HCA(US:HCA)2025-05-01 20:30Part I. Financial Information Financial Statements This section presents HCA Healthcare's unaudited condensed consolidated financial statements for Q1 2025 and 2024, including income statements, balance sheets, cash flows, and supporting notes Condensed Consolidated Income Statements Q1 2025 revenues increased to $18.321 billion, with net income attributable to HCA Healthcare rising slightly to $1.610 billion, or $6.45 per diluted share Q1 2025 vs Q1 2024 Income Statement Highlights | Metric | Q1 2025 (in millions) | Q1 2024 (in millions) | % Change | | :--- | :--- | :--- | :--- | | Revenues | $18,321 | $17,339 | 5.7% | | Income before income taxes | $2,327 | $2,247 | 3.6% | | Net income attributable to HCA | $1,610 | $1,591 | 1.2% | | Diluted EPS | $6.45 | $5.93 | 8.8% | Condensed Consolidated Balance Sheets As of March 31, 2025, total assets slightly increased to $59.798 billion, while long-term debt rose to $41.057 billion and cash decreased Balance Sheet Summary | Metric | March 31, 2025 (in millions) | December 31, 2024 (in millions) | | :--- | :--- | :--- | | Cash and cash equivalents | $1,060 | $1,933 | | Total Assets | $59,798 | $59,513 | | Long-term debt | $41,057 | $38,333 | | Total Liabilities | $60,236 (derived) | $58,958 (derived) | | Stockholders' deficit attributable to HCA | ($3,519) | ($2,499) | Condensed Consolidated Statements of Cash Flows Net cash from operating activities significantly decreased to $1.651 billion in Q1 2025, while investing and financing activities both used more cash Q1 2025 vs Q1 2024 Cash Flow Summary | Metric | Q1 2025 (in millions) | Q1 2024 (in millions) | | :--- | :--- | :--- | | Net cash provided by operating activities | $1,651 | $2,469 | | Net cash used in investing activities | ($1,032) | ($903) | | Net cash used in financing activities | ($1,495) | ($1,216) | | Change in cash and cash equivalents | ($873) | $349 | Notes to Condensed Consolidated Financial Statements These notes provide detailed information on revenue recognition, acquisitions, debt refinancing, share repurchases, and segment performance, supporting the financial statements - As of March 31, 2025, HCA and its affiliates owned and operated 192 hospitals, 125 freestanding surgery centers, and 26 freestanding endoscopy centers across 20 states and England19 Revenues by Payer (Q1 2025 vs Q1 2024) | Payer | Q1 2025 Revenue (in millions) | Q1 2025 Ratio | Q1 2024 Revenue (in millions) | Q1 2024 Ratio | | :--- | :--- | :--- | :--- | :--- | | Medicare | $2,895 | 15.8% | $2,838 | 16.4% | | Managed Medicare | $3,299 | 18.0% | $3,026 | 17.4% | | Medicaid | $1,190 | 6.5% | $1,000 | 5.8% | | Managed Medicaid | $879 | 4.8% | $978 | 5.6% | | Managed care and insurers | $9,041 | 49.4% | $8,545 | 49.2% | | Total Revenues | $18,321 | 100.0% | $17,339 | 100.0% | - In Q1 2025, the company paid $190 million for two hospitals and $37 million for nonhospital entities, also receiving proceeds of $157 million from the sale of a hospital2730 - In February 2025, the company entered into a new $8.0 billion senior unsecured revolving credit facility, repaid $2.6 billion in senior notes, and issued $5.25 billion in new senior notes4849 - During Q1 2025, HCA repurchased 7.762 million shares of common stock for approximately $2.5 billion, with $8.259 billion remaining available under the share repurchase authorization as of March 31, 202554 Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) Management discusses Q1 2025 financial results, highlighting revenue growth driven by increased patient volumes, analyzing operating expenses, and detailing changes in cash flow, capital resources, and financing activities Results of Operations Q1 2025 revenue grew 5.7% to $18.321 billion due to higher patient volumes, while salaries and benefits decreased as a percentage of revenue and the effective tax rate increased - Consolidated revenues increased 5.7% in Q1 2025, driven by a 3.1% increase in equivalent admissions and a 2.5% increase in revenue per equivalent admission64 Key Volume Metrics (Consolidated, YoY Change) | Metric | Q1 2025 vs Q1 2024 | | :--- | :--- | | Admissions | +2.8% | | Inpatient surgical volumes | +0.3% | | Outpatient surgical volumes | -2.5% | | Emergency department visits | +3.7% | - Salaries and benefits as a percentage of revenues decreased from 44.4% in Q1 2024 to 43.6% in Q1 202585 - The estimated cost of total uncompensated care (charity care, uninsured discounts, and implicit price concessions) rose to $1.055 billion in Q1 2025 from $1.010 billion in Q1 202470 Liquidity and Capital Resources Cash from operations declined to $1.651 billion in Q1 2025 due to working capital changes, while the company engaged in significant debt issuance and share repurchases, with total debt at $44.576 billion - Cash provided by operating activities decreased by $818 million in Q1 2025 compared to Q1 2024, primarily due to a $1.157 billion negative net impact from working capital changes93 - Planned capital expenditures for 2025 are expected to be between $5.0 billion and $5.2 billion94 - As of March 31, 2025, the company had $7.766 billion available under its new senior unsecured credit facility99 Quantitative and Qualitative Disclosures About Market Risk The company faces market risks from interest rate changes on its variable-rate debt and fluctuations in the value of insurance subsidiary investments, with a 1% rate increase potentially reducing pretax earnings by $5 million - The company is exposed to interest rate risk, with approximately $520 million of its long-term debt subject to variable rates as of March 31, 2025105 - A hypothetical 1% increase in interest rates would lead to a potential annualized reduction of approximately $5 million in future pretax earnings106 - Investments held by insurance subsidiaries, valued at $657 million, are exposed to market risk, with net unrealized losses of $21 million reported at quarter-end103 Controls and Procedures Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - Based on an evaluation as of March 31, 2025, the CEO and CFO concluded that HCA's disclosure controls and procedures were effective113 - There were no material changes in the company's internal control over financial reporting during the first quarter of 2025114 Part II. Other Information Legal Proceedings The company operates in a highly regulated and litigious industry, facing various lawsuits, claims, and governmental investigations, with details referenced in Note 8 of the financial statements - The company is subject to various lawsuits, claims, and legal and regulatory proceedings, including government inquiries and whistleblower suits under the False Claims Act5052 Risk Factors While no material changes to risk factors from the 2024 10-K are noted, this section elaborates on risks from the company's significant $44.576 billion indebtedness, which could impact financial flexibility - As of March 31, 2025, the company's total indebtedness was $44.576 billion119 - Significant indebtedness poses several risks, including increased vulnerability to economic downturns, dedication of cash flow to debt service, exposure to interest rate risk, and limitations on strategic acquisitions and financing124 - Debt agreements contain restrictive covenants that limit the company's ability to incur additional debt, create liens, and engage in certain other transactions, where a breach could lead to default and acceleration of debt repayment126130 Issuer Purchases of Equity Securities In Q1 2025, HCA repurchased 7.762 million shares for approximately $2.5 billion, with $8.259 billion remaining for future repurchases, and declared a quarterly dividend of $0.72 per share Share Repurchases in Q1 2025 | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | Jan 2025 | 1,901,781 | $316.08 | | Feb 2025 | 2,992,516 | $323.80 | | Mar 2025 | 2,867,300 | $326.32 | | Total Q1 | 7,761,597 | $322.84 | - As of March 31, 2025, the company had $8.259 billion of repurchase authorization available under its January 2025 program127 - On April 24, 2025, the Board of Directors declared a quarterly dividend of $0.72 per share131 Exhibits This section lists exhibits filed with the Form 10-Q, including supplemental indentures, the new credit agreement, executive compensation plans, and CEO/CFO certifications - Exhibits filed include the new Credit Agreement dated February 20, 2025, and various supplemental indentures for the senior notes issued in February 2025134