HCA Healthcare, Inc. (NYSE: HCA) today announced financial and
operating results for the second quarter ended June 30, 2020.
Key second quarter metrics (all percentage changes
compare 2Q 2020 to 2Q 2019 unless otherwise noted):
- Revenues totaled $11.068 billion
- Net income attributable to HCA Healthcare, Inc. totaled $1.079
billion, or $3.16 per diluted share
- Adjusted EBITDA totaled $2.666 billion
- Cash flows from operating activities totaled $8.723
billion
- Same facility admissions declined 12.8 percent and same
facility equivalent admissions declined 20.1 percent
“Throughout this remarkably challenging pandemic, I am reminded
daily of what an incredible and resilient organization we have,”
said Sam Hazen, Chief Executive Officer of HCA Healthcare. “I see
our colleagues and physicians working every day to do the right
thing for others, and I want to thank them for their dedication to
our patients and the tremendous sacrifices they, and their
families, are making in the midst of this global health
crisis.”
“With our continued focus on our patients and the well-being of
our colleagues and physicians, we can be proud of our
accomplishments. I am confident that we are well positioned for
long-term success and to continue the remarkable legacy that is HCA
Healthcare,” stated Hazen.
Revenues in the second quarter of 2020 declined to $11.068
billion from $12.602 billion in the second quarter of 2019. Net
income attributable to HCA Healthcare, Inc. totaled $1.079 billion,
or $3.16 per diluted share, compared to $783 million, or $2.25 per
diluted share, in the second quarter of 2019. The Company
recognized $822 million ($590 million net of tax), or $1.73 per
diluted share, in government stimulus income during the second
quarter of 2020 related to general distribution funds received from
the provider relief fund established by the Coronavirus Aid,
Relief, and Economic Security (“CARES”) Act. The Company recorded
losses on sales of facilities of $27 million, or $0.07 per diluted
share, during the second quarter of 2020 and gains on sales of
facilities of $18 million, or $0.04 per diluted share, during the
second quarter of 2019.
For the second quarter of 2020, Adjusted EBITDA totaled $2.666
billion, compared to $2.293 billion in the second quarter of 2019.
Adjusted EBITDA is a non-GAAP financial measure. A table providing
supplemental information on Adjusted EBITDA and reconciling net
income attributable to HCA Healthcare, Inc. to Adjusted EBITDA is
included in this release.
Same facility admissions declined 12.8 percent while same
facility equivalent admissions declined 20.1 percent in the second
quarter of 2020, compared to the prior year period. Same facility
emergency room visits declined 32.9 percent in the second quarter
of 2020, compared to the prior year period. Same facility inpatient
surgeries declined 15.7 percent, while same facility outpatient
surgeries declined 32.6 percent in the second quarter of 2020,
compared to the same period of 2019. Same facility revenue per
equivalent admission increased 10.0 percent in the second quarter
of 2020, compared to the second quarter of 2019. Patient volumes
across most service lines were significantly impacted in April due
to state and local policies implemented to contain the spread of
COVID-19 and preserve personal protective equipment. Patient
volumes gradually improved in May and June as states began to
re-open and allow for non-emergent procedures.
Six Months Ended June 30, 2020
Revenues for the six months ended June 30, 2020 totaled $23.929
billion, compared to $25.119 billion in the same period of 2019.
Net income attributable to HCA Healthcare, Inc. was $1.660 billion,
or $4.84 per diluted share, compared to $1.822 billion, or $5.22
per diluted share, for the first six months of 2019. Results for
the six months ended June 30, 2020 include government stimulus
income of $822 million ($590 million net of tax), or $1.72 per
diluted share, losses on sales of facilities of $20 million, or
$0.06 per diluted share, and losses on retirement of debt of $295
million, or $0.66 per diluted share. Results for the six months
ended June 30, 2019 included gains on sales of facilities of $17
million, or $0.04 per diluted share.
Balance Sheet and Cash Flows from Operations
As of June 30, 2020, HCA Healthcare, Inc.’s balance sheet
reflected cash and cash equivalents of $4.638 billion, total debt
of $30.942 billion, and total assets of $48.709 billion. During the
second quarter of 2020, capital expenditures totaled $745 million,
excluding acquisitions. Cash flows provided by operating activities
in the second quarter totaled $8.723 billion, compared to $1.997
billion in the second quarter of 2019. Cash flows from operations
for the second quarter included $4.4 billion of accelerated
Medicare payments and $1.4 billion of provider relief fund
distributions provided for in the CARES Act, of which $4.999
billion remains deferred on the balance sheet at June 30, 2020.
As of June 30, 2020, the Company had $7.718 billion of
availability under its credit facilities.
Earnings Conference Call
HCA Healthcare will host a conference call for investors at 9:00
a.m. Central Daylight Time today. All interested investors are
invited to access a live audio broadcast of the call via webcast.
The broadcast also will be available on a replay basis beginning
this afternoon. The webcast can be accessed through the Company’s
Investor Relations web page at
https://investor.hcahealthcare.com/events-and-presentations/default.aspx.
About the Company
As of June 30, 2020, HCA operated 186 hospitals and
approximately 2,000 sites of care, including surgery centers,
freestanding emergency rooms, urgent care centers and physician
clinics, in 21 states and the United Kingdom.
Forward-Looking
Statements
This press release contains forward-looking statements within
the meaning of the federal securities laws, which involve risks and
uncertainties. Forward-looking statements include the Company’s
capital allocation, as well as other statements that do not relate
solely to historical or current facts. Forward-looking statements
can be identified by the use of words like “may,” “believe,”
“will,” “expect,” “project,” “estimate,” “anticipate,” “plan,”
“initiative” or “continue.” These forward-looking statements are
based on our current plans and expectations and are subject to a
number of known and unknown uncertainties and risks, many of which
are beyond our control, which could significantly affect current
plans and expectations and our future financial position and
results of operations. These factors include, but are not limited
to, (1) developments related to COVID-19, including, without
limitation, related to the length and severity of the pandemic; the
volume of canceled or rescheduled procedures and the volume of
COVID-19 patients cared for across our health systems; measures we
are taking to respond to the COVID-19 pandemic; the impact of
government and administrative regulation and stimulus (including
the CARES Act, the Paycheck Protection Program and Health Care
Enhancement Act and other enacted legislation); changes in revenues
due to declining patient volumes, changes in payor mix and
deteriorating macroeconomic conditions (including increases in
uninsured and underinsured patients); potential increased expenses
related to labor, supply chain or other expenditures; workforce
disruptions and supply shortages and disruptions; and the timing
and availability of effective medical treatments and vaccines, (2)
the impact of our substantial indebtedness and the ability to
refinance such indebtedness on acceptable terms, as well as risks
associated with disruptions in the financial markets and the
business of financial institutions as the result of the COVID-19
pandemic which could impact us from a financial perspective, (3)
the impact of the Patient Protection and Affordable Care Act, as
amended by the Health Care and Education Reconciliation Act of 2010
(collectively, the “Affordable Care Act”), including the effects of
court challenges to, any repeal of, or changes to, the Affordable
Care Act or additional changes to its implementation, the possible
enactment of additional federal or state health care reforms and
possible changes to other federal, state or local laws or
regulations affecting the health care industry, including
single-payer proposals (often referred to as “Medicare for All”),
and also including any such laws or governmental regulations which
are adopted in response to the COVID-19 pandemic, (4) the effects
related to the continued implementation of the sequestration
spending reductions required under the Budget Control Act of 2011,
and related legislation extending these reductions, and the
potential for future deficit reduction legislation that may alter
these spending reductions, which include cuts to Medicare payments,
or create additional spending reductions, (5) increases in the
amount and risk of collectability of uninsured accounts and
deductibles and copayment amounts for insured accounts, (6) the
ability to achieve operating and financial targets, and attain
expected levels of patient volumes and control the costs of
providing services, (7) possible changes in Medicare, Medicaid and
other state programs, including Medicaid supplemental payment
programs or Medicaid waiver programs, that may impact
reimbursements to health care providers and insurers and the size
of the uninsured or underinsured population, (8) the highly
competitive nature of the health care business, (9) changes in
service mix, revenue mix and surgical volumes, including potential
declines in the population covered under third-party payer
agreements, the ability to enter into and renew third-party payer
provider agreements on acceptable terms and the impact of
consumer-driven health plans and physician utilization trends and
practices, (10) the efforts of health insurers, health care
providers, large employer groups and others to contain health care
costs, (11) the outcome of our continuing efforts to monitor,
maintain and comply with appropriate laws, regulations, policies
and procedures, (12) increases in wages and the ability to attract
and retain qualified management and personnel, including affiliated
physicians, nurses and medical and technical support personnel,
(13) the availability and terms of capital to fund the expansion of
our business and improvements to our existing facilities, (14)
changes in accounting practices, (15) changes in general economic
conditions nationally and regionally in our markets, including
economic and business conditions resulting from the COVID-19
pandemic, (16) the emergence of and effects related to other
pandemics, epidemics and infectious diseases, (17) future
divestitures which may result in charges and possible impairments
of long-lived assets, (18) changes in business strategy or
development plans, (19) delays in receiving payments for services
provided, (20) the outcome of pending and any future tax audits,
disputes and litigation associated with our tax positions, (21)
potential adverse impact of known and unknown government
investigations, litigation and other claims that may be made
against us, (22) the impact of potential cybersecurity incidents or
security breaches, (23) our ongoing ability to demonstrate
meaningful use of certified electronic health record (“EHR”)
technology and the impact of interoperability requirements, (24)
the impact of natural disasters, such as hurricanes and floods, or
similar events beyond our control, (25) changes in the U.S.
federal, state, or foreign tax laws including interpretive guidance
that may be issued by taxing authorities or other standard setting
bodies, and (26) other risk factors described in our annual report
on Form 10-K for the year ended December 31, 2019 and our other
filings with the Securities and Exchange Commission. Many of the
factors that will determine our future results are beyond our
ability to control or predict. In light of the significant
uncertainties inherent in the forward-looking statements contained
herein, readers should not place undue reliance on forward-looking
statements, which reflect management’s views only as of the date
hereof. We undertake no obligation to revise or update any
forward-looking statements, or to make any other forward-looking
statements, whether as a result of new information, future events
or otherwise.
All references to “Company” and “HCA” as used throughout this
release refer to HCA Healthcare, Inc. and its affiliates.
HCA Healthcare, Inc. Condensed Consolidated
Comprehensive Income Statements Second Quarter
(Dollars in millions, except per share amounts)
2020
2019
Amount Ratio Amount
Ratio Revenues
$11,068
100.0
%
$12,602
100.0
%
Salaries and benefits
5,330
48.2
5,837
46.3
Supplies
1,748
15.8
2,118
16.8
Other operating expenses
2,147
19.3
2,362
18.8
Government stimulus income
(822
)
(7.4
)
-
-
Equity in earnings of affiliates
(1
)
-
(8
)
(0.1
)
Depreciation and amortization
691
6.3
636
5.0
Interest expense
388
3.5
477
3.8
Losses (gains) on sales of facilities
27
0.2
(18
)
(0.1
)
9,508
85.9
11,404
90.5
Income before income taxes
1,560
14.1
1,198
9.5
Provision for income taxes
344
3.1
271
2.1
Net income
1,216
11.0
927
7.4
Net income attributable to noncontrolling interests
137
1.2
144
1.2
Net income attributable to HCA Healthcare, Inc.
$1,079
9.8
$783
6.2
Diluted earnings per share
$3.16
$2.25
Shares used in computing diluted earnings per share
(millions)
341.599
348.373
Comprehensive income attributable to HCA Healthcare, Inc.
$1,088
$726
HCA Healthcare, Inc. Condensed Consolidated Comprehensive
Income Statements For the Six Months Ended June 30, 2020 and
2019 (Dollars in millions, except per share amounts)
2020
2019
Amount Ratio Amount
Ratio Revenues
$23,929
100.0
%
$25,119
100.0
%
Salaries and benefits
11,448
47.8
11,484
45.7
Supplies
3,871
16.2
4,159
16.6
Other operating expenses
4,574
19.1
4,661
18.6
Government stimulus income
(822
)
(3.4
)
-
-
Equity in earnings of affiliates
(8
)
-
(19
)
(0.1
)
Depreciation and amortization
1,365
5.7
1,255
5.0
Interest expense
816
3.4
938
3.7
Losses (gains) on sales of facilities
20
0.1
(17
)
(0.1
)
Losses on retirement of debt
295
1.2
-
-
21,559
90.1
22,461
89.4
Income before income taxes
2,370
9.9
2,658
10.6
Provision for income taxes
456
1.9
550
2.2
Net income
1,914
8.0
2,108
8.4
Net income attributable to noncontrolling interests
254
1.1
286
1.1
Net income attributable to HCA Healthcare, Inc.
$1,660
6.9
$1,822
7.3
Diluted earnings per share
$4.84
$5.22
Shares used in computing diluted earnings per share
(millions)
342.848
349.334
Comprehensive income attributable to HCA Healthcare, Inc.
$1,558
$1,772
HCA Healthcare, Inc. Condensed Consolidated
Balance Sheets (Dollars in millions)
June 30,
March 31,
December 31,
2020
2020
2019
ASSETS Current assets: Cash and cash equivalents
$4,638
$731
$621
Accounts receivable
6,139
6,890
7,380
Inventories
1,834
1,953
1,849
Other
1,420
1,442
1,346
Total current assets
14,031
11,016
11,196
Property and equipment, at cost
48,484
47,861
47,235
Accumulated depreciation
(25,413
)
(24,876
)
(24,520
)
23,071
22,985
22,715
Investments of insurance subsidiaries
364
325
315
Investments in and advances to affiliates
275
238
249
Goodwill and other intangible assets
8,578
8,587
8,269
Right-of-use operating lease assets
1,863
1,828
1,834
Other
527
442
480
$48,709
$45,421
$45,058
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable
$2,882
$2,750
$2,905
Accrued salaries
1,631
1,560
1,775
Other accrued expenses
3,181
2,547
2,932
Contract liabilities - deferred revenues
4,999
-
-
Long-term debt due within one year
163
162
145
Total current liabilities
12,856
7,019
7,757
Long-term debt, less debt issuance costs and discounts of $252,
$258 and $239
30,779
34,699
33,577
Professional liability risks
1,485
1,432
1,370
Right-of-use operating lease obligations
1,531
1,497
1,499
Income taxes and other liabilities
1,490
1,477
1,420
EQUITY (DEFICIT)
Stockholders' deficit attributable to HCA Healthcare, Inc.
(1,786
)
(2,962
)
(2,808
)
Noncontrolling interests
2,354
2,259
2,243
Total equity (deficit)
568
(703
)
(565
)
$48,709
$45,421
$45,058
HCA Healthcare, Inc. Consolidated Statements of
Cash Flows For the Six Months Ended June 30, 2020 and
2019 (Dollars in millions)
2020
2019
Cash flows from operating activities: Net income
$1,914
$2,108
Adjustments to reconcile net income to net cash provided by
operating activities: Increase (decrease) in cash from operating
assets and liabilities: Accounts receivable
1,215
(174
)
Inventories and other assets
(57
)
(231
)
Accounts payable and accrued expenses
(336
)
(238
)
Contract liabilities - deferred revenues
4,999
-
Depreciation and amortization
1,365
1,255
Income taxes
472
27
Losses (gains) on sales of facilities
20
(17
)
Losses on retirement of debt
295
-
Amortization of debt issuance costs and discounts
14
16
Share-based compensation
148
158
Other
49
67
Net cash provided by operating activities
10,098
2,971
Cash flows from investing activities: Purchase of
property and equipment
(1,598
)
(1,745
)
Acquisition of hospitals and health care entities
(346
)
(1,504
)
Sales of hospitals and health care entities
39
41
Change in investments
(11
)
59
Other
(37
)
36
Net cash used in investing activities
(1,953
)
(3,113
)
Cash flows from financing activities: Issuances of
long-term debt
2,700
6,451
Net change in revolving bank credit facilities
(2,480
)
(3,040
)
Repayment of long-term debt
(3,364
)
(98
)
Distributions to noncontrolling interests
(199
)
(247
)
Payment of debt issuance costs
(35
)
(63
)
Payment of dividends
(153
)
(278
)
Repurchases of common stock
(441
)
(520
)
Other
(144
)
(135
)
Net cash (used in) provided by financing activities
(4,116
)
2,070
Effect of exchange rate changes on cash and cash equivalents
(12
)
-
Change in cash and cash equivalents
4,017
1,928
Cash and cash equivalents at beginning of period
621
502
Cash and cash equivalents at end of period
$4,638
$2,430
Interest payments
$854
$910
Income tax (refunds) payments, net
$(16
)
$523
HCA Healthcare, Inc. Operating
Statistics
For the Six Months
Second Quarter Ended June 30,
2020
2019
2020
2019
Operations:
Number of Hospitals
186
184
186
184
Number of Freestanding Outpatient Surgery Centers
122
125
122
125
Licensed Beds at End of Period
49,403
48,483
49,403
48,483
Weighted Average Licensed Beds
49,358
48,429
49,259
48,234
Reported:
Admissions
452,992
518,253
981,236
1,041,449
% Change
-12.6%
-5.8%
Equivalent Admissions
723,136
903,419
1,612,171
1,793,375
% Change
-20.0%
-10.1%
Revenue per Equivalent Admission
$
15,305
$
13,949
$
14,843
$
14,007
% Change
9.7%
6.0%
Inpatient Revenue per Admission
$
15,757
$
14,291
$
15,152
$
14,350
% Change
10.3%
5.6%
Patient Days
2,260,816
2,530,548
4,883,655
5,137,445
% Change
-10.7%
-4.9%
Equivalent Patient Days
3,609,607
4,412,348
8,023,845
8,846,680
% Change
-18.2%
-9.3%
Inpatient Surgery Cases
118,591
140,473
253,736
277,836
% Change
-15.6%
-8.7%
Outpatient Surgery Cases
170,911
253,441
397,230
494,287
% Change
-32.6%
-19.6%
Emergency Room Visits
1,516,116
2,253,337
3,780,823
4,540,777
% Change
-32.7%
-16.7%
Outpatient Revenues as a
Percentage of Patient Revenues
31.8%
39.1%
34.8%
38.5%
Average Length of Stay (days)
4.991
4.883
4.977
4.933
Occupancy
50.3%
57.4%
54.5%
58.8%
Same Facility:
Admissions
439,990
504,436
955,751
1,016,253
% Change
-12.8%
-6.0%
Equivalent Admissions
698,704
874,692
1,563,609
1,741,858
% Change
-20.1%
-10.2%
Revenue per Equivalent Admission
$
15,171
$
13,794
$
14,646
$
13,907
% Change
10.0%
5.3%
Inpatient Revenue per Admission
$
15,774
$
14,319
$
15,146
$
14,383
% Change
10.2%
5.3%
Inpatient Surgery Cases
115,192
136,651
246,536
270,529
% Change
-15.7%
-8.9%
Outpatient Surgery Cases
165,058
244,782
384,336
477,970
% Change
-32.6%
-19.6%
Emergency Room Visits
1,480,229
2,207,396
3,700,457
4,451,252
% Change
-32.9%
-16.9%
HCA Healthcare, Inc.
Supplemental Non-GAAP
Disclosures
Operating Results
Summary
(Dollars in millions, except
per share amounts)
For the Six Months
Second Quarter
Ended June 30,
2020
2019
2020
2019
Revenues
$11,068
$12,602
$23,929
$25,119
Net income attributable
to HCA Healthcare, Inc.
$1,079
$783
$1,660
$1,822
Losses (gains) on sales of facilities (net of tax)
24
(14
)
19
(13
)
Losses on retirement of debt (net of tax)
-
-
227
-
Net income attributable to HCA Healthcare, Inc., excluding
losses (gains) on sales of facilities and losses on retirement of
debt (a)
1,103
769
1,906
1,809
Depreciation and amortization
691
636
1,365
1,255
Interest expense
388
477
816
938
Provision for income taxes
347
267
525
546
Net income attributable to noncontrolling interests
137
144
254
286
Adjusted EBITDA (a)
$2,666
$2,293
$4,866
$4,834
Adjusted EBITDA margin
(a)
24.1
%
18.2
%
20.3
%
19.2
%
Diluted earnings per
share: Net income attributable
to HCA Healthcare, Inc.
$3.16
$2.25
$4.84
$5.22
Losses (gains) on sales of facilities
0.07
(0.04
)
0.06
(0.04
)
Losses on retirement of debt
-
-
0.66
-
Net income attributable to HCA Healthcare, Inc., excluding
losses (gains) on sales of facilities and losses on retirement of
debt (a)
$3.23
$2.21
$5.56
$5.18
Shares used in computing
diluted earnings per share (millions)
341.599
348.373
342.848
349.334
___________________________________ (a) Net income
attributable to HCA Healthcare, Inc., excluding losses (gains) on
sales of facilities and losses on retirement of debt, and Adjusted
EBITDA should not be considered as measures of financial
performance under generally accepted accounting principles
("GAAP"). We believe net income attributable to HCA Healthcare,
Inc., excluding losses (gains) on sales of facilities and losses on
retirement of debt, and Adjusted EBITDA are important measures that
supplement discussions and analysis of our results of operations.
We believe it is useful to investors to provide disclosures of our
results of operations on the same basis used by management.
Management relies upon net income attributable to HCA Healthcare,
Inc., excluding losses (gains) on sales of facilities and losses on
retirement of debt, and Adjusted EBITDA as the primary measures to
review and assess operating performance of its health care
facilities and their management teams. Management and
investors review both the overall performance (including net income
attributable to HCA Healthcare, Inc., excluding losses (gains) on
sales of facilities and losses on retirement of debt, and GAAP net
income attributable to HCA Healthcare, Inc.) and operating
performance (Adjusted EBITDA) of our health care facilities.
Adjusted EBITDA and the Adjusted EBITDA margin (Adjusted EBITDA
divided by revenues) are utilized by management and investors to
compare our current operating results with the corresponding
periods during the previous year and to compare our operating
results with other companies in the health care industry. It is
reasonable to expect that losses (gains) on sales of facilities and
losses on retirement of debt will occur in future periods, but the
amounts recognized can vary significantly from period to period, do
not directly relate to the ongoing operations of our health care
facilities and complicate period comparisons of our results of
operations and operations comparisons with other health care
companies. Net income attributable to HCA Healthcare,
Inc., excluding losses (gains) on sales of facilities and losses on
retirement of debt, and Adjusted EBITDA are not measures of
financial performance under GAAP, and should not be considered as
alternatives to net income attributable to HCA Healthcare, Inc. as
a measure of operating performance or cash flows from operating,
investing and financing activities as a measure of liquidity.
Because net income attributable to HCA Healthcare, Inc., excluding
losses (gains) on sales of facilities and losses on retirement of
debt, and Adjusted EBITDA are not measurements determined in
accordance with GAAP and are susceptible to varying calculations,
net income attributable to HCA Healthcare, Inc., excluding losses
(gains) on sales of facilities and losses on retirement of debt,
and Adjusted EBITDA, as presented, may not be comparable to other
similarly titled measures presented by other companies.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200722005392/en/
INVESTOR CONTACT: Mark Kimbrough 615-344-2688
MEDIA CONTACT: Harlow Sumerford 615-344-1851
HCA Healthcare (NYSE:HCA)
Historical Stock Chart
From Mar 2024 to Apr 2024
HCA Healthcare (NYSE:HCA)
Historical Stock Chart
From Apr 2023 to Apr 2024
