discounts applied (uninsured discounts and contractual discounts). We also record estimated implicit price concessions (based primarily on historical collection experience) related to uninsured accounts to record

self-pay

revenues at the estimated amounts we expect to collect. Patients treated at our hospitals for

non-elective

care, who have income at or below 400% of the federal poverty level, are eligible for charity care.

Table of Contents

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Results of Operations (continued)

Revenue/Volume Trends (continued)

Because we do not pursue collection of amounts determined to qualify as charity care, they are not reported in revenues. Our revenues by primary third-party payer classification and other (including uninsured patients) for the quarters ended March 31, ~~2020~~2021 and ~~2019~~2020 are summarized in the following table (dollars in millions):

~~Table of Contents~~

~~ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF~~

~~FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)~~


	2021		Ratio			2020		Ratio
Medicare	$	2,559		18.3	%	$	2,743		21.3	%
Managed Medicare		2,053		14.7			1,826		14.2
Medicaid		527		3.8			414		3.2
Managed Medicaid		725		5.2			666		5.2
Managed care and insurers		6,885		49.1			6,645		51.6
International (managed care and insurers)		333		2.4			292		2.3
Other		895		6.5			275		2.2

Revenues	$	13,977		100.0	%	$	12,861		100.0	%

~~Results of Operations (continued)~~

~~Revenue/Volume Trends (continued)~~

Consolidated and same facility revenue per equivalent admission increased ~~2.9%~~16.1% and ~~1.6%~~16.6%, respectively, in the first quarter of ~~2020,~~2021, compared to the first quarter of ~~2019.~~2020. Consolidated and same facility equivalent admissions declined ~~0.1%~~6.4% and ~~0.4%~~6.5%, respectively, in the first quarter of ~~2020,~~2021, compared to the first quarter of ~~2019.~~2020. Consolidated and same facility outpatient surgeries ~~declined 6.0%~~increased 2.2% and ~~5.9%~~2.3%, respectively, in the first quarter of ~~2020,~~2021, compared to the first quarter of ~~2019.~~2020. Consolidated and same facility inpatient surgeries declined ~~1.6%~~5.6% and ~~1.8%~~5.4%, respectively, in the first quarter of ~~2020,~~2021, compared to the first quarter of ~~2019.~~2020. Consolidated and same facility emergency department visits ~~both~~ declined ~~1.0%~~18.7% and 18.4%, respectively, in the first quarter of ~~2020,~~2021, compared to the first quarter of ~~2019.~~2020. Our revenues increased, although our patient volumes declined, during the first quarter of 2021 compared to the first quarter of 2020 due to favorable changes in payer mix and higher acuity levels for patients treated during the first quarter of 2021, which resulted in an increase in revenue per equivalent admission. We believe these trends have been impacted by the effect of the pandemic on our operations, including the patients diagnosed with COVID-19.


	2021			2020
Patient care costs (salaries and benefits, supplies, other operating expenses and depreciation and amortization)	$	11,643		$	11,342


Cost-to-charges ratio (patient care costs as percentage of gross patient charges)		11.4	%		11.9	%

Total uncompensated care	$	6,821		$	7,873
Multiply by the cost-to-charges ratio		11.4	%		11.9	%

Estimated cost of total uncompensated care	$	778		$	937

Same facility uninsured admissions ~~increased~~declined by ~~2,708~~6,564 admissions, or ~~7.1%~~15.7%, in the first quarter of ~~2020~~2021 compared to the first quarter of ~~2019.~~2020. Same facility uninsured admissions in ~~2019,~~2020, compared to ~~2018, increased 6.8%~~2019, declined 9.1% in the fourth quarter, ~~increased 2.1%~~declined 14.2% in the third quarter, ~~increased 5.1%~~declined 10.0% in the second quarter, and ~~were flat~~increased 7.1% in the first quarter. The declines in the first quarter of 2021, compared to the first quarter of 2020, and the last three quarters of 2020, compared to the last three quarters of 2019, were primarily due to the reimbursement received, as

Table of Contents

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Results of Operations (continued)

Revenue/Volume Trends (continued)

provided for under the Families First Coronavirus Response Act and subsequent legislation, for uninsured patients diagnosed with

COVID-19

and the resulting classification of those patients as an insured admission, as well as general declines in patient volumes resulting from the pandemic’s impact on our operations.

The approximate percentages of our admissions related to Medicare, managed Medicare, Medicaid, managed Medicaid, managed care and insurers and the uninsured for the quarters ended March 31, ~~2020~~2021 and ~~2019~~2020 are set forth in the following table.

2020

2019

Medicare

27
%
30
%
Managed Medicare

20

19

Medicaid

5

5

Managed Medicaid

12

12

Managed care and insurers

28

27

Uninsured

8

7

100
%

100
%

~~Table of Contents~~

~~ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF~~

~~FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)~~

~~Results of Operations (continued)~~

~~Revenue/Volume Trends (continued)~~


	2021			2020
Medicare		24	%		27	%
Managed Medicare		22			20
Medicaid		5			5
Managed Medicaid		12			12
Managed care and insurers		30			28
Uninsured		7			8

		100	%		100	%

The approximate percentages of our inpatient revenues related to Medicare, managed Medicare, Medicaid, managed Medicaid, managed care and insurers for the quarters ended March 31, ~~2020~~2021 and ~~2019~~2020 are set forth in the following table.

2020

2019

Medicare

29
%
29
%
Managed Medicare

16

15

Medicaid

4

4

Managed Medicaid

5

5

Managed care and insurers

46

47

100
%
100
%


	2021			2020
Medicare		24	%		29	%
Managed Medicare		17			16
Medicaid		5			4
Managed Medicaid		6			5
Managed care and insurers		48			46

		100	%		100	%

At March 31, ~~2020,~~2021, we had 9192 hospitals in the states of Texas and Florida. During the ~~first~~ quarter ~~of 2020,~~ended March 31, 2021, 56% of our admissions and ~~48%~~49% of our revenues were generated by these hospitals. Uninsured admissions in Texas and Florida represented ~~72%~~73% of our uninsured admissions during the ~~first~~ quarter ~~of 2020.~~ended March 31, 2021.

We receive a significant portion of our revenues from government health programs, principally Medicare and Medicaid, which are highly regulated and subject to frequent and substantial changes. In December 2017, the Centers for Medicare & Medicaid Services (“CMS”) announced that it will phase out federal matching funds for Designated State Health Programs under waivers granted under Section 1115 of the Social Security Act. Texas currently operates its Healthcare Transformation and Quality Improvement Program pursuant to a Medicaid waiver. In December 2017, CMS approved an extension of this waiver through September 30, 2022, but indicated that it will phase out some of the federal funding. Our Texas Medicaid revenues included Medicaid supplemental payments of ~~$115~~$138 million and ~~$108~~$115 million during the first quarters of ~~2020~~2021 and ~~2019,~~2020, respectively.

In addition, we receive supplemental payments in several other states. We are aware these supplemental payment programs are currently being reviewed by certain state agencies and some states have made requests to CMS to replace their existing supplemental payment programs. It is possible these reviews and requests will result in the restructuring of such supplemental payment programs and could result in the payment programs

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Results of Operations (continued)

Revenue/Volume Trends (continued)

being reduced or eliminated. Because deliberations about these programs are ongoing, we are unable to estimate the financial impact the program structure modifications, if any, may have on our results of operations.

Key Performance Indicators

We present certain metrics and statistical information that management uses when assessing our results of operations. We believe this information is useful to investors as it provides insight to how management evaluates operational performance and trends between reporting periods. Information on how these metrics and statistical information are defined is provided in the following tables summarizing operating results and ~~statistical~~operating data.

~~Table of Contents~~

~~ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF~~

~~FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)~~

~~Results of Operations (continued)~~

Operating Results Summary

The following is a comparative summary of results of operations for the quarters ended March 31, ~~2020~~2021 and ~~2019~~2020 (dollars in millions):

2020

2019

Amount

Ratio

Amount

Ratio

Revenues
$
12,861

100.0
$
12,517

100.0

Salaries and benefits

6,118

47.6

5,647

45.1

Supplies

2,123

16.5

2,041

16.3

Other operating expenses

2,427

18.9

2,299

18.4

Equity in earnings of affiliates

(7
)
(0.1
)
(11
)
(0.1
)
Depreciation and amortization

674

5.3

619

4.9

Interest expense

428

3.3

461

3.7

Losses (gains) on sales of facilities

(7
)
(0.1
)
1

—

Losses on retirement of debt

295

2.3

—

—

12,051

93.7

11,057

88.3

Income before income taxes

810

6.3

1,460

11.7

Provision for income taxes

112

0.9

279

2.3

Net income

698

5.4

1,181

9.4

Net income attributable to noncontrolling interests

117

0.9

142

1.1

Net income attributable to HCA Healthcare, Inc.
$
581

4.5
$
1,039

8.3

% changes from prior year:

Revenues

2.7
%
9.6
%
Income before income taxes

(44.5
)
(5.2
)
Net income attributable to HCA Healthcare, Inc.

(44.1
)
(9.2
)
Admissions(a)

1.0

3.0

Equivalent admissions(b)

(0.1
)
4.8

Revenue per equivalent admission

2.9

4.6

Same facility % changes from prior year(c):

Revenues

1.2

6.3

Admissions(a)

0.6

0.9

Equivalent admissions(b)

(0.4
)
1.8

Revenue per equivalent admission

1.6

4.4


	2021						2020
	Amount			Ratio			Amount			Ratio
Revenues	$	13,977			100.0		$	12,861			100.0

Salaries and benefits		6,301			45.1			6,118			47.6
Supplies		2,224			15.9			2,123			16.5
Other operating expenses		2,421			17.4			2,427			18.9
Equity in earnings of affiliates		(21	)		(0.2	)		(7	)		(0.1	)
Depreciation and amortization		697			5.0			674			5.3
Interest expense		384			2.7			428			3.3
Gains on sales of facilities		(2	)		—			(7	)		(0.1	)
Losses on retirement of debt		—			—			295			2.3

		12,004			85.9			12,051			93.7

Income before income taxes		1,973			14.1			810			6.3
Provision for income taxes		393			2.8			112			0.9

Net income		1,580			11.3			698			5.4
Net income attributable to noncontrolling interests		157			1.1			117			0.9

Net income attributable to HCA Healthcare, Inc.	$	1,423			10.2		$	581			4.5

% changes from prior year:
Revenues		8.7	%					2.7	%
Income before income taxes		143.6						(44.5	)
Net income attributable to HCA Healthcare, Inc.		145.0						(44.1	)
Admissions(a)		(4.1	)					1.0
Equivalent admissions(b)		(6.4	)					(0.1	)
Revenue per equivalent admission		16.1						2.9
Same facility % changes from prior year(c):
Revenues		9.0						1.2
Admissions(a)		(4.2	)					0.6
Equivalent admissions(b)		(6.5	)					(0.4	)
Revenue per equivalent admission		16.6						1.6

(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.

Table of Contents

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Results of Operations (continued)

Operating Results Summary (continued)

(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 revenues and gross outpatient revenues and then dividing the resulting amount by gross inpatient revenues. The equivalent admissions computation “equates” outpatient revenues 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 which were either acquired or divested during the current and prior period.

~~Table of Contents~~

~~ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF~~

~~FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)~~

~~Results of Operations (continued)~~

Quarters Ended March 31, ~~2020~~2021 and ~~2019~~2020

~~out-of-network~~

Revenues increased 8.7% on a consolidated basis and 9.0% on a same facility basis for the quarter ended March 31, ~~2020 and 350.316 million shares for~~2021, compared to the quarter ended March 31, ~~2019. During 2019 and the first quarter of 2020, we repurchased 7.949 million shares and 3.287 million shares of our common stock, respectively.~~

~~Due to the~~

~~COVID-19~~

~~pandemic, patient volumes and the related~~2020. The increase in consolidated revenues ~~for most of our services, particularly elective surgical procedures, were significantly impacted in the last two weeks of the quarter as various~~

~~COVID-19~~

~~stay-at-home and business closure policies were implemented by federal, state and local governments. Revenues increased 2.7%,~~can be primarily due to the net impact of revenue per equivalent admission growth of 2.9% and a 0.1% decline in equivalent admissions for the first quarter of 2020 compared to the first quarter of 2019. Same facility revenues increased 1.2% dueattributed to the net impact of a ~~1.6%~~16.1% increase in revenue per equivalent admission offset by a 6.4% decline in equivalent admissions. The same facility revenues increase primarily resulted from the net impact of a 16.6% increase in same facility revenue per equivalent admission ~~and~~offset by a ~~0.4%~~6.5% decline in same facility equivalent ~~admissions for the first quarter of 2020 compared to the first quarter of 2019.~~admissions.

Salaries and benefits, as a percentage of revenues, were 45.1% in the first quarter of 2021 and 47.6% in the first quarter of ~~2020 and 45.1% in the first quarter of 2019.~~2020. Salaries and benefits per equivalent admission increased ~~8.4%~~10.0% in the first quarter of ~~2020~~2021 compared to the first quarter of ~~2019.~~2020. Same facility labor rate increases averaged ~~2.8%~~6.1% for the first quarter of ~~2020~~2021 compared to the first quarter of ~~2019.~~2020.

Supplies, as a percentage of revenues, were 15.9% in the first quarter of 2021 and 16.5% in the first quarter of ~~2020 and 16.3% in the first quarter of 2019.~~2020. Supply costs per equivalent admission increased ~~4.1%~~11.9% in the first quarter of ~~2020~~2021 compared to the first quarter of ~~2019.~~2020. Supply costs per equivalent admission increased ~~3.9%~~7.0% for medical devices, 21.0% for pharmacy supplies and ~~6.1%~~12.0% for general medical and surgical items ~~and remained flat for pharmacy supplies~~ in the first quarter of ~~2020~~2021 compared to the first quarter of ~~2019.~~2020.

Other operating expenses, as a percentage of revenues, were 17.4% in the first quarter of 2021 and 18.9% in the first quarter of ~~2020 and 18.4% in the first quarter of 2019.~~2020. Other operating expenses is 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 ~~$140~~$134 million and ~~$136~~$140 million for the first quarters of ~~2020~~2021 and ~~2019,~~2020, respectively.

Equity in earnings of affiliates was $7$21 million and ~~$11~~$7 million in the first quarters of ~~2020~~2021 and ~~2019,~~2020, respectively.

Depreciation and amortization increased $55 million, from $619 million in the first quarter of 2019 to $674 million in the first quarter of 2020. The increase in depreciation relates to both acquired facilities and increased capital expenditures at our existing facilities.

2724

Table of Contents

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Results of Operations (continued)

Quarters Ended March 31, ~~2020~~2021 and ~~2019~~2020 (continued)

Depreciation and amortization increased $23 million, from $674 million in the first quarter of 2020 to $697 million in the first quarter of 2021. The increase in depreciation relates primarily to capital expenditures at our existing facilities.

Interest expense was $384 million in the first quarter of 2021 and $428 million in the first quarter of ~~2020 and $461 million in~~2020. Our average debt balance was $31.019 billion for the first quarter of ~~2019. Our average debt balance was~~2021 compared to $34.136 billion for the first quarter of ~~2020 compared to $34.036 billion for the first quarter of 2019.~~2020. The average effective interest rate for our long-term debt ~~declined to 5.1%~~was 5.0% for both of the ~~quarter~~quarters ended March 31, ~~2020 from 5.5% for the quarter ended March 31, 2019.~~2021 and 2020.

During the first quarters of ~~2020~~2021 and ~~2019,~~2020, we recorded gains on sales of facilities of $7$2 million and ~~losses on sales of facilities of $1~~$7 million, respectively.

During February 2020, we issued $2.700 billion aggregate principal amount of 3.50% senior unsecured notes due 2030. During March 2020, we used the net proceeds for the redemption of all $1.000 billion outstanding aggregate principal amount of HCA Healthcare, Inc.’s 6.25% senior notes due 2021 and, together with available funds, for the redemption of all $2.000 billion outstanding aggregate principal amount of HCA Inc.’s 7.50% senior notes due 2022. The pretax loss on retirement of debt was $295 million.

The effective tax rates were ~~16.2%~~21.7% and ~~21.2%~~16.2% for the first quarters of ~~2020~~2021 and ~~2019,~~2020, respectively. The effective tax rate computations exclude net income attributable to noncontrolling interests as it relates to consolidated partnerships. Our provisions for income taxes for the first quarters of ~~2020~~2021 and ~~2019~~2020 included tax benefits of ~~$53~~$74 million and ~~$49~~$53 million, respectively, related to employee equity award settlements. Excluding the effect of these adjustments, the effective tax rate for the first quarters of ~~2020~~2021 and ~~2019~~2020 would have been ~~23.8%~~25.7% and ~~24.8%~~23.8%, respectively.

Net income attributable to noncontrolling interests ~~declined~~increased from ~~$142 million for the first quarter of 2019 to~~ $117 million for the first quarter of ~~2020.~~2020 to $157 million for the first quarter of 2021. The ~~decline~~increase in net income attributable to noncontrolling interests related primarily to the operations of ~~a joint venture in one~~two of our Texas ~~markets and our surgery center partnerships.~~markets.

Liquidity and Capital Resources

Cash provided by operating activities totaled $1.988 billion in the first quarter of 2021 compared to $1.375 billion in the first quarter of ~~2020 compared to $974 million in the first quarter of 2019.~~2020. The ~~$401~~$613 million increase in cash provided by operating activities, in the first quarter of ~~2020~~2021 compared to the first quarter of ~~2019,~~2020, related primarily to the net effect of ~~positive changes in working capital of $678 million, primarily from the collection of patient accounts receivable, partially offset by a decline~~an increase in net income, excluding gains on sales of facilities and losses on retirement of debt, of ~~$188 million.~~$659 million and an increase related to income taxes of $218 million, offset by negative changes in working capital of $311 million, primarily related to an increase in accounts receivable. The net combination of interest payments and net income tax refunds in the first ~~quarter~~quarters of 2021 and 2020 ~~was~~totaled $362 million and $459 million, ~~and the combined interest payments and net tax payments in the first quarter of 2019 was $590 million.~~respectively. Working capital totaled ~~$3.997~~$3.394 billion at March 31, ~~2020~~2021 and ~~$3.439~~$3.629 billion at December 31, ~~2019.~~2020.

Cash used in investing activities was $649 million in the first quarter of 2021 compared to $1.145 billion in the first quarter of ~~2020 compared to $2.165 billion in the first quarter of 2019.~~2020. Acquisitions of hospitals and health care entities declined from ~~$1.474 billion in the first quarter of 2019 to~~ $328 million in the first quarter of 2020 ~~primarily related~~ to $22 million in the ~~acquisition~~first quarter of ~~a seven-hospital health system in North Carolina in 2019.~~2021. Excluding acquisitions, capital expenditures were $654 million in the first quarter of 2021 and $853 million in the first quarter of ~~2020 and $781 million~~2020. Planned capital expenditures are expected to approximate $3.7 billion in ~~the first quarter of 2019.~~2021. At March 31, ~~2020,~~2021, there were projects under construction which had estimated additional costs to complete and equip over the next five years of approximately ~~$3.4~~$3.0 billion. We expect to finance capital expenditures with internally generated and borrowed funds.

Table of Contents

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Liquidity and Capital Resources (continued)

Cash used in financing activities totaled $2.104 billion in the first quarter of 2021 compared to $109 million in the first quarter of ~~2020 compared to cash provided by financing activities of $1.216 billion in~~2020. During the first quarter of ~~2019.~~2021, net cash flows used in financing activities included a net increase of $33 million in our indebtedness, payment of dividends of $169 million, repurchase of common stock of $1.527 billion and distributions to noncontrolling interests of $234 million. During the first quarter of 2020, net cash flows used in financing activities included ~~a net~~an increase of $813 million from net borrowings on our revolving ~~bank~~ credit facilities and refinancing activity, ~~payments~~payment of dividends of $152 million, ~~repurchases~~repurchase of common stock of $441 million, distributions to noncontrolling interests of $154 million and ~~payments~~payment of debt issuance costs of $34 million. During the first quarter of 2019, net cash flows provided by financing activities included a net increase of $1.911 billion in our indebtedness, payment of dividends of $141 million, repurchases of common stock of $278 million and distributions to noncontrolling interests of $136 million.

~~In response to the risks the~~

~~COVID-19~~

pandemic presents to our business, we have suspended our share repurchase and quarterly dividend programs and reduced certain planned projects and capital expenditures. We expect to evaluate resumption of these programs at a future date.

We are a highly leveraged company with significant debt service requirements. Our debt totaled ~~$34.861~~$31.072 billion at March 31, ~~2020.~~2021. Our interest expense was $384 million for the first quarter of 2021 and $428 million for the first quarter of ~~2020 and $461 million for the first quarter of 2019.~~2020.

In addition to cash flows from operations, available sources of capital include amounts available under our senior secured credit facilities ($~~3.798~~5.590 billion ~~and $7.718 billion~~an

d $5.140 b

illion available as of March 31, ~~2020~~2021 and April ~~30, 2020,~~29, 2021, respectively) and anticipated access to public and private debt markets. The increase in the amount available under our senior secured credit facilities is due to repayment of the outstanding borrowings on these facilities using cash received in April as provided for in the CARES Act.

~~In response to the risks the~~

~~COVID-19~~

~~pandemic presents to our business, during March 2020, we also entered into a credit agreement that provides for a~~

~~364-day~~

~~In April 2020 the Company received approximately $900 million~~

based on the expected allocation methodology of the first $50 billion distributed from the CARES Act Provider Relief Fund. Further allocation of the funds provided for in the CARES Act may be received in future periods. However, we are not able to estimate the amount of additional funds we may receive. These government payments are currently expected to

~~Table of Contents~~

~~ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF~~

~~FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)~~

~~Liquidity and Capital Resources (continued)~~

be recognized in our operations during the second quarter of 2020 and will not be subject to repayment, provided the Company is able to attest to and comply with the terms and conditions of the funding.

Further legislation enacted on April 24, 2020 provides for an additional $75 billion in emergency appropriations to eligible providers for their COVID-19 response. Recipients will not be required to repay the government for funds received, provided they comply with terms and conditions, which have not yet been finalized.

Investments of our insurance subsidiaries, held to maintain statutory equity levels and to provide liquidity to pay claims, totaled ~~$438~~$501 million and ~~$462~~$504 million at March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively. An insurance subsidiary maintained net reserves for professional liability risks of ~~$178~~$148 million and ~~$175~~$188 million at March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively. Our facilities are insured by a 100% owned insurance subsidiary for losses up to ~~$50~~$75 million per occurrence; however, this coverage is generally subject, in most cases, to a $15 million per occurrence self-insured retention. Additionally, the insurance subsidiary has entered into reinsurance contracts providing reimbursement for a certain portion of losses in excess of self-insured retentions. Net reserves for the self-insured professional liability risks retained were ~~$1.683~~$1.816 billion and ~~$1.606~~$1.736 billion at March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively. Claims payments, net of reinsurance recoveries, during the next 12 months are expected to approximate ~~$465~~$463 million. We estimate that approximately ~~$413~~$422 million of the expected net claim payments during the next 12 months will relate to claims subject to the self-insured retention.

~~Considering the actions discussed above to respond to the uncertainty arising from the COVID-19 pandemic and provide additional financial flexibility,~~

~~management~~Management believes that cash flows from operations, amounts available under our senior secured credit facilities and our anticipated access to public and private debt markets will be sufficient to meet expected liquidity needs during the next 12 months.

Summarized Financial Information

During March 2020, HCA Healthcare, Inc. redeemed all $1.000 billion outstanding aggregate principal amount of its 6.250% senior unsecured notes due 2021. These notes were our only registered debt securities for which HCA Healthcare, Inc. was the issuer. HCA Inc., a direct wholly-owned subsidiary of HCA Healthcare, Inc., is the primary obligor under a substantial portion of our indebtedness, including our senior secured credit facilities, senior secured notes and senior unsecured notes. The senior secured notes and senior unsecured notes issued by HCA Inc. are fully and unconditionally ~~guaranteed by~~guarantee

d on an unsecured basis b

y HCA Healthcare, Inc. The senior secured credit facilities and senior secured notes are fully and unconditionally guaranteed ~~subject to customary release provisions,~~on a senior secured basis by substantially all existing and future, direct and indirect, 100% owned material domestic subsidiaries that are “Unrestricted Subsidiaries” under our Indenture dated December 16, 1993 (except for certain special purpose subsidiaries that only guarantee and pledge their assets under our senior secured asset-based revolving credit facility). For a list of subsidiary guarantors, see Exhibit 22 to this quarterly report on Form 10-Q.

The subsidiary guarantees rank senior in right of payment to all subordinated indebtedness of each subsidiary guarantor, equally in right of payment with all senior indebtedness of the subsidiary guarantors and are structurally subordinated in right of payment to all indebtedness and other liabilities of any nonguarantor subsidiaries of the subsidiary guarantors (other than indebtedness and liabilities owed to one of the subsidiary guarantors). The subsidiary guarantees are secured by first-priority liens on the subsidiary guarantors’ assets,

Table of Contents

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Liquidity and Capital Resources (continued)

Summarized Financial Information (continued)

subject to certain exceptions, that secure our senior secured cash flow credit facility on a first-priority basis. The subsidiary guarantees are secured by second-priority liens on the subsidiary guarantors’ assets that secure our senior secured asset-based revolving credit facility on a first-priority basis and our senior secured cash flow credit facility on a second-priority basis.

The subsidiary guarantees may be automatically and unconditionally released and discharged upon certain customary events, including in the event such guarantee is released under our senior secured credit facilities. The indentures governing the senior secured notes include a “savings clause” intended to limit each subsidiary guarantor’s obligations as necessary to prevent the guarantee from constituting a fraudulent conveyance under applicable law, which could reduce a subsidiary guarantor’s liability on its guarantee to zero. For further information regarding ~~such~~the guarantees, refer to the applicable indentures that are filed as exhibits to our annual report on Form 10-K for the year ended December 31, ~~2019.~~2020.

Summarized financial information is presented on a combined basis and transactions between the combining entities have been eliminated. Financial information for nonguarantor entities has been excluded. The summarized operating results information for the quarter ended March 31, ~~2020~~2021 and year ended December 31, ~~2019~~2020 and the summarized balance sheet information at March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, for HCA Healthcare, Inc., HCA Inc. and the subsidiary guarantors (the Parent, Subsidiary Issuer and Subsidiary Guarantors) follow (dollars in millions):

Quarter Ended March 31, 2021 and Year Ended December 31, 2020:


	Quarter March 31, 2021			Year December 31, 2020
Revenues	$	8,401		$	31,040
Income before income taxes		1,479			4,016
Net income		1,168			3,172
Net income attributable to Parent, Subsidiary Issuer and Subsidiary Guarantors		1,148			3,091

At March 31, 2021 and December 31, 2020:

	March 31, 2021			December 31, 2020
Current assets	$	7,198		$	7,442
Property and equipment, net		14,934			14,939
Goodwill and other intangible assets		5,762			5,763
Total noncurrent assets		21,801			21,771
Total assets		28,999			29,213

Current liabilities		5,178			5,316
Long-term debt, net		30,488			30,444
Intercompany balances		2,324			2,090
Income taxes and other liabilities		1,230			1,004
Total noncurrent liabilities		34,559			34,035

Stockholders’ deficit attributable to Parent, Subsidiary Issuer and Subsidiary Guarantors		(10,845	)		(10,247	)
Noncontrolling interests		107			109

Table of Contents

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Liquidity and Capital Resources (continued)

Summarized Financial Information (continued)

~~Quarter Ended March 31, 2020~~

The first-priority liens securing the subsidiary guarantees discussed above include liens on (i) substantially all of the capital stock of substantially all wholly owned first-tier subsidiaries of HCA Inc. or of the subsidiary guarantors (but limited to 65% of the stock of any such wholly owned first-tier subsidiary that is a foreign subsidiary), subject to certain limited exceptions, and ~~Year Ended~~(ii) substantially all indebtedness owing to HCA Inc. or to the subsidiary guarantors, including any and all intercompany indebtedness owed by HCA Healthcare, Inc. or any subsidiary thereof to HCA Inc., or any subsidiary guarantor. For a list of affiliates whose securities are pledged as collateral for the senior secured notes, see Exhibit 22 to this quarterly report on Form 10-Q.

Under the first lien intercreditor agreement, the administrative agent for the lenders under the cash flow credit facility, subject to the occurrence of certain events, has the exclusive right to direct foreclosures and take other actions with respect to these liens, and the trustee for the senior secured notes has no right to take any such actions. In certain circumstances, including upon certain events of default under the senior secured credit facilities and the senior secured notes, the collateral agent in respect of the cash flow credit facility and the senior secured notes could proceed against the collateral granted to it to secure such indebtedness, including the aforementioned pledged capital stock and pledged indebtedness, and require such collateral to be delivered to the collateral agent to the extent not already in its possession for purposes of perfecting the lien on such assets. For further information regarding the collateral, including events or circumstances that may require delivery of the collateral, refer to the applicable indentures, the first lien intercreditor agreement, the cash flow credit agreement and the pledge agreement that are filed as exhibits to our annual report on Form 10-K for the year ended December 31, ~~2019:~~2020.

There is no trading market for any of HCA Healthcare, Inc.’s affiliates whose securities are pledged as collateral for the senior secured notes.

Quarter
March 31, 2020

Year
December 31, 2019

Revenues
$
7,750
$
29,220

Income before income taxes

627

3,912

Net income

535

2,993

Net income attributable to Parent, Subsidiary Issuer and Subsidiary Guarantors

516

2,902

At March 31, 2020 and December 31, 2019:

March 31,
2020

December 31,
2019

Current assets
$
6,623
$
6,090

Property and equipment, net

14,859

13,418

Goodwill and other intangible assets

5,819

5,743

Total noncurrent assets

21,543

19,977

Total assets

28,166

26,067

Current liabilities

4,148

4,504

Long-term debt, net

34,364

33,227

Intercompany balances

1,342

(53
)
Income taxes and other liabilities

885

879

Total noncurrent liabilities

37,004

34,398

Stockholders’ deficit attributable to Parent, Subsidiary Issuer and Subsidiary Guarantors

(13,092
)
(12,941
)
Noncontrolling interests

106

106

Rule 13-02 of Regulation S-X requires the presentation of summarized financial information of the combined affiliates whose securities are pledged as collateral for the senior secured notes unless such information is not material. The rule provides that such information is not material if the assets, liabilities and results of operations of the combined affiliates whose securities are pledged as collateral are not materially different than the corresponding amounts presented in the consolidated financial statements of the Registrant. Healthtrust, Inc. — The Hospital Company (“Healthtrust”) is the first-tier subsidiary of HCA Inc., and the common stock of Healthtrust is pledged as collateral for the senior secured notes. Due to the corporate structure relationship of HCA Healthcare, Inc. and Healthtrust, all of HCA Healthcare, Inc.’s operating subsidiaries, including all other affiliates whose securities are pledged as collateral for the senior secured notes, are also subsidiaries of Healthtrust. The corporate structure relationship, combined with the application of push-down accounting in Healthtrust’s consolidated financial statements related to HCA Healthcare Inc.’s debt and financial instruments, mean that the assets, liabilities and results of operations of Healthtrust (and, therefore, of the combined affiliates whose securities are pledged as collateral for the senior secured notes) are not materially different than the corresponding amounts presented in the financial statements of HCA Healthcare, Inc. As a result, summarized financial information of affiliates whose securities are pledged as collateral for the senior secured notes is not required to be presented under Rule 13-02.

Market Risk

We are exposed to market risk related to changes in market values of securities. The ~~investments in~~investment securities held by our ~~100% owned~~ insurance subsidiaries were ~~$438~~recorded at $501 million at March 31, ~~2020.~~2021. These investments are carried at fair value, with changes in unrealized gains and losses that are not credit-related being recorded as adjustments to other comprehensive income. At March 31, ~~2020,~~2021, we had a net unrealized gain of ~~$13~~$21 million on the insurance subsidiaries’ investments.

Table of Contents

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Liquidity and Capital Resources (continued)

Market Risk (continued)

We are exposed to market risk related to market illiquidity. ~~Investments in debt and equity~~Investment securities ofheld by our ~~100% owned~~ insurance subsidiaries could be impaired by the inability to access the capital markets. Should the ~~100% owned~~ insurance subsidiaries require significant amounts of cash in excess of normal cash requirements to pay claims and other expenses on short notice, we may have difficulty selling these investments in a timely manner or be forced to sell them at a price less than what we might otherwise have been able to in a normal market environment. We may be required to recognize credit-related impairments on our investment securities in future periods should issuers default on interest payments or should the fair market valuations of the securities deteriorate due to ratings downgrades or other issue-specific factors.

We are also exposed to market risk related to changes in interest rates, and we periodically enter into interest rate swap agreements to manage our exposure to these fluctuations. Our interest rate swap agreements involve the exchange of fixed and variable rate interest payments between two parties, based on common

~~Table of Contents~~

~~ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF~~

~~FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)~~

~~Liquidity and Capital Resources (continued)~~

~~Market Risk (continued)~~

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. Our credit risk related to these agreements is considered low because the swap agreements are with creditworthy financial institutions. The interest payments under these agreements are settled on a net basis. These derivatives have been recognized in the financial statements at their respective fair values. Changes in the fair value of these derivatives, which are designated as cash flow hedges, are included in other comprehensive income.

With respect to our interest-bearing liabilities, approximately ~~$5.132~~$1.238 billion of long-term debt at March 31, ~~2020~~2021 was subject to variable rates of interest, while the remaining balance in long-term debt of ~~$29.729~~$29.834 billion at March 31, ~~2020~~2021 was subject to fixed rates of interest. Both the general level of interest rates and, for the senior secured credit facilities, our leverage affect our variable interest rates. Our variable debt is comprised primarily of amounts outstanding under the senior secured credit facilities. Borrowings under the senior secured credit facilities bear interest at a rate equal to an applicable margin plus, at our option, either (a) a base rate determined by reference to the higher of (1) the federal funds rate plus 0.50% or (2) the prime rate of Bank of America or (b) a LIBOR rate for the currency of such borrowing for the relevant interest period. The applicable margin for borrowings under the senior secured credit facilities may fluctuate according to a leverage ratio. The average effective interest rate for our long-term debt was ~~5.1% and 5.5%~~5.0% for both of the quarters ended March 31, ~~2020~~2021 and ~~2019, respectively.~~2020.

The estimated fair value of our total long-term debt was ~~$35.548~~$34.872 billion at March 31, ~~2020.~~2021. The estimates of fair value are based upon the quoted market prices for the same or similar issues of long-term debt with the same maturities. Based on a hypothetical 1% increase in variable interest rates, the potential annualized reduction to future pretax earnings would be approximately ~~$51~~$12 million. To mitigate the impact of fluctuations in interest rates, we generally target a portion of our debt portfolio to be maintained at fixed rates.

We are exposed to currency translation risk related to our foreign operations. We currently do not consider the market risk related to foreign currency translation to be material to our consolidated financial statements or our liquidity.

Tax Examinations

The Internal Revenue Service was conducting an examination of the Company’s 2016, 2017 and 2018 federal income tax returns at March 31, ~~2020.~~2021. We are also subject to examination by state and foreign taxing authorities. Management believes HCA Healthcare, Inc. and its predecessors, subsidiaries and affiliates properly reported taxable income and paid taxes in accordance with applicable laws and agreements established with IRS,

Table of Contents

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Tax Examinations (continued)

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.

Operating Data

2020

2019

Number of hospitals in operation at:

March 31

186

185

June 30

184

September 30

184

December 31

184


	2021		2020
Number of hospitals in operation at:
March 31		186		186
June 30				186
September 30				187
December 31				185
Number of freestanding outpatient surgical centers in operation at:
March 31		121		123
June 30				122
September 30				121
December 31				121
Licensed hospital beds at(a):
March 31		49,561		49,357
June 30				49,403
September 30				49,473
December 31				49,265
Weighted average licensed beds in service(b):
Quarter:
First		42,363		42,177
Second				42,309
Third				42,426
Fourth				42,072
Year				42,246
Average daily census(c):
Quarter:
First		29,678		28,822
Second				24,844
Third				28,186
Fourth				29,065
Year				27,734
Admissions(d):
Quarter:
First		506,380		528,244
Second				452,992
Third				506,756
Fourth				521,917
Year				2,009,909
Equivalent admissions(e):
Quarter:
First		832,489		889,035
Second				723,136
Third				835,576
Fourth				864,583
Year				3,312,330

~~Table of Contents~~

~~ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF~~

~~FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)~~30

~~Operating Data (continued)~~

2020

2019

Number of freestanding outpatient surgical centers in operation at:

March 31

123

124

June 30

125

September 30

125

December 31

123

Licensed hospital beds at(a):

March 31

49,357

48,455

June 30

48,483

September 30

48,588

December 31

49,035

Weighted average licensed beds(b):

Quarter:

First

49,160

48,036

Second

48,429

Third

48,535

Fourth

48,911

Year

48,480

Average daily census(c):

Quarter:

First

28,822

28,966

Second

27,808

Third

27,502

Fourth

28,274

Year

28,134

Admissions(d):

Quarter:

First

528,244

523,196

Second

518,253

Third

527,284

Fourth

540,194

Year

2,108,927

Equivalent admissions(e):

Quarter:

First

889,035

889,956

Second

903,419

Third

918,964

Fourth

933,996

Year

3,646,335

Average length of stay (days)(f):

Quarter:

First

5.0

5.0

Second

4.9

Third

4.8

Fourth

4.8

Year

4.9

Emergency room visits(g):

Quarter:

First

2,264,707

2,287,440

Second

2,253,337

Third

2,269,364

Fourth

2,350,988

Year

9,161,129

Table of Contents

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Operating Data (continued)

2020

2019

Outpatient surgeries(h):

Quarter:

First

226,319

240,846

Second

253,441

Third

249,177

Fourth

266,483

Year

1,009,947

Inpatient surgeries(i):

Quarter:

First

135,145

137,363

Second

140,473

Third

143,215

Fourth

145,584

Year

566,635

Days revenues in accounts receivable(j):

Quarter:

First

49

53

Second

52

Third

52

Fourth

50

Outpatient revenues as a % of patient revenues(k):

Quarter:

First

37
%
38
%
Second

39
%
Third

39
%
Fourth

39
%
Year

39
%


	2021			2020
Average length of stay (days)(f):
Quarter:
First		5.3			5.0
Second					5.0
Third					5.1
Fourth					5.1
Year					5.1
Emergency room visits(g):
Quarter:
First		1,841,778			2,264,707
Second					1,516,116
Third					1,813,661
Fourth					1,855,823
Year					7,450,307
Outpatient surgeries(h):
Quarter:
First		231,228			226,319
Second					170,911
Third					232,493
Fourth					252,760
Year					882,483
Inpatient surgeries(i):
Quarter:
First		127,590			135,145
Second					118,591
Third					133,492
Fourth					135,157
Year					522,385
Days revenues in accounts receivable(j):
Quarter:
First		48			49
Second					50
Third					44
Fourth					45
Outpatient revenues as a % of patient revenues(k):
Quarter:
First		36	%		37	%
Second					32	%
Third					36	%
Fourth					35	%
Year					35	%

(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 in service, weighted based on periods owned.

(c)	Represents the average number of patients in our hospital beds each day.

(d)	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.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)

Operating Data (continued)

(e)

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 revenues and gross outpatient revenues and then dividing the resulting amount by gross inpatient revenues. The equivalent admissions computation “equates” outpatient revenues to the volume measure (admissions) used to measure inpatient volume resulting in a general measure of combined inpatient and outpatient volume.

(f)	Represents the average number of days admitted patients stay in our hospitals.

(g)	Represents the number of patients treated in our emergency rooms.

(h)	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.

(i)	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.

(j)	Revenues per day is calculated by dividing revenues for the quarter by the days in the quarter. Days revenues in accounts receivable is then calculated as accounts receivable at the end of the quarter divided by revenues per day.

(k)	Represents the percentage of patient revenues related to patients who are not admitted to our hospitals.

Table of Contents

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The information called for by this item is provided under the caption “Market Risk” under Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

HCA’s management, with participation of HCA’s chief executive officer and chief financial officer, has evaluated the effectiveness of HCA’s disclosure controls and procedures as of March 31, ~~2020.~~2021. Based on that evaluation, HCA’s chief executive officer and chief financial officer concluded that HCA’s disclosure controls and procedures were effective as of March 31, ~~2020.~~2021.

Changes in Internal Control Over Financial Reporting

During the period covered by this report, there have been no changes in our internal control over financial reporting that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

~~We operate~~The information set forth in a highly regulated and litigious industry. As a result, various lawsuits, claims and legal and regulatory proceedings have been and can be expected to be instituted or asserted against us. We are also subject to claims and suits arisingNote 9 – Contingencies in the ordinary course of business, including claims for personal injuries or wrongful restriction of, or interference with, physicians’ staff privileges. In certain of these actions the claimants may seek 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.

~~Health care companies are subject to numerous investigations by various governmental agencies. Under the federal False Claims Act (“FCA”), private parties have the right to bring~~

~~qui tam~~

Texas operates a state Medicaid program pursuant to a waiver from CMS under Section 1115 of the Social Security Act (“Program”). The Program includes uncompensated-care pools; payments from these pools are intended to defray the uncompensated costs of services provided by our and other hospitals to Medicaid eligible or uninsured individuals. Separately, we and other hospitals provide charity care services in several communities in the state. In 2018, the Civil Division of the U.S. Department of Justice and the U.S. Attorney’s Office for the Southern District of Texas requested information about whether the Program, as operated in Harris County, complied with the laws and regulations applicable to provider related donations, and the Company cooperated with that request. On May 21, 2019, a

~~qui tam~~

~~lawsuit asserting violations of the FCA and the Texas Medicaid Fraud Prevention Act related~~notes to the ~~Program, as operated in Harris County, was unsealed~~condensed consolidated financial statements is incorporated herein by ~~the U.S. District Court for the Southern District of Texas. Both the federal and state governments declined to intervene in the~~

~~qui~~reference.

~~Table of Contents~~

~~tam~~

~~qui tam~~

~~lawsuit could have on the Company.~~

ITEM 1A. RISK FACTORS

Reference is made to the factors set forth under the caption “Forward-Looking Statements” in Part I, Item 2 of this quarterly report on

Form

10-Q

and other risk factors described in our annual report on

Form

10-K

for the year ended December 31, ~~2019,~~2020, which are incorporated herein by reference. There have not been any material changes to the risk factors previously disclosed in our annual report on

Form

10-K

for the year ended December 31, ~~2019, except as set forth below.~~

~~The~~

~~COVID-19~~

pandemic is significantly affecting our operations, business and financial condition. Our liquidity could also be negatively impacted, particularly if the U.S. economy remains unstable for a significant amount of time.

~~On March 11, 2020, the World Health Organization declared the outbreak of~~

~~COVID-19,~~

~~a disease caused by a novel coronavirus, a pandemic. This disease continues to spread throughout the United States and other parts of the world. The~~

~~COVID-19~~

~~pandemic is significantly affecting our employees, patients, hospitals, communities and business operations, as well as the U.S. economy and financial markets. As the~~

~~COVID-19~~

~~crisis is still rapidly evolving, the full extent to which the~~

~~COVID-19~~

~~outbreak will impact our business, results of operations, financial condition and liquidity will depend on future developments that are highly uncertain and cannot be accurately predicted.~~

~~We have been working with federal, state and local health authorities to respond to~~

~~COVID-19~~

cases in the markets we serve and are taking or supporting measures to try to limit the spread of the virus and to mitigate the burden on the health care system. Although we are implementing considerable safety measures, as a front line provider of health care services, we have been and will continue to be impacted by the health and economic effects of

~~COVID-19.~~

Beginning in the last two weeks of March 2020, we began cancelling a substantial amount of elective procedures at our facilities and have closed or reduced operating hours at a significant number of our surgery centers that specialize in elective procedures, resulting in significantly reduced patient volumes and operating revenues. Treatment of

~~COVID-19~~

patients has associated risks to our employees and physicians, which may adversely affect our operating capacity. These circumstances could result in workforce disruptions and increased patient reluctance to seek our services.

~~Restrictive measures, like travel bans, social distancing, quarantines and~~

~~stay-at-home~~

~~and~~

~~shelter-in-place~~

~~orders, have also reduced the volume of procedures performed at our facilities, as well as the volume of emergency room and physician office visits unrelated to~~

~~COVID-19.~~

At this time, we believe that certain of these patient volume declines reflect a deferral of health care services utilization to a later period, rather than a permanent reduction in demand for our services; however, we cannot provide assurances as to the recovery of

~~pre-pandemic~~

patient volumes or the ultimate impact on demand. Further, our patient volumes may be adversely impacted by the expanded use of telehealth services as a result of reduced regulatory barriers on the use and reimbursement of telehealth services and individuals becoming more comfortable with receiving remote care. Despite considerable efforts to source vital supplies, we have experienced and may continue to experience supply chain disruptions, including delays and price increases in equipment, pharmaceuticals and medical supplies, particularly personal protective equipment (“PPE”), and we may experience shortages. Staffing, equipment, and pharmaceutical and medical supplies shortages may also impact our ability to see, admit and treat patients. In addition, such restrictive measures may impact the availability of employed and contract labor staffing for corporate support services, including, but not limited to, coding, billing, collection and other business office functions, resulting in delays or failures in executing established control procedures that are not sufficiently mitigated through execution of our business continuity plans.

~~Table of Contents~~

~~Broad economic factors resulting from the current~~

~~COVID-19~~

pandemic, including high unemployment and underemployment rates and reduced consumer spending and confidence, also affect our service mix, revenue mix payer mix and patient volumes, as well as our ability to collect outstanding receivables. Business closings and layoffs in the areas where we operate may lead to increases in the uninsured and underinsured populations and adversely affect demand for our services, as well as the ability of patients and other payers to pay for services rendered. Any increase in the amount or deterioration in the collectability of patient accounts receivable will adversely affect our cash flows and results of operations, requiring an increased level of working capital. In addition, our results and financial condition may be adversely affected by federal, state or local laws, regulations, orders, or other governmental or regulatory actions addressing the current

~~COVID-19~~

pandemic or the U.S. health care system, which, if adopted, could result in direct or indirect restrictions to our business, financial condition, results of operations and cash flow. We may also be subject to claims from patients, employees and others exposed to

~~COVID-19~~

at our facilities. Such actions may involve large demands, as well as substantial defense costs, though there is no certainty at this time whether any such lawsuits will be filed or the outcome of such lawsuits if filed. Our professional and general liability insurance, a portion of which is provided through a 100% owned insurance subsidiary, may not cover all claims against us.

If general economic conditions continue to deteriorate or remain uncertain for an extended period of time, our liquidity and ability to repay our outstanding debt may be harmed and the trading price of our common stock could decline. Furthermore, the current

~~COVID-19~~

pandemic may cause disruption in the financial markets. These factors may affect the availability, terms or timing on which we may obtain any additional funding. There can be no assurance that we will be able to raise additional funds on terms acceptable to us, if at all.

~~The foregoing and other continued disruptions to our business as a result of the~~

~~COVID-19~~

~~pandemic could heighten the risks in certain of the other risk factors described in our Annual Report on Form~~

~~10-K~~

~~for the year ended December 31, 2019, any of which could have a material adverse effect on our results of operations and financial position.~~

There is a high degree of uncertainty regarding the implementation and impact of the CARES Act and future stimulus legislation, if any. There can be no assurance as to the total amount of financial assistance or types of assistance we will receive, that we will be able to benefit from provisions intended to increase access to resources and ease regulatory burdens for health care providers or that additional stimulus legislation will be enacted.

~~The CARES Act is a $2 trillion economic stimulus package signed into law on March 27, 2020, in response to the~~

~~COVID-19~~

pandemic. In an effort to stabilize the U.S. economy, the CARES Act provides for cash payments to individuals and loans and grants to small businesses, among other measures. For hospitals and other health care providers, it authorizes $100 billion in funding to be distributed through the Public Health and Social Services Emergency Fund (“PHSSEF”). These funds are intended to reimburse eligible providers and suppliers for health care-related expenses or lost revenues attributable to

~~COVID-19.~~

Recipients are not required to repay these funds, provided that they attest to and comply with certain terms and conditions, including limitations on balance billing and not using PHSSEF funds to reimburse expenses or losses that other sources are obligated to reimburse. The U.S. Department of Health and Human Services (“HHS”) allocated half of the CARES Act provider relief funding for general distribution to Medicare providers impacted by

~~COVID-19.~~

~~Initially, HHS distributed $30 billion of this funding based on each provider’s share of total Medicare~~

~~fee-for-service~~

reimbursement in 2019. HHS has started to distribute an additional $20 billion and announced that the total $50 billion of general distribution funding will ultimately be allocated proportional to providers’ share of net patient revenue. Of the remaining $50 billion of funding, HHS has indicated that $12 billion will be allocated for targeted distribution to hospitals in areas particularly impacted by

~~COVID-19~~

and $10 billion will be allocated for rural health clinics and hospitals. A portion of the balance of $28 billion is expected to be used to reimburse health care providers that submit claims requests for

~~COVID-19-related~~

treatment of uninsured patients at Medicare rates. However, some providers, including skilled nursing facilities, dentists, and providers that solely take Medicaid, are expected to receive further, separate funding from this balance. HHS has not yet

~~Table of Contents~~

~~announced the precise method by which future payments from the PHSSEF will be determined or allocated, so the potential impact to the Company is not currently known.~~

2020.

The CARES Act also makes other forms of financial assistance available to health care providers, including Medicare and Medicaid payments adjustments and an expansion of the Medicare Accelerated and Advance Payment Program, which makes available advance payments of Medicare funds in order to increase cash flow to providers. During April 2020, the Company received approximately $4.3 billion in accelerated Medicare payments, which are required to be repaid or recouped by CMS. In addition to financial assistance, the CARES Act includes provisions intended to increase access to medical supplies and equipment and ease legal and regulatory burdens on health care providers. Many of these measures, such as flexibilities related to the provision of telehealth services, are effective only for the duration of the public health emergency. The CARES Act also includes certain tax provisions.

~~In addition to the funds appropriated under the CARES Act, further legislation signed into law on April 24, 2020, provides for emergency appropriations for~~

~~COVID-19~~

response, including $75 billion to be distributed to eligible providers through the PHSSEF. This funding is intended to reimburse eligible providers for lost revenues and health care-related expenses attributable to the

~~COVID-19~~

pandemic. Applicants for the funds will be required to submit a justification statement for the payments. Recipients will not be required to repay the government for funds received, provided they comply with terms and conditions, which have not yet been finalized.

Due to the recent enactment of the CARES Act and other enacted legislation, there is still a high degree of uncertainty surrounding their implementation, and the public health emergency continues to evolve. The federal government may consider additional stimulus and relief efforts, but we are unable to predict whether additional stimulus measures will be enacted or their impact. There can be no assurance as to the total amount of financial and other types of assistance we will receive under the CARES Act or future legislation, if any, and it is difficult to predict the impact of such legislation on our operations. Further, there can be no assurance that the terms of provider relief funding or other programs will not change in ways that affect our funding or eligibility to participate. We will continue to assess the potential impact of

~~COVID-19~~

~~and government responses to the pandemic on our business, results of operations, financial condition and cash flows.~~

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

During January 2020 and 2019, our Board of Directors authorized share repurchase programs for up to $4 billion ($2 billion for each authorization) of our outstanding common stock. During February 2021, our Board of Directors authorized an additional $6 billion for repurchases of our outstanding common stock. During the quarter ended March 31, ~~2020,~~2021, we repurchased ~~3,287,027~~8,476,736 shares of our common stock at an average price of ~~$134.18~~$180.11 per share through market purchases pursuant to the $2$2.0 billion share repurchase program authorized during January ~~2019.~~2019 (which was completed during the first quarter of 2021) and the January 2020 authorization. At March 31, ~~2020,~~2021, we had ~~$2.800~~$7.274 billion of repurchase authorization available under the January ~~2019~~2020 and ~~2020~~February 2021 authorizations.

~~In response to the risks the~~

~~COVID-19~~

~~pandemic presents to our business, during March 2020, we announced the suspension of our share repurchase programs and expect to evaluate the resumption of the programs at a future date.~~

Table of Contents

The following table provides certain information with respect to our repurchases of common stock from January 1, ~~2020~~2021 through March 31, ~~2020~~2021 (dollars in millions, except per share amounts).

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

January 1, 2020 through January 31, 2020

570,980
$
147.12

570,980
$
3,157

February 1, 2020 through February 29, 2020

1,297,864
$
144.87

1,297,864
$
2,969

March 1, 2020 through March 31, 2020

1,418,183
$
119.18

1,418,183
$
2,800

Total for first quarter 2020

3,287,027
$
134.18

3,287,027
$
2,800


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
January 1, 2021 through January 31, 2021		—	$	—		—	$	2,800
February 1, 2021 through February 28, 2021		4,057,692	$	175.39		4,057,692	$	8,089
March 1, 2021 through March 31, 2021		4,419,044	$	184.44		4,419,044	$	7,274

Total for first quarter 2021		8,476,736	$	180.11		8,476,736	$	7,274

~~In response to the~~

~~COVID-19~~

~~pandemic concerns, we announced the suspension~~On April 21, 2021, our Board of ~~the Company’s~~Directors declared a quarterly dividend ~~program for~~of $0.48 per share on our common stock payable on June 30, 2021 to stockholders of record at the ~~second quarter~~close of ~~2020. The Company expects to evaluate resumption of the program at a future date. Any other future~~business on June 16, 2021. Future declarations of quarterly dividends and the establishment of future record and payment dates are subject to the final determination of our Board of Directors. Our ability to declare future dividends may also from time to time be limited by the terms of our debt agreements.

Table of Contents

ITEM 6. EXHIBITS

(a) List of Exhibits:


10.1

	~~4.1~~	—	Supplemental Indenture No. 26, dated as of February 26, 2020, among HCA Inc., HCA Healthcare, Inc., Delaware Trust Company, as trustee, and Deutsche Bank Trust Company Americas, as paying agent, registrar and transfer agent (filed as Exhibit 4.2 to the Company’s Current Report on Form 8-K filed February 26, 2020 (File No. 001-11239), and incorporated herein by reference).

	~~4.2~~	—	~~Form of 3.500% Senior Notes Due 2030 (included in Exhibit 4.1).~~

	~~4.3~~	—	Credit Agreement, dated as of March 19, 2020, by and among HCA Inc., as borrower, Bank of America, N.A., as administrative agent and collateral agent, and the lenders party thereto (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed March 20, 2020 (File No. 001-11239), and incorporated herein by reference).

	~~4.4~~	—	Guarantee, dated as of March 19, 2020, by and among the subsidiary guarantors party thereto and Bank of America, N.A., as administrative agent (filed as Exhibit 4.2 to the Company’s Current Report on Form 8-K filed March 20, 2020 (File No. 001-11239), and incorporated herein by reference).

	~~4.5~~	—	Additional First Lien Secured Party Consent, dated as of March 19, 2020, by and among Bank of America, N.A., as administrative agent, Bank of America, N.A., as collateral agent, HCA Inc., as borrower, and the subsidiary guarantors party thereto (filed as Exhibit 4.3 to the Company’s Current Report on Form 8-K filed March 20, 2020 (File No. 001-11239), and incorporated herein by reference).

	~~4.6~~	—	Additional Receivables Intercreditor Agreement, dated as of March 19, 2020, by and between Bank of America, N.A., as ABL Collateral Agent and Bank of America, N.A., as New First Lien Collateral Agent, and consented to by HCA Inc., as borrower, and the subsidiary grantors party thereto (filed as Exhibit 4.4 to the Company’s Current Report on Form 8-K filed March 20, 2020 (File No. 001-11239), and incorporated herein by reference).

	~~4.7~~	—	Joinder Agreement, dated as of March 31, 2020, to the Credit Agreement, dated as of September 30, 2011 (as amended and restated on March 7, 2014, as further amended on October 30, 2014, and as further amended and restated on June 28, 2017), by and among the subsidiary borrowers party thereto and Bank of America, N.A., as administrative agent.

	~~4.8~~	—	~~Supplement No. 16, dated as of March 31, 2020, to the Security Agreement, dated as of September 30, 2011, by and among the grantors party thereto and Bank of America, N.A., as collateral agent.~~

	~~4.9~~	—	Supplement No. 16, dated as of March 31, 2020, to the Amended and Restated Pledge Agreement, dated as of March 2, 2009, by and among the additional pledgors named therein and Bank of America, N.A., as collateral agent.

	~~4.10~~	—	Supplement No. 17, dated as of March 31, 2020, to the U.S. Guarantee, dated as of November 17, 2006 and amended and restated on February 26, 2014, by and among the U.S. guarantors party thereto and Bank of America, N.A., as administrative agent.

	~~4.11~~	—	Supplement No. 17, dated as of March 31, 2020, to the Amended and Restated Security Agreement, dated as of March 2, 2009, as supplemented, by and among the new grantors named therein and Bank of America, N.A., as collateral agent.

	~~4.12~~	—	~~Supplement No. 1, dated as of March 31, 2020, to the Guarantee, dated as of March 19, 2020, by and among each of the new guarantors party thereto and Bank of America, N.A., as administrative agent.~~

~~Table of Contents~~



	~~4.13(a)~~	—	Supplemental Indenture, dated as of March 31, 2020, among the subsidiary guarantors named therein, Delaware Trust Company, as trustee, and Deutsche Bank Trust Company Americas, as paying agent, registrar and transfer agent.

	~~4.13(b)~~	—	~~Schedule of Omitted Supplemental Indentures to Supplemental Indentures, filed pursuant to Instruction 2 to Item 601 of Regulation SK.~~

	~~10.1~~	—	HCA Healthcare, Inc. ~~2020~~2021 Senior Officer Performance Excellence Program (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed April ~~2, 2020~~9, 2021 (File No. 001-11239), and incorporated herein by reference).*

22
	~~10.2~~	—	Form of Director Restricted Share Unit Agreement Under the 2020 Stock Incentive Plan for Key Employees of HCA Healthcare, Inc. and its Affiliates.*

	22	—	List of Subsidiary ~~Guarantors.~~Guarantors and Pledged Securities.

31.1
	~~31.1~~	—	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2
	~~31.2~~	—	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32
	32	—	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101
	~~101~~	—	The following financial information from our quarterly report on Form 10-Q for the ~~quarters~~quarter ended March 31, ~~2020 and 2019,~~2021 filed with the SEC on ~~May 6, 2020,~~April 30, 2021, formatted in Inline Extensible Business Reporting Language: (i) the condensed consolidated balance sheets at March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, (ii) the condensed consolidated income statements for the quarters ended March 31, ~~2020~~2021 and ~~2019,~~2020, (iii) the condensed consolidated comprehensive income statements for the quarters ended March 31, ~~2020~~2021 and ~~2019,~~2020, (iv) the condensed consolidated statements of stockholders’ ~~deficit~~equity (deficit) for the quarters ended March 31, ~~2020~~2021 and ~~2019,~~2020, (v) the condensed consolidated statements of cash flows for the quarters ended March 31, ~~2020~~2021 and ~~2019~~2020 and (vi) the notes to condensed consolidated financial statements. The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

104
	~~104~~	—	The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, ~~2020,~~2021, formatted in Inline XBRL (included in Exhibit 101).

*	Management compensatory plan or ~~arrangement~~arrangement.

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


HCA Healthcare, Inc.

By:		/~~s/ William~~S/ WILLIAM B. ~~Rutherford~~RUTHERFORD
		William B. Rutherford
		Executive Vice President and Chief Financial Officer

Date: ~~May 6, 2020~~April 30, 2021

4236


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

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


	March 31, 2020			December 31, 2019
ASSETS
Current assets:
Cash and cash equivalents	$	731		$	621
Accounts receivable		6,890			7,380
Inventories		1,953			1,849
Other		1,442			1,346

		11,016			11,196

Property and equipment, at cost		47,861			47,235
Accumulated depreciation		(24,876	)		(24,520	)

		22,985			22,715

Investments of insurance subsidiaries		325			315
Investments in and advances to affiliates		238			249
Goodwill and other intangible assets		8,587			8,269
Right-of-use operating lease assets		1,828			1,834
Other		442			480

	$	45,421		$	45,058

LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable	$	2,750		$	2,905
Accrued salaries		1,560			1,775
Other accrued expenses		2,547			2,932
Long-term debt due within one year		162			145

		7,019			7,757

Long-term debt, less debt issuance costs and discounts of $258 and $239		34,699			33,577
Professional liability risks		1,432			1,370
Right-of-use operating lease obligations		1,497			1,499
Income taxes and other liabilities		1,477			1,420

Stockholders’ deficit:
Common stock $0.01 par; authorized 1,800,000,000 shares; outstanding 337,607,500 shares in 2020 and 338,445,600 shares in 2019		3			3
Accumulated other comprehensive loss		(571	)		(460	)
Retained deficit		(2,394	)		(2,351	)

Stockholders’ deficit attributable to HCA Healthcare, Inc.		(2,962	)		(2,808	)
Noncontrolling interests		2,259			2,243

		(703	)		(565	)

	$	45,421		$	45,058


	March 31, 2020
	Amortized Cost		Unrealized Amounts					Fair Value
	Amortized Cost		Gains		Losses			Fair Value
Debt securities	$	371	$	15	$	(2	)	$	384
Money market funds and other		54		—		—			54

	$	425	$	15	$	(2	)		438

Amounts classified as current assets									(113	)

Investment carrying value								$	325


	December 31, 2019
	Amortized Cost		Unrealized Amounts				Fair Value
	Amortized Cost		Gains		Losses		Fair Value
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


	Notional Amount		Maturity Date		Fair Value
Pay-fixed interest rate swaps	$	2,000		December 2021	$	(41	)
Pay-fixed interest rate swaps		500		December 2022		(24	)


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	$	46		Interest expense	$	1


	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, 2019	$	14		$	(283	)	$	(187	)	$	(4	)	$	(460	)
Unrealized losses on available-for-sale securities, net of $1 income tax benefit		(4	)											(4	)
Foreign currency translation adjustments, net of $9 income tax benefit					(64	)								(64	)
Change in fair value of derivative instruments, net of $14 income tax benefit											(46	)		(46	)
Expense (income) reclassified into operations from other comprehensive income, net of $1 income tax benefit and $1 of income taxes, respectively								3			—			3

Balances at March 31, 2020	$	10		$	(347	)	$	(184	)	$	(50	)	$	(571	)


	Quarter March 31, 2020			Year December 31, 2019
Revenues	$	7,750		$	29,220
Income before income taxes		627			3,912
Net income		535			2,993
Net income attributable to Parent, Subsidiary Issuer and Subsidiary Guarantors		516			2,902

At March 31, 2020 and December 31, 2019:

	March 31, 2020			December 31, 2019
Current assets	$	6,623		$	6,090
Property and equipment, net		14,859			13,418
Goodwill and other intangible assets		5,819			5,743
Total noncurrent assets		21,543			19,977
Total assets		28,166			26,067

Current liabilities		4,148			4,504
Long-term debt, net		34,364			33,227
Intercompany balances		1,342			(53	)
Income taxes and other liabilities		885			879
Total noncurrent liabilities		37,004			34,398

Stockholders’ deficit attributable to Parent, Subsidiary Issuer and Subsidiary Guarantors		(13,092	)		(12,941	)
Noncontrolling interests		106			106


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
January 1, 2020 through January 31, 2020		570,980	$	147.12		570,980	$	3,157
February 1, 2020 through February 29, 2020		1,297,864	$	144.87		1,297,864	$	2,969
March 1, 2020 through March 31, 2020		1,418,183	$	119.18		1,418,183	$	2,800

Total for first quarter 2020		3,287,027	$	134.18		3,287,027	$	2,800