HCA Reports First Quarter 2019 Results

NASHVILLE, Tenn.–(BUSINESS WIRE)–HCA Healthcare, Inc. (NYSE: HCA) today announced financial and operating
results for the first quarter ended March 31, 2019.

Key first quarter metrics (all percentage changes compare 1Q 2019
to 1Q 2018 unless otherwise noted):

• Revenues totaled $12.517 billion, an increase of 9.6 percent
• Net income attributable to HCA Healthcare, Inc. totaled $1.039
  billion, or $2.97 per diluted share
• Adjusted EBITDA totaled $2.541 billion
• Cash flows from operating activities totaled $974 million, compared
  to $1.283 billion in the prior year’s first quarter
• Same facility equivalent admissions and same facility admissions
  increased 1.8 percent and 0.9 percent, respectively

Revenues in the first quarter of 2019 increased to $12.517 billion,
compared to $11.423 billion in the first quarter of 2018. Net income
attributable to HCA Healthcare, Inc. totaled $1.039 billion, or $2.97
per diluted share, compared to $1.144 billion, or $3.18 per diluted
share, in the first quarter of 2018. During the quarter, we recorded an
increase of $86 million in revenues, or $0.19 per diluted share, as a
result of finalizing an arbitration with a payer related to
out-of-network claims. Results for the first quarter of 2018 included
gains on sales of facilities of $405 million, or $0.85 per diluted
share, primarily reflecting the sale of our Oklahoma facilities.

For the first quarter of 2019, Adjusted EBITDA totaled $2.541 billion,
compared to $2.118 billion in the first quarter of 2018. Adjusted EBITDA
is a non-GAAP financial measure. A table providing supplemental
information on Adjusted EBITDA and reconciling net income attributable
to HCA Healthcare, Inc. to Adjusted EBITDA is included in this release.

Same facility admissions increased 0.9 percent and same facility
equivalent admissions increased 1.8 percent in the first quarter of 2019
compared to the prior year period. Same facility emergency room visits
declined 2.3 percent in the first quarter of 2019, compared to the prior
year period. Same facility inpatient surgeries declined 0.3 percent,
while same facility outpatient surgeries increased 1.3 percent in the
first quarter of 2019 compared to the same period of 2018. Same facility
revenue per equivalent admission increased 4.4 percent in the first
quarter of 2019, compared to the first quarter of 2018 (80 basis points
of the increase relates to the out-of-network arbitration award).

Salaries and benefits, supplies and other operating expenses totaled
$9.987 billion, or 79.8 percent of revenues, in the first quarter of
2019, compared to $9.314 billion, or 81.6 percent of revenues, in the
first quarter of 2018.

Balance Sheet and Cash Flows from Operations

As of March 31, 2019, HCA Healthcare, Inc.’s balance sheet reflected
cash and cash equivalents of $531 million, total debt of $34.815
billion, and total assets of $43.379 billion. During the first quarter
of 2019, capital expenditures totaled $781 million, excluding
acquisitions. Cash flows provided by operating activities in the first
quarter totaled $974 million, compared to $1.283 billion in the first
quarter of 2018.

During the first quarter of 2019, the Company repurchased 2.106 million
shares of its common stock at a cost of $278 million. The Company had
$1.995 billion remaining under its existing repurchase authorization as
of March 31, 2019.

Acquisition of Mission Health

On February 1, 2019, HCA Healthcare completed the purchase of Mission
Health, a seven-hospital system in Asheville and western North Carolina
for approximately $1.5 billion.

Dividend

HCA today announced that its Board of Directors declared a quarterly
cash dividend of $0.40 per share on the Company’s common stock. The
dividend will be paid on June 28, 2019 to stockholders of record at the
close of business on June 3, 2019.

The declaration and payment of any future dividend will be subject to
the discretion of the Board of Directors and will depend on a variety of
factors, including the Company’s financial condition and results of
operations and contractual restrictions. Future dividends are expected
to be funded by cash balances and future cash flows from operations.

2019 Guidance

The 2019 guidance ranges for the year have been revised from our fourth
quarter release and are as follows:

The Company’s 2019 guidance contains a number of assumptions, including:

• 2019 guidance includes estimated financial impact of the Company’s
  Mission Health acquisition, which closed February 1, 2019.
• 2019 guidance excludes the impact of items such as, but not limited
  to, gains or losses on sales of facilities, losses on retirement of
  debt, legal claim costs and impairments of long-lived assets.

Adjusted EBITDA is a non-GAAP financial measure. A table reconciling
forecasted net income attributable to HCA Healthcare, Inc. to forecasted
Adjusted EBITDA is included in this release.

The Company’s guidance is based on current plans and expectations and is
subject to a number of known and unknown uncertainties and risks,
including those set forth below in the Company’s “Forward-Looking
Statements.”

Earnings Conference Call

HCA will host a conference call for investors at 9:00 a.m. Central
Daylight Time today. All interested investors are invited to access a
live audio broadcast of the call via webcast. The broadcast also will be
available on a replay basis beginning this afternoon. The webcast can be
accessed at: https://event.webcasts.com/starthere.jsp?ei=1234723&tp_key=968131d293
or through the Company’s Investor Relations web page at www.hcahealthcare.com.

About the Company

As of March 31, 2019, HCA operated 185 hospitals and approximately 2,000
sites of care, including surgery centers, freestanding emergency rooms,
urgent care centers and physician clinics, in 21 states and the United
Kingdom.

Forward-Looking Statements

This press release contains forward-looking statements within the
meaning of the federal securities laws, which involve risks and
uncertainties. Forward-looking statements include the Company’s
financial guidance for the year ending December 31, 2019, as well as
other statements that do not relate solely to historical or current
facts. Forward-looking statements 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) the impact of our substantial indebtedness and the ability to
refinance such indebtedness on acceptable terms, (2) the impact of the
Patient Protection and Affordable Care Act, as amended by the Health
Care and Education Reconciliation Act of 2010 (collectively, the “Health
Reform Law”), including the effects of court challenges to, any repeal
of, or changes to, the Health Reform Law or 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, (3) 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 the potential for
future deficit reduction legislation that may alter these spending
reductions, which include cuts to Medicare payments, or create
additional spending reductions, (4) increases in the amount and risk of
collectability of uninsured accounts and deductibles and copayment
amounts for insured accounts, (5) the ability to achieve operating and
financial targets, and attain expected levels of patient volumes and
control the costs of providing services, (6) 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, (7) the highly competitive
nature of the health care business, (8) 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, (9) the efforts of health insurers, health care
providers, large employer groups and others to contain health care
costs, (10) the outcome of our continuing efforts to monitor, maintain
and comply with appropriate laws, regulations, policies and procedures,
(11) increases in wages and the ability to attract and retain qualified
management and personnel, including affiliated physicians, nurses and
medical and technical support personnel, (12) the availability and terms
of capital to fund the expansion of our business and improvements to our
existing facilities, (13) changes in accounting practices, (14) changes
in general economic conditions nationally and regionally in our markets,
(15) the emergence and effects related to infectious diseases, (16)
future divestitures which may result in charges and possible impairments
of long-lived assets, (17) changes in business strategy or development
plans, (18) delays in receiving payments for services provided, (19) the
outcome of pending and any future tax audits, disputes and litigation
associated with our tax positions, (20) potential adverse impact of
known and unknown government investigations, litigation and other claims
that may be made against us, (21) the impact of potential cybersecurity
incidents or security breaches, (22) our ongoing ability to demonstrate
meaningful use of certified electronic health record technology, (23)
the impact of natural disasters, such as hurricanes and floods, or
similar events beyond our control, (24) the effects of the 2017 Tax Cuts
and Jobs Act, including potential legislation or interpretive guidance
that may be issued by federal and state taxing authorities or other
standard-setting bodies, and (25) other risk factors described in our
annual report on Form 10-K for the year ended December 31, 2018 and our
other filings with the Securities and Exchange Commission. Many of the
factors that will determine our future results are beyond our ability to
control or predict. In light of the significant uncertainties inherent
in the forward-looking statements contained herein, readers should not
place undue reliance on forward-looking statements, which reflect
management’s views only as of the date hereof. We undertake no
obligation to revise or update any forward-looking statements, or to
make any other forward-looking statements, whether as a result of new
information, future events or otherwise.

All references to “Company” and “HCA” as used throughout this release
refer to HCA Healthcare, Inc. and its affiliates.

Contacts

INVESTOR CONTACT:
Mark Kimbrough
615-344-2688

MEDIA CONTACT:
Ed Fishbough
615-344-2810