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 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”) currently scheduled to take effect after December 31, 2025, 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 Me…

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 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 health care spending or the health care industry, including the expiration at the end of 2025 of enhanced premium tax credits (“EPTCs”) for eligible individuals purchasing 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, effects of the 2025 Federal Budget Act (the “FBA”) and efforts to address health care affordability, (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 or other spending reduction legislation that may alter current spending reductions, which include cuts to Medicare payments, or impose additional spending reductions, (5) the ability to achieve ope…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

During the quarter ended September 30, 2025, consolidated admissions increased 2.8% and same facility admissions increased 2.1% compared to the quarter ended September 30, 2024. Inpatient surgical volumes increased 2.0% on a consolidated basis and 1.4% on a same facility basis during the quarter ended September 30, 2025, compared to the quarter ended September 30, 2024. Outpatient surgical volumes increased 1.6% on a consolidated basis and 1.1% on a same facility basis during the quarter ended September 30, 2025, compared to the quarter ended September 30, 2024. Emergency department visits increased 1.2% on a consolidated basis and 1.3% on a same facility basis during the quarter ended September 30, 2025, compared to the quarter ended September 30, 2024. Consolidated and same facility uninsured admissions declined 1.3% and 2.0%, respectively, for the quarter ended September 30, 2025, compared to the quarter ended September 30, 2024.

Current wording

During the quarter ended March 31, 2026, consolidated admissions increased 0.7% and same facility admissions increased 0.9% compared to the quarter ended March 31, 2025. Inpatient surgical volumes declined 0.4% on a consolidated basis and 0.3% on a same facility basis during the quarter ended March 31, 2026, compared to the quarter ended March 31, 2025. Outpatient surgical volumes declined 2.7% on a consolidated basis and 1.7% on a same facility basis during the quarter ended March 31, 2026 compared to the quarter ended March 31, 2025. Emergency department visits declined 0.4% on a consolidated basis and increased 0.3% on a same facility basis during the quarter ended March 31, 2026 compared to the quarter ended March 31, 2025. Volumes for the quarter ended March 31, 2026 were impacted by a decrease in seasonal respiratory-related activity and the impact of a winter storm in certain of our markets. Consolidated and same facility uninsured admissions increased 15.6% and 15.5%, respectively, for the quarter ended March 31, 2026 compared to the quarter ended March 31, 2025. Uninsured admissions increased for the first quarter of 2026 reflecting impacts from the expiration of the EPTCs at the end of 2025 and administrative reforms, as well as a decline in Medicaid conversions.

Previous wording

Revenues increased 9.6% from $17.487 billion in the third quarter of 2024 to $19.161 billion in the third 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 nine months ended September 30, 2025 and 2024 are summarized in the following table (dollars in millions):

Current wording

Revenues increased 4.3% from $18.321 billion in the first quarter of 2025 to $19.109 billion in the first quarter of 2026. 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, 2026 and 2025 are summarized in the following table (dollars in millions):

Previous wording

Consolidated and same facility revenue per equivalent admission increased 6.1% and 6.6%, respectively, in the third quarter of 2025, compared to the third quarter of 2024. Consolidated and same facility equivalent admissions increased 3.2% and 2.4%, respectively, in the third quarter of 2025, compared to the third quarter of 2024. Consolidated and same facility outpatient surgeries increased 1.6% and 1.1%, respectively, in the third quarter of 2025, compared to the third quarter of 2024. Consolidated and same facility inpatient surgeries increased 2.0% and 1.4%, respectively, in the third quarter of 2025, compared to the third quarter of 2024. Consolidated and same facility emergency department visits increased 1.2% and 1.3%, respectively, in the third quarter of 2025, compared to the third quarter of 2024.

Current wording

Consolidated and same facility revenue per equivalent admission each increased 3.1% in the first quarter of 2026, compared to the first quarter of 2025. Consolidated and same facility equivalent admissions increased 1.1% and 1.3%, respectively, in the first quarter of 2026, compared to the first quarter of 2025. Consolidated and same facility outpatient surgeries declined 2.7% and 1.7%, respectively, in the first quarter of 2026, compared to the first quarter of 2025. Consolidated and same facility inpatient surgeries declined 0.4% and 0.3%, respectively, in the first quarter of 2026, compared to the first quarter of 2025. Consolidated and same facility emergency department visits declined 0.4% and increased 0.3%, respectively, in the first quarter of 2026, compared to the first quarter of 2025.

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 and nine months ended September 30, 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 ended March 31, 2026 and 2025 follows (dollars in millions):

Previous wording

Same facility uninsured admissions in 2025, compared to 2024, decreased 2.0% in the third quarter, increased 0.4% in the second quarter and declined 0.7% in the first quarter. 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 15.5%, in the first quarter of 2026 compared to the first quarter of 2025, reflecting impacts from the expiration of the EPTCs at the end of 2025. Same facility uninsured admissions in 2025, compared to 2024, increased 7.1% in the fourth quarter, declined 2.0% in the third quarter, increased 0.4% in the second quarter and declined 0.7% 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 and nine months ended September 30, 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 ended March 31, 2026 and 2025 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 and nine months ended September 30, 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 ended March 31, 2026 and 2025 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 SDP arrangements to direct certain Medicaid managed care plan expenditures. These payments are generally authorized by the Centers for Medicare & Medicaid Services (“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 waivers authorized by Section 1115 of the Social Security Act. In addition, many states have implemented SDP arrangements to direct certain Medicaid managed care plan expenditures. These payments are generally authorized by the Centers for Medicare & Medicaid Services (“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.

Previous wording

We are aware these payment programs are currently being reviewed by certain government agencies, and some states requested modifications of their existing supplemental payment programs during the annual renewal process with CMS. It is possible these reviews and requests will result in the restructuring of such supplemental payment programs and could result in the payment programs being reduced or eliminated. Further, the OBBBA makes significant changes to Medicaid financing mechanisms, including limitations on provider taxes and SDP arrangements. However, the OBBBA grandfathers certain SDP arrangements, including those for which an application form was submitted to CMS prior to July 4, 2025, for the rating period occurring within 180 days of July 4, 2025, and those that received approval or made a good faith effort to receive approval from CMS prior to May 1, 2025. Certain states in which we operate have submitted application forms to CMS for approval where the grandfathered payments we receive could be impacted, and in some instances, increased. Beginning with the rating period on or after January 1, 2028, grandfathered payments will be reduced by 10 percentage points annually until they reach the allowable payment limits. Some states have received approval of grandfathered applications, but we are unable to predict the timing or extent of any additional approvals by CMS and the resulting recognition of the related revenues. Because these payment programs and arrangements continue to evolve, we are unable to estimate the financial impact that program structure modifications, if any, may have on our results of operations.

Current wording

As discussed in additional detail in Item 1, “Business — Sources of Revenue — Medicaid State Directed and Supplemental Payments” in our Annual Report on Form 10-K for the year ended December 31, 2025, the use and nature of SDP arrangements are subject to policy changes and certain revised regulations will apply to SDP arrangements made for services furnished in the rating periods beginning on or after July 4, 2025. However, the FBA temporarily grandfathers certain SDP arrangements, including those for which an application was submitted to CMS prior to July 4, 2025, for the rating period occurring within 180 days of July 4, 2025, and those that received approval or made a good faith effort to receive approval from CMS prior to May 1, 2025. Certain states in which we operate have submitted applications to CMS for approval where certain grandfathered payments we receive could be impacted and, in some instances, increased. Some states have received preliminary grandfathering determinations with application approvals, and any such approvals or future approvals could result in the recognition of additional revenues, which may be significant. However, we are unable to predict the timing or extent of any additional approvals by CMS and the timing or amount of any resulting recognition of the related revenues.

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 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 initiatives. 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.

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. 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, 2025 for additional information.

Previous wording

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

Current wording

The following is a comparative summary of results of operations for the quarters ended March 31, 2026 and 2025 (dollars in millions):

Previous wording

Revenues increased 9.6% on a consolidated basis and 9.2% on a same facility basis for the quarter ended September 30, 2025, compared to the quarter ended September 30, 2024. The increase in consolidated revenues can be primarily attributed to the combined impact of a 6.1% increase in revenue per equivalent admission and a 3.2% increase in equivalent admissions. The same facility revenues increase primarily resulted from the combined impact of a 6.6% increase in same facility revenue per equivalent admission and a 2.4% increase in same facility equivalent admissions.

Current wording

Revenues increased 4.3% and 4.5% on a consolidated basis and same facility basis, respectively, for the quarter ended March 31, 2026, compared to the quarter ended March 31, 2025. The increase in consolidated revenues can be primarily attributed to the combined impact of a 1.1% increase in equivalent admissions and a 3.1% increase in revenue per equivalent admission. The same facility revenues increase primarily resulted from the combined impact of a 1.3% increase in same facility equivalent admissions and a 3.1% increase in same facility revenue per equivalent admission.

Previous wording

Salaries and benefits, as a percentage of revenues, were 43.6% in the third quarter of 2025 and 45.0% in the third quarter of 2024. The decrease in salaries and benefits, as a percentage of revenues, is primarily related to continued improvements in salaries and contract labor growth resulting from our labor management initiatives combined with the increase in revenues for the quarter ended September 30, 2025. Salaries and benefits per equivalent admission increased 3.0% in the third quarter of 2025, compared to the third quarter of 2024. Same facility salaries and benefits per full time equivalent increased 4.0% for the third quarter of 2025, compared to the third quarter of 2024.

Current wording

Salaries and benefits, as a percentage of revenues, were 43.3% in the first quarter of 2026 and 43.6% in the first quarter of 2025. Salaries and benefits per equivalent admission increased 2.4% in the first quarter of 2026 compared to the first quarter of 2025. Same facility salaries and benefits per full time equivalent increased 3.6% for the first quarter of 2026 compared to the first quarter of 2025.

Previous wording

Supplies, as a percentage of revenues, were 14.5% in the third quarter of 2025 and 15.2% in the third quarter of 2024. Supply costs per equivalent admission increased 1.4% in the third quarter of 2025, compared to the third quarter of 2024. Supply costs per equivalent admission increased 7.0% for medical devices and declined 8.7% for pharmacy supplies and 1.1% for general medical and surgical items in the third quarter of 2025, compared to the third quarter of 2024. The increase in supply costs per equivalent admission for medical devices is primarily related to cardiovascular technologies. The decline in supply costs per equivalent admission for pharmacy supplies is primarily related to a decrease in the costs of certain drugs.

Current wording

Supplies, as a percentage of revenues, were 14.9% in the first quarter of 2026 and 15.1% in the first quarter of 2025. Supply costs per equivalent admission increased 2.1% in the first quarter of 2026 compared to the first quarter of 2025. Supply costs per equivalent admission increased 4.8% for medical devices and 0.7% for general medical and surgical items and declined 4.6% for pharmacy supplies in the first quarter of 2026 compared to the first quarter of 2025. The increase in supply costs per equivalent admission for medical devices is primarily related to cardiovascular technologies. The decline in supply costs per equivalent admission for pharmacy supplies is primarily related to a decrease in the utilization of certain drugs.

Previous wording

Other operating expenses, as a percentage of revenues, were 21.8% in the third quarter of 2025 and 21.2% in the third 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. The increase in other operating expenses, as a percentage of revenues, is primarily related to growth in state supplemental Medicaid program expenses and higher professional fees. 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 21.9% in the first quarter of 2026 and 21.0% in the first quarter of 2025. 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. The increase in other operating expenses, as a percentage of revenues, is primarily related to growth in state supplemental Medicaid program expenses, higher professional fees and an increase in technology investments. 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

Equity in earnings of affiliates was $16 million and $15 million in the third quarters of 2025 and 2024, respectively.

Current wording

Equity in earnings of affiliates was $9 million and $18 million in the first quarters of 2026 and 2025, respectively.

Previous wording

Depreciation and amortization increased $47 million, from $842 million in the third quarter of 2024 to $889 million in the third quarter of 2025. The increase in depreciation relates primarily to capital expenditures at our existing facilities.

Current wording

Depreciation and amortization increased $70 million, from $860 million in the first quarter of 2025 to $930 million in the first quarter of 2026. The increase in depreciation relates primarily to capital expenditures at our existing facilities.

Previous wording

Interest expense was $561 million in the third quarter of 2025 and $515 million in the third quarter of 2024. Our average debt balance was $44.400 billion for the third quarter of 2025, compared to $41.846 billion for the third quarter of 2024. The average effective interest rate for our debt was 5.0% and 4.9% for the quarters ended September 30, 2025 and 2024, respectively.

Current wording

Interest expense was $584 million in the first quarter of 2026 and $547 million in the first quarter of 2025. Our average debt balance was $47.225 billion for the first quarter of 2026 compared to $43.746 billion for the first quarter of 2025. The average effective interest rates for our long-term debt were 5.0% and 5.1% for the quarters ended March 31, 2026 and 2025, respectively.

Previous wording

During the third quarters of 2025 and 2024, we recorded losses on sales of facilities of $2 million and $4 million, respectively.

Current wording

During the first quarters of 2026 and 2025, we recorded losses on sales of facilities of $1 million and gains of $1 million, respectively.

Previous wording

The effective tax rates were 23.9% and 24.7% for the first nine 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 nine months ended September 30, 2025 is related to adjustments to our liability for unrecognized tax benefits. Our provisions for income taxes for the first nine months of 2025 and 2024 included tax benefits of $45 million and $93 million, respectively, related to employee equity award settlements.

Current wording

The effective tax rate was 21.0% and 23.8% for the first quarters of 2026 and 2025, 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 quarter ended March 31, 2026 is related primarily to an increase in the amount of deductible share-based compensation for vested employee equity awards. Our provisions for income taxes for the first quarters of 2026 and 2025 included tax benefits of $103 million and $24 million, respectively, related to employee equity award settlements.

Previous wording

Net income attributable to noncontrolling interests increased from $212 million for the third quarter of 2024 to $260 million for the third quarter of 2025. The increase in net income attributable to noncontrolling interests related primarily to the operations of two of our Texas markets.

Current wording

Net income attributable to noncontrolling interests increased from $215 million for the first quarter of 2025 to $237 million for the first quarter of 2026. The increase in net income attributable to noncontrolling interests related primarily to the operations of one of our Texas markets.

Previous wording

Cash provided by operating activities totaled $10.277 billion for the first nine months of 2025 compared to $7.955 billion for the first nine months of 2024. The $2.322 billion increase in cash provided by operating activities, for the first nine months of 2025 compared to the first nine months of 2024, related primarily to an increase in net income of $811 million, excluding the non-cash impact of losses and gains on sales of facilities, and a decline in income taxes paid of $1.259 billion 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 nine months of 2025 and 2024 totaled $1.923 billion and $2.891 billion, respectively. We had negative working capital of $2.611 billion at September 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. We also have the ability and the intent to refinance a portion of our long-term debt due within one year, utilizing our senior unsecured credit facility or issuing additional debt securities.

Current wording

Cash provided by operating activities totaled $2.014 billion in the first quarter of 2026 compared to $1.651 billion in the first quarter of 2025. The $363 million increase in cash provided by operating activities, in the first quarter of 2026 compared to the first quarter of 2025, related primarily to the net impact of positive changes in working capital items of $314 million. The net combination of interest payments and net income tax refunds in the first quarter of 2026 totaled $564 million, and the combination of interest payments and net income tax payments in the first quarter of 2025 totaled $549 million. We had negative working capital of $3.206 billion and $567 million at March 31, 2026 and December 31, 2025, respectively. The decline in working capital of $2.639 billion is primarily related to the increase in short-term borrowings and long-term debt due within one year of $3.643 billion, including $3.650 billion of outstanding commercial paper notes (short-term borrowings). We have the ability to refinance our outstanding commercial paper notes with our senior unsecured credit facility on a long-term basis. Excluding the impact of our outstanding commercial paper notes, our working capital at March 31, 2026 would have been $444 million.

Previous wording

Cash used in investing activities was $3.671 billion in the first nine months of 2025 compared to $3.587 billion in the first nine months of 2024. Excluding acquisitions, capital expenditures were $3.455 billion in the first nine months of 2025 and $3.590 billion in the first nine months of 2024. Planned capital expenditures are expected to be approximately $5.0 billion in 2025. At September 30, 2025, there were projects under construction which had estimated additional costs to complete and equip over the next five years of approximately $6.0 billion. We expect to finance capital expenditures with internally generated and borrowed funds.

Current wording

Cash used in investing activities was $1.282 billion in the first quarter of 2026 compared to $1.032 billion in the first quarter of 2025. Excluding acquisitions, capital expenditures were $1.119 billion in the first quarter of 2026 and $991 million in the first quarter of 2025. Planned capital expenditures are expected to be approximately between $5.0 billion and $5.5 billion in 2026. At March 31, 2026, there were projects under construction that had estimated additional costs to complete and equip over the next five years of approximately $8.8 billion. We expect to finance capital expenditures with internally generated and borrowed funds. We expended $265 million and $227 million for acquisitions of hospitals and health care entities during the first quarters of 2026 and 2025, respectively. Cash flows from sales of hospitals and health care entities were $3 million and $161 million for the first quarter of 2026 and 2025, respectively.

Previous wording

Cash used in financing activities totaled $7.551 billion in the first nine months of 2025, compared to $2.419 billion in the first nine months of 2024. During the first nine months of 2025, net cash flows used in financing activities included a net increase of $1.305 billion in our indebtedness, payment of dividends of $517 million, repurchase of common stock of $7.509 billion and distributions to noncontrolling interests of $631 million. During the first nine months of 2024, net cash flows used in financing activities included a net increase of $3.269 billion in our indebtedness, payment of dividends of $525 million, repurchase of common stock of $4.342 billion and distributions to noncontrolling interests of $530 million.

Current wording

Cash used in financing activities totaled $830 million in the first quarter of 2026, compared to $1.495 billion in the first quarter of 2025. During the first quarter of 2026, net cash flows used in financing activities included a net increase of $1.377 billion in our indebtedness, payment of dividends of $183 million, repurchase of common stock of $1.571 billion and distributions to noncontrolling interests of $191 million. 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.

Previous wording

We have significant debt service requirements. Our debt totaled $44.511 billion at September 30, 2025. Our interest expense was $1.676 billion for the first nine months of 2025 and $1.533 billion for the first nine months of 2024.

Current wording

We have significant debt service requirements. Our debt totaled $48.023 billion at March 31, 2026. Our interest expense was $584 million for the first quarter of 2026 and $547 million for the first quarter of 2025.

Previous wording

In addition to cash flows from operations, available sources of capital include amounts available under our senior unsecured credit facility ($6.076 billion and $5.886 billion available as of September 30, 2025 and October 27, 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 ($1.910 billion and $2.100 billion as of September 30, 2025 and October 27, 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 ($4.336 billion and $4.380 billion available as of March 31, 2026 and April 27, 2026, respectively, after giving effect to all issued and outstanding letters of credit and our intention to maintain a minimum available borrowing capacity equal to the aggregate amount outstanding under the commercial paper program ($3.650 billion and $3.606 billion as of March 31, 2026 and April 27, 2026, respectively) 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 $667 million and $657 million at September 30, 2025 and December 31, 2024, respectively. An insurance subsidiary maintained net reserves for professional liability risks of $85 million and $127 million at September 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 $1.917 billion and $1.924 billion at September 30, 2025 and December 31, 2024, respectively. Claims payments, net of reinsurance recoveries, during the next 12 months are expected to approximate $577 million. We estimate that approximately $546 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 $511 million and $588 million at March 31, 2026 and December 31, 2025, respectively. An insurance subsidiary maintained net reserves for professional liability risks of $100 million and $91 million at March 31, 2026 and December 31, 2025, respectively. Our facilities are insured by our insurance subsidiary for losses up to $120 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 $1.940 billion and $1.906 billion at March 31, 2026 and December 31, 2025, respectively. Claims payments, net of reinsurance recoveries, during the next 12 months are expected to approximate $571 million. We estimate that approximately $528 million of the expected net claim payments during the next 12 months will relate to claims subject to the self-insured retention.

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 $667 million at September 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 September 30, 2025, we had net unrealized losses of $15 million on the insurance subsidiaries’ investments.

Current wording

We are exposed to market risk related to changes in market values of securities. Our insurance subsidiaries held $511 million of investment securities at March 31, 2026. 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, 2026, we had net unrealized losses of $15 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 $2.210 billion of our debt at September 30, 2025 was subject to variable rates of interest, while the remaining debt balance of $42.301 billion at September 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% and 5.0% for the nine months ended September 30, 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 $3.950 billion of long-term debt at March 31, 2026 was subject to variable rates of interest, while the remaining balance of long-term debt of $44.073 billion at March 31, 2026 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 commercial paper program and the floating rate senior notes due 2028. The average effective interest rates for our long-term debt were 5.0% and 5.1% for the quarters ended March 31, 2026 and 2025, respectively.

Previous wording

The estimated fair value of our debt was $43.898 billion at September 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 $22 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 total long-term debt was $46.653 billion at March 31, 2026. 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 $40 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

The IRS concluded its examination of the Company’s 2022 and 2023 income tax returns during the quarter ended September 30, 2025, resolving all federal income tax matters for those years. At September 30, 2025, the IRS was examining the 2019 income tax returns of certain affiliates. 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.

Current wording

At March 31, 2026, the IRS was examining the 2019 income tax return of an affiliate of the Company. We are subject to examination by the IRS for tax years after 2023, as well as by state and foreign taxing authorities. Management believes HCA Healthcare, Inc., 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 ourresultsof operations orfinancial position. However, if payments due upon final resolutionof anyissues exceed ourrecorded estimates, such resolutions could havea material, adverse effect on ourresultsof operations orfinancial position.