HCA Healthcare Reports Second Quarter 2020 Results

NASHVILLE, Tenn.–(BUSINESS WIRE)–HCA Healthcare, Inc. (NYSE: HCA) today announced financial and operating results for the second quarter ended June 30, 2020.

Key second quarter metrics (all percentage changes compare 2Q 2020 to 2Q 2019 unless otherwise noted):

• Revenues totaled $11.068 billion
• Net income attributable to HCA Healthcare, Inc. totaled $1.079 billion, or $3.16 per diluted share
• Adjusted EBITDA totaled $2.666 billion
• Cash flows from operating activities totaled $8.723 billion
• Same facility admissions declined 12.8 percent and same facility equivalent admissions declined 20.1 percent

“Throughout this remarkably challenging pandemic, I am reminded daily of what an incredible and resilient organization we have,” said Sam Hazen, Chief Executive Officer of HCA Healthcare. “I see our colleagues and physicians working every day to do the right thing for others, and I want to thank them for their dedication to our patients and the tremendous sacrifices they, and their families, are making in the midst of this global health crisis.”

“With our continued focus on our patients and the well-being of our colleagues and physicians, we can be proud of our accomplishments. I am confident that we are well positioned for long-term success and to continue the remarkable legacy that is HCA Healthcare,” stated Hazen.

Revenues in the second quarter of 2020 declined to $11.068 billion from $12.602 billion in the second quarter of 2019. Net income attributable to HCA Healthcare, Inc. totaled $1.079 billion, or $3.16 per diluted share, compared to $783 million, or $2.25 per diluted share, in the second quarter of 2019. The Company recognized $822 million ($590 million net of tax), or $1.73 per diluted share, in government stimulus income during the second quarter of 2020 related to general distribution funds received from the provider relief fund established by the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act. The Company recorded losses on sales of facilities of $27 million, or $0.07 per diluted share, during the second quarter of 2020 and gains on sales of facilities of $18 million, or $0.04 per diluted share, during the second quarter of 2019.

For the second quarter of 2020, Adjusted EBITDA totaled $2.666 billion, compared to $2.293 billion in the second quarter of 2019. 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 declined 12.8 percent while same facility equivalent admissions declined 20.1 percent in the second quarter of 2020, compared to the prior year period. Same facility emergency room visits declined 32.9 percent in the second quarter of 2020, compared to the prior year period. Same facility inpatient surgeries declined 15.7 percent, while same facility outpatient surgeries declined 32.6 percent in the second quarter of 2020, compared to the same period of 2019. Same facility revenue per equivalent admission increased 10.0 percent in the second quarter of 2020, compared to the second quarter of 2019. Patient volumes across most service lines were significantly impacted in April due to state and local policies implemented to contain the spread of COVID-19 and preserve personal protective equipment. Patient volumes gradually improved in May and June as states began to re-open and allow for non-emergent procedures.

Six Months Ended June 30, 2020

Revenues for the six months ended June 30, 2020 totaled $23.929 billion, compared to $25.119 billion in the same period of 2019. Net income attributable to HCA Healthcare, Inc. was $1.660 billion, or $4.84 per diluted share, compared to $1.822 billion, or $5.22 per diluted share, for the first six months of 2019. Results for the six months ended June 30, 2020 include government stimulus income of $822 million ($590 million net of tax), or $1.72 per diluted share, losses on sales of facilities of $20 million, or $0.06 per diluted share, and losses on retirement of debt of $295 million, or $0.66 per diluted share. Results for the six months ended June 30, 2019 included gains on sales of facilities of $17 million, or $0.04 per diluted share.

Balance Sheet and Cash Flows from Operations

As of June 30, 2020, HCA Healthcare, Inc.’s balance sheet reflected cash and cash equivalents of $4.638 billion, total debt of $30.942 billion, and total assets of $48.709 billion. During the second quarter of 2020, capital expenditures totaled $745 million, excluding acquisitions. Cash flows provided by operating activities in the second quarter totaled $8.723 billion, compared to $1.997 billion in the second quarter of 2019. Cash flows from operations for the second quarter included $4.4 billion of accelerated Medicare payments and $1.4 billion of provider relief fund distributions provided for in the CARES Act, of which $4.999 billion remains deferred on the balance sheet at June 30, 2020.

As of June 30, 2020, the Company had $7.718 billion of availability under its credit facilities.

Earnings Conference Call

HCA Healthcare 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 through the Company’s Investor Relations web page at https://investor.hcahealthcare.com/events-and-presentations/default.aspx.

About the Company

As of June 30, 2020, HCA operated 186 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 capital allocation, 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) developments related to COVID-19, including, without limitation, related to the length and severity of the pandemic; 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 of government and administrative regulation and stimulus (including the CARES Act, the Paycheck Protection Program and Health Care Enhancement Act and other enacted legislation); changes in revenues due to declining patient volumes, changes in payor 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 supply shortages and disruptions; and the timing and availability 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 single-payer proposals (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 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 facilities, (14) changes in accounting practices, (15) changes in general economic conditions nationally and regionally in our markets, including economic and business conditions 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, (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 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:
Harlow Sumerford

615-344-1851

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