HCA Healthcare, Inc.

Previous wording

This quarterly report on Form 10-Q includes certain disclosures that contain “forward-looking statements” within the meaning of the federal securities laws, which involve risks and uncertainties. Forward-looking statements include statements regarding expected capital expenditures, expected dividends, expected share repurchases, expected net claim payments, expected inflationary pressures, expected labor costs 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) changes in or related to general economic or business conditions nationally and regionally in our markets, including inflation and the impact of trade policies, including changes in, or the imposition of, tariffs and/or trade barriers; changes in revenues resulting from declining patient volumes; changes in payer mix (including increases in uninsured and underinsured patients); potential increased expenses related to labor, pharmaceuticals, supply chain or other expenditures; workforce disruptions; supply and pharmaceutical shortages and disruptions (including as a result of tariffs or geopolitical disruptions); and the impact of potential federal government shutdowns, holds on or cancellations of congressionally authorized spending and interruptions in the distribution of governmental funds, (2) the impact of current and future health care public policy developments and possible changes to other federal, state or local laws and regulations affecting the health care industry, including the expiration of enhanced premium tax credits for individuals eligible to purchase insurance coverage through federal and state-based health insurance marketplaces and changes in the structure and administration of, and funding for, federal and state agencies and programs, (3) the impact of our significant indebtedness and the ability to refinance such indebtedness on acceptable terms, (4) the effects related to the implementation of sequestration spending reductions required under the Budget Control Act of 2011, 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) the ability to achieve operating and financial targets, attain expected levels of patient volumes and revenues, and control the costs of providing services, (6) possible reductions or other changes in Medicare, Medicaid a…

Excerpt shortened here; the source contains the full paragraph.

Current wording

This quarterly report on Form 10-Q includes certain disclosures that contain “forward-looking statements” within the meaning of the federal securities laws, which involve risks and uncertainties. Forward-looking statements include statements regarding expected capital expenditures, expected dividends, expected share repurchases, expected net claim payments, expected inflationary pressures, expected labor costs 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) changes in or related to general economic or business conditions nationally and regionally in our markets, including inflation, and the impact of trade policies, including changes in, or the imposition of, tariffs and/or trade barriers; changes in revenues resulting from declining patient volumes; changes in payer mix (including increases in uninsured and underinsured patients); potential increased expenses related to labor, pharmaceuticals, supply chain or other expenditures; workforce disruptions; supply and pharmaceutical shortages and disruptions (including as a result of tariffs or geopolitical disruptions); and the impact of potential federal government shutdowns, holds on or cancellations of congressionally authorized spending and interruptions in the distribution of governmental funds, (2) the impact of current and future health care public policy developments and the implementation of new, and possible changes to existing, federal, state or local laws and regulations affecting the health care industry, including the expiration of enhanced premium tax credits (“EPTCs”) for individuals eligible to purchase insurance coverage through federal and state-based health insurance marketplaces, changes in the structure and administration of, and funding for, federal and state agencies and programs, and effects of the One Big Beautiful Bill Act (the “OBBBA”), (3) the impact of our significant indebtedness and the ability to refinance such indebtedness on acceptable terms, (4) the effects related to the implementation of sequestration spending reductions required under the Budget Control Act of 2011, related legislation extending these reductions, and those that may be required under the Pay-As-You-Go Act of 2010 as a result of the federal budget deficit impact of the OBBBA, and the potential for future deficit reduction legislation that may alter these spending reductions, which include cuts to Medicare payments, or create additional spending red…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

During the quarter ended March 31, 2025, consolidated admissions increased 2.8% and same facility admissions increased 2.6% compared to the quarter ended March 31, 2024. Inpatient surgical volumes increased 0.3% on a consolidated basis and 0.2% on a same facility basis during the quarter ended March 31, 2025, compared to the quarter ended March 31, 2024. Outpatient surgical volumes declined 2.5% on a consolidated basis and 2.1% on a same facility basis during the quarter ended March 31, 2025, compared to the quarter ended March 31, 2024. Emergency department visits increased 3.7% on a consolidated basis and 4.0% on a same facility basis during the quarter ended March 31, 2025, compared to the quarter ended March 31, 2024. Consolidated and same facility uninsured admissions declined 0.2% and 0.7%, respectively, for the quarter ended March 31, 2025, compared to the quarter ended March 31, 2024.

Current wording

During the quarter ended June 30, 2025, consolidated admissions increased 2.1% and same facility admissions increased 1.8% compared to the quarter ended June 30, 2024. Inpatient surgical volumes increased 0.2% on a consolidated basis and declined 0.3% on a same facility basis during the quarter ended June 30, 2025, compared to the quarter ended June 30, 2024. Outpatient surgical volumes declined 0.2% on a consolidated basis and 0.6% on a same facility basis during the quarter ended June 30, 2025, compared to the quarter ended June 30, 2024. Emergency department visits increased 1.0% on a consolidated basis and 1.3% on a same facility basis during the quarter ended June 30, 2025, compared to the quarter ended June 30, 2024. Consolidated and same facility uninsured admissions increased 1.1% and 0.4%, respectively, for the quarter ended June 30, 2025, compared to the quarter ended June 30, 2024.

Previous wording

Cash flows from operating activities declined $818 million, from $2.469 billion for the first quarter of 2024 to $1.651 billion for the first quarter of 2025. The decline in cash provided by operating activities was primarily related to the net impact of negative changes in working capital items of $1.157 billion, partially offset by a $176 million increase in net income, excluding gains on sales of facilities.

Current wording

Cash flows from operating activities increased $2.239 billion, from $1.971 billion for the second quarter of 2024 to $4.210 billion for the second quarter of 2025. The increase in cash provided by operating activities was primarily related to a $216 million increase in net income, excluding the non-cash impact of losses and gains on sales of facilities, favorable working capital changes of $1.186 billion, including increased collections on accounts receivable, as well as a decline in income taxes paid of $862 million related to an IRS deferral of quarterly estimated income tax payments for Tennessee-based taxpayers until the fourth quarter of 2025.

Previous wording

Revenues increased 5.7% from $17.339 billion in the first quarter of 2024 to $18.321 billion in the first quarter of 2025. 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 and other 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. 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, 2025 and 2024 are summarized in the following table (dollars in millions):

Current wording

Revenues increased 6.4% from $17.492 billion in the second quarter of 2024 to $18.605 billion in the second quarter of 2025. 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 and other 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. 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 and six months ended June 30, 2025 and 2024 are summarized in the following table (dollars in millions):

Previous wording

Consolidated and same facility revenue per equivalent admission increased 2.5% and 2.9%, respectively, in the first quarter of 2025, compared to the first quarter of 2024. Consolidated and same facility equivalent admissions increased 3.1% and 2.8%, respectively, in the first quarter of 2025, compared to the first quarter of 2024. Consolidated and same facility outpatient surgeries declined 2.5% and 2.1%, respectively, in the first quarter of 2025, compared to the first quarter of 2024. Consolidated and same facility inpatient surgeries increased 0.3% and 0.2%, respectively, in the first quarter of 2025, compared to the first quarter of 2024. Consolidated and same facility emergency department visits increased 3.7% and 4.0%, respectively, in the first quarter of 2025, compared to the first quarter of 2024.

Current wording

Consolidated and same facility revenue per equivalent admission increased 3.9% and 4.0%, respectively, in the second quarter of 2025, compared to the second quarter of 2024. Consolidated and same facility equivalent admissions increased 2.3% and 1.7%, respectively, in the second quarter of 2025, compared to the second quarter of 2024. Consolidated and same facility outpatient surgeries declined 0.2% and 0.6%, respectively, in the second quarter of 2025, compared to the second quarter of 2024. Consolidated and same facility inpatient surgeries increased 0.2% and declined 0.3%, respectively, in the second quarter of 2025, compared to the second quarter of 2024. Consolidated and same facility emergency department visits increased 1.0% and 1.3%, respectively, in the second quarter of 2025, compared to the second quarter of 2024.

Previous wording

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, 2025 and 2024 follows (dollars in millions):

Current wording

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 and six months ended June 30, 2025 and 2024 follows (dollars in millions):

Previous wording

Same facility uninsured admissions declined 0.7%, in the first quarter of 2025 compared to the first quarter of 2024. Same facility uninsured admissions in 2024, compared to 2023, increased 0.1% in the fourth quarter, declined 1.8% in the third quarter, increased 3.5% in the second quarter and increased 2.4% in the first quarter.

Current wording

Same facility uninsured admissions increased 0.4% in the second quarter of 2025 compared to the second quarter of 2024. Same facility uninsured admissions declined 0.7% in the first quarter of 2025 compared to the first quarter of 2024. Same facility uninsured admissions in 2024, compared to 2023, increased 0.1% in the fourth quarter, declined 1.8% in the third quarter, increased 3.5% in the second quarter and increased 2.4% in the first quarter.

Previous wording

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, 2025 and 2024 are set forth in the following table.

Current wording

The approximate percentages of our admissions related to Medicare, managed Medicare, Medicaid, managed Medicaid, managed care and insurers and the uninsured for the quarters and six months ended June 30, 2025 and 2024 are set forth in the following table.

Previous wording

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, 2025 and 2024 are set forth in the following table.

Current wording

The approximate percentages of our inpatient revenues related to Medicare, managed Medicare, Medicaid, managed Medicaid, managed care and insurers for the quarters and six months ended June 30, 2025 and 2024 are set forth in the following table.

Previous wording

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. Some states make additional payments to providers through the Medicaid program that are separate from base payments. These payments may be in the form of payments, such as upper payment limit payments, that are intended to address the difference between Medicaid fee-for-service payments and Medicare reimbursement rates, or payments under other programs that vary by state under Section 1115 waivers. In addition, many states have implemented state directed payment arrangements to direct certain Medicaid managed care plan expenditures. These payments are generally authorized by CMS and subject to periodic extension or reapproval. Most states in which we receive payment have adopted statewide or local provider taxes to fund the non-federal share of Medicaid programs. These additional payments supplement Medicaid base rates that, when taken together, are insufficient to cover the cost of care provided to Medicaid beneficiaries combined with the state or local provider taxes levied.

Current wording

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. Some states make additional payments to providers through the Medicaid program that are separate from base payments. These payments may be in the form of payments, such as upper payment limit payments, that are intended to address the difference between Medicaid fee-for-service payments and Medicare reimbursement rates, or payments under other programs that vary by state under Section 1115 waivers. In addition, many states have implemented SDP arrangements to direct certain Medicaid managed care plan expenditures. These payments are generally authorized by CMS and subject to periodic extension or reapproval. Most states in which we receive payment have adopted statewide or local provider taxes to fund the non-federal share of Medicaid programs. These additional payments supplement Medicaid base rates that, when taken together, are insufficient to cover the cost of care provided to Medicaid beneficiaries combined with the state or local provider taxes levied.

Previous wording

The health care industry is subject to changing political, regulatory and other influences, including health care reform efforts at the federal and state levels. For example, the enhanced premium tax credits for individuals eligible to purchase insurance coverage through federal and state-based health insurance marketplaces are scheduled to expire at the end of 2025, and further extension is uncertain. We are monitoring and engaged in advocacy efforts around potential health care policy changes and reform. See Item 1A, “Risk Factors” from our Annual Report on Form 10-K for the year ended December 31, 2024 for additional information.

Current wording

The health care industry is subject to changing political, regulatory and other influences, including health care reform efforts at the federal and state levels and the OBBBA. For example, the EPTCs for individuals eligible to purchase insurance coverage through federal and state-based health insurance marketplaces are scheduled to expire at the end of 2025, and further extension is uncertain. We are monitoring and engaged in advocacy efforts around potential health care policy changes and reform. See the "Recent Developments" section of this Quarterly Report on Form 10-Q and Item 1A, “Risk Factors” from our Annual Report on Form 10-K for the year ended December 31, 2024 for additional information.

Previous wording

The following is a comparative summary of results of operations for the quarters ended March 31, 2025 and 2024 (dollars in millions):

Current wording

The following is a comparative summary of results of operations for the quarters and six months ended June 30, 2025 and 2024 (dollars in millions):

Previous wording

Salaries and benefits, as a percentage of revenues, were 43.6% in the first quarter of 2025 and 44.4% in the first quarter of 2024. Salaries and benefits per equivalent admission increased 0.6% in the first quarter of 2025 compared to the first quarter of 2024. Same facility salaries and benefits per full time equivalent increased 2.0% for the first quarter of 2025 compared to the first quarter of 2024.

Current wording

Salaries and benefits, as a percentage of revenues, were 43.7% in the second quarter of 2025 and 43.9% in the second quarter of 2024. Salaries and benefits per equivalent admission increased 3.5% in the second quarter of 2025, compared to the second quarter of 2024. Same facility salaries and benefits per full time equivalent increased 3.4% for the second quarter of 2025, compared to the second quarter of 2024.

Previous wording

Supplies, as a percentage of revenues, were 15.1% in the first quarter of 2025 and 15.4% in the first quarter of 2024. Supply costs per equivalent admission increased 0.4% in the first quarter of 2025 compared to the first quarter of 2024. Supply costs per equivalent admission increased 4.6% for medical devices and declined 3.9% for pharmacy supplies and 1.8% for general medical and surgical items in the first quarter of 2025 compared to the first quarter of 2024.

Current wording

Supplies, as a percentage of revenues, were 15.3% in the second quarter of 2025 and 15.1% in the second quarter of 2024. Supply costs per equivalent admission increased 5.5% in the second quarter of 2025, compared to the second quarter of 2024. Supply costs per equivalent admission increased 10.2% for medical devices and 2.1% for general medical and surgical items and declined 0.3% for pharmacy supplies in the second quarter of 2025, compared to the second quarter of 2024. The increase in supply costs per equivalent admission for medical devices is primarily related to cardiovascular technologies.

Previous wording

Other operating expenses, as a percentage of revenues, were 21.0% in the first quarter of 2025 and 20.9% in the first quarter of 2024. 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. We have seen inflation have a negative impact on certain of these expenses and expect inflationary pressures will continue to impact operating expenses in the future.

Current wording

Other operating expenses, as a percentage of revenues, were 20.4% in the second quarter of 2025 and 20.7% in the second quarter of 2024. Other operating expenses are primarily comprised of contract services, professional fees, repairs and maintenance, rents and leases, utilities, insurance (including professional liability insurance) and nonincome taxes. We have seen inflation have a negative impact on certain of these expenses and expect inflationary pressures will continue to impact operating expenses in the future.

Previous wording

Depreciation and amortization increased $65 million, from $795 million in the first quarter of 2024 to $860 million in the first quarter of 2025. The increase in depreciation relates primarily to capital expenditures at our existing facilities.

Current wording

Depreciation and amortization increased $44 million, from $819 million in the second quarter of 2024 to $863 million in the second quarter of 2025. The increase in depreciation relates primarily to capital expenditures at our existing facilities.

Previous wording

Interest expense was $547 million in the first quarter of 2025 and $512 million in the first quarter of 2024. Our average debt balance was $43.746 billion for the first quarter of 2025 compared to $40.383 billion for the first quarter of 2024. The average effective interest rate for our long-term debt was 5.1% for each of the quarters ended March 31, 2025 and 2024.

Current wording

Interest expense was $568 million in the second quarter of 2025 and $506 million in the second quarter of 2024. Our average debt balance was $44.506 billion for the second quarter of 2025, compared to $40.292 billion for the second quarter of 2024. The average effective interest rate for our debt was 5.1% for both of the quarters ended June 30, 2025 and 2024.

Previous wording

Net income attributable to noncontrolling interests increased from $211 million for the first quarter of 2024 to $215 million for the first quarter of 2025.

Current wording

Net income attributable to noncontrolling interests increased from $226 million for the second quarter of 2024 to $238 million for the second quarter of 2025. The increase in net income attributable to noncontrolling interests related primarily to the operations of one of our Texas markets.

Previous wording

Equity in earnings of affiliates was $18 million and equity in losses of affiliates was $2 million in the first quarters of 2025 and 2024, respectively.

Current wording

Equity in earnings of affiliates was $37 million in the first six months of 2025, and equity in losses of affiliates was $2 million in the first six months of 2024.

Previous wording

During the first quarters of 2025 and 2024, we recorded gains on sales of facilities of $1 million and $201 million, respectively. The gain for 2024 was primarily related to the sale of a hospital facility in California.

Current wording

During the first six months of 2025 and 2024, we recorded losses on sales of facilities of $2 million and gains on sales of facilities of $213 million, respectively. The gain for 2024 was primarily related to the sale of a hospital facility in California.

Previous wording

The effective tax rate was 23.8% and 21.8% for the first quarters of 2025 and 2024, respectively. The effective tax rate computations exclude net income attributable to noncontrolling interests as it relates to consolidated partnerships. The increase in the effective tax rate for the quarter ended March 31, 2025 is related primarily to a reduction in the amount of deductible share-based compensation for vested employee equity awards. Our provisions for income taxes for the first quarters of 2025 and 2024 included tax benefits of $24 million and $69 million, respectively, related to employee equity award settlements.

Current wording

The effective tax rates were 23.9% and 24.6% for the first six months of 2025 and 2024, respectively. The effective tax rate computations exclude net income attributable to noncontrolling interests as it relates to consolidated partnerships. The decline in the effective tax rate for the six months ended June 30, 2025 is related to adjustments to our liability for unrecognized tax benefits recorded in the second quarter of 2024, offset by a reduction in the amount of deductible share-based compensation for vested employee equity awards. Our provisions for income taxes for the first six months of 2025 and 2024 included tax benefits of $33 million and $79 million, respectively, related to employee equity award settlements.

Previous wording

Cash provided by operating activities totaled $1.651 billion in the first quarter of 2025 compared to $2.469 billion in the first quarter of 2024. The $818 million decline in cash provided by operating activities, in the first quarter of 2025 compared to the first quarter of 2024, related primarily to the net impact of negative changes in working capital items of $1.157 billion, partially offset by a $176 million increase in net income, excluding gains on sales of facilities. The combination of interest payments and net income tax payments in the first quarters of 2025 and 2024 totaled $549 million and $539 million, respectively. Working capital totaled $2.627 billion at March 31, 2025 and $1.237 billion at December 31, 2024. The increase in working capital is primarily related to the decline in long-term debt due within one year of $1.179 billion.

Current wording

Cash provided by operating activities totaled $5.861 billion for the first six months of 2025 compared to $4.440 billion for the first six months of 2024. The $1.421 billion increase in cash provided by operating activities, for the first six months of 2025 compared to the first six months of 2024, related primarily to an increase in net income of $392 million, excluding the non-cash impact of losses and gains on sales of facilities, as well as a decline in income taxes paid of $853 million related to an IRS deferral of quarterly estimated income tax payments for Tennessee-based taxpayers until the fourth quarter of 2025. The combination of interest payments and net income tax payments in the first six months of 2025 and 2024 totaled $1.220 billion and $1.942 billion, respectively. We had negative working capital of $376 million at June 30, 2025 and positive working capital of $1.237 billion at December 31, 2024. The decline in working capital is primarily related to the increase in short-term borrowings and long-term debt due within one year and other accrued expenses, as well as a decline in cash and cash equivalents. We have the ability to refinance our outstanding commercial paper notes (short-term borrowings) with our senior unsecured credit facility on a long-term basis. Excluding the impact of our outstanding commercial paper notes, our working capital at June 30, 2025 would have been $1.402 billion.

Previous wording

Cash used in investing activities was $1.032 billion in the first quarter of 2025 compared to $903 million in the first quarter of 2024. Excluding acquisitions, capital expenditures were $991 million in the first quarter of 2025 and $1.118 billion in the first quarter of 2024. Planned capital expenditures are expected to approximate between $5.0 billion and $5.2 billion in 2025. At March 31, 2025, there were projects under construction that had estimated additional costs to complete and equip over the next five years of approximately $5.6 billion. We expect to finance capital expenditures with internally generated and borrowed funds. We expended $227 million and $96 million for acquisitions of hospitals and health care entities during the first quarters of 2025 and 2024, respectively. Cash flows from sales of hospitals and health care entities were $161 million and $310 million for the first quarter of 2025 and 2024, respectively.

Current wording

Cash used in investing activities was $2.283 billion in the first six months of 2025 compared to $2.235 billion in the first six months of 2024. Excluding acquisitions, capital expenditures were $2.167 billion in the first six months of 2025 and $2.399 billion in the first six months of 2024. Planned capital expenditures are expected to be approximately $5.0 billion in 2025. At June 30, 2025, there were projects under construction which had estimated additional costs to complete and equip over the next five years of approximately $5.9 billion. We expect to finance capital expenditures with internally generated and borrowed funds.

Previous wording

Cash used in financing activities totaled $1.495 billion in the first quarter of 2025, compared to $1.216 billion in the first quarter of 2024. During the first quarter of 2025, net cash flows used in financing activities included a net increase of $1.558 billion in our indebtedness, payment of dividends of $180 million, repurchase of common stock of $2.506 billion and distributions to noncontrolling interests of $220 million. During the first quarter of 2024, net cash flows used in financing activities included a net increase of $537 million in our indebtedness, payment of dividends of $185 million, repurchase of common stock of $1.180 billion and distributions to noncontrolling interests of $152 million.

Current wording

Cash used in financing activities totaled $4.584 billion in the first six months of 2025, compared to $2.309 billion in the first six months of 2024. During the first six months of 2025, net cash flows used in financing activities included a net increase of $1.341 billion in our indebtedness, payment of dividends of $351 million, repurchase of common stock of $5.011 billion and distributions to noncontrolling interests of $394 million. During the first six months of 2024, net cash flows used in financing activities included a net increase of $1.184 billion in our indebtedness, payment of dividends of $356 million, repurchase of common stock of $2.547 billion and distributions to noncontrolling interests of $338 million.

Previous wording

During February 2025, we repaid all $2.600 billion aggregate principal amount of 5.375% senior notes due 2025 at maturity. We entered into a new credit agreement that provides for $8.000 billion of senior unsecured revolving credit commitments with a term of five years (“senior unsecured credit facility”). Currently, borrowings under the senior unsecured credit facility bear interest at a rate equal to the Secured Overnight Financing Rate plus 1.250% (plus a 0.10% credit spread adjustment). We concurrently borrowed funds from the senior unsecured credit facility and repaid outstanding borrowings under our $4.5 billion senior secured asset-based revolving credit facility and our senior secured term loan facility of $1.238 billion. We terminated these senior secured credit facilities along with our $3.5 billion senior secured revolving cash flow credit facility.

Current wording

During February 2025, we repaid all $2.600 billion aggregate principal amount of 5.375% senior notes due 2025 at maturity. We entered into a new credit agreement that provides for $8.000 billion of senior unsecured revolving credit commitments with a term of five years (“senior unsecured credit facility”). Currently, borrowings under the senior unsecured credit facility bear interest at a rate equal to the Secured Overnight Financing Rate plus 1.250% (plus a 0.10% credit spread adjustment). We concurrently borrowed funds from the senior unsecured credit facility and repaid outstanding borrowings under our $4.500 billion senior secured asset-based revolving credit facility and our senior secured term loan facility of $1.238 billion. We terminated these senior secured credit facilities along with our $3.500 billion senior secured revolving cash flow credit facility.

Previous wording

We have significant debt service requirements. Our debt totaled $44.576 billion at March 31, 2025. Our interest expense was $547 million for the first quarter of 2025 and $512 million for the first quarter of 2024.

Current wording

We have significant debt service requirements. Our debt totaled $44.483 billion at June 30, 2025. Our interest expense was $1.115 billion for the first six months of 2025 and $1.018 billion for the first six months of 2024.

Previous wording

In addition to cash flows from operations, available sources of capital include amounts available under our senior unsecured credit facility ($7.766 billion and $6.366 billion available as of March 31, 2025 and April 28, 2025, respectively) and anticipated access to public and private debt markets.

Current wording

In addition to cash flows from operations, available sources of capital include amounts available under our senior unsecured credit facility ($6.208 billion and $6.691 billion available as of June 30, 2025 and July 31, 2025, respectively, after giving effect to all issued and outstanding letters of credit and our intention to maintain a minimum available borrowing capacity under our senior unsecured credit facility equal to the aggregate amount outstanding under the commercial paper program ($1.778 billion as of June 30, 2025 and $1.295 billion as of July 31, 2025)) and anticipated access to public and private debt markets.

Previous wording

Investments of our insurance subsidiaries, held to maintain statutory equity levels and to provide liquidity to pay claims, totaled $657 million at both March 31, 2025 and December 31, 2024. An insurance subsidiary maintained net reserves for professional liability risks of $70 million and $127 million at March 31, 2025 and December 31, 2024, respectively. Our facilities are insured by our insurance subsidiary for losses up to $110 million per occurrence; however, this coverage is subject, in most cases, to a $15 million per occurrence self-insured retention. Additionally, an 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 $1.944 billion and $1.924 billion at March 31, 2025 and December 31, 2024, respectively. Claims payments, net of reinsurance recoveries, during the next 12 months are expected to approximate $554 million. We estimate that approximately $520 million of the expected net claim payments during the next 12 months will relate to claims subject to the self-insured retention.

Current wording

Investments of our insurance subsidiaries, held to maintain statutory equity levels and to provide liquidity to pay claims, totaled $632 million and $657 million at June 30, 2025 and December 31, 2024, respectively. An insurance subsidiary maintained net reserves for professional liability risks of $102 million and $127 million at June 30, 2025 and December 31, 2024, respectively. Our facilities are insured by our insurance subsidiary for losses up to $110 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 $1.932 billion and $1.924 billion at June 30, 2025 and December 31, 2024, respectively. Claims payments, net of reinsurance recoveries, during the next 12 months are expected to approximate $565 million. We estimate that approximately $532 million of the expected net claim payments during the next 12 months will relate to claims subject to the self-insured retention.

Previous wording

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 for the foreseeable future.

Current wording

Management believes that cash flows from operations, amounts available under our senior unsecured credit facility and our anticipated access to public and private debt markets will be sufficient to meet expected liquidity needs for the foreseeable future.

Previous wording

We are exposed to market risk related to changes in market values of securities. The investment securities held by our insurance subsidiaries were recorded at $657 million at March 31, 2025. 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, 2025, we had net unrealized losses of $21 million on the insurance subsidiaries’ investments.

Current wording

We are exposed to market risk related to changes in market values of securities. The investment securities held by our insurance subsidiaries were recorded at $632 million at June 30, 2025. 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 June 30, 2025, we had net unrealized losses of $18 million on the insurance subsidiaries’ investments.

Previous wording

We are also exposed to market risk related to changes in interest rates. With respect to our interest-bearing liabilities, approximately $520 million of long-term debt at March 31, 2025 was subject to variable rates of interest, while the remaining balance of long-term debt of $44.056 billion at March 31, 2025 was subject to fixed rates of interest. Both the general level of interest rates and, for the senior unsecured credit facility, our leverage affect our variable interest rates. Our variable debt is comprised primarily of amounts outstanding under the senior unsecured credit facility and the floating rate senior notes due 2028. The average effective interest rate for our long-term debt was 5.1% for each of the quarters ended March 31, 2025 and 2024, respectively.

Current wording

We are also exposed to market risk related to changes in interest rates. With respect to our interest-bearing liabilities, approximately $2.078 billion of our debt at June 30, 2025 was subject to variable rates of interest, while the remaining debt balance of $42.405 billion at June 30, 2025 was subject to fixed rates of interest. Both the general level of interest rates and our leverage affect our variable interest rates. Our variable debt is comprised of outstanding commercial paper notes and the floating rate senior notes due 2028. The average effective interest rate for our debt was 5.1% for both of the six months ended June 30, 2025 and 2024, respectively.

Previous wording

The estimated fair value of our total long-term debt was $42.876 billion at March 31, 2025. 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 interest rates, the potential annualized reduction to future pretax earnings would be approximately $5 million. To mitigate the impact of fluctuations in interest rates, we generally target a majority of our debt portfolio to be maintained at fixed rates.

Current wording

The estimated fair value of our long-term debt was $43.201 billion at June 30, 2025. 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 interest rates, the potential annualized reduction to future pretax earnings would be approximately $21 million. To mitigate the impact of fluctuations in interest rates, we generally target a majority of our debt portfolio to be maintained at fixed rates.

Previous wording

At March 31, 2025, the Internal Revenue Service (“IRS”) was examining the Company’s 2022 and 2023 income tax returns and the 2019 income tax returns of certain affiliates. We are subject to examination by the IRS for tax years after 2020, as well as by state and foreign taxing authorities. Management believes HCA Healthcare, Inc. and its subsidiaries and affiliates properly reported taxable income and paid taxes in accordance with applicable laws and agreements established with IRS, state and foreign taxing authorities and final resolution of any disputes will not have a material, adverse effect on our results of operations or financial position. However, if payments due upon final resolution of any issues exceed our recorded estimates, such resolutions could have a material, adverse effect on our results of operations or financial position.

Current wording

At June 30, 2025, the Internal Revenue Service (“IRS”) was examining the Company’s 2022 and 2023 income tax returns and the 2019 income tax returns of certain affiliates. We are subject to examination by the IRS for tax years after 2020, as well as by state and foreign taxing authorities. Management believes HCA Healthcare, Inc. and its subsidiaries and affiliates properly reported taxable income and paid taxes in accordance with applicable laws and agreements established with the IRS, state and foreign taxing authorities and final resolution of any disputes will not have a material, adverse effect on our results of operations or financial position. However, if payments due upon final resolution of any issues exceed our recorded estimates, such resolutions could have a material, adverse effect on our results of operations or financial position.